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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Core Communications, Inc., )
)
Complainant, )
)
v. ) File No. EB-01-MD-007
)
Verizon Maryland Inc., )
)
Defendant. )
)
MEMORANDUM OPINION AND ORDER
Adopted: April 18, 2003 Released: April 23,
2003
By the Commission:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we grant in
substantial part a formal complaint1 that Core
Communications, Inc. (``Core'') filed against Verizon
Maryland Inc. (``Verizon'') pursuant to section 208 of the
Communications Act of 1934, as amended (``Communications
Act'' or ``Act'').2 In particular, based on the record as a
whole, we grant Core's central claim that Verizon violated
the parties' interconnection agreement, and thus the
reasonableness standard of section 251(c)(2)(D) of the Act,3
by failing to interconnect with Core on just and reasonable
terms.4 We otherwise dismiss or deny Core's other claims.5
II. BACKGROUND
A. The Parties
2. Core is a facilities-based competitive local
exchange carrier (``LEC'') providing telecommunications
services in, among other locations, a region called LATA
236, which includes Washington, D.C. and parts of the States
of Maryland and Virginia (the ``Washington Metropolitan
LATA'').6 Verizon is an incumbent LEC providing
telecommunications services in, among other locations, the
Washington Metropolitan LATA.7
II.A. Statutory Background
3. Section 251(c)(2) of the Act requires incumbent
LECs to physically link their networks with those of all
competitive LECs who request such ``interconnection.'' 8
Interconnection makes possible communication between an
incumbent LEC's and a competitive LEC's customers. Because
incumbent LECs still serve the great majority of subscribers
in their home territories,9 a competitive LEC cannot
realistically provide facilities-based services until the
incumbent LEC interconnects with it. Prompt
interconnection, therefore, is essential to attaining the
pro-competitive goals of the 1996 Act.10 Accordingly,
section 251(c)(2) requires that incumbent LECs interconnect
with competitive LECs on ``terms and conditions that are
just [and] reasonable... in accordance with the terms and
conditions of the [parties' interconnection] agreement...
.''11
4. Under the statutory scheme of the 1996 Act, the
terms and conditions for interconnection typically appear in
interconnection agreements that incumbent LECs and
competitive LECs either negotiate or arbitrate pursuant to
section 252.12 The Bell Operating Companies, however, also
have the option to effectuate interconnection agreements by
``prepar[ing] and fil[ing] with a State commission a
statement of the terms and conditions that such company
generally offers within that State to comply with the
requirements of section 251 and the regulations thereunder,
and the standards applicable under [section 252].''13 Such
statements are referred to as ``Statements of Generally
Available Terms,'' or ``SGATs.'' A state commission may not
approve an SGAT unless the SGAT complies with, inter alia,
section 251 and the regulations thereunder.14
C. Core's Interconnection Request
5. During all periods relevant to this proceeding,
competitive LECs in Maryland seeking to interconnect with
Verizon could do so pursuant to Verizon's Statement of
Generally Available Terms and Conditions for Interconnection
for the State of Maryland (``Maryland SGAT'').15 The
Maryland SGAT provides, inter alia, that the parties may
negotiate a schedule for interconnection and that, in the
absence of such a negotiated schedule, interconnection would
require not less than 45 days. The Maryland SGAT does not
expressly establish a maximum period to complete
interconnection.16
6. In early February 2000, pursuant to sections
251(c) and 252(f) of the Act, Core requested interconnection
with Verizon in the Washington Metropolitan LATA under the
terms of the Maryland SGAT.17 In accordance with the terms
of the Maryland SGAT, Core and Verizon signed a schedule to
the SGAT entitled ``Request for Interconnection,'' pursuant
to which both parties ``agree[d] to be bound by the terms of
the Statement.''18 Thus, the Maryland SGAT served as the
parties' interconnection agreement.19 At that time, Core
had not yet begun to provide service in the Washington
Metropolitan LATA. Therefore, interconnecting with Verizon
was an absolute prerequisite to Core providing any
facilities-based service in that LATA.20
7. According to the record in this proceeding,
interconnection between Core and Verizon would require three
steps. First, Core had to provide Verizon with certain
information regarding its interconnection request, including
a forecast of the amount of Verizon network capacity that
Core expected to utilize. Next, Verizon had to build an
``entrance facility'' (i.e., a dedicated fiber optic
circuit) from Verizon's Damascus, Maryland end office to
Core's Point of Presence (``POP'') in Damascus, Maryland.
Finally, Verizon had to establish an interoffice facility to
carry traffic from its end users to Core's Damascus,
Maryland POP.21
8. By February 28, 2000, Core had fulfilled its
obligation to provide to Verizon a forecast of the amount of
Verizon network capacity that Core would require; Core also
had provided all the other information that Verizon needed
to begin building the entrance facility.22 Verizon
completed construction of the entrance facility four months
later, on June 28, 2000.23
9. As previously mentioned, the third and final step
to complete the Core/Verizon interconnection in the
Washington Metropolitan LATA was for Verizon to establish an
interoffice facility on Verizon's network to Core's POP.
Based on the forecast and other information submitted by
Core, Verizon determined that it would need two DS-3
transport circuits and two DS-1 transport circuits to carry
Core's traffic.24 Towards that end, on June 29, 2000 (the
day after completing Core's entrance facility), Verizon sent
Core an Access Service Request form (``ASR'') for the DS-3s.
Verizon stated on the ASR that the ``D[esired] D[ue]
D[ate]'' for providing the DS3s was July 14, 2000, a date
established by Verizon.25
10. Verizon did not provide the DS-3s on July 14,
2000, however.26 On July 25, 2000, Core telephoned Verizon
and asked when interconnection would be complete.27 Verizon
stated that it could not complete interconnection due to an
interoffice facility issue on Verizon's network, but Verizon
provided no specific description of the problem and did not
state when it expected to complete interconnection.28
Immediately thereafter, Core's counsel sent Verizon's
counsel a letter asking when interconnection would be
complete. Verizon did not respond to Core's letter.29
11. Between August 6, 2000 and August 25, 2000,
Verizon experienced a union work stoppage (i.e., a strike).
Verizon informed Core and other competitive LECs of the work
stoppage and that Verizon would not process orders during
the strike.30
12. On August 21, 2000, Core's counsel sent another
letter to Verizon's counsel asking when interconnection
would be complete.31 Verizon did not respond to this
letter, either.32 On about September 11, 2000, Core
telephoned Verizon, again asking when interconnection would
be complete. Verizon stated that interconnection probably
would not be completed until about November 15, 2000.33
13. Verizon completed interconnection with Core on
November 15, 2000, more than four months after Verizon
finished the entrance facility (on June 28, 2000), and four
months after the July 14, 2000 ``desired due date'' stated
by Verizon on the ASR.34 Consequently, even though Core had
provided all information necessary for Verizon to begin
building the entrance facility by late February 2000,35 Core
could not provide any facilities-based service in the
Washington Metropolitan LATA until about nine months later,
when Verizon finally completed the interconnection on
November 15, 2000.36
D. Verizon's Capacity Exhaust on Key Equipment in
the Washington Metropolitan
LATA37
14. It was during discovery in this proceeding that
Verizon revealed why it had failed to complete its
interconnection with Core until more than four months after
building the necessary entrance facility: two electronic
digital cross-connect machines -- a K36 3x1 (the ``K36'')
and a K43 3x3 (the ``K43'')38 -- located in Verizon's
Southwest Washington, D.C. transport hub (``Washington
Hub'') ran out of DS3 capacity during the pendency of Core's
interconnection request.39 Verizon had configured its
network so that all competitive LEC-bound traffic
originating in the Washington Metropolitan LATA had to
travel through a tandem switch located in its Washington
Hub.40 From that switch, certain competitive LEC traffic
had to travel through both the K36 and the K43, and,
ultimately, onto trunks to individual competitive LECs'
POPs.41
15. The consequence of this network configuration was
that, if and when either the K36 or the K43 ran out of
capacity, Verizon's ability to transport additional traffic
of competitive LECs in the Washington Metropolitan LATA
would be significantly hampered.42 As described below, that
is precisely what befell Core here: while Verizon was
building Core's entrance facility, the K36 and K43 ran out
of capacity, rendering Verizon unable to complete Core's
interconnection request and transport any Core traffic in
the Washington Metropolitan LATA until Verizon solved the
capacity problem.43
16. The K36 and K43 capacity exhaust was the result of
two Verizon actions. With respect to the K36, on January
31, 2000, Verizon placed an order with a third-party vendor
for equipment to increase the capacity of the K36.44
Although Verizon forecast that the machine would exhaust in
May, 2000,45 Verizon set an August 30, 2000 date for the
equipment to be installed.46 The K36 was exhausted by early
July,47 well before the equipment was installed.48
17. With respect to the K43, by no later than December
1, 1999, Verizon had forecast that the K43 would exhaust in
February, 2000.49 On December 22, 1999, Verizon ordered
equipment to increase the capacity of the K43 from its
vendor, requesting that some of the equipment be installed
by February 15, 2000, and that the remaining equipment be
installed by April 30, 2000.50 The vendor did not even
begin installing the K43 in February.51 Major portions of
the machine were at capacity exhaust by about April 1,
2000,52 and the machine suffered complete exhaust no later
than late June, 2000.53 On May 8, 2000 the K43 vendor
informed Verizon that installation would not be complete
until late October 2000.54 The vendor did not complete
installation of the equipment ordered for February, 2000
until August, 2000, and did not complete the rest of the
order by installing the remainder of the equipment ordered
(to be installed in April) until October 20, 2000.55
18. The K36 and K43 capacity exhaust conflicted with
Verizon's internal engineering standards: Verizon states
that its engineering objective was ``to add capacity to
digital cross-connect machines by the time the machine
reaches 90% utilization.''56 In addition, the capacity
exhaust had serious consequences for competitive LECs in the
Washington Metropolitan LATA, including Core. In
particular, because the capacity of the K36 and K43 cross-
connect machines had exhausted, Verizon could complete
neither Core's interconnection request nor numerous other
competitive LEC requests for transport capacity in the
Washington Metropolitan LATA.57 By June 23, 2000, Verizon
had 54 carrier capacity requests in ``hold'' status because
of the cross-connect exhaust.58 Verizon did not complete
any of those 54 ``held'' orders until several months later,
after new equipment was installed.59 Accordingly, Verizon
did not complete Core's interconnection until November 15,
2000,60 after the new equipment was installed on about
October 20, 2000.61 Thus, the record establishes that the
K36 and K43 were at capacity exhaust for not less than four
months, from June 23, 2000 (when 54 carrier requests were on
``hold'') until October 20, 2000 (when the new equipment was
installed). Similarly, the record reveals that the capacity
exhaust caused Core's interconnection to be delayed by four
months (from about July 14, 2000 -- the ``[D]esired [D]ue
[D]ate'' in the ASR -- to November 15, 2000).
