Opinion ID: 77289
Heading Depth: 4
Heading Rank: 1

Heading: The Use of Multiple Scenarios Is Consistent with TELRIC.

Text: 39 The TELRIC value of an unbundled network element is the forward-looking cost over the long run of the total quantity of the facilities and functions that are directly attributable to, or reasonably identifiable as incremental to, such element, calculated taking as a given the incumbent LEC's provision of other elements. 47 C.F.R. § 51.505(b). This cost should be measured based on the use of the most efficient telecommunications technology currently available and the lowest cost network configuration, given the existing location of the incumbent LEC's wire centers. Id. § 51.505(b)(1). The forward-looking economic cost per unit is then determined by dividing the TELRIC for the network element by the sum of the total number of units of the element that the incumbent LEC is likely to provide to requesting telecommunications carriers and the total number of units of the element that the incumbent LEC is likely to use in offering its own services. Id. § 51.511(a). 40 The TELRIC methodology requires that the per unit cost of an unbundled network element be calculated by finding the total cost for the element in a hypothetical most efficient network and dividing by the number of units that will be put into use by the incumbent or a competitive local carrier. BellSouth and the Florida Commission argue that no single scenario for wire loops can be most efficient because different services require different types of wire loops. To support this position, BellSouth and the Florida Commission argue that a competitive local carrier that offers DSL will require all wire loops to be copper; likewise, a competitive local carrier that intends to use its own switches must lease loops that use the universal digital loop carrier technology. In short, because different competitive local carriers will request different elements, there is no unitary most efficient network. 41 We agree with BellSouth and the Florida Commission that TELRIC does not prohibit the use of multiple scenarios in a pricing model. The use of multiple scenarios classifies different types of wire loops as different network elements. BellSouth and the Florida Commission, for example, maintain, without dispute, that DSL service can be offered only via copper wire loops, so the Copper Only scenario represents a network element consisting of DSL-capable wire loops. The Combo scenario likewise represents the network element of wire loops and switches that employ the integrated digital loop carrier technology. 42 The definition of network element in the Telecommunications Act supports an interpretation that depends on separate features, functions, and capabilities: 43 The term network element means a facility or equipment used in the provision of a telecommunications service. Such term also includes features, functions, and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems, and information sufficient for billing and collection or used in the transmission, routing, or other provision of a telecommunications service. 44 Id. § 153(29). Nothing in this definition requires that the network element be defined so broadly, as MCI and Florida Digital Networks argue, as to encompass all wire loops; rather, the focus of the definition on separate features, functions, and capabilities evidences the intent of the FCC to encourage narrowly-defined network elements. Id. 45 This interpretation also comports with the parties' understanding of the technology of telecommunications. The parties agree, for example, that DSL is a different telecommunications service than local telephone service, and DSL requires different equipment ( i.e., copper wire loops). Likewise, the parties agree that the equipment that provides integrated digital loop carrier service is different from universal digital loop carrier equipment. 46 We conclude that TELRIC permits an incumbent local carrier to define its unbundled network elements narrowly to separate wire loops with different capabilities and characteristics into different network elements through the use of multiple scenarios. This conclusion is consistent with the result reached by the FCC in section 271 proceedings, see, e.g., Ga. & La. Order, 17 F.C.C.R. at 9041-42 ¶¶ 38-42, and by many state commissions, see, e.g., id. at 9041 ¶ 40; Five-State Order, 17 F.C.C.R. at 17,621 ¶ 56. The district court erred in concluding otherwise.