WPC 2BfJ Z|xxTimes New Roman (TT)Courier New (TT)Symbol (TT)CourierTimes New Roman (TT)Book Antiqua (TT)C\  P6QPd6X@DQ@(a\  P[AP5d6X@C@=C\  P6QPSJz PQP2?@phoenix#C\  P6QP# Befc>re the JRabkinTKiehn 2 K) heading 1heading 1X` hp x (#` hp x (##z PQP#  #C\  P6QP#` hp x (#X` hp x (#heading 2heading 2F<# k\  P6Q P#  #C\  P6QP#heading 3heading 3X` hp x (#( 0 8@H!(#XXz PQXP##C\  P6QP#( 0 8@H!X` hp x (#(Default Paragraph FoDefault Paragraph Font11#XP\  P6QXP##C\  P6QP#2 v  O  List BulletList Bullet BulletBullet;1#XXz PQXP##C\  P6QP#BulletLastBulletLast;1#XP\  P6QXP##C\  P6QP#List 2List 2;1#XXz PQXP##C\  P6QP#2      Body TextBody Text ;1#XXz PQXP##C\  P6QP#headerheader X` hp x (#(8H!((8H!X` hp x (#(footerfooter X` hp x (#(8H!((8H!X` hp x (#(page numberpage number 11#XP\  P6QXP##C\  P6QP# hh   headerX` hp x (#(8H!((8H! (# ( 2/1/5  header page number#XP\  P6QXP##C\  P6QP#" page number"  header (# ( 0 8@H!(  headerX` hp x (#(8H!(#XP\  P6QXP# page number#XP\  P6QXP#(8H! (# (#C\  P6QP#" page number"  header (# ( 0 8@H!(#Xx6X@DQX@#Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 X` hp x (#( 0 8@H!( In the Matter of )  ) Application of BellSouth )Docket No. _________ Corporation to Provide ) InRegion, InterLATA Long ) Distance Services Under ) Section 271 of the  ) Telecommunications Act of 1966 ) ( 0 8@H!` hp x (#(AFFIDAVIT OF Gary M. Wright ` hp x (#( 0 8@H!( I, GARY M. WRIGHT, being of lawful age and duly sworn upon my oath, depose and state: 1.My name is Gary M. Wright. I am employed by BellSouth Telecommunications, Inc. (BST) as a Manager Regulatory Competitive Analysis in the Federal Regulatory Department. My business address is 675 West Peachtree Street, Room 38L64, Atlanta, Georgia 30375.  2. I started employment with South Central Bell in 1982 in the Business Marketing Department. From 1983 to 1987, I worked in National Accounts Marketing for AT&T. During 1987 and 1988 I worked as an associate for Callahan & Associates, Inc., an independent telecommunications consulting firm primarily serving large banking, health care and governmental institutions. I joined BellSouth Advanced Systems, Inc. in 1988 as a National Account Manager serving the aerospace industry. In 1990 I returned to South Central Bells staff in the Marketing Technical Support Department as competitive analyst in the Special Bids Support Group. My work at BellSouth has continued to focus on the field of competitive intelligence and analysis since 1990 in various marketing and regulatory positions. I have a Bachelor of Arts degree from Birmingham Southern College in Birmingham, Alabama where I doublemajored in Political Science and Analytic Philosophy. I completed one year of postgraduate study at the University of Alabama in Birmingham in the field of Computer Science and Mathematics and have completed numerous corporatesponsored management and technical education programs including work in technical marketing management at the Massachusetts Institute of Technologys Sloan School of Business and telecommunications technology at the University of Pittsburgh . 3. My current assignment, ManagerRegulatory Competitive Analysis, began in 1992. My primary responsibilities include monitoring and analyzing the activities of BellSouths competitors including Competitive Access Providers (CAPs) and Competitive Local Exchange Companies (CLECs) within the BellSouth region in support of BellSouth Telecommunications Inc.s (BSTs) regulatory and public policy activities. In carrying out this responsibility I have documented the progress of BSTs facilitybased competitors in deploying their networks in BSTs region and developed maps which document the known fiber routes of facilitybased competitors in selected markets throughout BSTs region. I also have developed mapping studies which document the proximity of competitors networks to current BST customers and have calculated an approximation of BST customer revenues which are at risk. 4. The purpose of my affidavit is first to document the current status of local exchange service and access competition within BSTs South Carolina serving area. In support of this purpose I will document current CLEC activity within South Carolina to the extent that it can be readily identified as of September 1997. Secondly, information is presented to illustrate the degree to which BST business and residence accounts and their associated local exchange service revenues are within the typical reach of, and are therefore at the greatest risk of loss to, facilitybased CLECs in selected South Carolina markets. BST customer locations located within 3000 feet of selected South Carolina CLEC fiber optic networks have been selected for this analysis. I also provide information concerning the future plans and market entry schedules for CLECs which have announced their intent to participate in the competitive local exchange service market in South Carolina. Information concerning current competitive activities and the future plans of competitive entrants is provided to support BSTs position that as of June 1997 no potential facilitybased CLEC was making any reasonable effort to serve both residential and business local exchange customers in South Carolina, and to substantiate the fact that as of September 19, 1997 no such provider could be identified by BST as actively providing local exchange services to both business and residential customers utilizing their own facilitybased