Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                         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.



                  ORDER ON RECONSIDERATION


Adopted:  April 28, 2004                Released:    May  4, 
2004

By the Commission:

I.       INTRODUCTION

       1.                                       In this 
  Order, we deny the Petition for Reconsideration1 filed by 
  Z-Tel Communications, Inc. (``Z-Tel'') pursuant to section 
  405 of the Communications Act of 1934, as amended 
  (``Act'').2  Z-Tel seeks reconsideration of the 
  Commission's Liability Order3 insofar as it denies Z-Tel's 
  claim, made in a section 208 formal complaint, that 
  defendant Pacific Bell Telephone Company (``Pacific'') 
  violated sections 201(b), 251(c)(1) and (c)(3) of the Act, 
  and Commission rules 51.309 and 51.313.4  For the 
  following reasons, we conclude that Z-Tel's Petition lacks 
  merit.   

II.            BACKGROUND

       2.     Z-Tel is a competitive local exchange carrier 
  (``CLEC''), and Pacific is an incumbent local exchange 
  carrier (``ILEC'').5  Pursuant to section 252(i) of the 
  Act,6 Z-Tel opted into an existing section 252 
  interconnection agreement between Pacific and another CLEC 
  (the ``Pacific Agreement'').  The Pacific Agreement 
  granted Z-Tel access to the shared transport unbundled 
  network element (``UNE''), but Pacific refused to allow Z-
  Tel to use the shared transport UNE to transport Z-Tel's 
  customers' intraLATA toll calls.  Z-Tel sought to amend 
  the Pacific Agreement by asking Pacific to execute a 
  ``Memorandum of Understanding'' that would have allowed Z-
  Tel to use the shared transport UNE for intraLATA toll.  
  Pacific refused Z-Tel's request.7  

       3.     In its Complaint filed in this proceeding, Z-
  Tel alleged that Pacific's refusal to allow Z-Tel to use 
  the shared transport UNE for intraLATA toll, and its 
  refusal to execute the Memorandum of Understanding, 
  violated, inter alia, sections 201(b), 251(c)(1), and 
  251(c)(3) of the Act and Commission rules 51.309 and 
  51.313.8   The Complaint did not include a copy of the 
  Pacific Agreement.  Nor did the Complaint discuss or 
  direct the Commission's attention to any of the language 
  found in the Pacific Agreement.9  

       4.     Pacific asserted in its Answer that it was not 
  obligated by the Pacific Agreement to provide Z-Tel shared 
  transport for intraLATA toll or to execute the Memorandum 
  of Understanding.10  Pacific also stated that, ``in 
  conference calls with Commission staff ... counsel for [Z-
  Tel] specifically disavowed any claim that [Pacific] had 
  violated their interconnection agreement[]... .''11  
  Pacific asserted as an affirmative defense that Z-Tel 
  failed to state a claim and had waived any claim because 
  Z-Tel ``specifically disavowed any claim that [Pacific] 
  ha[s] violated [the Pacific Agreement]'' and had 
  voluntarily entered into an agreement ``that do[es] not 
  make available the intraLATA interexchange transmission 
  [Z-Tel] seek[s].''12  Pacific also stated, ``The reason 
  [Z-Tel] attempt[s] to base [its] claims on the Act and the 
  Commission's rules and orders rather than the governing 
  agreements...is simple: [Z-Tel] ha[s] opted into 
  agreements that do not make available the intraLATA 
  interexchange transmission capability [Z-Tel] 
  seek[s]....''13

       5.     Z-Tel's Reply to the Answer did not dispute 
  Pacific's allegations about the requirements of the 
  Pacific Agreement or about Z-Tel's ``disavowal'' of any 
  claim of breach.  Z-Tel subsequently informed the 
  Commission that two ``key legal issues'' to be decided by 
  the Commission were ``whether [Z-Tel] ha[s] waived any 
  claim that [Pacific's] conduct is inconsistent with the 
  Act, and the Commission's rules and orders, ...because [Z-
  Tel] ... voluntarily ... adopted existing, approved 
  interconnection agreements that do not make available the 
  intraLATA interexchange transmission capability [Z-Tel] 
  seek[s]...'' and ``whether [Z-Tel]...failed to state a 
  claim upon which relief can be granted given that [Z-Tel] 
  ... ha[s] disavowed any claim that [Pacific] ha[s] 
  violated the terms of [the Pacific Agreement]... .''14

       6.     In the Liability Order, after granting Z-Tel's 
  complaint against Ameritech for violating the 
  SBC/Ameritech Merger Order Conditions, the Commission 
  denied Z-Tel's claims against Pacific.  The Commission 
  found that Z-Tel had effectively admitted that the Pacific 
  Agreement does not require Pacific to provide use of the 
  shared transport UNE for intraLATA toll.15  The Commission 
  reasoned that, although Commission rules ```plainly 
  require unbundling of shared transport for use with 
  intraLATA toll traffic,'''16 the obligations created by 
  section 251 and Commission implementing rules are 
  effectuated through the section 252 processes of 
  negotiation, arbitration, or opt-in.17  Therefore, because 
  Z-Tel had voluntarily opted into an agreement that did not 
  provide use of the shared transport UNE for intraLATA 
  toll, Z-Tel had waived its claims pursuant to section 
  251(c)(3) and Commission rules.18  

