******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect or Word to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Application of Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions) And Verizon Global Networks Inc., For Authorization to Provide In-Region, InterLATA Services in Massachusetts ) ) ) ) ) ) ) ) ) CC Docket No. 01-9 MEMORANDUM OPINION AND ORDER Adopted: April 16, 2001 Released: April 16, 2001 By the Commission: Chairman Powell and Commissioner Ness issuing separate statements; Commissioner Furchtgott-Roth concurring and issuing a statement; and Commissioner Tristani dissenting and issuing a statement. TABLE OF CONTENTS Paragraph I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 II. BACKGROUND . . . . . . . 4 A. History of this Application. . . . . . . . . . . . . . . . . . . . .4 B. Evaluations of Massachusetts Department and Department of Justice. . . . . . . 8 III. PROCEDURAL AND ANALYTICAL FRAMEWORK. . . . . . . 10 IV. PRIMARY ISSUES IN DISPUTE. . . . . . . . . . . . 15 A. Checklist Item 2 Unbundled Network Elements. . . . . . . . . . . 16 1. Pricing of Network Elements . . . . . . . . . . . . . . . . . . . 16 2. Access to Operations Support Systems. . . . . . . . . . . . . . . 43 3. UNE Combinations. . . . . . . . . . . . . . . . . . . . . . . . .117 B. Checklist Item 4 Unbundled Local Loops . . . . . . . . . . . . .121 1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . .121 2. Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . .124 V. OTHER CHECKLIST ITEMS . . . . . . . . . . . . . . . . . . . . . . . 182 A. Checklist Item 1 Interconnection . . . . . . . . . . . . . . . .182 1. Interconnection Trunking. . . . . . . . . . . . . . . . . . . . .183 2. Collocation . . . . . . . . . . . . . . . . . . . . . . . . . . .194 3. Technically Feasible Points of Interconnection. . . . . . . . . .197 4. Pricing of Interconnection. . . . . . . . . . . . . . . . . . . .198 B. Checklist Item 3 Poles, Ducts, Conduits and Rights of Way. . . . . . .205 1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . .205 2. Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . .206 C. Checklist Item 5 Unbundled Local Transport . . . . . . . . . . .207 D. Checklist Item 13 Reciprocal Compensation. . . . . . . . . . . .213 E. Checklist Item 14 Resale . . . . . . . . . . . . . . . . . . . .217 F. Remaining Checklist Items (6-12) . . . . . . . . . . . . . . . . .222 VI. COMPLIANCE WITH SECTION 271(C)(1)(a) . . . . . .223 A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . .223 B. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . .224 VII. SECTION 272 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . 226 A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . .226 B. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . .227 1. Unchallenged Sections . . . . . . . . . . . . . . . . . . . . . .228 2. Challenged Sections . . . . . . . . . . . . . . . . . . . . . . .229 VIII. PUBLIC INTEREST ANALYSIS . . . . . . .232 A. Competition in Local Exchange and Long Distance Markets. . . . . .234 B. Assurance of Future Compliance . . . . . . . . . . . . . . . . . .236 1. Performance Assurance Plan. . . . . . . . . . . . . . . . . . . .237 2. Key Elements of the Performance Assurance Plan. . . . . . . . . .240 C. Other Issues . . . . . . . . . . . . . . . . . . . . . . . . . . .249 IX. SECTION 271(d)(6) enforcement authority. . . . . . . 250 X. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 XI. Ordering Clauses . . . . . . . . . . . . . . . . . . 254 APPENDIX A List of Commenters Appendix B Statutory Requirements Checklist Items 6-12 I. INTRODUCTION 1. On January 16, 2001, Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions), and Verizon Global Networks Inc. (Verizon) filed this application pursuant to section 271 of the Communications Act of 1934, as amended, for authority to provide in-region, interLATA service originating in the state of Massachusetts. We grant this application in this Order based on our conclusion that Verizon has taken the statutorily required steps to open its local exchange markets to competition in Massachusetts. 2. In approving this application, we wish to recognize the hard work of the Massachusetts Department of Telecommunications and Energy (Massachusetts Department) in laying the foundation for approval of this application. The Massachusetts Department has conducted critically important proceedings concerning Verizon's section 271 compliance open to participation by all interested parties. The Massachusetts Department and Verizon also provided for third-party testing of Verizon's operations support systems (OSS) offering. In addition, the Massachusetts Department adopted a broad range of performance measures and standards and a Performance Assurance Plan designed to create a financial incentive for post-entry compliance with section 271. State proceedings such as these serve a vitally important role in the overall section 271 approval process. 3. We also commend Verizon for all of the work that it has undertaken to open its local exchange market to competition in Massachusetts. For example, Verizon states that competitive local exchange carriers (competitive LECs) serve more than 513,000 lines on a facilities basis in Massachusetts, with Verizon providing more than 333,000 interconnection trunks and 1,700 collocation nodes to competitive LECs. Verizon also states that it provides more than 93,000 unbundled local loops, including more than 69,000 stand-alone unbundled local loops and more than 23,000 unbundled loops provided as part of an unbundled network element platform (UNE- P). There is also an active resale market in Massachusetts. Verizon states that it provides more than 268,000 resold local exchange lines, including 238,000 business lines and 30,000 residential lines. These results bear out the fact that Verizon has made extensive efforts to open its local markets in compliance with the requirements of the Act. IV. BACKGROUND A. History of this Application 5. In the 1996 amendments to the Communications Act, Congress required that the Bell Operating Companies (BOCs) demonstrate compliance with certain market opening requirements contained in section 271 of the Act prior to entering the in-region, interLATA market. Congress also provided for Commission review of BOC applications to provide such services in consultation with the affected state and the Attorney General. The Commission has summarized the applicable statutory framework in a number of prior orders and need not repeat this material here. 6. On May 24, 1999, Verizon filed a draft section 271 application with the Massachusetts Department. The Massachusetts Department conducted a sixteen-month investigation of Verizon's compliance with section 271. These proceedings were open to full participation by all interested parties. This process included: a comprehensive third-party test of Verizon's OSS; numerous technical sessions with the Department's staff, Verizon and many competitive LECs; a series of public hearings and oral arguments; and hundreds of information requests. 7. In August of 1999, the Massachusetts Department contracted with KPMG consulting, L.L.C. to perform a third-party test of Verizon's OSS performance. In January 2000, the Massachusetts Department adopted the performance metrics developed in the New York carrier- to-carrier proceeding as the metrics to be used and replicated by KPMG in evaluating Verizon's performance in Massachusetts. On September 7, 2000, KPMG issued its final report, which found that Verizon satisfied 800 of 804 test points relating to its review of Verizon's OSS. 8. Verizon filed its initial application for section 271 authority for the state of Massachusetts (the Massachusetts I Application) on September 22, 2000, but later chose to withdraw it. Verizon filed another application for Massachusetts (the Massachusetts II Application) on January 16, 2001. The Massachusetts II Application incorporates the material in the original application by reference to demonstrate compliance with most of the section 271 requirements. It also provides additional information concerning Verizon's provision of DSL- capable local loops, the availability of loop make-up information and line sharing. In addition, competitive LECs now have access to Verizon's carrier specific performance data. A. Evaluations of Massachusetts Department and Department of Justice 9. The Massachusetts Department supports Verizon's application to provide in-region, interLATA long distance service originating in Massachusetts. Specifically, it concluded that Verizon had met the requirements of section 271, and urged the Commission to approve Verizon's in-region, interLATA entry in both its October 16, 2000 evaluation of the Massachusetts I Application, and its February 6, 2001 evaluation of the Massachusetts II Application. 10. The Department of Justice filed its evaluation of Verizon's Massachusetts I Application on October 27, 2000. It recommended that the Commission not approve the application until Verizon had demonstrated that it provides nondiscriminatory access to DSL- capable loops and established suitable performance measures with unambiguous benchmarks for DSL-capable loops. The Department of Justice submitted an evaluation of Verizon's Massachusetts II Application on February 21, 2001. It recognized that a "number of changes have taken place" since it filed its evaluation of the Massachusetts I Application and acknowledged that the second Verizon application "shows improvement in some aspects of Verizon's performance in providing access to DSL loops," although it highlighted several remaining disputed issues related to the provision of nondiscriminatory access to DSL-capable loops. The Department of Justice stated that it was unable to resolve those remaining issues based on the record on file at the time of its evaluation. As a result, it stated that it could not find at that stage of the proceeding that Verizon had adequately demonstrated its ability to provide nondiscriminatory access to DSL-capable loops. Recognizing that its evaluation reflected only the evidence in the record at the time of its evaluation, however, the Department of Justice urged the Commission to consider the full record -- as it developed in reply comments and ex parte submissions -- in its final determination. XI. PROCEDURAL AND ANALYTICAL FRAMEWORK 12. To determine whether a BOC applicant has met the prerequisites for entry into the long distance market, we evaluate its compliance with the competitive checklist, as developed in our local competition rules and orders in effect at the time the application was filed. Despite the comprehensiveness of our rules, there will inevitably be, in any section 271 proceeding, disputes over an incumbent LEC's precise obligations to its competitors that our rules have not addressed and that do not involve per se violations of self-executing requirements of the Act. As the Commission has explained in prior orders, the section 271 process simply could not function as Congress intended if we resolved all such disputes as a precondition to granting a section 271 application. In prior orders, the Commission has explained the procedural rules it has developed to facilitate the review process. Here we describe how we consider the evidence of compliance that Verizon has presented to us in this proceeding. 13. As part of our determination that a BOC has satisfied the requirements of section 271, we consider whether the BOC has fully implemented the competitive checklist in subsection (c)(2)(B). The BOC at all times bears the burden of proof of compliance with section 271, even if no party challenges its compliance with a particular requirement. In demonstrating its compliance, a BOC must show that it has a concrete and specific legal obligation to furnish the item upon request pursuant to state-approved interconnection agreements that set forth prices and other terms and conditions for each checklist item, and that it is currently furnishing, or is ready to furnish, the checklist items in quantities that competitors may reasonably demand and at an acceptable level of quality. In particular, the BOC must demonstrate that it is offering interconnection and access to network elements on a nondiscriminatory basis. Previous Commission orders addressing section 271 applications have elaborated on this statutory standard. First, for those functions the BOC provides to competing carriers that are analogous to the functions a BOC provides to itself in connection with its own retail service offerings, the BOC must provide access to competing carriers in "substantially the same time and manner" as it provides to itself. For those functions that have no retail analogue, the BOC must demonstrate that the access it provides to competing carriers would offer an efficient carrier a "meaningful opportunity to compete." 14. In past orders, the Commission has found that the most probative evidence of nondiscriminatory access to interconnection and UNEs is actual commercial usage, and "[p]erformance measures are an especially effective means of providing us with evidence of the quality and timeliness of the access provided by a BOC to requesting carriers." We expect that, in its prima facie case in the initial application, a BOC relying on performance data will: a) provide sufficient performance data to support its contention that the statutory requirements are satisfied; b) identify the facial disparities between the applicant's performance for itself and its performance for competitors; c) explain why those facial disparities are anomalous, caused by forces beyond the applicant's control (e.g., competing carrier-caused errors), or have no meaningful adverse impact on a competing carrier's ability to obtain and serve customers; and d) provide the underlying data, analysis, and methodologies necessary to enable the Commission and commenters meaningfully to evaluate and contest the validity of the applicant's explanations for performance disparities, including, for example, carrier specific carrier-to-carrier performance data. 5. The Massachusetts Department has adopted the performance metrics and standards established by the New York Commission. Under this framework, for functions with retail analogues, Verizon provides a figure indicating the degree of statistical significance for any differences in performance for competitors as compared to performance for its retail operations. For functions with a performance benchmark, Verizon provides data on its performance, which are then compared to the benchmark. The Commission has explained in prior orders that parity and benchmark standards established by state commissions do not represent absolute maximum or minimum levels of performance necessary to satisfy the competitive checklist. Rather, where, as here, these standards are developed through open proceedings with input from both the incumbent and competing carriers, these standards can represent informed and reliable attempts to objectively approximate whether competing carriers are being served by the incumbent in substantially the same time and manner, or in a way that provides them a meaningful opportunity to compete. Thus, to the extent there is no statistically significant difference between Verizon's provision of service to competing carriers and its own retail customers, we generally need not look any further. Likewise, if Verizon's provision of service to competing carriers satisfies the performance benchmark, our analysis is usually done. Otherwise, we will examine the evidence further to make a determination whether the statutory nondiscrimination requirements are met. Thus, we will examine the explanations that Verizon and others provide about whether these data accurately depict the quality of Verizon's performance. We also may examine how many months a variation in performance has existed and what the recent trend has been. We may find that statistically significant differences exist, but conclude that such differences have little or no competitive significance in the marketplace. In such cases, we may conclude that the differences are not meaningful in terms of statutory compliance. Ultimately, the determination of whether a BOC's performance meets the statutory requirements necessarily is a contextual decision based on the totality of the circumstances and information before us. 6. In this application, we examine performance data as reported in carrier-to-carrier reports reflecting service in the most recent full months before filing (i.e., from September through December 2000). We also examine Verizon's January performance data in a few instances for the limited purpose of confirming the acceptable performance or a trend of improvement shown in earlier months' data. Verizon has asserted that some of these data are affected by a workers' strike that took place in August 2000. We address the relevance of the strike and Verizon's explanations of its impact on the data below in our discussions of specific aspects of Verizon's performance. VII. PRIMARY ISSUES IN DISPUTE 8. In this Order, we assess all aspects of compliance with section 271, but we focus primarily on the most controversial checklist compliance issues as the Commission did in the recent SWBT Kansas/Oklahoma Order. First, we address checklist item 2, which encompasses access to unbundled network elements, including issues related to OSS and combinations of network elements as well as pricing. We then discuss checklist item 4, access to unbundled local loops. The remaining checklist requirements are then discussed briefly because commenting parties did not comment as extensively, or at all, on them, and our own review of the record leads us to conclude that Verizon has satisfied these requirements. We then address Verizon's showing of compliance with the requirements of Track A in Massachusetts. Finally, we discuss issues concerning compliance with section 272 and the public interest requirement, and our section 271(d)(6) enforcement authority. It is our hope that this approach will serve to focus attention on the section 271 requirements commenting parties address most extensively, while streamlining the discussion of the other less or noncontroversial requirements. A. Checklist Item 2 Unbundled Network Elements 1. Pricing of Network Elements a. Background 9. Checklist item 2 of section 271 states that a BOC must provide "[n]ondiscriminatory access to network elements in accordance with the requirements of sections 251(c)(3) and 252(d)(1)" of the Act. Section 251(c)(3) requires LECs to provide "nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. . . ." Section 252(d)(1) requires that a state commission's determination of the just and reasonable rates for network elements shall be based on the cost of providing the network elements, shall be nondiscriminatory, and may include a reasonable profit. Pursuant to this statutory mandate, the Commission has determined that prices for unbundled network elements (UNEs) must be based on the total element long run incremental cost (TELRIC) of providing those elements. 10. Although the United States Court of Appeals for the Eighth Circuit stayed the Commission's pricing rules in 1996, the Supreme Court restored the Commission's pricing authority on January 25, 1999, and remanded to the Eighth Circuit for consideration of the merits of the challenged rules. On remand from the Supreme Court, the Eighth Circuit concluded that while TELRIC is an acceptable method for determining costs, certain specific rules contained within the Commission's pricing rules were contrary to Congressional intent. The Eighth Circuit has stayed the issuance of its mandate pending review by the Supreme Court. Accordingly, the Commission's rules remain in effect for purposes of this application. 11. The Massachusetts Department established its prices for UNEs in an extensive proceeding beginning when several carriers requested arbitration of interconnection agreements with Verizon in July 1996. In Phase 4 of its Consolidated Arbitrations proceeding, the Massachusetts Department examined cost studies submitted by Verizon and the competitive LECs that purported to apply the Commission's TELRIC pricing methodology. The Massachusetts Department accepted, for the most part, Verizon's submitted cost model and ordered it to determine the cost of UNEs based on that model. The interim rates adopted in the Massachusetts DTE Phase 4 Order were made permanent by the Massachusetts Department on March 19, 1999. From the start of the Consolidated Arbitrations proceeding through the filing of Verizon's section 271 applications, commenters have been challenging Verizon's UNE rates in Massachusetts. On July 24, 2000, the Massachusetts Department approved lower, promotional residential UNE switching rates in an interconnection agreement between Verizon and one carrier, Z-Tel. These promotional rates were negotiated at the request of the Massachusetts Department and were made available to similarly situated carriers. In a tariff filing submitted to and approved by the Massachusetts Department on October 13, 2000, during the pendency of Verizon's Massachusetts I Application, Verizon further lowered its UNE rates for switching, transport and switch ports to rates equivalent to those that it currently has in effect in New York. In filing these October 13th rates with the Massachusetts Department, Verizon explained that the lower rates were intended to "eliminate pricing issues particularly regarding local switching in its Section 271 application now pending before the FCC." 12. On January 12, 2001, the Massachusetts Department opened its scheduled five-year review of UNE rates. The Massachusetts Department intends to conclude its investigation and have new UNE rates in place by the end of this calendar year. The Massachusetts Department asserts that the UNE rates currently in effect are permanent, not interim, despite the fact that the Massachusetts Department is now conducting its regular review of UNE rates. a. Discussion 13. Based on the evidence in the record, we find that Verizon's charges for UNEs made available in Massachusetts to other telecommunications carriers are just, reasonable, and nondiscriminatory in compliance with checklist item 2. Verizon states that it provides UNEs at TELRIC-based rates. The Massachusetts Department concludes that Verizon has satisfied the requirements of this checklist item. The Commission has previously held that it will not conduct a de novo review of a state's pricing determinations and will reject an application only if "basic TELRIC principles are violated or the state commission makes clear errors in factual findings on matters so substantial that the end result falls outside the range that the reasonable application of TELRIC principles would produce." In reviewing Verizon's Massachusetts pricing, we find that the Massachusetts Department generally followed basic TELRIC principles, though adherence to such basic principles, if other key inputs or methodologies are not reasonable, does not ensure that the rates adopted are TELRIC-complaint. 14. Verizon's Massachusetts II Application relies on voluntarily-adopted rates that are equivalent to those currently in place in New York. In the Bell Atlantic New York Order, over a year ago in 1999, the Commission found that these rates complied with the requirements of checklist item 2 for purposes of Verizon's section 271 application. This decision was affirmed by the United States Court of Appeals for the District of Columbia Circuit. We note, however, that these rates are at present under active review by the New York Commission. 15. Commenters have raised several objections to Verizon's October 13th UNE switching rates. Specifically, commenters claim that Verizon has not submitted evidence demonstrating that these rates are cost-based. As the Commission noted in the SWBT Kansas/Oklahoma Order, under appropriate circumstances, a BOC's UNE rates will be entitled to a presumption of TELRIC compliance if they are adopted in whole from another state whose rates have been found to comply with TELRIC, and if costs are demonstrated to be at or above the costs in the state whose rates were adopted. Under this standard, Verizon's October 13th rates will be found to be TELRIC-compliant if Verizon can demonstrate that its switching costs in Massachusetts are the same or higher than in New York. In the SWBT Kansas/Oklahoma Order, the Commission also determined that the USF cost model provides a reasonable basis for comparing cost differences between states. 16. We find that Verizon's Massachusetts rates at the filing of the application meet the TELRIC-presumption test set forth in the SWBT Kansas/Oklahoma Order. An analysis of relative switch costs using our USF model supports this conclusion. In the USF cost model, the Commission estimated forward-looking switch costs by adopting a fixed cost for host and stand- alone switches, and a separate fixed cost for remote switches. The switch costs in the USF model vary based primarily on the number of lines per switch. The results of regression analysis developed by the Commission through the USF model to estimate switching costs indicate that switching costs per line decrease as the number of lines increases because the fixed cost of switching is spread over a larger number of lines. The results also indicate that switching cost per line decreases as the relative number of remotes in the network increases because the fixed cost for a remote switch is less than that for a host or a stand-alone switch. 17. Here, evidence indicates that the number of lines per switch is no greater in Massachusetts than in New York, and it is reasonable to conclude that switch costs would not be lower in Massachusetts than in New York. The data used with the Commission's model to estimate switching costs indicate that in Massachusetts Verizon has 16,585 lines per wire center and that in New York it has 20,865 lines per wire center. These data show that in Massachusetts, Verizon's host and stand-alone switches account for 58 percent of the total number of switches and its remote switches account for the remaining 42 percent. The data also show that in New York, Verizon's host and stand-alone switches account for 54 percent of the total number of switches and its remote switches account for the remaining 46 percent. These data underlie the less than two percent higher estimate obtained from the Commission's model of switching cost per line for Massachusetts than for New York. 18. Our finding that Verizon may rely on New York rates is also supported by a comparison of Verizon's costs to Verizon's actual rates. A weighted average of Verizon's voluntarily-discounted Massachusetts rates (switching, transport, and switch ports) and corresponding rates in New York shows that rates in Massachusetts are roughly 5 percent lower than those in New York. A comparison based on the Commission's USF model of costs in Verizon's study areas in Massachusetts and New York for these same elements indicates that the costs in Massachusetts are roughly the same as the costs in New York. Because of the rate structure differences between Massachusetts and New York that recover more of the switching costs through the flat-rated port charge in New York, we believe this aggregate comparison is most appropriate. In comparing each of the non-loop elements separately, application of the USF cost model indicates that costs for unbundled switching are almost the same in Massachusetts and New York, with costs in Massachusetts only 1 percent higher. Verizon's per-minute rates for unbundled switching are slightly higher in Massachusetts than in New York, but this is offset by its unbundled switch port rates, which are lower in Massachusetts than in New York. Signaling and transport costs are lower in Massachusetts than in New York, according to the model, and the Massachusetts rates for these elements are correspondingly lower. 19. In addition to our analysis of the switching element costs based on the USF cost model, Verizon has submitted evidence demonstrating that its switching costs in Massachusetts are the same as or higher than its switching costs in New York. According to Verizon, cost studies based on the same assumptions were conducted for Massachusetts and New York, and these studies demonstrated higher costs in Massachusetts than in New York for all switching elements, including local switch usage, common transport, tandem usage, and line ports. 20. We therefore conclude that Verizon's switching rates in Massachusetts are at present within the range that a reasonable application of TELRIC principles would produce, although we recognize that rates may need to evolve over time to take into account updated information on cost inputs and new technologies. The Commission has previously found Verizon's switching rates that, at present, are still in effect in New York to be within a range of TELRIC-based rates. 21. We disagree with AT&T's assertion that New York rates should not be used as the benchmark for measuring whether Verizon's UNE rates are TELRIC-based in Massachusetts. AT&T would like the Commission to use rates found to be TELRIC-based in the SWBT states of Texas, Kansas, or Oklahoma for comparison. We find that it is permissible to rely on the New York rates in this application because they meet the criteria the Commission established in the SWBT Kansas/Oklahoma Order. In the SWBT Kansas/Oklahoma Order, to determine whether Oklahoma rates were within the range of what a reasonable application of what TELRIC would produce, the Commission compared SWBT's rates in Oklahoma to its rates in Texas. The Commission stated this was permissible because: 1) they have a common BOC and geographic similarities; 2) they have similar, although not identical, rate structures for comparison purposes; and 3) the Commission had already found the rates in Texas to be reasonable. Applying this standard to Verizon's Massachusetts rates, we find that New York is a permissible state for UNE rate comparison purposes. The states are adjoining, they have similar rate structures, the Commission has found the New York rates are within a zone that is consistent with TELRIC based on current information in the record, and it is the same BOC in both states. 22. We note, however, that the New York Commission is actively investigating UNE rates and may modify those rates to reflect changed market conditions, technologies, and information. If the New York Commission adopts modified UNE rates, future section 271 applicants could no longer demonstrate TELRIC compliance by showing that their rates in the applicant states are equivalent to or based on the current New York rates, which will have been superceded. 23. Moreover, because Verizon would have us rely on switching rates from the New York proceeding, a decision by the New York Commission to modify these UNE rates may undermine Verizon's reliance on those rates in Massachusetts and its compliance with the requirements of section 271, depending on the New York Commission's conclusions. We note that the Massachusetts Department has undertaken a review of UNE rates in Massachusetts and is endeavoring to reset UNE rates, consistent with the Act and our rules. We observe that in any context in which prices are not set in accordance with our rules and the Act, we retain the ability going forward to take appropriate enforcement action, including action pursuant to section 271(d)(6). 24. We disagree with those commenters who take issue with the current New York rates, arguing that they are not TELRIC-based. As evidence, the commenters point to the on-going review of the UNE rates being conducted by the New York Commission. It was reasonable for Verizon to rely on New York's current switching rates because these rates have been found to be TELRIC-compliant by the New York Commission in an extensive rate-making proceeding, and by this Commission in the Bell Atlantic New York Order, as affirmed by the D.C. Circuit, and are at present still in effect. It would be unreasonable to preclude incumbent LECs from relying on appropriate rates that have been found to be TELRIC-compliant merely because these rates are under some form of challenge or review where there has not been a determination that those rates are not TELRIC-compliant. As the D.C. Court of Appeals stated: [W]e suspect that rates may often need adjustment to reflect newly discovered information, like that about Bell Atlantic's future discounts. If new information automatically required rejection of section 271 applications, we cannot imagine how such applications could ever be approved in this context of rapid regulatory and technological change. 25. We also reject AT&T's contention that New York and Massachusetts switching rates are significantly higher than the switching rates our cost model generates and, therefore, are not TELRIC-compliant. The Commission has never used the USF cost model to determine rates for a particular element, nor was it designed to perform such a task. The model was designed to determine relative cost differences among different states, not actual costs. That is the purpose for which the Commission has used the model in the universal service proceeding and that is the purpose for which the Commission used it the SWBT Kansas/Oklahoma Order and in this Order. 26. Additionally, AT&T's and WorldCom's assertions that New York rates should not be relied on because Verizon applied an incorrect switch discount in New York does not change our conclusion. The commenters argue that Verizon applied a smaller switch discount offered by vendors for expanding existing switches rather than the larger discounts it received for bulk purchases of new switches, based on Verizon's erroneous assertion that the larger discounts were no longer available. Commenters raised this identical issue, however, during the course of the New York section 271 proceeding, and the Commission addressed it in the Bell Atlantic New York Order. The Commission found that the New York Commission had substantially reduced Verizon's originally-proposed switch rates and had "appropriately exercised its flexibility to set prices within a range of TELRIC-based rates." Although the New York Commission had initiated a second UNE rate case in which it is reexamining the switch discount issue, this Commission held that the switching rates were "no less TELRIC-compliant on that account," and noted the New York Commission's position that correcting the level of switch discounts involved complex adjustments. The Massachusetts Department has opened a new investigation into the UNE rates where this issue will be addressed. In the meantime, the switching rates are equivalent to those the Commission found to be TELRIC-compliant in New York. AT&T's and WorldCom's attack on the switching discount used in establishing New York rates was considered and rejected in the New York section 271 proceeding. As noted above, however, the outcome of the ongoing New York UNE rate proceeding could affect Verizon's future section 271 compliance in Massachusetts. 27. The fact that the New York Commission adopted a true-up mechanism for the switching rates pending the outcome of its UNE cost proceeding, while Massachusetts rates are not subject to true-up, does not at present mean that Verizon fails this checklist item. Although we agree that implementation of such a true-up mechanism pending the outcome of the Massachusetts Department's current UNE cost proceeding could help to ensure that competitive LECs pay cost-based rates, we do not fail Verizon on this checklist item merely because such a mechanism is lacking in Massachusetts. The Commission did not rely on the existence of the true- up mechanism in finding the New York switching rates to be TELRIC-compliant, although we recognize that in certain circumstances such measures could be appropriate. 