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In the Matter of Application by SBC Communications Inc., Southwestern Bell
Telephone Company, and Southwestern Bell Communications Services, Inc.
d/b/a Southwestern Bell Long Distance
Pursuant to Section 271 of the Telecommunications Act of 1996
To Provide In-Region, InterLATA Services in Texas, CC Docket No. 00-65

Concurring Statement of Commissioner Harold W. Furchtgott-Roth

I concur in the decision to grant this application by Southwestern Bell Telephone Company (SWBT) to provide in-region, inter-LATA services in the State of Texas. I write separately, however, in order to apply my understanding of the statute.

Application of Sections 251, 252, and 271

As I explained in the decision on Bell Atlantic's application to offer long distance service in New York, the relationship between the regulatory approval process under section 271 and the procedures regarding private interconnection agreements established by sections 251 and 252 is a critical one. Unfortunately, the Commission has not paid close attention to this relationship, and its failure to do so has caused the section 271 review process to morph into something quite different from the original statutory plan. The process has turned into a general federal regulatory scheme, instead of tracking the contract-based, State-centric model of sections 251, 252, and 271. See generally Concurring Statement of Commissioner Harold W. Furchtgott-Roth, In the Matter of Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act to Provide In-Region, InterLATA Service in the State of New York, CC Docket No. 99-295 (rel. Dec. 22, 1999) ("New York Statement").

I will briefly reiterate those points that pertain to my analysis here. First, the text of section 271 makes clear that the relevant universe of BOC conduct to be tested in a "Track A" application is not its commercial performance generally, as the Order supposes, but its fulfillment of specific interconnection agreements:

With respect to a BOC that "is providing access and interconnection pursuant to one or more agreements described in paragraph (1)(A)," as here, it is "such access and interconnection [that must] meet[] the requirements of" the competitive checklist. Id. section 271(c)(2)(A) (emphasis added). Similarly, the statute defines the Commission's administrative task under Track A as determining whether the petitioning BOC "with respect to access and interconnection provided pursuant to subsection c(1)(A) has fully implemented the checklist." Id. section 271(d)(3)(A)(i).

New York Statement at para. 6.

Second, in analyzing the RBOC's fulfillment of the checklist under its approved interconnection agreements, one should consider the existence of complaints to enforce those agreements filed by interconnecting parties with the State Commission. If CLECs are receiving seriously inadequate service under those agreements, one would expect to see them invoke the rights and remedies guaranteed to them by sections 251 and 252, including the right to arbitration and federal court review. Accordingly, it has seemed to me that

the most probative evidence of compliance with the checklist - perhaps even prima facie proof -- is the absence of disputes arising under section 252 contracts. Conversely, the best evidence of noncompliance is the presence of such disputes. Record documentation of these disputes, such as complaints filed with State Commissions pursuant to section 252, would only strengthen that showing.

Id. at para. 23..

In sum, the best case for noncompliance with section 271 under Track A is to be made by parties: (1) with approved interconnection agreements described in section 271(c)(1)(A); (2) who legitimately allege that the RBOC is not providing them service pursuant to the actual terms and conditions of those agreements; and (3) who have pursued those alleged violations with State Commissions pursuant to section 252.

On this record, we have evidence that approaches, but does not meet, this standard. Covad Communications, which opposes the instant application, receives interconnection and access from SWBT pursuant to a final, "Track A" interconnection agreement that was arbitrated and approved under section 252. And that agreement appears to provide for the non-discriminatory provisioning of x-DSL capable loops to Covad. See Ex Parte Submission of Covad Communications (June 27, 2000) (attaching interconnection agreement on DSL). So far, so good.

That interconnection agreement, however, was not finalized and operative until February of this year. Although Covad points to findings by Texas arbitrators related to discriminatory provisioning of loops by SWBT, those findings were not made in the context of a controversy arising under a section 252 contract - that is, in a dispute over the adequacy of SWBT's service under the terms of an existing interconnection agreement. Rather, they were made in the context of a petition for arbitration to establish an interconnection agreement and terms thereunder with SWBT.(1) Covad never alleged a breach of performance under a Track A agreement, at the State Commission or anywhere else, and the arbitrators' findings do not go to SWBT's actual performance of an agreement but to the proper drafting of a future agreement. Such findings, then, are not probative of a failure to provide access and interconnection pursuant to a Track A agreement.

AT&T, which also takes service from SWBT under an approved interconnection agreement, also opposes the grant of this application. It argues in this proceeding that SWBT is, in various ways, violating the terms and conditions of its interconnection agreement. See Ex Parte Submission of AT&T (June 23, 2000). For example, AT&T says that SWBT is discriminating against it in the provision of unbundled, DSL-capable loops obtained as part of the UNE-platform, and that this conduct violates the non-discrimination and other provisions of their agreement and section 251. See id. at page 2 (citing section 55.1 of agreement, providing that "[a]t the request of AT&T and pursuant to the requirements of the Act, SWBT will offer . . . Network Elements to AT&T on an unbundled basis on rates, terms, and conditions set forth in this Agreement that are just, reasonable, and non-discriminatory"). Thus, AT&T well demonstrated that the conduct that it alleges as a problem under section 271 is conduct to which its interconnection agreement directly speaks. Again, so far so good.