networks within BSTs South Carolina serving area. 5.The Wright Confidential Exhibit (WCE), provided as part of this affidavit, includes information which describes the wireline facilitybased networks of current and potential CLECs in South Carolina. Additional information is also presented which indicates the relative concentration of BST revenue streams across its South Carolina serving area and the proximity of these revenues to BSTidentified competitive facilities. This information was developed at considerable expense by BST, utilizing inhouse and thirdparty research, and presents highly sensitive proprietary information affecting BSTs South Carolina operations. The WCE also includes information which describes in detail the current activity of CLECs and potential CLECs in South Carolina with regards to interconnection, unbundling, and resale activities. For these reasons the WCE, and all attachments provided therein, is being filed under seal with a request for confidential treatment. 6.As of September 19, 1997 BST had signed local exchange interconnection and resale agreements with  83 different South Carolina telecommunications service providers. The South Carolina Public Service Commission (SCPSC) had reviewed and approved agreements with 66 of these providers. Attachment WPEA,  included in the Wright Public Exhibit (WPE) of this affidavit, provides further details concerning South Carolina interconnection and resale contract activity including the original contract signing and approval dates of all negotiated and/or arbitrated agreements as of September 19, 1997. Attachment WPEE provides a list of BSTs current negotiations with 71 additional companies which may possibly result in South Carolina agreements in the future. As shown in Attachment WPEA, 26 of the CLECs which have signed interconnection agreements with BST in South Carolina indicated in their interconnection negotiations that they may provide competitive local exchange services in whole or in part over their own facilitybased networks. These 26 potential facilitybased South Carolina CLECs are : ACSI, ALEC Inc., American MetroComm, AT&T, AXSYS Inc., Business Telecom, Communications Brokerage Services, Competitive Communications Inc. (CCI), Comm Depot, Cybernet Group, ITC DeltaCom, FiberSouth, GNET, Hart Communications, Intermedia (ICI), IntelCom Group, Interstate Telephone, KMC, MCI, National Telephone, Southeast Telephone, Teleport Communications Group (TCG), Time Warner Communications (TWC), Tricomm, US LEC, and Winstar Communications. Each of these 26 companies included in their respective agreements with BST terms and conditions for local exchange interconnection and the unbundling of BST network elements. These interconnection and unbundling services are readily available from BST for use by these CLECs, in conjunction with their own facilities, to provide facilitybased local exchange services to South Carolina customers. However, as of September 1, 1997 only one SCPSCauthorized CLEC had requested and installed BSTprovided local exchange interconnection services in South Carolina. 7.As of September 19, 1997, a total of 28 companies had requested certification from the SCPSC seeking authority to provide competitive local exchange services within the state. Of the 28 seeking CLEC certification, 9 had signed agreements with BST which included terms and conditions for the provisioning by BST of services which could be used to serve South Carolina customers on a facilitybased basis. These 9 potential facilitybased local exchange service providers are: ACSI, AT&T, ITC DeltaCom, FiberSouth, Hart Communications, Intermedia Communications (ICI), Kamine Multimedia Corp. (KMC), MCI, and US LEC. 8.Seven of the potential facilitybased providers seeking SCPSC local exchange service authority, ACSI, AT&T, ITC DeltaCom, Hart Communications, Intermedia Communications (ICI), Kamine Multimedia Corp. (KMC), and MCI had been approved by the SCPSC and certified to provide local exchange services within the state as of September 19, 1997. 9.As of September 19, 1997 BST had been unable to identify any CLEC marketing activity for wireline facilitybased local exchange services to any class of customer in South Carolina. Two certified South Carolina CLECs, American Communications Services Inc. (ACSI) and ITC DeltaCom were providing access and private line services over their own networks throughout South Carolina and one potential facilitybased CLEC, Time Warner Communications, operates a hybrid fiber/coax network in Columbia, which is currently utilized to provide CATV services. These three companies are the only potential facilitybased CLECs identified by BST with currently operational networks in South Carolina. 10.ACSI at present provides nonswitched dedicated services, including special access, data services, and private line services over its own fiber optic facilities in Columbia, Charleston, Greenville and Spartanburg. ACSI requested authority to provide local exchange services in South Carolina on May 31, 1996. This request was approved by the SCPSC on September 9, 1996. ACSI signed an interconnection agreement with BellSouth on July 25, 1996 which establishes negotiated terms and conditions for the interconnection of networks, the mutual exchange of local traffic, the unbundling of network elements, and resale of BSTs network facilities and services in South Carolina. This negotiated contract was approved by the SCPSC on October 28, 1996. A renegotiated resale agreement was signed by ACSI and BST on December 26, 1996 and approved by the SCPSC on February 7, 1997. 