Bells Speed Down 271 Highway

Posted: 11/2001

Bells Speed Down 271 Highway
By Kim

The nation’s Bell operating companies are progressing in their quests to provide long-distance services within their regions.

This fall, Verizon Communications Inc. received FCC approval to provide in-region long-distance service in Pennsylvania.

Meanwhile in Louisiana, regulators endorsed Bell South Corp.’s application to provide long-distance in that state. BellSouth then filed a joint application with the FCC for authority to offer in-region interLATA (local access and transport area) services in Louisiana and Georgia.

Although the U.S. Department of Justice (DOJ) didn’t support SBC Communications Inc.’s joint request to provide long-distance in Arkansas and Missouri, sources say the FCC approves of it.

And out West with Qwest Communications International Inc., progress is being made on the carrier’s region-wide testing of its operations support systems (OSS), the first such attempt in the United States. Once the OSS testing is completed, Qwest wants to enter the long-distance market in at least one state by the end of this year. It wants to win approval to enter all 14 states it serves by the end of 2002.

While the nation’s competitive carriers decry these advances, they appear resigned to the fact that the lead ball of Section 271 approvals will continue rolling down the local market hill. As of late September, the FCC had approved seven states for in-region, long-distance services provided by the BOCs. Several more are pending.

On Sept. 19, the FCC approved Verizon’s 271 application in Pennsylvania saying: (The BOC’s) “application promises substantial benefits for the state’s consumers in the form of enhanced competition in both the local and long-distance markets.”

The Telecommunications Act of 1996 stipulates a BOC’s entry into the long-distance market is subject to the BOC first opening its local market to competition. A BOC satisfies this rule by demonstrating compliance with Section. 271’s 14-point competitive checklist of requirements.

The Verizon Pennsylvania filing followed a two-year review of the company’s readiness by state regulators. In making its decision to support Verizon’s application, the Pennsylvania Public Utility Commission (PUC) examined the performance of Verizon’s OSS in an 18-months system test conducted by an independent auditing firm.

The FCC says that in Pennsylvania, competitors serve more than

1 million lines, one-third of which are residential lines. Competing carriers also serve more than 600,000 local lines over their own facilities; and they serve more than 385,000 unbundled loops and more than 160,000 lines through resale.

Backlash Fever

Industry lobbyist the Competitive Telecommunications Association (CompTel), however, says “the FCC appears to have ignored the significant issue of Verizon’s failure to render accurate electronic wholesale bills.”

CompTel says the FCC appears to have overlooked evidence which shows Verizon did not have, at the time of filing its Pennsylvania Section 271 bid, a commercially viable carrier-to carrier wholesale billing system. Verizon still doesn’t have this system in place, according to CompTel.

The system is used for carriers that provide residential and small business competition through the Verizon unbundled network element platform (UNE-P).

Verizon’s failure on this OSS requirement hurts those CompTel members that are attempting to provide residential and small business competition in Pennsylvania by leasing Verizon’s UNE combinations, CompTel alleges.

These carriers have been frustrated in their ability to rapidly ramp up

to commercial volumes largely because Verizon’s electronic

carrier-to-carrier bills were not formatted in an industry-standard fashion. This lack on Verizon’s part, results in competitors being unable to read and verify the accuracy of bills which, in turn, hampers their ability to render a timely, accurate bill to the competitors’ own customers, the association says.

The Association for Local Telecommunications Services (ALTS) likewise charges that Verizon refuses to provision lines to competitive carriers in Pennsylvania and reportedly tells competitors such facilities are nonexistent.

ALTS also claims Verizon has been able to provision such lines to retail customers or to carriers paying the higher retail rate.

“This is a blatant violation of the law,” says ALTS’ president John D. Windhausen Jr. “The [FCC] has made clear since 1996 that Verizon cannot discriminate against competitors by saving facilities for its retail customers and denying competitors access to those facilities. Verizon, however, has chosen to turn a blind eye to the law.”

In approving the application, the FCC said Verizon must continue to comply with Section 271 or suffer “penalties or suspension of approval.”

In its region, Verizon also awaits Section 271 support from regulators in New Jersey, Rhode Island and Vermont.

Cajun Country

Further south on the East Coast, BellSouth also is making long-distance strides. The Louisiana Public Service Commission (PSC) unanimously (5-0) endorsed BellSouth’s application to provide long-distance service within the state. At press time in late September BellSouth filed a joint long-distance application for Louisiana and Georgia with the FCC.

According to BellSouth, the level of competition to provide local telephone service in Louisiana has increased dramatically. A total of 87 CLECs now serve more than 230,000 residence and business customers in this state.

Bill Oliver, president of BellSouth’s Louisana operations, also said BellSouth has improved its OSS since the company filed its last long-distance petition for Louisiana with the FCC, which rejected that application in October 1998.

“A lot of things have changed since our last filing with the FCC,” he said. “BellSouth has spent nearly $2 billion across the region improving our [OSS] and we have dedicated more than 3,000 full-time employees to help our competitors grow.”

BellSouth also seeks a long-distance provisioning endorsement from regulators

in Tennessee.

Going for Two More

SBC also is attempting to get a joint application to provide long-distances services in Arkansas and Missouri approved by the FCC.

As the nation’s second-largest local telephone company, SBC already provides long-distance in Texas, Kansas and Oklahoma.

