Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
Access Charge Reform ) CC Docket No. 96-262
)
COMMENTS OF THE
COMPETITIVE TELECOMMUNICATIONS ASSOCIATION
Genevieve Morelli Robert J. Aamoth
Executive Vice President Jonathan E. Canis
and General Counsel Reed Smith Shaw & McClay
Competitive Telecommunications 1301 K Street, N.W.
Association Suite 1100 - East Tower
1900 M Street, N.W., Suite 800 Washington, D.C. 20005
Washington, D.C. 20036 (202) 414-9210
(202) 296-6650
January 29, 1997 Its Attorneys
SUMMARY
CompTel strongly supports the Commission's decision to initiate this proceeding to implement access reform. There is consensus in the industry that the incumbent local exchange carriers' ("ILECs'") switched access rates are priced grossly in excess of costs. CompTel endorses the FCC's proposal to adopt Total Service Long Run Incremental Costs ("TSLRIC") as the appropriate methodology for ensuring cost-based rates. The TSLRIC methodology is compelled by the Commission's interpretation of the Telecommunications Act of 1996 to require TELRIC-based rates for unbundled network elements, which carriers may use to provide switched access services to themselves and other carriers.
CompTel cautions the Commission against relying exclusively upon the development of competition through use of network elements under Sections 251(c)(3) and 252(d) of the 1996 Act as the means to bring access rates down. First, we are nearly at the one year anniversary of the 1996 Act, and network elements are nowhere close to being made available in the appropriate manner. In order for local competition to develop, network elements must be made as simple to order, as easy to provision, and as responsive to customer demand as the interLATA presubscription process. The Commission must continue to make it a top priority to ensure that the network element regime works, and works in the near future, as Congress intended.
Second, even when competitive entry through use of network elements becomes a reality, such competition by itself will not be sufficient to reduce all access rates to cost-based levels. Even under a fully-implemented and workable network element regime, there will never be competitive pressures upon terminating access rates because the commercial relationship between the caller and its chosen long distance carrier does not impose any incentive on the terminating access provider to decrease access rates to the long distance carrier. Consequently, the Commission must adopt a prescriptive approach for achieving cost-based terminating access rates.
With respect to originating access, carriers who enter the full-service market through use of network elements will be able to reduce their own originating access costs to TSLRIC-based levels. The development of full-service competition through network elements will help over time to create a retail market where end-user subscribers pay lower retail rates. However, it is unclear whether the competition brought about by network elements will translate into lower originating access charges for stand-alone long distance carriers. As a result, it is also necessary for the Commission to adopt a prescriptive approach for originating switched access rates.
The one area where some competition has already developed, and where competition may develop further under a meaningful network element regime, is Direct-Trunked Transport. However, competition has not yet developed for Tandem-Switched Transport, and there is no basis yet to conclude that the network element regime will facilitate competitive suppliers of Tandem-Switched Transport. As a result, it will be imperative for the Commission to immediately prescribe cost-based rates for Tandem-Switched Transport.
CompTel recognizes that it may be infeasible to implement TSLRIC-based rates for all switched access rates elements on a flash-cut basis. Therefore, while CompTel urges the Commission to commit on a policy basis to achieving TSLRIC-based rates for all switched access elements, CompTel recognizes that the Commission may need to set priorities. As a first step, the FCC should immediately prescribe cost-based rate levels for terminating switched access rate elements, and as well for originating Tandem-Switched Transport, because those access services are unlikely ever to be subject to meaningful competitive pressures. As a second step, the FCC should monitor the market for originating switched access services other than Tandem-Switched Transport and be prepared to step in by prescribing TSLRIC-based rates for originating access if competition proves insufficient to bring these rates to cost-based levels.
In moving terminating switched access rates to TSLRIC-based levels, the Commission should set the terminating Local Switching rate at the same levels established pursuant to Section 251(b)(5) of the 1996 Act. This is appropriate because the local switching function is the same, and has the same TSLRIC, regardless of whether it is provided for local or toll traffic, or whether it is provided as an access service or a network element. In addition, the terminating carrier common line ("CCL") charge should be set at zero (i.e., eliminated) because there are no incremental costs associated with terminating loop usage. The terminating transport interconnection charge ("TIC") also should be set at zero because, by definition, the TIC does not include any costs that will not be recovered through TSLRIC-based rates for other access rate elements. As regards originating and terminating Tandem-Switched Transport, the Commission should direct the ILECs to establish rates that conform with the Commission's TELRIC requirements in CC Docket No. 96-98 for such transport.
As regards rate structure issues, the Commission should retain the unitary rate structure whereby carriers pay a single end-to-end usage-based rate for Tandem-Switched Transport. The unitary rate structure is necessary to ensure non-discriminatory treatment of Tandem-Switched and Direct-Trunked Transport purchasers, all of whom route their traffic over the same shared interoffice facilities and often through the same tandem locations. Particularly since smaller carriers are more likely to use Tandem-Switched Transport while larger carriers are more likely to use Direct-Trunked Transport, the unitary rate structure to essential to promote efficient competition among all carriers.
In addition, CompTel opposes the introduction of peak/off-peak access pricing. Because such a small portion of interoffice traffic is interstate access (between 10-15%), it would not promote economic efficiency to require peak/off-peak pricing for interstate access traffic absent peak/off-peak pricing for other traffic routed over the network. Moreover, it is impossible to define peak and off-peak traffic with any reasonable degree of certainty or consistency.
CompTel supports the Joint Board's recommendation that the originating CCL be converted to a flat-rated charge and recovered on a per-line basis from presubscribed carriers. That rate structure is consistent both with the policy preference for recovering non-traffic sensitive costs through flat rates, and with the Commission's decision to require flat-rated charges for local loops as network elements under Sections 251(c)(3) and 252(d). However, CompTel opposes the application of multiple subscriber line charges to derived channels.
As regards Local Switching, CompTel supports a bifurcated approach. The
Commission should require terminating Local Switching rates to be set at TSLRIC immediately,
and CompTel believes that a usage-based charge for terminating Local Switching is appropriate.
For so long as originating Local Switching rates remain at above-TSLRIC levels, CompTel
supports establishing both flat-rated and usage-based charges while market forces, or further FCC
prescriptive remedies if necessary, impose competitive pressure upon originating Local Switching
rates. CompTel also opposes a separate charge for call setup on the ground that no state
regulatory body has established such a charge and there are no grounds on which to establish the
rate level. Lastly, CompTel urges the Commission to make no changes in the SS7 Signaling rate
structure at this time.