       7.     The Commission also denied Z-Tel's claim that 
  Pacific's refusal to adopt Z-Tel's ``Memorandum of 
  Understanding'' violated section 251(c)(1).  The 
  Commission reasoned that Z-Tel could not voluntarily opt 
  into the Pacific Agreement, and then invoke section 
  251(c)(1) to require Pacific to amend the agreement, 
  unless the Pacific Agreement obligated Pacific so to do.  
  Yet Z-Tel had not asserted that Pacific's refusal to adopt 
  the Memorandum of Understanding violated the Pacific 
  Agreement's amendment or change of law provisions, and, 
  indeed, had disavowed any claim that Pacific had breached 
  the Pacific Agreement.  Accordingly, the Commission found 
  that Z-Tel had not met its burden of proving that Pacific 
  was obligated to adopt Z-Tel's Memorandum of 
  Understanding.19

       8.     Finally, the Commission denied Z-Tel's section 
  201(b) claims because Z-Tel had advanced no reason, other 
  than Pacific's alleged violation of its obligations under 
  section 251(c), why Pacific's conduct was ``unjust and 
  unreasonable'' within the meaning of section 201(b).  
  Therefore, because Z-Tel's section 251(c) claims failed, 
  its section 201(b) claims also failed.20

III.           DISCUSSION

          A.      The  Liability  Order  is Consistent  with 
     Commission Precedent. 

       9.     Z-Tel argues that, in denying Z-Tel's claims 
  against Pacific, the Commission ``abandon[ed]'' prior 
  Commission precedent establishing that the terms of any 
  interconnection agreement between a CLEC and an ILEC are 
  irrelevant to the issue of whether the CLEC may prevail on 
  a claim that the ILEC has violated section 251.21  Z-Tel 
  argues further that the Commission's failure to follow 
  this alleged precedent violated principles of 
  administrative law. According to Z-Tel, where the 
  Commission departs from its prior precedent, it is 
  required to provide ``a reasoned explanation'' for its 
  change of mind, 22 and also to give the parties notice of 
  the change and an opportunity to provide evidence bearing 
  on the new standard.23  

       10.         We find, however, that the Liability 
  Order is fully consistent with Commission precedent.  
  Specifically, the Commission has never held that a 
  requesting carrier may successfully charge an ILEC with 
  violating its section 251(c) obligations when the 
  requesting carrier has, pursuant to section 252(i), opted 
  into an interconnection agreement that excludes the very 
  section 251(c) obligations at issue.24  As discussed 
  below, the Liability Order is not inconsistent with any of 
  the Commission precedent cited by Z-Tel in its Petition, 
  provides a reasoned explanation for the Commission's 
  finding,25 and thus fully complies with the requirements 
  of administrative law.  

           i.   The Liability Order is Consistent with 
          Commission Rulemakings.  

       11.         Z-Tel argues that the Commission's denial 
  of Z-Tel's claim against Pacific is inconsistent with the 
  Commission's statement, in the Local Competition Report 
  and Order,26 that a party may file a section 208 complaint 
  alleging violations of section 251 or Commission 
  implementing rules ``even if the [defendant carrier] is in 
  compliance with an agreement approved by the state 
  commission.''27  Z-Tel misconstrues the Commission's 
  statement.  The cited language cannot reasonably be read 
  to suggest that section 251 is violated when a carrier 
  voluntarily enters into an agreement, as Z-Tel did, that 
  does not afford the full range of rights available under 
  section 251, and later demands to change its terms.  Such 
  a construction would be fundamentally inconsistent with 
  the statutory scheme, which permits carriers to enter into 
  binding agreements ``without regard to the standards set 
  forth in subsections (b) and (c) of section 251.''28  The 
  Commission's discussion in the Local Competition Report 
  and Order simply does not address the situation where, as 
  here, the complainant voluntarily opted into an 
  interconnection agreement pursuant to section 252(i).  As 
  we explained in the Liability Order, Z-Tel may not rely 
  upon the general section 251 duties to circumvent the more 
  specific terms of an agreement that it has voluntarily 
  chosen to adopt. 

          ii.    The Liability Order is Consistent with 
          Commission Adjudications.

       12.         Z-Tel also argues that the Liability 
  Order is inconsistent with several Commission orders 
  resolving section 208 formal complaints.  Again, Z-Tel is 
  incorrect.  The cases upon which Z-Tel relies have no 
  bearing on the instant matter.

