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Common Carrier Services: In-Region InterLATA Services-Verizon New England Inc. et al.; Application To Provide Services in Vermont

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Application by Verizon New England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions), Verizon Global Networks Inc., and Verizon Select Services Inc., Pursuant to Section 271 of the Telecommunications Act of 1996, For Authorization To Provide In-Region, InterLATA Service in the State of Vermont


Federal Communications Commission.




This document grants the section 271 application of Verizon New England Inc., et al. (Verizon) for authority to enter the interLATA telecommunications market in the state of Vermont. The Commission grants Verizon's application based on its conclusion that Verizon has satisfied all of the statutory requirements for entry, and opened its local exchange markets to full competition.


Effective April 29, 2002.

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Julie Veach, Senior Attorney, Wireline Competition Bureau (WCB), at (202) 418-1580 or via the Internet at The complete text of this MO&O is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. Further information may also be obtained by calling the Wireline Competition Bureau's TTY number: (202) 418-0484.

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This is a summary of the Commission's Memorandum Opinion and Order (MO&O) in CC Docket No. 02-7, FCC Start Printed Page 2077202-118, adopted April 17, 2002, and released April 17, 2002. This full text may be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail It is also available on the Commission's website at​Bureaus/​Common_​Carrier/​in-region_​applications/​verizon_​vt/​welcome.html.

Synopsis of the Order

1. History of the Application. On January 17, 2002, Verizon filed an application (Vermont Application), pursuant to section 271 of the Telecommunications Act of 1996, with the Commission to provide in-region, interLATA service in the state of Vermont.

2. The Vermont Board's Evaluation. The Vermont Public Service Board (Vermont Board) conducted a comprehensive evaluation of Verizon's compliance with section 271, which included five days of evidentiary hearings. The Vermont Board concluded that Verizon met the checklist requirements of section 271(c) and has taken the appropriate steps to open the local exchange and exchange access markets in Vermont in accordance with standards set forth in the Act. Consequently, the Vermont Board recommended that the Commission approve Verizon's in-region, interLATA entry in its (February 6, 2002) evaluation of the Vermont Application.

3. The Department of Justice's Evaluation. The Department of Justice filed its evaluation of Verizon's Vermont Application on February 21, 2002, and recommended approval of the Vermont Application subject to the Commission satisfying itself as to pricing issues raised by commenters for UNEs in Vermont.

Primary Issues in Dispute

4. Compliance with Section 271(c)(1)(A). The Commission concludes that Verizon demonstrates that it satisfies the requirements of section 271(c)(1)(A) based on the interconnection agreements it has implemented with competing carriers in Vermont. The record demonstrates that competitive LECs serve some business and residential customers using predominantly their own facilities.

5. Checklist Item 2—Unbundled Network Elements. Based on the record, the Commission finds that Verizon's Vermont UNE rates are just, reasonable, and nondiscriminatory as required by section 251(c)(3), and are based on cost plus a reasonable profit as required by section 252(d)(1). Thus, Verizon's Vermont UNE rates satisfy checklist item 2. The Commission has previously held that it will not conduct a de novo review of a state's pricing determinations and will reject an application only if either “basic TELRIC principles are violated or the state commission make clear errors in the actual findings on matters so substantial that the end result falls outside the range that a reasonable application of TELRIC principles would produce.” The Vermont Board concluded that Verizon's UNE rates satisfied the requirement of checklist item 2. While the Commission has not conducted a de novo review of the Vermont Board's pricing determinations, the Commission has followed the urging of the Department of Justice to examine commenters' complaints regarding UNE pricing.

6. After carefully reviewing these complaints, the Commission concludes that the Vermont Board followed basic TELRIC principles and the complaints do not support a finding that the Vermont Board committed clear error in adopting Verizon's switching and Daily Usage File (DUF) rates. Thus, the Commission concludes that Verizon's Vermont UNE rates satisfy the requirement of checklist item 2.

7. The Commission also concludes that Verizon meets its obligation to provide nondiscriminatory access to its operations support systems (OSS). Verizon provided evidence that its Massachusetts OSS and Vermont OSS are substantially the same; therefore the Commission finds that evidence concerning Verizon's Massachusetts OSS is relevant and should be considered in this proceeding.

8. Pursuant to this checklist item, Verizon must also provide nondiscriminatory access to network elements in a manner that allows other carriers to combine such elements. Based on the evidence in the record, Verizon demonstrates that it provides to competitors combinations of already-combined network element as well as nondiscriminatory access to unbundled network elements in a manner that allows competing carriers to combine those elements themselves.

Other Checklist Items

9. Checklist Item 1—Interconnection. Based on the evidence in the record, the Commission concludes as did the Vermont Board that Verizon demonstrates that it provides interconnection and collocation in accordance with the requirements of section 251(c)(2) and as specified in section 271 and applied in the Commission's prior orders.

