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					                                  Before the
                    FEDERAL COMMUNICATIONS COMMISSION
                             Washington, D.C. 20554


In the Matter of

Joint Application by SBC Communications Inc.,         WC Docket No. 03-167
Illinois Bell Telephone Company, Indiana Bell
Telephone Company Incorporated, The Ohio Bell
Telephone Company, Wisconsin Bell, Inc., and
Southwestern Bell Communications Services, Inc.
for Provision of In-Region, InterLATA Services
in Illinois, Indiana, Ohio, and Wisconsin


To:    The Commission


                          SBC’S REPLY COMMENTS
        IN SUPPORT OF ITS APPLICATION FOR PROVISION OF IN-REGION,
      INTERLATA SERVICES IN ILLINOIS, INDIANA, OHIO, AND WISCONSIN
                  __________________________________________


JAMES D. ELLIS                                    MICHAEL K. KELLOGG
PAUL K. MANCINI                                   GEOFFREY M. KLINEBERG
MARTIN E. GRAMBOW                                 COLIN S. STRETCH
JOHN T. LENAHAN                                   LEO R. TSAO
KELLY M. MURRAY                                   KELLOGG, HUBER, HANSEN,
ROBERT J. GRYZMALA                                 TODD & EVANS, P.L.L.C.
RANDALL JOHNSON                                       1615 M Street, N.W.
TRAVIS M. DODD                                        Suite 400
JOHN D. MASON                                         Washington, DC 20036
    175 East Houston                                  (202) 326-7900
    San Antonio, TX 78205
    (210) 351-3410                                Counsel for SBC Communications Inc.,
                                                      Illinois Bell Telephone Company,
Counsel for SBC Communications Inc                    Indiana Bell Telephone Company
                                                      Incorporated, The Ohio Bell
                                                      Telephone Company, Wisconsin
                                                      Bell, Inc., and Southwestern Bell
                                                      Communications Services, Inc.
August 29, 2003



              [NAMES OF ADDITIONAL COUNSEL APPEAR ON THE FOLLOWING PAGE]
                                                                             SBC’s Reply Comments
                                                          Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                     August 29, 2003

LOUISE SUNDERLAND                             MARY RYAN FENLON
MARK ORTLIEB                                  JON F. KELLY
    225 West Randolph Street, Floor 25            150 East Gay Street, Room 4-A
    Chicago, IL 60606                             Columbus, OH 43215
    (312) 727-6705                                (614) 223-3302

Counsel for Illinois Bell Telephone Company   Counsel for The Ohio Bell Telephone
                                                  Company

BONNIE K. SIMMONS                             PETER J. BUTLER
   240 North Meridian Street                      722 North Broadway, Floor 14
   Room 1831                                      Milwaukee, WI 53202
   Indianapolis, IN 46204                         (414) 270-4555
   (317) 265-3676
                                              Counsel for Wisconsin Bell, Inc.
Counsel for Indiana Bell Telephone Company
    Incorporated
                                                                                 SBC’s Reply Comments
                                                              Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                         August 29, 2003

                                  EXECUTIVE SUMMARY

       The volume of competition represented in this Application is unprecedented. Previous

Bell company applicants under section 271 have hinged their applications for regionwide relief

on a single “anchor” state with advanced levels of competition, followed by additional states

where CLECs had made fewer inroads. SBC’s Midwest region, by contrast, shows extremely

high levels of competition everywhere. In each of the states represented in this Application,

CLECs have won at least 15% of the market, and in Illinois, for example, they’ve won twice

that. Excluding Michigan – which was filed before this Application and is now pending in a

separate docket, and which itself has witnessed extraordinary CLEC penetration – these

percentages add up to at least 4.2 million access lines that CLECs are serving today in the SBC

Midwest region.

       This widespread, extensive competition can mean only one thing: that SBC Midwest has

opened the local markets in the applicant states, and it is providing CLECs with everything they

need to compete. The comments filed in this proceeding confirm as much. The vast majority of

them – 99 out of the 114 parties participating in the proceeding – unequivocally support the

Application. These comments, most of which were filed by parties representing the interests of

consumers and small businesses throughout the Midwest region, recognize that competition has

come to the local market, and they now want to see it come to long distance.

       The state commissions for the applicant states recognize the same thing. These state

commissions have monitored SBC Midwest’s efforts to open the local market to competition for

seven years. They know from first-hand experience that SBC Midwest has satisfied the checklist

and that local markets are accordingly open, and they are equally certain that consumers in their

states stand to gain immeasurably if SBC Midwest is permitted to provide long-distance service.
                                                                                    SBC’s Reply Comments
                                                                 Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                            August 29, 2003


This Commission has long held that, “where the state has conducted an exhaustive and rigorous

investigation into the BOC’s compliance with the checklist, we may give evidence submitted by

the state substantial weight in making our decision.” E.g., Texas Order ¶ 51. That principle

applies four-fold here, as each state commission has vigorously investigated the BOC

Applicants’ compliance with the competitive checklist, and each has reached the same

conclusion: that SBC Midwest has taken all the steps necessary to warrant interLATA relief.

       As it has in virtually every section 271 proceeding to date, AT&T opposes SBC’s bid to

compete for its long-distance customers. Yet in doing so, AT&T, despite its years of experience

in the local market in the Midwest region and its huge and rapidly growing customer base, can

find no significant operational concerns to report. That is no surprise. AT&T has emphasized

that it will not enter states where there are “flaws” in the incumbent’s network or where it is not

“certain it could serve customers without disruption” – as one AT&T executive explained,

“[w]e’re not going to go into a community where we don’t trust the [ILEC’s] system.”* More

than any other fact in this proceeding, AT&T’s real-world experience – its aggressive entry in

the Midwest region, and the extraordinary successes it is achieving there – belies its overheated

rhetoric to the effect that the local markets at issue are in fact closed to competition.

       In any event, AT&T’s objections here are by and large the same ones that were raised

and rebutted in the Michigan proceeding. Thus, for example, AT&T, along with several other

commenters, disputes the accuracy of SBC’s wholesale bills. But SBC’s showing in this respect

       *
        Steve Alexander, Judge Recommends Qwest Be Fined for Impeding Local Service by
AT&T, Star Tribune (Minneapolis, Minn.), Feb. 26, 2002, at 3D; David DeKok, Verizon To
Market Long-Distance Service, Patriot-News, Sept. 20, 2001, at B9; Sharon Smith, Telecom
Companies Continue Battle over Local Telephone Service in York, Pa., York Daily Record,
Nov. 24, 2000.



                                                   ii
                                                                                   SBC’s Reply Comments
                                                                Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                           August 29, 2003


is based on a wealth of evidence, including comprehensive third-party testing more extensive

than any BOC applicant for 271 relief has provided previously, along with authoritative

statements from state commissions that SBC Midwest’s bills are sufficiently accurate, reliable,

and timely to provide CLECs a meaningful opportunity to compete. In the face of that objective

evidence, commenters offer two categories of complaints: (1) lists of telephone numbers that

they claim are being improperly billed, and (2) allegations of billing disputes that they claim

prove SBC is billing inaccurately. As to the former, SBC decisively demonstrated in Michigan –

and does so again in this reply – that the vast majority of numbers the CLECs claim are being

improperly billed are in fact being properly billed, and that the bulk of any discrepancies is the

result of the CLECs’ own recordkeeping errors. As to the latter, the Commission has repeatedly

and properly held that, in the absence of evidence demonstrating a systemic flaw in the billing

systems – something that no party has even attempted to demonstrate – self-interested claims of

alleged billing errors are insufficient to show checklist noncompliance.

       As it did in the pending Michigan application, the Department of Justice (“DOJ” or

“Department”) sees things differently. In its view, “the record does not permit” it to conclude

that SBC Midwest’s bills are sufficiently accurate and reliable to satisfy the checklist. But the

portion of “the record” on which the DOJ relies in reaching this conclusion is decidedly

incomplete. Thus, for example, the DOJ notes that BearingPoint’s testing of SBC Midwest’s

billing systems “did not identify . . . errors” related to the ACIS-CABS conversion, but it simply

ignores Ernst & Young’s validation related to that same event. Likewise, the Department notes

AT&T’s claims that SBC has misbilled more than 1,900 telephone numbers, but it does not




                                                 iii
                                                                                   SBC’s Reply Comments
                                                                Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                           August 29, 2003


engage the evidence SBC filed with its Application demonstrating that the vast majority of those

numbers are in fact being billed correctly.

       More fundamentally, neither the DOJ nor any other commenter makes any serious

attempt to demonstrate that the billing issues raised in this Application deprive CLECs of a

meaningful opportunity to compete. To be sure, the DOJ’s evaluation suggests the possibility

that the alleged billing “problems” might have that effect. But the only real evidence it cites in

this regard is the CLECs’ self-interested assertion that they are required to devote resources to

checking their bills. Such assertions are not new in the section 271 context; similar ones were

made as recently as last fall. The only thing new about them here is that, this time, the

Department has decided to credit them, whereas previously they did not even warrant a mention.

       AT&T’s and other commenters’ claims with respect to line splitting are likewise

insufficient to rebut SBC Midwest’s showing of checklist compliance. As an initial matter, no

party disputes that SBC Midwest’s processes in this regard are the same as were in place when

the Commission approved SBC applications in Texas, Kansas, Oklahoma, Missouri, and

Arkansas. If SBC’s processes were good enough for approval in those states – and the

Commission held that they were – they are equally sufficient here.

       That conclusion is especially appropriate with respect to SBC’s processes for converting

line splitting back to UNE-P, where AT&T and other commenters train most of their fire. SBC

has received few actual requests for this type of conversion in any of its regions to date.

Moreover, the CLECs have only just begun to discuss the process with SBC. And, while SBC’s

existing process is plainly nondiscriminatory and consistent with the Commission’s rules, SBC

has made clear its willingness to work with the CLECs in developing a new process that would



                                                 iv
                                                                                   SBC’s Reply Comments
                                                                Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                           August 29, 2003


meet their evolving needs, and it is in fact working to do so with the one CLEC who has – for

this issue at least – put aside its regulatory gamesmanship and confirmed its willingness to move

the process forward in a constructive fashion.

       Continuing the pattern of rehashing claims litigated in the Michigan proceeding, some

commenters continue to argue that the mere fact that BearingPoint has not yet finished its

performance measurement review is evidence that the performance measurements themselves are

inaccurate or unreliable. As SBC explained in its Application, Ernst & Young (“E&Y”) not only

comprehensively reviewed SBC Midwest’s performance data – using a methodology this

Commission has repeatedly approved – it also validated the corrective actions SBC took in

response to that review. This evidence provides a compelling prima facie case that the data

reliably reflect SBC Midwest’s actual performance, and shifts the burden to the parties to present

evidence – not conjecture – rebutting that conclusion. No party has even attempted to do so.

       The few additional issues raised in this proceeding that are new – i.e., that have not been

raised and rebutted in Michigan – can be disposed of quickly:

          Commenters’ challenges to SBC Midwest’s OSS run headlong into two undisputed
           facts: SBC’s systems are handling extremely high commercial volumes with no
           systemic performance problems, and those systems have been thoroughly tested by
           BearingPoint (which these same commenters identify as the gold standard with
           respect to testing for data integrity).

          AT&T’s and NuVox’s challenges to Ohio Bell’s and Indiana Bell’s method for
           charging for collocation power is not properly presented here, and it is in any case
           based on a factual representation regarding how power is consumed that AT&T has
           expressly repudiated elsewhere.

          Globalcom’s challenge to the rates for one particular type of UNE combination – a
           noncollocated DS1 EEL – does not even allege (much less prove) a TELRIC
           violation, and it ignores the fact that, when considered in the aggregate, the recurring
           and nonrecurring rates that apply to that combination are entirely reasonable.



                                                 v
                                                                                  SBC’s Reply Comments
                                                               Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                          August 29, 2003

          ACN’s challenge to Illinois Bell’s loop rates is concededly hypothetical – i.e., it turns
           on what might happen when the Seventh Circuit resolves a now-pending appeal
           related to Illinois Bell’s rates. As the Commission has recognized many times before
           in analogous circumstances, the pendency of this litigation in the Seventh Circuit is
           irrelevant to the question of SBC’s checklist compliance.

          Commenters’ allegations with respect to “unproductive truck rolls” refer to a
           phenomenon which, while unfortunate, occurs only in a minute number of new orders
           and affects SBC’s wholesale and retail operations alike.