19. As stated above, between the time that Core
provided all information necessary to enable Verizon to
begin building the entrance facility in late February 2000
and the time that Verizon finally honored Core's request
nine months later, on November 15, 2000, Core could not
provide any facilities-based service whatsoever in the
Washington Metropolitan LATA.62 Meanwhile, throughout that
period, Verizon's own traffic in the Washington Metropolitan
LATA continued to flow freely, because Verizon did not route
its own traffic through the congested Washington Hub, and
because the portion of Verizon's network that did transport
Verizon's traffic had capacity sufficient to allow Verizon
to increase its end-user customer base.63
III. DISCUSSION
20. Core's central allegation is essentially that
Verizon violated the Maryland SGAT, and thus the
reasonableness standard of section 251(c)(2)(D) of the Act,
by failing to interconnect with Core promptly and by failing
to notify Core of the likelihood and extent that
interconnection would be delayed.64 In response, Verizon
asserts that (i) the Commission lacks jurisdiction over the
Complaint;65 (ii) the Complaint fails to state a claim;66
(iii) comity with state commissions warrants dismissal of
the Complaint;67 and (iv) it interconnected with Core in a
timely and otherwise just and reasonable manner.68
21. As discussed below, we reject all of the reasons
Verizon asserts that we should dismiss Core's Complaint
without reaching its merits. Moreover, we find that Verizon
violated section 251(c)(2)(D) of the Act and section
51.305(a)(5) of our rules by failing to provide Core with
interconnection ``on rates, terms, and conditions that are
just [and] reasonable, ... in accordance with the terms and
conditions of [its interconnection] agreement''69 with Core.
Verizon allowed exhaust in the portion of its network
through which Core's traffic had to travel, thereby delaying
interconnection by four months. Verizon further aggravated
the delay by repeatedly failing to provide information to
Core as to the existence and probable duration of the delay.
Finally, the record reveals that Verizon made little, if
any, effort to solve the exhaust problem. Viewing all the
facts as a whole, we find that Verizon did not provide
interconnection to Core on just and reasonable terms.
A. The Commission Has Jurisdiction Under Section 208.
22. Verizon asserts that the Commission lacks
jurisdiction under section 208 of the Act to adjudicate
Core's claims alleging a violation of section 251(c)(2) of
the Act.70 The Commission recently addressed and rejected
all of the same jurisdictional arguments that Verizon raises
here.71 Therefore, for the reasons stated in CoreComm v.
SBC,72 we deny Verizon's jurisdictional defense, and hold
that we have jurisdiction under section 208 to adjudicate
Core's claims alleging a violation of section 251(c)(2).
B. Core's Complaint States a Claim Under Section 208
of the Act.
23. Verizon asserts two reasons why Core's Complaint
fails to state a claim under section 208 of the Act. First,
Verizon argues that Core's Complaint really alleges only a
violation of the Maryland SGAT, not of the Communications
Act.73 In addition, Verizon argues that the Maryland SGAT
establishes only a minimum interconnection interval (i.e. 45
days) and not a maximum, and that therefore, even under the
Maryland SGAT, no claim lies for taking ``too long'' to
complete interconnection.74 As this latter issue is more an
argument about the merits, we discuss it below in evaluating
the substance of Core's Complaint. We begin, however, by
rejecting Verizon's assertion that a violation of the
Maryland SGAT would not violate the Communications Act.
24. As noted above, rather than negotiating its own
individual agreement with Verizon, Core chose to accept the
terms of Verizon's Maryland SGAT. In accordance with the
terms of the Maryland SGAT, Core and Verizon signed a
schedule to the SGAT entitled ``Request for
Interconnection,'' pursuant to which both parties ``agree[d]
to be bound by the terms of the Statement.'' Thus, the
Maryland SGAT served as the parties' interconnection
agreement.75 To the extent that Verizon violated the terms
of the Maryland SGAT, therefore, it violated the terms of an
interconnection agreement entered into pursuant to sections
251 and 252.
25. Verizon essentially argues that nothing in the Act
requires it to comply with the interconnection agreements
that it enters into pursuant to sections 251 and 252.
Verizon is incorrect. Section 251(c)(2) expressly requires
Verizon to provide interconnection ``on rates, terms, and
conditions that are just [and] reasonable ..., in accordance
with the terms and conditions of the agreement and the
requirements of this section and section 252.'' 76
Similarly, section 51.305(a)(5) of the Commission's rules
requires Verizon to provide interconnection ``in accordance
with the terms and conditions of any agreement.''77 Thus,
both the Act and the Commission's implementing rules require
Verizon not only to enter into interconnection agreements,
but also to comply with their terms. We find below that
Verizon failed to comply with its interconnection agreement
with Core (i.e., the Maryland SGAT) by failing to provide
interconnection on just and reasonable terms. This
violation of the Maryland SGAT constitutes a violation of
both 47 U.S.C. § 251(c)(2)(D) and 47 C.F.R. § 51.305(a)(5).
Thus, Core's Complaint states a claim pursuant to section
208 of the Act.
26. Verizon argues that Core's Complaint cannot
possibly state a claim under sections 208 and 251(c)(2) of
the Act, because ``it is inconceivable that Congress would
have elaborated a significant role for state commissions in
the implementation of the 1996 Act while authorizing private
parties to eliminate that role by filing a complaint with
the Commission.''78 Verizon's argument is unpersuasive.
Allowing formal complaints like Core's to proceed will
hardly ``eliminate'' state commissions' roles in
implementing the 1996 Act. State commissions will continue
to exercise primary authority to arbitrate and approve
interconnection agreements, and will continue to exercise
concurrent authority to adjudicate interconnection and
unbundling disputes arising from interconnection agreements.
Thus, the state commissions' roles in arbitrating and
enforcing the requirements of interconnection agreements
will remain central, as Congress intended.
27. Verizon further argues that allowing Core's
Complaint to proceed would ``make[] nonsense of the entire
remedial scheme under section 252 and would deprive
interconnection agreements of any binding effect - indeed it
would deprive interconnection agreements of virtually all
practical significance.''79 Verizon's argument is
incorrect. As Verizon acknowledges,80 Core's claim does not
seek to hold the Maryland SGAT unlawful or to rewrite its
terms. Instead, Core's Complaint essentially seeks to
enforce the SGAT's terms (and, by definition, the Act's
terms). Thus, far from vitiating the significance of
interconnection agreements in the statutory scheme, allowing
Core's Complaint to proceed actually emphasizes and
reinforces the crucial status of interconnection agreements
in implementing the statutory requirements, as well as
incumbent LECs' statutory obligation to comply with their
agreements. 81
28. Finally, although Verizon does not cite it, we
note that the United States Court of Appeals for the Second
Circuit recently issued an opinion considering whether,
under the particular circumstances at issue, an alleged
breach of an interconnection agreement constituted an
alleged violation of section 251 of the Act. In Trinko v.
Bell Atlantic Corp.,82 a divided panel concluded, over a
vigorous dissent, ``that in this case it does not.''83
Trinko does not undermine our conclusion here, however.
Trinko implies that an incumbent LEC has no obligation under
the Communications Act to comply with an interconnection
agreement; thus, an incumbent LEC's obligations would flow
solely from contract law enforceable only in a court. In
the case of interconnection, this conclusion conflicts with
express statutory language obligating incumbent LECs to
provide interconnection ``in accordance with the terms and
conditions of the agreement.'' 47 U.S.C. § 251(c)(2)(D).84
In addition, the Second Circuit's conclusion is not
consistent with the great weight of court and Commission
authorities holding that state commissions have authority to
enforce interconnection agreements.85 Trinko does not
discuss or distinguish those authorities. Indeed, as the
dissenting opinion observes, the parties had not raised the
issue before either the district court or the Second
Circuit, and thus the Trinko Court did not have the benefit
of any briefing or factual record. Finally, the Commission
was not a party in Trinko, so the Trinko holding is not
binding.86
C. The Comity Doctrine Does Not Warrant Dismissal of
the Complaint.