28. Although questions have been raised regarding whether the Massachusetts Department will adopt TELRIC-based pricing on a going-forward basis, we note that Massachusetts' permanent UNE rates were adopted by the Massachusetts Department shortly after the passage of the 1996 Act and our rules implementing it. Since that time, there has been significant guidance on what constitutes TELRIC-based rates from this Commission, other state commissions, and the courts. States may benefit from the experiences of other states that have undertaken extensive pricing analyses. Additionally, circumstances have changed since Massachusetts prices were originally set in late 1996. New developments, technologies, and information, including information as to the kind of switch discounts that would be available if a carrier were building an entire network, have become available since that time. As always, we presume that the Massachusetts Department, like other state commissions, will examine these issues during the course of its ongoing rate case and set rates within the range of what a reasonable application of what TELRIC would produce. 29. We find the concerns of the commenters regarding the pending UNE cost proceeding before the Massachusetts Department to be unwarranted. As discussed above, the fact that a state may conduct a rate investigation and change the rates in the future does not cause an applicant to fail the checklist item at this time. Indeed, rates may well evolve over time to reflect new information on cost inputs and changes in technology or market conditions. The Massachusetts Department has expended an extraordinary amount of effort in its Consolidated Arbitrations and other rate-making proceedings. We applaud the Massachusetts Department for the tremendous amount of work it has done, and we expect that it will adopt appropriate cost- based UNE rates in its current proceeding. The Massachusetts Department has committed to conclude its proceeding and implement new UNE rates before the end of this calendar year. 30. Additionally, we find the Massachusetts loop rates to be within the range that the reasonable application of TELRIC principles would produce. Commenters contend that Verizon's UNE-loop rates are not TELRIC-based. The Commission has made clear that it will not overturn a state's pricing decision in the context of a section 271 proceeding where isolated factual findings might differ from what we would find if we were arbitrating the case. Instead, we will reject an application "only if basic TELRIC principles are violated or the state commission makes clear errors in factual findings on matters so substantial that the end result falls outside the range that the reasonable application of TELRIC principles would produce." 31. Commenters have raised legitimate concerns regarding some of the inputs used by Massachusetts in calculating its loop rates. In particular, we note that the Massachusetts Department utilized a cost of capital of 12.16 percent. This is higher than the cost of capital that the Massachusetts Department has used in setting Verizon's local rates and substantially higher than the cost of capital employed by any of the other states in Verizon's region. AT&T questions whether there is any reason to believe that offering UNEs on a wholesale basis, where Verizon faces no competition, is riskier than offering retail service, where it now has competition. We question whether this relatively high cost of capital is sufficiently justified by state-specific factors. We note, however, that the Massachusetts Department is reviewing this input as part of its current rate case, and, as discussed below, we find that Verizon's loop rates fall within a reasonable TELRIC range. 32. In addition, commenters have pointed out that Massachusetts used substantially lower fill factors in calculating its UNE-loop rates than this Commission has used in its USF cost model. For copper distribution cable, which affects loop rates, Verizon used a fill factor of 40 percent for metro, urban, and suburban zones. In the SWBT Kansas/Oklahoma Order, the Commission found that a fill factor of 30 percent for distribution cable was too low because it assumed that too large a percentage of capacity would be idle for an indefinite time, contrary to TELRIC's presumption of an efficient network. The Commission noted that it adopted fill factors ranging from 50 to 75 percent for the USF cost model, that the Kansas Commission adopted a 53 percent distribution cable fill factor, and that the New York Commission adopted a 50 percent distribution cable fill factor. We question whether the low fill factor used in Massachusetts is appropriate without a state-specific justification. We note, however, that the Massachusetts Department is reviewing this input as part of its current rate case, and, as discussed below, we find that Verizon's rates fall within a reasonable TELRIC range. 33. Despite our concerns, we conclude that any errors made by the Massachusetts Department in establishing loop rates were not so great as to render the resulting rates outside the range that a reasonable application of TELRIC principles would produce. In reaching this conclusion, we have compared the differences between Verizon's Massachusetts and New York loop rates with the relative cost differences between the two states using the USF cost model. According to the USF cost model, average loop costs in Verizon's Massachusetts study area are 8 percent higher than average loop costs in Verizon's New York study area. Yet loop rates in Massachusetts are only 6 percent higher than in New York. The Commission has already determined that the New York loop rates are TELRIC-compliant. Based on this analysis, we conclude that the loop rates in Massachusetts are also within the reasonable range that application of TELRIC principles would produce. 34. Finally, we do not accept WorldCom's assertion that competitors lack a sufficient profit margin between Verizon's retail and wholesale rates to allow local residential competition over the UNE-P, which indicates that the UNE rates are not TELRIC-based. WorldCom asserts that Verizon's UNE rates do not provide a "viable path to entry" because the rates do not provide a "gross margin" of profit that is "economically viable." In the SWBT Kansas/Oklahoma Order, the Commission held that this profitability argument is not part of the section 271 evaluation of whether an applicant's rates are TELRIC-based. The Act requires that we review whether the rates are cost-based, not whether a competitor can make a profit by entering the market. Conducting a profitability analysis would require us to consider the level of a state's retail rates, because such an analysis requires a comparison between the UNE rates and the state's retail rates. Retail rate levels, however, are within the state's jurisdictional authority, not the Commission's. Conducting such an analysis would further require a determination of what a "sufficient profit margin" is. We are hesitant to engage in such a determination. Moreover, competition currently exists in Massachusetts through the use of the UNE-P. The number of UNE-P lines in use in Massachusetts has significantly increased since Verizon's adoption of the October 13th rates. 35. We do not accept AT&T's contention that its inability to make a profit by entering the Massachusetts market proves that it is not permitted an "efficient entry," which is contrary to the Commission's prior determination. AT&T's misinterpretation of the Commission's prior holding appears to be based on its equating "efficient entry" with the guarantee of a profit that would induce competitors to enter the market. The Commission, in a prior section 271 case, rejected Ameritech's section 271 application because it failed to demonstrate compliance with non-pricing checklist items. The Commission did not analyze whether Ameritech complied with the checklist's pricing requirements. It did, however, set forth "general concerns about pricing" with the goal of providing "guidance as to what showing is required in future applications." The Commission concluded that a BOC is not in compliance with section 271's pricing requirements unless it demonstrates that its costs are "based on forward-looking economic costs." The Commission determined that new entrants "should make their decisions whether to purchase unbundled elements . . . based on the relative economic costs of these options," and that such competitors would not be able to make such decisions "efficiently" unless the BOC was offering UNEs based on forward-looking economic costs. The Commission equated "efficient entry" with the availability of UNEs at forward-looking economic costs, which "replicates . . . the conditions of a competitive market." "Efficient entry" simply means that competitors seeking entry will face the same sorts of costs they would face in a fully competitive market, that is, TELRIC-based UNE rates. The Commission's use of TELRIC was designed to prevent "inefficient entry" conditions, a situation in which competitors would have to bear unreasonably higher costs than incumbents. Contrary to AT&T's assertion, the concept of "efficient entry" does not guarantee that any competitors will necessarily enter the market. Even if competitors can gain "efficient entry" to a market through the availability of TELRIC-based UNE rates, they may still decide not to enter based on their independent determinations that they cannot turn a sufficient profit in the market. As long as UNE rates are cost-based under TELRIC, however, a BOC has satisfied its obligations under sections 251 and 252. We thus find that AT&T has misinterpreted the Commission's determinations in the Ameritech Michigan Order and that its assertion does not cause Verizon to fail this checklist item. 1. Access to Operations Support Systems a. Background 36. The Commission has defined OSS as the various systems, databases, and personnel used by incumbent LECs to provide service to their customers, and consistently has found that nondiscriminatory access to OSS is a prerequisite to the development of meaningful local competition. Our discussion of Verizon's Operations Support Systems (OSS) begins by outlining our general approach to analyzing the adequacy of an applicant's OSS. Next, we describe the analytical roadmap we use in reviewing the results of independent third-party OSS testing in the applicant's state. Also, because Verizon contends that its line sharing OSS in Massachusetts is the same as its line sharing OSS in New York, we also describe the roadmap we use in reviewing the BOC's reliance on its performance and OSS in another state where substantially greater volumes of commercial data exist to demonstrate the adequacy of its OSS in the applicant state. We then individually analyze Verizon's performance in providing access to the five critical OSS functions: pre-ordering (which includes access to loop qualification information), ordering, provisioning, maintenance and repair, and billing. Finally, we address Verizon's change management process and the technical assistance that Verizon offers to competing carriers seeking to use its OSS. Because the Commission has described its two-step analysis of OSS in previous orders, we do not repeat that analytical approach here. We instead proceed to evaluate the adequacy of Verizon's Massachusetts OSS consistent with the analysis the Commission has applied previously. a. Third-Party Testing 37. KPMG's Independent Third-Party Testing. The Massachusetts Department retained KPMG to conduct an independent, third-party test of the readiness of Verizon's OSS, interfaces, documentation and processes. KPMG's test was broad in scope. All stages of the relationship between Verizon and competing carriers were considered, from establishing the initial relationship, to performing daily operations, to maintaining the relationship. Resale, UNE-loops, UNE-P, and combinations were all included in the test. In addition, both the application-to- application electronic data interchange (EDI) and the terminal-type web-based graphical user interface (GUI) were tested. KPMG performed pre-ordering, ordering, provisioning, maintenance and repair, billing, and relationship management and infrastructure tests to evaluate functional capabilities and determine whether competing carriers receive a level of service comparable to Verizon retail service. To fully test these systems, orders were submitted with known error conditions, canceled, and supplemented. To perform these transaction-driven tests, KPMG combined efforts with Hewlett Packard. Documentation was evaluated for usefulness, correctness, and completeness. KPMG also performed stress volume tests of Verizon systems and identified specific bottlenecks for wholesale customers. 38. In performing these tests, KPMG adopted a military-style test standard. Thus, when situations arose where testing revealed that a Verizon process, document, or system did not meet expectations, Verizon would formally respond by providing a clarification or describing its intended fix for the problem, and KPMG would retest the process, document, or system as required. Furthermore, to the greatest extent possible, the KPMG test was both independent and blind. Although it was virtually impossible for the KPMG transactions to be truly blind, KPMG instituted certain procedures to ensure that both KPMG and Hewlett Packard would not receive preferential treatment. For example, KPMG required that all documents provided to them were generally available to all competing carriers. 39. The persuasiveness of a third-party review depends upon the conditions and scope of the review. The scope and depth of KPMG's review, and the conditions surrounding it, including KPMG's independence, military-style test philosophy, efforts to place itself in the position of an actual market entrant, and efforts to maintain blindness when possible, lead us to treat the conclusions in the KPMG Final Report as persuasive evidence of Verizon's OSS readiness. 40. PricewaterhouseCoopers Review. After filing its initial application, but before refiling, Verizon engaged PricewaterhouseCoopers ("PwC") to review certain aspects of its performance metrics data and OSS to supplement the KPMG review. Among other things, PwC: (1) replicated certain DSL performance metrics for Massachusetts and certain line sharing metrics for Massachusetts and New York to assess whether Verizon calculates measures according to the prescribed business rules; and (2) reviewed the processes, systems, and procedures used for line sharing by Verizon in Massachusetts to assess whether they are comparable to those used in New York. 41. We conclude that Verizon, through the PwC review and other aspects of its application, provides sufficient evidence that the line sharing OSS in New York are relevant and should be considered in our evaluation of Verizon's Massachusetts OSS. This showing thus enables us to rely, for limited purposes, on New York performance data as an indication of Verizon's line sharing OSS readiness in Massachusetts in addition to the limited Massachusetts specific performance evidence in Verizon's Massachusetts carrier-to-carrier reports. We find that this showing is adequate, in these circumstances, because we are merely considering it as evidence to supplement the limited commercial line sharing performance available in Massachusetts. We also note that our finding rests in part on the fact that no party asserts that the New York and Massachusetts line sharing OSS are different or that we should not consider Verizon's New York line sharing performance in this application. Indeed, at least one commenter concedes the comparability issue. 42. The record indicates that Verizon's line sharing OSS in New York and Massachusetts use the same systems and offer the same functionality. PwC's review included a step-by-step "walkthrough" of 957 OSS transactions. PwC tracked both New York and Massachusetts transactions forward from the competing carrier interfaces to Verizon's service order processor to determine if the process is the same in both states. PwC also sampled pending service orders in the Service Order Processor and traced their history back to Verizon's front-end systems. PwC supplemented the walkthroughs by examining programming code, reviewing documentation related to systems architecture and process flow, and interviewing Verizon employees. PwC concluded, based upon its review, that there are "no significant differences in the systems and processes used to provide ordering, provisioning, or maintenance and repair of line sharing in New York and Massachusetts." In addition to PwC's review, the record indicates that Verizon's Massachusetts OSS for pre-ordering functions does not distinguish queries related to line sharing from those for stand alone xDSL-capable loops. As we conclude below, Verizon has shown that its pre-ordering OSS for xDSL-capable loops is adequate. Accordingly, we shall consider Verizon's commercial line sharing performance in New York as a supplement to Verizon's limited commercial line sharing performance in Massachusetts. a. Pre-Ordering 43. Based on the evidence in the record, we conclude that Verizon demonstrates that it provides nondiscriminatory access to its OSS pre-ordering functions. Specifically, we find that Verizon demonstrates that: (i) Verizon's pre-ordering systems allow competing carriers to successfully build and use application-to-application interfaces to perform pre-ordering functions, allow competitors to integrate pre-ordering and ordering interfaces, provide reasonably prompt response times, and are consistently available in a manner that affords competitors a meaningful opportunity to compete; and (ii) Verizon offers nondiscriminatory access to OSS pre-ordering functions associated with determining whether a loop is capable of supporting xDSL advanced technologies. 44. The pre-ordering phase of OSS generally includes those activities that a carrier undertakes to gather and verify the information necessary to place an order. Most of the pre- ordering activities undertaken by a competing carrier to order resale services and UNEs from the incumbent are analogous to the activities a BOC must accomplish to furnish service to its own customers. For example, in this proceeding and in accordance with the UNE Remand Order, we require Verizon to provide competing carriers with access at the pre-ordering stage to the same detailed information Verizon makes available to itself concerning loop make-up information so that competitors may make fully informed judgments about whether to provision xDSL service to end users. In prior orders, the Commission has emphasized that providing pre-ordering functionality through an application-to-application interface is essential in enabling carriers to conduct real-time processing and to integrate pre-ordering and ordering functions in the same manner as the BOC. (i) Pre-Ordering Functionality, Integration, Response Times and Availability 45. Verizon's pre-ordering systems allow competing carriers to successfully build and use application-to-application interfaces to perform pre-ordering functions, allow competitors to integrate pre-ordering and ordering interfaces, provide reasonably prompt response times, and are consistently available in a manner that affords competitors a meaningful opportunity to compete. Verizon offers requesting carriers in Massachusetts access to an EDI application-to-application interface. We find that the EDI interface allows competing carriers to perform the same full range of pre-ordering functions for both resale services and UNEs that Verizon provides to itself. We note that no commenter alleges that Verizon fails or refuses to offer any of these specific pre- ordering functions. Verizon also demonstrates that competing carriers can successfully build and use application-to-application interfaces. We base our conclusion on the ability of the third-party tester to construct and extensively test the EDI interface for pre-ordering functions. KPMG successfully conducted a functional evaluation and volume and stress tests of the EDI interface, which confirm Verizon's ability to provide the requisite pre-ordering functionality. We also find that Verizon has shown that it allows competing carriers to integrate successfully pre-ordering information into Verizon's ordering interface and the carriers' back office systems. As part of its functional evaluation of the EDI interface, KPMG used pre-order response information to populate subsequent service requests. KPMG found that the pre-order and order field names and formats were compatible, allowing carriers to integrate pre-ordering and ordering interfaces and integrate pre-ordering information into their back office systems. In addition, although we do not rely on Verizon's common object request broker architecture interface (CORBA) in reaching our conclusion, we take note that Verizon provides competing carriers with this additional application-to-application interface for pre-order functions. 46. Verizon demonstrates that it provides access to pre-ordering functionality in a manner that allows an efficient competitor a meaningful opportunity to compete. The Commission has held previously that an interface that provides responses in a prompt timeframe and is stable and reliable is necessary for competing carriers to market their services and serve their customers as efficiently and at the same level of quality as Verizon serves its own customers. Verizon's performance data demonstrate that Verizon's EDI interface has met or exceeded the relevant benchmarks for interface response time and availability in each of the last four months, with only a few scattered exceptions of negligible competitive impact. KPMG's functional and volume tests of Verizon's LSOG 2 EDI pre-order interface provide additional confirmation of Verizon's satisfactory performance with respect to the availability and response times of its pre-order functionality. We therefore conclude that Verizon's interfaces are available in a stable and consistent manner and afford an efficient competitor a meaningful opportunity to compete. (i) Access to Loop Qualification Information 47. Background. As the Commission required of SWBT in the recent SWBT Kansas/Oklahoma Order, we require Verizon to demonstrate that it provides access to loop qualification information in a manner consistent with the requirements of the UNE Remand Order. In particular, we require Verizon to provide access to loop qualification information as part of the pre-ordering functionality of OSS. In the UNE Remand Order, the Commission required incumbent carriers to provide competitors with access to all of the same detailed information about the loop available to themselves, and in the same time frame as any of their personnel could obtain it, so that a requesting carrier could make an independent judgment at the pre-ordering stage about whether a requested end user loop is capable of supporting the advanced services equipment the requesting carrier intends to install. Under the UNE Remand Order, Verizon must provide carriers with the same underlying information that it has in any of its own databases or internal records. The relevant inquiry as required by the UNE Remand Order is not whether Verizon's retail arm or advanced services affiliate has access to such underlying information but whether such information exists anywhere in Verizon's back office and can be accessed by any of Verizon's personnel. Moreover, Verizon may not "filter or digest" the underlying information and may not provide only information that is useful in the provision of a particular type of xDSL that Verizon offers. Verizon must provide loop qualification information based, for example, on an individual address or zip code of the end users in a particular wire center, NXX code or on any other basis that Verizon provides such information to itself. Verizon must also provide access for competing carriers to the loop qualifying information that Verizon can itself access manually or electronically. Finally, Verizon must provide access to loop qualification information to competitors "within the same time frame that any incumbent personnel are able to obtain such information," including any personnel in its advanced services affiliate, Verizon Advanced Data, Inc. (VADI). 48. Currently, Verizon provides four ways for competing carriers to obtain loop make-up information: (1) mechanized loop qualification based on information in its LiveWire database; (2) access to loop make-up information in its Loop Facility Assignment and Control System (LFACS) database; (3) manual loop qualification; and (4) engineering record requests. As we discuss in more detail below, competitors can request loop make-up information from the LFACS and LiveWire databases, or can request that Verizon perform a manual search of its paper records to determine whether a loop is capable of supporting advanced technologies. 49. Verizon's mechanized loop qualification database, known as LiveWire, provides real- time access on a pre-order basis to the loop qualification information VADI's retail personnel use to qualify an end-user customer's line for VADI's ADSL service. Competing carriers are able to access the LiveWire mechanized database via the Web GUI, CORBA and EDI interfaces. Verizon states that LiveWire provides information on whether a loop is qualified for ADSL service, the length of the loop and, if the loop does not qualify for ADSL service, data on why the loop does not qualify (e.g., presence of Digital Loop Carrier, T-1 in the binder group, or load coils). The information contained in the LiveWire database is "theoretical" or "sampled" loop information, i.e., information about a test sample of loops in a given distribution terminal that is attributed to the rest of the loops in the same terminal. According to Verizon, as of July 2000, the mechanized database included information about loops in 93 percent of Verizon's central offices in Massachusetts with collocation arrangements in place, which covered 98 percent of the access lines in Massachusetts with collocation. 50. Competing carriers are also able to use an interim pre-order process to access any loop make-up information stored in Verizon's LFACS database. The loop make-up information contained in LFACS includes actual, loop-specific information. Within 24 hours of a competitive carrier querying LFACS for loop make-up information, Verizon returns all of the LFACS information on the loop in the remarks field of the pre-order interface used to make the query. In addition, through its change management process, Verizon has begun implementing a permanent process for providing this information in real-time and in electronically parsed form through its LSOG 4 and LSOG 5 pre-order interfaces, with availability expected by October 2001. 51. Verizon also provides a manual loop qualification process. According to Verizon, this manual process provides competing carriers with the same types of information ordinarily available through the mechanized loop qualification process. To conduct a manual loop qualification, Verizon's Loop Qualification Center (LQC) first examines information from the LiveWire and LFACS databases, and performs a mechanized line test (MLT) on the loop to verify the actual loop length. If this information is inconclusive, engineers in Verizon's Facilities Management Center examine paper records to determine the loop length, whether or not the loop is qualified and, if it is not, the reasons why. Unlike loop qualification through the "real time" LiveWire mechanized database, which is designed to return loop qualification information within seconds when queried, the manual qualification process has a standard completion interval of three business days between submission of a request for manual loop qualification and the return of the requested loop information to the competing carrier. Currently, competing carriers request manual loop qualification as part of the OSS ordering function by ordering an xDSL loop and indicating in the Local Service Request (LSR) order form that a manual qualification is required. Verizon has begun implementing access to manual loop qualification as a pre-order function. Detailed specifics for this pre-order transaction are being addressed in Verizon's change management process, with complete implementation expected in October 2001. 52. Finally, Verizon, through an engineering record request, provides additional types of loop make-up information not returned through the mechanized and manual loop qualification processes. Verizon indicates that competitors may request this engineering query on a pre-order basis. To conduct this engineering query, Verizon's Facilities Management Center conducts a search of loop inventory and paper records. The additional information provided through an engineering query includes the exact locations of load coils, the exact locations and lengths of bridge taps, as well as actual cable gauges and the length of each gauge. According to Verizon, this information is more detailed than the information returned in response to a manual loop qualification request. Furthermore, the engineering query provides loop make-up information for loops not in the LFACS database. The engineering query carries a standard interval of 72 hours for performing the engineering record review. These queries appear to be seldom requested; Verizon performed only 15 engineering queries in Massachusetts between January and June 2000, whereas it performed approximately 11,700 manual loop qualifications in the same period. 53. Discussion. Based on this evidence, we conclude that Verizon demonstrates that it offers nondiscriminatory access to OSS pre-ordering functions associated with determining whether a loop is capable of supporting xDSL advanced technologies. We reject commenters' various assertions that Verizon's loop make-up information processes do not comply with its UNE Remand obligations. These complaints fall into three categories. First, Covad complains that deficiencies in the interim LFACS process render Verizon's loop information processes noncompliant with the checklist. Second, Rhythms and Covad complain that Verizon's manual loop qualification process is not part of the pre-ordering stage, contrary to the requirements of the UNE Remand Order. Finally, several commenters advance various other complaints that deficiencies in Verizon's loop information processes warrant a finding of noncompliance. For the reasons discussed below, we reject these claims. 54. Interim LFACS Process. We conclude, contrary to Covad's assertions, that Verizon's offering for LFACS loop make-up information complies with the checklist. Our conclusion is based on both the nature of Verizon's interim process for access to LFACS information coupled with its work in the formal change management process implementing enhanced permanent loop qualification processes. In addition, we are encouraged by Verizon's current plans to develop a permanent fix for loop qualification OSS by October 2001. With respect to the nature of the interim process, we find that Verizon is currently providing useful, detailed information to competing carriers concerning the ability of loops to support xDSL services and is doing so in reasonable time frames. Specifically, although Verizon states that it will return all queries for loop qualification information within 24 hours of receiving a request, in actuality, competitors are generally receiving this information within 2 hours. Moreover, we find it significant that Verizon's interim loop qualification process is largely automated. For example, competitors are able to submit their loop information queries and receive responses to these queries through Verizon's electronic pre-order interfaces. 55. With respect to Verizon's work in the change management process, we find that Verizon has begun actively implementing enhancements to its loop qualification processes under a proposal that is detailed, well-developed, and subject to a prioritized time frame. Extensive software development is required of both Verizon and competing carriers to implement Verizon's change management proposals for LFACS access. Importantly, we find that Verizon has initiated concrete and irreversible steps to implement these changes through its formal change management process. This is not a case, for example, where only a skeletal plan is being submitted to change management. Verizon's proposals provide competitors with comprehensive detail about the business rules and field format requirements of its new loop information processes. Implementation of these processes at a minimum requires extensive software development in Verizon's interface systems (Web GUI, EDI and CORBA), the Request Manager gateway system, the underlying systems (LFACS, LiveWire), and the data exchange between these systems. Moreover, we recognize that change management is an appropriate and important step in implementing systems enhancements where, as here, such enhancements may substantially impact competing carriers' OSS. In reaching our conclusion, we rely on the nature of Verizon's formal change management process in Massachusetts, which provides for substantial competing carrier input and participation and for oversight by the Massachusetts Department. We also rely on the fact that Verizon has introduced its proposals as regulatory changes, subject to the prioritized implementation process for regulatory requirements. Finally, we note that Verizon has established October 2001 as the expected completion date for its system enhancements. 56. Under these circumstances, we reject Covad's claim that checklist compliance is not met until the completion of the change management process. To find such would perversely incent competing carriers to delay implementation of improved OSS and BOCs to circumvent the change management process. Given these specific circumstances, we find that Verizon's processes for access to LFACS comply with the checklist. Verizon has an interim process for LFACS access in place, and is actively using the change management process in implementing a proposal that is detailed, well-developed, subject to a prioritized time frame and firm completion date, and carries substantial implications for competitors' OSS. 57. We also reject Covad's other arguments that Verizon's LFACS process fails to satisfy its UNE Remand obligations for the following reasons. Covad objects that competing carriers must wait 24 hours to receive LFACS loop make-up information under the interim process, whereas Verizon's personnel are able to access this information electronically "in an instant." As already explained, however, requesting carriers generally receive LFACS information through the interim process within 2 hours. Covad also objects that the interim process does not provide loop information in electronically parsed form, to allow for integration between pre-ordering and ordering interfaces. Verizon's interim process does, however, allow competitors to submit queries for and obtain LFACS loop information through Verizon's electronic pre-order interfaces. Furthermore, with respect to both of these objections to the interim process, our finding of checklist compliance does not rely on Verizon's interim processes alone. Rather, as explained above, our conclusion rests on the nature of Verizon's interim processes for access to LFACS coupled with its work in change management enhancing this process. The permanent process for LFACS access will provide the functionality and features Covad seeks. Until this permanent system enhancement is in place, Verizon has provided competing carriers with an adequate process for obtaining LFACS loop information quickly and electronically. Finally, Covad objects that Verizon does not return working telephone number or serving address information with the LFACS information it returns, making it more difficult for competitors to associate the information with a particular loop. We find, however, that requesting carriers are able to associate LFACS loop information with working telephone numbers or serving area addresses, contrary to Covad's assertions. 