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


                                )
In the Matter of                 )
                                )
                                )    File No. EB-00-IH-0134
                                )
                                )    Acct. No. X32080035
BellSouth Corporation            )
                                )




                         CONSENT DECREE

I.   INTRODUCTION

      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.

II.  BACKGROUND

      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 
251(c)].''1  

      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 
effects.''6 

      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.



III. DEFINITIONS

      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.
     1.   
          (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.

IV.  AGREEMENT

      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 
modification.

      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 
order.

      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



By: ______________________________________

     Magalie Roman Salas, Secretary


BELLSOUTH CORPORATION


By:  _____________________________________

     Margaret Greene, Executive Vice President - Regulatory and 
External Affairs
_________________________

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.