ࡱ>    !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}~Root Entry`DESTͼPerfectOffice_MAIN& PerfectOffice_OBJECTS,3ͼ3ͼ{'{'{'{'{'{'{'{' 0T&( 0hz( 0|( 0^)^)^)^)^)^) 0()))))))************************************** B*, D3 -S- 0O. 0Ch. 0O. AS... 0zCM/M/ //V0V0V0 0}E11111111111111111111 0ea1a1a1a1a1 1111 0e3Rightfax,,,,,,0xhH  Z6Times New Roman RegularX( $  ((3$ !   +,-./E01V23D4C#(M3|x4lUxhH  Z6Times New Roman Regular  NP$  37  .  ݛConsumersofintrastateservicesalsohavebenefitted,asAT&TrespondedtoSNETslong  distanceofferingswithcompetitiveintrastateofferings.SeeGilbertAff.3742. xhH  Z&Times New Roman NP$  24  .  ݛEvaluationoftheUnitedStatesDepartmentofJustice,ApplicationofSBCCommunications  Inc.,CCDocketNo.97121,at34(FCCfiledMay16,1997). c NP$  22  .  ݛAmeritechMichiganOrder381. Z NP$  26  .  ݛNormaytheCommissionjustifyaggressiveregulatorymicromanagementoflocal  competitiontodayonthegroundthatsuchregulatoryinducedlocalcompetitionwilleventuallyeliminatetheneedfortheregulatorysafeguardsundersection272.Excessiveregulationtodaycannotbedefendedinthenameofidealderegulationtomorrow.SeeMCITelecommunications  Corp.v.FCC,627F.2d322,340(D.C.Cir.1980)( Thebestmustnotbecometheenemyofthe p good.).    * NP$WPC54 <.8t|)sc m޽g.+1F[)h 6s2\my闂) ? l ؉h"&u@ Y,QQe(b FKM@bUiV~^'|\p{{8jJ N*zP(RgK!U;/5v GڒOb4bůްnArji/7vsА8I_"a÷7r{zQΙ􆜊34b^^ە; W3U/tXR! ^ym=[?A9 )@_djAOMr\h@}orz깫t)=CϒQ?L~7!&C+]aO f-kb ȉ>aG֗s#v _aH)˾y>9l#!UN  %W 04] 0Pw@4!5D mFU9N]U> mdk4UB[cd#@$>2&p(UN?)2)+m-*./n/z 3C4::;>p?d0@_A ACDlGH;HJJ 0ehLLM,P 1m4PP 1m=QQSRSTGV>W5Z$]`b eej {hqttv)vw Bw6w2{}g~J5#X1Ctxf]ÉH1Î6 D3* B*]!F7ߝǞ*! U+$$ =ۺH 0@` 0c 0g r 0Uznz+++bT9 0P7@_P[lJkpL@X7hTK;(c?v0+} D^   # u 9 0!!!!!!!!!!!!!!!! B" D/" C#############d$$$$$$$$$$$$$$ D3@%s% 0J9& AM&&&n&&n{'{'{'{'{'{'{'{'{'{'{'{'  20  .  ݛEvaluationoftheUnitedStatesDepartmentofJustice,ApplicationofSBCCommunications  Inc.,CCDkt.No.97121,at34(FCCfiledMay16,1997) XXXX.#XXX X#\  `*Times New RomanTT   NP$  30  .  ݛSee XXXX#XXX XA#InquiryintoPoliciestobeFollowedintheAuthorizationofCommonCarrierFacilitiesto  ProvideTelecommunicationsServ.offoftheIslandofPuertoRico,2FCCRcd6600,6604,30  (1987)( plac[ing]aburdenonanyentityopposingentrybyanewcarrierintointerstate,interexchangemarketstodemonstratebyclearandconvincingevidencethat[additional]  competitionwouldnotbenefitthepublic)(emphasisadded); XXXXԀ#XXX X#MTSWATSMarketStructure p Inquiry,81FCC2d177,20102,103(1980)(Commissionwill refrainfromrequiringnew `  entrantstodemonstratebeneficialeffectsofcompetitionintheabsenceofashowingthatcompetitionwillproducedetrimentaleffects). NP$  21  .  ݛSeparateStatementofChairmanReedE.Hundtat1(appendedtoOklahomaOrder) XXXX.#XXX X#  NP$  64  .  ݛSeeWorochAff.1719,8188(notingincentivesofCLECs,absentBellSouthinterLATA  entry,to goslowinSouthCarolinaandtopursuemarketsthatoffergreaterprofitmargins);ϢHausmanAff.9(notingthat,followingBellSouthinterLATAentry,interexchangecarriers andothercompetitorswillberequiredbycompetitiontorespondwithcompetitiveofferings). 4 NP$  58  .  ݛInquiryintotheUseoftheBands825845MHZand870890forCellularCommunications  Systems,86FCC2d469,49450(1981)(cellular);AmendmentofSection64.702ofthe  CommissionsRulesandRegulations(SecondComputerInquiry),FinalDecision,77FCC2d  384,453(BellSystem),affdsubnom.ComputerandCommunicationsIndustryAssociationv.  FCC,693F.2d198,211(D.C.Cir.1982). NP$  34  .  ݛSeeAT&TCallsMCIFlatPricingMoreThanaCoincidence,Newsbytes,Sept.30,1996  (App.Vol.II,Tab16).(hH  Z 6Times New Roman Regular ( NP$  65  .  ݛMCIsInitialCommentstotheDepartmentofJusticeConcerningtheMotiontoVacatethe  JudgmentandNYNEXsRequesttoProvideInterexchangeServiceinNewYorkStateat58,UnitedStatesv.WesternElectricCo.,(No.820192)(D.D.C.,Dec.9,1994);seeAT&Ts  OppositiontotheFourRBOCsMotiontoVacatetheDecree,UnitedStatesv.WesternElectric  Co.,(No.820192)at159(D.D.C.,Dec.7,1994).  NP$  31  .  ݛSeeInquiryintoPoliciestobeFollowedintheAuthorizationofCommonCarrierFacilitiesto  ProvideTelecommunicationsServ.offoftheIslandofPuertoRico,2FCCRcdat6604,30  (Commissions openentrypolicy, clearlycontemplate[s]competitiveentrybyindependentlocalexchangecompanies)(citingMTSWATSMarketStructureInquiry,81FCC2dat186). c NP$  29  .  ݛAmeritechMichiganOrder387. NP$  38  .  ݛHausmanAff.14(averaging24percentdiscountbelowAT&Tsstandardrates,and10.6  percentdiscountbelowAT&Tsdiscountplans). NP$  64  .  ݛSusanJackson,ATelecomYankeeDefendsitsTurf,BusinessWeek,Oc.28,1996,at167. d NP$  2  .  ݛBellSouthintendstoofferinregion,interLATAservicesinSouthCarolinathroughBellSouth  LongDistance,Inc.,whichwilloperateinaccordancewiththerequirementsofsection272.However,allreferencestoBellSouthLongDistance,Inc.shouldbeunderstoodtoencompassanyaffiliateofBellSouthTelecommunications,Inc.(oritssuccessorsorassignsthatprovidewirelinetelephoneexchangeservice)thatoperatesconsistentwiththisapplicationsrepresentationsregardingthefutureactivitiesofBellSouthLongDistance,Inc.TheCommissionshouldconfirmwhenitapprovesthisapplicationthatnofurtherauthorization,undersection214orotherwise,isnecessaryfortheseentitiestocommenceprovidinginregion,interLATAandinternationalservicesinSouthCarolina. p NP$  25  .  ݛMichiganOrder381;seealsoSeparateStatementofChairmanReedE.Hundtat1(appended  toOklahomaOrder)( theentryintothelongdistancemarketbyBellcompaniesundertheAct   wouldpromotecompetitionandbenefitconsumers). 9 NP$  16  .  ݛXXXXԀ#XXXX;#WXXXXheretheCommissionhasbeensubjecttoacomparableinstructionto consul[t]withthe  SecretaryofStateonforeign,politicalandrelatedmatters,ithasdecidedto defertotheStateDepartment.CableNewsNetwork,Inc.,FileNo.907DSEL85(IB,rel.Nov.19,1985).#XXXX#XXXXԀ  Here,moreover, thevalueoffederalismprovidesanadditionalreasonforaccordingdeference,UniversityofTenn.v.Elliot,478U.S.788,798(1986),tominimizethe inevitablefrictionthat p occurswhenfederaldecisionmakers overturn...thefactual...conclusionsofstatedecisionmakers,Summerv.Mata,449U.S.539,550(1981). P    ThereisnoconflictbetweenthestatutesrequirementofconsultationwiththestatecommissiontoverifychecklistcomplianceandtheadditionalrequirementofconsultationwiththeAttorneyGeneral.47U.S.C.271(d)(2)(A).Unlikethestatecommissions,theU.S.DepartmentofJusticehasnospecialexpertiseonchecklistissues.Accordingly,theAttorneyGeneralsconsultativeroleislimitedtoantitrustissuesunderthepublicinteresttest"wheretheDepartmentdoeshaverelevantexpertise.Seeinfrap.__.  #XXXX# '  ݛ    @  @` ܣXXBellSouth,September30,1997,SouthCarolina#XpXܣF#  NP$  28  .  ݛ271(d)(4);ConferenceReportat1(enactinga deregulatorynationalpolicyframework);  141Cong.Rec.S7895(statementofSen.Hollings)( Weshouldnotattempttomicro-managethemarketplace);141Cong.Rec.H8282(dailyed.Aug.2,1995)(statementofRep.Bliley)(Congresswantedtopromote competition,andnotGovernmentmicro-managementofmarkets);accordLocalInterconnectionOrder12;seealsoHausmanAff.9( The p Commissionisonceagainfailingtorecognizethatregulationismeanttobenefitconsumers,nottofurtherotherobjectivesorregulators.). CI"  ݛIntheMatterofApplicationbyBellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.,forProvisionofInRegion,InterLATAServicesinSouthCarolina NP$  39  .  ݛSeeSusanJackson,ATelecomYankeeDefendsitsTurf,BusinessWeek,Oct.28,1996,at  167. Z NP$  43  .  ݛAT&TCorp.sPetitionforWaiverandRequestforExpeditedConsideration,AT&TPetition  forWaiverofSection64.1701oftheCommissionsRules,CCDocketNo.9626AttachmentA  (FCCfiledOct.23,1996)( AT&TWaiverPetition). U NP$  44  .  ݛAT&TWaiverPetitionat3.  NP$  62  .  ݛAT&TsOppositiontoRBOCsMotionto ExemptWirelessServicesfromSectionIIofthe  Decreeat5556,UnitedStatesv.WesternElectricCo.,No.820192(D.O.J.Apr.27,1992).  NP$  45  .  ݛSeeAT&TWaiverPetitionat1,5;MCICommentsat1,AT&TPetitionforWaiverofSection  64.1701oftheCommissionsRules,CCDocketNo.9626(FCCfiledNov.18,1996)( MCI  Comments)(petitioningtheCommission sothat[MCI]likewisewillbeinapositiontobenefitconsumersbybeingabletocompeteeffectivelyagainstBellAtlanticandAT&T).  NP$  40  .  ݛSeeAT&TComments,MarketDefinition,Separations,RateAveragingandRateIntegration,  at29,PolicyandRulesConcerningtheInterstate,InterexchangeMarketplace&Implementation  ofSection254(g),CCDk.No.9661(FCCApr.19,1996)( AT&TRateAveraging  Comments);AT&TCorp.sPetitionforReconsideration,PolicyandRulesConcerningthe  Interstate,InterexchangeMarketplaceat25(FCCSept.16,1996);seealsosupraat34 p (discussingnationwiderateincreases). b NP$  41  .  ݛAT&TPetitionforReconsiderationat2.a, b, c,Level 1Level 2Level 3Level 4Level 5 1 NP$  46  .  ݛSeeAT&TWaiverPetitionat5(consumersinthecorridors,unlikeotherareas, benefitfrom  thehighestdegreeofcompetitionpossible);MCICommentsat3( fullysupport[ing]AT&Ts arguments).I., II.,Level 1Level 2Level 3Level 4Level 5 ~ NP$  61  .  ݛTheCommissionhasruledthatonceacomplainantmakesprimafacieshowingthataBell  companyhas ceasedtomeettheconditionsforentry,theburdenshiftstotheBellcompanyto   produceevidenceofitscompliance.NonAccountingSafeguardsOrder345.4#4F2Quick I.1  .0 1 NP$  17  .  ݛBusinessrulesforotherduedateintervalshavebeenprovidedtoCLECs.StacyOSSAff.  35.  NP$  23  .  ݛSee141Cong.Rec.S7972,S8012(dailyed.June8,1995)(statementofSen.Hollings)( XXXX we  havehadeveryparticularsafeguardthatyoucanimagine,thatthelawyerscouldthinkof...tomakesurethatitworksandworksproperlyforthepublicinterest);#XXX X#141Cong.Rec.S7906  (dailyed.June7,1995)(statementofSen.Lott)( Itiscriticaltorecognizethereasonwhyallofthesebarriers,restrictions,andregulationsexistinthefirstplace"theso-calledbottleneck. ' e37=CIQYag1.a.i.(1)(a)(i)1)a) NP$  42  .  ݛSeeAT&TPetitionforReconsiderationat25;AT&TRateAveragingCommentsat29.# e37=CIQYag1.a.i.(1)(a)(i)1)a) CC"  ݛIntheMatterofApplicationbyBellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.,forProvisionofInRegion,InterLATAServicesinSouthCarolina I NP$  25  .  ݛ142Cong.Rec.H1176(dailyed.Feb.1,1996)(statementofRep.JacksonLee);142Cong.  Rec.H1178(dailyed.Feb.1,1996)(statementofRep.Sensenbrenner)( FCC'srelianceontheJusticeDepartmentislimitedtoantitrustrelatedmatters). NP$  63  .  ݛMCIComments,SouthwesternBellsWaiverRequesttoProvideInterexchangeService  WaiverNo.20202,at4(FCCAug.1,1994). } NP$  5  .  ݛAT&ThasappealedtheSCPSCsarbitrationdecisiontotheUnitedStatesDistrictCourt.  AT&TCommunicationsoftheSouthernStates,Inc.v.BellSouthTelecommunications,Inc.,No.  3:97216417(D.S.C.filedJul.18,1997).Thearbitrationdecisionremainsfullyeffective.  NP$  19  .  ݛOSSaccessisbeingprovidedatnochargeuntiltheSCPSCestablishesratesafteritscost  proceeding.SeeVarnerAff.72.WhiletheStatementdoesnotincludeoptionalpaymentplans  fornonrecurringcharges,BellSouthwillconsiderCLECsrequestsforsuchplansinnegotiations.Id.78. 4 NP$  1  .  ݛWeusetheterm CLECstorefertobothpotentialandactualcompetitors,consistentwiththe  Commissionsuseofthisterm.SeeMemorandumOpinionandOrder,ApplicationofSBC  CommunicationsInc.,PursuanttoSection271oftheCommunicationsActof1934,asAmended,toProvideInRegion,InterLATAServicesinOklahoma,CCDocketNo.97121,FCCNo.97 t 121,35(rel.June26,1997)( OklahomaOrder).  NP$  28  .  ݛ271(d)(4);ConferenceReportat1(enactinga deregulatorynationalpolicyframework);  141Cong.Rec.S7895(statementofSen.Hollings)( Weshouldnotattempttomicro-managethemarketplace);141Cong.Rec.H8282(dailyed.Aug.2,1995)(statementofRep.Bliley)(Congresswantedtopromote competition,andnotGovernmentmicro-managementofmarkets);accordLocalInterconnectionOrder12;seealsoHausmanAff.9( The p Commissionisonceagainfailingtorecognizethatregulationismeanttobenefitconsumers,nottofurtherotherobjectivesorregulators.).  NP$  6  .  ݛSeeVarnerAff.511(discussingSCPSCmodifications).AT&ThasappealedtheSCPSCs  approvaloftheStatementnotwithstandingitsowndecisiontoarbitrateacustomtailored  interconnectionagreementratherthanrelyinguponthetermscontainedintheStatement.See  AT&TCommunicationsoftheSouthernStates,Inc.v.BellSouthTelecommunications,Inc.,No. t 3:97238817(D.S.C.filedAug.8,1997).TheStatementandtheComplianceOrderremainin ` fulleffectandAT&Tsappealdoesnotaffectthisapplicationundersection271.  NP$  7  .  ݛSeealso142Cong.Rec.H1152(dailyed.Feb.1,1996)(statementofRep.Hastert)( section  271(c)(1)(B)providesthataBOCmaypetitiontheFCCforthisinregionauthorityifithas...notreceived...anyrequestforinterconnectionfromafacilitiesbasedcompetitorthatmeetsthecriteriainsection271(c)(1)(A));141Cong.Rec.H8458(dailyed.Aug.4,1995)(statementof t z Rep.Tauzin)(TrackBavailableunless theexclusivelyorpredominantlyfacilitiesbasedproviderdescribedinsubparagraph(A)hasrequestedinterconnectionandaccessfromtheBOC).  NP$  18  .  ݛCertaincomplexservicesthatrequireextensivedesignworkandareorderedinrelativelylow  volumes,suchasSONETrings,mayonlybepreorderedandorderedthroughapaperprocess.ThisistrueforBellSouthandCLECsalike.StacyOSSAff.6373.TheserviceinquiryandanysubsequentservicerequestsarehandledwithoutdistinguishingbetweenordersgeneratedbyBellSouthandordersgeneratedbyaCLEC.Id.66.TheprocessesemployedbyBellSouthfor ` theseservicesthusaffordCLECsandtheircustomersthesameleveloftimelyserviceasBellSouthanditsretailcustomersreceive.Seeid.6373.     NP$  67  .  ݛSeeComplianceOrderat65(approvalofBellSouthsapplication willnotdiminishits  obligationsundersections251and252oftheAct,SouthCarolinalaw,FCCand[SCPSC]regulationsanditsbindinginterconnectionagreements);LetterfromCharlesMolonyCondon,SouthCarolinaAttorneyGeneral,toFederalCommunicationsCommissionat2(Sept.5,1997)(committingresources topursuefullyanyallegationofanticompetitiveacts)(App.DatTab1A);WorochAff.5153(describingSCPSCsprocompetitiveinitiatives). ` NP$  4  .  ݛTheSCPSChasapprovedBellSouthsagreementswiththefollowing67telecommunications  carriers:360CommunicationsCompany;ALEC,Inc.;AllianceTelecommunications,Inc.;ALLTELMobileCommunications,Inc.;AmericanMetroCommCorporation;AmericanCommunicationServices,Inc.(ACSI);Annox,Inc.;AT&T;AT&TWirelessServices,Inc.;AXSYS,Inc.;BellSouthPersonalCommunications,Inc.d/b/aBellSouthMobilityDCS;BTITelecommunications,Inc.;CellcoPartnershipd/b/aBellAtlanticNYNEXMobile,Columbia L  z CellularTelephoneCompany,AndersenCellularTelephoneCompany(BANM);CommSouthCompanies;Comm.Depot,Inc.;CompetitiveCommunications,Inc.(CCI);CybernetGroup;Data&ElectronicServices,Inc.(DES);DeltaCom,Inc.;EZPhone,Inc.;FiberSouth,Inc.;GeorgiaCommSouth,Inc.andFla.CommSouth;GNetTelecom,Inc.;GTEMobilnetIncorporated;GTEMobilnetofFlorence,SouthCarolinaInc.;GTEMobilnetofSouthCarolinaInc.;HartCommunicationsCorporation;ICGTelecomGroup,Inc.;InterWorldCommunications;InterlinkTelecommunications,Inc.;IntermediaCommunications,Inc.(ICI);InterstateTelephoneGroup;JETCOM,Inc.;KMCTelecomInc.;LCIInternationalTelecomCorp.;NationalTel;Netel,Inc.;NextelCommunications,Inc.;NOWCommunications,Inc.;OmniCall,Inc.;PalmerWireless,Inc.;PayphoneConsultants,Inc.;Powertel,Inc.;PreferredCarrierServices,Inc.;PrimeTimeLongDistanceServices,Inc.;PublicServiceCellular,Inc.;RGWCommunications,Inc.;SouthEastTelephone,LTD;SouthernPhonReconnek;SterlingInternationalFunding,Inc.d/b/aReconex;SupraTelecommunications&InformationSystems,Inc.;TelLink,L.L.C.d/b/aTelLink,L.L.C.andTelLinkofFlorida,L.L.C.;TeleSys,Inc.;Teleconex,Inc.;TheTelephoneCompanyofCentralFlorida;TriComm,Inc.;TTE,Inc.;U.S.DialTone,Inc.;U.S.LongDistance,Inc.(USLD);UnidialCommunications,Inc.;UnitedStatesCellularCorporationandCentralFloridaCellularTelephoneCompany;USLECofNorthCarolina,L.L.C.;VanguardCellularFinancialCorp.;WinStarTelecommunications,Inc.;andWrightBusinesses,Inc.BellSouthsagreementswithMCImetroAccessTransmissionServices,Inc.,andTimeWarnerCommunicationswererecentlyapprovedandarereproducedinAppendixD.  NP$  9  .  ݛIntheOklahomaOrder,theCommissionsetoutits reasonablestepsstandardaspartofan  illustrativeexampleinvolvingasecondsection271applicationforagivenState.Oklahoma  Order58.ACLECsstatusasaqualifyingpotentialTrackAcompetitoratagivenmoment  wouldnot,however,dependuponwhethertheincumbentBellcompanyhaspreviouslyfiledasection271application. NP$  14  .  ݛTestimonyofJamesC.Falvey,VicePresident,RegulatoryAffairs,ACSI,beforetheSouth  CarolinaPublicServiceCommission,July10,1997,at113,120.  NP$  47  .  ݛAT&TsOppositiontoRBOCsMotionto ExemptWirelessServicesfromSectionIIofthe  Decreeat5556,UnitedStatesv.WesternElectricCo.,No.820192(D.O.J.Apr.27,1992).  e   NP$  48  .  ݛThe70%figureisbasedonMTAEMCIsurveyresultsforthesoutheasternquarterofthe  UnitedStatesandthereforeincorporatessomedatafromoutsideBellSouth'sregion.GilbertAff.18.BellSouth'sbrandrecognitionwithinitsregionisthereforelikelyunderstatedbytheMTA   EMCIestimate.    d , NP$  26  .  ݛSeeNAACPv.FPC,425U.S.662,669(1976)( theuseofthewordspublicinterestina  regulatorystatute...takemeaningfromthepurposesoftheregulatorylegislation);NewYork  CentralSec.Corp.v.UnitedStates,287U.S.12,25(1932)( thetermpublicinterestasthus  used[inastatute]isnotaconceptwithoutascertainablecriteria);BusinessRoundtablev.SEC, t 905F.2d406,413(D.C.Cir.1990)( broadpublicinterestmandatesmustbelimitedtothepurposesCongresshadinmindwhenitenacted[the]legislation)(quotingNAACPv.FPC, L  425U.S.at670).  NP$  49  .  ݛSeeSchmalenseeAff.[24];ApplicationsofCraigO.McCaw,9FCCRcd5836,587172,  57(1994)(findingthatAT&TacquisitionofMcCawwouldservepublicinterestduetoAT&Tsbrandname,financialstrength,marketingexperience,andtechnologicalknowhow),affdsub  nom.SBCCommunicationsIncv.FCC56F.3d1484(D.C.Cir.1995).  NP$  15  .  ݛSee,e.g.,StateActivitiesCommunicationsDaily,April1,1997(AT&Tannouncingthatit  wouldtargetGeorgiainBellSouthsregion).Thereareregulatoryreasonsfortheslowpaceof  z localresidentialcompetitionaswell,suchasdelaysindevelopinguniversalservicerules.See r WorochAff.__. ] NP$  54  .  ݛSecondReportandOrderinCCDocketNo.96149andThirdReportandOrderinCCDocket  No.9661,RegulatoryTreatmentofLECProvisionofInterexchangeServicesOriginatinginthe  LECsLocalExchangeArea,FCC97142(rel.Apr.18,1997). NP$  60  .  ݛBrookGroupv.Brown&WilliamsonTobaccoCorp.,509U.S.209,226(1993)(citations  omitted);seeid.at226. + NP$  3  .  ݛInadditiontoBellSouth,ACSI,AT&T,CommunicationsWorkersofAmerica,theConsumer  AdvocatefortheStateofSouthCarolina,LCI,MCI,theSouthCarolinaCableTelevisionAssociation,SouthCarolinaCompetitiveCarriersAssociation,SouthCarolinaTelephoneCoalition,andSprintallparticipatedintheSCPSCsproceedings.BellSouthcontactedeachoftheseentitiesinanefforttonarrowtheissuesindisputeforthisproceeding.SeeApp.DatTab2 ` z (copiesofBellSouthletters).Thatefforthasnotresultedinanynarrowingoftheissuestodate.BellSouthwill,however,notifytheCommissionwithinfivedaysofthefilingofthisapplicationifitseffortsdonarrowdisputedissues. NP$  38  .  ݛHausmanAff.[38](averaging29.8percentdiscountbelowAT&Tsstandardrates,and10.6  percentdiscountbelowAT&Tsdiscountplans). ' NP$  52  .  ݛProfessorHausmanexplainsthatwhereasingleentityearnsmarginsonbothaccessservices  andretaillongdistance,ithasanincentivetolowerpricetoexpanditsmarketshare.HausmanϢAff.1012.  NP$  59  .  ݛSeegenerallyTownofConcordv.BostonEdisonCo.,915f.2d17,18(1stCir.1990)(per  Breyer,J.)(discussingtheoryofpricesqueezes),cert.denied,499U.S.931(1991). CC"  ݛIntheMatterofApplicationbyBellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.,forProvisionofInRegion,InterLATAServicesinSouthCarolina CC"  ݛIntheMatterofApplicationbyBellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.,forProvisionofInRegion,InterLATAServicesinSouthCarolina \\R3' Letter\ CI"  ݛIntheMatterofApplicationbyBellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.,forProvisionofInRegion,InterLATAServicesinSouthCarolina > NP$  50  .  ݛApplicationsofCraigO.McCaw,9FCCRcd5836,587880(1994),affdsubnom.SBC  CommunicationsIncv.FCC56F.3d1484(D.C.Cir.1995);see141Cong.Rec.S713(dailyed.  Feb.1,1996)(statementsofSen.Harkin)(1996Actwillallow lowcostintegratedservicewiththeconvenienceofhavingonlyonevendorandonebilltodealwith);S.Rep.No.23at43(jointofferingsconstitutea significantcompetitivemarketingtool).  NP$  27  .  ݛSeeMichiganOrder389(reasoningthatif compliancewiththechecklistaloneissufficient  toopenaBOCslocaltelecommunicationsmarketstocompetition,then BOCentryintotheinregioninterLATAservicesmarketwouldalwaysbeconsistentwiththepublicinterestrequirementwheneveraBOChasimplementedthecompetitivechecklist). ' NP$  28  .  ݛSeeMichiganOrder388(discussing congressionaldeterminationthatopenlocalmarkets  andregulatorysafeguardswillprotectinterLATAcompetition);seealso141Cong.Rec.S7972,  S8012(dailyed.June8,1995)(statementofSen.Hollings)( wehavehadeveryparticularsafeguardthatyoucanimagine,thatthelawyerscouldthinkof...tomakesurethatitworksandworksproperlyforthepublicinterest). , NP$  21  .  ݛLetterfromSusanneGuyer,ExecutiveDirector,FederalRegulatoryPolicyIssues,NYNEXto  WilliamF.Caton,ActingSecretary,FederalCommunicationsCommissionat3(Oct.23,1996)( GuyerLetter)(emphasisadded).````'dxd&P d d  NP$  57  .  ݛTotheextentthatsharingmayformerlyhavebeenaconcern,seeNonAccountingSafeguards  NPRMat136,thatconcernisaddressedbytheCommissionsrecentdecisiontoeliminate  sharingentirely.FourthReportandOrderat147155,PriceCapPerformanceReviewfor  LocalExchangeCarriers,CCDkt.No.941,FCC97159(rel.May21,1997).  NP$  56  .  ݛNationalRuralTelecomAss'nv.Commission,988F.2d174,178(D.C.Cir.1993);seeNon  AccountingSafeguardsNPRMat136(Commissionspricecappolicies reduc[e]thepotential  thattheBOCswouldimproperlyallocatethecostsoftheiraffiliatesinterLATAservices).  NP$  55  .  ݛTheDepartmentofJusticecontendedinsupportingapprovaloftheMFJthattheBellSystems  allegedpracticeofsubsidizingitscompetitiveofferingsatratepayersexpense stem[med]...directlyfromAT&T'sstatusasarateofreturnregulatedfirm....CompetitiveImpactStatementat13,UnitedStatesv.AT&T,No.741698(D.D.C.Feb.10,1982).c:\Corel\Office7\Template\memo.wpt  NP$  14  .  ݛTherelevantinquiryunderTrackBiswhetherBellSouth generallyoffer[s]therelevant  items.47U.S.C.271(d)(3)(A)(ii).Toaddressthatissue,ExhibitAJV3totheVarnerAffidavitcrossreferenceseachchecklistitemwiththeStatementsprovisions.IfBellSouthalso  (oralternatively)qualifiesunderTrackA,thefirstchecklistinquiryundertheCommissionsdecisionsiswhetherBellSouthhas aconcreteandspecificlegalobligationtofurnishTrackAcompetitor(s)thechecklistitemsuponrequest.MichiganOrder110.Inadditiontothespecific L  termsofBellSouthsagreements,thatobligationissatisfiedbytheStatementitselfinsofaras 8  CLECswithexistinginterconnectionagreementscanavailthemselvesoftheStatementasan $ t alternativetothetermsoftheiragreements.SeeComplianceOrderat25(BOCmayuse  ` StatementtosupplementinterconnectionagreementsunderTrackA).Seealso,e.g.,ACSI  L  AgreementXXII(givingACSIaccesstotermsofanySCPSCinterconnectionorder)(App.BatTab9);DeltaComAgreementXXII(C)(givingITCDeltaComaccesstotermsofanySCPSCinterconnectionorder)(App.BatTab27). NP$  12  .  ݛSupplementingfacilitiesbasedresidentialservicewithresoldbusinessservicewouldqualify  justasmuchastheoppositecombination.   NP$  13  .  ݛSeesupran.10.Thereisnoconflictbetweenthestatutesrequirementofconsultationwiththe  statecommissiontoverifychecklistcomplianceandtheadditionalrequirementofconsultationwiththeAttorneyGeneral.See47U.S.C.271(d)(2)(A).Unlikethestatecommissions,the  U.S.DepartmentofJusticehasnospecialexpertiseonchecklistissuesandchosenottobeaparticipantinstatelevelevidentiaryproceedings.Accordingly,theDepartmentofJusticesviewswouldbeentitledtolessweightthantheSCPSCsevenifonedidnotconsiderthelegislativehistoryoftheAct.Whenthatlegislativehistoryisconsidered,itshowsthatCongressintendedtolimittheAttorneyGeneralsconsultativeroletoantitrustissuesunderthepublicinteresttest.See,e.g., 142Cong.Rec.H1176(dailyed.Feb.1,1996)(statementofRep.  ` JacksonLee)( substantialweighttobeaccordedtotheviewsoftheAttorneyGeneralislimitedtoher expertiseinantitrustmatters);id.atH1178(statementofRep.Sensenbrenner)( FCCs  <  relianceontheJusticeDepartmentislimitedtoantitrustrelatedmatters);seealsoid.atH1157 (  (statementofSen.Hyde)( theDepartmentofJusticewillapplyanyantitruststandarditconsidersappropriate).  NP$  51  .  ݛJ.D.PowerandAssociates,Release,"J.D.PowerandAssociatesAnalysisReveals:Long  DistanceCarriersPrimeforLocalandLongDistanceMarketShare,"February27,1997(http//www.jdpower.com/70227tel.html).  NP$  11  .  ݛSuchinformationcould,ofcourse,befiledwiththeCommissioninaccordancewiththesame  confidentialityproceduresadoptedinpriorsection271proceedings.See,e.g.,ProtectiveOrder,  ApplicationofSBCCommunications,Inc.PursuanttoSection271oftheTelecommunications  Actof1996toProvideInRegion,InterLATAServicesinOklahoma,12FCCRcd6157(1997).  NP$  20  .  ݛSeealsoFirstReportandOrderandFurtherNoticeofProposedRulemaking,Implementation  oftheNonAccountingSafeguardsofSections271and272oftheCommunicationsActof1934,asAmended,11FCCRcd21905,22020,242,22081,368(1996)(reportingofthe service  intervalsinwhichtheBOCsprovideservicetothemselvesortheiraffiliates)( NonAccounting t SafeguardsOrder),recon.12FCCRcd2297(1997),furtherrecon.12FCCRcd8653(1997), ` petnforreviewpendingsubnom.BellAtlanticTel.Cos.v.FCC,No.971432(D.C.Cir.filed L  July11,1997).  NP$  22  .  ݛ [T]heNYNEXcustomerservicerepresentativewouldinformthecustomerthatanumberof  companiesprovidelongdistanceservice,includingNYNEXLongDistanceCompany,andoffertosendmaterialregardingNYNEXlongdistance.GuyerLetterat3. Ifthecustomerindicatesthatheorshewantsanotherlongdistancecarrier(e.g.,MCI,Sprint,etc.),NYNEXwouldthen t processthepresubscriptionrequest....IfthecustomerwantedtohearmoreaboutNYNEXLongDistance,therepresentativewouldthenprovideinformationonNYNEXLongDistanceproductsandservices....Ifthecustomerindicatesthathe/sheisnotsureastowhichcarriertochoose,therepresentativewouldoffertoreadarandomlygeneratedlistofavailablecarriersincludingNYNEXLongDistance.Id. K NP$  23  .  