TABLE OF CONTENTS
Page
I. INTRODUCTION 1
II. ACCESS TO UNBUNDLED NETWORK ELEMENTS IS A
MANDATORY, BUT NOT NECESSARILY SUFFICIENT,
PRECONDITION TO THE DEVELOPMENT OF COMPETITION 4
III. MARKET FORCES CANNOT SUFFICE TO PREVENT UNLAWFUL ANTICOMPETITIVE ACTIVITY BY INCUMBENT LECS -- THE
COMMISSION MUST ADOPT A PRESCRIPTIVE APPROACH TO
ACCESS REFORM 11
A. Introduction 11
B. Access rates will not move to TSLRIC absent a prescriptive
approach to access reform 13
IV. PROPOSED RATE LEVEL MODIFICATIONS 16
A. Overview 16
B. Terminating Access Charges: Carrier Common Line, Local
Switching and Transport Interconnection Charge 18
C. Interoffice Transport 21
D. Originating Access Charges: Carrier Common Line, Local
Switching and Transport Interconnection Charge 22
E. Volume and Term Discounts 22
V. PROPOSED RATE STRUCTURE MODIFICATIONS 24
A. Transport 24
B. Common Line 29
C. Local Switching 30
D. SS7 Signaling 31
VI. OTHER ISSUES NOT SPECIFICALLY ADDRESSED IN THE NPRM 32
A. Nonrecurring charges 32
VII. CONCLUSION 33
Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
Access Charge Reform ) CC Docket No. 96-262 )
COMMENTS OF THE
COMPETITIVE TELECOMMUNICATIONS ASSOCIATION
The Competitive Telecommunications Association ("CompTel"), by its
undersigned counsel, and pursuant to the Commission's Notice of Proposed Rulemaking
("NPRM")(1) in the above-captioned proceeding, hereby submits its initial comments regarding
access charge reform.
I. INTRODUCTION
CompTel is an industry association representing providers of competitive
telecommunications services, with approximately 200 members ranging in size from large
nationwide carriers to smaller regional service providers. Because CompTel's member companies
are among the largest purchasers of incumbent local exchange carrier ("ILEC") access services,
CompTel is critically concerned that access charges be nondiscriminatory and cost-based. In light
of this concern, CompTel has been an active participant in the Commission's proceedings
involving the restructuring of ILEC switched transport rates,(2) and the reform of universal service
rules and charges.(3)
CompTel applauds the Commission's determination to conduct a plenary review of
the existing access rates and rate structures. The instant NPRM responds to a consensus among
the industry that access is priced grossly in excess of cost, and that in many cases, current cost
recovery mechanisms are uneconomic because the rate structure does not reflect the way costs are
incurred. Reforming existing access rates and rate structure into a rational and cost-based system
is an important step on the path to the development of full-service competition, and in these
comments, CompTel makes specific proposals to address both rate level and rate structure
problems. The Commission must be aware, however, that while access reform is critically
important to the development of competitive service markets, such reform, by itself, is insufficient
to create a national environment that will support effective competition.
The NPRM specifically questions whether unbundled network elements are a
viable substitute for switched access and, as a result, whether cost-based network elements would
provide a vehicle for the market reform of switched access services. This conclusion, however, is
not based on facts or realized competition, but rather on the promise that network elements can
become an effective means of cost-based local entry. CompTel believes that the realization of this
vision is critical to the nation's telecommunications marketplace. The Commission's Competition
Order in CC Docket No. 96-98(4) establishes a framework within which entrants should be able to
order network elements, including network element combinations, that could promote broad-based local entry, potentially lessening the need for the prescriptive reform of some portions of
switched access. This vision is a cornerstone of the market of the future, but it is not yet
implemented. As CompTel explains in these comments, the Commission must assure the
availability of network elements at cost-based rates -- most specifically, logical combinations of
network elements -- and insist that they are as easily obtainable and as promptly provisioned as
access service is today. Doing so is the only means by which Congress' and the Commission's
vision of broad-based local competition can become a reality.
As CompTel discusses herein, local entry through the use of network elements will
unleash market forces that will impose some competitive pressure upon the service rates paid by
end users. However, those market pressures are largely absent in the case of carrier access
charges. Especially for terminating access, there is no market-driven incentive for providers of
access services to reduce the rates they charge interexchange carriers that are their captive
customers. This dynamic will be true whether an ILEC, a competitive local service provider, or a
carrier purchasing unbundled network elements controls the terminating access. Only by
prescribing rates at economically efficient levels can the Commission ensure that access charges
are reasonable and nondiscriminatory, and allow competitive carriers to design their networks and
develop their services in ways that respond to customer needs and rational market signals.
As discussed herein, the magnitude of the non-cost amounts currently recovered
through access charges likely prohibits bringing all access charges to cost-based levels
immediately, and necessitates that the Commission prioritize the rate elements that will be brought
to cost. Because competition -- whether facilities-based, or based on unbundled network
elements -- will never place significant downward pressure on terminating access services, the
Commission's first priority should be to reform terminating access rates. It is unclear whether
market pressures will suffice to drive originating access rates to cost-based levels. The
Commission should therefore adopt as a secondary priority the reform of originating access rates
over time. Tangible evidence that competitive local entry through unbundled network elements
has been effective in driving these rates to cost should be the precondition to reassessing that
priority. CompTel discusses each of these issues at length below.
II. ACCESS TO UNBUNDLED NETWORK
ELEMENTS IS A MANDATORY, BUT NOT
NECESSARILY SUFFICIENT, PRECONDITION
TO THE DEVELOPMENT OF COMPETITION
(Response to § IV: Approaches to Access Reform and Deregulation)
While CompTel supports the Commission's determination to reform switched
access, it is concerned that the Commission has not incorporated into the NPRM all of the
elements necessary for a competitive environment. Specifically, the NPRM is premised on the
assumption that competitive entry via unbundled network elements is now available and is
adequate to promote competition for local services; that such competition will drive switched
access rates to cost; and that the restructuring of access charges is the final step in moving from a
regulatory to a competitive environment. As the recent experience of CompTel members and
other carriers demonstrates, this assumption is fundamentally flawed. Network elements that are
fully substitutable for access services are not available today, and recent experience makes clear
that, without active regulatory intervention, they will not become available. Moreover, as
CompTel discusses in Section III below, even the existence of unbundled element-based
competition is unlikely to result in access charges being driven to cost-based levels, or to ensure
that any access rate reductions that do occur will be competitively neutral.
