# Appendix — At&T Corp. v. Iowa Utilities Bd. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0135%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1999 - **Citation:** 525 U.S. 366 ## Text sVvererme Vout, U.S. FI (2) 92 826 NOV 17 1997 N In THE Supreme Court of the United States OCTOBER TERM, 1997 AT&T Corp., et al., . Petitioners, IowA UTILITIES BOARD, et al., Respondents. AT&T Corp., et al., . Petitioners, CALIFORNIA, et al., Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit PETITIONERS’ APPENDIX MARK C. ROSENBLUM DAVID W. CARPENTER * Roy E. HOFFINGER PETER D. KEISLER 295 North Maple Avenue SIDLEY & AUSTIN Basking Ridge, NJ 07920 One First National Plaza (908) 221-3539 Chicago, IL 60603 (312) 853-7237 Counsel for AT&T Corp. [ Additional Counsel Listed on Inside Cover] * Counsel of Record WILSON - Eras PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 DANA FRIX SWIDLER & BERLIN, CHARTERED 3000 K Street, N.W. Suite 300 Washington, DC 20007 (202) 424-7500 Counsel for ACC Corp. CHARLES H. HELEIN ROBERT M. MCDOWELL HARISHA J. BASTIAMPILLAI HELIN & ASSOCIATES, P.C. 8180 Greensboro Drive Suite 700 McLean, Virginia 22102 (703) 714-1300 Counsel for America’s Carriers Telecommunications Association GENEVIEVE MORELLI 1140 Connecticut Avenue, N.W. Suite 220 Washington, DC 20036 ROBERT J. AAMOTH EDWARD A. YORKGITIS, JR. KELLEY DrYE & WARREN LLP 1200 19th Street, N.W. Suite 500 Washington, DC 20036 (202) 955-9600 Counsel for Competitive Telecommunications Association JAMES M. SMITH Vice-President-Law and Public Policy 3000 K Street, N.W. Suite 300 Washington, DC 20007 DANA FRIX RUSSELL M. BLAU SwImDLeR & BERLIN, CHARTERED 3000 K Street, N.W. Suite 300 Washington, DC 20007 (202) 424-7500 Counsel for Excel Telecommunications, Inc. JAMES R. JACKSON, JR. GENERAL COMMUNICATIONS, INC. 2550 Denali Street Suite 1000 Anchorage, AK 99503 (907) 265-5545 Counsel for General Communications, Inc. DANIEL L. BRENNER NEAL M. GOLDBERG DAVID L. NICOLL 1724 Massachusetts Ave., N.W. Washington, DC 20036 (202) 775-3664 Counsel for National Cable Television Association LEON M. KESTENBAUM JaY C. KEITHLEY H. RICHARD JUHNKE 1850 M Street, N.W. 1lth Floor Washington, DC 20036 (202) 828-7437 Counsel for Sprint Corporation CHARLES C. HUNTER CATHERINE M. HANNAN HUNTER COMMUNICATIONS LAW Group, P.C. 1620 I Street, N.W. Suite 701 Washington, DC 20006 (202) 293-2500 Counsel for Telecommunications Resellers Association CATHERINE R. SLOAN RICHARD L. FRUCHTERMAN, III RICHARD S. WHITT 1120 Connecticut Avenue, N.W. Suite 400 Washington, DC 20036 (202) 776-1550 Counsel for WorldCom, Inc. TABLE OF CONTENTS APPENDIX A: Page Opinion, Jowa Utilities Board, et al. v. FCC, et al., No. 96-3321, Court of Appeals for the Eighth Cir- cuit (filed July 18, 1997) la-67a APPENDIX B: Order, Jowa Utilities Board, et al. v. FCC, et al., No. 96-3321, Court of Appeals for the Eighth Cir- CU SN BR, BG. BRIG P. wchtebtncanteretinhinchintettienehntione: 68a APPENDIX C: Order on Petition for Rehearing, lowa Utilities Board, et al. v. FCC, et al., No. 96-3321, Court of Appeals for the Eighth Circuit (filed Oct. 14, 1997) (as amended on Oct. 23, 1997) -..2...2........--cccceeeeeeeee 69a-72a APPENDIX D: Opinion & Order, California, et al. v. FCC, et al., No. 96-3519, Court of Appeals for the Eighth Cir- fF PF § & |) eee 73a-9la APPENDIX E: Additional parties to the proceeding not already listed in Appendix A and D 00002... 92a APPENDIX F: Statutory Provisions Involved .......................... 93a-130a APPENDIX G: Excerpts from In the Matter of Implementation of Local Competition Provisions of the Telecommuni- cations Act of 1996, First Report and Order, CC Docket No. 96-98 (Aug. 8, 1996) : TJ 1-137 santasegnamnenintsovenesnpepeupusedeusnimantetitiand 131a-224a T 265-270 spnampuveiennpnensanenendnemesespasitvens 225a-228a la ii APPENDIX A TABLE OF CONTENTS—Continued ie UNITED STATES COURT OF APPEALS SU SOOGOT canna cane ceneesnennneneremenne pane FOR THE EIGHTH CIRCUIT ns aida GH TORTOT cscacecccneeccccesosensesensssereerenssssonsssemecess — FT 12SQC-1BLB _...-.----nnencnenenneenecnnenrnreennenncsnnnenns ros > Appendix ) : nnn 9a-33 No. 96-3321 APPENDIX H: peer ee ane tt Sommuted. Iowa UTitities Boar, cations Act of 1996, Second Report and Order, CC Petitioner, _ -gnnaalegael .838a-345a e BELL ATLANTIC CORPORATION; BELLSOUTH CORPORA- pone te B Rule 5 1 ii TION; PaciFic TeLesis Group; SBC COMMUNICATIONS, ° are 7 otal .348a-353a INC.; MARYLAND PuBLic Service CoMMIssion; US West, Inc.; US TELEPHONE ASSOCIATION; ARKANSAS Pustic Service COMMISSION; ALLTEL TELEPHONE SERVICES CORPORATION; AMERITECH CORPORATION; OREGON PusLic UtiLity CoMMISSION; NoRTH STATE TELEPHONE COMPANY; WESTERN ALLIANCE; INDE- PENDENT TELEPHONE AND ‘TELECOMMUNICATIONS ALLIANCE; ROSEVILLE TELEPHONE COMPANY; CoNn- CORD TELEPHONE COMPANY; Rock HILL TELEPHONE COMPANY; PuBLic UTILITIES COMMISSION OF THE STATE OF HAWAII; AMERICAN PusBLic CoMMUNICA- TIONS CouNcIL, INc.; ICG TeLtecom Group, INc.; MINNESOTA PuBLic UTILITIES COMMISSION; SOUTHERN New ENGLAND TELEPHONE COMPANY; THE Ap Hoc COALITION OF TELECOMMUNICATIONS MANUFACTURING CoMPANIeS; PAciFic TELECOM, INC.; MINNESOTA IN- DEPENDENT COALITION; KENTUCKY PUBLIC SERVICE COMMISSION; KANSAS CORPORATION COMMISSION: Pub- Lic SERVICE COMMISSION OF THE STATE OF WYOMING; Ruope ISLAND PuBLIC UTILitres COMMISSION: PUBLIC SeRvICE COMMISSION OF WISCONSIN; STATE OF TEXAS: ALABAMA PuBLic Service COMMISSION: CITIZENS TELEPHONE COMPANY OF KECKSBURG; NEw MEXICO _ ——— ae 2a STATE CORPORATION COMMISSION; PUBLIC SERVICE COMMISSION OF THE STATE OF MONTANA; GTE SERVICE CORPORATION; UTAH DEPARTMENT OF Com- MERCE, Division OF PuBLic UTILITIES; PUBLIC SERV- ice COMMISSION OF UTAH; PuBLic SERVICE COM- MISSION OF THE STATE OF SOUTH CAROLINA; TENNESSEE REGULATORY AUTHORITY; AGING FORUM, Inc., Domnc Business AS NATIONAL SILVER HAIRED Concress; U.S. COALITION ON AGING; COLLEGE FOR Livinc; Councit OF StLveR HAIRED LEGISLATURES; MissouR! ALLIANCE OF AREA AGENCIES ON AGING; MISSOURI ASSOCIATION FOR THE DeaAF; Missouri CoUNCIL OF THE BLIND; PRESIDENTS’ CLUB FOR TELE- COMMUNICATIONS JUSTICE; PARAQUAD, RURAL ADvo- CATES FOR INDEPENDENT LIVING; SERVICES FOR INDE- PENDENT LIviING; PuBLic UTILITIES COMMISSION OF THE STATE OF COLORADO; DEPARTMENT OF PUBLIC UTILITIES OF THE COMMONWEALTH OF MASSACHU- SETTS; OKLAHOMA CORPORATION COMMISSION; PUBLIC SERVICE COMMISSION OF THE STATE OF CONNECTICUT, DEPARTMENT OF PusBLic Utitity ConTRoL; NEw YorK TELEPHONE COMPANY; NeW ENGLAND TELE- PHONE AND TELEGRAPH COMPANY, Intervenors on Appeal, Vv. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, Af&T Corp.: COMPETITIVE TELECOMMUNICATIONS As- SOCIATION; MFS COMMUNICATIONS COMPANY, INC.; ArrtoucH COMMUNICATIONS, INC.; NEXTLINK COM- MUNICATIONS, L.L.C.; Sprint Spectrum, L.P.; Na- TIONAL CABLE TELEVISION AssocIATION, INC.; MCI TELPCOMMUNICATIONS CORPORATION; SPRINT CORP.; Cox COMMUNICATIONS, INC.; VANGUARD CELLULAR ee 3a SysTEMS, INC.; WESTERN WIRELESS CORPORATION; AMERICAN COMMUNICATIONS SERVICES, INC.; KMC TeLecom, INc.; THE COMPETITION Po.icy INSTITUTE; ASSOCIATION FOR LOCAL TELECOMMUNICATIONS SER- VICES; CELLULAR TELECOMMUNICATIONS INDUSTRY AssociaTion; GST TeLecom, Inc.; ACC Corp.; Gen- ERAL COMMUNICATION, INC.; TELECOMMUNICATIONS RESELLERS ASSOCIATION; CONSUMER FEDERATION OF AMERICA; AD Hoc TELECOMMUNICATIONS Users Com- MITTEE; INFORMATION TECHNOLOGY INDUSTRY COUN- CIL; AMERICA’S CARRIERS TELECOMMUNICATION Asso- CIATION; JONES INTERCABLE, INC.; TELECOMMUNICA- TIONS, INC.; TELEPORT COMMUNICATIONS Group, INC.: RURAL TELECOMMUNICATIONS GROUP; ALLIED Asso- CIATED PARTNERS; GELD INFORMATION SYSTEMS: PRONET, INC.; WINSTAR COMMUNICATIONS, Inc.; U.S. ONE COMMUNICATIONS SERVICES; COMCAST CoRPORA- TION; FRONTIER CORPORATION; ANAHEIM, CALIFORNIA PuBLic Utitities DEPARTMENT; City oF LONG BEACH, CALIFORNIA; CITY OF MANASSAS, VIRGINIA: CABLE & WIRELESS, INC.; NATIONAL ASSOCIATION OF STATE Utitity CONSUMER ADVOCATES; TIME WARNER Com- MUNICATIONS HOLDINGS, INC.; PERSONAL COMMUNICA- TIONS INDUSTRY ASSOCIATION; ExceL TELECOMMUNI- CATIONS, INC.; PAGING NETWORK, INC.; NEXTWAVE TELECOM, INc.; SMALL CABLE BUSINESS ASSOCIATION: Woripcom, INc.; METROCALL, INC.; Texas OFFICE OF PuBLic Utitity CouNseL, Intervenors on Appeal, CONSUMERS’ Utitity CouNseEL Division, Grorcia Gov- ERNOR’S OFFICE OF CONSUMER AFFAIRS; HONORABLE Joun D. DinGELL; HONORABLE W_J. (Bitty) Tauzin; HONORABLE RICK BOUCHER; HONORABLE DENNIS HASTERT, Amici on Behalf of Petitioner, 4a HONORABLE THOMAS J. BLILEY, JR.; HONORABLE ERNEST F. HoLLINnGs; HONORABLE TED STEVENS, HONORABLE DANteL K. INouye; HONORABLE TRENT Lott; HONOR- ABLE Epwarp J. MARKEY, Amici on Behalf of Respondent. ition to the above caption, the Parties for Docket ” ee 96-3406, 96-3410, 96-3414, 96-3416, 96- 3418, 96-3424, 96-3430, 96-3436, 96-3444, 96-3450, 96-3453, 96-3460, 96-3507, 96-3519, 96-3520, 96- 3603. 96-3608, 96-3696, 96-3708, 96-3709, 96-3756, 96-3901, 96-3906, 96-3982, are listed in Appendix E On Petition for Review of an Order of the Federal Communications Commission Submitted: January 17, 1997 Filed: July 18, 1997 Before BOWMAN, WOLLMAN and HANSEN, Circuit Judges. HANSEN, Circuit Judge. When Alexander Graham Bell, after spilling sulfuric acid on himself, first transmitted the words, “Mr. Watson, come here; I want you,” across a rudimentary phone line in 1876,’ he could not have possibly imagined that his invention would explode into the current technologically- advanced, multi-billion dollar telecommunications industry. 1 George P. Oslin, The Story of Telecommunications, 219 (Mercer University Press 1992). omer ws convenience, and necessity and are consistent with (c) Definition. (1) In general. Universal service is an evolvin level of telecommunications services that the Canmniaten shall establish periodically under this section, taking into ac- count advances in telecommunications and information technologies and services. The Joint Board in recommend. ing, and the Commission in establishing, the definition of the services that are supported by Federal universal serv- ice support mechanisms shall consider the extent to which such telecommunications services— (A) are essential to educati ; public safety: ucation, public health, or (B) have, through the operation of market choj se me, Sinough asta chatons oe eh n a to by a substantial majority . (C) are being deployed in public telecommunica- tions networks by nipeummmeaiottems Carriers; _—s (D) are consistent with the io i ease, ond i. I public interest, con- (2) Alterations and modifications The Joi ' J may, from ume to time, recommend to the ein modifications in the definition of the services that are sup- ported by Federal universal service support mechanisms. 118a (3) Special services. In addition to the services in- cluded in the definition of universal service under para- graph (1), the Commission may designate additional services for such support mechanisms for schools, libraries, and health care providers for the purposes of subsec- tion (h). (d) Telecommunications carrier contribution. Every tele- communications carrier that provides interstate telecom- munications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service. The Commission may exempt a carrier or class of carriers from this require- ment if the carrier’s telecommunications activities are lim- ited to such an extent that the level of such carrier’s con- tribution to the preservation and advancement of universal service would be de minimis. Any other provider of in- terstate telecommunications may be required to contribute to the preservation and advancement of universal service if the public interest so requires. (e) Universal service support. After the date on which Commission regulations implementing this section take effect, only an eligible telecommunications carrier desig- nated under section 214(e) shall be eligible to receive specific Federal universal service support. A carrier that receives such support shall use that support only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. Any such sup- port should be explicit and sufficient to achieve the pur- poses of this section. (f) State authority. A State may adopt regulations not inconsistent with the Commission’s rules to preserve and advance universal service. Every telecommunications car- rier that provides intrastate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, in a manner determined by the State to the preserva- tion and advancement of universal services in that Sta te. A State may adopt regulations to provide for additional re yr and standards to preserve and advance uni- versal service within that State only to the extent that such regulations adopt additional specific, predictable, and suffi- cient mechanisms to support such definitions or standards that do not rely on or burden Fede i . pa My ral universal service change telecommunications services to subscribers in rural and high cost areas shall be no higher than the rates charged by each such provider to its subscribers in urban areas. Such rules shall also require that a provider of interstate interexchange telecommunications services (h) Telecommunications services for certain providers. (1) In general. (A) Health care providers for rural areas. A telecommunications carrier shall, upon receiving a bona fide request, provide telecommunications services which are necessary for the provision of health care services in a State, including instruction relating to such services, to care providers for rural areas in a State and the rates f similar services provided to other customers in omen 120a ble rural areas in that State treated as a service obligation as a part of its obligation to participate in the mecha- nisms to preserve and advance universal service. (B) Educational providers and libraries. All tele- communications carriers serving a geographic area shall, upon a bona fide request for any of its services that are within the definition of universal service under subsection (c)(3), provide such services to elementary schools, sec- ondary schools, and libraries for educational purposes at rates less than the amounts charged for similar services to other parties. The discount shall be an amount that the Commission, with respect to interstate services, and the States, with respect to intrastate services, determine is ap- propriate and necessary to ensure affordable access to and use of such services by such entities. A telecommunica- tions carrier providing service under this paragraph shall— (i) have an amount equal to the amount of the discount treated as an offset to its obligation to con- tribute to the mechanisms to preserve and advance uni- versal service, or (ii) notwithstanding the provisions of sub- section (e) of this section, receive reimbursement utiliz- ing the support mechanisms to preserve