ݛTheOrdersrestrictionsonjointmarketingraiseFirstAmendmentconcernsaswell.The  CommissionmaynotrestrictaBOCsabilitytodisclose truthful,verifiable,andnonmisleadingfactualinformationaboutitslongdistanceaffiliatesofferingsabsenta substantialgovernmentinterestthatreasonably fit[s]theCommissionsrestriction.Rubinv.Coors t BrewingCo.,115S.Ct.1585,1590(1995);Cincinnativ.DiscoveryNetwork,Inc.,507U.S. ` 410,416(1993).BecausetheOrdersapproachtopresubscriptionwoulddeprivetheBOCsofa L  statutorilyprotectedrighttoengageinjointmarketing,itfailsbothprongsofthistest.TheCommissionssuggestedapproachmight,inaddition,runafouloftheconstitutionalprohibitiononcoercingpartiestodelivermessageswithwhichtheydisagree.SeePacificGas&Elec.Co.v.  ` PublicUtil.Commn,475U.S.1,1011(1986);cf.Glickmanv.WilemanBrothers&Elliott,  L  Inc.,117S.Ct.2130,2138(1997)(contrastingsituationinwhichcomplainants agreewiththe  8  centralmessageofthespeech). ! NP$  17  .  ݛCertaincomplexservicesthatareorderedinrelativelylowvolumes,suchasSONETringsand  ISDN,mayonlybepreorderedandorderedthroughapaperprocess.ThisistrueforBellSouthandCLECsalike.CalhounAff.__.TheserviceinquiryandanysubsequentservicerequestsarehandledbyaccountteamsthathandlespecificservicesandwhichmakenodistinctionbetweenordersgeneratedbyBellSouthandordersgeneratedbyaCLEC.Id.__. NP$  53  .  ݛSeeMarkLandler,MCIDealReverberatesonBothSidesoftheAtlantic,NewYorkTimes,  Nov.4,1996atD1.  NP$  29  .  ݛSee,e.g.,141Cong.Rec.S8188,S8195(dailyed.June12,1995)(statementofSen.Pressler)  (describingextensivenegotiationsandworkthatwentintodevelopingthecompetitivechecklist).H  NP$  10  .  ݛWheretheCommissionhasbeensubjecttoacomparableinstructionto consul[t]withthe  SecretaryofStateonforeignpolicymatters,ithasdecidedto defertotheStateDepartment.CableNewsNetwork,Inc.,FileNo.907DSEL85(IB,rel.Nov.19,1985).Here thevalueof  federalismprovidesanadditionalreasonforaccordingdeference,UniversityofTenn.v.Elliot, t 478U.S.788,798(1986),tominimize frictionbetweenfederalandstateofficials.Sumnerv. ` Mata,449U.S.539,550(1981). 3 NP$  31  .  ݛMCITelecommunicationsCorp.v.FCC,627F.2d322,341(D.C.Cir.1980)( Thebestmust  notbecometheenemyofthegood.);seegenerally47U.S.C.271(d)(4);ConferenceReportat  1(enactinga deregulatorynationalpolicyframework);141Cong.Rec.S7895(dailyed.June7,1995)(statementofSen.Hollings)( Weshouldnotattempttomicro-managethemarketplace);141Cong.Rec.H8282(dailyed.Aug.2,1995)(statementofRep.Bliley)(Congresswantedtopromote competition,andnotGovernmentmicro-managementofmarkets);accordLocalInterconnectionOrder,11FCCRcdat15509,12( look[ing]tothe 8  market,nottoregulationtodetermineentrystrategies);seealsoHausmanAff.10( The $ t Commissionisonceagainfailingtorecognizethatregulationismeanttobenefitconsumers,nottofurtherotherobjectivesofregulators.).c:\Corel\Office7\Template\WP7US.WPT2c0Quick 220 (;$2 e  0  .3  0   6#34Quick a. /  .0 / >a$"Small Circle"0..<6X9`("Courier 10cpiXx6X@8;X@  NP$  32  .  ݛSeeNAACPv.FPC,425U.S.at669;UnitedSav.Assnv.TimbersofInwoodForestAssocs.,  Ltd.,484U.S.365,371(1988)(when onlyoneofthepermissiblemeaningsproducesa  substantiveeffectthatiscompatiblewiththerestofthelawstatutoryprovisionsmeaningis clarifiedbytheremainderofthestatutoryscheme)(internalquotationmarksomitted);National t BroadcastingCo.v.UnitedStates,319U.S.190,216(1943)(thepublicinterest istobe ` interpretedbyitscontext).  NP$  33  .  ݛSeePetitionoftheStateCommissionPartiesandtheNationalAssociationofRegulatory  UtilityCommissionersforIssuanceandEnforcementoftheMandate(filedSept.17,1997)&PetitionforImmediateIssuanceandEnforcementoftheMandate(filedSept.18,1997),Iowa  Utils.Bd.v.FCC,No.963321(8thCir.).- - J#Xd#     NP$  34  .  ݛCaliforniav.FCC,1997U.S.App.LEXIS22343,at*10(emphasisinoriginal)(citing  LouisianaPub.Serv.Commnv.FCC,473U.S.355,37677(1986)).((3$ !     NP$  35  .  ݛSeeReportandOrder,InquiryintoPoliciestobeFollowedintheAuthorizationofCommon  CarrierFacilitiestoProvideTelecommunicationsServ.offoftheIslandofPuertoRico,2FCC  Rcd6600,6604,30(1987)( plac[ing]aburdenonanyentityopposingentrybyanewcarrierintointerstate,interexchangemarketstodemonstratebyclearandconvincingevidencethat t [additional]competitionwouldnotbenefitthepublic)(emphasisadded);ReportandThirdSupplementalNoticeofInquiryandProposedRulemaking,MTSWATSMarketStructure L  Inquiry,81FCC2d177,20102,103(1980)(Commissionwill refrainfromrequiringnew 8  entrantstodemonstratebeneficialeffectsofcompetitionintheabsenceofashowingthatcompetitionwillproducedetrimentaleffects). 6 NP  19  .  ݀Inaccordancewithsection271(e)(2),BellSouthalsohastakenadditionalstepstooffer  intraLATAtolldialingparitythroughoutSouthCarolinacoincidentwithitsprovisionofinterLATAservices.See[Varner]Aff.__.  NP$  36  .  ݛSeeInquiryintoPoliciesToBeFollowedintheAuthorizationofCommonCarrierFacilitiesto  ProvideTelecommunicationsServ.OffoftheIslandofPuertoRico,2FCCRcdat6604,30  (Commissions openentrypolicy, clearlycontemplate[s]competitiveentrybyindependentlocalexchangecompanies)(citingMTSWATSMarketStructureInquiry,81F.C.C.2dat186). F NP$  37  .  ݛMemorandumoftheUnitedStatesinResponsetotheMotionoftheBellCompaniesMotion  forGenericWirelessWaiverat22,UnitedStatesv.WesternElec.Co.,No.820192(D.D.C.  filedJuly25,1994);TheAntitrustReformAct:HearingsonH.R.3626BeforetheSubcomm.on  EconomicandCommercialLawoftheHouseComm.ontheJudiciary,103dCong.,2dSess. t E (1994)(statementofAssistantAttorneyGeneralAnneK.Bingaman).  NP$  24  .  ݛSee141Cong.Rec.S7942,S7969(dailyed.June8,1995)(statementofSen.Lott)(public  interesttestallowsCommissionto makesurethatwehaveafairandlevelplayingfield);141Cong.Rec.S7881,S7888(dailyed.June7,1995)(statementofSen.Pressler)( AfterBellcompaniessatisfyalltherequirements,theFCCmust,ineffect,certifycompliancebymakingapublicinterestdetermination.). NP$  38  .  ݛSeeAT&TCallsMCIFlatPricingMoreThanaCoincidence,Newsbytes,Sept.30,1996.  NP$  39  .  ݛInadditiontotheevidenceregardingU.S.marketsdiscussedbelow,evidencefromthese  foreignmarketsconfirmsthatAmericanconsumersaresufferingfromextensionoftheMFJprohibition.InCanada,wherecarriersuseessentiallythesameequipmentasintheUnitedStatestoservelessdenselypopulatedareas,longdistanceratesareactuallylowerthaninthiscountry.HausmanAff.26;seeGilbertAff.44&n.70.AndintheUnitedKingdom,competitionhas ` developedtotheverticallyintegratedincumbentnotwithstandingthatlocalmarketsaresignificantlylessopenthanintheUnitedStates.GilbertAff.44.  NP$  40  .  ݛConsumersofintrastateservicesalsohavebenefitted,asAT&TrespondedtoSNETslong  distanceofferingswithcompetitiveintrastateofferings.SeeGilbertAff.3738. NP$  41  .  ݛSeeSusanJackson,ATelecomYankeeDefendsitsTurf,BusinessWeek,Oct.28,1996,at  167.  NP$  42  .  ݛSeeAT&TComments,MarketDefinition,Separations,RateAveragingandRateIntegration,  at29,PolicyandRulesConcerningtheInterstate,InterexchangeMarketplace&Implementation  ofSection254(g),CCDocketNo.9661(FCCApr.19,1996)( AT&TRateAveraging  Comments);AT&TCorp.sPetitionforReconsideration,PolicyandRulesConcerningthe t Interstate,InterexchangeMarketplaceat25(FCCSept.16,1996);seealsosupraat34 ` (discussingnationwiderateincreases).  NP$  28  .  ݛ271(d)(4);ConferenceReportat1(enactinga deregulatorynationalpolicyframework);  141Cong.Rec.S7895(statementofSen.Hollings)( Weshouldnotattempttomicro-managethemarketplace);141Cong.Rec.H8282(dailyed.Aug.2,1995)(statementofRep.Bliley)(Congresswantedtopromote competition,andnotGovernmentmicro-managementofmarkets);accordLocalInterconnectionOrder12;seealsoHausmanAff.9( The p Commissionisonceagainfailingtorecognizethatregulationismeanttobenefitconsumers,nottofurtherotherobjectivesorregulators.). b NP$  43  .  ݛAT&TPetitionforReconsiderationat2. @ NP$  32  .  ݛMemorandumoftheUnitedStatesinResponsetotheMotionoftheBellCompaniesMotion  foraGenericWirelessWaiverat22,UnitedStatesv.WesternElec.Co.,No.820192(D.D.C.  filedJuly25,1994);TheAntitrustReformAct:HearingsonH.R.3626BeforetheSubcomm.on  EconomicandCommercialLawoftheHouseComm.ontheJudiciary,103dCong.,2dSess.  (1994)(statementofAssistantAttorneyGeneralAnneK.Bingaman). NP  33  .  ݀141Cong.Rec.S7881,S7889(dailyed.June7,1995)(statementofSen.Pressler); f NP$  15  .  ݛTheEighthCircuithaspendingbeforeitpetitionsarguingthatbecausepricingmattersare  reservedtotheStatesundersection252,andthechecklistsimplyrequirescompliancewithsection252spricingrules,thechecklistdoesnotauthorizetheCommissiontoconditionBOCinterLATAentryuponcompliancewithfederalpricingrules.SeePetitionoftheState t CommissionPartiesandtheNationalAssociationofRegulatoryUtilityCommissionersforIssuanceandEnforcementoftheMandate(filedSept.17,1997)&PetitionforImmediateIssuanceandEnforcementoftheMandate(filedSept.18,1997),IowaUtils.Bd.v.FCC,No.96 8  3321(8thCir.).TheCommissionspoliciesregardingcombinationsofunbundlednetworkelements"discussedinparagraphs160and336oftheMichiganOrder"arethesubjectofa  ` petitionforrehearingbeforetheEighthCircuit,PetitionforRehearing,IowaUtils.Bd.v.FCC,  L  No.963321(8thCir.filedAug.29,1997),andalsoareatissueinanotherappealinthesamecourt.PetitionforReview,SouthwesternBellTel.Co.v.FCC,No.973389(8thCir.filedSept. $  5,1997).Inaddition,BellSouthhaspetitionedtheCommissiontoreconsiderandclarifyportionsoftheMichiganOrder,includingthosedealingwithOSSperformancemeasurements   andstandardsandevidentiarymatters.PetitionofBellSouthCorporationforReconsiderationandClarification,ApplicationofAmeritechMichiganPursuanttoSection271ofthe   TelecommunicationsActof1996toProvideInRegion,InterLATAServicesinMichigan,CC p DocketNo.97137(FCCfiledSept.18,1997). z NP$  44  .  ݛSeeid.at25;AT&TRateAveragingCommentsat29. NP$  35  .  ݛSeePaulFarhi,InTelecommunications,aToughActtoFollow,WashingtonPost,Aug.11,  1996,atH1(citingBureauofLaborStatisticsmaterials). N NP$  36  .  ݛSeeid. ^ NP$  45  .  ݛAT&TCorp.sPetitionforWaiverandRequestforExpeditedConsideration,AT&TPetition  forWaiverofSection64.1701oftheCommissionsRules,CCDocketNo.9626AttachmentA   (FCCfiledOct.23,1996)( AT&TWaiverPetition). J NP$  46  .  ݛId.at3.  NP$  47  .  ݛSeeid.at1,5;MCICommentsat1,AT&TPetitionforWaiverofSection64.1701ofthe  CommissionsRules,CCDocketNo.9626(FCCfiledNov.18,1996)( MCIComments)  (petitioningtheCommission sothat[MCI]likewisewillbeinapositiontobenefitconsumersbybeingabletocompeteeffectivelyagainstBellAtlanticandAT&T). 1 NP$  48  .  ݛSeeAT&TWaiverPetitionat5(consumersinthecorridors,unlikeotherareas, benefitfrom  thehighestdegreeofcompetitionpossible);MCICommentsat3( fullysupport[ing]AT&Ts arguments).  NP$  49  .  ݛSeeSchmalenseeAff.37;GilbertAff.28;seealsoApplicationsofCraigO.McCaw,9  FCCRcdat587172,57(findingthatAT&TacquisitionofMcCawwouldservepublicinterestduetoAT&Tsbrandname,financialstrength,marketingexperience,andtechnologicalknowhow). 5 NP$  50  .  ݛApplicationsofCraigO.McCaw,9FCCRcdat587880,7375;see141Cong.Rec.S713  (dailyed.Feb.1,1996)(statementsofSen.Harkin)(1996Actwillallow lowcostintegratedservicewiththeconvenienceofhavingonlyonevendorandonebilltodealwith);S.Rep.No.10423,at43(1995)(jointofferingsconstitutea significantcompetitivemarketingtool);see t  alsoGilbertAff.16( Consumerswillbenefitfromtheintegrationofserviceofferingsandthe % marketingofbundledproductsthroughconvenienceandthroughtheincreasednumberandvarietyoftelecommunicationsoptionsavailableinthemarketplace.);HausmanAff.7. l NP$  27  .  ݛ XXXX141Cong.Rec.S8310,S83198321#XXX X;# XXXXԀ(dailyed.June14,1995)#XXX X# XXXXԀ(defeatofSenatorKerreys  amendmentthatwouldhaverequired substantialcompetition);141Cong.Rec.H8424,H8454(dailyed.Aug.4,1995)(statementofRep.Bunn)(HousesrejectionoftestthatwouldhaverequiredCLECstoofferlocalservicesto10%ofcustomers).#XXX X# ! NP$  51  .  ݛProfessorHausmanexplainsthatwhereasingleentityearnsmarginsonbothaccessservices  andretaillongdistance,ithasanincentivetolowerpricetoexpanditsmarketshare.HausmanAff.1012.  NP$  52  .  ݛSecondReportandOrderinCCDocketNo.96149andThirdReportandOrderinCCDocket  No.9661,RegulatoryTreatmentofLECProvisionofInterexchangeServicesOriginatinginthe  LECsLocalExchangeAreaandPolicyandRulesConcerningtheInterstate,InterexchangeMarketplace,FCC97142(rel.Apr.18,1997)( BOCNonDominanceOrder).  NP$  53  .  ݛTheDepartmentofJusticecontendedinsupportingapprovaloftheMFJthattheBellSystems  allegedpracticeofsubsidizingitscompetitiveofferingsatratepayersexpense stem[med]...directlyfromAT&Tsstatusasarateofreturnregulatedfirm....CompetitiveImpactStatementat13,UnitedStatesv.AT&T,No.741698(D.D.C.Feb.10,1982).  NP$  54  .  ݛTotheextentthatsharingmayformerlyhavebeenaconcern,seeNonAccountingSafeguards  NPRM,11FCCRcdat1894243,136,thatconcernisaddressedbytheCommissionsrecent  decisiontoeliminatesharingentirely.FourthReportandOrderinCCDocketNo.941andSecondReportandOrderinCCDocketNo.96262,PriceCapPerformanceReviewforLocal t ExchangeCarriersandAccessReformCharge,FCC97159,147155(rel.May21,1997);see ` Hausman34.  NP$  55  .  ݛReportandOrder,InquiryintotheUseoftheBands825845MHZand870890forCellular  CommunicationsSys.,86FCC2d469,494,50(1981)(cellular);AmendmentofSection  64.702oftheCommnsRulesandRegulations(SecondComputerInquiry);FinalDecision,  AmendmentofSection64.702oftheCommissionsRulesandRegulations(SecondComputer t Inquiry),77F.C.C.2d384,453177(BellSystem),affdsubnom.Computerand ` CommunicationsIndus.Assnv.FCC,693F.2d198,211(D.C.Cir.1982).  NP$  56  .  ݛSeeOrderGrantingAlternativeRegulationandApprovingPlanasModified,Applicationof  BellSouthforAlternativeRegulation(PriceProtectionPlan),No.9619,DocketNo.95720C,1  (SCPSCJan.30,1996)(approvingplan tocaptheratesforcertaincategoriesofservices,includingbasicexchangeservices).  NP$  57  .  ݛSeegenerallyTownofConcordv.BostonEdisonCo.,915F.2d17,18(1stCir.1990)(per  Breyer,J.)(discussingtheoryofpricesqueezes),cert.denied,499U.S.931(1991). : NP$  8  .  ݛTheCommissionhasreadsection271(c)(1)(B)toconditionBellcompanyinterLATAentryon  theabsenceofarequestfornegotiationtoobtainaccessandinterconnection fromaprospective  competingproviderofthetypeoftelephoneexchangeservicedescribedinsection271(c)(1)(A).OklahomaOrder31(emphasisadded).ThisinterpretationofTrackBisthesubjectofanappeal t beforetheU.S.CourtofAppealsfortheDistrictofColumbia.SeeSBCCommunications,Inc.v. ` FCC,No.971425(D.C.Cir.tobearguedJan.9,1998).BellSouthbelievestheCommissions L  positionisincorrectandTrackBisforeclosedonlyiftheBOChasreceivedarequestfromaqualifying competingprovide[r]thatactuallymeetsthecriteriaofTrackAasof thedatewhichis3monthsbeforethedatethecompanymakesitsapplication.47U.S.C.271(c)(1)(B).InSouthCarolina,BellSouthhadnotreceivedanysuchrequest,whichaloneestablishesBellSouthseligibilitytofileunderTrackB.SeeWrightAff.4(nofacilitiesbasedproviderof  8  businessandresidentialserviceonJune30,1997). NP$  58  .  ݛBrookeGroupv.Brown&WilliamsonTobaccoCorp.,509U.S.209,226(1993)(citations  omitted);seeid. T NP$  59  .  ݛSeeReportandOrder,FurnishingofCustomerPremisesEquipmentbytheBellOperating  CompaniesandtheIndependentTelephoneCompanies,2FCCRcd143,15366(1987),on  reconsideration,3FCCRcd22(1987),petn.forreviewdenied,IllinoisBellTelephoneCo.v.  FCC,883F.2d104(D.C.Cir.1989);ComputerIIIRemandProceedings:BellOperating t CompanySafeguards,6FCCRcd7571,760214,6895(1991). z NP$  i  .  ݛSeeOrderAddressingStatementandCompliancewithSection271oftheTelecommunications  Actof1996,EntryofBellSouthTelecommunications,Inc.,intoInterLATATollMarket,Docket  No.97101C,OrderNo.97640(SCPSCJul.31,1997)( ComplianceOrder). k NP$  ii  .  ݛMemorandumOpinionandOrder,ApplicationofAmeritechMichiganPursuanttoSection271  oftheCommunicationsActof1934,asAmended,toProvideInRegion,InterLATAServicesinMichigan,CCDocketNo.97137,FCCNo.97298(rel.Aug.19,1997)( MichiganOrder).  NP$  60  .  ݛTheCommissionhasruledthatonceacomplainantmakesaprimafacieshowingthataBell  companyhas ceasedtomeettheconditionsofentry,theburdenshiftstotheBellcompanytoproduceevidenceofitscompliance.NonAccountingSafeguardsOrder,11FCCRcdat22072,  345.  NP$  61  .  ݛSee,e.g.,15U.S.C.1,2(ShermanAct);AntitrustAmendmentsActof1990,15U.S.C.1  (1997)(raisingmaximumantitrustfineforcorporationsfrom$1millionto$10millionandforindividualsfrom$100,000to$350,000);UnitedStatesSentencingCommn,GuidelinesManual  2R1.1(requiringprisonsentencesforanumberofantitrustviolations). / NP$  62  .  ݛThesameistrueofBOCparticipationintheinformationservicesandCPEmarkets.See  HausmanAff.33,40.Inthatregard,theinterexchangecarriershavetriedinvariousproceedingstocastBellSouthsintroductionofitsMemoryCallvoicemessagingserviceasanexampleofdiscriminatoryconduct.Thatonlyshowshowbaretherecordisofanyactualwrongdoing.In1991,theGeorgiaPSCdidfindthatBellSouthhadusedimpropermarketingpracticesandhaddiscriminatedagainstcompetingenhancedserviceprovidersandorderedatemporaryhalttoMemoryCallsales.YetMCIandSprint,amongothers,supportedBellSouthssuccessfulpositionbeforetheFCCthatthePSClackedjurisdictiontofindaviolationwhereBellSouthhadactedinaccordancewithFCCrules.PetitionforEmergencyReliefand  ` DeclaratoryRulingFiledbytheBellSouthCorporation,7FCCRcd1619(1992).This  L  CommissionlaterstatedthatitfoundtheGeorgiaPSCsfindingofimproperpracticesunpersuasiveonthemerits.BriefforRespondents,Californiav.FCC,No.9270083,at5961 $  (9thCir.filedJuly14,1993).    EquallymeritlessarerecentclaimsbeforethisCommissionthatBellSouthPublicCommunications( BSPC),awhollyownedsubsidiaryofBellSouthTelecommunications,Inc.,requiresitspayphonecustomerstopresubscribetoaspecificinterexchangecarrier.Section276oftheCommunicationsActandthisCommissionspayphoneordersauthorizeBSPCtonegotiate,select,andcontractwithinterexchangecarriersonbehalfofitspayphonecustomers.BSPChasmailedletterstoitspayphonecustomersadvisingthemofthisfact.Nowheredothesematerialssuggestthatlocationprovidersmustreevaluate,letalonechange,theirchoiceofinterexchangecarrier.Tothecontrary,BSPCexpresslyrequiresthatexistingcarriercontractsbeallowedtoruntheirtermsunaffected.NoristhereanytruthtotheassertionsthatBSPCdiscriminatesagainstpayphonesubscriberswhodonotauthorizeBSPCtonegotiatewith 4  interexchangecarriersontheirbehalf.BSPCdoesimposea$15feeonasmallminorityofitspayphonesthatgenerateinsufficienttraffictorecovercosts.BSPCanticipatesthat,whenauthorizedtodoso,itwillbeabletomakeuptheshortfallonthesepayphonesbynegotiatingwithaninterexchangecarriertocarrythetrafficfromtheBusinessPayphones.Butwherethelocationproviderchoosestoselectaninterexchangecarrieritself,BSPCisunabletocoverthecostsofthepayphone.BSPCthusdecidedtoofferitsBusinessPayphoneServiceonatwotierbasisandtochargeamonthlyfeeof$15tolocationproviderswhoelectnottoappoint,orareprecludedbycontractfromappointing,BSPCastheiragent.Thistwotiersystemisentirelyconsistentwiththeletterandthespiritofsection276andwiththisCommissionspayphoneorders. & NP$  63  .  ݛMCIsInitialCommentstotheDepartmentofJusticeConcerningtheMotiontoVacatethe  JudgmentandNYNEXsRequesttoProvideInterexchangeServiceinNewYorkStateat58,UnitedStatesv.WesternElectricCo.,No.820192(D.D.C.,Dec.9,1994);seeAT&Ts  OppositiontotheFourRBOCsMotiontoVacatetheDecree,UnitedStatesv.WesternElectric t Co.,No.820192,at159(D.D.C.Dec.7,1994).  NP$  65  .  ݛCommentsoftheOklahomaCorporationCommissionat11,ApplicationbySBC  CommunicationsInc.,SouthwesternBellTelephoneCompany,andSouthwesternBellCommunicationsServices,Inc.d/b/aSouthwesternBellLongDistanceforProvisionofInRegion,InterLATAServicesinOklahoma,CCDocketNo.97121(FCCfiledMay1,1997).K Kd' dxd d  NP$  30  .  ݛResponsiveCommentsoftheFederalCommunicationsCommissionAsAmicusCuriaeonthe  ReportandRecommendationsoftheUnitedStatesConcerningtheLineofBusinessRestrictionsImposedontheBellCompaniesbytheModificationofFinalJudgment,at58,UnitedStatesv.  WesternElectricCo.,No.820192(D.D.C.filedApr.27,1987). Z NP$  66  .  ݛMichiganOrder387.MMMM'dxd Level 1 Level 2 Level 3 Level 4 Level 5("$ Figure    AA<< c<6X9`("Courier 10cpiXx6X@8;X@<6X9`("Courier 10cpiXx6X@8;X@(,!$0  0` (#(#  (@$0  0` (#(#0 ` (#` (# ` (T$0  0` (#(#0 ` (#` (#0 (# (# (hJ$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#  ($  NP$  18  .  ݛXXXX[Varner]Aff.__;#XXXX;#XXXX[Milner]#XXXX#XXXXԀAff.__(discussingAmendmentofRulesandPolicies  GoverningtheAttachmentofCableTelevisionHardwaretoUtilityPoles,2FCCRcd4387   (1987),recon.,4FCCRcd468(1989#XXXX#XXXX))#XXXX #XXXX.#XXXXP#XXXXԀ#XXXX#&0 d d>>>>'dxd Level 1 Level 2 Level 3 Level 4 Level 5('2I$ !   ($     ('2I$ !   @CAB?E<< c($    A, B,Level 1Level 2Level 3Level 4Level 51, 2, 3,Level 1Level 2Level 3Level 4Level 5(P$  4  .4#;2Quick 1.K  .0 K  NP$  16  .  ݛBellSouthrecognizesthattheCommissionhasnopowernowtograntreliefonBellSouths  beliefthatsection271,alongwithotherprovisionsofthe1996ActthatsingleoutandimposeburdensontheBOCsbyname,constitutesanunconstitutionalbillofattainderandalsoviolatesbothseparationofpowersandequalprotectionprinciples.Accordingly,BellSouthherebypreservestheseargumentsforfuturereviewintheCourts.4#;*2Quick A.I  .0 I !   ݛTRX3' Letter3'3' Letter3'T$!  @33% Beforethe  @f f FEDERALCOMMUNICATIONSCOMMISSION@Washington,D.C.20554   D'M=9z (x p @ P@E`xd t`,  (#(#(#(# H CCDocketNo.__________ (#(#(#(#To:  TheCommission   @ BRIEFINSUPPORTOFAPPLICATIONBYBELLSOUTHFOR \   PROVISIONOFINREGION,INTERLATASERVICESINSOUTHCAROLINA  H @ 򀀀 4 (X@(#(#(WALTERH.ALFORDWILLIAMB.BARFIELDJIMO.LLEWELLYǸ1155PeachtreeStreet,N.E.̀Atlanta,GA30367̀(404)2492051DAVIDG.FROLIÒ113321stStreet,N.W.  ЀWashington,DC20036̀(202)4634182GARYM.EPSTEIǸLATHAM&WATKINS̀1001PennsylvaniaAve.,N.W.̀Washington,DC20004̀(202)6372249CounselforBellSouthCorporation %0!$ JAMESG.HARRALSON  '#&  28Perimeter CenterEast (#' ЀAtlanta,GA30346̀(770)3523116  *%)  CounselforBellSouthLongDistance,Inc. l+&* September30,1997 D-(, MICHAELK.KELLOGGAUSTINC.SCHLICKKEVINJ.CAMERONJONATHANT.MOLOT̀0 p  KELLOGG,HUBER,HANSEN, 0p(#p(#  p TODD&EVANS,P.L.L.C.̀1301KStreet,N.W.̀Suite1000West̀WashingtonDC20005̀(202)3267900CounselforBellSouthCorporation, D!6 ЀBellSouthTelecommunications,Inc.and̀BellSouthLongDistance,Inc. #l8 MARGARETH.GREENER.DOUGLASLACKEYMICHAELA.TANNERSTEPHENM.KLIMACEK̀675W.PeachtreeStreet,N.E.̀Suite4300̀Atlanta,GA30375̀(404)3350764CounselforBellSouthTelecommunications, T,'B ЀInc.@-(C( ! 8pXXdXXd8   (X@(!  @ll"  EXECUTIVESUMMARY a   H   TheCommissionhaslaboredsincepassageofthe1996Acttoestablishthepreconditionsforcompetitivelocaltelephonemarkets.BellSouthhasworkedequallyhardtofulfillitsresponsibilitiesundertheAct.Yet,asisthecaseinotherpartsofthecountry,facilitiesbasedlocalcompetitionislimitedinmuchofBellSouthsserviceterritory.Outsideofthemostobviouslyprofitablecitiesandservicecategories,potentiallocalcompetitorsappearunwillingtoseizetheopportunitiesCongress,regulators,andBellSouthhavemadeavailable.  CompetitionininterLATAserviceslikewisehasstalled.CongressdeterminedthatentrybytheBellcompaniesisthebestwaytoendyearsoflocksteppriceincreasesbytheincumbentlongdistancecarriers,yettheCommissionandtheDepartmentofJusticehavethusfaropposedsuchentry.SNETandGTEmeanwhileareenergizinglongdistancecompetitionintheirlocalserviceareas,highlightingwhatisbeinglostbykeepingBellcompaniesonthesidelines.  Twentymonthsofexperienceunderthe1996ActshowsitisfutileandenormouslycostlytodelayinterLATAcompetitionwhilewaitingforfacilitiesbasedlocalcompetitiontospreadtobothbusinessandresidentialcustomers.IfincumbentlongdistancecarriersbelievetheycanpreventBellcompaniesfromcapturingapieceofthelongdistancemarketsimplybyfocusingtheirlocalentryonlucrativebusinesscustomers,thatiswhattheywilldo.Residentialcallerspaytheprice,includingforegonelongdistancesavingsofabout$7billioneachyear. %X"   Withthisapplication,BellSouthoffersasolution.Ratherthanrelyingsolelyonregulation,theCommissioncanuseitsauthorityundersection271toletmarketforcesjumpstartcompetitioninlocalandinterLATAservices.SouthCarolinaistheperfectlaboratoryforprovingthismorepromisingapproach,forseveralreasons. -&*   First,BellSouthhasfullycompliedwiththelocalcompetitionprovisionsofthe1996Act H inSouthCarolina.TheSouthCarolinaPublicServiceCommission( SCPSC)unanimouslyconcludedafterexhaustiveinquirythatBellSouthhasdoneeverythingitreasonablycantofacilitatelocalcompetition.Amongotherthings,BellSouthhasvoluntarilynegotiatedover80interconnectionandresaleagreementswithrequestingcarriersinSouthCarolina;filedandreceivedapprovalofastatementofgenerallyavailabletermsandconditionsthatsatisfiesallstatutoryandregulatoryrequirements;investedhundredsofmillionsofdollarstomakeinterconnectionandnetworkaccessavailabletolocalcompetitors;anddemonstrateditsabilitytoprocesscompetitorsordersandfurnishlocalfacilitiesandservicesuponrequest. G  i          TheSCPSCsdetailedfactualfindings,developedinitscapacityasatrieroffactafterafullevidentiaryreview,withthebenefitofdecadesofexperienceinoverseeinglocaltelecommunicationsinSouthCarolina,establishBellSouthssatisfactionofallrelevantrequirementsundersections251and252.TheyruleoutthepossibilitythatshortfallsoflocalcompetitionareattributabletoBellSouthratherthanthebusinessdecisionsofpotentialcompetitorsthemselves.  BellSouthhasalsofollowedtheguidanceregardinginterLATAentrygivenbythisCommissioninitsMichiganOrderT G  ii      ׀totheextentpossiblewhilepreservingBellSouthsrightto #  haveacourtdecidewhetherthoserequirementsareconsistentwiththeActbasedonthefactsastheyexistinSouthCarolina.AspartofitscommitmenttoworkingcooperativelywiththeCommission,BellSouthevenhasincludedextensiveevidencerequestedbytheCommissionnotwithstandingpendingproceedingsthatbearontherelevanceandnecessityofsuchevidence.  Second,anddespiteBellSouthseffortstoeasetheirentry,potentialcompetitorsarenot  ` enteringtheresidentialmarketinSouthCarolinaonafacilitiesbasis.AT&T,MCI,andSprinthavealldisavowedanintentiontooffersuchservice.ComplianceOrderat19.Nopotential X  providerhadtakenanysubstantialstepstoofferfacilitiesbasedservicetoresidentialcustomersasofthreemonthsago,whichistherelevanttimeunder TrackB.47U.S.C.271(c)(1)(B).  ThesituationinSouthCarolinareflectsageneralproblem:potentiallocalcompetitorsareturningtheirbacksonresidentialandruralcustomerstopursuemoreprofitableopportunitiesandkeeptheBellcompaniesoutoflongdistance.AlthoughtheCommissioncannotsolvethisproblembyfurtherregulatingincumbentLECs,itcanbreakthelogjambyauthorizinginterLATAcompetitionunderTrackB,therebysendingasignalthatlongdistancecarriersandotherpotentiallocalproviderscannotdelayinterLATAcompetitionbytailoringtheirlocalentry.  