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                         Before the
              Federal Communications Commission
                   Washington, D.C. 20554


In the Matter of                  )
                                 )
CoreComm Communications, Inc.,    )
and                               )
Z-Tel Communications, Inc.,       )
                                 )
      Complainants,               )   File No. EB-01-MD-017
                                 )
                v.                )
                                 )
SBC Communications Inc.,          )
Southwestern Bell Telephone       )
Company,                          )
Pacific Bell Telephone Company,   )
Nevada Bell Telephone Company,    )
The Southern New England          )
Telephone Company,                )
Illinois Bell Telephone           )
Company,                          )
Indiana Bell Telephone Company,   )
Michigan Bell Telephone           )
Company,                          )
The Ohio Bell Telephone 
Company, and
Wisconsin Bell, Inc., 

       Defendants.



                MEMORANDUM OPINION AND ORDER


Adopted:  April 10, 2003                Released:  April 17, 
2003

By the Commission:  Commissioner Abernathy issuing a 
separate statement.

I.   INTRODUCTION

       1. In this Memorandum Opinion and Order, we grant in 
  part and deny in part the formal complaint filed by 
  CoreComm Communications, Inc. (``Core'') and Z-Tel 
  Communications, Inc. (``Z-Tel'') (collectively, 
  ``Complainants''), pursuant to section 208 of the 
  Communications Act of 1934, as amended (``Act'' or 
  ``Communications Act''),1 against nine incumbent local 
  exchange carriers (``ILECs'') and their parent 
  corporation, SBC Communications Inc. (``SBC'') 
  (collectively, ``Defendants'').2

       2. Core and Z-Tel state in their complaint that they 
  purchased access to the shared transport unbundled network 
  element (``UNE'') from Defendants, but that Defendants 
  have refused to allow them to use that UNE to transport 
  intraLATA toll traffic.  Core and Z-Tel allege that 
  Defendants' refusal violates sections 201(b), 202(a), 
  251(c)(1), and 251(c)(3) of the Act, 3 Commission rules 
  51.309(a), 51.309(b), and 51.313(b), 4 and paragraph 56 of 
  the SBC/Ameritech Merger Order Conditions.5

       3.                                   As discussed 
  below, we grant Core and Z-Tel's claim that Defendants 
  Illinois Bell Telephone Company, Indiana Bell Telephone 
  Company, Michigan Bell Telephone Company, The Ohio Bell 
  Telephone Company, and Wisconsin Bell, Inc. (collectively, 
  ``Ameritech'') violated paragraph 56 of the SBC/Ameritech 
  Merger Order Conditions, and, in this regard, section 
  201(b) of the Act.  We otherwise deny the complaint.

   II.  BACKGROUND

      A.  Statutory and Regulatory Background

       4. Section 251(c)(3) of the Act obligates an ILEC 
  ``to provide, to any requesting telecommunications carrier 
  for the provision of a telecommunications service, 
  nondiscriminatory access to network elements on an 
  unbundled basis ... .''6  The Commission determined that 
  one of the UNEs to be provided pursuant to section 
  251(c)(3) is the shared transport UNE, defined as 
  ``transmission facilities shared by more than one carrier, 
  including the incumbent LEC,  ... in the incumbent LEC 
  network.''7 

       5. Section 252 of the Act8 establishes procedures for 
  negotiating, arbitrating, and approving agreements between 
  ILECs and requesting carriers for interconnection, 
  services, and access to UNEs pursuant to section 251.  
  Section 252(a)(1) provides that the parties may negotiate 
  and enter into a binding agreement ``without regard to the 
  standards set forth in subsections (b) and (c) of section 
  251.''9  Section 252(b) provides that either party to 
  section 251 negotiations may petition the state commission 
  to arbitrate any open issues, and section 252(c) provides 
  that the state commission's resolution of arbitrated 
  issues shall ``meet the requirements of section 251, 
  including the regulations prescribed by the Commission 
  pursuant to section 251... .''10  Section 252(i)11 
  obligates a local exchange carrier to make available ``any 
  interconnection, service, or network element'' provided 
  under an approved agreement to which it is a party to any 
  other requesting carrier upon the same terms and 
  conditions as those provided in the agreement.  This 
  provision allows a requesting carrier to ``opt in'' to 
  existing agreements (or specific provisions of existing 
  agreements) between other carriers.

       6. Section 201(b) of the Act declares unlawful any 
  unjust or unreasonable ``charge, practice, classification, 
  or regulation'' by a carrier in connection with 
  communication service.12  Section 202(a) provides that it 
  shall be unlawful for any common carrier to make any 
  unjust or unreasonable discrimination in connection with 
  like communication service.13

       7. In the Merger Order, the Commission approved the 
  applications filed by SBC and Ameritech Corporation, 
  pursuant to sections 214 and 310 of the Act,14 for 
  approval to transfer control of certain licenses and lines 
  from Ameritech Corporation to SBC in connection with the 
  companies' proposed merger.  The Commission made its 
  approval subject to certain conditions, stating ``We 
  conclude that approval ... is in the public interest 
  because such approval is subject to significant and 
  enforceable conditions designed to mitigate the potential 
  public interest harms of their merger ... .''15  One 
  condition, contained in paragraph 56 of the Merger Order 
  Conditions, requires Ameritech to ``offer shared transport 
  ... within the Ameritech states under terms and conditions 
  ... that are substantially similar to (or more favorable 
  than) the most favorable terms [SWBT] offers to 
  telecommunications carriers in Texas as of August 27, 
  1999.''16



        B.     Factual Background

       8. The Defendants are ILECs in one or more of 13 
  states (``13-state region'').17  Core is a competitive 
  local exchange carrier (``CLEC'') providing 
  telecommunications services in four states in the 13-state 
  region; Z-Tel is a CLEC providing telecommunications 
  services in eleven states in the 13-state region.18

       9. Core and Z-Tel purchased the shared transport UNE 
  from Defendants Ameritech, Pacific, and SWBT by ``opting 
  in,'' pursuant to section 252(i) of the Act, to existing 
  Ameritech, Pacific or SWBT interconnection agreements or 
  Statements of Generally Accepted Terms (``Agreements'').19  
  Core and Z-Tel have not purchased the shared transport UNE 
  from Defendants SNET or Nevada Bell, and do not allege 
  that they are in negotiations to do so.20

       10.      Core and Z-Tel allege that the Merger Order, 
  the Act, and Commission rules 51.309 and 51.313 require 
  Defendants to allow them to use the shared transport UNE 
  to transport intraLATA toll traffic.21  Core and Z-Tel 
  state that they will file a supplemental complaint for 
  damages if successful in establishing liability,22 and 
  request ``that the Commission order [Defendants] to permit 
  [Core and Z-Tel] to transport intraLATA toll traffic over 
  the entirety of [Defendants'] shared transport 
  network.''23