          AT&T’s challenge to Ohio Bell’s reciprocal compensation arrangements is directed at
           agreement language on which Ohio Bell does not rely in this Application and is in
           any event premised on a reading of FCC rules that this Commission has never
           adopted.

          Commenters’ mish-mash of “public interest” allegations fall well short of rebutting
           the Commission’s long-standing presumption that, where, as here, the checklist is
           satisfied, BOC entry into long distance enhances the public interest.

                                              ****

       The record in this proceeding demonstrates that SBC Midwest has done everything that

Congress and this Commission have asked of it in implementing the local competition provisions

of the 1996 Act and opening the local market. And the results are clearly evident: CLECs have

established a large and rapidly growing base throughout the entire Midwest region. The state

commissions that have reviewed this Application number among the strongest and most

respected public service commissions in the nation, and they recognize that SBC Midwest has

taken all the steps necessary to satisfy the competitive checklist. Under the standards set out in

the Act and this Commission’s prior orders, this Commission should grant this Application and

authorize SBC to provide interLATA services in Illinois, Indiana, Ohio, and Wisconsin.




                                                 vi
                                                                                                                SBC’s Reply Comments
                                                                                             Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                                                        August 29, 2003




                                                  TABLE OF CONTENTS


EXECUTIVE SUMMARY ............................................................................................................. i

GLOSSARY OF 271 ORDERS ......................................................................................................x

INTRODUCTION ...........................................................................................................................1

DISCUSSION ..................................................................................................................................6

I.      WHOLESALE BILLING .......................................................................................................6

II.     LINE SPLITTING ................................................................................................................16

          A.       Converting UNE-P to Line Splitting.........................................................................16

          B.       Nonrecurring Charges Associated with Line Splitting .............................................18

          C.       Converting Line Splitting to UNE-P.........................................................................21

          D.       E911 ..........................................................................................................................25

III.    DATA INTEGRITY .............................................................................................................28

IV. NONDISCRIMINATORY ACCESS TO OSS ....................................................................33

          A.       Post to Bill Notifications...........................................................................................34

          B.       Ordering Complex Products .....................................................................................36

          C.       Line Loss Notifications .............................................................................................38

          D.       Change Management ................................................................................................39

          E.       Miscellaneous OSS Issues ........................................................................................42

V.      ADDITIONAL ISSUES .......................................................................................................45

          A.       Pricing of Interconnection and UNEs .......................................................................45

                   1.      Collocation Power Pricing .............................................................................. 45

                   2.      Illinois Loop Prices ......................................................................................... 49

                   3.      Nonrecurring EEL Charges............................................................................. 56



                                                                       vii
                                                                                                             SBC’s Reply Comments
                                                                                          Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                                                     August 29, 2003

                  4.      Additional Pricing Claims............................................................................... 62

          B.      Loop Provisioning .....................................................................................................64

          C.      Reciprocal Compensation for the Exchange of Local Traffic ..................................66

          D.      Public Interest ...........................................................................................................70

CONCLUSION ..............................................................................................................................78


Reply Appendix:                 Reply Affidavits

         Tab 1.          Scott J. Alexander
                         (Wholesale Policy Issues)

         Tab 2.          Justin W. Brown, Mark J. Cottrell, and Michael E. Flynn
                         (Billing)

         Tab 3.          Justin W. Brown, Mark J. Cottrell, and Beth Lawson
                         (OSS and Local Service Centers)

         Tab 4.          Jolynn B. Butler
                         (Indiana State Proceedings/Pricing)

         Tab 5.          Carol A. Chapman
                         (Advanced Services)

         Tab 6.          Carol A. Chapman, W. Karl Wardin, Jolynn B. Bulter, Daniel R. McKenzie,
                         and Scott T. VanderSanden
                         (Nonrecurring Charges)

         Tab 7.          William C. Deere
                         (Network Issues)

         Tab 8.          James D. Ehr
                         (Performance Measures)

         Tab 9.          James D. Ehr and Salvatore T. Fioretti
                         (Third-Party Performance Data Evaluation)

         Tab 10.         John J. Muhs
                         (Network Operations)

         Tab 11.         Bernard E. Valentine
                         (E911/911)


                                                                    viii
                                                          SBC’s Reply Comments
                                       Illinois, Indiana, Ohio, and Wisconsin 271
                                                                  August 29, 2003

Tab 12.   Scott T. VanderSanden
          (Wisconsin Pricing)

Tab 13.   W. Karl Wardin
          (Illinois Pricing)




                                  ix
                                                                             SBC’s Reply Comments
                                                          Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                     August 29, 2003

                              GLOSSARY OF 271 ORDERS


Arkansas/Missouri Order        Joint Application by SBC Communications Inc., et al.
                               Pursuant to Section 271 of the Telecommunications Act
                               of 1996 To Provide In-Region, InterLATA Services in
                               Arkansas and Missouri, Memorandum Opinion and
                               Order, 16 FCC Rcd 20719 (2001), aff’d, AT&T Corp.
                               v. FCC, No. 01-1511, 2002 WL 31558095 (D.C. Cir.
                               Nov. 18, 2002) (per curiam)

BellSouth Five-State Order     Joint Application by BellSouth Corp., et al., for
                               Provision of In-Region, InterLATA Services in
                               Alabama, Kentucky, Mississippi, North Carolina, and
                               South Carolina, Memorandum Opinion and Order, 17
                               FCC Rcd 17595 (2002)

California Order               Application by SBC Communications Inc., et al. for
                               Authorization to Provide In-Region, InterLATA
                               Services in California, Memorandum Opinion and
                               Order, 17 FCC Rcd 29650 (2002)

Georgia/Louisiana Order        Joint Application by BellSouth Corp., et al., for
                               Provision of In-Region, InterLATA Services In
                               Georgia and Louisiana, Memorandum Opinion and
                               Order, 17 FCC Rcd 9018 (2002)

Kansas/Oklahoma Order          Joint Application by SBC Communications Inc., et al.,
                               for Provision of In-Region, InterLATA Services in
                               Kansas and Oklahoma, Memorandum Opinion and
                               Order, 16 FCC Rcd 6237 (2001), aff’d in part and
                               remanded, Sprint Communications Co. v. FCC, 274
                               F.3d 549 (D.C. Cir. 2001)

Maryland/D.C./West Virginia    Application by Verizon Maryland Inc., et al., for
Order                          Authorization To Provide In-Region, InterLATA
                               Services in Maryland, Washington, D.C., and West
                               Virginia, Memorandum Opinion and Order, 18 FCC
                               Rcd 5212 (2003)

Massachusetts Order            Application of Verizon New England Inc., et al., For
                               Authorization to Provide In-Region, InterLATA
                               Services in Massachusetts, Memorandum Opinion and
                               Order, 16 FCC Rcd 8988 (2001), aff’d in part,
                               dismissed in part, remanded in part, WorldCom, Inc. v.
                               FCC, 308 F.3d 1 (D.C. Cir. 2002)


                                            x
                                                                       SBC’s Reply Comments
                                                    Illinois, Indiana, Ohio, and Wisconsin 271
                                                                               August 29, 2003



Minnesota Order          Application by Qwest Communications International,
                         Inc., for Authorization To Provide In-Region,
                         InterLATA Services in Minnesota, Memorandum
                         Opinion and Order, WC Docket No. 03-90, FCC 03-
                         142 (rel. June 26, 2003)

New Hampshire/Delaware   Application by Verizon New England Inc., et al., for
Order                    Authorization To Provide In-Region, InterLATA
                         Services in New Hampshire and Delaware,
                         Memorandum Opinion and Order, 17 FCC Rcd 18660
                         (2002)

New Jersey Order         Application by Verizon New Jersey Inc., et al., for
                         Authorization To Provide In-Region, InterLATA
                         Services in New Jersey, Memorandum Opinion and
                         Order, 17 FCC Rcd 12275 (2002)

New York Order           Application by Bell Atlantic New York for
                         Authorization Under Section 271 of the
                         Communications Act To Provide In-Region,
                         InterLATA Service in the State of New York,
                         Memorandum Opinion and Order, 15 FCC Rcd 3953
                         (1999), aff’d, AT&T Corp. v. FCC, 220 F.3d 607 (D.C.
                         Cir. 2000)

Pennsylvania Order       Application of Verizon Pennsylvania Inc., et al., for
                         Authorization To Provide In-Region, InterLATA
                         Services in Pennsylvania, Memorandum Opinion and
                         Order, 16 FCC Rcd 17419 (2001), aff’d, Z-Tel
                         Communications, Inc. v. FCC, 333 F.3d 262 (D.C. Cir.
                         2003)

Texas Order              Application by SBC Communications Inc., et al.,
                         Pursuant to Section 271 of the Telecommunications Act
                         of 1996 To Provide In-Region, InterLATA Services In
                         Texas, Memorandum Opinion and Order, 15 FCC Rcd
                         18354 (2000), appeal dismissed, AT&T Corp. v. FCC,
                         No. 00-1295 (D.C. Cir. Mar. 1, 2001)


Vermont Order            Application by Verizon New England Inc., et al., for
                         Authorization To Provide In-Region, InterLATA
                         Services in Vermont, Memorandum Opinion and
                         Order, 17 FCC Rcd 7625 (2002), appeal dismissed,
                         AT&T Corp. v. FCC, No. 02-1152, 2002 WL
                         31619058 (D.C. Cir. Nov. 19, 2002)
                                      xi
                                                             SBC’s Reply Comments
                                          Illinois, Indiana, Ohio, and Wisconsin 271
                                                                     August 29, 2003



Virginia Order   Application by Verizon Virginia Inc., et al., for
                 Authorization To Provide In-Region, InterLATA
                 Services in Virginia, Memorandum Opinion and Order,
                 17 FCC Rcd 21880 (2002)




                             xii
                                    Before the
                      FEDERAL COMMUNICATIONS COMMISSION
                               Washington, D.C. 20554


In the Matter of

Joint Application by SBC Communications Inc.,                 WC Docket No. 03-167
Illinois Bell Telephone Company, Indiana Bell
Telephone Company Incorporated, The Ohio Bell
Telephone Company, Wisconsin Bell, Inc., and
Southwestern Bell Communications Services, Inc.
for Provision of In-Region, InterLATA Services
in Illinois, Indiana, Ohio, and Wisconsin




                          SBC’S REPLY COMMENTS
        IN SUPPORT OF ITS APPLICATION FOR PROVISION OF IN-REGION,
      INTERLATA SERVICES IN ILLINOIS, INDIANA, OHIO, AND WISCONSIN
                  __________________________________________

                                        INTRODUCTION

       The local markets are open to competition in each of the applicant states, and competitors

are entering on a massive scale. In Illinois, CLECs have captured at least 29% of Illinois Bell’s

total lines (i.e., between approximately 2.3 and 2.4 million lines in the state). See Heritage IL

Aff. ¶ 4. In Indiana, CLECs have obtained between 15% and 21% of the total access lines in

Indiana Bell’s service area (between 393,000 and 574,000 lines). See Heritage IN Aff. ¶ 4. In

Ohio, CLECs have captured between 20% and 29% of the total access lines in Ohio Bell’s

service area (or between 885,000 and 1.4 million lines). See Heritage OH Aff. ¶ 4. And, in

Wisconsin, CLECs have captured approximately 25% of the total lines in Wisconsin Bell’s

service area (representing approximately 633,000 lines). See Heritage WI Aff. ¶ 4.