Thisapplicationmaybeproperunder TrackA(47U.S.C.271(c)(1)(A))aswell.OnecompetitorinSouthCarolinarecentlyhastakenstepsthatmayindicateanintentiontoprovideresidentialservice"possiblyinabelatedefforttothwartBellSouthsTrackBapplication.Toresolvethisissueanddevelopafullrecord,theCommissionshouldrequestthatpartieswhoprovideorintendtoprovidelocalservicesinSouthCarolinadetailtheircurrentandplannedservicesintheircommentsonthisapplication. (+$(   Third,thebenefitstoconsumersofgrantingthisapplicationarecrystalclear.Overfive H years,fullercompetitionasaresultofBellSouthsinterLATAentrywillresultinnearly13,000newjobsinSouthCarolinaandincreasethegrossstateproductbymorethan$1.2billion.BellSouthhassubmittedtotheSCPSCaproposedtariffthatwouldestablishbasicinterLATAratesatleastfivepercentbelowthoseofAT&T.Thistariffwouldguaranteelowvolumecallers,whoaremostinneedofpricerelief,theopportunitytorealizesavingsfromalongdistancecarriertheyknowandcantrust.  Thesebenefitswillbesecuredwithoutanythreatofharmtocompetition.ThetraditionaljustificationforexcludingBellcompaniesfrominterLATAservicesisthattheymightdominateinterexchangeSRXXmarketsthroughcostmisallocationordiscrimination#XpXRS%#.Yetthe1996Act,together  withlongstandingCommissionregulationsandmarketrealities,renderssuchmisconductinconceivable.ThelocalexchangeinSouthCarolinaisopentocompetitors.BellSouthwillstartwithzeromarketshareinabusinessdominatedbyentrenchedincumbentswithvastresourcesandhighsunkcosts,factorsthatmakesuccessfulpredationunimaginable.Commissionrulesandprocedureshavesuccessfullyprotectedregulatedratepayerswhenincumbentlocalexchangecarriershaveenteredothermarketsadjacenttothelocalexchange.TheCommissionhasconfirmedthatthe1996ActgivesitampleauthoritytodeteranticompetitivebehaviorandtofacilitatedetectionofpotentialviolationsoftheAct.TheSCPSCandSouthCarolinaAttorneyGenerallikewisehavecommittedthemselvestoprotectingagainstanypossibleharmfrom BellSouthsinregion,interLATAentry. P)#&   Theunqualifiedbenefitsofgrantingthisapplicationhavebeenrecognizedbythosewho aremostaffected.IncludedinAppendixDtothisapplicationaremorethan450lettersfromSouthCarolinianswhosupportBellSouthsrequestforpermissiontocompete,sentbytheGovernorandAttorneyGeneralofSouthCarolinaandotherrepresentativesatthelocalandStatelevels,publicandprivateeducationalinstitutions,nonprofitorganizations,communityandbusinessleaders,andordinarybusinessandresidentialconsumers.  Fourth,BellSouthsentryintointerLATAserviceslikelywillendlongdistancecarriers X  lackofinterestinSouthCarolinaslocalmarkets.AstheSCPSCfound,themajorlongdistancecarriers willnolongerbeabletopursueotheropportunitiessecureintheknowledgethat[BellSouth]cannotinvadetheirmarketuntiltheybuildsubstantiallocalfacilities.Compliance  Orderat6667.AT&T,MCI,andSprintalsowillbefreedofallrestrictionsonofferingbundled p servicepackages,addinganadditionaldimensiontolocalcompetition.  TheSCPSChasdeterminedthatthe lastavenuetoachievingCongresssgoalofcompetitionacrossalltelecommunicationsmarketsinSouthCarolinaistoallowBellSouthtoprovideinterLATAservices.Id.at78,6667.ThisCommissionwillbeslowingcompetitionin   SouthCarolinaifitfailstoembraceandactonthisfindingbythestateagencythatisclosesttothefacts.  #  @" TABLEOFCONTENTS H  D  EXECUTIVESUMMARY""J(#.H H i   34F  34F11I  .0    BELLSOUTHMAYPROCEEDUNDERTRACKB#""J(#.2(#(##434F1711ی   Ќ  0k;*    k;*,2IA  .0 `   BellSouthHasTakenAllRequiredStepstoOpenLocalMarketsk;*,2e2Iی t` (#` (# Ќ    0 ` inSouthCarolina#""J(#.%` (#` (##5@(#(#K(#.!!U  `      `  1.  BellSouthHasNegotiatedAgreementswithNumerousCLECs""J(#.!!U5 8  Kb;     `  b;4K2  .0    BellSouthHasObtainedStateApprovalofitsStatementofb;44KیX (#(# Ќ     `  0  GenerallyAvailableTermsandConditions#""J(#.zzF(#(##6 D    G2k;*    k;*Z6IB  .0 `   NoCLECHasTakenReasonableStepsTowardProvidingk;*Z66Iی ` (#` (# Ќ    0 ` FacilitiesBasedResidentialServiceinSouthCarolina#""J(#.XXJ` (#` (##8  u6hk;*    k;*8IC  .0 `   InformationHeldbyBellSouthsCompetitorsMayDemonstratek;*8B8Iی` (#` (# Ќ     ` thatBellSouthHasSatisfiedTrackAasWell`"`"I(#.@15  8II.0  BELLSOUTHSSTATEMENTMAKESINTERCONNECTIONAND\(#(# 0  ACCESSAVAILABLEINCOMPLIANCEWITHTHEACTS (#(# 0  COMPETITIVECHECKLIST#`"`"I(#.$(#(##17 |4   0  A.0` (#(#BellSouthIsProvidingNondiscriminatoryAccesstoitsT ` (#` (# 0  0` (#(#OperationsSupportSystems#`"`"I(#.@@.` (#` (##21 @   B.0 ` AllFourteenChecklistItemsAreLegallyandPracticallyAvailable#`"`"I(#.XXV` (#` (##33        C.0 ` PerformanceMeasurements#`"`"I(#.,` (#` (##54 !    9III.0  BELLSOUTHSATISFIESTHEREQUIREMENTSOFSECTION272#`"`"I(#.ppB(#(##57 #  IV.0  BELLSOUTHSENTRYINTOTHEINTERLATASERVICES%X"(#(# 0  MARKETWILLPROMOTECOMPETITIONANDFURTHER (#(# 0  THEPUBLICINTEREST#`"`"I(#.ZZ"(#(##66 x'0!$ I    k;*  k;*>IA  .0 `   TheScopeofthePublicInterestInquiry#`"`"I(#.<` (#` (##68k;*>>Iی P)#& Ќ  k;*    k;*?IB  .0 `   TheCurrentLongDistanceOligopolyLimitsCompetition#`"`"I(#.K` (#` (##72k;*??Iی (+$( Ќ   ,%)   C.0 ` MarketEvidenceConfirmsthatBellSouthsEntryintotheH` (#` (# 0  0` (#(#InterLATAMarketinSouthCarolinaWillBenefitConsumers#`"`"I(#.M` (#` (##75 4 0  0` (#(#0 ` (#` (# ` 1.0 (# (#EvidenceofCompetitionWhereLECsHaveBeenAllowedto  (# (# 0  0` (#(#0 ` (#` (# `  OfferLongDistance.#`"`"I(#.VV- (# (##76   Kb;     ` b;sCK2  .0   BellSouthIsSuitedtoBreakUptheInterexchangeOligopolyinb;sCCKی  (# (# Ќ     `  SouthCarolina`"`"I(#.nn'78  t   D.0 ` BellSouthsEntryintotheInterLATAMarket,SubjecttoExtensiveL ` (#` (#    ` StatutoryandRegulatorySafeguards,PresentsNoRisktoCompetition`"`"I(#.X85 8  K0   ` 1.0 (#(#RegulationandPracticalConstraintsMake Leveraging  (# (#    `  StrategiesImpossibletoAccomplish`"`"I(#.,,<+85+   0  b;   ` b;vGK2  .0 (#(#  ActualExperiencewithLECParticipationinAdjacentb;vGGKی0  (# (# Ќ     `  MarketsDisprovesTheoriesaboutAnticompetitivePotential`"`"I(#.S,98,   Ik;*    k;*2IIE  .0 `   TheEffectofBellSouthsEntryonLocalCompetition#!!H(#.ZZH` (#` (##-102-k;*2IYIIی  Ќ  0CONCLUSION!!H(#. .1./.9./0060  APPENDIXA(VerificationsandAntiDrugAbuseActCertifications)  \   JWL(Oa Y/ctofBellSo@33% Beforethe H @f f FEDERALCOMMUNICATIONSCOMMISSION@Washington,D.C.20554    DZM=9z (x p @ P@E xd t ,  (#(#(#(# H CCDocketNo.__________ (#(#(#(#To:  TheCommission   @ BRIEFINSUPPORTOFAPPLICATIONBYBELLSOUTHFOR    PROVISIONOFINREGION,INTERLATASERVICESINSOUTHCAROLINA   @@  ___________________________________    Pursuanttosection271(d)(1)oftheCommunicationsActof1934,asamended,47U.S.C.271(d)(1),BellSouthCorporation,BellSouthTelecommunications,Inc.,andBellSouthLongDistance,Inc.(collectively, BellSouth)herebyseekauthorizationtoprovideinterLATAservicesoriginatingintheStateofSouthCarolina,includingallservicestreatedassuchunder47U.S.C.271(j).BellSouthhassatisfiedeachofthefourrequirementsforapprovalofitsapplication.PartIofthisBriefexplainsthat,pursuanttosection271(c)(1),BellSouthhasreceivedstateapprovalofastatementofthetermsandconditionsunderwhichitgenerallyoffersinterconnectionandnetworkaccesstocompetitivelocalexchangecarriers( CLECs)? G  1      ׀andis &D # Y/  YTRX3' LetterX3' Letter3' Letter3' LetterT Y  eligibletoapplyforinterLATAentryonthebasisofthatstatementpursuanttosection H 271(c)(1)(B).PartIIshowsthatBellSouthsstatementsatisfiesthecompetitivechecklistofsection271(c)(2)(B).PartIIIconfirmsthatBellSouthwillabidebythesafeguardsofsection272.! G  2      ׀PartIVdemonstratesthatapprovingBellSouthsapplication isconsistentwiththepublic   interest,convenienceandnecessity.47U.S.C.271(d)(3).ThisBriefandsupportingaffidavitsareavailableinelectronicformat.  VirtuallyalloftheissuespresentedbythisapplicationwerefullybriefedandarguedbeforetheSCPSC.Pursuanttosection271(d)(2)(B)"whichprovidesstatecommissionsaformalconsultativeroleonlocalissuesinsection271proceedings"theSCPSCestablishedadockettoconsiderBellSouthseligibilitytoprovideinterLATAservicesinitsState.Compliance  Orderat2.Thatdocketinvolvedafullfourmonthsofreview,includingdiscovery,hearings,and p evidentiarysubmissionsfromlongdistancecarriersandotherpotentialcompetitorsthatopposeBellSouthsinterLATAentry.S  G  3      ׀Actingasthetrieroffact,theSCPSCadducedevidence, h  evaluatedthecredibilityofwitnesseswhowereexposedtocrossexaminationunderoath,andreachedconclusionsonarecordcontainingover1600pagesofliveandpreparedsworntestimonyandanother1500pagesofpleadings.Allpartieswhowishedtobeheardhadthatopportunity,andtheSCPSChadtheopportunitytoassessthesepartiespositionsandcredibility.TherecordoftheSCPSCsproceedingsisreproducedasAppendixCofthisapplication.  Followingitsreview,theSCPSCcertifiedinaunanimousdecisionthat noneof[BellSouths]potentialcompetitorsaretakinganyreasonablestepstowardsimplementinganybusinessplanforfacilitiesbasedlocalcompetitionforbusinessandresidentialcustomersinSouthCarolina.ComplianceOrderat19.TheSCPSCbasedthiscertificationnotonlyonthe  testimonyofpotentialcompetitorsthemselves,butalsoonitsintimateknowledgeoflocalmarkets,acquiredinthecourseofreviewingscoresoflocalinterconnectionandresaleagreements,issuingcertificatesofpublicconvenience,andgenerally tak[ing]everystepavailableto[theSCPSC]toencourageandtofosterlocalcompetitionintheStateofSouthCarolina.Id.at20. @   TheSCPSCalsoprovidedanindepthanalysisofBellSouthschecklistofferings.Id.at   2759.AfterreviewingthetermsofBellSouthsstatementofgenerallyavailabletermsandconditionsandextensiveevidenceregardingBellSouthsactualabilitytofurnisheachoftheitemsitformallyholdsout,theSCPSCconcludedthat [a]lthoughnotallofthefunctions,capabilities,andservicesintheStatementhavebeenrequestedbyCLECsforuseinSouth x'0!$ Carolina,BellSouthhad demonstratedthatitisfunctionallyabletoprovide[these]itemsinSouthCarolinawhenorderedbyaCLEC.Id.at56.     Finally,theSCPSCconcludedthatBellSouths entryintotheinterLATAmarketinSouthCarolinawouldleadtoincreasedlongdistancecompetitionandmorechoicesforconsumers,whichisinthepublicinterest.Id.at61.TheSCPSCnotedBellSouths  ` commitmenttosetitsbasicratesatleast5percentbelowthoseofAT&T.Id.at6.Ontheother 8  sideofthecoin,theSCPSCexplainedthatextensive legalobligationsandsafeguards,atboththefederalandstatelevels,protectagainstanypossibleadverseeffectsfromBellSouthsentry.Id.at6566.TheSCPSCalsoconsideredandrejectedargumentsthatthesebenefitswouldbe  offsetbyareductioninlocalcompetitionifBellSouthwerepermittedtocompeteforlongdistancecustomers.Id.at63.TheSCPSCfound,tothecontrary,that localcompetitionmay p speedupconsiderablyandthatBellSouthsentry willcreaterealincentivesforthemajor[interexchangecarriers]toenterthelocalmarketrapidlyinSouthCarolina,becausetheywillnolongerbeabletopursueotheropportunitiessecureintheknowledgethat[BellSouth]cannotinvadetheirmarketuntiltheybuildsubstantialfacilities.Id.at66.     ThesefindingsbytheexpertagencyresponsibleforoverseeingtelecommunicationsmarketsinSouthCarolinaprovidetheframeworkforBellSouthsapplication. 134F  34Fg1I  .0    BELLSOUTHMAYPROCEEDUNDERTRACKB 34Fgg1ی%X"(#(# Ќ  qg  ThisCommissionheldinitsOklahomaOrderthataBellcompanymayapplyfor x'0!$ interLATAreliefonthebasisofanapprovedoreffectivestatementofgenerallyavailabletermsandconditionsunderTrackBwherenopotentialcompetitorsaretakingreasonablestepstoward (+$( providingfacilitiesbasedservicetobusinessandresidentialcustomers.OklahomaOrder57 H 58.TheSCPSCdeterminedafterafullreviewthatthisispreciselythesituationinSouthCarolina,andthisshortfalloflocalcompetitionisnotattributabletoanyfailingbyBellSouth.   A.0 ` BellSouthHasTakenAllRequiredStepstoOpenLocalMarketsinSouth   Carolina ` (#` (# k  BellSouthhasdoneitsparttoallowcompetitiveentrybynegotiatingagreementswith L  individualCLECsandofferinginterconnectionandnetworkaccessthroughitsstatementofgenerallyavailabletermsandconditions.  D     ` 1. BellSouthHasNegotiatedAgreementswithNumerousCLECs     BellSouthhasdevotedsubstantialresourcesinvolvingtheeffortsofhundredsofemployeesandtheexpenditureofhundredsofmillionsofdollarstomeetortoexceedtherequirementsofthe1996Acttoopenitslocalmarketstocompetition.ComplianceOrderat20. \ BellSouthsnegotiatorshavedevotedcountlesshourstofieldingCLECrequests,negotiatingarrangementsthatmeetindividualCLECsneeds,andobtainingstateapprovaloftheresultingagreements.Asaresultoftheseefforts,BellSouthhasexecutedagreementswith83differenttelecommunicationscarriersinSouthCarolina.SeeWrightAff.Ex.1Attach.WPEA(App.A ! atTab16).BellSouthsSCPSCapprovedagreementsandtheSCPSCordersapprovingthemarereproducedinAppendixBofthisapplication.F G  4      ׀Alltheagreements,exceptBellSouths $l! agreementwithAT&T,werecompletedwithouttheneedforanSCPSCarbitrationorder.AcopyoftheSCPSCsdecisionintheAT&T/BellSoutharbitrationisreproducedinAppendixB(atTab69).= G  5      ׀Noothercarrierhassoughtarbitrationoridentifiedanyoutstandingdisputewith   BellSouththatwouldrequirearbitration.&     ` 2.0 BellSouthHasObtainedStateApprovalofitsStatementofGenerally  ` AvailableTermsandConditions  (# (#  r  BellSouthhasalsoactivelyinvitedentrybyCLECsthroughitsStatementofGenerally' &r l$  AvailableTermsandConditions( Statement).TheStatementsetsoutspecifictermsand D  conditionsunderwhichBellSouthofferstoprovideinterconnectionandaccesstoitsnetwork,aswellasresaleopportunitiesonanondiscriminatorybasistoanyrequestingCLECinSouthCarolina.TheseofferingsreflecttheActandfederalandStaterulesanddecisions,aswellaswhatBellSouthhaslearnedaboutCLECsrequirementsinthecourseofnegotiatingitsnumerousinterconnectionagreements.SeeVarnerAff.1718,2324(App.AatTab14).Inorderto  ` easeentrybyCLECs(andparticularlysmallerCLECs)thatdonotwanttonegotiatecarrierspecificterms,andtoestablishausefulmodelforcarriersthatdowanttonegotiate,theStatementsetsoutofferingsregardingallofthecapabilitiesneededtocompeteinthelocal 0  marketin asstraightforwardandsimpleawayaspossible.VarnerAff.13.  Pursuanttosection252(f)oftheAct,theSCPSCapprovedBellSouthsStatement,with  modifications,onJuly31,1997,findingthat therates,termsandconditionsofinterconnection,unbundlingandresaleintheStatementcomplywithSection251and252(d)oftheActand reflectinaveryspecificanddetailedwaythe[SCPSCs]rulingsintheBellSouthAT&Tarbitrationproceeding.ComplianceOrderat27.A G  6      ׀OnSeptember9,1997,inresponsetoa @ MotionforClarificationfiledbyAT&T,theSCPSCapprovedfurthermodificationstotheStatementtomakethedocumentmoreconsistentwiththeEighthCircuitsdecisioninIowa ! UtilitiesBoardv.FCC,1997U.S.App.LEXISat18183,*48(July18,1997).SeeApp.Dat #  Tab9(SCPSCorder);seealsoVarnerAff.512.AcopyoftheStatementreflectingthe H modificationsapprovedbytheSCPSCisprovidedasanexhibittotheAffidavitofAlphonsoVarner(App.AatTab14).   B.0 ` NoCLECHasTakenReasonableStepsTowardProvidingFacilitiesBased   ResidentialServiceinSouthCarolina ` (#` (#  }  DespitealltheseeffortsbyBellSouth,noCLECmadeanysignificant,timelyeffortto L  providethesortoffacilitiesbasedcompetitionthatlegislators consistently...contemplatedwhendraftingthe1996Act.S.Conf.Rep.No.104230,at148(1996)( ConferenceReport).AstheSCPSChascertified, noneof[BellSouths]potentialcompetitorsaretakinganyreasonablestepstowardsimplementinganybusinessplanforfacilitiesbasedlocalcompetitionforbusinessandresidentialcustomersinSouthCarolina.ComplianceOrderat19.    CongressrecognizedthatfacilitiesbasedlocalcompetitionmaynotemergeimmediatelyineveryState.SeeOklahomaOrder43(citingConferenceReportat148).Yetlegislators |4 wantedtoensurethatBellcompanieswouldopenlocalmarketsandenhancelongdistancecompetitioneveninthoseStateswherefacilitiesbasedcompetitionisslowertodevelop.TheHouseCommerceCommitteethusdraftedTrackB toensurethataBOCisnoteffectivelypreventedfromseekingentryintothelongdistancemarketbecausenofacilitiesbasedcarrierwhichmeetsthecriteriaspecifiedintheActsoughttoenterthemarket.H.R.Rep.No.104204,at77(1995)( HouseReport);seeConferenceReportat148.B G  7       &D #   InSouthCarolina,theSCPSChasconcludedthatpotentialcompetitors,andparticularlythelargeinterexchangecarriers,arepositionedtobecomefacilitiesbasedCLECsbutare pursu[ing]otheropportunitiesinstead.ComplianceOrderat6667.IfTrackBwerenot   availableinsuchinstancescompaniessuchasAT&T,MCI,andSprintwouldhaveastrongincentivetocontinuedelayingfacilitiesbasedlocalentrysoastoprotecttheirownsharesoftheinterLATAmarketagainstBellcompanycompetition.SeeOklahomaOrder56.Inthewords 8  oftheCommission, TrackBappropriatelysafeguardsthe[Bellcompanies]interestswherethereisnoprospectoflocalexchangecompetitionthatwillsatisfytherequirementsofsection271(c)(1)(A).Id.55.T G  8          InsomecasestheBellcompanyseligibilitytofileundertheCommissionsstandardcanreadilybeestablished.Forinstance,TrackBwouldbeavailablewherepotentialcompetitorshavesoughtonlyresaleagreements,butwouldnotbeavailableundertheCommissionstestifa H CLEChadcommitteditselftoprovidefacilitiesbasedservicetobusinessesandresidencesunderareasonabletimetableandwasincompliancewiththatschedule.Wheretherequestforinterconnectionisopenendedandpotentialcompetitorshaveneitherruledoutnorcommittedthemselvestoprovidingfacilitiesbasedservicetoresidentialandbusinesscustomers,however,theCommissionmust engageinadifficultpredictivejudgment.OklahomaOrder57.This  ` assessmentmustbeinformedbytherequestersactionsaswellasitswords.Thus,theCommissionhasheldthatarequestcanprecludeanapplicationunderTrackBonlyiftherequester(1)hasmadearequestthatonitsfacewill,ifimplemented, leadtothetypeoftelephoneexchangeservicedescribedinsection271(c)(1)(A)and(2)is takingreasonablestepstowardimplementingitsrequestinafashionthatwillsatisfysection271(c)(1)(A).Id.54,  57,58.G G  9       p   Indecidingwhetherrequestingcarriersarereasonablyproceedingtowardprovidingfacilitiesbasedservicetoresidentialandbusinesscustomers,theCommissionsinquirymustaddressthestateoflocalcompetitionasof 3monthsbeforethedatethe[Bell]companymakesitsapplication.47U.S.C.271(c)(1)(B).Congressestablishedthiscutoffdateto ensuretheBellcompaniesabilitytofileTrackBapplicationswhenfacilitiesbasedlocalcompetitionisnotdevelopingdespiteanopenmarket.ConferenceReportat148.Becauseofthethreemonthcutoff,interexchangecarriersandotherCLECscannot gamethesystembywaitinguntiltheBOC %X" isclosetofiling(orhasfiled)itsapplication,andthenprofessingadesiretoprovidefacilitiesbasedlocalservice.SeeOklahomaOrder56(construingTrackBinlightofCLECsincentive   togamesection271process).Accordingly,therelevantquestionunderCommissionprecedentiswhether"asofJune30,1997"anypotentialfacilitiesbasedcompetitorhadmadearequestforinterconnectionandaccessfromBellSouthinSouthCarolinathatsatisfiedthetwoparttestsetforthabove.  Inansweringthisquestion,theCommissionmustlooktotheSCPSCsassessmentofthelocalmarket.Likeotherstatecommissions,theSCPSChasbeen doingthehardjobofpromotingcompetitionin[its]jurisdictionandthusisintimatelyfamiliarwiththeactivitiesofBellSouthandnewentrantsalike.ChairmanReedE.Hundt,SpeechtoCommissionStaff  (Washington,D.C.May27,1997).StatecommissionsareresponsibleforlicensingCLECs,47U.S.C.253(b),forensuringthatCLECsmayobtainaccessandinterconnectionatreasonableprices,id.252(d),forreviewing h  interconnectionagreementsbetweenCLECsandincumbentBellcompanies,id.252(e),andfor @ resolvinganyimplementationdisputesthatmayariseandenforcingagreementterms,seeIowa   Utils.Bd.,1997U.S.App.LEXISat18183,*48.InSouthCarolina,forinstance,theSCPSChas ! hadthebenefitofnotonlyextensivehearingsonlocalcompetitionissuesgenerally,butalsoitsreviewofcarrierspecificagreementsandapplicationsforlocalserviceauthority,aswellasitsexperiencearbitratinganagreementbetweenBellSouthandAT&T.ComplianceOrderat1920. x'0!$  ThisextensiveexperienceputstheSCPSCinthebestpositiontomakethe highlyfactspecific P)#& determinationwhetheranyCLECinSouthCarolinaistakingreasonablestepstobecomeafacilitiesbasedcompetingproviderofbusinessandresidentialservice.OklahomaOrder60.      Section271(d)(2)(B)reflectsthestatecommissionsuniqueexpertisebyrequiringthisCommissionto consultwiththeStatecommission...inordertoverifythecomplianceoftheBelloperatingcompanywiththerequirementsofsubsection[271](c),includingfulfillmentofTrackAorTrackB.t G  10      ׀Moreover,section271(c)(1)(B)authorizesstateregulatorsto certifyifa 8  CLEChas (i)failedtonegotiateingoodfaithasrequiredbysection252,or(ii)violatedthetermsofanagreementapprovedundersection252ofthistitlebytheprovidersfailuretocomply,withinareasonableperiodoftime,withtheimplementationschedulecontainedinsuchagreement.Liketheinquiryintowhetheracarrieris takingreasonablestepstowardimplementingarequestinafashionthatwillsatisfysection271(c)(1)(A),resolvingtheseissuesrequiresfamiliaritywithlocalmarketsandtheactivitiesoflocalcompetitors.Congressevidentlybelievedthatthisexpertiseresideswiththestatecommissions.Consistentwiththestructureofthe1996Act,therefore,thisCommissionshoulddefertotheSCPSCsdeterminationthat noneof[BellSouths]potentialcompetitorsaretakinganyreasonablestepstowardsimplementinganybusinessplanforfacilitiesbasedlocalcompetitionforbusinessandresidentialcustomersinSouthCarolina.ComplianceOrderat19. #    TheSCPSCsconclusionis,moreover,amplysupportedbythematerialsprovidedintheAppendicestothisapplication.MostoftherequestsfornegotiationsthatBellSouthhasreceivedareexclusivelyforresaleofBellSouthslocalservicesandthuscouldneverleadtofacilities   basedTrackAservice.WrightAff.6.OfalltheCLECswithsignedinterconnectionagreements,only26indicatedinnegotiationsthattheymightatsomefuturetimeprovide  ` facilitiesbasedlocalexchangeservices.Id.Andofthese26CLECs,onlyninehavesought 8  certificationfromtheSCPSCtoprovidecompetitivelocalexchangeservicesinSouthCarolina.Id.6&Ex.1Attach.WPEA. 0    UnlikeotherBellSouthStates,nocarriershaveorderedunbundledloopsfromBellSouthinSouthCarolina.MilnerAff.37(App.AatTab9).OnlyonecarrierhasrequestedanunbundledswitchportinSouthCarolina.Id.50.And,asdiscussedbelow,justthree p requesters(ACSI,ITCDeltaCom,andTimeWarner)haveplacedselfprovidedfacilitiesinSouthCarolina.WrightAff.9.  ACSIhasfiberopticnetworksinColumbia,Charleston,Greenville,andSpartanburg,SouthCarolinaandhasexecutedanSCPSCapprovedinterconnectionagreementwithBellSouth.WrightAff.1013.However,ACSItoldtheSCPSCthatithasinstalledthosefacilitiesnot !  asalocalserviceprovider,butratheronlyasanaccessprovider"whichdoesnotcountforpurposesofTrackAandTrackB.ComplianceOrderat19;see47U.S.C.271(c)(1)(A) %X" (excludingexchangeaccessfromscopeoftelephoneexchangeserviceforpurposesofBOCinterLATAentry).Indeed,theSCPSCconcluded,basedonACSIsowntestimony,thatACSI hadnobusinessplanorfirmcommitmenttoplacethenecessaryfacilitiesinSouthCarolinato (+$( begintoprovide[facilitiesbased]competitionand hadnointenttocompeteforresidencecustomersinSouthCarolina,aswellasthatACSIs decisionnottocompeteinSouthCarolinaisrelatednottoanyactiononthepartof[BellSouth],butratheritsownbusinessdecisiontodeployitscapitalinotherareas,suchasGeorgia,Texas,NewOrleansandBaltimore.ComplianceOrderat19.ThemostrecentinformationavailabletoBellSouthconfirmsthat,  ` althoughACSImayinthefutureserveSouthCarolinabusinessesoveritsnetworks,itwillnotseektoofferfacilitiesbasedservicetoresidentialcustomersintheState.WrightAff.1112.  AsecondCAPthathassignedanSCPSCapprovedinterconnectionagreementwithBellSouth"ITCDeltaCom"alsohasfiberopticnetworksinplace.Id.1421.ITC  DeltaComdidnotprovide"andwasnottakinganystepstoprovide"facilitiesbasedlocalexchangeserviceinSouthCarolinaasofJune30ofthisyear.Id.ITCDeltaComsmorerecent p activitiesarediscussedinPartI(C),below.  Thethirdfacilitiesbasedprovider,TimeWarnerCommunications,ownsfiberroutesinColumbia,SouthCarolina.TimeWarnerCommunicationshasfocuseditslocaltelephonyinitiativesinBellSouthsregionalmostentirelyonbusinesscustomers.WhenandifthecompanyentersthelocalexchangemarketinSouthCarolina,itisexpectedtofocusexclusivelyonbusinesscustomers.WrightAff.2223&Attach.WCEC.  TheSCPSChasconfirmedthatCLECsfailuretomovemorequicklytolaunchfacilitiesbasedlocalservice"particularlyforresidentialcustomers"isduesolelytotheirownbusiness x'0!$ decisions,forBellSouthhasnot takenanyactiontopreventortoretardthedevelopmentoflocalcompetitioninSouthCarolina.ComplianceOrderat20.AsProfessorGlennWorochof (+$( JW Je J  theUniversityofCaliforniaatBerkeleydemonstrates,thesimplefactisthatdemographicandeconomicconditionsunrelatedtoBellSouthsofferingsmakeotherStatesmoreattractivecandidatesforcompetitivelocalentry,atleastaslongasBellSouthcanbekeptoutoflongdistanceinSouthCarolina.WorochAff.1619,21,8692(App.AatTab15).AlthoughAT&TandotherinterLATAincumbentswillarguethatthismeansthatlongdistancecompetitionshouldalsobedelayedinSouthCarolina,Congressdecidedotherwise.Underthe 8  ActandCommissionprecedentTrackBensuresthatcustomersinSouthCarolinawillnotbepenalizedsimplybecauseCLECsprioritieslieelsewhere.   C.0 ` InformationHeldbyBellSouthsCompetitorsMayDemonstratethat  BellSouthHasSatisfiedTrackAasWell ` (#` (#   Ofcourse,BellSouthdoesnothaveaccesstocompleteinformationaboutitsactualandpotentialcompetitors.ItispossiblethatsomeCLECrecentlystartedtotakereasonablestepstomeetaspecific,neartermscheduleforrollingoutfacilitiesbasedresidentialservice.That,however,wouldnotaffectBellSouthsabilitytofileunderTrackBonthebasisofmarketconditionsastheystoodthreemonthsbeforethedateofthisapplication.  ItisevenpossiblethatCLEC(s)inSouthCarolinahavebeguntoofferfacilitiesbasedservicetoresidentialaswellasbusinesssubscribersinSouthCarolinainrecentweeks,perhapsinaneffortsomehowtostopBellSouthsentryintolongdistance.Inparticular,justsixdaysaftertheSCPSCsJuly24votetoapprovetheStatementandBellSouthsproposedapplication &D # underTrackB,ITCDeltaComfiledaretroactivetariffforlocalservice,backdatedwithan d("% effectivedateofJanuary23,1997.SeeWrightAff.Ex.1Attach.WPEE(ITCDeltaComtariff). <*#' ITCDeltaComsnewtariffwasnoticedtotheSCPSCatitsmeetingonAugust21,1997.ITC ,%) DeltaComalsoisnowgivingpotentialresidentialcustomersinGreenville,SouthCarolinadirectlycontradictoryinformationwhetheritservesresidentialcustomersinthatcity.Compare   AffidavitofDavidS.Wyatt(App.DatTab5)withAffidavitofBethB.Hughes(App.DatTab   6).SuchconductmaybepartofanimproperattempttothwartapprovalofBellSouthsapplicationwithoutactuallymovingITCDeltaComintotheresidentialmarket,oritmayreflectthatITCDeltaComjustrecentlydeterminedtoenterthelocalresidentialmarketinGreenville.  