       11.      In their Answer, Defendants assert that the 
  Commission does not have jurisdiction over Core and Z-
  Tel's claims,24 and that, in any event, neither the Merger 
  Order, nor the Act, nor the Commission's rules obligates 
  them to allow CLECs to use the shared transport UNE to 
  transport intraLATA toll traffic.25  In addition, 
  Defendants deny the substance of Core and Z-Tel's claims 
  as to each of the Defendants, although on different 
  grounds depending on the company.  First, Defendants deny 
  the claims against SBC, SNET, and Nevada Bell on the 
  ground that Complainants have not purchased shared 
  transport from these Defendants.26  Defendants deny the 
  claims against SWBT on the ground that SWBT allows 
  Complainants to use shared transport for intraLATA toll.27  
  As to the remaining states, Defendants assert that the 
  Ameritech and Pacific Agreements do not make available 
  shared transport for intraLATA toll and that, therefore, 
  Complainants fail to state a claim or have waived their 
  claim.28      

III.    DISCUSSION

      A.   Jurisdiction 

              B.1.  Merger Order Conditions

       12.      Defendants assert that the Commission lacks 
  jurisdiction over Core and Z-Tel's claims alleging 
  violations of the Merger Order.29  We disagree.  Sections 
  214(c) and 310(d) of the Act30 expressly authorize the 
  Commission to impose conditions such as the Merger Order 
  Conditions, and section 416(c) of the Act31 requires 
  compliance with such conditions, thereby creating a cause 
  of action under section 208 for violation of the 
  conditions.  Moreover, the Commission has a duty to 
  enforce those conditions to protect the public interest, 
  and has discharged this duty by adjudicating section 208 
  complaints alleging violations of merger conditions 
  imposed in orders approving license transfers, as well by 
  initiating forfeiture proceedings on our own motion.32  
  Nothing in the Merger Order or the Act suggests that the 
  Commission cannot enforce paragraph 56 of the Merger Order 
  Conditions.  Quite to the contrary, we stated in the 
  Merger Order that, ``[a]ttaching conditions to a merger 
  without an efficient and judicious enforcement program 
  would impair the Commission's ability to protect the 
  public interest.''33  Section 208 formal complaint 
  proceedings are an integral part of that enforcement 
  process:  ``Members of the public may pursue a claim 
  [alleging failure to comply with the Merger Order] in 
  accordance with either section 207 or 208 of the Act. ... 
  In this way, the enforcement plan rightly ensures that 
  consumers will not be forced to bear the costs of 
  SBC/Ameritech's mistakes.''34  Accordingly, we find that 
  we have jurisdiction, pursuant to section 208, to resolve 
  Core and Z-Tel's claims relating to the Merger Order 
  Conditions.

              B.2.  Section 251 and the FCC's Rules

       13.  Defendants also assert that the Commission 
  lacks jurisdiction over Core and Z-Tel's claims alleging 
  violations of section 251(c) of the Act, and the 
  Commission's rules implementing section 251(c).35  
  According to Defendants, ``[t]he 1996 Act makes 
  unmistakably clear ... that such disputes are to be 
  determined in the first instance not through [section 208] 
  complaint proceedings before this Commission, but rather 
  through private negotiations, and, if necessary, state 
  commission arbitrations, with Federal district court (not 
  Commission) review of such arbitrations.''36  We find 
  that, while the section 252 process is the primary means 
  of resolving disputes about what should be included in an 
  interconnection agreement, and that failure to invoke that 
  process may in some cases deprive parties of a cause of 
  action, the Commission has jurisdiction to adjudicate Core 
  and Z-Tel's complaint.37  The language, structure, and 
  purpose of the statute all support our conclusion.  Our 
  jurisdiction is, of course, concurrent with state 
  jurisdiction to interpret and enforce interconnection 
  agreements.38    

       14.      The language of the Communications Act 
  expressly grants the Commission jurisdiction to resolve 
  complaints alleging any violation of the Act.  Section 206 
  makes carriers liable for damages for ``any act, matter, 
  or thing in this Act prohibited or declared to be 
  unlawful'' and for ``omit[ting] to do any act, matter, or 
  thing in this Act required to be done.''39  Similarly, 
  section 208 allows a complaint to be filed by ``[a]ny 
  person...complaining of anything done or omitted to be 
  done by any common carrier subject to this Act, in 
  contravention of the provisions thereof... .''40  Thus, 
  the Commission's complaint jurisdiction has generally been 
  understood to be coextensive with the reach of the 
  substantive provisions at issue.  Here, Core and Z-Tel 
  allege violations of the Act, bringing their complaint 
  squarely within the scope of sections 206 and 208.

       15.          Defendants' jurisdiction arguments rest 
  on the assumption that sections 251 and 252 of the Act 
  implicitly override the broad language of sections 206 and 
  208.  Section 601 of the Telecommunications Act provides, 
  however, that ``[t]his Act and the amendments made by this 
  Act shall not be construed to impair, or supersede 
  Federal, State, or local law unless expressly so 
  provided.''41  Accordingly, in order for the 1996 Act to 
  supersede the Commission's broad general complaint 
  authority, it would have to do so explicitly.  There is, 
  however, no explicit language in sections 251 or 252, or 
  elsewhere in the Act, depriving the Commission of 
  jurisdiction to hear complaints involving the local 
  competition provisions.

       16.          The structure of the Act also supports 
  the view that the Commission's complaint authority extends 
  to complaints alleging violations of sections 251 and 252 
  of the Act.  In this regard, in Iowa Utilities Board,42 
  the Supreme Court examined the structure of the Act in 
  assessing the extent of the Commission's rulemaking 
  authority, and the reasoning of the Court on that issue is 
  equally valid here.  The Court held that Congress's 
  general grant of authority to the Commission in section 
  201(b) of the Act to prescribe rules and regulations ``to 
  carry out the provisions of this Act''43 included a grant 
  of authority to promulgate rules and regulations 
  implementing sections 251 and 252.  ``Since Congress 
  expressly directed that the 1996 Act, along with its 
  local-competition provisions, be inserted into the 
  Communications Act of 1934,'' the Court stated, ``the 
  Commission's rulemaking authority would seem to extend to 
  implementation of the local-competition provisions.''44  
  Further, the Court found that it ``cannot plausibl[y] [be] 
  assert[ed]'' that Congress, in passing the 1996 Act, was 
  unaware of section 201(b), because section 251(i) 
  specifically refers to section 201.45

       17.          It seems equally true that, since 
  Congress inserted the local competition provisions into 
  the existing statute, the complaint provisions of that 
  statute extend to the local competition provisions.  And, 
  as with the section 201(b) rulemaking authority, it may 
  not ``plausibl[y] [be] assert[ed]'' that in passing the 
  1996 Act, Congress was unaware of section 208.  Indeed, 
  Congress was fully aware of section 208, having amended 
  that section in the 1996 Act.46  Thus, the logic of the 
  Supreme Court on the issue of rulemaking authority leads 
  directly to the conclusion that the Commission's 
  enforcement authority also extends to the local 
  competition provisions of the 1996 Act.47  

       18.      We also find that our interpretation 
  furthers the purpose of the Act, to promote competition.  
  In this case, the Complainants allege violations 
  throughout SBC's 13-state region.  If the statute were 
  read to exclude complaint authority in this case, the 
  parties would have to litigate the same issue in multiple 
  states.  Allowing for the filing of a single complaint 
  under section 208 enhances enforcement, and competition, 
  by resolving the issues economically, helping to achieve 
  uniform results, and relieving the parties of the burdens 
  of multistate litigation.

