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" # # #A N${ $ $$X?#* "#X4pU#SWC P   SWC@@@<$$-<$$<<-<<E)0#X4pU8#Unbundled P   UnbundledJ.59#X4pU8#Incumbent LEC P  9Incumbent LEC B&-#X4pU8#Tandem P  TandemE)0 [#X4pU8#Unbundled P    UnbundledJ.5= _#X4pU8#Incumbent LEC P  = Incumbent LEC H,3 c #X4pU8#Local Switch P   Local Switch X4#o\  PCynXP# X   `(#(#  X4w  Federal Communications Commission`(#ZFCC 97295 ă   yxkdddy ЊNORMAL +` Before the w Federal Communications Commission  X'-Washington, D.C. 20554 ă  X4In the Matter of XXhhCXqX)(# XX` ` X XXhhCXqX)(#  X_4Implementation of the Local CompetitionqX)XppXCC Docket No. 9698(#  XH4Provisions in the Telecommunications ActqX)(#  X14of 1996` ` X XXhhCXqX)(# XX` ` X XXhhCXqX)(#  X 4Interconnection between Local ExchangeqX)XppXCC Docket No. 95185(#  X 4Carriers and Commercial Mobile RadioqX)(#  X 4Service Providers XXhhCXqX)(#  X4d Third Order on Reconsideration ă  Xy4J{ and  Xb' Further Notice of Proposed Rulemaking ă  X44Adopted: August 18, 1997` XhhCXqXXppXReleased: August 18, 1997(#  X4 FNPRM Comment Date: ` October 2, 1997(#  X4 FNPRM Reply Date: ` October 17, 1997(#  X4By the Commission: Chairman Hundt issuing a separate statement.(#  X4E Table of Contents ă    X\I. INTRODUCTION p>"(# 1 X\II. BACKGROUND p>"(# 4  X 4XX` ` A.` ` Local Competition Order ` p>"(# 4  X4XX` ` B.` ` Petitions ` p>"(# 7 X\III. DISCUSSION p"(# 19  X!4XX` ` A.` ` Incumbent LECs' obligation regarding shared transport ` p"(# 25  X"4XX` ` B.` ` Application of the requirements of section 251(d)(2) to shared transport ` p"(# 31  X#4XX` ` C.` ` Use of shared transport facilities to provide exchange access service ` p"(# 38  Xh$4XX` ` D.` ` Response to Specific Arguments Raised by Parties ` p"(# 40  XQ%4XX` ` E. ` ` Final Regulatory Flexibility Analysis ` p"(# 53 X\IV. FURTHER NOTICE OF PROPOSED RULEMAKING p"(# 60"#', ( (, , m%"Ԍ X4XX` ` A. ` ` Discussion ` p"(# 60  X4XX` ` B.` ` Procedural Matters ` p"(# 62 X\V. ORDERING CLAUSES p"(# 75  Xv4M: I. INTRODUCTION ă 1. In this Order, we address two petitions for reconsideration or clarification of the  X14Local Competition and Order1 {O 'ԍ Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Report and  {Ot 'Order, CC Docket No. 9698, 11 FCC Rcd 15499 (1996) (Local Competition Order), Order on Reconsideration,  {O> '11 FCC Rcd 13042 (1996), Second Order on Reconsideration, 11 FCC Rcd 19738 (1996), further recon.  {O 'pending, aff'd in part and vacated in part sub. nom. CompTel. v. FCC, 11 F.3d 1068 (8th Cir. 1997) (CompTel),  {O 'aff'd in part and vacated in part sub nom. Iowa Utilities Bd. v. FCC and consolidated cases, No. 963321 et al.,  {O'1997 WL 403401 (8th. Cir., Jul. 18, 1997) (Iowa Utilities Bd.). regarding the obligation of incumbent local exchange carriers  X 4(LECs) to provide unbundled access to interoffice transport facilities on a shared basis.C L yO'ԍ 47 C.F.R.  51.319(d).C We  X 4intend to address petitions for reconsideration of other aspects of the Local Competition Order in the future.  X 42. In the Local Competition Order, which established rules to implement sections 251  X 4and 252 of the Communications Act of 1934 (the Act),=  yO:'ԍ 47 U.S.C.  251.= as amended by the  X4Telecommunications Act of 1996,l  {O'ԍ Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996 Act), codified at 47 U.S.C.   {O}'151 et seq. the Commission required incumbent LECs "to provide unbundled access to shared transmission facilities between end offices and the tandem  Xh4switch."hh  {O'ԍ Local Competition Order, 11 FCC Rcd at 15718, para. 440.h In this reconsideration order, we first explain that the Local Competition Order required incumbent LECs to provide requesting carriers with access to the same transport facilities, between the end office switch and the tandem switch, that incumbent LECs use to carry their own traffic. We further explain that, when a requesting carrier takes unbundled local switching, it gains access to the incumbent LEC's routing table, resident in the switch.  X4Second, we reconsider the requirement that incumbent LECs only provide "shared transport"XZ  yO$'ԍ Section 51.319(d) of the Commission's rules requires that incumbent LECs provide access on an unbundled basis to interoffice transmission facilities shared by more than one customer or carrier. 47 C.F.R.  51.319(d). In this reconsideration order, we refer to such shared interoffice transmission facilities as "shared"%,[&[&%" transport.""X,[&[&, , j" between the end office and tandem. For the reasons discussed below, we conclude that incumbent LECs should be required to provide requesting carriers with access to shared transport for all transmission facilities connecting incumbent LECs' switches that is, between end office switches, between an end office switch and a tandem switch, and between tandem switches. Third, we conclude that incumbent LECs must permit requesting carriers that purchase unbundled shared transport and unbundled switching to use the same routing table and transport links that the incumbent LEC uses to route and carry its own traffic. By requiring incumbent LECs to provide requesting carriers with access to the incumbent LEC's rounting table and to all its interoffice transmission facilities on an unbundled basis, requesting carriers can route calls in the same manner that an incumbent routes its own calls and thus take advantage of the incumbent LEC's economies of scale, scope, and density. Finally, incumbent LECs must permit requesting carriers to use shared transport as an unbundled element to carry originating access traffic from, and terminating access traffic to, customers to whom the requesting carrier is also providing local exchange service. 3. We also issue a further notice of proposed rulemaking seeking comment on whether requesting carriers may use shared transport facilities in conjunction with unbundled switching, to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service. Moreover, we seek comment on whether requesting carriers may use dedicated transport facilities to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service.  X' g<II. BACKGROUND ׃  X' A.Local Competition Order  4. Sections 251(c)(3) and 251(d)(2) of the Act set forth standards for identifying unbundled network elements that incumbent LECs must make available to requesting  Xe4telecommunications carriers.ReX yOn'ԍ 47 U.S.C.  251(c)(3) and (d)(2).R Section 251(c)(3) requires incumbent LECs to provide requesting carriers with "nondiscriminatory access to network elements on an unbundled basis  X74at any technically feasible point."C7 yO!'ԍ 47 U.S.C.  251(c)(3).C Section 251(d)(2) provides that, in identifying unbundled elements, the "Commission shall consider, at a minimum, whether X(A) access to such network elements as are proprietary in nature is necessary; and "x,[&[&, , k"ԌX(B) the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services  X4that it seeks to offer."C  yOK'ԍ 47 U.S.C.  251(d)(2).C   X45. In the Local Competition Order, the Commission, pursuant to sections 251(c)(3) and 251(d)(2), identified a minimum list of seven network elements to which incumbent LECs must provide access on an unbundled basis. These network elements included local switches, tandem switches, and interoffice transmission facilities. With respect to interoffice transmission facilities, the Commission required incumbent LECs to provide requesting telecommunications carriers access to both dedicated and "shared" interoffice transmission  X 4facilities.;  X {O% 'ԍ Local Competition Order, 11 FCC Rcd at 15718, para. 440. 47 C.F.R.  51.319(d)(2) states: XThe incumbent LEC shall:  X` ` (i) provide a requesting telecommunications carrier exclusive use of interoffice transmission facilities dedicated to a particular customer or carrier, or use of the features, functions, and capabilities of interoffice transmission facilities shared by more than one customer or carrier;  X` ` (ii) provide all technically feasible transmission facilities, features, functions, and capabilities that the requesting telecommunications carrier could use to provide telecommunications services;  X` ` (iii) permit, to the extent technically feasible, a requesting telecommunications carrier to connect such interoffice facilities to equipment designated by the requesting telecommunications carrier, including, but not limited to, the requesting telecommunications carrier's collocated facilities . . . .  47 C.F.R.  51.319(d)(2).; The Commission defined "interoffice transmission facilities" as: Xincumbent LEC transmission facilities dedicated to a particular customer or carrier, or shared by more than one customer or carrier, that provide telecommunications between wire centers owned by incumbent LECs or requesting telecommunications carriers, or between switches owned by  X4incumbent LECs or requesting telecommunications carriers.F  yO'ԍ 47 C.F.R.  51.319(d)(1).F  The Commission stated that "[f]or some elements, especially the loop, the requesting carrier will purchase exclusive access to the element for a specific period, [and for] other elements, especially shared facilities such as common transport, [carriers] are essentially purchasing  X4access to a functionality of the incumbent's facilities on a minutebyminute basis."h j {O:%'ԍ Local Competition Order, 11 FCC Rcd at 15631, para. 258.h In" ,[&[&, , o" defining the network elements to which incumbent LECs must provide access on an  X4unbundled basis, the Commission adopted the statutory definition of unbundled elements as physical facilities of the network, together with the features, functions, and capabilities  X4associated with those facilities.  yO4'ԍ The Act defines the term "network element" as: Xa facility or equipment used in the provision of a telecommunications service. Such term also includes features, functions, and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems, and information sufficient for billing and collection or used in the transmission, routing, or other provision of a telecommunications service.  47 U.S.C.  3 (29). The Commission concluded that "the definition of the term network element includes physical facilities, such as a loop, switch, or other node, as well as logical features, functions, and capabilities that are provided by, for example, software located  Xv4in a physical facility such as a switch."hv {O'ԍ Local Competition Order, 11 FCC Rcd at 15632, para. 260.h The Commission found that: Xthe embedded features and functions within a network element are part of the characteristics of that element and may not be removed from it. Accordingly, incumbent LECs must provide network elements along with all of their features and functions, so that new entrants may offer services that compete with those  X 4offered by incumbents as well as new services.h *  {O'ԍ Local Competition Order, 11 FCC Rcd at 15632, para. 260.h  The Commission also determined that "we should not identify elements in rigid terms, but  X 4rather by function."k  {O'ԍ Local Competition Order, 11 FCC Rcd at 1563132, para. 259.k 6. On July 18, 1997, the United States Court of Appeals for the Eighth Circuit issued  Xb4a decision affirming certain of the Commission's rules adopted in the Local Competition  XM4Order, and vacating other rules.MN  {OL 'ԍ Iowa Utilities Bd. v. FCC, 1997 WL 403401 (8th Cir. July 18, 1997). See n.1 supra. With respect to issues relevant to this reconsideration decision, the court affirmed the Commission's authority to identify unbundled network elements pursuant to section 251(d)(2), and generally upheld the Commission's decision regarding incumbent LECs' obligations to provide access to network elements on an  X4unbundled basis.M {O%'ԍ Iowa Utilities Bd. at *2224.M The order we issue today is consistent with the court's decision."r,[&[&, , ]"Ԍ X'ԙ B.XPetitions (#  X47. Parties contend that the Local Competition Order is not clear with respect to incumbent LECs' obligation to provide access to shared transport as a network element. Although only two petitions for reconsideration, filed by WorldCom, Inc. (WorldCom) and the Local Exchange Carriers Coalition (LECC), seek clarification or reconsideration of what incumbent LECs must provide pursuant to section 251(c)(3) with regard to "shared transport," several parties addressed that issue in oppositions to petitions for reconsideration and replies. Moreover, since the record closed in the reconsideration proceeding, some parties have made  X34numerous ex parte presentations in this docket regarding their views on the proper definition of shared transport as a network element. 8. The record indicates that one basis for confusion is the discrepancy between our rule defining interoffice transmission facilities under section 251(c)(3), 47 C.F.R.  51.319(d), and the rule that establishes the rate structure standard for shared transport, 47 C.F.R.  51.509(d). The Eighth Circuit vacated the Commission's rule, 47 C.F.R.  51.509(d), which  X4established the rate structure standard for shared transport.O {O 'ԍ Iowa Utilities Bd. at *9, n.20.O Although the discrepancy between our rule defining interoffice transmission facilities and the rate structure rule no longer exists, we nevertheless believe that it is useful to clarify the Commission's rules regarding shared transport. The definition of interoffice transmission facilities includes transmission facilities "dedicated to a particular customer or carrier, or shared by more than  X!4one customer or carrier, that provide telecommunications between wire centers4X!Z yO,'ԍ A wire center, or serving wire center, is defined as a telephone company central office designated by the telephone company to serve the geographic area in which the interexchange carrier or other person's point of demarcation is located. 47 C.F.R.  69.2(rr). 4 owned by  X 4incumbent LECs or requesting telecommunications carriers, or between switches owned by  X4incumbent LECs or requesting telecommunications carriers."z {O 'ԍ See 47 C.F.R. 51.319(d) (emphasis added). Switches include both end office and tandem switches. The rule setting forth the rate structure for shared transport, which has been vacated by the Eighth Circuit, addressed only  X4"[s]hared transmission facilities between tandem switches and end offices."@  yO'ԍ 47 C.F.R.  51.509(d) (emphasis added). That rule (now vacated) stated:  yO!'X(d) Shared transmission facilities between tandem switches and end offices. The costs of shared transmission facilities between tandem switches and end offices may be recovered through usagesensitive charges, or in another manner consistent with the manner that the incumbent LEC incurs those costs.  