TheCommissionshouldgettothebottomofthematter.Todevelopafullrecordsupportingitsdecisiononthisapplication,theCommissionshouldrequestthatallcommentersgivespecificdetailsregardingtheirtelephoneexchangeserviceoperations,ifany,inSouthCarolina,includingdescriptionsofallservicesnowbeingofferedandfurnished,allstepscurrentlybeingtakentoenterthemarket,andtimetablesforintroducingnewservices.j G  11      ׀The p CommissionshouldissueanOrdertothateffectimmediately,togivecommentersthegreatestpossiblenotice.  IftheevidenceshowsthatITCDeltaComorsomeothercarrier(s)areinfactofferingfacilitiesbasedservicetoresidentialandbusinesscustomersinSouthCarolina,TrackA(aswellasTrackB)wouldbesatisfiedandBellSouthsapplicationcouldgoforwardonthatbasis.Likewise,iftheevidenceshowsthataCLEChasbegunsupplementingfacilitiesbasedservicetobusinesscustomerswithresaleofBellSouthsresidentialserviceinSouthCarolina,BellSouth %X" wouldbeeligibleforinterLATAreliefunderbothTrackAandTrackB.TheDepartmentofJusticehasexplainedthattheAct doesnot...requirethateachclassofcustomers(i.e.,businessandresidential)mustbeservedoverafacilitiesbasedcompetitorsownfacilities.AddendumtoDOJOklahomaEvaluationat3,CCDkt.No.97121(May21,1997). [I]tdoesnotmatterwhetherthecompetitorreachesoneclassofcustomers"e.g.,residential"onlythroughresale,providedthecompetitorslocalexchangeservicesasawholeareprovidedpredominantlyoveritsownfacilities.Id.      !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}~f G  12      ׀Furthermore,therequirementsofTrackAcanbe X  satisfiedbyacombinationofCLECs,ratherthantheactivitiesofjustoneCLECalone.See 0  MichiganOrder8285.Toapplythesestandards,however,itiscriticalthattheCommission  collectthebestavailableinformationfromthosepartieswhohaveit. C 7 e'#9C  II.0  BELLSOUTHSSTATEMENTMAKESINTERCONNECTIONANDACCESS p AVAILABLEINCOMPLIANCEWITHTHEACTSCOMPETITIVECHECKLIST  H(#(#   WheneverCLECsinSouthCarolinadecidetheyarereadytocompete,theywillhavereadyandwaitingunderthetermsoftheirexistingagreementsand/orBellSouthsStatement @ eachofthefourteenchecklistitems.See47U.S.C.271(c)(2)(B).Theaffidavitssubmitted   withthisbrief,includingparticularlytheAffidavitsofW.KeithMilnerandAlphonsoJ.Varner,andthetwoaffidavitsofWilliamN.Stacy,explainexactlyhowBellSouthmakeseachofthe ActsfourteenchecklistitemsavailabletoanyCLECthatrequeststhem. %X"   TheSCPSCalsohasverifiedthatBellSouthsStatementmeetsorexceedsevery H  requirementoftheActscompetitivechecklistandthattheStatementsofferingsarenotmere   paperpromises,butratheraredemonstrablyreadyandwaitingforCLECswhochoosetoplaceorders.ComplianceOrderat2959.Theselocalcompetitionissuesareatthecoreofthe   SCPSCsestablishedexpertiseandthestatecommissionscontinuingjurisdictionoversuchmatterswasconfirmedbythe1996Act.SeeIowaUtils.Bd.,1997U.S.App.LEXIS18183. 8  ThisCommission,moreover,isrequiredtoconsultwiththeSCPSC toverifyBellSouthssatisfactionofthechecklist,furtherdrivinghomethattheSCPSCsdeterminationsareentitledtogreatweight.47U.S.C.271(d)(2)(B).h G  13          TheStatementlegallyrequiresBellSouthtoprovideallfourteenchecklistitemsand  BellSouthstandsreadytofurnisheachiteminthequantitiesthatcompetitorsmayreasonably demandandatalevelofqualitythatenablescompetitorstoprovideserviceonparwith H BellSouths.SeeMichiganOrder110.e G  14      ׀Moreover,throughactualcommercialusageinSouth H  CarolinaanditsotherinregionStatesaswellasthoroughtesting,BellSouthhasaccumulatedextensiveevidenceregardingitsabilitytofurnishtheseitemsincompliancewiththeAct.TheempiricalevidenceaccumulatedbyBellSouthandprovidedwiththisapplicationconfirmsthatallchecklistitemsareavailabletodayonanondiscriminatorybasisthatenablesCLECstoprovidethesamequalitytelecommunicationsservicesasBellSouth.  ConsistentwiththerecommendationsofthisCommissionandtheDepartmentofJustice,moreover,BellSouthhasestablishedperformancemeasurementsthatwillallowregulatorsandprivatepartiestoconfirmBellSouthscontinuedcompliancewiththechecklistafterinterLATAreliefhasbeengranted.SeegenerallyStacyPerformanceAff.(App.AatTab13).BellSouth  alsohasestablishedspecificprovisioningtargetsformanyunbundlednetworkelements( UNEs),whichoffercompetitorsafurtherguaranteeofnondiscriminatoryaccess.SeeStacy H  PerformanceAff.36&Ex.WNS7. h    ThereareafewareasinwhichBellSouthdisagreeswiththeinterpretationsofchecklist requirementssuggestedintheCommissionsMichiganOrder,particularlyregardingpricing,   combinationsofunbundlednetworkelements,andcertainOSSperformancemeasurementsandstandards.BellSouthandotherpartieshaveproperlypresentedtheseissuestotheCourtsandtheCommission; G  15      ׀inthisapplicationBellSouthpreservesitspositionsforresolutionbythecourtsif  ` necessary.g( G  16      ׀Noonewhofullyreviewsthisapplication,however,couldgenuinelyquestion 8  BellSouthsgoodfaithcommitmenttosatisfyingthelocalmarketrequirementsofthechecklistandthe1996Act.BellSouththusbelievesnotonlythattheCommissionshouldchangeits 0  positiononthedisputedlegalissues,butalsothattheCommissionshouldlookbeyondthesenarrowdisagreementsaboutthemeaningofthelegislationtothebroadeffortBellSouthismakingtoaccommodatecompetitiveentrybyCLECs.Thiseffort,whichBellSouthbelievesamplysatisfiestherequirementsforinregion,interLATArelief,isdetailedbelow.&    A.0 ` BellSouthisProvidingNondiscriminatoryAccesstoitsOperationsSupport  ` Systems L ` (#` (#   InitsMichiganOrderthisCommissionemphasizednondiscriminatoryaccessto' w l$  operationssupportsystems( OSSs)asacriticalaspectofthechecklistrequirements.Michigan D  Order128221.Afterexhaustiveandveryexpensiveeffortstoimplement,test,andmake   commerciallyavailablenewandimprovedinterfacesandOSSs,seegenerallyStacyOSSAff.,  andtoestablishandstaffneworganizations,centers,andproceduresforthebenefitofCLECs,seeStacyPerformanceAff.411,BellSouthisabletoensureCLECstherequiredaccess. \ BellSouthisnotstoppingthere,however.Astheaffidavitscitedbelowexplain,BellSouthiscontinuingtoenhanceitssystems,whichalreadymeettheActsrequirements,sothatCLECswillhaveevenbetteraccesstoOSSs.Althoughnotnecessarytothisapplication,thatfactshould , givetheCommissionadditionalconfidenceinBellSouthscommitmenttofacilitatelocalmarketentry.  CLECsareabletoperformtraditionalOSSfunctionssuchaspreordering,ordering,provisioning,maintenanceandrepair,andbilling insubstantiallythesametimeandmannerasBellSouth.FirstReportandOrder,ImplementationoftheLocalCompetitionProvisionsinthe d("% TelecommunicationsActof1996,11FCCRcd15499,15764,518( LocalInterconnection <*#' Order),modifiedonrecon.,11FCCRcd13042(1996),vacatedinpart,IowaUtils.Bd.v.FCC, ,%) No.963321,1997U.S.App.LEXIS18183(8thCir.July18,1997).AsdemonstratedinavideotapeprovidedaspartofAppendixD(atTab7)tothisapplication,BellSouthhasmodifieditsOSSstoprocessCLECtransactionrequestsandhasdevelopedinterfacesthatallowCLECstoobtainaccesstoresaleservicesandunbundledelementsatparitywithBellSouth.Withthesemodificationsnowinplace,CLECsmayobtainpreorderinginformation,prepareandenterorders,receiveprovisioninginformation,enterandtrackthereceiptandstatusoftroublereports,andbillcustomersaccurately,insubstantiallythesamemannerasBellSouth.  TocatertothedifferingneedsofvariousCLECs,BellSouthhasprovidedachoiceofmanualorelectronicOSSinterfaces.ElectronicinterfacescurrentlyareavailableforeveryaspectofOSSaccess:preorderingfunctions;orderingandprovisioning;maintenanceandrepair;submittingandcheckingthestatusoftroublereportsforeitherresoldservicesorUNEs;andobtainingbillinginformation.BellSouthselectronicinterfacesmeetexistingindustrystandards;asnewindustrystandardsaredeveloped,BellSouthwillimplementthem,too.SeeStacyOSS h  Aff.6.Inaddition,BellSouthhasprovidedCLECswithallinformation(suchasuserguidesandorderingcodes)necessarytoenablequickprocessingofCLECrequests,aswellasthetrainingtheymayneedtouseBellSouthssystemseffectively.StacyOSSAff.135141&Exs.WNS4851.  Whateverinterface(s)aCLECchooses,BellSouthwillprovidesubstantiallythesametypeoffunctionalityatsubstantiallythesamelevelofperformancethatBellSouthprovidestoitself.TheSCPSChasfoundasmuch.AdoptingthestandardestablishedbytheFCC,itconcludedthatBellSouths electronicinterfacesprovideaccessto[BellSouths]operational (+$( supportsystems...thatissubstantiallythesameas,andinmanycasesbetterthan,thatwhich[BellSouth]providestopersonnelsupporting[BellSouths]retailcustomers.ComplianceOrder   at33.̀  NorcantherebeanyargumentthattheaccessBellSouthprovidesisnotcommercially   viable.AllofBellSouthsOSSinterfaceshavebeensubjectedtoextensiveinternaltesting.See  ` StacyOSSAff.117134.Forexample,BellSouthhasconductedtestsofitscombinedelectronicinterfacestoestablishaminimumcapacityof5,000totalrequestsperday,andthe X  interfaceshavesufficientexcesscapacitytohandledoublethatvolumeinBellSouthsninestateregion.StacyOSSAff.119121.CLECsaresuccessfullyusingBellSouthselectronicinterfacestosubmitordersforresaleservicesandUNEsandtoentertroublereports.Almost1700troublereportshavebeenprocessedthroughthemaintenanceandrepairinterfaceandBellSouthreceivedmorethan10,000electronicordersforresaleservicesinAugustalone.StacyOSSAff.125,128&Ex.WNS46.BellSouthssystemsareeasilyexpandabletomeetanyreasonablyforeseeabledemandbyCLECswithoutdiscriminatorydelays.StacyOSSAff.119134.  TherewillbethosewhosaythatevenBellSouthsextraordinaryeffortstoaccommodatecompetitorsareinadequate,andthatthesufficiencyofBellSouthsOSSscanonlybeshownbyprocessinglargernumbersofactualordersfromCLECs.InallowingBellcompaniestosatisfythechecklistbyofferinginterconnectionandnetworkaccesspursuanttoastatementoftermsand x'0!$ conditions,47U.S.C.271(c)(2)(A)(i)(II),however,Congressnecessarilyrejectedthenotionthattheavailabilityoflocalfacilitiesandservicescanonlybeshownbyfurnishingthemto (+$( L(  L L  competitorsatsomeminimumvolume.ThechecklistdoesnotallowthisCommissiontodelaylongdistancecompetitionuntilCLECsdecidetocomeandgetBellSouthsofferings.  Preordering.ToaccessOSSscontainingpreorderinginformation,CLECscanselecta   manualorelectronicinterface.Theelectronicinterface"knownastheLocalExchangeNavigationSystem( LENS)"isaninteractivesystemthatallowstheCLECdirect,realtimeaccesstoBellSouthspreorderingOSSs.StacyOSSAff.712.LENSiscompatiblewithinexpensive,commerciallyavailablehardwareandsoftwareandrequiresnoadditionaldevelopmenteffortbytheCLEC,yetcanbecustomizedbytheCLECtowhateverextenttheCLECchooses.Id.10.ToaccommodateCLECsofdifferingsizesandneeds,LENSis  accessiblethroughdirect(LANtoLAN)connections,dialupaccess,orpublicInternetaccess.Id.󀀀LENSenablesaCLECtosatisfyacustomersneedsforpreorderinginformationduringa p singletelephonecallwiththecustomer,withoutanyassistanceorinterventionfromBellSouthpersonnel.StacyOSSAff.12.  Formanualpreordering,which smallercompetingcarriers[may]prefer,Michigan  Orderat137&n.333,theCLECsimplypassesonpreorderinginformationrequeststooneof  BellSouthstwo(redundant)LocalCarrierServiceCenters( LCSCs)viafacsimile,telephone,ormail.SeeStacyPerformanceAff.4(discussingLCSCs). #    Usingeitheroftheseinterfaces,CLECsmaygatherandverifystreetaddressinformation,telephonenumberavailability,serviceandfeatureavailability,duedateinformation,andcustomerservicerecordinformation.StacyOSSAff.1341.Forinstance,ifaCLECinitiatesanaddressverificationquerythroughLENS,theLENSserverwillquerytheappropriate +$( BellSouthdatabaseandverifytheaddressonarealtimebasis.Id.16,20.ACLECcanuse % LENStoselectandreservetelephonenumbers(includingvanitynumbers)onarealtimebasiswhiletheCLECscustomerisontheline.Id.2324.LENSalsomaybeusedtovalidatewhat   featuresareavailabletoparticularendusercustomers,eitherbyenteringatendigittelephonenumberorastreetaddress.Id.26.  `   Additionally,LENSallowsCLECstoobtainduedateinformationforinstallationsrequiringapremisesvisit,basedonfieldpersonnelavailabilityandtechnicalfactorssuchasswitchcutovers.Id.32.4 G  17      ׀AuthorizedCLECslikewisemayaccesscustomerservicerecords    onarealtimebasisthroughtheLENSinterface.Id.38.Notallpreorderingfunctionsare  applicabletounbundlednetworkelements.However,whereaparticularfunctionisapplicable,suchasassigningatelephonenumberforanunbundledport,BellSouthspreorderinginterfacecanbeusedforunbundlednetworkelementsaswellasresoldexchangeservices.Id.48. mH   FortheconvenienceofCLECs,BellSouthhasmadethesingleLENSsystemavailableforbothbusinessandresidentialpreordering,eventhoughBellSouthsownpersonnelcurrentlymustusedifferentsystemstoservethesetwogroups.Id.12.Ch G  18      ׀LENS,inaddition,ismore  userfriendlythansomeofthesystemsusedbyBellSouthsownservicerepresentatives,forit ! reliesexclusivelyongraphicsandEnglishtextpromptsratherthancodeandfunctionkeys.Id. % 8,12.  InanefforttomakeLENSevenmoreusefultolargerCLECs,BellSouthhasprovidedtointerestedCLECsaLENSinterfacespecificationthatprovidesdatafordirectintegrationintoaCLECssystems.ThisallowstheCLECtouseitsownsystemstoobtainandmanipulatethedataprovidedbyLENS.StacyOSSAff.44.OverandabovethenondiscriminatoryaccessprovidedbyLENSandrequiredundertheAct,moreover,BellSouthmakesavailablemachinetomachineinterfacesforaccesstopreorderingOSSsthataretailoredtoindividualCLECsrequirements.Id.4245.Forinstance,eventhoughitisnotrequiredtodosotomeetitsduty  ofnondiscriminatoryaccessundertheAct,BellSouthisdevelopingacustomizedmachinetomachineinterface( ECLITE)thatmeetsAT&Tsparticularspecifications.BellSouthexpectstodeploythisinterfaceinDecember1997.Id.42. mH   AsdescribedintheattachedStacyOSSAffidavit,testsandactualusagedemonstratethatLENSiscomparableinspeedtotheinterfacesthroughwhichBellSouthscustomerservicerepresentativesaccessthesamesystems.Id.6,9,20,31.BellSouthscentralOSSdatabases  thereaftertreatallqueriesalike,whethertheyoriginatewithaCLECoraBellSouthservicerepresentative.Id.16,24,28,34&Ex.WNS37. [E]mpiricaldatathusdemonstratesthat #  BellSouthis providingnondiscriminatoryaccesstoall[preordering]OSSfunctions,asrequiredbytheAct.MichiganOrderat128. ]'8!$   OrderingandProvisioning.Orderingandprovisioningaretheprocesseswherebya 5)#& CLECrequestsresoldservices,UNEs,orinterconnectiontrunkingfromBellSouthandthen  +$( receivesinformationsuchasaconfirmationthattheorderhasbeenaccepted.See47C.F.R. % 51.5.CLECsmayusetheExchangeAccessControlandTracking( EXACT)systemtorequestinterconnectiontrunking.ThisisthesameindustrystandardinterfaceBellSouthusestoprocessaccessservicerequestsfrominterexchangecarriers.StacyOSSAff.55.Inaddition,asecondinterfacespecificallydevelopedforCLECs,ElectronicDataInterchange( EDI),hasbeenmadeavailabletoCLECssinceDecember31,1996.Currently,fiveCLECshaveanEDIinterfaceinactualusewithBellSouth.Id.54.EDIallowsCLECstoorderresoldservices, 5  simpleunbundlednetworkelementssuchasunbundledloopsandports,interimnumberportability,andsomecomplexservices.Id.59,63.BellSouthsinterfacemeetstheindustry  standardsforEDIdevelopedbytheOrderingandBillingForum(asubcommitteeoftheAssociationforTelecommunicationsIndustrySolutions),andallowsaCLECtotransmitservicerequestsinstandardEDIformattoBellSouth.Id.50.UsingtheEDIformat,forinstance, mH CLECsmayspecifythatacustomerbeswitched asis(nofeaturesorfunctionsareaddedordeleted)or asspecified(specifiedfeaturesorfunctionsareaddedordeleted).Id.58.    CLECsnotchoosingtouseEXACTorEDIhaveanotheralternative.AlthoughnotanaspectofBellSouthsprovisionofnondiscriminatoryaccessundertherequirementsoftheAct,CLECsmaysubmitservicerequestsformostnoncomplexservicesthroughLENS.Id.56.In #  addition,ifaCLECchoosesnottouseanelectronicinterface,itmayrequestservicesorUNEsusingamanualprocess.StacyPerformanceAff.8.  WhetheraCLECsubmitsanorderthroughEDIorLENS,therequestisscreenedforformattingerrorsandthecompleteandcorrectservicerequestisthentransferredtothesame +$( serviceordercontrolsystemusedforBellSouthsownretailorders.ThisdatabaseautomaticallydeliversserviceorderrecordstothedownstreamOSSsthatselectandassignfacilitiesandcrossconnectwiringfunctions.ThereisnodistinctionbetweenCLECandBellSouthoriginatedorderrecords.Instead,ordersarescheduledandfilledonafirstcome,firstservedbasis.StacyOSSAff.23,33,34.  AstheSCPSCdetermined, thesesystemsareoperationalandarecapableofprocessingasufficientnumberoforderstopermitmeaningfulcompetitioninSouthCarolina.Compliance 5  Orderat37.ThecapacityofEDI,forinstance,greatlyexceedsthecurrentvolumeofCLEC    requests.Id.at37;seeStacyOSSAff.119&Ex.WNS43.AllofBellSouthssystemsfor  orderingandprovisioningarescalabletomeetanyreasonablyforeseeabledemandwithoutdiscriminatorydelays.Id.119134. p   CLECsaccesstoBellSouthsorderingfunctionsissubstantiallythesameastheaccessprovidedtoBellSouthsownretailoperations.MechanizedordergenerationisavailableonBellSouthssideoftheEDIinterfaceforservicesthatcollectivelyrepresent90percentofBellSouthsconsumerandsmallbusinessrevenuesand80percentoftotalretailoperatingrevenue.StacyOSSAff.58.Mechanizedservicegenerationforunbundledloops,ports,andinterimnumberportabilityhasbeentestedandisavailabletoCLECsasofOctober6,1997.Id. #  WhiletherehaveinthepastbeenproblemswithrejectionofelectronicordersplacedbyCLECs,allproblemsattributabletoBellSouthhavebeencorrected.Id.111112. U'0!$   BellSouthhasdesigneditsOSSsinaccordancewiththeEighthCircuitsconclusionthatthetextoftheAct cannotbesquaredwitharequirementthat incumbentLECs,ratherthanthe +$( requestingcarriers,...recombinenetworkelementsthatarepurchasedbytherequestingcarrieronanunbundledbasis.IowaUtils.Bd.,1997U.S.App.LEXIS18183,at*81;seeStacyOSS  Aff.60.Toimposeundersection271anyrequirementthatBellSouthmustofferUNEsonaprecombinedbasisorasa platformwouldcontravenetheCourtofAppealsdecisionandviolatesection271(d)(4),whichforbidstheCommissiontoexpandtherequirementsofthecompetitivechecklist.  ServiceMaintenanceandRepair.CLECscanuseBellSouthsinteractiveTrouble 5  AnalysisFacilitationInterface( TAFI)oramanualinterfacetoinitiatemaintenanceorrepairinquiriesforservicesassociatedwithatelephonenumber.StacyOSSAff.83,8695.ThirteenCLECsarepresentlyusingTAFI.Id.95.For designedservices(whichare  associatedwithacircuitnumber),BellSouthmakesavailabletoCLECsthesameT1M1electronicbondinginterfacecurrentlyusedbyinterexchangecarriersforaccessservicesandtheabilitytopassatroubleticketelectronicallyintotheWorkForceAdministrationdatabaseusingtheExchangeCarrierCommonPresentationManagerinterface.Id.82,96.BellSouthalso  willdevelopcustomizedsystemssuchasonenowbeingdevelopedforAT&TbasedontheT1M1standard.Id.98. !   IfaCLECelectstousethemanualinterface,BellSouthwillhandletheCLECsphonedintroublereportsinthesamewayithandlesreportsfromitsownretailcustomers"byenteringthereportintoTAFI.Id.90,93.ButiftheCLECchoosesdirectaccesstoTAFI,itspersonnel U'0!$ arethemselvesabletoinputtroublereports,obtaincommitmenttimes,andcheckonthestatusofpreviouslyenteredreports.CLECpersonnelentertroublereportsbyinputtinginformationin +$( responsetoTAFImechanizedquestionsinthesamewayBellSouthretailservicerepresentatives,whouseTAFIthemselves,wouldaccomplishthesametask.Id.93.CLECshaveaccessto  informationontheresaleservicesandUNEstheyhavepurchasedfromBellSouth,butnottoinformationaboutthecustomersofotherCLECs.Id.9091.UnlikeBellSouthretailservice   representatives,CLECshavetheadvantageofbeingabletoaccessTAFIforbothbusinessandresidentialcustomersthroughthesameinterface.Id.90. ]8    TAFIautomaticallyperformsdiagnostictestsand,byinteractingwithotherinternalBellSouthsystems,isoftenabletocorrectatroublereportwhilethecustomerisstillontheline.Forexample,ifacustomerweretoreportaproblemwithcallwaiting,TAFIwouldfirstverifythatthefeatureislistedonthecustomerservicerecord.Then,dependingonthenatureoftheproblem,TAFImaybeabletorestoretheservicetotheline.TAFIwillverify,forinstance,thattheprogramoptionsinthecentralofficeswitcharecorrect.IfTAFIfindsanerrorinthoseoptions,itwillautomaticallyreprogramtheswitch.Id.87.Incaseswherefurtheractionis E  required,BellSouthwilladvisetheCLECofthestepsbeingtakenandthetimetheywilltake,sothattheCLECcaninformitsowncustomer.Id.90.Thereafter,theCLECcancheckthestatus  ofarepairorderbyenteringasubsequentreportintoTAFIor,ifitplacedtheinitialordermanually,bycontactingtheBellSouthResidenceRepairCenterorBusinessRepairCenterwithwhichitplacedtheinitialreport.Seeid.9091. }%X" *,XXT$%XX*  TAFIcurrentlywillsupport130simultaneoususerswithavolumeof2600troublereportsperhour.StacyOSSAff.127;seeComplianceOrderat39( [t]hecurrentcapacityfar -)#& exceedsusagetodateandforecastedusageintheimmediatefuture).BellSouthisabletoadd +$( additionalcapacityalmostimmediately.StacyOSSAff.% s 127.AsofAugust31,1997,143usersfrom13CLECshavegeneratedatotalof1690troublereportsinTAFI.664reportsweregeneratedinthemonthofAugustalone. Usagedataandtestingconfirmthattheaccessprovided   toCLECsthroughTAFIisnondiscriminatory.SeeStacyOSSAff.126129&Exs.WNS33,   39.. X,XXT$%X&.  Billing.BellSouthbillsCLECsusingitstwobillingsystems"CarrierAccessBilling e@  Systems( CABS)andCustomerRecordsInformationSystem( CRIS).CABSisabillingsystemforcarriersthatmeasuresbillableaccessusageandconformstoindustrystandardsestablishedbytheOrderingandBillingForum.CRISwasdevelopedforbillingendusersandisusedtobillCLECsforresoldservices:Itmeasuresbillablecallevents(e.g.,theuseofavertical  servicethatischargedonaperusebasis)andaccumulatescallrecorddetails.HollettAff.5.  ACLECreceivesseparatebillsfromtheCRISandCABSsystems,justasaBellSouthenduserwhosubscribestoaservicethatisrecordedinbothsystemswouldreceivetwobills.StacyOSSAff.101.AvarietyofbillingmediaformatsareavailabletoCLECsforbothCRISandCABSbills,andBellSouthoffersacapabilityforsortingtheinformationprovidedonCRISbills.HollettAff.6.Whiletheseparatebillsinvolvedifferentformats,BellSouthhasnegotiatedwithsomeCLECstoprovideCRISdatainCABSformatandistestingthiscapabilitywithAT&TandMCI.Id.7;seealsoStacyOSSAff.102. %`"   BellSouthadditionallyoffersCLECsaccess,eitherelectronicallyorusingamagnetictape,tousagesensitivedatainamannerthatfacilitatesenduserbilling.HollettAff.8(App.AatTab6).TwentyfourCLECsinBellSouthsregionarepresentlyusingthisdailydatatransfer.  +$( Id.󀀀Dailyusageinformationisavailableforresoldlines,interimnumberportabilityaccounts, % andsomeunbundlednetworkelementssuchasunbundledports.Id.Thissystem,theSCPSC  determined,providesCLECs accesstothedatatheyneedinsubstantiallythesametimeandmannerasBST.ComplianceOrderat39.     TestingandactualusageprovethatCLECsareabletoreceivebillinginformationonanondiscriminatorybasis.SeeHollettAff.918(discussingmeasurestoensureadequacyof ]8  billingsystemsforCLECsneeds);StacyPerformanceAff.Ex.WNS53.BellSouthhasadoptedavarietyofsafeguardstopreventdoublebillingandotherbillingerrorsandhasaddressedthefewissuesofthissortthathavearisen.HollettAff.917.  PerformanceMeasurements. h BellSouthhascollectedextensivedataontherealworld  performanceofitssystemsforthisapplication.Thisinformation,whichconfirmsthenondiscriminatoryaccessprovidedbyBellSouth,ispresentedintheattachedaffidavitsofWilliamStacy.SeeStacyOSSAff.108134&Exs.WNS33,3643,4548,53.BellSouth E  alsohascommittedtoprovidedatathatwillallowCLECstoconfirmtheircontinuedreceiptofnondiscriminatoryaccesstoOSSsinthefuture.StacyPerformanceAff.4043&Exs.WNS46,8(discussingBellSouthsagreementwithAT&Tand permanentperformancemeasures).  AsBellSouthhasexplainedinitspetitionforreconsiderationoftheMichiganOrder,the #  Commissionmaynotenforcesubstantiveperformancestandardsforotherchecklistitemsunder }%X" therubricofaccesstoOSSs.WhathappensafterCLECsrequestshavemadeitthrough U'0!$ BellSouthssupportsystemsisgovernednotbytheActsOSSprovisions,butratherbythe -)#& checklistrequirements(ifany)thataddresstheunderlyingitemordered.Therightofaccessto +$( Oa) e   OSSscannotbeextendedtooverlaportrumpthoseindependentchecklistrequirements"norviceversa"fortheActexpresslystatesthat [t]heCommissionmaynot,byruleorotherwise,limitorextendthetermsusedinthecompetitivechecklist....47U.S.C.271(d)(4).However,theperformancemeasurementcommitmentsthatBellSouthhasmadeallowtheCommissionandCLECstoverifythatBellSouthisprovidingnondiscriminatoryaccesstoitsOSSs.SeeinfraPartII(C)(discussingperformancemeasurements).Inthatrespect,theyarejust ]8  partofacomprehensiveeffortbyBellSouthtoensureCLECsongoingaccesstoBellSouthsOSSsthatis"atabareminimum"infullcompliancewiththeAct.   B.0 ` AllFourteenChecklistItemsAreLegallyandPracticallyAvailable ` (#` (#   OSSsenableCLECstoobtainlocalnetworkfacilitiesandservicestheCLECsuseintheirownservices.ThechecklistrequiresthatfourteencategoriesofBellSouthfacilitiesandservicesbemadeavailableonanondiscriminatorybasis.47U.S.C.271(c)(2)(B).Asexplainedbelow,BellSouthfullysatisfiesallfourteenrequirementsbyvirtueofthelegallybindingofferingsofitsStatementandBellSouthsextensive,successfuleffortstomaketherequireditemsavailablein  practice.   ` (1)Interconnection.Subsection271(c)(2)(B)(i)requiresBellSouthtoholdout ! interconnectionwithitsnetworkfacilitiesinaccordancewiththerequirementsofsections251(c)(2)and252(d)(1)oftheCommunicationsAct.ThesetwoprovisionsinturnrequireBellSouthtoprovideinterconnection:(A) forthetransmissionandroutingoftelephone exchangeserviceandexchangeaccess;(B) atanytechnicallyfeasiblepoint;(C) thatisat -)#& leastequalinqualitytowhatBellSouthprovidesitself;(D) onrates,termsandconditionsthatarejust,reasonable,andnondiscriminatory;and(E)baseduponcostplusa reasonableprofit.   BellSouthsStatementsatisfiessections251(c)(2)and252(d)(1)andapplicable   Commissionregulationsbyofferinglocalinterconnectionofequalquality,atanytechnicallyfeasiblepoint,atcostbasedrates.StatementI;VarnerAff.4366;MilnerAff.1014.  ` TheStatementprovidesinterconnectionatthelinesideortrunksideofthelocalswitch,aswell ]8  asattrunkinterconnectionpointsforatandemswitch,centralofficecrossconnectpoints,andoutofbandsignaltransferpoints.StatementI.A.1.TheSCPSCconfirmedthat    interconnectionisavailableateachofthesepoints.ComplianceOrderat29.Pursuanttoa   BonaFideRequestProcessthatwasdevelopedjointlywithAT&TandisavailabletoallCLECs,BellSouthalsowillprovidelocalinterconnectionatanyothertechnicallyfeasiblepoint,includingmeetpointarrangements.StatementI.A.2&Attach.B;Varner19,52;Milner mH Aff.10.Interconnectionisavailablethroughseveralalternativemethods,includingvirtualandphysicalcollocationandinterconnectionviapurchaseoffacilitiesfromeithercompanybytheothercompany.StatementI.C;VarnerAff.49.    TheSCPSCfoundthattheStatementsinterconnectionofferingsareactuallyavailableto ! competitors.Itnotedthat BellSouthhadinstalledapproximately19,360interconnectiontrunksfromCLECsswitchestoBellSouthsswitchesinBellSouthsninestateregion.Compliance }%X" Orderat30.AsofSeptember1,1997,thatnumberhadrisentomorethan28,000trunks, U'0!$ including288trunksinSouthCarolina.MilnerAff.11.TheSCPSCalsofoundthat thereisnodisputethatvirtualcollocationisavailablefromBellSouth,asevidencedbythefivevirtual +$( collocationarrangementsinplace[inSouthCarolina]atthetimeofthehearingandoneadditionalarrangementinprogress.ComplianceOrderat32;seeMilnerAff.26&  Ex.WKM2(currentlistofBellSouthsvirtualcollocations).Thereare14physicalcollocationarrangementsinplaceinBellSouthsregionand86inprogress,includingoneinSouthCarolina.SeeMilnerAff.20(discussingandprovidinglistofphysicalcollocations).BecauseBellSouth  ` usesthesameprocesseswithrespecttochecklistitemsinallofitsninestates,thisexperiencewithinandoutsideSouthCarolinaconfirmsthepracticalavailabilityofinterconnectioninSouthCarolina.MilnerAff.5.  TodemonstratethattheinterconnectionBellSouthprovidescompetitorsisequalinqualitytothatBellSouthprovidesitself,BellSouthhasfurnishedwiththisapplication:detailedtechnicalservicedescriptionsoutliningitslocalinterconnectiontrunkingarrangementsandswitchedlocalchannelinterconnection,MilnerAff.1011&Ex.WKM9;BellSouthsCollocationHandbook,whichestablishesstandardizedproceduresforcollocation,MilnerAff.15;VarnerEx.AJV4;andblockageratesfortrunksthatrouteBellSouthtrafficandfortrunksthatroutecompetitorstraffic,seeStacyPerformanceAff.23,5585.Eachofthesethree  basesforcomparisonconfirmsthattheinterconnectionBellSouthprovidescompetitorsequalswhatitprovidestoitself.MilnerAff.12;StacyPerformanceAff.5585&Exs.WNS1114.Ineveryinstanceinwhichatrunkhasbeenblocked,BellSouthhascooperatedwithcompetitorstoresolvetheproblem.SeeMilnerAff.14(describingexamples). U'0!$   TheStatementalsoaddressestheratesatwhichinterconnectionwillbeprovided. -)#& StatementI.E&Attach.Aat1.TheSCPSCapprovedBellSouths interimratesfor +$( interconnectionasconsistentwithsection252(d)(1),notingthattheymatchtheratesthattheSCPSChadpreviouslyapprovedasconsistentwiththeActintheAT&T/BellSouthArbitrationandarewithinthenowoverturnedinterimproxyratesthathadbeenestablishedbythisCommission.ComplianceOrderat2930;seeVarnerAff.5362(discussingrates).The   SCPSCexplainedthatnothinginthe1996Actrestrictsastatecommissionsabilitytoapproveratesasconsistentwithsection252priorto finalcostproceedings,thatratesettingnecessarily isanongoingprocess,andthattheFCCitselfhasemployedaninterimratemethodologyundersection252.ComplianceOrderat5458.Then,toaddressconcernsthataninterimapproach    might chil[l]localcompetitionbecauseofthepossibilityofanupwardadjustment,theSCPSCeliminatedthatpossibility.Id.at58.WhileBellSouthmustguaranteeCLECsaretroactive,  downwardadjustmenttotheirbillsifwarrantedaftercostproceedings,itmaynotrecoveranyunderchargesincorporatedintotheinteriminterconnectionrates.Id.at5859. mH   CLECsthusareguaranteedthattheywillpaynomorethanthefinalcostbasedratesetbytheSCPSC.VarnerAff.3136.TherewillbenobackbillingforitemspurchasedattheStatementscurrentrates.Id.Thisapproach,theSCPSCdetermined, willactuallyencourage  earlyentryintothelocalmarketbecausepotentialcompetitorswillwanttotakethelargestpossibleadvantageofthecappedinterimratespendingproceedingstoestablishreplacementrates.ComplianceOrderat59. }%X"   TheSCPSChasissuedacommentandhearingschedulegoverningitscostproceeding, underwhichhearingsaretobeginonDecember1,1997andadecisionwillberenderedin -)#& January1998.VarnerAff.28.BellSouthsTELRICbasedcoststudieshavealreadybeenmadeavailabletotheSCPSC.Id.29.     TheSCPSCspricingdeterminationsareconclusive.Section252(d)reservestotheStatespricingauthorityoverlocalinterconnection,unbundledaccess,resale,andtransportandterminationoftraffic. [T]heFCChasnovalidpricingauthorityovertheseareasofnewlocalizedcompetition.IowaUtils.Bd.,1997U.S.App.LEXIS18183,at*29.Thechecklist,in ]8  turn,requiresonlythatinterconnectionpricingcomplywiththerequirementsofsections251(c)(2)and252(d)(1).47U.S.C.271(c)(2)(B)(i).ThisincorporationoftheStatesratesettingauthorityintothechecklistdoesnotsuggestanytransferofpowertotheCommission.Indeed,farfromissuingan explici[t]direct[ion]thattheCommissionexercisejurisdictionoverintrastaterates(aswouldbenecessarytoestablishfederalauthority,Californiav.FCC,No.96 p 3519,1997U.S.App.LEXIS22343,at*10(8thCir.Aug.22,1997)),Congressforbadethe mH CommissionfromextendingthechecklistrequirementofStateregulatedpricinginaccordancewithsection252.47U.S.C.271(d)(4).Simplyput, statecommissiondeterminationsofthejustandreasonableratesthatincumbentLECscanchargetheircompetitorsforinterconnection,unbundledaccess,andresaleare offlimitstotheFCC.IowaUtils.Bd.,1997U.S.App. ! МLEXIS18183,at*50.  (2)AccesstoNetworkElements.Subsection271(c)(2)(B)(ii)requiresBellSouthto }%X" provideaccesstoUNEsinaccordancewiththerequirementsofsections251(c)(3)and252(d)(1)oftheCommunicationsAct.Sections251(c)(3)and252(d)(1)inturnrequireBellSouthtoprovideaccesstounbundlednetworkelements:(A) atanytechnicallyfeasiblepoint;(B) on +$( rates,termsandconditionsthatarejust,reasonable,andnondiscriminatory;and(C)baseduponcostplusa reasonableprofit.Inaddition,intheLocalInterconnectionOrder,theCommission  adoptedrulesthatrequireBellSouthtomakeinterconnectionavailableforunbundledaccessto,ataminimum,thefollowingindependentnetworkelements:localloops;thenetworkinterfacedevice;switching;interofficetransmissionfacilities;signalingnetworksandcallrelateddatabases;OSSfunctions;andoperatorservicesanddirectoryassistance.47C.F.R.51.319.  TheSCPSCfoundthatBellSouthsStatement providesCLECswithnondiscriminatory 5  accesstonetworkelementsinaccordancewiththerequirementsoftheAct.ComplianceOrder    at40.TheStatementprovidesnondiscriminatoryaccesstoallnetworkelementsidentifiedinthe  Commissionsrulesonanunbundledbasisatanytechnicallyfeasiblepoint.StatementII&  Attach.C;VarnerAff.6780;MilnerAff.2729;seealsosupraPartII(A)(OSSaccess). p DarkfiberalsoisavailableinSouthCarolinaonanunbundledbasis,Milner34,consistentwiththetechnicalservicedescriptionprovidedasMilnerAff.Ex.WKM9.ElementsnotspecificallyprovidedforintheStatementareavailablethroughtheBonaFideRequestProcess,where  technicallyfeasible.StatementII.A&D&Attach.B.    BellSouthdoesnotimposeanylimitations,restrictions,orrequirementsonrequestsfororuseofaUNEthatwouldimpairaCLECsabilitytoprovideatelecommunicationsserviceinthemanneritintends.SeeStatementII.G( Networkelementsmaybecombinedinanymanner.). }%X" CLECsobtainexclusiveuseofanunbundlednetworkfacilityandmayusefeatures,functions,or capabilities,forasetperiodoftimeasrequiredbysection51.309(c)oftheCommissionsrules. -)#& VarnerAff.70.BellSouthretainstheobligationtomaintain,repair,orreplaceUNEs,alsoincompliancewithsection51.309(c).Id.;seeStatementAttach.C.     BellSouthpermitsCLECstorecombineUNEsonanendtoend(oranyother)basis,therebycreatingtheequivalentofoneofBellSouthsretailservicesoradifferentserviceoftheirown.VarnerAff.74.ToassistCLECsindoingso,BellSouthwillperformnecessarysoftwaremodificationsandphysicallydeliverUNEs,wherereasonablypossible,atnoextracharge.Id. ]8  AdditionalsoftwaremodificationsareavailablethroughtheBonaFideRequestProcess.Id. 5    AstheU.S.CourtofAppealsfortheEighthCircuithasheld,however,theActslanguagerequiringincumbentLECstoprovideUNEs inamannerthatallowsrequestingcarrierstocombinesuchelements,47U.S.C.251(c)(3), unambiguouslyindicatesthatrequestingcarrierswillcombinetheunbundledelementsthemselves.IowaUtils.Bd.,1997U.S.App. p LEXIS18183,at*82;seealsoid.( [W]edonotbelievethatthislanguagecanbereadtolevya mH dutyontheincumbentLECstodotheactualcombiningofelements....[T]heActdoesnotrequiretheincumbentLECstodoallofthework.)(emphasisinoriginal).Therefore,ifaCLEC  wishestoobtainanexistingretailservicefromBellSouthonaprecombined, switchasisbasis,BellSouthwillprovidethisserviceattheretailratelessthe14.8percentresalediscountsetbytheSCPSC.VarnerAff.75.Thatpercentagestandsincontrasttotheeffective52percentdiscountthatCLECscouldreapiftheywereallowedtocircumventtheActsresalerulesandStatepricingpoliciesbyorderingprecombinedUNEsthatcompriseafinished,endtoendretailserviceattheratesthatapplytounbundled,uncombinedelements.SeeVarnerAff.76.The -)#& SCPSC"exercisingitsexclusivejurisdictionoverpricingofbothUNEsandresaleservices" +$( hasconfirmedtheconsistencyofthispracticewiththerequirementsofthe1996Act.SeeAT&T % ArbitrationOrderat10(Mar.10,1997);VarnerAff.79.  TheStatementsratesfornetworkelementspurchasedonanunbundledbasisalsohave   beenapprovedbytheSCPSC.TheSCPSCheldthattheratesare costbasedwithintherequirementsofthe1996Act.ComplianceOrderat55;seealsoVarnerAff.2540;see  ` StatementAttach.Aat1&AttachG.> G  19      ׀Insodoing,itexplainedthat [i]fratesaresubsequently ]8  modifiedby[theSCPSC]inalaterproceeding,paymentsbyCLECswillbeadjustedretroactivelytothenewratesifthenewratesarelower;again,thisensuresCLECsratesthatwillbenohigherthantheratessetbytheSCPSCafteritscostproceeding.ComplianceOrderat  5354,68.Asdiscussedabove,theSCPSCsconclusionsonpricingaredefinitive.  (3)NondiscriminatoryAccesstoPoles,Ducts,ConduitsandRightsofWay.Section p 271(c)(2)(B)(iii)directsBellSouthtoprovidenondiscriminatoryaccesstothepoles,ducts,conduits,andrightsofwayownedorcontrolledbyitatjustandreasonableratesinaccordancewiththerequirementsofsection224.  BellSouthsStatementprovidessuchnondiscriminatoryaccessontermsthatfulfillall  statutoryandregulatoryrequirements.StatementIII&Attachs.A&D;VarnerAff.8184; ! MilnerAff.3536.NineCLECsauthorizedtoprovideserviceinSouthCarolinahaveexecutedlicenseagreementswithBellSouthtoattachfacilitiestoBellSouthspolesandplace }%X" facilitiesinBellSouthsductsandconduits.ComplianceOrderat40;MilnerAff.35.In % addition,BellSouthhasprovidedcabletelevisionandpowercompanieswithaccesstopoles,ducts,conduitsandrightsofwayinSouthCarolinaandthroughoutitsregionformanyyears.MilnerAff.35.Sucharrangementsare businessasusualforBellSouth.Id.36.     (4)UnbundledLocalLoops.Section271(c)(2)(B)(iv)requiresBellSouthtomake  ` availablelocallooptransmissionfromthecentralofficetothecustomerspremisesunbundledfromlocalswitchingorotherservices.Asnotedabove,BellSouthsStatementmakeslocalloop 5  transmissionavailableonanunbundledbasisincompliancewithsection51.319oftheCommissionsrules.StatementIV.Standardunbundledlocalloopsavailableunderthe  Statementinclude2and4wirevoicegradeanaloglines,2wireISDN,2wireAsymmetrical  DigitalSubscriberLine( ADSL),2wireand4wireHighbitrateDigitalSubscriberLine( HDSL),and4wireDS1digitalgradeline.VarnerAff.85;StatementIV.A.Technical mH servicedescriptionsofBellSouthsloopofferingsareincludedinExhibitWKM9totheAffidavitofKeithMilner.AdditionalloopstypesmayberequestedthroughtheBonaFideRequestProcess.VarnerAff.86.Inadditiontoloopsthemselves,CLECsareabletoobtainloopdistribution,loopcrossconnects,loopconcentration,anduseoftheNetworkInterfaceDevice( NID)undertheStatement.StatementIV.B;Attach.Cat2;VarnerAff.8792; #  MilnerAff.2829.InresponsetoadesireexpressedbyAT&Tinstateproceedings,BellSouthalsoofferstwoalternativewaysofprovidingCLECsaccesstoloops behind integrateddigitalloopcarrierequipment,wherethenecessaryfacilitiesexist.VarnerAff.93 -)#& 97.Asexplainedinconnectionwithchecklistitem(ii)above,theSCPSChasfoundthatBellSouthspricesforlocalloopsareincompliancewithSection252(d)(1).Seealsoid.86.     LocalloopsareavailableinpracticetoanyCLECthatwishestoorderthem.AlthoughCLECsinSouthCarolinahavenottakenBellSouthuponitsoffer,theSCPSCexplainedthat asofJune1,1997,[BellSouth]hadprovisioned2,654unbundledloopstoCLECsinitsninestateregion,ComplianceOrderat42;thatnumberhadgrownto4,316byAugust1.MilnerAff. ]8  37.BellSouthalsohastesteditsabilitytoprocessordersandbillforvariousloopsthattheStatementmakesavailable,ensuringthat generatedordersfortheseitems...flo[w]edthrough    the[BellSouth]systeminatimelyandaccuratefashion.ComplianceOrderat42;MilnerAff.  39.Inactualpractice,BellSouthhasconfirmedthatatleast98percentofthetimeitisabletocutoverloopstoCLECswithin15minutes.MilnerAff.41.  (5)UnbundledLocalTransport.Section271(c)(2)(B)(v)oftheActrequiresBellSouthto mH offerlocaltransportunbundledfromswitchingorotherservices.BellSouthmakesavailablededicatedandsharedtransportbetweenendoffices,betweentandems,andbetweentandemsandendoffices.StatementV.A;VarnerAff.104108;seeMilnerAff.Ex.WKM9(technical  servicedescriptions).CLECshaveaccesstothesametransportfacilitiesthatBellSouthusestocarryitsowntraffic,withoutanydistinctionbetweenBellSouthstrafficandtheCLECstraffic.VarnerAff.107.CLECschoosingsharedtransporthaveaccesstotheroutingtablesinBellSouthsswitches.Id. U'0!$   BellSouthpermitsarequestingcarriertousesharedtransporttoprovideinterstateexchangeaccesstocustomersforwhomthecarrierprovideslocalservice.VarnerAff.108.In +$( suchcases,theCLEC,andnotBellSouth,willcollectthecorrespondinginterstateaccesscharges,regardlessofwhethertheCLEChaspurchasedadedicatedtrunkorsharedtransport.SeeVarnerAff.108.     TheStatementsratesforlocaltransportwerederivedfromtheFCCsproxyratesandare   subjecttoacappedtrueup.VarnerAff.112;seeStatementAttach.Aat2.Likethe  ` Statementsotherrates,theyhavebeenapprovedbytheSCPSC.ComplianceOrderat2930,55. ]8    BellSouthhasfurnished10dedicatedlocaltransporttrunkstoCLECsinSouthCarolinaandnearly1000dedicatedtrunksinitsregion.MilnerAff.47;seealsoComplianceOrderat    4344(notingprovisionoftrunksandthatBellSouthhas testeditsmethodsandproceduresfortheseservicesandhasdemonstrateditsabilitytoplacethesefacilitiesinserviceandgenerateatimelyandaccuratebillforthem).BellSouthhaslikewisedemonstrateditsabilitytofurnishsharedtransportuponrequest.MilnerAff.49.  (6)UnbundledLocalSwitching.Section271(c)(2)(B)(vi)oftheActrequiresBellSouth E  tomakeavailablelocalswitchingunbundledfromtransport,localloops,orotherservices.TheCommissionsrulesrequirefurtherunbundlingoflocalandtandemswitchingcapabilities.47C.F.R.51.319(c)(2). BellSouthsStatementmeetstheserequirementsthroughtheswitching ! servicesdescribedinthisapplication.StatementVI.A;VarnerAff.113121;MilnerAff. #  5052&Ex.WKM9.Wherelineclasscodesareavailable,BellSouthwillprovideselective(or customized)routingbythismethodonafirstcome,firstservedbasis.VarnerAff.119121;MilnerAff.51;seealsoComplianceOrderat45(rejectingAT&Targumentthatselective 5)#& routingcapabilitiesarenotavailable).  +$(   BellSouthwillfollowanyintervalsspecifiedinitsSCPSCapprovedinterconnectionagreementsandSCPSCordersinconvertingservicefromBellSouthtoaCLEC,orfromoneCLECtoanother.BellSouthsgeneralpolicy,however,isthatwheretheCLECdoesnotspecifyanotherduedate,conversionsrequiringasoftwarechangewillbemadeonthesamedaytheyarerequestedifrequestedby3:00p.m.Ifrequestedlater,suchconversionswillbemadeonthenextbusinessday.SeeStacyOSSAff.Ex.WNS19. ]8    BellSouthsswitchofferingssatisfythepricingrequirementsofchecklistitem(ii)andsection252(d)(1).VarnerAff.117118;StatementVI.B&Attach.Aat3.Pendingthe    SCPSCsestablishmentofratesforactivationanduseofverticalfeaturesafteritscostproceeding,BellSouthisnotseparatelychargingCLECsforthesefeaturesbutincludesverticalfeaturesaspartofitsunbundledlocalswitching.Varner118.  TheSCPSCfoundthatBellSouthoffers avarietyofswitchingportsandassociatedusageunbundledfromtransport,locallooptransmissionandotherservicesandmakesadditionalporttypesavailableuponrequestundertheBonaFideRequestProcess.Compliance  Orderat4445.OneCLECinSouthCarolinahasrequestedandreceivedanunbundledswitch  portfromBellSouth,andBellSouthhasfurnishedCLECswith21unbundledportsregionwide.MilnerAff.50;seeComplianceOrderat45.TheSCPSCalsonotedtheextensivetests #  BellSouthhascompletedtoensurethatCLECspurchasingselectiveroutingcanroute0+,0,and411callstoanoperatorotherthanBellSouthsorroute611repaircallstoarepaircenterother thanBellSouths.ComplianceOrderat4546;seeMilner51.TheSCPSCthusproperly -)#& concludedthatBellSouthprovideslocalswitchinginaccordancewithchecklistitem(6).Id.46. %    (7)NondiscriminatoryAccessto911,E911,DirectoryAssistance,andOperatorCall  CompletionServices.Section271(c)(2)(B)(vii)oftheActfurtherconditionsinregion,   interLATAreliefonprovidingnondiscriminatoryaccessto911andE911services,directoryassistanceservices,andoperatorcallcompletionservices.BellSouthfulfillseachoftheserequirements.StatementVII;seeVarnerAff.122153;MilnerAff.5365. ]8    Whethertheyarefacilitiesbasedcompetitorsorresellers,CLECshavenondiscriminatoryaccesstoBellSouths911andEnhanced911facilities.SeeVarner124;StatementVII.A.    For911calls,facilitiesbasedCLECstranslatethe911calltoa10digitnumber(providedbyBellSouth)androutethecalltoBellSouthstandemorendoffice,atwhichpointBellSouthwillcompletethecall.VarnerAff.126;StatementVII.A.3.CLECsareresponsibleforobtaining p thetrunksneededtoreachBellSouthsswitch,butthecostofthe911(orE911)functionalityisbornebythemunicipalitypurchasingtheservice.VarnerAff.126;StatementVII.A.3A.5. E  ForE911calls,theCLECforwardsthe911callandAutomaticNumberIdentification( ANI)totheappropriateBellSouthtandem.Id.127128;StatementVII.A.4.IftheE911tandem  trunksarenotavailable,theCLECwillroutethecall(withoutANI)overBellSouthsinterofficenetworkusinga7digitnumber.VarnerAff.128.BellSouthhasdevelopedaguidethatprovidesfacilitiesbasedCLECswiththeinformationtheyneedtointerconnectwithBellSouthfor911andE911service,whichisfurnishedaspartofthisapplication.MilnerAff.53.  BellSouthroutinelymonitorscallblockageonE911trunkgroupsand,incoordinationwiththeCLEC,takescorrectiveactionusingthesametrunkservingproceduresforE911trunk +$( groupsfromCLECswitchesasforE911trunkgroupsfromBellSouthswitches.MilnerAff.57.  BellSouthisresponsibleforupdatingandmaintainingtheAutomaticLocationIdentification/DatabaseManagementSystemandwilluseitsserviceorderprocesstodosoonthesamedailyschedulethatBellSouthusesforitsownendusercustomers.VarnerAff.125;MilnerAff.54.CLECswillprovideBellSouthwithdailydatabaseupdates.VarnerAff.127;MilnerAff.54.AnyerrorsfoundbyBellSouthinthedatasuppliedbyCLECsarefaxedbacktotheCLECalongwitherrorcodes.MilnerAff.54.BellSouthsproceduresformaintainingthedatabaseandprovidingnondiscriminatoryaccesstoitarefullydiscussedinExhibitWKM4totheAffidavitofKeithMilner.BellSouthisnotawareofanyinstanceinwhichitcausedincorrectenduserinformationregardingaCLECendusercustomertobesenttoemergencyservicepersonnel.MilnerAff.54.  BellSouthhas211trunksconnectingCLECswithBellSouthsE911arrangementsinitsninestateservicearea,including4trunksinSouthCarolina.MilnerAff.59.BellSouthalsoisreceivingmechanizeddatabaseupdatesfrom15differentCLECs.Id.;seeComplianceOrderat  4647.  ThroughitsStatement,BellSouthbothofferstoperformdirectoryassistance( DA)and #  directoryassistancecallcompletion( DACC)servicesonbehalfofCLECsandprovidesCLECswithdirectaccesstoitsDAdatabases.StatementVII.B;VarnerAff.129133; U'0!$ MilnerAff.6064.DetailsofBellSouthsDAandDACCservicesaresetoutinatechnicalservicedescription.MilnerAff.60,64&Ex.WKM9.Subjecttolineclasscodecapacity, +$( BellSouthwilluseselectiveroutingtoprovidebrandeddirectoryassistancecapabilitiesforfacilitiesbasedCLECsandresellers.VarnerAff.131;StatementVII.B.3.CLECs  subscriberlistingswillbeincludedinBellSouthsDAdatabasesatnochargeandwillbemaintainedinthesamemannerandwithinthesameintervalsasBellSouthenduserlistings.VarnerAff.132;StatementVII.B.1.  `   AsofSeptember1,CLECswereusing492BellSouthdirectoryassistancetrunks.Milner60.AlthoughnoCLECshadorderedsuchtrunksinSouthCarolina,id.,BellSouthhas for 5  manyyearsprovidedcomparabledirectoryassistancetoindependentlocaltelephonecompaniesinSouthCarolina,aswelltoIXCs.ComplianceOrderat47;MilnerAff.61.BellSouth  currentlyprovidesDAserviceto15CLECsandDACCservicesto16CLECs.MilnerAff.60.ElevenCLECsinBellSouthsregion,including7inSouthCarolina,wereusingBellSouthsDAdatabaseserviceasofAugust1,1997.OneCLECinBellSouthsregionwasusingBellSouthsdirectaccesstoDAservice( DADAS)asofSeptember1.Id. E    TheStatementlikewiseprovidesoperatorservicesincompliancewithstatutoryand  regulatoryrequirements,allowingaCLECssubscriberstoaccessservicessuchasoperatorcallprocessingaccessservices,busylineverification,centralizedmessagedistributionsystemhosting,emergencyinterrupt,intercept,andoperatorservicestransport.StatementVII.C& #  Attach.E(CMOS);VarnerAff.134139;MilnerAff.63,65&Ex.WKM9.AsofSeptember1,1997,therewere6operatorservicestrunksand2verificationtrunksinplaceinSouthCarolina,andatotalof222operatorservicestrunksand48verificationtrunksacrossBellSouthsninestates.MilnerAff.65. +$(   RatesforfacilitiesandservicesfurnishedtoCLECsunderchecklistitem(vii)havebeenapprovedbytheSCPSCandarefurtherdiscussedintheAffidavitofAlphonsoVarner.ComplianceOrderat4647;VarnerAff.140146;seeStatementAttach.Aat34.     (8)WhitePagesDirectoryListingsforCLECCustomers.Section271(c)(2)(B)(viii)   requiresBellSouthtomakeavailableWhitePagesdirectorylistingsforthecustomersofcompetingCLECs.BellSouthsStatementsatisfiesthisrequirement.StatementVIII.A;see ]8  VarnerAff.147153.ItmakesavailableWhitePageslistingsforcustomersofbothresellersandfacilitiesbasedcarriers,asiftheywereBellSouthcustomers.VarnerAff.148;Statement    VIII.A.&F.CLECsubscribersarenotseparatelyclassifiedorotherwiseidentified,andtheirlistingsareaccordedthesamelevelofconfidentialityasthelistingsofBellSouthcustomers.VarnerAff.149150.TheSCPSCfoundthat CLECsubscribersreceivenolessfavorablerates,termsandconditionsfordirectorylistingsthanareprovidedto[BellSouths]subscribersandthatBellSouth isprovidingWhitePageslistingstoCLECsandtheirsubscribers,withthousandsinplacetoday.ComplianceOrderat4748;seeMilnerAff.66.Althoughitisnot  requiredtodosounderthechecklistoranyotherprovisionoftheAct,BellSouthalsoincludesCLECsbusinesssubscriberslistingsintheappropriateYellowPagesorclassifieddirectory.VarnerAff.150.  (9)NondiscriminatoryAccesstoTelephoneNumbers.Pursuanttosection }%X" 271(c)(2)(B)(ix)oftheAct,BellSouthmustprovideCLECswithnondiscriminatoryaccessto telephonenumbersforassignmenttotheircustomersuntiltelecommunicationsnumbering -)#& administrationguidelines,plans,orrulesareestablished.BellSouthhasmetthisrequirement.SeeStatementIX;VarnerAff.154155;MilnerAff.6971.     AstheCentralOfficeCode( NXX)Administratorforitsterritory,BellSouthhasfollowedindustryestablishedguidelinespublishedbytheIndustryNumberingCommittee.MilnerAff.69&Ex.WKM5.Pursuanttoitsprocedures,BellSouthhasassigned72NPA/NXXcodesforCLECsinSouthCarolina.MilnerAff.69.BellSouthhasnotturneddownanyrequestsforNPA/NXXcodeassignments.Id. 5    (10)NondiscriminatoryAccesstoSignalingandCallRelatedDatabases.Section    271(c)(2)(B)(x)oftheActrequiresBellSouthtoprovideCLECswithnondiscriminatoryaccesstodatabasesandassociatedsignalingnecessaryforcallroutingandcompletion.TheCommissionsimplementingregulationsalsorequireBellSouthtoprovidenondiscriminatoryaccesstosignalingnetworksandcallrelateddatabases.47C.F.R.51.319(e).  BellSouthsStatementofferstherequiredaccess.StatementX;VarnerAff.156 E  169;MilnerAff.7294.CLECsinSouthCarolinahaveaccesstoSignalingLinks(dedicatedtransmissionpathscarryingsignalingmessagesbetweenswitchesandsignalingnetworks),SignalTransferPoints(signalingmessageswitchesthatinterconnectSignalingLinkstoroutesignalingmessagesbetweenswitchesanddatabases),andServiceControlPoints(databasescontainingcustomerand/orcarrierspecificrouting,billing,orserviceinstructions).StatementX.A. }%X" ServiceControlPointstowhichCLECshaveaccessinclude(butarenotlimitedto):LineInformationDataBase( LIDB);tollfreenumberdatabase;AutomaticLocationIdentification/DataManagementSystem;AdvancedIntelligentNetwork( AIN);andselective +$( routing.VarnerAff.157167;StatementX.A.3&Attach.F(LIBD).BellSouthprovides % accesstoitsdatabasesonanondiscriminatorybasisandinamannerthatcomplieswiththerequirementsofsection222oftheCommunicationsAct.SeeMilnerAff.7294;seealso   MilnerAff.Ex.WKM9(technicalservicedescriptions).StatementX&Attach.C.     TheSCPSCfoundthatthedatabasesandsignalingnetworksofferedintheStatementare  ` eachavailabletoCLECs.ComplianceOrderat49.Indeed,inthefirst7monthsof1997alone, ]8  CLECsmadeapproximately22millionqueriestoBellSouthstollfreedatabase.MilnerAff.92.BellSouthsLIDBprocessedmorethan244millionqueriesfromoutsideBellSouthduringthesameperiod.Id.󀀀BellSouthsAINToolkit1.0andAINSMSAccess1.0"whichCLECs  willuseinconnectionwithAINaccess"havebeentestedandtheaccuracyofbillingfortheseofferingshasbeenconfirmed.Id.93;ComplianceOrderat49.BellSouthssignalingservices p arealsoavailabletoCLECsinpractice,asdemonstratedbyactualCLECinterconnection.ComplianceOrderat49;MilnerAff.94. E    (11)InterimNumberPortability.Section271(c)(2)(B)(xi)oftheActrequiresBellSouth  toprovideCLECswithinterimnumberportability( INP),eitherthroughremotecallforwarding( RCF),directinwarddialing( DID),orothercomparablearrangements,untiltheCommissionissuesregulationstoensurepermanentnumberportability.Seealso47C.F.R. #  42.7(a),42.9,42.3(a),(b).BellSouthsStatementmeetsthisrequirementaswell.Itoffers }%X" RCForDID,attheCLECsoption,onnondiscriminatoryrates,termsandconditions.Statement U'0!