       19.      In short, we find that we have jurisdiction, 
  pursuant to section 208, to resolve Core and Z-Tel's 
  claims.48  The fact that we have jurisdiction pursuant to 
  section 208 to resolve a particular complaint does not, of 
  course, necessarily mean that the complainant has a 
  meritorious cause of action.  Indeed, as explained below, 
  we find that Z-Tel cannot prevail in this case in 
  California because it failed properly to invoke governing 
  statutory and contractual provisions to amend its existing 
  interconnection agreement.

                    B.    The Merits

                                          1.  The  Ameritech 
  States

       20.      Defendants admit that Core and Z-Tel 
  purchased the shared transport UNE from Ameritech, that 
  Core and Z-Tel requested permission to use the UNE to 
  transport intraLATA toll call traffic, and that Ameritech 
  denied those requests.49  Given these facts, we find that 
  Ameritech has violated the Merger Order.50

       21.      As we recently stated, ``[t]he plain 
  language of paragraph 56 required [Ameritech] to offer ... 
  shared transport for intraLATA toll to CLECs in the 
  Ameritech region as of October 8, 2000.''51  Thus, we 
  reject Defendants' arguments here that the Merger Order 
  does not require Ameritech to offer shared transport for 
  intraLATA toll traffic.  The Merger Order obligates 
  Ameritech to ``offer'' use of the shared transport UNE for 
  intraLATA toll to CLECs who request such use.  To the 
  extent that Ameritech's existing agreements with the 
  Complainants did not make available shared transport for 
  intraLATA toll, the Merger Order required Ameritech to 
  agree to the necessary amendments to do so.  When Core and 
  Z-Tel asked for this functionality, however, Ameritech 
  just said ``no.''52  That refusal self-evidently 
  constituted a failure to offer under paragraph 56.  

       22.      Defendants nevertheless argue that the 
  Complaint fails to state a claim, or that  Complainants 
  have waived their right to claim that Ameritech violated 
  the Merger Order.53  According to Defendants, ``[u]nder 
  the plain language and structure of the 1996 Act, once 
  parties have concluded an interconnection agreement, the 
  terms of that agreement - not the ... Commission's ... 
  orders - govern their relations.''54

       23.      We reject Defendants' argument, as 
  unsupported by the statute and fundamentally inconsistent 
  with the purpose of the paragraph 56 condition.  As 
  Defendants note,55 under section 252(a)(1), parties are 
  free to negotiate terms that do not meet the requirements 
  of sections 251(b) and (c).  The issue before us in this 
  claim, however, is not whether Defendants complied with 
  their obligations under section 251(c), but whether they 
  violated the terms of the Merger Order.  Paragraph 56 of 
  the Merger Order Conditions, which SBC itself proposed,56 
  imposes an obligation pursuant to sections 214(c) and 
  303(r) of the Act.  Even if sections 251 and 252 did not 
  obligate Defendants to amend their agreements with Core 
  and Z-Tel to provide for shared transport for intraLATA 
  toll traffic, the Merger Order did.  Section 252(a)(1) 
  says nothing about overriding requirements beyond those 
  established in section 251, and Defendants have provided 
  no support to lead us to read it that way.

       24.      Moreover, Defendants' suggested approach 
  would run entirely counter to the basic purpose of the 
  paragraph 56 condition.  As Defendants recognize, prior to 
  the Merger Order, Ameritech had refused to provide shared 
  transport;57 indeed, that refusal is what made the 
  paragraph 56 condition necessary.  Thus, presumably 
  Ameritech interconnection agreements predating the Merger 
  Order, including those with the Complainants in some 
  states, did not provide for shared transport of any 
  kind.58  Yet if we accepted Defendants' arguments, then 
  those carriers who had been denied shared transport 
  previously would be unable to amend their agreements to 
  take advantage of a merger condition specifically designed 
  to remedy the situation.

       25.      Paragraph 56 requires Ameritech to offer 
  shared transport for intraLATA toll traffic to carriers 
  who request it.  Here it did not do so.  Rather than 
  agreeing to make any necessary amendments to its 
  interconnection agreements, Ameritech responded to 
  requests by asserting that it was not required to provide 
  shared transport for intraLATA toll.  Accordingly, we find 
  that Ameritech violated paragraph 56 of the Merger Order 
  Conditions, and in so doing, engaged in an unjust and 
  unreasonable practice under section 201(b) of the Act.59

              2.   SNET   (Connecticut)   and  Nevada   Bell 
              (Nevada)

       26.      We deny Core and Z-Tel's claims against SNET 
  and Nevada Bell because the record does not support 
  Complainants' allegations against these Defendants.  
  Complainants allege that they purchased the shared 
  transport UNE from Defendants, and that Defendants have 
  violated the Act and Commission rules by refusing to agree 
  to allow Complainants to use that UNE for intraLATA toll 
  calls.60  The record does not show that SNET and Nevada 
  Bell ever failed to comply with the Commission's UNE 
  rules, however, because Core and Z-Tel have not purchased 
  the shared transport UNE from either SNET or Nevada 
  Bell.61  Accordingly, we deny the Complaint against 
  Defendants SNET and Nevada Bell because the claims against 
  these Defendants are not supported by the record.
                   3.   The SWBT States (Arkansas, Kansas, 
          Missouri, Oklahoma, and                       
          Texas)

       27.      We also deny the complaint with respect to 
  the SWBT states.  The record shows no violation in Kansas 
  or Oklahoma, because SWBT agreed to allow Z-Tel to use the 
  shared transport UNE for intraLATA toll in Kansas and 
  Oklahoma after Z-Tel opted into SWBT interconnection 
  agreements for those states.62  Similarly, the record does 
  not establish that SWBT ever denied Core or Z-Tel use of 
  the shared transport UNE for intraLATA toll in Texas, 
  Arkansas or Missouri.63

              II.A.1.     Pacific Bell (California)

