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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-00-IH-0134
) Acct. No. X32080035
BellSouth Corporation )
1. The Federal Communications Commission (the
``Commission'') and BellSouth Corporation (``BellSouth'' or the
``Company'') hereby enter into this Consent Decree for the
purpose of terminating an informal investigation by Commission
staff into whether BellSouth violated section 251(c)(1) of the
Communications Act of 1934, as amended (``the Act''), and section
51.301 of the Commission's rules. The investigation focused on
whether BellSouth had negotiated in good faith with Covad
Communications Company (``Covad'') over the terms and conditions
of an amendment to an interconnection agreement relating to
BellSouth's provision of unbundled copper loops.
2. Section 251 of the Act imposes on BellSouth, as an
incumbent LEC, several obligations designed to promote
competition in local telephone markets. In section 251(c)(1), the
incumbent local exchange carrier and the requesting carrier have
a duty to negotiate in good faith `` in accordance with section
252 [of the Act] the particular terms and conditions of
agreements to fulfill the duties described in paragraphs (1)
through (5) of subsection (b) of [section 251] and [section
3. In implementing section 251(c)(1), the Commission
adopted section 51.301(c) of its rules, which sets forth a non-
exclusive list of actions or practices that, if proven, would
violate the duty to negotiate in good faith.2 Under section
51.301(c)(8), ``[r]efusing to provide information necessary to
reach agreement'' constitutes such a violation.3 In the Local
Competition Order, the Commission stated that ``an incumbent LEC
may not deny a requesting carrier's reasonable request for cost
data during the negotiation process, because . . . such
information is necessary for the requesting carrier to determine
whether the rates offered by the incumbent are reasonable.''4
4. Under section 51.301(c)(1), a telecommunications
carrier violates the duty to negotiate in good faith by
``[d]emanding that another party sign a nondisclosure agreement
that precludes such party from providing information requested by
the Commission, or a state commission, or in support of a request
for arbitration under section 252(b)(2)(B) of the Act. . . .''5
In the Local Competition Order, the Commission expressed
particular concern about ``overly broad, restrictive, or coercive
nondisclosure requirements [that] may well have anticompetitive
5. In late 1999, the Enforcement Bureau (``Bureau'')
received information from Covad suggesting that BellSouth may
have failed to negotiate in good faith in violation of section
251(c)(1) of the Act and section 51.301 of the Commission's
rules. The Bureau commenced an informal investigation into these
matters on February 25, 2000. The Bureau's investigation
disclosed that in April 1999, Covad made a request to BellSouth
for cost data to support BellSouth's proposed rates for unbundled
copper loops. BellSouth did not offer access to the data until
September 1999, when it offered to permit Covad access subject to
Covad's execution of a non-disclosure agreement (``NDA'') which
the Bureau believes limited Covad's ability to disclose the cost
data, as well as information concerning the course of the
negotiations, to the Commission or a state commission. Covad
objected to the terms of the NDA. In October 1999, BellSouth
advised Covad that the proposed language did not limit Covad's
ability to disclose any cost information to the Commission or a
state commission. In October 1999, BellSouth offered access to
the cost data without a NDA, but proposed to limit Covad's review
to a period of two hours at BellSouth's offices. Covad also
objected to this arrangement. The following month, BellSouth
offered access to the data for 30 days without a NDA.
6. The Bureau's investigation concerned whether
BellSouth's actions during the Relevant Period, as outlined
above, violated the statutory good faith requirement, as
implemented by the Commission. BellSouth denies that its actions
constituted a failure to negotiate in good faith, and disputes
that its proposed NDA would have precluded Covad from providing
information to the Commission or a state commission.
7. For purposes of this Consent Decree, the following
definitions shall apply:
(a) The ``Commission'' or ``FCC'' means the Federal
Communications Commission and all divisions of the
Commission, including the Enforcement Bureau.