       In light of this undisputed evidence of extensive local competition in each of the

applicant states, it is no surprise that the vast majority of commenters in this proceeding support
                                                                                  SBC’s Reply Comments
                                                               Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                          August 29, 2003


SBC’s application for interLATA relief. Having enjoyed the benefits of open competition in the

local market, these commenters look forward to the benefits that will flow from such competition

in long distance. The Illinois Chamber of Commerce, for example, explains that “[t]here is no

doubt that a competitive marketplace gives consumers better prices, better choices, and better

service. We are satisfied the users of telecommunications services in Illinois will be

beneficiaries of a more competitive market if SBC’s application for long distance service is

granted.” Illinois Chamber of Commerce Comments at 1. The Alliance for Public Technology

strikes a similar chord, “strongly urg[ing] the Commission to seize this opportunity to increase

facilities-based competition for local and long distance service, and promote ubiquitous

broadband network deployment.” Alliance for Public Technology Comments at 4.1

       Other commenters take the openness of the local market for granted, and focus instead on

the positive contribution SBC and its employees have made to communities throughout the

Midwest region. See, e.g., CWA Local 4900 Comments at 1 (“SBC is a good corporate citizen

with a very positive record of working with the CWA to preserve and expand career

       1
          See also, e.g., Comments of Todd Rokita, Indiana Secretary of State at 1 (“Indiana’s
entire economy will benefit if the Commission approves SBC’s application to provide long
distance service.”); Comments of Dan Stevenson, Indiana State Representative, Chairman of the
House Commerce Committee at 1 (“SBC Indiana’s entry into the long distance market will spur
competition even further here. My constituents, consumers, businesses and other organizations
in my district, want to see those increased benefits.”); Comments of Jim Petro, Ohio Attorney
General at 1 (“[C]ompetition . . . results in a better product at a more favorable cost to our
citizens. Offering the people of Ohio another option when choosing a long distance company is
directly in line with my administration’s policy of enhancing their overall experience as
consumers.”); Chicagoland Chamber of Commerce Comments at 1 (“We believe that SBC’s
entrance in the long distance market will promote competition in both the Illinois local and long
distance markets.”); Wisconsin Manufacturers and Commerce Comments at 1 (“If SBC is
allowed to enter the long distance market, Wisconsin businesses will enjoy the fruits of more
telecommunications competition and, moreover, will have the opportunity to receive long
distance service from a company which employs over 6,500 Wisconsin workers.”).



                                                 2
                                                                                  SBC’s Reply Comments
                                                               Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                          August 29, 2003


opportunities in our state.”); Eastern Ohio Development Alliance Comments at 1 (“The

company’s capital investment, taxes paid, employees’ donations and community involvement

have contributed much to the welfare of our region and the State of Ohio.”); Indiana AFL-CIO

Comments at 1 (“SBC is a good corporate citizen in Indiana and a valued employer in our

community. At a time when some other major telecommunications companies are running afoul

of the law, SBC provides not only essential telecom services and consistently high quality

service to competitors and business and residential customers – but also civic leadership.”);

Comments of Paul Barrett, President, Kokomo, IN Branch of NAACP at 1 (“SBC has been a

good corporate citizen and has, through its employees, actively participated in assisting the

minority community.”).

       Still other commenters attest to SBC’s efforts to ensure positive working relationships

with its wholesale customers and thereby to provide a hospitable climate for them to compete in

the local market. See, e.g., Comments of James Merrit, Jr., Indiana State Senator at 1 (“As

Chairman of the Senate Utility and Regulatory Committee, I am very familiar with the major

issues challenging the telecommunication industry today. The local phone market in this state is

indeed open and competitive,” and “I am hopeful the FCC acts expeditiously and grants the SBC

application.”); Greater Akron Chamber Comments at 1 (“The level of competition has intensified

with the entry of residential providers MCI and AT&T, bringing even more choices for

consumers and businesses in Ohio.”).

       These commenters recognize what the state commissions in each of the applicant states

have found: that SBC has taken all of the steps necessary to warrant interLATA relief. As SBC

explained in its opening brief – and as the state commissions confirm in their comments on the



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                                                                Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                           August 29, 2003


Application – the Indiana, Illinois, Ohio, and Wisconsin commissions stand squarely behind the

work they have done in facilitating open local markets in their respective states, and they

accordingly conclude that SBC has satisfied the checklist in each of the applicant states. Thus,

for example, the Indiana Utility Regulatory Commission (“IURC”) found that “SBC Indiana is in

compliance with checklist items (1) through (14)” and that SBC’s Application “is consistent with

the public interest, convenience and necessity.” Comments of the Indiana Utility Regulatory

Commission at 4. The Illinois Commerce Commission (“ICC”) likewise found, after considering

“all the evidence, affidavits, comments, briefs, and briefs on exceptions filed” in the state

proceeding, that “SBC satisfies Section 271(c)(1)(A) of the 1996 Act, is in substantial

compliance with checklist items (i) through (xiv) of Section 271(c)(2)(B), and that SBC’s

provision of interLATA services in Illinois is consistent with the public interest, convenience and

necessity.” Consultative Report of the Illinois Commerce Commission at 4 (“ICC Comments”).

The Public Utilities Commission of Ohio (“PUCO”) found that “SBC Ohio has opened its local

market to competitive local exchange companies (CLECs) who wish to compete in Ohio” and

“has done so by fully implementing the competitive checklist.” Comments of the Public Utilities

Commission of Ohio at 1, 3. And the Public Service Commission of Wisconsin (“PSCW”),

having “determine[d] . . . that SBC Wisconsin offers its competitors in Wisconsin

nondiscriminatory access to unbundled network elements,” “supports SBC Wisconsin’s

application to the FCC for long distance authority pursuant to § 271.” Determination (Phase II),

Petition of Wisconsin Bell, Inc. for a Section 271 Checklist Proceeding, Docket No. 6720-TI-

170, at 30 (PSCW July 7, 2003) (“PSCW Phase II Final Order”) (App. C-WI, Tab 67).




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        Particularly in light of these state commissions’ unbiased, favorable evaluations of the

Application, this Commission should be highly skeptical of the self-interested efforts by AT&T,

MCI, and others to oppose it. As Chairman Powell has recognized, “[t]here will never be a 271

. . . to which there will not be a community of competitive entrants . . . like AT&T who will not

scream that it was premature. Why? Because as far as they’re concerned entry will never be

right.”2 The time is right in SBC’s Midwest region. The Application should be granted.

                                              ****

        The remainder of these Reply Comments are organized as follows: Parts I-III focus on

issues that have been exhaustively addressed in the Michigan proceeding (WC Docket Nos. 03-

16 & 03-138). Part I addresses allegations relating to SBC Midwest’s provision of accurate and

timely wholesale bills; Part II addresses SBC Midwest’s processes and prices relating to line

splitting; and Part III explains that SBC Midwest’s performance data are stable and reliable,

based on both the completed E&Y audit and the ongoing BearingPoint test. Part IV addresses

specific issues concerning SBC’s OSS in the Midwest region. Finally, Part V addresses a

number of additional issues relating to pricing of interconnection and UNEs, loop provisioning,

reciprocal compensation, and the “public interest” standard.




        2
            Powell Defends Stance on Telecom Competition, Communications Daily, May 22,
2001.


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                                         DISCUSSION

I.     WHOLESALE BILLING

       SBC’s Application demonstrated that, in each of the applicant states, “it provides

competing carriers with . . . wholesale bills in a manner that gives [them] a meaningful

opportunity to compete.” California Order, App. C, ¶ 39; see, e.g., Kansas/Oklahoma Order

¶ 163. Among other things, SBC demonstrated that:

          BearingPoint has conducted five (including Michigan) exhaustive tests of the SBC
           Midwest billing systems – pursuant to Master Test Plans developed in each state in
           consultation with the CLECs – and concluded that SBC Midwest satisfied 95 out of
           95 applicable test criteria. See Brown/Cottrell/Flynn Aff. ¶¶ 24-42.

          In the wake of the transition to the Carrier Access Billing Systems (“CABS”) for
           UNE-P, SBC Midwest reconciled CABS with its ACIS provisioning database to
           ensure that the databases matched one another, and E&Y validated that reconciliation
           process and its results. See id. ¶¶ 59-82.

          In response to allegations regarding rate tables, SBC Midwest put in place processes
           to ensure those tables accurately reflect the rates particular CLECs should be charged
           for particular products, and E&Y validated those processes, too, as well as their
           results. See id. ¶¶ 94-104.

          SBC Midwest has worked diligently to ensure that an extremely high percentage
           (approximately 96%) of billing service orders mechanically post to CABS, and E&Y
           validated the data supporting that figure as well. See id. ¶¶ 86-87.

          The volume of billing disputes in the four applicant states over the 17 months leading
           up to the Application is comparable to the volume seen in other states with section
           271 relief, and the BOC Applicants are dedicated to working with their CLEC
           customers to resolve those disputes and have extensive processes in place for doing
           so. See id. ¶¶ 128-149.

       Though numerous commenters allege problems with SBC Midwest’s billing systems,

none of them grapples with this evidence in any meaningful way. Instead, they focus on isolated

allegations rich on rhetoric but unaccompanied by detail. SBC’s prima facie evidence cannot,

however, be ignored. With the exception of Michigan Bell in its pending application, SBC is




                                                6
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aware of no Bell company applicant for section 271 relief that has provided anything close to the

volume of evidence that SBC has provided in this Application to demonstrate the accuracy and

reliability of its wholesale bills. Commenters’ failure seriously to contest that evidence should

be enough, standing alone, to warrant a conclusion that the BOC Applicants satisfy their

wholesale billing obligations under Checklist Item 2.

       As it did in the pending Michigan application, the DOJ disagrees. In its view, “[t]he

record does not permit the Department to conclude” that “SBC’s billing performance is

adequate.” DOJ Eval. at 14-15. A careful review of the Evaluation, however, begs the question

as to precisely what portion of the record the DOJ believes supports this result. The DOJ does

not suggest that SBC Midwest has not carried its prima facie burden on this checklist item (nor

could it, in view of the mass of evidence noted above). The DOJ points to the IURC’s concerns

related to billing, see DOJ Eval. at 10, but it does not suggest that those concerns outweigh or are

more persuasive than the positive billing evaluations SBC Midwest has received from the ICC,

the PUCO, the PSCW, and the Michigan PSC.3 The Department also notes that SBC Midwest

has acknowledged in its affidavits that it has made billing errors in the past, see DOJ Eval. at 9,

14, but it does not dispute the additional information, set forth in those same affidavits, that

demonstrates that the errors in question either were not systemic or have been addressed with

process changes that have themselves been validated. Finally, the DOJ disclaims reliance on the

BearingPoint billing test because “BearingPoint apparently did not identify . . . errors” related to

       3
         To the extent the DOJ intends to suggest that the PSCW’s newly initiated billing
proceeding suggests that commission does not endorse Wisconsin Bell’s billing showing for
purposes of section 271, see DOJ Eval. at 10-11, it is mistaken. See PSCW Phase II Final Order
at 21 (“On balance, the [PSCW] determines that SBC Wisconsin’s billing systems are adequate
for § 271 checklist compliance.”).



                                                  7
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the ACIS-CABS conversion, see DOJ Eval. at 13 n.54, but it does not so much as mention the

fact that these errors were the consequence of a massive one-time transfer of data that is not

remotely indicative of SBC Midwest’s regular billing experience, or, more fundamentally, the

comprehensive validation E&Y undertook to ensure that the errors resulting from that conversion

were corrected.

       Ultimately, then, the DOJ is left with the self-serving assertions of the CLECs that

oppose the Application – i.e., the parties that stand to gain the most if SBC Midwest’s entry into

long distance is delayed still further. Although the Department acknowledges that it “cannot . . .

verify that every CLEC complaint about billing is correct,” it apparently believes these parties

have identified enough billing disputes “to raise a genuine issue” regarding SBC Midwest’s

wholesale bills, such that SBC Midwest should be required to provide “additional evidence” in

order to demonstrate checklist compliance. DOJ Eval. at 12, 14.4

       As it did in Michigan, SBC welcomes the opportunity to provide such evidence. And, as

in Michigan, SBC will start with AT&T’s claim that it has identified 1,941 telephone numbers

(“TNs”) in Michigan for which it is being misbilled. See AT&T Comments at 32. Although the

DOJ no longer describes these particular allegations as “credible,” it continues to include them

among the “billing issues” that gave it pause in Michigan and, presumably, here as well. DOJ

Eval. at 13 n.56.




       4
          Conspicuously absent from the DOJ’s recitation of CLEC comments on SBC Midwest’s
billing systems is any discussion of the one CLEC that has endorsed those systems. See Ex Parte
Letter from Connie Mitchell, VarTec Telecom, Inc., to Marlene Dortch, FCC, WC Docket No.
03-138, at 2 (July 14, 2003) (“VarTec has received comparable or better billing performance
from SBC in the Midwest than it has in the other SBC or ILEC states.”).



                                                 8
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       As an initial matter, the TNs AT&T has identified are an incredibly small proportion of

AT&T’s UNE-P lines in service in Michigan. See Brown/Cottrell/Flynn Reply Aff. ¶ 38 (Reply

App., Tab 2). AT&T’s numbers thus prove absolutely nothing about the overall accuracy of

SBC Midwest’s billing systems, even assuming AT&T’s allegations were true.