and advance uni- versal service. (2) Advanced services. The Commission shall estab- lish competitively neutral rules— (A) to enhance, to the extent technically feasible and economically reasonable, access to advanced tele- communications and information services for all public and nonprofit elementary and secondary school class- rooms, health care providers, and libraries; and (B) to define the circumstances under which a telecommunications carrier may be required to connect its network to such public institutional telecommunica- tions users. _ (3) Terms and conditions, Telecommunications serv- ices and network capacity provided to a public institu- tional telecommunications user under this subsection may not be sold, resold, or otherwise transferred by such user in consideration for money or any other thing of value. (4) Eligibility of users. No entity listed in this sub- section shall be entitled to preferential rates or treatment as required by this subsection, if such entity operates as a for-profit business, is a school described in paragraph (5) (A) with an endowment of more than $50,000,000, or is a library or library consortium not eligible for as- sistance from a State library administrative agency under the Library Services and Technology Act. (5) Definitions. For purposes of this subsection: (A) Elementary and secondary schools. The term elementary and secondary schools” means elementary schools and secondary schools, as defined in paragraphs — and (25), respectively, of section 14101 of the lementary and Secondary Education Act U.S.C. 8801), sy: wa AR of 1965 (20 (B) Health care provider. The term “health care provider” means— po coe post-secondary educational _ institutions ng th care instruction, teaching hospi medical schools: g pitals, and (ii) community health centers or health centers providing health care to migrants; (iii) local health departments or agencies; (iv) community mental health centers; (v) not-for-profit hospitals; (vi) rural health clinics; and SOLED (vii) consortia of health care providers con- sing of one or more entities described j through (vi). in clauses (i) 122a (C) Public institutional telecommunications user. The term “public institutional telecommunications user” means an elementary or secondary school, a library, or a health care provider as those terms are defined in this . (i) Consumer protection. The Commission and the States should ensure that universal service is available at rates that are just, reasonable, and affordable. j) Lifeline assistance. Nothing in this section shall af- ad ‘ae eon distribution, or administration of the Lifeline Assistance Program provided for by the Com- mission under regulations set forth in section 69.117 of title 47, Code of Federal Regulations, and other related sections of such title. k) Subsidy of competitive services prohibited. A tele- peer 9a Be carrier may not use services that are not competitive to subsidize services that are subject to com- petition. The Commission, with respect to interstate serv- ices, and the States, with respect to intrastate services, shall establish any necessary cost allocation rules, account- ing safeguards, and guidelines to ensure that services included in the definition of universal service bear no more than a reasonable share of the joint and common costs of facilities used to provide those services. § 255. Access by persons with disabilities (a) Definitions. As used in this section— (1) Disability. The term “disability” has the mean- ing given to it by section 3(2)(A) of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102(2)(A)). (2) Readily achievable. The term “readily achievable” has the meaning given to it by section 301(9) of that Act (42 U.S.C. 12181(9)). (b) Manufacturing. A manufacturer of telecommuni- cations equipment or customer premises equipment shall 123a ensure that the equipment is designed, developed, and fabricated to be accessible to and usable by individuals with disabilities, if readily achievable. (c) Telecommunications services. A provider of tele- communications service shall ensure that the service is accessible to and usable by individuals with disabilities, if readily achievable. (d) Compatibility. Whenever the requirements of sub- sections (b) and (c) are not readily achievable, such a manufacturer or provider shall ensure that the equipment or service is compatible with existing peripheral devices or specialized customer premises equipment commonly used by individuals with disabilities to achieve access, if readily achievable. (e) Guidelines. Within 18 months after the date of enactment of the Telecommunications Act of 1996, the Architectural and Transportation Barriers Compliance Board shall develop guidelines for accessibility of tele- communications equipment and customer premises equip- ment in conjunction with the Commission. The Board shall 1eview and update the guidelines periodically. (f) No additional private rights authorized. Nothing in this section shall be construed to authorize any private right of action to enforce any requirement of this section or any regulation thereunder. The Commission shall have exclusive jurisdiction with respect to any complaint under this section. § 256. Coordination for interconnectivity (a) Purpose. It is the purpose of this section— (1) to promote nondiscviminatory accessibility by the broadest number of users and vendors of communications products and services to public telecommunications networks used to provide telecommunications servi.e through— 124a (A) coordinated public telecommunications net- work planning and design by telecommunications carriers and other providers of telecommunications service; and (B) public telecommunications network intercon- nectivity, and interconnectivity of devices with such net- works used to provide telecommunications service; and (2) to ensure the ability of users and information pro- viders to seamlessly and transparently transmit and receive information between and across telecommunications net- works. (b) Commission functions. In carrying out the purposes of this section, the Commission— (1) shall establish procedures for Commission over- sight of coordinated network planning by telecommunica- tions carriers and other providers of telecommunications service for the effective and efficient interconnection of public telecommunications networks used to provide tele- communications service; and (2) may participate, in a manner consistent with its authority and practice prior to the date of enactment of this section, in the development by appropriate industry standards-setting organizations of public telecommunica- tions network interconnectivity standards that promote access to — (A) public telecommunications networks used to provide telecommunications service; (B) network capabilities and services by individ- uals with disabilities; and (C) information services by subscribers of rural telephone companies. (c) Commission’s authority. Nothing in this section shall be construed as expanding or limiting any authority that the Commission may have under law in effect before 125a rr oe of enactment of the Telecommunications Act of (d) Definition. As used in this section, the term “pub- lic telecommunications network interconnectivity” means the ability of two or more public telecommunications net- works used to provide telecommunications service to com- municate and exchange information without degeneration, and to interact in concert with one another. the date of enactment of the Telecommunications Act of 1996, the Commission shall complete a proceeding for the purpose of identifying and eliminating, by regulations pur- suant to its authority under this Act (other than this sec- tion), market entry barriers for entrepreneurs and other shall businesses in the provision and ownership of tele- communications services and information services, or in the Provision of parts or services to providers of telecom- munications services and information services. (b) National policy. In carrying out subsection (a), the Commission shall seek to Promote the policies and purposes of this Act favoring diversity of media voices, vigorous economic competition, technological advance- ment, and promotion of the public interest, convenience and necessity. (Cc) Periodic review, Every 3 years following the com- pletion of the proceeding required by subsection Commission shall review and report to Congress gy (1) any regulations prescribed to eliminate barri * . . . . . . arriers within its jurisdiction that are identified under subsection (a) and that can be Prescribed consistent with t i interest, convenience, and necessity; and mere (2) the statutory barriers identified under subsection (a) that the Commission recommends be eliminated, con- sistent with the public interest, convenience, and necessity. 126a § 258. Illegal changes in subscriber carrier selections (a) Prohibition. No telecommunications carrier shall submit or execute a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification proce- dures as the Commission shall prescribe. Nothing in this section shall preclude any State commission from enforc- ing such procedures with respect to intrastate services. (b) Liability for charges. Any telecommunications car- rier that violates the verification procedures described in subsection (a) and that collects charges for telephone ex- change service or telephone toll service from a subscriber shall be liable to the carrier previously selected by the sub- scriber in an amount equal to all charges paid by such subscriber after such violation, in accordance with such procedures as the Commission may prescribe. The rem- edies provided by this subsection are in addition to any other remedies available by law. § 259. Infrastructure sharing (a) Regulations required. The Commission shall pre- scribe, within one year after the date of enactment of the Telecommunications Act of 1996, regulations that re- quire incumbent local exchange carriers (as defined in sec- tion 251(h)) to make available to any qualifying carrier such public switched network infrastructure, technology, information, and telecommunications facilities and func- tions as may be requested by such qualifying carrier for the purpose of enabling such qualifying carrier to provide telecommunications services, or to provide access to in- formation services, in the service area in which such quali- fying carrier has requested and obtained designation as an eligible telecommunications carrier under section 214(e). (b) Terms and conditions of regulations. The regula- tions prescribed by the Commission pursuant to this sec- tion shall— 127a (1) not require a local exchange carrier to which this section applies to take any action that is economically un- reasonable or that is contrary to the public interest: (2) permit, but shall not require, the joint ownership Or operation of public switched network infrastructure and services by or among such local exchange carrier and a qualifying carrier; (3) ensure that such local exchange carrier wiil not be treated by the Commission or any State as a common carrier for hire or as offering common carrier services with respect to any infrastructure, technology, information, facilities, or functions made ivailable to a qualifying car- rier in accordance with regulations issued pursuant to this (4) ensure that such local exchange carrier makes such infrastructure, technology, information, facilities, or func- tions available to a qualifying carrier on just and reason- able terms and conditions that permit such qualifying car- rier to fully benefit from the economies of scale and scope of such local exchange carrier, as determined in accord- ance with guidelines prescribed by the Commission in reg- ulations issued pursuant to this section: (5) establish conditions that promote cooperation be- tween local exchange carriers to which this section applies and qualifying carriers; (6) not require a local exchange carrier to which this section applies to engage in any infrastructure sharing agreement for any services or access which are to be pro- vided or offered to consumers by the qualifying carrier in such local exchange carrier's telephone exchange area; and ~ cer ay which such carrier is making avail- able public switched network infrastructure and i ee ee re and functions 128a (c) Information concerning deployment of new services and equipment. A local exchange carrier to which this section applies that has entered into an infrastructure sharing agreement under this section shall provide to each party to such agreement timely information on the planned deployment of telecommunications services and equipment, including any software or upgrades of software integral to the use or operation of such telecommunications equip- ment. (d) Definition. For purposes of this section, the term “qualifying carrier” means a telecommunications carrier that— (1) lacks economies of scale or scope, as determined in accordance with regulations prescribed by the Commission pursuant to this section; and (2) offers telephone exchange service, exchange access, and any other service that is included in universal service, to all consumers without preference throughout the service area for which such carrier has been designated as an eligible telecommunications carrier under section 214(e). §$ 260. Provision of telemessaging service (a) Nondiscrimination safeguards. Any local exchange carrier subject to the requirements of section 251(c) that provides telemessaging service— (1) shall not subsidize its telemessaging service di- rectly or indirectly from its telephone exchange service or its exchange access; and (2) shall not prefer or discriminate in favor of its telemessaging service operations in its provision of tele- communications services. (b) Expedited consideration of complaints. The Com- mission shall establish procedures for the receipt and re- view of complaints concerning violations of subsection (a) carrier and any affiliates to cease engaging in such viola- messaging service” means voice mail and voice storage and retrieval services, any live operator services used to record, ae re te coh — — ges (other than telecommunica- y ices), and any ancilla i i combination with these ator near Senn § 261. Effect on other requirements (b) Existing State regulations, Nothing in this shall be construed to prohibit any State commission a enforcing regulations prescribed Prior to the date of enact- ment of the Telecommunications Act of 1996, or from prescribing regulations after such date of enactment, in fulfilling the requirements of this part, if such regulations are not inconsistent with the provisions of this part. necessary to further competition in the ision of tele- Phone exchange service or exchange natn os long