       28.      Core and Z-Tel assert that Pacific has 
  violated sections 201(b), 202(a), 251(c)(1), and 251(c)(3) 
  of the Act, and the Commission's unbundling rules, by 
  refusing to provide shared transport for intraLATA toll 
  traffic.  We find that Complainants have failed to prove 
  their case, and deny the claims against Pacific.64

       29.      Z-Tel currently has an interconnection 
  agreement with Pacific, entered into through the section 
  252(i) opt-in process,65 that includes provisions for the 
  shared transport UNE.  Core and Z-Tel do not appear to 
  assert that Z-Tel's current agreement with Pacific is 
  itself in violation of the Act or Commission rules,66 nor 
  do they assert that Pacific has breached that agreement.  
  Core and Z-Tel effectively admit, for purposes of this 
  complaint, that Z-Tel's agreement with Pacific does not 
  permit the use of shared transport for intraLATA toll 
  traffic.67  The premise of their complaint is that Pacific 
  violated the Act and Commission rules by refusing to 
  negotiate in good faith and agree to an amendment to 
  permit the use of shared transport for intraLATA toll 
  traffic.  The record indicates that Z-Tel asked Pacific to 
  agree to such an amendment by signing a ``Memorandum of 
  Understanding,''68 and that Pacific refused that 
  request.69  Defendants assert that they are not required 
  to agree to amend their agreement with Z-Tel except 
  insofar as Z-Tel has complied with any modification or 
  change of law provision in that agreement.70  

       30.      Our rules do ``plainly require unbundling of 
  shared transport for use with intraLATA toll traffic.''71  
  At the same time, however, the obligations created by 
  section 251 and our rules are effectuated through the 
  process established in section 252 - that is, by reaching 
  agreement through negotiation, arbitration, or opt-in.72  
  In this case, Z-Tel opted into a pre-existing Pacific 
  interconnection agreement with another party, including 
  its shared transport terms, and then sought to negotiate 
  an amendment to that agreement.  We agree with Defendants 
  that Z-Tel is bound by the terms of its agreement, and 
  that therefore any request to amend the interconnection 
  agreement must comply with any modification or change of 
  law provisions.  

       31.      Z-Tel provides no evidence in this record 
  that it complied with any modification or change of law 
  provisions.  Furthermore, Z-Tel does not assert that 
  Pacific failed to comply with such provisions; as noted 
  above, Complainants expressly disavow any claim that 
  Pacific has breached the agreement.  Under these 
  circumstances, we cannot find that Core and Z-Tel have met 
  their burden of demonstrating that Pacific's refusal to 
  agree to an amendment violated either the substantive 
  requirements of the Act and our rules, or the duty to 
  negotiate in good faith.  Accordingly, we deny the claims 
  against Pacific.

       32.      Core and Z-Tel seek support for their claims 
  in the Local Competition First Report and Order's 
  statement that a party may file a section 208 complaint 
  alleging violations of section 251 or Commission rules 
  ``even if the [defendant] carrier is in compliance with an 
  agreement approved by the state commission.''73  It is 
  true, as the Local Competition First Report and Order 
  states, that there may be circumstances in which a carrier 
  could file (and prevail on) a section 208 complaint, even 
  where the defendant is in compliance with its 
  interconnection agreement.  For instance, a carrier could 
  allege a violation of the duty to negotiate in good faith 
  under section 251(c)(1), ``even if the [defendant] carrier 
  is in compliance with an agreement approved by the state 
  commission.''74  By choosing to opt into an agreement that 
  Complainants say does not provide shared transport for 
  intraLATA toll traffic, however, Z-Tel effectively waived 
  any right to insist upon different terms.  In light of the 
  specific processes established in section 252 for 
  effectuating the obligations set forth in section 251, Z-
  Tel cannot rely upon the general section 251 duties to 
  circumvent the terms of its agreement. 

       33.      We also find that Core and Z-Tel fail to 
  establish a cause of action against Pacific pursuant to 
  section 201(b) of the Act.75  Core and Z-Tel assert no 
  reason, independent of the obligations imposed by section 
  251(c) and Commission implementing rules, why Pacific's 
  refusal to allow Z-Tel to use shared transport for 
  intraLATA toll is an ``unjust or unreasonable'' practice 
  within the meaning of section 201(b).  Yet, as discussed, 
  the requirements of section 251 and Commission 
  implementing rules do not apply where, as here, the 
  parties have entered into a section 252(a)(1) agreement on 
  different terms.

       34.      Finally, Core and Z-Tel have not established 
  a cause of action against Pacific pursuant to section 
  202(a) of the Act.76  Core and Z-Tel's complaint alleges 
  that ``the intraLATA toll service that ... Complainants 
  provide to their local exchange customers and the 
  intraLATA toll service SBC provides to its retail 
  customers are like services... .''77  Section 202(a) is 
  not concerned with whether the services of two separate 
  carriers are ``like''; it is concerned with whether two 
  services offered by the same carrier are like, and 
  provides that, if the services are ``like,'' the carrier 
  may not unjustly or unreasonably discriminate in their 
  provision.78     

       35.      In sum, we deny Core and Z-Tel's claims 
  against Pacific pursuant to sections 201(b), 202(a), and 
  251(c)(1) and (3) of the Act, as well as the Commission's 
  rules implementing section 251(c).79

 IV.      ORDERING CLAUSE

       36.      Accordingly, IT IS ORDERED, pursuant to 
  sections 201, 202, 208, and 251 of the Communications Act 
  of 1934, as amended, 47 U.S.C.  201, 202, 208, and 251, 
  sections 51.309 and 51.313 of the Commission's rules, 47 
  C.F.R.  51.309 and 51.313, and Paragraph 56 of the 
  Merger Order Conditions, that the instant formal 
  complaint, IS GRANTED to the extent indicated herein, and 
  is in all other respects DENIED.

                                  
                              FEDERAL         COMMUNICATIONS 
COMMISSION



                              Marlene H. Dortch
                              Secretary                    SEPARATE STATEMENT OF
              COMMISSIONER KATHLEEN Q. ABERNATHY

Re:  Core Communications and Z-Tel Communications v. SBC 
Communications Inc., et al., File No. EB-01-MD-017, 
Memorandum Opinion and Order 

     I support the foregoing Order, both in terms of its 
jurisdictional analysis and its discussion of the merits.  I 
write separately to explain the narrowness of the 
Commission's jurisdictional holding.

     This Order holds that the Commission has concurrent 
jurisdiction with the state commissions to adjudicate 
interconnection disputes.  I agree that the plain language 
of the Act compels this conclusion.  But I also believe 
there are significant limitations on the circumstances in 
which complainants actually will be able to state a claim 
under section 208 for violations of section 251(c) and the 
Commission's implementing rules.