At the outset, it is important to establish a clear understanding of the differences
between network elements and access services. Network elements are not a pure substitute for
switched access service because each is used by fundamentally different firms. Switched access is
required by carriers that provide long distance services independently from the local service
provider. Network elements, in contrast, are used by an integrated or "full service" provider,
offering both local, access and long distance services. Consequently, as a threshold proposition,
network elements are a substitute only if the market is transformed to one where all carriers are
full service providers and carriers are able to effectively and efficiently use network elements to
provide service.
Although the development of a full service marketplace may be a likely outcome, it
is important for the Commission to remember that this is a projection and not a fact. It is
important that the Commission's policies not prejudge nor predetermine the ultimate market
structure. But, assuming that the market prefers full service choices, the important issue becomes
what actions are most critical to ensure that carriers can use network elements to provide service
efficiently.
Fundamentally, for network elements to provide a viable local entry vehicle,
network elements must be as simple to order, easy to provision, and as responsive to customer
demand (i.e., able to serve customers as quickly as the interLATA presubscription process does
today) as switched access has become over the past decade. To meet this standard, at least three
broad conditions must be satisfied:
(1) ILECs must introduce and support an unbundled local
switching network element that enables multiple local
providers to offer services within the same switch;
(2) Customers must be able to be moved among local providers
in service intervals equivalent to the interLATA
presubscription process; and
(3) Local providers must be able to combine unbundled
switching with loops, as well as transport and termination
obtained either from the ILEC or third parties, to provide
local exchange and exchange access services.
Significantly, each of these broad conditions is required by FCC rules.(5) The critical
step is to translate these FCC requirements into practical serving arrangements that are
functioning in the market.
The most critical step is correctly establishing the local switching element. The
local switch lies at the heart of local exchange service; it is here that services are created and most
revenues generated.(6) The only way that network elements can be used as a substitute for
switched access services, promoting competition on a geographically-broad scale, is if multiple
carriers can use existing ILEC switches (and, as explained below, loop/switch combinations) to
provide exchange and exchange access services. The FCC rules recognize this fact and the
Commission has ordered the introduction of an unbundled switching element that includes:
* basic switching connecting lines and trunks
§51.319(c)(1)(i)(C)(1);
* any capability available to ILEC customers, including
telephone numbers, white page listings and dial tone --
§51.319(c)(1)(i)(C)(1);
* every feature the switch is capable of providing, including
customer calling, CLASS functionality, and Centrex --§51.319(c)(1)(i)(C)(2);
* software-controlled systems which transfer customers to a
new local provider in the same interval as the ILEC
transfers customers between interexchange carriers(7) --§51.319(c)(1)(ii);
* establishes the unbundled local switching purchaser as the
provider of local exchange and exchange access service --§51.307(c), §51.309(a), and §51.309(b);
* use of the ILEC's signaling and call-related data base
systems in the same manner as the ILECs use such systems
themselves -- §51.319(e)(1)(ii) and §51.319(c)(2)(iii); and
* access to the entrant's operator services by dialing "0" or "0
plus" the desired telephone number,(8) with a similar
obligation for access to directory services using the 411 and
555-1212 dialing patterns.(9)
The collective effect of these provisions is to define a switching element that
establishes the purchaser as its customers' local telephone company in every material respect.
Unbundled switching, by itself, however, would provide the heart of local competition without a
body to sustain it. Network elements are operationally and economically substitutable for
switched access services only if entrants are able to obtain logical combinations of network
elements, including combinations where each network element used to provide service is
purchased from the ILEC.
Again, FCC rules require that the ILECs provision and support network element
combinations,(10) but these rules are not yet translated into operationally-useful arrangements that
could be considered in any way comparable to switched access services. In fact, several ILECs
are actively working to preclude network element combinations from ever becoming a reality.
BellSouth in particular has been very aggressive in promoting this agenda and has been successful
in getting several state utility commissions to adopt orders that significantly impair competitors'
practical ability to use combinations of network elements.
In an order released on December 4, 1996 in a BellSouth/AT&T arbitration
proceeding, the Georgia Public Service Commission denied AT&T its entitlement to cost-based
rates for combinations of network elements and prohibited AT&T from exercising its role as
access provider when it purchases network element combinations.(11) The Georgia Commission did
so despite acknowledging that the 1996 Act and the Commission's Competition Order permit
carriers to purchase network elements at prices based on economic costs and to combine those
network elements in any manner that is technically feasible.(12) Similarly, in an order released on
November 25, 1996, the Tennessee Regulatory Authority (TRA) determined that AT&T and MCI
should be permitted to purchase network elements at cost-based rates only if they combine the
elements to provide a new or different function from that already being provided by BellSouth.(13)
In addition, in a November 7, 1996 order, the Ohio Public Utility Commission (PUCO) stated its
opinion that purchasing carriers not be permitted to use network elements in combination if they
would replace packaged ILEC retail services. The PUCO included this restriction in its order but
stayed its effectiveness pending completion of the reconsideration process in CC Docket No. 96-98 at the Commission.(14)
Local switching is not the only network element that is currently being provided in
an inadequate manner or not at all. At least one ILEC, Ameritech, has steadfastly refused to
make available common transport as a network element. This failure to conform to an explicit
unbundling requirement of the Commission's Competition Order is the focus of pending petitions
for reconsideration in that docket.(15) In addition, the Commission's express requirements
regarding the availability of operations support systems ("OSS") -- including access to pre-ordering, ordering, provisioning, maintenance and repair, and billing functions -- are not being
met. Despite the Commission's requirement that ILECs provide access to OSS by January 1,
1997, no ILEC currently is providing properly-functioning automated OSS access for both
unbundled network elements and local exchange service resale.
Moreover, while some ILECs are asserting in several states that they have fully complied
with the unbundled network element requirements of the 1996 Act,(16) ILECs are actively gaming
the regulatory and judicial processes to forestall implementation of these statutory requirements.
For example, GTE has appealed every final arbitration award issued by a state regulatory
commission to date.(17) It is abundantly clear that competitive entry through network elements is
not now available, and may not become available without active regulatory involvement. Until
network elements are as easy to obtain and as quickly provisioned as switched access services,
and until they are available at cost-based rates with no restrictions on purchasers' ability to
combine them, effective local competition cannot develop. Access reform alone will not promote
a competitive local environment.
