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October 13, 1998


Re: Application of BellSouth Corporation et al. Pursuant to Section 271 of the Communications Act of 1934, as amended, to Provide In-Region, InterLATA Services in Louisiana (CC Docket No. 98-121).

In this Order, we deny BellSouth's third application to provide in-region interLATA service pursuant to section 271 of the Act. I commend BellSouth for taking a number of steps toward meeting the prerequisites for entry established by Congress under section 271. Indeed, BellSouth has successfully satisfied nearly half of the items identified in section 271's "competitive checklist" and additional items would be satisfied but for deficiencies in BellSouth's OSS. Unfortunately, however, the instant application suffers from some of the same important deficiencies we identified in BellSouth's South Carolina and initial Louisiana applications, and thus we are compelled by the statute to reject it.

Although BellSouth's performance has been less than perfect in satisfying the statute, neither is this Order perfect, despite the valiant efforts of our talented but overworked Common Carrier Bureau. In particular, I wish we were able, in this Order, to give even more guidance to BellSouth and the other Bell Operating Companies (BOCs) regarding how they may satisfy the requirements of section 271. Rather than dwell on how I wish we could improve the Order, however, I write separately to highlight the bases upon which I vigorously support it.

First and foremost, I applaud our decision in this Order to discuss every element of the competitive checklist, as well as the public interest. I believe this decision constitutes a significant step toward achievement of Congress' goal of simultaneously opening the BOCs' local exchange markets to competition while promoting long distance competition through BOC entry into that market. Further, based on our internal discussions during the final stages of preparing this Order, it is my expectation that Commission staff will continue to work closely with BellSouth to clarify further the guidance we have provided in this and previous orders. I sincerely hope that BellSouth will take advantage of such guidance before filing another section 271 application; the company's success in satisfying several elements of the checklist indicates that it has the wherewithal and good faith to satisfy the statutory requirements and thereby obtain long distance approval.

Second, I am very pleased that we will allow BellSouth and future BOC applicants to certify that they remain in compliance with checklist items they have satisfied in previous applications. In implementing this new certification option, the Commission must, of course, be careful to remain receptive to entirely new arguments raised in subsequent applications that parties had no reasonable opportunity to raise previously. I believe, however, that it is entirely appropriate for us to signal that we are strongly disinclined to revisit ground satisfactorily covered in previous applications. This approach will put more pressure on parties commenting on BOC applications to level all available criticisms in the first application for any particular state. This approach also will enable BOCs to focus their energies on quickly satisfying the remaining statutory requirements and thereby expedite the local market-opening process by which BOCs may obtain approval to provide in-region long distance service.

Third, I support this Order because it makes clear that the evidentiary standards governing our review of section 271 applications are intended to prevent the perfect from becoming the enemy of the good with respect to the showings BOCs must make to obtain interLATA approval. As the Order highlights, BOCs need only prove each statutory requirement by a preponderance of the evidence, rather than some higher burden. The Order makes clear, moreover, that a BOC is not restricted to using only the types of evidence that we have identified as helpful in reviewing an application if a BOC can persuade us that other types of evidence demonstrate nondiscriminatory treatment and other aspects of the statutory requirements.

Fourth, I support this Order because it evidences at least some reluctance to allow our public interest review of section 271 applications to sweep too broadly. I believe this review should be disciplined both by the statute's express prohibition against limiting and extending the terms of the competitive checklist, 47 U.S.C. 271(d)(4), and by the likelihood that it will serve the public interest to grant the application of any BOC that can satisfy every element of the checklist. I believe this likelihood is significant, in part, because of the continued rigor with which this Commission and many state commissions have implemented the checklist. This rigor makes me increasingly skeptical that in many cases we would need, in essence, to require BOCs to satisfy public interest factors in addition to the checklist to achieve the broad aims of section 271.

In sum, this Order and the work leading up to it evidence a significant improvement in the section 271 process from a year ago. While I would have preferred that we give even more detailed guidance as to the next steps BellSouth must take in order to obtain section 271 approval, I acknowledge the limitations imposed by the ninety-day statutory time frame, and I recognize how far the Commission has come from the arms-length, generally reactive approach that characterized our early implementation of section 271. That approach, in my view, robbed both applicants and other interested parties of a meaningful opportunity to help the Commission translate complex and as-yet-uninterpreted statutory provisions into workable directives that interested parties can understand and follow.(1)

Regardless whether one believes the Commission's actions in this area have been "too regulatory" or not, it is indisputable that BOCs, new entrants, members of Congress, state commissions, consumer groups all have been clamoring for this Commission to give more guidance -- not less -- as to the meaning of section 271's requirements. All sides cry out for the Commission to take steps to carry out Congress' vision of promoting long distance competition while simultaneously opening local markets. To ignore these pleas, and to ignore the express directions of Congress to implement the statute, is less deregulation than derogation of duty. Thus, I am pleased that the Commission is well on its way to answering the call for more guidance.

By working with both BOCs and competing carriers over the past year to provide guidance on the statutory requirements before and after section 271 application proceedings, we have brought ourselves closer than ever to defining what BOCs must do to satisfy the statute. I believe this progress is considerable, especially in light of the intricate and conflicting evidence presented in section 271 proceedings, as well as the inherent difficulties of coaxing incumbent local and long distance providers to open their respective markets to competitors. Clearly, we have much more to do in this regard. But I have every confidence that we can reach the light at the end of the tunnel if we remain true to our commitment to work with the industry and other regulators to achieve our collective goal of bringing more competition to local and long distance markets.

Change is good. But it is also messy. I praise my colleagues, the industry and especially the Commission's staff for their tremendous contributions in hashing through some of the messiest issues raised by our implementation of the 1996 Act in this and other section 271 proceedings. We have found a promising path. Now we must redouble our efforts to push forward along that path. It is my firm belief that, by working with the entire industry to help BOCs understand what they must do to satisfy section 271, we will succeed in delivering on the promise of increased local and long distance competition that the Act holds for the industry and for the American public.

1. Despite criticism to the contrary, it is my understanding that the process by which Commission staff have provided informal guidance to BOCs and other interested parties is both public and consistent with past Commission practice. The Commission issued a public notice in January inviting all interested parties to meet informally with staff regarding section 271 issues, just as Commission staff have historically provided informal staff guidance to parties in other areas, such as broadcast. Further, to ensure disclosure of the substance of the collaborative meetings, Commission staff have informed participants in each meeting about information and ideas that have been discussed in previous meetings with other parties. Regardless of what is discussed in these meetings, the Commission will decide each application on its merits, within the ninety-day statutory period and based solely on the record that is developed during the ninety days. All of the facts on which the Commission will rely in making this decision will be in the public record for comment by interested parties.