       13.         First, Z-Tel cites Net2000 
  Communications,29 in which the complainant CLEC alleged 
  that the defendant ILECs had violated sections 201(b) and 
  251(c)(3) of the Act, as well as Commission rules 
  requiring that, upon request, ILECs convert tariffed 
  special access circuits into enhanced extended loops.30  
  Net2000 does not stand for the proposition that an ILEC 
  may be found to have violated section 251(c) even though 
  the parties' interconnection agreement excludes the very 
  section 251(c) obligations at issue. The Commission found 
  it unnecessary to inquire into the terms of the special 
  access tariff or the parties' interconnection agreement 
  because the Commission denied complainant's claims on 
  other grounds.  Specifically, the Commission found that 
  the complainant's factual allegations were 
  unsubstantiated.31  

       14.         Z-Tel argues that the fact that Net2000's 
  claims were not dismissed on jurisdictional grounds makes 
  the case inconsistent with the Liability Order:  ``If the 
  Commission lacked the appropriate authority to address 
  section 251 claims..., and if a violation of section 251 
  could not amount to a section 201(b) violation..., then 
  the Commission presumably would have dismissed Net2000's 
  claims on jurisdictional grounds - which is exactly what 
  the Commission did with regard to Z-Tel's claims against 
  Pacific.''32  With this argument, Z-Tel fundamentally 
  misconstrues the Liability Order.

       15.         First, the Liability Order does not stand 
  for the proposition that the Commission ``lack[s] the 
  appropriate authority to address section 251 claims.''  In 
  the Liability Order, the Commission did address Z-Tel's 
  section 251 claims.  The Commission asserted jurisdiction 
  over Z-Tel's section 251(c) claims against Pacific, and 
  then denied those claims on the merits.33  The Commission 
  did not, as Z-Tel seems to believe, deny Z-Tel's claims on 
  jurisdictional grounds. Neither does the Liability Order 
  stand for the proposition that ``a violation of Section 
  251 could not amount to a Section 201(b) violation.''  No 
  such statement can be found in the Liability Order.  The 
  Commission denied Z-Tel's section 201(b) claims because Z-
  Tel advanced no reason why Pacific's conduct was ``unjust 
  and unreasonable'' other than that Pacific had allegedly 
  violated section 251(c), which the Commission found it had 
  not.  Because its section 251(c) claims failed, Z-Tel's 
  section 201(b) claims also failed.  Nothing in this 
  reasoning, however, supports Z-Tel's cited assertion.  
  Thus, the conflict that Z-Tel finds between the Liability 
  Order and Net2000 comes entirely from misconstruing the 
  Commission's decision in the Liability Order.

       16.         Z-Tel also cites TSR Wireless,34 in which 
  the Commission found that the defendant LECs had violated 
  Commission rule 51.703(b)35 by charging the complainants, 
  commercial mobile radio service (``CMRS'') providers, for 
  facilities used to deliver LEC-originated traffic.  Z-Tel 
  argues that TSR Wireless establishes that the terms of the 
  Pacific Agreement were irrelevant to an analysis of Z-
  Tel's claims against Pacific.36  As with Net2000, Z-Tel 
  again focuses on the jurisdictional issue that it has 
  misunderstood.  Z-Tel argues that in TSR Wireless, ``the 
  Commission again unequivocally stated that carriers could 
  plead violations of its local competition implementing 
  rules as part of a section 208 complaint arising under 
  section 251.''37  Nothing in the Commission's statement of 
  jurisdiction in TSR Wireless conflicts with the Liability 
  Order. 

       17.         Nothing in the substantive portion of the 
  TSR Wireless decision conflicts with the Liability Order, 
  either.  We recognize that, in TSR Wireless, the 
  Commission found the defendants bound by rule 51.703(b) 
  even though the obligation created by that rule had not 
  been incorporated into an interconnection agreement.  The 
  TSR Wireless defendants were bound by rule 51.703(b) for 
  reasons not applicable to Pacific's obligations at issue 
  here.  First, the Commission's authority to issue rule 
  51.703(b), as applied to CMRS providers, arises under 
  section 332 of the Act.38  Accordingly, rule 51.703(b) may 
  apply, in circumstances such as those present in TSR 
  Wireless, regardless of the existence or terms of a 
  section 252 interconnection agreement.  Further, in 
  adopting rule 51.703(b), the Commission stated that ``[a]s 
  of the effective date of [the Local Competition Report and 
  Order], a LEC must cease charging a CMRS provider ... for 
  terminating LEC-originated traffic ....''39  Thus, as the 
  Commission stressed in TSR Wireless, rule 51.703(b) 
  ``clearly calls for LECs immediately to cease charging 
  CMRS providers for terminating LEC-originated traffic; the 
  [rule] does not require a section 252 agreement before 
  imposing such an obligation on the LEC.''40  The 
  Commission has imposed no such immediate obligation with 
  respect to shared transport.  Indeed, the Commission 
  stressed in TSR Wireless that, ``to the extent that other 
  Commission rules promulgated under the Local Competition 
  [Report and] Order were not made `effective immediately,' 
  we would expect that requesting carriers would utilize the 
  interconnection agreement process of sections 251 and 252 
  to obtain services under section 251.''41  Thus, TSR 
  Wireless is not relevant to Z-Tel's claims against 
  Pacific, and does not stand for the proposition that a 
  CLEC may successfully charge an ILEC with violating 
  section 251(c) even though the parties' interconnection 
  agreement excludes the very section 251(c) obligations at 
  issue.         