58. Manual Loop Qualification. We also reject Rhythms' and Covad's complaints that Verizon has so far failed to develop a pre-ordering interface for manual loop qualification. We find that this is insufficient to render Verizon's loop information offering to competitors noncompliant with the requirements of the UNE Remand Order. For the most part, the information returned through the manual loop qualification process is already provided to competitors through other loop qualification processes that are available at the pre-ordering stage. The only information returned through manual loop qualification not otherwise available at the pre-ordering stage is the result of a loop-specific MLT test. MLT information is merely a small subset of the information returned through the manual loop qualification process. We find that, given the totality of the circumstances, the inability of competitors to access this subset of information on a pre-order basis is not fatal to Verizon's application. Moreover, we rely on Verizon's work in the change management process to implement pre-order access to manual loop qualification, including MLT test results, through its LSOG 4 and LSOG 5 pre-order interfaces. 59. Other Arguments. Finally, commenters make various other claims alleging that Verizon's provision of loop make-up information is discriminatory and violates the requirements of the UNE Remand Order, which we reject for the following reasons. For example, ALTS and Covad claim that Verizon's mechanized loop make-up information database -- LiveWire -- fails to meet UNE Remand requirements because it sometimes contains inaccurate and incomplete information, hampering competing carriers' ability to order xDSL loops. As we noted above, the LiveWire database Verizon makes available to competing carriers is the same database used by Verizon's retail affiliate to qualify loops. Thus, any inaccuracies or omissions in Verizon's LiveWire database are not discriminatory, because they are provided in the exact same form to both Verizon's affiliate and competing carriers. 60. We also reject Covad's assertion that Verizon's inclusion of information in its LiveWire database regarding whether a loop qualifies for VADI's retail ADSL service violates the UNE Remand Order. Covad contends that Verizon's use of this information denies competing carriers access to more detailed loop information and does not allow carriers to identify the physical attributes of the loop to make a more informed judgment about the possibility of offering service. We reject this contention because we find that this information is provided to competitors in addition to the other loop make-up information required by the UNE Remand Order, and not instead of required information. Verizon's designation of whether or not a loop qualifies for VADI's retail ADSL service is a summary of the loop make-up information contained in LiveWire and an alternative way to provide help in determining whether the loop is adequate for providing advanced services. It does not replace the loop make-up information contained in LiveWire that is also returned with each query. In addition to the loop make-up information contained in LiveWire, competing carriers can also access actual loop make-up information from Verizon's LFACS database to the extent it is available and, upon request, Verizon will perform an engineering search of its paper records to determine the actual make-up of the loop. We therefore find that Verizon's designation of whether a loop qualifies for VADI's retail ADSL service merely supplements the other loop make-up information Verizon provides. 61. Moreover, we reject ALTS' argument that Verizon's current loop qualification processes, including its interim process for allowing competitors access to LFACS, fail to satisfy UNE Remand obligations because portions of these processes are manual rather than electronic. Specifically, ALTS asserts that "the only truly competitive way for [competing carriers] to receive [loop information] is electronically." The Commission specifically rejected such an assertion in the UNE Remand Order. That order makes clear that, to the extent an incumbent has not compiled loop information for itself, it is not required to "conduct a plant inventory and construct a database on behalf of requesting carriers." Instead, the incumbent is obligated to provide requesting competitors with nondiscriminatory access to loop information within the same time frame whether it is accessed manually or electronically. 62. We also reject Sprint's contention that Verizon fails to meet its obligations under the UNE Remand Order because it fails to provide unfiltered access to information about its digital loop carrier (DLC) facilities. Specifically, Sprint contends that Verizon only offers information about DLC on a line-by-line basis, rather than also on the basis of "zip code of the end users in a particular wire center, NXX code, or on any other basis that the incumbent provides such information to itself," as stated in the UNE Remand Order. The UNE Remand Order, however, does not require that Verizon provide loop information on the basis of zip code and NXX code if none of Verizon's personnel are able to access loop information on those bases. Rather, the UNE Remand Order sets forth a standard of nondiscrimination, requiring incumbents to provide loop information on any basis that any incumbent personnel may obtain that information. Verizon indicates that, through both its interim and long-term LFACS access processes, it will provide: (1) an indication that DLC equipment is present on the facility for which loop make-up has been requested; and (2) the type of DLC equipment present. The record does not contain any evidence that DLC information is available to any Verizon personnel in any form other than on a line-by-line basis, nor is there information on the record that any Verizon personnel have access to DLC information beyond the information returned through an LFACS query. Without more than Sprint's allegations to the contrary, we decline to find that Verizon fails to provide competitors with nondiscriminatory access to its loop information systems, including information about DLC facilities. a. Ordering 63. In this section, we address Verizon's ability to provide competing carriers with access to the OSS functions necessary for placing wholesale orders. We find that Verizon demonstrates -- with performance data, the results of its third-party test, and other evidence -- that it provides competing carriers with access to OSS ordering functions in a manner that allows these carriers a meaningful opportunity to compete or in the same time and manner as it provides those functions to its retail operations. First, in subparts (i) through (iv), we address those same elements of ordering as have been probative in past section 271 orders: confirmation notices, rejection notices, flow-through, completion notices, and jeopardy information. Then in subpart (v) we address commenters' concerns that Verizon's ordering OSS is susceptible to the same problems that led to a Consent Decree between Verizon (then Bell Atlantic) and the Commission after the company's section 271 application was approved in New York. (i) Order Confirmation Notices 64. Using the same analysis and looking to similar performance measurements as in prior orders, we find that Verizon provides order confirmation notices in a manner that affords competitors a meaningful opportunity to compete. Data indicate that for orders that flow through its systems without manual handling, Verizon consistently exceeds the Massachusetts Department's benchmark of returning 95 percent of confirmation notices within two hours. For orders that require some amount of manual processing (e.g., complex orders, orders for nine or more loops), Verizon generally exceeds the Massachusetts Department's benchmark, with scattered exceptions relating to resale two-wire digital services, resale special services of ten or more lines, and UNE DS-1 and DS-3 orders. The disparities for two-wire digital services and resale special services were minimal. Although the disparities for UNE DS-1 and DS-3 order confirmations were more significant, confirmations for these orders made up less than one percent of all confirmations from September through December. Absent evidence of discrimination or competitive harm, we find that this disparity has little competitive impact in light of the small number of those orders. We also find that Verizon's confirmation notices accurately reflect competing carriers' orders. 65. Our conclusion that Verizon's performance is acceptable is further supported by the results of KPMG's examination of Verizon's order confirmation process and performance. KPMG found that Verizon timely returns confirmations for flow-through orders and non-flow- through orders upwards of 96 percent of the time. The Massachusetts Department likewise concluded that Verizon provides timely confirmation notices. 66. We reject commenters' arguments that Verizon fails to provide confirmation notices adequately. ASCENT (on behalf of its members) and OnSite assert without support that they experience problems with confirmation timeliness and accuracy. We decline to find that these vague assertions overcome Verizon's specific evidence showing that it provides confirmation notices in a manner that affords competing carriers a meaningful opportunity to compete. (i) Order Rejection Notices and Order Rejections 67. We agree with the Massachusetts Department that Verizon provides competing carriers with order rejection notices in a manner that allows them a meaningful opportunity to compete. Verizon's performance data demonstrate that it returns order rejection notices in a timely manner over both EDI and the web GUI. From September through December, Verizon returned rejection notices for orders that flow through its system within two hours more than 97 percent of the time. In the same period, for orders that require some manual processing, Verizon returns rejection notices within the number of hours required for each particular service, with minor exceptions. Furthermore, KPMG found that Verizon timely and appropriately returns rejection messages. Absent any clear evidence of discrimination or competitive harm, we find that this performance demonstrates compliance with our requirements. 68. We recognize, however, that on average for all carriers combined, Verizon rejects a substantial number of orders. From September through December, Verizon rejected approximately 43 to 49 percent of resale orders and 21 to 25 percent of UNE orders. The Commission does not, however, hold a BOC accountable for rejects that occur for reasons within a competing carrier's control. As in the SWBT Kansas/Oklahoma Order, SWBT Texas Order, and Bell Atlantic New York Order, rejections in this instance vary widely by individual competing carrier: among carriers submitting the most orders in May, June, or July, rejection rates varied from about 5 to 83 percent. Because all competing carriers interface with the same Verizon system, we find, on this record, that it would not be appropriate to attribute this wide range of results entirely to Verizon. The Massachusetts Department likewise determined that "the efforts put forth by the [competing carriers] in submitting accurate [local service requests] are very strongly tied to the overall order reject rates reported by VZ-MA." In light of this variation, we conclude that the overall reject rates experienced by competing carriers in this instance do not indicate flaws in Verizon's OSS. 69. Two commenters, OnSite and ASCENT (on behalf of its members), allege that they have problems receiving timely rejection notices. Their assertions are not supported, however, by any specific evidence. Absent such evidence, these assertions are insufficient to rebut Verizon's evidence of compliance with this checklist item. We also disagree with Rhythms' assertion that Verizon's rejection performance does not satisfy our standards for section 271 approval because Verizon was rejecting its orders for "defective characters" and has not performed a root cause analysis on this problem. We are not able to conclude based on the evidence that Rhythms provides that this is a problem with Verizon's OSS and not Rhythms'. Finally, ALTS points to a KPMG observation regarding inappropriate rejections of ISDN resale orders. This observation was successfully closed, and in the absence of further evidence we believe the issue is resolved. (i) Order Flow-Through Rate 70. We agree with the Massachusetts Department that Verizon's OSS are capable of flowing through orders in a manner that affords competing carriers a meaningful opportunity to compete. In recent section 271 orders, the Commission has examined flow-through rates largely for their potential to indicate problems elsewhere in a BOC's OSS. In particular, low flow- through rates, combined with other independent record evidence, can be indicators of: (1) failure to provision orders in a timely manner; (2) failure to provide competing carriers with complete, up-to-date business rules and ordering codes; (3) lack of integration between pre-ordering and ordering functions; (4) failure to provide order status notices electronically; and (5) inability to process competing carriers' orders at reasonably foreseeable commercial volumes in a nondiscriminatory manner. Flow-through rates, therefore, are not so much an end in themselves, but a tool used to indicate a wide range of possible deficiencies in a BOC's OSS that may deny an efficient competitor a meaningful opportunity to compete in the local market. As discussed elsewhere in this Order, these specific deficiencies are not present here. As a result, we use flow- through here not as a "conclusive measure of nondiscriminatory access to ordering functions," but as one indicium among many of the performance of Verizon's OSS. 71. Although Verizon's commercial data show low average total flow-through rates -- ranging from about 46 to 49 percent for resale orders and 51 to 55 percent for UNE orders from September through December -- we conclude, as the Massachusetts Department did, that Verizon's OSS is capable of flowing through competing carriers' orders in substantially the same time and manner as Verizon's own orders. Some competing carriers are achieving much higher flow-through rates than others. Data regarding resale orders show that carriers that placed the most orders in July 2000 had total flow-through rates for resale orders varying from 0 to 90.09 percent; data regarding UNE-P orders similarly show that carriers that placed the most orders in July 2000 had total flow-through rates for such orders varying from 66.10 to 70.59 percent. Because all competing carriers interface with the same Verizon system, we find, on this record, that it would not be appropriate to attribute this wide range of results entirely to Verizon. The Commission has consistently stated that a BOC is not accountable for orders that fail to flow through due to competing carrier-caused errors. Moreover, our conclusion that Verizon's systems are capable of achieving high overall levels of order flow-through is reinforced by KPMG's testing. When KPMG submitted test orders, it achieved a flow-through rate of 100 percent for both resale and UNE-L orders that are designed to flow through Verizon's systems. We expect that Verizon's flow-through rates will improve over time as individual carriers gain experience with the OSS and as Verizon conducts monthly workshops for competing carriers to help them improve their order submissions. 72. We disagree with commenters that we should reject Verizon's application based on its average flow-through rates or because some kinds of orders are not designed to flow through. Specifically, WorldCom first argues that Verizon's flow-through rates are too low. It points out that Verizon's Massachusetts rates are below the rates in New York at the time of section 271 approval there, and it argues that Verizon should be reporting on achieved flow-through, as it does in New York. WorldCom also disagrees that Verizon should be permitted to rely on UNE-P flow-through rates to show that competing carrier orders can flow through. Second, WorldCom argues that KPMG's test revealed problems with Verizon's flow-through in Massachusetts. It points out that KPMG's commercial test shows a less than 60 percent achieved flow-through rate and that four orders that flowed through for Verizon did not flow through in the wholesale environment. 73. As we explain above, Verizon has shown that its OSS is capable of flowing competing carrier orders through. The commercial data, particularly the individual carrier reports, demonstrate that some carriers are capable of achieving high flow-through rates. Verizon's showing that some carriers achieve high UNE-P flow-through rates is not its sole showing that its OSS can flow through orders, but is incremental evidence that some carriers are achieving high flow-through. We do not specifically need Verizon's achieved flow-through figures in order to determine that Verizon's OSS are capable of offering high flow-through. The commercial data are the most probative evidence that Verizon provides nondiscriminatory access to its OSS. KPMG's functionality test, which showed good flow-through, supports our determination. While its commercial test does not, KPMG itself discounted its commercial test, and the Massachusetts Department concurred that the commercial test was not as probative as the functionality test. Finally, the Massachusetts Department has added a special provision on flow-through to the Performance Assurance Plan (PAP); Verizon must report there both achieved and total flow- through. This addition will provide a substantial disincentive to discriminate against competing carriers with regard to flow-through. 74. We also agree with the Massachusetts Department that Verizon is timely and accurately processing orders that do not flow through, and that Verizon's ordering systems are sufficiently scalable to handle reasonably foreseeable commercial volumes of orders in a nondiscriminatory manner. Verizon has been able to maintain or improve upon its performance while order volumes have generally increased. KPMG also concluded that Verizon's systems are scalable. 75. Some commenters have expressed concern that low levels of flow-through, the commensurate higher levels of manual processing, or other inadequacies limit the scalability of Verizon's OSS. In particular, the Department of Justice expressed concern in its first evaluation that Verizon has not shown its OSS to be scalable, because KPMG's test was less rigorous than its test in New York and because the Massachusetts PAP had less deterrent force than the New York plan. The Department of Justice did not raise this concern in its Massachusetts II Application comments, and we believe that these concerns are addressed by the more recent Massachusetts PAP. (i) Order Completion Notices and Jeopardy Information 76. We conclude that Verizon provides billing and provisioning completion notifiers and jeopardy information in a manner that affords competing carriers a meaningful opportunity to compete. After provisioning an order that requires physical work, Verizon updates its Service Order Processor to reflect that the work has been done; if an order requires no physical work (e.g., feature changes), the Service Order Processor is automatically updated during overnight processing. The Service Order Processor then communicates with the appropriate Verizon gateway to send a provisioning completion notice to the competing carrier. The Service Order Processor also communicates to Verizon's billing system that the work has been completed. Verizon's billing records are updated overnight, and Verizon sends a billing completion notice to the competing carrier the next day. 77. Verizon's commercial performance indicates that it provides completion notices in a nondiscriminatory fashion. Verizon consistently meets the benchmark set by the Massachusetts Department for timely delivery of both provisioning completion notices and billing completion notices. Verizon has begun reporting on new measures designed to track how long it takes to update its billing systems after performing the relevant work. While these are "parity" measures, Verizon has not yet begun reporting the data for its retail operations. Nonetheless, the data regarding its wholesale performance generally show that it is updating its billing systems on average in less than a day. The Massachusetts Department also found that Verizon's current performance is satisfactory, and we are encouraged by the Massachusetts Department's recent decision to add new measures to the PAP, which we discuss below. 78. We agree with the Massachusetts Department that the order status and jeopardy information system created by Verizon for wholesale orders is nondiscriminatory because it allows competing carriers to access order status and jeopardy information, to the extent that it is available, in substantially the same time and manner as Verizon's retail representatives can access such information. Verizon makes jeopardy information available to its retail representatives and to competing carriers in the manner described in the Bell Atlantic New York Order. Verizon does not actively provide jeopardy notices, except that it follows the same hot cut procedures it first developed and implemented in New York. 79. WorldCom asserts that because of "systems problems on Verizon's side," it has been unable to access its jeopardy reports for some days in December 2000 and January 2001. Verizon responds that it investigated and found a problem with the back-office OSS that formats the reports; pending implementation of a fix, Verizon is formatting the reports manually. We find that the reports are being provided in a nondiscriminatory manner pending the fix, and that any disruption has not had a competitive impact. (i) Ordering Notifiers and the New York Consent Decree 80. We disagree with commenters' assertions that there is a systemic problem with ordering notifiers in Massachusetts similar to the problem that led to the Commission issuing a Consent Decree following section 271 approval in New York. After the Commission approved Bell Atlantic's -- now Verizon's -- entry into the interLATA service market in New York, it became clear that Bell Atlantic was having "problems associated with lost or mishandled orders for unbundled network elements electronically submitted by its local service competitors" over EDI. The Commission began to investigate Bell Atlantic's performance as a possible violation of section 271, and "[e]vidence submitted by Bell Atlantic in this investigation suggest[ed] that Bell Atlantic's performance in providing order acknowledgements, confirmation and rejection notices, and order completion notices for UNE-P local service orders deteriorated following Bell Atlantic's entry into the New York long distance market." The investigation terminated in the Consent Decree between the Commission and Bell Atlantic. The Consent Decree required Bell Atlantic to begin reporting using several new measures: percent missing notifier trouble ticket PONs cleared within three business days; percent order confirmations/rejects sent within three business days; percent SOP to bill completion within three business days; percent confirmation timeliness -- total local service requests; and percent resubmission rejection. After the parties entered into the Consent Decree, Bell Atlantic's performance improved. Therefore, the Commission terminated the Consent Decree. 81. We reject the assertions of WorldCom and others that there is a systemic problem with notifiers in Massachusetts. First, WorldCom points to KPMG's findings that Verizon failed to return two to three percent of completion notifiers. There is no evidence in the record, however, that KPMG's findings involving this limited number of notifiers would have any competitive impact. Second, WorldCom asserts that KPMG's test revealed problems with late billing completion notifiers, and some billing completion notifiers contained information not in accordance with Verizon's business rules. We are unable to compare KPMG's results against the commercial data that Verizon provided, however, because KPMG did not explain adequately how it measured the timeliness of completion notifiers. With regard to the contents of the billing completion notifiers, KPMG found there was sufficient information to permit it to engage in its billing activities. Finally, WorldCom asserts that carrier-to-carrier business rules underlying the commercial data Verizon provided are inadequate to reveal problems with late or missing notifiers. Specifically, WorldCom asserts that Verizon should have reported data under the measures developed in the Consent Decree, which capture how long it takes Verizon to send out billing completion notifiers after completing the relevant work. In our discussion of completion notifiers above, however, we explain that Verizon has begun reporting how long it takes an order to enter Verizon's billing systems after the relevant provisioning work is completed. Those data show that Verizon updates its billing systems on average in less than a day, and that Verizon takes more than four days to do so for less than five percent of orders. In combination with the data that show that Verizon sends out billing completion notifiers on time after updating its billing systems, these data show that Verizon updates its billing systems promptly after completing orders, and sends out billing completion notifiers promptly after updating its billing systems. 82. We also note that the Massachusetts Department has adopted new performance measures in the Massachusetts PAP to track this area: percent missing notifier trouble ticket PONs cleared within three business days, percent resubmission rejection, and percent SOP to bill completion within three business days. These measures will inform carriers, the Massachusetts Department, and the Commission about Verizon's notifier performance going forward, and the special provision of the PAP will give Verizon a substantial disincentive for performance like that that occurred in New York. a. Provisioning 83. We conclude that Verizon provisions competing carriers' orders for resale and UNE-P services in substantially the same time and manner as it provisions orders for its own retail customers. Consistent with the Commission's approach in prior section 271 orders, we examine the procedures Verizon follows when provisioning competitors' orders, its performance with respect to provisioning timeliness and its provisioning quality. Based on the results of KPMG's Massachusetts testing and Verizon's performance data, we find that Verizon demonstrates that it provides nondiscriminatory access to its provisioning processes. KPMG's test of Verizon's Massachusetts OSS demonstrates that Verizon makes available in Massachusetts the same set of standard intervals and SMARTS clock intervals for both competing carriers and its retail personnel. KPMG's test also demonstrates that, in its provisioning systems, methods and processes, Verizon provides parity between competitors' orders and its retail orders. As discussed below, Verizon's performance data for resale services and UNE-P demonstrate that Verizon provides parity in provisioning competitors' orders as compared to its retail orders. (i) Resale Orders 84. We conclude that Verizon provisions orders for resale "POTS" and "specials" to competitors in substantially the same time that it provisions equivalent orders to itself. As in previous section 271 orders, we review Verizon's performance data to determine whether it provisions resale service at parity with its analogous retail services. For this application we review performance data measuring how Verizon performs in meeting competitors' due dates for service installation as a reliable indicator of whether Verizon is providing nondiscriminatory service. The data indicate that Verizon satisfied parity standards for meeting competitors' resale POTS and specials due dates from September through December 2000 in Massachusetts, with a few limited exceptions. We find that the limited exceptions to Verizon's satisfactory performance are not competitively significant. 85. We also examine performance data measuring average completed intervals for competing carriers' resale orders, but find that these data are not an accurate indicator of Verizon's performance in provisioning these orders. As it did for its section 271 application in New York, Verizon offers unrebutted evidence that the disparity in the performance data between average completed intervals for competing carriers' resale orders and Verizon's retail orders in Massachusetts is substantially caused by several factors outside of Verizon's control. Therefore, consistent with the Commission's findings in the Bell Atlantic New York Order, we accord little weight here to performance data evidencing the average intervals in which Verizon completes resale orders in Massachusetts. Instead, as discussed above, we rely on the performance data measuring Verizon's performance in meeting competitors' due dates for resale service installation. 86. Verizon also demonstrates that the quality of resale installations provided to competitors' customers is generally the same as, or better than, similar work performed for its own retail customers. The data demonstrate that Verizon generally receives trouble reports from competitors' resale customers at the same rate as from its own retail customers, and in some cases demonstrate that Verizon receives trouble reports from competitors' customers at a lower rate. We find that the limited exceptions to Verizon's parity performance are not competitively significant. (i) UNE-P Orders 87. Based on a review of performance data for UNE-P service, we conclude that Verizon provisions competing carrier orders for these network combinations in the same time as it provisions equivalent retail services and at the same level of quality (i.e., with a comparably low level of troubles reported within the first ten days after installation). Verizon's performance data demonstrate that, from September through December 2000 in Massachusetts, Verizon provisioned UNE-P orders in substantially the same time that it provisioned similar orders for itself. Verizon's data also indicate that, over this time period, it provisioned UNE-P orders in substantially the same manner (i.e., quality) as it provisioned comparable retail orders for itself in Massachusetts. While there are disparities with respect to some measurements of UNE-P provisioning performance, these disparities do not appear to be competitively significant. Taken as a whole, we find this performance to be acceptable. a. Maintenance and Repair 88. Functionality. We conclude that Verizon offers maintenance and repair interfaces and systems that enable a requesting carrier to access all the same functions that are available to Verizon's retail representatives. Verizon provides competing carriers with several options for requesting maintenance and reporting troubles. Competing carriers may electronically access Verizon's maintenance and repair functions for UNE-Loop, UNE-P, and resale through the GUI Repair Trouble Administration System (RETAS) interface or the application-to-application Electronic Bonding Interface (EBI). Both the RETAS and EBI interfaces flow directly into Verizon's back-end OSS and enable competing carriers to perform the same functions, in the same manner, as Verizon's retail operations. Although the EBI interface does not support every maintenance and repair function supported by RETAS, the Commission has not in the past required applicants to provide an integratable, application-to-application interface for maintenance and repair. Furthermore, Verizon's performance data indicate that its RETAS maintenance and repair interface is available in a manner that affords an efficient competitor a meaningful opportunity to compete. KPMG's functional testing of Verizon's RETAS maintenance and repair interface confirms the satisfactory performance demonstrated by Verizon's performance data. Based on the evidence before us, we conclude that Verizon satisfies its obligation of providing maintenance and repair functionality to competitors in substantially the same manner that it provides such functionality to itself. Finally, we note that no commenter has provided evidence to suggest that Verizon's systems and processes are inadequate in this area. 89. Interface Response Times, Time to Restore and Quality of Work Performed. We conclude that Verizon has demonstrated that it provides nondiscriminatory access to its maintenance and repair systems and processes. In previous section 271 applications, the Commission reviewed performance data reflecting the timeliness of the BOC's interfaces used for maintenance and repair functions, the timeliness of its repair work, and the quality of the repair work. Verizon's performance data indicate satisfactory performance in each of these areas. The performance data show that Verizon's maintenance and repair interfaces and systems process trouble inquiries from competing carriers in substantially the same, if not less, time as Verizon processes inquiries concerning its own retail customers. The data also show that Verizon repairs troubles for competing LECs' customers in substantially the same time as it repairs its own retail customers' troubles, and meets substantially the same percentage of repair commitments for troubles on competing carriers' lines as it does for comparable retail repair commitments. Finally, the data reveal that competing carriers' customers that receive service via resale or UNE- P generally reported the same rate of trouble reports, and the same rate of repeat trouble reports, as Verizon's retail customers. KPMG's testing of Verizon's maintenance and repair performance for competitors confirms the satisfactory performance evidenced by Verizon's performance data. Finally, we note that no commenter has provided evidence to suggest that Verizon's systems and processes are inadequate in this area. a. Billing 90. We agree with the Massachusetts Department that Verizon provides nondiscriminatory access to its billing functions. As the Commission has required in prior section 271 orders, a BOC must provide competing carriers with complete and accurate reports on the service usage of competing carriers' customers in substantially the same time and manner that it provides such information to itself, and wholesale bills in a manner that gives competing carriers a meaningful opportunity to compete. Verizon provides competing carriers with billing information through Daily Usage Files (DUFs), which itemize the daily usage of competing carrier customers, and through carrier bills, which are monthly invoices incorporating charges for all products and services Verizon provides to a competing carrier. These are the same mechanisms that Verizon uses to provide billing information to its retail operations. 