29. Verizon argues that, because the Commission and
many courts have held that state commissions have authority
to interpret and enforce interconnection agreements, we
should decline to adjudicate Core's Complaint out of
deference to the authority of the Maryland Public Service
Commission to do so.87 Verizon's argument lacks merit.
First, the Maryland Commission does not have (and has never
had) an open proceeding regarding this matter to which we
could defer. Moreover, Verizon's argument unduly diminishes
this Commission's role in enforcing the federal regime, as
reflected in interconnection agreements. As discussed
above,88 Core has stated a claim under the Communications
Act, and the Commission has jurisdiction to adjudicate that
claim. Verizon has not raised any specific circumstances
present here that make it appropriate to decline to exercise
our jurisdiction to adjudicate Core's Complaint. Instead,
Verizon essentially suggests that we abstain from exercising
our jurisdiction under section 208 to enforce the Act where
interconnection agreements are involved.89 This argument
suffers from several flaws, among them are that it appears
inconsistent with Congress's decision to deny the Commission
authority to forbear from section 208; would vitiate the
Commission as a forum for enforcing federal interconnection
and unbundling requirements; and, in these particular
circumstances, would needlessly delay resolution of the
dispute.90
30. In response, Verizon relies upon two orders in
which the Commission deferred to state commission
processes.91 Verizon's reliance is misplaced. In both of
those orders, the Commission deferred to state commission
processes because those processes concerned the precise
matter at issue and were complete or nearly complete.92
Here, by stark contrast, there is no state commission
proceeding at all - ongoing or completed - regarding the
matters at issue here.93 Thus, in sum, Verizon has failed
to demonstrate that the comity doctrine warrants dismissal
of Core's Complaint.
D. Verizon Violated the Reasonableness Standard of
Section 251(c)(2)(D) of the Act.
1. The Maryland SGAT required Verizon to
interconnect on rates, terms
and conditions that are just and reasonable.
31. Verizon argues that, because the Maryland SGAT
does not expressly establish a maximum time for providing
interconnection, no claim can lie for taking too long.94 We
do not accept Verizon's position that it may take as long as
it wants to honor an interconnection request. We find that
Verizon was obligated - pursuant to section 251(c)(2)(D) and
the terms of the Maryland SGAT - to provide Core with
interconnection on rates, terms, and conditions that are
just and reasonable, including within a reasonable period of
time.
32. An SGAT, as defined in the Act, is a Bell
Operating Company's statement ``of the terms and conditions
that such company generally offers within [a] state to
comply with the requirements of section 251 and the
regulations thereunder ....''95 Moreover, ``[a] State
commission may not approve such [SGAT] unless such [SGAT]
complies with ... section 251 and the regulations
thereunder.''96 Thus, the terms that Verizon offered
through the Maryland SGAT were, by definition, intended to
comply with the requirement of section 251(c)(2) to provide
interconnection ``on rates, terms, and conditions that are
just [and] reasonable.''97 The Maryland Commission approved
those terms, and Core accepted them. Accordingly, although
the Maryland SGAT does not provide an express deadline for
fulfilling interconnection requests, the Maryland SGAT does
require Verizon to provide interconnection on just and
reasonable terms, including within a just and reasonable
period of time.98 Here, the totality of the circumstances,
which include not only a lengthy delay in providing
interconnection, but also Verizon's refusal to provide any
timely information about the reason for the delay or its
likely duration, demonstrate that Verizon failed to provide
interconnection on just and reasonable terms.
2. Verizon failed to interconnect on just and
reasonable terms.
33. The facts and circumstances of this case, when
viewed in their totality, establish that Verizon did not
provide interconnection on just and reasonable terms. The
length of delay in providing interconnection, Verizon's
failure to provide timely information regarding the expected
duration of the delay, and its failure to explore solutions
for the delay, taken together constitute a violation of
section 251(c)(2)(D). After carefully reviewing the record
and considering all of the facts and circumstances as a
whole, we conclude that Core has shown, by a preponderance
of the evidence,99 that Verizon did not interconnect with
Core on terms and conditions that are just and reasonable
and in accordance with the Maryland SGAT. Specifically, we
find that Verizon's substantial delay in interconnecting
with Core, together with Verizon's failure to timely inform
Core of the delay and its likely duration, and its failure
to make any significant effort to solve the cause of the
delay, violated Verizon's statutory obligations.
a. Verizon failed to timely inform Core of
the likelihood and extent
that interconnection would be delayed.
34. When an incumbent LEC promptly informs a
competitive LEC regarding an anticipated delay in
interconnection, the requesting competitive LEC can then
make rational and educated business decisions about how best
to serve its end user customers. For example, when a
requesting carrier learns in advance that interconnection
will be significantly delayed, it may decide to find a
different interconnection method or point, to enter the
market by different means (such as resale), or to divert its
resources to a different market altogether. This promotes
efficient competition and fosters consumer choice.
35. In analogous circumstances, the Commission has
found that incumbent LECs have a duty to provide to
competitive LECs information indicating the location and
technical characteristics of the incumbent LEC's network.100
In so concluding, the Commission reasoned that, ``[w]ithout
access to such information, competing carriers would be
unable to make rational network deployment decisions and
could be forced to make inefficient use of their own and
incumbent LEC facilities, with anticompetitive effects.''101
That same reasoning applies to information regarding
interconnection delays. Where the incumbent LEC knows that
a delay in interconnecting will be significant, conveying
that information promptly to the requesting carrier will
enable the requesting carrier to ``make rational network
deployment decisions,'' so that it will not ``be forced to
make inefficient use of [its] own and incumbent LEC
facilities, with anticompetitive effects.''102 In sum,
information regarding the projected time of interconnection
is very valuable to competitive LECs. Therefore, the manner
in which an incumbent LEC conveys such information to a
requesting competitive LEC is relevant in determining
whether an incumbent LEC has provided interconnection on
``terms and conditions that are just [and] reasonable''
under section 251(c)(2)(D).
36. We find that Verizon did not timely inform Core of
the likelihood and extent that interconnection would be
delayed. By June 23, 2000, Verizon knew, or should have
known, that completing Core's interconnection request would
be significantly delayed. On that date, Verizon had 54
requests for capacity on ``hold'' because of lack of
capacity on the K36 and K43 cross-connect machines.
Further, Verizon knew, or should have known, that these 54
requests, as well as Core's, would be on ``hold'' for a
significant amount of time, because its vendor had informed
it on May 8, 2000 that the equipment needed to increase the
capacity of the K43 would not be installed until at least
October 19, 2000. Therefore, because Verizon's delay in
interconnecting with Core was both severe and readily
apparent, we find that, by at least June 23, 2000, Verizon
should have informed Core that interconnection would be
delayed, and provided a reasonable estimate of the extent of
the delay.
37. Yet Verizon failed to do so. Although Verizon
knew or should have known by at least June 23, 2000 that
interconnection with Core would be severely delayed, Verizon
sent Core an ASR on June 29, 2000 for DS-3 transport service
with a ``D[esired] D[ue] D[ate],'' established by Verizon,
of July 14, 2000. This ASR was tantamount to a
representation by Verizon that DS3 service likely would be
provided on or about July 14.
38. Verizon argues that the ASR's July 14 ``D[esired]
D[ue] D[ate]'' was not a ``firm order commitment.''103
Verizon's argument does not succeed. Although we agree that
the ASR did not provide an absolute date for provisioning,
the ASR did, in fact, indicate that Verizon expected to
provision the DS-3s on or about July 14, and not as much as
four months later. Verizon generated the ASR and the
desired due date,104 and Verizon knew all information
regarding its network facilities.
39. Moreover, the July 14 date in the ASR came and
went, again without Verizon notifying Core of the
interconnection problems. Finally, on July 25, 2000, in a
phone call initiated by Core, Verizon stated merely that it
was experiencing an ``interoffice facilities issue'' in
interconnecting with Core.105 Verizon did not give a sense
of the seriousness of the problem, and refused to tell Core
when it expected interconnection to be completed. Core's
counsel wrote to Verizon's counsel two days later, and again
on August 21, 2000, demanding to know when interconnection
would be complete. Verizon did not respond to Core's
letters. Indeed, it was not until September 11, 2000,
almost three months after Verizon knew or should have known
of the severity of the interconnection problem and its
likely duration, that Verizon informed Core, in response to
a call initiated by Core, that interconnection would not be
completed until November 15, 2000. Thus, the record amply
demonstrates that Verizon's notice to Core was late and
insufficient.
