20050518Reply brief on the merits.pdf

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Mary S. Hobson (ISB No. 2142)
STOEL RIVES LLP
101 South Capitol Blvd., Suite 1900
Boise, Idaho 83702
Telephone: [phone]
Facsimile: [phone]
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Adam L. Sherr
QWEST CORPORATION
1600 Seventh Avenue, Room 3206
Seattle, Washington 98191
Telephone: [phone]
Facsimile: [phone]
John M. Devaney
PERKINS corn LLP
607 Fourteenth St., N., Suite 800
Washington, D.C. 20005
Telephone: [phone]
Facsimile: [phone]
devaney~perkinscoie. com
Attorneys for Qwest Corporation
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. CYD-05-
QWEST CORPORATION'S REPLY
BRIEF ON THE MERITS
Qwest Corporation ("Qwest") submits this reply brief in support of its positions in this
interconnection arbitration under the Telecommunications Act of 1996 ("the Act") between
Qwest and Covad Communications Company ("Covad"
INTRODUCTION
Qwest and Covad have been able to resolve most of their disputes through cooperative
good faith negotiations, leaving only one disputed issues that the Commission must decide in this
QWEST CORPORATION'S REPLY BRIEF ON THE MERITS - Page 1
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arbitration. As Qwest stated in its initial brief, the parties' inability to resolve this remaining
issue is largely attributable to Covad's adherence to overly aggressive demands that are without
legal support. Covad continues this approach in its opening brief.
The absence of legal support for Covad's arguments is demonstrated by Covad'
willingness to voluntarily accept Qwest's language in the Colorado Covad/Qwest arbitration and
the recent decisions in the Covad/Qwest arbitrations in Minnesota, Washington and Utah. 1 The
commissions and administrative law judges in those states have uniformly ruled for Qwest on the
single issue in this arbitration, finding that Covad's position lacks legal and evidentiary support.
There is thus now a substantial body of determinations and recommendations by neutral
decision-makers relating to the disputed issue that the Commission must decide in this
proceeding. These decisions and recommendations demonstrate forcefully the significant flaws
in Covad's proposal. In the discussion that follows, Qwest further demonstrates these flaws and
explains why the Commission should adopt Qwest's proposal.
Before turning to the merits of Qwest's response to Covad's opening brief, it is important
to emphasize that Qwest provides competitive local exchange carriers ("CLECs ), including
Covad, with access to network elements through means other than Section 251 interconnection
See In the Matter of the Petition ofDIECA Communications, Inc., d/b/a Covad Communications Company
for Arbitration to Resolve Issues Relating to an Interconnection Agreement with Qwest Corporation, Minnesota
Commission Docket No. P-5692, 421/IC-04-549, Arbitrator s Report ~~ 46-50 (Minn. PUC Dec. 16 2004)
Minnesota ALJ Order ) affd in part In the Matter of the Petition of Covad Communications Company for
Arbitration of an Interconnection Agreement With Qwest Corporation Pursuant to 47 U.C. ~ 252(b), Minnesota
Commission Docket No. P-5692, 421/IC-04-549, Order Resolving Arbitration Issues and Requiring Filed
Interconnection Agreement at 5 (Minn. PUC March 14 2005) ("Minnesota Arbitration Order ); In the Matter of the
Petition for Arbitration of Covad Communications Company with Qwest Corporation, Washington Commission
Docket No. UT -043045, Order No. 06, Final Order Affmning in Part, Arbitrator s Report and Decision; Granting, In
Part, Covad's Petition for Review; Requiring Filing of Conforming Interconnection Agreement ~ 37 (Wash. UTC
Feb. 9, 2005) ("Washington Arbitration Order ); In the Matter of the Petition ofDIECA Communications, Inc., d/b/a
. Covad Communications Company, for Arbitration to Resolve Issues Relating to an Interconnection Agreement with
Qwest Corporation, Utah Commission Docket No. 04-2277-, Arbitration Report and Order at 19-21 (Utah
Commission Feb. 8, 2005) ("Utah Arbitration Order
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agreements ("ICAs
).