     First, as the Order acknowledges, the section 252 
process of commercial negotiation and arbitration provides 
the primary means of resolving disputes about what should be 
included in an interconnection agreement.  A party's failure 
to adhere to the requirements of an interconnection 
agreement ~ its change-of-law provisions, for example ~ 
likely would foreclose any remedy under section 208.  Thus, 
in this case, the failure of Core Communications and Z-Tel 
to follow the change-of-law provision in their 
interconnection agreement in California denied them a cause 
of action against SBC for failing to provide shared 
transport for intraLATA toll traffic in California.  Order 
at  28-35.

     In addition, if a party does invoke the state-
commission arbitration process prescribed in section 252, 
and loses, it seems clear that the party's sole remedy is to 
file an appeal in federal district court under section 
252(e)(6) ~ the party may not collaterally attack the state 
action before the FCC in a section 208 complaint.  
Permitting a second bite at the apple before the Commission 
would appear to violate not only the text and structure of 
section 252, but also black letter law on collateral 
estoppel.  I recognize that the Local Competition Order 
suggested that a party aggrieved by a state arbitration 
determination may prevail in a section 208 action against a 
carrier that is in compliance with the state-approved 
agreement.80  While the facts of this proceeding do not 
require the Commission to confront this issue, I believe the 
Local Competition Order was clearly wrong to the extent it 
suggested that section 208 confers jurisdiction for 
collateral attacks on state arbitration decisions.  I hope 
that if the Commission is presented with such an effort to 
supplant the statutory scheme, we squarely hold that our 
jurisdiction under section 208 does not authorize such 
actions. 


_________________________

1    47 U.S.C.  208. 
2    See  Formal Complaint,  File  No. EB-01-MD-017  (filed 
Aug. 28,  2001) (``Complaint'').  Core and  Z-Tel filed the 
Complaint jointly pursuant to Commission rule 1.723(a).  47 
C.F.R.  1.723(a).

3    47 U.S.C.  201(b), 202(a), 252(c)(1), (c)(3).

4    47 C.F. R.  51.309(a), 51.309(b), 51.313(b).

5    Applications of  Ameritech Corp., Transferor,  and SBC 
Communications  Inc., Transferee,  for Consent  to Transfer 
Control  of Corporations  Holding  Commission Licenses  and 
Lines  Pursuant   to  Sections   214  and  310(d)   of  the 
Communications Act and Parts 5, 22,  24, 25, 63, 90, 95 and 
101  of  the  Commission's Rules,  Memorandum  Opinion  and 
Order,  14 FCC  Rcd  14712  (1999) (``SBC/Ameritech  Merger 
Order''   or    ``Merger   Order''   )   at    Appendix   C 
(``Conditions'').

6    47 U.S.C.  251(c)(3).

7    47 C.F. R.  51.319(d)(1)(iii).

8    47 U.S.C.  252.


9    47 U.S.C.  252(a)(1).

10   47 U.S.C.  252(b), 252(c)(1).

11   47 U.S.C.  252(i).

12        47 U.S.C.  201(b).

13   47 U.S.C.  202(a).

14   47 U.S.C.  214, 310.

15   Merger Order, 14 FCC Rcd at 14716,  2.

16   Merger Order Conditions, 14 FCC Rcd at 15023-4,  56.  

17   Revised Joint Statement of  Stipulated Facts, File No. 
EB-01-MD-017  (filed   Nov.  23,  2001)   (``Revised  Joint 
Statement'') at 2,  3-4; Defendants' Answer, File No. EB-
01-MD-017 (filed  Oct. 10,  2001) (``Answer'') at  1-2 n.1.  
The 13-state  region is comprised of  Arkansas, California, 
Connecticut, Illinois, Indiana, Kansas, Michigan, Missouri, 
Nevada,   Ohio,  Oklahoma,   Texas,  and   Wisconsin.   The 
Ameritech  Defendants  are   ILECs  in  Illinois,  Indiana, 
Michigan, Ohio,  and Wisconsin.   The Southern  New England 
Telephone Company (``SNET''), Nevada Bell Telephone Company 
(``Nevada  Bell''),  and  Pacific  Bell  Telephone  Company 
(``Pacific'')  are   ILECs  in  Connecticut,   Nevada,  and 
California,  respectively.    Southwestern  Bell  Telephone 
Company  (``SWBT'')   is  an  ILEC  in   Arkansas,  Kansas, 
Missouri, Oklahoma, and Texas.  Answer at 1-2 n.1.

18   Revised Joint Statement at 2-3,  6-7.

19   Revised Joint Statement at 2-3,  6-7.  

20   Revised Joint Statement  at 2,  4;  Letter to Magalie 
R. Salas,  Office of  the Secretary,  FCC, from  Michael H. 
Hazzard, counsel  to Core and Z-Tel,  File No. EB-01-MD-017 
(filed Sept. 20, 2001) (stating  that ``neither Core nor Z-
Tel provide[s] service in  ... Connecticut or Nevada,'' and 
only  ``plan   eventually  to  provide  service   in  those 
jurisdictions'')  (emphasis  added).    See  Revised  Joint 
Statement at 2-3,  6-7; Answer at 1-2 n.1.

21   Complaint  at 14-24,    35-97 (citing  47 U.S.C.   
201(b), 202(a), 251(c); 47  C.F.R.  51.309(a), 51.309(b), 
51.313(b); SBC/Ameritech  Merger Order, 14 FCC  Rcd 14712).  
An  intraLATA  toll call  is  one  that stays  within  LATA 
boundaries  but  that  is "between  stations  in  different 
exchange areas  for which there  is made a  separate charge 
not  included in  contracts with  subscribers for  exchange 
service."  47  U.S.C.   153(48) (defining  "telephone toll 
service").  Complainants allege that Defendants' refusal to 
allow them  to use the  shared transport UNE  for intraLATA 
toll  calls has  forced them  to transport  their intraLATA 
toll traffic to an interexchange carrier.  Complaint at ii.

22   Complaint  at   24-25,    99  (citing   47  C.F.R.   
1.722(b)).

23   Complaint at 15,   41; 16,  48; 17,   55; 19,  63; 
20,  71; 21,  77; 22,  83; 23,  89; 24,  96.

24   Answer at 2-5.

25   Answer, Ex. C (Defendants' Legal Analysis) at 15-55.

26   Answer at 19,  21; Revised Joint Statement at 2,  4.

27   Answer at 12-13,  13.

28   Answer at 3-5.

29   Answer at  2-5, Ex. C (Defendants'  Legal Analysis) at 
6-9.

30   Section 214(c) authorizes the Commission, in resolving 
a  section  214 application,  to  impose  ``such terms  and 
conditions as  in its  judgment the public  convenience and 
necessity  may  require.''  47 U.S.C.    214(c).   Section 
310(d)  prohibits the  transfer of  licenses except  ``upon 
finding  by  the  Commission   that  the  public  interest, 
convenience, and  necessity will  be served  thereby.''  47 
U.S.C.  310(d).