       And, as SBC explained in the Michigan proceeding, they are most certainly not true. As

SBC has explained both to AT&T and the Commission, SBC’s initial analysis of AT&T’s claims

showed that approximately 75% of the so-called billing errors identified by AT&T are

attributable to AT&T’s own recordkeeping errors. See id. ¶ 39. These errors fall into a number

of different categories. Some appear to be the result of the fact that AT&T never changed its

records to reflect the telephone number that SBC Midwest actually assigned and communicated

to AT&T, after its requested telephone number was no longer available. Others appear to be the

result of AT&T’s failure to update its records to reflect its own subsequent order requesting that

the original telephone number be changed to a different telephone number. See id. ¶ 46 &

Attach. A.

       AT&T’s response to this showing is, to be generous, unpersuasive. First, it complains

that the manner in which SBC has provided information on the TNs in dispute renders it difficult

to analyze SBC’s response. See AT&T Comments at 34-35; AT&T’s DeYoung/Tavares Decl.

¶ 13. SBC provided information to AT&T in the same format as AT&T itself provided it to this

Commission. See Brown/Cottrell/Flynn Reply Aff. ¶ 40. If AT&T found that format

cumbersome, it has no one to blame but itself. Second, AT&T asserts that some of the numbers

which SBC claims are properly billed have no usage, thus suggesting that the bills are incorrect.

See AT&T Comments at 35; see also DOJ Eval. at 13 n.56 (noting that AT&T has “disput[ed]



                                                 9
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much of SBC’s analysis”). But the absence of usage on a TN during a given period does not

itself mean that the bill is incorrect. See Brown/Cottrell/Flynn Reply Aff. ¶ 44. For example,

vacation residences that are occupied for only certain parts of the year could experience

substantial fluctuations in usage, including many months of no usage at all. Indeed, of the 345

TNs that AT&T contends fall into this “no usage” category, SBC has confirmed that only two, in

fact, were the result of SBC errors in processing an AT&T disconnect order. See id. ¶¶ 45-46.5

       Finally, AT&T claims that its allegations in this regard, even if discredited, nevertheless

establish that SBC’s and AT&T’s “systems do not agree,” and that SBC accordingly does not

satisfy Checklist Item 2. AT&T Comments at 35. SBC’s burden in this proceeding is not to

establish that its systems “agree” with AT&T’s. Rather, it is to demonstrate that it provides

“competing carriers with . . . wholesale bills in a manner that gives [them] a meaningful

opportunity to compete.” California Order, App. C, ¶ 39. For the reasons explained above, SBC

has easily carried that burden.

       AT&T also purports to provide “additional” billing evidence, not on the record in the

Michigan proceeding, that, in its view, demonstrates systemic problems in SBC Midwest’s

billing processes. See AT&T Comments at 30-31. The sum total of this “new” evidence,

       5
          On August 25, four days before the due date of these Reply Comments, AT&T filed an
ex parte in the Michigan proceeding providing further details on the “time consuming and
tedious process” of resolving the proper billing of the TNs AT&T has placed in dispute. See Ex
Parte Letter of Jacqueline G. Cooper on behalf of AT&T to Marlene Dortch, FCC, WC Docket
No. 03-138, Attach. at 1 (FCC filed Aug. 25, 2003). SBC is evaluating the information
contained in this letter. See Brown/Cottrell/Flynn Reply Aff. ¶ 43. For present purposes, this ex
parte is relevant only insofar as it confirms both the extraordinary complexity of the billing
systems in question – which is what makes the resolution of AT&T’s dispute so “time
consuming and tedious” – as well as the inappropriateness of attempting to resolve such disputes
in connection with a section 271 application, instead of in business-to-business discussions or, if
necessary, before the appropriate state commission.



                                                10
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however, is a loop zone classification issue that SBC itself disclosed, and the contention that

SBC is inappropriately billing for nonrecurring charges on so-called “no field work.” As to the

first, as SBC has previously explained, SBC Midwest has taken extensive steps to ensure that it

charges CLECs according to the appropriate rate zone, and E&Y has validated those steps and

confirmed that SBC’s processes are sufficient to ensure accuracy in this respect. See

Brown/Cottrell/Flynn Aff. ¶¶ 111-118; see also Brown/Cottrell/Flynn Reply Aff. ¶¶ 108-109.

As to the second, AT&T’s complaint appears to stem in large part from its own

misunderstanding regarding when new installation nonrecurring rates apply, compared to when

migration nonrecurring rates are to be applied. See Brown/Cottrell/Flynn Reply Aff. ¶¶ 111-114.

Considered in the context of the abundance of evidence SBC has provided demonstrating the

accuracy and reliability of its systems, AT&T’s “additional” evidence thus falls far short of

rebutting SBC’s showing of checklist compliance.

       For its part, MCI alleges “discrepancies in SBC’s internal databases” that lead to

inconsistencies between SBC’s lines-in-service report and “other data.” MCI Comments at 7.

MCI is plainly trying to put SBC in a catch-22. The lines-in-service report was designed for the

precise purpose of identifying such “discrepancies” – i.e., to permit MCI to work with SBC on a

business-to-business basis to identify any billing-related issues and to facilitate their resolution.

See Brown/Cottrell/Flynn Reply Aff. ¶¶ 49, 53. MCI’s effort to use that report to its regulatory

advantage, if credited by this Commission, would, in effect, penalize SBC for working with its

wholesale customers to identify and resolve billing issues.

       In any event, MCI’s allegations relating to SBC’s lines-in-service report are vastly

overstated. Indeed, even if one credited MCI’s allegations with respect to each TN it identifies



                                                  11
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as an SBC error, it would amount to a miniscule error rate of MCI’s lines in service. See id.

¶ 49. Thus, like AT&T’s allegations, MCI’s allegations on their face fail to call into question the

overall accuracy and reliability of SBC’s systems, even assuming them to be true. And, also like

AT&T’s, they are not true. SBC has conducted an initial analysis of the 6,090 TNs MCI

provided, and it has concluded that, for 69% of them, any discrepancy between the lines-in-

service report and MCI’s records is due to MCI’s own recordkeeping errors. See id. ¶ 50. Thus,

to the extent MCI’s allegations are relevant at all, they demonstrate only that – like AT&T –

MCI is all too willing to blame SBC for problems that are of its own making.

       The remainder of the billing disputes raised in this proceeding are exactly that – billing

disputes. See Z-Tel Comments at 11; Access One Comments at 2; ACN et al. Comments at 4-

14; CIMCO Comments at 7; Forte Comments at 11-12; TDS Metrocom Comments at 8-23; NTD

Comments at 2-9. SBC replies to those disputes in extraordinary detail in the attached Reply

Affidavit of Justin Brown, Mark Cottrell, and Michael Flynn (¶¶ 90-146). As these affiants

explain, the disputes fall into a number of different categories, with the majority of them relating

to rate administration and/or contract interpretation issues which SBC believes it has resolved

appropriately. See Brown/Cottrell/Flynn Reply Aff. ¶ 90; see generally id. ¶¶ 90-107. For

present purposes, however, the key point is that, wherever there is local competition that depends

in part on access to the incumbent’s facilities, there will be billing disputes. Through CABS,

SBC Midwest bills more than $3 billion per year, and generates more than 6,000 monthly CLEC

bills for a variety of UNE and interconnection products. See id. ¶ 5. With these volumes, it is

simply unrealistic to expect perfection.




                                                 12
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       Moreover, no party to this proceeding has an answer to the undisputed fact that the

volume of billing disputes in each of the applicant states over the 17 months leading up the

Application is comparable to the volume of disputes in other states for which the Commission

has granted section 271 approval. See Brown/Cottrell/Flynn Aff. ¶ 130 & n.130.6 As it did in

Michigan, the DOJ questions whether this figure has any probative value, see DOJ Eval. at 13

n.55, but, as in Michigan, it does not address the purpose for which the figure was introduced –

namely, if SBC were really having serious billing problems in the Midwest, one would expect to

see a significantly higher percentage of billing disputes. The evidence does not support this

theory. To warrant a finding of checklist non-compliance with respect to wholesale billing, the

Commission requires commenters to “demonstrate that [the applicant]’s billing performance is

‘materially worse’” than in other states with section 271 approval. Virginia Order ¶ 40. As the

evidence makes clear, commenters here have failed to carry that burden.

       Commenters have also utterly failed to demonstrate that any billing problems they have

experienced in the Midwest region have deprived them of a meaningful opportunity to compete.

The Commission has repeatedly made clear that this standard governs the question of wholesale



       6
         AT&T’s only response to this point is that the figures offered for this Application do not
include dollar volumes that AT&T thinks were billed incorrectly but that AT&T has not raised
through the formal dispute resolution process. See AT&T Comments at 42 n.90. The DOJ
shares the same concern. See DOJ Eval. at 13 n.55. The figures presented in other states
likewise excluded such volumes, and accordingly present an apples-to-apples comparison. See
Brown/Cottrell/Flynn Reply Aff. ¶ 78. The DOJ’s concern that the data are not broken down by
month, see DOJ Eval. at 13 n.55, appears deliberately to ignore the stated rationale for providing
an aggregate figure – i.e., to normalize peaks and valleys in CLEC claim activity. See
Brown/Cottrell/Flynn Aff. ¶ 131; Brown/Cottrell/Flynn Reply Aff. ¶ 75. The DOJ does not
explain its additional suggestion that the inclusion of states that received 271 relief at some point
in the 17-month period skews the figure, nor does it elaborate on the “other reasons” that it
thinks render this figure “insufficient.” See DOJ Eval. at 13 n.55.



                                                 13
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billing,7 yet, as even the Department must ultimately admit (in what can only be described as an

understatement), “the CLECs could have more fully demonstrated the extent to which [the

alleged billing] problems have adversely affected their ability to compete.” DOJ Eval. at 12.

Indeed, the only evidence – or “data,” as the DOJ describes it – bearing on this point are the

CLECs’ self-serving allegations that, because SBC Midwest’s bills are purportedly problematic,

they must spend time and resources reviewing them. See id. at 11 & n.48 (citing NTD

Comments at 8; TDS Metrocom Comments at 9; and AT&T’s DeYoung/Tavares Decl. ¶¶ 28-

29).

       Even this “data,” however, crumples under the most cursory analysis. AT&T’s “data,”

for example, simply asserts that two employees spend so much time dealing with SBC

Midwest’s bills, they are “unable properly to address billing issues that arise in other states that

are within their responsibility.” AT&T’s DeYoung/Tavares Decl. ¶ 29. By its own terms, that

“data” fails to explain how much time would be spent on bills in other states, if in fact AT&T

reviewed them “properly,” nor does it compare the volume of bills AT&T receives in those states

(or even identify what those states are). TDS Metrocom’s “data” consists of a similar assertion

likewise devoid of any information that would put it in context. See TDS Metrocom Comments

at 9 (asserting that it spends time reviewing SBC Midwest bills – 30% of the time of a five-

person team – and that an affiliate, USLink, “has not experienced the same level of problems”

with the bills it receives from Qwest).8 Finally, the sum total of NTD’s “data” is the bare

       7
        See, e.g., Pennsylvania Order ¶¶ 14-15; Kansas/Oklahoma Order ¶ 163;
Georgia/Louisiana Order ¶ 173.
       8
        The DOJ cites TDS Metrocom’s comments for the proposition that it has not
experienced “anywhere near the same magnitude of billing problems with Qwest as it has with
SBC Midwest.” DOJ Eval. at 11 n.48 (citing TDS Metrocom Comments at 9) (emphasis added).


                                                 14
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assertion that it has been “forced” to hire a single employee “dedicated to reviewing SBC bills

and disputing billing inaccuracies and improper charges.” NTD Comments at 8.