by 130a , i i ith this part or State's requirements are not inconsistent with t the Commission's regulations to implement this part. § 303. Powers and duties of Commission Except as otherwise provided in this Act, the Commission from time to time, as public convenience, interest, or necessity requires, shall— (r) Make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this Act, or any international radio or wire communications treaty or convention, or regulations annexed thereto, including any treaty or convention insofar as it relates to the use of radio, to which the United States is or may hereafter be- come a party. l3la APPENDIX G FROM IN THE MATTER OF IMPLEMENTATION OF LOCAL COMPETITION PROVISIONS OF THE TELECOMMUNICATIONS ACT OF 1996, FIRST REPORT AND CC DOCKET NO. 96-98 (AUG. 8, 1996): 4 1-137, 265-270, 289-97, 317-341, 704-707, 1296-1323 & Appendix B I. INTRODUCTION, OVERVIEW, AND EXECUTIVE SUMMARY A. The Telecommunications Act of 1996—A New Direct; 1 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, to be codified at 47 U.S.C. $8 151 et seq. Hereinafter, all cita- tions to the 1996 Act will be to the 1996 Act as codified in the United 132a 2. The 1996 Act also recasts the relationship between the FCC and state commissions responsible for regulating telecommunications services. Until now, we and our state counterparts generally have regulated the jurisdictional segments of this industry assigned to each of us by the Communications Act of 1934. The 1996 Act forges a new partnership between state and federal regulators. This arrangement is far better suited to the coming world of competition in which historical regulatory distinctions are supplanted by competitive forces. As this Order demon- strates, we have benefitted enormously from the expertise and experience that the state commissioners and their staffs have contributed to these discussions. We look for- ward to the continuation of that cooperative working rela- tionship in the coming months as each of us carries out the role assigned by the 1996 Act. 3. Three principal goals established by the telephony provisions of the 1996 Act ave: (1) opening the local exchange and exchange access markets to competitive entry; (2) promoting increased competition in telecom- munications markets that are already open to competi- tion, including the long distance services market; and (3) reforming our system of universal service so that universal service is preserved and advanced as the local exchange and exchange access markets move from monop- oly to competition. In this rulemaking nd related pro- ceedings, we are taking the steps that will achieve the pro-competitive, deregulatory goals of the 1996 Act. The Act directs us and our state colleagues to remove not only statutory and regulatory impediments to com- petition, but economic and operational impediments as well. We are directed to remove these impediments to competition in all telecommunications markets, while also preserving and advancing universal service in a manner fully consistent with competition. 4. These three goals are integrally related. Indeed, the relationship betwen fostering competition in local tele- communications markets and promoting greater competi- section 251, incumbent local exchange carriers (LECs) including the Bell Operating Companies (BOCs), are competition, including providing interconnection, offeri access to unbundled elements of their networks, and —_ ing their retail services available at wholesale rates so that they can be resold. Under section 271, once the BOCs munications—the local exchange and exchan al exc ge access markets—to competition is intended to pave the way for enhanced competition in all telecommunications markets, by allowing all providers to enter all markets. The open- blur traditional industry distinctions and bring new 1 g pack- ages of services, lower prices and increased innovation to These subsidies are intended to promote telephone sub. scribership, yet they do so at the expense of deterring ot ing competition. Some policies that traditionally 134a n justified on universal service considerations ae parcel at a disadvantage. Other universal serv- ice policies place the incumbent LECs at a competitive disadvantage. For example, LECs are required to ae interexchange carriers a Carrier Common Line charge or every minute of interstate traffic that any of their cus- tomers send or receive. This exposes LECs to competi- tion from competitive access providers, which are not subject to this cost burden. Hence, section 254 of a Act requires the Commission, working with the states an consumer advocates through a Federal/ State Joint Board, to revamp the methods by which universal service pay- ments are collected and disbursed.? The present universal service system is incompatible with the statutory mandate to introduce efficient competition into local markets, be- cause the current system distorts competition in those markets. For example, without universal service reform, facilities-based entrants would be forced to compete against monopoly providers that enjoy not only the tech- nical, economic, and marketing advantages of incum- bency, but also subsidies that are provided only to the incumbents. . . . . . ; ] B. The Competition Trilogy: Section 251, Universa Service Reform and Access Charge Reform 6. The rules that we adopt to implement the local competition provisions of the 1996 Act represent only one part of a trilogy. In this Report and Order, we adopt initial rules designed to accomplish the first of the goals outlined above—opening the local exchange and exchange access markets to competition. The steps we take today are the initial measures that will enable the states and the Commission to begin to implement sections 251 and 252. Given the dynamic nature of telecommunications tech- nology and markets, it will be necessary over time to } } ] ket No. 2 Federal-State Joint Board on Universal Service, CC Doc 96-45, Notice of Proposal Rulemaking and Order Establishing Joint Board, FCC 96-93 (rel. Mar. 8, 1996) (Universal Service NPRM). 135a review proactively and adjust these rules to ensure both that the statute’s mandate of competition is effectuated and enforced, and that regulatory burdens are lifted as soon as competition eliminates the need for them. Efforts to review and revise these rules will be guided by the experience of states in their initial implementation efforts. 7. The second part of the trilogy is universal service reform. In early November, the Federal/State Universal Service Joint Board, including three members of this Commission, will makes its recommendations to the Com- mission. These recommendations will serve as the corner- stone of universal service reform. The C>-nission will act on the Joint Board’s recommendatio:zs and adopt universal service rules not later than May 8, 1997, and, we hope, even earlier. Our universal service reform order, consistent with section 254, will rework the sub- sidy system to guarantee affordable service to all Ameri- cans in an era in which competition will be the driving force in telecommunications. By reforming the collection and distribution of universal service funds, the states and the Commission will also ensure that the goals of afford- able service and access to advanced services are met by means that enhance, rather than distort, competition. Universal service reform is vitally connected to the local competition rules we adopt today. 8. The third part of the trilogy is access charge re- form. It is widely recognized that, because a competitive market drives prices to cost, a system of charges which includes non-cost based components is inherently unstable and unsustainable. It also well-recognized that access charge reform is intensely interrelated with the local com- petition rules of section 251 and the reform of universal service. We will complete access reform before or con- currently with a final order on universal service. 9. Only when all parts of the trilogy are complete will the task of adjusting the regulatory framework to fully competitive markets be finished. Only when our counter- 136a at the state level complete implementing and supple- ae these rules will the complete blueprint for com- tiiion be in place. Completion of the trilogy, coupled with the reduction in burdensome and inefficient regula- tion we have undertaken pursuant to other provisions of the 1996 Act, will unleash marketplace forces that will fuel economic growth. Until then, incumbents and new entrants must undergo a transition process toward fully competitive markets. We will, however, act quickly to complete the’ three essential rulemakings. We intend to issue a notice of proposed rulemaking in 1996 and to complete the access charge reform proceeding concur- rently with the statutory deadline established for the sec- tion 254 rulemaking. This timetable will ensure that actions taken by the Joint Board in November and this Commission by not later than May 1997 in the universal service reform proceeding will be coordinated with the access reform docket. C. Economic Barriers 10. As we pointed out in our Notice of Proposed Rulemaking in this docket *, the removal of statutory and regulatory barriers to entry into the local exchange and exchange access markets, while a necessary precondition to competition, is not sufficient to ensure that competition will supplant monopolies. An incumbent LEC’s existing infrastructure enables it to serve new customers at a much lower incremental cost than a facilities-based entrant that must install its own switches, trunking and loops to serve its customers.* Furthermore, absent interconnection be- tween the incumbent LEC and the entrant, the customer of the entrant would be unable to complete calls to sub- scribers served by the incumbent LEC’s network. Because 3 Implementation of the Local Competition Provisions of the Tele- communications Act of 1996, CC Docket No. 96-98. Notice of Pro- posed Rulemaking, FCC 96-182 (rel. Apr. 19, 1996), 61 Fed. Reg. 18311 (Apr. 25, 1996) (NPRM). 4 See NPRM at para. 6. 137a an incumbent LEC currently serves virtually all sub- scribers in its local serving area,® an incumbent LEC has little economic incentive to assist new entrants in their efforts to secure a greater share of that market. An in- cumbent LEC also has the ability to act on its incentive to discourage entry and robust competition by not inter- connecting its network with the new entrant’s network or by insisting on supracompetitive prices or other un- reasonable conditions for terminating calls from the en- trant’s customers to the incumbent LEC’s subscribers. 11. Congress addressed these problems in the 1996 Act by mandating that the most significant economic im- pediments to efficient entry into the monopolized local market must be removed. The incumbent LECs have economies of density, connectivity, and scale; traditionally, these have been viewed as creating a natural monopoly. As we pointed out in our NPRM, the local competition provisions of the Act require that these economies be shared with entrants. We believe they should be shared in @ way that permits the incumbent LECs to maintain operating efficiency to further fair competition, and to enable the entrants to share the economic benefits of that efficiency in the form of cost-based prices.* Congress also recognized that the transition to competition presents spe- cial considerations in markets served by smaller telephone companies, especially in rural areas.’ We are mindful of these considerations, and know that they will be taken into account by state commissions as well. 12. The Act contemplates three paths of entry into the local market—the construction of new networks, the use of unbundled elements of the incumbent’s network, and resale. The 1996 Act requires us to implement rules that eliminate statutory and regulatory barriers and re- 5 See NPRM at n.13. * See NPRM at paras. 10-12. 747 U.S.C. § 251(f). 138a move economic impediments to each. We anticipate that some new entrants will follow multiple paths of entry as market conditions and access to capital permit. Some may enter by relying at first entirely on resale of the incumbent’s services and then gradually deploying their own facilities. This strategy was employed successfully by MCI and Sprint in the interexchange market during the 1970’s and 1980’s. Others may use a combination of entry strategies simultaneously—whether in the same geographic market or in different ones. Some competitors may use unbundled network elements in combination with their own facilities to serve densely populated sections of an incumbent LEC’s service territory, while using re- sold services to reach customers in less densely populated areas. Still other new entrants may pursue a single entry strategy that does not vary by geographic region or over time. Section 251 neither explicitly nor implicitly ex- presses a preference for one particular entry strategy. Moreover, given the likelihood that entrants will combine or alter entry strategies over time, an attempt to indicate such a preference in our section 251 rules may have unintended and undesirable results. Rather, our obliga- tion in this proceeding is to establish rules that will ensure that all pro-competitive entry strategies may be explored. As to success or failure, we look to the market, not to regulation, for the answer. 13. We note that an entrant, such as a cable company, that constructs its own network will not necessarily need the services or facilities of an incumbent LEC to enable its own subscribers to communicate with each other. A firm adopting this entry strategy, however, still will need an agreement with the incumbent LEC’s to enable the entrant’s customers to place calls to and receive calls from the incumbent LEC’s subscribers.* Sections 251(b)(5) and (c)(2) require incumbent LECs to enter 8 See infra, Section IV.A. 139a into Such agreements on just, reasonable i criminatory terms and to transport and va me rane originating on another carrier's network under reciprocal compensation arrangements. In this item, we adopt rules for States to apply in implementing these mandates of section 251 in their arbitration of interconnection dis- putes, as well as their review of such arbitrated arrange- ments, or a BOC’s statement of generally available terms We believe that our rules will assist the states in carrying r= Par fay rae under the 1996 Act, thereby cts : pave wes port goals of fostering prompt, efficient, 14. We also note that many new entr ill have fully constructed their local ane mae Mowe begin to offer service.’ Although they may provide some of their own facilities, these new entrants will be unable to reach all of their customers without depending on the incumbent's facilities. Hence, in addition to an ar- rangement for terminating traffic on the incumbent LEC’s network, entrants will likely need agrments that enable them to obtain wholesale prices for services the wish to sell at retail and to use at least some portions a the incumbents’ facilities, such as | office switching facilities. cere or 15. Congress recognized that, because of the i bent LEC’s incentives and superior bargaining sbines “te negotiations with new entrants over the terms of such agreements would be quite different from typical com- mercial negotiations. As distinct from bilateral commer- cial negotiation, the new entrant comes to the table with iy or nothing the incumbent LEC needs or wants : e statute addresses this problem by creating an arbitra- ion Proceeding in which the new entrant may assert certain rights, including that the incumbent's prices for unbundled network elements must be “just, reasonable ® Joint Managers’ Statement, S. Co , nf. Rep. No. 104-230, 1 Cong,. 2d Sess. 113 (1996) (“Joint Explanatory Statement” ) at a. 140a and nondiscriminatory.”*® We adopt rules herein to im- plement these requirements of section 251(c)(3). D. Operational Barriers 16. The statute also directs us to remove the existing operational barriers to entering the local market. Vigor- ous competition would be impeded by technical disad- vantages and other handicaps that prevent a new entrant from offering services that consumers perceive to be equal in quality to the offerings of incumbent LECs. Our recently-issued number portability Report and Order ad- dressed one of the most significant operational barriers to competition by permitting customers to retain their phone numbers when they change local carriers.” 17. Closely related to number portability is dialing parity, which we address in a companion order.” Dialing parity enables a customer of a new entrant to dial others with the convenience an incumbent provides, regardless of which carrier the customer has chosen as the local service provider. The history of competition in the inter- exchange market illustrates the critical importance of dialing parity to the successful introduction of competi- tion in telecommunications markets. Equal access enabled customers of non-AT&T providers to enjoy the same con- venience of dialing “1” plus the called party's number 10 See 47 U.S.C. § 251(c) (3). 11 Telephone Number Portability, CC Docket No. 95-116, First Report and Order and Further Notice of Proposed Rulemaking, FCC 96-286 (rel. July 2, 1996) (Number Portability Order). Consistent with the 1996 Act, 47 U.S.C. § 251(b) (2), we required LECs to implement interim and long-term measures vo ensure that customers can change their local service providers without having to change their phone number. Number portability promotes competition by making it less expensive and less disruptive for a customer to switch providers, thus freeing the customer to choose the local provider that offers the best value. 12 NPRM paras. 202-219. l4la that AT&T customers had. Prior to equal access, sub- scribers to interexchange carriers (IXCs) other than AT&T often were required to dial more than 20 digits to place an interstate long-distance call. Industry data show that, after equal access was deployed throughout the country, the number of customers using MCI and other long-distance carriers increased significantly." Thus, we believe that equal access had a substantial pro- competitive impact. Dialing parity should have the same 18. This Order addresses other operational barriers to competition, such as access to rights of way, collocation, and the expeditious provisioning of resale and unbundled elements to new entrants. The elimination of these ob- stacles is essential if there is to be a fair opportunity to compete in the local exchange and exchange access mar- kets. As an example, customers can voluntarily switch from one interexchange carrier to another extremely rapidly, through automated systems. This has been a boon to competition in the interexchange market. We expect that moving customers from one local carrier to another rapidly will be essential to fair local competition. 19. As competition in the local exchange market emerges, operational issues may be among the most diffi- cult for the parties to resolve. Thus, we recognize that, along with the state commissions and the courts, we will be called upon to enforce provisions of arbitrated agree- ments and our rules relating to these operational barriers to entry. Because of the critical importance of eliminating these barriers to the accomplishment of the Act's pro- competitive objectives, we intend to enforce our rules in a manner that is swift, sure, and effective. To this end 18 Federal Communications Commission, ST ATISTICS OF COMMUNI- es sor COMMON CARRIERS 1994-95, at 344, Table 8.8; Federal Com. munications Commission, REPORT ON LONG DISTANCE MARKET SHARE Second Quarter 1995, at 14, table 6 (Oct. 1995). 142a we will review, with the states, our enforcement techniques during the fourth quarter of 1996. 20. We recognize that during the transition from monopoly to competition it is vital that we and the states vigilantly and vigorously enforce the rules that we adopt today and that will be adopted in the future to open local markets to competition. If we fail to meet that responsi- bility, the actions that we take today to accomplish the 1996 Act’s pro-competitive, deregulatory objectives may prove to be ineffective. E. Transition 21. We consider it vitally important to establish a “pro-competitive, deregulatory national policy frame- work” * for local telephony competition, but we are acutely mindful of existing common carrier arrangements, relationships, and expectations, particularly those that affect incumbent LECs. In light of the timing issues described above, we think it wise to provide some appro- priate transitions. 22. In this regard, this Order sets minimum, uniform, national rules, but also relies heavily on states to apply these rules and to exercise their own discretion in imple- menting a pro-competitive regime in their local telephone markets. On those issues where the need to create a factual record distinct to a state or to balance unique local considerations is material, we ask the states to develop their own rules that are consistent with general guidance contained herein. The states will do so in rule- makings and in arbitrating interconnection arrangements. On other issues, particularly those related to pricing, we facilitate the ability of states to adopt immediate, tem- porary decisions by permitting the states to set proxy prices within a defined range or subject to a ceiling. We 1* Joint Explanatory Statement at 1. promoting competition. Between now and then, we are 23. Similarly, as states i adopt in this order as ait tae oe vty ~ 144a F. Executive Summary l. Scope of Authority of the FCC and State Com- “47 24. The Commission concludes that sections 251 and 252 address both interstate and intrastate aspects of interconnection, resale services, and access to unbundled elements. The 1996 Act moves beyond the a between interstate and intrastate matters that was esta lished in the 1934 Act, and instead expands the gor bility of national rules to historically intrastate issues, state rules to historically interstate issues. In the Report and Order, the Commission concludes that the states and the FCC can craft a partnership that is built on mutual commitment to local telephone competition throughout the country, and that under this partnership, the FCC establishes uniform national rules for some issues, the states, and in some instances the FCC, administer these rules, and the states adopt additional rules that are critical to pro- moting local telephone competition. The rules that the FCC establishes in this Report and Order are minimum requirements upon which the states may build. The Com- mission also intends to review and amend the rules it adopts in this Report and Order to take into account competitive developments, states’ experiences, and tech- nological changes. 2. Duty to Negotiate in Good Faith . In the R and Order, the Commission estab- bes some Bowen rules regarding the duty to negotiate in good faith, but concludes that it would be futile to try to determine in advance every possible action that might be inconsistent with the duty to negotiate in good faith. The Commission also concludes that, in many instances, whether a party has negotiated in good faith will need to be decided on a case-by-case basis, in light of the partic- ular circumstances. The Commission notes that the arbi- tration process set forth in section 252 provides one 145a remedy for failing to negotiate in good faith. The Com- mission also concludes that agreements that were tiated before the 1996 Act was enacted, including agree- ments between neighboring LECs, must be filed for review by the state commission pursuant to section 252(a). If the state commission approves such agreements, the terms of those agreements must be made available to requesting telecommunications carriers in accordance with section 252(i). 3. Interconnection 26. Section 251(c)(2) requires incumbent LECs to provide interconnection to any requesting teieccommunica- tions carrier at any technically feasible point. The inter- connection must be at least equal in quality to that pro- vided by the incumbent LEC to itself or its affiliates, and must be provided on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. The Commis- sion concludes that the term “interconnection” under sec- tion 251(c)(2) refers only to the physical linking of two networks for the mutual exchange of traffic. The Com- mission identifies a minimum set of five “technically feasi- ble” points at which incumbent LECs must provide inter- connection: (1) the line side of a local switch (for ex- ample, at the main distribution frame); (2) the trunk side of a local switch; (3) the trunk interconnection points for a tandem switch; (4) central office cross-con- nect points; and (5) out-of-band signalling facilities, such as signalling transfer points, necessary to exchange traffic and access call-related databases. In addition, the points of access to unbundled elements (discussed below) are also technically feasible points of interconnection. The Commission finds that telecommunications carriers may request interconnection under section 251(c)(2) to pro- vide telephone exchange or exchange access service, or both. If the request is for such purpose, the incumbent LEC must provide interconnection in accordance with section 251(c)(2) and the Commission’s rules there- 146a icati ier, including inter- under to any telecommunications carrier, exchange carriers and commercial mobile radio service (CMRS) providers. 4. Access to Unbundled Elements i i LECs to 27. Section 251(c)(3) requires incumbent provide requesting telecommunications carriers nondis- criminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscrim. tures ided by such switches), interoffice trans- aan fhcilities, network interface devices, signalling and call-related database facilities, operations support systems functions, and operator and directory assistance facilities. The Commission concludes that incumbent LECs must provide nondiscrimination access to operations support systems functions by January 1, 1997. The Commission concludes that access to such operations support systems is critical to affording new entrants a meaningful oppor- tunity to compete with incumbent LECs. The oe, “A sion also concludes that incumbent LECs are req sa provide access to network elements in a manner tha allows requesting carriers to combine such elements as they choose, and that incumbent LECs may not impose restrictions upon the uses to which requesting carriers put such network elements. 5. Methods of Obtaining Interconnection and Access to Unbundled Elements 28. Section 251(c)(6) requires incumbent LECs £ provide physical collocation of equipment necessary for 147a interconnection or access to unbundled network elements at the incumbent LEC’s premises, except that the incum- bent LEC may provide virtual collocation if it demon- strates to the state commission that physical collocation is not practical for technical reasons or because of space limitations. The Commission concludes that incumbent LECs are required to provide for any technically feasible method of interconnection or access requested by a tele- communications carrier, including physical collocation, virtual collocation, and interconnection at meet points. The Commission adopts, with certain modifications, some of the physical and virtual collocation requirements it adopted earlier in the Expanded Interconnection pro- ceeding. The Commisssion also establishes rules inter- preting the requirements of section 251(c) (6). 6. Pricing Methodologies 29. The 1996 Act requires the states to set prices for interconnection and unbundled elements that are cost- based, nondis¢riminatory, and may include a reasonable profit. To help the states accomplish this, the Commis- sion concludes that the state commissions should set arbitrated rates for interconnection and access to un- bundled elements pursuant a forward-looking economic cost pricing methodology. The Commission concludes that the prices that new entrants pay for interconnection and unbundled elements should be based on the locai telephone companies Total Service Long Run Incremental Cost of a particular network element, which the Com- mission calls “Total Element Long-Run Incremental Cost” (TELRIC), plus a reasonable share of forward-looking joint and common costs. States will determine, among other things, the appropriate risk-adjusted cost of capital and depreciation rates. For states that are unable to con- duct a cost study and apply an economic costing meth- odology within the statutory time frame for arbitrating interconnection disputes, the Commission establishes de- 148a fault ceilings and ranges for the states to apply, on an interim basis, to interconnection arrangements. The Com- mission establishes a default range of 0.2-0.4 cents per minute for switching. For tandem switching, the Com- mission establishes a default ceiling of 0.15 cents per min- ute. The Order also establishes default ceilings for the other unbundled network elements. 