BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Investigation Into ) U S WEST Communications Inc.'s ) Compliance with Section 271 of the ) Docket No. UT-970300 Telecommunications Act of 1996 ) COMMENTS OF THE TELECOMMUNICATIONS RESELLERS ASSOCIATION The Telecommunications Resellers Association ("TRA"), TRA is a national organization representing more than 500 telecommunications service providers and their suppliers, who offer a variety of competitive telecommunications services throughout the U.S. The Association's members play a vital role in providing desirable, competitive, value-added telecommunications products and services, including local service. on behalf of its members and pursuant to the Washington Utilities and Transportation Commission's ("Commission's") August 13, 1997 Order on Investigation, in the above-captioned proceeding, hereby comments on the Commission's proposed Interim Policy Statement governing the conduct of the Commission's investigation into U S WEST Communications, Inc.'s ("USWC") compliance with Section 271 of the Telecommunications Act of 1996 (the "Act"). Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996), codified at 47 U.S.C. Sections 151 et seq. The Commission's Interim Policy Statement represents a well-reasoned framework to guide the evaluation of whether USWC has complied with its obligations under Section 271 of the Act for in-region interLATA market entry. TRA supports the proposed Interim Policy Statement and urges its adoption. I. THE COMMISSION HAS A STATUTORY OBLIGATION TO PROVIDE THE FCC WITH A RECOMMENDATION REGARDING USWC'S COMPLIANCE WITH THE ACT, BASED ON A FACTUAL AND COMPLETE RECORD. A. The Commission Plays a Necessary and Crucial Role In Evaluating USWC's Compliance with Section 271 of the Act. Despite its efforts to down play the Commission's role in evaluating USWC's compliance with Section 271 of the Act, USWC concedes that the state commission's role is "very important". Comments of U S WEST Communications, Inc., UT-970300 (February 10, 1997), at 3. Clearly, as the Commission itself acknowledges, In the Matter of the Investigation Into US WEST Communications, Inc.'s Compliance with Section 271 of the Telecommunications Act of 1996, Washington Utilities and Transportation Commission, UT-970300, Interim Policy Statement, (August 13, 1997) at 2 (hereinafter "Interim Policy Statement"). the Commission has an explicit obligation pursuant to Section 271(d)(2)(B) of the Act to verify to the Federal Communications Commission ("FCC") that USWC fulfills the requirements of the "Competitive Checklist" for in-region interLATA market entry under Section 271(c) of the Act. "Before making any determination under this subsection, the Commission shall consult with the State commission of any State that is the subject of the application in order to verify the compliance of the Bell operating company with the requirements of subsection (c)" [italics added] 47 U.S.C. Section 271 (d)(2)(B). Adoption of the proposed Interim Policy Statement serves to establishes an objective process and comprehensive framework under which the Commission can effectively fulfill its consultative role to the FCC. B. In Order to Carry Out Its Consultative Obligations Under the Act, the Commission Must Establish Evaluation Standards On Which Its Recommendation to the FCC Can Be Based. Of the state commissions' consultative role, the FCC, in its recent order denying SBC Communications, Inc.'s ("SBC's") application for in-region interLATA market entry in Oklahoma, noted, "Section 271 requires us to consult with the Oklahoma Commission 'in order to verify the compliance of [SBC] with the requirements of [section 271(c)]' before we make any determination on SBC's application under section 271(c) [footnote omitted]." In the Matter of Application by SBC Communications Inc., Pursuant to Section 271 of the Communications Act of 1934, as amended, To Provide In-Region InterLATA Services in Oklahoma, CC Docket No. 97-121, FCC 97-228 (Released June 25, 1997), para. 15 at 11. [hereinafter "SBC Order"]. The FCC went on to express its apparent displeasure at the absence of a complete state record and the basis on which the Oklahoma Corporation Commission determined that SBC had satisfied the requirements of subsection 271(c)(1)(A) of the Act, stating further, " we find that the Oklahoma Commission's determination on this issue is not dispositive" and "Moreover, based on the record before us, we find that it is unclear what standard the Oklahoma Commission applied, or what specific facts it relied on in making its determination about Brooks' activities [in serving both business and residential customers] (emphasis added)." Id. para. 16 at 11. The FCC concluded that "None of the Oklahoma Commission's statements, either taken together or individually, specifies whether the Oklahoma Commission has made a finding that Brooks is actually furnishing residential service, or otherwise qualifies as a competing provider of residential