$ XI&Attachs.Aat56andG;VarnerAff.170177;MilnerAff.95103&Ex.WKM9(technicaldescriptionsofRCFandDID).CLECsthatchooseDIDnumberportabilityhave +$( accesstosignalingusingtheSS7protocol.MilnerAff.95.AdditionalmethodssuchasRouteIndexPortabilityHub,DirectNumberRouteIndex,andLocalExchangeRoutingGuideareavailablethroughtheBonaFideRequestProcess.VarnerAff.172.BellSouthsinterimratesfornumberportabilityareconsistentwiththerequirementsoftheActandwereapprovedbytheSCPSCsubjecttoacappedtrueupafterthatCommissionscostproceeding.VarnerAff.176;seeStatementAttach.Aat56. ]8    TheSCPSCfoundthatBellSouthhad testeditsmethodsandproceduresforprovidingRCFandDID, demonstrateditsabilitytoplacethesefacilitiesinserviceandgenerateatimelyandaccuratebillforthem,and demonstrateditsoperationalreadinessbyportingthousandsofactualendusertelephonenumbersinitsregion.ComplianceOrderat50;seeMilnerAff.97  (BellSouthhasportedover13,000businessnumbersand29residencenumbers).  AsexplainedintheAffidavitofKeithMilner,BellSouthwillimplementapermanentapproachtonumberportabilityconsistentwiththestandardssetbytheSCPSC,thisCommission,andindustryfora.MilnerAff.102&Exs.WKM6&WKM7;StatementXI.F;seealso  VarnerAff.178.  (12)LocalDialingParity.Section271(c)(2)(B)(xii)ofthe1996ActrequiresBellSouth ! toprovideCLECswithnondiscriminatoryaccesstoservicesandinformationthatarenecessarytoallowlocaldialingparityinaccordancewithsection251(b)(3).Seealso47C.F.R.51.207 }%X" (equalnumberofdigits).Consistentwiththisrequirement,BellSouthsStatementguarantees U'0!$ that CLECcustomerswillnothavetodialanygreaternumberofdigitsthanBellSouthcustomerstocompletethesamecallandthat CLEClocalservicecustomerswillexperienceat +$( leastthesamequalityasBellSouthlocalservicecustomersregardingpostdialdelay,callcompletionrateandtransmissionquality.StatementXII.A;seeVarnerAff.179182;  MilnerAff.105.TheSCPSCfoundthatBellSouthofferslocaldialingparityinaccordancewiththechecklistrequirement.ComplianceOrderat51.     (13)ReciprocalCompensationfortheExchangeofLocalTraffic.Section  ` 271(c)(2)(B)(xiii)requiresBellSouthtoagree,undersection251(d)(2),tojustandreasonabletermsandconditionsthatprovideformutualandreciprocalrecoverybyBellSouthandtheCLECofthecostsassociatedwithtransportingandterminatingcallsthatoriginateontheothercarriersnetwork. AstheSCPSCexplainedinitsorderapprovingtheStatement,BellSouthsrateswere  approvedbytheSCPSCintheAT&TArbitration,fallwithintheCommissionsnowdefunctproxyrates,and areinfullcompliancewiththischecklistitem.ComplianceOrderat52;see x StatementAttach.Aat1;VarnerAff.183187.Asdiscussedabove,theSCPSCsconclusions uP onthesemattersaredefinitive.BellSouthdoesnotpayorbilllocalinterconnectionchargesfortrafficterminationtoenhancedserviceprovidersbecausethistrafficisjurisdictionallyinterstate.VarnerAff.186187.  (14)Resale.Section271(c)(2)(B)(xiv)requiresBellSouthtomakeits ! telecommunicationservicesavailableforresaleinaccordancewiththeprovisionsofsections251(c)(4)and252(d)(3)oftheCommunicationsAct.Theseprovisions,inturn,requireBellSouthtoprovideitsservicesatwholesalerates,withnounreasonableordiscriminatory conditionsorlimitations.47U.S.C.251(c)(4),252(d)(3);seealso47C.F.R.51.603(b) 5)#& (requiringequalquality,subjecttothesameconditions,andwiththesameprovisioningtimeintervals).   BellSouthsStatementoffersCLECswholesaleratesforanyservicesthatBellSouthofferstoitsretailcustomers,withtheexceptionofthoseexcludedfromresalerequirementsinaccordancewiththeCommissionsrulesandtheordersoftheSCPSC.SeeStatementXIV;  ` VarnerAff.188198;MilnerAff.106109&Ex.WKM9(technicalservicedescriptions).Servicestowhichthewholesalediscountdoesnotapplyincludepromotionsof90daysorless(whichareavailableatthepromotionalprice),grandfatheredservices(whichmayonlyberesoldtosubscriberswhoaregrandfathered),andcontractservicearrangements(whichareavailableforresaleatthesamerates,terms,andconditionsofferedtoBellSouthsendusercustomers).VarnerAff.191192.AstheSCPSCnoted,BellSouthhasfilledhundreds(nowthousands)ofresaleordersinSouthCarolinaandtensofthousandsofordersinitsregion.ComplianceOrder mH at53;seeMilnerAff.106&Ex.WKM8.Testingconfirmsthepracticalavailabilityofresale E  servicesthathavenotyetbeenpurchasedbyanyCLEC.MilnerAff.109.AllknownbillingproblemsassociatedwithresaleserviceshavebeencorrectedbyBellSouth.Id.107108.    TheStatementsdiscountrateof14.8percent,seeStatementAttach.H,wasestablished ! bytheSCPSCintheAT&TArbitration.ConsistentwiththisCommissionspreferredmethodology,seeMichiganOrder295,theSCPSCsetits14.8percentdiscountbyadjusting }%X" upwardtherateindicatedinanavoidablecostdiscountstudypreparedbyBellSouth.CochranAff.31(App.AatTab2).TheSCPSCreaffirmedtheconsistencyofthisdiscountwiththeActsrequirementsinitsComplianceOrderat52. +$( Ik;*    k;*hIC  .0 `   PerformanceMeasurements k;*hIی%` (#` (# Ќ    AswithOSSs,BellSouthhascommittedtoprovidingCLECswithperformancemeasurementsregardingotherchecklistitemsthatwillallowthoseCLECstoverifytheyarereceivingnetworkinterconnectionandaccessinaccordancewiththeAct.ThemeasurementsBellSouthwillmakeavailablefallintothreecategories: initialmeasurementsthatreflectthecriteriahistoricallyappliedtoBellSouthsownretailoperations; AT&TmeasurementsthathavebeennegotiatedwithAT&TandincorporatedintotheBellSouth/AT&Tinterconnectionagreement,seeStacyPerformanceAff.Ex.WNS4;andgenerallyavailable permanent    measurements,whichgobeyondtheAT&TmeasurementsandconstituteadditionalevidenceofBellSouthscompliancewiththerequirementsoftheAct,seeStacyPerformanceAff.16,42  43.  BellSouthsinitialmeasurementsshow,forresoldbusinessandresidentialservices:  ~a"0 `  percentageofduedatesmetinprovisioningordersforaservice;E ` (#` (#   ~a"0 `  troublereportrateper100accesslinesinservice;` (#` (#   ~a"0 `  percentageoftroublereportsthatareresolvedinlessthan24hours;` (#` (#   ~a"0 `  averageintervalfromreceiptofatroublereportuntilitiscleared;!` (#` (#   ~a"0 `  percentageofmissedappointmentsformaintenancereports;# ` (#` (#   ~a"0 `  percentageofrepeattroublereportsreceivedonthesamelinewithin30days;and}%X"` (#` (#   ~a"0 `  percentageoftroublereportsreceivedwithin30daysoftheinstallationofnew U'0!$ service. ` (#` (#   -)#& Id.19.Thisinformationisseparatelyavailableforbusinessandresidentialservicesonastate % bystateandregionwidebasis forBSTandallCLECsasagroup.Id.18.CLECsalsoareable  toobtainspecificdatarelatingtotheirowninteractionswithBellSouth.   InitialperformancemeasurementsforSouthCarolinaandBellSouthsregionareprovidedasExhibitsWNS1,WNS2,andWNS3totheStacyPerformanceAffidavit.Thesedatademonstratethatineverycategory,CLECsinSouthCarolinaandthroughoutBellSouthsregionhavereceivedservicethatissubstantiallysimilarto,orbetterthan,theservicereceivedbyBSTsownretailcustomers.SeeStacyPerformanceAff.2122.     Forlocalinterconnectiontrunking,theinitialperformancemeasurementsare:  ~a"0 `  totalnumberoftrunksinservice;` (#` (#   ~a"0 `  numberoftrunkordersprocessedduringthemonth;x` (#` (#   ~a"0 `  numberoforderdatesmissedforCLEC/enduserandBellSouthreasons;uP` (#` (#   ~a"0 `  percentageoforderduedatesmetontime,excludingtrunkinstallationsmissed M( duetocustomer; ` (#` (#   ~a"0 `  percentageofnewcircuitfailureswithin30daysofinstallation;and` (#` (#   ~a"0 `  averagerepairintervaloftroubles. ` (#` (# Id.2327&WNS3.Thesamedataareavailableforunbundledloops.Id.2327&Ex. " WNS3.Inaddition,theunbundledloopsreportprovidesthepercentageofrepeattroublereportswithin30days.Id.Aswithresaleservices,thesemeasuresdemonstratethatCLECsinSouth q&L # CarolinaandthroughoutBellSouthsregionarecurrentlyreceivingaccesstotrunksandunbundledloopsonanondiscriminatorybasis,wheredirectcomparisonstoBellSouthsretailoperationsarepossible.Wheresuchdirectcomparisonsarenotpossible,themeasures +%) demonstratethatBellSouthprovidesahighlevelofservicethatwillallowCLECstocompeteeffectively.Id.2527.    AsnotedaboveinconnectionwithBellSouthssystemsforOSSaccess,BellSouthalsonegotiatedwithAT&TtoasetofcontractualperformancemeasurementsthatareavailabletoanyotherCLECthatwishestoenterintosimilarnegotiations.StacyPerformanceAff.28.InadditiontotheinitialmeasurementscollectedbyBellSouth,theAT&TagreementrequiresBellSouthtoincludemeasurementssuchas dispatchoutand nondispatchcategoriesforresaleservices,localinterconnectiontrunking,andUNEs,aswellasmeasuresforbilling,databaseaccessandaccuracy,andaccountmaintenance.Id.40&Ex.WNS8.Alsoin  connectionwiththeAT&Tagreement,BellSouthhasestablishedasetoftargetintervalsforprovisioningofUNEs.Id.36.Provisioningtargetshavebeenestablishedforloops,subloops, p theNID,openAIN,signalingtransport,interofficetransport,DAandoperatorservices,crossconnects,selectiverouting,andswitchingfunctions.Id.Ex.WNS7A.BellSouthhas E  establishedtargetintervalsformaintenanceofUNEsaswell.Id.36&Ex.WNS7A;seealso  id.5254&Ex.WNS10(discussingserviceorderintervals).    BaseduponitsexperiencewiththeinterimandAT&TmeasurementsanditsnegotiationswithotherCLECs,BellSouthhasestablishedasetofpermanentperformancemeasurementsforresaleservices,interconnectiontrunking,andUNEs.ThepermanentmeasurementsgenerallyparallelthosedevelopedwithAT&T,butthepermanentmeasurementssplittheresoldservicesintomorecategories(dispatchandnondispatch),splittheUNEsintotwocategories(loopandnonloop)andaddmeasuresfororderrejectpercentagesandtimelinessofFirmOrder +$( Confirmations.Id.43.InthecaseofUNEs,thedatawillreflectonlytheCLECactivity,since % BellSouthdoesnotprovideunbundledelementstoitself.Inaddition,BellSouthcollectstrafficmeasurementsontrunkgroupsinterconnectedwithCLECsaswellasonothertrunkgroupsinitsnetwork.Id.68.Trunkblockagedataareaavailabletointerestedpartieseverytwoweeks.Id.   BellSouthstrunkblockagemeasurementsarediscussedfullyintheStacyPerformanceAffidavitat6874.BellSouthiscollectingdataforallcategoriesofpermanentmeasurements,andinitialdataisavailableformostresalemeasurements(id.4451&Ex.WNS9),unbundled 5  loops(id.26&Ex.WNS3),andlocalinterconnectiontrunking(id.2527&Ex.WNS2    andWNS9,pp.2932).Thesemeasurements,liketheinterimmeasurementsdiscussedabove,confirmthatresoldservices,unbundledloops,andlocalinterconnectiontrunkingareavailabletoCLECsonanondiscriminatorybasis.  BymakingtheseperformancemeasurementsavailabletointerestedCLECsandregulators,BellSouthgivesthesepartiesampletoolstoensurethatBellSouthisprovidingandwillinthefutureprovidethenondiscriminatoryaccesscalledforbytheAct.TheresimplycanbenoundetectedbackslidingfromBellSouthscommitmentsandsuccessfulimplementationofitschecklistobligations.  III.0  BELLSOUTHSATISFIESTHEREQUIREMENTSOFSECTION272 # (#(#    Section271(d)(3)(B)authorizestheCommissiontoensurethat therequested }%X" authorizationwillbecarriedoutinaccordancewiththerequirementsofsection272.Section272inturnrequirescompliancewithseparateaffiliateandnondiscriminationsafeguardsthatpreventaBellcompanyfromprovidingitslongdistanceaffiliatewithanunfairadvantageover +$( competitors.Asdescribedbelow,BellSouthissubmittingwiththisapplicationextensiveevidencethatitsentryintolongdistancewillsatisfyeachoftherequirementsofsection272andtheCommissionsimplementingregulations.  SeparateAffiliateRequirementofSection272(a).BellSouthCorporationhasestablished   anaffiliate"BellSouthLongDistance,Inc."thatwillprovideinregioninterLATAservicesincompliancewiththestructuralseparationandoperationalrequirementsofsection272.JarvisAff.59(App.AatTab7).BellSouthwillprovideinterLATAservicesthroughBSLDandnotthroughBST.Id.;CochranAff.67.      StructuralandTransactionalRequirementsofSection272(b).Section272(b)(1)provides  thattherequiredseparateaffiliate shalloperateindependentlyfromtheBelloperatingcompany,andtheCommissionhasissuedregulationsimplementingthisstatutoryrequirement.JarvisAff.10;CochranAff.8.BSLDandBSThaveestablishedrulesandprocedurestoensurethattheywilloperateinamannerthatsatisfiesboththeActandtheCommissionsimplementingregulations.JarvisAff.11;CochranAff.819.BSLDandBSTdonotandwillnotjointlyowntelecommunicationstransmissionorswitchingfacilities,orthelandandbuildingsonwhichsuchfacilitiesarelocated.JarvisAff.10;CochranAff.9.Inaddition,BSTandBSLDuseseparatepersonneltooperate,install,andmaintainfacilities,andwillcontinuetodoso.JarvisAff.10;VarnerAff.238.  BSTandBSLDwillalsocomplywiththerequirements,setoutinsections272(b)(2)and 272(b)(3),thattheymaintainseparatebooksandseparateofficers,directors,andemployees. -)#& JarvisAff.1112;CochranAff.1117.Inaccordancewithsection272(b)(4),BSLDscreditorsdonotandwillnothaverecoursetoBSTsassets.JarvisAff.13;CochranAff.18.   Consistentwithsection272(b)(5),alltransactionsbetweenthetwocompanieswillbeconductedonanarmslengthbasis,reducedtowriting,subjecttopublicinspection,andaccountedforinaccordancewithallapplicableCommissionrequirements.JarvisAff.1114(describingprocedures);id.14(a)(describingproceduresforpostingtransactionsonthe ]8  Internet);id.Ex.4(copyofInternethomepage);CochranAff.20(describingcostallocation 5  manual).  PriortoreceivinginterLATAauthorizationandestablishingBSLDasasection272affiliate,BSTandBSLDneednotconducttransactionsinaccordancewiththerequirementsofsection272.Section271(d)(3)(B)employsthefuturetense,authorizingtheCommissiontoensurethat therequestedauthorizationwillbecarriedoutinaccordancewiththerequirements mH ofsection272(emphasisadded).While pastandpresentbehaviorunderapplicablerulesmayberelevanttoensuringfuturecompliancewithsection272(andinAmeritechscasewas highlyrelevantbecauseAmeritechclaimedalreadytobeincompliance),MichiganOrder366,the  ActdoesnotempowertheCommissiontorequirefullsection272compliancebeforetheBOC ! applicantreceivesinterLATAauthorization.  Nonetheless,inordertoprovidetheCommissionwithwhatitmaydeem relevantinformation,BellSouthincludeswithitsapplicationadescriptionofalltransactionsbetweenBSTandBSLDtodateaswellasadescriptionoffutureservicesthatmaybeprovidedpursuanttowrittenagreements.JarvisAff.14(b)(c).Thesetransactionshavebeencarriedoutonan +$( armslengthbasisandinaccordancewiththeCommissionsaffiliatetransactionandcostaccountingrules.CochranAff.1923.  NondiscriminationSafeguardsofSection272(c).Section272(c)(1)prohibitsBSTfrom   discriminatingbetweenBSLDandanyotherentity.IncompliancewiththisprovisionandCommissionregulations,andsubjecttothejointmarketingauthoritygrantedbysection272(g),BSTwillmakeavailabletounaffiliatedentitiesanygoods,services,facilitiesandinformationthatBSTprovidestoBSLDatthesamerates,terms,andconditions.VarnerAff.204.Thesemayincludeexchangeaccess,interconnection,collocation,UNEs,resoldservices,accesstoOSSs,andadministrativeservices.Id.205207.TotheextentBSTdevelopsnewservices  fororwithBSLD,itwillalsocooperatewithotherentitiesonanondiscriminatorybasistodevelopsuchservices,solongasitisrequiredtodosoundersection272.Id.207.BSTdoes p notandwillnot,forsolongastherequirementapplies,discriminatebetweenBSLDandotherentitieswithregardtothedisseminationoftechnicalinformationandinterconnectionstandardsrelatedtotelephoneexchangeandexchangeaccessservices,orwithregardtoprotectionofconfidentialnetworkorcustomerinformation.Id.208212;seealsoinfraPartIV.D.1  (describingregulatoryandpracticalprotectionsagainsttechnicaldiscrimination);GunterAff.544(same)(App.AatTab4).NorwillBSTdiscloseanyindividuallyidentifiableCustomerProprietaryNetworkInformation( CPNI)toBSLDexcepttotheextentthatsuchdisclosureisconsistentwithsection272andCommissionrules.VarnerAff.213.BSTwillcontinueto providepublicnoticeregardinganynetworkchangethatwillaffectacompeting -)#& telecommunicationscarriersperformanceorabilitytoprovideservice,orwillaffectBSTsinteroperabilitywithothertelecommunicationscarriers.Id.211.     Asrequiredbysection272(c)(2),BSTwillaccountforalltransactionsbetweenBSLDandBSTinaccordancewithapplicableCommissionrules.SeeCochranAff.2023.     AuditRequirementsofSection272(d).Pursuanttosection272(d)(1),BSTwillobtain  ` andpayforajointfederal/stateauditeverytwoyears.Thisauditwillbeconductedbyanindependentauditortoverifycompliancewiththerequirementsofsection272andCommissionregulationspromulgatedthereunder,includingseparateaccountingrequirementsundersection272(b).CochranAff.27.Inaccordancewithsection272(d)(2),BSTwillrequiretheindependentauditortoprovidethisCommissionandtheSCPSCwithaccesstoworkingpapersandsupportingmaterialsrelatingtothisaudit.Id.28.And,asrequiredbysection272(d)(3), p &  BSTanditsaffiliates,includingBSLDandBellSouthCorporation,will'm&providetheindependentauditor,theCommission,andtheSCPSCwithaccesstofinancialrecordsandaccountsnecessarytoverifycompliancewithsection272andtheregulationspromulgatedthereunder,includingtheseparateaccountingrequirementsundersection272(b).Id.29.    FulfillmentofRequestsPursuanttoSection272(e).Pursuanttosection272(e)(1),BST ! willfulfillrequestsfromanunaffiliatedentityforinstallationandmaintenanceoftelephoneexchangeandexchangeaccessservicewithinaperiodnolongerthantheperiodinwhichitprovidessuchservicetoBSLD.VarnerAff.216222.Inaddition,BellSouthwillcomplywithallapplicableCommissionmonitoringandreportingrequirements.Id.219;see,e.g., -)#& Order,RevisionsofARMISQuarterlyReport,11FCCRcd22508,2251516,20,22(1996) +$( (reportingof,interalia,informationabouttrunkblockage,totalswitchdowntime,andconsumer % satisfaction);RevisionsofARMISQuarterlyReport,11FCCRcdat22515,20(reportingof  installationandrepairintervals).k G  20           BSTwillcomplywithsection272(e)(2)byrefusingtoprovideanyfacilities,services,orinformationconcerningitsprovisionofexchangeaccesstoBSLDunlesssuchfacilities,services,orinformationaremadeavailabletootherprovidersofinterLATAservicesinthatmarketonthesametermsandconditions.VarnerAff.223.Inaccordancewithsection272(e)(3),BSTwillchargeBSLDratesfortelephoneexchangeserviceandexchangeaccessthatarenolessthantheamountBSTwouldchargeanyunaffiliatedinterexchangecarrierforsuchservice.Id.224  225.Also,whereBSTusesaccessforprovisionofitsownservices,BSTwillimputetoitselfthesameamountitwouldchargeanunaffiliatedinterexchangecarrier.Id.225.Finally,tothe p extentthatBSTispermittedtoprovideinterLATAorintraLATAfacilitiesorservicestoBSLD,BSTwillmakesuchservicesorfacilitiesavailabletoallcarriersatthesameratesandonthesametermsandconditions,inaccordancewithsection272(e)(4).Id.227.    JointMarketingProvisionsofSection272(g).Pursuantto272(g)(1),BSLDwillnot  marketorsellBSTstelephoneexchangeserviceunlessBSTpermitsBSLDscompetitorstodosoaswell.VarnerAff.228.Incompliancewithsection272(g)(2),BSThasnotandwillnot #  marketorsellBSLDsinterLATAservicesinSouthCarolinauntiltheCommissiongrantsinterLATAauthorityforthatState.VarnerAff.229.  BellSouthhaspetitionedtheCommissiontoreconsidertheMichiganOrdersdiscussion   ofAmeritechsproposed marketingscript,whichmayerroneouslybereadtopreventaBellcompanyfrommentioningitslongdistanceaffiliatebeforereadingalistofallavailablecarriersinrandomorder.SeeVarnerAff.230232.Section251(g)preservesaBOCspreexisting ]8  obligationtoprovideequalaccess.TheAct,however,alsoauthorizestheBOCsandtheirsection272affiliatestomarkettheirservicesjointlyuponreceivinginterLATAreliefundersection271.47U.S.C.272(g)(2).IntheNonAccountingSafeguardsOrdertheCommissionstrucka  balancebetweentherightofaBOCanditsaffiliatetomarketservicesjointlyandtheBOCscontinuingobligationsundersection251(g).TheCommissionexplainedthat thecontinuingobligationtoadvisenewcustomersofotherinterLATAoptionsisnotincompatiblewiththeBOCsrighttomarketandselltheservicesoftheirsection272affiliatesundersection272(g).NonAccountingSafeguardsOrder,11FCCRcdat22046,292.Rather,aBOCcanmeetits  equalaccessobligations,whilejointmarketing,by inform[ing]newlocalexchangecustomersoftheirrighttoselecttheinterLATAcarrieroftheirchoiceandtak[ing]thecustomersorderfortheinterLATAcarrierthecustomerselects.Id. #    Inexplainingthatthetwoprovisionswerecompatible,theCommissionreliedontheex }%X" partecommentsofNYNEX,id.&n.764,inwhichNYNEXsetforthamarketingscriptreflecting U'0!$ thefactthatsection251(g) doesnotcontinuetheMFJsprohibitionagainstmarketing,but onlycontinuestherequirementtoadvisenewcustomersofavailablecarriersifthecustomer +$( doesnotnamealongdistancecarrier.^ G  21      ׀TheNYNEXscriptthattheCommissioncited % approvinglyinformedcustomersthattheyhadachoiceofcarriers,butdidnotrequireNYNEXrepresentativestolistalloftheeligibleinterexchangecarriersuntilafterNYNEXhadmentioneditsownlongdistanceaffiliateandaskedthecustomerifheorshehadalreadymadeaselection.lT G  22           TheCommissionsacceptanceofthisbalancedapproachmadesense.AnyrequirementthattheBOCslongdistanceaffiliatebementionedonlyaspartofarandomlistwouldnullifytheBOCsstatutoryjointmarketingright.Moreover,requiringaBOCtolisteveryinterexchangecarrierevenwhenthecustomer(afterthirteenyearsofequalaccessandexposuretonumerouscarriersmarketingefforts)hasalreadymadeuphisorhermindwouldimposeaneedlesslyburdensomeobligationthatwouldslowthepresubscriptionprocessandannoytheBOCslocalcustomers.SucharequirementalsowouldbeflatlyinconsistentwiththeCommissionspriorrecognitionthatsection251(g)doesnotaddtoaBOCspreexistingequalaccessobligationsandthat,undersection272(g),aBOCmustbepermittedtomarkettheservicesofitslongdistanceaffiliate.NonAccountingSafeguardsOrder,11FCCRcdat22046,  292.Ifthestatutesexpressjointmarketingauthorizationistomeananything,aBOCcannotbedeniedtheopportunitytobringitsaffiliatesservicestothecustomersattentioninapreferentialfashion.SeeBabbittv.SweetHomeChapterofCommunitiesforaGreatOregon,   115S.Ct.2407,2426(1995)( statutesshouldberead...togiveindependenteffecttoalltheirprovisions);seealsoWeinbergerv.Hynson,WestscottandDunning,Inc.,412U.S.609,63132  ` (1973) ( ItiswellestablishedthatourtaskininterpretingseparateprovisionsofasingleActisto ]8  givetheActthemostharmonious,comprehensivemeaningpossible).m G  23      ׀ =    Compliance.BSLDhasdevelopedacomplianceplantoensuresatisfactionofits   obligationsundersection272.Likewise,BSThasanextensivecomplianceprogramthatwillincludethecompanysnondiscriminationobligationsundersection272.AgertonAff.517(App.AatTab1).Theseprocedures,whicharesimilartoproceduresusedtocomplywithjudicialrestrictionsundertheModificationofFinalJudgment( MFJ),willensurethattheletter andspiritofsection272anditsimplementingregulationsarehonored. M( &    IV.0  BELLSOUTHSENTRYINTOTHEINTERLATASERVICESMARKETWILL % PROMOTECOMPETITIONANDFURTHERTHEPUBLICINTEREST (#(#  F  ThefinalelementoftheCommissionssection271analysisisadeterminationwhether'%FinterLATAentry isconsistentwiththepublicinterest,convenienceandnecessity.47U.S.C.271(d)(3)(C).TheremainderofthisbriefdemonstratesthatBellSouthsprovisionofinterLATAservicesinSouthCarolinameetsthistest.AstheSCPSCheldunanimouslybelow,BellSouthsentrywillsecuresignificantbenefitsforthepublic,intheformoflowerpricesand/orhigherqualitylongdistanceservices.ComplianceOrderat6162.TheSCPSCs !  conclusionisconsistentwithCongresssexpectation,inpassingthe1996Act,that removingallcourtorderedbarrierstocompetition"includingtheMFJinterLATArestriction"willbenefitconsumersbyloweringpricesandacceleratinginnovation.142Cong.Rec.S713(dailyed.Feb.1,1996)(statementofSen.Breaux).TheU.S.DepartmentofJusticeagreesthatinregioninterLATAentrybyBellcompanieswouldpromotelongdistancecompetition. G  24      ׀Thefull Y4 Commissionalsorecentlyaffirmedthat BOCentryintothelongdistancemarketwillfurtherCongressobjectivesofpromotingcompetitionandderegulationoftelecommunicationsmarkets."h G  25           ThedamagedonebycontinuingtoexcludetheBellcompaniesfrominregion,interLATAservicesisstaggering.AstheattachedaffidavitofProfessorJerryHausmanofMIT $l! details,delayingBellcompanyinterLATAentryhascostU.S.residentialconsumers$7billionperyear,effectivelyimposinganannualtaxoneachlongdistancecustomer.HausmanAff.5,2123,24(App.AatTab5).Thispublicburdencannotbejustifiedbyadesiretopromotelocalcompetition.The1996Actalreadyopenslocalmarkets,andanyadditionalbenefitfromapplyingsomehigherstandardwouldbemuchlessthanthecostsofcontinuingtocurtailinterLATAcompetition.Id.11,2425;seealsoMichiganOrder387,390(suggesting ]8  higherstandards).AsProfessorHausmanexplains, [t]heconsumerwelfaregainsfromincreasedcompetitioninlongdistancewillmorethanoutweightheincrementalgainfromthelaststepstoregulatoryperfectionthatthe[MichiganOrder]demands.HausmanAff.25.    InSouthCarolinathereisnooffsettingbenefitatallfromdelayinglongdistancecompetitionbecauseBellSouthsinterLATAentrywouldincreaselocalcompetition.The p SCPSCfoundthat [t]heentitieswiththefinancialandmarketingresourcestoprovideeffective[local]competitionarethesame[interexchangecarriers]thathaveadirectfinancialinterestindelaying[BellSouths]competingintheirlongdistancemarket.ComplianceOrderat66.  ApprovingBellSouthsapplication,itdetermined,wouldendthesecarriersincentivestogoslowaslocalcarriers.InthewordsoftheSCPSC,allowingBellSouthintolongdistance willcreaterealincentivesforthemajor[interexchangecarriers]toenterthelocalmarketrapidlyinSouthCarolina,becausetheywillnolongerbeabletopursueotheropportunitiessecureintheknowledgethat[BellSouth]cannotinvadetheirmarketuntiltheybuildsubstantiallocal facilities.Id.at67. -)#& &     A. ` TheScopeofthePublicInterestInquiry  %   WhilethepublicinterestinquirygenerallymayprovidetheCommissionwith broad'%Vdiscretion...toconsiderfactorsrelevanttotheachievementofthegoalsandobjectivesofthelegislation,MichiganOrder385,itislimitedbyCongresssspecificdeterminations.N G  26      ׀Inthe   1996Act,Congressdecidedthatitwouldopenlocalmarketsbyenactingacompetitivechecklistthatsetsforthconcreteobligationsinplainterms.The checklistwasCongressstestof what...competitionwouldencompass,141Cong.Rec.S7972,S8009(dailyed.June8,1995)(statementofSen.Hollings),andCongressforbadetheCommissionfromsecondguessingitsjudgmentormodifyingitschecklist byruleorotherwise.47U.S.C.271(d)(4)(emphasis  added);seealso141Cong.Rec.S8188,S8195(dailyed.June12,1995)(statementofSen.  