For example, under commercial agreements that Qwest and Covad have
entered into throughout Qwest's region, Covad continues to have access to line sharing despite
the FCC's ruling that "de-listed" line sharing as a Section 251 unbundled network element
UNE"). Similarly, pursuant to multi-state commercial agreements between the parties
involving a product known as "Qwest Platform Plus " Covad still has access to switching and
shared transport, neither of which incumbent local exchange carriers ("ILECs ) are required to
provide as UNEs under Section 251.2 Under these agreements, Qwest provides access to
network elements and services based on commercially negotiated terms and rates, not based on
the pricing and other terms that the Act mandates for UNEs.
In addition, Qwest provides CLECs with access to many of its network elements
including loops and dedicated transport, through Qwest's FCC1 Access Service Tariff. For
example, Section 6 of Qwest's tariff provides CLECs with general Switched Access Service
which includes loops and is defined as "a two-point electrical communications path between a
customer s premises and an end user s premises. . .." Section 6.A specifically addresses
Switched Transport and allows CLECs to obtain "transmission facilities between the customer
premises and the end office switch( es) where the customer s traffic is switched to originate or
terminate its communications." Under Switched Transport, CLECs also may purchase Direct
Trunk Transport, which is a transmission path on circuits dedicated to the use of a single
customer. FCC 1 Access Service Tariff 9 6.(b). Thus, network elements Covad seeks are
available through Qwest's tariffs in addition to commercial agreements.
2 As Qwest has entered into these commercial agreements with CLECs in Idaho, it has submitted the agreements to
this Commission for informational purposes.
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Accordingly, a ruling by this Commission that the ICA between Qwest and Covad should
only include access to UNEs that Qwest is required to provide under Section 251 - as the
Minnesota, Utah, and Washington commission have ruled - does not mean that Covad will be
without access to any non-251 network elements and services. Consistent with the Act'
fundamental objective oftransitioning the telecommunications industry away from a regime of
extensive regulation and toward a more market-driven, deregulatory structure 3 Covad will still
have access to multiple non-251 elements through commercially negotiated agreements and
tariffs.
ARGUMENT
Issue 1: Section 4 Definition Of "Unbundled Network Element" and Sections
1.1, 9.1.1.6, 9.1.1.7, 9.1.1.8, 9.1.5, 9.1.3, 9.1.4, 9.1.1, 9.1.2, 9.
, 9.6, 9.1.5.1 (and related 9.1.5), 9.1.6.1 (and related 9.1.6) and21.2.
As Qwest demonstrated in its opening brief, the Act's "impairment" standard imposes
important limitations on ILECs' unbundling obligations , as has been forcefully demonstrated by
the Supreme Court's decision in AT&T Corp. v. Iowa Utilities Boarct and the D.C. Circuit'
decisions in UST A and UST A If invalidating three of the FCC's attempts at establishing lawful
unbundling rules. In this case, the unbundling obligations that Covad would have the
Commission impose on Qwest ignore entirely these critical limitations and are based on the
legally flawed assumption that a state commission may require unbundling under state law that
the FCC has expressly rejected. As shown by its opening brief, Covad does not recognize the
Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, In the Matter of
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers 18 FCC Rcd 16978
, ~
, n.198 (2003) Triennial Review Order or TRO"
525 U.S. 366 (1998) Iowa Utilities Board"
Us. Telecom Ass v. FCC 290 F.3d415 (D.C. Cir. 2002) USTA 1').
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Act's important limits on state law authority - namely, that such authority must be exercised
consistently with Section 251 and the federal unbundling regime established by the FCC.
Moreover, Covad is asking this Commission to order broad unbundling of network elements
without having provided any evidence that it will be impaired in the absence of access to those
elements. Covad's broad unbundling requests cannot be permitted without evidence of
impairment, and there is no such evidence before the Commission.
Covad also improperly asks this Commission to require unbundling and set rates under
Section 271 , ignoring that states have no decision-making authority under that section.
discussed below, the FCC has exclusive jurisdiction to determine the network elements that
BOCs are required to provide under Section 271 and to determine the rates that apply to those
elements. The FCC cannot - and has not - delegated that authority to state commissions. Covad
offers several strained readings of the Act to support its claim that states have unbundling
authority under Section 271 , but its interpretations are wrong and certainly do not come close to
establishing that Congress has expressly conferred Section 271 decision-making authority on
state commissions.
The Washington Commission ruled correctly when it recently stated:
(TJhis Commission has no authority under Section 251 or Section
271 of the Act to require Qwest to include Section 271 elements in
an interconnection agreement. . . . (andJ any unbundling
requirement based on state law would likely be preempted as
inconsistent with federal law, regardless of the method the state
used to require the element.