III. MARKET FORCES CANNOT SUFFICE
TO PREVENT UNLAWFUL ANTICOMPETITIVE
ACTIVITY BY INCUMBENT LECS -- THE
COMMISSION MUST ADOPT A PRESCRIPTIVE
APPROACH TO ACCESS REFORM
(Response to §§ V & VI: Market-Based vs. Prescriptive Approach to
Access Reform and § VIII (A) Regulation of Terminating Access)
A. Introduction
In Sections V and VI of the NPRM, the Commission seeks comment on two
different approaches to access reform: one premised on market factors, and one taking a
prescriptive approach. The market approach considered by the Commission is intended to
eliminate uneconomic regulatory constraints on ILECs, and would consist of two phases. Each
phase would eliminate regulatory restrictions on ILEC access pricing as a quid pro quo for
attaining some procompetitive benchmark.
Under Phase 1, the removal of barriers to competitive entry (defined by the
Commission as implementation of the interconnection and network unbundling requirements of
the 1996 Act) would allow ILECs to engage in geographic rate deaveraging, eliminate Price Cap
restrictions on rate reductions, and deregulate new services. The approach is premised on the
assumption that the availability of unbundled network elements will exert downward pressure on
access rates. In seeking comment on this proposal, however, the Commission expressly seeks
input on whether this assumption is reasonable:
Will the availability of unbundled network elements at
forward-looking economic costs drive LECs' access
charges to efficient levels and structures? Or will it only
tend to constrain the overall level of charges, and give
incumbent LECs incentives to choose inefficiently high or
inefficiently structured access charges, thus disadvantaging
IXCs that are not effectively integrated into local service,
and thus driving the market, possibly inefficiently, towards
one-stop shopping?(18)
Phase 2 would be triggered by an actual competitive presence in the marketplace, or
possibly if an ILEC has made its facilities and services available in a reasonable and
nondiscriminatory manner despite the absence of actual competition. The quid pro quo for
reaching this benchmark would be the elimination of most Price Cap constraints on access
services.(19) In seeking comment on Phase 2 regulatory changes, the Commission states that a
demonstration of actual competition may be necessary before ILECs can obtain this additional
pricing flexibility because:
incumbent LECs may have an incentive to set per-minute
access charges to raise the cost for interexchange resellers,
who may have difficulty vertically integrating. This pricing
would raise the marginal costs of those IXCs, distorting
competition and raising prices and the profits of a LEC or
its interexchange affiliate.(20)
In addition, the Commission expressly seeks comment on whether it should retain different, and
more stringent, regulations on ILEC terminating access rates.(21) In seeking comment on these
issues, the Commission tacitly acknowledges that market forces may not be adequate to ensure
reasonable access rates for IXCs that do not provide local services, and for all carriers that
purchase terminating access.
The Commission also posits that market forces alone may not be adequate to drive
originating or terminating access charges to economic cost, and seeks comment on a prescriptive
approach to reforming access charges.(22) In seeking comment on a prescriptive approach, the
Commission tentatively concludes that, to support a competitive environment for both local and
interexchange services, access charges should reflect total service long-run incremental cost
("TSLRIC") levels. It also concludes that the goal of TSLRIC access rates will require
reductions in most, if not all, access rate elements.(23) The Commission therefore seeks comment
on the magnitude of such rate reductions and the means by which they should be implemented.
As CompTel discusses in this Section, market forces alone will not drive access rates to
cost-based levels; indeed, even the advent of competition for local services will not exert
sufficient market discipline on access rates to warrant a market-based approach to access reform.
As a result, the Commission must adopt a prescriptive approach, and must prescribe TSLRIC-based rates for access elements.
B. Access Rates Will Not Move To TSLRIC Absent A Prescriptive
Approach To Access Reform
(Response to § VI: Prescriptive Approach to Access Reform)
In considering whether market forces will exert downward pressure on access
charges, it is necessary to consider terminating access, originating access and transport separately
-- each category of service is subject to different market forces. For example, terminating access
is not now subject to competitive pressures, nor will it be in the future, even after local
competition has begun to evolve. This is so because, in the vast majority of cases, the carrier
providing terminating access is not chosen by the party paying for the call. Currently, in most
cases, the calling party chooses its interexchange service provider, and so the interexchange
carrier has the incentive to offer attractive prices to the caller -- but this relationship does not
provide any incentive for the carrier providing terminating access to lower its charges to the
interexchange service provider. Similarly, when competition for local services develops, the local
exchange carrier -- whether an incumbent or new entrant -- will have an incentive to lower the
total charges for its service to the caller, but this incentive will fail to place any downward
pressure on the rates that these local exchange carriers will charge stand-alone IXCs for access.
Simply put, the carrier providing terminating access typically has no direct connection to the party
paying for the service it provides, and so has no incentive to reduce its charges to that party.(24)
Because terminating access is thus insulated from competitive pressures, prescriptive regulatory
action is absolutely essential to drive terminating access charges to cost-based levels.
For originating access, the dynamic is different, but it is still unclear whether market forces
will be adequate to bring rates to cost-based levels. If the Commission exercises sufficient
regulatory oversight to ensure that network elements are offered in the proper manner, at some
time in the future originating callers will have a choice of competing local service providers.
Their choices will include vertically-integrated carriers that provide local service through the use
of unbundled ILEC network elements. When customers have that choice, local carriers will have
the incentive to lower total charges for their services to their end users. The market forces that
will exert downward pressure on charges to the originating end user, however, may not translate
into downward pressure on the access charges that carriers providing stand-alone interexchange
service must pay to the local service provider. Indeed, it is likely that, as long as the local loop
and switch remain a bottleneck facility, any carrier that controls those facilities -- whether an
ILEC, a facilities-based local service provider, or an unbundled network element-based provider
of integrated interexchange and local services -- will retain the incentive to keep its access charges
as high as possible to maximize the revenues it can collect from non-integrated carriers that must
purchase access services from it.
Finally, switched transport evinces yet another dynamic.(25) Interoffice transport is not
intrinsically tied to either originating or terminating loops, and therefore is not affected by the
same market forces that impact originating or terminating access charges. Indeed, in a number of
geographic markets, competitive carriers today provide high-capacity dedicated interoffice
transport, and so provide at least some downward pressure on direct-trunked transport rates. At
present, however, no carrier provides competitive tandem switching or tandem-switched
transport, and effective competition is not likely to develop in this market segment in the
foreseeable future. As a result, rates for tandem switching and tandem-switched transport will not
be brought down to cost-based levels absent prescriptive regulatory action.