40. Verizon argues that it generally does not confirm
the availability of interoffice facilities for a particular
requesting carrier until it has completed the carrier's
entrance facility and issued an ASR.106 Verizon notes that
it completed Core's entrance facility on June 28, and issued
the ASR on June 29. Verizon argues, therefore, that it
could not have given Core notice of the delay until early
July.107 The record reveals, however, that Verizon did not
inform Core of the delay or its probable extent in early
July. Verizon did not contact Core soon after issuing the
ASR, and refused to inform Core during the July 25 telephone
conversation initiated by Core of the likely duration of the
interconnection delay. Moreover, Verizon ignored Core's
July 27 and August 21 letters asking when interconnection
would be completed, and refused to provide Core with that
information until September 11. In any event, the fact that
Verizon typically does not confirm the availability of
interoffice facilities for a particular requesting carrier
until it has completed the carrier's entrance facility and
issued an ASR is not sufficient in the specific
circumstances here. By at least June 23, 2000, Verizon had
actual knowledge of all relevant facts: that Core had
requested DS3 service, that 54 capacity requests remained on
hold due to the capacity exhaust, and that the equipment to
alleviate the capacity exhaust would not be installed until
late October. Therefore, by at least June 23, 2000, Verizon
knew, or should have known, that Core would experience a
substantial interconnection delay, and should have provided
notice to Core of that circumstance.
b. Verizon failed to interconnect with Core
in a reasonably
expeditious manner.
41. The length of time taken by an incumbent LEC to
interconnect with a competitive LEC is a relevant factor in
determining whether the incumbent LEC complied with its duty
to provide interconnection on terms and conditions ``that
are just [and] reasonable.''108 As discussed above, an
incumbent LEC's failure to interconnect expeditiously may
frustrate accomplishment of Congress's goal of introducing
facilities-based competition to the local telecommunications
market. Where interconnection is delayed, a competitive
LEC's resources may be wasted, and its reputation may suffer
permanent damage because it does not provide the promised
service in a timely manner. Core effectively explains the
importance of timely interconnection as follows: ``Core was
trying to establish the initial interconnection with Verizon
in order to get into business in [the Washington
Metropolitan LATA]. This is critical to the success of a
competitive LEC and time is usually of the essence ... .
Until the network is up and running, a competitive LEC can't
exchange traffic with Verizon, can't sell to customers and
ultimately can't get any revenues.''109
42. Core contends that the combined effect of three
acts or omissions by Verizon unreasonably delayed Core's
interconnection. First, Core argues that Verizon failed to
take adequate steps to ensure that the K43 and K36 would not
run out of DS-3 capacity well before additional capacity
could be added.110 Second, Core argues that Verizon should
have pressed its vendors to expedite installation of the
cross-connect equipment.111 Third, Core asserts that
Verizon should have asked its vendors whether smaller,
alternative equipment could be installed to solve the K43
and K36 exhaust problem.112 For the following reasons, we
agree.113
43. First, with respect to Verizon's efforts to ensure
that the K36 and K43 did not exhaust, the record suggests
that two Verizon errors caused that exhaust. Verizon's
first error concerned the K36. In January 2000, Verizon
forecast that the K36 would exhaust in May, 2000. On
January 31, 2000, Verizon placed an order for equipment to
increase the capacity of the K36, but, despite predicting
that the machine would exhaust in May, set an August 30 date
for the equipment to be installed. Not surprisingly, the
K36 suffered capacity exhaust well before Verizon's August
30 installation date.
44. Verizon also erred with respect to the K43. By no
later than December 1, 1999, Verizon had forecast that the
K43 would exhaust in February, 2000. On December 22, 1999
Verizon ordered equipment to increase the capacity of the
K43 equipment, requesting that a portion of the equipment
installation be ``advance completed'' by February 15, 2000,
and that the remaining equipment be installed by April 30,
2000.
45. Given that Verizon expected the K43 to exhaust in
February, Verizon's February ``advance complete'' date left
Verizon and its vendor little room for error or mishap,
particularly since Verizon placed the order shortly before a
holiday period (on December 22) and, as Verizon admits, even
after the equipment was installed, it would have to be
``turned up'' and tested.114 Moreover, subsequent events
establish that Verizon had indeed given its K43 vendor too
little time to complete the job. The vendor did not begin
work on the K43 in February, and the machine suffered
capacity exhaust by June, 2000. The vendor did not complete
the ``advance complete'' portion of the order (which Verizon
requested be completed by February 15) until August 2000,115
and did not complete the remainder of the order (to be
completed by April 30) until about October 19, 2000. In
sum, with respect to the ``advance complete'' order, Verizon
gave its K43 vendor two months to complete work that
required eight months, and, with respect to the remaining
portion of the order, gave its vendor four months to
complete work that ultimately required ten months.116
46. The record does not reveal why Verizon ordered the
K36 equipment to be installed in August when it forecast
that the machine would exhaust in May. Similarly, with
respect to the K43, the record does not reveal whether
Verizon ordered the equipment too late because Verizon
misjudged the time it would take its vendor to complete
installation, or because Verizon did not accurately forecast
the machine's capacity utilization growth, and therefore did
not realize until too late that the K43 was near exhaust.
47. In any event, as Verizon acknowledges, Verizon
must make reasonable efforts to plan for equipment vendor
installation intervals, and to forecast future capacity
utilization growth in order to prevent network capacity
exhaust.117 Moreover, by allowing the K43 and K36 to
exhaust, Verizon failed to meet its own internal engineering
objectives. Verizon further acknowledges that allowing the
capacity of the K36 and K43 to exhaust significantly
hindered Verizon's ability to handle additional traffic of
competitive LECs in the Washington Metropolitan LATA, and
delayed interconnection with Core for four months.
Moreover, Verizon is a large, sophisticated, and experienced
telecommunications provider. Core's expert expresses
astonishment at the fact that the K43 and K36 were exhausted
for four months, stating that the K43 and K36 are ``gigantic
units with lots of capacity,'' and noting that Verizon
routinely monitors equipment usage, and forecasts future
usage. ``[I]t is nearly inconceivable to me that they could
have exhausted these facilities without having known it was
going to happen and without planning to already have the
next unit installed.''118 Given all these circumstances,
the fact that Verizon's K36 and K43 were at virtually
complete exhaust for at least four months, standing alone,
establishes a prima facie case that Verizon failed to make
reasonable efforts to ensure that the equipment did not
exhaust.
48. Because Core has established a prima facie case
that Verizon's allowing the capacity of the K43 and K36 to
exhaust was unreasonable, ``it is incumbent upon [Verizon]
to respond fully to [Core's] showing, with full legal and
evidentiary support.''119 Moreover, the cause of the K36
and K43 capacity exhaust is within Verizon's exclusive
knowledge. Therefore, Verizon has the burden to come
forward with all facts establishing its defense with respect
to the capacity exhaust.120 Yet Verizon presents little
evidence to rebut the prima facie showing of
unreasonableness. Verizon's sole explanation for its
mistakes is as follows: ``The problems Verizon encountered
in Core's interconnection came in the wake of exploding
demand for high capacity service. During 1999 and 2000,
demand for services requiring high capacity interoffice
facilities increased tremendously with an unprecedented gain
of 80% in installed/working high capacity services.''121
49. Given the importance of timely interconnection, we
find Verizon's explanation insufficient. Verizon's errors
caused an exhaust problem that lasted - not for days or
weeks - but for months, four months. Verizon does not argue
in its pleadings or briefs that it experienced other
comparably lengthy exhaust problems during this period of
increased demand. Furthermore, although Verizon states that
there was an ``explosion'' in demand, Verizon does not state
either that it was unaware of the ``explosion'' or,
alternatively, that it did not learn of the explosion in
time to react. Verizon states that its engineers retrieved
and reviewed data as to capacity utilization of the K43 and
K36 ``at least once every two weeks,''122 but does not
explain why, during those bi-weekly reviews, its engineers
either did not detect the ``explosion,'' or, having detected
it, could not make appropriate adjustments.123 Similarly,
the record establishes that Verizon required Core and other
interconnecting competitive LECs to provide forecasts of
their capacity needs,124 yet Verizon does not assert that
those forecasts did not sufficiently foretell the increase
in demand.
50. Nor does Verizon's evidence adequately explain its
failure to plan accurately for vendor installation
intervals. Even if demand for facilities was ``exploding,''
and, as Verizon also asserts, its vendors were
``experiencing longer than usual ordering and installation
intervals,''125 Verizon does not state that it was unaware
of this problem, and does not assert that it made any
attempt to adjust its equipment ordering processes to
reflect the vendor delays. Moreover, the ``explosion'' in
demand had begun by at least January 1999;126 therefore, it
appears that Verizon had some advance warning of, and time
to adjust for, its vendors' delays. Verizon regularly
communicated with its vendors, and routinely ordered
equipment for its facilities located throughout the
Northeast.127 Yet, Verizon's ordering interval here proved
to be far too short: as discussed, it gave its K43 vendor
only two months to complete installation of equipment that
ultimately required eight months. Finally, we note that
Verizon does not argue that it has made comparable errors in
forecasting capacity demand or vendor installation intervals
regarding the flow of its own traffic.
51. In addition, we find that Verizon compounded its
mistakes by failing to act assertively to resolve the
capacity problem. For example, Verizon failed to press its
vendors to expedite installation of the cross-connect
equipment, and waited for the cross-connect equipment to be
installed rather than exploring alternative means of
interconnecting with Core, such as by obtaining different
equipment. As discussed above, the capacity exhaust problem
had significant ramifications to numerous competitive LECs,
including Core. The Washington Hub bottleneck substantially
stunted the growth of facilities-based competition in the
Washington Metropolitan LATA. In other words, the state of
competition in the Washington Metropolitan LATA had to
remain constrained until Verizon solved the capacity
problem.
