20050302Petition.pdf

ORIGINAL
Dean J. (Joe) Miller
McDevitt & Miller LLP
420 West Bannock Street
Boise, ID 83702
[phone]
[phone] Fax
oe~mcdevitt -miller .com
ECEIVED
Andrew R. Newell (CSB No. 31121)Kr B I PC 'Hilr;. rn "::'0 ys oy e
, .
;"",uu, L' t'1 4: 3'600 Seventeenth Street I
", , ", '
Suite 2700 South
If' l' ~i
'~U ii) Lie
Denver CO 80202 ' J Lll it0 COt'U"'HSS1ON
[phone]
[phone] Fax
anewell~krysboyle.com
r:'t :
Gregory Diamond
Senior Counsel
Covad Communications Company
7901 Lowry Boulevard
Denver, CO 80230
[phone]
[phone] Fax
gdiamond~covaq.. com
Attorneys for DIECA Communications, Inc.
d/b/a Covad Communications Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
DIECA COMMUNICATIONS, INC. D/B/A
COY AD COMMUNICATIONS COMPANY FOR)
ARBITRATION OF AN INTERCONNECTION
AGREEMENT WITH QWEST CORPORATION
Case No. G
,-,
1-oS-a
PETITION
DIECA Communications, Inc., d/b/a Covad Communications Company ("Covad"
through its undersigned counsel, hereby petitions the Idaho Public Utilities Commission
Commission ) to arbitrate, pursuant to Idaho Code ~ 61-614, and Section 252(b) of the
Communications Act of 1934, as amended by the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (1996) (the "Act"), certain terms and conditions of a proposed
Interconnection Agreement between Covad and Qwest Corporation ("Qwest") (hereafter, Covad
and Qwest are collectively referred to as the "Parties ) for the State of Idaho.
COY AD PETITION -
Name.. Address.. and Telephone Number of~he Petitioner and its Counsel
Petitioner s full name and its official business address are as follows:
DIECA Communications, Inc.
d/b/a Covad Communications Company
110 Rio Robles
San Jose, California 95134-1813
DIECA Communications, Inc. is a Virginia corporation, and provides telecommunications
service in Idaho. Covad is, and at all relevant times has been, a "local exchange carrier
" ("
LEC"
under the Act.
The names, addresses, and contact numbers of Covad's representatives in this
proceeding are as follows:
Dean J. (Joe) Miller
McDevitt & Miller LLP
420 West Bannock Street
Boise, ID 83702
[phone]
[phone] Fax
ioe~mcdevitt-miller.com
Gregory Diamond
Senior Counsel
Covad Communications Company
7901 Lowry Boulevard
Denver, CO 80230
[phone]
[phone] Fax
gdiamond~covad.com
Andrew R. Newell (CO lic. #31121)
Krys Boyle, P.
600 Seventeenth Street
Suite 2700 South
Denver, CO 80202
[phone]
[phone] Fax
anewell~krysboyle.com
COY AD PETITION - 2
Name.. Address.. and Telephone Number of the Other Party to the Neeotiatim!.
and its Counsel
Qwest is a corporation organized and formed under the laws of the State of
Colorado, having an office at 1801 California Street, Denver, Colorado 80202. Qwest provides
local exchange and other services within its service territory in Idaho. Qwest (in current name or
as U S WEST Communications, Inc.) is, and at all relevant times has been, a "Bell Operating
Company" and an "incumbent local exchange carrier
" ("
ILEC") under the terms of the Act.
The names, addresses, and contact numbers for Qwest's representatives during the
negotiations with Covad are as follows:
Linda Miles
Qwest Corporation
1600 7th Ave
Room 3007
Seattle, Washington 98191
[phone] (Tel)
[phone] (Fax)
John Devaney
Mary Rose Hughes
Perkins Coie, LLP
607 Fourteenth Street, N., Suite 800
Washington, DC 20005-2011
[phone] (Tel)
[phone] (Fax)
Qwest is represented in Idaho by its counsel:
Mary Hobson
Stoel Rives
101 S. Capitol Blvd.
Suite 1900
Boise, ID 83702
[phone] (Fax)
COY AD PETITION - 3
Brief S ummarv of N el!otia~ion Hist!!!:I
The Parties have worked in good faith from language supplied by both Covad and
Qwest to resolve the vast majority of issues raised during the negotiations. Notwithstanding
these negotiations Covad and Qwest have been unable to come to agreement on all terms
particularly certain terms relating to Qwest's continuing obligations to provide unbundled access
to certain elements pursuant to section 271 of the Act and Idaho law. The remaining issues that
Covad understands to be unresolved between the Parties are addressed below in Section G
Unresolved Issues Submitted for Arbitration and Positions of the Parties.
A draft of the Interconnection Agreement ("Agreement") reflecting the Parties
negotiations to date is attached hereto as Exhibit A. Unless otherwise expressly marked in the
Agreement as the proposal of one Party or another, agreed upon language is shown in normal
type. Covad will continue to negotiate in good faith with Qwest to resolve disputed issues and
will advise the Commission in the event arbitration, or arbitration on particular issues, is
longer necessary.
Covad requests that the Commission approve the Agreement between Covad and
Qwest reflecting:(i) the language agreed to in Exhibit A, and (ii) the resolution in this
arbitration proceeding of unresolved issues in accordance with the recommendations made by
Covad below and in Exhibit A.
Date of Initial ReQuest for Newiation and Dates 135 days.. 160 days.. and Nine
Months After that Date
Covad initiated negotiations by a letter dated January 31 , 2003. The Parties have
agreed to numerous extensions, agreeing that the final day for either party to seek arbitration
before the Idaho Public Utilities Commission would be February 28, 2005. Pursuant to Section
252(b)(I), arbitration must be requested between the 135th day (February 3, 2005) and the 160
COY AD PETITION - 4
day (February 28, 2005) following the date negotiations were requested. The Parties agree this
Petition is timely filed.
Issues Resolved by the Parties
The Parties have resolved the issues and negotiated contract language to govern
the Parties' relationship with respect to most of the provisions set forth in Exhibit A. These
negotiated portions of the Agreement are shown in normal type. To the extent Qwest asserts that
any provisions remain in dispute, Covad reserves the right to present evidence and argument as
to why those provisions were considered closed and why they should be resolved in the manner
shown in Exhibit A.
Unresolved Issues Not Submitted for Arbitration
10.There are no unresolved issues that are not being submitted for arbitration. While
other issues remain disputed by the Parties in other states, Covad has chosen not to raise those
issues in Idaho for business reasons.
Unresolved Issues Submitted for Arbitration and Positions of the Parties
ISSUE (Section 4 Definition of "Unbundled Network Element " Sections 9.1.1 , 9.1.1.6
, 9., 9., 9., 9., 9., 9., 9., 9., 9.