31   47 U.S.C.  416(c).

32   See, e.g.,  Global NAPs,  Inc. v.  Verizon, Memorandum 
Opinion  and Order,  17 FCC  Rcd 4031  (2002) (section  208 
complaint);  In the  Matter  of  SBC Communications,  Inc., 
Apparent Liability for Forfeiture, Forfeiture Order, 17 FCC 
Rcd  19923, petition   for  reconsideration pending  (2002) 
(``SBC   Forfeiture  Order'')   (self-initiated  forfeiture 
proceeding); SBC Communications  Inc., Order of Forfeiture, 
16 FCC Rcd 5535 (EB  2001), review denied, Order on Review, 
16   FCC  Rcd   12306  (2001)   (self-initiated  forfeiture 
proceeding).

33   SBC/Ameritech  Merger Order,  14 FCC  Rcd at  14881,  
406.

34   SBC/Ameritech  Merger Order,  14 FCC  Rcd at  14885,  
415.   See  In  the  Matter of  SBC  Communications,  Inc., 
Apparent  Liability  for  Forfeiture,  Notice  of  Apparent 
Liability, 17 FCC Rcd 1397  (2002) at  19 (rejecting SBC's 
argument that the Commission lacks authority to enforce the 
Merger Order Conditions).

35   Answer,  Ex.  C  (Defendants' Legal  Analysis)  at  6; 
Defendants'  Response Brief,  File No.  EB-01-MD-017 (filed 
Feb. 12, 2002) (``Defendants' Response Br.'') at 2-4.  

36   Answer, Ex. C (Defendants' Legal Analysis) at 6.

37   Our conclusion  here is  consistent with  our previous 
statements on this issue.   See Implementation of the Local 
Competition  Provisions in  the  Telecommunications Act  of 
1996, Interconnection  Between Local Exchange  Carriers and 
Commercial Mobil Radio Service  Providers, First Report and 
Order, 11 FCC Rcd 15499 (1996) (subsequent history omitted) 
(``Local Competition First Report and Order''), at 15564,  
126 (``[s]ections 251 and 252  do not divest the Commission 
of its  section 208  authority'').  See also  TSR Wireless, 
LLC  v. US  West  Communications, Inc.,  15  FCC Rcd  11166 
(2000) (rejecting defendants' arguments that the Commission 
lacked jurisdiction to resolve the formal complaints before 
it), upheld  on appeal on different  reasoning, Qwest Corp. 
v. FCC, 252 F.3d 462 (D.C. Cir. 2001).

38   See,  e.g.,  BellSouth  Telecomm.,  Inc.  v.  MCIMetro 
Access  Transmission Services,  Inc., 317  F.3d 1270  (11th 
Cir. 2003)  (en banc); Southwestern  Bell Tel. Co.  v. Pub. 
Util.  Comm'n of  Texas,  208 F.3d  475,  479-80 (5th  Cir. 
2000);  Southwestern   Bell  Tel.   Co.  v.   Brooks  Fiber 
Communications  of Oklahoma,  Inc.,  235  F.3d 493,  496-97 
(10th Cir. 2000).

39   47 U.S.C.  206 (emphasis added).  

40   47  U.S.C.   208  (emphasis  added).    In 1997,  the 
Eighth Circuit ruled that the Commission lacks authority to 
enforce sections 251 and 252 of the Act through section 208 
complaints, but  the Supreme  Court reversed,  finding that 
the issue was not ripe for judicial review.  Iowa Utilities 
Board v.  FCC, 120  F.3d 753,  803-804 (8th  Circuit 1997), 
aff'd in  part, rev'd in part  sub nom. AT&T Corp.  v. Iowa 
Utilities  Board,  525 U.S.  366  (1999).   In the  vacated 
decision, the Eighth Circuit asserted that ``nothing in the 
Act even suggests that the FCC has the authority to enforce 
the  terms of  negotiated or  arbitrated agreements  or the 
general  provisions  of  sections   251  and  252.''   Iowa 
Utilities  Board v.  FCC,  120 F.3d  at  804.  We  believe, 
however,  that the  language  of sections  206 through  208 
directly grants such authority.

41   47 U.S.C.  152 note (emphasis added).  

42            Iowa Utilities  Board  v. FCC,  525 U.S.  366 
(1999).

43   47 U.S.C.  201(b).

44   Iowa Utilities  Board, 525  U.S. at  377-78 (citations 
omitted). 

45   Id. at 378 n.5.

46   The  1996  Act  changed the  statutory  deadlines  for 
certain section 208 complaints.  See  47 U.S.C. 208(b)(1).  
In  addition, Congress  considered  (and  then rejected)  a 
proposal to  allow the  Commission to forbear  from section 
208.  H.R. Rep. No. 104-458,  184 (1996), reprinted in 1996 
U.S. Code Cong. & Admin. News 1584. 

47   The  Supreme Court  decision in  Iowa Utilities  Board 
also discredits  the Eighth  Circuit's conclusion  that FCC 
jurisdiction  to adjudicate  complaints involving  sections 
251 and 252 would ``provide  the FCC with jurisdiction over 
intrastate  communications  services  in  contravention  of 
section  2(b).''  Iowa  Utilities Board,  120 F.3d  at 804.  
The  Supreme Court  rejected  a similar  conclusion by  the 
Eighth   Circuit   that   section   2(b)   restricted   the 
Commission's  local competition  rulemaking authority,  and 
the  same  reasoning  should  apply  to  enforcement.   See 
National Cable  & Telecomm.  Ass'n v.  Gulf Power  Co., 534 
U.S. 327 (2002) (rejecting  arguments that the language and 
structure of the 1996 Act implicitly limit the scope of the 
general grant  of authority  to the Commission  pursuant to 
section 224).  

48   In   support   of   their   jurisdictional   argument, 
Defendants  cite  the  Eighth   Circuit's  ruling  in  Iowa 
Utilities  Board.  See  Answer,  Ex.  C (Defendants'  Legal 
Analysis) at 7.  The  decision does not support Defendants' 
position, however,  because the  Supreme Court  vacated it.  
See Iowa  Utilities Board, 525  U.S. at 386.   Moreover, as 
discussed above,  the logic of the  Supreme Court's opinion 
supports   our   conclusion   that   the   Commission   has 
jurisdiction  over  this  dispute.   Defendants  also  cite 
Trinko v. Bell Atlantic Corp.,  305 F.3d 89 (2d Cir. 2002), 
pet. for  cert. granted in  part on other grounds  sub nom. 
Verizon Communications,  Inc. v. Trinko, --  S.Ct. --, 2003 
WL891459 (Mar., 2003), for  the proposition that the Second 
Circuit has ``rejected the notion  that a plaintiff can sue 
an ILEC alleging  a violation of section 251  where an ILEC 
has entered into an interconnection agreement in accordance 
with section  252.''  Letter  to Secretary, FCC,  from SBC, 
File No. EB-01-MD-017  (filed July 24, 2002).  In Trinko, a 
divided panel  of the  Second Circuit  dismissed a  suit in 
federal court  alleging that  breach of  an interconnection 
agreement violated  section 251  of the  Act.  We  need not 
address  Trinko, as  this case  expressly does  not involve 
breach  of an  agreement, nor  does  it involve  a suit  in 
federal court.   We also note  that the court did  not have 
before  it  a  cause   of  action  alleging  violations  of 
conditions imposed  by the Commission pursuant  to sections 
214(c) and 303(r) of the Act.