52. Verizon argues that the affirmative steps
suggested by Core (i.e., pressing the vendors, exploring
interconnection alternatives) would likely have proven
fruitless.128 The record does not permit us to agree with
Verizon on that score. In particular, the record contains
no evidence that Verizon contacted its vendors to obtain
alternative equipment, but was told that no such equipment
was available.129 Nor does the record contain evidence that
Verizon complained to its vendors or otherwise urged them to
accelerate installation of the equipment Verizon had
ordered. For example, there is no evidence that Verizon
protested when, having forecast that the K43 would exhaust
by February, and having requested that a portion of the K43
equipment be installed by February, the K43 ran out of
capacity in June, and the vendor had not even begun
installing the equipment.130 Indeed, as explained above,
Verizon did not notify Core of the problem in a timely
manner. In sum, especially given the magnitude of the
capacity problem, Verizon should have made substantial
efforts to expedite its resolution. Verizon's apparent
passivity was an unreasonable response to Core's dilemma.
* * *
53. In sum, based on what the record reveals about the
specific circumstances at issue here, we conclude that
Verizon's acts and omissions, viewed as a whole, violated
the Maryland SGAT, and thus the reasonableness standard of
section 251(c)(2)(D) of the Act. In particular, Core has
shown, by a preponderance of the evidence that Verizon acted
unreasonably by taking too long to complete interconnection
with Core and by failing to promptly notify Core of the
likelihood and extent of the interconnection delay. Given
the substantial magnitude and significant anticompetitive
repercussions of Verizon's errors, taken together, we cannot
excuse them as reasonable mistakes.131
E. We Dismiss or Deny Core's Other Claims.
54. Core alleges that Verizon violated sections
201(b), 202(a), and 251(c)(2) of the Act. As discussed
above, we find that Verizon violated that portion of section
251(c)(2) which requires that Verizon provide ``just'' and
``reasonable'' interconnection. With respect to Core's
claim that Verizon violated section 202(a) and that portion
of section 251(c)(2)(D) which prohibits discrimination by
incumbent LECs in favor of third parties, Core argues that
Verizon provided more favorable interconnection to two other
carriers situated similarly to Core than Verizon provided to
Core.132 In response, Verizon argues that section 202(a)
does not govern interconnection provided pursuant to section
251(c),133 and that, in any event, Core has failed to
provide record evidence of discriminatory treatment.134 We
agree with Verizon that the record falls far short of
showing any discriminatory treatment against Core.135
Accordingly, we deny Core's claim under section 202(a) and
that portion of section 251(c)(2)(D) which prohibits
discrimination in favor of third parties.136
55. With respect to Core's remaining claims under
section 201(b) and the remaining portions of section
251(c)(2), our ruling under the ``just'' and ``reasonable''
standard of section 251(c)(2)(D) will afford Core all of the
relief to which it would be entitled were we to rule in its
favor on these remaining claims. Accordingly, we need not
address these claims, and dismiss them without prejudice.137
IV. ORDERING CLAUSES
56. ACCORDINGLY, IT IS ORDERED, pursuant to sections
4(i), 4(j), 208, and 251 of the Communications Act of 1934,
as amended, 47 U.S.C. §§ 154(i), 154(j), 208, and 251, that
the portion of Core's Count 2138 that alleges violation of
the ``just'' and ``reasonable'' standard of section
251(c)(2)(D) of the Communications Act, as amended, 47
U.S.C. § 251(c)(2)(D), IS GRANTED to the extent indicated
herein.
57. IT IS FURTHER ORDERED, pursuant to sections 4(i),
4(j), 202, 208, and 251 of the Communications Act of 1934,
as amended, 47 U.S.C. §§ 154(i), 154(j), 202, 208, and 251,
that Core's Count 3,139 which alleges that Verizon violated
section 202(a) of the Communications Act of 1934, as
amended, 47 U.S.C. § 202(a), and those portions of Core's
Counts 2 and 4,140 which allege that Verizon violated that
portion of section 251(c)(2)(D) which prohibits
discrimination by the incumbent LEC in favor of third
parties, are DENIED.
58. IT IS FURTHER ORDERED, pursuant to sections 4(i),
4(j), 201, 208, and 251 of the Communications Act of 1934,
as amended, 47 U.S.C. §§ 154(i), 154(j), 201, 208, and 251,
that the remaining portions of Core's Complaint are
DISMISSED WITHOUT PREJUDICE.
FEDERAL COMMUNICATIONS
COMMISSION
Marlene H.
Dortch
Secretary Appendix
Timeline with respect to the K43 and K36 Cross-Connect
Machines
1999
December
22nd: Having forecast that the K43 will exhaust in February
2000, Verizon orders equipment to increase the capacity of
the K43, requesting that a portion of the work be completed
on February 15, 2000 and the remainder on April 30, 2000.
2000
January
31st: Having forecast that the K36 will exhaust in May
2000, Verizon orders equipment to increase the capacity of
the K36, requesting completion by August 30, 2000.
April
1st: The last spare K43 OC-12 port is used.
May
8th: The vendor for the K43 informs Verizon that
installation will not be complete until October 20, 2000.
June
29th: Verizon sends Core an ``Access Service Request'' form
(``ASR'') for DS-3 transport, stating that the ``D[esired]
D[ue] D[ate]'' is July 14, 2000.
July
1st: The last OC-12 port on the K36 suffers DS3 capacity
exhaust.
14th: The ``D[esired] D[ue] D[ate]'' on Verizon's ASR
arrives: Verizon does not provide the DS-S transport or
contact Core.
25th: Core telephones Verizon to ask when interconnection
will be completed; Verizon does not describe the cause of
the interconnection delay or state when it expects
interconnection to be completed.
27th: Core writes to Verizon, asking when interconnection
will be completed; Verizon does not respond to Core's
letter.
August
6th-25th: Verizon strike.
21st: Core writes to Verizon and asks when interconnection
will be completed; Verizon does not respond to Core's
letter.
September
11th: Core telephones Verizon and is informed that
interconnection will be completed on about November 15,
2000. October
20th: Installation of equipment for the K36 and K43 is
completed.
November 15
Core's interconnection is completed.
_________________________
1 Formal Complaint of Core Communications, Inc., File No.
EB-01-MD-007 (filed Mar. 21, 2001) (``Complaint'').
2 47 U.S.C. § 208.
3 47 U.S.C. § 251(c)(2)(D).
4 See Part III (D), infra.
5 See Part III (E), infra
6 Joint Statement, File No. EB-01-MD-007 (filed May 2,
2001) (``Joint Statement'') at 1, ¶ 1. LATAs are ``Local
Access and Transport Areas,'' which are geographic areas
established by the AT&T Consent Decree between which the
incumbent Bell Operating Company may not provide service
except pursuant to section 271 of the Act. See, e.g., 47
U.S.C. §§ 271, 153(3), 153(25); Newton's Telecomm
Dictionary (16th ed.) at 505-506.
7 Joint Statement at 1, ¶¶ 1-2.
8 47 U.S.C. § 251(c)(2). Section 251(c) provides, in
pertinent part, that ``each incumbent local exchange
carrier has the following duties: ... (2) The duty to
provide, for the facilities and equipment of any requesting
telecommunications carrier, interconnection with the local
exchange carrier's network ... .'' 47 U.S.C. § 251(c)(2).
See, e.g., 47 C.F.R. § 51.305 (rules pertaining to
interconnection).
9 See Local Telephone Competition: Status as of June 30,
2002, Industry Analysis and Technology Div'n, Wireline
Competition Bureau, Dec. 2002, http://
www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-
State_Link/IAD/lcom1202.pdf.
10 See, e.g., Preamble, Telecommunications Act of 1996,
Pub. L. No. 104-404, 110 Stat. 56 (1996) (``1996 Act'')
(stating that the 1996 Act was designed ``to promote
competition and reduce regulation in order to secure lower
prices and higher quality services for American
telecommunications consumers and encourage the rapid
deployment of new telecommunications technologies.'').
11 47 U.S.C. § 251(c)(2)(D). Section 251(c)(2)(D)
provides, in pertinent part, that each incumbent LEC shall
provide interconnection ``on rates, terms, and conditions
that are just [and] reasonable ... in accordance with the
terms and conditions of the [parties' interconnection]
agreement and the requirements of this section and section
252... .'' 47 U.S.C. § 251(c)(2)(D).
12 47 U.S.C. §§ 251-252.
13 47 U.S.C. § 252(f)(1).
14 47 U.S.C. § 252(f)(2). The existence of an approved
SGAT does not vitiate a Bell Operating Company's obligation
to engage in negotiations for different terms, if a
competitive LEC so requests. 47 U.S.C. § 252(f)(5).
15 Joint Statement at 1, ¶ 1.
16 Answer of Defendant Verizon Maryland, File No. EB-MD-01-
007 (filed Apr. 10, 2001) (``Answer''), Ex. 1 (Maryland
SGAT) at 7 § 4.4.4; Joint Statement at 2, ¶ 4. The
Maryland SGAT provides, in pertinent part, that Verizon and
the requesting competitive LEC ``shall agree upon an
addendum ... to reflect the schedule ... applicable to each
new LATA requested by [the requesting competitive LEC];
provided, however, that unless otherwise agreed to by
[Verizon and the requesting competitive LEC], the
Interconnection Activation Date in a new LATA shall not be
earlier than ... 45 days ... .'' Answer, Ex. 1 (Maryland
SGAT) at 7 § 4.4.4. According to the record, Core did not
seek to negotiate a different schedule for interconnection.