The DOJ’s antitrust division, which makes recommendations to the FCC about such Section 271 filings, said it doesn’t fully support SBC’s bid in Missouri and Arkansas because of UNE pricing concerns in Missouri.

SBC’s data doesn’t show problems have been resolved for competitors seeking electronic access to SBC’s maintenance and repair systems in both states, the antitrust division said. The department’s evaluation also said SBC might not be subject to appropriate post-entry performance oversight and enforcement in Arkansas.

However, the antitrust division also said the FCC likely will approve the application if it “can assure itself the remaining questions have been answered.” State regulators in Missouri and Arkansas already have endorsed SBC’s bid and a FCC decision is due by Nov. 18.

Competitors have held up as proof the massive fines SBC paid elsewhere in its region, for failing to meet goals related to providing competitive carriers access to its networks, that further Section 271 approvals are premature.

The BOC, for instance, in September paid the federal government $2.4 million for failing to meet certain performance measurements. The payment is almost 37 percent less than the $3.8 million the carrier paid the government in August for similar shortcomings.

SBC must make such payments when it fails to meet goals for three straight months. Since last December, SBC has paid the government $44.7 million for these infractions.

SBC contends the wholesale service it provides competitors has improved significantly, as reflected in the continuing decline in the amount of the payments, which have decreased from more than $6 million in January.

Wild, Wild West

OSS testing for Qwest has progressed with the completion of the audit of the wholesale performance measures. A previous delay in setting up these measures forced Qwest earlier this year to put off beginning the nation’s first regionwide OSS testing collaborative. But the process has begun.

The auditor, Liberty Consulting Group, has determined the performance measures “accurately and reliably” report Qwest’s actual performance.

Liberty also made several recommendations concerning monitoring the measures in the future, according to sources. Those suggestions will be passed on to the Qwest Regional Oversight Committee’s (ROC) OSS Colla-borative, which was established by 13 of the 14 states served by Qwest. The ROC is conducting an open, web-based process that provides a forum for interested parties to resolve issues related to the Qwest OSS testing.

In the beginning of the year, the OSS testing was delayed, forcing Qwest to set a new goal on providing long-distance in its area.

Qwest, which merged with US West Inc. in 2000, planned to get back into the long-distance market in at least one of the states in its region this summer. The new goal is to enter at least one state by the end of the year, and then be approved to enter all 14 states by 2002.

States involved in the project are: Montana, Idaho, Utah, Washington, Oregon, New Mexico, Colorado, Minnesota, North Dakota, South Dakota, Wyoming, Iowa and Nebraska. Arizona, the other Qwest state, is conducting its own OSS testing process.

The OSS testing will determine if Qwest’s network is open to local phone competitors, satisfying the 14-point checklist. Of the 14 items on the checklist, seven are pretty much directly related to the OSS test.

At the same time the audit was being conducted this year, KPMG Consulting, the independent, third party OSS tester, and Hewlett-Packard began conducting tests of the performance of Qwest’s OSS.


* The Georgia Public Service Commission (, at the request of AT&T Corp. (, reopens the record of independent, third-party tests of BellSouth Corp. ( operation support systems
(OSS) to determine if BellSouth gave preferential treatment to service orders from certain local providers in the state. In a joint filing at the Federal
Communications Commission (, Bell-South has asked for approval to provide long-distance services in Louisiana and Georgia. Are court delays far away?

Members of the Michigan Alliance for Competitive Telecommunications (MiACT) blame SBC/Ameritech (www.
) for Michigan’s lack of broadband telecom services. Speaking at a news conference in the state capitol, MiACT executive director Greg Boyd termed SBC/Ameritech’s call for a private so-called Michigan Broadband Summit “a sham” and said that MiACT supports a more inclusive process for expanding broadband services in Michigan. Several ISPs say SBC/Ameritech’s delays in providing broadband service in Michigan are part of a national pattern. The BOCs have said such groups actually are fronted by the nation’s largest competitive carriers.

* The California legislature passed a telemarketing bill (SB-771) that would make California the 15th state to establish statewide no-call list for persons who want to block telemarketing calls. Telecom carriers throughout the nation are rethinking how they sign on new customers.

Oct. 1 began a new era of telephone access, according to the FCC, when the familiar calling shortcuts of 911 and 411 were joined by 711. This is the new three-digit number for access to all Telecommunications Relay Services (TRS), which facilitate telephone conversations between people who do and those who don’t have hearing or speech disabilities. Under new rules the FCC adopted last year, all telecommunications carriers in the United States, including wireline, wireless, and pay phone providers, must provide 711 TRS dialing. The FCC rule also encourages all PBX suppliers to configure their systems for 711 access to TRS. And to ensure efficient and successful use of 711 access to TRS, the FCC required carriers and relay providers, in cooperation with the states, to engage in on-going and comprehensive education and outreach programs to publicize the availability of 711 access.


Association for Local Telecommunications Services
BellSouth Corp.
Competitive Telecommunications Association
KPMG Consulting
Liberty Consulting Group
Louisiana Public Service Commission
Pennsylvania Public Utility Commission
Qwest Communications International Inc.
Qwest Regional Oversight Committee’s OSS Collaborative
SBC Communications Inc.
U.S. Department of Justice
Verizon Communications Inc.

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