services". While the FCC's observations pertain primarily to the Oklahoma Commission's findings that SBC had met the requirement of subsection 271(c)(1)(A), its statements reflect the FCC's expectation that State commissions will establish evaluation standards and a factual basis on which their recommendations to the FCC are based. Unlike the basis for the Oklahoma Commission's recommendation, the Commission's Interim Policy Statement establishes the very standard for evaluation that will support the Commission's findings and recommendations sought by the FCC, and is a necessary component in the Commission's overall investigation into USWC's compliance with section 271. II. THE COMMISSION'S INTERIM POLICY STATEMENT UNEQUIVOCALLY ESTABLISHES THE STANDARDS AND PROCESS TO BE USED IN EVALUATING USWC'S COMPLIANCE WITH SECTION 271. The Commission's Statement of Policy clearly sets forth a procedural framework as well as the specific information that will serve as the basis for the Commission's evaluation of USWC's in-region interLATA market entry. Notwithstanding that the FCC has an explicit statutory obligation to consult with the state commissions and that the FCC has expressed its expectation that a state commission's recommendations will be based on a factual record, adoption of the proposed Interim Policy Statement serves to establish pragmatic "ground rules" for investigation of USWC's compliance with Section 271's requirements for in-region interLATA market entry before the Commission's evaluation begins. In the absence of such a defined policy, too many issues may be left to interpretation, and worse yet, subject to protracted argument. Such arguments would impede the Commission's ability to conduct a detailed evaluation and hamper its efforts to formulate a recommendation under what could become a compressed evaluation schedule. By establishing evaluation standards requirements and a proceeding schedule well in advance of USWC's filing, the Commission creates certainty for all parties and avoids the possibility that the Commission's evaluation standards could become a moving target and yield inconclusive results. Adoption of the Commission's Interim Policy Statement ensures that its evaluation process and recommendation are based on a definitive and decisive record. III. THE MATTERS TO BE INCLUDED IN USWC'S FILING ARE APPROPRIATE TO CONDUCT A MEANINGFUL EVALUATION. A. The Commission's Intent to Evaluate the Extent of Competition in Washington, Not Simply Its Presence, Will Be Critical Towards Determining Whether Meaningful Local Competition Has In Fact Developed. The proposed Interim Policy Statement expresses the Commission's interpretation of "competing provider" in the Act to mean that more than insignificant or de minimis competition must exist between an interconnecting company and USWC. Interim Policy Statement, item 4, at 5. Consistent with its interpretation of "competing provider" the Commission has determined that as part of its obligation to consult with the FCC, the Commission must reach a public interest determination. Id. item 12 at 6. Further, the Commission would impose a requirement on USWC to present information which will enable the Commission to determine whether the market is open and whether competitors are offering more than token competition. Ibid. The Commission's intent to evaluate the level of local competition, not simply its existence, will be crucial to the development of a complete and fully documented recommendation to the FCC. USWC, as one would expect, is eager to demonstrate that it is being besieged by competition. It will point to a number of interconnection agreements to demonstrate the level of competitive entry. Yet while such agreements may be reflective of nascent competitive entry, the true test of whether USWC has fulfilled its obligations under the competitive checklist, as the Commission rightly recognizes, should come from a public perspective. The existence of one, or ten, or one hundred interconnection agreements does not demonstrate that Washingtonians have realistic choice in local service providers. Broad availability of competitive service alternatives to the public was the primary intent of the Act. The level of realistic competitive alternatives available to the public should, then appropriately be a guiding factor in the development of the Commission's general recommendation to the FCC and determination of the public interest merits of USWC's 271 filing specifically. Again, USWC has down played the Commission's role in making public interest determinations by opining that the Commission's responsibilities do not extend to obtaining input into the public interest determination. Comments of U S West Communications, Inc., at 26. Yet a review of the FCC's recent order denying Ameritech-Michigan's entry into Michigan's interLATA market undermines USWC's position. The FCC therein stated that the Michigan Commission's consultation did not include an analysis of the state of local competition