The Commission should rule likewise and find that Covad's requests are improper and
without legal support.
Us. Telecom Ass v. FCC 359 F.3d 554 (D.C. Cir. 2004) (" USTA 11').
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It Is Improper To Include Terms Relating To Network Elements Provided
Under Section 271 In An Interconnection Agreement.
As Qwest discussed in its initial brief, there is no statutory or other legal basis for
including terms and conditions relating to network elements provided under Section 271 in a
Section 252 interconnection agreement. 8 Indeed, the FCC has defined the "interconnection
agreements" that must be submitted to state commissions for approval as "only those agreements
that contain an ongoing obligation relating to section 251 (b) or (c) . . . ,,9 Thus, the term
interconnection agreement" encompasses only terms and conditions relating to network
elements and other services provided under Section 251 and does not include terms and
conditions relating to elements provided under Section 271. As the Minnesota ALJ stated in a
ruling recently upheld by the Minnesota Commission
, "
there is no legal authority in the Act, the
TRO or in state law that would require the inclusion of section 271 terms in the interconnection
agreement, over Qwest's objection.
Accordingly, for these reasons and those set forth in Qwest's initial brief, Covad's attempt
to include Section 271 network elements in the ICA is improper and should be rejected. The
terms and conditions relating to offerings under Section 271 are properly addressed in
commercial agreements and tariffs, not ICAs. The Commission should reject Covad's proposals
for the following ICA sections: Section 4.0 definition of "UNE," Sections 9.1.1; 9.1.5; 9.1.4;
9.3.1.1; 9.3.1.2; 9.3.2; 9.3.2.1; and 9.6. For each of these sections, the Commission should
adopt Qwest's proposed language.
Washington Arbitration Order ~ 37.
Qwest Corporations Initial Brief ("Qwest Br. ") at 15-17.
Memorandum Opinion and Order, Qwest Communications Int'l Inc. Petition for Declaratory Ruling on the
Scope of the Duty to File and Obtain Prior Approval of Negotiated Contractual Arrangements under Section
252(a)(1), FCC 02-276, WC Docket No. 02-89 ~ 8 n.26 (FCC Oct. 4, 2002) ("Declaratory Order
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Covad Has Provided No Legal Support For Its Claim That State
Commissions Have Decision-Making Authority Under Section 271 And Can
Impose Unbundling Obligations Under That Provision Of The Act.
The Act does not give state commissions any substantive decision-making role in the
administration and implementation of Section 271. Section 271(d)(3) expressly confers upon the
FCC, not state commissions, the authority to determine if BOCs have complied with the
substantive provisions of Section 271 , including the 271 checklist provisions upon which Covad
bases its arbitration demands for 271 unbundling. State commissions have only a non-
substantive, consulting role in that determination. Accordingly, even if it were proper to address
Section 271 issues in the context of a Section 252 arbitration, the Commission still would not
have authority to impose affirmative obligations under that section.
Significantly, in its discussion of this issue, Covad fails to cite any provision or language
in the Act giving a state commission decision-making authority under Section 271. While
Section 271 requires the FCC to "consult" with a state commission in reviewing a BOC'
compliance with that section in connection with applications for authority to provide long
distance service, there is an obvious difference between Congress s decision to give states
consulting authority relating to BOCs' Section 271 applications and the complete absence of any
Congressional delegation of decision-making authority under that provision.
As the D.C. Circuit made emphatically clear in USTA II the only authority that state
commissions have under the Act is that which Congress has clearly and expressly delegated to
them.12 Under the Act, Congress and the FCC took over the regulation of local telephone
10 Minnesota ALJ Order ~ 46.
11 See Qwest Br. at 15-17.
USTA II 359 F.3d at 565-68.
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service, leaving the states only with authority that Congress expressly granted. The Seventh
Circuit recently described this regulatory regime:
In the Act, Congress entered what was primarily a state system of
regulation of local telephone service and created a comprehensive
federal scheme of telecommunications regulation administered by
the Federal Communications Commission (FCC). While the state
utility commissions were given a role in carrying out the Act
Congress "unquestionably" took "regulation of local
telecommunications competition away from the State" on all
matters addressed by the 1996 Act;" it required that the
participation of the state commissions in the new federal regime be
guided by federal-agency regulations.