7. Access Charges for Unbundled Switching 30. Nothing in this Report and Order alters the col- lection of access charges paid by an interexchange carrier under Part 69 of the Commission’s rules, when the in- cumbent LEC provides exchange access service to an interexchange carrier, either directly or through service resale. Because access charges are not included in the cost-based prices for unbundled network elements, and because certain portions of access charges currently sup- port the provision of universal service, until the access charge reform and universal service proceedings have been completed, the Commission continues to provide for a certain portion of access charge recovery with respect to use of an incumbent LEC’s unbundled switching element, for a defined period of time. This will minimize the possi- bility that the incumbent LEC will be able to “double recover,” through access charges, the facility costs that new entrants have already paid to purchase unbundled elements, while preserving the status quo with respect to subsidy payments. Incumbent LECs will recover from interconnecting carriers the carrier common line charge and a charge equal to 75% of the transport interconnec- tion charge for all interstate minutes traversing the incum- bent LECs local switches for which the interconnecting carriers pay unbundled network element charges. This aspect of the Order expires at the earliest of: 1) June 30, 1997: 2) the effective date of final decisions by the Com- mission in the universal service and access reform pro- ceedings; or 3) if the incumbent LEC is a Bell Operating 149a Company (BOC), the date on which that BOC i ), is author- ized under section 271 of the Act to provide in-region interLATA service, for any given state. 31. For a similar limited period, incumbent LECs may charge the same portions of any intrastate access charges comparable to the carrier common line charge (CCLC) and the transport interconnection charge (TIC), as well as any existing explicit universal service support mech- anisms based on intrastate access charges. During this period, incumbent LECs may continue to recover such revenues from purchasers of unbundled loce" switching elements that use those elements to originate or terminate intrastate toll calls for end user customers they win from incumbent LECs. These state mechanisms must end on the earlier of: (1) June 30, 1997; (2) the effective date of a state commission decision that an incumbent LEC may not assess such charges; and (3) if the incumbent LEC that receives the access charge revenues is a BOC the date on which that BOC is authorized under section 271 of the 1996 Act to offer in-region interLATA service The last end date will apply only to the recovery of charges in those states in which th rized offer interLATA service. srs meade m 8. Resale a The 1996 Act requires all incumbent LECs to er for resale any telecommunications service that the Carrier Provides at retail to subscribers who are not tele- communications carriers. Resale will be an important entry strategy both in the short term for many new en- trants as they build out their own facilities and for small businesses that cannot afford to compete in the local mewn market by purchasing unbundled elements or 7 building their own networks. State commissions must - entify marketing, billing, collection, and other costs at will be avoided or that are avoidable by incumbent 150a LECs when they provide services wholesale, and calculate the portion of the retail rates for those services that is attributable to the avoided and avoidable costs. The Com- mission identifies certain avoided costs, and the applica- tion of this definition is left to the states. If a state elects not to implement the methodology, it may elect, on an interim basis, a discount rate from within a default range of discount rates established by the Commission. The Commission identifies certain avoided costs, and the appli- cation of this definition is left to the states. If a state elects not to implement the methodology, it may elect, on an interim basis, a discount rate from within a default range of discount rates established by the Commission. The Commission establishes a default discount range of 17-25% off retail prices, leaving the states to set the specific rate within that range, in the exercise of their discretion. 9. Requesting Telecommunications Carriers 33. The Commission concludes that, to the extent that a carrier is engaged in providing for a fee local, inter- exchange, or international basic services, directly to the public or to such classes of users as to be effectively available directly to the public, the carrier is a “telecom- munications carrier,” and is thus subject to the require- ments of section 251(a) and the benefits of section 251(c). The Commission concludes that CMRS pro- viders are telecommunications carriers, and that private mobile radio service (PMRS) providers generally are not telecommunications carriers, except to the extent that a PMRS provider uses excess capacity to provide local, interexchange, or international services for a fee directly to the public. The Commission also concludes that, if a company provides both telecommunications services and information services, it must be classified as a telecom- munications carrier. 15la 10. Commercial Mobile Radio Service 34. The Commission concludes that LECs are obli- gated, pursuant to section 251(b)(5) and the corres- ponding pricing standards of section 252(d)(2) to enter into Teciprocal compensation arrangements with CMRS Providers, including Paging providers, for the transport and termination of traffic on each other’s networks. The Commission concludes that many CMRS providers (spe- cifically cellular, broadband PCS and covered specialized mobile radio (SMR) providers) offer telephone exchange service and exchange access, and that incumbent LECs therefore must make interconnection available to these CMRS providers in conformity with sections 251 (c) and 252. The Commission concludes that CMRS pro- viders should not be classified as LECs at this time. The Commission also concludes htat it may apply section 251 and 252 to LEC-CMRS interconnection. By opting to Proceed under sections 251 and 252, the Commission is not finding that section 332 jurisdiction over intercon- nection has been repealed by implication, and the Com- mission acknowledges that section 332, in tandem with section 201, is a basis for jurisdicti rete he j iction over LEC-CMRS 11. Transport and Termination 35. The 1996 Act requires that charges for and termination of traffic set based on sadhieeet ana.” The Commission concludes that state commissions during arbitrations, should set symmetrical prices based on the local telephone company’s forward-looking economic costs The state commissions would use the TELRIC method. ology when establishing rates for transport and termina- tion. The Commission establishes a default range of 0.2- 0.4 cents per minute for end office termination for states which have not conducted a TELRIC cost study. The Commission finds significant evidence in the record in Support of the lower end of the range. In addition, the 152a Commission finds that additional reciprocal charges could apply to termination through a tandem switch. The de- fault ceiling for tandem switching is 0.15 cents per minute, plus applicable charges for transport from the tandem switch to the end office. Each state opting for the default approach for a limited period of time, may select a rate within that range. 12. Access to Rights of Way 36. The Commission amends its rules to implement the pole attachment provisions of the 1996 Act. Spe- cifically, the Commission establishes procedures for non- discriminatory access by cable television systems and tele- communications carriers to poles, conduits, and rights-of way owned by utilities or LECs. The Order includes several specific rules as well as a number of more general guidelines designed to facilitate the negotiation and mu- tual performance of fair, pro-competitive access agree- ments without the need for regulatory intervention. Addi- tionally, an expedited dispute resolution is provided when good faith negotiations fail, as are requirements concern- ing modifications to poles, ducts, conduits, and rights-of- way and the allocation of the costs of such modifications. 13. Obligations Imposed on non-incumbent LECs 37. The Commission concludes that states generally may not impose on non-incumbent LECs the obligations set forth in section 251(c) entitled, “Additional Obliga- tions on Incumbent Local Exchange Carriers.” Section 251(h)(2) sets forth a process by which the Commission may decide to treat LECs as incumbent LECs, and state commissions or other interested parties may ask the Com- mission to issue a rule, in accordance with section 251 (h)(2), providing for the treatment of a LEC as an incumbent LEC. In addition to this Report and Order, the Commission addresses in separate proceedings some 153a of the obligations, such as dialin i e rf g parity and number portability, that section 251(b) imposes a all LECs. 14. Exemptions, Suspensions, and Modificati Section 251 Requirements geal 38. Section 251(f)(1) provides for exemption from the reuiqrements in section 251(c) for rural telephone companies (as defined by the 1996 Act) under certain circumstances. Section 251(f)(2) permits LECs with fewer than 2 percent of the nation’s subscriber lines to petition for suspension or modification of the require- ments in sections 251(b) or (c). In the Report and Order, the Commission establishes a very limited set of rules interpreting the requirements of section 25 1(f) For example, the Commission finds that LECs bear the burden of proving to the state commission that a suspen- sion or modification of the requirements of section 251 (b) or (c) is justified. Rural LECs bear the burden of prov- ing that continued exemption of the requirements of sec- tion 251(c) is justified, once a bona fide request has been made by a carrier under section 251. The Commission also concludes that only LECs that, at the holding com- pany level, have fewer than 2 percent of the nation’s sub- scriber lines are entitled to petition for suspension or modification of requirements under section 251(f)(2) For the most part, however, the states will interpret the provisions of section 251(f) through rulemaking and adjudicative proceedings, and will be responsible for deter- mining whether a LEC in a particular instance is entitled to exemption; suspension, or ificati ; . ; , modification of se ? requirements. cuion 251 15. Commission Responsibilities Under Section 252 39. Section 252(e)(5) requires the C iSSi ommiss t assume the State s responsibilities under section 252 if the State “fails to act to carry out its responsibility” under that section. In the Report and Order, the Commission 154a adopts a minimur: set of rules that will provide notice of the standards and procedures that the Commission will use if it has to assume the responsibility of a state commission under section 252(e)(5). The Commission concludes that, if it arbitrates agreements, it will use a “final offer” arbitration method, under which each party to the arbitration proposes its best and final offer, and the arbitrator chooses among the proposals. The arbitrator could choose a proposal in its entirety, or could choose different parties’ proposals on an issue-by-issue basis. In addition, the parties could continue to negotiate an agree- ment after they submit their proposals and before the arbitrator makes a decision. 40. Section 252(i) of the 1996 Act requires that in- cumbent LECs make available to any requesting tele- communications carrier any individual interconnection, service, or network element on the same terms and condi- tions as contained in any agreement approved under Sec- tion 252 to which they are a party. The Commission concludes that section 252(i) entitles all carriers with interconnection agreements to “most favored nation” status regardless of whether such a clause is in their agreement. Carriers may obtain any individual interconnection, serv- ice, or network element under the same terms and condi- tions as contained in any publicly filed interconnection agreement without having to agree to the entire agree- ment. Additionally, carriers seeking interconnection, net- work elements, or services pursuant to section 252(i) need not make such requests pursuant to the procedures for initial section 251 requests, but instetd may obtain access to agreement provisions on an expedited basis. II. SCOPE OF THE COMMISSION’S RULES 41. In implementing section 251, we conclude that some national rules are necessary to promote Congress’s goals for a national policy framework and serve the public interest, and that states should have the major re- 155a sposibility for prescribing the specific terms and condi- tions that will lead to competition in local exchange mar- kets. Our approach in this Report and Order has been a pragmatic one, consistent with the Act, with respect to this allocation responsibilities. We believe that the steps necessary to implement section 251 are not appro- priately characterized as a choice between specific na- tional rules on the one hand and substantial state discre- tion on the other. We adopt national rules where they facilitate administration of sections 251 and 252, expedite negotiations and arbitrations by narrowing the potential range of dispute where appropriate to do so, offer uniform tively self-executing. In many instances, however, the rules we establish call on the states to exercise significant discretion and to make critical decisions through arbitra- tions and development of state-specific rules. Over time, we will continue to review the allocation of responsibili- ties, and we will reallocate them if it appears that we have inappropriately or inefficiently designated the deci- sionmaking roics. 42. The decisions in this Report and Order, and in this Section in particular, benefit from valuable insights provided by states based on their experiences in establish- ing rules and taking other actions intended to foster local competition. Through formal comments, ex parte meet- ings, and open forums,” state commissioners and their 18 47 U.S.C. § 251(d) (1). ** Public forum held on March 15, 1996, by FCC’s Office of Gen- eral Counsel to discuss interpretation of sections 251 and 252 of 156a staffs provided extensive, detailed information to us re- garding difficult or complex issues that t'cy have en- countered, and the various approaches they have adopted to address those issues. Information from the states high- lighted both differences among communities within states, as well as similarities among sietes. Recent state rules and orders that take into acccur ete oe for a nationwide pro-competitive 60. We disagree with those parties that claim we are trying to impose a uniformity that Congress did not in- tend. Variations among interconnection agreements will ** AT&T comments at 12. is SE designed on a state-by-state basis. Ohio Consumers’ ments at 4. Cou 172a exist, because parties may negotiate their own terms, states may impose additional requirements that differ from state to state, and some terms are beyond the scope of this Report and Order. We conclude, however, that estab- lishing certain rights that are available, through arbitra- tion, to all requesting carriers, will help advise parties of their minimum rights and obligations, and will help speed the negotiation process. In effect, the Commission's rules will provide a national baseline for terms and conditions for all arbitrated agreements. Our rules also may tend to serve as a useful guide for negotiations by setting forth minimum requirements that will apply to parties if they are unable to reach agreement. This is consistent with the broad delegation of authority that Congress gave the Com- mission to implement the requirements set forth in section 251. 