91. The performance data demonstrate Verizon's ability to provide competing carriers with DUFs in substantially the same time and manner that Verizon provides such information to itself, and carrier bills in a manner that gives competing carriers a meaningful opportunity to compete. Verizon met or came close to meeting the Massachusetts Department's benchmarks for timeliness in sending out DUFs and carrier bills, and for bill accuracy. The exception was not competitively significant. KPMG found Verizon's billing system to be accurate and reliable. Although KPMG initially opened a few billing related exceptions on bills for UNE products, it closed those exceptions after Verizon implemented fixes, including changes to software and handbooks. We find that these fixes resolved KPMG's concerns and that Verizon's billing OSS provide competing carriers a meaningful opportunity to compete. 92. We reject WorldCom's and Winstar's complaints over observations and exceptions in the KPMG test because, as the Massachusetts Department confirmed, they were successfully closed after retesting or evaluation and confirmation of Verizon's explanations. ASCENT argues that its members frequently complain about inaccuracy of billing data from Verizon, overuse of paper bills, problems with electronic bill transmission, and problems getting Verizon to credit competing carrier payments and resolving billing disputes. Absent support, however, these concerns do not overcome the showing that Verizon has made through its performance data and the KPMG analysis that its billing systems are accurate and prompt, providing competing carriers a meaningful opportunity to compete. 93. Line Loss Reports. We reject commenters' claims that Verizon fails to provide timely or accurate "line loss reports," which signal competing carriers that a customer has migrated to another LEC. Competing carriers require line loss notifications in order to know that a customer has in fact migrated and should no longer be billed for service. Commenters have not provided evidence of a systemic problem: ASCENT does not provide details about its members' problems with line loss notifications, and WorldCom describes problems occurring outside of Massachusetts. Therefore, we reject their assertions. 94. Suspension for Non Payment. We decline to address WorldCom's complaint that Verizon is disconnecting (SNPing or snipping) WorldCom customers for nonpayment of charges that accrued while the customers were still Verizon customers. WorldCom provides evidence of snipped customers in states other than Massachusetts. For the reasons explained above, we do not address complaints arising outside of Massachusetts. a. Change Management and Technical Assistance 95. We conclude that Verizon has shown that it "'has deployed the necessary systems and personnel to provide sufficient access to each of the necessary OSS functions and . . . is adequately assisting competing carriers to understand how to implement and use all of the OSS functions available to them.'" Specifically, Verizon has shown that it has an adequate change management process in place in Massachusetts; has adhered to that change management process over time; and provides adequate technical assistance, training, documentation, and help desk support to competing carriers. We concur with the Massachusetts Department that Verizon "has satisfied its requirements in the offering of nondiscriminatory access to its OSS functions with respect to Change Management and Technical Assistance." (i) Change Management Process 96. In evaluating whether a BOC's change management process affords an efficient competitor a meaningful opportunity to compete, we first assess whether the change management plan as stated is adequate. To make that assessment, we examine whether the evidence demonstrates: (1) that information relating to the change management process is clearly organized and readily accessible to competing carriers; (2) that competing carriers had substantial input in the design and continued operation of the change management process; (3) that the change management plan defines a procedure for the timely resolution of change management disputes; (4) the availability of an adequate testing environment; and (5) the efficacy of the documentation the BOC makes available for the purpose of building an electronic gateway. We also evaluate whether the BOC has demonstrated a pattern of compliance with its change management process. 97. Change Management Plan. We concur with the Massachusetts Department that Verizon's "defined Change Management process is sufficient to meet the needs of [competing carriers]." The plan is memorialized in Verizon's Telecom Industry Services Change Management Process (Change Agreement). The Change Agreement is clearly organized, divided into sections that describe the processes for different types of changes, such as those initiated by Verizon, those initiated by competing carriers, those required by regulators, and emergency changes. The Change Agreement includes flow charts that describe the change process from conceptualization of a change to implementation, specifies time frames for Verizon's provision of specifications to competing carriers for each type of change, and specifies time frames for competing carrier comment on those specifications. The Change Agreement is available to competing carriers at Verizon's website. 98. We agree with the Massachusetts Department that Verizon "has adhered to its Change Management process over time." Verizon has implemented performance metrics to measure whether it provides change management notices to competing carriers in compliance with the Change Agreement. The performance data show that Verizon consistently issues its notices according to the schedule set forth in the Change Agreement. We therefore find that Verizon carries out the activities set forth in the Change Agreement in a reasonable and timely manner. 99. WorldCom asserts that Verizon has failed to comply with the Change Agreement with regard to the rollout of a new billing OSS, expressTRAK. Specifically, WorldCom asserts that Verizon has begun implementation of expressTRAK in some states but has not provided a detailed rollout schedule or specifications. Verizon responds it is not rolling out expressTRAK in Massachusetts before the end of 2001, and that expressTRAK is a "back-office" OSS and is therefore not subject to the same business rule and specification requirements as interface software releases. Based on Verizon's explanation of its timing, we conclude that Verizon is not rolling out expressTRAK in Massachusetts in violation of the Change Agreement. ALTS points to a KPMG observation regarding timing and completeness of change management notices. As discussed above, current data, however, show good performance with regard to the timing of notices, and we do not believe absent further evidence that KPMG's finding with regard to completeness of change management notices has a competitive impact. In general, we note that the Massachusetts Department found that "each of the Observations raised by KPMG was satisfactorily resolved prior to the conclusion of the test." 100. Competing Carrier Input and Participation. Competing carriers had substantial input in the design of the Change Agreement and continue to participate meaningfully in its operation; we agree with the Massachusetts Department that "[competing carriers] have substantial input in [the change management] process." Competing carriers participate in monthly change management meetings with Verizon, at which all parties discuss new change requests and vote on priorities. Competing carriers also initiate change proposals, comment on change proposals, participate in the development of the change schedule, and test new software before it is finalized. We note that Verizon employs "versioning," meaning that it maintains a prior version of a software release for some time after implementing a new version, so that competing carriers need not switch to the newer version immediately. The Commission has previously found versioning very useful to a BOC's demonstration that its change management process affords competing carriers a meaningful opportunity to compete, because it "ensur[es] that system changes and enhancements do not adversely affect a carrier's ability to access the BOC's OSS." 101. Separate Dispute Resolution Forum. The record also reflects that Verizon provides a separate dispute resolution forum for change management issues: Competing carriers may escalate change management problems to Verizon's Change Management Director, and, if needed, to a Verizon Vice President. They may also bring disputes to the attention of the Massachusetts Department. The Massachusetts Department noted that competing carriers invoked the change management dispute resolution forum successfully to defer the retirement of the Phase II GUI. 102. Testing Environment. We find that Verizon's change management process provides for an adequate testing environment. In past section 271 orders, the Commission has found it useful to determine whether the record demonstrates that the BOC's testing environment is stable, adequately mirrors the production environment, affords competing carriers an opportunity to develop test decks of representative pre-ordering and ordering transactions, and offers the extended testing period that competing carriers need for EDI implementation and new release testing. We analyze these factors and determine that Verizon's test environment affords competing carriers adequate testing opportunities. 103. Verizon has established the "CLEC Test Environment," or "CTE," which is a testing environment that is physically separate from but matches the actual production environment. In the CTE, competing carriers can test their own software to be sure it is compatible with Verizon's OSS, and they can test new Verizon software releases. First, we find that Verizon's provision of the CTE satisfies its requirement to provide a stable testing environment. Verizon's "CLEC Handbook" specifies that "Bell Atlantic will not make any changes to the CLEC Test Environment while [competing carriers] are testing the new release." KPMG found improvement in the stability of the CTE in the June 2000 release as compared with the February 2000 release. Moreover, the CLEC Handbook calls for Verizon to complete its internal testing before competing carrier testing begins. Second, we find that the test environment adequately mirrors production. Third, the Change Agreement time frames before and during testing are long enough to permit competing carriers to develop their own test decks; Verizon provides dedicated test coordinators to help competing carriers develop, execute, and evaluate their test decks; and Verizon makes its own test deck available on its website. Finally, Verizon offers sufficiently long testing periods to permit adequate testing. 104. We disagree with commenters' assertions that Verizon fails to provide an adequately stable testing environment. WorldCom points to KPMG's analysis and argues that Verizon's poor documentation and coding errors require Verizon and competing carriers to make changes to their interfaces during testing, which changes make the testing environment unstable. We note that KPMG found improvement, however, in the stability of Verizon's testing environment; moreover, the Massachusetts Department notes that KPMG was able to complete its interface testing during the established new release test period. We also note that KPMG closed its exception regarding problems with Verizon's test deck after successful retesting. We believe in the absence of further evidence to the contrary that Verizon's testing environment is adequately stable. 105. Documentation. The record supports our finding and the Massachusetts Department's finding that Verizon makes available sufficiently detailed interface design specifications and documentation to enable competing carriers to modify or design their systems in a manner that enables them to communicate with Verizon's systems and any relevant interfaces. Verizon publishes an "Electronic Interface Guide" as part of its CLEC Handbook series, and it provides technical documentation to enable competing carriers to program their own systems to communicate with Verizon's OSS. The adequacy of Verizon's documentation is demonstrated most forcefully by the fact that several competing carriers have constructed and are using EDI interfaces in a commercial environment. The fact that several of these carriers are placing commercial volumes of orders via EDI with relatively few rejects significantly undermines the assertion that poor documentation prevents competing carriers from successfully implementing EDI. Furthermore, KPMG/Hewlett Packard also successfully used Verizon's documentation to build an EDI interface. KPMG's evaluation of documentation issued in anticipation of the June 2000 release revealed some errors and inconsistencies, which Verizon corrected over the summer. KPMG overall found that the documentation was satisfactory. Based on all these facts, we determine that the EDI implementation and design specifications that Verizon makes available afford an efficient competitor a meaningful opportunity to compete. 106. In their comments, WorldCom and ALTS repeat KPMG's findings with regard to errors in Verizon's documentation. WorldCom notes that the errors were corrected, but points out that "the poor quality of Verizon's documentation when it is first released imposes significant costs on [competing carriers]." WorldCom further states that when Verizon issues corrections to its documentation, those corrections often contain errors as well, and that Verizon takes too long to issue documentation. ASCENT also commented that its members report "persistent flaws" in documentation, and noted that KPMG failed to perform a root cause analysis. We recognize that it would be better if Verizon's documentation were 100 percent correct from the beginning. However, we believe that Verizon's actions to correct documentation once errors are brought to its attention are further evidence that the change management process is effective and that competing carriers have meaningful participation in it. Furthermore, we do not believe that the relatively small number of errors in this large amount of documentation poses a barrier to competing carriers' ability to use Verizon's OSS. (i) Training, Technical Assistance, and Help Desk Support 107. We conclude that Verizon demonstrates that it provides the technical assistance and help desk support necessary to give competing carriers nondiscriminatory access to its OSS. Verizon publishes on its website many documents to assist competing carriers in using its OSS, including a three volume handbook series for resellers, a three volume handbook series for purchasers of UNEs, technical documentation to enable competing carriers to program their systems to communicate with Verizon's systems, business rules and EDI and CORBA specifications, and several other guides on a variety of topics. Verizon also provides training for resellers and for purchasers of UNEs in a "hands on" classroom. Verizon will provide training at competing carriers' premises on request as scheduling permits. Finally, Verizon's help desk, known now as the Wholesale Customer Care Center (WCCC), provides a single point of contact for all competing carrier reports of system issues. We find that, on the whole, Verizon provides technical assistance and help desk support adequate to permit competitors to use Verizon's OSS effectively. The Massachusetts Department likewise found that Verizon "provides [competing carriers] with a significant level of technical assistance and help desk support through its training programs, published documentation, and the WCCC." 108. We reject commenters' assertions that Verizon's help desk is inadequate. ASCENT, Rhythms, and WorldCom argue that WCCC staff is not knowledgeable and does not follow through on problems promptly. In support of its argument, WorldCom points to KPMG's findings that the help desk sometimes takes several days to respond to even critical issues. And OnSite believes that frequent personnel changes at Verizon's help desk cause poorer service. Except for pointing to KPMG's findings, the commenters do not provide any evidence of a problem with Verizon's help desk. KPMG's findings do not compel the conclusion that the commenters suggest. KPMG tested Verizon's former help desk, the Bell Atlantic System Support (BASS) Help Desk. Verizon has since consolidated its help desk functions in the new WCCC; therefore, KPMG's findings carry less weight than they otherwise would. While KPMG did find that 38 percent of critical trouble tickets and 38 percent of all trouble tickets took longer than one day to close, it also found that some delays were caused by competing carriers' not closing trouble tickets after the issue is actually resolved or by problems traced back to competing carriers' OSS. Verizon notes that KPMG's test evaluated data through April 2000, and that after April 2000 its time to resolve trouble tickets improved: the number of tickets open for two days or more dropped from 38 to 18 percent. We conclude that the bulk of the evidence shows that Verizon's help desk provides competing carriers with the technical assistance necessary for a meaningful opportunity to compete. 109. We also reject commenters' suggestions for enhancements. WorldCom says that Verizon should report on the timeliness of resolving trouble tickets and otherwise track its own help desk performance. Covad and Rhythms argue that Verizon should expand the hours of the TISOC. While these suggestions for improvement may have merit, they do not affect our conclusion that Verizon currently provides technical assistance adequate to permit competing carriers a meaningful opportunity to compete. 1. UNE Combinations 110. In this section, we conclude that Verizon provides nondiscriminatory access to combinations of UNEs. The record indicates first that Verizon provides access to UNE combinations, and second that it provides access to UNEs in a manner that allows requesting carriers to combine those elements. We base our conclusion on evidence of actual commercial usage, and also on Verizon's legal obligation to provide such access as established in its Massachusetts tariff and interconnection agreements. 111. First, the record indicates that Verizon has an obligation to provide access to UNE combinations in compliance with our UNE rules. Verizon has a legal obligation, under its tariff, interconnection agreements, and our rules to provide access to UNE combinations, including the loop-switch port platform combination (UNE-P) and the loop-transport facilities combination (Enhanced Extended Link, or EEL). Verizon also makes available a "switch sub-platform," which is local switching combined with other shared elements such as shared transport, shared tandem switching, operator services, directory assistance, and SS7 signaling. The evidence of actual commercial usage demonstrates that Verizon is currently providing access at acceptable levels of quantity and quality. Verizon has provisioned 23,000 UNE-P orders as of January 2001. The Massachusetts Department determined that Verizon provides access to UNE combinations in compliance with our UNE rules and the Massachusetts Department's own requirements. No commenter has raised an issue with regard to Verizon's provision of combinations. 112. The record also indicates that Verizon provides access to UNEs in a manner that allows competing carriers to combine such elements for themselves. Verizon provides a variety of methods that allow competing carriers to combine UNEs. In addition to standard physical and virtual collocation arrangements, Verizon provides alternative collocation arrangements such as smaller physical collocation cages and cageless collocation arrangements, any of which may be used by competing carriers to combine UNEs. Where space for collocation is not available, Verizon also permits competing carriers to collocate their equipment in adjacent controlled environmental vaults. The record also indicates that Verizon satisfies its obligation to make noncollocation options available for the combination of unbundled network elements. Under the Commission's rules, Verizon must "provide . . . any technically feasible method of obtaining . . . access to unbundled network elements[, which is] not limited to . . . physical collocation and virtual collocation." In at least one interconnection agreement, Verizon offers "any technically feasible method to access unbundled [n]etwork [e]lements." Although Verizon has not provided evidence of a standardized offering for noncollocation methods of combining UNEs, this commitment in an interconnection agreement satisfies the obligation to make available noncollocation options for competing carriers wanting to combine UNEs. 113. We reject as irrelevant Sprint's argument that volumes of UNE combinations in Massachusetts will not continue to increase. Sprint points to a statement Verizon made that it might reconsider its provision of UNE combinations if its legal obligation to do so changes. This argument does not suggest that Verizon is not in compliance with current UNE requirements, and therefore is not relevant to our inquiry. A. Checklist Item 4 Unbundled Local Loops 1. Background 114. Section 271(c)(2)(B)(iv) of the Act, item 4 of the competitive checklist, requires that a BOC provide "[l]ocal loop transmission from the central office to the customer's premises, unbundled from local switching or other services." A BOC has an obligation to provision different types of loops, including "two-wire and four-wire analog voice-grade loops, and two- wire and four-wire loops that are conditioned to transmit the digital signals needed to provide service such as ISDN, ADSL, HDSL, and DS1-level signals." 115. In evaluating Verizon's overall performance in providing unbundled local loops in Massachusetts, we examine Verizon's performance in the aggregate (i.e., by all loop types) as well as its performance for specific loop types (i.e., by voice grade, xDSL-capable, line-shared and DS-1 types). In doing so, we are looking for patterns of systemic performance disparities that have resulted in competitive harm or otherwise denied competing carriers a meaningful opportunity to compete. As the Commission has noted in previous section 271 orders, we examine the data for all the various loop performance measurements, as well as the factors surrounding the development of these measures. Verizon demonstrates that for xDSL loops, it is performing at acceptable levels for all of the measures the Commission has considered in previous section 271 orders. Isolated cases of performance disparity, especially when the margin of disparity or the number of instances measured is small, will generally not result in findings of checklist noncompliance. Finally, we evaluate the information Verizon provided describing its processes for installing and maintaining loops, the capabilities of its workforce, and employee training to show that it provisions and maintains unbundled loops. 116. We focus our analysis in this section on the issues in controversy under this checklist item, beginning with the pre-ordering, ordering, provisioning and maintenance and repair of stand-alone xDSL-capable loops. We also address voice-grade loops provisioned as new loops and hot cut loops as well as Verizon's subloop unbundling offering. Finally, we address line sharing and line splitting at the end of this discussion. 1. Discussion 117. Based on the record before us, we conclude that Verizon has adequately demonstrated that it provides unbundled local loops as required by section 271 and our rules. First, as described above, we find that Verizon provides access to loop make-up information in compliance with the UNE Remand Order. Second, we find that Verizon provides nondiscriminatory access to stand alone xDSL-capable loops and high-capacity loops. Third, we find that Verizon provides voice grade loops, both as new loops and through hot-cut conversions, in a nondiscriminatory manner. Finally, we find that Verizon has demonstrated that it has a line- sharing and line-splitting provisioning process that affords competitors nondiscriminatory access to these facilities. In so doing, we acknowledge that the Massachusetts Department also concludes that Verizon complies with this checklist item. 118. When all types of loops are considered, Verizon shows that it performs at an acceptable level, generally meeting the parity standards in the four month period leading up to its application. Verizon demonstrates that it has put in place a process to deliver xDSL-capable loops in a timely manner and at acceptable levels of quality to allow competitors to meet the significant demand for high-speed services in Massachusetts. Furthermore, Verizon demonstrates that it has adapted its provisioning methods and procedures to accommodate competitive carrier requests for line-shared loops loops that are recognized as an important element in providing high-speed service to residential subscribers. One commenter, Rhythms, initially opposed Verizon's application on the basis of its xDSL loop performance, but now states that Verizon has taken steps to resolve its difficulties and has withdrawn its opposition. We find that Verizon's overall performance meets the checklist requirements, even though some performance measurements indicate isolated and marginal problems. As explained below, we believe that the marginal disparities in some measurements are not competitively significant and do not show signs of systemic discrimination. 119. As described above, the New York Commission developed Verizon's performance measurements, business rules and standards in a collaborative state proceeding with input from competing carriers. The Massachusetts Department has adopted these performance measures, business rules and standards. When possible, the New York Commission elected to compare Verizon's service to competing carriers using unbundled loops directly to the level of service provided to Verizon's retail operations. Where, however, the New York Commission determined that no comparable retail function exists, the level of service Verizon provided to competing carriers in Massachusetts is tested against benchmarks developed in New York. Because the New York Commission adopted the performance measures through an open and collaborative process, and no commenter specifically criticizes the New York Commission's process, we defer to the reasonable standards it set for these measurements as a basis for analyzing Verizon's Massachusetts application. a. Overview of Performance Data 120. In our analysis we rely primarily on Massachusetts performance data collected and submitted by Verizon under the state-adopted carrier-to-carrier standards. Where the data displays facial disparities in performance between the manner in which Verizon provisions loops for itself vis-…-vis its competitors, Verizon proposes explanations for statistical disparities and offers studies that recalculate measures according to various exclusions which are discussed below. In such instances, we look to the availability of data reconciled under the auspices of the Massachusetts Department and specific evidence presented by commenters to determine the appropriate weight to accord the challenged data. In evaluating the probity of Verizon's explanations and studies, we consider among other things, whether third parties had access to the underlying data and whether the challenged data were reconciled by the Massachusetts Department. 121. Although KPMG conducted a review of other Verizon performance metrics in Massachusetts, it did not separately evaluate the xDSL metrics because they were implemented by Verizon after the initial testing period. In its supplemental filing, however, Verizon describes its engagement of PwC to "validate its DSL and line sharing measures" and notes that PwC performed its work under the same standards as KPMG did during its third party OSS testing. PwC replicated a total of 159 measures and matched Verizon's calculations for 136 of 159 measures. Verizon asserts that for the remaining 23, the number of observations were identical and the reported performance was within one percent of the results replicated by PwC. In addition to replicating the carrier-to-carrier data, PwC examined the additional special studies Verizon performed with respect to certain DSL measures. 122. Several commenters challenge the validity of Verizon's adjustment to official carrier-to-carrier performance data. Where commenters challenge the comprehensiveness of a third-party evaluation of underlying data or a BOC-applicant's adjustment to carrier-to-carrier measures, carrier-specific carrier-to-carrier data become an important tool for the Commission to evaluate a BOC's compliance with section 271. Carrier-specific data underlying the carrier-to- carrier reports are important to this Commission's section 271 process because they allow competing carriers to compare carrier-to-carrier results or BOC-applicants' explanations to their own experiences and thus provide us with as complete a record as possible on which to make our decision. Likewise, where there is no comprehensive third-party evaluation of particular metrics, we strongly suggest that state commissions and applicants enable all parties to have access to the data used to calculate special studies of the BOC's performance. We find evidence that has been scrutinized in this manner is most persuasive. Accordingly, BOC-applicants may facilitate the development of a full record upon which they may rely to demonstrate compliance with section 271. In this case, Verizon has provided carrier-specific data underlying carrier-to-carrier measures and the underlying data used to generate reformulated measures of performance. We discuss competitor challenges to Verizon's performance based on carrier-specific data where relevant below. a. xDSL-Capable Loops 123. We find that Verizon demonstrates that it is providing xDSL-capable loops in accordance with the requirements of checklist item 4. In analyzing Verizon's showing, we rely primarily on the performance measures and performance data described in prior section 271 orders. We review Verizon's xDSL-capable loop order processing timeliness, the timeliness of Verizon's xDSL-capable loop installation and percentage of Verizon-caused missed installation appointments, the quality of the xDSL-capable loops Verizon installs, and the timeliness and quality of the maintenance and repair functions Verizon provides to competing carrier xDSL- capable loops. We note, however, that we do not rely on data reflecting Verizon's provision of xDSL loops to its separate affiliate to reach our conclusions because Verizon demonstrates checklist compliance with an evidentiary showing of performance to its wholesale xDSL customers. 124. Verizon has a concrete and specific legal obligation to provide unbundled xDSL- capable loops to competing carriers. Verizon makes available unbundled xDSL-capable loops (including all technically feasible features, functions and capabilities) in Massachusetts through interconnection agreements and pursuant to tariffs approved by the Massachusetts Department. (i) Order Processing Timeliness 125. To determine whether Verizon is processing orders in a timely fashion, we examine whether it provides competitors with nondiscriminatory access to loop information in a timely manner and whether it returns timely firm order confirmations (FOCs) to competitors. 126. Timely Access to Loop Information. As described above, we find that Verizon has demonstrated that its pre-ordering OSS provides competitors with access to the same underlying loop information available to Verizon's retail and back office personnel. We also find that Verizon appears to be providing that information within the required time frames. 127. Verizon's performance data reflect that it provides responses to competing carrier requests for loop information in substantially the same time and manner as for itself. The carrier- to-carrier reports contain four pre-ordering metrics that measure Verizon's performance in providing competitors with pre-order access to loop information. Under two of these metrics, Verizon provides performance data for September through December 2000 showing that Verizon is providing timely responses to competitors' pre-order mechanized loop database queries submitted via Verizon's EDI and CORBA interfaces. Verizon, however, has not reported carrier-to-carrier performance data measuring its average response times in conducting pre-order manual loop qualifications and engineering record requests. Instead, Verizon provides data for manual loop qualifications conducted from September through November 2000 under Verizon's existing process through its ordering OSS, showing that between 97 percent and 99 percent of manual loop qualifications were completed within 48 hours. Although these data have not been submitted under the auspices of the Massachusetts carrier-to-carrier reports prepared in accordance with business rules developed collaboratively by Verizon and competitive carriers, we accept them here because they have not been challenged. Finally, Verizon provides evidence that it is consistently meeting its target of returning loop make-up information to competitors within 24 hours under its interim LFACS process. Verizon also states that competitors generally receive this information within 2 hours. 128. Timely Return of Firm Order Confirmations. We conclude that Verizon's reported performance metrics indicate that it consistently provides timely confirmation notices to competing LECs in Massachusetts for xDSL unbundled loop orders. We encourage Verizon to work in the collaborative process to adopt disaggregated performance metrics for xDSL and digital loops, whether pre-qualified or manually qualified. As the Commission explained in the Bell Atlantic New York Order, the "need for unambiguous [xDSL] performance standards and measures has been reinforced by the disputes in [that] record regarding . . . what performance is being measured." (i) Provisioning Timeliness 129. We find that Verizon demonstrates that it provisions xDSL-capable loops for competing carriers in substantially the same time and manner that it installs xDSL-capable loops for its own retail operations. In analyzing Verizon's provisioning performance for checklist compliance, we continue to rely primarily upon the performance measurements identified in the Bell Atlantic New York Order and SWBT Texas Order, i.e., missed installation appointments and average completion intervals. 130. Percent Missed Installation Appointments. Recent performance data show that Verizon's missed appointment measure demonstrates parity performance for competitive LECs. Although past performance indicates some statistically significant disparities, the trend in Massachusetts has improved significantly and, in the months of September, October, November and December, Verizon's performance moved to within approximately two percentage points of Verizon's retail missed appointment rate. Thus, the record shows that whatever performance disparities may have existed in the past, they have been narrowed to a small margin. 