Under this regime, states are not permitted to regulate local telecommunications
competition "except by the express leave of Congress. " 14 As described by the Third Circuit
(b Jecause Congress validly terminated the states' role in regulating local telephone competition
and, having done so, then permitted the states to resume a role in that process, the resumption of
that role by a state is a congressionally bestowed gratuity.15 Thus, the court explained, a "state
commission s authority to regulate comes from Section 252(b) and ( e), not from its own
sovereign authority.16 Here, there has been no delegation of271 decision-making authority to
state commissions, and this Commission therefore has no authority to impose the Section 271
unbundling obligations that Covad seeks to impose through its proposed ICA unbundling
language.
13 Indiana Bell Telephone Co., Inc. v. Indiana Utility Regulatory Comm , 359 F.3d 493 494 (7th Cir. 2004)
(quoting AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 378 n.6 (1999)).
14 MCI Telecommunications Corp. v. Bell Atlantic-Pennsylvania 271 F.3d 491 , 510 (3rd Cir. 2001) (internal
citations omitted).
Id.
Id.
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As Qwest discussed in its initial brief, in Indiana Bell Telephone Company v. Indiana
Utility Regulatory Commission 17 a federal district court held that the consulting role given to
states under Section 271 does not give a state commission substantive decision-making authority.
Indiana Bell confirms the absence of a decision-making role for states under Section 271. The
decision contrasts the substantive role that states have in administering Sections 251 and 252
with the "investigatory" and "consulting" role they have under Section 271.18 In recognizing the
different roles that Congress assigned states under these distinct provisions of the Act, the court
noted that the Act does not include a "savings clause" that preserves the application of state law
in the administration of Section 271.19 By contrast, the court observed, Congress included a
savings clause - Section 261(b) - that preserves the application of "consistent" state regulations
in the administration of Sections 251 and 252.20 As the court found, this contrast confirms
further that Congress did not intend a substantive role for states in the administration of Section
271.
Further, Covad's suggestion that a state legislature may grant to its agencies the authority
to administer federal law that Congress has withheld is frivolous.22 A state legislature may
plainly confer authority to adopt and enforce state law if Congress has not preempted the law
subject. It may also permit the state s administrative agencies to exercise any authority conferred
upon them by Congress. However, state legislatures may not confer authority to administer
2003 WL 1903363 (S.D. Ind. March 11 , 2003).
Id. at *11.
Id.
Id.
Id.
Covad Br. at 10-11.
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federal law that has been withheld by Congress. Covad cites no decision from any court or
agency, federal or state, holding otherwise.
In addition, the provision of Idaho law that Covad cites does not even remotely purport to
give the Commission authority to engage in substantive decision-making under Section 271 or to
require unbundling of network elements that the FCC has declined to require ILECs to
unbundle?3 Specifically, Covad cites Section 62-614 of the Idaho Telecommunications Act of
1988 , the limited purpose of which is to establish that this Commission has authority to resolve
disputes involving certain incumbent local exchange telephone companies. The statute does not
address network unbundling and, since it pre-dates the 1996 Act by eight years, does not
mention Section 271.
The order issued by the Maine Commissions in a tariff proceeding involving Verizon
which Covad relies upon in its brief,24 is also plainly distinguishable and does not support
Covad's unbundling demands under Section 271. As the Minnesota ALJ found in the
Qwest/Covad arbitration in that state, the Verizon-Maine decision "is distinguishable on its facts
as it appears to be premised on enforcement of a specific commitment that Verizon made to the
Maine Commission during 271 proceedings to include certain elements in its state wholesale
tariff. ,,
Indeed Verizon-Maine did not involve an interconnection arbitration under Section 252
and thus did not present the issue presented here - whether a state commission serving as an
arbitrator in a Section 252 arbitration has authority to impose Section 271 unbundling in an ICA.
Instead, the issue in that proceeding was whether the Maine Commission could require Verizon
See Covad Br. at 8.
Covad Br. at 4. This order is attached to Covad's Initial Brief.