See, e.g., Answer at 4, ¶ 5; Joint Statement at 1, ¶ 3.
17 Joint Statement at 1, ¶ 3. Answer, Ex. 1 (Maryland SGAT
).
18 Answer, Ex. 1 (Maryland SGAT) at Schedule 3.1, ``Request
for Interconnection'' (providing that Core and Verizon
``agree to be bound by the terms of the Statement'').
19 Joint Statement at 1, ¶ 3.
20 Complaint at 1; Complainant's Motion to Include the
Affidavit of Douglas A. Dawson in the Record of this
Proceeding, File No. EB-01-MD-007 (filed Nov. 13, 2001) at
Attachment (Affidavit of Douglas A. Dawson dated Nov. 11,
2001) (``Dawson Aff.'') at 14, ¶ 30; Joint Statement at 2,
¶ 7.
21 Answer, Ex. C (Declaration of Donald E. Albert dated
Apr. 10, 2001) (``Apr. 10 Albert Dec'n'') at 2-3, ¶¶ 4-6;
Joint Statement at 2, ¶¶ 5-8.
22 Complaint at 3-4, ¶¶ 6-8; Answer at 5, ¶ 10; Joint
Statement at 2, ¶¶ 5-6.
23 Joint Statement at 3, ¶ 11.
24 Apr. 10 Albert Dec'n at 2, ¶ 4; Declaration of Donald E.
Albert, File No. EB-01-MD-007 (filed July 23, 2001) (``July
23 Albert Dec'n'') at 3, ¶ 5.
25 Complaint, Ex. 2 (ASR dated June 29, 2000); Joint
Statement at 3, ¶ 12. An ASR is a service order form
developed by the United States telecommunications industry
used, among other things, for ordering access to a local
exchange carrier's network. Verizon asserts that it sent
the ASR to Core (rather than Core sending the ASR to
Verizon) because Core's clients included internet service
providers, so that only Verizon would have originating
traffic. Apr. 10 Albert Dec'n at 3-4, ¶¶ 8-9; Answer, Ex.
2 (Access Service Ordering Guidelines) at 3-14. The record
does not reveal whether Core's only customers were internet
service providers.
26 Joint Statement at 3, ¶ 13.
27 Complaint, Ex. I (Affidavit of Bret L. Mingo) (``Mingo
Aff.'') at 2, ¶ 6; Joint Statement at 3, ¶ 14.
28 Mingo Aff. at 2, ¶ 6; Joint Statement at 3, ¶ 14.
29 Complaint Ex. 2 (letter dated July 27, 2000 from Michael
Hazzard, counsel to Core, to Steven Hartmann, counsel to
Verizon); Joint Statement at 3, ¶ 15.
30 Joint Statement at 3, ¶ 18; Answer, Exs. 9-13.
31 Joint Statement at 3, ¶ 17; Complaint, Ex. 4 (letter
dated August 21, 2000 from Michael Hazzard, counsel to
Core, to Steven Hartmann, counsel to Verizon).
32 Joint Statement at 3-4, ¶¶ 17-18.
33 Joint Statement at 4, ¶ 19; Complaint, Ex. 5 (letter
dated September 13, 2000 from Michael Hazzard, counsel to
Core, to Steven Hartmann, counsel to Verizon, describing a
September 11, 2000 conversation between Messrs. Hazzard and
Hartmann).
34 Joint Statement at 4, ¶ 22.
35 Verizon does not assert that any acts or omissions by
Core after February 28, 2000 delayed interconnection with
Core. See Apr. 10 Albert Dec'n at 5, ¶ 12; Joint Statement
at 2, ¶ 6 and 3, ¶ 14; Supplement to the Joint Statement,
File No. EB-01-MD-007 (filed May 7, 2001) at 3, ¶¶ 5, 7.
36 Complaint at 3; Joint Statement at 4, ¶ 22.
37 A timeline setting out relevant dates regarding the
capacity exhaust is attached as an appendix.
38 Digital cross-connect machines (often referred to as
``DACs'') connect telecommunications transport facilities
that operate at different capacities or have different
technical characteristics. They consist of ports - the
physical interface to which the transport facility is
connected - and a matrix, the internal device that makes
connections and multiplexes and de-multiplexes traffic from
one type of port to another (for example, from a DS-3 to an
OC-12). Defendants' Supplemental Answer to Interrogatory
Number 6 and Supplemental Response to Questions Posed by
the Commission During the July 26, 2001 Status Conference,
File No. EB-01-MD-007 (filed Aug. 10, 2001) (``Verizon's
Supplemental Responses'') at 7. See Newton's Telecomm
Dictionary (16th ed.) at 231 (defining cross-connect
equipment as ``distribution system equipment used to
terminate and administer communication circuits''). Core
explains: ``Think of these boxes as a huge collection of
pre-wired connections. When a new connection is needed for
a circuit ... , these boxes allow technicians to choose one
of the pre-wired connections to implement the circuit
quickly. Using a pre-wired connection is quicker than
having a technician run wires ... to create the
connections.'' Dawson Aff. at 7, ¶ 15. The K43 is an
Alcatel iMTN and the K36 is a Tellabs Titan 550. Dawson
Aff. at 7, ¶ 15.
39 Specifically, Verizon states, ``[T]here was no DS-3
channel (capacity) available through the K36 ... into and
through the K43... . That is, there was no available DS-3
capacity on the ports that already were providing
service... . In addition, ... there also were no unused
OC-12 ports on the K36 3x1 machine and no unused OC-12
ports on the K43 3x3 machine.'' Verizon's Supplemental
Responses at 7-8. See Defendant Verizon Maryland Inc.'s
Answers to Complainant Core Communications, Inc.'s
Interrogatories, File No. EB-01-MD-007 (filed June 25,
2001) (``Verizon's Answers to Interrogatories 1-7'') at 3-4
(Answer to Interrogatory no. 2); July 23 Albert Dec'n at 4,
¶¶ 6-7.
40 Defendant Verizon Maryland Inc.'s Answers to Complainant
Core Communications, Inc.'s Interrogatories, File No. EB-
01-MD-007 (filed Oct. 26, 2001) (``Verizon's Answers to
Interrogatories 8-13'') at 5-6 (Answer to Interrogatory no.
10(c)); July 23 Albert Dec'n at 2, ¶ 2.
41 July 23 Albert Dec'n at 2-3, ¶ 3. Specifically,
Verizon's network transported certain competitive LEC-bound
traffic to the K36, which multiplexed the signals into DS-
3s and converted them from electrical to optical, and then
carried the traffic, via OC-12 connections, to the K43.
The K43 also multiplexed the traffic, and then carried it
to an OC-48 multiplexer, from which the traffic ultimately
was transported to the competitive LEC's POP. July 23
Albert Dec'n at 2-3, ¶ 3. Verizon describes the role of
the K43 and K36 as follows: ``After being switched by the
tandem, the Core bound call goes to trunks that are
connected to Verizon's K36 3x1 digital cross-connect
machine. The K36 3x1 cross-connect machine multiplexes the
trunks into DS-3's and converts the signals from electrical
to optical. This cross-connect machine is then connected
to Verizon's K43 3x3 cross-connect machine using OC-12
connections. The K43 3x3 is then connected to the OC-48
IOF fiber optic multiplexer using OC-12 connections.''
July 23 Albert Dec'n at 4, ¶¶ 6-7.
42 Supplemental Joint Statement at 4, ¶ 7; Verizon's
Supplemental Responses, Ex. 9 (Status memo from Verizon's
vendor) at 5; Verizon's Answers to Interrogatory nos. 8-13
at 3 (Answer to Interrogatory no. 8(f)).
43July 23 Albert Dec'n at 3-4, ¶¶ 6-7; Verizon's Answers to
Interrogatories 1-7, at 3-4 (Answer to Interrogatory no.
1).
44 Verizon's Supplemental Responses, Ex. 6 (Telephone
Equipment Order).
45 Verizon's Supplemental Responses at 4, Verizon's
Supplemental Responses, Ex. 2 (K36 Capacity Creation
Request).
46 Verizon's Supplemental Responses at 4; Verizon's
Supplemental Responses, Exs. 2 (K36 Capacity Creation
Request), and 6 (Telephone Equipment Order).
47 Verizon's Supplemental Responses at 6, 7-8.
48 Verizon's Answers to Interrogatory nos. 8-13 at 7
(Answer to Interrogatory no. 11(b)).
49 Verizon's Supplemental Responses, Ex. 1 (K43 Capacity
Creation Request).
50 Verizon's Supplemental Responses, Exs. 1 (K43 Capacity
Creation Request), 5 (Telephone Equipment Order).
51 Verizon's Supplemental Responses, Ex. 8 (Status memo
from the K43 vendor) at 4; Verizon's Answers to Core
Interrogatories 8-13 at 7 (Answer to Interrogatory no.
11(c)).
52 Verizon's Supplemental Responses at 6.
53 Verizon's Supplemental Responses, Ex. 9 (Status memo
from Verizon's vendor) at 5; Verizon's Answers to
Interrogatories 8-13 at 3 (Answer to Interrogatory no.
