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SUMMARY OF SBC/AMERITECH CONDITIONS

I. PROMOTING ADVANCED SERVICES

1. Separate Affiliate for Advanced Services
   • SBC and Ameritech will create, prior to closing the merger, one or more separate affiliates to provide all advanced services in the combined SBC/Ameritech region.

   • These separate affiliates will use the same processes as competitors and pay an equivalent price for facilities and services.

   • The separate affiliates will be subject to a comprehensive annual audit.

2. Surrogate Line Sharing Discount
   • SBC/Ameritech will provide data CLECs the economic equivalent of "line sharing" by providing them a second loop at a 50% discount for purposes of providing advances services to consumers.

   • This condition will ensure a comparable playing field between the advanced services separate affiliate and its competitors.

3. Advanced Services Operations Support Systems (OSS)
   • SBC/Ameritech will establish common electronic interfaces to be used by CLECs and its advanced services separate affiliate.

   • Until the separate affiliate uses these enhanced interfaces to order 75% of its loops, CLECs will receive a 25% discount off of all loops used for advanced services.

   • This condition will lower competitors' costs of providing advanced services.

4. Access to Loop Information for Advanced Services
   • The separate affiliate will use the same means as CLECs to access the same loop information made available to CLECs.

   • SBC/Ameritech will provide CLECs with access to loop make-up information including actual length, gauge, presence and location of bridge taps, load coils, repeaters.

   • This condition will promote the rapid deployment of advanced services by ensuring that carriers have access to the information they need to market and sell their advanced services offerings.

5. Loop Conditioning Charges and Cost Studies
   • SBC/Ameritech will file cost studies that comply with the Commission's UNE pricing methodology for conditioning loops.

   • Pending approval of state-specific rates, SBC/Ameritech will make available to CLECs loop conditioning rates (provided they are greater than zero) contained in any effective interconnection agreement to which SBC/Ameritech is a party.

   • Also in the interim, SBC/Ameritech will not impose loop conditioning charges on loops less than 12,000 feet.

   • This condition will ensure that SBC/Ameritech will not erect a barrier to the competitive deployment of advanced services by charging excessive rates for loop conditioning.

6. Nondiscriminatory Rollout of xDSL Services
   • This condition provides that at least 10% of all rural/urban wire centers where the separate affiliate provides xDSL service will be low-income rural/urban wire centers.

   • SBC/Ameritech will file a quarterly report with the Commission describing the status of its xDSL rollout.

   • This condition will ensure that advanced services are available to some of the least competitive market segments and to low-income consumers.

II. OPENING LOCAL MARKETS TO COMPETITION

7. Carrier-to-Carrier Performance Plan
   • SBC/Ameritech will publicly file performance measurement data, reflecting 20 different categories, for each of its 13 in-region states with the Commission and relevant state commissions on a monthly basis. These data reflect how the firm responds to its rivals' and customers' requests for information and interconnection.

   • SBC/Ameritech will meet its performance goals or make voluntary incentive payments to the U.S. Treasury of up to $1.125 billion dollars over three years.

   • This condition will ensure that SBC/Ameritech's service to competitors will not deteriorate as a result of the merger.

8. Uniform and Enhanced OSS
   • SBC/Ameritech will develop and deploy, with CLEC input, uniform application-to-application interfaces, graphical user interfaces, business rules, and change management processes.

   • SBC/Ameritech will make voluntary incentive payments of up to $20 million if deployment targets are not met.

   • If SBC/Ameritech completes the OSS enhancements prior to its deployment target dates, its potential liability under the Carrier-to Carrier Performance Plan may be reduced by up to $125 million.

   • This condition will reduce the costs of providing competing telecommunications services.

9. Restructuring OSS Charges
   • SBC/Ameritech will restructure OSS charges to eliminate any flat rate, up-front charge for the right to use the company's standard electronic interfaces for accessing OSS.

   • This condition will assist smaller competitors and new entrants by requiring the merged firm to recover electronic OSS costs on a strict usage basis rather that through a monthly fee.

10. OSS Assistance to Qualifying CLECs
    • SBC/Ameritech will provide free training and OSS expert teams for CLECs whose annual revenues are under $300 million.

    • This condition will assist smaller competitors by allowing them to enter new markets faster and more efficiently.

11. Collocation Compliance
    • Before the merger closing, an independent auditor, approved by the Chief of the Common Carrier Bureau will conduct a review to determine whether the companies have in place methods and procedures that comply with the Commission's collocation rules.

    • After merger closing, an independent auditor will develop and implement a comprehensive audit of the merged company's compliance with the Commission's collocation rules.

    • SBC/Ameritech will waive the nonrecurring charges for collocation projects if a collocation due date is missed by more than 60 days.

    • This condition will ensure that SBC/Ameritech provides collocation in a lawful and timely manner.

12. Most-Favored Nation Provisions
    • SBC/Ameritech will offer telecommunications carriers within its region any new arrangement or unbundled network element (UNE) secured by SBC/Ameritech outside of its region.

    • Any interconnection arrangement or UNE negotiated by SBC/Ameritech or its affiliates in one SBC/Ameritech state will be made available in all other states throughout its region.