131. We find no basis in the record to support NAS' contention that Verizon grants preferential installation appointments to its retail affiliate. Verizon states that it offers nondiscriminatory access to shorter appointment windows for competitive LECs and Verizon alike. Given Verizon's representation that it offers identical installation appointment windows to customers of both competitors and its retail affiliate that have "extenuating circumstances," we emphasize that Verizon is required to apply this policy consistently. 132. Average Completion Interval. We find that Verizon's average completion interval data for the period September through December show nondiscriminatory treatment. During this period, the average completion interval for orders requiring a dispatch, which captures the vast majority of competing carrier orders, indicates a trend of improving performance and shows that retail performance is, on average, within approximately one-half a day of Verizon's retail affiliate and approximately one and one-half days longer than the standard six-day interval established by the Massachusetts Department. The average completion interval for Verizon retail during the period September through December is also approximately one day longer than the standard interval. Verizon argues that these results show nondiscriminatory treatment and any average completion interval disparities that remain should be discounted because these results are skewed by competing carrier behavior. Specifically, Verizon asserts that orders which were not prequalified (which have a 9-day interval) and orders which request installation dates outside of the standard interval skew the carrier-to-carrier results. 133. Although we recognize that the average completion interval as reported by the carrier-to-carrier measure slightly exceeds the standard interval adopted by the Massachusetts Department, we note that Verizon's performance has improved over the period September through December while the number of competitor orders has remained consistent. This improving trend and the competitively insignificant disparity between competitor and Verizon completion intervals persuades us that Verizon's technicians have gained sufficient expertise and operational readiness to adjust to the growth of competition in Massachusetts. To evaluate Verizon's provisioning timeliness, we look to the totality of the evidence presented to us. It is based on this totality and specifically, the measures the Commission has relied upon in the past, that we conclude that Verizon's provisioning timeliness performance offers competitors a meaningful opportunity to compete. 134. Although Verizon and some commenters urge us to rely on other measures, we need not do so in this case because Verizon has demonstrated compliance with this aspect of our loops analysis on the basis of the measures the Commission has relied upon in previous section 271 orders. We decline to rely upon the percent on-time measure supplied by Verizon or percent completed within 6 days measures supplied by competitors, because we do not have enough data or experience with them for determining a BOC's compliance with section 271. Moreover, commenters have offered no persuasive reason to depart from Commission practice of placing primary reliance upon the percent missed appointment or the average completion interval measures. Accordingly, we view the on-time measures cited by Verizon and the percent completed within 6 days measure cited by competitors as additional diagnostic data to evaluate Verizon's contention that it provides xDSL-capable loops in a timely manner. We find that these measures support rather than refute the measures the Commission relied upon in the past and confirm our view that the missed appointment and average completion interval measures provide an accurate description of Verizon's performance for competitors. (i) Provisioning Quality 135. We conclude that Verizon provides xDSL loops to competing carriers at a level of loop installation quality that meets the requirements of checklist item 4. In analyzing installation quality we continue to rely primarily upon the measure identified in the Bell Atlantic New York Order and SWBT Texas Order percent installation troubles within 30 days. Assessing the quality of loop installation is important because advanced services customers that experience substantial troubles in the period following installation of an xDSL-capable loop are unlikely to remain with a competing carrier. 136. As an initial matter, we reject Verizon's request that we depart from relying upon certain metrics the Commission has relied upon in the past. We conclude that Verizon's use of the total DSL trouble report rate as a substitute for the percent trouble within 30 days does not measure the quality of Verizon's installation performance. In fact, it is not even classified in the carrier-to-carrier reports or the Commission's past orders as a provisioning metric, but rather, as a measure of maintenance and repair activities. Verizon has not persuaded us that the metric for trouble reports within 30 days of installation is any less probative of installation quality in the factual context of this application than it was in the previous applications wherein the Commission relied on this metric. Specifically, we find that the percent troubles within 30 days measure is more probative of installation quality than the total trouble report rate which measures all xDSL- lines in service throughout Verizon's network, not lines recently installed. 137. During this proceeding, the New York Commission and the Massachusetts Department accepted a consensus revision to the trouble report within 30 days measure to control for certain carrier business practices. Under the new consensus measure, the metric will include only trouble reports that are submitted within 30 days of installation by competitors that participate in acceptance testing. The revised definition reflects the fact that properly conducted acceptance testing could identify some installation quality problems that could be resolved at the time the competitive LEC and Verizon conduct the acceptance test. When Verizon presents data that control for the exclusions adopted by the consensus revision, the performance dissimilarities are reduced or eliminated entirely. Competitive LECs question whether Verizon may appropriately exclude some of these trouble reports and have used carrier-specific data supplied by Verizon to argue that Verizon does not provide loops at an acceptable level of quality. 138. We agree with the Department of Justice that Verizon's adjustments to the data are justified if an inference could reliably be made when the type of trouble reported: (1) could not occur post-acceptance, but rather must have existed at acceptance; and (2) would consistently be detected by the joint testing methods employed. The issue of whether competing carriers can consistently detect loop quality problems is disputed by Covad, Rhythms and NAS. Covad argues that carrier-specific data show that it experiences installation quality troubles which are over four times higher for its orders compared to Verizon retail. Verizon responds that when an adjustment is made for Covad's failure to properly conduct acceptance testing its I-code rate falls to below retail. Verizon forwards similar carrier-specific responses to Rhythms and NAS. 139. We find that Verizon is making loops available at substantially the same level of quality as Verizon provides to itself. In reaching this conclusion we rely upon data that are adjusted to comply with the recently-adopted consensus revision to the troubles with 30 days measure. During the period September through November 2000, competitive LECs experienced installation quality troubles at a rate of 7.0 percent compared to 2.3 percent for Verizon retail. Thus, the adjusted data narrow the facial disparity between Verizon's performance to its competitors compared to itself. Moreover, we also note that recent performance shows that Verizon has improved its ability to provide competitors with xDSL-capable loops at acceptable levels of quality. We find, therefore, that the adjusted data coupled with the improving trend in Verizon's performance are sufficient for us to conclude that Verizon is installing loops in a nondiscriminatory manner. 140. We are unable to quantify exactly the effect of Verizon and competitor adjustments to the data because of limited factual disputes. We note however, that the Massachusetts Department has conducted a comprehensive and detailed factual reconciliation of I-codes for the month of November 2000 with the participation of Covad and Verizon. This inquiry has yielded several process improvements that are designed to improve Verizon's installation quality results. We welcome the Massachusetts Department's participation in addressing Verizon's acceptance testing process and are encouraged by the improvements to this process. We encourage carriers to bring issues such as these to the attention of state commissions so that factual disputes can be resolved before a BOC applicant files a section 271 application with this Commission. 141. We find that recent carrier-to-carrier installation quality measures show that Verizon has improved significantly its ability to provide competitors with xDSL-capable loops at acceptable levels of quality. Moreover, we find that Verizon's remedial efforts to improve the stand-alone xDSL loop provisioning and acceptance testing process, in addition to those agreed to in the context of the Massachusetts Department's reconciliation proceeding, are likely to reduce competitive LEC installation quality impairments in the future. Starting in January 2001, Verizon will tag DSL loops at both the NID and the cross-connection box with special services markers to indicate to Verizon technicians that the loop is in use for data services and should not be used to serve another customer. Verizon is also engaged in on-site visits to competitive LEC testing centers to discover ways to improve the acceptance testing process. Verizon has committed to providing competitive LECs with detailed information on their I-codes to diagnose acceptance testing issues and reconcile data. Verizon has also agreed to a trial of "sync" testing to enable Verizon technicians, at the time of testing, to determine whether the competitive LEC can synchronize its DSLAM with customer premises modems. Finally, Verizon is working with a competitive LEC to make access to its testing equipment available to Verizon through a voice response unit. We emphasize that Verizon's installation quality performance is minimally acceptable -- even under our flexible approach of reviewing Verizon's performance in light of the totality of the circumstances. (i) Maintenance and Repair 142. We agree with the Massachusetts Department that Verizon demonstrates that it provides maintenance and repair functions for competing carrier xDSL-capable loops in a manner sufficient to meet the requirements of checklist item 4. In analyzing Verizon's maintenance and repair functions we continue to rely primarily upon the mean time to repair and repeat trouble rate measures identified in the Bell Atlantic New York and SWBT Texas Orders. 143. Mean Time to Repair. Like the Massachusetts Department, we find that Verizon offers nondiscriminatory access to maintenance and repair functions. During the period from September through December, the mean time to repair competing carrier troubles on xDSL loops was 29.4 hours while the comparable number for Verizon was 21.59 hours, an approximately 8 hour difference. Although this disparity is statistically significant, we note that, in December, Verizon repaired competitive LEC lines in 19.1 hours compared to 17.8 hours for its retail affiliate, bringing Verizon into near facial parity with its retail operation. Accordingly, the most recent month we consider indicates that Verizon has virtually eliminated this performance disparity. We do not find, therefore, any systematic discrimination in Verizon's maintenance and repair functions offered to competitors. 144. Verizon contends that the data reflecting the measurement of mean time to repair for xDSL loops provide a misleading indication of its performance and thus the Commission should look behind the measures for additional evidence of nondiscrimination. Verizon claims that it is much more likely to be unable to access competing carriers customers' premises to repair xDSL loops than access to the premises of its own retail customers and that competing carriers are less willing to schedule weekend appointments than are Verizon's retail customers. Both of these factors, Verizon claims, lengthens the time needed to repair competing carrier xDSL loops. Covad and Rhythms specifically deny that they avoid weekend repair appointments and otherwise criticize Verizon's maintenance and repair functions. 145. We exercise our discretion to afford Verizon's adjusted mean time to repair data little weight. Because the official carrier-to-carrier data provide sufficient evidence for the Commission to conclude that Verizon provides nondiscriminatory access to maintenance and repair functions, we need not resolve the factual dispute presented by commenters regarding refused weekend repair appointments. We recognize and encourage BOCs to conduct root cause analysis of their performance and will appropriately credit explanations of disparities in the performance measures. We believe, however, that such explanations are best used to improve processes and carrier-to-carrier reporting and that they are most useful when surfaced in state proceedings. We note that the development of performance measures is an iterative process and we encourage competitive LECs and Verizon to continue to specifically improve the mean time to repair measure to provide a more accurate indicator of performance. 146. Repeat Trouble Rate. We conclude that Verizon provides competitors with maintenance and repair services at an acceptable level of quality. Verizon's repeat trouble report data show that competing carriers infrequently experience problems after a repair visit for a trouble on DSL loops. This measure shows that competing carriers experience fewer repeat troubles than Verizon's retail affiliate. For the period September through December, competing carriers experienced 16.3 percent repeat trouble report rates compared to 21.5 percent for Verizon. Thus, during the four recent months we consider, Verizon provides better service to competitors in this area than it does for its retail affiliate. a. Subloops 147. We find that Verizon provides nondiscriminatory access to subloops consistent with the requirements of section 271 and the UNE Remand Order. The Commission's UNE Remand Order requires incumbent LECs to provide competitors access to subloop elements at any technically feasible point to ensure that "requesting carriers [have] maximum flexibility to interconnect their own facilities" with those of the incumbent LEC. Competitors take issue with Verizon's subloop offering claiming that Verizon limits subloops to "metallic distribution pairs/facilities;" restricts competitor subloop access to interconnection at the feeder distribution interface (FDI); and refuses to allow competitors to collocate equipment inside remote terminals for purposes of accessing subloops. 148. We find that, consistent with our rules, Verizon allows collocation inside remote terminals on a space-available basis. Where space is unavailable, competitive LECs may deploy an adjacent cabinet to access subloops through an interconnecting cable. Furthermore, Verizon does not limit competitive LEC access to subloops to only metallic distribution facilities. Rather, Verizon allows requesting carrier to obtain access to subloop facilities regardless of the transmission medium. Finally, Verizon has demonstrated that competitive LECs may gain access to subloops at technically feasible points of interconnection other than the FDI. For these reasons, we cannot agree with the commenters' claims that Verizon limits access to subloop unbundled network elements in violation of the requirements of section 271. a. High Capacity Loop Performance 149. We find that Verizon's performance for high capacity loops does not result in a finding of noncompliance with checklist item four. We look to the totality of the circumstances in evaluating Verizon's performance in providing loops in accordance with the checklist requirements. During the period September through November, although volumes are low, carrier-to-carrier data show that Verizon misses a comparable number of installation appointments for competitors and retail alike. Verizon's performance data for its maintenance and repair functions for high capacity loops show parity. Like other types of loops we consider, Verizon states that competing carrier behavior skews its high capacity loop performance. We recognize that Verizon's performance on other measures with respect to provisioning high capacity loops has been poor in Massachusetts. High capacity loops in Massachusetts represent only approximately 0.8 percent of all unbundled loops provisioned to competitors. Verizon performs at an acceptable level for most types of unbundled local loops. Given the low volumes of orders for high capacity loops in Massachusetts we cannot find that Verizon's performance for high capacity loops results in a finding of noncompliance for all loop types. a. Voice Grade Loops 150. We agree with the Massachusetts Department that Verizon demonstrates that it provides voice grade unbundled loops in a nondiscriminatory manner. This category includes hot cut loops and new stand-alone loops. We discuss each of these categories separately below. (i) Hot Cut Loop Provisioning 151. Hot Cut Process. Verizon's hot cut process is designed to move a loop that is in service from Verizon's switch to a competitor's switch. Competitors can request that Verizon complete the hot cut within a specific appointment window and Verizon has committed to ensuring that the customer will not be out of service for more than five minutes during the hot cut. Verizon's hot cut process includes a number of steps that Verizon and competitors must take during the days preceding the hot cut. These steps include pre-wiring a cross-connection from the competitor's collocation arrangement to Verizon's main distribution frame prior to the committed date and time of the hot cut, setting the appropriate Local Number Portability triggers and confirming with the competitor that the loop is to be cut over to a competitor's switch. 152. Hot Cut Timeliness and Quality. We find that Verizon demonstrates that it provides hot cuts in Massachusetts in accordance with checklist item 4 because it provides hot cuts in a timely manner, at an acceptable level of quality, with minimal service disruption, and with a minimum number of troubles following installation. Verizon reports data on the percentage of hot cut orders completed within the cut-over window specified by the requesting competing carriers on an LSR. 153. In the instant application, Verizon demonstrates that its hot cut performance has returned to acceptable pre-strike levels which afford a competitor a meaningful opportunity to compete. During October and November 2000, Verizon completed on average 96 percent of hot cut orders on time. During the same time period, less than 0.8 of the hot cut lines experienced installation troubles within 7 days. The Massachusetts Department engaged in a reconciliation of various Verizon self-reported hot cut performance measurement data in the context of the state section 271 proceeding. Relying upon the results of its carrier-specific data reconciliation, the Massachusetts Department concluded that "there is no need for further data reconciliation" and concluded that Verizon provides sufficient on-time hot cut performance to meet the requirements of checklist item 4. Because the Massachusetts Department performed a searching and specific data reconciliation of Verizon's hot cut performance, we accord its resolution of this issue substantial weight. We note that no commenter challenges Verizon's hot-cut conversion performance in this phase of the proceeding. We thus conclude that the record demonstrates that the hot cut performance Verizon makes available to competing carriers in Massachusetts minimizes service disruptions and affords a competitor a meaningful opportunity to compete. (i) New Stand-Alone Loop Provisioning 154. We agree with the Massachusetts Department that Verizon demonstrates that it provisions new unbundled stand-alone voice grade loops in accordance with the requirements of checklist item 4. When Verizon does not presently service the customer on the line in question, a hot cut loop is not required. In such instances, a competing carrier obtains a new stand-alone loop from Verizon which dispatches a technician to the customer's premises to complete the installation. We find that Verizon demonstrates that it provisions and maintains new stand-alone voice grade loops for competing carriers in substantially the same time and manner that it installs new voice grade loops for its own retail operations. 155. Provisioning Timeliness and Quality, Maintenance and Repair. Verizon demonstrates that it delivers new voice grade loops in a timely manner and at acceptable levels of quality. Verizon also demonstrates that it provides maintenance and repair functions for such loops in a nondiscriminatory manner. No party specifically criticizes Verizon's new, stand-alone loop provisioning performance. As in previous section 271 orders, in reviewing Verizon's performance we examine the average completion interval, missed installation appointments, trouble reports within 7 days and mean time to repair measures. Specifically, Verizon's performance results for the months of September, October, November and December 2000 also demonstrate parity for the average completion interval for new loop orders of 1-5 lines measure. During the same period, Verizon's missed installation appointment rate for new voice loops also demonstrated parity. Furthermore, Verizon appears to be providing new voice grade loops to competitors at an acceptable level of quality. Based on the trouble report within 7 days measure, Verizon provided installation at the same level of quality for competitive LECs compared to retail during the months of September, October, November and December 2000. Verizon's mean time to repair measures show that it is providing maintenance and repair functions for new loops to competitors in a nondiscriminatory manner. a. Line Sharing (i) Background 156. On December 9, 1999 the Commission released the Line Sharing Order that, among other things, defined the high-frequency portion of local loops as a UNE that must be provided to requesting carriers on a nondiscriminatory basis pursuant to section 251(c)(3) of the Act and, thus, checklist items 2 and 4 of section 271. In the Line Sharing Order the Commission acknowledged that it could take as long as 180 days from the release date for incumbent LECs to develop and deploy the modifications necessary to implement this new requirement. This 180 day period concluded on June 6, 2000, approximately six months before Verizon filed its Massachusetts II application. In the SWBT Kansas/Oklahoma Order, the Commission provided BOC-applicants guidance concerning the required section 271 line sharing showing necessary to meet a BOC's burden of proof. Specifically, the Commission stated that "a successful BOC- applicant should provide evidence that its central offices are operationally ready to handle commercial volumes of line sharing and that it provides competing carriers with nondiscriminatory access to the pre-ordering and ordering OSS functions associated with the provision of line shared loops, including access to loop qualification information and databases." The Commission also held that "to the extent that a BOC applicant relies upon commercial data from another state to establish that it is providing nondiscriminatory access to line shared loops in a state where it requests section 271 authority, it should provide evidence that the OSS and provisioning processes are identical. Verizon must demonstrate, therefore, that it provides nondiscriminatory access to the unbundled high-frequency portion of the loop to gain section 271 approval in Massachusetts. 157. Verizon proposes to demonstrate compliance with its line sharing obligation with evidence that it has signed nine interconnection agreements in Massachusetts with line sharing provisions. Verizon also notes that the Massachusetts Department recently approved its line sharing tariffs, with only minor amendments. It further states that it is able to handle "considerable volumes of line sharing orders" by utilizing its successful New York provisioning methods and procedures in Massachusetts. Finally, through the New York DSL collaborative, it has worked with competing carriers to identify and resolve various technical and operational issues associated with line sharing in Massachusetts. Competing carriers contest Verizon's operational readiness to offer line sharing and Verizon's ability to offer line sharing on a nondiscriminatory basis. (i) Discussion 158. We find that Verizon demonstrates that it provides nondiscriminatory access to the high-frequency portion of the loop. Specifically, the most probative evidence that Verizon submits to support this point is actual commercial usage. The Commission stated in the SWBT Kansas/Oklahoma Order that "a successful BOC applicant could provide evidence of BOC- caused missed installation due dates, average installation intervals, trouble reports within 30 days of installation, mean time to repair, trouble report rates and repeat trouble report rates." Our approach in this case is to rely primarily on the limited commercial data Verizon has submitted from its Massachusetts operations. Because line sharing volumes in Massachusetts have escalated only recently, however, we look to Verizon's line sharing performance in New York as well, where line sharing volumes are larger for additional evidence that Verizon is providing nondiscriminatory access to line sharing. As discussed above, we conclude that Verizon's line sharing OSS in New York and Massachusetts uses the same systems and offers the same functionality. Accordingly, we shall consider Verizon's commercial line sharing performance in New York as a supplement to Verizon's limited commercial line sharing performance in Massachusetts. 159. Operational Readiness. Competitive LECs take issue with Verizon's ability to wire adequately central offices to offer line sharing. Covad specifically contests Verizon's representation that it was operationally ready to provision line sharing for all splitter collocation arrangements in place as of December 1, 2000. In response, Verizon states that it recognized central office wiring problems that delayed the readiness of certain offices and committed to reinspections of all line-sharing related central office work beginning in December 2000. The Department of Justice recognizes that "Verizon is making efforts to resolve its line sharing implementation difficulties" and the Massachusetts Department urges us to find that Verizon provides nondiscriminatory access to the high frequency portion of the loop. 160. Verizon has now completed all the quality inspections and has "taken the necessary corrective action for all of the line sharing-related collocation arrangements that were in place as of December 1, 2000 . . . in both Massachusetts and New York." Verizon has also agreed to implement the elements of its quality inspection process into the normal collocation inspection process and thus, new line sharing-related collocation arrangements will be subject to this inspection process as well. It therefore appears that Verizon instituted its quality inspection process and completed any necessary corrective action as it became aware of central office wiring issues described by competitive LECs. 161. Line Sharing Performance Data. Verizon has supplied a limited amount of Massachusetts commercial data for the period September through November 2000 in support of its line sharing showing. To show that the data are reliable, Verizon engaged PwC to replicate its carrier-to-carrier results and 34 line sharing measures for the period September through November, the results of which, according to PwC, largely confirm the results presented by Verizon. We recognize the Department of Justice's concerns that some of the line sharing completion interval data may be inaccurate. Like the Massachusetts Department, however, we conclude that the data adequately show that Verizon has met its line sharing obligation. The New York Commission only recently directed Verizon to capture its xDSL performance in disaggregated line sharing measures. In this case, we decline to hold isolated inaccuracies against Verizon where the method of reporting and collecting data is new and the underlying cause of the distortion has been addressed by Verizon. In this context, we believe it is appropriate to credit Verizon's submission of Massachusetts commercial line sharing data, supplemented by data from New York, when making our determination that Verizon provides nondiscriminatory access to the high-frequency portion of the loop. Specifically, we are convinced that the flawed timeliness measures provide evidence of the time it takes Verizon to provision line shared loops. 162. Provisioning Timeliness. Overall, Verizon adequately demonstrates that it provisions line sharing to competitors in substantially the same time as it does for itself. We note at the outset that we give no decisional weight to Verizon's missed appointment data for line sharing in New York and Massachusetts. Although the data on their face show that Verizon meets the parity standard we agree with the Department of Justice, the Massachusetts Department and even Verizon itself, that the measure may be flawed. Specifically, Verizon states that this measure may not have captured those instances where a Verizon technician performed the central office work typically required for xDSL loops but failed to confirm that a splitter was functioning on the line. Parties criticizing the completion measures appear to argue that because a Verizon technician did not test for a functioning splitter, the quality rather than the timeliness of Verizon's installation work is unacceptable. While we recognize that performing the additional work required to test whether a splitter was functioning on the line could have an impact on the completion measures, we find that the data provided by Verizon are probative of the time it takes Verizon's technicians to install line-shared service. We are therefore not prepared to dismiss all of the evidence of commercial usage as USISPA suggests because the inaccuracies appear to be limited to the completion measures and are not so pervasive as to render Verizon's line sharing data completely untrustworthy. Furthermore, as Verizon became aware of this problem, it addressed this data integrity issue by properly instructing its installation personnel to code orders as complete after properly functioning splitters are working on a given line, implementing its quality inspections for line sharing-related collocation work and performing a splitter signature test to ensure that the quality of its installation work was acceptable. Indeed, the record shows that during the period of time not affected by the distortion, Verizon's timeliness performance demonstrates parity. 163. The average completion interval data for line sharing show parity. While Verizon has supplied no retail information as a basis for comparison during the months of September and October for Massachusetts data, the average completion interval measure in November shows that Verizon required slightly more than six days to provision line-shared loops to competitors compared to over seven days for itself. In New York, for the months of September and November, performance for competitive LECs is superior to that provided to VADI. Although these data show that Verizon is performing at parity we note that Verizon's performance is generally above the 5-day interval established by the Massachusetts Department even as the current interval is scheduled to be reduced to four days in the near future. It is encouraging that Verizon is moving toward meeting this state-approved provisioning interval while it gains additional experience provisioning commercial volumes of line shared orders. 164. Installation Quality & Maintenance and Repair. Based on the commercial data presented in Massachusetts, Verizon appears to be providing line shared loops at acceptable levels of quality. Although VADI did not submit any trouble reports within thirty days of installation in the month of November, the competitive LEC rate was 1 percent and in September and October 2000, competitive LECs did not report any troubles on line-shared loops captured by the measures. In New York, from September through November, the weighted average of installation troubles for competitive LECs was 1.70 percent compared to less than one percent for VADI. 165. With respect to maintenance and repair, Verizon repairs loops for competitors in less time than it takes to repair retail line-shared loops. In November, the only month for which Verizon provided such data in Massachusetts, Verizon repaired competing carrier line-shared loops in just over three hours. Verizon represents that it took significantly longer to repair loops for VADI over 25 hours. In New York, Verizon shows that the mean time to repair is comparable to stand-alone xDSL loop repair times and offers competitors nondiscriminatory access to maintenance and repair functions. Verizon also shows that its repair services are performed at acceptable levels of quality. Thus we find that the data suggest that Verizon is providing line-shared loops at an acceptable level of quality and repairing these facilities in a nondiscriminatory manner. 166. Although we have some concerns with the accuracy of Verizon's performance results and the limited volume of competitive LEC orders captured by the measures, we base our decision on measures not affected by such inaccuracies, the replication of other measures by PwC and Verizon's efforts in addressing the central office wiring issues that have impaired the ability of competitive LECs to submit commercial volumes of line sharing orders. Recent efforts by Verizon have substantially, if not completely, addressed the initial central office wiring implementation issues experienced by competitive LECs in Massachusetts. Furthermore, we also note that Verizon has designed a process to address line sharing implementation difficulties going forward. a. Line Splitting (i) Background 167. In the Line Sharing Order on Reconsideration, the Commission made clear that line splitting is an existing legal obligation and that incumbent LECs must allow competitors to order line splitting immediately, whether or not a fully electronic interface is in place. The Commission further stated that "we expect Bell Operating Companies to demonstrate, in the context of section 271 applications, that they permit line splitting, by providing access to network elements necessary for competing carriers to provide line-split services." We discuss below the steps Verizon has taken to offer line splitting capabilities consistent with the Line Sharing Order on Reconsideration. 