1.5.1 (and related 9.1.5),1.6.1 (and related Section 9.1.6), and 9.21.2)
Issue:Should the Parties ' Agreement provide for access to network
elements pursuant to Section 271 of the Telecommunications
Act of 1996 and Idaho law, as well as Section 251 of the
Telecommunications Act of 1996?
The Parties disagree with respect to Qwest's continuing obligations to provide certain
network elements, including certain unbundled loops (including high capacity loops, line
splitting arrangements, and sub loop elements) and dedicated transport, after the FCC's recent
analysis in the Triennial Review Order. Covad maintains that the FCC's explicit direction was to
continue the obligations of Regional Bell Operating Companies ("RBOCs ) to provide all
network elements listed in the provisions of Section 271 of the Act outlining specific RBOC
COY AD PETITION - 5
obligations to maintain authority to provide in-region interLATA service (the "271 Checklist" or
Checklist"
) .
Qwest believes its obligations under Section 271 , if any, are outside the
Commission s jurisdiction.
Furthermore, Covad believes that Qwest continues to be obligated under Idaho law to
provide unbundled access to network elements pursuant to Idaho Code ~~ 61-503 , 61-513 , 61-
514, 62-602 and that the Commission further possesses the authority to establish the rates for
these elements pursuant to Idaho Code ~ 61-503. Qwest argues this Commission s authority to
regulate access to these facilities has been preempted by congressional and FCC action.
Section 271
This Commission can, and should, use its authority to enforce the unbundling
requirements of Section 271 of the Act. The FCC made clear in the Triennial Review that
Section 271 creates independent access obligations for the RBOCs:
(W)e continue to believe that the requirements of Section
271(c)(2)(B) establish an independent obligation for BOCs to
provide access to loops, switching, transport, and signaling
regardless of any unbundling analysis under section 251.
Triennial Review Order ~ 653.
Section 271 was written for the very purpose of establishing
specific conditions of entry into the long distance that are unique to
the BOCs. As such, BOC obligations under Section 271 are not
necessarily relieved based on any determination we make under
the section 251 unbundling analysis.
Triennial Review Order ~ 655.
Thus, there is no question that, regardless of the FCC'analysis of competitor
impairment and corresponding unbundling obligations under Section 251 for ILECs as a Bell
Company Qwest retains an independent statutory obligation under Section 271 of the Act to
provide competitors with unbundled access to the network elements listed in the Section 271
COY AD PETITION - 6
checklist. Other states have begun enforcing section 271 unbundling obligations, and have
denied RBOCs' attempts to discontinue unbundled offerings as a result of the Triennial Review
Order.See Investigation into the Obligations of Incumbent Local Exchange Carriers
Unbundle Local Circuit Switching for the Enterprise Market Pennsylvania Public Utility
Commission Docket No. 1-00030100, Reconsideration Order (May 27 2004) at 4 (upholding a
prior order determining that the Triennial Review Order relieved Verizon of its section 251
obligation to provide certain elements, but upholding its determination that access to those
elements remained under as a result ofVerizon s section 271 long distance entry and state law).
A copy of this decision is attached hereto as Exhibit B.
Moreover, there is no question that these obligations include the provision of unbundled
access to loops and dedicated transport under checklist item #4:
Checklist items 4, 5 , 6, and 10 separately impose access
requirements regarding loop, transport, switching, and signaling,
without mentioning section 251. (emphasis added)
Triennial Review Order ~ 654.
In addition, the Commission has independent authority to enforce these Section 271
RBOC obligations. This enforcement authority encompasses the authority to ensure that Qwest
fulfills its statutory duties under Section 271 , including its ongoing unbundling obligations.
Furthermore, there can be no argument that the Commission s enforcement of Qwest's Section
271 checklist obligations would substantially prevent the implementation of any provision of the
Act.Indeed where state enforcement activities do not impair federal regulatory interests
concurrent state enforcement activity is clearly authorized. Florida Avocado Growers v. Paul,
373 U.S. 132 142 83 S.Ct. 1210 1217 10 L.Ed.2d 248 (1963). Courts have long held that
federal regulation of a particular field is not presumed to preempt state enforcement activity "
See 47 V.C. ~ 271 (c)(2)(B).
COY AD PETITION - 7
the absence of persuasive reasons - either that the nature of the regulated subject matter permits
no other conclusion, or that the Congress has unmistakably so ordained.De Canas v. Bica, 424
s. 351 , 356, 96 S.Ct. 933, 936, 47 L.Ed.2d 43 (1976) (quoting Florida Avocado Growers, 373
s. at 142, 83 S.Ct. at 1217). The Act, however, hardly evinces an unmistakable indication of
Congressional intent to preclude state enforcement of federal 271 obligations. Far from doing
, the Act expressly preserves a state role in the review of a RBOC's compliance with its
Section 271 checklist obligations, and requires the FCC to consult with state commissions in
reviewing a RBOC's Section 271 compliance.2 Thus, the Commission clearly has the authority
to enforce Qwest's obligations to provide unbundled access to loops (including high capacity
loops, line splitting arrangements and subloop elements) and dedicated transport under Section
271 checklist item #4.
The FCC did make clear in the Triennial Review Order that a different pricing standard
applied to network elements required to be unbundled under Section 271 as opposed to network
elements unbundled under Section 251 of the Act.Specifically, the FCC stated that "the
appropriate inquiry for network elements required only under Section 271 is to assess whether
they are priced on a just, reasonable and not unreasonably discriminatory basis - the standards
set forth in sections 201 and 202.Triennial Review Order ~ 656. In other words, according to
the FCC, the legal standard under which pricing for Section 271 checklist items should be
determined is a different legal standard than that applied to price Section 251 UNEs. Thus
Section 271 requires RBOCs to provide unbundled access to elements not required to be
unbundled under Section 251 , but does not require TELRIC pricing.Triennial Review Order
659 (emphasis added).
See 47 V.C. ~ 271(d)(2)(B) (requiring the FCC to consult with state commissions in reviewing RBOC
compliance with the 271 checklist).
COY AD PETITION - 8
Notably, in the Triennial Review, the FCC nowhere forbids the application of state
commission pricing of network elements required to be unbundled under Section 271. Rather
the FCC merely states that unbundled access to Section 271 checklist items is not required to be
priced pursuant to the particular forward-looking cost methodology specified in the FCC's rules
implementing Section 252(d)(I) of the Act - namely, TELRIC.The FCC states that the
appropriate legal standard to determine the correct price of Section 271 checklist items is found
in Sections 201 and 202. However nowhere does the FCC state these two different legal
standards may not result in the same, or similar, rate-setting methodology.