       18.         Z-Tel also relies upon the Commission's 
  statement in Cellexis42 that ``Defendants' statutory 
  interconnection obligations, whatever they may be, exist 
  independently of the [interconnection] Agreement's 
  terms.'''43  Z-Tel reads the Commission's statement out of 
  context. The Cellexis case involved entirely different 
  facts and statutory provisions than the instant matter.  
  The complainant in that proceeding was a reseller of CMRS 
  services who alleged that the defendant CMRS providers had 
  violated sections 201(b), 202(a), 251(a), and 332(c)(1)(B) 
  of the Act by refusing to continue to interconnect their 
  cellular networks with complainants after the parties' 
  interconnection agreement had expired.  The 
  interconnection obligations at issue in Cellexis arose 
  under sections 251(a) and 332 of the Act, not under 
  section 251(c), as in this case.  Neither the general 
  interconnection obligation of section 251(a) nor the 
  interconnection obligation arising under section 332 is 
  implemented through the negotiation and arbitration scheme 
  of section 252.44  Thus, the significance of the terms of 
  any agreement in Cellexis has no bearing on the 
  significance of the terms of the agreement in this case, 
  and nothing in the Liability Order is inconsistent with 
  Cellexis.        

       19.         Finally, Z-Tel argues that, ``In the 
  context of pole attachment agreements entered into 
  pursuant to section 224 of the Act, the Commission 
  routinely has concluded that the existence of such 
  agreements does not constitute a waiver of a carrier's 
  ability to file a formal complaint under the Commission's 
  pole attachment rules.''45  Z-Tel's analogy is unavailing. 
  Section 252(a)(1) provides that an incumbent LEC ``may 
  negotiate and enter into a binding agreement ... without 
  regard to the standards set forth in subsections (b) and 
  (c) of section 251.''46  In contrast, nothing in section 
  224 provides that parties may negotiate without regard to 
  the requirements of the Act.  Finally, the Commission's 
  pole attachment rules specifically contemplate that the 
  Commission will rule on the reasonableness of the rates, 
  terms, and conditions contained in pole attachment 
  agreements before the Commission.47

        B.       The Commission Correctly Concluded that Z-
          Tel Waived Its Section 251(c)   Claims.

       20.         Z-Tel argues that the Liability Order 
  incorrectly concludes that ``carriers, such as Z-Tel, 
  `implicitly' waive their rights under section 251 of the 
  Act and the Commission's rules by merely signing an 
  interconnection agreement - regardless of the language of 
  the interconnection agreement.''48  The Liability Order 
  draws no such conclusion.  Rather, the Commission in the 
  Liability Order found that Z-Tel waived its claims because 
  Z-Tel effectively admitted that the Pacific Agreement did 
  not obligate Pacific either to provide shared transport 
  for intraLATA toll or to execute a Memorandum of 
  Understanding to do so.49 

       21.         Z-Tel argues that it made no admissions 
  regarding the terms of the Pacific Agreement, but ``only 
  denied any need (under the Act, the Commission's rules, or 
  the [Pacific Agreement]) to plead a section 208 complaint 
  under the interconnection agreement itself.''50  Z-Tel 
  ignores the record in this proceeding.  For example, as 
  stated above, Z-Tel informed the Commission that the 
  Pacific Agreement ``do[es] not make available the [use of 
  the shared transport UNE] capability [Z-Tel] seeks,'' and 
  that Z-Tel ``disavowed any claim that [Pacific] ha[s] 
  violated the terms of [the Pacific Agreement].''51  Thus, 
  we stand by our earlier conclusion that Z-Tel admitted 
  that the agreement Z-Tel chose to adopt did not require 
  Pacific to provide shared transport for intraLATA toll 
  traffic, and that Z-Tel accordingly waived its right to 
  demand such terms.  Z-Tel opted into the Pacific Agreement 
  without first negotiating or arbitrating an amendment to 
  its terms regarding shared transport, and may not complain 
  now. 

        C.        The Pacific Agreement Excludes Shared 
     Transport for IntraLATA Toll                     Unless 
     Z-Tel Requests Such Use in Accordance with the Terms of 
     the                          Agreement, and Z-Tel Has 
     Not Done So. 

       22.         Z-Tel argues that the Commission should 
  have reviewed the Pacific Agreement to determine whether 
  it in fact obligated Pacific to provide shared transport 
  for intraLATA toll or to execute the Memorandum of 
  Understanding.52  As discussed above, Z-Tel's statements 
  and omissions in this proceeding meant that the Commission 
  was under no such obligation.  In any event, however, any 
  such review would have been unavailing.  The Pacific 
  Agreement provides use of the shared transport UNE for 
  intraLATA toll calls only if Z-Tel complies with the 
  Pacific Agreement's ``Bona Fide Request'' process or 
  requests ``Customized Routing, Option C.''  Z-Tel has not 
  demonstrated that it did either.  