61. We also believe that national rules will assist smaller carriers that seek to provide competitive local service. As noted above, national rules will greatly reduce the need for small carriers to expend their limited re- sources securing their right to interconnection, services, and network elements to which they are entitled under the 1996 Act. This is particularly true with respect to discrete geographic markets that include areas in more than one state.” We agree with the Small Business Administration that national rules will reduce delay and lower transaction costs, which impose particular hardships for small entities that are likely to have less of a financial cushion than larger entities.“ In addition, even a small provider may wish to enter more than one market, and national rules will create economies of scale for entry into multiple markets. We reject the position advocated by some parties © Approximately 17 Personal Communications Service (PCS) providers have Basic Service Areas/Metropolitan Statistical Areas, for example, that cross state lines. *1 SBA comments at 3-4. 173a that we should not adopt national rules because such rules will be particularly burdensome for small or rural incumbent LECs.” We note, however, that section 251 (f) provides relief from some of « r rules. 62. We recognize the concern of many state commis- sions that the Commission not undermine or reverse existing state efforts to foster local competition. We be- lieve that Congress did not intend for us needlessly to disrupt the pro-competitive actions some states already have taken that are both consistent with the 1996 Act and cur rules implementing section 251.“ We believe our rules will in many cases be consistent with pro-com- petitive actions already taken by states, and in fact, many of the rules we adopt are based directly on existing state commission actions. We also intend to continue to reflect states’ experiences as we revise our rules. We also recog- nize, however, that in at least some instances existing state requirements will not be consistent with the statute and our implementing rules.“ It will be necessary in those instances for the subject states to amend their rules and alter their decisions to conform to our rules. In our judg- ment, national rules are highly desirable to achieve Con- gress’s goal of a pro-competitive national policy frame- work for the telecommunications industry. B. Suggested Approaches for FCC Rules 1. Comments 63. Parties propose a variety of approaches that the Commission could take in establishing rules for inter- connection, network unbundling, and other issues ad- dressed in section 251." Many parties suggest that the © See, e.g., Joint Consumer Advocates reply at 5-6. * 47 U.S.C. § 251(d) (3). * See infra, Section II.C. ® See, e.g., Cox comments at 22-23; Illinois Commission com- ments at 9-10; MCI comments at 12; MFS comments at 5-6; SBA 174a Commission can, and should, establish regulations within six months of the date of enactment of the 1996 Act, and continue on an ongoing basis to revise and amend rules regarding interconnection, service, and access to unbundled network elements.” Parties have differing views about why Congress imposed relatively short frames for action by states and the FCC.“ Some parties suggest that the Commission take a largely “hands off” approach initially, but that it set more specific rules if and when such rules are needed.“ IXCs, state commissions, in- cumbent LECs and others agree that, in setting national rules, the Commission should learn from and build upon the experiences of the states.” 64. Some state commissions and incumbent LECs rec- ommend that the FCC establish general, broad principles rather than detailed requirements.” Several parties favor a “preferred outcomes” approach similar to the one comments at 5; Attorneys General reply at 3; California Commis- sion reply at 10-11; Minnesota Ind. Coalition reply at 3-4; Na- tional Association of the Deaf reply at 1-3. ** MCI reply at 5; Sprint reply at 11. * See, e.g., DoJ coments at 13-15 (the short time frame in which to establish rules evidences Congress's desire to bring about change quickly, which could only occur through a single set of rules, rather than through many iterations) ; contra, e.g., SBC comments at 10 (the short time frames for seeking arbitration and for state com- mission review of agreements reflect Congress’s desire to bring about change more quickly than the pace that the regulatory process historically has achieved) . *8 Alliance for Public Technology comments at 8-10; U S West comments at 8-4, Illinois Commission comments at 9-10. * See, e.g., Ad Hoe Telecommunications Users Committee com- ments at 11-18; MCI comments at 12; Sprint comments at 6-7. ™ Citizens Utilities comments at 3; Guam Telephone Authority comments at 5; Lincoln Tel. comments at 1, 3; District of Columbia Commission comments at 11-12. 175a adopted in California."' Under that approach, the FCC would establish acceptable or “preferred” outcomes, but parties would have the opportunity to justify deviation from those outcomes.” The California Commission ar- gues that we should establish a range of guidelines that are detailed enough to be easy to implement by states that have not yet developed rules for competition, but flexible enough to allow states to continue their pro- competitive efforts without disruption.” At least one party, however, asserts that a “preferred outcomes” approach is not sufficient to provide incumbent LECs with an in- centive to bargain in good faith." 65. Some state commissions recommend that, if the FCC does establish explicit requirements, states should be allowed to impose different requirements. For example, the Illinois Commission urges the FCC to adopt a process by which states may seek a waiver from the national regulations, upon a showing of need." The Ohio and Florida Commissions recommend that the FCC adopt ex- plicit requirements that states could choose to adopt, but that states would have the option of developing their own requirements." Under the proposal recommended by the Ohio Commission, existing state regulations that are con- sistent with the 1996 Act would be “grandfathered.” ” ™ See, e.g., GTE comments at 12-14; PacTel comments at 1-8; Washington Commission comments at 1-2; ALTS comments at 2-4; Teleport comments at 14-17; Texas Public Utility Counsel reply at 2; Minnesota Ind. Coalition reply at 8. ™ ALTS comments at 2-4. ™ California Commission reply at 4-7. ™ Comcast reply at 5. Illinois Commission comments at 18; accord AT&T comments at 11; ACTA comments at 2-4. ™ Florida Commission comments at 2-8; Ohio Commission com- ments at 4-5; accord NYNEX reply at 4. a Commission comments at 4-5; accord NARUC comments a , 176a In addition, if a state failed to adopt any rules regarding competitive entry into local markets within a specified time, the FCC rules would be binding.” 2. Discussion 66. We intend to adopt minimum requirements in this proceeding; states may impose additional pro-competitive requirements that are consistent with the Act and our rules. We decline to adopt a “preferred outcomes” ap- proach, because such an approach would fail to establish explicit national standards for arbitration, and would fail to provide sufficient guidance to the parties’ options in negotiations. To the extent that parties advocate “pre- ferred outcomes” from which the parties could deviate in arbitrated agreements, we reject such a proposal, because we conclude that it would not provide the benefits con- ferred by establishing “default” requirements. To the ex- tent that commenters advocate a regulatory approach that would require parties to justify a negotiated result differ- ent from the preferred outcomes, we believe that such an approach would impose greater constraints on voluntarily negotiated agreements than the 1996 Act permits. Under the 1996 Act, parties may freely negotiate any terms without justifying deviation from “preferred outcomes.” ” The only restriction on such negotiated agreements is that they must be deemed by the state commission 10 be nondiscriminatory and consistent with the public interest, under the standards set forth in section 252(e)(2)(A). In response to the Illinois Commission’s suggestion that we adopt a process by which states may seek waivers of our rules, we note that Commission rules already provide for waiver of our rules under certain circumstances.” 78 Ohio Commission comments at 4-5. 747 U.S.C, §252(a) (parties may negotiate and enter into a binding agrement without regard to standards set forth in sections 251(b) and (c)). 8 47 C.F¥.R. § 1.3. 177a We decline to adopt a special waiver process in this proceeding. 67. We intend our rules to give guidance to the parties regarding their rights and obligations under section 251. The specificity of our rules varies with respect to different issues; in some cases, we identify broad principles and leave to the states the determination of what specific requirements are necessary to satisfy those principles. In other cases, we find that local telephone competition will be better served by establishing specific requirements. In each of the sections below, we discuss the basis for adopt- ing particular national principles or rules. 68. We also believe that we should periodically re- view and amend our rules to take into account experi- ences of carriers and states, technological changes, and market developments. The actions we take here are fully responsive to Congress’s mandate that we complete all actions necessary to establish regulations to implement the requirements of section 251 by August 8, 1996." We nevertheless retain authority to refine or augment our rules, or to follow a different course, after developing some practical experience with the rules adopted herein. It is beyond doubt that the Commission has ongoing rulemaking authority. For example, section 4(i) provides that the Commission “may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with the Act. as may be necessary in the execution of its functions.” Section 4(j) provides that the Commission “may conduct its proceedings in such manner as will best conduce to the proper dispatch and to the ends of justice.” We agree with Sprint, the Tlli- 1 47 U.S.C. § 251 (d) (1). ® 47 U.S.C. § 154(i). 83 47 U.S.C. § 154(j). Section 11 of the 1996 Act also directs the Commission to review and modify its rules on an ongoing basis. 47 U.S.C. § 161. 178a nois Commission, and other parties that we should ad- dress in this rulemaking the most important issues, and continue to refine our rules on an ongoing basis to ad- dress additional or unanticipated issues, and especially to learn from the decisions and experiences of the states.“ We also reject the argument of Margaretville Telephone Company that the 1996 Act constitutes an unconstitu- tional taking because it seeks to deprive incumbent LECs of their “reasonable, investment-backed expectation to hold competitive advantages over new market entrants.” “ C. Legal Authority of the Commission to Establish Rules Applicable to Intrastate Aspects of Intercon- nection, Services, and Unbundled Network Elements 1. Background 69. In the NPRM, we tentatively concluded that Con- gress intended sections 251 and 252 to apply, and that our rules should apply, to both interstate and intrastate aspects of interconnection, services, and access to network elements.” We stated in the NPRM that it would seem to make little sense, in terms of economics or technology, to distinguish between interstate and intrastate components for purposes of sections 251 and 252." We also believed % Sprint comments at vi, 6-7; Illinois Commission comments at 9-10. Although various parties have encouraged us to address issues that are beyond those identified in the NPRM, we will ad- dress only those topics identified in the NPRM, or that are a clear and logical outgrowth from issues specifically identified in the NPRM. See, e.g., Unicom comments at 1-2 (urging the Commis- sion to extend to IXCs the rules it adopts for LECs regarding collocation, interconnection, and unbundling); TCI comments at 15-17 (asking Commission to clarify the extent to which munici- palities have control over rights-of-way under section 253). % Margaretville Tel. comments at 1-4. 8¢ NPRM at para. 37. 8? NPRM at para. 37. 179a that such a distinction would appear to be inconsistent with Congress’s desire to establish a national policy frame- work for interconnection and other issues critical to achieving local competition. We sought comment on these tentative conclusions. 70. We further tentatively concluded in the NPRM that section 2(b) of the 1934 Act does not require a contrary conclusion.“ Section 2(b) states that except as provided in certain enumerated sections not including sections 251 and 252, “nothing in [the 1934] Act shall be construed to apply or to give to the Commission jurisdic- tion with respect to . . . charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service by wire or radio of any carrier... .”™ We noted in the NPRM that sections 251 and 252 do not alter the jurisdictional division of authority with respect to matters falling outside the scope of these provisions.” For example, rates charged to end users for local exchange service have traditionally been subject to state authority, and will continue to be. 2. Comments 71. The parties disagree about the extent to which the FCC has authority to establish regulations pursuant to sections 251 and 252. A majority of commenters that address the issue contend that sections 251 and 252 apply to both interstate and intrastate aspects of inter- connection, services, and access to unbundled network elements." Other commenters contend, however, that 88 NPRM at para. 39. 