Regulatory News - Regulators Prepare for BOC Long-Distance Onslaught

Posted: 12/2000

Regulators Prepare for BOC Long-Distance Onslaught
By Kim Sunderland

Anticipating a flood of BOC requests to enter the long-distance market, the FCC (www.fcc.gov) is taking a proactive role in preparation for the Section 271 rush.

With competitive carriers and the incumbents, federal and state regulators hope to create a better prepared and more efficient regulatory machine to handle regional BOC Section 271 applications, or those that are filed on a state-by-state basis.

"This is not streamlining the Sec. 271 process," says Mike Balmoris, public affairs manager in the FCC's Common Carrier Bureau (CCB, www.fcc.gov/ccb). "We don't want to intimate that the 271 standards are being lowered. This is a way to better manage the applications since we anticipate we will be getting multiple BOC applications at the same time over the coming months."

In fact, Verizon Communications (www.verizon.com) plans to submit multiple Section 271 bids for New England states within its region outside of New York where the BOC has approval, and in Massachusetts where the company has an application pending. The FCC is expected to rule on it this month.

Throughout the fall, the CCB has been preparing for the application windfall by conducting regional meetings with state public utility commissioners and their staffs. The meetings address issues related to reviewing BOC applications for authority to provide in-region, interLATA services.

At least one Section 271 meeting has been conducted by the CCB staff in each BOC region, with state commissioners from an entire BOC region invited to attend. In most cases, representatives from the U.S. Department of Justice (www.usdoj.gov) also attended the meetings. Each regional meeting was broken into several parts, with parties meeting separately with the FCC and DOJ.

"The purpose of the meeting was to discuss the FCC's expectations regarding 271 filings," explains Lisa Harvey, the Florida Public Service Commission's (www2.scri.net/psc/psc_toc.html) project manager handling BellSouth Corp.'s (www.bellsouth.com) OSS testing. "And I think that purpose was achieved."

Lois Burns, assistant counsel with the Pennsylvania Public Utility Commission (http://puc.paonline.com), hailed the collaborative meeting in Harrisburg, Pa., as a great way to inform the states of the FCC's process, and what it needs from the states regarding a Section 271 filing.

"The FCC walked the states through the process, for example explaining what happens during the 90-day review process, and gave us suggestions on how to work within this time frame," Burns says. "This is a brand new area in Pennsylvania and in other states, so any type of assistance and help is always useful."

Among suggestions the FCC gave to the states was to provide the commission and the DOJ one state contact person to ensure everyone is talking to each other in a coordinated manner, Burns notes.

"The general theme of the regional meetings was to prepare the states for more 271 filings," she says. "Here in Pennsylvania, we've done a tremendous amount of work for telephone competition. A 271 filing here won't be a surprise because we've already done a lot of work to get the market ready. But the FCC wanted to be very thorough because there's a vast amount of information to consider."

Balmoris adds, "First and foremost, we are attempting to demystify the 271 process for the states that have never handled one. We want to help them ensure that the record is full and comprehensive."

Bob Rowe, a commissioner of the Montana Public Service Commission (www.psc.state.mt.us) and president of the National Association of Regulatory Utility Commissioners (NARUC, www.naruc.org), says, "The level of consultation with the states has been close. The FCC told us how they want info filed from a region on 271s. Hopefully, the major goal is attaining a higher quality product."

He adds there is no decreased level of rigor using a regional process. In fact, it's quite the opposite. "Through sharing resources, you get to a higher quality system more efficiently."

The regional coordination on OSS is part of Rowe's contribution to telecom public policy. He says it is an example of "border issues" (federal-state, state-state, company-company), which raise questions of coordination and authority.

Similar issues are heating up in energy markets, with a strong emphasis on regional coordination, according to Rowe. An analog to OSS in energy markets is "uniform business practices."

"In both markets the challenge can be thought of as identifying practices/processes which had been internal/implicit within a vertically integrated or closed entity, and making them external, transparent and explicit in an 'unbundled' [energy] or 'open' [telecom] market," Rowe says.

Competitors Say

The comments from the competitive carriers were well received by the FCC during the regional meetings. They gave the commission a general sense of the competitive climate in each state.

An example is XO Communications Inc. (www.xo.com), which had plenty to say. XO Communications vice presidents of regulatory--Dan Gonzalez, Cathy Massey and Alaine Miller--each attended different meetings around the country and found some of the same problems cropped up in different BOC regions.

"There was a uniformity to the CLEC complaints," Massey says. "In Boston [part of Verizon's region], for example, the main complaint regarded interoffice facilities and long provisioning intervals with all types of services."