(b) ``BellSouth'' or ``the Company'' means BellSouth
Corporation and any subsidiaries, including its incumbent
LEC operating telephone companies in the BellSouth states,
as defined in subsection (i) below, and any successors or
assigns of BellSouth Corporation or its incumbent LEC
operating telephone companies.
(c) ``Parties'' means BellSouth and the Commission.
(d) ``Order'' or ``Adopting Order'' means an order of
the Commission adopting this Consent Decree.
(e) ``Final Order'' means an order that is no longer
subject to administrative or judicial reconsideration,
review, appeal or stay.
(f) ``Relevant Period'' means the period prior to
November 16, 2000.
(g) ``Inquiry'' means the enforcement action initiated
by the Bureau's February 25, 2000 letter of inquiry
regarding allegations about BellSouth's failure to
negotiate in good faith.
(h) ``Effective Date'' means the date on which the
Commission releases the Adopting Order.
(i) The term ``BellSouth States'' means Alabama,
Florida, Georgia, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina and Tennessee.
8. The Commission and BellSouth agree that this Consent
Decree does not constitute either an adjudication of the merits
or a factual or legal finding or determination regarding any
compliance or noncompliance by BellSouth with the requirements of
the Communications Act, including section 251 thereof, and the
Commission's implementing rules, arising out of any alleged
actions or failures while negotiating with Covad Communications
Company the terms and conditions of an amendment to an
interconnection agreement relating to BellSouth's provision of
unbundled copper loops during the Relevant Period in nine states.
The Parties agree that this Consent Decree is for settlement
purposes only and that by agreeing to this Consent Decree,
BellSouth does not admit any noncompliance, violation or
liability associated with or arising from such actions or
failures, including any actions or failures described in the
Commission's February 25, 2000 and June 7, 2000 letters of
inquiry, in any follow-up correspondence, in any meetings between
BellSouth and the Commission concerning BellSouth's negotiations,
or in any formal or informal complaints, ex parte communications
or other information received by the Commission.
9. In express reliance on the covenants and
representations contained herein, the Commission agrees to
terminate the Inquiry at such time as the Commission releases an
Order adopting this Consent Decree.
10. The parties agree and acknowledge that this
Consent Decree shall constitute a final settlement between
BellSouth and the Commission of the Inquiry. In consideration of
the termination of this Inquiry in accordance with the terms of
this Consent Decree, BellSouth agrees to the terms, conditions
and procedures contained herein.
11. BellSouth admits the jurisdiction of the
Commission to adopt this Consent Decree.
12. BellSouth shall be obligated under this Consent
Decree to adopt a standard NDA for requests under section 251 for
access to confidential information that (1) authorizes the
requesting carrier to provide confidential information requested
by the FCC or a state commission, or in support of a request for
arbitration or an allegation of failure to negotiate in good
faith; and (2) contains no language requiring that requesting
carriers treat the negotiations themselves as confidential.
13. In addition, BellSouth shall be obligated to
revise, within 30 calendar days of the execution of this consent
decree, its existing negotiation manual to include (1) a copy of
the statutory and regulatory obligations regarding BellSouth's
duty to negotiate in good faith; (2) a copy of the standard NDA
described above; and (3) procedures for expedited access to
confidential information, including a timeline for proposing the
standard NDA and for prompt release of confidential information
to the CLEC, and escalation procedures for issues regarding
disclosure of confidential information.
14. BellSouth shall also be obligated to conduct,
within 30 calendar days of the execution of this consent decree,
a training session for all of its negotiators that focuses on the
statutory and regulatory obligations regarding BellSouth's duty
to negotiate in good faith; and to revise its current training
schedule to include a session every six months that focuses on
BellSouth's statutory and regulatory duty to negotiate in good
faith. BellSouth shall be further obligated to provide new
employees who have negotiation duties a copy of the revised
negotiation manual prior to their assumption of such duties, and
to ensure that supervisors will review the negotiation manual
with such employees, highlighting BellSouth's statutory and
regulatory duty to negotiate in good faith.