11.ACSI has traditionally targeted business customers of all sizes for its switched service offerings including local exchange services. ACSIs four networks in South Carolina serve the central business districts located in the downtown areas of the respective cities. ACSI has stated before the SCPSC that it does not plan to offer facilitybased residential local exchange service in any market were it is currently active in the BellSouth region including South Carolina. ACSI filed a local exchange service tariff in South Carolina which were approved by the SCPSC in April 1997. ACSIs tariff includes terms and conditions for basic local exchange service, PBX services, and other enhanced telecommunications services and features in the Greenville, Spartanburg, Columbia, and Charleston markets. The ACSI basic local exchange offering is priced to compete with BSTs tariffed basic business local exchange service in each of these South Carolina markets. ACSI has not tariffed residential local exchange services in South Carolina. The ACSI tariff offering makes no mention of any planned future residential service offering on either a resold or facilitybased basis. A copy of the ACSI South Carolina local exchange service tariff is included as Attachment WPEB of this affidavit. 12. BST does not expect ACSI to offer residential local exchange services in South Carolina or any other market within BellSouth territory on either a resold or facilitybased basis at any time in the foreseeable future. ACSI began offering business local exchange services in the BST region during the fourth quarter of 1996 in Columbus, GA on a resold and a facilitybased basis and has offered resold business local exchange services in South Carolina as well as 11 other markets in 8 states across BSTs region since April 1, 1997. ACSI has yet to offer residential local exchange service in any BST market were it currently operates as a CLEC on either a facilitybased or resold basis. 13.Descriptions and analyses of ACSIs current South Carolina facilitybased CAP operations are included in Attachment WCEA in the Wright Confidential Exhibit (WCE) of this affidavit. As is clearly demonstrated in Attachment WCEA, sufficient revenue opportunities exist to sustain facilitybased local exchange competition for both business and residential customers in the South Carolina markets currently served by ACSIs CAP operations. However, as of September 19, 1997 ACSI had made no identifiable effort to provide facilitybased local exchange services to any customer in South Carolina. 14.The only other currently certified potential facilitybased CLEC in operation in South Carolina, ITC DeltaCom Inc., applied for SCPSC certification to provide local exchange services on October 2, 1996. The application was approved in January 1997 and a certificate was granted. ITC DeltaCom signed a negotiated interconnection, unbundling, and resale agreement with BST on March 12, 1997 which was approved by the SCPSC on April 3, 1997. 15.ITC DeltaCom is a subsidiary of Georgiabased ITC Holding Co. and is a regional longdistance company in the southeast that has traditionally focused on the business market. ITC DeltaComs regional fiberoptic network extends throughout 8 of the 9 states in the BST region. ITC DeltaCom also offers Internet access through MindSpring Enterprises Inc., another subsidiary of ITC, and Viper, a leading Internet access provider in the Southeast, that ITC DeltaCom acquired in June 1996. The current ITC DeltaCom network currently comprises over 2100 miles of fiberoptic cable and spans the Carolinas, Georgia, Florida, Alabama, Mississippi, Louisiana, and parts of Texas. ITC DeltaCom has constructed a series of SONETrings along its fiber routes in order to provide selfhealing HICAP access and transport services. Eventually, the company plans to offer access services to all 44 LATAS in the BellSouth region. The regional fiber network delivers digital telecommunications long haul transport at DS3 bandwidths and above to other carriers and large corporate customers. Its dedicated access offerings are delivered in a variety of options from DS1 to OC3. The company has also installed 64port Signal Transfer Point (STP) systems in mated pairs within the companys network, which allow customers to have access to Signaling System 7 (SS7) functionality. ITC DeltaCom offers interLATA and intraLATA long distance and private line services throughout its network and operator services through its subsidiary, InterQuest Inc. InterQuest markets a wide range of automated and live operator services to interexchange carriers (IXCs), independent Telcos, coinoperated and customerowned (COCOT) providers, hotels/motels, and cellular companies. 16.ITC DeltaComs parent, ITC Holdings, also owns interest in several other BellSouth competitors including InterCel, a wireless provider with licenses throughout the BellSouth region including Atlanta. InterCel provides wireless services utilizing PCS spectrum licenses under the name, PowerTel. ITC DeltaCom will provide access, transport, and operator services to PowerTel as it builds out its PCS network and expands current cellular coverage areas in Georgia and the Carolinas. 