47 C.F.R.  51.509(d). In the Local",[&[&, , "  X4Competition Order, we promulgated no rules mandating the rate structure for shared transport  X4between end offices. WorldCom requests that the Commission clarify that incumbent LECs must offer a usage option for shared transport regardless of whether the traffic is routed  X4through the tandem." {O8'ԍ WorldCom Petition at 2, 67. Accord CompTel Opposition at 34 (FCC should establish a usage option for all transport over shared facilities between two incumbent LEC end offices); Sprint Opposition at 67 (shared transport to take traffic directly from one endoffice switch to another is the most economical means of handling the traffic). LECC requests that the Commission clarify that shared transmission facilities must be provided to a requesting carrier only "in conjunction with" both a local  X4switching and tandem switching capability.+Z {O 'ԍ LECC Petition at 33. Cf. NYNEX Opposition at 10 (traditionally, shared facilities are only provided by an incumbent LEC between its central offices and its tandems, and not between its central offices and the switching facilities of another carrier).+ 9. More fundamentally, parties ask the Commission to clarify, or reconsider, the definition of shared transport. WorldCom asks the Commission to clarify that section 251(c)(3) requires incumbent LECs to provide shared transport as a network element pursuant to a usage option whereby the requesting carrier pays a single, usage based rate for the  X 4routing functionality between the end office and the serving wire center (SWC).  {O'ԍ Worldcom Petition at 25. See also MCI Opposition at 18; Sprint Opposition at 6. LECC, on the other hand, asserts that "transmission facilities are 'shared' only if they are associated with switching capability. If they are not so associated, such facilities presumably must be  X 4considered dedicated facilities."> f  yO'ԍ LECC Petition at 33.>  10. In support of WorldCom's petition, various competitive carriers argue that the  X}4Commission was clear in the Local Competition Order that "shared transport," as defined by the Commission, requires incumbent LECs to make available to requesting carriers access to  XQ4all transport links between any two incumbent LEC switches (i.e., between two end office switches, between an end office switch and a tandem switch, or between two tandem  X%4switches) on a per minute of use basis.$%  yO'ԍ Letter from Bruce K. Cox, Government Affairs Director, AT&T, to William F. Caton, Acting Secretary,  {O 'FCC, Jan. 28, 1997 (AT&T Jan. 28 Ex Parte), citing Local Competition Order, 11 FCC Rcd at 15633, 15631, paras. 262, 258; Letter from Leonard S. Sawicki, Director FCC Affairs, MCI, to William F. Caton, Acting  {O&"'Secretary, FCC, June 17, 1997 (MCI June17 Ex Parte).  AT&T notes that, in defining unbundled network elements, the Commission stated that the definition includes "all the features, functions, and capabilities that are provided by means of such facility or equipment" and that "carriers seeking . . . shared facilities, such as common transport, are essentially purchasing access to a",[&[&, , :"  X4functionality of the incumbent's facilities on a minutebyminute basis."F {Oy'ԍ AT&T Jan. 28 Ex Parte.F WorldCom claims that the 1996 Act and the Commission's rules make clear that carriers taking unbundled local switching have the right to use the incumbent LEC's entire interoffice network on a cost based, nondiscriminatory basis to complete local calls. WorldCom asserts that several incumbent LECs, such as NYNEX and Bell Atlantic, have made this form of transport  X4available.Z yO'ԍ Letter from Linda L. Oliver, Counsel for WorldCom, Inc., to William F. Caton, Acting Secretary, FCC,  {O` 'Apr.16, 1997 (WorldCom Apr. 16 Ex Parte).  11. Ameritech argues that the network element "interoffice transport" must be unbundled from switching and must be a discrete facility or piece of equipment used in the  X14provision of telecommunications services.1 yO'ԍ Letter from James K. Smith, Director Federal Relations, Ameritech, to William F. Caton, Acting  {O^'Secretary, FCC, May 23, 1997 (Ameritech May 23 Ex Parte). See also Letter from Cyndie Eby, Executive Director Federal Regulatory, US West, Inc., to William F. Caton, Acting Secretary, FCC, Feb. 27, 1997 (US  {O'West Feb. 27 Ex Parte) (a network element is a facility that is dedicated to the exclusive use of a lawful interconnector). Ameritech contends that the Commission's requirement to provide unbundled shared interoffice facilities means that requesting carriers have the option of sharing dedicated interoffice facilities by subdividing those facilities among themselves, but that requesting carriers do not have the right to share the links used to  X 4transport Ameritech's own traffic.F h  yO'ԍ Ameritech Opposition at 89.F Ameritech claims that unbundled transport can be provided in two ways: (1) dedicated transport, which is a discrete network element used exclusively by a single carrier and billed to that carrier; and (2) shared transport, which is a discrete network element jointly used by two or more requesting carriers, with the bill being  Xy4prorated as directed by sharers.K y  {O"'ԍ Ameritech Jan. 28 Ex Parte.K Ameritech contends that, although requesting carriers may have the option of combining unbundled network elements, the definition of the term "network element" requires that the element must be able to be used separate from the rest of  X44the incumbent LEC's network or facilities.F!4  yOo 'ԍ Ameritech Opposition at 78.F  12. Several incumbent LECs argue that the competitive carriers' definition of shared transport is inconsistent with the definition of an unbundled network element. Ameritech and BellSouth argue that shared transport, as proposed by competitive carriers, constitutes a"!,[&[&, , T"  X4service rather than an unbundled element." {Oy'ԍ Ameritech Opposition at 7; BellSouth Opposition at 5.  See also Bell Atlantic Opposition at 20 (the Commission's unbundled rules require services to be unbundled into separate network elements). According to Ameritech, such a definition  X4bundles two elements transport and switching.D#" yO'ԍ Ameritech Opposition at 7.D Ameritech also argues that the competitive carriers' position is contrary to the basic concept of unbundled network elements because unbundled elements are billed on a per facility/per month basis, which is consistent with the  X4purchase of facilities as opposed to services.$ yO 'ԍ Letter from James K. Smith, Director Federal Relations, Ameritech, to William F. Caton, Acting  {O 'Secretary, FCC, Feb. 3, 1997 (Ameritech Feb. 3 Ex Parte). Ameritech contends that competitive LECs are requesting "common transport" service rather than the network element "shared transport." Ameritech claims that the term "common transport" is used to describe basic network connectivity, where incumbent LECs are responsible for transporting the call to the destination. Ameritech contends that it is currently offering "common transport" service as switched access service and wholesale usage service. Ameritech argues that these services are not network elements; rather, the switched access and wholesale usage services use many separate components of the existing public switched network in combination. Ameritech claims that "common transport" is thus inextricably intertwined with switching, and is not  X 4"transport unbundled from switching."K%  {O'ԍ Ameritech Jan. 28 Ex Parte.K Ameritech also argues that the Commission's rules applicable to the provision of unbundled switching only require that incumbent LECs offer the  X 4features "the switch is capable of providing."K&Z  yO'ԍ Letter From James K. Smith, Director Federal Relations, Ameritech, to William F. Caton, Acting  {O'Secretary, FCC, May 9, 1997 (Ameritech May 9 Ex Parte) attaching Supplemental Rebuttal Testimony of David H. Gebhardt at 67 (Gebhardt Supplemental Rebuttal Testimony).K Ameritech claims that the switch does not include the routing instructions, which are a proprietary product of Ameritech, and are not a  Xy4feature of the switch.X'y  yO'ԍ Gebhardt Supplemental Rebuttal Testimony at 6.X  XK4 13. Ameritech contends that competitive LECs are trying to "game" the statutory pricing scheme by attempting to purchase minutes of use of Ameritech's entire network, as opposed to a specific transport facility within the network. According to Ameritech, competitive carriers would thus be able to purchase unbundled elements while avoiding the concomitant risk that the leased facility will be underutilized. This, according to Ameritech," P ',[&[&, , w"  X4is contrary to the FCC's intent.(" {Oy'ԍ Ameritech Feb. 3 Ex Parte, citing Local Competition Order, FCC Rcd at 1566869, para. 334. See also Ameritech Opposition at 78 (citing the Commission's statement that carriers purchasing network elements by definition face a greater risk than a reseller but under WorldCom's proposal, requesting carriers assume no additional risk). Bell Atlantic contends that WorldCom is requesting a single usagesensitive rate for both dedicated and tandem switched transport. Bell Atlantic opposes this request on the ground that it seeks reinstatement of the "equal charge per unit of traffic"  X4rule)  yO 'ԍ The "equal charge per unit of traffic rule" was established in the Modification of Final Judgment (MFJ) in  {O 'United States v. AT&T, 552 F. Supp. 131 (D.D.C. 1982), affirmed sub. nom., Maryland v. United States, 103 S. Ct. 1240 (1983). The rule required that until Sept. 1, 1991: XCharges for delivery or receipt of traffic of the same type between end offices and facilities of interexchange carriers within an exchange area, shall be equal, per unit of traffic delivered or received, for all interexchange carriers.  MFJ, Appendix B, Section B. that the Commission abandoned years ago.J*  yO'ԍ Bell Atlantic Opposition at 20; Bell Atlantic Reply at 10. Bell Atlantic claims, however, that, if  {O'WorldCom seeks merely to route local calls made by customers of competitive carriers that purchase unbundled switching over the incumbent's network in common with local calls made by customers of the incumbent, then Bell Atlantic is willing to provide such transport and will route competitive carrier's local calls between offices exactly the way Bell Atlantic routes its own local calls. Bell Atlantic Reply at 10.J BellSouth claims that per minuteofuse pricing for shared transport would be inconsistent with the 1996 Act because, pursuant to Section 252(d)(1), pricing for an unbundled element shall be "based on the cost . . . of  Xv4providing" the element.f+v6 {O]'ԍ BellSouth Reply at 6, citing 47 U.S.C.  252(d)(1).f BellSouth contends that the "common" transport option that WorldCom requests would consist of "common" transport between an incumbent LEC's local end office and tandem plus dedicated transport between the incumbent LEC's tandems and the serving wire center. BellSouth argues that the costs of the dedicated transport are not usage X 4sensitive.?,  yO'ԍ BellSouth Reply at 6.? In addition, several incumbent LECs object to WorldCom's petition on the ground that it would enable requesting carriers, in effect, to obtain access service without having to  X 4pay access charges.p- X yO 'ԍ Ameritech Opposition at 7; USTA Opposition at 1617; LECC Reply at 9. p  X 4 14. AT&T contends that Ameritech's proposal for "shared transport" is merely dedicated transport with a billing option that would enable carriers to resell portions of the" -,[&[&, , u "  X4dedicated transport and have Ameritech act as the billing agent.F. {Oy'ԍ AT&T Jan. 28 Ex Parte.F AT&T argues that shared transport, as defined by Ameritech, would not provide a viable transport option for competitive carriers. AT&T claims that competitive carriers cannot properly engineer a transport network because they do not have access to data about existing traffic patterns and levels. Consequently, AT&T alleges that, under Ameritech's shared transport proposal, competitive carriers will be forced to route their traffic to tandems even when it would be more efficient to route such traffic directly to end offices. AT&T claims that this will lead to poor utilization of incumbent LEC interoffice transport facilities and will require the inefficient deployment of additional transport facilities between incumbent LEC end offices  X14and the tandems./1Z yO< 'ԍ Letter from Bruce K. Cox, Government Affairs Director, AT&T, to William F. Caton, Acting Secretary,  {O 'FCC, Dec. 12, 1996 (AT&T Dec. 12 Ex Parte). AT&T also argues that usage sensitive pricing for shared use of interoffice transport facilities is consistent with other network elements such as unbundled switching, tandem switching, signalling, and call related databases, which are either partly or  X 4entirely priced on a per minuteofuse or per query basis.v0  {OQ'ԍ AT&T Jan. 28 Ex Parte. See also WorldCom May 21 Ex Parte.v In contrast to Ameritech's position regarding the routing table, NYNEX claims that the shared transport unbundled element being offered by NYNEX allows competing carriers to use the same end office  X 4routing tables and functions that are used by NYNEX to route its own traffic.1 F yO'ԍ Letter from G. R. Evans, Vice President Federal Regulatory Affairs, NYNEX, to William F. Caton,  {Of'Acting Secretary, FCC, July 18, 1997 (NYNEX July 18 Ex parte). Also, WorldCom claims that, when a carrier purchases unbundled local switching, it purchases all "features and functions, including functions integral to call routing" including the routing  Xb4table..2b yO'ԍ Letter from Linda L. Oliver, Counsel for WorldCom, Inc., to William F. Caton, Acting Secretary, FCC,  {O{'May 21, 1997 (WorldCom May 21 Ex parte) attaching Surrebuttal Testimony of Joseph Gillan at 16. (Gillan  {OE'Surrebuttal Testimony). See also WorldCom Opposition at 3 (shared transport is necessary to permit a requesting carrier using the local switching element to use the same routing options for its local traffic that the incumbent LEC uses for its own traffic)..  