       As noted at the outset, CLECs have made enormous inroads in the local markets in the

Midwest region. The truth is that the “data” cited by the Department establishes nothing more

than the fact that the CLECs incur an ordinary cost of doing business associated with such entry

– they expend resources to review their bills. This “data” says nothing about whether they spend

comparatively more than in other regions, taking into account relative bill volumes and other

relevant factors, much less about whether any such additional expenditure is limiting in any way

their ability to compete. CLECs have, moreover, offered similar “data” in the past, including in

a state with substantial attention focused on billing.9 In that case, this “data” did not even




The superlative is the Department’s, not TDS Metrocom’s. In addition, as noted in the text, the
comparison TDS Metrocom drew was to the bills received by an affiliate, not by TDS Metrocom
itself.
       9
            See, e.g., Vycera Comments at 10, WC Docket No. 02-306 (FCC filed Oct. 9, 2002)
(“[W]holesale bills from Pacific Bell are inaccurate to such a degree that Vycera has spent
literally hundreds, possibly thousands, of hours developing mechanized audits for its local resale
bills. . . . Vycera has a team of personnel who each week review the mechanized audits, spot
check by doing manual audits, create and submit disputes. Vycera has done this out of necessity,
not out of desire.”); Ex Parte Letter from Ross Buntrock on behalf of Telscape to Marlene
Dortch, FCC, WC Docket No. 02-306, at 3 (FCC filed Oct. 18, 2002) (“Telscape has hired a full-
time bill auditor to audit SBC’s bills (both electronic and paper) and Telscape spends hours each
week on the telephone with SBC on weekly billing conference calls. Telscape has found billing
errors each and every month that Telscape has done business with SBC.”); Mpower Comments
at 6, WC Docket No. 02-306 (FCC filed Oct. 9, 2002); see also Comments of NTELOS Network
Inc. and R&B Network Inc. at 5, WC Docket No. 02-214 (FCC filed Aug. 21, 2002) (“The
billing for UNEs and other wholesale products” by Verizon in Virginia “is often inaccurate,
causing CLECs to incur expenses and deploy scarce resources to review, research and dispute
improper charges.”).



                                                 15
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warrant a mention from the Department.10 It is unclear why the Department reaches a different

result here.

        In sum, SBC has provided a wealth of evidence – including extensive and repeated third-

party testing, as well as the approval of some of the most vigorous state commissions in the land

– to demonstrate that its wholesale bills are sufficiently accurate, reliable, and timely to permit

CLECs a meaningful opportunity to compete. The CLEC efforts to rebut that showing fail on

their face to establish that any billing issues have affected their ability to compete in any

significant way.

II.     LINE SPLITTING

        As they did in the pending Michigan application, AT&T and MCI broadly challenge

SBC’s line-splitting processes in the Midwest region. In large part, these commenters simply

rehash claims that have been raised and rebutted in the Michigan proceeding, and these claims

fail here for the same reasons they fail there. Where these commenters have raised something

new – in their challenges, for example, to the nonrecurring charges associated with line splitting

– they have nonetheless failed to rebut SBC’s showing of checklist compliance.

        A.     Converting UNE-P to Line Splitting.

        AT&T and MCI take issue with SBC’s processes for converting UNE-P arrangements to

line splitting. See AT&T Comments at 11-14; MCI Comments at 1. Critically, however, these

commenters wholly fail to dispute the core aspect of SBC’s showing in this regard: that each of

the BOC Applicants offers CLECs the ability to engage in line splitting using the same processes

        10
         See Evaluation of the Department of Justice, WC Docket No. 02-306 (FCC filed Oct.
29, 2002) (declining to comment on billing allegations raised by CLECs); see also Evaluation of
the Department of Justice, WC Docket No. 02-214 (FCC filed Sept. 5, 2002) (same).



                                                 16
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that this Commission considered and approved in the Texas Order, the Kansas/Oklahoma

Order, and the Arkansas/Missouri Order. See Chapman Reply Aff. ¶ 2 (Reply App., Tab 5).

Specifically, CLECs can order an unbundled loop terminated to a voice or data CLEC’s

collocation cage, together with cross-connects and an unbundled switch port. See Chapman Aff.

¶¶ 82-89. Moreover, CLECs can establish a new line-splitting arrangement, or convert any

existing UNE-P customer to a line-splitting arrangement, by means of a single LSR. Id. ¶¶ 87-

88; Chapman Reply Aff. ¶¶ 2, 20. No party disputes that each of the BOC Applicants offers

these capabilities, nor do they contest that these processes were held to be sufficient previously.

The absence of such a challenge is dispositive of their claims. If SBC’s UNE-P to line-splitting

processes were sufficient to meet approval in Texas, Kansas, Oklahoma, Arkansas, and Missouri

– and the Commission’s precedent makes clear that they were – it follows that they are sufficient

to warrant approval here.

       MCI nevertheless claims that SBC Midwest’s UNE-P to line-splitting processes are

“deficien[t]” because they “forc[e] CLECs to disconnect the UNE-P arrangement and reconnect

it as a separate [xDSL-capable loop] and [unbundled switch port].” MCI Comments at 1. This

allegation is mystifying. As this Commission has explained, when a CLEC seeks to convert a

UNE-P customer to a line-splitting arrangement, the ILEC must provide “an unbundled xDSL-

capable loop terminated to a collocated splitter and DSLAM equipment and unbundled switching

combined with shared transport, to replace [the CLEC’s] existing UNE-platform arrangement.”

Line Sharing Reconsideration Order11 ¶ 19; see Texas Order ¶ 325. What MCI describes, then,

is exactly what the Commission requires.

       11
         Third Report and Order on Reconsideration in CC Docket No. 98-147, Fourth Report
and Order on Reconsideration in CC Docket No. 96-98, Third Further Notice of Proposed


                                                 17
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       For its part, AT&T “incorporates . . . by reference” its complaints in the Michigan

proceeding – to wit, that BearingPoint’s test of SBC’s UNE-P to line-splitting processes revealed

mistaken documentation, excessive manual handling of orders, and too many outages. AT&T

Comments at 11 n.4. Unsurprisingly, AT&T neglects to mention that BearingPoint found SBC’s

process for converting UNE-P to line splitting to be satisfactory. See Chapman/Cottrell Reply

Aff. ¶¶ 15-18, WC Docket No. 03-16 (FCC filed Mar. 4, 2003) (App. M, Tab 198). In fact,

BearingPoint’s detailed results for ordering and provisioning of unbundled xDSL loops and

unbundled switch ports – which are included in the BearingPoint report in both its ordering and

provisioning tests – rebut each of AT&T’s three claims. SBC has made this point previously,12

moreover, and, tellingly, AT&T offers nothing in response.

       B.        Nonrecurring Charges Associated with Line Splitting

       In addition to its claims regarding the BOC Applicants’ processes, AT&T complains that

the BOC Applicants’ nonrecurring charges (“NRCs”) for line splitting are not TELRIC-based.

See AT&T Comments at 46-47. According to AT&T, the BOC Applicants “cobbled” these rates

together from a “hodge-podge” of sources to form a set of “line splitting NRCs” that cover the

costs of services it does not in fact perform. See AT&T’s DeYoung/Henson/Willard Decl.

¶¶ 51, 58.

       AT&T’s complaint rests on a profound misunderstanding of the charges in question.

SBC Midwest does not provide a “line splitting” product to CLECs, and there is accordingly no


Rulemaking in CC Docket No. 98-147, Sixth Further Notice of Proposed Rulemaking in CC
Docket No. 96-98, Deployment of Wireline Services Offering Advanced Telecommunications
Capability, 16 FCC Rcd 2101 (2001) (“Line Sharing Reconsideration Order”).
       12
             See SBC Reply Comments at 39, WC Docket No. 03-16 (FCC filed Mar. 4, 2003).



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such thing as “line splitting NRCs.” See Chapman/Wardin/Butler/McKenzie/VanderSanden

Reply Aff. ¶ 4 (“NRC Reply Aff.”) (Reply App., Tab 6). As noted above, when a CLEC wishes

to engage in line splitting, it orders two UNEs: an xDSL-capable loop and a stand-alone switch

port, both of which SBC Midwest provisions to the CLEC’s collocation space. See id.; Chapman

Aff. ¶ 83. And the NRCs that SBC Midwest charges in that circumstance are the charges that

apply to these UNEs in the ordinary course. See NRC Reply Aff. ¶¶ 4, 19-21.

       Thus, for example, when a CLEC seeks to convert an end user from UNE-P to line

splitting, it submits an order requesting that SBC Midwest disconnect the combined voice-grade

loop and switch port (and related cross connect), connect an xDSL-capable loop to the facility

designated by the CLEC, and connect a switch port to the appropriate facility. Id. ¶¶ 23-26.

Accordingly, in this circumstance, SBC Midwest performs the work necessary for – and is

entitled to charge any NRCs associated with – disconnecting the UNE-P, pre-ordering and

ordering the unbundled loop and port, connecting the xDSL-capable loop, and connecting the

stand-alone switch port. Id. ¶¶ 23-26, 36. Likewise, when a CLEC seeks to convert an end user

from line sharing to line splitting with a change in splitter, it submits an order requesting that

SBC Midwest move the physical connections for both the loop and the port. Id. ¶¶ 27-29. And,

again, SBC Midwest performs those functions and is entitled to charge any NRCs associated

with them. Id.13




       13
            Where the CLEC seeks to convert an end user from line sharing to line splitting
without a change in splitter, the loop facilities and the TN of the port are re-used. See NRC
Reply Aff. ¶ 28. Because the CLEC in this scenario has not requested any physical change in
facilities, only service order charges typically apply. See id. ¶ 28 & n.21.



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        Much of AT&T’s confusion on this point appears to stem from its misunderstanding of

the Line Sharing Reconsideration Order. As it has done throughout the Michigan proceeding,

AT&T relies on that order to insist that line splitting is really just UNE-P. See AT&T Comments

at 45 & n.93; AT&T’s DeYoung/Henson/Willard Decl. ¶¶ 25-27. As a result, in AT&T’s view,

the NRCs associated with line splitting should be the same as those associated with UNE-P. See

AT&T Comments at 46-47; AT&T’s DeYoung/Henson/Willard Decl. ¶¶ 25-27, 63-65.

        Line splitting is not, however, UNE-P – either as a physical matter or under this

Commission’s precedent. As explained above, the Line Sharing Reconsideration Order makes

clear that the ILEC’s “obligation” with respect to transitioning a CLEC UNE-P customer to line

splitting is to permit the CLEC to “order an unbundled xDSL-capable loop terminated to a

collocated splitter and DSLAM equipment and unbundled switching combined with shared

transport, to replace its existing UNE-platform arrangement.” Line Sharing Reconsideration

Order ¶ 19 (emphasis added). Again, when a CLEC “order[s] an xDSL-capable loop,” along

with “unbundled switching with shared transport,” to its collocation space to “replace” its

UNE-P arrangement, SBC Midwest must perform a host of functions. A UNE-P, by contrast, is

designed to be entirely self-contained within SBC’s network and does not require the same

ordering, provisioning, and maintenance flows. See NRC Reply Aff. ¶ 21 n.18. Accordingly,

the fact that the NRCs associated with these two distinct scenarios vary significantly is consistent

both with Commission precedent and with the way in which the scenarios are provided to the

CLEC.

        AT&T also appears to be confused about whether the state commissions in the applicant

states have reviewed the NRCs in question and approved them in the line-splitting context. See



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AT&T Comments at 44 (“there have been no findings by any of the four state commissions that

the NRCs SBC seeks to impose in connection with line splitting are consistent with TELRIC”).

To be clear, although there is, as noted, no such thing as “line splitting NRCs,” the NRCs

associated with the UNEs CLECs use in a line-splitting arrangement have been approved as

TELRIC-compliant by each of the state commissions in the four applicant states. See NRC

Reply Aff. ¶¶ 35-48. In addition, each state commission has specifically addressed AT&T’s

claim that line splitting is a unique product that requires unique NRCs, and each state

commission has declined to impose such a requirement. See id. ¶¶ 39-48. AT&T’s attempt to

draw support from the state commissions for its unprecedented contention that unique “line

splitting NRCs” are a prerequisite to section 271 relief is thus plainly misguided.14

       C.      Converting Line Splitting to UNE-P

       As explained above, when a CLEC has established a line-splitting arrangement, SBC

Midwest provisions a stand-alone xDSL-capable loop and a stand-alone switch port to the

CLEC’s collocation space (or to that of its data CLEC partner). See Chapman Aff. ¶¶ 83-84; see

also Chapman Reply Aff. Attach. B at 1. SBC Midwest has had virtually no commercial demand

for reversing the process – i.e., for converting a line-splitting customer to UNE-P. See Chapman

       14
           AT&T also expresses confusion over the NRCs that apply to line splitting in the
various states, and it further challenges the application of certain discrete charges in Indiana and
Wisconsin. See AT&T Comments at 43-49; AT&T’s DeYoung/Henson/Willard Decl. ¶¶ 55-73.
As to the former issue, the constituent rates that apply to each component of a line splitting
arrangement are set forth in the requesting CLEC’s interconnection agreement or applicable state
tariff, and, to the extent a CLEC does not understand which charges would apply in a particular
scenario, SBC Midwest provides the relevant information on the website it maintains for CLECs.
See NRC Reply Aff. ¶ 36. As to the latter issue, the Reply Affidavit of Carol Chapman, Karl
Wardin, Jolynn Butler, Daniel McKenzie, and Scott VanderSanden (¶¶ 9-14 & Attachs. A, B)
clarifies the rates that Indiana Bell and Wisconsin Bell charge in the various scenarios and makes
clear that each of these is appropriately assessed.