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to honor unbundling commitments it made during the Section 271 approval process by ordering
it to amend a wholesale tariff to include network elements that the FCC had de-listed from
Section 251 in the TRO. The Commission ruled that it had the authority to require Verizon to
amend the tariff because, as a condition to receiving approval for entry into the Maine long
distance market, Verizon had specifically agreed to include its unbundling obligations under both
Section 251 and 271 in the tariff: "We find, upon consideration of each of these factors, that we
do have authority to enforce Verizon s commitment to file a wholesale tariff with us that includes
both its section 251 and 271 obligations. ,,26 Significantly, the Commission also recognized that it
does not have authority independent of the FCC to determine the scope of Section 271
obligations: "This is not to suggest that the Commission has the independent authority to define
the scope of (Section 271J obligations where the FCC has clearly spoken; merely that, in light of
Verizon s commitment, the Commission has an independent role in determining whether those
obligations have been met. ,,
Here, unlike in the Maine proceeding, Covad is specifically asking this Commission to
exercise independent unbundling authority under Section 271 , not to enforce a commitment made
during the Section 271 approval process. The Commission does not have that authority, and the
Maine orders does not suggest otherwise.
Minnesota ALJ Order ~ 46.
Maine Order at 12.
Id. at 14.
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The Commission Does Not Have Authority To Establish Prices For Section
271 Elements.
Covad asserts that the Act and the FCC'Triennial Review Order ("TRO,,)28 establish the
authority of state commissions to set prices for Section 271 elements.29 For several reasons, this
argument is seriously flawed, as Qwest discusses in its initial brief.
First, the FCC was quite clear in the TRO that it has responsibility for setting prices for
elements that BOCs provide under Section 271: "w )hether a particular (Section 271) checklist
element's rate satisfies the just and reasonable pricing standard is a fact specific inquiry that the
Commission (i.the FCC) will undertake in the context of a BOC's application for Section 271
authority or in an enforcement proceeding brought pursuant to section 271 (d)(6).
Second, Sections 201 and 202, which govern the rates, terms and conditions applicable to
the unbundling requirements imposed by Section 271 32 provide no role for state commissions.
That authority has been conferred by Congress upon the FCC and federal courtS.33 The FCC has
not delegated that authority, and Congress has not permitted it to do so.
Third, the pricing authority that state commissions have under Section 252( d)(1) does not
empower states to set rates for Section 271 elements. The authority granted by that provision is
28 Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, In the Matter of
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers; Implementation of the
Local Competition Provisions of the Telecommunications Act of 1996; Deployment of Wire line Services Offering
Advanced Telecommunications Capability, CC Dkt. Nos. 01-338, 96-, 98-147, FCC 03-36 (FCC reI. Aug. 21
2003) ("Triennial Review Order" or "TRO"), vacated in part, remanded in part, U.S. Telecom Ass n v. FCC, 359
F.3d 554 (D.C. Cir. 2004).
Covad Br. at 6-
Qwest Br. at 17-19.
TRO ~ 664.
Id. ~~ 656, 662.
33 See id.47 U.C. ~~ 201(b) (authorizing the FCC to prescribe rules and regulations to carry out the Act'
provisions), 205 (authorizing FCC investigation of rates for services, etc. required by the Act), 207 (authorizing FCC
and federal courts to adjudicate complaints seeking damages for violations of the Act), 208(a) (authorizing FCC to
adjudicate complaints alleging violations of the Act).
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expressly limited to determining "the just and reasonable rate for the interconnection of facilities
and equipment for purposes of subsection (251 (c )(2)) . . . (and) for network elements for
purposes of subsection (251 (c )(3)). ,,34 Thus, the only network elements over which states have
pricing authority are those that an ILEC provides pursuant to Section 251(c)(3). Nothing in the
Act extends that authority to Section 271 elements, as evidenced by Covad's inability to cite any
statutory provision that even remotely suggests state commissions have such authority.
Significantly, as Qwest discussed in its initial brief, the FCC recently rejected
substantially the same pricing argument in its opposition to the petitions for a writ of certiorari
filed with the Supreme Court by NARUC, state commissions, and certain CLECs in connection
with UST A 11.35 Addressing NARUC's contention that Section 252 gives state commissions
exclusive authority to set rates for network elements, the FCC stated that the contention "rests on
a flawed legal premise. ,,36 It explained that Section 252 limits the pricing authority of state
commissions to network elements provided under section 251(c)(3).
Fourth, Covad's claim that the Commission has authority to set TELRIC rates for Section
271 elements - which of course incorrectly assumes that state commissions have pricing
authority over Section 271 elements - is directly refuted by the TRO and USTA II In the TRO,
the FCC ruled very clearly that any elements a BOC provides pursuant to Section 271 are to be
priced based on the Section 201-02 standard that rates must not be unjust, unreasonable, or
47 U.C. ~ 252(d)(1).
Qwest Br. at 18-19.36 Brief for the Federal Respondents in Opposition to Petitions for Writ of Certiorari National Association of
Regulatory Utility Commissioners v. United States Telecom Ass Supreme Court Nos. 04-, 04-, and 04-18 at
23 (filed Sept. 2004).