The differing market dynamics discussed above call for different regulatory approaches to
reforming rates for terminating access, originating access, and transport. In each case, however,
it is clear that market forces alone are inadequate to ensure reasonable rates -- even for the
minority of switched access rate elements that may be subject to some competition. It is therefore
necessary for the Commission to adopt a prescriptive approach to bringing access charges to cost-based levels. In the following Section, CompTel discusses necessary changes that must be
prescribed for various access rate levels. CompTel recommends that the Commission adopt a
two-step approach. As the first step, the Commission immediately should prescribe TSLRIC-based rates for terminating access and for the transport elements that are not subject to
competitive pressures. As the second step, the Commission should monitor movement in
originating access rates, and should take further prescriptive action unless shown that market
forces are exerting sufficient downward pressure on those rates.
IV. PROPOSED RATE LEVEL MODIFICATIONS
(Response to § VI: Prescriptive Approach to Access Reform)
A. Overview
The Commission has long recognized that economic theory and public policy
considerations require that service prices be set at cost-based levels whenever possible.(26) When
the Commission implemented the local competition provisions of the Telecommunications Act of
1996 in its Competition Order, it concluded that, in order to promote efficiency and send the
correct signals to the market, ILEC rates for interconnection and unbundled network elements
must be set at "forward-looking long-run economic cost."(27) Consistent with if not compelled by
that interpretation of the 1996 Act, the Commission in the instant NPRM reached the tentative
conclusion that "our goal for prescriptive access reform should focus on interstate access rates
based on some form of a TSLRIC pricing method."(28) CompTel agrees that it is critical to adopt a
TSLRIC standard in order to foster competition and to promote efficiency in network design and
service development, and strongly supports the use of TSLRIC as the appropriate standard for
setting prescribed rates for access services.
CompTel recognizes, however, that the magnitude of non-cost amounts embedded
in existing switched access revenues is enormous, and that a "flash cut" of access rates to
TSLRIC may be considered infeasible. It is therefore necessary to establish priorities and
concentrate initially upon prescribing TSLRIC-based rates for those access charges that are least
subject to market discipline. This conclusion is consistent with the approach taken by the
Commission in its Competition Order: in that Order, the Commission adopted a "reverse-Ramsey
pricing" method for allocating ILEC common costs among local services. Specifically, the
Commission concluded that a reasonable method of allocating ILEC common costs:
would allocate only a relatively small share of common
costs to certain critical network elements, such as the local
loop and collocation, that are most difficult for entrants to
replicate promptly (i.e., bottleneck facilities). Allocation of
common costs on this basis ensures that the prices of
network elements that are least likely to be subject to
competition are not artificially inflated by a large allocation
of common costs."(29)
CompTel's proposal would apply precisely the same logic to the process of bringing access
charges to economic cost. By immediately prescribing TSLRIC rates for those access elements
that are the least subject to competitive market forces, while maintaining access rate elements that
may be subject to competitive pressure at current levels for the present, the Commission would
establish a prescriptive pricing methodology that takes a major step toward establishing cost-based access rates while minimizing the ILECs' ability to disadvantage entrants by imposing
uneconomic costs on them.
CompTel cautions the Commission that, above all, it must not establish a TIC-like
"slush fund" that fails to distinguish between ILEC TSLRIC, embedded costs, and recovery of
historic earnings levels. Permitting ILECs to charge rates that include such vague and
unquantifiable amounts have caused the pricing distortions and cross-subsidies that have plagued
ILEC access charges since their inception. The Commission must seize this opportunity to
exorcise such non-cost amounts from access charges. Failure to do so would be catastrophic. It
would send the wrong economic signals to the market, would inhibit efficient network design by
both ILECs and competitive carriers, and would allow ILECs to shift costs among classes of
customers to anticompetitive effect.
B. Terminating Access Charges: Carrier Common Line, Local
Switching and Transport Interconnection Charge
The Carrier Common Line ("CCL"), Local Switching and Transport
Interconnection Charge ("TIC") rates on the terminating side of a call should be prioritized as the
first switched access rate elements to be brought to TSLRIC levels, and the Commission should
prescribe TSLRIC rates for these services immediately. Three considerations compel this
approach.
First, as discussed in Section III above, the terminating CCL, local switching and
TIC are not subject to competitive pressures, and will not become subject to competitive
pressures even after competitive carriers enter the local market using unbundled ILEC network
elements. The provider of terminating access -- whether the ILEC or a competitor -- has no
direct relationship with the party that pays for the call. Rather, the calling party chooses its long
distance carrier, but that relationship does not provide any incentive for the terminating access
provider to lower its charges to the originating long distance carriers. Given that there is no
incentive for reductions in these access charges, a prescriptive approach is necessary to bring
these rates to TSLRIC-based levels.
Second, as a general matter, access charges must reflect the functions that are
being provided by the ILEC, and services that provide identical functions must be priced
identically. This outcome is not only necessary to prevent unreasonable discrimination among
purchasers of ILEC access services, it is entailed by TSLRIC because the same function has the
same costs. Specifically, ILEC services that provide identical functions must be priced at identical
TSLRIC rates, regardless of the label of the traffic (i.e., local or toll). Absent such pricing,
competitive carriers would not be able to design their networks and develop their services
efficiently in response to market signals. Rather, they would be compelled to mirror the ILECs'
network designs and to define their local calling areas identically to the ILECs, even if such
decisions would otherwise be inefficient or inconsistent with customers' preferences.
Third, as incumbent local service providers, the ILECs will continue to be the local
service provider for the vast majority of customers, thereby ensuring their domination of the
market for terminating access for the foreseeable future. Eliminating non-TSLRIC distortions in
terminating access charges will lessen the advantages that ILECs derive by virtue of their
incumbency, and will lessen barriers to competitive entry.