X4415. MCI and AT&T assert that the per minuteofuse option for shared transport is  X4critical when providing local exchange service via unbundled local switching.b3T  {O""'ԍ MCI June 17 Ex Parte; AT&T Jan. 25 Ex Parte.b AT&T states  X4that the Commission, in the Local Competition Order, recognized that the unbundling requirements of the 1996 Act provided competitive carriers with the opportunity to share the economies of scale and scope of the incumbent LEC. AT&T contends that access to shared" 3,[&[&, , T" transport on a costbased, per minuteofuse basis is critical to preserving such scale and scope  X4economies for competitive carriers.4 {Ob'ԍ AT&T Jan. 28 Ex Parte, citing Local Competition Order, 11 FCC Rcd at 1550809, para. 11 ("incumbent LECs have economies of density, connectivity, and scale; traditionally, these have been viewed as creating a natural monopoly . . . [t]he local competition provisions of the [1996] Act require that these economies be shared  {O'with entrants"); Id. at 15624, para. 242 ("National requirements for unbundled elements will allow new entrants . . . seeking to enter local markets on a national or regional scale to take advantage of economies of scale in the network design"). MCI claims that competing carriers will need access to unbundled local switching and shared transport in less densely populated areas, because they are likely to build their own facilities early on only in urban centers. MCI contends that transport thus needs to be priced on a per minuteofuse basis because, in less densely populated areas, new entrants may have insufficient customer volume to justify flatrated,  Xv4dedicated transport.5vD {Ok 'ԍ MCI June 17 Ex Parte. AT&T claims that competitive carriers will not have the volume of traffic to justify purchasing dedicated transport. Letter from Judy Argentieri, Government Affairs Director, AT&T, to  {O'William F. Caton, Acting Secretary, FCC, Jan. 6, 1997 (AT&T Jan. 6 Ex Parte). Accord WorldCom Apr. 16 Ex  {O'Parte; CompTel Opposition at 23 (a usage option for tandemswitched transport is necessary to prevent harmful discrimination against new entrants who must rely upon tandemswitched transport compared with larger carriers whose traffic volumes justify purchasing dedicated transport). MCI notes that other incumbent LECs, including NYNEX and  X_4BellSouth, are offering shared transport on a per minuteofuse basis.E6_  {O'ԍ MCI June 17 Ex Parte.E MCI further notes that Ameritech's proposed nonrecurring charges associated with Ameritech's shared and dedicated  X14transport make the use of flatrated shared and dedicated facilities even more uneconomic.G71T  {O6'ԍ MCI June 17 Ex Parte. G MCI contends that in Illinois Ameritech, in connection with its unbundled local switching proposal, is attempting to impose monthly trunk port charges of $147.56 for each digital trunk port and a nonrecurring charge of $729.39 for each trunk port. MCI claims that, if Ameritech is successful in forcing new entrants to use dedicated trunking in connection with unbundled local switching at these rates, there is little likelihood that use of unbundled local switching  X 4will be a viable entry strategy where traffic volumes do not justify flatrated transport.G8  {O>'ԍ MCI June 17 Ex Parte. G  Xy416. AT&T and WorldCom also argue that, contrary to Ameritech's contention, defining shared transport consistent with the competitive carriers' interpretation would not  XK4eliminate the difference between resale and unbundled elements.9\Kx yOt#'ԍ Letter from Bruce K. Cox, Government Affairs Director, AT&T, to William F. Caton, Acting Secretary,  {O<$'FCC, May 14, 1996 (AT&T May 14 Ex Parte); Letter from Linda L. Oliver, Counsel for WorldCom, Inc., to  {O%'William F. Caton, Acting Secretary, FCC, May 23, 1997 (WorldCom May 23 Ex parte). AT&T claims that the"K 9,[&[&, , "  X4Commission, in the Local Competition Order, identified three differences between the  X4purchase of unbundled elements and resale, and all three differences continue to be valid.:,  {Od'ԍ AT&T May 14 Ex Parte. First, according to AT&T, network element purchasers bear the risk if elements, such as the loop and the switch, are not profitably utilized by customers. Carriers purchasing endtoend rebundled unbundled elements face the risk that their users will generate substantial switch usage costs on local calls (free usage), without generating significant interLATA traffic and associated revenue. Second, competitive carriers buying the endtoend unbundled elements can use their elements to create services the incumbent does not offer, and thus increase competitive options to consumers. Finally, use of rebundled unbundled network elements fosters the growth of facilitiesbased competition because competitors can gradually introduce their own facilities in place of elements purchased from incumbents. AT&T contends that most large competitive carriers would prefer to own their own networks because it reduces their vulnerability to discrimination by the incumbent, and gives them greater control over their costs, network quality, and ability to provide new services  {O6 'in response to consumer demand. Id.  See also WorldCom May 23 Ex Parte (combinations of network elements provide new entrants an entirely different competitive entry strategy than resale. Such combinations of network elements permit new entrants the opportunity to provide new service and price pressures on incumbent LECs).  X417. WorldCom contends that the Act and the Commission's rules make clear that the requesting carrier, purchasing unbundled local switching, is the sole provider of the local switching portion of interexchange access, regardless of the method of transport chosen by the  Xx4interexchange carrier (IXC) to reach the unbundled local switch.J;x  {O'ԍ WorldCom Apr. 16 Ex Parte.J WorldCom suggests that  Xa4NYNEX and Bell Atlantic do not contest this.J<aN  {O`'ԍ WorldCom Apr. 16 Ex Parte.J AT&T contends that, when a requesting carrier purchases the unbundled local switch and the unbundled loop, that requesting carrier is entitled to bill an IXC for the access services associated with those unbundled network elements when the competitive carrier's local customer initiates or receives an interexchange call carried by that IXC. AT&T also claims that the requesting carrier has the right to offer transport services to the IXC; it is, however, the IXC's decision as to which carrier it uses to  X 4provide access transport services.=  yOh'ԍ Letter from Bruce K. Cox, Government Affairs Director, AT&T, to William F. Caton, Acting Secretary, FCC, filed July 11, 1997.  X 418. Responding to LECC's petition, WorldCom argues that, by tying the provision of shared transmission facilities to both local switching and tandem capabilities, the clarification sought by LECC is overbroad and would unnecessarily constrain the ability of requesting carriers to purchase access to shared transmission facilities between two end offices as a"d 8=,[&[&, , "  X4network element.>  yOy'ԍ WorldCom Opposition at 35 (network cost and efficiency of both the incumbent and the requesting carrier would suffer because additional and unnecessary dedicated trunk groups would have to be created, raising the costs for competitors, and the incumbent's own trunk groups would operate less efficiently as new entrant's traffic is removed from trunk groups already sized to handle this traffic load). WorldCom further contends that such a transport regime would require that each requesting carrier that purchases dedicated trunks between end offices establish customized routing using new line class codes. According to WorldCom, this would lead to  X4rapid line class code exhaustion.C? yO 'ԍ WorldCom Opposition at 5.C  X' CIII. DISCUSSION ׃  X_419. On July 18, 1997, the United States Court of Appeals for the Eighth Circuit  XH4affirmed in part and vacated in part the Commission's Local Competition Order. We note, as a predicate to our discussion below, that the court affirmed the Commission's rulemaking authority to identify unbundled network elements. The court held that section 251(d)(2) of  X 4the Act expressly gave the Commission jurisdiction in this area.P@ @ {O'ԍ Iowa Utilities Bd. at *32, n.10.P We thus conclude that the Commission has authority to address, in this reconsideration order, the issues raised by petitioners concerning the extent to which "shared transport" should be provided as an unbundled element.  X420. WorldCom filed a petition for clarification, and LECC filed a petition for  X{4reconsideration of the Local Competition Order; both petitions concerned the definition of shared transport as an unbundled network element. WorldCom filed a petition for clarification pursuant to 47 U.S.C.  405 and 47 C.F.R.  1.429, which set forth rules regarding petitions for reconsideration. In its petition WorldCom also stated that, "[s]hould  X!4the Commission not regard this petition as a request for clarification of the Local Competition  X 4Order, WorldCom requests that it be regarded as a petition for reconsideration."GA  yO'ԍ WorldCom Petition at 1, fn 1.G We believe WorldCom's filing is more properly addressed as a petition for reconsideration, and treat it as such in this decision.  X421. Parties disagree about what we required in the Local Competition Order with respect to shared transport. In addition, parties ask us to clarify or reconsider our decision regarding the provision of shared transport under section 251(c)(3). We first restate what we  Xo4required in the Local Competition Order, and then reconsider certain aspects that may have  XZ4been unclear or that were not addressed in the Local Competition Order. We then respond to"Zb A,[&[&, , N" arguments raised by parties that advocate a different approach to the provision of shared transport than our rules require.  X422. We believe that the petitions for reconsideration have raised reasonable questions about the scope and nature of an incumbent LEC's obligation to offer shared transport as an unbundled network element, pursuant to section 251(c)(3) and our implementing regulations. We address these issues below. We also believe, however, some parties have argued that certain aspects of the rules adopted last August were ambiguous which, in our view, were  XH4clear. Specifically, in the Local Competition Order, we expressly required incumbent LECs  X34to provide access to transport facilities "shared by more than one customer or carrier."IB3 yO 'ԍ 47 C.F.R.  51.319(d)(2)(i).I The term "carrier" includes both an incumbent LEC as well as a requesting telecommunications  X 4carrier. We, therefore, conclude that "shared transport," as required by the Local Competition  X 4Order encompasses a facility that is shared by multiple carriers, including the incumbent LEC.  X 4We recognize that the Local Competition Order did not explicitly state that an incumbent LEC must provide shared transport in a way that enables the traffic of requesting carriers to be carried on the same facilities that an incumbent LEC uses for its traffic. We find, however, that a fair reading of our order and rules does not support the claim advanced by Ameritech that a shared network element necessarily is shared only among competitive carriers and is separate from the facility used by the incumbent LEC for its own traffic.  XS4Indeed, only Ameritech and US West suggest that the Local Competition Order could be  X>4interpreted to require sharing only between multiple competitive carriers.wC>X {OG'ԍ See Ameritech Jan. 28. Ex Parte; US West Feb. 27 Ex Parte. w Moreover, the fact that we required incumbent LECs to provide access to other network elements, such as signalling, databases, and the local switch, which are shared among requesting carriers and incumbent LECs is consistent with our view that transport facilities "shared by more than one customer or carrier" must be shared between the incumbent LECs and requesting carriers.  X4Furthermore, with respect to local switching, we expressly rejected, in the Local Competition  X4Order, a proposal that incumbent LECs could, or were required to, partition local switches before providing requesting carriers access to incumbent LEC switches under section 251(c)(3). We stated that "[t]he requirements we establish for local switch unbundling do not entail physical division of the switch, and consequently do not impose the inefficiency or  X\4technical difficulties identified by some commentators."hD\ {O 'ԍ Local Competition Order, 11 FCC Rcd at 15708, para. 416.h We thus required that shared portions of incumbent LEC switches would be shared by all carriers, including the incumbent  X.4LEC. Although we do not believe that the Local Competition Order was unclear as to this aspect of an incumbent LEC's obligation to provide shared transport, we take this opportunity  X4to state explicitly that the Local Competition Order requires incumbent LECs to offer"|D,[&[&, , " requesting carriers access, on a shared basis, to the same interoffice transport facilities that the incumbent uses for its own traffic.  X423. We also conclude that the Local Competition Order was not ambiguous as to an incumbent LEC's obligation to offer access to the routing table resident in the local switch to  X4requesting carriers that purchase access to the unbundled local switch.E  yO'ԍ Both end office and tandem switches contain routing tables, which provide information about how to route each call. The routing instructions notify the switch as to which trunks are to be used in transporting a call. Depending upon the availability of circuits, a call may be routed directly from the end office of the calling party to the called party's end office, or routed through a tandem switch. The Local  Xz4Competition Order made clear that requesting carriers that purchase access to the unbundled local switch may obtain customized routing, unless it is not technically feasible to provide customized routing from that switch. In those instances, a requesting carrier is limited to  X74using the routing instructions in the incumbent LEC's routing table.hF7 {O'ԍ Local Competition Order, 11 FCC Rcd at 15706, para. 412.h In so holding, we necessarily accepted the view that requesting carriers that take unbundled local switching have access to the incumbent LEC's routing table, resident in the switch. We find nothing in the  X 4Local Competition Order that supports the contention that requesting carriers that obtain access to unbundled local switching, pursuant to section 251(c)(3), do not obtain access to the routing table in the unbundled local switch.  X424. The Local Competition Order did not clearly define certain aspects of incumbent LECs' obligation to provide access to shared transport under section 251(c)(3). In particular, we did not clearly and unambiguously (1) identify all portions of the network to which incumbent LEC must provide interoffice transport facilities on a shared basis; and (2) address whether requesting carriers may use shared transport facilities to provide exchange access service to IXCs for access to customers to whom they also provide local exchange service. We do so here on reconsideration.  