The Locals Are Restless: Bells Trudge a LongDistance

Posted: 08/1999

Regulatory News

The Locals Are Restless: Bells Trudge a Long

Kim Sunderland

The incumbent local exchange carriers (ILECs) are certain that their ability to provide
in-region interLATA (local access and transport area) services is now–all they have to do
at this point is hang tough.

Bell Atlantic Corp., New York, still is considered the frontrunner in this race. The
ILEC had hoped to submit its Section 271 application with the Federal Communications
Commission (FCC) by early summer, but that’s unlikely now until early fall. The New York
Public Service Commission (PSC) delayed hearings on Bell Atlantic-New York’s in-region
long distance filing until late last month, which means the PSC may issue its decision
this month, although it’s under no deadline to do so. Bell Atlantic says if the New York
PSC acts favorably on its filing this month, it will send its Section 271 application to
the FCC within two weeks. The FCC has 90 days to review it and issue a decision. Most
industry watchers, though, don’t expect the FCC’s review to take that long.

"The New York PSC is unlikely to see major problems with Bell Atlantic’s system at
this point," says Jeffrey Binder, president, Jeffrey Binder and Co., Brookline, Mass.
"The New York commission has been extremely demanding and has plowed the road here,
even before the Telecommunications Act [of 1996] was passed. If the state is satisfied, I
find it difficult to imagine that the FCC wouldn’t be satisfied."

The domino effect that will follow Bell Atlantic’s state and federal approvals for
in-region long distance service will come hard and fast. Binder predicts Massachusetts,
where Bell Atlantic also has filed with state regulators to provide in-region long
distance, will be the next state to approve the ILEC’s filing, followed by Pennsylvania,
New Jersey and then the rest of Bell Atlantic’s New England states.

But "never trust conventional wisdom," says one source, referring to Texas,
where Public Utility Commission (PUC) Chairman Pat Wood III is pushing hard to get SBC
Communications Inc., San Antonio, approved for in-region long distance service.

Chairman Wood claims he’s more interested in getting it right than being first.
"We’re pretty far down the road on this, but we’re not there yet," he said.
"We need to see if we can get a meeting of the minds on some of these outstanding
issues," which include collocation and unbundled network elements (UNEs). Wood has
told SBC that if it gets reliable third-party testing completed on its operations support
system (OSS), and if it collocates properly with its competitors, then the Texas PUC will
approve its 271 filing. To date, however, Wood is a frustrated professor, trying
desperately to get SBC on the right course, only to have it fail right before his very

"Pat Wood does want Texas to be the first state commission to put a Bell through a
rigorous process on the 14-point competitive checklist before its long distance
application goes to the FCC," explains Rosemary McMahill, manager of regulatory
services for Cathey, Hutton & Associates Inc., Austin, Texas. "He knows that if
the Bell’s system works for the CLECs (competitive LECs), then the FCC will consider it
more seriously."

Texas would do anything to have SBC approved first by the FCC for in-region long
distance service, Binder agrees. "But SBC is considerably behind the standards of New
York and is a less-strong case," he says. "SBC will simply have to tow the mark,
even if Texas [regulators] support its application."

The New York PSC staff also has been struggling with Bell Atlantic to satisfy and
complete third-party testing of its OSSs. "It’s the most immediate challenge,"
Chairwoman Maureen O. Helmer says, referring to the staff’s tough job of determining
whether the company’s OSS can handle commercial volumes.

Major headway on Section 271 filings also has been made in states such as South
Carolina, Mississippi and Louisiana, where in-region long distance bids by BellSouth Corp.
have been approved. But the ILEC hasn’t passed muster yet with the FCC, which twice denied
its Louisiana 271 filings and another in South Carolina for not meeting all of the Telecom
Act’s 14 competitive checkpoints. BellSouth hasn’t approached the FCC yet with a long
distance bid in Mississippi, but instead is having regular conversations with FCC staff to
put the company in a good position before it does file.

BellSouth also is trying to have a Section 271 filing approved by Georgia regulators,
which in May ordered that outside testing be conducted on BellSouth’s OSS. "While we
don’t think we need to," says Randy New, BellSouth’s vice president of public policy,
"we’re certainly obliged."

Third-party testing of BellSouth’s OSS–which New says is akin to Bell Atlantic’s OSS
tests in New York–is slated to end this month. He says BellSouth’s tests are different
from those on Bell Atlantic’s OSS in that the actual test doesn’t have to be defined,
since it already has been in New York, and the only elements and services being tested are
those that can’t handle commercial usage volumes. The Georgia PSC says the outside audit
on BellSouth’s OSS focuses on:

  • UNE analog loops, with and without local number portability;
  • UNE switch ports; and
  • UNE business and residential loop/port combinations.

"The commission will use the final report issued … in arriving at its final
recommendations to the FCC on the operational readiness of BellSouth’s OSS," the
Georgia PSC says in its order. BellSouth is "confident we’re going to satisfy the
commission," New says, "and then we’ll file this with the FCC within three weeks
of Georgia clearing our filing."

The FCC’s general stance on the ILECs’ race to provide in-region long distance is
guarded but hopeful as it tries to balance pressure coming from both the industry and
members of Congress, who are frustrated that the federal agency hasn’t given a Bell
company Section 271 approval thus far.

"I still expect Bell Atlantic’s 271 application to be the first one in here,"
says Lawrence E. Strickling, chief of the FCC’s Common Carrier Bureau. "But then, I
stopped predicting these things a long time ago."

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