8(f)).
54 Verizon's Supplemental Responses, Ex. 5 (Telephone
Equipment Order); Verizon's Answers to Core's
Interrogatories 8-13 at 7 (Answer to Interrogatory no.
11(c)).
55 Verizon's Answers to Interrogatories 8-13 at 3 (Answer
to Interrogatory no. 8(f)), 7 (Answer to Interrogatory no.
11(c)); July 23 Albert Dec'n at 4, ¶ 8.
56 Verizon's Supplemental Responses at 2.
57 Verizon's Supplemental Responses at 6; April 10 Albert
Dec'n at 6, ¶ 15.
58 Verizon's Supplemental Responses, Ex. 9 (Status memo
from Verizon's vendor) at 5; April 10 Albert Dec'n at 6, ¶
13. The record does not reveal how many requests for
capacity in addition to Core's were placed in ``hold''
status after June 23, 2000.
59 Verizon's Answers to Interrogatories 8-13 at 3 (answer
to Interrogatory no. 8(f)); Verizon's Supplemental
Responses, Ex. 10 at 5. Although some of the 54 ``held''
orders may have been completed in September 2000, after a
portion of the equipment for the K43 was installed, the
rest of the 54 orders could not be completed until after
the remainder of the equipment was installed on about
October 20, 2000. Verizon's Answers to Interrogatories 8-
13 at 3 (answer to Interrogatory no. 8(f)); Verizon's
Answers to Interrogatories 8-13 at Attachments 1, 2.
60 Joint Statement at 4, ¶ 22.
61 Verizon's Answers to Interrogatories 8-13 at 3 (Answer
to Interrogatory no. 8(f)), 7 (Answer to Interrogatory no.
11(c)); July 23 Albert Dec'n at 4, ¶ 8.
62 Core states that, as a result of Verizon's delay, Core
``was unable to provide service to its current and
prospective customers.'' Complaint at 1. As Core was only
seeking a finding as to liability in this phase of the
proceedings, Core's assertion has not been tested.
63 Letter dated December 19, 2001 from Sherry A. Ingram,
counsel to Verizon, to Commission staff, File No. EB-01-MD-
007 (filed Dec. 19, 2001) (``Verizon's December 2000
Letter'') at 1-2. Specifically, Verizon had direct
trunking in the Washington Metropolitan LATA between end
offices for its own traffic, and therefore, used the
Washington Hub for its own traffic only on an overflow
basis. Because these direct trunks were operating at an
approximately 63% utilization rate in 2000, Verizon's own
existing traffic, and its ability to add new dial-tone
customers, were not affected by the K36/K43 capacity
exhaust. Id. By ``Verizon's own traffic,'' we mean
traffic between Verizon's end-user customers, and traffic
from Verizon end-user customers to long-distance carriers.
64 Complaint at 8-9, ¶¶ 22-31. Core states that it will,
pursuant to section 1.722 of the Commission's rules, 47
C.F.R. § 1.722, file a supplemental complaint for damages
if successful in establishing liability. Complaint at 9-
10, ¶ 33.
65 Answer at 12, ¶ 35; Answer, Ex. B (Verizon's Legal
Analysis) at 9; Opening Brief of Verizon Maryland, Inc.,
File No. EB-01-MD-007 (filed Jan. 18, 2002) (``Verizon's
Opening Br.'') at 13-14; Reply Brief of Verizon Maryland
Inc., File No. EB-01-MD-007 (filed Feb. 8, 2002)
(``Verizon's Reply Br.'') at 2.
66 Answer at 12, ¶ 36; Answer, Ex. B (Verizon's Legal
Analysis) at 4-5; Verizon's Opening Br. at 9-10, 13;
Verizon's Reply Br. at 2-8.
67 Verizon's Opening Br. at 11-12; Verizon's Reply Br. at
9-10.
68 Answer at 2; Answer, Ex. B (Verizon's Legal Analysis) at
2-3; Verizon's [Brief in] Opposition to Core's Initial
Brief on Liability, File No. EB-01-MD-007 (filed Feb. 1,
2002) (``Verizon's Opp. Br.'') at 35-43.
69 47 U.S.C. § 251(c)(2)(D).
70 Answer at 12, ¶¶ 35-36; Answer, Ex. B (Verizon's Legal
Analysis) at 9; Verizon's Opening Br. at 13-14; Verizon's
Reply Br. at 2.
71 See CoreComm Communications, Inc. and Z-Tel
Communications, Inc. v. SBC Communications Inc., et al.,
Memorandum Opinion and Order, -- FCC Rcd --, File No. EB-
01-MD-017, FCC No. 03-83 (rel. Apr. 17, 2003) at ¶¶ 13-19.
72 CoreComm v. SBC, at ¶¶ 13-19.
73
74 Verizon's Opening Br. at 2-3; Verizon's Reply Br. at 2,
7-9.
Verizon's Opening Br. at 9-10.
75 47 U.S.C. § 252(f); Joint Statement at 1, ¶ 3.
76 47 U.S.C. § 251(c)(2)(D). We note that the Act also
requires an incumbent LEC to provide unbundled access to
network elements.
77 47 C.F.R. § 41.305(a)(5) (emphasis added).
78 Verizon's Opening Br. at 13.
79 Verizon's Reply Br. at 8.
80 Answer at 4, 13; Verizon's Opening Br. at 9-10;
Verizon's Reply Br. at 8-9.
81 Contrary to Verizon's suggestion otherwise, Verizon's
Reply Br. at 8, nothing in this order indicates that the
Commission would ignore a valid forum-selection clause in
an interconnection agreement.
82 Trinko v. Bell Atlantic Corp., 309 F.3d 89 (2d Cir.
2002), (dissenting opinion published at 309 F.3d 71),
Trinko v. Bell Atlantic Corp., 305 F.3d 89 (2d Cir. 2002),
pet. for cert. granted in part on other grounds sub nom.
Verizon Communications, Inc. v. Trinko, -- S.Ct. --, 2003
WL891459 (Mar., 2003).
83 305 F.3d at 104 (emphasis added).
84 See also 47 U.S.C. § 251(c)(3), similarly requiring that
unbundled elements also be provided ``in accordance with
the terms and conditions of the agreement.''
85 See BellSouth Telecomm., Inc. v. MCIMetro Access
Transmission Services, Inc., 317 F.3d 1270, 1274 (11th Cir.
2003) (en banc); Global Naps, Inc. v. FCC, 291 F.3d 832
(D.C. Cir. 2002); Southwestern Bell Tel. Co. v. Connect
Communications Corp., 225 F.3d 942 (8th Cir. 2000);
Southwestern Bell Tel. Co. v. PUC, 208 F.3d 475, 479-80
(5th Cir. 2000); Southwestern Bell Tel. Co. v. Brooks Fiber
Comm. Of Oklahoma, 235 F.3d 493, 497 (10th Cir, 2000);
Starpower Communications, LLC, Petition for Preemption,
Memorandum Opinion and Order, 15 FCC Rcd 11277 (2000). See
also Verizon Maryland, Inc. v. PUC, 535 U.S. 635, 638 n.2
(2002), and Illinois Bell Tel. Co. v. WorldCom Techs.,
Inc., 179 F.3d 566, 573 (7th Cir. 1999), cert. dismissed,
535 U.S. 682 (2002) (assuming without discussion that state
commissions have authority to construe and enforce
interconnection agreements).
86 This order does not address whether the Commission would
enforce obligations in interconnection agreements that do
not relate directly to matters covered by sections 251 and
252 of the Act.
87 Verizon's Opening Br. at 11-12; Verizon's Reply Br. at
9-10.
88 See Part III (A)-(B), supra.
89 Verizon's Opening Br. at 11-12; Verizon Reply Br. at 9-
10.
90 Indeed, in passing the 1996 Act, Congress considered
(and then rejected) a proposal to allow the Commission to
forbear from section 208. H.R. REP. No. 104-458, 184
(1996), reprinted in 1996 U.S.C.C.A.N. 1584. See CoreComm
v. SBC, -- FCC Rcd --, at n.46.
91 Verizon's Opening Br. at 11-12 (citing AT&T v. Bell
Atlantic Corp., 15 FCC Rcd 17066 (2000), aff'd sub nom.
MCIWorldCom v. FCC, 274 F.3d 542 (D.C. Cir. 2001) and
Global NAPs, Inc. Petition for Preemption of Jurisdiction
of New Jersey Brd. of Pub. Util. Regarding
Interconnection Dispute with Bell Atlantic-New Jersey,
Inc., 14 FCC Rcd 12530 (1999)).
92 In AT&T v. Bell Atlantic Corp., the Commission
dismissed the complaint on comity grounds because the
complaint asked the Commission to duplicate complex rate-
making proceedings that several state commissions had
already completed or nearly completed. See AT&T v. Bell
Atlantic Corp., 15 FCC Rcd at 17071, ¶ 12; MCIWorldCom v.
FCC, 274 F.3d at 548-49. In Global Naps, Inc., the
Commission rejected a carrier's petition for preemption of
the authority of the New Jersey PUC to resolve an
interconnection dispute under section 252, because the New
Jersey PUC had already completed the proceeding at issue.
Global NAPs, Inc., 14 FCC Rcd at 12538-39, ¶¶ 17-18.