X' A.XIncumbent LECs' obligation regarding shared transport (#  X425. We conclude that the obligation of incumbent LECs to provide requesting carriers with access to shared transport extends to all incumbent LEC interoffice transport facilities, and not just to interoffice facilities between an end office and tandem. Thus, incumbent LECs are required to provide shared transport between end offices, between  XX4tandems, and between tandems and end offices).>GXB {OK#'ԍ See Diagram 1.> "*G,[&[&, , "Ԍy! , 0*)dd   y$(#(# (#(#! $ !  !  !  !  !  !  !  !  !  !  !  !  !  !  !  !  !  !  !   (#(#4(#(#  X426. The Local Competition Order expressly required "incumbent LECs to provide unbundled access to shared transmission facilities between end offices and the tandem  X4switch."HZ {O%'ԍ Local Competition Order, 11 FCC Rcd at 15718, para. 440. The Commission also stated in its rules that shared transmission facilities must be made available between "tandem switches and end offices." 47 C.F.R. 51.509(d). Parties disagree, however, about whether incumbent LECs are required to provide  X4shared transport between end offices. As noted above,BI {O0'ԍ See supra para. 9.B there is a discrepancy between the rule that establishes the general obligation to provide shared transport as a network element, and the rule vacated by the court that purports to establish the pricing standard for shared  XP4transport.%JXP| yO}"'ԍ 47 C.F.R.  51.319(d) and 51.509(d). We note that the Eighth Circuit has held that the Commission lacked jurisdiction to adopt the pricing standard set forth in section 51.509(d), and accordingly vacated that section of the Commission's rules.% To the extent that incumbent LECs already have transport facilities between end offices, and between tandems, the routing table contained in the switch most likely wouldX9J,[&[&, , 3, !, X  X4route calls between such switches.K {Oy'ԍ In fact, incumbent LECs would have to modify their routing tables in order to prevent calls from being routed between end offices or between tandems. We therefore conclude that there is no basis for limiting the use of shared transport facilities to links between end office switches and tandem switches. Limiting the definition of shared transport in this manner would not permit requesting carriers to utilize the routing tables in the incumbent LECs' switches. To the contrary, such a limitation effectively would require a requesting carrier to design its own customized routing table, in order to avoid having its traffic transported over the same interoffice facilities, connecting end offices, that the incumbent LEC use to transport its own interoffice traffic.  X_4Moreover, in the Local Competition Order, we held that it is technically feasible to provide access to interoffice transport facilities between end offices and between end offices and  X34tandem switches.qL3" {O 'ԍ Local Competition Order, 11 FCC Rcd at 15719, paras. 442 and 443.q No new evidence has been presented in this proceeding to convince us  X 4that our earlier conclusion regarding technical feasibility was incorrect.b M  {O'ԍ FNAmong incumbent LECs, only Ameritech, in various ex parte submissions, asserts that its switches are unable to "provide precise usage data or originating carrier identity for terminating local usage, or to identify terminating access usage with the called number." In essence, Ameritech contends that it is unable to accurately bill for the use of shared transport, including exchange access. Letter from James K. Smith, Director Federal  {O'Relations, Ameritech, to William F. Caton, Acting Secretary, FCC, July 15, 1997 (Ameritech July 15 Ex Parte) attaching Reply Brief in Support of Application by Ameritech Michigan for Provision of InRegion, InterLATA  {O5'Services in Michigan at 2223 (Ameritech 271 Michigan Application Reply). As we held in our Local  {O'Competition Order, however, a determination of technical feasibility does not include consideration of billing  {O'concerns. 47 CF.R. 51.5. Accord Iowa Utilities Bd. at *21. Moreover, as noted above, Ameritech is the only party to contend that it is not currently able to measure and bill for shared transport. In contrast, Bell Atlantic, NYNEX, and PacTel have stated that they offer shared transport in conjunction with unbundled local switching. Letter from Patricia E. Koch, Assistent Vice President Government Relations FCC, Bell Atlantic, to William  yO'F. Caton, Acting Secretary, FCC, August 4, 1997. Letter from G.R. Evans, Vice President Federal Regulatory Affairs, NYNEX, to William F. Caton, Acting Secretary, FCC, July 18, 1997; Letter from M.E. Garber, Senior Counsel, Pacific Telesis, to William F. Caton, Acting Secretary, FCC, Mar. 3, 1997. In any event, we note that Ameritech has stated in another proceeding that it has proposed a settlement mechanism as an interim solution until it develops a longterm solution. Ameritech 271 Michigan Application Reply, CC Docket No. 97137, at  yO'22 . Ameritech has also stated that it "is operationally capable of furnishing the 'platform' (unbundled local switching and shared transport) upon request." Ameritech 271 Michigan Application Reply, CC Docket No. 97137, at 23. We thus find no evidence that it is not technically feasible to provide shared transport.b  X 427. We further clarify in this order that incumbent LECs are only required to offer  X 4dedicated transport between their switches, or serving wire centers, and requesting carriers'  X 4switches. Our Local Competition Order was not absolutely clear as to whether incumbent LECs must provide dedicated or shared interoffice transport between incumbent LEC  X4switches, or serving wire centers, and switches owned by requesting carriers. In the Local  X4Competition Order, we required incumbent LECs to "provide access to dedicated transmission"&M,[&[&, , "  X4facilities between LEC central offices or between end offices and those of competing  X4carriers."{N {Od'ԍ Local Competition Order, 11 FCC Rcd at 15718, para. 440 (emphasis added). { This could be read to suggest that incumbent LECs are only required to provide dedicated (but not shared) interoffice transport facilities between their end offices, or serving wire centers, and points in the requesting carrier's network. The rule that defines interoffice transmission facilities, however, is less clear, and could be read to require incumbent LECs to provide shared transport between incumbent LECs' switches, or serving wire centers, and  Xx4requesting carriers' switches.O@xZ yO 'ԍ 47 C.F.R. 51.319(d)(1) states: XInteroffice transmission facilities are defined as incumbent LEC transmission facilities dedicated to a particular customer or carrier, or shared by more than one customer or carrier, that provide telecommunications between wire centers owned by incumbent LECs or requesting telecommunications carriers, or between switches owned by incumbent LECs or requesting telecommunications carriers.(# 47 C.F.R. 51.319(d)(1).  XJ428. We therefore clarify here that incumbent LECs must offer only dedicated  X54transport, and not shared transport, between their switches, or serving wire centers, and  X 4requesting carriers' switches, as set forth in the Local Competition Order. We also note that  X 4the Local Competition Order expressly limited the requirement to provide unbundled  X 4interoffice transport facilities to existing incumbent LEC facilities.hP b  {O 'ԍ Local Competition Order, 11 FCC Rcd at 15722, para. 451.h  X 429. On reconsideration, we further clarify that incumbent LECs are not required to  X 4provide shared transport between incumbent LEC switches and serving wire centers.Q$  {OX'ԍ We note that this clarification finds some support in the Local Competition Order, where we concluded that: "[t]his requirement [that incumbent LECs provide access to dedicated transmission facilities] includes, at a  {O'minimum, interoffice facilities between end offices and serving wire centers . . ." Local Competition Order at 15718, para 440. We stated above that shared transport must be provided between incumbent LEC switches. Serving wire centers are merely points of demarcation in the incumbent LEC's network, and are not points at which traffic is switched. Traffic routed to a serving wire center is traffic dedicated to a particular carrier. We thus conclude that unbundled access to the transport links between incumbent LEC switches and serving wire centers must only be provided by  X)4incumbent LECs on a dedicated basis.>R) {O#'ԍ See Diagram 2.> "rR,[&[&, , ]"ԌyA , 0*ddh y$(#(# (#(#A $ A  A  A  A  A  A  A  A  A  A  A  A  A  A  A  A  A  A   (#(#K(#(#  X4430. Finally, we note that, traditionally, shared facilities are priced on a usagesensitive basis, and dedicated facilities are priced on a flatrated basis. We believe that this usagesensitive pricing mechanism provides a reasonable and fair allocation of cost between the  X4users of shared transport facilities. For example, in the Access Charge Reform Order, specifically the sections dealing with rate structure issues for interstate access charges, we required that the cost of switching, a shared facility, be recovered on a per minute of use basis, while the cost of entrance facilities, which are dedicated to a single interexchange  X4carrier, be recovered on a flatrated basis.S yO'ԍ Access Charge Reform, First Report and Order, CC Docket 96-262, FCC 97-158 (rel. May, 16, 1997)  {O'(Access Charge Reform Order) at paras, 135, 153. We note that several state commissions, in proceedings conducted pursuant to section 252 of the Act, have required incumbent LECs to  Xg4offer shared transport priced on a usagesensitive basis.TZg" {O:'ԍ See, e.g., Michigan Public Service Commission, Case No. U11280, July 14, 1997, Order at 26; Public Service Commission of Wisconsin, Case No. 6720TI120, Findings of Fact, Conclusions of Law, and Second Order, May 30, 1997.  We acknowledge that, under the Eighth Circuit's decision, we may not establish pricing rules for shared transport. However, in situations where the Commission is required to arbitrate interconnection agreementsX9DT,[&[&, , 3, sA, hX pursuant to subsection 252(e)(5), we intend to establish usagesensitive rates for recovery of  X4shared transport costs unless parties demonstrate otherwise.CUZ {Ob'ԍ See 47 U.S.C.  252(e)(5). See also Local Competition Order, 11 FCC Rcd at 1612732, paras. 128395 (giving notice of certain minimum procedural rules and substantive standards that the Commission will use if it assumes jurisdiction pursuant to section 252(e)(5)). C  X4 B.XApplication of the requirements of section 251(d)(2) to shared transport  (#  X4 31. Shared transport, as defined in this order, satisfies the twoprong test set forth in section 251(d)(2) of the Act. Section 251(d)(2) requires the Commission, in determining what network elements should be made available under section 251(c)(3), to consider "at a minimum, whether (A) access to such network elements as are proprietary in nature is necessary; and (B) the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to  X 4offer."CV  yO'ԍ 47 U.S.C.  251(d)(2).C In the Local Competition Order, we held that an incumbent could refuse to provide access to a network element pursuant to section 251(d)(2) only if the incumbent LEC demonstrated that "the element is proprietary and that gaining access to that element is not necessary because the competing provider can use other, nonproprietary elements in the  X 4incumbent LEC's network to provide service."W z {O'ԍ Local Competition Order, 11 FCC Rcd at 15710, para. 419. See also id. at 15642, para. 283. We further held that, under section 251(d)(2)(B), we must consider "whether the failure of an incumbent to provide access to a network element would decrease the quality, or increase the financial or administrative cost of the service a requesting carrier seeks to offer, compared with providing that service over other  XM4unbundled elements in the incumbent LEC's network."iXM  {O 'ԍ Local Competition Order, 11 FCC Rcd at 15643, para. 285. i The Eighth Circuit affirmed the  X64Commission's interpretation of section 251(d)(2).UY6 {O'ԍ Iowa Utilities Bd. v. FCC, at *2224.U  X432. In the Local Competition Order, we concluded that, with respect to transport facilities, "the record provides no basis for withholding these facilities from competitors based  X4on proprietary considerations."hZ0  {O!'ԍ Local Competition Order, 11 FCC Rcd at 15720, para. 446.h We also concluded that section 251(d)(2)(B) requires incumbent LECs to provide access to shared interoffice facilities and dedicated interoffice  X4facilities.k[  {O!%'ԍ Local Competition Order, 11 FCC Rcd at 1572021, para. 447.k With respect to the unbundled local switch, we held that, even assuming that"T [,[&[&, , " switching may be proprietary, at least in some respects, "access to unbundled local switching  X4is clearly 'necessary' under our interpretation of section 251(d)(2)(A)."\^ {Ob'ԍ Local Competition Order, 11 FCC Rcd at 15710, para. 419. In the Local Competition Order, we defined  {O,'"necessary" in this specific context as meaning "that an element is a prerequisite for competition." Id. at para.  {O'282. We also note that the Eighth Circuit affirmed this definition. Iowa Utilities Bd. at *2223. We also concluded that a requesting carrier's ability to offer local exchange service would be "impaired, if not thwarted," without access to the unbundled local switch, and therefore, that section  X4251(d)(2)(B) requires incumbent LECs to provide access to the unbundled local switch.k] {OC 'ԍ Local Competition Order, 11 FCC Rcd at 1571011, para. 420.k  Xv4 33. Upon reconsideration, we herein affirm that incumbent LECs are obligated under section 251(d)(2) to provide access to shared transport, as we here define it, as an unbundled network element. Parties in the record have not contended that interoffice transport facilities are proprietary, and we have no basis for modifying our prior conclusion that interoffice transport facilities are not proprietary. Thus, there is no basis under section 251(d)(2)(A) for incumbent LECs to refuse to provide interoffice transport facilities on a shared as well as a dedicated basis.  X 4!34. We also note that the failure of an incumbent LEC to provide access to all of its interoffice transport facilities on a shared basis would significantly increase the requesting carriers' costs of providing local exchange service and thus reduce competitive entry into the  Xy4local exchange market. In the Local Competition Order, we observed that: XX` ` By unbundling various dedicated and shared interoffice facilities, a new entrant  X64can purchase all interoffice facilities on an unbundled basis as part of a competing local network, or it can combine its own interoffice facilities with those of the incumbent LEC. The opportunity to purchase unbundled interoffice facilities will decrease the cost of entry compared to the much higher cost that would be incurred by an entrant that had to construct all of its own facilities. An efficient new entrant might not be able to compete if it were required to build interoffice facilities where it would be more efficient to use  X4the incumbent LEC's facilities.