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Texas Judge Rips Telecom Act Finds Prejudice Against Baby Bells

Fortnightly Magazine - March 1 1998

reviewing applications for certification by the BOCs. Others are laying groundwork through generic review of the Telecom Act to determine their exact obligations regarding the Act's "Competitive Checklist."

Section 271 of the Act sets forth the conditions for BOC entry into the in-region, interLATA market. (The Baby Bells currently are permitted to provide long distance service outside of their own local service territories.) Section 271 also requires the FCC to consult with state regulators to verify compliance with the conditions.

Under section 271, a BOC may enter the in-region long distance market in a state in two ways: Track A or Track B.

Track A requires the presence of a facilities-based competitor who offers service to both business and residential customers. The BOC then will need only show that it has entered into at least one agreement to provide access and interconnection to its network; Track B, on the other hand, allows entry even if no facilities-based competition exists, provided that the BOC has filed a statement of terms and conditions offering to provide adequate access and interconnection. The access and interconnection provided or offered under either tract must then pass the 14-point competitive checklist contained in the Act.

Two of the 14 checklist items have drawn the most attention so far from the state PUCs: (1) Interconnection in accordance with the requirements of sections 251(c)(2) and 252(d)(1); and (2) Nondiscriminatory access to network elements in accordance with the requirements of sections 251(c)(3) and 252(d)(1).

Other key requirements include: (1) access to the poles, ducts, conduits and rights-of-way owned or controlled by the Bell operating company at just and reasonable rates; (2) white page directory listings; and (3) access to operator assistance and 911 services.

Of the PUC rulings known to be issued, the difficulties in interpretation appear to lie primarily in the area of standard of proof. What did Congress intend? How can a BOC prove that it stands ready and willing to make interconnections available, if no requests are forthcoming? Will strict interpretation place control of the checklist in the hands of BOC competitors?

Another problem arises: Do tracks A and B cover the field, or does a gap exist? Is it possible, under a peculiar set of facts, that whatever it might try to do, a BOC might find itself in a sort of black hole, unable to qualify under either Track A or Track B? (See sidebar, "State Certifications.")

Industry Reform Now Uncertain

Overall, the ruling appears to leave one part of the Act unsettled: the bargain that ended the federal government's antitrust prosecution of AT&T in 1982.

Under this settlement agreement, commonly called the "consent decree," BOCs traded certain business restrictions for a new set of obligations and opportunities. The Act opened the local exchange market to competition and requires the established local carriers to open their networks to assist competitors seeking to enter the field. It also permits entry by the BOCs into the interLATA long-

distance market, once the carriers pass a test administered by the FCC and state regulators to check whether a carrier