Pressler)(notingadoptionofchecklistapproachinplaceof actualcompetitiontest).AstheChairmanoftheSenateCommerceCommitteereassuredSenators, [t]heFCCspublic-interestreviewisconstrainedbythestatutebecause theFCCisspecificallyprohibitedfromlimitingorextendingthetermsusedinthecompetitivechecklist.141Cong.Rec.S7942,S7967(dailyed.June8,1995)(statementofSen.Pressler).Accordingly,theCommissionmaynotusethepublicinterestinquirytoaddlocalcompetitioncriteriabeyondthosethatCongressincludedinthechecklist. #    TheMichiganOrderneverthelesssuggeststhatpublicinterestapprovalshouldbe % conditionedineverycaseonexceedingthechecklist.TheCommissionreasonedthatbecauseCongress(1)wantedtheBellcompaniestoenterlongdistanceonlyafterlocalmarketsareopenand(2)includedboththecompetitivechecklistandthepublicinteresttestinsection271,   Congressmusthaveviewedthecompetitivechecklistasaninadequatemechanismtoopenlocalmarkets.\ G  27      ׀Butinfact,CongresswantedtheCommissiontoexamineanessentialelementofBell ]8  companyinterLATAentrynotaddressedbyanyotherpartofsection271:thecompetitiveconsequencesofthatentry,giventhechecklistandsection272ssafeguards.]@ G  28      ׀The    Commissionsequationofthepublicinterestinquirywithitsownassessmentoflocalcompetitionisimplausibleonitsface,foritassumesthatCongressdevotedcountlesshourstohoningthesmallestdetailsofthechecklistandforbadetheCommissionfromalteringthem,see p 47U.S.C.271(d)(4),andyetwantedtheCommissiontouseadifferentstandardofopenlocal marketsasthedispositivetestinconsideringBOCapplications.p  G  29       E    ThepointofthepublicinteresttestisthustoallowtheCommissiontoexaminetheeffect %  oncompetitionofBellcompanyentryintotheinterLATAmarket.Accordingly,theprincipalfocusoftheinquirymustbethemarketwheretheeffectsofBellcompanyentrywoulddirectlybefelt:theinterLATAmarket.Itcannotbethelocalmarket,forissuesrelatedsolelytolocalcompetitionareconclusivelydeterminedbycompliancewiththecompetitivechecklist.  TheCommissionmayaspartofitspublicinterestinquiryevaluatesuchmattersasthecurrentstateoflongdistancecompetitionandthedegreetowhichthechecklist,section272,andotherregulatorysafeguardsconstrainanticompetitiveconductintheinterLATAmarket.TheseinquiriesarefamiliarfortheCommission.Aslongasadecadeago,forexample,theCommissionaddressedthehotlycontestedissuewhetherregulatorysafeguardsandmarketconditionswerethensufficienttoprecludetheBellcompaniesfromimpedingcompetitioninlongdistance.TheCommissionconcludedthattheywereandthusagreedwiththeDepartmentofJusticethattheMFJslineofbusinessrestrictionsshouldbelifted,notwithstandingthattheBellcompaniesin1987hadnoobligationstocompetitorscomparabletothechecklist. G  30          TheCommissionalsomayconsiderindividualcircumstancesthatCongresscouldnothaveanticipated"suchastheapplicantshistoryofcomplianceornoncompliancewithCommissionrules.SeeMichiganOrder397.TheCommissionmaynot,however,usethe #  publicinterestinquirytosubstituteitsownlocalcompetitionplanforthatestablishedby }%X" Congress.Overregulationoflocalandlongdistancemarketstodaycannotbedefendedinthenameofidealcompetitiontomorrow.w G  31      ׀TheCommissionalsomaynotusethepublicinterest  inquirytorewriteexpressprovisionsoftheAct.  G  32      ׀Inparticular,thepublicinteresttestmaynot   beusedasavehicleforcircumventingthespecificstatutoryrestrictionsofsections251and252regardingsuchmattersasthepricingofUNEsandresoldservices.AlthoughthisissueisnowpendingbeforetheEighthCircuit, G  33      ׀thatCourtjustrecentlyconfirmedthatthisCommissiondoes ]8  nothave jurisdictionoverintrastatetelecommunicationsmattersundertheCommunicationsActunlessCongresshasdraftedprovisionsthat expresslyapplytointrastatetelecommunicationsmattersandexplicitlydirecttheFCCtoimplementtheactsintrastate  requirements. G  34      ׀Becausesection252reservespricingauthoritytotheStates,andthepublic % interestprovisionsofsection271donotpurporttooverridethatdelegationofauthority,theFCCispowerlesstousurpStatejurisdictionoverpricingthroughthesection271process.&    I B. ` TheCurrentLongDistanceOligopolyLimitsCompetition      TheCommissionhaslongheldthatthebenefitsofnewentryinlongdistance'ppresumptivelyoutweighanyriskofharm,h G  35      ׀evenwherethelongdistanceentrantisanincumbent ]8  localexchangecarrier.|  G  36      ׀Thatpresumptionisespeciallyaptwhenappliedtothisapplication. 5    Theinterexchangemarketishighlyconcentratedandsystematicallynoncompetitive.TheDepartmentofJustice,forexample,hasconcludedthatcompetitioninthelongdistancebusinessis decidedlyimperfectandthereis roomformorecompetition. G  37      ׀Legislatorswho  craftedthe1996Actagreedthatthelongdistanceindustryis oligopolistic.141Cong.Rec.S7881,S7889(dailyed.June7,1995)(statementofSen.Pressler).AlthoughithasfoundthatAT&Tnolongerretainsunilateralmarketpower,theCommissionalsohasacknowledgedthatAT&T,MCI,andSprintmayjointlybeengagedinnoncompetitive,cooperativepricing.Order,   MotionofAT&TCorp.tobeReclassifiedasaNonDominantCarrier,11FCCRcd3271,3313  ` 15,8084(1995).IntheMichiganOrder,theCommissionrepeatedits concern[s]thatnotall ]8  segmentsofthismarketappeartobesubjecttovigorouscompetition,and abouttherelativelackofcompetitionamongcarrierstoservelowvolumelongdistancecustomers.Michigan    Order16.    Inacompetitivemarket,entrybynewfirmsandcompetitionbyincumbentfirmsdrivespricestowardcost.SeeSchmalenseeAff9(App.AatTab11);PaulW.MacAvoy,TheFailure p ofAntitrustandRegulationtoEstablishCompetitioninLongDistanceTelephoneServices173 mH 74(1996)( MacAvoyStudy).Yetlongdistancecarriershavefailedtopassoncostsavingstotheircustomers.AT&T,MCIandSprinthavebenefittedfromtheCommissionsreductionsinaccesscharges,whichconstitutenearlyhalfofinterexchangecarrierstotalcosts.HausmanAff.30.FromJanuary1990toJuly1996accesschargesdeclinedby27percent,yieldingatleasta13percentreductionininterexchangecarrierstotalcostsduringthatperiod.Id.Yetcarriers #  haveraisedtheirpricesdespitethesedeclinesinaccesscharges.SeeSchmalenseeAff.9(9% }%X" dropinaccesschargesbetween1993and1996,whileAT&Traisesrates22%);Hausman2832.Indeed,theyhaveraisedpricesdespiteadditionalsavings,overandaboveaccesscharge -)#& declines,duetonewtransmissiontechnologiesandlowerequipmentprices.Id.;see % SchmalenseeAff.9;MacAvoyStudyat96;WEFAStudyatp.11(App.CatTab62)(failuretopassthroughcostreductionsof6to7percentperyear).  Inaddition,themajorcarriershaveraisedtheirdiscountedratesalongwiththebasicrates   offofwhichdiscountsaretaken.HausmanAff.31;seeSchmalenseeAff.11,1617  ` (discountedratesyield supracompetitiveprofits).Recentflatratepromotions,moreover,donotmarkasubstantialdeparturefromthelongstandingpatternoflocksteppriceincreases.SchmalenseeAff.1214;HausmanAff.32.AT&Tsflatrateof15centsperminute"higherthanitsstandardeveningrate"doesnotbenefittypicalresidentialcallerswhoplacemostcallsduringoffpeakhours.SchmalenseeAff.13.MCIsflatrateof14.5centsandSprintstwotieredplanofa25centpeakrateand10centoffpeakratealsoprovideatmostmodestrelief. G  38      ׀Themonthlyconsumerpriceindexforinterstatetollcallsrosesteadilyduring mH 1995and1996,withonlyminordeclinesinearly1997.SeeWEFAStudyatp.10.AsProfessor E  Schmalenseepointsout, theonlyreasonthatmanyconsumersfindtheOneRateplanattractivetodayisthatAT&Thassubstantiallyraiseditsbasicratesoverthelastseveralyears.  SchmalenseeAff.14. !   Totheextentthattherehavebeenpricereductions,theyconsistsimplyofpassingonlya #  portionoftheinterchangecarrierssavingsfromrecentaccesschargereductions,andwere }%X" effectedonlybecausetheCommissionrequiredAT&Ttosharesomeofitswindfallwithresidentialconsumerswhopayundiscountedbasicrates.SeeHausmanAff.32(notingthat -)#& noneoftheaccesschargesavingswaspassedontodiscountcustomers).Inacompetitiveindustry,regulatorsdonotneedtostrongarmcompetitorsintopassingoncostsavingstoconsumers.SeeSchmalenseeAff.9.     Themajorcarriersthemselvesconcedethattheydonotcompeteforthebusinessofthelowestvolumecallers.Seeid.15.Theyhaveinthepastclaimedthatthesecustomersare  ` servedbelowcost,butthatdoesnotexplainwhymidvolumecallersaredenieddiscounts.See ]8  id.1517.Besides,evenifclaimsofbelowcostpricingweretrue,theywouldonlyhighlight 5  theneedforadditionalfacilitiesbasedcompetitiontoplacepressureuponallcarrierstoloweroperationalandmarketingcosts.& x   C.0 ` MarketEvidenceConfirmsthatBellSouthsEntryintotheInterLATA  MarketinSouthCarolinaWillBenefitConsumers ` (#` (#    BellSouthsentryintointerLATAservicesinSouthCarolinawillprovidetheneededcompetitionandbenefitlongdistance'xԀconsumersthroughlowerpricesand/orhigherqualityservice.Moreover,bychippingawayatcostlybarriersbetweenlocalandlongdistanceservices,BellSouthsentrywillbringfurtherbenefits.TheUnitedStatesistheonlynationintheWorldthatdivideslocalfromlongdistancetelephoneserviceandtherebydeprivesconsumersthebenefitsofbothintegrationandofadditionalformidablecompetitorsinlongdistance.Hausman2627;seealsoGilbertAff.44(App.AatTab3).Despitehypotheticalpossibilitiesof $p! anticompetitiveconduct,everyothercountrythathaspermittedcompetitioninlongdistancehasdecidedthatthebenefitsofallowingincumbentLECstoparticipateoutweighspossible anticompetitiveconcerns.HausmanAff.26.TherecordofincumbentLECscompetitively *#' beneficialprovisionofverticallyrelatedservicesmakesclearthattheunanimousconclusionofalltheseothernationsiscorrect. G  39         &    1.0 ` EvidenceofCompetitionWhereLECsHaveBeenAllowedtoOfferLong   Distance. ` (#` (#   UniformhistoricalexperienceconfirmsthepotentialbenefitsofinregioninterLATA'entrybyBellSouth.AstheCommissionitselfhasrecognized,the recentsuccessesof[SNET]andGTEinattractingcustomersfortheirlongdistanceservicesillustratestheabilityoflocalcarriertoattractasignificantshareofthelongdistancemarketrapidly; recentstudiesbaseduponthesepositivemarketexperiences havepredictedthatAT&Tsshareofthelongdistancemarketmayfallto30percentwithBOCentry;andthatsuch additionalcompetitioninthelongdistancemarketispreciselywhatthe1996Actcontemplatesandiswelcomed.MichiganOrder  15.  LongdistancecustomersinConnecticuthavebenefittedfromSNETspricecompetitionsinceitenteredtheinterstatemarketin1994. G  40      ׀Onaverage,SNETsresidentiallongdistance 1  rateshavebeen1718percentlowerthanAT&Ts.HausmanAff.1619.Thesesavingshaveespeciallybenefittedlowvolumecallerswho,priortoSNETsentrance,haddisproportionately   stayedwithAT&Tbecausetheywereignoredbyothercarriers.SeeSchmalenseeAff.2528. % SNEThasshownbothawillingnessandabilitytocompeteforthissegmentofthemarket:whereasitsshareofrevenuesis20percent,itsshareofcustomersishalfagainashigh. G  41           InorderbettertocompetewithSNET,AT&TpetitionedtheCommissionforauthoritytoreduceitslongdistanceratesspecificallyinConnecticut.h G  42      ׀AT&Tsstatedreasonforthepetition  ` was therapidlyemergingcompetitionfromSNETinConnecticut.  G  43      ׀AT&Tthuseffectively ]8  admittedthatitfacesmoreintensecompetitioninConnecticutthanelsewherebecausetheincumbentLEChasbeenallowedtoenterthelongdistancemarket.l  G  44            ThetwogeographiccorridorsrunningfromNewYorkCityandPhiladelphiatoNewJerseyofferanotherexampleinwhichincumbentlocalexchangecarriers"inthiscaseBellAtlanticandNYNEX"havecompetedininregion,interLATAservicesbysettingpricesbelowthoseofthemajorcarriers.AT&TconcedesthatBellAtlanticscorridorratesareasmuchasonethirdlowerthanAT&Ts,  G  45      ׀andcreditsBellAtlanticswidespreadmarketingof sav[ings] E  overAT&TsbasicratesforBellAtlantics20percentmarketshareofinterstatecorridorcalls.| G  46      ׀SeeTaylorAff.atp.18(App.CatTab62).AT&TandMCIsoughtpermissionto  reducetheirratesinthesecorridorspreciselybecausetheyfacemoreintensecompetitiontherethanelsewhere.0 G  47      ׀Neitherquestionsthatconsumersinthesecorridorsarebetteroffbecauseof   pricecompetitionfromtheincumbentBellcompany. G  48        `    ` 2.0 BellSouthIsSuitedtoBreakUptheInterexchangeOligopolyinSouth ]8  Carolina  (# (#   BellSouthwillofferconsumersthesesamesortsofcompetitivebenefitswhenitprovides !  inregion,interLATAserviceinSouthCarolina.  BellSouthhasanaffirmativeincentivetolowerlongdistancepricesinSouthCarolina,becauseincreasedinterLATAusagewillincreaseusageofBellSouthsaccessservicesaswell.SeeHausmanAff.1214.Indeed,theSCPSCnotedthatBellSouthalreadyhadprepareda \ proposedintrastate,interLATAtariffwithinitialbasicratesthatare atleast5%lowerthanthecorrespondingratesoft      !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]helargestinterexchangecarrier.ComplianceOrderat6;seeApp.Dat 1  Tab8(proposedtariff).     BellSouthis,moreover,wellpositionedtospurthecompetitionthatwilllowerinterexchangeprices.BellSouthhashoneditsmarketingskillsasawirelesscarrierinSouthCarolina,aswellasaproviderofothercompetitiveofferingssuchasexchangeaccesstobusinesscustomers,Centrexservice,customerpremisesequipment,anddirectories.TheseexperienceswillenableBellSouthtoprovidebetterinterexchangeservicestoSouthCaroliniansandtosellthemeffectively.SeeSchmalenseeAff.3037.BellSouthalsocouldreducecostsbyusing ]8  existingsalesandcustomersupportsystems(incompliancewiththerequirementsofsection272).SeeGilbertAff.2428;SchmalenseeAff.29.Indeed,AT&Tsecuredapprovalto    acquireMcCawinpartonthesegrounds.ApplicationsofCraigO.McCaw,9FCCRcd5836,  5885,83(1994),affdsubnom.SBCCommunicationsInc.v.FCC56F.3d1484(D.C.Cir.  1995).  Aboveall,however,BellSouthsbrandnamewillmakeitastrongcompetitortothethreemajorincumbents.TheBellSouthbrandisrecognizedbyapproximately70percentofconsumersinregion"lessthanAT&TandMCI,buthighinrelationtootherpotentialentrantsintolongdistance.GilbertAff.17.BellSouthsreputationisonparwiththatofthemajorincumbentinterexchangecarriers:betterthanthreeoutoffourcustomersratedBellSouthas verygoodinthecategoriesofcustomerserviceandservicereliability/productquality. SchmalenseeAff.32.ThesefactorswillgiveBellSouthlowermarketingcostsinregionthan }%X" otherpotentialnewentrantsandpositionBellSouthasaseriouscompetitortoAT&T,MCI,andSprint. G  49           BellSouthsmarketingstrengthwillbemostpronouncedamongcurrentBellSouthcustomerswhoarepartofalowvolumemarketsegmentthatis neglectedinthecompetitionamonginterexchangecarriers.SchmalenseeAff.26.ThefailureofthethreelargecarrierstomarketservicestothisgroupleadsmanyresidentialandsmallbusinesscustomerstochooseAT&Toutofinertia,withoutgivingothercarriersseriousconsideration.Indeed,theevidencedemonstratesthatmostcurrentcompetitorstothemajorinterexchangecarriersfocusonhighrevenuecustomers,notonresidentialusersorsmallbusinesses.Id.2728.IfBellSouth(and  otherBellcompaniesacrossthecountry)canmakecompetitiveinroads,however,AT&T,MCI,andSprintarelikelytorespondwithnewpromotionsandexpandedeligibilityfortargetedofferings,tothebenefitoflowvolumecallers.Id.37. mH   Likewise,BellSouthwillbeabletoofferbundledserviceofferingsand onestopshopping.SeeComplianceOrderat67.Bundledservicepackagescan haveclearadvantages  forthepublic,suchasgreaterconvenienceandtheabilitytosecurevolumediscountsbyaggregatingpurchasesofdifferentservices.@ G  50      ׀TheCommissionthushassupporteddevelopments ! thatpromisetospeedtheintroductionofbundledservicesattheretaillevel.ThiswasonereasonwhytheCommissionapprovedAT&TsbuyoutofMcCawCellularCommunications,sayingit woulddenyusersthecurrentandprospectivebenefitsofbundlingonlyifpresentedwithacompellingpublicinterestjustificationfordoingso.9FCCRcdat5880;seeGilbertAff.19.     BellSouthwillnotbetheonly,oreventhefirst,carriertomarketbundledofferings,andwillhavenounfairadvantageinprovidingbundledpackages.SeeGilbertAff.716.Indeed, ]8  theSCPSCfoundthatBellSouths entryintotheinterLATAmarketwillgive[its]customersthesameopportunityascustomersofotherSouthCarolinatelephonecompanies(i.e.,GTEinMyrtleBeachandSumter;SprintUnitedinBeaufortandGreenwood;RockHillTelephoneCo.inRockHillandYork)tochooseoneproviderforalltheirtelecommunicationsneeds.Compliance  Orderat67. p   Moreover,bundledofferingsarethecornerstoneofinterexchangecarriersplansforenteringthelocalexchange.AT&T,forexample,hasannouncedthatitplansto takeabasic$25amonthlongdistancecustomerandconverthimorherintoa$100amonthcustomerforabroaderbundleofservices.AT&TChallengestheBellCompanies,WallSt.J.,June12,1996,  atA3;seeGilbertAff.719(describingAT&Tsplans).MCIisofferinglongdistance, ! cellularservice,Internetaccess,andMCImetrolocalserviceonthesamebillinsomeStates.GilbertAff.10.Sprintisbundlingitslongdistanceofferingswithlocalwirelineservice,cabletelevision,andPCSofferings.Id.1114.FollowingMFSCommunicationsmergerwiththe U'0!$ InternetaccessproviderUUNetandthelongdistancecarrierWorldCom,themergedentitysPresidentexplained: WearecreatingthefirstcompanysincethebreakupofAT&Ttobundletogetherlocalandlongdistanceservicecarriedoveraninternationalendtoendfibernetworkownedorcontrolledbyasinglecompany.CommunicationsFirmstoJoinin$12BillionDeal,   LosAngelesTimes,August27,1996,atA1(seealsoGilbertAff.15).  `   ArecentstudybyJ.D.PowerandAssociatesfoundthat65percentofhouseholdsarelikelytosignupwithonecompanyforalltheirtelecommunicationsservices,withthemajoritychoosingtheircurrentlongdistancecarrierasthatsoleprovider.GilbertAff.18.Congressrecognizedtheimportanceofbundledofferingstothedevelopmentoflocalandlongdistancecompetition,notingthata full86percentof...smallbusinessownerswantone-stopshoppingfortelecommunicationsservicesandthat [t]wo-thirdsofthemwanttobeabletochooseoneproviderthatcangivethembothlocalandlong-distancetelephoneservice.141Cong.Rec.S7903(dailyed.June7,1995)(statementofSen.Burns).LegislatorsinfactconsideredbundlingsoimportantthattheybarredthemajorinterexchangecarriersfromjointlymarketingresoldlocalservicewiththeirownlongdistanceservicesuntiltheincumbentBellcompanyhasanequalabilitytocombinelocalandlongdistanceofferings.47U.S.C.271(e)(1).  ApprovalofBellSouthspetitionalsowillliftremainingprohibitionsonBellSouthsparticipationintelecommunicationsequipmentmanufacturingandallowBellSouthtopursueallopportunitiesinthisarea,subjecttostatutoryandregulatorysafeguards.Seeid.273(a); U'0!$ S.Rep.No.10423,at67(allowingBellCompaniestoengageinmanufacturingwill foste[r]competition...andcreat[e]jobsalongtheway).Finally,approvalofthisapplicationwould +$( trigger 1+intraLATAcompetitioninSouthCarolina,intensifyingcompetitioninthe % intraLATAtollmarketaswell.SeeComplianceOrderat6;47U.S.C.271(e)(2).BellSouthis  submittingalongwiththisapplicationadetailedimplementationplanforintraLATAdialingparity.VarnerAff.199201&Ex.AJV8.TherivalrybetweenSNETandAT&TandConnecticut"whichquicklyspilledoverfrominterstateservicestointrastatetoll"indicateshow,inaworldofbundledserviceofferings,greatercompetitionininterLATAserviceswillbenefitSouthCaroliniansacrossarangeoftelecommunicationsservicesincludinglocalandintraLATAtoll.SeeGilbertAff.3438;HausmanAff.10n.13,22.      Whileitisdifficulttoquantifysuchbenefitswithprecision,estimatesareavailable.AnanalysisconductedbytheWEFAGrouppredictsthatlongdistancerateswilldropby25percentasaresultofBellcompanyinregion,interLATAentry.WEFAStudyatp.11;RaimondiAff.atp.38(App.CatTab62).Thestudyestimatesanadditional13,000newjobswillbecreatedinSouthCarolinaasaresultandthatthetotalbenefitofnewlongdistancecompetitionforSouthCarolinianswillriseto$1.2billionafterfiveyears.WEFAStudyatpp.12,21.IndependenteconomistshaveconfirmedthattheWEFAmodelwasbasedonreliableassumptionsandwouldproducereliableresultsinSouthCarolina.HefnerAff.88(App.CatTab62).TheSCPSCinfactnotedthatthesestudieswere unrefutedbyBellSouthsopponents.ComplianceOrderat #  62.  TheestimatespresentedtotheSCPSCareconsistentwiththeworkofotherprominenteconomists.Dr.PaulMacAvoyofYaleprojectsthat,nationwide,thetotalgainstoconsumersfromunrestrictedBellcompanyentryintothelongdistancemarketwouldbeashighas$306 +$( billion,evenifAT&T,MCI,andSprint maintaintheirtacitlycollusivepricingstrategies.MacAvoyStudyatp.185.Duringdebatesonthe1996Act,Congressrelieduponestimatedsavingsof$333billionfromgreaterlongdistancecompetition.141Cong.Rec.S704(Feb.1,1996)(statementofSen.Ford).RelyinguponactualmarketexperiencewithlocaltelephonecompanyentryintolongdistanceaswellasincumbentLECseconomicincentivetolowerpricesuponverticalintegration, G  51      ׀ProfessorHausmananticipatesthatpriceswouldfallbyabout1718 ]8  percentasaresultofinregionentrybytheBellcompanies,andthatresidentialcustomersalonestandtobenefitbyabout$7billionperyear.HausmanAff.5,2023.      Awareofthesepotentialbenefits,SouthCarolinianshaveralliedaroundBellSouthsapplication.AttachedasTabs1A1HofAppendixDaremorethan450letterssupportingBellSouthsentryintolongdistanceintheSouthCarolina.Theseletterscomefrompeopleineverywalkoflife:theGovernorandAttorneyGeneralofSouthCarolinaandotherStateandlocalofficials,communityandeducationalorganizations,businesses,communityleaders,andeverydayconsumers.ThisCommissionshouldgivetheviewsofthesehundredsofsupporters"representingtheinterestsofthousandsandthousandsmoreintheState"atleastasmuchweightinascertainingthepublicinterestastheselfservingprotestationsofBellSouths competitors. #  &   I   D.0 ` BellSouthsEntryintotheInterLATAMarket,SubjecttoExtensive % StatutoryandRegulatorySafeguards,PresentsNoRisktoCompetition ` (#` (#     Forallitspotentialstrengthsasacompetitor,BellSouthhasabsolutelynoabilityto'%impedecompetitionbyenteringtheinterLATAmarket.The1996Actandregulatoryreformshaverendered20yearoldworriesaboutcrosssubsidyandnetworkdiscriminationobsolete.&  I    ` 1.0 RegulationandPracticalConstraintsMake LeveragingStrategies qL  ImpossibletoAccomplish]8  (# (#   InlightofthefederalandstatesafeguardsthatpreventBellcompaniesfromengagingin'qanticompetitiveconductuponenteringlongdistance,theCommissionrecentlyheldthattheBellcompaniesshouldberegulatedasnondominantwhentheyprovideinregion,interLATAservices. G  52      ׀ItfoundthatBellcompaniescouldnotdriveotherinterexchangecarriersfromthe  marketthroughcostmisallocation,thatfederalandstatepricecapsreduceincentivestomisallocatecosts,andthatexistingsafeguards willconstrainaBOCsabilitytoallocatecostsimproperlyandmakeiteasiertodetectanyimproperallocationofcoststhatmayoccur.Id. E  105.TheCommissionlikewisedismissedfearsofpredationagainsttheestablishedlongdistanceincumbents,id.108;foundthatthenumerousprotectionsagainstdiscriminationwill  preventBellcompaniesfromgainingmarketpoweruponentrythroughsuchtactics,id.111 ! 119;andconcludedthatanyriskofpricesqueezescanbeaddressedthroughFCCproceduresandtheantitrustlaws,id.128129.Finally,theCommissionrecognized thattheentryofthe }%X" BOCinterLATAaffiliatesintotheprovisionofinregion,interLATAserviceshasthepotentialtoincreasepricecompetitionandleadtoinnovativenewservicesandmarketefficiencies.Id.  134.     Eachoftheseconclusionsisbuttressedbythesuccessthatfederalandstateregulators   havehadinregulatingBellcompaniesovertheyears,aswellasbythenew,additionalsafeguardsimposedbythe1996ActandtheCommissionsimplementingregulations.AsaformerDeputyAssistantAttorneyGeneralforEconomicsinthecurrentAdministrationsAntitrustDivisionexplains,existingsafeguards expresslyandcomprehensivelyaddresspotentialharms.GilbertAff.43.I   `  a.  CostMisallocation.TheoriesthatBellSouthmightshiftcosts  incurredinprovidinginterLATAservicestolocalratepayers,therebygivingitselfacompetitiveedgeasaninterLATAcarrier,dependupontheassumptionthatBellSouth isregulatedunderrateofreturnregulation.NoticeofProposedRulemaking,ImplementationoftheNon E  AccountingSafeguardsofSections271and272oftheCommunicationsActof1934,asAmended,11FCCRcd18877,1888283,7(1996)( NonAccountingSafeguardsNPRM.) G  53      ׀    Tocurethisproblem,theCommissionhastotallyoverhauleditsapproachtorateregulation,seeHausmanAff.34,ashastheSCPSC,seeWorochAff.53,67.The #  Commissionadoptedapricecapregimethatsetsmaximumratesalmostentirelywithoutregard }%X" tocosts,therebygivingLECs apowerfulprofitincentivetocutthecostsoftheirregulatedservices.NationalRuralTelecomAssnv.FCC,988F.2d174,178(D.C.Cir.1993).Thereis  no rewardforshiftingcostsfromunregulatedactivitiesintoregulatedones,forthehighercostswillnotproducehigherlegalceilingprices.Id.;seeNonAccountingSafeguardsNPRM,11   FCCRcdat1894243,136(Commissionspricecappolicies reduc[e]thepotentialthattheBOCswouldimproperlyallocatethecostsoftheiraffiliatesinterLATAservices);Hausman34.Indeed,theCommissionhasdescribedpricecapsregulationasprovidingstrong efficiencyincentivestokeepdowncostsallocatedtoregulatedservices.ReportandOrder,ImplementationoftheTelecommunicationsActof1996;AccountingSafeguardsUnderthe  TelecommunicationsActof1996,11FCCRcd17539,1760506,145( Accounting  SafeguardsOrder);seealsoIllinoisPublicTelecommunicationsAssnv.FCC,117F.3d555, p 570(D.C.Cir.July1,1997)(underpricecaps riskoflossisborneby investorsratherthanratepayers),clarified,CaseNo.961394,slipop.(D.C.Cir.Sept.16,1997);HausmanAff. E  3536. G  54      ׀    Congressneverthelesstookstepstoaddresssupposedworriesaboutpossiblecostmisallocation.Insection272ofthe1996Act,CongresssharplyreducedopportunitiesforcostshiftingbyrequiringthataBellcompanyprovidelongdistancethroughanaffiliatethathas #  separatefacilities,employees,andrecordkeepingfromthelocaltelephonecompany.47U.S.C.272.Moreover,Congressreinforcedstructuralseparationwithdemandingaccountingrequirements.Seeid.272(d),HausmanAff.37.Legislatorsconcluded,afterhearing   argumentsonallsides,thatthesestatutorysafeguardsandtheCommissionsimplementingruleswouldbesufficienttodealwithconcernsaboutBellcompanycostmisallocation.See,e.g.,  ` 47U.S.C.254(k)(requiringCommissiontoimplementregulationsasnecessary toensurethatrevenuesfromregulatedservicesarenotusedtosubsidizecompetitivelyprovidedservices).TheCommissionhaslikewiseexpressedconfidenceintheefficacyofstructuralseparationinvariouscontexts. G  55          TheCommissionspostActrulemakingstoimplementsection272ssafeguards,togetherwithitspreexistingregulations,guaranteethatthestatutoryprotectionswillamplysufficetoprotectagainstcostmisallocation.Indeed,theCommissionhasexplainedthatitspreexisting costallocationandaffiliatetransactionsrules,incombinationwithaudits,tariffreview,andthecomplaintprocess,haveprovensuccessfulatprotectingregulatedratepayersfrombearingtherisksandcostsofincumbentlocalexchangecarrierscompetitiveventures.Accounting  SafeguardsOrder,11FCCRcdat1755051,25.Itreasonedthattheserulestogether will ! effectivelypreventpredatorybehaviorthatmightresultfromcrosssubsidization,andthat #  becausethey haveprovengenerallyeffectivetherewas noreasontorequireachangetoadifferentsystem.Id.28,108.    