       23.         The Pacific Agreement provides at 
  Attachment 6, section 2:                   

     General:  Unbundled Network Elements and Combinations:  
     Access to [UNEs] shall be specified herein and not 
     presumed.  The Network Elements offered under this 
     Agreement shall be clearly specified in this Agreement 
     or the attachments hereto.  In no event will it be 
     presumed that access to a [UNE] is offered unless so 
     specified.  Pacific will make available any other form 
     of access requested by [Z-Tel] that is required by the 
     Act and the regulations thereunder.  Requests for 
     Network Elements not specified in this Attachment shall 
     be processed according to the process described in 
     Section 22 (Bona Fide Request) ... of this Agreement.53

Thus, section 2 provides initially that Z-Tel may not have 
access to shared transport unless the Pacific Agreement 
expressly so states.  Yet section 2 further provides that Z-
Tel may obtain such access if it complies with the ``Bona 
Fide Request'' provisions of the Agreement:  Pacific ``will 
make available any other form of access'' if that access is 
``required by... [Commission] regulations.''  In short, 
Pacific was obligated to provide access to shared transport 
only to the extent provided in the Pacific Agreement unless 
Z-Tel complied with the ``Bona Fide Request'' process.  The 
only section of the Pacific Agreement expressly granting 
access to the shared transport UNE provides that the UNE may 
be used for intraLATA toll only if Z-Tel exercises ``Option 
C.''54   ``Option C'' is found in an earlier section of the 
Pacific Agreement.  That section is headed ``Option C:  
Customized Routing-Complex for [Z-Tel] Using Routes 
Designated by [Z-Tel].''  This section provides that, if Z-
Tel exercises ``Option C'', Pacific ``shall route [Z-Tel's] 
intraLATA traffic over Pacific's Shared Transport 
facilities... .''55

       24.         Z-Tel argues that the Pacific Agreement 
  ``expressly provides that Z-Tel may...request use of the 
  shared transport UNE for intraLATA toll service,'' and 
  that ``Z-Tel made such a request through its Memorandum of 
  Understanding.''56  Consistent with our analysis above, 
  however, the language upon which Z-Tel relies provides 
  shared transport for intraLATA toll only if Z-Tel requests 
  ``Option C'', or makes a request that complies with the 
  ``Bona Fide Request'' process.57  Yet Z-Tel has not shown 
  that its Memorandum of Understanding complied with the 
  Bona Fide Request process, or that it constituted a 
  request to exercise Option C.58  Thus, as the Liability 
  Order correctly concluded,59 Pacific did not violate 
  section 251(c)(1) by failing to negotiate in good faith.   

       25.         Z-Tel's additional arguments regarding 
  construction of the Pacific Agreement also fail.  Z-Tel 
  asserts that the agreement ``permits either party to file 
  a complaint at the FCC... .''60  Yet the Pacific Agreement 
  does not state that any such complaint will succeed.  Z-
  Tel argues that the Pacific Agreement ``is expressly 
  designed to encompass the UNEs required by the Act....''61  
  The language cited by Z-Tel, however, does not state that 
  Pacific is offering all UNE access available under the Act 
  and Commission rules.  The section is entitled 
  ``Introduction,'' and merely explains that the purpose of 
  Attachment 6 is to enumerate the specific UNEs provided.  
  Indeed, Z-Tel omits the final sentence of this section:  
  ``The specific terms and conditions that apply to the 
  [UNEs] and Combinations are described below.''62  Thus, 
  the terms pertaining to UNEs are ``described below'' -- in 
  the sections of the Pacific Agreement that follow.63
IV.           ORDERING CLAUSE

       26.         Accordingly, IT IS ORDERED, pursuant to 
  sections 201, 208, 251, and 405 of the Communications Act 
  of 1934, as amended, 47 U.S.C.  201, 208, 251, and 405, 
  and sections 51.309 and 51.313 of the Commission's rules, 
  47 C.F.R.  51.309 and 51.313, that the instant petition 
  for reconsideration IS DENIED.

                                  
                              FEDERAL         COMMUNICATIONS 
COMMISSION



                              Marlene H. Dortch
                              Secretary
_________________________

1  Petition  for  Reconsideration,  File  No.  EB-01-MD-017 
(filed May 19, 2003) (``Petition'').

2 47 U.S.C.  405.

3 CoreComm  Communications, Inc. and  Z-Tel Communications, 
Inc. v. SBC Communications  Inc. et al., Memorandum Opinion 
and  Order, 18  FCC Rcd  7568 (2003),  petition for  review 
pending  release  of  the   instant  order,  sub  nom.  SBC 
Communications Inc.  v. FCC,  No. 03-1147 (D.C.  Cir. 2003) 
(``Liability Order'').    