Gonzalez says the same type of CLEC complaints popped up in the BellSouth regional meeting that regarded orders and provisioning, change management processes, the CLEC's inability to get facilities on time, and BellSouth's own data showing that its retail arm got better provisioning from the BOC than its wholesale side of the business.

The same thing happened at the San Francisco meeting, where Miller says getting data from Pacific Bell (www.pacbell.com) can be a nightmare. "Sometimes [the data] isn't useful, or it's missing," she says. "And the CLECs also discussed their inability to get much information about the OSS testing there in California."

Data LEC (DLEC) experiences in BellSouth's region also haven't gone well, according to Thomas Allen, vice president of ILEC relations for Covad Communications Co. (www.covad.com). During the Orlando, Fla., regional meeting with the FCC, Allen outlined several issues of concern for Covad specifically.

BellSouth's OSS issues are pronounced, according to Allen's overview. For instance, there's a delay of xDSL loop ordering via the electronic data interchange (EDI) largely because the interface's release was delayed repeatedly, he told the FCC.

Subsequently, testing was delayed, and DLECs and CLECs had to "rely on manual ordering processes that are arbitrary and inconsistent, varying from person to person, day to day," Allen said.

Allen also cited other problems in the BellSouth region:

• No established UNE rates for xDSL services by the state commissions;
• The need for a federal rule to be adopted that requires loops be provisioned in three business days;
• Delayed collocation; and
• No automated ordering for line sharing.

Ordering and provisioning aren't the only problems in BellSouth's region, says John Kerkorian, regional vice president of legal and regulatory affairs for Mpower Commu- nications Corp. (www.mpowercom.com).

Add maintenance and repair and billing issues, and the situation looks like "intentional hurdles" are being erected by the BOCs in the local market, he says.

Just the Facts

The FCC and DOJ want hard data from the competitive carriers on problems they experience in incumbent territories. Anecdotal hard-luck stories don't fit that bill.

"The FCC stressed that it would like to see substantiated evidence rather than anecdotal evidence in response to these 271 filings," XO's Gonzalez says. For instance, if there's poor provisioning by an incumbent, but the incumbent relies on documented performance data that the CLEC can't likewise dispute, the situation becomes a tough one for regulators to sort out.

"The FCC made it clear it wanted to see from competitors a substantiated response based on statistical data," Gonzalez says.

The FCC also wants hard data from the CLECs to be submitted at the state level so all regulators have ample time to review it, XO's Miller explains.

WorldCom Inc. (www.wcom.com) and other competitors did that during the regional meeting on the US WEST Inc. region, which has become part of Qwest Communications International Inc. (www.qwest.com). The competitors released information on OSS and non-OSS issues, including data on the BOC's legacy computer systems, local number portability and directory assistance.

According to sources, Qwest in this region is three to four years behind the other Bells, so it will take a long time for the BOC to get up to speed with its OSS.

"In this 100-yard race," said one attorney, "Qwest is starting 100 yards behind."

Plowing Ahead

BellSouth, among other BOCs, continues to move forward on its Section 271 efforts. The company had hoped to complete OSS testing in Georgia quickly to give regulators there its Section 271 application last month, and then to get it to the FCC this month.

Similarly, BellSouth OSS testing has begun in Florida, and state regulators in Mississippi, Louisiana and South Carolina already have approved BellSouth's Section 271 applications.

"Once we get Georgia approved at the federal level, we'll freshen those applications and others and get them up here [to the FCC]," says Bill McCloskey, BellSouth's director of media relations in Washington. "I think it is likely you will start to see multistate applications being put forward by the Bells in an effort to save resources."

During the regional meetings, McCloskey said the FCC indicated that it will watch closely for evidence that the ILEC is working closely with CLEC customers in taking the steps toward opening the network.

"In other words, they want us to open the network in a way the CLECs find convenient, not just the way we find convenient," he says. "The FCC also wants evidence that sufficient resources are being devoted to the process of opening the network to competition. In BellSouth's case, that's over a billion dollars so far--and counting."

Future Section 271 applications will pour in at the FCC, which expects to receive one or two more before the year ends.

"With multiple applications expected to come in and with limited resources, the FCC is attempting to manage the process," Balmoris says. "We want to ensure we're doing our job thoroughly."

The CLECs, states and incumbents seem satisfied with how the regional meetings progressed and with the valuable information that was exchanged.

"The [regional] meetings were particularly helpful for smaller companies that operate without Washington representation," says Massey of XO. "The FCC got into the market to meet with the smaller carriers, who have compelling stories to tell but no way to get those stories to Washington. It was a real commitment on the FCC's part."