49   Answer at 15-16,   17-18; Revised Joint Statement at 
5-6,  19-20, 7  22-23.

50   Core  and  Z-Tel allege  that  all  of the  Defendants 
violated  Paragraph  56  of the  Merger  Order  Conditions.  
Complaint at  24,  95.   By its very terms,  however, that 
condition  applies only  in the  five states  in which  the 
Ameritech Defendants  are ILECs.  Merger  Order Conditions, 
14  FCC Rcd  at  15023-4,   56  (requiring that  Ameritech 
``offer   shared  transport   ...   within  the   Ameritech 
states...'')  (emphasis  added).    We  therefore  find  no 
violation of the Merger Order outside the Ameritech states.

51   SBC Forfeiture  Order, 17  FCC Rcd   at 19925-6,   5.  
See  In the  Matter of  SBC Communications  Inc.,  Apparent 
Liability for Forfeiture, Notice  of Apparent Liability for 
Forfeiture,  17  FCC  Rcd  1397  (2002)  (``SBC  Notice  of 
Apparent Liability'') at 1399-1406,  7-19.

52   See, e.g., Answer at 16-17,  18 (admitting that Z-Tel 
requested  negotiation of  the  shared  transport issue  in 
Illinois  and Michigan,  but that  Defendants denied  those 
requests.)

53   Answer at 3-5.

54   Answer, Ex. C (Defendants' Legal Analysis) at 3.  

55   Answer, Ex. C (Defendants' Legal Analysis) at 12-13.

56   Merger Order, 14 FCC Rcd at 14716,  1.

57   Answer, Ex. C (Defendants' Legal Analysis) at 39, 44. 

58   For example, Core entered  into agreements in Illinois 
and Ohio, and Z-Tel in Ohio, prior to the effective date of 
paragraph 56 of the  Merger Order Conditions.  Letter dated 
December 7,  2001 from  Christopher M. Heimann,  counsel to 
SBC, to  Magalie R.  Salas, Office  of the  Secretary, FCC, 
File No.  EB-01-MD-017 (filed Dec. 7,  2001) (enclosing the 
Agreements between SBC and Core or Z-Tel).  

59   We  do  not  address   Core  and  Z-Tel's  claim  that 
Ameritech violated section 251(c) and relevant implementing 
rules,  because our  finding  that  Ameritech violated  the 
SBC/Ameritech Merger  Order grants  Core and Z-Tel  all the 
relief to which they are entitled against Ameritech.  

60   Complaint at 7,  16-17.

61   See  Letter dated  September  20, 2001  to Magalie  R. 
Salas,  Office  of  the  Secretary, FCC,  from  Michael  H. 
Hazzard, counsel  to Core and Z-Tel,  File No. EB-01-MD-017 
(filed  Sept.   20,  2001)  at  Attachment   (stating  that 
``neither  Core   nor  Z-Tel  provide[s]  service   in  ... 
Connecticut  or Nevada,''  and  only  ``plan eventually  to 
provide  service   in  those   jurisdictions.'')  (emphasis 
added).  See also  Revised Joint Statement at  2-3,  6-7; 
Answer  at  1-2  n.1.   Moreover, the  only  count  in  the 
Complaint  alleging  failure  to negotiate  in  good  faith 
asserts  that  Defendants  have  failed in  good  faith  to 
negotiate    amendments    to   existing    interconnection 
agreements.  Complaint at 17,  52; 19,  68. 

62   See Complaint,  Tab D,  Ex. 13 (Letter  dated December 
21, 2000  from SBC to  Z-Tel) at  1 (referring to  the fact 
that Z-Tel informed SBC on  December 5, 2000 that Z-Tel had 
opted into  SWBT interconnection agreements for  the states 
of Kansas and  Oklahoma, and agreeing that  Z-Tel could use 
the  shared  transport  UNE  for intraLATA  toll  in  those 
states).  

63   The record  establishes that Z-Tel was  allowed to use 
shared  transport  for  intraLATA   toll  in  Arkansas  and 
Missouri  by  at least  August  8,  2001, but  contains  no 
evidence that Z-Tel was denied such use prior to that date.  
See Complaint,  Tab D, Ex.  1 (Letter dated August  8, 2001 
from SBC to  counsel to Z-Tel) at  3-4 (expressing surprise 
at Z-Tel's  assertion that it  was unable to  obtain shared 
transport for intraLATA toll throughout the 13-state region 
since  ``Z-Tel  can  purchase  this  capability  under  its 
current  interconnection  agreement  ... in  ...  Arkansas, 
[and]  ...   Missouri  ...'').     Similarly,   the  record 
establishes that Z-Tel was  allowed to use shared transport 
for intraLATA toll calls in  Texas by at least November 30, 
2000, but contains  no evidence that Z-Tel  was denied such 
use  prior to  that date.   See  Complaint, Tab  D, Ex.  10 
(Letter from counsel Z-Tel to  SWBT dated December 5, 2000) 
at 1 (discussing  the fact that Z-Tel was  using the shared 
transport  for  intraLATA toll  in  Texas  on November  30, 
2000).  See also  Revised Joint Statement at 4,   11; 6  
19-20  (Complainants  stipulate  that SWBT  provides  Z-Tel 
shared transport for intraLATA  toll in Arkansas, Missouri, 
and Texas.).  

64   Core has no agreement with Pacific, nor does the record 
indicate that it has ever attempted to negotiate one.  We 
therefore focus solely on Z-Tel, and Pacific's actions with 
respect to Z-Tel. 

65      We note  that if  Z-Tel was  dissatisfied with  the 
shared transport terms  of the Agreement, it  need not have 
opted into  them.  Under our  ``pick and choose''  rule, 47 
C.F. R.  51.809, Z-Tel had  the option of opting into only 
those  portions   of  the  Agreement  with   which  it  was 
satisfied.  Z-Tel  could then have sought  negotiation, and 
arbitration if necessary, on  the shared transport UNE.  Z-
Tel instead took the approach  of opting into an agreement, 
and then requesting additional rights.  

66   Given that  Pacific appears  to have complied  with Z-
Tel's  opt-in  request,  we  see  no  basis  for  any  such 
assertion.