4 47 U.S.C.   201(b), 251(c)(1) and (c)(3);  47 C.F.R.  
51.309(a),  51.309(b),  51.313(b).   Z-Tel  does  not  seek 
reconsideration of  the Commission's denial of  its section 
202(a) claims.   The Commission granted Z-Tel's  claim that 
defendants  Illinois Bell  Telephone Company,  Indiana Bell 
Telephone  Company, Michigan  Bell  Telephone Company,  and 
Wisconsin     Bell    Telephone,     Inc.    (collectively, 
``Ameritech'') violated  paragraph 56 of  the SBC/Ameritech 
Merger Order  Conditions.  Liability  Order, 18 FCC  Rcd at 
7576-78,  20-25 (citing  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, 15023-24  (1999), 
(subsequent history omitted)  (``SBC/Ameritech Merger Order 
Conditions'').   Specifically,  the Liability  Order  noted 
that  Z-Tel   purchased  the  shared  transport   UNE  from 
Ameritech, that  Z-Tel requested permission to  use the UNE 
for  intraLATA toll,  and  that  Ameritech refused  Z-Tel's 
request.   Ameritech's refusal  violated the  SBC/Ameritech 
Merger Order  Conditions, because those  conditions require 
Ameritech to ``offer'' shared transport for intraLATA toll.  
Liability Order  at 18 FCC  Rcd at 7576-77,   20-21.  The 
Commission has issued a  forfeiture order against Ameritech 
for  violation of  the  Merger Order  Conditions.  See  SBC 
Communications,  Inc., Apparent  Liability for  Forfeiture, 
Forfeiture Order, 17 FCC Rcd 19923 (2002), appeal pending.       

5 Liability Order, 18 FCC Rcd at 7571,  8. 

6 47 U.S.C.  252(i). 

7 Liability Order, 18 FCC Rcd at 7579-81,  29.

8 Liability Order, 18 FCC Rcd at 7569,  2.

9 Liability Order, 18 FCC Rcd at 7580,  29 n.67.

10 Liability  Order, 18 FCC Rcd  at 7572,  11,  7579-81,  
29.  

11 Defendants'  Answer, File  No. EB-01-MD-017  (filed Oct. 
10, 2001) (``Answer''), Ex.  B (Defendants' Legal Analysis) 
at 11.

12 Liability Order,  18 FCC Rcd at 7580,   29 n.67; Answer 
at 4-5.

13 Answer Ex. B (Defendants' Legal Analysis) at 14.  

14 Liability Order, 18 FCC Rcd at 7580,  29 n.67; Revised 
Joint Statement, File No. EB-01-MD-017 (filed Nov. 23, 2001) 
at Statement of Key Legal Issues, 11-12,  6-7.

15 Liability Order, 18 FCC Rcd at 7579-81  29.

16 Liability  Order, 18 FCC Rcd  at 7581,  30  (citing SBC 
Communications,  Inc., Apparent  Liability for  Forfeiture, 
Forfeiture Order, 17 FCC Rcd 19923, 19932,  18 (2002)).

17 Liability Order, 18 FCC Rcd at 7581,  30.

18 Liability Order, 18 FCC Rcd at 7579-81,  29-30.

19 Liability Order, 18 FCC Rcd at 7581-82,  30-32.

20 Liability Order, 18 FCC Rcd at 7582,  33.

21 Petition at 3.  Accord Petition at 6-12.  

22 Petition at 13.  

23 Petition at 3, 12-14.     

24 Indeed,  to so  hold under these  specific circumstances 
would   undermine  the   point  of   these  interconnection 
agreements, which Congress established  as the mechanism to 
implement  the  duties  arising  section  251(c).   In  the 
present  case,  Z-Tel  opted into  a  pre-existing  Pacific 
interconnection  agreement  without  first  negotiating  or 
arbitrating an amendment to  the agreement regarding shared 
transport.  Z-Tel  is bound  by the Pacific  Agreement, and 
may  not  now require  Pacific  to  amend its  terms.   See 
Liability Order,  18 FCC  Rcd at  7581-82,   30 (stressing 
that any request by Z-Tel to change the Pacific Agreement's 
terms   would  have   to   comply   with  the   agreement's 
modification or change of law provisions).  We note that Z-
Tel had ample  notice that it was taking a  risk in failing 
to  allege  that  the  Pacific  Agreement  provided  shared 
transport  for intraLATA  toll, because  Pacific repeatedly 
argued that Z-Tel's  claims were precluded by  the terms of 
the Pacific Agreement.   For  example, Pacific alleged that 
Z-Tel   had   waived   its   claims   because   Z-Tel   had 
``specifically  disavowed any  claim  that [Pacific]  ha[s] 
violated  [the Pacific  Agreement].''  Liability  Order, 18 
FCC  Rcd  at  7580,   29  n.67.   Nevertheless,  far  from 
contesting   Pacific's  allegations,   Z-Tel  affirmatively 
adopted them.  See discussion at   5, supra (discussing Z-
Tel's ``key legal issues'').  Moreover, as discussed below, 
Z-Tel would not have prevailed even if it had asserted that 
Pacific breached  the Pacific Agreement, because  there was 
no such breach.

25 Liability Order, 18 FCC Rcd at 7581-82,  30-32.  

26 Implementation  of the  Local Competition  Provisions in 
the Telecommunications Act of 1996, First Report and Order, 
11  FCC  Rcd  15499  (1996)  (subsequent  history  omitted) 
(``Local Competition Report and Order'').

27  Petition  at 6  (citing  Local  Competition Report  and 
Order, 11 FCC Rcd at 15565,  127).

28 47 U.S.C.  252(a)(1).

29  Net2000  Communications,  Inc.  v.  Verizon-Washington, 
D.C., Inc., Memorandum  Opinion and Order, 17  FCC Rcd 1150 
(2002).