|^ {O'ԍ Local Competition Order, 11 FCC Rcd at 1571819, para. 441 (emphasis added).|(#` We continue to find the foregoing statements to be true with respect to shared as well as  XR4dedicated transport facilities. Requesting carriers should have the opportunity to use all of the incumbent LEC's interoffice transport facilities. Moreover, the opportunity to purchase transport facilities on a shared basis, rather than exclusively on a dedicated basis, will decrease the costs of entry. "^,[&[&, , "Ԍ X4ԙ"35. We believe that access to transport facilities on a shared basis is particularly important for stimulating initial competitive entry into the local exchange market, because new entrants have not yet had an opportunity to determine traffic volumes and routing patterns. Moreover, requiring competitive carriers to use dedicated transport facilities during the initial stages of competition would create a significant barrier to entry because dedicated transport is not economically feasible at low penetration rates. In addition, new entrants would be hindered by significant transaction costs if they were required to continually reconfigure the unbundled transport elements as they acquired customers. We note that incumbent LECs have significant economies of scope, scale, and density in providing transport facilities. Requiring transport facilities to be made available on a shared basis will assure that such economies are passed on to competitive carriers. Further, if new entrants were forced to rely on dedicated transport facilities, even at the earliest stages of competitive entry, they would almost inevitably miscalculate the capacity or routing patterns. We recognize, however, that the need for access to all of the incumbent LEC's interoffice facilities on a shared basis may decrease as competitive carriers expand their customer base and have an opportunity to identify traffic volumes and call routing patterns. We therefore may revisit at a later date whether incumbent LECs continue to have an obligation, under section 251(d)(2), to provide access to all of their interoffice transmission facilities on a  Xb4shared, usage sensitive basis._b yO'ԍ We note that, if, in the future, competitive carriers gain sufficient market penetration to justify obtaining dedicated transport facilities, either through the use of unbundled elements or through building their facilities, shared transport may no longer meet the section 251(d)(2) requirements. In that event, the Commission can evaluate at that time whether incumbent LECs must continue to provide access to shared transport as a network element.  X44#36. As noted above, although interoffice transport, as we define the element pursuant to section 251(c)(3), refers to the transport links in the incumbent LEC's network, access to those links on a shared basis effectively requires a requesting carrier to utilize the routing table contained in the incumbent LEC's switch. Ameritech contends that the routing table contained in the switch, which is used in conjunction with shared transport, is proprietary. Ameritech and other incumbent LECs further allege that requesting carriers may obtain the functional equivalent of shared transport either by purchasing transport as an access service, or by purchasing dedicated transport facilities. These parties thus contend that, under section 251(d)(2)(A), incumbent LECs are not required to provide shared transport (including use of the routing table contained in the switch) as a network element.  X74$37. Issues regarding intellectual property rights associated with network elements are  X 4before us in a separate proceeding.` x {OI$'ԍ See MCI Petition for Declaratory Ruling, CC Docket No. 9698, CCB Pol. 974 (Mar. 11, 1997). For purposes of this Order only, we therefore assume without deciding that the routing table is proprietary. We nevertheless conclude that section"  `,[&[&, , " 251(d)(2) requires an incumbent LEC to provide access to both its interoffice transmission  X4facilities and to the routing tables contained in the incumbent LEC's switches. a yOb'ԍ The Eighth Circuit recognized that "the Act itself expressly contemplates that requesting carriers will have  {O*'access to network elements that are proprietary in nature." Iowa Utilities Bd. at *32, n.37.  We affirm  X4our finding in the Local Competition Order that transport provided as part of access service, or as a wholesale usage service, is not a viable substitute for shared transport as a network  X4element.rb" {Oy'ԍ See Local Competition Order, 11 FCC Rcd at 15721, para. 448.r All incumbent LECs are not required to offer transport as an access service on a  X4stand alone basis. Only Class A carriers are required, under our Expanded Interconnection  Xz4rules, to unbundle interstate transport service.cz yO 'ԍ Class A carriers are those exchange carriers that have more than $100 million in total company regulated revenues. 47 C.F.R.  32.11(a)(1), 32.9000. Moreover, transport service that incumbents  Xc4offer under the Expanded Interconnection tariffs may include only interstate transport facilities (transport provided either via a tandem switch or direct trunked between a local switch and the serving wire center), not interoffice transport facilities directly connecting two local  X 4switches. In the Local Competition Order, moreover, we expressly rejected the suggestion that requesting carriers "are not impaired in their ability to provide a service . . . if they can  X 4provide the proposed service by purchasing the service at wholesale rates from a LEC."d\  {O'ԍ Local Competition Order, 11 FCC Rcd at 1564344, para. 286. See also id. at 15644, para. 287. See  {O{'also Iowa Utilities Bd. at *21 (stating that the fact that a capability may be available as a service does not necessarily preclude that capability from being available as a network element).  X ' C.XUse of shared transport facilities to provide exchange access service (#  X4%38. In this order on reconsideration, we clarify that requesting carriers that take shared or dedicated transport as an unbundled network element may use such transport to provide interstate exchange access services to customers to whom it provides local exchange service. We further clarify that, where a requesting carrier provides interstate exchange access services to customers, to whom it also provides local exchange service, the requesting carrier is entitled to assess originating and terminating access charges to interexchange carriers, and it is not obligated to pay access charges to the incumbent LEC.  X4&39. In the Local Competition Order, we held that, if a requesting carrier purchases access to a network element in order to provide local exchange service, the carrier may also  X4use that element to provide exchange access and interexchange services.he0  {O#'ԍ Local Competition Order, 11 FCC Rcd at 15679, para. 356.h We did not impose any restrictions on the types of telecommunications services that could be provided  X4over network elements. We did not specifically consider in the Local Competition Order," e,[&[&, , " however, whether a requesting carrier may use interoffice transport to provide exchange access service. We conclude here that a requesting carrier may use the shared transport unbundled element to provide exchange access service to customers for whom the carrier  X4provides local exchange service.fZ yO4'ԍ We issue a further notice of proposed rulemaking below seeking comment on whether carriers may use dedicated and shared unbundled transport facilities to carry originating to, and terminating access traffic from,  {O'customer to whom the requesting carrier does not also provide local exchange service. See infra paras. 5152. We find that this is consistent with our initial decision.g {OV'ԍ See, e.g., Local Competition Order, 11 FCC Rcd at 15679, para. 356 (section 251(c)(3) permints interexchange carriers and all other requesting telecommunications carriers, to purchase unbundled elements for  {O 'the purpose of offering exchange access services). See also NYNEX July 18 Ex Parte (recognizing that, when a requesting carrier "wins a local service customer," and uses an unbundled network element such as shared transport to serve that customer, that the carrier "is entitled to use that same element to provide other telecommunications services, such as exchange access, to IXCs.")  X' D.Response to Specific Arguments Raised by Parties   X_4'40. As discussed above, we define the unbundled network element of shared transport under section 251(c)(3) as interoffice transmission facilities, shared between the incumbent LEC and one or more requesting carriers or customers, that connect end office switches, end office switches and tandem switches, or tandem switches, in the incumbent LEC's network. We exclude from this definition interoffice transmission facilities that connect an incumbent LEC's switch and a requesting carrier's switch, and those connecting an incumbent LEC's end office switch, or tandem switch, and a serving wire center. This definition of shared transport assumes the interconnection point between the two carriers' networks, pursuant to section 251(c)(2), is at the incumbent LEC's switch. This definition is consistent with the statutory definition of network elements, which defines a network element as a facility or equipment used in the provision of a telecommunications service, including the features, functions, and  Xb4capabilities provided by means of such facility or equipment.Ahbf  yOy'ԍ 47 U.S.C.  153(29).A  X44(41. As an initial matter, we reject Ameritech's contention that, by definition, network  X4elements must be partly or wholly dedicated to a customer.Ji  {O'ԍ See Ameritech Reply at 19.J To the contrary, we held in the  X4Local Competition Order that some network elements, such as loops, are provided exclusively to one requesting carrier, and some network elements, such as interoffice transport provided  X4on a shared basis, are provided on a minuteofuse basis and are shared with other carriers.hj  {O$'ԍ  Local Competition Order, 11 FCC Rcd at 15631, para. 258.h  X4In the Local Competition Order, we also identified signalling, callrelated databases, and the"j,[&[&, , " switch, as network elements that necessarily must be shared among the incumbent and  X4multiple competing carriers.k {Ob'ԍ See 47 C.F.R.  51.319(e). See also Iowa Utilities Bd. at *18 (affirming determination that signalling and databases are network elements).  X4)42. We also reject Ameritech's and BellSouth's contention that, because WorldCom and other requesting carriers seek access to an element shared transport that cannot be effectively disassociated from another element local switching, the requesting carriers are in fact seeking access to a bundled service rather than to transport as a network element  X_4unbundled from switching.?l\_" {O2 'ԍ See Ameritech Opposition at 7 and Bell South Reply at 6. Ameritech also contends that incumbent LECs are not required to provide bundled services at costbased rates under section 251(c)(3) and section  {O '252(d)(1). See Ameritech Opposition at 7.? As previously discussed, several of the network elements we  XH4identified in the Local Competition Order depend, at least in part, on other network elements. In particular, although we identified the signalling network as a network element, the information necessary to utilize signalling networks resides in the switch, which we identified as a separate network element. In addition, we required incumbent LECs, upon request, to provide access to unbundled loops conditioned to provide, among other things, digital services such as ISDN, even though the equipment used to provide ISDN service typically resides in  X 4the local switch, rather than in the loop.hm F {O'ԍ Local Competition Order, 11 FCC Rcd at 15691, para. 380.h We thus find no basis for concluding that each network element must be functionally independent of other network elements.  X{4*43. We reject as well Ameritech's contention that a network element must be identifiable as a limited or preidentified portion of the network. We find nothing in the statutory definition of network elements that prohibits requesting telecommunications carriers from seeking access to every transport facility within the incumbent's network. Our definition of signalling as a network element does not require requesting carriers to identify in advance a particular portion of the incumbent LEC's signalling facilities, but instead permits requesting carriers to obtain access to multiple signalling links and signalling transfer points in the  X4incumbent LEC's network on an asneeded basis.~n {Oc'ԍ See generally Local Competition Order, 11 FCC Rcd at 1573841, paras. 479483.~ We also reject Ameritech's assertion that  X4shared transport cannot be physically separated from switching.oZj  {O!'ԍ See May 9, 1997 ex parte from Jim Smith, Director, Federal Relations, Ameritech, to William Caton, Acting Secretary, FCC, attaching Supplemental Rebuttal Testimony of David H. Gebhardt at 2 (Gebhardt Supplemental Rebuttal Testimony). Both dedicated and shared transport facilities are transport links between switches. These links are physically distinct from the end office and tandem switches themselves." o,[&[&, , "Ԍ X4ԙ+44. Although we conclude that shared transport is physically severable from switching, incumbent LECs may not unbundle switching and transport facilities that are already combined, except upon request by a requesting carrier. Although, the Eighth Circuit struck down the Commission's rule that required incumbent LECs to rebundle separate  X4network elements,p {O'ԍ Iowa Utilities Bd. at *25. See also 47 C.F.R.  51.315(c)(f) (vacated rules). the court nevertheless stated that it: "upheld the remaining unbundling rules as reasonable constructions of the Act, because, as we have shown, the Act itself calls for the rapid introduction of competition into the local phone markets by requiring incumbent  X_4LECs to make their networks available to . . . competing carriers."Jq_Z {Oj 'ԍ Iowa Utilities Bd. at *28.J Among other things, the court left in effect section 51.315(b) of the Commission's rules, which provides that, "[e]xcept upon request, an incumbent LEC shall not separate requested network elements that the  X 4incumbent LEC currently combines."Cr  yO'ԍ 47 C.F.R.  51.315(b).C Therefore, although incumbent LECs are not required to combine transport and switching facilities to the extent that those elements are not already combined, incumbent LECs may not separate such facilities that are currently combined, absent an affirmative request. In addition to violating section 51.315(b) of our rules, such dismantling of network elements, absent an affirmative request, would increase the costs of requesting carriers and delay their entry into the local exchange market, without serving any apparent public benefit. We believe that such actions by an incumbent LEC would impose costs on competitive carriers that incumbent LECs would not incur, and thus would violate the requirement under section 251(c)(3) that incumbent LECs provide nondiscriminatory access to unbundled elements. Moreover, an incumbent LEC that separates shared transport facilities that are already connected to a switch would likely disrupt service to its own customers served by the switch because, by definition, the shared transport links are also used by the incumbent LEC to serve its customers. Thus, incumbent LECs would seem to have no networkrelated reason to separate network elements that it already combines absent a request.  