Furthermore, the FCC does not preclude the use of forward-looking, long-run
incremental cost methodologies other than TELRIC, such as TSLRIC, to establish the prices for
access to Section 271 checklist items. As the FCC made clear when it adopted the TELRIC
pricing methodology in its Local Competition Order there are various methodologies for the
determination of forward-looking, long-run incremental cost. Local Competition Order FCC
96-325 , ~ 631. TELRIC describes only one variant, established by the FCC for setting UNE
prices under Section 252( d)(1), derived from a family of cost methodologies consistent with
forward-looking, long-run incremental cost principles. See Local Competition Order FCC 96-
325, at ~~ 683-685 (defining "three general approaches" to setting forward-looking costs). Thus
the FCC'Triennial Review Order does not preclude the use of a forward-looking, long-run
incremental cost standard other than TELRIC in establishing prices consistent with Sections 201
and 202 of the Act.
3 For example, where the 271 checklist item for which rates are being established is not legacy loop plant but next-
generation loop plant, incumbents might argue for the use of a forward-looking, long-run incremental cost
methodology based on their current network technologies - in other words, a non- TELRIC but nonetheless forward-
looking, long-run incremental cost methodology. See, e.g., Local Competition Order FCC 96-325, ~ 684.
COY AD PETITION - 9
State Law Unbundling Authority
The Idaho Legislature, in enacting the Telecommunications Act of 1988 stated:
( 4) The legislature further finds that the telecommunications
industry is in a state of transition from a regulated public utility
industry to a competitive industry. The legislature encourages the
development of open competition in the telecommunications
industry in accordance with provisions of Idaho law and
consistent with the federal telecommunications act of 1996.
(5) The commission shall administer these statutes with respect to
telecommunication rates and services in accordance with these
policies and applicable federal law.
Idaho Code ~ 62-602(4) and (5). (emphasis added).
The above policy statements make clear that the Idaho Legislature intended the
Commission to possess independent, state law authority to promote competition within the state
of Idaho, in addition to the authority delegated to it under the federal Act.In fact, the
Commission s authority to implement the Act, also granted by the legislature, is contained in a
separate section of the Idaho Code. See Idaho Code ~ 62-615. In order to implement these
policies, the Idaho Code contains specific requirements that public utilities provide for the joint
use of their plant and equipment and allow physical connections with other telephone
corporations. See Idaho Code ~~ 61-513 61-514.
This Commission therefore has the requisite authority and policy directives to require
access to loops, including high capacity loops, line splitting arrangements and subloop
arrangements, as well as dedicated transport, under its independent, state law authority. Idaho
Code ~~ 61-513 , 61-514, 62-602. This independent state law authority is not preempted by the
FCC's recent Triennial Review Order. Nowhere does Section 251 of the Act evince any general
Congressional intent to preempt state laws or regulations providing for competitor access to
unbundled network elements or interconnection with the ILEC. In fact, as recognized by the
FCC in its Triennial Review Order several provisions of the Act expressly indicate Congress
COY AD PETITION - 10
intent not to preempt such state regulation, and forbid the FCC from engaging in such
preemption:
Section 252(e)(3) preserves the states ' authority to establish or
enforce requirements of state law in their review of interconnection
agreements. Section 251 (d)(3) of the 1996 Act preserves the
states ' authority to establish unbundling requirements pursuant to
state law to the extent that the exercise of state authority does not
conflict with the Act and its purposes or our implementing
regulations. Many states have exercised their authority under state
law to add network elements to the national list.
Triennial Review Order ~ 191.
As the FCC further acknowledges in the Triennial Review Order Congress expressly
declined to preempt states in the field of telecommunications regulation:
We do not agree with incumbent LECs that argue that the states are
preempted from regulating in this area as a matter of law.
Congress intended to preempt the field, Congress would not have
included section 251 (d)(3) in the 1996 Act.
Triennial Review Order ~ 192.
In fact, the FCC only identified a narrow set of circumstances under which federal law
would act to preempt state laws and rules providing for competitor access to ILEC facilities:
Based on the plain language of the statute, we conclude that the
state authority preserved by section 251 (d)(3) is limited to state
unbundling actions that are consistent with the requirements of
section 251 and do not "substantially prevent" the implementation
of the federal regulatory regime. .
. .
(W)e find that the most reasonable interpretation of Congress
intent in enacting sections 251 and 252 to be that state action
whether taken in the course of a rulemaking or during the review
of an interconnection agreement, must be consistent with section
251 and must not "substantially prevent" its implementation.
Triennial Review Order ~~ 192, 194.
Notably, in reaching these conclusions, the FCC was simply restating existing, well-
known precedents governing the law of preemption. Specifically, the long-standing doctrine of
COY AD PETITION -
federal conflict preemption provides for exactly the limited sort of federal preemption
acknowledged by the FCC'Triennial Review Order. Courts have long held that state laws are
preempted to the extent that they actually conflict with federal law. As noted by the FCC'
Triennial Review Order such conflict exists where compliance with state law "stands as an
obstacle to the accomplishments and execution of the full purposes and objectives of Congress.
Triennial Review Order ~ 192 n. 613 (citing Hines v. Davidowitz 312 U.S. 52 67 (1941)). Even
more notably, in its Triennial Review Order the FCC did not act to preempt any existing state
law or regulation inconsistent with the FCC's rules, nor did it act to preclude the adoption of
future state laws or regulations governing the access of competitors to ILEC facilities which are
inconsistent with the FCC's rules. In fact, following the governing law set out in the Eighth
Circuit'Iowa Utilities Board I decision, the FCC specifically recognized that state laws or
regulations which are inconsistent with the FCC's unbundling rules are not ipso facto preempted:
That portion of the Eighth Circuit's opinion reinforces the
language of (Section 251(d)(3)), that state interconnection and
access regulations must "substantially prevent" the implementation
of the federal regime to be precluded and that "merely an
inconsistency" between a state regulation and a Commission
regulation was not sufficient for Commission preemption under
section 251(d)(3).
Triennial Review Order ~ 192 n. 611 (citing Iowa Utils. Bd. v. FCC 120 F.3d at 806).
In so doing, the FCC made clear that it was acting in conformance with the governing
law set out in the Iowa Utilities Board I decision:
We believe our decision properly balances the broad authority
granted to the Commission by the 1996 Act with the role preserved
for the states in section 251 (d)(3) and is fully consistent with the
Eighth Circuit's interpretation of that provision.
Id.
Thus, far from taking any specific action to preempt any state law or regulation
governing competitor access to incumbent facilities, the FCC merely acted in the Triennial
COY AD PETITION -
Review to restate the already-existing bounds on state action recognized under existing doctrines
of conflict preemption. Furthermore, the FCC'Triennial Review Order recognized that "merely
an inconsistency" between state rules providing for competitor access and federal unbundling
rules would be insufficient to create such a conflict. Instead, consistent with existing doctrines
of conflict preemption, the FCC recognized that the state laws would have to "substantially
prevent implementation" of Section 251 in order to create conflict preemption.