In these comments, CompTel recommends specific changes to the terminating
CCL, Local Switching, and TIC rates. In the Competition Order, the Commission has found that
there are no incremental costs associated with terminating loops.(30) Because the TSLRIC of the
terminating CCL is zero, the Commission should eliminate the terminating CCL as a rate
element.(31)
Regarding Local Switching, the Commission must ensure that the terminating Local
Switching rates are set at the same levels that are established for the termination of local traffic
pursuant to Section 251(b)(5) of the 1996 Act. This outcome is compelled by several
considerations. The first can be summarized as "a minute is a minute" -- that is, the function
performed, and the costs incurred, in switching a minute of traffic in the ILEC end office is the
same whether the traffic is local or toll. The Local Switching function in the access regime is
therefore identical to the switching component of the unbundled Termination function identified
by the Commission for purposes of interconnection under Section 251(b)(5) of the 1996 Act.(32)
Indeed, the Commission anticipated this conclusion in its Competition Order, where it stated that:
"[u]ltimately, we believe that the rates that local carriers impose for the transport and termination
of local traffic and for the transport and termination of long distance traffic should converge."(33)
Because the Local Switching and Termination rate elements reflect the same functions, they have
the same TSLRIC and must be priced identically. The Commission should therefore require
ILECs to set their rates for Local Switching at the same level that state regulatory commissions
establish for the termination of local traffic.(34)
The terminating TIC should be set at zero. By definition, the TIC is not associated with a
discrete exchange access function. Under a TSLRIC regime, the ILECs will recover all TSLRIC
costs through other access rate elements and the terminating TIC must be reduced to zero.(35)
C. Interoffice Transport
As discussed in Section III, above, Tandem Switching and Tandem-Switched Transport
are not intrinsically tied to the originating or terminating loop, and so there is no reason to
differentiate between originating and terminating access charges for these functions. Because
competitive carriers must today purchase these functions from ILECs and have no realistic
alternatives for these functions, the Commission must immediately prescribe TSLRIC-based rates
for these access rate elements. The Commission has already required TELRIC-based rates for
tandem switching and tandem-switched transport in the Competition Order, and it should require
ILECs to use those rates when providing tandem switching and tandem-switched transport as
switched access services.
Because there is some competition today for dedicated transport, Direct-Trunked
Transport should be accorded the same treatment as the originating access services discussed in
subsection D below. While it is important that all access elements be brought to TSLRIC-based
levels, CompTel recognizes that it is necessary to prioritize among the services for which
TSLRIC-based rates will be prescribed immediately. The Commission should therefore monitor
movements in Direct-Trunked Transport rates and should reserve the right to take prescriptive
action in the future if market forces are not adequate to drive these rates to cost-based levels.
D. Originating Access Charges: Carrier Common Line, Local
Switching and Transport Interconnection Charge
As noted in Section IV(A), the Commission may consider the magnitude of non-incremental cost amounts embedded in current ILEC access rates to make it infeasible from a
practical standpoint to reduce all access charges to TSLRIC-based levels in the near term. For
that reason, CompTel agrees that the Commission may wish to retain for now the current rate
levels for access rate elements that may be subject to downward pressure as local service
competition begins to develop. These rate elements include the originating CCL, Local Switching
and TIC charges. As CompTel discusses in Section III above, originating access charges may
become subject to some competitive pressure in the future. While this is by no means a
guaranteed outcome -- it is possible that competitive providers of originating access will have the
same incentives to maintain inflated rates as ILECs -- the Commission and the industry can
monitor the development of competition for these functions, and any related rate changes, and can
decide that prescriptive action is not warranted if competition brings reductions in originating
access rates.
E. Volume and Term Discounts
The NPRM seeks comment on the expansion of the ILECs' ability to establish
volume and term-discounted rates for access services.(36) CompTel is concerned that without
adequate safeguards, ILECs could use volume and term discounts to provide unreasonably
discriminatory preferential treatment to themselves or large carriers at the expense of smaller
carriers. Indeed, the Commission has acknowledged its concern that ILECs could use volume and
term discounts to anticompetitive effect if they were accorded this level of pricing flexibility
prematurely.(37) As with other access charges, volume and term discounts should not be established
unless the ILEC demonstrates that the discount levels reflect TSLRIC costs. Moreover, the
Commission must ensure that ILECs do not discriminate in the application of these discounts.
In addition, ILECs that establish term discounts for long-term access service contracts
must clarify that competitive carriers will be able to resell such services without penalty. Under
many ILEC tariffs, premature termination of long term contracts can result in significant
termination liability penalties -- frequently payment of 90% or 100% of the entire contract price
regardless of when service is terminated. Recently, questions have arisen as to whether these
termination liability charges apply when a competitive carrier providing local service via service
resale under Section 251(c)(4) of the Act wishes to convert an existing ILEC customer with a
long-term contract to its customer. Some ILECs have taken the position that a customer that
wishes to switch from an ILEC long term contract to ILEC service resold by a competitive carrier
is terminating its long term contract, which triggers the termination liability penalty. If an ILEC is
able to apply termination liability charges in such instances, it will, of course, effectively preclude
customers from switching to resellers, and will construct an absolute barrier to that form of
competition. The Commission should therefore clarify that, to the extent that ILECs are accorded
expanded ability to establish term discounts, their term discounted arrangements are fully subject
to the resale requirements of the 1996 Act.
V. PROPOSED RATE STRUCTURE MODIFICATIONS
(Response to § III: Rate Structure Modifications)
A. Transport (Response to § III(D))
The Commission does not reach any tentative conclusions regarding changes to the
existing rate structure for switched transport, but seeks comments on several proposals: (1)
retain the current interim structure, which offers carriers a choice of a single usage-based rate for
transport and switching between a serving wire center ("SWC") and end office ("EO") (the
"unitary" rate option), or a combination of a flat-rated charge for the tandem-SWC transport and
a usage charge for the tandem-EO link (the "partitioned" rate option); (2) eliminate the current
unitary rate option, and require all carriers to purchase the SWC-tandem circuit on a flat-rated
basis; (3) establish a peak/off-peak rating system for interoffice transport.(38) As CompTel
discusses below, retention of the existing transport rate structure -- which allows carriers the
choice between a unitary or partitioned rate structure -- is compelled by the 1996 Act, the
Commission's TSLRIC pricing rules, and by economic and policy considerations. CompTel also
shows that peak/off-peak pricing is impracticable, and should not be adopted.
In addressing the issue of access charge rate structure in general, the Commission
correctly voices its preference for rate structures that recover costs in the way costs are incurred.(39)
In deciding on the permanent structure for interoffice transport, however, the Commission must
not be driven by obsolete concepts of "common" and "dedicated" facilities. In a copper network
environment, such terms may have been relevant at one time -- discrete coaxial or twisted pair
cables often were dedicated to the exclusive use of a single customer. The interoffice network
now, however, is virtually entirely fiber and all digital, and the way such facilities are used greatly
increases the shared nature of the physical interoffice network.