X4,45. We likewise reject Ameritech's contention that purchasing access to the switch as  X4a network element does not entitle a carrier to use the routing table located in that switch.Zs| yO'ԍ Gebhardt Supplemental Rebuttal Testimony at 67.Z According to Ameritech, vendors provide switches that are capable of acting on routing instructions, but the switch itself does not include routing instructions; those instructions are added by the carrier after it purchases the switch from the vendor and are contained in a routing table resident in the switch. Ameritech asserts that its routing tables are proprietary  X74products, and "are not a feature of the switch."Zt7  yO$'ԍ Gebhardt Supplemental Rebuttal Testimony at 67.Z In the Local Competition Order, we"7t,[&[&, , +"  X4determined that "we should not identify elements in rigid terms, but rather by function."ku {Oy'ԍ Local Competition Order, 11 FCC Rcd at 1563132, para. 259.k Routing is a critical and inseverable function of the local switch. One of the most essential features a switch performs is to provide routing information that sends a call to the  X4appropriate destination. We find no support in the statute, the Local Competition Order, or our rules for Ameritech's assertion that the switch, as a network element, does not include access to the functionality provided by an incumbent LEC's routing table. In fact, the only  Xx4question addressed in the Local Competition Order was whether requesting carriers could  Xc4obtain customized routing, that is, routing different from the incumbent LEC's existing routing  XN4arrangements.vZNZ {OY 'ԍ Local Competition Order, 11 FCC Rcd at 15709, para. 418. We concluded that incumbent LECs must offer customized routing unless they prove to the state commission that doing so would not be technically feasible in a particular switch.  X 4-46. We further find that access to unbundled switching is not necessarily limited to the product the incumbent LEC originally purchased from a vendor. As we noted in the  X 4Local Competition Order, incumbent LECs may in some instances be required to modify or  X 4condition a network element to accommodate a request under section 251(c)(3).w | {O 'ԍ See, e.g., Local Competition Order, 11 FCC Rcd at 15692, para. 382. This determination was  {O'specifically "endorsed" by the Eighth Circuit. Iowa Utilities Bd. at *32, n.33. See also 47 C.F.R.  51.307. Moreover, we held that unbundled local switching includes access to the vertical features of the switch, regardless of whether the vertical features were included in the switch when it was purchased, or whether the vertical features were purchased separately from the vendor or developed by  X4the incumbent.x {O 'ԍ See generally Local Competition Order, 11 FCC Rcd at 15706, para. 412. See also 47 C.F.R.  51.319(c)(1)(i)(C). We held that network elements include physical facilities "as well as logical  Xj4features, functions, and capabilities that are provided by, for example, software located in a  XU4physical facility such as a switch."yyU2  {O8'ԍ Local Competition Order, 11 FCC Rcd at 15632, para. 260 (emphasis added).y We also note that the Eighth Circuit affirmed the Commission's interpretation of the Act's definition of "network elements." The court stated that "the Act's definition of network elements is not limited to only the physical components of a network that are directly used to transmit a phone call from point A to point B" and that the Act's definition explicitly made reference to "databases, signaling systems, and  X4information sufficient for billing and collection."Jz  {OY#'ԍ Iowa Utilities Bd. at *20.J Thus, just as databases and signaling systems may include software created by the incumbent LEC, which must be made available to competitive carriers purchasing those elements on an unbundled basis, we believe that the"V z,[&[&, , " routing table created by the incumbent LEC that is resident in the switch must be made available to requesting carriers purchasing unbundled switching. Finally, we note that Ameritech is the only incumbent LEC that has argued in this record that the routing table is not included in the unbundled local switching element. Other incumbent LECs have stated  X4that they offer shared transport in conjunction with unbundled local switching.Q{ {O'ԍ See n. FN77  supra.Q This suggests that other incumbent LECs recognize that the routing table is a feature, function, or capability of the switch.  XH4.47. We also disagree with Ameritech's and BellSouth's argument that defining the unbundled network element shared transport as all transport links between any two incumbent LEC switches would be inconsistent with Congress's intention to distinguish between resale services and unbundled network elements. Section 251(c)(3) requires incumbent LECs to make available unbundled network elements at costbased rates; sections 251(c)(4) and 252(d)(3) require incumbent LECs to make available for resale, at retail price less avoided  X 4costs, services the incumbent LEC offers to retail users. In the Local Competition Order, we  X 4held  that a key distinction between section 251(c)(3) and section 251(c)(4) is that a requesting carrier that obtains access to unbundled network elements faces greater risks than a  X{4requesting carrier that only offers services for resale.k|{Z {O'ԍ Local Competition Order, 11 FCC Rcd at 1566869, para. 334.k A requesting carrier that takes a network element dedicated to that carrier, and recovered on a flatrated basis, must pay for the cost of the entire element, regardless of whether the carrier has sufficient demand for the services that the element is able to provide. The carrier thus is not guaranteed that it will recoup the costs of the element. By contrast, a carrier that uses the resale provision will not  X4bear the risk of paying for services for which it does not have customers.M} {O'ԍ Iowa Utilities Bd. at *2627.M In particular, a requesting carrier that takes an unbundled local switch must pay for all of the vertical features included in the switch, even if it is unable to sell those vertical features to end user  X4customers.k~~ {O'ԍ Local Competition Order, 11 FCC Rcd at 1570708, para. 414.k Requesting carriers that purchase shared transport as a network element to provide local exchange service must also take local switching, for the practical reasons set  X4forth herein, and consequently will be forced to assume the risk associated with switching.  yOV!'ԍ A requesting carrier that uses its own selfprovisioned local switches, rather than unbundled local switches obtained from an incumbent LEC, to provide local exchange and exchange access service would use dedicated transport facilities to carry traffic between its network and the incumbent LEC's network. Thus, the only carrier that would need shared transport facilities would one that was using an unbundled local switch. "~ ,[&[&, , "Ԍ X4/48. BellSouth's arguement, that assessing a usagesensitive rate for shared transport would be inconsistent with the 1996 Act because it would not reflect the manner in which costs are incurred, is similarly unpersuasive. BellSouth's argument is premised on the assumption that incumbent LECs would be required to provide shared transport over facilities between the tandem switch and the serving wire center. In this order, however, we make clear that incumbent LECs are required to provide transport on a dedicated, but not on a shared basis, over transport facilities between the incumbent LEC's tandem and the serving wire center. Thus, BellSouth's concern is misplaced.  X14049. We also find that there is no element in the incumbent LEC's network that is an equivalent substitute for the routing table. We agree with Ameritech that requesting carriers could duplicate the shared transport network by purchasing dedicated facilities. But in that instance, requesting carriers would be forced to develop their own routing instructions, and would not be utilizing a portion of the incumbent LEC's network to substitute for the routing  X 4table. In the Local Competition Order, we specifically rejected the suggestion that an incumbent LEC is not required to provide a network element if a requesting carrier could  X4obtain the element from a source other than the incumbent LEC." {O 'ԍ Local Competition Order, 11 FCC Rcd at 1564344, paras. 28687. We found that requiring incumbent LECs to provide an element only where it is unavailable from any other source would nullify section 251(c)(3) because any new entrant, theoretically, could duplicate the incumbent LEC's entire network. Congress recognized that such duplication could delay entry and might be inefficient. The Eighth Circuit  X{4affirmed the Commission's conclusion.J{ {O'ԍ Iowa Utilities Bd. at *22.J  XM4150. Furthermore, we find that, at this stage of competitive entry, limiting shared transport to dedicated transport facilities, as Ameritech suggests, would impose unnecessary costs on new entrants without any corresponding, direct benefits. AT&T and Ameritech have both presented evidence regarding the costs of dedicated transport facilities linking every end office and tandem in a incumbent LEC's network as significant relative to the cost of "shared transport.". For example, AT&T contends that the cost is $.041767 per minute for dedicated  X4transport plus associated nonrecurring charges (NRCs).D yO'ԍ Letter from Bruce Cox, Government Affairs Director, AT&T, to William F. Caton, Acting Secretary,  {O'FCC, March 20, 1997 (AT&T Mar. 20 Ex Parte). AT&T claims that Ameritech would charge a total of $5008.58 per DS1 (including administrative charges and connection  X4charges) and $58,552.87 per switch (including customized routing and billing development).M {O"'ԍ AT&T Mar. 20 Ex Parte.M  X~4AT&T argues that this compares with $.000776 per minute for unbundled shared transport.L~0  {O_%'ԍ AT&T Mar. 20 Ex Parte.L "~ ,[&[&, , " Ameritech, on the other hand, contends the use of tandem routed dedicated facilities cost is  X4$.0031148 per minute plus associated NRCs. yOb'ԍ Letter from James K. Smith, Director Federal Relations, Ameritech, to William F. Caton, Acting  {O*'Secretary, FCC, Mar. 28, 1997 (Ameritech Mar. 28 Ex Parte). Ameritech claims that the nonrecurring charges per DS1 are $2769.27 (including administrative charges per order). Ameritech states that other NRCs include two trunk port connection charges ($770.29 initial, $29.16 subsequent), service ordering charge per occasion ($398.72 initial, $17.37 subsequent), billing development charge per switch ($35,328.87), custom routing charge, per line class code per  Xv4switch ($232.24), and a service order charge ($398.73).Qv" {OI 'ԍ Ameritech Mar. 28 Ex Parte.Q Nevertheless, under either AT&T's or Ameritech's cost calculations for dedicated transport, we conclude that the relative costs of dedicated transport, including the associated NRCs, is an unnecessary barrier to entry for competing carriers.  X 4251. We also find that limiting shared transport to dedicated facilities, as defined by Ameritech, would be unduly burdensome for new entrants. First, we agree with MCI, AT&T, et al., that a new entrant may not have sufficient traffic volumes to justify the cost of  X 4dedicated transport facilities.F  {O#'ԍ See n. 53 supra.F Second, a new entrant entering the local market with smaller traffic volumes would have to maintain greater excess capacity relative to the incumbent LEC in order to provide the same level of service quality (i.e., same level of successful call  Xy4attempts) as the incumbent LEC. yF {Op'ԍSee William W. Sharkey, The Theory of Natural Monopoly 18485, (1982) ("that for a given number of circuits the economies [of scale] are more pronounced at higher grades of service (lower blocking probability).  {O'The economics of scale, however, decline substantially as the number of circuits increases. Therefore for small demands a fragmentation of the network could result in a significant cost penalty, because more circuits would be required to maintain the same grade of service. At larger demands the costs of fragmentation are less  {O\'pronounced.") (emphasis added). As a new entrant gains market share and increased traffic volumes for local service, however, the relative amount of excess capacity necessary to prevent blocking should decrease. We do not rule out the possibility, therefore, that, once new entrants have had a fair opportunity to enter the market and compete, we might  X4reconsider incumbent LECs' obligations to provide access to the routing table.z\  {O 'ԍ As we held in the Local Competition Order, "the plain language of section 251(d)(2), and the standards articulated there, give us the discretion to limit the general obligation imposed by section 251(c)(3), but they do  {O$"'not require us to do so." Local Competition Order, 11 FCC Rcd at 1564344, para. 286.z  X4352. As discussed above, requesting carriers may use shared transport to provide exchange access service to customers for whom they also provide local exchange service. ",[&[&, , :" Several competing carriers contend that an interexchange carrier (IXC) has the right to select a requesting carrier that has purchased unbundled shared transport to provide exchange access  X4service. yOK'ԍ Letter from Bruce D. Cox, Government Affairs Vice President for AT&T, to William F. Caton, Acting  {O'Secretary, FCC, July 11, 1997; WorldCom June 27 Ex Parte. The carriers further contend that, if the IXC selects a requesting carrier, rather than the incumbent LEC, as the exchange access provider, the competing carrier is entitled to bill the IXC for the access services associated with shared transport. We find that a requesting carrier may use shared transport facilities to provide exchange access service to originate or terminate traffic to its local exchange customers, regardless of whether the requesting carrier or another carrier is the IXC for that traffic. We further conclude that a requesting carrier that provides exchange access service to another carrier is entitled to assess access charges associated with the shared transport facilities used to transport the traffic. We believe that  X 4this necessarily follows from our decision in the Local Competition Orderm " {O 'ԍ In the Local Competition Order, we adopted a limited, transitional plan to address public policy concerns raised by the potential for requesting carriers to bypass access charges through the use of unbundled network  {O'elements. See Local Competition Order at 1586269, paras. 