37 Id.
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unreasonably discriminatory.38 Consistent with its prior rulings in Section 271 orders, the FCC
confirmed that TELRIC pricing does not apply to these network elements.39 In USTA II the D.
Circuit reached the same conclusion, rejecting the CLECs' claim that it was "unreasonable for the
Commission to apply a different pricing standard under Section 271" and instead stating that "
see nothing unreasonable in the Commission s decision to confine TELRIC pricing to instances
where it has found impairment. ,,
The Act Does Not Permit The Commission To Create Under State Law
Unbundling Requirements That The FCC Rejected In The TRO Or That
The D.C. Circuit Vacated In UST A IL
As Qwest demonstrated in its initial brief, under Section 251 of the Act, there is no
unbundling obligation absent an FCC requirement to unbundle and a lawful FCC impairment
finding. Section 251(c)(3) authorizes unbundling only "in accordance with. . . the requirements
of this section (251 J. ,,41 Section 251 (d)(2), in turn, provides that unbundling may be required
only if the FCC determines (A) that "access to such network elements as are proprietary in nature
is necessary" and (B) that the failure to provide access to network elements "would impair the
ability of the telecommunications carrier seeking access to provide the services that it seeks to
offer.,,42
Congress explicitly assigned the task of applying the Section 251 (d)(2) impairment test
and "determining what network elements should be made available for purposes of subsection
TRO ~~ 656-64.
Id.
USTA II 359 F.3d at 589; see generally id. at 588-90.
47 U.C. ~ 251(c)(3).
47 U.C. ~ 251(d)(2).
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(251J(c)(3)" to the FCC.43 The Supreme Court confirmed that as a precondition to unbundling,
Section 251(d)(2) "requires the (Federal CommunicationsJ Commission to determine on a
rational basis which network elements must be made available, taking into account the objectives
of the Act and giving some substance to the 'necessary' and 'impair' requirements.44 And
USTA II establishes that Congress did not allow the FCC to have state commissions perform this
work on its behalf.45 Consistent with these rulings, as Qwest discussed in its opening brief, the
FCC recently ruled in the Bel/South Declaratory Order that state commissions are generally
without authority to require ILECs to unbundle network elements that the FCC has declined to
require ILECs to unbundle.
Covad responds to the legal framework established by these authorities and those
described in Qwest's opening brief as if it were not there, arguing that the Act, the TRO and
UST A II do not impose any meaningful limits on the authority of state commissions to require
unbundling under state law. Thus, Covad asserts that the Commission is free to require Qwest to
provide network elements that the FCC declined to require ILECs unbundle based on specific
findings that CLECs are not impaired without them.47 Covad's argument fails to recognize that
the Act's savings clauses preserve independent state authority only to the extent that authority is
exercised in a manner consistent with the Act.48 This point was forcefully confirmed in the
47 U.C. ~ 251(d)(2).
Iowa Utilities Board 525 U.S. at 391-92.
See USTA II 359 F.3d at 568.
Qwest Br. at 11-12.47 For example, Covad asserts that the Board has authority to require access to "subloop elements" (Covad Br.
at 2) even though the FCC expressly ruled in the TRO that CLECs are not impaired without access to feeder subloops
and that ILECS are therefore not required to provide them. TRO ~ 253.
Qwest Br. at 12-13.
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recent decision from the United States District Court for the District of Michigan discussed in
Qwest's initial brief.
The fundamental problem with Covad's position, as confirmed by its brief, is that it
requires unbundling regardless of consistency with the Act. As Qwest described in its opening
brief, the inevitable conflicts with federal law that would result from adoption of Covad'
position are demonstrated by the application of Covad's proposed unbundling language to feeder
sub loops. 50 Covad fails to respond to this striking example of how the virtually limitless
unbundling obligations that would result from its language directly conflict with federal law and
the "federal regime" that the FCC alone has authority to implement. And this example would not
be an isolated occurrence under Covad's unbundling language, as the language is broad enough
for Covad to contend that Qwest is required to provide unbundled access to OCn loops, feeder
subloops, DS3 loops (in excess of two per customer location), extended unbundled dedicated
interoffice transport and extended unbundled dark fiber, and other elements despite the FCC'
fact-based findings in the TRO that CLECs are not impaired without access to these elements.