In the digital fiber network, the description of a circuit as "dedicated" or
"common" has nothing to do with the routing of a particular transmission; rather, all interoffice
transport facilities are shared. Instead, dedicated and common circuits are distinguished by the
way the information is loaded onto the transmission facilities. Data or voice transmissions are
broken down into bits of information that are loaded onto different channels on the transmission
facility on a cyclical basis. When a dedicated circuit is multiplexed onto an interoffice
transmission facility -- whether at a SWC, EO or tandem -- the information transmitted is given a
consistent time assignment on a given channel; in contrast, a non-dedicated or common
transmission may be multiplexed and transmitted over precisely the same facilities, but it shares
time assignments with other transmissions carried over the same facility.(40) Indeed, the
Commission has already recognized that routing of dedicated and common circuits may be
interchangeable, stating in CC Docket No. 91-213 that "the physical routing of direct-trunked
[dedicated] transport may parallel the routing of tandem-switched [common] transport, passing
through the tandem office, or may pass through some other intermediate LEC office."(41)
Because dedicated and common circuits may in fact use identical routing paths, it
would be patently unreasonable to eliminate the unitary rate option. If this option were
eliminated, carriers that purchased tandem-switched traffic would be forced to pay separate
transport rate elements based on the mileage from the SWC to the tandem and from the tandem to
the EO, and would be denied the ability to pay a single rate based on the mileage from the SWC
to EO. In contrast, carriers that purchased direct-trunked circuits would be able to pay a rate
based on the mileage between the SWC and the EO, even if their circuit was not in fact routed
directly between those two points. Such a rate structure would be inherently discriminatory, in
contravention of Section 202(a) of the Communications Act. To cure this unreasonably
discriminatory outcome, the Commission would have to restructure direct-trunked transport rates
so that they reflect the physical routing of the dedicated circuits. Such a rate structure would, of
course, be difficult if not impossible to administer, and so is not a preferred outcome. The need
for such action can be obviated, however, simply by retaining the unitary rate structure for tandem
switched transport that currently is in place.
The avoidance of discrimination between the rate structures for direct-trunked and
tandem-switched transport is critical because such discrimination is tantamount to discrimination
between classes of customers. As the U.S. Court of Appeals for the D. C. Circuit has
recognized,(42) large carriers are the predominant users of direct-trunked transport, while smaller
carriers typically purchase tandem-switched transport. Establishment of discriminatory transport
rate structures would effectively permit ILECs to favor one class of transport users over another.
The routing of both direct-trunked and tandem-switched circuits is determined by the ILEC's
network design, including the number and location of its tandem offices, the placement of its wire
centers and the capacity of the transport facilities deployed among these locations. Thus, the
routing of any dedicated or common transmission over an ILEC's interoffice network -- and the
costs associated with such routing -- are determined by the ILEC's network engineering decisions
and are wholly outside the control of the carrier purchasing transport. Indeed, CompTel has
shown in other Commission proceedings that the network design decisions made by LECs are
inefficient from the perspective of entrants and small users, and impose unnecessary costs on the
purchasers of tandem-switched transport.(43)
Elimination of the unitary rate structure would result in a rate structure that
imposes excessive costs upon smaller carriers. In an environment in which ILECs have increasing
incentives to discriminate against new entrants, the discrimination that would result from the
elimination of the unitary transport rate structure would be profoundly anticompetitive. Further,
the existing structure permits both large and small carriers the option to purchase transport based
on mileage measured from the SWC to the EO. As such, it eliminates any discrimination in favor
of large carriers and precludes ILECs from favoring themselves. It also avoids inaccurate
assumptions regarding the routing patterns of interoffice traffic. The existing structure is
therefore consistent with the Communications Act and economic theory, and promotes the
Commission's procompetitive policy goals. The unitary rate structure has worked well for over
four years, and must be retained.
Finally, the Commission should not consider peak/off-peak pricing alternatives for
switched transport. First, application of this pricing structure to access services would not
produce the efficient pricing signals that proponents of peak/off-peak pricing anticipate.
Currently, less than 15 percent of RBOC interstate traffic is access -- the vast majority of traffic is
local. If only access charges are reformed to reflect peak/off-peak pricing structures, such change
will leave approximately 90% of ILEC traffic unaffected. Even if the adoption of peak/off-peak
rate structures would eliminate uneconomic distortions in ILEC network design and pricing
practices, any such changes that are limited to access services would have a de minimis impact on
usage patterns and ILEC network design decisions.
Second, it is impossible to define peak and off-peak traffic with any degree of
certainty or consistency. Peak traffic hours may change with time zone (business customers in
New York may experience a surge at 12:00 Eastern time, when offices in California open for
business, while California offices may experience a surge at 2:00 Pacific Time, just before New
York offices close); rate zone (rural service tends to peak earlier than urban service); service type
(residential and Internet traffic begin to peak at 5:00-6:00 p.m., when business traffic starts to
decline); and by class of customer (hotels, hospitals, and payphones all have peak calling times
that differ from typical business or residential users). It would be impossible to establish verifiably
reasonable rates in the face of these variables. Moreover, even if appropriate rates and rate
structures could be devised, the billing systems that would be required for such rate structures
would be prohibitively expensive and complex. In its Competition Order, the Commission
recognized that these variables complicated any peak/off-peak billing structure considerably, and
concluded that "there may be administrative difficulties in establishing peak-load pricing schemes
that may outweigh the benefits of such schemes."(44)
For the reasons discussed above, the Commission must retain as a permanent rate
structure for switched transport the unitary rate structure that is currently in place.
B. Common Line
(Response to §§ III(B) & V)
CompTel supports the Joint Board's recommendation(45) that the CCL be converted
to a flat-rated charge, and recovered on a per-line basis from presubscribed carriers. This
structural change is consistent with the Commission's finding in the Competition Order that loop
costs should be recovered on a flat-rated basis, and that it would be inefficient to do otherwise.(46)
Finally, by restating the CCL as a flat rated, per-line element, the Commission would establish a
CCL that is similar in structure to the flat-rated charges for unbundled loops established under
Section 251(c)(3) of the 1996 Act. Such action would further the Commission's stated goal of
bringing rates for similar functions into alignment.(47)
CompTel opposes the application of multiple Subscriber Line Charges ("SLCs") to
derived channels for several reasons. First, the application of multiple SLCs would not reflect the
way costs of derived channels are incurred. When multiple channels are derived from a single
loop, the incremental cost reflects the installation of a multiplexer or other piece of aggregating
equipment at some point along the loop. Yet the application of multiple SLCs would, in effect,
assume that multiple loops are being provided. This application of the SLC would grossly
overstate the actual incremental costs of providing derived channels, and would overcompensate
the ILECs.