Of course, the FCC'Triennial Review Order could not have concluded that all state
rules unbundling network elements not required to be unbundled nationally by the FCC create
conflict preemption. Had the FCC reached such a conclusion, the FCC would have rendered
Section 251 (d)(3)' s savings provisions a nullity, never operating to preserve any meaningful
state law authority in any circumstance. Rather than reaching such a conclusion, the FCC
created a process for parties to determine whether a "particular state unbundling obligation
requiring the unbundling of network elements not unbundled nationally by FCC rules creates a
conflict with federal law. The Triennial Review Order invited parties to seek declaratory rulings
from the FCC regarding individual state obligations. An invitation to seek declaratory ruling,
however, hardly amounts to preemption in itself - it merely creates a process for interested
parties to establish in future proceedings before the FCC whether or not a particular state rule
conflicts with federal law.
The FCC did give interested parties some indication of how it might rule on such
petitions. Specifically, the FCC stated that it was unlikely that the FCC would refrain from
finding conflict preemption where future state rules required "unbundling of network elements
for which the Commission has either found no impairment ... or otherwise declined to require
unbundling on a national basis.Triennial Review Order 195.The FCC's statement
however, that such future rules were merely unlikely - as opposed to simply unable -
COY AD PETITION -
withstand conflict preemption leads to the inevitable conclusion that there are some
circumstances in which the FCC would find that such future rules were not preempted.
Moreover, with respect to state rules in existence at the time of the Triennial Review Order the
FCC's indications that it might find conflict preemption are even more muted. Specifically, the
FCC merely stated that "in at least some circumstances existing state requirements will not be
consistent with our new framework and may frustrate its implementation.Triennial Review
Order ~ 195.
Thus, while the FCC'Triennial Review Order indicates that under some circumstances
the FCC would find conflict preemption for state rules requiring the unbundling of network
elements not unbundled nationally under federal law, the decision also indicates that in some
circumstances the FCC would decline to find that such state rules substantially prevent
implementation of Section 251.In fact, the FCC's decision gives some direction on the
circumstances that would lead the FCC to decline a finding of conflict preemption for state rules
unbundling network elements the FCC has declined to unbundle nationally. Specifically, in its
discussion of state law authority to unbundle network elements, the FCC states that "the
availability of certain network elements may vary between geographic regions.Triennial
Review Order ~ 196. Indeed, according to the FCC, such a granular "approach is required under
USTA.Triennial Review Order ~ 196 (citing USTA 290 F.3d at 427). Thus, if the requisite
state-specific circumstances exist in a particular state, state rules unbundling network elements
4 Notably, the FCC's statements indicating when it is 'likely' to find preemption for particular state rules appear to
conflict with a recent Sixth Circuit decision. The Sixth Circuit has stated that "as long as state regulations do not
prevent a carrier from taking advantage of sections 251 and 252 of the Act, state regulations are not preempted.
The court further noted that a state commission is permitted to "enforce state law regulations, even where those
regulations differ from the terms of the Act or an interconnection agreement" entered into pursuant to section 252 of
the Act
, "
as long as the regulations do not interfere with the ability of new entrants to obtain services.See
Michigan Bell v. MCIMetro 323 F.3d 348 359 (6th Cir. 2003).
COY AD PETITION - 14
not required to be unbundled nationally are permissible in that state, and would not substantially
prevent the implementation of Section 251.
In addition, state determinations to require the unbundling of elements also subject to the
unbundling requirements of Section 271 of the Act, such as switching, dedicated transport and
loops, could not, as a matter of law, be subject to preemption analysis. The inclusion of these
requirements in the Act clearly indicates that, far from frustrating the implementation of the Act
these unbundling requirements are critical components of the Act.
While Covad believes preemption of Idaho law mandating unbundling is unlikely, it is
also irrelevant. This Commission should exercise its authority as it is delineated by Idaho
statute, irrespective of preemption analysis, as the adjudication of the constitutionality of
legislative enactments is generally beyond the jurisdiction of administrative agencies. Johnson,
Administrator of Veterans ' Affairs, et. al. v. Robison, 415 U.S. 361 , 368; 94 S. Ct. 1160, 1166;
39 L.Ed. 2d 389, 398 (1974), see also Alpert v. Boise Water Corp.795 P.2d 298, 302 (Idaho
1990) (Commission possesses only the authority conferred by statute).
It should also be noted, however, that Qwest has not yet sought to remove the elements
requested by Covad from its Statement of Generally Available Terms (SGA T) in Idaho. Under
this Commission s rules, Qwest must continue to provide access to these elements on the rates
terms and conditions contained in Qwest's SGAT unless and until Qwest is granted permission
to remove them. IDAP A 31.42.203. As a result, Covad is not asking for access to any new
essential facilities; it is merely asking this Commission to confirm that elements listed in Qwest'
Idaho SGA T remain available. Should Qwest wish to implement its proposals in this arbitration
it would be required to initiate a proceeding to reclassify the elements.
COY AD PETITION -
Consistent with the discussion above, Covad has proposed language maintaining access
to network elements that may, in the future, no longer be available pursuant to Section 251 of the
Act, but must nevertheless remain available pursuant to Section 271 of the Act and Idaho law.
Proposed Schedule for Implementing Terms and Conditions Imposed in the
Arbitration
11.Covad proposes that terms and conditions imposed in the arbitration take effect
immediately upon their approval by the Commission.
Recommendation as to What Information Other Parties to the N eeotiation
Should Provide
12.Covad does not anticipate the need for discovery in this matter, but reserves its
right to seek such information as may become necessary for an adequate development of the
record pertinent to the determination of the issue presented for resolution by the Commission.
REQUEST FOR RELIEF
WHEREFORE Covad respectfully requests that the Commission grant the following
relief:
(a)Arbitrate the unresolved issues between Covad and Qwest;
(b)Issue an order directing the Parties to submit an Agreement reflecting: (i) the
agreed upon language in Exhibit A and (ii) the resolution in this arbitration
proceeding of the unresolved issues in accordance with the recommendations
made by Covad herein and in Exhibit A;
(c)Retain jurisdiction of this arbitration until the Parties have submitted an
Agreement for approval by the Commission in accordance with section 252(e) of
the Act;
COY AD PETITION -
(d)Further retain jurisdiction of this arbitration and the Parties hereto until Qwest has
complied with all implementation time frames specified in the arbitrated
Agreement and has fully implemented the Agreement; and
(e)Take such other and further actions as it deems necessary and appropriate.