What AT&T has not done, however, is adduce evidence that it has sought enforcement of its contractual right to nondiscrimination with the State Commission. Like Covad, it has participated in hearings regarding the content of new, not-yet-entered-into interconnection agreements. See AT&T Ex Parte Submission (June 27, 2000). But the record does not reflect that AT&T has ever asserted that SWBT's provision of access and interconnection under an operative agreement was in breach. As with respect to Covad, there is no showing here that AT&T has ever attempted to enforce its contractual rights.

As noted above, CLEC action to enforce an alleged breach of an interconnection agreement is evidence of significantly inadequate provisioning of access and interconnection under section 252 contracts, which, as I read section 271, is the relevant universe of access and interconnection Accordingly, while both Covad and AT&T make legitimate points here, I still "view with skepticism assertions of inadequate BOC performance lodged for the first time in the section 271 approval process." Concurring Statement, New York Order. That is what we have with respect to both Covad and AT&T, and I thus find no record evidence of failure by SWBT to perform as required under the terms of section 252 contracts.

SBC/Ameritech Merger Conditions

As I stated at the time of the Commission's approval of SBC and Ameritech's application to transfer licenses and authorizations under sections 309 and 214 of the Communications Act, I believe that some of the conditions applied to the license transfer conflict with specific sections of the Act. In particular, I believe that

of especial legal concern are those related to carrier-to-carrier promotions. These conditions limit the number of services and facilities that may be offered to competitive local exchangecarriers (CLECs) on a promotional basis. Once the caps are reached, some CLECs will be unable to obtain the same promotional deals as other CLECs. Quite simply, carrier-to-carrier promotions will not be available on an equal basis to all requesting carriers. In this way, then, the conditions violate the "nondiscriminatory access" requirement of section 251(c)(3), as well as the resale non-discrimination requirement of 251(c)(4)(B).

Moreover, the caps directly conflict with the "pick-and-choose" provision of section 252. Section 252(i) requires incumbent LECs to "make available [to a CLEC] any . . . service, or network element" provided to any other CLEC "upon the same terms and conditions," regardless of the level of offering to others. For the reasons given above, the guarantee of that section will be unfulfilled as a result of the caps.

Apart from the caps themselves, the underlying discounts on loop rates also offend sections 252(i) and 251(c)(3). These discounts discriminate among CLECs -- in terms of prices and offerings -- by creating a situation in which a CLEC that uses an ILEC's unbundled switch gets one rate for the loop, but a CLEC that uses its own switch gets a discount on the very same loop.

Separate Statement of Commissioner Harold W. Furchtgott-Roth, Concurring in Part and Dissenting in Part, In re Applications of Ameritech Corp., Transferor, and SBC Communications, Inc., Transferee, CC Docket No. 98-141 (rel. Oct. 6, 1999).

I personally solicited further comment on the effect of these merger conditions on SWBT's section 271 application. See Separate Statement of Commissioner Harold W. Furchtgott-Roth, In the Matter of Application by SBC Communications Inc.,Southwestern Bell Telephone Company, and Southwestern Bell Communications Services, Inc. d/b/a Southwestern Bell Long Distance Pursuant to Section 271 of the

Telecommunications Act of 1996 To Provide In-Region, InterLATA Services In Texas, CC Docket 00-4 (rel. April 6, 2000).

Some parties addressed this issue. See Comments of AT&T at 62-64. As I review the record, no party submitted information revelatory of the actual effects of the loop discounts required in the Commission's merger Order. Specifically, the record is ambiguous as to whether the cap has been reached or not; and if the cap has not been reached, then price discrimination is, at this point in time, just a theoretical possibility. If, in future long distance applications, a party can show that the cap has been reached and differential prices are actually being charged, this issue would be live and I would be most willing to pursue it further. At this point, however, the record does not support it.

* * *

Because I believe that SBWT is providing access and interconnection pursuant to Track A agreements as required by those contracts, which in turn incorporate rights available to CLECs under sections 251 and 252, I concur in the grant of its application to offer long distance service in Texas.

1    Indeed, the arbitration award relied upon so heavily by Covad as evidence of actual discrimination in violation of section 251 and 271 is captioned "Petition of Rhythms Links, Inc. for Arbitration to Establish an Interconnection Agreement with Southwestern Bell Telephone Company and Petition of Dieca Communications, Inc. d/b/a Covad Communications Company for Arbitration of Interconnection Rates, Terms, Conditions, and Related Arrangements with Southwestern Bell Telephone Company."