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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

March 25, 1998

Summary of Statement of William E. Kennard
Federal Communications Commission
Section 271 of the Telecommunications Act of 1996
Before the
Subcommittee on Communications
of the
Committee on Commerce, Science, and Transportation
United States Senate

March 25, 1998

The Commission's work in carrying out its responsibilities under section 271 will always be guided by the words of the statute itself, with its four basic requirements for Bell Company entry into the interLATA interexchange market: satisfaction the Track A or Track B requirements of section 271(c)(1); satisfaction of the items in the competitive checklist; satisfaction of the separate affiliate requirements of section 272; and, finally, the Commission's finding that the requested authorization is consistent with the public interest.

Consistent with the statutory provisions of section 271, I have attempted to articulate the following "Consumer Competition Bill of Rights": 1.) the right to choose providers -- from as wide a variety of providers as the market will bear; 2.) the right to move seamlessly, without obstruction or delay, from one provider to another; 3.) the right to move without changing phone numbers; 4.) the right not be forced to dial extra digits simply because one chooses a competitive carrier rather than an incumbent one; and 5.) the right to change carriers without paying unnecessary fees.

While the Commission must work to ensure that all consumers ultimately enjoy the benefits of the Bill of Rights, section 271 permits Bell Company entry into long distance even before there is some quantifiable amount of competition in the local market. One test for entry into long distance is whether a Bell Company has opened the door to local competition by complying with the statutory requirements, and we will grant a 271 application that meets this test, even if potential competitors have chosen not to walk through that door.

We must focus on the most fundamental goals of the Act, each integral to the other: opening all markets, especially local telecommunications markets, ensuring free consumer choice of every kind, and lowering all barriers to entry in the name of competition. Once these goals are fully realized through the mechanisms of the Act, the deregulation of telephone markets in favor of market forces is possible and desirable. This is the vision of Congress and the end to which every action of the FCC is and shall be directed.

The Commission's orders denying the three most recent 271 applications have placed great emphasis on the inadequacy of the Bell Companies' operations support systems or "OSS." OSS is an unbundled network element that impacts nine out of the remaining 13 checklist items. The Commission has therefore provided detailed guidance in this critical area.

Based on our recent experience with 271 applications, what we see emerging is a hierarchy of checklist items, with some items requiring more work to satisfy than others. We have focused on the most controversial, difficult checklist items first.

To provide additional guidance on 271 applications, especially on items not yet addressed in previous applications, I instructed Commission staff last December to initiate a dialogue with the Bell Companies, competitive local exchange providers, and other interested parties. The vision is to create a transparent process that will add predictability to section 271 applications. I am confident that this dialogue, in conjunction with the guidance we have provided in past Commission orders, will help the Bell Companies understand the performance requirements set forth in the Act. The dialogue we have initiated is not a process of negotiation. We will not prejudge a Bell Company's compliance with section 271. Each application will be decided on the merits, within the 90-day statutory period, and based solely on the record that is developed during that period. But we can bring clarity to the requirements, which should facilitate the submission of stronger applications in the future.

Two truths are absolutely fundamental to the FCC's role in the 271 process Congress devised: we will not grant long distance authorization to companies that have not opened their markets; we will grant entry to those that have.