[Federal Register Volume 68, Number 187 (Friday, September 26, 2003)]
[Notices]
[Pages 55614-55616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24446]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[WC Docket No. 03-138; FCC 03-228]


Application by SBC Communications Inc., Michigan Bell Telephone 
Company, and Southwestern Bell Communications Services, Inc., for 
Authorization To Provide In-Region, InterLATA Service in Michigan

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: In the document, the Federal Communications Commission 
(Commission) grants the section 271 application of SBC Communications 
Inc., Michigan Bell Telephone Company, and Southwestern Bell 
Communications Services, Inc. (Michigan Bell) for authority to enter 
the interLATA telecommunications market in Michigan. The Commission 
grants Michigan Bell's application based on the Commission's conclusion 
that Michigan Bell has satisfied all of the statutory requirements for 
entry and opened its local exchange markets to full competition.

DATES: Effective September 26, 2003.

FOR FURTHER INFORMATION CONTACT: Gina Spade, Attorney-Advisor, Wireline 
Competition Bureau, at (202) 418-7105 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 in WC Docket No. 03-138, FCC 03-228, 
adopted September 17, 2003, and released September 17, 2003. The full 
text of this order may be purchased from the Commission's duplicating 
contractor, Qualex International, Portals

[[Page 55615]]

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/Wireline_Competition/in-region_applications.

Synopsis of the Order

    1. History of the Application. On June 19, 2003, Michigan Bell 
filed an application with the Commission, pursuant to section 271 of 
the Telecommunications Act of 1996, to provide in-region, interLATA 
service in the state of Michigan.
    2. The State Commission's Evaluation. The Michigan Public Utilities 
Commission (Michigan Commission), following an extensive review 
process, advised the Commission that Michigan Bell has taken the 
statutorily required steps to open its local markets to competition. 
Consequently, the Michigan Commission recommended that the Commission 
approve Michigan Bell's in-region, interLATA entry in its evaluation 
and comments in this proceeding.
    3. The Department of Justice's Evaluation. The Department of 
Justice filed its evaluation on July 16, 2003, expressing concerns 
about Michigan Bell's wholesale billing, line splitting, and data 
reliability. The Department of Justice ultimately stated that because 
of serious concerns about wholesale billing, it could not support the 
application based on the current record, but noted that the Commission 
might be able to resolve these billing issues prior to conclusion of 
its review.
    4. Compliance with Section 271(c)(1)(A). In order for the 
Commission to approve a BOC's application to provide in-region, 
interLATA services, a BOC must first demonstrate that it satisfies the 
requirements of either section 271(c)(1)(A) (Track A) or section 
271(c)(1)(B) (Track B). The Commission concludes that Michigan Bell 
satisfies the requirements of Track A in Michigan. This decision is 
based on the interconnection agreements Michigan Bell has implemented 
with competing carriers in Michigan and the number of carriers that 
provide local telephone exchange service, either exclusively or 
predominantly over their own facilities, to residential and business 
customers.

Primary Issues in Dispute

    5. Evidentiary Case--Data Reliability. The Commission finds that 
Michigan Bell's data are, on the whole, reliable and accurate, based on 
the evidence in the record, including two independent, third-party 
audits of Michigan Bell's performance data. The Commission finds, 
therefore, that the commercial performance data submitted by Michigan 
Bell form an adequate evidentiary basis on which the Commission can 
render judgments regarding Michigan Bell's satisfaction of the 
competitive checklist.
    6. Checklist Item 2--Unbundling Network Elements. Based on the 
record, the Commission finds that Michigan Bell provides 
``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. The Commission also concludes that 
Michigan Bell provides nondiscriminatory access to combinations of 
unbundled network elements (UNE combinations) in compliance with the 
Commission's rules. Based on the evidence in the record, the Commission 
also finds that Michigan Bell's charges for UNEs made available to 
other telecommunications carriers are just, reasonable, and 
nondiscriminatory in compliance with checklist item 2. The Commission 
finds that the Michigan Commission followed basic TELRIC principles and 
that the Michigan Commission worked diligently to set UNE rates at 
TELRIC levels.
    7. Access to Operations Support Systems. Based on the evidence in 
the record, the Commission finds that Michigan Bell is providing 
competitors nondiscriminatory access to OSS in compliance with 
checklist item 2. Pursuant to its analysis, the Commission finds that 
Michigan Bell provides non-discriminatory 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 Michigan Bell 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), Michigan Bell 
provides access to its OSS in a manner that enables competing carriers 
to perform the functions in substantially the same time and manner as 
Michigan Bell does or, if no appropriate retail analogue exists within 
Michigan Bell's systems, in a manner that permits competitors a 
meaningful opportunity to compete. In particular, the Commission, 
assessing the totality of the circumstances, finds that Michigan Bell's 
evidence regarding billing demonstrates that competitive LEC concerns 
reflect only isolated instances or errors typical of high-volume 
carrier-to-carrier commercial billing, rather than systemic problems. 
The Commission thus finds that the allegations raised about billing in 
this record do not warrant a finding of checklist noncompliance because 
Michigan Bell's billing processes provide competitors a meaningful 
opportunity to compete. In addition, regarding specific areas for which 
the Commission identifies issues with Michigan Bell's OSS performance--
line loss notification reports and billing completion notices--the 
Commission finds that these problems do not demonstrate overall 
discriminatory treatment or are not sufficient to warrant a finding of 
checklist noncompliance.
    8. Checklist Item 4--Unbundled Local Loops. Based on the evidence 
in the record, the Commission concludes that Michigan Bell provides 
unbundled local loops in accordance with the requirements of section 
271 and Commission rules. The Commission's conclusion is based on its 
review of Michigan Bell's performance for all loop types, which include 
voice-grade loops, xDSL-capable loops, digital loops, and high-capacity 
loops, as well as the Commission's review of Michigan Bell's processes 
for hot cut provisioning, line sharing and line splitting. With respect 
to issues related to Michigan Bell's line splitting processes, the 
Commission finds that a BOC is not required to have in place processes 
for all possible line splitting scenarios at the time of its 
application if the BOC is working with competing LECs in a state 
collaborative to develop appropriate procedures. Because Michigan Bell 
is working with competitive LECs to develop such processes in Michigan, 
the Commission finds that these issues do not warrant a finding of 
checklist noncompliance.
    9. Checklist Item 7--Access to 911/E911 and Operator Services/
Directory Assistance. Section 271(c)(2)(B)(vii) of the Act requires a 
BOC to provide ``[n]ondiscriminatory access to 911 and E911 services.'' 
A BOC must provide competitors with access to its 911 and E911 services 
in the same manner that it provides such access to itself, i.e., at 
parity. Specifically, the BOC ``must maintain the 911 database entries 
for competing LECs with the same accuracy and reliability that it 
maintains the database entries for its own customers.'' The Commission 
finds that Michigan Bell provides nondiscriminatory access to 911 and 
E911 services. Section 271(c)(2)(B)(vii) also requires a BOC to provide 
nondiscriminatory access to