Second, the installation of equipment to provide derived channels may actually
reduce the ILECs' loop costs. By placing points of aggregation along the loop (whether
multiplexers or digital loop carriers) the ILEC is able to aggregate traffic from multiple loops and
transport it to the end office via a high capacity feeder cable. Because this form of aggregating
replaces multiple individual cables running from the customers' premises to the end office, it
provides the ILEC with considerable cost savings. In such a case, the SLC charge likely should
be reduced, not multiplied.
Finally, multiple SLCs for derived channels could easily be avoided by installing
the multiplexer on the customer's premises as customer premises equipment, instead of on the
loop as part of the ILEC's outside plant. Such a result could establish an artificial incentive for
ILECs to emphasize CPE over network solutions, and so could unintentionally promote inefficient
network design.
For all these reasons, the Commission should restructure the SLC as a flat-rated element
and should refrain from applying the SLC to derived channels.
C. Local Switching
(Response to §§ III(C) & V)
CompTel supports a bifurcated approach to restructuring Local Switching charges.
As CompTel notes in Section IV(B) above, rates for terminating Local Switching must be
prescribed at TSLRIC levels immediately. In setting these terminating rates at TSLRIC, it is
appropriate to maintain the charge solely as a usage-based element. CompTel agrees with
commentors who argue that non-traffic sensitive costs are involved in the Local Switching
function, however, those costs are not included in a TSLRIC analysis of usage.
CompTel supports the establishment of both flat-rated and usage-based charges for
originating Local Switching. As discussed in Section IV(D) above, CompTel would accept the
continued pricing of originating Local Switching at existing rate levels for some time. Because
these existing rate levels are by definition set at above-TSLRIC levels, departing from a TSLRIC
standard for these rates is acceptable. In establishing a flat-rated element for originating Local
Switching, CompTel supports the recovery of line card costs through a flat rate applied per
presubscribed line. Even though such a pricing model is not cost-based, it approximates the way
costs are incurred in that the ILEC adds line cards as the carrier adds presubscribed lines.
The Commission has requested comment on the desirability of establishing a
separate charge for call setup.(48) CompTel urges the Commission not to adopt such charges at this
time. To the best of CompTel's knowledge, no state regulatory body has established separate call
setup charges when establishing local switching network element rates. Because, at present, there
are simply no grounds on which to base a call setup charge, CompTel opposes such action.
CompTel does not support the establishment of a peak/off-peak pricing structure
for Local Switching. As CompTel discusses in Section V(A), above, applying such a rate
structure change to access charges, but not on local service rates, would have a de minimis impact
on service usage patterns or ILEC network design decisions, and so would not convey the
benefits suggested by proponents. In addition, the definition of peak and off-peak periods varies
markedly with time zone, rate zone, time of day and class of service, and this number of variables
make a peak/off-peak rate structure impracticable.
D. SS7 Signaling
(Response to §§ III(7) & V)
CompTel urges the Commission to make no change in the SS7 Signaling rate
structure at this time. The disaggregated rate structure proposed by Ameritech may be
appropriate to adopt in the future, but should not be mandated at this time. Under Ameritech's
proposed structure, any carrier that does not use the Carrier Access Billing System -- and smaller
carriers typically do not -- would have to perform direct metering of transaction capabilities
application part ("TCAP"), which is used to communicate between service switching points and
signal control points. This requirement would place a significant financial and operational burden
on smaller carriers at a time when they must adjust to myriad other changes in the way access
charges are assessed and collected. The time is therefore not ripe for this additional change.
VI. OTHER ISSUES NOT SPECIFICALLY ADDRESSED IN THE NPRM
A. Nonrecurring charges
CompTel urges the Commission to make clear that nonrecurring charges
("NRCs") for the design, installation or change in point of termination for an access service must
be set at TSLRIC. The same policy and economic considerations that compel recurring TSLRIC-based rates for recurring charges are applicable to NRCs. Moreover, as the market for local
services becomes competitive, ILEC NRCs for circuit "rollovers" (i.e., the charge that a customer
pays for shifting a circuit from an ILEC to a competitive carrier) can constitute a significant
barrier to entry if ILECs are permitted to set such rates at non-cost levels.
To date, some CompTel members have been subject to unreasonable NRCs when
attempting to rollover circuits to their facilities. Some ILECs have attempted to impose upon
rollover customers the same NRCs that they charge for the installation of a new circuit. Such
charges are inappropriate because rollovers do not require an ILEC technician to travel to the
customer premises, as a new installation does, and because significantly less labor is involved in
completing rollovers. Similarly, most ILECs do not differentiate between installations or rollovers
that are accomplished electronically, as opposed to manually. With the increasing deployment of
digital cross-connect systems and SONET networks, the rerouting of circuits has become much
less labor intensive. While rollovers and new installations formerly required a technician to
manually disconnect and reconnect circuits, the new technologies often allow ILECs to reroute
circuits by making a few entries on a computer terminal at a centralized point in the network.
When such routing is performed, it clearly is inappropriate to impose a charge based on technician
travel time and labor hours. The Commission should therefore instruct ILECs to establish for all
access rate elements separate, cost-justified rates for installation of new circuits, rollovers of
existing circuits, and circuit rerouting that is performed electronically as opposed to manually.
VII. CONCLUSION
CompTel respectfully requests that the Commission adopt revisions to ILEC
access rate structures and rate levels consistent with the discussion contained herein.
Respectfully submitted,
THE COMPETITIVE TELECOMMUNICATIONS
ASSOCIATION
By: _______________________
Genevieve Morelli Robert J. Aamoth
Executive Vice President Jonathan E. Canis
and General Counsel Reed Smith Shaw & McClay
Competitive Telecommunications 1301 K Street, N.W.
Association Suite 1100 - East Tower
1900 M Street, N.W., Suite 800 Washington, D.C. 20005
Washington, D.C. 20036 (202) 414-9210
(202) 296-6650
January 29, 1997 Its Attorneys
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