in Michigan. This information is not germane to the competitive checklist ... [b]ut this information will be valuable to our assessment of the public interest, and it is information which the state commissions are well-suited to gather and evaluate [emphasis added]. In the Matter of Application of Ameritech Michigan Pursuant to Section 271 of the Communications Act of 1934, as amended, to Provide In-Region, InterLATA Services in Michigan, Federal Communications Commission, CC Docket No. 97-137, Memorandum Opinion and Order, FCC 97-2948 (August 19, 1997), para 34 at 19. The Commission's intent to evaluate the level of local competition and recognition of its obligation to include a public interest test under its evaluation are entirely consistent with the Act's requirements and FCC's expectations, and are indeed essential to develop a complete and accurate assessment of USWC's compliance with Section 271 of the Act. B. The Commission's Determination that a Statement of Generally Available Terms Option is Not Available to USWC is Correct and Consistent With the Recent FCC Findings. Under the proposed Interim Policy Statement, the Commission concludes that USWC is foreclosed from seeking in-region interLATA market entry under Section 271(c)(1)(B), the submission of a statement of generally available terms and conditions ("SGAT"), or "Track B," since a facilities-based carrier has requested interconnection with USWC in Washington State. In the Matter of the Investigation Into U S WEST Communications, Inc.'s Compliance with Section 271 of the Telecommunications Act of 1996, Washington Utilities and Transportation Commission, UT-970300, Order on Investigation (August 13, 1997) at 7 (hereinafter "Order on Investigation"). USWC must, therefore, seek in-region interLATA market entry through its reliance on the presence of a facilities-based competitor, pursuant to section 271(c)(1)(A), or "Track A," of the Act. Again, the Commission's proposed position correctly reflects Washington's competitive marketplace realities and is consistent with the FCC's most recent findings concerning regional Bell operating company reliance on Track A or B as an in-region interLATA market entry vehicle. According to the FCC's determination regarding the availability of Track B to a RBOC in the SBC proceeding, the FCC concluded: ... in order to decide whether SBC's application may proceed under Track B, we must determine whether SBC has received a 'qualifying request'. We conclude that 'qualifying request' under section 271(c)(1)(B) is a request for negotiation to obtain access and interconnection that, if implemented, would satisfy the requirements of section 271(c)(1)(A). SBC Order, para. 27 at 18. The FCC supported its conclusion stating, As a matter of statutory interpretation, we find that our reading, by giving full effect to the meaning of the term 'request' in section 271(c)(1)(B), is the one most consistent with the statutory design. In addition, as a matter of policy, we find that our interpretation will best further Congress' goal of introducing competition in the local exchange market by giving BOCs an incentive to cooperate with potential competitors in providing them the facilities they need to fulfill their requests for access and interconnection. Id. para. 28 at 18. Clearly, facilities-based carriers have entered into, and are beginning to provide, competitive local service based on those agreements in Washington. The Commission's determination that USWC is foreclosed from seeking in-region interLATA market entry under Track B is entirely appropriate under the circumstances existing in Washington State. C. The Commission's Determination that the "Competitive Checklist" Review Under Section 271 Requires An Examination of the Implementation of Agreements, Rather than Only Their Existence, Is Necessary to Verify USWC's True Compliance With the Act. The Commission wisely determines that its investigation into USWC compliance with the "Competitive Checklist", like its analysis of competitive presence, must evaluate actual or "real" implementation of agreements, e.g. whether interconnection, access to unbundled network elements and services are functionally provided or available to competitors. Demonstrable evidence that the "Competitive Checklist" items are, or can be, implemented is the true test of whether USWC has met its obligations for in-region interLATA market entry under Section 271(c)(2)(B). Existence of interconnection agreements alone, represent no more than USWC's promise to provide interconnection, access and services to competitors. Under the scrutiny of the Commission's analysis, a wide gap between USWC's promises and actual nondiscriminatory delivery may well be found to exist. The Commission's intent to evaluate USWC's delivery, as well its promises, will effectively support the Commission's ultimate recommendations to the FCC regarding USWC's compliance with the "Competitive Checklist". Commission evaluation of USWC's fulfillment of the "Competitive Checklist" relies on how USWC is deemed to "provide" each checklist item. A recent proposed Illinois Commerce Commission Hearing Examiner's Proposed Order regarding Ameritech-Illinois' entry into the Illinois in-region interLATA market sets forth proposed standards for evaluation of checklist item compliance which may be adopted for the Commission's own use in establishing "specific information [that] will demonstrate the full implementation of interconnection agreements, including a showing of nondiscriminatory treatment [emphasis in original]." Order on Investigation, Attachment 1. In the Illinois Commission's analysis of Ameritech-Illinois' fulfillment of the checklist items, the Hearing Examiner's proposed order, while agreeing with Ameritech that the term "provide" in Section 271(c)(2)(B) may mean either "actually furnish" or to "make available", clarified what evidence it would accept under an availability approach. The proposed order states, We will deem an item 'available' only when we find with substantial certainty that each of the following standards is met with respect to a given checklist item: 1. the item is currently available and can be ordered immediately and the competing carrier can receive, within a reasonable time, the item in sufficient quantities and in a manner that will allow it to provide service to its own customers on a commercial basis. 2. all systems necessary are in place allowing Ameritech to immediately provide said item and in instances where said item has been ordered or requested it is actually being furnished. 3. if applicable, thorough internal testing of said item has been completed and where possible, carrier-to-carrier testing has also been completed. 4. the checklist item will function as expected; and 5. said item can be provided to the requesting party on a non-discriminatory basis and at a quality level that is at parity with the quality that Ameritech itself receives. In essence, for this Commission to consider that a particular checklist item is being provided, [the] evidentiary record must demonstrate that the item can be provided without significant glitches or problems. Illinois Commerce Commission On Its Own Motion Investigation concerning Illinois Bell Telephone Company's compliance with Section 271(c) of Telecommunications Act of 1996, Illinois Commerce Commission, Docket 96-0404, Hearing Examiner's Post-Exceptions Proposed Order, (August 5 1997) at 8, 9. Adoption of similar standards would accomplish the Commission's objective to establishing indicators of USWC's compliance with the "Competitive Checklist". In reviewing the standards contained in the Illinois Commission Hearing Examiner's Proposed Order, and the remaining order itself, it is evident that the functional availability of operational support systems ("OSS") constituted an integral part of the Illinois Commission's investigation. The Commission should similarly focus a portion of its investigation on whether USWC has met its requirements to provide competitors with functionally available access to OSS, as an unbundled network element pursuant to Section 271(c)(2)(B)(ii), at parity with the OSS it provides to itself. Adoption of standards such as those developed by the Illinois Commission to evaluate Ameritech-Illinois' compliance with the "Competitive Checklist" will aid the Commission in reaching its own conclusion regarding USWC's OSS availability and USWC's fulfillment of the competitive checklist generally. IV. CONCLUSION TRA commends the Commission for the development of an Interim Policy Statement meant to guide the conduct of the Commission's investigation into whether USWC meets the requirements for in-region interLATA market entry. The Commission has a statutory responsibility to provide a recommendation to the FCC regarding USWC's compliance with Section 271 of the Act, and is expected by the FCC to provide such a recommendation based on a factual record. A failure to establish specific requirements and evaluation standards could significantly dilute the impact of the Commission's recommendation, as the FCC's SBC Order demonstrated. Commission clarification of the matters to be included in USWC's 271 filing, particularly those concerning the existence of actual competition, the foreclosure of Track B to USWC, and the review of implemented agreements under the Commission's evaluation of checklist compliance, eliminate ambiguity and mitigate the potential for protracted argument, allowing the Commission to focus on USWC's true compliance with Section 271 of the Act. Adoption of compliance evaluation standards similar to those developed and employed by the Illinois Commission would enhance the Commission's ability to determine compliance. For the reasons stated herein, TRA urges adoption of the Interim Policy Statement. Respectfully Submitted, Telecommunications Resellers Association By: Andrew O. Isar Director - Industry Relations 4312 92nd Avenue NW Gig Harbor, WA 98335 253.265.3910 18 September 1997