Joint Statement of 
Commissioner Jonathan S. Adelstein and 
Commissioner Michael J. Copps, 
Dissenting

Re:	Section 272(f)(1) Sunset of the BOC Separate Affiliate and Related Requirements

      We dissent from today’s decision insofar as it allows the separate affiliate 
requirements in Section 272 to sunset for Verizon in New York without the necessary 
analysis by the Commission.  As the Commission stated so clearly just last week in its 
decision on the SBC California 271 Order, “our principal guarantee under the Act against 
improper accounting practices and cross-subsidizations is compliance with the structural 
and accounting safeguards of section 272.”  In this era of corporate governance problems 
and accounting depradations, we find it incredible that the Commission would eliminate a 
tool to provide safeguards and accounting transparency without even addressing the 
arguments raised in the record.
      
      In Section 272, Congress required Bell companies to provide long-distance and 
manufacturing services through a separate affiliate.  In implementing these requirements, 
the Commission concluded that Congress adopted these safeguards because it recognized 
that Bell companies may still exercise market power at the time they enter long-distance 
markets.  Congress provided that these requirements would continue for three years, but 
could be extended by the Commission by rule or order.  
      
      Congress clearly gave the Commission the charge to determine whether these 
structural, accounting, and auditing safeguards remain necessary to prevent 
anticompetitive discrimination in the market.  Yet the Commission has neglected to 
consider whether there is a need for these or alternative safeguards.  The Commission has 
also not addressed other steps necessary to prevent discrimination, such as performance 
measures, notwithstanding that that issue has been pending for more than a year.  Further, 
the Commission has failed even to address arguments raised in the record.  
      
      In particular, the Commission has not considered the views of our State 
colleagues.  The New York Commission found that elimination of these requirements 
would be premature.  The Texas Commission – the next State in the queue for 
elimination of these requirements – concluded that the sunset  of the Section 272 
safeguards would be “imprudent and untimely,” and “would fail to meet Congress’ 
objectives in implementing Section 272.”  Since the State commissions are engaged in 
the Section 271 process from the beginning, and are our partners in the effort to carry out 
the directives of Congress, it is particularly important to weigh their considerations, and 
particularly that of the affected State, as we move to this next phase.  
      
      Further, we have neglected to analyze the market in New York.  Our data on 
whether competition is taking hold is sketchy and non-integrated.  The data we have and 
the analysis derived from it are, for us, insufficient for making the determination 
mandated by Congress.
      
      By neglecting to comprehensively evaluate the basis for our action in this 
proceeding, we now reach the anomalous result that rural independent carriers are subject 
to more stringent separation requirements than the Bell companies.  We would have 
preferred to address all of these issues together in a coherent and reasoned manner.
      
      Without doing so, we have not fulfilled our statutorily mandated responsibilities.