168. Verizon states that it currently offers the unbundled network elements that would allow line-split services. On February 14, 2001, Verizon issued a statement of policy to accommodate line splitting. Additionally, Verizon has incorporated line splitting contract language reflecting this policy into its Model Interconnection Agreement which it will make immediately available to any carrier who wishes to offer line-split services. Verizon has also demonstrated that it offers competitors nondiscriminatory access to the individual network elements necessary to provide line-split services and that nothing prevent competitors from offering voice and data services over a single unbundled loop. Several competitors contest the adequacy of this language and argue that Verizon is currently not in compliance with the Commission's line sharing and line splitting requirements. These carriers further contend that Verizon has engaged in a pattern of recalcitrant behavior with regard to implementing line sharing and line splitting requirements and the Commission should not credit its promises of future compliance. (i) Discussion 169. Verizon demonstrates that it makes it possible for competing carriers to provide voice and data service over a single loop i.e., to engage in "line splitting." Specifically, Verizon demonstrates that it has concrete and specific legal obligation to provide line splitting through rates, terms and conditions in interconnection agreements. As a result, a competing carrier may, for instance, provide voice service using UNE-P and, either alone or in conjunction with another carrier, provide xDSL service on that same line. 170. Our recent Line Sharing Reconsideration Order is clear: Verizon must permit competing LECs to offer both voice and data services over a single unbundled loop in a line splitting configuration. The Commission also stated that incumbents must make necessary network modifications including access to OSS necessary for the "pre-ordering, ordering, provisioning, maintenance and repair and billing for loops used in line splitting arrangements." As carriers identify operational issues associated with line splitting, the Commission recognized that state collaboratives and change management processes could be used by "incumbent LECs and competing carriers to work together to develop processes and systems to support competing carrier ordering and provisioning of unbundled loops and switching necessary for line splitting." 171. We disagree with WorldCom's contention that Verizon's line-splitting interconnection agreement language limits line splitting to carriers who are collocated in Verizon central offices or that Verizon is taking the position that the UNE-P providers may not line split unless they are collocated. Verizon's contract language, which includes a reference to "collocator to collocator" connections, does not require UNE-P providers to be collocated in Verizon central offices to offer line split services. Rather, UNE-P providers need not obtain collocation in Verizon central offices to offer the voice component of line-split services. 172. Verizon's interconnection agreement amendment is also consistent with our Line Sharing Reconsideration Order, which requires that incumbent LECs minimize service disruptions to existing voice customers undergoing a transition to line-splitting. For example, where competitive LECs provide data service to existing end user customers and Verizon provides voice service to that customer there is no need to "rearrange" network facilities to provide line-split services. Because no central office wiring changes are necessary in such a conversion from line sharing to line splitting, Verizon is required under our Line Sharing Reconsideration Order to develop a streamlined ordering processes for formerly line sharing competitive LECs to enable migrations between line sharing and line splitting that avoid voice and data service disruption and make use of the existing xDSL-capable loop. Such a transition from line sharing to line splitting should occur subject only to charges consistent with the Commission's cost methodology as articulated in the Local Competition First Report and Order. 173. We disagree with WorldCom's claim that Verizon's OSS does not comply with our Line Sharing Reconsideration Order in other respects. The Line Sharing Reconsideration Order does not require Verizon to have implemented an electronic OSS functionality to permit line splitting. Rather, the Commission's Line Sharing Reconsideration Order recognizes that a state-sponsored xDSL collaboratives is the appropriate place for Verizon to evaluate how best to develop this functionality. For example, Verizon has represented that it is actively working on developing the OSS upgrades necessary to provide for electronic ordering of line-split services in the context of the New York Commission's xDSL collaborative. We recognize that Verizon has not, to date, implemented the OSS upgrades necessary to electronically process line-splitting orders in a manner that is minimally disruptive to existing voice customers; but that such functionality may require significant software upgrades and testing. It is undisputed that the parties in the New York DSL collaborative commenced discussion of line splitting over a year ago; that in April 2000 Verizon formally posed numerous questions to competitors concerning their business rules for line splitting; and that in August 2000, competitive LECs submitted their initial detailed business rules to Verizon. Thus it appears that Verizon has the necessary information to implement the necessary OSS upgrades. Verizon has been able to provide its customers line-shared DSL service for approximately two years. Our Line Sharing Reconsideration Order is fulfilled by Verizon's adoption of an implementation schedule for line splitting as directed by the New York Commission that will afford competitors the same opportunities. 174. We note that in response to WorldCom's concerns, Verizon has agreed upon an implementation schedule to offer line splitting-specific OSS capabilities under the supervision of the New York Commission. In June of this year we expect that Verizon will conduct a preliminary OSS implementation in New York using new OSS functionality to add data service to an existing UNE-P customer. In October, Verizon has committed to implement, in the Verizon East territory including Massachusetts, the new OSS capability necessary to support migrations from line sharing to line splitting arrangements consistent with the business processes defined in the New York DSL collaborative. Consistent with their plans and with the guidance of the New York DSL collaborative, Verizon plans to offer OSS capability necessary to support UNE-P migrations to line splitting by October 2001. CLXXV. OTHER CHECKLIST ITEMS A. Checklist Item 1 Interconnection 176. We conclude, as described below, that Verizon demonstrates that it provides equal-in-quality interconnection on terms and conditions that are just, reasonable, and nondiscriminatory in accordance with the requirements of sections 251(c)(2) and as specified in section 271 and applied in the Commission's prior orders. We further find that Verizon proves that it designs its interconnection facilities to meet "'the same technical criteria and service standards' that are used for the interoffice trunks within [its own] network." We also find that Verizon makes interconnection available at any technically feasible point, including the option to interconnect at only one technically feasible point within a LATA, and that it is providing collocation in Massachusetts in accordance with the Commission's rules. We note that the Massachusetts Department found that Verizon has satisfied all aspects of this checklist item. 1. Interconnection Trunking 177. Based on our review of the record, we are persuaded that Verizon provides competing carriers with interconnection trunking in Massachusetts that is equal in quality to the interconnection Verizon provides to its own retail operations, and on terms and conditions that are just, reasonable, and nondiscriminatory. Verizon makes interconnection available in Massachusetts through interconnection agreements and through its state approved wholesale tariff. Verizon receives orders for interconnection trunks through the Access Service Request (ASR) process, and accepts ASRs through an electronic application-to-application interface, its GUI and manual orders. Verizon provides affidavit evidence to demonstrate compliance with checklist item 1 in Massachusetts, as well as performance data to measure the quality of interconnection service provided to competing carriers. Several commenting parties raise concerns about interconnection trunking, and we address these issues below. 178. Interconnection Quality. We conclude that Verizon provides interconnection trunking to competitive LECs that is equal in quality to the interconnection Verizon provides to its own retail operations. Although the performance metric that we analyze to evaluate interconnection quality, Percent Final Trunk Group Blockage, demonstrates facial disparity between Verizon's performance for competitive LECs as compared to its own retail operations, we find, based on the totality of the circumstances, that such a disparity is not competitively significant. 179. We reach this conclusion based on the following factors. First, the extent of call blocking for all trunks, including competitive LEC trunks, is low in absolute terms. The blocking standard employed by the carrier-to-carrier guidelines permits only one out of two hundred calls to be blocked during the busy hour, and the percentage of competitive LEC trunk groups exceeding this blocking standard is small. Specifically, in the aggregate, less than two percent of competitive LEC trunk groups exceeded the blocking standard due to insufficient trunking from September through December 2000. Stated another way, Verizon met the trunk blocking standard approximately 98 percent of the time during these four months. Moreover, the difference between the percentage of competitive LEC trunk groups and the percentage of Verizon trunk groups exceeding the blocking standard is also small, with a difference of only 1.64 percentage points between the competitive LEC and Verizon four-month averages for September through December 2000. Second, as discussed below, other data used to evaluate Verizon's interconnection trunking performance demonstrate, on their face, that Verizon is providing interconnection in a manner that complies with this checklist item. Finally we note that no commenter has complained about trunk blockage in this proceeding. If the rate of competitive LEC trunks exceeding the blocking standard were competitively significant, we would expect the commenting parties to address this issue, particularly when competitive LECs have been provided with carrier-specific data showing their individual rates for trunk groups exceeding the blocking standard. 180. Interconnection Timeliness. Other aspects of Verizon's performance data further indicate it is providing nondiscriminatory interconnection trunking in Massachusetts. In previous section 271 applications, the Commission has evaluated missed installation appointments and average installation intervals to gauge trunk provisioning timeliness. Verizon demonstrates satisfactory performance in both of these areas in Massachusetts. Verizon's performance data concerning the percentage of missed installation appointments for provisioning of interconnection trunks show that, in recent months, Verizon's provisioning performance for competitors in Massachusetts was as good as that provided to interexchange carriers. In Massachusetts, from September to December 2000 in the aggregate, Verizon-caused missed trunk installations averaged 4.44 percent for competitive LECs, and 4.43 percent for interexchange carriers. These figures indicate that, in general, Verizon provided parity or better performance for competitive LECs in Massachusetts for trunk installations. 181. Average Installation Intervals. Verizon's performance data measuring the average time for installation of interconnection trunks in Massachusetts also show that Verizon's installation performance for competitors was as good as or better than that provided to interexchange carriers. For example, Verizon's performance data show that the average time to install interconnection trunks for competitive LECs for the months of September through December 2000 was 27 days, and 49 days for interexchange carriers. 182. Issues Raised by Commenting Parties. CompTel, on behalf of ICG, and Winstar raise issues concerning Verizon's interconnection trunking performance. In particular, they have raised provisioning timeliness as an issue. Winstar also raises issues concerning service outages on interconnection trunks, and argues that the current performance data do not accurately reflect Verizon's performance. 183. Winstar alleges that Verizon caused ordering and provisioning delays and provided untimely or otherwise inadequate FOCs for interconnection trunks. We do not find these allegations persuasive. As an initial matter, we note that a number of the provisioning delays cited by Winstar appear to have occurred in the first half of 2000 or earlier. Accordingly, those contentions have little bearing on Verizon's performance in recent months and its current checklist compliance. Moreover, we find that those allegations, as well as Winstar's claims relating to more recent performance, are not supported by affidavit. Given the fact that Verizon's responses to these issues are supported by affidavit and are much more factually detailed, we find that Verizon satisfactorily refutes Winstar's claims. Winstar also cites to the provisioning delays raised by other carriers as evidence of endemic provisioning problems. Except for ICG's claims, as discussed below, other carriers' claims were only raised before the Massachusetts Department and not in this proceeding, and have now been resolved. 184. ICG's allegations concerning delays in trunk provisioning likewise do not warrant a finding of noncompliance with checklist item 1. Verizon states that the trunks requested by ICG carry traffic from Verizon to ICG and that the number of trunks requested was not justified by existing or reasonably anticipated traffic, and that the existing trunks were under-utilized, with only a 33 percent overall utilization level. We find the detailed information Verizon provided to support its explanation persuasive. Verizon states that the delays in the provisioning of entrance facilities cited by ICG were actually caused by ICG. ICG provided no response to Verizon's explanations. In any event, to the extent that there may have been delays in the provisioning of interconnection trunks to ICG, this appears to have been an isolated situation rather than evidence of a widespread problem. 185. Nor do Winstar's claims of service outages on interconnection trunks or maintenance and repair problems persuade us that Verizon is not currently in compliance with checklist item 1. The outage primarily relied on by Winstar in support of these contentions occurred in September 1999. Thus, it is not relevant to Verizon's recent or current performance for purposes of the instant proceeding. The other outages referred to by Winstar do not involve interconnection trunking provided by Verizon in Massachusetts. We also note that none of the other commenting parties raise concerns relating to service outages. 186. Winstar also alleges that Verizon engages in practices designed to distort the performance data and conceal its poor provisioning and maintenance and repair of interconnection trunking. These claims by Winstar are not supported by affidavits, and, based on the current record, we are unable to determine the extent to which Winstar's claims are true. We also note that no other carrier raises similar claims in this proceeding. We emphasize that, as an initial matter, competitive LECs should raise issues such as this concerning the performance metrics in the relevant state proceedings where they can be investigated and properly addressed. Further, in the future, if competitive LECs allege that poor performance is not being captured by the state- approved performance measures, then competitive LECs should provide evidence, such as reliable performance data, along with a showing of why the BOC is responsible for the performance. 187. Finally, we reject the contentions of Winstar, CompTel and Global Crossing involving the provision of interexchange access services. The Commission has held in prior orders that checklist compliance is not intended to encompass the provision of these services. 1. Collocation 188. Verizon demonstrates that its collocation offerings in Massachusetts satisfy the requirements of sections 251 and 271 of the Act. Verizon provides physical and virtual collocation through state-approved tariffs. Verizon's Massachusetts physical and virtual collocation tariffs are virtually identical to the New York physical and virtual collocation tariffs, which the Commission found to satisfy checklist item 1 in the Bell Atlantic New York Order. In its application, Verizon states that shared, cageless, and adjacent collocation options are available in Massachusetts, and that it has taken other steps necessary to implement the collocation requirements contained in the Advanced Services First Report and Order and the Collocation Reconsideration Order. 189. Verizon's collocation performance data generally indicate that Verizon processed collocation requests and provisioned collocation arrangements in accordance with the time frames established by the Massachusetts Department. Verizon's performance data show 100 percent on-time responses to requests for physical and virtual collocation for the period September through December 2000. Although Verizon's performance data for average on-time completion for both new and augmented orders of physical collocation demonstrate some facial disparities, when adjusted for the time lost during the August strike, Verizon's performance is at or near the established benchmarks. We conclude that this overall level of on-time performance for completion of physical collocation arrangements satisfies Verizon's section 271 obligations and allows an efficient competitor a meaningful opportunity to compete. 190. Contrary to the assertions made by ALTS, we conclude that Verizon has demonstrated that it has a concrete and specific legal obligation to provide remote terminal collocation consistent with the UNE Remand Order. We are also not persuaded by Rhythms' and ALTS' contentions that Verizon attempts to limit the Remote Terminal Equipment Enclosures (RTEEs) at which it will provide remote terminal collocation through its definition of RTEEs. In particular, we accept Verizon's explanation that the definition of RTEEs is intended to expand the remote locations encompassed by the definition, not limit them. We also conclude that Verizon is not required to permit in-place conversion of virtual to physical collocation in Massachusetts for purposes of section 271 despite the contentions of Rhythms and ALTS. Nor do we believe that the concern raised by ALTS about the ability of competitive LECs to obtain POTS lines in their collocation cages raises issues of section 271 compliance. 1. Technically Feasible Points of Interconnection 191. We conclude that Verizon provides interconnection at all technically feasible points, including a single point of interconnection, and therefore demonstrates compliance with the checklist item. Verizon demonstrates that it has state-approved interconnection agreements that set forth readily available points of interconnection, and provide a process for competitive LECs to request interconnection at additional, technically feasible points. Verizon further shows that, for purposes of interconnection to exchange local traffic, a competitive LEC may choose a single, technically feasible point of interconnection within a LATA. In addition, the Verizon revised Massachusetts Collocation Tariff complies with Commission rules by allowing competing carriers to choose a single technically feasible point. 1. Pricing of Interconnection 192. Checklist item 1 requires a BOC to provide "interconnection in accordance with the requirements of sections 251(c)(2) and 252(d)(1)." Section 251(c)(2) requires incumbent LECs to provide interconnection "at any technically feasible point within the carrier's network . . . on rates, terms, and conditions that are just, reasonable, and nondiscriminatory." Section 252(d)(1) requires state determinations regarding the rates, terms, and conditions of interconnection to be based on cost and to be nondiscriminatory, and allows the rates to include a reasonable profit. The Commission's pricing rules require, among other things, that in order to comply with its collocation obligations, an incumbent LEC provide collocation based on TELRIC. 193. Based on the evidence in the record, we find that Verizon offers interconnection in Massachusetts to other telecommunications carriers at just, reasonable, and nondiscriminatory rates, in compliance with checklist item 1. The Massachusetts Department concludes that Verizon currently provides collocation under approved interconnection agreements and tariffs, consistent with Commission and Massachusetts Department orders. 194. We find that the collocation pricing issues raised by commenters that are currently before the Massachusetts Department do not cause Verizon to fail this checklist item. First, commenters contend that Verizon improperly charges for the number of amps fused, rather than the number of drained amps actually requested and used by competitive LECs. Prior to refiling its Massachusetts II Application with the Commission, Verizon amended its tariff to apply collocation power charges on a per-load amp requested basis, rather than on a per-fused amp basis. AT&T and Covad filed a petition with the Massachusetts Department requesting an investigation of this tariff revision. When the Massachusetts Department declined to investigate the tariff revision, the parties filed a reconsideration motion, asserting that Verizon is improperly charging them on a per-fused amp basis. In its response to the Massachusetts Department, Verizon responds that its tariff revision addresses these parties' concerns by charging them on a per-load amp basis and that such tariff revision will lead to a decrease in power charges. 195. Second, commenters assert that Verizon is improperly charging competitive LECs for collocation power by assessing an additional power charge for each redundant feed requested by the competitive LEC. According to these commenters, a redundant feed runs only between the power distribution bay and the competitive LEC's collocation point. They assert that Verizon is charging an additional power charge that recovers the cost of every piece of equipment in the collocation power configuration, regardless of whether or not it is utilized for the redundant feed. ALTS contends that most competitive LECs configure their equipment to use either the A or B feed as the power source, but not both. Verizon should not charge the full amount for power for both the main and redundant feeds because the backup feed is only used when the original feed fails. According to the commenters, competitive LECs would use only the amount of amps requested to operate their equipment, and not double that amount simply because they have back- up feeds. AT&T and Covad also raise this issue in their tariff investigation reconsideration motion before the Massachusetts Department. 196. Verizon responds that it provides competitive LECs with a means of purchasing only the power they want. Verizon disputes ALTS' assertion that most competitive LECs configure their equipment to use either the A or B feed, but not both. Verizon contends that most competitive LECs have collocation equipment that is designed to draw power from two feeds simultaneously. To support this statement, Verizon asserts that it surveyed over 1,000 power feeds at collocation arrangements in Massachusetts and found that over 97 percent of them were drawing power on both feeds. Verizon also asserts that it does not require competitive LECs to take a second backup feed, nor does it specify the load that a competitive LEC must place on a given feed. If, for instance, a competitive LEC has a piece of equipment that draws 40 amps and wants to order and pay for only 40 amps of power, Verizon asserts that it can order two power feeds with 20 load amps on each feed. 197. These disputes are currently before the Massachusetts Department. As we noted in the SWBT Texas Order, the Act authorizes the state commissions to resolve specific carrier-to- carrier disputes arising under the local competition provisions, and it authorizes the federal district courts to ensure that the results of the state arbitration process are consistent with federal law. Although we have an independent obligation to ensure compliance with the checklist, section 271 does not compel us to preempt the orderly disposition of intercarrier disputes by the state commissions, particularly now that the Supreme Court has restored our pricing jurisdiction and has thereby directed the state commissions to follow our pricing rules in their disposition of those disputes. Here, we have confidence in the Massachusetts Department's ability to resolve these matters consistent with our rules. Verizon amended its collocation tariff in January 12, 2001 to address the concerns of the parties, and parties have presented no evidence that Verizon is not fully cooperating with the efforts of the Massachusetts Department to resolve these issues. We note that progress is being made in this regard. We therefore find that these disputes do not cause Verizon to fail this checklist item. 198. We are not persuaded by ALTS' assertion that Verizon charges more for power in its Massachusetts tariff for cageless collocation than it charges for power in its federal tariff, in which there is no cageless collocation offering. According to ALTS, there is no cost justification for the difference in collocation power charges. Verizon claims that its federal power rate is based on outdated information from 1991 and greatly understates its power costs. Differences between the federal tariff and the state tariff are not enough, by themselves, to support a finding that the state tariff is unlawful. The power rates in the Massachusetts tariff are based on more recent cost studies and have been approved by the Massachusetts Department, and we find no basis for rejecting them. A. Checklist Item 3 Poles, Ducts, Conduits and Rights of Way 1. Background 199. Section 271(c)(2)(B)(iii) requires BOCs to provide "[n]ondiscriminatory access to the poles, ducts, conduits, and rights-of-way owned or controlled by the [BOC] at just and reasonable rates in accordance with the requirements of section 224." Section 224(b)(1) states that the Commission shall regulate the rates, terms, and conditions governing pole attachments to ensure that they are "just and reasonable." Notwithstanding this general grant of authority, section 224(c)(1) states that where such matters are regulated by a state nothing in the section shall be construed to apply to, or to give the Commission jurisdiction with respect to the rates, terms, and conditions, or access to poles, ducts, conduits and rights-of-way. Massachusetts has certified to this Commission that it regulates the rates, terms, and conditions for pole attachments in that state. 1. Discussion 200. Based on the evidence in the record, we conclude, as the Massachusetts Department does, that Verizon demonstrates that it provides nondiscriminatory access to its poles, ducts, conduits, and rights-of-way at just and reasonable rates in accordance with section 271(c)(2)(B)(iii). We reject commenters' requests to find that Verizon's pole attachment policies and practices in Massachusetts are discriminatory. As we explain above, the Massachusetts Department is certified by this Commission to regulate pole attachments in that state. The Massachusetts Department has established a process for complaints of discriminatory access to poles. Therefore, any claim regarding discriminatory access to poles is a matter for the Massachusetts Department to consider. The record does not indicate that anyone, including any of the commenters, has filed a discriminatory access complaint with the Massachusetts Department. A. Checklist Item 5 Unbundled Local Transport 201. Section 271(c)(2)(B)(v) of the competitive checklist requires a BOC to provide "[l]ocal transport from the trunk side of a wireline local exchange carrier switch unbundled from switching or other services." The Commission has required that BOCs provide both dedicated and shared transport to requesting carriers. Dedicated transport consists of BOC transmission facilities dedicated to a particular customer or carrier that provide telecommunications between wire centers owned by BOCs or requesting telecommunications carriers, or between switches owned by BOCs or requesting telecommunications carriers. Shared transport consists of transmission facilities shared by more than one carrier, including the BOC, between end office switches, between end office switches and tandem switches, and between tandem switches, in the BOC's network. 202. We conclude, based upon the evidence in the record, that Verizon demonstrates that it provides both shared and dedicated transport in compliance with the requirements of checklist item 5. The Massachusetts Department also finds that Verizon is in compliance with this checklist item. 203. In prior orders the Commission has reviewed the missed appointment rates for the provision of interoffice facilities to competitive LECs to determine compliance with checklist item 5. On first examination, the carrier-to-carrier missed appointment rate performance appears to depict a significant difference in the provision of interoffice facilities for competitive LECs compared to the retail analogue described in the carrier-to-carrier guidelines in place prior to January 2001. GivenWe place little weight on this performance disparity, however, given the revised retail analogue developed by the carrier-to-carrier working group and adopted by the New York Commission and Massachusetts Department in December 2000, which paints a more accurate picture of Verizon's transport provisioning performance, however, weplace little weight on this performance performance. disparity. As explained below, when Verizon's provision of unbundled transport is compared to the revised retail analogue, its performance is better for competing LECs than it is for its own retail customers. 204. Under the carrier-to-carrier guidelines in place prior to January 2001 for the missed appointments metric, the provisioning of competitive LEC interoffice facility transport was compared to Verizon's provisioning of retail "special services." According to Verizon, retail special services are "predominately at the voice grade level." As Theof January 2001, however, the carrier-to-carrier working group agreed to change the guidelines were changedas of January 2001, however, to reflect a revised retail analogue for this performance measure using provisioning of retail DS-3s instead of retail special services because the unbundled interoffice facilities Verizon provides to competitive LECs are predominately at theDS- DS-3 level, rather than the voice grade level. We find that the revised retail analogue appears to be more appropriate, and represents a better indicator of whether Verizon is providing the same quality of service to competitive LECs as to its own customers for transport than the comparison in place prior to January transport.2001. We further find that the missed appointment data, using the revised carrier-to-carrier retail analogue, provides sufficient evidence that Verizon is providing unbundled transport to competitive LECs in a nondiscriminatory manner. 205. We reject OnSite's assertion that Verizon has repeatedly failed to provide transport circuits in violation of checklist item 5 because the record indicates OnSite orders the those circuits out of Verizon's special access tariff. The Commission previously determined in the Bell Atlantic New York Order that checklist compliance is not intended to encompass provision of tariffed interstate services simply because these services use some of the same physical facilities as a checklist item. We note, however, that to the extent parties are experiencing delays in the provisioning of special access services ordered from Verizon's federal tariffs, these issues are appropriately addressed in the Commission's section 208 complaint process. 206. We also disagree with Digital Broadband's assertions that Verizon has failed to satisfy checklist item 5. Through comments filed by ALTS, Digital Broadband states that it has experienced difficulties with ordering and provisioning DS-3s during April through September 2000. Specifically, Digital Broadband complains about orders not completed by the committed due date, repeated postponements of the committed due dates and newly installed circuits that do not function properly. Although we acknowledge thatEven though Digital Broadband may have experienced some problems during that time period, performance data from that period have little bearing on Verizon's performance in recent months and, consequently, its current checklist compliance. Moreover, no commenter complains of recent problems with ordering or provisioning of unbundled transport. A. Checklist Item 13 Reciprocal Compensation 207. Section 271(c)(2)(B)(xiii) of the Act requires that a BOC enter into "[r]eciprocal compensation arrangements in accordance with the requirements of section 252(d)(2)." In turn, pursuant to section 252(d)(2)(A), "a state commission shall not consider the terms and conditions for reciprocal compensation to be just and reasonable unless (i) such terms and conditions provide for the mutual and reciprocal recovery by each carrier of costs associated with the transport and termination on each carrier's network facilities of calls that originate on the network facilities of the other carrier; and (ii) such terms and conditions determine such costs on the basis of a reasonable approximation of the additional costs of terminating such calls." 208. Based on the evidence in the record, we conclude that Verizon demonstrates that it has entered into reciprocal compensation arrangements in accordance with the requirements of section 252(d)(2), and thus satisfies the requirements of checklist item 13. Verizon demonstrates that it: (1) has in place reciprocal compensation arrangements in accordance with section 252(d)(2), and (2) is making all required payments in a timely fashion. The Massachusetts Department has concluded that Verizon complies with the reciprocal compensation requirements in checklist item 13. 