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Reply Aff. ¶ 11. But, in any case, in the event a CLEC wishes to accomplish that result, it has

two options. First, it can perform the work of combining the unbundled loop with the stand-

alone switch port itself within its collocation space. See id. ¶¶ 12-17. Second, it can ask SBC

Midwest to do so. If the CLEC asks SBC Midwest to do the work, SBC Midwest’s Loop

Facility Assignment and Control System (“LFACS”) selects and assigns a voice-grade loop to

provision the UNE-P in the same manner that it would if it were selecting and assigning a loop to

SBC Midwest in a retail POTS arrangement.

       To AT&T, this process – and, in particular, the fact that it typically results in the

assignment of new loop for the UNE-P service, rather than re-using the xDSL-capable loop in

the line-splitting arrangement – is discriminatory. See AT&T Comments at 14-20; see also MCI

Comments at 2. In truth, the process works this way specifically because it is nondiscriminatory.

When Michigan Bell provisions a POTS loop to a customer previously served by a line-splitting

arrangement, LFACS selects and assigns the loop on the basis of certain specific engineering

design criteria for voice-grade loops. See Chapman Reply Aff. Attach. B at 2. An xDSL-

capable loop previously used in a line-splitting arrangement may or may not meet those criteria.

Id. Moreover, that loop is unlikely to be available for assignment at the time LFACS selects and

assigns the voice-grade loop.15




       15
           Because an xDSL-capable loop is a “designed” circuit, the physical disconnection of
that loop does not actually occur until five business days after the requested due date. See
Chapman Aff. ¶ 25. It is at the conclusion of that “five-day hold” that the loop becomes
available for assignment by LFACS. Id. Unless the CLEC requests a due date for the new UNE-
P five days after the due date for the disconnect of the xDSL-capable loop, that loop would
ordinarily not be available for assignment. Even then, however, LFACs would not necessarily
select that loop for the new UNE-P. See id.; Chapman Reply Aff. Attach. B at 2 n.7.



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       The nondiscrimination requirements of the 1996 Act and the Commission’s own rules

require Bell companies to treat CLECs in substantially the same manner as they treat their own

retail operations when provisioning UNE-P. See, e.g., California Order, App. C, ¶ 37. As a

result, when SBC Midwest provisions a UNE-P arrangement for an end user previously served in

a line-splitting arrangement, it uses the same provisioning processes as it does in the retail

context. See, e.g., Chapman Reply Aff. Attach. B at 2. Specifically, as in the retail context,

LFACS surveys the inventory of available loops and selects one that meets various design

criteria for voice-grade loops. And, as in the retail context, that process will likely result in the

assignment of a new loop, depending in part on whether the xDSL-capable loop is available for

assignment in LFACS and on whether it meets the relevant design criteria. See id.

       SBC’s processes thus ensure that, with respect to any particular customer, SBC and the

CLECs stand in the same shoes. AT&T’s response to this point, which it relegates to a footnote,

is to assert that, even so, SBC’s processes are discriminatory. See AT&T Comments at 15 n.12.

That is so because, according to AT&T, the relevant question is not whether SBC’s processes

treat SBC retail and the CLECs in substantially the same manner, but rather whether those

processes work the same across different types of customers. See id. That is to say, according to

AT&T, because line-sharing customers can typically drop their data service but retain the same

loop for voice service (whether that service is provided by SBC or a CLEC), line-splitting

customers must also be able to do so (again, whether the voice service is provided by SBC or a

CLEC). But AT&T can find no support for this novel view of “discrimination” in the

Commission’s orders, and SBC is aware of none. To the contrary, the Commission’s orders

uniformly stand for the principle that, to gauge whether a BOC’s processes are



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“nondiscriminatory” for purposes of section 271, one must compare the BOC’s wholesale

processes to analogous processes afforded the BOC’s retail arm. See California Order, App. C,

¶ 37 (“A BOC must provision competing carriers’ orders for . . . UNE-P services in substantially

the same . . . manner as it provisions orders for its own retail customers.”); Massachusetts Order

¶ 90 (examining whether Bell company applicant “provisions competing carriers’ orders for . . .

UNE-P services in substantially the same . . . manner as it provisions orders for its own retail

customers,” including an examination of “the procedures [the applicant] follows when

provisioning competitors’ orders”); Kansas/Oklahoma Order ¶ 154 (examining “the procedures

SWBT follows when provisioning competitors’ orders” and concluding that “SWBT provisions

competing carriers’ orders for . . . UNE-P services in substantially the same . . . manner as it

provisions orders for its own retail customers”). The process at issue here amply satisfies that

test, and it is presumably for that reason that AT&T is ultimately forced to argue that the

question of discrimination is “irrelevant.” See Ex Parte Letter of Richard E. Young on behalf of

AT&T to Marlene H. Dortch, FCC, at 6, WC Docket No. 03-138 (FCC filed Aug. 15, 2003). As

the Commission’s orders make clear, that question is dispositive, not “irrelevant.”

       The Commission need not, however, even resolve this issue here. As noted above, SBC

has received a negligible number of orders to convert line-splitting arrangements to UNE-P, and

AT&T’s concerns are accordingly almost entirely theoretical. The section 271 process is an

inappropriate forum in any event for working out complex, fact-intensive issues relating to BOC

provisioning processes; that is especially so where, as here, there is virtually no commercial

demand for the process at issue.16

       16
          This point is confirmed by the single example provided by AT&T of a Bell company
that forces re-use of the loop in the line splitting to UNE-P scenario: Verizon in New York. See


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       Two additional reasons make that result particularly appropriate here. First, as Carol

Chapman explains in her reply affidavit, SBC is presently working with MCI to develop a

process to force the re-use of the loop in the situation described above. See Chapman Reply Aff.

¶ 19. Although much work remains to be done, SBC is committed to working to develop a

process that meets the needs of the CLEC community and fully expects to be able to do so. Id.

Second, as noted above, a CLEC that is dissatisfied with SBC’s existing process can perform the

work of combining the unbundled loop with the stand-alone switch port itself within its

collocation space. See Chapman Aff. ¶¶ 82-89; Chapman Reply Aff. ¶¶ 12-17. Any CLEC

dissatisfied with SBC’s existing process can thus take matters into its own hands while working

with SBC to develop a long-term solution.17

       D.      E911

       AT&T challenges SBC’s policies and practices for maintaining and updating E911

database entries for CLEC line-splitting customers. See AT&T Comments at 12-13; 23-26. Its



AT&T Comments at 3. Verizon’s process is the result of a state commission proceeding
conducted when a CLEC – in that case, Covad – raised the issue in the ordinary course. The
parties, apparently unable to resolve the issue on a business-to-business basis, then litigated the
issue, and the state commission, consistent with its duties under the 1996 Act to resolve such
complex, fact-intensive issues, released an order setting forth the parties’ respective obligations.
AT&T could have taken a similar course in any of the applicant states, giving the parties ample
opportunity to address the issue either in business-to-business discussions or, if necessary, in
litigation before the relevant state commission. AT&T, however, appears to be more interested
in using this issue for leverage in the regulatory process than it is in reaching a solution.
       17
          AT&T objects that this scenario is “unrealistic.” AT&T Comments at 18-19. After all,
it would require AT&T to actually install its own equipment in its own collocation cage (Heaven
forefend!), or, worse yet, require it to use its own technicians to configure that equipment. See
id. SBC simply does not know what to make of these complaints, other than to note that,
sometimes, to be a telephone company, one actually has to be a telephone company. See
generally Chapman Aff. ¶¶ 82-89; Chapman Reply Aff. ¶¶ 13-18.



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complaint takes two forms: first, that SBC’s process for ensuring accurate E911 entries for new

line-splitting arrangement is unreliable, and, second, that SBC’s policies for allocating

responsibility for E911 updates in the applicant states – even if they meet with AT&T’s approval

today – might become objectionable at some point in the future. Both claims are taken

practically verbatim from AT&T’s comments in the Michigan proceeding, and, as in that case,

neither is remotely sufficient to rebut SBC’s showing of checklist compliance. See generally

Valentine Reply Aff. ¶¶ 2-14 & Attach. A (Reply App., Tab 11).

       As an initial matter, AT&T’s challenge to SBC’s administration of its E911 duties must

be viewed through the lens of SBC’s E911, Directory Assistance, and Operator Call Completion

services as a whole. See 47 U.S.C. § 271(c)(2)(B)(vii). As SBC demonstrated in the

Application, its processes in each of these respects is consistent with this Commission’s rules

and orders, and its performance with respect to this checklist item has been exemplary. See SBC

Br. at 108-12.

       AT&T does not dispute this broad showing. Instead, it contends that SBC Midwest fails

the checklist solely because its local service center (“LSC”) representatives are purportedly

required to exercise “judgment” in determining whether, when a CLEC orders a new line-

splitting arrangement, the E911 record associated with the switch port serving the customer does

not change. See AT&T Comments at 12-13. But, for one thing, AT&T does not contend that

this purported judgment-call has in fact resulted in any inaccuracies in the E911 database.18

       18
          As SBC Midwest has explained, it has identified and corrected approximately 50 E911
records that listed an SBC Midwest central office as the customer premises. See Cottrell/Lawson
Aff. ¶ 215. As SBC Midwest has further explained, it has corrected those records. See id. More
to the point for present purposes, those records were created before SBC Midwest put in place
the process described in the text, and therefore have no bearing on the adequacy of that process.
See Brown/Cottrell/Lawson Reply Aff. ¶ 119 (Reply App., Tab 3).


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And, in any event, the factual predicate of AT&T’s contention is simply wrong. The LSC

service representatives are not required to exercise “judgment” on the matter. For orders for

unbundled switch ports that flow through SBC’s systems with no need for manual handling,

SBC’s systems are programmed to populate the end user’s location as the service address,

regardless of what service the CLEC chooses to provide to the end user. See

Brown/Cottrell/Lawson Reply Aff. ¶ 118. And, contrary to AT&T’s assumption, where such

orders do require manual handling, SBC’s methods and procedures likewise require population

of the end user’s location as the service address. See id. ¶ 120.

       AT&T also challenges SBC’s policies for allocating responsibility for E911 updates for

customers served via UNE-P. See AT&T Comments at 13, 25. Here too, however, the precise

nature of AT&T’s allegation is worthy of note. AT&T does not challenge the policy that is in

fact in place in the applicant states, pursuant to which the BOC Applicants are responsible for

updating E911 records to account for generally applicable MSAG updates. Instead, it challenges

SBC’s position that, in California, under the specific language of the interconnection agreement

in effect between Pacific Bell and AT&T, AT&T is required to perform all E911 updates

(including MSAG updates) for its UNE-P customers. But SBC’s position in that pending dispute

is not remotely germane to the present proceeding. The position SBC is advocating in California

is driven by the precise terms of its interconnection agreement with AT&T. See Valentine Reply

Aff. ¶ 7 n.4 & Attach. A ¶ 29. AT&T does not, because it cannot, provide any evidence to

suggest that SBC has advocated a similar position in any of the applicant states. Moreover, SBC

has committed to continuing to perform all E911 updates for AT&T’s UNE-P customers pending

the resolution of the dispute. See id. ¶ 7 n.4. Similarly, the limited difference in process for



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California E911 database updates in a conversion from a UNE-P or line-shared arrangement to a

line-splitting arrangement is driven by system differences between Pacific Bell and SBC

Midwest. See id. ¶¶ 7-10. Accordingly, AT&T’s rhetoric aside, this Commission simply has no

reason, in this Application, to delve into this dispute.19

III.   DATA INTEGRITY

       As SBC explained in its opening brief (at 20-28), the performance-measurement system

throughout SBC’s Midwest region has been comprehensively reviewed and verified by E&Y,

using a methodology this Commission has endorsed previously. See Ehr/Fioretti Aff. ¶¶ 18-31.

E&Y’s audit of the BOC Applicants’ performance measures is now entirely complete, and it

confirms that SBC Midwest’s performance data are accurate and reliable. See id. ¶ 22 &

Attach. A.