SouthCarolinaregulatorshaveimplementedaparallelregulatoryregimethatcontainsmanyofthesesameprotections.InendorsingBellSouthsapplicationforinterLATAentry,theSCPSCrejectedinterexchangecarrierspredictionsofanticompetitiveconduct,explainingthat justas[BellSouths]provisionoflongdistanceserviceswillnotdiminishitsobligationsunderthechecklist,italsowillnotdiminishitsobligationsunderSections251and252oftheAct,SouthCarolinalaw,FCCand[SCPSC]regulationsanditsbindingagreements.Compliance    Orderat65.LiketheCommission,theSCPSChasabandonedrateofreturnregulationinfavor  ofpricecapregulation. G  56      ׀TheSCPSCalsoadherestothisCommissionsaccounting  requirements,imposingsimilarrecordkeepingandreportingrequirementsandcarryingoutperiodicaudits.WorochAff.53,67;ComplianceOrderat65.Moreover,theSouthCarolina mH AttorneyGeneralhascommittedhisofficesresources topursuefullyanyallegationofanticompetitiveactsinconnectionwithBellSouthsinterLATAentry.LetterfromCharlesMolonyCondon,SouthCarolinaAttorneyGeneral,toFederalCommunicationsCommissionat2(Sept.5,1997)(App.DatTab1A).   ` b. OtherPricingStrategies.Justascostmisallocationwouldbeimpossibleto #  accomplish,BellSouthwouldnotandcouldnotraisethecostofitsaccessservicesinaneffortto }%X" effectuatea pricesqueezeonotherinterexchangecarriers. G  57      ׀TheCommissionhascitedahost % offactorsthat constraintheabilityofa[Bellcompanyorits]interLATAaffiliatetoengageinapredatorypricesqueeze,andconcludedthatBellcompanies willnotbeabletoengageinapricesqueezetosuchanextentthatthe[Bellcompany]interLATAaffiliateswillhavetheability,uponentryorsoonthereafter,toraisepricebyrestrictingtheirownoutput.BOCNon  ` DominanceOrder129.TheCommissionlikewiseconcludedthatastrategyofprovidinglong ]8  distanceservicesbelowcosttodriveoutcompetitorscouldnotbeprofitableforBellcompaniesbecauselossesincurredinpredationcouldnotlaterberecoveredthroughsupracompetitivepricing.Id.108;seealsoNonAccountingSafeguardsNPRM,11FCCRcdat18943,137;  HausmanAff.38.  Whollyasidefromregulatorysafeguards, predatorypricingschemesarerarelytried,andevenmorerarelysuccessful.h G  58      ׀SeeRobertsAff.54(App.AatTab10).Inanindustrywith mH standardizedtechnologiesandsophisticatedincumbents,itis especiallyunlikelythatBellSouthcouldemploytheclassicpredatorystrategyofloweringpricesbelowcosttoaffectcompetitorsassessmentsoffuturecompetition.Id.24,4648;seealsoGilbertAff.4346.Realistically,  moreover,anyattempttodriveoutlargeandwellfinancedincumbentcarrierswhohavemade mammothsunkinvestmentswouldbedoomed.RobertsAff.4647. #     ` c. PriceDiscrimination.Perhapstheweakestofalltheoriesadvancedby %  thosewithavestedinterestindelayinginterLATAcompetitionisthatBellcompaniesmightdiscriminateinthepricingoftheirexchangeaccessservices.TheCommissionhasforyears require[d]anyexchangecarrierofferinginterexchangeservicetoimputetoitselfthesamecoststhatitusestodeveloptheaccessratesthatitchargesitsinterexchangecustomers.OrderonReconsideration,PolicyandRulesConcerningRatesforDominantCarriers,6FCCRcd2637, ]8  2714(1991).Consistentwiththatregulatoryrequirement,CongressspecificallyprovidedthattheBellcompanymustchargeitsaffiliate,orimputetoitself, anamountforaccesstoitstelephoneexchangeserviceandexchangeaccessthatisnolessthantheamountchargedtoanyunaffiliatedinterexchangecarriersforsuchservice.47U.S.C.272(e)(3).TheCommissionthusrightlyhasconcludedthat thestatutoryandregulatorysafeguards...willpreventa[Bellcompany]fromdiscriminatingtosuchanextentthatitsinterLATAaffiliatewouldhavetheability,uponentryorshortlythereafter,toraisethepriceofinregion,interstate,domestic,interLATAservices.BOCNonDominanceOrder119.  /   ` d. TechnicalDiscrimination.TheoriesthatBellSouthmightimpede  competitionbyengagingintechnicaldiscriminationareequallyunfounded.AT&T,BritishTelecom/MCI,andSprint/Centel/DeutscheTelekom/FranceTelecomaresophisticated,verticallyintegratedgoliathswithrevenuesmuchgreaterthanBellSouthsandtheexpertiseandresourcestodetectandchallengesystematicdiscrimination.SeeGilbertAff.4647,49.Indeed,tostate U'0!$ howdiscriminationagainstthemwouldhavetooccurisvirtuallytoproveitsimpossibility:Inordertogainananticompetitiveedge,BellSouthwouldhavetoprovideinferioraccessservices +$( toitsmajorcompetitors,withoutdisruptingitsownlocalorlongdistanceservices,inafashionthatisinvisibletootherinterexchangecarriersandregulators,yetsoapparenttocustomersthatitdrivesthemtoswitchtoBellSouthslongdistanceservice,butnottheserviceofsomeothercompetitor.SeeHausmanAff.40;seealsoGilbertAff.4647(noharmtocompetition   unlessdiscriminationraisesconsumerprices).Whenoneconsiderstheserealities,itisnotsurprisingthatincumbentinterexchangecarriersneverhaveproducedspecifics(muchlesshardevidence)astothepreciseformhypotheticalfuturediscriminationwouldtake,howitisfeasible,whateffectitwouldhaveonconsumerdecisionmaking,whatcostsitwouldimposeoninterexchangecarriers,orhowitwouldreducecompetitionandincreaseprices.  Toaccomplishdiscrimination,BellSouthwouldhavetocircumventthemechanizationofitstechnicalandoperationssystems,includingassignmentandprovisioningprocesses.ItwouldhavetobypasstheSONETcapabilitiesusedbymanyinterexchangecarrierstoreconfigureimmediatelytheirnetworksshouldamalfunctionorservicedegradationoccur.GunterAff.4042.Iftechnicallypossibleatall,thiswouldrequiresubstantialandvisibleinvestments,participationbylargenumbersofemployees,andthecooperationofhardwareandsoftwarevendorswhohavenointerestinfavoringBellSouthsinterLATAservicesoperations,allofwhichmakesuchastrategyunthinkable.Id.40.Ofcourse,therealsowouldbenoguarantee #  thatcustomerswhoareunhappywiththeirexistinglongdistancecarrierwouldswitchtoBellSouth;targeteddiscriminationagainst,say,Sprint,wouldsendmanycustomerstoAT&T andMCI,givingBellSouthnobenefit.Cf.UnitedStatesv.WesternElec.Co.,993F.2d1572, -)#& 1579(D.C.Cir.1993)(notingthatdiscriminationisunlikelywhere customerscouldreadilyshifttotheBOCslargercompetitors).   Furthermore,BellSouthhasbeenprovidingexchangeaccessservicestothelongdistanceindustryforoveradozenyears.InterexchangecarrierscananddodirectlymonitorBellSouthsperformance,makingit likelythatanIXCwoulddetectanydegradationinBellSouthsaccessservicelongbeforeanycustomercouldnoticethatdegradationandattributeittotheIXC.GilbertAff.4647.BellSouthsinterconnectionarrangementswithallthemajorinterexchangecarriersestablishspecificcriteriaforservicequalityandproceduresfortheinterexchangecarriertomonitorBellSouthsperformance.GunterAff.2832.Inaddition,BellSouthisrequiredtofilevariousreports,ofproveneffectiveness,withtheCommission.See  VarnerAff.219;GilbertAff.48;suprapp.6162(listingsomerequiredreports);seealso p SecondReportandOrder,PolicyandRulesConcerningRatesforDominantCarriers,5FCCRcd mH 6786,6827,335(1990)( expand[ing]significantlyourmonitoringofservicequalityandinfrastructuredevelopment).  TheCommissionrecentlyrejectedadditionalreportingrequirementsbecause sufficientmechanismsalreadyexistwithinthe1996Actbothtodeteranticompetitivebehaviorandtofacilitatethedetectionofpotentialviolationsofsection272requirements.NonAccounting #  SafeguardsOrder,11FCCRcdat2206061,321.Indeed,theCommissionexplainedthat the }%X" reportingrequirementsrequiredbythe1996Act,thoserequiredunderstatelaw,andthosethatmaybeincorporatedintointerconnectionagreementsnegotiatedingoodfaithbetweenBOCsandcompetingcarrierswillcollectivelyminimizethepotentialforanticompetitiveconductbythe +$( BOCanditsinterexchangeoperations.Inadditiontodeterringpotentialanticompetitivebehavior,theseinformationdisclosureswillalsofacilitatedetectionofpotentialviolationsofthesection272requirements.Id.at2206364,327.     SuggestionsthataBellcompanymightseektoslowrollinterexchangecarriersindevelopingandimplementingnewaccessarrangementsareequallyunfounded.The1996Act  ` providesthataBelltelephoneoperatingcompany maynotdiscriminatebetweenthatcompanyoraffiliateandanyotherentityintheprovisionorprocurementofgoods,services,facilities,andinformation,orintheestablishmentofstandards,47U.S.C.272(c)(1);mustfulfill anyrequestsfromanunaffiliatedentityfortelephoneexchangeservices,andexchangeaccesswithinaperiodnolongerthantheperiodinwhichitprovidessuchtelephoneexchangeserviceandexchangeaccesstoitselfortoitsaffiliates,id.272(e)(1);andmaynotprovidefacilities, p services,orinformationconcerningexchangeaccesstoitslongdistanceaffiliateunlesstheyaremadeavailabletootherprovidersofinterLATAserviceonthesametermsandconditions,id. E  272(e)(2),(4).SeeGilbertAff.4243;WorochAff.60.    Regulatorsshouldhavenotroubleenforcingtheserequirements.TheCommissionhasexplainedthatexistingrulesrelatingtoenhancedservicesandcustomerpremisesequipmentcurrentlyprotectagainstanalogousdiscrimination.NonAccountingSafeguardsNPRM,11FCC #  Rcdat1891516,75.Moreover,accessrevenuesaccountforonequarterofBellSouthTelecommunicationstotaloperatingrevenues,1996AnnualReportat20.BellSouththushasanaffirmativeincentivetoprovidehigherqualityorlowercostaccesstointerexchangecarriers,soastoincreasedemandforitsexchangeaccessservicesandavoidthelossofaccessrevenuesthat +$( wouldresultifinterexchangecarriersprovidedtheirownaccessservicesorobtainedaccessservicesfromafacilitiesbasedcompetitortoBellSouth.SeeSchmalenseeAff.45;Woroch  Aff.74(discussingaccesscompetitioninSouthCarolina).Allthatwillberequiredinthecontextofnewexchangeaccessarrangementsisanevolutionofexisting,routinized,and   mutuallyadvantageousarrangementsbetweeninterexchangecarriersandBellSouth,whichleave  ` noroomorreasonformisconduct./   `  e.  MisuseofConfidentialInformation.Section272(c)(1)prohibitsa 5  Bellcompanyfromdiscriminating intheprovisionorprocurementofgoods,services,facilities,orinformation.TheCommissionhasinterpreted informationinsection272(c)(1)sothatit includes,butisnotlimitedto,CPNIandnetworkdisclosureinformation.NonAccounting  SafeguardsOrder,11FCCRcdat22010,222.Accordingly,aBellcompanymustmakesuch p informationavailabletootherinterexchangecarriersonthesametermsandconditionsasitsownlongdistanceaffiliate.Id.;seeWorochAff.69(citingstatementandagreementprovisions E  governingconfidentiality).  TheCommissionhasexplainedthatits currentnetworkdisclosurerulesaresufficienttomeettherequirementofsection272(e)(2)thatBOCsdiscloseanyinformationconcerning...exchangeaccessonanondiscriminatorybasis.NonAccountingSafeguardsOrder,11FCC #  ТRcdat22025,253.Commissionregulationsalsohavelonggoverned,andwillcontinuetoregulate,accesstocompetitivelyusefulinformationconcerningparticularcustomers.Seeid.at U'0!$ 22010,222(notingseparateCPNIproceeding).UndertheCommissionsrules,forexample,BellcompaniesmustdiscloseCPNItounaffiliatedenhancedserviceprovidersandCPE +$( suppliers;bartheirownenhancedservicesalespersonnelfromaccessingcertainCPNIwithoutcustomerauthorization;andnotifymultilinebusinesscustomersoftheirCPNIrightseachyear. G  59      ׀     `  f.  Penalties.Inlightofitsinabilitytoengageincostmisallocationor   anyformofdiscrimination,theresimplywouldbenoreasonforBellSouthtoriskthesubstantialpenaltieslikelytofollowsuchafruitlessendeavor.IfBellSouthweretoviolateanyprovisionoftheCommunicationsActof1934itwouldberequiredtopaycivilfines,47U.S.C.202(c),andwouldbeliabletoinjuredpartiesfortheamountoftheirinjuriesplusattorneysfees.47U.S.C.206207.Inaddition,section220(e)oftheCommunicationsActimposescriminalpenaltiesforfalseentriesinthebooksofacommoncarrier"astrongdeterrentagainstpurposefulviolationsoftheaccountingrequirementsdescribedabove.Sections501through504provideadditionalpenalties"includingimprisonment,fines,andforfeiture"forknowingviolationsofanystatutoryorregulatoryprovision.Moreover,iftheCommissiondeterminesthatBellSouth hasceasedtomeetanyoftheconditionsrequiredforinterLATAentry,itmayrevoke interLATAauthorityundersection271(d)(6)., G  60          AlloftheActsandtheCommissionsspecificstatutoryandregulatoryprotectionsare backedupbyfederalandstateantitrustlaws.Theweightycorporateandpersonalpenalties(includingimprisonment)thatmaybeleviedagainstviolatorsoftheantitrustlaws,combinedwiththenearimpossibilityofkeepingsystematicdiscriminationorcostshiftingsecret,makeitmostunlikelythatBellcompanymanagerswouldorderunlawfulpractices. G  61        `   Givenitsowndecisionsnotingthestrengthoftheseprotections,theCommissioncouldhardlyfindtheminadequatetothetaskinthiscase.Moreover,theCommissionjustrecentlydetermined,inapprovingBritishTelecomsacquisitionofMCI,thatregulationsintheUnitedKingdom ensurepropercostallocation,timelyandnondiscriminatorydisclosureofnetworktechnicalinformation,andprotectionofcarrierandconsumerproprietaryinformationagainstunauthorizeddisclosure,andthereby contro[l]BTsmarketpowerintheprovisionofaccessservices.MergerofMCICommunicationsCorp.andBritishTelecommunicationsPLC,GN mH DocketNo.96245,FCC97302at203n.288(rel.Sept.24,1997).TheU.K.ssafeguards,however,areweakerthanthoseundertheActandthisCommissionsregulations,seeid.218  223,anddonotevenincludeequalaccess,unbundling,orresale,id.202.IftheU.K.smuch  weakerregulationsandthepotentialforfuturecompetitionaresufficienttopreventharmfrom !  BTsverticalintegrationwithMCI,seeid.210,thenthemuchstrongerU.S.safeguardsandthe #  opennessofSouthCarolinamarketstocompetitorsunderthechecklistmustbesufficienttoaddressanyanalogousconcernsraisedinthisproceeding. Kb;  I  0 ` b;4K2  .0 ` (#` (#  ActualExperiencewithLECParticipationinAdjacentMarketsDisproves   TheoriesaboutAnticompetitivePotentialb;4a4Kی  (# (# Ќ      BellSouthsinabilitytoraisepricesorrestrictoutputasaninterexchangecarrierinSouthCarolinaisconfirmedbyoveradecadeofexperiencewithLECentryintomarketsadjacenttothelocalexchange,including,insomeinstances,longdistanceservice.Asnotedearlier,localexchangecarriershavecompetedfairlyandeffectivelywheretheyhavebeenpermittedtoofferlongdistance.Seesupraat7678. G  62      ׀Onewouldnothaveexpectedsuchcompetitivebenefits   basedontheselfservingpredictionsofpotentialcompetitors,whichwereofthesameilkastheargumentstheywillmakeinopposingthisapplication.  TheNewJerseyCorridors.WhenNYNEXandBellAtlanticsoughtpermissionto   operateasinterexchangecarriersinlimitedgeographiccorridorsduringtheearly1980s,thedistrictcourtcreditedsuggestionsthatallowingsuchservicewouldgive theOperatingCompaniesthesameincentivetodiscriminateagainstnewentrantsthattheyhadwhilepartoftheintegratedBell[s]ystem,andthatit maybetantamounttogivingtotheOperatingCompaniesamonopolyovercertaininterstatetraffic.UnitedStatesv.WesternElec.Co.,569F.Supp.990,    1018n.142,1023(D.D.C.1983).Yetthese(nowmerged)Bellcompaniesdonotdominatecorridortraffic.ByAT&Tsowncount,BellAtlantichaslessthan20percentofthecorridorbusiness.AT&TWaiverPetitionat3.AT&TandMCIhavesoughtauthoritytolowertheirlong p distanceratesinthecorridorswhiletheyraisethemelsewhere,notbecauseofanyleveragingoflocal bottlenecks,butratherbecausetheirpricesarebeingundercut.SeeAT&TWaiver E  Petitionat5;MCICommentsat3.Disprovingthepredictionsofpotentialcompetitors,BellAtlanticandNYNEXhavebenefittedconsumersbyloweringprices.    SNETinConnecticut.Similarly,alltheevidencesuggeststhatSNETscompetitive % successinConnecticutisduetoitslowprices"currently1718percentlowerthanAT&Ts"nottoanyanticompetitivebehavior.SeeHausmanAff.16,22,41.AT&Tdoesnotallege   thatSNEThasgainedmarketsharethroughanticompetitiveconduct,butratherattributesSNETssuccesstolowerprices.Id.;seealsoGilbert53(nocomplaintsagainstSNETor  ` FrontierCommunications).Moreover,competitionbetweenSNETandAT&Tisvigorous,leadingAT&TtoaskforpermissiontoreducepricesalongwithSNETinordertopreserveitsmarketshare.Seesuprapp.7677.      GTE/Sprint.GTEsownershipofSprintprovesthesamepointonalargerscale.See  GilbertAff.5152.Asthefourthlargestlocalexchangecarrierandtheincumbentcarrieracrosslargegeographicareas,GTEhadthesametheoreticalincentivestoimpedeinterexchangecompetitionaswouldaBellcompanyenteringthelongdistancemarkettoday.SeeUnitedStates mH v.WesternElec.Co.,993F.2dat1579(explainingrelevanceofGTEexperience).Indeed,when E  seekingtoplaceconditionsonGTEspurchaseofSprintin1984,theDepartmentofJusticearguedthatbecauseGTE provide[d]inthesamemarketbothlocalmonopolytelecommunicationsservicesandcompetitivelongdistanceservices,itnecessarilywouldhave theincentiveandabilitytoforecloseortoimpedecompetitioninthecompetitive(orpotentiallycompetitive)marketbydiscriminatinginfavorofitsownlongdistancecarrier.UnitedStatesv. }%X" GTECorp.,603F.Supp.730,732(D.D.C.1984). U'0!$   Yetaftertheacquisitionwentthrough,SprintneverwasabletoaccumulatedisproportionatemarketshareinareasservedbyaGTEtelephonecompany.TheDepartmentof +$( JusticefoundnopatternofdiscriminationbyGTEinfavorofSprint,GilbertAff.52,andevenAT&TandMCIhavehadtoconcedethatGTEsmonopolypowerinthelocalexchangeneverenableditto achievemarketpowerinitsinregioninterLATAmarket. G  63      ׀Asfurtherevidence   ofitsinabilitytoearnmonopolyprofitsinthelongdistancebusiness,GTEsoldSprintinthreeinstallmentsbetween1986and1992.Gilbert51.GTErecentlyenteredlongdistanceasanewentrant"inthesamewaythatBellSouthwillenter"andhascompetedeffectivelywithAT&Tnotthroughanyanticompetitiveconductbutratherthroughresidentialpricesthatare17.2 5  percentlower.HausmanAff.23.  CellularServices.ExperiencewithLECparticipationincellularservicesprovides  anothergoodexample.SeeHausmanAff.33,40.Giventhatcellularcarriersand  interexchangecarriershavesimilarlocalinterconnectionrequirements,Bellcompanieshavehadessentiallythesameincentiveandabilitytoactanticompetitivelyagainstrivalcellularcarriersastheywouldhavetoactanticompetitivelyagainstotherinterexchangecarriersininregionstates.Aswithinterexchangeservices,moreover,predictionsoffutureharmtothepublicinterestprecededBellcompanyparticipationinthecellularbusiness.See,e.g.,825845MHZInquiry,  86F.C.C.2dat469,53031,54043,55051,643(summarizingcommentsofMillicom, Telocator,andtheDepartmentofJustice). #    Yet,thistheoreticalincentiveofwirelinecarrierstoinhibitcellulargrowthhasnot createdanyactualproblems.TheCommissionhasconfirmed theinfrequencyofinterconnectionproblemsbetweenlocalexchangecarriersandunaffiliatedcellularproviders.EligibilityfortheSpecializedMobileRadioServs.,10FCCRcd6280,6293,22(1995).   Indeed, thewirelesscommunicationsbusinessisoneinwhichrelativelysmall,entrepreneurialcompetitorshaveoftenbeenassuccessfulas...theBOCs.ApplicationsofCraigO.McCaw ]8  andAT&TCo.,9FCCRcdat586162,38. 5    TheBellcompanies,whowouldknowifincumbentlocaltelephonecompaniescouldgivetheircellularaffiliatesanunfaircompetitiveedge,haveinvestedheavilyincellularsystemsthatcompetewiththeincumbentLECssystems.BellSouth,forinstance,competesagainstan  incumbentLECswirelessaffiliateinHawaii,California,Illinois,andIndiana.SuchinvestmentswouldneverbemadeifBellcompaniesreallybelievedthatLECscanfrustratefaircompetition.EvenAT&TeffectivelyhasagreedthattheBellcompanieshavenoabilitytooverwhelmcompetitorsinwireless;itboughtthenationslargestcellularcarrierandhasinvestedbillionsmoreforPCSlicenses,investmentsthatwouldnotmakesenseiftheincumbentLEChadaclearedge.  E. ` TheEffectofBellSouthsEntryonLocalCompetition #     EveniftheCommissionfollowsthepolicysuggestedinitsMichiganOrderandfocuses }%X" primarilyonlocalcompetition,itshouldfindthatapprovingBellSouthsapplicationisinthepublicinterest.TheexpertagencyonlocaltelecommunicationsinSouthCarolinafoundthatallowingBellSouthintolongdistance willcreaterealincentivesforthemajor[interexchange +$( carriers]toenterthelocalmarketrapidlyinSouthCarolina,becausetheywillnolongerbeabletopursueotheropportunitiessecureintheknowledgethat[BellSouth]cannotinvadetheirmarketuntiltheybuildsubstantiallocalfacilities.ComplianceOrderat67.TheSCPSCs   thoroughlyresearchedconclusionisconsistentwithcommonsense,economictheory, G  64      ףandthe   findingsofotherStatecommissions.Forexample,theOklahomaCorporationCommissionhasinformedthisCommissionthat oncefulllongdistancecompetitionisopenedupinOklahoma,themajorcompetitiveprovidersoflocalexchangeservicewilltakenoticeandadjusttheirrespectivebusinessplanstomoveOklahomaclosertothetopoftheirschedules,resultinginfasterandbroaderlocalexchangecompetitionforOklahomaconsumers.@ G  65          ApprovingBellSouthsapplication,moreover,wouldprovidetheBigThreelongdistancecarrierswiththeabilitytocompetemoreeffectivelyasCLECs.ThesecarriersaretemporarilyprohibitedfrombundlinganywholesaleservicestheyobtainfromBellSouthinSouthCarolinawithinterLATAservices.BellSouthsentrywillhavethebeneficialeffectof releas[ing]theϢinterexchangecarriersfromthecurrentprohibitionundertheActagainstthejointpackagingoflocalandlongdistanceservice.ComplianceOrderat6;47U.S.C.271(e)(1).Theresultwill  betheoneCongressenvisioned:enhancedcompetitioninbothlocalandlongdistancemarkets ! inSouthCarolina.ConferenceReportat1(Actintendedto ope[n]alltelecommunicationsmarketstocompetition);seeGilbertAff.1823(notingbenefitstocompetitionand  consumersofbundledofferings);HausmanAff.7(same).  TheActsprohibitiononbundlingbythemajorcarrierspendingBellSouthsinterLATAentryisinfacttheonlybarrierremainingtofulllocalcompetitioninSouthCarolina. [A]ll  ` procompetitiveentrystrategiesareavailabletonewentrantsintheState G  66      ׀andtheSCPSChas ]8  confirmedthatthecurrentabsenceoffacilitiesbasedlocalcompetitionisduesolelytothe 5  businessdecisionsofcompetitors.ComplianceOrderat20.BellSouthhasexecutedagreements    with83telecommunicationscarriersinSouthCarolina.WrightAff.Attach.WPEA.TheAffidavitofGaryWrightdescribesthevariedbackgroundsandbusinessplansoftheseCLECsandtheopportunitiesavailabletothem.ThirteenCLECshavealreadyorderedservicesfromBellSouthforresaleinSouthCarolina.WrightAff.24.SeealsoAttach.WCEE.Whilethe mH ordersofsomeofthesecompaniesmaywellbe testorders,havebegunservingcustomersinsubstantialnumbers.WrightAff.24.SeealsoEx.WCED.AsofSeptember11,1997,  CLECshadcaptured1,785businesslinesand573residentiallinesfromBellSouthinSouthCarolina.WrightAff.24.  Althoughtheireffortstodatehavebeenminimal,andtheyhavenottaken reasonablestepstowardbecomingfacilitiesbasedprovidersofresidentialandbusinessservice,CAPSsuchasACSIandITCDeltaComandcabletelevisioncompaniessuchasTimeWarneralreadyhavefacilitiesthatcouldeasilybeutilizedtoofferfacilitiesbasedtelephoneexchangeservice.ACSI, -)#& forexample,hasnetworksinColumbia,Greenville,SpartanburgandCharleston,whileITCDeltaComsnetworkscouldbeusedtoprovidefacilitiesbasedtelephoneexchangeserviceinBeaufort,Charleston,Columbia,Florence,Greenville,HiltonHead,MyrtleBeach,Orangeburg,Spartanburg,andSumter.WrightAff.921.SeealsoAttach.WCEA,WCEB.Aproximity   analysisofthenetworksofACSI,ITCDeltaComandTimeWarnerrevealsthatifthesethreecompetitorschosetocompeteovertheirownnetworks,theywouldhaveaccesstoasubstantialpercentageofBellSouthsSouthCarolinarevenueswithouthavingtoextendtheirnetworksorresorttoresale.WrightAff.27.SeealsoAttach.WCED(providingconfidentialfigures).      Moreover,becausealmostonethirdofBellSouthsSouthCarolinabusinessrevenuesaregeneratedbybusinesscustomersservedbyonly5ofthe115wirecentersintheState"inareascoveredbythenetworksofpotentialfacilitiesbasedcarriers"thethreatofcompetitionfromthesepotentialcompetitorsimposesasignificantcompetitiveconstraintonBellSouthsconduct.WrightAff.26.Indeed,thisgeographicconcentrationofrevenuesmeansthatBellSouthislikelytofacefacilitiesbasedcompetitionforalargeportionofitslocalbusinessrevenuesinSouthCarolinaassoonasanyoneofthesepotentialcompetitorstakesstepstowardcompeting.  Thepotentialcompetitorswhohavefacilitiesinplaceforotherbusinesses,andeventhosewhohavenone,neednotconstructanynewfacilitiestocompeteasfacilitiesbasedproviders,butrathercouldorderwhattheyneedfromBellSouth.SeesupraPartII.BellSouths }%X" interconnectionagreementsensurethatCLECswillhavenondiscriminatoryaccesstoallfourteenchecklistitemsnotonlytoday,butalsointhefuture.StacyPerformanceAff.417(performancemonitoringprovisions);WorochAff.3233(adoptionofindustrystandards). +$( Moreover,ifCLECsthemselvesdonotkeeptrackofBellSouthsofferings,stateregulatorsandlawenforcementofficialscertainlywill.E G  67          AstheSCPSCfound,therefore,theonlythingpreventingCLECsfromcompetingfiercelywithBellSouthistheirincentivetoprotectlongdistanceprofitsandpursuemoreprofitablemarkets.&    CONCLUSION  ]8      SouthCarolinaconsumershavebeendeniedthebenefitsofcompetitiveinterLATAand'upnlocalmarketslongenough.TheCommissionshouldendthatsituation,asrecommendedbytheSCPSC,bygrantingBellSouthreliefundersection271.BecauseBellSouthhassatisfiedallspecificstatutoryprerequisitestoprovideinterexchangeservicesinSouthCarolinaandsuchservicewouldbeconsistentwiththepublicinterest,convenience,andnecessity,theapplicationshouldbegranted.  E     `     h     Respectfullysubmitted,   `     h     _______________________________(X@(#(#(WALTERH.ALFORDWILLIAMB.BARFIELDJIMO.LLEWELLYǸ1155PeachtreeStreet,N.E.̀Atlanta,GA30367̀(404)2492051DAVIDG.FROLIÒ113321stStreet,N.W. 5  ЀWashington,DC20036̀(202)4634182GARYM.EPSTEIǸLATHAM&WATKINS̀1001PennsylvaniaAve.,N.W.̀Washington,DC20004̀(202)6372249CounselforBellSouthCorporation p JAMESG.HARRALSOǸ 28Perimeter CenterEast Y4 ЀAtlanta,GA30346̀(770)3523116  5  CounselforBellSouthLongDistance,Inc. !    MICHAELK.KELLOGGAUSTINC.SCHLICKKEVINJ.CAMERONJONATHANT.MOLOT̀0 p  KELLOGG,HUBER,HANSEN,qLp(#p(#  p TODD&EVANS,P.L.L.C.̀1301KStreet,N.W.̀Suite1000West̀WashingtonDC20005̀(202)3267900CounselforBellSouthCorporation,  % ЀBellSouthTelecommunications,Inc.and̀BellSouthLongDistance,Inc. ' MARGARETH.GREENER.DOUGLASLACKEYMICHAELA.TANNERSTEPHENM.KLIMACEK̀675W.PeachtreeStreet,N.E.̀Suite4300̀Atlanta,GA30375̀(404)3350764CounselforBellSouthTelecommunications,  1 ЀInc. 2   3 (X@( "3 September30,19971  $l5 12TheAffidavitsappendedasAppendixAtothisBrief232are22available234wereprovidedtotheCommission42inelectronicform.AttachmentstotheAffidavitsandothersupportingmaterialsareonfilewiththeCommission.2