Respectfully submitted, this 28th day of February, 2005.
DIECA COMMUNICATIONS, INC.D/B/A
COV AD COMMUNICATIONS COMPANY
By:
DeanJ. (oe) iller
McDevitt & Miller LLP
420 West Bannock Street
Boise ID 83702
[phone]
[phone] Fax
ioe~mcdevitt -miller .com
Gregory Diamond
Senior Counsel
Covad Communications Company
7901 Lowry Boulevard
Denver, CO 80230
[phone]
[phone] Fax
gdiamond~covad.com
Andrew R. Newell (CSB No. 31121)
Krys Boyle, P.
600 Seventeenth Street
Suite 2700 South
Denver, CO 80202
[phone]
[phone] Fax
anewell~krys boy Ie. com
Its attorneys.
COY AD PETITION -
CERTIFICATE OF SERVICE
I hereby certify that on this 28th day of February, 2005, I caused to be served a true and
correct copy of the foregoing by the method indicated below, and addressed to the following:
Mary Hobson
Stoel Rives
101 S. Capitol Blvd.
Suite 1900
Boise, ID 83702
[phone] (Fax)
~U.Mail
Hand Delivered
Overnight Mail
Telecopy (Fax)
John Devaney
Mary Rose Hughes
Perkins Coie, LLP
607 Fourteenth Street, N., Suite 800
Washington, DC 20005-2011
[phone] (Fax)
CZ S. Mail
Hand Delivered
Overnight Mail
Telecopy (Fax)
9~ 4,(
COY AD PETITION -
PETITION OF DIECA COMMUNICATIONS, INC., D/B/A COY AD
COMMUNICATIONS COMPANY FOR ARBITRATION
EXHIBIT A
Draft Interconnection Aereement
One copy delivered separately to the Idaho Public Utilities Commission
PETITION OF DIECA COMMUNICATIONS, INC., D/B/A COY AD
COMMUNICATIONS COMPANY FOR ARBITRATION
EXHIBIT B
Investigation into the Obligations of Incumbent Local Exchange Carriers to Unbundle Local
Circuit Switching for the Enterprise Market, Pennsylvania Public Utility Commission Docket
No. 1-00030100, Reconsideration Order (May 27, 2004)
PENNSYL VANIA
PUBLIC UTILITY COMMISSION
Harrisburg P A 17105-3265
Public Meeting held May 27, 2004
Commissioners Present:
Terrance J. Fitzpatrick, Chairman
Robert K. Bloom, Vice Chairman
Glen R. Thomas
Kim Pizzingrilli
Wendell F. Holland
Investigation into the Obligations of
Incumbent Local Exchange Carriers to
Unbundle Local Circuit Switching for
the Enterprise Market
Docket No. 1-00030100
RECONSIDERATION ORDER
BY THE COMMISSION:
Before the Commission is Verizon Pennsylvania Inc.s (Verizon s) Petition for
Reconsideration of that section of our December 18, 2003 Order (December Order) that
addresses the continuing obligations of Verizon to provide competitors with access to its
local circuit switching. In that Order, we found on the record before us no compelling
justification to petition the Federal Communications Commission (FCC) for a waiver of
its "no impairment" finding for local switching in the enterprise market. Verizon takes
no issue with this finding. We further stated, however, that pursuant to our Global Order
and 47 U.C. ~ 271(c)(2)(B)(vi) Verizon has a continuing obligation to provide
requesting carriers with access to its local circuit switching at the rates contained in
Verizon s Tariff 216. It is this continuing obligation section of the December Order
which Verizon s petition is directed. We will grant-in-part and deny-in-part the petition.
Covad CommunicationsCompany
Exhibit B to Petition; Page 1 of 14
Factual and Procedural Back~round
In 1996, Congress adopted a national policy of promoting local telephone
, competition through the enactment of the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (1996), amending the Communications Act of 1934 codified at
C. ~~151 et seq. (Act). The Act relies upon the dual regulatory efforts of the FCC
and its counterpart in each of the states, including the Commission, to foster competition
in local telecommunications markets. See generally Verizon Communications Inc.
Trinko 124 S. Ct. 872, 881-883 (2004) (discussing regulatory structure of the Act). The
goals of the Act are accomplished in part through the imposition of particular access
obligations upon incumbent local exchange carriers, like Verizon, and Regional Bell
Operating Companies (BOCs), also including Verizon. Relevant access obligations are
set forth in 47 U.C. ~~ 251(c)(3) and 271(c)(2)(B)(vi), respectively. Additional
relevant obligations may also be imposed by state law on a state-specific basis.
C. ~ 251(d)(3) (preserving state access regulations).
In 1999, in order to promote competition in local markets, we ordered Verizon to
provide the Unbundled Network Element Platform (UNE-P) to competitors for service to
business customers with total billed revenue from local services and intraLA T A toll
services at or below $80 000 annually. Global Order at 85-92. UNE-P was defined to
be "a combination of all network elements required to provide local service to an end
user. It contains, at a minimum, the loop, switch port, switch usage, and transport
elements.Id. at 85. The obligation to provide UNE-P was imposed through December
2003 , after which time Verizon was invited to demonstrate to the Commission that
the obligation should no longer be imposed. Id. at 90. Our December Order at 14
observed the continuation of the Global Order obligation. Concurrently, the December
Joint Petition of Nextlink et al.Opinion and Order (entered Sep. 30, 1999), Docket Nos. P-00991648
and P-00991649 (Global Order).
Covad CommunicationsCompany
Exhibit B to Petition; Page 2 of 14
Order at 16 cautioned V erizon' s competitors against assuming that this state law
obligation would continue indefinitely.
In 2001, the FCC granted Verizon s request for authorization to provide in-region
interLATA services in Pennsylvania. Pennsylvania 271 Order.Authorization was
granted as in the public interest because, in part, this Commission had put into place and
was actively providing oversight ofVerizon s performance assurance plan (PAP), which
provided the FCC with assurance the local market would remain open. Pennsylvania 271
Order at 127. The PAP measures, among other things, aspects ofVerizon s UNE-
performance.
In 2003 , the FCC issued an order relieving Verizon of its obligation under 47
C. ~ 251(c) to provide access to local circuit switching on an unbundled basis to
requesting telecommunications carriers for the purpose of serving end-user customers
using DSI capacity and above loops, except where a state commission petitions the FCC
for waiver and waiver is granted. Triennial Review Order (or TRO)at ~~ 451-458; 47
R. ~ 51.319(d)(3). Absent switching, there is no UNE-P by definition. After review
of the record in this proceeding, we decided not to petition the FCC for waiver.
December Order. Since ~ 251(c) does not presently impose upon Verizon an obligation
to provide carriers with access to local circuit switching for service to end-user customers
using DS 1 capacity and above loops, the availability of UNE- P under ~ 251 ( c) for service
to such customers has been eliminated.
