The Act envisions a "win-win" for consumers -- more choice in local service and more choice in long distance. The Act does not seek merely to provide more choice in long distance at the expense of maintaining the status quo in local service -- that would be "win-lose."
Unfortunately, were we to grant the application before us today, it would still be a "win-lose" result, not "win-win." BellSouth has not yet fully opened its market to competition.
In today's order we review all 14 points of the checklist, this time in the context of BellSouth's second application to provide long distance service in Louisiana. This is by far the most thorough analysis of a section 271 application that the Commission has ever conducted. In today's analysis we can see the fruits of the efforts on the part of the Commission and of all of the stakeholders who have participated in our informal dialogue. This dialogue has produced an improved application and a better process. I commend the efforts of Bell South and other Bell Operating Companies, competitive local exchange carriers, state commissions, and others, that have contributed to the success of this process.
I also commend BellSouth for the progress it has made toward satisfying the statutory requirements. BellSouth has satisfied six checklist items and part of a seventh. As to the remaining items that BellSouth did not meet in this application, I believe BellSouth can and will remedy the deficiencies we identify in our Order. While the deficiencies that remain are significant, they are not insurmountable.
There are two major areas BellSouth must improve: operations support systems (OSS) and access to combinations of network elements. We previously identified these areas in our order addressing BellSouth's first application to provide long distance service in Louisiana. OSS is critical to competition. Through OSS, competitors purchasing interconnection, unbundled elements, and resold services know what services and facilities they can order, place orders, obtain confirmation of the orders and delivery dates, and receive delivery of the services. If its OSS does not work, a BOC is unable to provide interconnection, access to elements, or resold services in the non-discriminatory manner required by the Act.
Our concerns here are not new. When we denied BellSouth's first application for long distance entry in Louisiana, we noted that its OSS satisfactorily processed orders to move a customer from BellSouth to a competitor only about half the time in the best cases (and sometimes as low as 25%), while the "flow-through" rate for customers choosing BellSouth's services was over 80%, and well over 90% in the case of residential customers. We clearly stated before that if BellSouth's OSS worked effectively only when customers wanted BellSouth's service, but not when they wanted to switch to a competitor, we could not conclude the market was open to competition. BellSouth did not show improvement in these numbers in it second application and, in fact, actual performance has worsened.
Likewise, BellSouth's previous application demonstrated that when BellSouth seeks to sign up new customers using its OSS, it can integrate the pre-ordering phase (when information concerning the customer's name, location, and services are identified and collected) and the ordering phase (when the order is actually place) by electronically transferring the pre-ordering information with, essentially, the push of a button that places the order. This integration is efficient and eliminates errors that could arise if the data must be transferred manually, rather than electronically. By contrast, BellSouth's OSS does not provide its competitors with the ability to perform an integrated transfer of data from the pre- ordering to ordering phase. This slows down a competing carrier and increases the risk of errors being committed that BellSouth can avoid when signing up customers for itself. Although we noted in our previous order that BellSouth would have to correct this discriminatory condition, it has not done so in its second application.
The second major area of concern relates to BellSouth's obligation to provide competing carriers access to combinations of network elements through collocation on reasonable and non-discriminatory terms and conditions. In the past, BellSouth has failed to state the terms and conditions on which it will provide such access, and we have therefore been unable to find that BellSouth satisfies this requirement. In the current application, BellSouth again fails to state the terms and conditions of access, and thus again has deprived of us of a basis on which to analyze its compliance with this obligation.
While today's order identifies other areas of concern, it also identifies six checklist items that are fully satisfied and other items that would be satisfied but for the problems with BellSouth's OSS. I strongly encourage BellSouth to concentrate on the remaining deficiencies, because I fully believe they can and will be overcome. Indeed, we will not require BellSouth to resubmit its filing on the checklist items it already has satisfied, other than to certify in any subsequent application that those items show no deterioration. BellSouth has advanced the ball considerably; the next time it takes the field, it should be able to start from where we leave off today, by focusing on the deficiencies we identify today, rather than having to start all over again.
As soon as BellSouth demonstrates that it has turned it attention to these issues in a meaningful way, the people of Louisiana will see a whole new world of choice in local and long distance service open up before them.