71632. Our authority to adopt that interim plan  {OI'generally was upheld in Competitive Telecommunications Association v. FCC, although the court noted that the Commission lacks authority to decide whether carriers are obligated to continue to pay intrastate access charges.  {O'Competitive Telecommunications Association v. FCC, 1997 WL 352284 (8th Cir. June 27, 1997) at *6, n.5. Outside the scope of that transitional plan, however, we held that parties that use network elements to provide  {Om'interexchange or exchange access services are not required to pay access charges. Local Competition Order, 11  {O7'FCC Rcd at 15682, para. 363; Access Charge Reform Order at paras. 339340. m where we stated that: XX` ` [W]here new entrants purchase access to unbundled network elements to provide exchange access services, whether or not they are also offering toll services through such elements, the new entrants may assess exchange access charges to IXCs originating or terminating toll calls on those elements. In these circumstances, incumbent LECs may not assess exchange access charges to IXCs because the new entrants, rather than the incumbents, will be providing  XM4exchange access services . . . .nM  {O'ԍ Local Competition Order, 11 FCC Rcd at 15682, para. 363 n.772.n(#` We therefore find that requesting carriers that provide exchange access using shared transport facilities to originate and terminate local exchange calls may also use those same facilities to provide exchange access service to the same customers to whom the requesting carrier is providing local exchange service. Requesting carriers are then entitled to assess access charges to interexchange carriers that use the shared transport facilities to originate and terminate traffic to the requesting carrier's customers. " ,[&[&, , "Ԍ X' E. XFinal Regulatory Flexibility Analysis (#  X4453. As required by the Regulatory Flexibility Act (RFA),yZ {OK'#]\  PCɒP#э See 5 U.S.C.  604. The RFA, see 5 U.S.C.  601 et seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).y the Commission issued a  X4Final Regulatory Flexibility Analysis (FRFA) in its Local Competition Order in this  X4proceeding. {OA '#X\  P6G;ɒP#э Local Competition Order, 11 FCC Rcd at 1614380, paras. 1324441. None of the petitions for reconsideration filed in Docket No. 9698 specifically address, or seek reconsideration of, that FRFA. This present Supplemental Final Regulatory Flexibility Analysis addresses the potential effect on small entities of the rules adopted  Xa4pursuant to the Third Order on Reconsideration in this proceeding, supra. This Supplemental FRFA incorporates and adds to our FRFA.  X 4554. Need for and Objectives of this Third Order on Reconsideration and the Rules  X 4Adopted Herein. The need for and objectives of the rules adopted in this Third Order on  X 4Reconsideration are the same as those discussed in the Local Competition Order's FRFA  X 4"Summary Analysis of Section V Access to Unbundled Network Elements." | {O '#X\  P6G;ɒP#э Local Competition Order at 16161, paras. 13741383. In general, our rules adopted in Section V were intended to facilitate the statutory requirement that incumbent local exchange carriers (LECs) are required to provide nondiscriminatory access to unbundled  X4network elements. {OY'#X\  P6G;ɒP#э Local Competition Order at 16161, para. 1374. In this Third Order on Reconsideration, we grant in part and deny in  X4part the petitions filed for reconsideration and/or clarification of the Local Competition Order, in order to further the same needs and objectives. We conclude that the duty of incumbent LECs to provide access to unbundled network elements also includes the provision of "shared transport" as an unbundled network element between end offices, even if tandem switching is not used to route the traffic. We also hold that the term "shared transport" refers to all transmission facilities connecting an incumbent LEC's switches that is, between end office switches, between an end office switch and a tandem switch, and between tandem switches. We conclude that incumbent LECs are obligated under Section 251(d)(2) of the Communications Act of 1934, as amended, 47 U.S.C.  251(d)(2), to provide access to both their interoffice transmission facilities and their routing tables contained in the incumbent LEC's switches. Finally, we conclude that a requesting carrier may use the shared transport unbundled element to provide exchange access service to customers for whom the carrier  Xs4provides local exchange service. "\!,[&[&, , N"Ԍ X4655. Description and Estimate of the Number of Small Entities To Which the Rules  X4Will Apply. In determining the small entities affected by our Third Order on Reconsideration  X4for purposes of this Supplemental FRFA, we adopt the analysis and definitions set forth in the  X4FRFA in our Local Competition Order.n {O:'ԍ See Local Competition Order at 1614957, paras. 134160.n The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that might be affected by the rules we have adopted. The RFA defines the term "small entity" as having the same meaning as the terms "small business," "small organization," and "small business  Xg4concern" under Section 3 of the Small Business Act..gZ {Or '#]\  PCɒP#э See 5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5U.S.C.632). The Commission may also develop additional definitions that are appropriate to its activities.. A small business concern is one which: (1)is independently owned and operated; (2) is not dominant in its field of operation; and (3)satisfies any additional criteria established by the Small Business Administration  X" 4(SBA).g"  yO'#]\  PCɒP#э 15 U.S.C.  632. g The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications,  X 4Except Radiotelephone) to be an entity with no more than 1,500 employees. D {O'#X\  P6G;ɒP#э Id. (citing 13 C.F.R. 121.201). Consistent with our FRFA and prior practice, we here exclude small incumbent local exchange carriers  X 4(LECs) from the definition of "small entity" and "small business concern."  {OM'#X\  P6G;ɒP#э See Local Competition Order, 11 FCC Rcd at 16150, para. 1342. While such a company may have 1500 or fewer employees and thus fall within the SBA's definition of a small telecommunications entity, such companies are either dominant in their field of operations or are not independently owned and operated. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent LECs within this present analysis and use the term "small incumbent LECs" to refer to any incumbent LEC that arguably might be defined by SBA as a small business concern.  X4756. In addition, for purposes of this Supplemental FRFA, we adopt the FRFA estimates of the numbers of telephone companies, incumbent LECs, and competitive access  X4providers (CAPs) that might be affected by the Local Competition Order. In the FRFA, we determined that it was reasonable to conclude that fewer than 3,497 telephone service firms  X4are small entity telephone service firms or small incumbent LECs that might be affected.h  {O"'#X\  P6G;ɒP#э Local Competition Order at 16150, para. 1343. We further estimated that there are fewer than 1,347 small incumbent LECs that might be"" ,[&[&, , "  X4affected. {Oy'#X\  P6G;ɒP#э Local Competition Order at 16151, para. 1345. Finally, we estimated that there were fewer than 30 small entity CAPs that would  X4qualify as small business concerns.Z {O'#]\  PCɒP#э Local Competition Order at 16151, para. 1347.  X4857. Summary of Projected Reporting, Recordkeeping and Other Compliance  X4Requirements. As a result of the rules adopted in the Third Order on Reconsideration, we require incumbent LECs to provide requesting carriers with access to the same shared transport for all transmission facilities connecting incumbent LECs' switches. No party to this proceeding has suggested that changes in the rules relating to access to unbundled network elements would affect small entities or small incumbent LECs. We determine that complying with this rule may require use of engineering, technical, operational, accounting, billing, and legal skills. For example, a new entrant may be required to combine its own interoffice facilities with those of the incumbent LEC, or be required to combine purchased unbundled  X 4network elements into a package unique to its own needs.    X 4  X 4958. Steps Taken to Minimize Significant Economic Impact on Small Entities, and  X 4Alternatives Considered. As stated in our FRFA, we determined that our decision to establish minimum national requirements for unbundled elements should facilitate negotiations and reduce regulatory burdens and uncertainty for all parties, including small entities and small  Xl4incumbent LECs.l {O '#X\  P6G;ɒP#э Local Competition Order at 16162, para 1376. National requirements for unbundling may allow new entrants, including small entities, to take advantage of economies of scale in network design, which may  X>4minimize the economic impact of our decision in the Local Competition Order. As stated above, no petitioner has challenged this finding. We further find that our new rules, which clarify the definition of "shared transport," will likely ensure that small entities obtain the unbundled elements that they request.  X4:59. Report to Congress : The Commission will send a copy of the Third Order on  X4Reconsideration, including this Supplemental FRFA, in a report to be sent to Congress  X4pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C.  X4801(a)(1)(A). A copy of the Third Order on Reconsideration and this supplemental FRFA  Xy4(or summary thereof) will also be published in  the Federal Register, see 5 U.S.C.  604(b),  Xd4and will be sent to the Chief Counsel for Advocacy of the Small Business Administration.   X64  IV. FURTHER NOTICE OF PROPOSED RULEMAKING ׃  X' A. XDiscussion (# "#~,[&[&, , "Ԍ X4;60. In the Local Competition Order, we did not condition use of network elements on the requesting carrier's provision of local exchange service to the enduser customer. We recognized, however, that, as a practical matter, a requesting carrier using certain network elements would be unlikely to obtain customers unless it offered local exchange service as well as exchange access service over those network elements. In particular, we found that  X4local loops are dedicated to the premises of a particular customer.h {O'ԍ Local Competition Order, 11 FCC Rcd at 15679, para. 357.h Therefore, we stated that a requesting carrier would need to provide all services requested by the customer to whom the local loops are dedicated, and that, as a practical matter, requesting carriers usually would need to provide local exchange service over any unbundled local loops that it purchases under  X34section 251(c)(3).h3Z {O> 'ԍ Local Competition Order, 11 FCC Rcd at 15679, para. 357.h We similarly held in our Order on Reconsideration that the unbundled  X 4switch, as defined in the Local Competition Order, includes the line card, which is typically dedicated to a particular customer. We concluded that: XX` ` Thus, a carrier that purchases the unbundled switching element to serve an end user effectively obtains the exclusive right to provide all features, functions, and capabilities of the switch, including switching for exchange access and local exchange service, for that end user. A practical consequence of this determination is that the carrier that purchases the local switching element is likely to provide all available services requested by the customer served by that switching element, including switching for local exchange and exchange  X:4access.h: {O'ԍ Order on Reconsideration, 11 FCC Rcd at 13048, para. 11.h(#`  X 4<61. Neither of the petitions for reconsideration expressly asked the Commission to determine whether requesting carriers may purchase shared transport facilities under section 251(c)(3) of the Act to originate or terminate interexchange traffic to customers to whom the  X4requesting carrier does not provide local exchange service.z~ {O'ԍ See, e.g., WorldCom Petition at 6 (new local entrants may need to use shared transport facilities between end offices as well as between an end office and a tandem); WorldCom Opposition at 4 (contending that requesting carriers that purchase unbundled local switching should be able to route calls over the same facilities the incumbent LEC uses to transport its traffic); LECC Petition at 33 ("the Order requires incumbent LECs to provide unbundled access to shared transmission facilities between end offices and tandem switches . . . [t]he Commission, however, should clarify that such shared transmission facilities may be provided to a requesting carrier only in conjunction with local switching and tandem capability). Moreover, the oppositions and  X4replies to the two petitions for reconsideration, as well as the ex partes, focused on the issue of whether requesting carriers may use unbundled shared transport facilities, in conjunction"$ ,[&[&, , "  X4with unbundled switching, to compete in the local exchange market.