[[Page 55616]]

``directory assistance services to allow the other carrier's customers 
to obtain telephone numbers'' and ``operator call completion 
services,'' respectively. Additionally, section 251(b)(3) of the 1996 
Act imposes on each LEC ``the duty to permit all [competing providers 
of telephone exchange service and telephone toll service] to have 
nondiscriminatory access to * * * operator services, directory 
assistance, and directory listing, with no unreasonable dialing 
delays.'' Based on the Commission's review of the record it concludes 
that Michigan Bell offers nondiscriminatory access to its directory 
assistance services and operator services (OS/DA).

Other Checklist Items

    10. Checklist Item 1--Interconnection. Based on its review of the 
record, the Commission concludes that Michigan Bell provides 
interconnection in accordance with the requirements of section 
251(c)(2) and as specified in section 271 and prior Commission orders. 
In reaching this conclusion, the Commission examined Michigan Bell's 
performance with respect to collocation and interconnection trunks, as 
the Commission has done in prior section 271 proceedings.
    11. 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. Based on the evidence in the 
record, the Commission finds that Michigan Bell provides 
nondiscriminatory access to databases and signaling networks in the 
state of Michigan.
    12. Checklist Item 13--Reciprocal Compensation. Section 
271(c)(2)(B)(xiii) of the Act requires BOCs to enter into 
``[r]eciprocal compensation arrangements in accordance with the 
requirements of section 252(d)(2).'' In turn, section 252(d)(2)(A) 
specifies the conditions necessary for a state commission to find that 
the terms and conditions for reciprocal compensation are just and 
reasonable. The Commission finds that commenters' allegations regarding 
Michigan Bell's reciprocal compensation policies and rate structure in 
Michigan do not cause Michigan Bell to fail this checklist item or the 
public interest standard. In addition, the Commission waives its 
complete-as-filed requirement on its own motion pursuant to section 1.3 
of the Commission's rules to the limited extent necessary to consider 
Michigan Bell's revised reciprocal compensation rates. The Commission's 
``complete-as-filed'' requirement provides that when an applicant files 
new information after the comment date, the Commission reserves the 
right to start the 90-day review period again or to accord such 
information no weight in determining section 271 compliance. In its 
application filed on June 19, 2003, Michigan Bell explained that it had 
elected to invoke the rate structure set out in the Commission's ISP 
Remand Order, and the rate structure change would be effective in 
Michigan on July 6, 2003-after comments were filed on Michigan Bell's 
application. The Commission finds that a waiver is appropriate because 
Michigan Bell changed its rate structure for reciprocal compensation 
for ISP-bound traffic to the rate caps set forth in the Commission's 
ISP Remand Order, not as part of a strategy to win approval of its 
application.
    13. Remaining Checklist Items (3, 5, 6, 8, 9, 11, 12 and 14). Based 
on the evidence in the record, the Commission concludes that Michigan 
Bell demonstrates that it is in compliance with checklist item 3 
(access to poles, ducts, and conduits), item 5 (unbundled transport), 
item 6 (unbundled switching), item 8 (white pages), item 9 (numbering 
administration), item 11 (number portability), item 12 (dialing 
parity), and item 14 (resale).
    14. Section 272 Compliance. Based on the record, the Commission 
concludes that Michigan Bell has demonstrated that it will comply with 
the requirements of section 272. Significantly, Michigan Bell provides 
evidence that it maintains the same structural separation and 
nondiscrimination safeguards in Michigan as it does in Texas, Kansas, 
Oklahoma, Missouri, Arkansas, and California--states for which SBC has 
already received section 271 authority.
    15. Public Interest Analysis. The Commission concludes that 
approval of this application is consistent with the public interest. 
From its extensive review of the competitive checklist, which embodies 
the critical elements of market entry under the Act, the Commission 
finds that barriers to competitive entry in the local exchange markets 
have been removed and the local exchange markets in Michigan today are 
open to competition. The Commission further finds that the record 
confirms its view, as set forth in prior section 271 orders, 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.
    16. Section 271(d)(6) Enforcement Authority. Working with the 
Michigan Commission, the Commission intends to closely monitor Michigan 
Bell's post-approval compliance to ensure that it continues to meet the 
conditions required for section 271 approval. The Commission stands 
ready to exercise its various statutory enforcement powers quickly and 
decisively in appropriate circumstances to ensure that the local market 
remains open in Michigan.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-24446 Filed 9-25-03; 8:45 am]
BILLING CODE 6712-01-P