In the Matter of Application ofVerizon Pennsylvania Inc., et al.for Authorization to Provide In-Region
InterLATA Services in Pennsylvania 16 FCC Rcd 17419, FCC 01-269, CC Docket No. 01-138, Order
(reI. Sep. 19 2001).
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, 18 FCC Rcd
16978, FCC 03-, as corrected by FCC 03-227, CC Docket No. 01-338, Report and Order (reI. Aug. 21
2003).
Covad CommunicationsCompany
Exhibit B to Petition; Page 3 of 14
The FCC'Triennial Review Order was challenged by various petitioners
including this Commission, in the United States Court of Appeals for the District of
Columbia. The case was argued January 28 2004. On March 2 2004, the court decided
among other things, that the Commission s challenge to the preemptive scope of the TRO
was not ripe because the FCC "has not taken any view on any attempted state unbundling
order.Us.TA. v. 359 F.3d 554 594 (D.C. Cir. 2004). The court also denied
petitions for review of the FCC's determination regarding the unbundling of enterprise
switches. Id. at 586-587. Regarding ~ 271 , the court decided that there was "nothing
unreasonable in the (FCC's) decision to confine TELRIC pricing to instances where it
has found impairment (under ~ 251).Id. at 589. The court also decided that the FCC
was not unreasonable in deciding that any duty to combine network elements under ~ 251
does not apply to ~ 271 unbundling obligations. Id. The court distinguished its holding,
however, from the separate question of whether the FCC's decision not to require
combinations under ~ 271 satisfies the general nondiscrimination requirement of ~ 202.
Id. at 590.
Our December Order distinguishes Verizon s distinct access obligations stemming
from the Global Order (an exercise of our independent state law authority), the
Pennsylvania 271 Order (memorializing federal requirements imposed on Verizon as a
condition of entry into the long distance market pursuant to 47 U.C. ~ 271), and the
Triennial Review Order (establishing minimum federal requirements pursuant to 47
C. ~ 251(c)). We recognized the FCC had relieved Verizon of the relevant
obligation under ~ 251 , but correspondingly recognized the continuation of the relevant
access obligations under state law and, to an extent, under ~ 271.
On January 2, 2004, Verizon filed a Petition for Reconsideration of our December
Order. Verizon challenges the lawfulness of that section of the December Order which
recognized Verizon s continuing obligation to provide access to UNE-P under state law.
Verizon also seeks clarification of our position on the rate at which carriers can obtain
Covad CommunicationsCompany
Exhibit B to Petition; Page 4 of 14
access to local switching under ~ 271. On January 21 2004, we granted the petition
pending consideration on the merits.
An answer to the petition was filed by the Pennsylvania Carrier s Coalition
(PCC).4 A joint answer was filed by ARC Networks, Inc. d/b/a InfoHighway
Communications Corp. and Metropolitan Telecommunications Corporation ofPA
(collectively ARC). A third answer was filed by MCI WorldCom Network Services, Inc.
(MCI).
Verizon moved to strike MCI's answer. MCI answered Verizon s Motion to
Strike.
Further, on April 16, 2004, before the FCC, Verizon filed an Emergency Request
for Declaratory Ruling and Preemption. Verizon s filing urges the FCC to issue a
declaratory ruling that the December Order-to the extent that it requires Verizon to
continue to provide unbundled access to its local switching serving the enterprise market
at TELRIC prices-is inconsistent with, and therefore preempted by, federal law. In the
Matter of Verizon Pennsylvania Inc. Petition for Declaratory Ruling and Order
Preempting the Pennsylvania Public Utility Commission s Order Directing Verizon
Pennsylvania Inc. To Provide Unbundled Access to Its Enterprise Switches, File No.
, Emergency Request for Declaratory Ruling and Preemption (filed April 16
2004).
4 The PCC is an infonnal group of competitive local exchange carriers comprised of Full Service
Computing Corp. t/a Full Service Network; A TX Licensing, Inc.; Remi Retail Communications, LLC;
and Line Systems, Inc.
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Exhibit B to Petition; Page 5 of 14
Position of the Parties
Verizon s position is that the December Order:
appears to suggest (1) that Verizon P A has a separate and
continuing additional unbundling obligation under the
Commission Global Order to provide unbundled switching
and UNE-P to enterprise customers-a conclusion directly at
odds with the 1996 Act, binding case law, and the FCC'
express conclusions; and (2) that the TELRIC rates that apply
to network elements unbundled pursuant to section 251 of the
1996 Act must also be applied to network elements
unbundled pursuant only to section 271-an assumption
expressly and unambiguously rejected by the FCC, which has
controlling authority over this question.
Petition at 1. "Simply put, a state conclusion that 'yes, an ILEC is required to unbundle
actually and directly conflicts with the federal conclusion that ', the ILEC does not
have to unbundle.
'"
Id. at 9. Thus, Verizon argues that the Commission s reading of the
Global Order as imposing a continuing obligation to provide access to local switching
directly conflicts with the FCC's national finding of non-impairment for enterprise
switching, a finding made pursuant to ~ 251 (d)(2). Id. Further, Verizon argues that any
continuing access obligation imposed by ~ 271 does not require TELRIC pricing, rather
Verizon is permitted to price access at a "market-based" rate. Id. at 12-13.