30 See 47 C.F.R. 51.305 - .321. 

31 The Commission found that  the circuits at issue did not 
meet the  criteria for conversion prescribed  by Commission 
rules.  Net2000 Communications, Inc., 17 FCC Rcd at 1157,  
23, 1160,  33.

32 Petition at 9.

33 See Liability Order, 18 FCC Rcd at 7572-73,  12-13. 

34 TSR  Wireless, LLC v. U.S.  West Communications, Inc.,15 
FCC Rcd 11166  (2000), petition for review  denied sub nom. 
Qwest Corporation v. FCC, 252 F.3d 462 (D.C. Cir. 2001).

35 47 U.S.C.  51.703(b) (``A LEC may not assess charges on 
any other telecommunications carrier for telecommunications 
traffic that originates on the LEC's network.'')

36 Petition at 9-10.

37 Petition at 9.

38 47  U.S.C.  332.  See  Iowa Utilities Brd .v.  FCC, 120 
F.3d  753, 800  n.21  (8th Cir.  1997) (subsequent  history 
omitted); Qwest  Corp. v. FCC,  252 F.3d 462,  465-67 (D.C. 
Cir. 2001) (confirming that  section 332(c)(1)(B) gives the 
Commission authority to require that LECs interconnect with 
CMRS providers). 

39 TSR Wireless, 15 FCC Rcd at 11167,  3.

40  TSR Wireless,  15  FCC  Rcd at  11183,   29  (emphasis 
added).

41  TSR  Wireless,  15  FCC   Rcd  at  11182,    29  n.97.  
Similarly,  the  Liability   Order  emphasized  that  ``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.''  Liability Order, 18  FCC Rcd at 
7581,  30.

42  Cellexis  Int'l, Inc.  v.  Bell  Atlantic NYNEX  Mobile 
Systems, Inc., et al., Memorandum Opinion and Order, 16 FCC 
Rcd 22887 (2001) (``Cellexis'').

43 Petition at 10 (citing Cellexis,  16 FCC Rcd at 22891,  
9, but omitting the word ``Defendants''').

44  Section 251(c) obligates  incumbent LECs ``to negotiate 
in good faith in accordance with section 252 the particular 
terms and  conditions of  agreements to fulfill  the duties 
described in  paragraphs (1) through (5)  of subsection (b) 
and this subsection [i.e.,  subsection (c)].''  47 U.S.C.  
251(c)(1).   It  does  not require  such  negotiation  with 
respect to  section 251(a).  Similarly,  section 252(a)(1), 
47  U.S.C.     252(a)(1),   permits  ILECs   to  negotiate 
agreements ``without  regard to the standards  set forth in 
subsections  (b) and  (c) of  section 251,''  but does  not 
mention subsection  251(a).  Section  332(c)(1)(B) requires 
interconnection  when   the  Commissionfinds   such  action 
necessary  or desirable  in  the public  interest.  See  47 
U.S.C.    332(c)(1)(B)  (providing that,  upon  reasonable 
request  of a  CMRS  provider, the  Commission shall  order 
interconnection pursuant to section 201.)  There is, again, 
no mention of the section 251/252 negotiation process.    

45 Petition at 10.

46 47 U.S.C.  252(a)(1).

47 See Commission rule 1.1410 (``If the Commission 
determines that the rate, term, or condition complained of 
is not just and reasonable, it may prescribe a just and 
reasonable rate, term, or condition and...[s]ubstitute in 
the pole attachment agreement the just and reasonable rate, 
term, or condition established by the Commission.'') 47 
C.F.R.  1.1410.  See also Southern Co. Servs. Inc. v. FCC, 
313 F.3d 574 (D.C. Cir. 2002) (concluding that the 
Commission has authority to review the reasonableness of the 
terms of a pole attachment agreement).  Accord Pub. Service 
Co. of Colorado v. FCC, 328 F.3d 675, 677-678 (D.C. Cir. 
2003). 

48 Petition at 3.

49 Z-Tel argues that the Commission in Cellexis ``confirmed 
that a carrier does not waive its statutory right merely by 
signing  an interconnection  agreement.''   Petition at  10 
(citing  Cellexis, 16  FCC Rcd  at 22891,   9).   What the 
Commission  said,  however,  was that  the  interconnection 
agreement at issue in that  case, which had expired, ``does 
not alter  whatever right  to interconnection  Cellexis may 
have under the Act.''  Cellexis, 16  FCC Rcd at 22891,  9. 
The  Commission's statement  is not  inconsistent with  the 
Liability  Order because,  as discussed,  the duty  of CMRS 
providers  to  interconnect  can  be  imposed  pursuant  to 
section 332 independently of an interconnection agreement.