       As they did in the Michigan proceeding, several CLECs dispute this conclusion. See,

e.g., AT&T Comments at 68-84; MCI Comments at 1 (incorporating by reference the

Declaration of Sherry Lichtenberg, WC Docket No. 03-138 (FCC filed July 2, 2003)); TDS

Metrocom Comments at 2-8; ACN et al. Comments at 11-15. The primary basis for these

challenges, however, is the simple fact that BearingPoint – which is also undertaking a review of

SBC Midwest’s performance measures – has not yet completed that review. But, in view of

E&Y’s completed audit – which, again, it conducted using a methodology this Commission has

       19
           AT&T and MCI additionally challenge SBC’s process for permitting separate CLECs,
on separate versions of SBC’s ordering interface, to submit related orders for a single line-
splitting arrangement. AT&T Comments at 21-22; MCI Comments at 5. The CLECs only
recently brought this issue to SBC’s attention, at which point SBC both instructed the CLECs
how to perform such joint ordering presently and agreed to a system modification that will, once
implemented, make such joint ordering easier. See Cottrell/Lawson Aff. ¶¶ 202-208;
Brown/Cottrell/Lawson Reply Aff. ¶¶ 38-41.



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approved previously – it plainly is not enough simply to identify the existence of another

performance measure review. Rather, the burden is on the parties opposing SBC’s Application

to establish that BearingPoint, in its ongoing review, is unearthing evidence that materially calls

into question E&Y’s audit or otherwise suggests that SBC’s performance data are not reliable.

In the absence of such evidence, the ongoing BearingPoint audit is relevant only insofar as it

provides additional assurance that the BOC Applicants will continue to track their wholesale

performance with measures that are accurate, reliable, and verifiable.

       It is clear, moreover, that the ongoing BearingPoint audit is not uncovering any evidence

that meaningfully rebuts the authoritative conclusion reached by E&Y. On the contrary, as SBC

has explained, at the time of the Application, with respect to BearingPoint’s ongoing PMR4 test

– which primarily addresses data processing – none of the BearingPoint “Open” exceptions or

“Not Satisfied” test findings in its interim status reports in any way compromised the results of

the E&Y audit. See Ehr/Fioretti Aff. ¶ 103. Moreover, none of these issues has any material

impact on the reported performance results on which the BOC Applicants rely in this

Application. See id. ¶¶ 104-113. Likewise, with respect to BearingPoint’s ongoing PMR5 test –

which is addressing SBC Midwest’s calculation of data and application of the business rules –

SBC explained that (i) BearingPoint’s “blind replication” test was materially “matching” SBC

Midwest’s results for key measures historically relied upon by the Commission at an extremely

high rate, id. ¶¶ 140-143 & Attach. E; and (ii) any issues BearingPoint had identified with

respect to the business rules involved either interpretive questions pending before the state

commissions or matters that had been resolved previously, see id. ¶¶ 145-156 & Attach. F.




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       As the Reply Affidavit of James Ehr and Salvatore Fioretti attests, those trends continue

to date. Specifically, on August 1, 2003, BearingPoint released its most recent interim report

(included as Ehr/Fioretti Reply Aff. Attach. A), which confirms the trends noted above.

Specifically, with respect to PMR4, that report identifies no new issues that would call into

question E&Y’s assessment of the SBC Midwest’s data processing. See Ehr/Fioretti Reply Aff.

¶¶ 43-45, 72-76 (Reply App., Tab 9); Ex Parte Letter from Colin S. Stretch on behalf of SBC to

Marlene Dortch, FCC, Attach. at 3 (FCC filed Aug. 19, 2003) (“SBC Aug. 19 Ex Parte”). With

respect to PMR5, BearingPoint’s “blind replication” test continues to match SBC Midwest’s

reported data for key measures at an extremely high level (for example, 95.8% on a four-state

basis, based on a 1% materiality threshold). See Ehr/Fioretti Reply Aff. ¶¶ 78-82; SBC Aug. 19

Ex Parte, Attach. at 4-6. And, although the August 1 report identifies certain new observations

and findings, SBC Midwest has confirmed that none of them materially affects the data upon

which the BOC Applicants rely in this Application. See Ehr/Fioretti Reply Aff. ¶¶ 87-117; SBC

Aug. 19 Ex Parte, Attach. at 6-8.

       In light of this evidence, the DOJ’s cryptic assertion that the Commission “should use

great care before dismissing, based solely on [E&Y’s] findings, problems identified by

BearingPoint or indicated by marketplace performance data” is difficult to fathom. DOJ Eval. at

19-20. SBC has never suggested that any BearingPoint finding be “dismissed” outright, based

solely on E&Y’s findings. Rather, it has demonstrated, in extraordinarily painstaking detail, that

each such finding either has been corrected or is immaterial. The DOJ identifies no instance in

which this detailed, laborious process has sought to “dismiss” any BearingPoint finding that

retains relevance today, and SBC is aware of none.



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       The opposing parties, moreover, have no answer to this analysis. To be sure, AT&T

asserts that BearingPoint has “[f]ound [n]umerous [e]rrors” that E&Y failed to uncover. AT&T

Comments at 74. But those so-called “errors” in every case involve issues that have already

been addressed and/or that have no material impact on the data on which the BOC Applicants

rely in this Application. See Ehr/Fioretti Reply Aff. ¶¶ 86-117. Thus, for example, AT&T

makes much of Observation 643, relating to the truncating of a time calculation in data captured

by PMs 6, 11, 11.2, and 95. See AT&T Comments at 77; AT&T’s Moore/Connolly Decl. ¶ 135.

But this observation was not material to begin with – since, even where the PM involved was

measured against a benchmark, the amount of time affected by this issue was minute – and it was

in any event resolved with November 2002 results. See Ehr/Fioretti Reply Aff. ¶ 89. Likewise,

AT&T points to Observation 687 – involving the exclusion of certain transactions from the

numerator but not the denominator of PM 10.4, see AT&T Comments at 77-78; AT&T’s

Moore/Connolly Decl. ¶ 136 – without acknowledging that SBC Midwest implemented

corrective action in August 2002 (and restated the results for July of that year). See Ehr/Fioretti

Reply Aff. ¶ 90. Indeed, time and again AT&T points to observations and exceptions that it

characterizes as significant, without acknowledging that, in virtually all cases, the issue is

immaterial and/or it has been corrected. See Ehr/Fioretti Reply Aff. ¶¶ 87-117. AT&T’s

scattershot allegations thus fall far short of rebutting the prima facie showing of data integrity

based on E&Y’s completed audit.

       Presumably recognizing that its evidence does not remotely call into question the results

of the E&Y audit, AT&T attempts to discredit the auditor itself. See AT&T Comments at 70-71

(raising concerns about E&Y’s “objectivity”). But AT&T does not, because it cannot, provide



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any evidence to support its reckless accusation that E&Y compromised its objectivity in

validating SBC Midwest’s performance data. As the ICC explained in response to a similar

claim,
         [T]he [contention] that E&Y is not objective or impartial [is] unsupported and
         unfounded. . . . E&Y designed its own procedures, but it was based on accepted
         attestation principles and its extensive experience in the field. . . . The CLECs had ample
         opportunity to review E&Y’s report and methodology and ask questions of E&Y
         personnel under oath, and they had access to E&Y’s working papers. . . . E&Y like
         BearingPoint fully and credibly provided answers to numerous written questions (as well
         as verbal follow-up questions) during the course of the workshops. Further, . . . E&Y had
         identified exceptions, and the inclusion of those exceptions in its report, together with all
         the other evidence confirms, to this Commission, that E&Y is objective.20

AT&T offers nothing to call this considered judgment into question. Its attack on E&Y should

accordingly be seen for what it is: an attempt to discredit the reviewer because it does not like the

results of the review.

         SBC Midwest’s showing of data integrity, moreover, rests on more than E&Y’s third-

party validation (persuasive though that is). In particular, SBC’s Application stressed the “open

and collaborative nature of metric workshops,” the supervision by the applicable state

commissions, SBC’s “readiness to engage in data reconciliations” between its own records and

those of the CLECs, and its internal and external data controls. Georgia/Louisiana Order ¶¶ 18-

19; see SBC Br. at 29-32. No party seriously contests any aspect of that showing. See

Ehr/Fioretti Reply Aff. ¶ 50. The Commission has previously placed substantial reliance on

evidence such as this to confirm the accuracy and reliability of Bell company applicants’

performance data. E.g., Georgia/Louisiana Order ¶¶ 18-19. It should do the same here.



         20
        Order on Investigation, Investigation Concerning Illinois Bell Telephone Company’s
Compliance with Section 271 of the Telecommunications Act of 1996, No. 01-0662, ¶ 2939
(ICC May 13, 2003) (“ICC Final Order”) (App. C-IL, Tab 135).



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       Indeed, it is precisely evidence such as this that caused the PSCW and PUCO – which did

not rely on the E&Y validation on which SBC Midwest primarily relies here – to nevertheless

conclude that SBC Midwest’s performance data were sufficiently reliable to demonstrate

compliance with the checklist. As the PSCW puts it, even without E&Y, the “quantum and

quality of evidence” that SBC Midwest provided to address data reliability permitted that

commission to “reasonably conclude” that Wisconsin Bell had met the requirements of section

271. PSCW Phase II Final Order at 18; see also PUCO Comments at 2-3 (noting that, “[t]hrough

the expenditure of immense resources, both public and private, SBC Ohio’s operations and track

record have been scrutinized to a demanding degree,” and that “the resulting record” permitted

the PUCO to conclude that “SBC Ohio’s network, for the purpose of satisfying the requirements

of the 1996 Act, is open to competitors on a non-discriminatory basis”); accord ICC Comments

at 16 (concluding that Illinois Bell’s data “accurately reflect[] [its] commercial activity,” based

on “BearingPoint findings compiled to date, and [Illinois Bell’s] commitment to continue testing

performance measures until they pass, taken in conjunction with the E&Y Audit results and other

assurances of reliability”).

       In short, the evidence SBC has amassed regarding data integrity – particularly when

considered in conjunction with the findings of the state commissions and the absolute failure of

any party to produce any evidence calling that showing into question – leads inexorably to the

conclusion that SBC Midwest’s performance data are stable, accurate, and reliable.

IV.    NONDISCRIMINATORY ACCESS TO OSS

       The Application provided overwhelming evidence that each BOC Applicant provides

competing carriers nondiscriminatory access to its OSS. See SBC Br. at 54-87. SBC Midwest’s



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regional OSS are handling unprecedented commercial volumes, and they are meeting or

exceeding nearly all of the benchmarks established by the state commissions. And those same

systems have passed – on five separate occasions (including Michigan) – an OSS test that the

ICC properly describes as, “[w]ithout doubt, . . . one of the most comprehensive OSS

Operational tests in the nation.” ICC Comments at 79. As explained below, and in detail in the

Brown/Cottrell/Lawson reply affidavit, although a few parties take issue with limited aspects of

this showing, none of these claims rebuts the BOC Applicants’ overwhelming showing of

checklist compliance.

       A.      Post to Bill Notifications

       The Application provided abundant evidence demonstrating that SBC Midwest provides

nondiscriminatory access to post to bill (“PTB”) notifications – i.e., notices that tell the CLEC

that an order has been updated to SBC Midwest’s billing systems. See Cottrell/Lawson Aff.

¶¶ 123-130. Although SBC Midwest has experienced certain isolated incidents involving

untimely PTB notifications in the past, those incidents have all been fully addressed, as SBC

Midwest has comprehensively documented in the pending Michigan application. See id.;

Brown/Cottrell/Lawson Reply Aff. ¶¶ 76-80. As the ICC explains, SBC Midwest “ha[s] taken

prompt and aggressive actions to identify the cause [of, among other issues, issues with PTB

notifications] and to fix them with minimal impact to the CLEC.” ICC Comments at 65.

       AT&T nevertheless continues to insist that SBC Midwest’s performance with respect to

PTBs inhibits its ability to compete. But, as an initial matter, AT&T’s claims are based on a

misunderstanding of SBC Midwest’s OSS. AT&T asserts that it cannot send any subsequent

orders on an end user’s account until it receives the PTB advising it that the service order has



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posted to SBC’s billing systems. See AT&T Comments at 64-66; AT&T’s DeYoung/Willard

Decl. ¶ 63. This is false. SBC’s systems treat the end-user account as effectively migrated to the

new local service provider once provisioning is complete and a service completion order

(“SOC”) notice has been sent to the CLEC, not when the order posts to the billing systems. See

Brown/Cottrell/Lawson Reply Aff. ¶ 91. And, in most cases, the customer service information

(“CSI”) for the end user will be updated in the ACIS database within 24 hours of delivery of the

SOC to reflect the CLEC as the “owner” of the account. See id. Once the CSI has been updated

in ACIS, SBC Midwest’s systems are programmed not to reject a CLEC change order even if the

billing system has not been updated. See id. ¶ 92.