209. Several commenters allege that Verizon is failing to pay reciprocal compensation for ISP-bound traffic. We find that the issues raised by the commenters do not evidence Verizon's failure to satisfy checklist item 13. Under a prior Commission order, ISP-bound traffic is not subject to the reciprocal compensation provisions of section 251(b)(5) and 252(d)(2); therefore, as the Commission stated in the Bell Atlantic New York Order, whether a carrier pays such compensation is "irrelevant to checklist item 13." The United States Court of Appeals for the District of Columbia Circuit vacated and remanded the Commission's order, and the Commission is now reconsidering the matter. Given that the Commission has not yet determined the status of ISP-bound traffic, refusal to pay reciprocal compensation for ISP-bound traffic does not violate checklist item 13's requirements at this time. As we have stated, "[i]n the absence" of a Commission rule on reciprocal compensation, "parties may voluntarily include this traffic within the scope of their interconnection agreements . . . [and] they are bound by those agreements, as interpreted and enforced by the state commissions." At this time, therefore, provided that a carrier follows states' interpretations and requirements promulgated under their interpretation of interconnection agreements, including states' requirements concerning ISP-bound traffic, such carrier has satisfied checklist item 13. 210. The Massachusetts Department has created a rebuttable presumption that the minutes of traffic to a competitive LEC will be presumed local (i.e., non-ISP) and subject to reciprocal compensation up to an amount that is twice the amount of traffic from the competitive LEC to Verizon. Verizon states that it will make reciprocal compensation payments in excess of the 2:1 ratio if a competitive LEC provides evidence that its "local" traffic exceeds this ratio, and as of July 2000, one competitive LEC had made such a showing and was receiving reciprocal compensation payments in excess of the 2:1 ratio. The Massachusetts Department has verified that Verizon "is providing reciprocal compensation under the obligations in its Department- approved interconnection agreements and tariffs, as well as relevant Department Orders." Therefore, we find that Verizon is in compliance with checklist item 13. A. Checklist Item 14 Resale 211. Section 271(c)(2)(B)(xiv) of the Act requires a BOC to make "telecommunications services . . . available for resale in accordance with the requirements of sections 251(c)(4) and 252(d)(3)." Based on the evidence in the record, we conclude that Verizon demonstrates that it makes telecommunications services available in Massachusetts for resale in accordance with sections 251(c)(4) and 252(d)(3), and thus satisfies the requirements of checklist item 14. Verizon states that it is in compliance with the requirements of this checklist item, and the Massachusetts Department agrees. Verizon says that it commits in its interconnection agreements and tariffs to making its retail services available to competing carriers at wholesale rates. In its Consolidated Arbitrations proceeding, conducted after the 1996 Act was implemented, the Massachusetts Department used an avoided-cost calculation method consistent with the Commission's pricing rules to establish interim resale discount rates of 24.99 percent for lines with Verizon's operator services and directory assistance, and 29.47 percent for lines without these features. These interim rates were adopted as permanent rates by the Massachusetts Department in 1999. Verizon applies the wholesale discount to customer specific arrangements (CSAs), grandfathered services, and promotional offerings in effect more than 90 days. For promotional offerings of 90 days or less, competing carriers may elect to have Verizon apply the wholesale discount to the retail price of telecommunications services offered in the promotional offering, or to pay the promotional offering rate. Competing carriers may purchase at the wholesale discount CSAs to resell to new customers. Verizon permits competing carriers that resell CSAs to meet minimum volume requirements by aggregating the traffic of multiple end- user customers, provided that those customers are similarly situated to the customer(s) of Verizon's original contract. 212. Verizon also states that it makes its retail telecommunications services available for resale without unreasonable or discriminatory conditions or limitations. The Massachusetts Department agrees. According to Verizon, it provides for resale all of the telecommunications services that it provides at retail to subscribers that are not telecommunications carriers. Verizon demonstrates that it provides its retail telecommunications services for resale in a nondiscriminatory and timely manner. 213. We reject commenters' contentions that Verizon fails this checklist item because its separate advanced services affiliate was not providing DSL and other advanced services at resale discounts in accordance with the ASCENT v. FCC decision. The mandate in that decision had not issued when Verizon filed the instant application. Accordingly, we find the ASCENT decision is not relevant to our analysis of checklist compliance in the context of this proceeding. 214. We find unpersuasive Allegiance's claim that the Commission should adopt a "fresh look" policy. Allegiance asserts that the Commission should allow customers in long-term contracts with Verizon for local exchange and intraLATA service to switch to competing telecommunications carriers before the expiration of their Verizon contracts without incurring termination penalties. We note that a similar issue has been raised by KMC Telecom in a Petition for Declaratory Ruling, which is currently pending. We find, as we did in prior orders, that this issue is best addressed in the context of that pending petition, and we decline to resolve the issue here. 215. Based on evidence in the record, we also find that Verizon satisfies the provisioning requirements of checklist item 14. As discussed above, Verizon is provisioning competitive LECs' orders for resale in substantially the same time and manner as for its retail customers. A. Remaining Checklist Items (6-12) 216. An applicant under section 271 must demonstrate that it complies with checklist item 6 (unbundled local switching), item 7 (911/E911 access and directory assistance/operator services), item 8 (white page directory listings), item 9 (numbering administration), item 10 (databases and associated signaling), item 11 (number portability), and item 12 (local dialing parity). Based on the evidence in the record, and in accordance with Commission rules and orders concerning compliance with section 271 of the Act, we conclude that Verizon demonstrates that it is in compliance with checklist items 6, 7, 8, 9, 10, 11 and 12 in Massachusetts. The Massachusetts Department also concludes that Verizon complies with the requirement of each of these checklist items. Moreover, no commenter raised allegations challenging Verizon's compliance with these checklist items. CCXVII. COMPLIANCE WITH SECTION 271(C)(1)(a) A. Background 218. In order for the Commission to approve a BOC's application to provide in-region, interLATA services, a BOC must first demonstrate that it satisfies the requirements of either section 271(c)(1)(A) (Track A) or 271(c)(1)(B) (Track B). To qualify for Track A, a BOC must have interconnection agreements with one or more competing providers of "telephone exchange service . . . to residential and business subscribers." The Act states that "such telephone service may be offered . . . either exclusively over [the competitor's] own telephone exchange service facilities or predominantly over [the competitor's] own telephone exchange facilities in combination with the resale of the telecommunications services of another carrier." The Commission concluded in the Ameritech Michigan Order that section 271(c)(1)(A) is satisfied if one or more competing providers collectively serve residential and business subscribers. A. Discussion 219. We conclude, as did the Massachusetts Department, that Verizon demonstrates that it satisfies the requirements of Track A based on the interconnection agreements it has implemented with competing carriers in Massachusetts. The Massachusetts Department has approved a substantial number of binding interconnection agreements between Verizon and competing providers of telephone exchange service. The record demonstrates that the three largest competing carriers in Massachusetts -- AT&T, WorldCom, and RCN -- collectively provide telephone exchange service predominantly over their own facilities to residential and business subscribers. Verizon also asserts that six other competitive LECs provide business and/or residential service through some mix of their own facilities, UNEs, UNE-P, and resale. 220. Although AT&T and WorldCom have challenged some of Verizon's estimates of the number of residential customers served over competitors' own facilities, those carriers have not challenged Verizon's claim that a sufficient number of residential customers are being served by competing LECs using their own facilities to demonstrate that there is an "actual commercial alternative" to Verizon in Massachusetts for purposes of a Track A showing. Specifically, both AT&T and WorldCom complain that Verizon's method of estimation overstates the current level of residential telephony competition in Massachusetts. Even if we credited such claims, however, Verizon has shown that facilities-based competing carriers serve more than a de minimis number of residential customers in Massachusetts. AT&T and WorldCom do not challenge this claim. Moreover, no carrier has challenged Verizon's evidence with regard to the level of facilities-based business competition. Accordingly, we conclude that Verizon has met the requirements for a Track A showing. CCXXI. SECTION 272 COMPLIANCE A. Background 222. Section 271(d)(3)(B) requires that the Commission shall not approve a BOC's application to provide interLATA services unless the BOC demonstrates that the "requested authorization will be carried out in accordance with the requirements of section 272." The Commission set standards for compliance with section 272 in the Accounting Safeguards Order and the Non-Accounting Safeguards Order. Together, these safeguards discourage and facilitate the detection of improper cost allocation and cross-subsidization between the BOC and its section 272 affiliate. In addition, these safeguards ensure that BOCs do not discriminate in favor of their section 272 affiliates. As the Commission stated in prior section 271 orders, compliance with section 272 is "of crucial importance" because the structural, transactional, and nondiscrimination safeguards of section 272 seek to ensure that BOCs compete on a level playing field. A. Discussion 223. Based on the record, we conclude that Verizon has demonstrated that it complies with the requirements of section 272. Significantly, Verizon provides evidence that it maintains the same structural separation and nondiscrimination safeguards in Massachusetts as it does in New York, a state in which Verizon has already received section 271 authority. With the exception of Verizon's provisioning of special access services, no party challenges Verizon's section 272 showing. We address each section 272 requirement below. 1. Unchallenged Sections 224. We find, based on the evidence in the record, that Verizon's Massachusetts section 272 structure and compliance controls are the same as those the Commission reviewed for New York. Specifically, we conclude that Verizon demonstrates it will operate in accordance with the following elements of section 272: 1) section 272(a), which requires the BOC and its local exchange carrier affiliates that are subject to section 251(c) to provide certain competitive services through structurally separate affiliates; 2) section 272(b), which requires the BOC to demonstrate that its section 272 affiliates will operate independently, maintain separate books, records, and accounts, maintain separate officers, directors and employees, comply with certain credit requirements, and comply with the Commission's arm's length and public disclosure requirements; 3) section 272(c), which requires the BOC to account for all transactions with section 272 affiliates in accordance with the accounting principles designated or approved by the Commission and prohibits discrimination in favor of the section 272 affiliates in the "provision or procurement of goods, services, facilities, and information, or in the establishment of standards;" 4) section 272(d), which requires an independent audit of the BOC's compliance with section 272 after receiving interLATA authorization; and 5) section 272(g), which requires that the BOC comply with that section's joint marketing provisions and affiliate services requirements. 1. Challenged Sections 225. Section 272(e) Fulfillment of Certain Requests. Based on the evidence in the record, we conclude that Verizon will comply with section 272(e). Specifically, section 272(e) requires the BOC to fulfill requests for, among other things, telephone exchange and exchange access services from unaffiliated entities within the same time period the BOC fulfills such requests for its own retail operations. In addition, section 272(e) also provides that a BOC "shall not provide any facilities, services, or information concerning its provision of exchange access to the [section 272 affiliate] unless such facilities, services or information are made available to other providers of interLATA services in that market on the same terms and conditions." Finally, section 272(e) places certain accounting and nondiscrimination requirements on BOCs with respect to exchange access and facilities or services provided to their section 272 affiliates. 226. Several parties complain that the quality of Verizon's provisioning of special access services is poor. These comments do not undermine our finding that Verizon complies with section 272. As the Commission stated in the Bell Atlantic New York Order and the SWBT Texas Order, we do not consider the provision of special access services pursuant to a tariff for purposes of Verizon's section 272 showing. In addition, our section 272 analysis does not focus on Verizon's provisioning of special access services because Verizon does not currently have an operational section 272 affiliate in Massachusetts. Consequently, we do not, nor could we, inquire whether Verizon provides competitors special access on a nondiscriminatory basis, as compared to Verizon's section 272 affiliates. Our review, instead, focuses upon whether, after it receives section 271 authority, Verizon will maintain records tracking the quality of service to its section 272 affiliate for telephone exchange and exchange access services. While the Commission has not prescribed a reporting format, Verizon will provide exchange access service quality as described in its application. Because Verizon's special access performance will be included in these reports, we expect that any such discrimination will be detectable. 227. Finally, we note that Verizon reports to the Commission its special access performance pursuant to the Bell Atlantic/GTE Merger Conditions and, to the extent that parties are experiencing problems in the provisioning of special access services ordered from Verizon's federal tariffs, we note that these issues are appropriately addressed in the Commission's section 208 complaint process. CCXXVIII. PUBLIC INTEREST ANALYSIS 229. Separate from determining whether a BOC satisfies the competitive checklist and will comply with section 272, Congress directed the Commission to assess whether the requested authorization would be consistent with the public interest, convenience, and necessity. We conclude that approval of this application is consistent with the public interest. 230. We view the public interest requirement as an opportunity to review the circumstances presented by the application to ensure that no other relevant factors exist that would frustrate the congressional intent that markets be open, as required by the competitive checklist, and that entry will therefore serve the public interest as Congress expected. Among other things, we may review the local and long distance markets to ensure that there are not unusual circumstances that would make entry contrary to the public interest under the particular circumstances of this application. Another factor that could be relevant to our analysis is whether we have sufficient assurance that markets will remain open after grant of the application. While no one factor is dispositive in this analysis, our overriding goal is to ensure that nothing undermines our conclusion, based on our analysis of checklist compliance, that this market is open to competition. A. Competition in Local Exchange and Long Distance Markets 231. As set forth below, we conclude that approval of this application is consistent with promoting competition in the local and long distance telecommunications markets in Massachusetts. Consistent with our extensive review of the competitive checklist, which embodies the critical elements of market entry under the Act, we find that barriers to competitive entry in the local markets have been removed and the local exchange markets today are open to competition. We further find that the record confirms our view, as noted in prior section 271 orders, that BOC entry into the long distance market will benefit consumers and competition if the relevant local exchange market is open to competition consistent with the competitive checklist. 232. Several commenters argue that the public interest would be disserved by granting Verizon's application because the local market in Massachusetts has not yet truly been opened to competition. We disagree. Commenters cite an array of evidence which, they argue, demonstrates that the local telecommunications market is not open and that competition has not sufficiently taken hold in Massachusetts. For example, several commenters suggest that the state of competition for residential services in Massachusetts indicates that this market is not yet truly open. Given an affirmative showing that a market is open and the competitive checklist has been satisfied, low customer volumes in and of themselves do not undermine that showing. Factors beyond a BOC's control, such as individual competitive LEC entry strategies, might explain a low residential customer base. We note that Congress specifically declined to adopt a market share or other similar test for BOC entry into long distance, and we have no intention of establishing one here. A. Assurance of Future Compliance 233. Verizon's Performance Assurance Plan (or PAP) for Massachusetts provides additional assurance that the local market will remain open after Verizon receives section 271 authorization. The Commission previously has explained that one factor it may consider as part of its public interest analysis is whether a BOC would continue to satisfy the requirements of section 271 after entering the long distance market. Although the Commission strongly encourages state performance monitoring and post-entry enforcement, it has never required BOC applicants to demonstrate that they are subject to such mechanisms as a condition of section 271 approval. The Commission has stated that the fact that a BOC will be subject to performance monitoring and enforcement mechanisms would constitute probative evidence that the BOC will continue to meet its section 271 obligations and that its entry would be consistent with the public interest. Indeed, performance monitoring and enforcement mechanisms administered by state commissions can be critical complements to this Commission's section 271(d)(6) authority given the state commissions' historical role in regulating local exchange services. We note that in all the applications that have been granted to date, each contained an enforcement plan to protect against backsliding after entry into the long-distance market. 1. Performance Assurance Plan 234. The Massachusetts Department has ordered Verizon to report performance data, on a monthly basis, using a wide range of performance measurements or metrics. These measurements were developed through the "Carrier-to-Carrier Service Quality" proceeding before the New York Commission. The measurements track Verizon's performance on functions essential to an open, competitive local market: pre-ordering, ordering, provisioning, maintenance and repair, network performance (interconnection trunks), collocation, billing and operator services. Associated with most of these measurements are standards -- either benchmarks or retail analogues -- also developed through the carrier-to-carrier proceeding. 235. The Massachusetts Department also required Verizon to submit a comprehensive performance enforcement mechanism, which would become effective upon Verizon receiving authority to provide interLATA services under section 271. The PAP is modeled on the New York plan the Commission reviewed in the Bell Atlantic New York Order. The PAP establishes an automatic process under which affected competitors receive bill credits if Verizon fails to satisfy pre-determined performance standards on a sub-set of the carrier-to-carrier reporting metrics. 236. The PAP has undergone several changes since Verizon's first Massachusetts filing. After that filing, the Massachusetts Department responded to competitive LECs' complaints by ordering Verizon, inter alia, to increase the amount of bill credits available for payment and to add DSL and Line Sharing metrics. 1. Key Elements of the Performance Assurance Plan 237. The PAP in Massachusetts provides incentives to foster post-entry checklist compliance. Plans may vary in their strengths and weaknesses, and there is no one way to demonstrate assurance. In the Bell Atlantic New York Order, the Commission predicted that the enforcement mechanisms developed in New York would be effective in practice. The carrier-to- carrier guidelines were developed through a collaborative process involving the New York Commission, Verizon, and competitive LECs. The collaborative efforts yielded workable measures to sufficiently capture Verizon's wholesale performance. As explained below, the Massachusetts Department established a PAP that discourages anti-competitive behavior by setting the damages and penalties at a level above the simple cost of doing business. 238. Total Liability At Risk. The Massachusetts PAP places a total of $155 million in potential bill credits placed at risk, on an annual basis, under all components of the PAP. The PAP adopted by the Massachusetts Department does not represent the only means of ensuring that Verizon continues to provide nondiscriminatory service to competing carriers. In addition to the $155 million at stake under this plan, Verizon faces other consequences if it fails to sustain a high level of service to competing carriers, including: federal enforcement action pursuant to section 271(d)(6) and remedies associated with antitrust and other legal actions. 239. We reject commenters' assertions that the PAP limitations on the damages available to competitive LECs to the higher of PAP bill credits or damages under their individual interconnection agreements dilutes the PAP's value as an anti-backsliding safeguard. We also note that in previous section 271 orders the Commission has seen public interest benefits in liquidated contract damages to supplement enforcement plan damages. The Massachusetts Department concludes, however, that the interconnection agreements here provide damages more like a comprehensive PAP than the limited contract damages available to competitive LECs in New York. In addition, the Massachusetts Department has found that requiring Verizon to pay cumulative damages would result in double counting. Finally, the Massachusetts Department can increase the amount of bill credits available to competitive LECs under the PAP should it decide that the current amount is inadequate to compensate competitive LECs and penalize Verizon. Given this, the PAP, with the Massachusetts Department's ongoing oversight, will deter backsliding and serve the public interest. 240. Performance Measurements and Standards. Each performance metric developed through the carrier-to-carrier proceeding has a clearly-articulated definition, or "business rule," which sets forth the manner in which the data are to be collected by Verizon, lists any relevant exclusions, and states the applicable performance standards. The clarity provided by these business rules will help to ensure that the reporting mechanism provides a "benchmark against which new entrants and regulators can measure performance over time to detect and correct any degradation of service rendered to new entrants." 241. We note that commenters in the first Massachusetts application complained that the PAP lacked sufficient DSL and Line Sharing measurements to deter backsliding in these important areas. Since that filing, these concerns have been addressed. Specifically, Verizon has added DSL as its own Mode of Entry category and added DSL metrics to the Critical Measures. Verizon also imported EDI notifier metrics from the New York PAP to the Massachusetts plan (including additional damages). Although commenters raise a handful of additional concerns about specific metrics in the PAP, none of these arguments demonstrate that the PAP is contrary to the public interest or insufficient to prevent backsliding in light of the substantial progress Verizon and the Massachusetts Department have made strengthening the plan since the first application. 242. Structural Elements of the PAP. The structural elements of the PAP are designed to detect and sanction poor performance when it occurs. The PAP sets forth, in great detail, the processes by which Verizon's performance is measured and evaluated, the method for determining compliance and noncompliance with respect to individual metrics, and the manner in which noncompliance with individual metrics will translate into bill credits. 243. Self-executing mechanism. The PAP's performance monitoring and enforcement mechanisms are reasonably self-executing and comparable to those the Commission reviewed in the Bell Atlantic New York Order, the SWBT Texas Order, and the SWBT Kansas/Oklahoma Order. We reject commenters' claims that the PAP's waiver provisions allow Verizon to escape liability too easily. In this case, Verizon may ask for a waiver for "unusual" competitive LEC behavior. When it seeks a waiver, Verizon must provide detailed documentation as to why competitive LEC behavior necessitates the waiver. Verizon, moreover, must prove its case with clear and convincing evidence and provide competitive LECs an opportunity to respond to Verizon's petition. We disagree with commenters, therefore, that the absence of a deadline to act on waivers detracts from the effectiveness of the PAP or undermines its public interest value. 244. Data Validation and Audit Procedures. The PAP includes review and monitoring mechanisms that assure the data will be reported in a consistent and reliable manner. The Massachusetts Department has ordered Verizon to obtain an independent audit of Verizon's data and reporting on an annual basis. The Massachusetts Department will select the auditor and the audit will be subject to the Massachusetts Department's review. The Massachusetts Department will also conduct an annual review to determine whether changes should be made to improve the PAP. 245. Accounting Requirements. Consistent with our accounting rules with respect to antitrust damages and certain other penalties paid by carriers, Verizon should not reflect any portion of market adjustments as expenses under the revenue requirement for interstate services of the Verizon incumbent LEC. Such accounting treatment ensures that ratepayers do not bear, in the form of increased rates, the cost of market adjustments under the enforcement plan in the event Verizon fails to provide adequate service quality to competitive LECs. A. Other Issues 246. ALTS and Sprint allege that Verizon mismanaged its responsibility when it was the local numbering administrator and, therefore, granting the application would be in violation of the public interest. These allegations do not convince us that a grant of this application would be inconsistent with the public interest. Specifically, even assuming these allegations are true, they do not undermine our confidence that Verizon's local market is open to competition and will remain so after it receives interLATA authority. CCXLVII. SECTION 271(d)(6) enforcement authority 248. Section 271(d)(6) of the Act requires Verizon to continue to satisfy the "conditions required for . . . approval" of its section 271 application after the Commission approves its application. As the Commission has already described the post-approval enforcement framework and its various section 271(d)(6) enforcement powers in detail in prior orders, it is unnecessary to do so again in this Order. Working in concert with the Massachusetts Department, we intend to monitor closely Verizon's post-approval compliance for Massachusetts to ensure that Verizon does not "cease[ ] to meet any of the conditions required for [section 271] approval." We stand ready to exercise our various statutory enforcement powers quickly and decisively in appropriate circumstances to ensure that the local market remains open in Massachusetts. For example, we expect that Verizon's proposed new processes for LFACS access and pre-order manual loop qualifications will enhance competitors' ability to access loop make-up information in a nondiscriminatory fashion. As stated above, we note that Verizon has established October 2001 as the expected completion date for its system enhancements. We stress that we are prepared to use our authority under section 271(d)(6) if evidence surfaces at a later date that Verizon's OSS have fallen out of compliance with the requirements of the UNE Remand Order. 249. The Commission has a responsibility to not only ensure that Verizon is in compliance with section 271 today, but also that it remains in compliance in the future. The Commission will not hesitate to use its enforcement authority after section 271 authority has been granted. In this regard, the Commission will pay particular attention to section 271 checklist items where Verizon's performance was most marginal. For example, like many commenters in this proceeding and the Department of Justice, we have serious concerns that repetition of some of the assumptions incorporated into the original Massachusetts Department-approved UNE switching rates may result in rates outside the range that the reasonable application of TELRIC principles would produce. We note that these original rates were significantly higher than those of any other state of comparable population and teledensity, and there does not appear to have been any justification for such significant differences based on Massachusetts-specific technological, environmental, regulatory, and economic conditions. The original cost study used to set those rates has a number of potential flaws that, if repeated without justification, could result in UNE rates that warrant enforcement action. These include the size of switch discounts that it assumed would be available from vendors, the use of an installation factor (the cost to install a switch) that was based on installation costs relative to discounted switches but applied to undiscounted switches, a cost of capital in excess of the authorized rate of return in Massachusetts and higher than any other state in Verizon's territory with nothing on the record to justify a Massachusetts-specific difference, and an inappropriate busy hour conversion factor. Because states have considerable flexibility in setting UNE rates, certain flaws in a cost study, by themselves, may not result in rates that are outside the reasonable range that a correct application of our TELRIC rules would produce. Collectively, however, the number of possible flaws in the original cost study, if repeated without adequate state-specific justification, may well result in prices outside the reasonable range of what TELRIC would produce. The Massachusetts Department is currently examining all UNE prices in its five-year UNE rate review. We presume, as we do with all state commissions, that the Massachusetts Department will set UNE rates within the range of what a reasonable application of what TELRIC would produce. We observe that in any context in which prices are not set in accordance with our rules and the Act, we retain the ability to take appropriate enforcement action, including action pursuant to section 271(d)(6), and will not hesitate to do so. 250. Consistent with prior section 271 orders, we require Verizon to report to the Commission all Massachusetts carrier-to-carrier performance metrics results and Performance Assurance Plan monthly reports beginning with the first full month after the effective date of this Order, and for each month thereafter for one year unless extended by the Commission or Chief of the Enforcement Bureau. These results and reports will allow us to review, on an on-going basis, Verizon's performance to ensure continued compliance with the statutory requirements. We are confident that cooperative state and federal oversight and enforcement can address any backsliding that may arise with respect to Verizon's entry into the Massachusetts long distance market. CCLI. CONCLUSION 252. For the reasons discussed above, we grant Verizon's application for authorization under section 271 of the Act to provide in-region, interLATA services in the state of Massachusetts. CCLIII. Ordering Clauses 254. Accordingly, IT IS ORDERED that, pursuant to sections 4(i), 4(j), and 271 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j) and 271, Verizon's application to provide in-region, interLATA service in the state of Massachusetts, filed on January 16, 2001, IS GRANTED. 255. IT IS FURTHER ORDERED that this Order SHALL BECOME EFFECTIVE April 26, 2001. