[Federal Register Volume 68, Number 1 (Thursday, January 2, 2003)]
[Notices]
[Pages 119-121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-33043]


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FEDERAL COMMUNICATONS COMMISSION

[WC Docket No. 02-314; FCC 02-332]


Application by Qwest Communications International Inc., Pursuant 
to Section 271 of the Telecommunications Act of 1996, For Authorization 
To Provide In-Region, InterLATA Service in the States of Colorado, 
Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington and 
Wyoming

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission grants the section 271 
application of Qwest Communications International Inc. for authority to 
enter the interLATA telecommunications market in the states of 
Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, 
Washington, and Wyoming. The Commission grants Qwest's application 
based on its conclusion that Qwest has satisfied all of the statutory 
requirements for entry, and opened its local exchange markets to full 
competition.

DATES: Effective January 2, 2003.

FOR FURTHER INFORMATION CONTACT: Michael Carowitz, Attorney-Advisor, 
Wireline Competition Bureau, at 202-418-0026 or via the Internet at 
[email protected]. The complete text of this Memorandum Opinion and 
Order is available for inspection and copying during normal business 
hours in the FCC Reference Information Center, Portals II, 445 12th 
Street, SW., Room CY-A257, Washington, DC 20554. Further information 
may also be obtained by calling the Wireline Competition Bureau's TTY 
number: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order (MO&O) in WC Docket No. 02-314, FCC 02-
332, adopted December 20, 2002, and released December 23, 2002. This 
full text may be purchased from the Commission's duplicating 
contractor, Qualex International, Portals II, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 
202-863-2898, or via e-mail [email protected]. It is also available on 
the Commission's Web site at http://www.fcc.gov/Bureaus/Common_Carrier/in-region_applications/verizon_vt/welcome.html.

Synopsis of the Order

    1. History of the Application. On September 30, 2002, Qwest filed 
an application, pursuant to section 271 of the Telecommunications Act 
of 1996, with the Commission to provide in-region, interLATA service in 
the states of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, 
Utah, Washington and Wyoming.
    2. The State Commissions' Evaluations. The Colorado Public 
Utilities Commission (Colorado Commission), the Idaho Public Utilities 
Commission (Idaho Commission), the Iowa Utilities Board (Iowa Board), 
the Montana Public Service Commission (Montana Commission), the 
Nebraska Public Service Commission (Nebraska Commission), the North 
Dakota Public Service Commission (North Dakota Commission), the Public 
Service Commission of Utah (Utah Commission), the Washington Utilities 
and Transportation Commission (Washington Commission), and the Wyoming 
Public Service Commission (Wyoming Commission), (collectively, state 
commissions), following an extensive review process over a number of 
years, advised Commission that Qwest met the checklist requirements of 
section 271 and has taken the statutorily required steps to open its 
local markets in each state to competition. Consequently, the state 
commissions recommended that the Commission approve Qwest's in-region, 
interLATA entry in its evaluations.
    3. The Department of Justice's Evaluation. The Department of 
Justice filed its evaluation of Qwest's Application on October 22, 
2002. It recommended approval of the application subject to Qwest's 
submission of supplemental evidence addressing certain pricing issues.

Primary Issues in Dispute

    4. Compliance with section 271(c)(1)(A). The Commission concludes 
that Qwest demonstrates that it satisfies the requirements of section 
271 (c) (1) (A) based on the number of interconnections agreements it 
has implemented with competing carriers in all nine states.
    5. Checklist Item 2--Unbundled Network Elements. Based on the 
record, the Commission finds that Qwest has provided 
``nondiscriminatory access to network elements in accordance with the 
requirements of sections 251(c)(3) and 252(d)(1)'' of the Act in 
compliance with checklist item 2.
    6. Operating Support Systems (OSS). The Commission finds that Qwest 
provides non-discriminatory access to its OSS. The Commission also 
concludes that Qwest provides nondiscriminatory access to its OSS--the 
systems, databases, and personnel necessary to support network elements 
or services. Nondiscriminatory access to OSS ensures that new entrants 
have the ability to order service for their customers and communicate 
effectively with Qwest regarding basic activities such as placing 
orders and providing maintenance and repair services for customers. The 
Commission finds that, for each of the primary OSS functions (pre-
ordering, ordering, provisioning, maintenance and repair, and billing, 
as well as change management), Qwest provides access to its OSS in a 
manner that enables competing carriers to perform the functions in 
substantially the same time and manner as Qwest does or, if no 
appropriate retail analogue exists within Qwest's systems, in a manner 
that permits competitors a meaningful opportunity to compete. In 
particular, the Commission finds that Qwest provides access to loop 
qualification information consistent with requirements in the UNE 
Remand Order. In addition, regarding specific areas where the 
Commission identifies issues with Qwest's OSS performance in the nine-
state region--order processing notifiers, accuracy of manual 
processing, flow-through, and billing accuracy--these problems are not 
sufficient to warrant a finding of checklist noncompliance.
    7. UNE Combinations. Pursuant to section 271(c)(2)(B)(ii) and BOC 
must demonstrate that it provides nondiscriminatory access to network 
elements in a manner that allows requesting carriers to combine such 
elements and that the BOC does not separate already combined elements, 
except at the specific request of the competing carrier. The Commission 
concludes, based on the performance data in the record, that Qwest 
meets its obligation to provide access to UNE combinations in 
compliance with the Commission's rules.
    8. Pricing of Unbundled Network Elements. Checklist item 2 states 
that a BOC must provide ``nondiscriminatory access to network elements 
in accordance with sections 251(c) (3) and 252(d) (1)'' of the Act. 
Section 251(c)(3) requires incumbent LECs to provide 
``nondiscriminatory access to network elements on an unbundled basis at 
any technically feasible point on rates, terms, and conditions that are 
just, reasonable, and nondiscriminatory.'' Section 252(d) (1) provides 
that a state