In support, Verizon cites a variety of authorities and theories. Verizon s petition
cites: 47 D.C. ~ 251(d)(2) (requiring FCC to determine which network elements should
be made available for purposes of ~ 251(c)(3)); 47 D.C. ~ 252(c)(I) (requiring state
commissions to resolve arbitration disputes consistent with regulations prescribed by the
FCC pursuant to ~ 251); USTA v. FCC, 290 F.3d 415 417-18 (D.C. Cir. 2002) (opining
that ~ 251 requires Verizon to unbundled its network elements on terms prescribed by the
FCC); TRO ~ 186 (stating that the FCC has responsibility for establishing a framework
to implement the unbundling requirements of ~ 251(d)(2)); AT&Tv. Iowa Uti/so Bd.525
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Exhibit B to Petition; Page 6 of 14
s. 366, 371 , 378 n. 6 , 387 n. 10 (1999) (for the assertion that state-specific unbundling
requirements that do not mirror FCC requirements impede competition and are prohibited
by the Act); TRO,-r,-r 187, 192, 195 (requiring state commissions to amend and alter state-
specific decisions to conform to the FCC's unbundling rules); Brief for Respondents at
92-US.T.A. v. No. 00-1012 (D.C. Cir., filed Dec. 13 2003) (explaining FCC
view that a FCC decision not to require an ILEC to unbundled a particular element
reflects a "balance" struck by the agency and that any state rule that struck a different
balance would conflict with federal law, thereby warranting preemption); and TRO,-r
(stating that FCC must interpret the Act's "impair" standard as requiring the FCC to
determine the elements that "should or should not be unbundled"
Verizon also cites TRO,-r 655, n. 1990 (declining to require BOCs, pursuant to
271 , to combine network elements that no longer are required to be unbundled under
251); TRO,-r 659 (concluding that ~ 271 requires BOCs to provide unbundled access to
elements not required to be unbundled under ~ 251
, "
but does not require TELRIC
pricing
);
TRO,-r,-r 663 (discussing pricing of unbundled access pursuant to ~ 271 and
deciding that the pricing methodology applicable to elements accessed pursuant to ~ 271
is the "basic just, reasonable, and nondiscriminatory rate standard of (47 U.C. ~~ 201
202) that is fundamental to common carrier regulation that has historically been applied
under most federal and state statutes, including (for interstate service) the
Communications Act"
);
TRO,-r,-r 659, 662-64 (further discussing pricing and
enforcement); Proceeding by the Dep t of Telecoms. And Energy on its own Motion to
Implement the Requirements of the F. C. C. 'Triennial Review Order Regarding
Switchingfor Large Business Customers Served by High-Capacity Loops E. 03-
Order (issued Nov. 25 , 2003) at 19 (holding that market prices that are subject to the
disciplining effects of competitive forces are presumptively just and reasonable and that
Verizon s pricing under ~ 271 would be subject to competitive forces).
PCC's position is that the December Order is consistent with federal law and that
Verizon s Petition "fails miserably under the Commission s long-established standards
Covad CommunicationsCompany
Exhibit B to Petition; Page 7 of 14
for reconsideration.PCC Answer at 2. "The bottom line is that this Commission is free
and should continue its current policies originally established in the Global Order until a
party, including Verizon, convinces this Commission that the policies should be
changed.Id. at 4. Further, PCC argues that the FCC has not exercised exclusive
jurisdiction over Verizon s ~ 271 obligations and notes Verizon s agreement to unbundle
its network as a condition of providing in-region, interLATA service. Id. at 12 , 20.
ARC's position, like PCC' s , is that the Commission "clearly has the authority to
take the actions it took in the (December Order), and the conclusions the Commission
reached in the (December Order) are fully consistent with the 1996 Act." ARC Answer
at 3. "Section 251 ( d)(3) does not preclude states from modifying the federal unbundling
regime, as Verizon suggests, but rather, it bars only measures that require incumbents to
violate the Act or preclude competitors from using elements to provide competing
services.Id. at 5. "(T)he Act does not demand that state rules mirror exactly the FCC'
regulations. Section 251(d)(3) of the Act clearly contemplates that the states will co-
administer Section 251's market-opening mechanisms.Id. at 6. Regarding ~ 271
pricing, ARC notes that the December Order does not require TELRIC pricing, rather
the Commission held that Tariff No. 216 rates satisfy the "just and reasonable" pricing
standard for ~ 271 elements, especially given the fact that the FCC has determined in the
course ofVerizon s ~ 271 proceeding that the Tariff No. 216 rates are just and
reasonable. Id. at 8-
MCl's position on the merits of the December Order is substantially the same as
the positions taken by PCC and ARC. The distinguishing feature ofMCl's Answer5 is
Verizon moves to strike MCrs Answer on the ground that MCI was not one of the petitioners in this
case and has never filed a Petition to Intervene in this proceeding. Alternatively, Verizon argues that
Verizon had consented to an extension of time for "parties" to answer the petition. Given that MCI is not
a "party," and therefore not subject to the extension, Verizon argues the MCI Answer should be stricken
as untimely. Verizon Motion at 2. MCI responds that it is true that MCI did not formally intervene, but
that is because MCI did not intend to present evidence on issues specifically dealing with the enterprise
market. When Verizon s Petition brought other issues into the case, MCI argues its rights became
Covad CommunicationsCompany
Exhibit B to Petition; Page 8 of 14
that MCI did not participate in the development of the factual record in this CLEC-
initiated investigation, but now argues that this proceeding is not the place for Verizon to
challenge the Commission Global Order decision because many CLECs interested in
the preservation of the Global Order requirements are not on this Docket's service list.
MCI Answer at 1-2. MCI argues that Verizon s Petition broadens the scope of this
proceeding by challenging the viability of the Global Order requirements generally.
MCI accepts that Verizon has a procedural right to make such a challenge, but argues that
(i)f V erizon disagrees that the Global Order creates a continuing obligation, it should
petition the Commission separately, but should not use this proceeding to make such a
monumental change in the current legal landscape in Pennsylvania.Id. at 3.
In opposition to Verizon s Petition, opponents ' citations include TRO ~~ 191-
653 662 665; the FCC'USTA Brief at 90-91; 47 D.C. ~~ 152(b), 251(d)(3),
252(e)(3), 253(b), 254(i), 261(b)&(c), 153(41), 601(c), and 706(c); Verizon
Communications Inc. v. Trinko, supra; Application of Verizon PaM Inc. et al. for
Authorization to Provide In-Region, InterLATA Services in Pa., supra.
Analysis
Whether the Commission Will Consider the Merits ofVerizon s Petition
The Commission will only address reconsideration requests that raise new and
novel arguments, not previously heard, or considerations that appear to have been
overlooked or not addressed by the Commission. Duick v. Pennsylvania Gas Water
Co.56 Pa. P.C. 553 (1982). Thus, reconsideration petitions that raise the same
questions as raised previously are improper.
directly affected, and therefore, it is entitled to respond to the petition. MCI Answer to Verizon Motion at
Covad CommunicationsCompany
Exhibit B to Petition; Page 9 of 14
In this case, we will consider the merits of Verizon' s Petition in order to address
the guidance and clarifications of the Act and Triennial Review Order provided by the
federal courts and the FCC since issuance of our December Order.
Whether the Commission Will Consider the Merits of MCl's Answer
The section of the December Order that is challenged by V erizon' s Petition for
Reconsideration merely reminded Verizon and the CLECs of the continuing obligations
of the Global Order absent further proceedings. Preemption arguments made by the
parties in this proceeding had prompted our decision to be clear on the point of whether
we viewed the Global Order requirements as remaining intact. We specifically stated:
Given the lack of record development and the uncertainty as to an actual conflict, as
well as our open and unanswered invitation to (V erizon) to demonstrate that the Global
Order requirement can be retired, we will not change the status quo vis-a-vis access at
this time.December Order at 15. Similarly, we left the Tariff No. 216 pricing in place.
Id. at 16.
We continue to believe it was beneficial to the competitive markets to be clear on
the status of the Global Order. We also note recent support for our position. The D.