    • This condition will facilitate market entry throughout the SBC/Ameritech region by spreading best practices.

13. Multi-State Interconnection and Resale Agreements
    • SBC/Ameritech will offer telecommunications carriers an interconnection and/or resale agreement covering multiple SBC and/or Ameritech states.

    • This condition will prevent unnecessary negotiation costs and delays from being imposed on competitors.

14. - 16. Carrier-to-Carrier Promotions
    • Subject to state-specific quantity limits, SBC/Ameritech will offer three promotions to telecommunications carriers serving residential customers:
      • Loop Discount - 25% discount off of the lowest monthly recurring charges for unbundled local loops
      • Resale Discount - 32% discount off of retail rates
      • UNE-Platform - end-to-end combinations of network elements

    • These conditions will encourage rapid development of local competition in residential markets.

17. Offering of Unbundled Network Elements (UNEs)
    • SBC/Ameritech will make UNEs available until the Commission's new UNE rules are completely final and non-appealable.

    • This condition will reduce uncertainty for competitors arising from litigation over the Commission's rules.

18. Alternative Dispute Resolution through Mediation
    • SBC/Ameritech will offer interested telecommunications carriers a state-supervised mediation dispute resolution process for resolving interconnection agreement disputes.

    • This condition will streamline and expedite the resolution of carrier-to-carrier disputes.

19. Shared Transport in Ameritech States
    • No later than merger-closing date, Ameritech will file tariffs to provide shared transport to telecommunications carriers.

    • This condition will reduce uncertainty for competitors arising from litigation over the Commission's rules.

20. Access to Cabling in Multi-Unit Properties
    • SBC/Ameritech will conduct a trial in five cities that will provide telecommunications carriers access to a single point of interconnection to cable owned or controlled by SBC/Ameritech in multi-tenant residential and business properties.

    • SBC/Ameritech will design and install new cabling owned or controlled by SBC/Ameritech so that it can be accessed at single point of interconnection at a minimum point of entry.

    • This condition will provide additional competition in the provision of local service to multi-unit properties.

III. FOSTERING OUT-OF-REGION COMPETITION

21. Out-of-Territory Competitive Entry (National-Local Strategy)
    • Within 30 months from the merger closing, SBC/Ameritech will enter at least 30 major markets outside of its region as a facilities-based competitive provider of local services to business and residential customers.

    • SBC/Ameritech is liable for voluntary incentive payments of nearly $1.2 billion dollars if it misses the entry requirements in all 30 markets.

    • This condition will ensure that residential consumers and business customers outside of SBC/Ameritech's region benefit from increased facilities-based local competition.

IV. IMPROVING RESIDENTIAL SERVICE

22. Pricing of Long Distance Service
    • SBC/Ameritech will not charge residential consumers a minimum monthly flat charge for long distance service.

    • This condition will benefit low-income consumers and low-volume long distance callers.

23. Enhanced Lifeline Plans
    • SBC/Ameritech will offer a low-income Lifeline universal service plan to low-income residential subscribers in each of its states.

    • This condition will ensure that benefits of the merger extend to low-income residential customers throughout SBC/Ameritech's region.

24. Additional Service Quality Reporting
    • SBC/Ameritech will report, on a quarterly basis, the quality of service that it provides its customers in accordance with the NARUC Technology Policy Subgroup's November 1998 "Service Quality White Paper."

    • SBC will develop and file reports showing the service quality provided to interexchange carriers.

    • SBC/Ameritech will continue reporting ARMIS data on an operating-company basis.

    • This condition will safeguard against potential deterioration in SBC's or Ameritech's quality of service as a result of the merger and promote affirmative service quality improvements.

25. Network Reliability and Interoperability Council (NRIC)
    • SBC/Ameritech will continue participation in the NRIC.

    • This condition will ensure that SBC/Ameritech will maintain reliable, high-quality networks and services.

V. COMPLIANCE AND ENFORCEMENT

26. Internal Compliance Program
    • Prior to merger close, SBC/Ameritech will appoint an internal corporate Compliance Officer who will prepare and publicly file with the Commission an annual report addressing the company's compliance with the merger conditions.

    • This condition will ensure that the SBC/Ameritech has internal controls in place to maintain full and timely compliance with the conditions.

27. Independent Auditor
    • SBC/Ameritech will retain an independent auditor, approved by the Commission, to provide a thorough and systematic evaluation of its compliance with the conditions and determine the sufficiency of its internal controls. The auditor will issue reports that will be publicly available.

    • This condition establishes an efficient and cost-effective mechanism for detecting potential noncompliance with the conditions.

28. Enforcement Mechanisms
    • The enforcement and compliance programs established by the conditions in no way supercede or replace the Commission's enforcement and investigative powers.

    • Commission may extend or toll the conditions for a period commensurate with any noncompliance.

29. Sunset
    • Each of the conditions will generate a full three-year period of benefit.

30. Effect of Conditions
    • These conditions are intended to be a floor, not a ceiling. They do not limit the authority or jurisdiction of state commissions to impose or enforce additional requirements stemming from a state's review of the merger. Nor do they alter or preempt any other federal statutes, such as the antitrust laws.