As the FCC stated quite clearly in the TRO, the type of state law unbundling regime that
Covad is proposing - one that ignores altogether FCC findings of non-impairment with respect to
individual elements
- "
overlook(sJ the specific restraints on state action taken pursuant to state
law embodied in section 251 (d)(3), and the general restraints on state actions found in sections
Qwest Br. at 10-11.
Qwest Br. at 13 and n. 39.51 In the following paragraphs of the TRO the FCC ruled that ILECs are not required to unbundled these and
other elements under Section 251: ~ 315 (OCn loops); ~ 253 (feeder subloops); ~ 324 (DS3 loops); ~ 365 (extended
dedicated interoffice transport and extended dark fiber); ~~ 388-89 (OCn and DS3 dedicated interoffice transport);
~~ 344-45 (signaling); ~ 551 (call-related databases); ~ 537 (packet switching); ~ 273 (fiber to the home loops); ~ 560
(operator service and directory assistance); and ~ 451 (unbundled switching at a DS1 capacity).
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261 (b) and (c) of the Act. ,,52 This approach to state law unbundling "ignore ( s J long-standing
federal preemption principles that establish a federal agency s authority to preclude state action if
the agency, in adopting its federal policy, determines that state actions would thwart that
policy. ,,53 As the United States Court of Appeals for the Seventh Circuit stated
, "
we cannot now
imagine" how a state could require unbundling of an element consistently with the Act where the
FCC has not found the statutory impairment test to be satisfied.
Equally significant, any unbundling obligations imposed under state law would have to be
supported by an express finding that Covad would be impaired without access to specific
network elements. A finding of impairment is essential under Section 251 , and any unbundling
requirement that does not rest on such a finding is plainly unlawful. Covad's failure to provide
any evidence of impairment is thus fatal to its unbundling demands, as the Commission has no
evidentiary record upon which to base findings of impairment or requirements to unbundle.
Relying on an inaccurate interpretation of a ruling by the Illinois Commerce Commission
that is expressly based on Illinois law, Covad asserts that this Commission must apply Idaho law
relating to network unbundling without concern for whether the results conflict with the 1996
Act and FCC orders and rules implementing the Act.55 This argument is meritless. First, no
provision of Idaho law empowers the Commission to order network unbundling, and
accordingly, the premise of Covad's argument - that the Commission must order unbundling
under Idaho law without regard to federal law - is fundamentally flawed. 56 Second, the Illinois
TRO ~ 192 (footnote omitted).
Id.
Indiana Bell Tel. Co. v. McCarty, 362 F.3d at 395.
Covad Br. at 10.
See Qwest Br. at 13-14.
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Commission ruled only that as a creation of the Illinois legislature, that Commission s powers are
limited to those that the legislature expressly conferred. 57 Applied to this case, this ruling
directly undermines Covad's request for unbundling under state law, since the Idaho Legislature
has not empowered this Commission to order network unbundling. Third, contrary to Covad'
incomplete description of the ruling, the Illinois Commission concluded that it does have
authority to construe and apply Illinois law relating to network unbundling to avoid inconsistency
with the 1996 Act and FCC orders. 58 Fourth, the 1996 Act establishes that any exercise of state
authority must be consistent with the federal law, and any unbundling requirements imposed
under state law that conflict with FCC rulings are, therefore, unlawful.
Finally, Covad incorrectly implies that Qwest's position is that state commissions are
entirely without authority to regulate unbundled network elements under the Act. However
Qwest is not arguing that state commissions are without authority to regulate under the Act.
Instead, as described here and in Qwest's opening brief, states are permitted to regulate but only
with respect to the specific areas identified by Congress in the Act and only to the extent their
regulations are consistent with federal law, including FCC orders and rules. Here, Covad is
asking the Commission to regulate in a manner that is inconsistent with federal law by requiring
network unbundling that the FCC has specifically rejected. The Commission does not have that
authority and, accordingly, Covad's request is unlawful.
57 Illinois Bell Telephone Co.; Filing to Implement Tariff Provisions Related to Section 13-801 of the Public
Utilities Act, Docket No. 01-0614, Order on Remand (Phase I) at 61 (Ill. Commission Apr. 20, 2005).