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas, Secretary APPENDIX A List of Commenters Verizon New England Inc., et al., Section 271 Application to Provide In-Region InterLATA Services in Massachusetts CC Docket No. 01-9 Comments Commenters: A.R.C. Networks, Inc. Association for Local Telecommunications Services (ALTS); XO Communications, Inc., & Focal Communications Corporation (filing jointly) Association of Communications Enterprises AT&T Corp. Commercial Internet Exchange Association Competitive Telecommunications Association (CompTel) Conversent Communications of Massachusetts, L.L.C. Covad Communications Company Fiber Technologies Global Crossing North America, Inc. Global NAPS, Inc. Massachusetts Attorney General Massachusetts Coalition for Competitive Phone Service Network Access Solutions New England Public Communications Council, Inc. NOBLE (North of Boston Library Exchange, Inc.) RCN BecoCom, L.L.C. Rhythms Netconnections Inc. Sprint Communications Company L.P. Telecommunications Advocacy Project Winstar Communications, Inc. WorldCom, Inc. Verizon New England Inc., et al., Section 271 Application to Provide In-Region InterLATA Services in Massachusetts CC Docket No. 01-9 Reply Comments Commenters: AT&T Corp. Commercial Internet Exchange Association Competition Policy Institute Covad Communications Company Massachusetts Attorney General's Office Massachusetts Department of Telecommunications & Energy Network Access Solutions United States Internet Provider Alliance Verizon New England Winstar Communications, Inc. WorldCom, Inc. Verizon New England Inc., et al., Section 271 Application to Provide In-Region InterLATA Services in Massachusetts CC Docket No. 00-176 Comments Commenters: Affiliated Chambers of Commerce of Greater Springfield, Inc. Alliance for Education Alliance for Public Technology Arts Boston Association of Communications Enterprises Association for Local Telecommunications Services (ALTS) AT & T Corp. BCNC (Business in Partnership with the Community) Blackstone valley Vocational Regional School District Boston Partners in Education Boston Private Industry Council Boston Public Schools Bristol Workforce Investment Board Cape and Islands United Way Cape Cod Technology Council, Inc. Century 21 Chinatown Business Association Chemetal City of Boston, MA, Office of the Mayor City of Brockton, MA, Office of the Mayor City of Chelsea, MA City of Fall River, MA City of Haverhill, Haverhill, MA City of Marlborough, MA, Office of the Mayor City of Melrose, MA, Office of the Mayor City of New Bedford, Office of the Mayor City of Taunton, MA, Office of the Mayor City of Taunton, MA, Mayor's Office of Economic Development Communica Competitive Telecommunications Association CONQUEST, Inc. Consulado General de la Republica Dominicana Covad Diane Davis Associates Florence Paint & Decorating Center, Inc. Frank M. Hynes, State Representative Greater New Bedford Workforce investment Board, Inc. Haddad Electronic Supply Inc. Hispanic-American Chamber of Commerce Immigrant Learning Center Just a Start Corporation Keep America Connected, et al. League of Latin American Citizens Lynn Area Chamber of Commerce Martin L. King, Jr. Business Empowerment Center Massachusetts Attorney General Massachusetts House of Representatives Massachusetts Department of Telecommunications & Energy Massachusetts Rural Development Council, Inc. MATP Center (Massachusetts Assistive Technology Partnership Center) Mentor Merrimack Valley Economic Development Council, Inc. MetroWest Chamber of Commerce National Association for the Advancement of Colored People, Washington Bureau National Association of Partners in Education National Black Chamber of Commerce, et al. National Congress for Puerto Rican Rights NECLEC, LLC Network Access Solutions Corporation New Networks Institute Northern Essex Community College Onsite Access Local, L.L.C. Organizations Concerned About Rural Education (OCRE) Plymouth Area Chamber of Commerce Puerto Rican Cultural Center Puerto Rico Federal Affairs Administration Public Schools of Springfield, MA Rainbow Push Coalition RCN BecoCom, L.L.C. RNK Inc. d/b/a RNK Telecom Regional Employment Board of Hampden County, Inc. Rhythms Netconnections Inc. Saunders Hotel Group Shepley Wood Products, Inc. Southern Essex Workforce Investment Board Springfield Bilingual Veteran's Outreach Center Sprint Communications Company L.P. Stanton Insurance Agency, Inc. Stik-II Products Telecommunications Insight Group Telecommunications Research and Action Center (TRAC) The October Company, Inc. The Lowell Plan Thomas J. O'Brien, State Representative Town of Braintree, MA Town of Burlington, MA Town of Cohasset, MA Town of Randolph, MA Town of Scituate, MA United Seniors Health Cooperative University of Massachusetts, Boston Urban League of Eastern Massachusetts Inc. Vinny deMacedo, State Representative Waltham West Suburban Chamber of Commerce Wellesley Chamber of Commerce, Inc. Winstar Communications, Inc. Worcester Area Chamber of Commerce WorldCom, Inc. World Institute on Disability, et al. Z-Tel Communications, Inc. Verizon New England Inc., et al., Section 271 Application to Provide In-Region InterLATA Services in Massachusetts CC Docket No. 00-176 Reply Comments Commenters: Alliance for Public Technology Allegiance Telecom of Massachusetts, Inc. AT&T Corp. Covad Digital Broadband Communications, Inc. Fiber Technologies, Inc. Keep America Connected, et al. Massachusetts Attorney General Massachusetts Department of Telecommunications & Energy National Consumers League RCN BecoCom Rhythms NetConnections Inc. Telecommunications Research & Action Center (TRAC) Verizon Winstar Communications, Inc. WorldCom, Inc. Appendix B Statutory Requirements Checklist Items 6-12 1 Checklist Item 6 Unbundled Local Switching. Section 271(c)(2)(B)(ix) requires BOCs to provide "[l]ocal switching unbundled from transport, local loop transmission, or other services." To satisfy its obligations under this subsection, an applicant must demonstrate compliance with the Commission rules effective as of the date of the application relating to unbundled local switching, must of which are set forth in detail in our prior section 271 orders. The Commission revised these rules in the UNE Remand Order, which was released on November 5, 1999. That order generally retained the unbundling obligations for local switching while narrowing the scope of obligation for certain geographic areas. In the UNE Remand Order, the Commission required that incumbent LECs need not provide access on an unbundled basis to packet switching except in certain limited situations. 2. Checklist Item 7 911/E911 Access and Directory Assistance/Operator Services. Section 271(c)(2)(B)(vii) of the Act requires a BOC to provide "[n]ondiscriminatory access to (I) 911 and E911 services." In the Ameritech Michigan Order, the Commission found that "section 271 requires a BOC to provide competitors access to its 911 and E911 services in the same manner that a BOC obtains such access, i.e., at parity." Specifically, the Commission found that a BOC "must maintain the 911 database entries for competing LECs with the same accuracy and reliability that it maintains the database entries for its own customers." For facilities-based carriers, the BOC must provide "unbundled access to [its] 911 database and 911 interconnection, including the provision of dedicated trunks from the requesting carrier's switching facilities to the 911 control office at parity with what [the BOC] provides to itself." Section 271(c)(2)(B)(vii)(II) and section 271(c)(2)(B)(vii)(III) require a BOC to provide nondiscriminatory access to "directory assistance services to allow the other carrier's customers to obtain telephone numbers" and "operator call completion services," respectively. Section 251(b)(3) of the Act imposes on each LEC "the duty to permit all [competing providers of telephone exchange service and telephone toll service] to have nondiscriminatory access to . . . operator services, directory assistance, and directory listing, with no unreasonable dialing delays." The Commission concluded in the Second BellSouth Louisiana Order that a BOC must be in compliance with the regulations implementing section 251(b)(3) to satisfy the requirements of sections 271(c)(2)(B)(vii)(II) and 271(c)(2)(B)(vii)(III). In the Local Competition Second Report and Order, the Commission held that the phrase "nondiscriminatory access to directory assistance and directory listings" means that "the customers of all telecommunications service providers should be able to access each LEC's directory assistance service and obtain a directory listing on a nondiscriminatory basis, notwithstanding: (1) the identity of a requesting customer's local telephone service provider; or (2) the identity of the telephone service provider for a customer whose directory listing is requested." The Commission concluded that nondiscriminatory access to the dialing patterns of 4-1-1 and 5-5-5-1-2-1-2 to access directory assistance were technically feasible, and would continue. The Commission specifically held that the phrase "nondiscriminatory access to operator services" means that ". . . a telephone service customer, regardless of the identity of his or her local telephone service provider, must be able to connect to a local operator by dialing '0,' or '0 plus' the desired telephone number." 3. Competing carriers may provide operator services and directory assistance by either reselling the BOC's services or by using their own personnel and facilities to provide these services. Our rules require BOCs to permit competitive LECs wishing to resell the BOC's operator services and directory assistance to request the BOC to brand their calls. Competing carriers wishing to provide operator services or directory assistance using their own facilities and personnel must be able to obtain directory listings either by obtaining directory information on a "read only" or "per dip" basis from the BOC's directory assistance database, or by creating their own directory assistance database by obtaining the subscriber listing information in the BOC's database. Although the Commission originally concluded that BOCs must provide directory assistance and operator services on an unbundled basis pursuant to sections 251 and 252, the Commission removed directory assistance and operator services from the list of required unbundled network elements in the Local Competition Third Report and Order. Checklist item obligations that do not fall within a BOC's obligations to provide unbundled network elements are not subject to the requirements of sections 251 and 252, including the requirement that rates be based on forward-looking economic costs. Checklist item obligations that do not fall within a BOC's UNE obligations, however, still must be provided in accordance with sections 201(b) and 202(a), which require that rates and conditions be just and reasonable, and not unreasonably discriminatory. 4. Checklist Item 8 White Pages Directory Listing. Section 271(c)(2)(B)(viii) of the Act requires a BOC to provide "[w]hite pages directory listings for customers of the other carrier's telephone exchange service." Section 251(b)(3) of the Act obligates all LECs to permit competitive providers of telephone exchange service and telephone toll service to have nondiscriminatory access to directory listings. In the Second BellSouth Louisiana Order, the Commission found that a BOC satisfies the requirements of checklist item 8 by demonstrating that it: (1) provided nondiscriminatory appearance and integration of white page directory listings to competitive LEC's customers; and (2) provided white page listings for competitors' customers with the same accuracy and reliability that it provides its own customers. 5. Checklist Item 9 Numbering Administration. Section 271(c)(2)(B)(ix) of the Act requires a BOC to provide "nondiscriminatory access to telephone numbers for assignment to the other carrier's telephone exchange service customers," until "the date by which telecommunications numbering administration, guidelines, plan, or rules are established." The checklist mandates compliance with "such guidelines, plan, or rules" after they have been established. A BOC must demonstrate that it adheres to industry numbering administration guidelines and Commission rules. 6. Checklist Item 10 Databases and Associated Signaling. Section 271(c)(2)(B)(x) of the Act requires a BOC to provide "nondiscriminatory access to databases and associated signaling necessary for call routing and completion." In the Second BellSouth Louisiana Order, the Commission required BellSouth to demonstrate that it provided requesting carriers with nondiscriminatory access to: "(1) signaling networks, including signaling links and signaling transfer points; (2) certain call-related databases necessary for call routing and completion, or in the alternative, a means of physical access to the signaling transfer point linked to the unbundled database; and (3) Service Management Systems (SMS)." The Commission also required BellSouth to design, create, test, and deploy Advanced Intelligent Network (AIN) based services at the SMS through a Service Creation Environment (SCE). In the Local Competition First Report and Order, the Commission defined call-related databases as databases, other than operations support systems, that are used in signaling networks for billing and collection or the transmission, routing, or other provision of telecommunications service. At that time the Commission required incumbent LECs to provide unbundled access to their call-related databases, including but not limited to: the Line Information Database (LIDB), the Toll Free Calling database, the Local Number Portability database, and Advanced Intelligent Network databases. In the UNE Remand Order, the Commission clarified that the definition of call-related databases "includes, but is not limited to, the calling name (CNAM) database, as well as the 911 and E911 databases." 7. Checklist Item 11 Number Portability. Section 271(c)(2)(B) of the Act requires a BOC to comply with the number portability regulations adopted by the Commission pursuant to section 251. Section 251(b)(2) requires all LECs "to provide, to the extent technically feasible, number portability in accordance with requirements prescribed by the Commission." The Act defines number portability as "the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another." In order to prevent the cost of number portability from thwarting local competition, Congress enacted section 251(e)(2), which requires that "[t]he cost of establishing telecommunications numbering administration arrangements and number portability shall be borne by all telecommunications carriers on a competitively neutral basis as determined by the Commission." Pursuant to these statutory provisions, the Commission requires LECs to offer interim number portability "to the extent technically feasible." The Commission also requires LECs to gradually replace interim number portability with permanent number portability. The Commission has established guidelines for states to follow in mandating a competitively neutral cost-recovery mechanism for interim number portability, and created a competitively neural cost-recovery mechanism for long- term number portability. 8. Checklist Item 12 Local Dialing Parity. Section 271(c)(2)(B)(xii) requires a BOC to provide "[n]ondiscriminatory access to such services or information as are necessary to allow the requesting carrier to implement local dialing parity in accordance with the requirements of section 251(b)(3)." Section 251(b)(3) imposes upon all LECs "[t]he duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service with no unreasonable dialing delays." Section 153(15) of the Act defines "dialing parity" as follows: [A] person that is not an affiliate of a local exchange carrier is able to provide telecommunications services in such a manner that customers have the ability to route automatically, without the use of any access code, their telecommunications to the telecommunications services provider of the customer's designation . . . . 9. Our rules implementing section 251(b)(3) provide that customers of competing carriers must be able to dial the same number of digits the BOC's customers dial to complete a local telephone call. Moreover, customers of competing carriers must not otherwise suffer inferior quality service, such as unreasonable dialing delays, compared to the BOC's customers. SEPARATE STATEMENT OF CHAIRMAN MICHAEL K. POWELL Re: Application of Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions) and Verizon Global Networks Inc., for Authorization to Provide In-Region, InterLATA Services in Massachusetts (CC Docket No. 01-9) I write separately to explain the bases upon which I support this Order, which approves an application by Verizon to provide in-region, interLATA service in Massachusetts, pursuant to section 271 of the Telecommunications Act of 1996. There was a time when the Commission's interpretation of section 271 was so fluid that it was difficult to ascertain precisely what was required of a Bell Company to enable it to attain approval to enter the long distance market. The Commission was criticized for "hiding the ball" in that, in the face of undeniably weak applications, we declined to provide guidance regarding what we would find to be a persuasive showing of compliance with the statutory "competitive checklist." Under the stewardship of the previous Chairman, however, the Commission concertedly labored to provide more detailed guidance, notwithstanding the strict limitations imposed on our deliberations by the 90-day statutory deadline for approving or rejecting section 271 applications. The fruits of this effort have been that, of the more than five years in which we have been responsible for implementing section 271, we have adopted all five approval orders only in the last 16 months. This cluster of recent approvals (which were supported by all of my present colleagues) is, in my view, the result of simple logic: without a clear explanation of what they needed to do to gain section 271 approval, Bell Companies lacked adequate incentives and ability to do what this provision intended, namely, open local markets in exchange for entry into the in- region, interLATA telecommunications market. But future applicants and other interested parties are admonished that, even after more than a year of applying a standard that provides section 271 applicants the guidance they need to succeed, the Commission will continue to apply the same rigor it always has to these questions. It is not overstating matters to point out that the legal and policy questions encompassed by these proceedings are extraordinarily complex and, most often, close questions must be resolved. As such, there still will be times when the Commission receives an application that either fails to meet the demanding standard outlined in our precedent, or fails based on questions that surface for the first time. With respect to the application before us, though it has some weaknesses, I believe it is consistent with our precedent and merits approval. The central concern with this application is the rate Verizon offers for switching. It is clearly higher than those we have seen in some other states. Our task under the checklist, however, is to ensure that whatever rates are offered are "cost-based" and the product of a forward-looking methodology (i.e., TELRIC). In evaluating section 271 applications, the Commission does not conduct completely independent rate proceedings. Thus, we are left to examine whether a state commission demonstrates intent and some ability to use the appropriate methodology, and whether the rates ultimately relied on in the application are within the range that a reasonable application of TELRIC principles would produce. Here, Verizon relies on a switching rate lower than that set by the Massachusetts Department, recognizing the Commission's concern that the state-set rate might not be appropriately cost-based. Verizon chose simply to offer a switching rate similar to that we approved in New York. In the Bell Atlantic New York Order, we found this rate to be consistent with the cost-based methods we require. Given that, I believe we are constrained to approve the rate unless we find it unquestionably clear that the rate is not built on the proper TELRIC foundation. In contrast, opponents of this application argue that we should not rely on the New York rate, because the New York Commission is on the verge of revising it, having found an arguable input error in its previous methodology. It is alleged that this revision will result in a substantially lower rate and thus we should not endorse the current rate for Massachusetts. This is not an idle concern, for we recognize the importance of cost-based rates to new entrants hoping to enter the incumbent's local market. I must conclude, however, that we cannot properly reject an application from one state that is consistent with precedent, on the basis of speculation regarding the outcome of another state's future rate proceeding. We cannot know with sufficient certainty what will be the full impact on the rates of that future proceeding, even if it is generally accepted that the rate is likely to be lower. Nor can we, on this record and within the constraints of this 90-day proceeding, conduct our own de novo evaluation of these switching rates, so as to revise our prior decision. Moreover, I cannot agree that we should, as a prior condition of approving this application, compel Verizon (through formal or informal means) to mirror its Massachusetts rates with any revisions that occur in New York. Taking such action now, as a condition of approval, would impermissibly subject the Massachusetts Department to the regulatory actions of another state and might well interfere with the Department's ongoing ratemaking proceedings. That said, approval today does not forever insulate the switching rate Verizon has successfully proferred in this application. If New York in fact revises its rates downward after concluding that its prior determinations were not soundly cost-based, neither Verizon nor anyone else could properly rely in future applications on the rates we approved in the Bell Atlantic New York Order without new substantiation. Furthermore, depending on the scope of the New York Commission's upcoming decision on rates, this Commission might determine that Verizon has subsequently "ceased to meet [one] of the conditions required for [section 271] approval," thereby empowering us to take remedial action under section 271(d)(6). Thus, there may be situations after the New York Commission rules in which I would support taking action that would have the practical effect of requiring Verizon to find a new cost-based rate for switching for a few months until the Massachusetts Department resets its rates. I have full confidence that the Massachusetts Department will take account of New York's experience, as well as carefully ensure that any rates it chooses are based on sound TELRIC methodology, as described in this and prior Commission orders. For these reasons and with these caveats, I support adoption of this section 271 application. I wish to thank, in particular, the Massachusetts Department, the Department of Justice and our tireless Common Carrier Bureau staff for their exemplary skill, drive and stamina in bringing this Order to fruition. SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS Re: Application of Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions) and Verizon Global Networks Inc., for Authorization to Provide In-Region, InterLATA Services in Massachusetts (CC Docket No. 01-9) Notwithstanding serious reservations about Verizon New England's pricing of unbundled network elements, I vote to approve this application to provide long-distance services in Massachusetts. On balance, I believe that Massachusetts consumers will benefit from heightened competition in both the long distance and local markets. Although I vote for this order with some trepidation, I am optimistic that this Commission and the Massachusetts Department of Telecommunications and Energy (DTE) will maintain vigilance to ensure that the market-opening requirements mandated by Congress continue to be met. Enduring competition in the local market will only take root and thrive if we and our state colleagues rigorously pursue cost-based pricing. Indeed, pricing is at the very core of the statutory framework Congress constructed to eliminate economic barriers to entry in all telecommunications markets. The use of a forward-looking methodology -- with a reasonable risk-adjusted return to incumbents -- promotes fair and efficient competition. Since the earliest 271 applications, the Commission has made clear that we must make an independent determination that the rates are based on forward-looking costs -- a statutory responsibility that the Commission diligently undertook in the recent SWBT Kansas/Oklahoma Order. Today's decision squarely reaffirms this obligation. Our independent evaluation shows that the original switching rates adopted by the Massachusetts DTE were substantially higher than other states and not within a range of prices that would be consistent with forward-looking principles. With average consumer usage, the per month costs for switching, transport, and signaling would have been $21.68 in Massachusetts more than double the rate in New York and more than 300 percent above the rates in numerous other states in Verizon's territory and across the country. I would not have approved an application that was based upon such rates absent compelling evidence that switching costs in Massachusetts should differ so extraordinarily from those in other states. The order permits Verizon to rely on current switching rates from New York -- a neighboring state with similar cost characteristics -- to prove compliance with the statutory requirements. I have significant misgivings about this approach. The rates adopted in New York are several years old and are under active review by the New York Commission with a true-up after it completes its review. As noted above, since our approval of Verizon's New York application, other states have adopted switching rates that are significantly lower than those in New York. Reluctantly, I am compelled to support the decision to grant this application because the rates that were approved by the New York Commission -- and evaluated by this Commission - - are presently in effect and there is insufficient evidence in the record at this time to determine that those rates are inconsistent with forward-looking principles. Today's order correctly recognizes, however, that rates will evolve over time to reflect changed market conditions, new technologies, and updated information on cost inputs. Parties should be forewarned that they should not rely on outdated rates in future applications. Moreover, depending on the New York Commission's decision, Verizon's reliance on the present rates to demonstrate continuing compliance in Massachusetts may be undermined. If the New York Commission orders lower rates after determining that the present rates are not cost-based and Verizon does not revise its rates in Massachusetts, the FCC should use its section 271(d)(6) authority to suspend or revoke Verizon's long-distance authorization in Massachusetts until the DTE completes its cost proceeding. I am also troubled by the cost inputs used to set the loop rates in Massachusetts. In particular, the fill factor used is exceptionally low. In addition, the designated cost of capital exceeds the figure used to set retail rates in Massachusetts and is substantially higher than the percentages used in the other Verizon states. I have every confidence that the Massachusetts DTE will address any flaws in the inputs through its pending cost proceeding. As we have consistently noted, opening a local market to competition does not end with the grant of a 271 application. Indeed, the Commission and state commissions must be even more vigilant in ensuring that incumbents live up to their statutory obligations once long-distance authorization is granted. This application demonstrates the importance of each state commission undertaking an evaluation of forward-looking costs as it establishes rates within its borders. It also demonstrates that, although a forward-looking methodology provides latitude in setting rates, pricing decisions in other states can serve as a benchmark by which a state commission can evaluate the appropriateness of its rates. I encourage state commissions to undertake a pro-active dialogue on pricing with each other and with this Commission so that the benefits of effective competition reach consumers throughout the entire country as quickly as possible. After this fifth grant of an application to provide long-distance services, there should no longer be any question about getting to yes; rather the focus must be on getting it right. CONCURRING STATEMENT OF COMMISSIONER HAROLD FURCHTGOTT-ROTH Re: Application of Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions) and Verizon Global Networks Inc., for Authorization to Provide In-Region, InterLATA Services in Massachusetts (CC Docket No. 01-9) I support today's decision to grant Verizon Section 271 authority in Massachusetts. While I continue to have doubts about the Commission's overall approach to these proceedings, I believe today's approval is a first step towards a more statutorily-constrained approach to Section 271 applications. There are a number of hopeful signs in today's Order. First, the Commission has resisted the temptation to condition its approval on some future event or approve entry based on some new information submitted after the filing date. The only relevant consideration should be a carrier's section 271 performance at the time the application is filed. Section 271 is intended to be a snapshot of what actually prevailed in the market 90 days ago not a crystal-ball-gazing speculation about a parade of horribles that may or may not happen in the future. When speculation prevails, 11th hour "dealmaking" is not far behind. Second, today's decision is less intrusive into the province of state commissions. I have long advocated a more deferential approach to state commission decisions, on compliance with the checklist generally and particularly on pricing issues. Today's order moves productively in that direction. Similarly the Commission has refrained from the detailed second-guessing of state commission determinations that once typified these orders. Finally, today's order more clearly limits our consideration to those items actually in the statutory checklist. Prior decisions seemed at least implicitly to expand that checklist by "encouraging" and "expecting" companies and commissions to take additional steps that reflected the policy priorities of the erstwhile majority. That practice has now been largely eliminated. Although these are all positive trends, I hope that future commissions will continue down this road. Nonetheless some aspects of today's Order are not consistent with my overall view of the FCC's role. As I have stated in prior Section 271 decisions, I believe that Section 271 primarily requires the Commission to determine whether a Bell operating company has fulfilled its obligations under Sections 251 and 252, and these are specified in the interconnection agreements into which it has entered. In this regard, an essential element in my review is whether any complaints have been filed at the FCC or with the relevant state commission alleging non- compliance with section 251 generally and section 252 agreements in particular. In the absence of such complaints, I take a highly skeptical view of allegations that are aired for the first time in the Section 271 application process. Section 271 does not create an opportunity to circumvent the statutory dispute resolution process created by Sections 251 and 252. Although today's order does emphasize the utility of complaint processes and the role of the states, it nonetheless indulges new and novel concerns unreviewed elsewhere in far more detail than I would have. I also wish to emphasize that the FCC's job does not end with approval of Verizon's application. Section 271 (d)(6) sets forth a clear role for the Commission to ensure that Bell operating companies continue to meet the statutory checklist. I share Chairman Powell's commitment to swift and sure enforcement action when licensees violate our rules. Thus we will closely monitor the situation in Massachusetts in order to be certain that Verizon remains in full compliance with Section 271. DISSENTING STATEMENT OF COMMISSIONER GLORIA TRISTANI Re: Application of Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions) and Verizon Global Networks Inc., for Authorization to Provide In-Region, InterLATA Services in Massachusetts (CC Docket No. 01-9) With the stakes so high, the Commission cannot afford to let Verizon into the Massachusetts long distance market before the company has fully demonstrated compliance with the market opening requirements of section 271. The availability of unbundled network elements (UNEs) at cost-based rates is an essential ingredient of a primary strategy for entering the residential market in Massachusetts. Accordingly, I must dissent, because the Commission should not permit Verizon to enter the in-state long distance market without more rigorous support for its unbundled switching rates in Massachusetts. Based on the evidence in the record, I cannot conclude that Verizon has demonstrated that its switching rates are based on the forward-looking, total element long run incremental cost (TELRIC) of providing that network element. Prior to filing its second 271 application for Massachusetts, Verizon elected not to rely on the unbundled switching rates set by the Massachusetts Department of Telecommunications and Energy (Massachusetts Department). Instead Verizon chose to rely on voluntarily-adopted rates equivalent to those currently in effect in New York, without providing any further evidence that those rates are TELRIC compliant for Massachusetts. By allowing Verizon simply to mirror rate levels set four years ago in another state and subject to imminent revision, the Commission has undermined the rigor of its 271 process. Indeed the majority has sent a signal that it will allow reliance on previously approved rates, irrespective of the amount of time passed or pricing information gathered since those rates were last before us. In a declining cost industry characterized by rapid technological innovation, such an approach is inconsistent with our statutory mandate. Nor can the majority's threats of future enforcement action -- particularly with regard to "section 271 checklist items where Verizon's performance was most marginal," such as the pricing of unbundled elements -- substitute for a requirement that Verizon demonstrate full checklist compliance before winning long distance authority. The record that supported Verizon's New York 271 application in 1999, based on a pricing docket completed in 1997, is not adequate to support Verizon's case in Massachusetts today. The New York Public Service Commission (NYPSC) is expected to revise the New York rates this summer, after it completes its review of additional information regarding the cost of unbundled switching. The NYPSC adopted the current rates at a time when there was comparatively little experience with TELRIC pricing. Since the New York application was adopted, however, the Commission has acquired additional information about the pricing of switching in particular. The applications that the Commission has approved since that time reflected rates for the per-line, per-month cost for switching, transport, and signaling that -- based on WorldCom's usage assumptions -- are roughly half of New York's rates. Such rate disparities suggest there is a good chance that the NYPSC may revise its rates significantly. At a minimum, such comparisons support the need for additional information to ensure that the Massachusetts switching rate is within the range that reasonable application of TELRIC principles would produce. In any case, Verizon did not adopt the New York rates for unbundled switching in their entirety. The New York rates, unlike the fixed rates on which Verizon relies, are subject to true- up and potential refund. Moreover, although the NYPSC is expected to complete its pricing proceeding shortly, Verizon did not commit to adopt the resulting rates, which will be based on more complete and updated cost information. Finally, when we approved Verizon's New York 271 application, we placed "great weight on the New York Commission's active review and modification of Bell Atlantic's proposed unbundled network element prices, its commitment to TELRIC-based rates, and its detailed supporting comments concerning its extensive, multi-phased network elements rate case." We do not have the same record in Massachusetts. As the majority describes, significant errors appear to have been made in establishing the original UNE switching rates in Massachusetts. Like the majority, I expect that the Massachusetts Department will examine these issues during the course of its on-going rate case and set rates within the range that a reasonable application of TELRIC principles would produce. But, based on the record currently before me, I cannot conclude that the unbundled switching rates on which Verizon relies are within that range and accordingly must dissent.