15. BellSouth agrees to make a voluntary contribution
to the United States Treasury in the amount of seven hundred
fifty thousand dollars ($750,000) within 10 calendar days after
the time that the Order adopting this Consent Decree becomes a
Final Order. Payment should be made by check or money order
drawn to the order of the Federal Communications Commission.
Reference should be made on the check or money order to [``Acct
No. X32080035'']. Such remittances must be mailed to: Forfeiture
Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, IL 60673-7482.
16. The Commission agrees that, based on the facts
developed in the Inquiry and in the absence of material new
evidence related to this matter, it will not use the facts
developed in this Inquiry through the date of the Consent Decree
or the existence of this Consent Decree to institute, on its own
motion, any new proceeding, formal or informal, or take any
action on its own motion against BellSouth concerning the matters
that were the subject of the Inquiry. The Commission also agrees
that, based on the facts developed in the Inquiry, and in the
absence of material new evidence related to this matter, it will
not use the facts developed in this Inquiry through the date of
this Consent Decree or the existence of this Consent Decree to
institute on its own motion any proceeding, formal or informal,
or take any action on its own motion against BellSouth with
respect to its basic qualifications, including its character
qualifications, to be a Commission licensee or with respect to
compliance with the Commission's rules and policies. Consistent
with the foregoing, nothing in this Consent Decree limits the
Commission's authority to adjudicate any complaint that may be
filed pursuant to section 208 or 251 of the Communications Act,
as amended, 47 U.S.C. §§ 208, 251, and to take any action in
response to such complaint. If any such complaint is made by a
third party, the Commission's adjudication of such complaint
shall be based solely on the record developed in that proceeding.
17. BellSouth waives any and all rights it may have to
seek administrative or judicial reconsideration, review, appeal
or stay, or to otherwise challenge or contest the validity of
this Consent Decree and the Order adopting this Consent Decree,
provided the Order adopts the Consent Decree without change,
addition, or modification.
18. BellSouth and the Commission agree that the
effectiveness of this Consent Decree is expressly contingent upon
issuance of an Order that is consistent with the Consent Decree
and which adopts the Consent Decree without change, addition, or
19. In the event that this Consent Decree is rendered
invalid by any court of competent jurisdiction, this Consent
Decree shall become null and void and may not be used in any
manner in any legal proceeding.
20. If either Party (or the United States on behalf
of the Commission) brings a judicial action to enforce the terms
of the Order adopting this Consent Decree, neither BellSouth nor
the Commission shall contest the validity of the Consent Decree
or Order, and BellSouth and the Commission will waive any
statutory right to a trial de novo with respect to any matter
upon which the Order is based, and shall consent to a judgment
incorporating the terms of this Consent Decree.
21. BellSouth waives any claims it may otherwise have
under the Equal Access to Justice Act, Title 5 U.S.C. § 504 and
47 C.F.R. § 1.1501, et seq.
22. Any violation of the Consent Decree or the Order
adopting this Consent Decree will constitute a separate violation
of a Commission order, entitling the Commission to exercise any
rights and remedies attendant to the enforcement of a Commission
23. The Parties also agree that any provision of the
Consent Decree that would require the Company to act in violation
of a rule or order adopted by the Commission will be superseded
by such Commission rule or order.
24. This Consent Decree may be signed in counterparts.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas, Secretary
Margaret Greene, Executive Vice President - Regulatory and
1 47 U.S.C. § 251(c)(1).
2 See 47 C.F.R. § 51.301(c).
3 47 C.F.R. § 51.301(c)(8).
4 Implementation of the Local Competition Provisions of the
Communications Act of 1996, CC Docket No. 96-98, First Report
and Order, 11 FCC Rcd 15499, 15577-78 ¶ 155 (1996) (``Local
Competition Order'') (subsequent history omitted).
5 47 C.F.R. § 51.301(c)(1).
6 Local Competition Order 11 FCC Rcd at 15575-76 ¶ 151.