17.ITC DeltaCom has formed a strategic partnership to share use of network facilities with CARONET. CARONET was formed as a partnership of smaller regional networks in December 1995. The partnership became active during the first quarter, 1996 with the interconnection of the partners four smaller fiber optic networks and the launch of major expansion projects to reach new markets. CARONETs equity partners include: PalmettoNet, DukeNet, Carolinas FiberNet, and Access/On. PalmettoNet was formed by 11 independent telcos during 1985 in an effort to economically deliver fiberbased services within their serving areas. DukeNet is a telecommunications subsidiary of Duke Power which provides internal telecommunications services to corporate affiliates. CARONET is the telecommunications subsidiary of Carolina Power & Light. Access/On, like PalmettoNet, was formed by a consortium of independent telcos serving parts of northeastern and northwestern North Carolina. The partnership, CARONET, now provides fiberbased services utilizing a 3200 mile network which extends from Atlanta throughout the Carolinas. The network not only provides internal services to each of the partners but also provides HICAP access and transport services to IXCs, facilitybased resellers, cellular providers, PCS providers, and other nonaffiliated commercial customers. 18.A map of ITC DeltaComs regional fiber optic network within the BST region including South Carolina is attached to this affidavit as Attachment WPEC. 19.ITC DeltaCom publicly announced its intentions to offer local exchange service throughout its service area during the second quarter of 1997 . ITC DeltaCom initiated both resold and facilitybased business local exchange service offerings on a limited basis in selected Alabama markets during June 1997. ITC DeltaComs current core long distance business focuses on the business market and BST anticipates that business customers will remain the primary target of any future local exchange service marketing efforts. Business customers have clearly remained the focus of its early local exchange market entry efforts in Birmingham and Montgomery, Alabama. 20.ITC DeltaCom has not publicly announced plans to market residential local exchange services at this time in South Carolina or any other BST market. A description of ITC DeltaComs residential service offerings included on its September 19, 1997 Internet Website is provided as Attachment WPED to this affidavit. The current residential service offerings listed on the webpage make no mention of local exchange service offerings in any ITC DeltaCom market. The ITC DeltaCom business service offerings webpage, provided herein as Attachment WPED, does include descriptive information about local exchange service offerings for business customers. Additional information concerning ITC DeltaComs South Carolina CLEC market entry activities is provided as Attachment WCEB to this affidavit. Despite recent ITC DeltaCom activity, BST has been unable as of September 19, 1997 to identify any active marketing of local exchange services to either business or residential customers in South Carolina. No public announcement of the availability of ITC DeltaCom local exchange services in South Carolina has been found by BST in the South Carolina media. No public advertising of the availability of ITC DeltaCom local exchange services of any type has come to the attention of BST employees residing in South Carolina. 21.The sole publicly available information source, identified by BST, indicating ITC DeltaComs intent to provide local exchange services in South Carolina is contained in the ITC DeltaCom local exchange service tariff filing which was approved by the SCPSC in August 1997. The ITC DeltaCom approved tariff which includes both business and residential local exchange service offerings is provided as Attachment WPEE to this affidavit. As of September 19, 1997 BST competitive research efforts have been unable to determine if ITC DeltaCom will provide South Carolina business and residential local exchange services on a facilitybased basis only, on a resold basis only, and/or a combination of both provisioning methods. 22.The only other potential South Carolina CLEC with currently operational network facilities, Time Warner Communications (TWC) signed an interconnection, unbundling, and resale agreement with BST on June 2, 1996. TWC only recently filed this agreement with the SCPSC for review and approval in August 1997. In mid1996 TWC announced plans to offer competitive local exchange services utilizing its own network facilities to both business and residential customers in its cable service areas. TWC launched a major national construction effort to upgrade its coaxial cable network facilities to support the delivery of telephony services. TWCs Columbia, South Carolina network facilities were substantially upgraded as part of this national TWC effort. During late 1996 and early 1997, the press began to release reports that TWC was scaling back plans for aggressive local exchange market entry. TWC was reportedly focusing its initial deployment plans and local exchange marketing efforts on serving business customers in selected TWC markets. 