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commission's determination of the just and reasonable rates for network 
elements, must be nondiscriminatory, based on the cost of providing the 
network elements, and may include a reasonable profit. Pursuant to this 
statutory mandate, the Commission has determined that prices for UNEs 
must be based on the total element long run incremental cost (TELRIC) 
of providing those elements. Based on the evidence in the record, the 
Commission finds that Qwest's UNE rates in Colorado, Idaho, Iowa, 
Montana, Nebraska, North Dakota, Utah, Washington, and Wyoming are 
just, reasonable, and nondiscriminatory, and are in accordance with 
section 252(d)(1). Thus, Qwest's UNE rates in these states satisfy 
checklist item 2. Qwest has taken a different approach to pricing 
issues compared to other BOCs whose applications we previously have 
approved under section 271. Qwest made a series of voluntary rate 
reductions in Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, 
Washington, and Wyoming prior to filing its section 271 applications. 
Those reductions were specifically calculated to produce rates that 
would enable those states to pass a benchmark comparison to rates in 
Colorado. The Commission first evaluated Qwest's UNE rates in Colorado 
and found them to be TELRIC-compliant. The Commission next conducted a 
benchmark analysis comparing Qwest's Idaho, Iowa, Montana, Nebraska, 
North Dakota, Utah, Washington, and Wyoming UNE rates to the Colorado 
UNE rates. This analysis compares the difference between the benchmark 
state's rates and Colorado's rates to the difference between the 
benchmark state's and Colorado's costs according to the Synthesis 
Model. Because the percentage differences between Qwest's Colorado 
rates and the benchmark state rates do not exceed the percentage 
differences between Qwest's Colorado costs and the benchmark state's 
costs according to the Synthesis Model, the Commission found that 
Qwest's rates in Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, 
Washington, and Wyoming satisfy our benchmark analysis.