10. Checklist Item 4—Unbundled Local Loops. Verizon has adequately demonstrated that it provides unbundled local loops as required by section 271. More specifically, Verizon establishes that it provides access to stand alone xDSL-capable loops, high-capacity loops, and digital loops. Also, Verizon provides voice grade loops, both as new loops and through hot-cut conversions, in a nondiscriminatory manner. Finally, Verizon has demonstrated that it has a line-sharing and line-splitting provisioning process that affords competitors nondiscriminatory access to these facilities.

11. In the Commission's overview of Verizon's performance data, it relies primarily on Vermont performance data (supplemented with Massachusetts data) collected and submitted by Verizon under the state-adopted carrier-to-carrier standards. Verizon provides evidence and performance data establishing that it can efficiently furnish unbundled loops, for the provision of both traditional voice services and various advanced services, to other carriers in a nondiscriminatory manner.

12. Checklist Item 5 “ Unbundled Local Transport. Section 271(c)(2)(B)(v) of the competitive checklist requires a BOC to provide “local transport from the trunk side of a wireline local exchange carrier switch unbundled from switching or other services.” The Commission concludes, as did the Vermont Board that based upon the evidence in the record, that Verizon demonstrates that it provides both shared and dedicated transport, including dark fiber, in compliance with the requirements of checklist item 5.

13. Checklist Item 13—Reciprocal Compensation. Based on the evidence in the record, the Commission concludes that Verizon demonstrates that it satisfies this checklist item. While one commenter claims that Verizon fails to meet the requirement of checklist 13 to provide reciprocal compensation for transport and termination of local calls to competing carriers, the Commission finds that the commenter's claim is not appropriately resolved in a section 271 proceeding.

14. Checklist Items 3, 6-12, 14. An applicant under section 271 must demonstrate that it complies with checklist item 3 (poles, ducts, conduits, and rights of way), item 6 (unbundled local switching), item 7 (911/E911 access and directory assistance/operator services), item 8 (white page directory Start Printed Page 20773listings), item 9 (numbering administration), item 10 (databases and associated signaling), item 11 (number portability), item 12 (local dialing parity), and item 14 (resale). Based on the evidence in the record, and in accordance with Commission rules and orders concerning compliance with section 271 of the Act, the Commission concludes that Verizon demonstrates that it is in compliance with these checklist items in Vermont. The Vermont Board also concluded that Verizon complies with the requirements of each of these checklist items.

Other Statutory Requirements

15. Section 272 Compliance. Verizon has demonstrated that it complies with the requirements of section 272. Significantly, Verizon provides evidence that it maintains the same structural separation and nondiscrimination safeguards in Vermont as it does in Pennsylvania, New York, Connecticut, and Massachusetts—states in which Verizon has already received section 271 authority.

16. Public Interest Analysis. The Commission concludes that approval of this application is consistent with the public interest. The Commission views the public interest requirement as an opportunity to review the circumstances presented by the application to ensure that no other relevant factors exist that would frustrate the congressional intent that markets be open, as required by the competitive checklist, and that the applicant's entry into the in-region, interLATA market will therefore serve the public interest as Congress expected. While no one factor is dispositive in this analysis, the Commission's overriding goal is to ensure that nothing undermines its conclusion that markets are open to competition.

17. The Commission finds that, consistent with its extensive review of the competitive checklist, barriers to competitive entry in the local market have been removed and the local exchange market today is open to competition. The Commission also finds that the record confirms its view that a BOC's entry into the long distance market will benefit consumers and competition if the relevant local exchange market is open to competition consistent with the competitive checklist. The Commission also finds that the performance monitoring and enforcement mechanisms developed in Vermont, in combination with other factors, provide meaningful assurance that Verizon will continue to satisfy the requirements of section 271 after entering the long distance market.

18. Commenters urge the Commission to perform a price squeeze analysis. The Commission has reviewed the commenters' evidence of a price squeeze, however, and determined that, even if the Commission accepted their assertions that a price squeeze analysis is mandated by section 271's public interest requirement, no price squeeze is present here. The commenters' price squeeze claims, focusing solely on entry into the residential market using the UNE-Platform, are insufficient to demonstrate the existence of a price squeeze that dooms them to failure under the standard articulated by the D.C. Circuit in Sprint v. FCC. Therefore, the Commission concludes that there is no evidence in the record that warrants disapproval of this application based on allegations of a price squeeze, whether couched as discrimination under checklist item two or a violation of the public interest standard.

19. Section 271(d)(6) Enforcement Authority. Working with the Vermont Board, the Commission intends to monitor closely post-entry compliance and to enforce the provisions of section 271 using the various enforcement tools Congress provided in the Communications Act.

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Federal Communications Commission.

William F. Caton,

Deputy Secretary.

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[FR Doc. 02-10112 Filed 4-25-02; 8:45 am]