58 Id. at 62 ("(W)e have some latitude to a make appropriate changes (to state law) to achieve consistency with
federal law. "
See Qwest Br. at 12-13.
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The ICA Should List Specific Non-251 Network Elements That Qwest Is Not
Required to Provide Under The Agreement.
In its proposed ICA, Qwest includes several provisions listing the network elements that
the FCC has ruled ILECs are not required to provide under Section 251. Qwest's proposed
Section 9.1.1.6 lists 18 different elements and services that pursuant to rulings in the TRO, ILECs
are not required to unbundle under Section 251. There is no dispute that Qwest's listing of these
elements and services accurately reflects the FCC'TRO rulings. However, Covad clearly
believes that Qwest's unbundling obligations are unlimited and include even the network
elements for which the FCC has made findings of non-impairment and declined to impose an
unbundling requirement. Given Covad's overreaching position, Qwest is very concerned that
Covad will demand unbundling of these de-listed elements if the ICA does not state clearly that
the elements are unavailable. To protect against this distinct possibility and the dispute that
would result, the ICA should include the list of de-listed UNEs in Qwest's section 9., which
all parties agree is accurate.
The Commission should also approve Qwest's language and not require Qwest to
continue providing network elements that the FCC has de-listed as UNEs until the Commission
approves an ICA amendment removing the UNEs from the ICA. The use of the amendment
process for de-listed UNEs is improper because it would require Qwest to continue providing
network elements at TELRIC rates potentially long after the FCC has ruled that ILECs are not
required to provide the elements under Section 251. Accordingly, the Commission should adopt
Qwest's proposed sections that would eliminate unbundling obligations upon non-impairment
findings by the FCC.
60 For the same reason, the Commission should adopt Qwest's proposed language for Sections 9.1.3; 9.1.5;
1; 9.6; 9.1; and 9.21.2. These sections establish that certain network elements will no longer be
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Boise-184139.10029l64-00108
CONCLUSION
For the reasons stated here and in its initial brief, Qwest respectfully requests that the
Commission adopt Qwest's proposed language for each of the ICA provisions in dispute.
DATED: May 18, 2005
Respectfully submitted
Mary S. son (ISB No. 2142)
STOEL ES LLP
101 South Capitol Blvd., Suite 1900
Boise, Idaho 83702
Telephone: [phone]
Facsimile: [phone]
msho bson~stoe 1. com
Adam L. Sherr
QWEST CORPORATION
1600 Seventh Avenue, Room 3206
Seattle, Washington 98191
Telephone: [phone]
Facsimile: [phone]
John M. Devaney
PERKINS com LLP
607 Fourteenth St., N., Suite 800
Washington, D.C. 20005
Telephone: [phone]
Facsimile: [phone]
1 devaney~perkinscoie.com
Attorneys for Qwest Corporation
available under the ICA if the FCC rules that ILECs are not required to provide them under Section 251.
QWEST CORPORATION'S REPLY BRIEF ON THE MERITS - Page 20
Boise-184139.l0029l64-00108
CERTIFICATE OF SERVICE
I hereby certify that on this 18th day of May, 2005, I served the foregoing QWEST
CORPORATION'S REPLY BRIEF ON THE MERITS upon all parties of record in this
matter as follows:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, Idaho 83720-0074
iiewell~puc.state.id~
John Devaney
Mary Rose Hughes
Perkins Coie LLP
607 Fourteenth Street NW - Suite 800
Washington, DC 20005-2011
Telephone: [phone]
Facsimile: [phone]
Co-Counsel for Qwest
---X-
Gregory Diamond
Covad Communications Company
7901 Lowry Boulevard
Denver, CO 80230
Telephone: [phone]
Facsimile: [phone]
Counsel for Covad
---X-
Dean 1. (Joe) Miller
McDevitt & Miller LLP
420 West Bannock Street
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
j oe~mcdevitt -miller. com
Counsel for Covad
---X-
Andrew R. Newell (CSB #31121)
Krys Boyle P.
600 Seventeenth Street - Suite 2700 South
Denver, CO 80202
Telephone: [phone]
Facsimile: [phone]
anewell~krysboyle.com
---X-
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Brandi L. Gearhart, PLS
Legal Secretary to Mary S. Hobson
Stoel Rives LLP
QWEST CORPORATION'S REPLY BRIEF ON THE MERITS - Page 21
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