8° 47 U.S.C. § 152(b). * NPRM at para. 40. %! See, e.g., ACTA comments at 4: ALTS comments at 6; ACSI coments at 5; Arch comments at 5; Bell Atlantic comments at 7-8 (section 251 addresses matters of a “predominantly intrastate na- 180a sections 251 and 252 apply only to intrastate aspects of interconnection, services, and access to unbundled net- work elements.”” None of the commenters appears to claim that section 251 addresses exclusively interstate matters. As discussed below, many parties, including BOCs and state commisssions, contend that the FCC's role under sections 251 and 252 is quite limited.” 72. The IXCs and other potential competitors in local exchange markets generally assert that the 1996 Act ex- pressly authorizes, and even obligates, the Commission to establish regulations regarding interstate and intrastate aspects of interconnection, service, and access to unbun- died network elements. For example, MCI contends that, “Iblecause the tuchnical feasibility and cost of providing a particular arrangement do not depend on whether the requesting carrier uses that arrangement to provide inter- state or intrastate services,” it would make no sense to interpret section 251 to include a jurisdictional distinction between interstate and intrastate aspects of interconnection that does not appear on the face of that provision.” Several parties assert that sections 251 and 252 alter traditional jurisdictional boundaries by giving states some authority over interstate matters that they previously did not have, and by giving the FCC some new authority over ture”); BellSouth comments at 8; Cable & Wireless comments at 11; CompTel comments at 15; Florida Commission comments at 7; GCI comments at 4; GSA/DoD comments at 6; GTE comments at 3: Jones Intercable comments at 10; MCI comments at 7-8; Sprint comments at 7; TCI comments at 12; Texas Commission comments at 5; NTIA reply at 6 n.15; NCTA reply at 2-7. * NARUC comments at 9-10; New York Commission comments at 10-11; U S West comments at 10-11. %8 Bell Atlantic comments at 7-8; GTE comments at 3; PacTel comments at 11. ** MCI comments at 7, 8 (it is highly unlikely that interconnec- tion arrangements will be used exclusively for jurisdictional- specific traffic). 18la intrastate matters.” Other parties assert that section 251 clearly applies to intrastate aspects of interconnection, services, and access to unbundled elements, and that, as a basic principle of administrative law, to the extent that section 251 addresses intrastate matters, the FCC has authority to adopt implementing regulations.” 73. Parties point to other provisions in the 1996 Act to show that the traditional jurisdictional division of au- thority between states and the FCC does not apply with respect to sections 251 and 252. MCI contends that sec- tion 253, by addressing federal preemption of both inter- State and intrastate barriers to competition, makes it clear that the jurisdictional division of responsibility is inappli- cable.” Parties also point to the fact that the Commission must in some circumstances assume the state commission’s responsibilities as evidence of a shift in jurisdictional authority.”” Jones Intercable asserts that sections 251 and 252 of the 1996 Act make distinctions among classes of entities (telecommunications carriers, LECs, and in- cumbent LECS), rather than between interstate and intra- State service.” * Illinois Commission comments at 3-5, 15: Spri commen ; , ; Sprint ts at 5; CompTel reply at 5; Rural Tel. Coalition reply at 3. . *° MCI reply at 36-37; Vanguard reply at 4 (citing Time Warner v. FCC, 56 F.3d 151, 174-76 (D.C. Cir. 1995) for the proposition that agencies are empowered to interpret their organic statutes through rules and other mechanisms, to govern the behavior of parties regulated under those statutes). ** MCI comments at 7-8; accord Sprint comments ’ t 4; comments at 15; TCI reply at 6. ; pas 8 See, e.g., ACTA comments at 4; New Jersey Cable Ass’ reply at 18-19; TCI reply at 6. y n, et al. * Jones Intercable comments at 10; see also Time Warner com- ments at 7; Cable & Wireless comments at 11-12 (sections 251 and 62 apply to all telecommunications serviecs, and the definitions of ‘telecommunications,” “telecommunications service,” and tele- communications carrier” are defined without reference to juris- dictional boundaries); New Jersey Cable Ass’n, et al. reply at 182a 74. AT&T contends that, by requiring the Commis- sion to “complete all actions necessary to establish regula- tions to implement the requirements of this Section,” sec- tion 251(d)(1) requires the Commission to establish min- imum national standards for interconnection, unbundling, pricing, resale, and related requirements.” AT&T states that the 1996 Act was created pursuant to the settled rule that federal agency regulations preempt any incon- sistent state policies unless the underlying federal statute otherwise provides.” It interprets section 251(d)(3) to mean that any Commission regulation that reasonably implements section 251 bars state enforcement of any inconsistent state regulations, without regard to whether the preemptive provisions of section 253 would also apply. According to AT&T, the only limitation on the Commis- sion’s preemptive powers is that it may not preclude the enforcement of state access and interconnection require- ments that are consistent with the 1996 Act and the FCC's implementing regulations.” AT&T maintains that this interpretation is consistent with the fact that section 252(c)(1) requires state commissions to ensure that non- voluntary agreements are consistent with the Commission's regulations under section 251 (d).™™ 18-19; GSA/DoD reply at 7 (Congress did not intend to expand traditional interstate and intrastate jurisdictional distinctions) ; Competitive Policy Insitue reply at 10. 10 AT&T comments at 4 (quoting § 251(d)(1) of the Act). 11 AT&T comments at 4-5 (citing Fidelity Federal Savings and Loan Assoc. v. de la Cuesta, 458 U.S. 141, 152-154 (1982); City of New York v. FCC, 467 U.S. 57, 64 (1988); Oklahoma Natural Gas v. FERC, 28 F.3d 1281, 1283 (D.C. Cir. 1994) ). 1@ AT&T comments at 5 and nn.3-4; accord Cable & Wireless comments at 11 (in section 253, Congress made clear that the Com- mission has authority to preempt any state requirement that creates a barrier to either interstate or intrastate services, or that is incon- sistent with the 1996 Act); MCI comments at 7-8; Sprint com- ments at 4. 1088 AT&T comments at 5-6. 183a 75. AT&T further contends that section 2(b) of the Act does not limit the Commission's authority to promul- gate rules under section 251, because section 251 “gives the FCC explicit authority to prescribe and enforce pre- emptive rules that are necessary to achieve the Act's pur- pose of developing local services competition.” * Sprint, Comcast, and other parties assert that Congress intended section 251 to give the Commission authority over both interstate and intrastate aspects of interconnection, not- withstanding the fact that it left section 2(b) un- amended.” For example, Comcast contends that section 253(a) authorizes the Commission to preempt any state or local requirement that prohibits or has the effect of prohibiting any interstate or intrastate telecommunications service." In view of the explicit grants of authority in sections 251 and 253, Comcast asserts that it was unneces- sary to amend section 2(b). Cable & Wireless contends that the fact that section 251(d)(1) provides that the FCC shall” in some cases preempt state regulations is evidence that Congress did not believe it was required to amend section 2(b) before delegating intrastate author- ity to the FCC." AT&T asserts that the fact that prior versions of the legislation amended section 2(b) to except Part Il of Title Il of the Act is not dispositive; when the language was taken out, it was not listed as a substantive change, but treated as a “minor drafting” or “clerical” AT&T comments at 6 (section 2(b) can not be read to nullif ae 2(a) and sections 201 to 205) (citing California v. FCC. : F.3d 919, 931-33 (9th Cir. 1994); PUC of Tezras v. FCC 886 2d 1825 (D.C. Cir, 1990); NARUC v. FCC, 746 F.24 1492 (D.C Cir, 1984); Lowisiana PSC +. FCC conan : , 476 US. 355, 375-76 n4 8 Sprint comme . aa” co nts at 7; Comcast reply at 2-8; NCTA reply #6 Comcast reply at 2-3. Cable & Wireless reply at 9-10. 184a change."* AT&T asserts that this was an appropriate characterization, because section 2(b) would not have had any effect in any event. 76. Several parties contend that the Act makes clear that states are required to apply FCC rules established under section 251. For example, sections 252(c)(1) and (f)(2) explicitly require the states to apply the FCC's regulations."” In addition, section 261(c) provides that state requirements must be “not inconsistent” with Part Il of Title Il, including the Commission’s regulations thereunder."” Thus, the parties contend that these pro- visions constitute express federal preemption, and that section 601(c), which provides that any premptive effect of the new law must be express, does not establish limits to the FCC’s authority to establish regulations under section 251." 77. Sprint states that other provisions of the 1996 Act: subordinate state actions and policies with respect to intrastate service to those of the Commission, ¢.g., sections 253 (entry barriers), 254(f) (universay serv- ice), 258 (PIC change procedures), and 276 (pay- phone services). If Congress had intended the juris- dictional split in section 2(b) to remain unaffected by the 1996 Act, all of these very specific subordina- tions of state policy to federal policy would be nulli- ties, and much of the 1996 Act would make no sense at all.”” 108 AT&T reply at 4 n.5 (citing Joint Explanatory Statement at 113). 1° AT&T reply at 2. 11@ Jones Intercable comments at 11-12; MCI reply at 7; MFS reply at 7; New Jersey Cable Ass'n, et al. reply at 23. 111 New Jersey Cable Ass’n, et al. reply at 23; Jones Intercable reply at 15. 112 Sprint comments at 7. 185a Sprint contends that the only way to give meaning to both section 2(b) and the above-referenced provisions is to conclude that the section 2(b) distinctions remain in effect for “retail” services offered to end users, but that the detailed scheme for intercarrier relationships set forth in Part II of Title II supersedes section2(b). '* .MCI con- curs, and adds that this interpretation is consistent with settled principles of statutory construction that the specific prevails over the general, and the later-enacted provision prevails over the earlier-enacted provision.'™ 78. Some state commissions and some other com- menters assert that section 251, as well as other provi- sions of the 1996 Act, support the interpretation thai Congress intended states to have a primary role in setting requirements for intrastate interconnection. For example, these parties assert that section 251(d)(3) is evidence that Congress intended to permit states to implement their own access and interconnection regulations. and that this statutory language requires the FCC to fashion its regulations to avoid precluding state interconnection policy or rules."° They note that section 251(d)(3) requires consistency with the Act, but does not mandate consist- ency with the FCC’s regulations."* SNET asserts that. if Congress intended to preclude state discretion to interpret section 251 requirements, it would have preempted all 113 Sprint comments at 7-8. ™4 MCI comments at 8 (citing Stendor Enterprises Ltd. v. Arm- tex, Inc., 947 F.2d 727, 732 (4th Cir. 1991); Redhouse v. C.LR., 728 F.2d 1249, 1253 (9th Cir. 1984) ; Mesa Petroleum Co. v. FERC, 688 F.2d 1014, 1016 (5th Cir. 1982) ). "® Maryland Commission comments at 22; Ohio Commission comments at 16-17 (citing Joint Explanatory Statement at 1, 119); accord, ¢.g., Bogue, Kansas comments at 4: Connecticut Commi>- sion comments at 7; NARUC comments at 14; PacTel comments at 14; Pennsylvania Commission comments at 7-9. "Maryland Commission comments at 22; Washington Commis- sion comments at 6-7. 186a state policies addressing those requirements, rather than just policies that substantially prevent implementation of the statute."" Some parties also point out that section 251(d)(3) is entitled “Preservation of state access regu- lations,” and argue that the stated purpose of that pro- vision is to preserve or “grandfather” most, if not all, state access and interconnection regulations.'’* They also allege that section 601(c) of the Act demonstrates that Congress intended to preserve states’ authority over intra- state matters, and that any preemption finding would have to be based on an express provision.’ Bogue, Kan- sas states that section 256(c) also ae Oe that noth- ing in that section expands or iimits ommission’s pon Ft prior to the enactment of the 1996 Act. The Oregon Commission argues that section 261 also permits states to impose requirements, as long as those require- ments are not inconsistent with the 1996 Act.™ 79. Some state commissions and incumbent LECs con- tend that the Commission's authority to establish regula- tions that may preempt state requirements is limited to those instances where section 251 expressly provides for Commission action.” Some parties also contend that, 117 SNET reply at 1-2; accord Colorado Commission comments at 5-9. 118 Ohio Commission reply at 3; BellSouth reply at 5. 119 See, e.g., District of Columbia Commission comments at 6; Maryland Commission comments at 21; NARUC comments at 13; Ohio Commission comments at 15-16; Wyoming Commission com- ments at 10; BellSouth reply at 5-6. 120 Bogue, Kansas comments at 5. 121 Oregon Commission comments at 13-14; accord Washington Commission comments at 9; Rural Tel. Coalition reply at 4. 122 Rural Tel. Coalition comments at 5 (Commission authority should be limited to establishing number portability requirements, regulations for limitations on resale, minimum unbundling re- quirements, rules for administering the North American Number- 187a because section 252(e)(5) specifically requires the FCC to assume the responsibilities of the state commission if the state commission fails to act under section 252, the FCC's role under section 252 is limited to that specific delegation of authority.” 80. These parties also reject the claim that section 251 takes precedence over section 2(b)."* They note that section 2(b) was not amended by the 1996 Act, although prior version of the bills would have done so."** Moreover, parties claim that, in other instances, Congress did spe- cifically amend section 2(b) to give the Commission au- thority over intrastate aspects of specified matters.’ Bell Atlantic asserts that the failure to amend section 2(b) is “fatal to the notice’s proposed federalization of intrastate interconnection and other intrastate matters.” *’ The Ohio Commission expressly rejects the suggestion in the NPRM ing Plan, enforcing existing access and interconnection require- ments, and determining whether to treat additional carriers as in- cumbent LECs) ;*see also District of Columbia Commission com- ments at 8-10; NARUC comments at 14-15; New York Commis- sion comments at 2-3, 8. 