93 As a result, addressing the merits of Core's Complaint
here will not duplicate any efforts of the Maryland PUC.
In fact, deferring to the Maryland PUC would only delay
resolution of the dispute.
94 Answer, Ex. B (Defendant's Legal Analysis) at 5; Answer
at 3-4, ¶ 5.
95 47 U.S.C. § 251(f)(1) (emphasis added).
96 47 U.S.C. § 252(f)(2).
97 47 U.S.C. § 251(c)(2).
98 See generally, 47 C.F.R. § 51.305(a)(5). Our approach
here is consistent with general principles of contract law.
See, e.g., Williston on Contracts § 30.19 (4th ed. 1999)
(Except where a contrary intention is evident, ``valid
applicable laws existing at the time of the making of the
contract enter into and form a part of the contract as
fully as if expressly incorporated in the contract'');
Restatement 2d of Contracts § 204 (where a contract is
silent with respect to a term that is essential to a
determination of the parties' duties, the court may supply
terms that are ``reasonable in the circumstances''). This
principle applies with special force where, as here, the
agreement at issue concerns a subject regulated by federal
law. See, e.g., Williston on Contracts § 30.20.
99 See, e.g., AT&T v. Winback & Conserve Program, Inc., 16
FCC Rcd 16074, 16079, n.35 (2001) (holding that the
``preponderance'' standard applies in complaint proceedings
brought under section 208).
100 Implementation of the Local Competition Provisions in
the Telecommunications Act of 1996, Interconnection between
Local Exchange Carriers and Commercial Mobile Radio Service
Providers, First Report and Order, 11 FCC Rcd 15499, 15503,
¶ 205 (1996) (``First Local Competition Report and
Order''); 47 U.S.C. § 51.305(g).
101 First Local Competition Report and Order, 11 FCC Rcd at
15503, ¶ 205.
102 First Local Competition Report and Order, 11 FCC Rcd at
15503, ¶ 205.
103 Answer at 6-7, ¶ 12; Verizon's Opp. Br. at 9-12.
Verizon explains that the instructions for the ASR state,
``The actual due date may be different from that desired
because of factors such as the availability of facilities
and the quantity, complexity, and impact on local service
of the circuit(s) involved.'' Id.
104 Joint Statement at 3, ¶ 12.
105 Joint Statement at 3, ¶ 14.
106 Verizon's Opp. Br. at 28.
107 Verizon's Opp. Br. at 28.
108 See, e.g., 47 C.F.R. § 51.305(a)(5) (inquiry into
whether interconnection is ``just'' and ``reasonable''
includes ``the time within which the incumbent LEC provides
such interconnection.'')
109 Dawson Aff. at 14, ¶ 30.
110 Initial Brief [of] Core Communications, Inc., File No.
EB-01-MD-007 (filed Feb. 1, 2001) (``Core's Initial Br.'')
at 7-9; Reply of Core Communications, Inc. to Verizon's
Opposition, File No. EB-01-MD-007 (filed Feb. 8, 2002)
(``Core's Reply Br.'') at 8-9.
111 Core's Initial Br. at 8; Core's Reply Br. at 17.
112 Core's Initial Br. at 15-20; Core's Reply Br. at 20-21.
113 Core also alleges that Verizon delayed unreasonably in
building the entrance facility. Core's Initial Br. at 15-
20; Core's Reply Br. at 20-21. Yet, Core has failed to
provide probative evidence supporting this allegation.
Specifically, Core's Complaint provided no evidence to
support its assertion. This failure, standing alone, could
warrant disregard of Core's allegation. See 47 C.F.R. §§
1.720(c), 1.721 (a)(5), (a)(11). In any event, in
subsequent briefing, Core relied on a single e-mail sent to
Core by Verizon. Core's Initial Br. at 15-17 (citing
Answer, Ex. 4 (Verizon e-mail to Core)). Yet this e-mail is
reasonably read in the manner suggested by Verizon, see
Verizon's Opp. Br. at 21, particularly given Core's failure
to cite it until final briefing in this proceeding. See
Complaint (failing to cite or attach Verizon's e-mail);
[Core's] Responses to [Verizon's] Interrogatories, File No.
EB-01-MD-007 (file June 25, 2001) at 1 (failing to cite the
e-mail or its June 7 date in response to Verizon's request
that Core state the basis for its expectation that the
entrance facility would be completed before June 28).
Accordingly, in determining whether Verizon violated
section 251(c)(2)(D), we do not consider Verizon's conduct
in constructing the entrance facility to have been flawed.
114 Verizon's Answers to Interrogatories 8-13 at 2 (Answer
to Interrogatory no. 8(b)).
115 Verizon's Answers to Interrogatories 8-13 at 3 (Answer
to interrogatory no. 8(f)).
116 Thus, Verizon's assertion that the August strike
contributed to the length of the capacity exhaust, Verizon
Opp. Br. at 26, is not supported by the record. As
discussed, when ordering equipment to increase the capacity
of the K36, Verizon requested that installation be
completed by August 30 - after the Verizon strike. With
respect to the K43, Verizon's vendor informed it, before
the Verizon August strike, that it would not be able to
complete installation until October 2000.
117 Verizon's Supplemental Responses at 2-3.
118 Dawson Aff. at 8, ¶ 17 (stating that cross-connect
machines such as the K36 and K43 ``are gigantic units with
lots of capacity. ... For Verizon to have run out of
capacity in these units means there is something wrong in
their system. They ... do routine forecasts and monitoring
of equipment usage, and I have to say that it is nearly
inconceivable to me that they could have exhausted these
facilities without having known it was going to happen and
without planning to already have the next unit
installed'').
119 Implementation of the Telecomm. Act of 1996, Amendment
of Rules Governing Procedures to be Followed When Formal
Complaints are Filed Against Common Carriers, Report and
Order, 12 FCC Rcd 22497, 22617 at ¶ 295 (1997) (subsequent
history omitted).
120 Implementation of the Telecomm. Act of 1996, Amendment
of Rules Governing Procedures to be Followed When Formal
Complaints are Filed Against Common Carriers, Report and
Order, 12 FCC Rcd at 22615 n.782, 22617, ¶ 295.
121 July 23 Albert Dec'n at 5, ¶ 10.
122 Verizon's Supplemental Responses at 5.
123 See April 10 Albert Dec'n at 2, ¶ 5; Verizon Opp. Br.
at 8; Joint Statement at 2, ¶¶ 5-6; Dawson Aff. at 9, ¶ 20.
124 See April 10 Albert Dec'n at 2, ¶ 5; Verizon Opp. Br.
at 8; Joint Statement at 2, ¶¶ 5-6; Dawson Aff. at 9, ¶ 20.
125 Verizon's Answers to Interrogatories 1-7 at 7 (Answer
to Interrogatory no. 6).
126 July 23 Albert Dec'n at 5, ¶10.
127 Verizon's Supplemental Responses, Exs. 8-10.
128 Verizon's Opp. Br. at 39-41.
129 For example, Core proposes two alternatives that
Verizon could have considered that would have involved
Verizon's obtaining alternative equipment, such as
multiplexers or smaller cross-connect machines. Core's
Initial Br. at 20-21. Verizon effectively admits that
these alternatives were technically feasible. Verizon's
Opp. Br. at 41.
130 Verizon has not produced a single written communication
from Verizon to its vendors urging them to act more quickly
to install the equipment, despite Core's interrogatory
requesting that it do so. Nor does Verizon assert that any
such documents ever existed. Verizon's Answers to
Interrogatories 8-13 at 5 (Answer to interrogatory no.
10(b)). Verizon does state that it ``held numerous
telephone conference calls with its digital cross-connect
vendors...,'' and that it had weekly conference calls with
the vendor for the K43. Verizon's Supplemental Responses
at 8. Yet these calls concerned dozens of installation
orders throughout Verizon's territory, not just the orders
pertaining to the Washington Hub K36 and K43. Id.
Further, Verizon provides no evidence that, during these
calls, it pressed the vendors to act more quickly with
respect to the K36 and K43; indeed, Verizon states that the
calls were simply to ``manage th[e] situation and
prioritize the jobs.'' Verizon's Supplemental Responses at
8.
131 The imposition of liability here is limited to the
particular facts presented in this case. We do not hold
here that a provisioning delay of four months is per se
unreasonable.
132 Complaint at 8-9, ¶ 29; Core's Initial Br. at 21-23.
133 Verizon Opening Br. at 2-9; Verizon's Reply Br. at 1-7.
134 Verizon Opp. Br. at 32-35.
135 Core alleges that Verizon unlawfully discriminated
against it by providing more favorable treatment to two
carriers who likewise requested entrance facility
interconnection with Verizon in the Washington Metropolitan
LATA during this same period of time. Core's Initial Br.
at 21-30. The record indicates, however, that Verizon
actually took longer to interconnect with these two
carriers than it took to interconnect with Core. See
Verizon's Opp. Br. at 35 (citing Verizon Answer to
Interrogatory No.1 and Attachment).
136 Given this conclusion, we need not decide whether
section 202(a) applies to interconnection provided pursuant
to section 251(c).
137 Given this conclusion, we need not address Verizon's
assertion that section 201(b) does not apply to
interconnection provided pursuant to section 251(c). See
Verizon Opening Br. at 2-9.
138 Complaint at 8.
139 Complaint at 8-9.
140 Complaint at 8, 9.