50 Petition at 16.

51  Z-Tel argues  that its ``disavowal'' of  any claim that 
Pacific  breached  the  Pacific  Agreement,  see  Liability 
Order, 18 FCC Rcd at 7580,   29 n.67, merely meant that Z-
Tel denied that it was obligated so to allege.  Petition at 
16.  We disagree.  As Z-Tel notes, ``disavow'' means, among 
other things, ```to disclaim knowledge of... .'''  Petition 
at  16  (citing Webster's  II  New  College Dictionary  323 
(2001)).   If  Pacific  were   in  breach  of  the  Pacific 
Agreement's terms  governing shared transport,  Z-Tel would 
have had  ``knowledge of'' that breach.   Hence, when Z-Tel 
``disavowed''  any  claim  that Pacific  had  breached  the 
Pacific Agreement,  it effectively admitted that  there was 
no breach.  In any event, the Commission's conclusion, that 
Z-Tel effectively  admitted that the Pacific  Agreement had 
not  been  breached,  was  not based  solely  upon  Z-Tel's 
``disavowal,'' but upon the  totality of Z-Tel's statements 
and omissions during  the proceeding.  See Liability Order, 
18 FCC Rcd at 7580,  29 n.67. 

52 Petition at 4-5, 17-20.    

53  Letter  dated  December  7, 2001  from  Christopher  M. 
Heimann,  counsel   to  Pacific,   to  Magalie   R.  Salas, 
Secretary, FCC, File  No. EB-01-MD-017 (``Heimann Letter'') 
Ex. 1 (Pacific Agreement) at Attachment 6,  2.1.  

54 Heimann  Letter Ex. 1 (Pacific  Agreement) at Attachment 
6,  7.4.1 (providing that  the shared transport UNE may be 
used  for  intraLATA  toll  ``if requested  by  [Z-Tel]  in 
connection  with  LSNE  option   `C'  under  Section  6.5.3 
above.'')

55 Heimann  Letter Ex. 1 (Pacific  Agreement) at Attachment 
6,  6.5.3. 

56 Petition at 5.  Accord Petition at 17-20. 

57 With regard to Option  C, Z-Tel relies upon two sections 
of  the Pacific  Agreement providing  shared transport  for 
intraLATA  toll  only if  Z-Tel  exercises  Option C.   See 
Petition at  19 (citing Pacific Agreement,  Attachment 6,  
6.5.3,  which,  as  discussed above  at  paragraphs  25-26, 
provides shared transport for  intraLATA toll only if Z-Tel 
exercises Option C).  See also Petition at 19, n.45 (citing 
Pacific Agreement,  Attachment 6,  7.4.1,  which provides, 
```Pacific  shall route  [Z-Tel]'s  intraLATA traffic  over 
Pacific's Shared  Transport facilities if requested  by [Z-
Tel] in connection  with LSNE option C  under section 6.5.3 
above.'') (emphasis  added).  Finally,  with regard  to the 
Bona Fide  Request process, Z-Tel quotes  a single sentence 
from Attachment  6, section 2.   Petition at 18,  n.42.  As 
discussed above,  however, when read in  its entirety, this 
section  requires compliance  with  the  Bona Fide  Request 
process.       

58 Z-Tel did not place the Memorandum of Understanding in 
the record, and it does not allege that the Memorandum was a 
``Bona Fide Request'' or the exercise of Option C.  On the 
contrary, Z-Tel admits that the Memorandum was an 
``amend[ment]'' to the Pacific Agreement.  See Formal 
Complaint, File No. EB-01-MD-017 (filed Aug. 28, 2001) 
(``Complaint'') at 8,  18.  Further, Z-Tel used the 
Memorandum of Understanding as a proposed amendment to a 
number of interconnection agreements, not just the Pacific 
Agreement. Id. Thus, the Memorandum of Understanding was not 
tailored specifically to comply with the requirements of the 
Pacific Agreement.  See also Complaint Ex. 7 (Letter dated 
Jan. 19, 2001 from Michael Hazzard, counsel to Z-Tel, to 
Adam McKinney, counsel to Pacific) (describing the 
Memorandum of Understanding as ``based on the MOU drafted by 
SBC and executed by Z-Tel in Texas...''); Petition at 5 
(same).  Z-Tel argues that Pacific was obligated to 
``suggest that Z-Tel modify or otherwise reformulate its 
request.'' Petition at 5.  Z-Tel made no such claim in the 
liability phase of this proceeding, and therefore may make 
no such claim now.  In any event, Z-Tel has advanced no 
reason why section 251(c)(1) imposes an obligation upon 
Pacific to explain to Z-Tel why Z-Tel's Memorandum did not 
comply with the Pacific Agreement.

59 Liability Order, 18 FCC Rcd at 7579-82,  29-32.

60  Petition   at  17-18   (citing  Pacific   Agreement  at 
Attachment 3, 2.1).

61  Petition at 18  (citing Pacific Agreement at Attachment 
6,  1.1)

62 Heimann  Letter Ex. 1 (Pacific  Agreement) at Attachment 
6,  1.1.

63 Because we  affirm our denial of  Z-Tel's section 251(c) 
claims, we also affirm our denial of Z-Tel's section 201(b) 
claims.  Z-Tel's  Petition provides no  reason, independent 
of  its claim  that  Pacific violated  section 251(c),  why 
Pacific violated  section 201(b).  See Liability  Order, 18 
FCC Rcd at 7582, 33.