128 See, e.g., NARUC comments at 15; New York Commission comments at 9; PacTel comments at 13. ™4 See, e.g., Bell Atlantic comments at 4; Connecticut Commis- sion comments at 5; Oregon Commission comments at 12; Indiana Commission Staff comments at 4-5; Iowa Commission comments at 6. 8 See, e.g., Maryland Commission comments at 16 (citing Conf. Rep. No. 104-230 at 78 and H.R. 1555 Rep. No. 104-204 at 53); accord NARUC comments at 10 (citing Russello v. US., 464 U.S. 16 (1989) ) ; Oregon Commission comments at 15. #6 California Commission comments at 11: Connecticut Commis- ison comments at 7 (citing the Omnibus Budget Reconciliation Act of 1993 as an example of congressional intent to alter juris- dictional authority) ; Maryland Commission comments at 20; Ohio Commission comment sat 14-15; BellSouth reply at 4. "7 Bell Atlantic comments at 7. 188a that there was no need to amend section 2(b) because sections 251 and 252 do not affect end user rates.’ 81. Some parties further contend that preemption must be express, not implied, and that no such express state- ment was made in section 251.'” Parties also assert that, by comparison, the Act is “quite clear in preempting states where it intended to do so.”*” For example, the New York Commission asserts that, in certain circum- stances, section 254(f) expressly directs states to act in a manner that is “not inconsistent” with FCC rules.” NARUC asserts that there is a “well established presump- tion against finding preemption of State law in areas tradi- tionally regulated by the States” that weighs against an interpretation that the FCC has broad regulatory author- ity to establish rules governing local exchange markets." 82. To support their claim that, in 1934, Congress established a dual regulatory system, and that the FCC’s 128 Ohio Commission comments at 15 (the 1993 amendments to section 2(b) expressly reserved to states responsibility for whole- sale rates in general). 129 See, e.g., NARUC comments at 12 (citing Hillsborough County v. Automated Medical Laboratories, 471 U.S. 707, 175 (1985) ); Ari- zona Commission comments at 16; Bogue, Kansas comments at 3 (citing Gregory v. Asheroft, 501 U.S. 452, 460 (1991)); New York Commission comments at 6 (citing Washington Market v. Hoffman, 101 U.S. 112 (1879)); Municipal Utilities reply at 5 (FCC may not preempt state regulations that are consistent with the Act). 139 Bogue, Kansas comments at 4 n.3 (section 251(e) gives FCC “exclusive jurisdiction” over some aspects of Number Administra- tion); Maryland Commission comments at 15; Ohio Commission comments at 12, 16. 131 New York Commission comments at 8; see also NARUC com- ments at 12 (contrasting section 276, which explicitly provides that Commission regulations shall preempt inconsistent state require- ments). 182 NARUC comments at 12 (quoting California v. ARC America Corp., 490 U.S. 91, 101 (1989)). 189a jurisdiction is limited to interstate issues, except where otherwise expressly provided, these parties cite to the Supreme Court's decision in Louisiana Public Service Comm'n v. FCC.” The Maryland Commission contends that Louisiana PSC is controlling here, because: (1) the dual regulatory system was not eliminated by the 1996 Act; (2) the FCC may not rely upon the broad con- gressional intent to promote competition as a delegation of authority over intrastate issues; and (3) the 1996 Act does not embody a federal regulatory scheme that is so pervasive as to infer that Congress left no room for states to supplement it." PacTel claims that, because section 251 was created after the decision in Louisiana PSC, Con- gress was aware that, if it wanted section 251 to override section 2(b), it would have to do so in an unambiguous manner. Consequentially, because Congress did not amend section 2(b) or otherwise expressly limit its effect, section 2(b) takes precedence over section 251 to the extent the provisions conflict.” Several parties offer additional bases for finding that the Louisiana PSC decision controls the scope of the Commission’s authority under section 251. 88476 U.S. 335 (1986) “Louisiana PSC). In that case, the Su- preme Court held that section 220 of the 1934 Act, which directs the FCC to set depreciation regulations, did not give the FCC au- thority to preempt inconsistent state depreciation regulations for intrastate ratemaking purposes. ‘8 Maryland Commission comments at 17-18 (citing Fidelity Sav- ings Loan Assn, v de la Cuesta, 458 U.S. 141, 153 (1982)): accord Ohio Commission comments at 11; Oregon Commission com- ments at 13; Washington Commission comments at 9-10. 185 PacTel comments at 14-15. The Maryland Commission further asserts that compliance with both federal and state regulation as envisioned by the 1996 Act is not a physical impossibility that would support a claim of implied preemption. Maryland Commission comments at 18 ( citing Florida Lime & Avocado Growers Inc. v. Paul, 373 U.S. 182. 142-43 (1963) ) ; accord Washington Commission comments at 10. The Ohio Commission avers that it is possible for the FCC to promulgate 190a 3. Discussion 83. We conclude that, in enacting sections 251, 252, and 253, Congress created a regulatory system that differs significantly from the dual regulatory system it established in the 1934 Act.** That Act generally gave jurisdiction over interstate matters to the FCC and over intrastate matters to the states. The 1996 Act alters this framework, and expands the applicability of both national rules to historically intrastate issues, and state rules to historically interstate issues.“ Indeed, many provisions of the 1996 Act are designed to open telecommunications markets to rules that apply to interstate services only. Ohio Commission com- ments at 13. Several states also reject the idea that section 251 squarely addresses, and therefore controls, the jurisdictional issue, because there is “no mention of intrastate services or preemption of states’ authority over such matters in Section 251.” Ohio Com- mission comments at 12; Maryland Commission conmments at 23; accord Bell Atlantic comments at 6. Pacific Telesis asserts that sections 251 and 2(b) may be read as internally consistent, and that, under rules of statutory construction, they must be so interpreted. PacTel comments at 12-13 (citing Washington Market Co. v. Hoff- man, 101 U.S. 112 (1879)). Bell Atlantic states that the Supreme Court held in Louisiana PSC that the rule of statutory construction that the specific takes precedence over the general does not apply where two provisions “address ‘different subject[s]’ and therefore ‘are not general or specific with respect to each other.” Bell At- lantic comments at 6 (quoting Louisiana PSC, 476 U.S. at 376 n.5); GTE reply at 5. 137 According to Senator Pressler, “Progress is being stymied by a morass of regulatory barriers which balkanize the telecommunica- tions industry into protective enclaves. We need to design a national policy framework—a new regulatory paradigm for telecommunica- tions—which accommodates and accelerates technological change and innovation.” 141 Cong. Rec. S7881-2, S7886 (June 7, 1995) (emphasis added). According to Representative Fields, “{Congress] is decompartmentalizing segments of the telecommunications in- dustry, opening the floodgates of competition through deregulation, and most importantly, giving consumers choice. .”, 142 Cong. Rec. 11149 (Feb. 1, 1996). 138 For example, section 253(a) suggests that states may estab- lish regulations regarding interstate as well as intrastate matters. 19la all potential service providers, without distinction between interstate and intrastate services. 84. For the reasons set forth below, we hold that tion 251 authorizes the FCC to establish ouitiaens regarding both interstate and intrastate aspects of in- terconnection, services, and access to unbundled ele- ments. We also hold that the regulations the Com- mission establishes pursuant to section 251 are binding upon states and carriers and section 2(b) does not limit the Commission’s authority to establish regulations governing intrastate matters pursuant to section 251 Similarly, we find that the states’ authority pursuant to section 252 also extends to both interstate and intrastate matters. Although We recognize that these sections do not contain an explicit grant of intrastate authority to the Commission or of interstate authority to the states, we nonetheless find that this interpretation is the only reason- able way to reconcile the various provisions of sections 251 and 252, and the statute as a whole. As we indicated in the NPRM, it would make little sense in terms of economics or technology to distinguish between interstate and i me oe components for purposes of sections 251 85. We view sections 251 and 252 as cretatin parall jurisdiction for the FCC and the states. These on require the FCC to establish implementing rules to govern interconnection, resale of services, access to unbundled network elements, and other matters, and direct the States to follow the Act and those rules in arbitrating and os arbitrated agreements under sections 251 and 252. Among other things, the fact that the Commission is required to assume the state commission’s responsibili- ties if the state commission fails to Carry out its section ee : as m trey a that this interpretation is the most reasonable one oe of our expectation that marketing and product offerings y ecommunications carriers will diminish or eliminate the si nificance of interstate-intrastate distinctions. ee 192a 252 responsibilities gives rise to the inevitable infer- ence that both the states and the FCC are to address the same matters through their parallel jurisdiction over both interstate and intrastate matters under sections 251 and 252. 86. The only other possible interpretations would be that: (1) sections 251 and 252 address only intertate aspects of interconnection, services, and access to un- bundled elements; (2) the provisions address only tbe intrastate aspects of those issues; or (3) the FCC's role is to establish rules for interstate aspects, and the states’ role is to arbitrate and approve agreements on intrastate aspects. As explained below, none of these interpretations withstands examination. Accordingly, we conclude that sections 251 and 252 address both interstate and intra- state aspects of interconnection services and access to unbundled elements. 87. Some parties have argued that our authority under section 251 is limited by section 2(b). Ordinarily, in light of section 2(b), we would interpret a provision of the Communications Act as addressing only the interstate jurisdiction unless the provision (as well as section 2(b) itself) provided otherwise. That interpretation is con- tradicted in this case, however, by strong evidence in the statute that the local competition provisions of the 1996 Act are directed to both intrastate and interstate matters. For example, section 251(c)(2), the interconnection re- quirement, requires LECs to provide interconnection “for the transmission and routing of telephone exchange serv- ice and exchange access.” ** Because telephone exchange service is a local, intrastate service, section 251(c)(2) plainly addresses intrastate service, but it also addresses interstate exchange access. In addition, we note that in section 253,” the statute explicitly authorizes the Com- = a 140 See 47 U.S.C. § 252(e) (5). 11 47 U.S.C. § 251(c) (2). 193a mission to preempt intrastate and interstate barriers to entry.’* 88. More genrally, if these sections are read to address only interstate services, the grant of substantial responsi- bilities to the states under section 252 is incongruous. A statute designed to develop a national policy framework to promote local competition cannot reasonably be read to reduce significantly the FCC’s traditional jurisdiction Over interstate matters by delegating enforcement responsi- bilities to the states, unless Congress intended also to implement its national policies by enhancing our author- ity to encompass rulemaking authority over intrastate interconnection matters.’“ 89. Some parties argue that section 251 addresses solely intrastate matters. We do not find this argument persuasive."** Under this narrow view, section 251(c) (6) requiring incumbent LECs to offer physical collocation would apply only to equipment used for intrastate serv- ices, while new entrants would be limited to the use of virtual collocation for equipment used in the provision of interstate services, pursuant to the decision in Bell Atlantic. Such an interpretation would force new en- 142 47 U.S.C. § 258(a). “8 The legislative history is replete with statements indicating that Congress meant to address intrastate local exchange competi- tion. For instance, Senator Lott stated that “ijn addressing local and long distance issues, creating an open access and sound inter- connection policy was the key objective...” 141 Cong. Rec. S7906 (June 7, 1995) (emphasis added). Representative Markey noted that “we take down the barriers of local and long distance and cable company, satellite, computer software entry into any business they want to get in.” 142 Cong. Rec. H1151 (Feb. 1, 1996) (emphasis added). ™* See, e.g., New York Commission comments at 5-8. be Bell Atlantic Telephone Companies v. FCC, 24 F.3d 1441 (D.C. Cir. 1994) (Bell Atlantic) (holding that the Commission did not have authority to require physica! collocation for the provision of interstate services). 194a trants to use diffeernt methods of collocation based on the jurisdictional nature of the traffic involved, and would thereby greatly increase new entrants’ costs. Moreover, such an interpretation would fail to give effect to Con- gress’s intent to enacting section 251(c)(6) to reverse the result reached in Bell Atlantic.” 90. Another factor that makes clear that sections 251 and 252 did not address exclusively intrastate matters 1s the provision in section 251(g), ‘Continued Enforcement of Exchange Access and Interconnection Requirements. That section provides that BOCs must follow the Com- mission’s “equal access and nondiscriminatory intercon- nection restrictions (including receipt of compensation )” until they are explicitly superseded by Commission regu- lations after the date of enactment of the 1996 Act. This provision refers to existing Commission rules governing interstate matters, and therefore it contradicts the argu- ment that section 251 addresses intrastate matters ex- clusively. 91. Nor does the savings cla [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0135%3A03. Public record. Not legal advice.