23.Descriptions and analyses of TWCs current South Carolina facilitybased CAP operations, which are primarily concentrated in the Columbia market, are included in Attachment WCEC in the Wright Confidential Exhibit (WCE) of this affidavit. Attachment WCEC supports BSTs position that sufficient revenue opportunities exist to sustain facilitybased local exchange competition for both business and residential customers in TWCs Columbia serving area. However, as of September 19, 1997 TWC had made no effort to utilize the services available via its negotiated and signed interconnection agreement with BST to provide facilitybased local exchange services to any customer in South Carolina. As of September 19, 1997 TWC had not requested CLEC certification from the SCPSC. 24.To the best of BSTs knowledge as of September 19, 1997 no wireline facilitybased local exchange service competition had begun in South Carolina. No South Carolina CLEC had placed an order for the provisioning of unbundled loops, number portability services, or CLEC directory listing services. Thirteen CLECs had processed initial orders for resold services in the South Carolina market which were completed and in service as of September 11, 1997. A description of South Carolina resold lines in service by CLEC is provided as Attachment WCEE to this affidavit. As of September 11, 1997, South Carolina CLECs were providing approximately 1785 resold business local exchange access lines and 573 resold residential local exchange access lines within the state. 25.When and if any of the companies discussed in this affidavit choose to in fact make a commitment to construct facilities or utilize the facilities currently available to them from BST to serve South Carolina customers, BST fully expects that their facilitybased offering will be generally available only to a select group of South Carolina businesses. Moreover, it should be reiterated that only ACSI, Time Warner, and ITC DeltaCom have been identified by BST as having sufficient distribution facilities currently in place to support the general delivery of facilitybased local exchange services. Clearly the major IXCs such as AT&T, MCI, and Sprint have current transport and switching facilities in place throughout South Carolina, as they do across a large part of the nation, which could be utilized to facilitate the provisioning of facilitybased local exchange services in whole or in part. However, the general lack of commitment demonstrated by these potential facilitybased providers in serving the local exchange market has led BST to discount any possibility of their facilitybased entry in South Carolina in the foreseeable future. 26. BSTs highly concentrated South Carolina local exchange and access revenues will be at risk when major facilitybased CLECs commit to the marketing and delivery of local exchange services. As graphically illustrated in Attachment WCED of this affidavit, BSTs critical South Carolina business revenue streams are highly concentrated in extremely small geographic areas in South Carolinas metropolitan areas. Almost onethird of all BSTs South Carolina business revenues are generated by business customers served by only 5 of the 115 BST wire centers currently operating in South Carolina. Current business customer concentrations have always been, and will remain, the primary focus of facilitybased access competition in South Carolina. These heavy concentrations of large business and governmental customers have been the target for construction of new facilities and are the focus of competitors product/service development and marketing efforts. BST fully expects these business and governmental customers to remain the primary focus of any future facilitybased local exchange service competition within South Carolina. 27.Clearly, a morethansufficient economic opportunity exists for the successful entry and growth of multiple facilitybased competitive local exchange service providers in South Carolinas major markets. The currently identified and mapped competitive facilities. as discussed in the Attachments provided in the Wright Confidential Exhibit (WCE), pass within a mere 3000 feet of highly significant percentages of BSTs annual business and residential revenues in South Carolina. BST expects current facilitybased competitors as well as new facilitybased entrants to make their bid for these business revenue streams in the not too distant future. However, it is now BSTs firm belief, supported by the historical growth patterns over the past year of wireline facilitybased local competition in 8 of the 9 states it serves, that residential wireline facilitybased competition will never emerge on a widespread basis in South Carolina or anywhere else in the BST region until competitive facilitybased providers such as the major IXCs are forced by market conditions, including BellSouths interLATA entry, to provide such services. 28.BST has no knowledge of any nonaffiliated facilitybased provider currently providing wireless services utilizing FCClicensed PCS spectrum in South Carolina as of September 1, 1997. 29.The information contained in this affidavit and in the attached Exhibits is true and correct to the best of my knowledge and belief. #Xv6X@CX@#I hereby swear that the foregoing is true and correct to the best of my information and belief. #b6X@C@# ______________________________________________ #Xx6X@DQX@#Gary M. Wright  Manager, Competitive Analysis Federal Regulatory BellSouth Telecommunications, Inc.   #b6X@C@# #Xx6X@DQX@#Subscribed and sworn to before me this ____ day of _____________________, 1997.   NOTARY PUBLIC  # k\  P6Q P#