67        Accordingly, for  purposes of this case  only, we 
presume that  the agreement between Z-Tel  and Pacific does 
not  provide  for  shared   transport  for  intraLATA  toll 
traffic.  The complaint is premised on Pacific's refusal to 
agree to  the desired terms,  not on any argument  that the 
interconnection  agreement  requires   Pacific  to  provide 
shared  transport  for  intraLATA  toll  traffic  but  that 
Pacific  has  failed to  comply  with  the agreement.   The 
Complainants do not allege any breach of the agreement, and 
indeed explicitly disavow any such allegation.  

     In particular,  Defendants allege in support  of their 
Second   Affirmative  Defense   that  Complainants   ``have 
specifically  disavowed  any  claim  that  Defendants  have 
violated [the Pacific Agreement]  ...,''  Answer at 4, n.9, 
and  that  ``Complainants   voluntarily  ...  adopted  [an] 
existing interconnection  agreement[] that do[es]  not make 
available   the    intraLATA   interexchange   transmission 
capability they seek  ... . '' Answer at 4-5.   Core and Z-
Tel's  Reply to  Defendants' affirmative  defense does  not 
deny  Defendants'  allegations,  and asserts  instead  that 
Defendants have violated the  Act and Commission rules even 
if  they  are in  compliance  with  the Pacific  Agreement.  
Reply   at  8-9.    Moreover,  Complainants   informed  the 
Commission that two key legal issues in this proceeding are 
``whether   Complainants  have   waived   any  claim   that 
Defendants'  conduct  is  inconsistent  with  the  Act  ... 
because Complainants voluntarily  ... adopted [an] existing 
interconnection agreement[] that  do[es] not make available 
the  intraLATA interexchange  transmission capability  they 
seek  ..., ''  and  ``whether Complainants  have failed  to 
state a claim  upon which relief can be  granted given that 
Complainants ...  have disavowed any claim  that Defendants 
have violated the terms  of [the Pacific] agreement[]...''.   
Revised Joint  Statement, Statement of Key  Legal Issues at 
11-12,   6-7.  Finally,  Complainants do not  allege that 
Pacific is in breach of the Pacific Agreement, did not file 
a  copy  of   the  agreement  until ordered  to  do  so  by 
Commission staff, and have not cited any of the agreement's 
provisions  as  providing  use   of  shared  transport  for 
intraLATA toll. 

     We  note that  SBC has  made apparently  contradictory 
statements about  what its  agreement with  Z-Tel requires.  
In California, Z-Tel opted into the Pacific-AT&T agreement.  
In this  record, Defendants  deny that  the interconnection 
agreement   ``require[s]  Defendants   to  provide   shared 
transport  in  the   manner  requested  by  Complainants.''  
Answer  at    16.   In its  section  271  application  for 
California,  however,  SBC  argues  that  under  this  same 
agreement,  it  does have  a  legal  obligation to  ``offer 
shared transport for intraLATA  toll in accordance with the 
order  of the  California  PUC in  the AT&T  Arbitration.''  
Reply  Comments of  SBC in  Support of  In-Region InterLATA 
Relief in  California at 62,  filed November 4, 2002  in WC 
Docket  No.   02-306,  and  Shannon  Affidavit   at    94, 
Application  by  SBC  Communications,   Inc.  et  al.,  for 
Provision of  In-Region, InterLATA Services  in California, 
filed September 20, 2002, in WC Docket No. 02-306.  We need 
not  resolve  the   apparent  inconsistency  between  these 
positions here, as it would  not affect the outcome of this 
case.  If we  were to take SBC's most  recent statements as 
true, we  would still  find in  favor of  Defendants, since 
Core  and Z-Tel  have specifically  disavowed any  claim of 
breach of the interconnection agreement.

68   Revised Joint Statement at 5-6,  19.

69   Revised Joint Statement at 6,  20.

70    Answer, Ex. C (Defendants' Legal Analysis) at 4.

71    See SBC Forfeiture Order, 17  FCC Rcd at 19932,  18.  
Defendants argue  that the D.C. Circuit  decision in United 
States Telecom  Assoc'n  v. FCC,  295 F.3d 1326  (D.C. Cir. 
2002)  prevents the  Commission  from  enforcing this  rule 
against  them.  Because  we  rule in  favor of  Defendants, 
however, we need not address this argument.

72   See, e.g., 47 U.S.C.  251(c)(1) (duty to negotiate in 
good  faith  ``the  particular   terms  and  conditions  of 
agreements to  fulfill the  duties described  in paragraphs 
(1) through (5) of subsection (b) and this subsection.'')

73   Local Competition  First Report and Order,  11 FCC Rcd 
at 15565,  127.

74   Id.

75   Section  201(b)  of  the Act  states,  ``All  charges, 
practices,  classifications,  and  regulations for  and  in 
connection with  such communication service, shall  be just 
and   reasonable,   and    any   such   charge,   practice, 
classification,   or   regulation   that   is   unjust   or 
unreasonable is hereby declared to  be unlawful ... .''  47 
U.S.C.  201(b). 

76   Section  202(a) of  the  Act provides,  ``It shall  be 
unlawful  for any  common  carrier to  make  any unjust  or 
unreasonable   discrimination    in   charges,   practices, 
classifications, regulations,  facilities, or  services for 
or in  connection with like communications  service ... .''  
47 U.S.C.  202(a).

77   Complaint at 14,  37.

78   See,  e.g., Competitive  Telecomm. Ass'n  v. FCC,  998 
F.2d  1058,  1064 (D.C.  Cir.  1993)  (``Section 202(a)  is 
designed to prevent  a carrier from granting  a discount to 
one (usually large)  user that it would not  grant were the 
same  or a  `like'  service purchased  by another  (usually 
small) customer.'')

79   Core and Z-Tel request ``that the Commission order 
[Defendants] to permit [Core and Z-Tel] to transport 
intraLATA toll traffic over the entirety of [Defendants'] 
shared transport network.''  Complaint at 15  41.  The SBC 
Forfeiture Order imposes a fine upon SBC for violating 
Paragraph 56 of the Merger Order Conditions by refusing to 
allow ILECs to use the shared transport UNE for intraLATA 
toll calls.  Moreover, as explained in the SBC Forfeiture 
Order, the Commission's implementing rules require that 
ILECs allow CLECs to use the shared transport UNE for any 
telecommunications service, including intraLATA toll 
service, unless the parties agree otherwise pursuant to 
section 252(a)(1).  See SBC Forfeiture Order, 17 FCC Rcd at 
19928-33,  1-17.  Defendants are required by law fully to 
comply with the Act and our rules, and their failure to do 
so will result in appropriate enforcement action.



80 Implementation  of the  Local Competition  Provisions in 
the  Telecommunications  Act of  1996,  11  FCC Rcd  15499, 
15564-65  127-28 (1996).