Other Checklist Items

    9. Checklist Item 1--Interconnection. Based on the evidence in the 
record, the Commission concludes that Qwest provides interconnection in 
accordance with the requirements of section 251(c) (2) and as specified 
in section 271 and applied in the Commission's prior orders. Based on 
its review of the record, the Commission concludes, that Qwest complies 
with the requirements of this checklist item. In reaching this 
conclusion, the Commission examined Qwest's performance in providing 
collocation and interconnection trunks to competing carriers, as it has 
done in prior section 271 proceedings.
    10. Checklist Item 4--Unbundled Local Loops. Qwest provides 
unbundled local loops in accordance with the requirements of section 
271 and the Commission's rules. The Commission's conclusion is based on 
its review of Qwest's performance for all loop types, which include 
voice grade loops, xDSL-capable loops, and high capacity loops, as well 
as hot cut provisioning and our review of Qwest's processes for line 
sharing and line splitting.
    11. Checklist Item 5--Unbundled Local Transport. Section 
271(c)(2)(B)(v) of the competitive checklist requires a BOC to provide 
``[l]ocal transport from the trunk side of a wireline local exchange 
carrier switch unbundled from switching or other services.'' Based on 
our review of the record, the Commission concludes that Qwest complies 
with the requirements of this checklist item.
    12. Checklist Item 6--Unbundled Local Switching. Based on the 
Commission's review of the record, it concludes that Qwest demonstrates 
that it provides: (1) line-side and trunk-side facilities; (2) basic 
switching functions; (3) vertical features; (4) customized routing; (5) 
shared truck ports; (6) unbundled tandem switching; (7) usage 
information for billing exchange access; and (8) usage information for 
billing for reciprocal compensation in compliance with checklist item 
6.
    13. Checklist Item 7--911/E911 Access and Directory Assistance/
Operator Services. Based on the Commission's review of the record, it 
finds that Qwest provides non-discriminatory access to 911 and E911 
services and access to directory assistance services to allow the other 
carrier's customers to obtain telephone numbers and operator call 
completion services in compliance with checklist item 7.
    14. Checklist Item 10--Databases and Signaling. Section 
271(c)(2)(B)(x) of the 1996 Act requires a BOC to provide 
nondiscriminatory access to databases and associated signaling 
necessary for call routing and completion. Qwest states that it 
provides competitive LECs in each of the five application states with 
unbundled, nondiscriminatory access to its signaling network, including 
signaling links and transfer points, and to Qwest's call-related 
databases and service management systems. Based on the evidence in the 
record, the Commission finds that Qwest complies with the requirements 
of checklist item 10.
    15. Checklist Item 11--Number Portability. Section 251(b)(2) 
requires all LECs to provide, to the extent technically feasible, 
number portability in accordance with requirements prescribed by the 
Commission. Qwest states that it satisfies the requirements of 
checklist item 11 as it complies with the Commission's (a) long term 
number portability (``LNP'') implementation schedule; (b) performance 
criteria; (c) technical, operational, architectural and administrative 
requirements and (d) cost recovery rules for number portability. Based 
on the evidence in the record, the Commission concludes that Qwest has 
satisfied the requirements of checklist item 11.
    16. Checklist Item 14--Resale. Based on the record in this 
proceeding, the Commission concludes that Qwest demonstrates that it 
makes telecommunications services available for resale in accordance 
with the requirements of section 251(c)(4) and section 252(d)(3), and 
thus satisfies the requirements of checklist item 14.
    17. Remaining Checklist Items. An applicant for section 271 
authority must demonstrate that it complies with checklist item 3 
(poles, ducts, and conduits), item 8 (white pages), item 9 (numbering 
administration), item 12 (local dialing parity), and item 13 
(reciprocal compensation). Based on the evidence in this record, the 
Commission concludes that Qwest complies with the requirements of all 
of the checklist items: 3, 8, 9, 12, and 13.

Other Statutory Requirements

    18. Section 272 Compliance. Commission standards for compliance 
with Section 272 are set forth in the Accounting Safeguards Order (61 
FR 41208, August 7, 1996) and the Non-Accounting Safeguards Order (61 
FR 39397, July 29, 1996). Together, these safeguards discourage and 
facilitate the detection of improper cost allocation and cross-
subsidization between the BOC and its section 272 affiliate and ensure 
that BOCs do not discriminate in favor of these section 272 affiliates. 
Based on the record, the Commission concludes that Qwest and QLDC, its 
section 272 affiliate, have demonstrated compliance with the 
requirements of section 272.
    19. Public Interest Analysis. The Commission concludes that 
approval of this application is consistent with the public interest. 
From the Commission's extensive review of the competitive checklist, 
which embodies the critical elements of market entry under the Act, it 
finds that barriers to competitive entry

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in the application states' local exchange markets have been removed, 
and that these local exchange markets are open to competition. It 
further finds that the record confirms the Commission's view that BOC 
entry into the long distance market will benefit consumers and 
competition if the relevant local exchange market is open to 
competition consistent with the competitive checklist. Notwithstanding 
its concern about discrimination in interconnection agreements and 
potential violations of the Act as a result, the Commission finds that 
Qwest's previous failure to file certain interconnection agreements 
with the application states does not warrant a denial of this 
application. The Commission concludes that concerns about any potential 
ongoing checklist violation (or discrimination) are met by Qwest's 
submission of agreements to the commissions of the application states 
pursuant to section 252 and by each state acting on Qwest's submission 
of those agreements. Based on the limited circumstances established in 
the record, the Commission does not find that the allegations 
concerning Qwest's compliance with section 271 relate to openness of 
the local telecommunications markets to competition. Instead, it defers 
any enforcement action pending the Enforcement Bureau's investigation 
of the matter.
    20. Section 271(d) (6) Enforcement Authority. Working with the 
state commissions, the Commission intends to closely monitor Qwest's 
post-approval compliance to ensure that Qwest continues to meet the 
conditions required for section 271 approval. It stands ready to 
exercise its various statutory enforcement powers quickly and 
decisively in appropriate circumstances to ensure that the local market 
remains open in each of the states.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 02-33043 Filed 12-31-02; 8:45 am]
BILLING CODE 6712-01-P