^ {Oy'ԍ WorldCom April 16 Ex Parte (asserting that carriers that purchase unbundled local switching have the  {OC'right to use incumbent LECs' interoffice transport facilities to complete local calls); AT&T Jan. 28 Ex Parte (noting that the Commission had held that carriers that seek to enter the local exchange market should be able to take advantage of the incumbent LEC's economies of scale); Bell Atlantic Reply at 10 (requesting carriers are entitled to purchase shared transport in conjunction with local switching to route local calls). ^ In fact, the issue of whether requesting carriers may purchase unbundled shared transport facilities to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide  X4local exchange service was specifically addressed only in two recent ex parte submissions.h| {O 'ԍ WorldCom June 27 Ex Parte; NYNEX July 18 Ex Parte.h In order to develop a complete record on this issue, we issue this further notice of proposed rulemaking specifically asking whether requesting carriers may use unbundled dedicated or shared transport facilities in conjunction with unbundled switching, to originate or terminate interstate toll traffic to customers to whom the requesting carrier does not provide local exchange service. Absent restrictions requiring carriers to provide local exchange service in order to purchase unbundled shared or dedicated transport facilities, an IXC, for example, could request shared or dedicated transport under section 251(c)(3) for purposes of carrying originating interstate toll traffic between an incumbent LEC's end office and the IXC's point of presence (POP). Likewise, an IXC could request such transport network elements for purposes of terminating interstate toll traffic from its POP to an incumbent LEC's end office. Parties that advocate the use of transport network elements for the transmission of such access  X 4traffic should address whether that approach is consistent with our Order on Reconsideration regarding the use of the unbundled local switching element to provide interstate access  X}4servicen} {O<'ԍ Order on Reconsideration, 11 FCC Rcd at 1304849, para. 1213.n as well as recent appellate court decisions interpreting section 251(c)(2) and (3).o} {O'ԍ CompTel, 11 F.3d at 107375; Iowa Utilities Bd. at n. 20.o Parties that advocate restricting the use of transport network elements should address whether such restrictions are consistent with section 251(c)(3) of the Act, which requires an incumbent LEC to provide access to unbundled network elements "for the provision of a telecommunications service." Moreover, those parties should also address the technical feasibility of requiring an IXC to identify terminating toll traffic that is destined for customers that are not local exchange customers of the incumbent LEC.  X' B.Procedural Matters   X' 1.` ` Ex Parte Presentations "%2 ,[&[&, , z"Ԍ X4=62.` ` This Further Notice is a permitbutdisclose noticeandcomment rulemaking  X4proceeding. Ex parte presentations are permitted, in accordance with the Commission's rules,  X4provided that they are disclosed as required.p {OO'ԍ See generally 47 C.F.R.  1.1200, 1.1202, 1.1204, 1.1206.p  X' 2.` ` Initial Regulatory Flexibility Analysis  Xz4>63. As required by the Regulatory Flexibility Act (RFA),RZzZ {O 'ԍ See 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).R the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the expected significant  XL4economic impact on small entities by the policies and rules proposed in the Further Notice of  X74Proposed Rulemaking (Further Notice). Written public comments are requested on the IRFA. These comments must be filed by the deadlines for comment on the remainder of the Further Notice, and should have a separate and distinct heading designating them as responses to the  X 4IRFA. The Commission will send a copy of the Further Notice, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA) in accordance with  X 4the RFA, 5 U.S.C.  603(a).  X4?64. Need for and Objectives of the Proposed Rules. We seek comment on whether requesting carriers may use unbundled shared transport facilities in conjunction with unbundled switching, to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service. We also seek comment on whether similar use restrictions may apply to the use of unbundled dedicated transport facilities. We propose no new rules at this time. In light of comments received in response  X4to the Further Notice, we might issue new rules.  X4@65. Legal Basis. The legal basis for any action that may be taken pursuant to the Further Notice is contained in Sections 1, 2, 4, 201, 202, 274, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154, 201, 202, 274, and 303(r).   Xu4A66. Description and Estimate of the Number of Small Entities That May Be Affected  X`4by the Further Notice of Proposed Rulemaking. In determining the small entities affected by  XK4our Further Notice for purposes of this Supplemental FRFA, we adopt the analysis and  X64definitions set forth in the FRFA in our First Report and Order.v6| {Oc$'ԍ Local Competition Order, 11 FCC Rcd at 1614957, paras. 134160.v The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of"!&,[&[&, , " small entities that might be affected by proposed rules. The RFA defines the term "small entity" as having the same meaning as the terms "small business," "small organization," and  X4"small business concern" under Section 3 of the Small Business Act.. {OK'#]\  PCɒP#э See 5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5U.S.C.632). The Commission may also develop additional definitions that are appropriate to its activities.. A small business concern is one which: (1)is independently owned and operated; (2) is not dominant in its  X4field of operation; and (3)satisfies any additional criteria established by SBA.g" yOw'#]\  PCɒP#э 15 U.S.C.  632. g The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except  X_4Radiotelephone) to be an entity with no more than 1,500 employees._ {O '#X\  P6G;ɒP#э Id. (citing 13 C.F.R. 121.201). Consistent with our FRFA and prior practice, we here exclude small incumbent local exchange carriers (LECs)  X14from the definition of "small entity" and "small business concern."1D {O&'#X\  P6G;ɒP#э See Local Competition Order, 11 FCC Rcd at 16150, para. 1342. While such a company may have 1500 or fewer employees and thus fall within the SBA's definition of a small telecommunications entity, such companies are either dominant in their field of operations or are not independently owned and operated. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent LECs within this present analysis and use the term "small incumbent LECs" to refer to any incumbent LEC that arguably might be defined by SBA as a small business concern.  Xy4B67. In addition, for purposes of this IRFA, we adopt the FRFA estimates of the numbers of telephone companies, incumbent LECs, and competitive access providers (CAPs)  XK4that might be affected by the First Report and Order. In the FRFA, we determined that it was reasonable to conclude that fewer than 3,497 telephone service firms are small entity  X4telephone service firms or small incumbent LECs that might be affected. {O'#X\  P6G;ɒP#э Local Competition Order at 16150, para. 1343. We further  X4estimated that there are fewer than 1,347 small incumbent LECs that might be affected.h  {O!'#X\  P6G;ɒP#э Local Competition Order at 16151, para. 1345. Finally, we estimated that there are fewer than 30 small entity CAPs that might qualify as  X4small business concerns.  {O"'#]\  PCɒP#э Local Competition Order at 1615152, para. 1347.  X4C68. Description of Projected Reporting, Recordkeeping and Other Compliance  X4Requirements. It is probable that any rules issued pursuant to the Further Notice would not"' ,[&[&, , " change the projected reporting, recordkeeping, or other compliance requirements already  X4adopted in this proceeding. {Ob'ԍ#X\  P6G;ɒP# See, e.g., Local Competition Order at 1616162, paras. 13741375.  X4D69. Steps Taken to Minimize Significant Economic Impact on Small Entities, and  X4Alternatives Considered. As stated in our FRFA, we determined that our decision to establish minimum national requirements for unbundled elements would likely facilitate negotiations and reduce regulatory burdens and uncertainty for all parties, including small entities and  Xc4small incumbent LECs.cZ {On '#X\  P6G;ɒP#э Local Competition Order, 11 FCC Rcd at 16162, para 1376. National requirements for unbundling may allow new entrants, including small entities, to take advantage of economies of scale in network design, which  X54may minimize the economic impact of our decision in the First Report and Order. This finding has not been challenged. We do not believe that any rules that may be issued  X 4pursuant to the Further Notice will change this finding. We seek comment on this tentative conclusion.  X 4E70. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.  X' 3.` ` Comment Filing Procedures  XU4F71.` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or before October 2, 1997, and reply comments on or before October 17, 1997. To file formally in this proceeding, you must file an original and six copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original and eleven copies. Comments and reply comments should be sent to the Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C., 20036. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C., 20554.  X4G72.` ` Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also"(,[&[&, , k"  X4comply with Section 1.49 and all other applicable sections of the Commission's Rules./\ {Oy'ԍ See 47 C.F.R.  1.49. However, we require here that a summary be included with all comments and reply comments, regardless of length. This summary may be paginated separately from the rest of the pleading  {O '(e.g., as "i, ii")./ We also direct all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. All parties are encouraged to utilize a table of contents, regardless of the length of their submission.  X4H73.` ` Parties are also asked to submit comments and reply comments on diskette. Such diskette submissions would be in addition to, and not a substitute for, the formal filing requirements addressed above. Parties submitting diskettes should submit them to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly labelled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter.  X 4I74.` ` In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C., 20554, or via the Internet to jboley@fcc.gov, and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington, D.C., 20503 or via the Internet to fain_t@al.eop.gov.  X46% V. ORDERING CLAUSES ׃  X4J75. Accordingly, IT IS ORDERED that, pursuant to sections 14, 201205, 214, 251, 252, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  151154, 201205, 214, 251, 252, and 303(r), the Third Order on Reconsideration is ADOPTED.  X4K76. IT IS FURTHER ORDERED that changes adopted on reconsideration in section III.B. and the rule appendix will be effective 30 days after publication in the Federal Register.  XN4L77. IT IS FURTHER ORDERED, pursuant to section 405 of the Communications Act of 1934, as amended, 47 U.S.C.  405, and section 1.106 of the Commission's rules, 47 C.F.R.  1.106 (1995), that the petitions for reconsideration filed by WorldCom, Inc. and the Local Exchange Carriers Coalition are DENIED IN PART and GRANTED IN PART to the extent indicated above. "),[&[&, , ^"Ԍ X4M78. IT IS FURTHER ORDERED, that the Commission SHALL SEND a copy of this  X4Third Order on Reconsideration and Further Notice of Proposed Rulemaking, including the associated Supplemental Final Regulatory Flexibility Analysis and Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  X4N79. IT IS FURTHER ORDERED that pursuant to sections 1, 2, 4, 201, 202, 274 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154, 201, 202, 274, and 303(r), the FURTHER NOTICE OF PROPOSED RULEMAKING IS ADOPTED. XX` ` X XXhhCXqFEDERAL COMMUNICATIONS COMMISSION(# XX` ` X XXhhCXqWilliam F. Caton(# XX` ` X XXhhCXqActing Secretary(# "*,[&[&, , "  X'\ Appendix A (#\  X4] Final Rules Part 51INTERCONNECTION 1. The authority citation for part 51 continues to read as follows: Authority: Sections 15, 7, 20105, 218,l 22527, 25154, 271, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 15155, 157, 20105, 218, 22527, 25154, 271, unless otherwise noted. 2. Paragraph (d)(1) of Section 51.319 is revised to read as follows:  X ' 51.319` ` Specific unbundling requirements. *****  Xb4(d) Interoffice Transmission Facilities. ` ` (1) Interoffice transmission facilities include: ` `  (i) Dedicated transport, defined as incumbent LEC transmission facilities dedicated to a particular customer or carrier that provide telecommunications between wire centers owned by incumbent LECs or requesting telecommunications carriers, or between switches owned by incumbent LECs or requesting telecommunications carriers; ` `  (ii) Shared transport, defined as transmission facilities shared by more than one carrier, including the incumbent LEC, between end office switches, between end office switches and tandem switches, and between tandem switches, in the incumbent LEC's network; 3. Section 51.515 is revised to read as follows:  X'  51.515` ` Application of access charges. (d) Interstate access charges described in part 69 shall not be assessed by incumbent LECs on each element purchased by requesting carriers providing both telephone exchange and exchange access services to such requesting carriers' end users. "#+,[&[&, , !"  #P2 `(#UAugust 18, 1997  X4  SEPARATE STATEMENT OF CHAIRMAN REED HUNDT ă  V4RE: Implementation of the Local Competition Provisions of the Telecommunications Act of 1996; Third Order on Reconsideration and Further Notice of Proposed Rulemaking  Xv4 The Commission today reaffirms and clarifies a very important aspect of our Local Competition Order: the ability of a competitive local exchange carrier to obtain transport on a shared basis from the incumbent local exchange carrier. More fundamentally, this decision highlights the importance we place on incumbents making available to new entrants their network elements on a combined basis a combination sometimes referred to as the UNE platform. In the Telecommunications Act of 1996, Congress mandated that new entrants into the formerly monopolized local exchange market have the ability to choose any or all of three entry strategies: interconnection, resale and unbundled network elements. Congress correctly foresaw that new entrants would need these flexible strategies if they are to compete successfully with the incumbents and their extraordinary economies of scale and scope. In its decision last month, the Eighth Circuit explicitly affirmed our authority under the Act to define unbundled network elements. This is a very important aspect of our local competition policies. Where the purpose or effect of moves by an incumbent LEC to break apart currently combined elements is to create a barrier to competition, we will take action to tear down or prevent the erection of such barriers.  #P2