| Federal Communications Commission | FCC 99-404 |
| Re: | 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 |
Our action today granting Bell Atlantic's application to provide in-region long distance service ushers in a new era of competition in telecommunications for the citizens of New York. It heralds the wisdom of Congress in establishing the Telecommunications Act of 1996 regime which rewards a Bell Operating Company for opening its market to local competition.
It celebrates the outstanding efforts of the New York Public Service Commission which, over a two year period, conducted an open and collaborative process to establish rules and to examine rigorously every market opening detail to ensure that Bell Atlantic had met the requirements for certification. And it affirmatively credits Bell Atlantic's sustained actions and cooperative attitude that have led the carrier across the Section 271 threshold and into the 21st century of communications.
Consumers today are reaping the benefits of competition in New York's local telecommunications market. New York amply illustrates the proposition that when barriers to competition are removed, competitors will enter all segments of the local market, including the facilities-based residential market. This increased competition should lead to more consumer choice, improved services, lower prices, and greater innovation. Beginning today, New York consumers will also enjoy an intensified battle for their long distance dollars as an unleashed Bell Atlantic enters that fray.
Although I strongly support granting this Bell Atlantic application, I write separately to underscore four points in today's Order:
First, I support the affirmation of our rule that a Section 271 application must be complete on the date it is filed. We announced this requirement before any Section 271 applications were filed, and have frequently reiterated the rule. Resolving such a complex adjudicatory proceeding within 90 days would become an impossible task if parties were able to supplement the record at any time during the proceeding. Parties might have an incentive to "game" the system by withholding evidence until late in the 90-day period or by trying to cure deficiencies with promises of future performance that could not adequately be evaluated. As a matter of fundamental fairness, parties ought to be able to rely on the Commission's rules, and we should not be changing our rules in the middle of the game. As our Order today makes clear, we rely neither on late-filed data nor on paper promises in reaching our decision to grant this application.
Second, assessing compliance with the provisions Congress set forth in Section 271 of the Act is a complex task. In judging the parade, it is easy to get lost in the ticker tape of details. As our Order makes clear, we have examined all of the circumstances surrounding each checklist item, rather than dwelling on any single performance measurement. The debates over specific performance metrics must not obscure the basic inquiry that we undertake in the Section 271 process: has the applicant eliminated barriers so that new entrants have the opportunity to compete in the local market?
Accordingly, when there are multiple performance measurements for a checklist item, a minor misstep on one measurement may have little competitive significance in the marketplace. In such situations, it is important to look at other measures to form a complete picture of the applicant's performance. Nor should we hold the applicant responsible for problems that can reasonably be attributed to its competitors.
Third, while Bell Atlantic rightfully can pop the corks on its vintage bottles of New York champagne, it must not lose sight of the fact that the grant today was not an easy decision for the Commission. A few of the checklist items barely received passing grades. We expect to see continued improvement in, for example, access to its operational support systems and loop provisioning, especially DSL loops. If there is evidence of backsliding, the Commission is fully prepared to use any and all of the tools at its disposal to ensure that new barriers to competition do not arise. We will closely monitor progress in New York.
But I believe that Bell Atlantic is committed to a competitive marketplace. I applaud the steps it has taken to establish a wholesale business and to imbue the employees of the wholesale operation with the incentives to deliver quality service to their carrier customers. Indeed, during the course of our examination of the Section 271 application, many of its competitors applauded Bell Atlantic for its cooperative attitude and efforts to tackle problems as they arose. I fully expect to see that spirit of cooperation continue. It was the evidence of that cooperative spirit -- an intangible that does not appear on any graphs -- that added to my comfort level in assessing this application a passing grade.
Fourth, demand for broadband service has exploded over the past few months. Because the consumer market for broadband services has only recently begun to develop, neither the FCC's collaborative discussions nor our earlier Section 271 decisions adequately addressed the ordering and provisioning of xDSL-capable loops. Thus, it would be unfair to penalize Bell Atlantic for its record on DSL loop performance at this time. However, our evaluation of future applications -- and our monitoring of the New York marketplace for continued compliance -- will indeed focus on this issue. In this Order, we provide notice that we will examine closely whether Section 271 applicants provide competitors with nondiscriminatory access to xDSL-capable loops. I also fully expect that Bell Atlantic, through the New York Commission's collaborative process, will address any problems that arise as competitors roll out these advanced services.
While I applaud Bell Atlantic for its recent announcement, in assessing compliance with the loop provisioning checklist item, I did not rely on the proposal of Bell Atlantic to establish a separate affiliate for advanced services. I do, however, believe in general that a separate affiliate for advanced services -- if properly structured - helps to demonstrate non-discrimination in loop provisioning. But the mere presence of a separate affiliate, absent other performance measurements, is unlikely to be sufficient to insure that the market for advanced services is fully open to competition.
Conclusion
Opening the local market to competition, as required by Sections 251 and 271 of the Telecommunications Act, has been a vital process that could not be accomplished overnight. Some sought to challenge this framework in court, rather than take the difficult steps that Congress required. But today, we see that the congressional vision of a competitive marketplace is working. Bell Atlantic has demonstrated that achieving the Act's directives will lead to success for Bell Atlantic, for competitive carriers, and, most importantly, for consumers.
As we celebrate the new era of competition, I want to express my sincere appreciation to the New York Commission, for its outstanding work in opening its state market to local competition. I also want to thank the Antitrust Division of the Department of Justice for its probative evaluations and wise counsel on Section 271 compliance.
Finally, I want to express my gratitude to the Common Carrier Bureau of the Federal Communications Commission. Bureau staff members have spent countless hours working through the complex issues presented in this application. They are indeed public servants of the highest caliber.
A toast to all for a job well done.