Bell Atlantic Looks Good to Go

Posted: 12/1999

Bell Atlantic Looks Good to Go
By Kim Sunderland

In what should clear the runway for Bell Atlantic-New York’s (BANY’s) next takeoff, New
York’s top telecom regulator says the incumbent local exchange carrier (ILEC) has met
federal competitive conditions in the state and should be approved to provide in-region
long distance. But there are rumblings that one of the nation’s largest interexchange
carriers (IXCs) just might try to hinder the flight before it gets off the ground.

In an effort to prolong BANY’s entry, an IXC may file a petition claiming that the Bell
hasn’t sufficiently or consistently met all the Telecom Act’s requirements and request a
stay of the Federal Communication Commission’s (FCC’s) order. Most expect the FCC to
approve BANY’s application by the end of the year. If a court stay is granted, then the
FCC’s approval will be frozen until the proceeding is litigated. "My hunch is that
such a stay would be granted," one telecom attorney predicted recently.

Lobbyists working on behalf of the competitors clearly weren’t happy with the New York
Public Service Commission’s (NYPSC’s) ruling. "The New York PSC ultimately has fallen
short, bowing to political pressure," says one telecom lobbyist. "I mean, are we
looking at the same data here?" The lobbyist says there is compelling evidence that
BANY isn’t quite there yet. For example, he says that one out of four competitors still is
having cutover problems, as well as lousy interconnection, inconsistent collocation and
inadequate access to loops.

In comments with the FCC, NYPSC Chairwoman Maureen O. Helmer says the arguments
presented by the competitors against BANY’s bid are due to "simply misreading"
the performance data of particular checklist items, namely unbundled network elements
(UNEs)–specifically the operations support systems (OSSs)–and unbundled loops. She says
their claims don’t show that BANY is providing access to these checklist items in a
discriminatory manner. "We have knowledge that this isn’t perfect," she says,
"and it’s never going to be perfect."

In more than 170 pages of comments filed with the FCC Oct. 19, the NYPSC says that BANY
has met the Telecom Act’s Section 271 requirements, including the 14-point competitive
checklist. The PSC also says that BANY has entered into more than 75 interconnection
agreements with competitive LECs (CLECs) to provide access and interconnection, and all of
these agreements have been approved by the PSC. "Opening both local and long distance
markets is critical to the development of effective telecommunications competition,"
Helmer says. "Postponement of long distance entry will not serve the consumer;
neither will simply waiting for wholesale performance that goes beyond the requirements of
the 1996 Act."

But the Competitive Telecommunications Association (CompTel), Washington, which
represents facilities-based competitors, isn’t convinced. The group is urging the FCC to
require BANY to file a compliance plan to demonstrate it has met the FCC’s UNE Remand
order. CompTel also is urging the FCC to adopt and enforce a comprehensive blueprint for
preventing BANY from backsliding from its local market-opening obligations. The
association notes that 23 of its members are providing or preparing to provide competitive
local services in New York.

"CompTel’s members will welcome Bell Atlantic’s participation in the broad markets
to be made available by the Act’s market-opening provisions, when and if the conditions of
local competition are fair and the playing field is level," says H. Russell Frisby
Jr., CompTel’s president. "Although CompTel is encouraged by the progress to date, a
faithful application of Section 271 requires the [FCC] to deny the Bell Atlantic
application [because] very real problems remain." Frisby says these problems result
from BANY policies that restrict competition, from inadequate or unreliable ordering and
provisioning capabilities to incomplete remedies for non-performance. CompTel cites the
following areas in which BANY’s application falls short of complying with the Section 271
checklist:

CompTel plans to shift its focus over the next few months to ensure that BANY lives up
to its competitive promises and to make sure the Bell company is punished properly if it
doesn’t.

Resellers also want to see BANY consistently meet established minimum performance
measures before it receives a favorable recommendation for interLATA (local access and
transport area) market entry. The Telecommunications Resellers Association (TRA),
Washington, has told regulators that the determining factor for BANY’s long distance
market entry should be whether the company is able to consistently serve competitors at
parity with service provided to its own end users, as required by the Telecom Act.

"Our competitive local exchange carrier members continue to voice their
frustrations over their inability to serve end users because of problems with Bell
Atlantic that they experience on an ongoing basis," says Ernest B. Kelly III,
president of TRA. "The only way for regulators to ensure that Bell Atlantic meets its
obligations is to test performance where the ‘rubber meets the road’ with its
competitors." He says that the evidence in the New York proceeding demonstrates
numerous deficiencies in Bell Atlantic’s operations. "Parity and non-discrimination
must be consistent and should not be demonstrated solely through evaluation with a
fictitious competitor," Kelly adds.

Despite their dissatisfaction with the NYPSC’s recommendation, Helmer praised the
competitors for being "invaluable" in helping the commission determine what was
necessary for "a functioning, competitive market." Competitors–who now will
become BANY customers–worked with the NYPSC throughout this process to help ensure BANY’s
compliance with the Telecom Act and with the commitments BANY made in its pre-filing
statement with NYPSC. The process also included the PSC’s supervision of a comprehensive
15-month OSS test conducted by an outside auditor. The OSS test ultimately showed that
BANY’s OSS provides the functions required by Section 271 of the Act, that its practices
for serving wholesale customers are appropriate, and that its service quality and
reporting are satisfactory, Helmer says.

New York’s support likely nails down BANY’s approval from the FCC to become the first
regional Bell operating company (RBOC) to offer long distance inside its own service area,
as well as one-stop shopping for domestic and international services to business and
residential customers in the state.

"This seals it," says Mitchell F. Brecher, a telecom attorney and partner
with the Washington law offices of Greenberg Traurig. "With the support of the New
York PSC, I think there’s a reasonably strong probability that the FCC will approve Bell
Atlantic’s application." Brecher believes this for two reasons: a sufficient amount
of time has passed and there’s been enormous effort expended on testing Bell Atlantic’s
OSSs. "If there’s meaningful competition anywhere," he says, "it’s in New
York." Brecher also says that regulators are feeling a certain amount of frustration
with current pricing schemes in the long distance market, which in turn is pressuring them
into letting the Bells into this market.

Helmer says that BANY should be recognized for "the tremendous progress" it
has made in almost three years because "in many cases, what we have required in New
York goes well beyond the Telecommunications Act of 1996." Is the pressure off the
PSC now? "Absolutely not," Helmer says. "This is the comma in the sentence,
not the period. We have a lot of work to do in this state to make sure that markets stay
open to competition."

The FCC has until late this month to issue a ruling. And don’t be surprised to see SBC
Communications Inc.’s in-region long distance application creating another stir at the FCC
soon.