Circuit has decided that the concern we expressed in December about the preemptive
effect of the Triennial Review Order was premature. U8.TA. v. 359 F.3d at 594.
Further, the FCC recently observed that uncertainty can be harmful to telephone
consumers. Letter of FCC Commissioners to Verizon President & CEO Ivan Seidenberg,
dated March 31 , 2004, available at
Imp:/ /www .fcc.gov / commissioners/letters/triennial review/verizon.QQf (stating
telephone consumers are served best by ending this uncertainty and getting back to
6 Due to our disposition of the Petition, we do not add parentheticals to these citations.
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Exhibit B to Petition; Page 10 of 14
business
).
These actions favor our decision to maintain the status quo pending formal
proceedings.
Formal proceedings initiated to address the issue of whether we should amend the
Global Order would provide all interested parties with notice and an opportunity to be
heard as well as assure development of an adequate record. See 66 Pa.S. ~~ 501(a),
703(g). Because of this, we will simply apply 52 Pa. Code ~ 1.2(c), which permits a
liberal construction of our formal proceeding rules when necessary and appropriate, to
allow consideration of MCl's Answer. Therefore , Verizon s Motion to Strike MCl's
Answer to Verizon s Petition for Reconsideration will be denied.
Consideration of the Merits ofVerizon s Petition for Reconsideration
We grant the petition in part to clarify our position on the pricing of network
elements unbundled pursuant to ~ 271. Contrary to V erizon' s suggested interpretation
the December Order does not mandate that TELRIC pricing be used to price such
network elements. Rather, as observed by ARC, the order merely provides that existing
Tariff No. 216 rates be used at present because they are currently in effect and fall within
the range of a just and reasonable price. Verizon remains free to exercise all of its rights
to propose the establishment of new just and reasonable prices applicable to ~ 271
network elements.
Since the Triennial Review Order did not fully flesh out all the processes
procedures and requirements associated with Verizon s ~ 271 access obligations, we
recognize that it remains unclear as to where and how Verizon' s "just and reasonable
rate for access in a particular state (since ~ 271 is granted on a state-by-state basis) is
established and/or disclosed to the requesting carrier. Our review of the TRO the D.
Circuit's opinion , and even the FCC's brief in the USTA litigation, has not provided any
clarity on this point. However, given that the Tariff No. 216 is filed with the
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Exhibit B to Petition; Page 11 of 14
Commission, the Commission s existing procedures for tariff changes, namely 66 Pa.
S. ~~ 1301 and 1308, are available to be used ifVerizon seeks to establish new non-
TELRIC rates for enterprise switching. Meanwhile, the uncertainty again supports our
observation that the Tariff No. 216 rates are currently in effect and should be used until a
new rate is properly established.
We deny the remaining portion of the petition. Weare not persuaded that
maintaining the status quo vis-a.-vis the Global Order requirements is improper. We
continue to believe that absent further proceedings, which Verizon is free to initiate
Verizon has a separate and continuing additional unbundling obligation under the Global
Order to provide unbundled switching and UNE-P to enterprise customers. Support for
our view is found in multiple sources, specifically including 47 D.C. ~ 251(d)(3)
(preserving state access requirements); and Us.TA. v. 359 F.3d at 594 (holding
that our challenge to the preemptive scope of the TRO is not ripe because the general
prediction voiced in TRO ~ 195 does not constitute final agency action). In particular, the
Global Order provides that the availability of UNE- P for enterprise customers would not
be indefinite and that Verizon may request its termination after December 31 , 2003.
Verizon has yet to avail itself of this opportunity.
Furthermore, even if the Global Order requirements are deemed to be preempted
(and no court has so determined), there is support for finding a continuing access
obligation in ~ 271 ' s requirement that Verizon provide access to its local switching.
Presently, no FCC decision has relieved Verizon from its ongoing ~ 271 obligations in
Pennsylvania, or fully defined what those obligations are in the wake of the Triennial
7 The Commission has tariffs on file that allow Verizon pricing flexibility. See Verizon
Pennsylvania Inc. Informational Tariff for Competitive Services, Pa. P.C. No. 500, Section 2, 1 st
Revised Sheet 13 at ~ 29 (providing that the rates for Centrex Service packages "will be determined by
the Telephone Company... (and) will range from a floor represented by the costs of furnishing service to a
ceiling represented by the rates set forth in Sections 2 and 2A of this Informational Tariff.
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Exhibit B to Petition; Page 12 of 14
Review Order.
8 We conclude that there is no firm basis for this Commission to
unilaterally sanction removal of a ~ 271 element from Verizon s offerings in
Pennsylvania under the present state of FCC orders. IfVerizon believes that its ~ 271
obligations in Pennsylvania have changed, it should put that issue to the FCC. Upon
FCC approval ofVerizon s position, modifications of relevant offerings would then be
appropriate.
We also note that Verizon may not have to offer such switching in combination
under ~ 271 by virtue of ~ 251 , but it has not been decided whether Verizon must
combine the switching with other elements under another legal theory. See US.TA.
359 F.3d at 590; Verizon v. Trinko 124 S. Ct. at 882-83 (holding that Verizon
may subject itself to state commission oversight under a performance assurance plan).
We do not imply a viewpoint on the merits of alternative legal theories, rather, we make
these observations to explain why we maintain the status quo in the absence of a fully
developed record on the issues raised in V erizon' s instant Petition for Reconsideration.
Our action in this regard is without prejudice to Verizon s right to seek further
administrative relief, and we invite Verizon to initiate appropriate formal proceedings to
address the preemption and pricing issues raised in its Petition for Reconsideration;
THEREFO RE
IT IS ORDERED:
That the Petition for Reconsideration of our Order entered December 18
2003, filed by Verizon Pennsylvania Inc. on January 2, 2004, and granted pending review
8 On October 24, 2003, the Verizon telephone companies filed a petition asking the FCC to forebear from ~ 271
obligations. See Petitionfor Forbearance of the Verizon Telephone Companies Pursuant to 47 US.c. 160(c);
Docket No. 01-338. The matter is pending.9 The Pennsylvania Performance Assurance Plan measures aspects ofVerizon s UNE-P performance.
Covad CommunicationsCompany
Exhibit B to Petition; Page 13 of 14
and consideration of the merits by Order entered January 21, 2004, is hereby granted-in-
part and denied-in-part consistent with the discussion contained in the body of this Order.
That Verizon s Motion to Strike the Answer ofMCI to Verizon s Petition
for Reconsideration is denied.
That this record shall be marked closed.
BY THE COMMISSION
James J. McNulty
Secretary
(SEAL)
ORDER ADOPTED: May 27, 2004
ORDER ENTERED: May 28, 2004
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Exhibit B to Petition; Page 14 of 14