       Moreover, even where the CSI is not yet updated, SBC’s systems are programmed to

determine if it might be soon – i.e., to perform a “pending order” check to see if a FOC has been

sent to the CLEC. See id. ¶ 93. If so, SBC’s systems and processes are designed to process the

CLEC’s subsequent change even if the CSI has not yet been updated in ACIS. See id. The

upshot is that the crux of AT&T’s allegation – that purported delays in receiving PTBs prevent it

from submitting change orders – is simply wrong. In most cases, AT&T can begin sending

change orders on UNE-P migrations once it receives a FOC from SBC Midwest. See id.

       AT&T also asserts that it relies on PTBs to determine when to start billing end users,

such that any delays in receiving those notices adversely affects it relationship with its end users.

See AT&T Comments at 65-66; AT&T’s DeYoung/Willard Decl. ¶ 62. But, while AT&T is free

to use any information it wants to determine when to bill its own customers, the fact of the

matter is that PTBs are not designed for that purpose. Rather, they are intended to indicate that

the SBC Midwest billing database has been updated based on a given LSR. See



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Brown/Cottrell/Lawson Reply Aff. ¶ 94. In fact, PTBs were not even available to AT&T until it

migrated to LSOR 5.03 in December 2002. See id. The notion that it therefore “needs” such

notices in order to bill its own customers is therefore implausible.

       In all events, apart from AT&T’s misunderstanding of the purpose and effect of PTBs,

the factual predicate for its argument – that SBC Midwest is slow in providing these notices, see

AT&T’s DeYoung/Tavares Decl. ¶ 20 – is incorrect. SBC Midwest has provided data to the

CLECs that show that SBC typically provides PTBs within five days of the service order (which

is precisely the standard that AT&T thinks should be adopted). See Brown/Cottrell/Lawson

Reply Aff. ¶ 88. What is more, AT&T’s allegation of “substantial competitive harm” stemming

from the allegedly untimely PTBs is vastly overblown. AT&T’s DeYoung/Willard Decl. ¶ 72.

As noted, the theory behind this alleged harm is that AT&T must wait to send a change order

until it receives a PTB, lest it receive a reject. The data, however, make clear that, from May

through July in the Midwest region, AT&T received such rejects on 0.03%, 0.05%, and 0.02%,

respectively, of its LSRs. See Brown/Cottrell/Lawson Reply Aff. ¶ 100. AT&T fails to explain

how numbers such as these – even assuming them to be the fault of SBC Midwest – can

plausibly be said to result in “substantial competitive harm.” See New Jersey Order ¶ 116

(declining to give weight to allegations of late billing completion notices, where the “absolute

number of orders affected” was “not . . . competitively significant”).

       B.      Ordering

       The DOJ notes that “[s]ome CLECs argue that they are often forced to rely on manual

processes” to order services and UNEs from SBC Midwest. DOJ Eval. at 15. In particular, the

Department notes that, when electronic orders are erroneously rejected, “CLECs must bypass



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SBC’s interfaces and submit affected orders manually by fax.” Id. And, based on “[t]he nature

and number of the software problems alleged,” the DOJ concludes that “SBC’s software testing

may be inadequate.” Id.

       SBC Midwest’s software testing is not, in fact, inadequate, and the CLECs’ self-serving

allegations are not to the contrary. Thus, for example, CIMCO, one of the CLECs on which the

DOJ relies, complains that it identified “various deficiencies” during its pre-testing phase prior to

the implementation of LSOG 5, and that SBC “chose to withhold any corrections” before

CIMCO went into production. CIMCO Comments at 2. LSOG was available in the test

environment as of January 7, 2003. Brown/Cottrell/Lawson Reply Aff. ¶ 32. CIMCO waited

until May to begin testing, however, and the issues it identified were simply too late to be

included by the time it was required to migrate. Even so, SBC Midwest addressed CIMCO’s

issues as soon as reasonably possible upon learning of its difficulties. See id. ¶ 36. Far from

demonstrating “inadequate” testing, this example demonstrates the lengths to which SBC

Midwest will go to work with the CLECs to resolve outstanding issues.21

       Nor is it the case that CLECs in the SBC Midwest are encountering unacceptably high

levels of rejects. Access One – another CLEC on which the DOJ relies in this context – alleges



       21
            Indeed, the only testing allegation that is remotely substantiated is provided by a party
(TDS Metrocom) on which the DOJ does not rely in this context. See Brown/Cottrell/Lawson
Reply Aff. ¶ 31 (explaining two isolated instances in which orders were improperly accepted in
the testing environment due to error by a single LSC service representative, and noting further
that SBC has reinforced with this service representative the importance of mirroring the
production environment when engaged in CLEC testing). That allegation, of course, is
insufficient on its face to demonstrate that SBC Midwest’s testing environment is insufficient.
See California Order ¶ 98 (“We also reject AT&T’s argument that, because AT&T was unable to
identify two types of problems during testing that arose later when it began submitting real
orders . . . , Pacific Bell’s test environment is flawed.”).



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that SBC Midwest has rejected 70% of “simple electronic orders” and suggests that SBC

Midwest is to blame. See Access One Comments at 3. Access One does indeed experience a

high rate of rejection – far higher than the corresponding average CLEC reject rate – but that is

due to its own difficulties filling out and submitting LSRs on simple orders. See

Brown/Cottrell/Lawson Reply Aff. ¶ 59 & Attach J. And, as the Commission has said

previously, variations in CLECs’ ability to successfully submit orders electronically says more

about variations in the CLECs themselves; it does not reflect any inadequacy in the BOC’s

systems. E.g., Georgia/Louisiana Order ¶ 145 (noting that “BellSouth’s ability to flow-through

orders at high rates is dependent, in part, on the ability of competing carriers” to submit orders

properly); see also Brown/Cottrell/Lawson Reply Aff. ¶¶ 121-127 (discussing CIMCO’s

difficulties ordering complex products correctly).

       C.      Line Loss Notifications

       In connection with the Michigan proceeding, a number of commenters raised allegations

regarding line-loss notifications (“LLNs”). Michigan Bell responded to those allegations

comprehensively, acknowledging that it had experienced some difficulties in the past but

demonstrating that it had fully addressed them. See Brown/Cottrell/Lawson Reply Aff. ¶ 146

(identifying testimony addressing LLN allegations). On the basis of that showing, the DOJ,

which initially raised concerns relating to LLN, ultimately concluded that SBC Midwest’s line

loss issues “appear to have been resolved.” Evaluation of the Department of Justice at 3-4, WC

Docket No. 03-138 (FCC filed July 16, 2003); see also, e.g., ICC Comments at 64 (“[Illinois

Bell’s] line loss notification procedures comply with section 271 requirements.”).




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       Undeterred, MCI broadly alleges that SBC Midwest is “again having problems both with

erroneous line loss notifications being sent and with its processes for alerting CLECs to its line

loss errors.” MCI’s Lichtenberg Decl. ¶ 17. To support this sweeping allegation, however, MCI

can identify only a single instance that was not fully addressed in the Michigan proceeding.

Specifically, MCI relies on an isolated incident that occurred on June 3, 2003, that resulted in

414 erroneous LLNs sent to MCI. See id. Three facts are important to keep in mind regarding

this issue. First, although the incident involved 414 erroneous LLNs, its actual impact on MCI

was far less, since 398 of those LLNs corresponded to lines that MCI did not serve. See

Brown/Cottrell/Lawson Reply Aff. ¶ 147 & Attach. L. Second, these erroneous LLNs were the

result of a single, isolated error by a single employee, and accordingly does not reflect a systemic

problem. See id. ¶ 148. Third, SBC Midwest reported the incident itself promptly upon

discovery, and it has taken remedial steps to limit the likelihood that manual error of the sort at

issue here will recur. See id. ¶¶ 150-152. All told, this incident hardly supports the proposition

that SBC fails to provide nondiscriminatory access to OSS. See Georgia/Louisiana Order ¶ 163

(declining to credit line-loss allegations where they did not suggest “systemic” problems and

were not of sufficient “scope and duration” to raise serious competitive concerns).22

       D.      Change Management

       SBC Midwest satisfies all aspects of this Commission’s test for an adequate change

management process (“CMP”). See Cottrell/Lawson Aff. ¶¶ 144-211. Indeed, the Commission

has already reviewed and approved this process repeatedly, in connection with SBC’s

       22
          SBC Midwest’s recent notification to AT&T regarding 29 incorrect LLNs during the
period from June 20 to August 15 likewise involves an isolated occurrence that SBC has taken
steps to ensure will not recur. See Brown/Cottrell/Lawson Reply Aff. ¶¶ 154-155.



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applications for interLATA relief in California, Arkansas, and Missouri. See id. ¶ 145. CLECs

nevertheless challenge this same CMP here on a number of grounds, none of which has merit.

       First, Choice One complains that SBC did not accept its proposed change request to

implement “unreject” functionality. See ACN et al. Comments at 24; see also Forte Comments

at 7-9. Specifically, under LSOG 4, where the CLEC received an erroneous electronic reject on

an electronically submitted order, the LSC could “unreject” the order upon notification by the

CLEC. See Brown/Cottrell/Lawson Reply Aff. ¶ 10 & n.24. Such “unreject” functionality is not

part of the Uniform & Enhanced Plan of Record, and it accordingly is not available in the

Midwest region with LSOG 5 and higher.

       Although Choice One seeks to paint SBC’s handling of this change as a failure of the

CMP, the exact opposite is true. In June of 2002, Choice One submitted its change request to

restore the “unreject” functionality for the Midwest, and to implement it for the first time for the

West and Southwest regions. See id. ¶ 12. As documented by the CMP history log for this

request, SBC did not “immediately dismiss” Choice One’s change request as Choice One

alleges, but rather gave it full consideration. See id. ¶¶ 12-15. Choice One’s change request was

actively discussed in CMP meetings in February, March, May, and June 2003. See id. ¶ 13.

Although the change request was finally denied – for reasons primarily relating to the costs and

difficulty of reprogramming the systems, and SBC’s determination that resources were better

devoted to clearing the defects giving rise to the rejects rather than expending resources on

reprogramming to allow processing despite the rejects – that decision was made only after full




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consideration and discussions with CLECs in CMP meetings.23 This episode thus demonstrates

SBC Midwest’s adherence to its CMP, not – as Choice One alleges – a flaw in it.

       Second, Choice One and MCI complain that the number of defects is increasing with

successive LSOG releases, and that the speed with which those defects are repaired has not

improved. ACN et al. Comments at 25; MCI Comments at 10. Choice One’s and MCI’s

complaint is based on a mischaracterization of the enhanced defect report (“EDR”). Both Choice

One and MCI argue that the number of defects listed on the EDR have increased, but neglect to

mention that, unlike the earlier version of the Defect Report – which only listed defects reported

by CLECs to OSS Support managers and/or the Mechanized Customer Production Support

Center (“MCPSC”) – the new EDR also lists both potentially CLEC-impacting defects identified

internally by SBC and defects reported by CLECs to the LSC and/or IS Call Center. See

Brown/Cottrell/Lawson Reply Aff. ¶ 17. Thus, the increased number of defects now being

reported by SBC Midwest reflects only an increase in the amount and types of defect information

being made available to the CLECs. See id. It does not reflect an increase in the actual number

of defects, or a decrease in the quality of SBC’s releases. See id.




       23
          Choice One (at 26-27) and Forte (at 7-9) complain that without the “unreject”
functionality, CLECs are required in some instances to fax orders to the LSC, and argue that they
should be permitted to send such orders via e-mail. See Brown/Cottrell/Lawson Reply Aff.
¶ 28. As an initial matter, this complaint is undermined by the fact that, with advances in fax
technology, CLECs may configure (or may have already configured) a fax server so that
electronic documents can be sent via fax from any CLEC employee’s desktop. See id. ¶ 29.
Moreover, the systems and processes utilized by the LSC to manage its manual processing
obligations were designed and built to accommodate faxed orders, not e-mail orders. The
modification of these systems and processes to accept, consolidate, deliver and track e-mail
transactions, in addition to faxed transactions, would require substantial system modifications,
training and management of LSC representatives. See id. ¶ 30.



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       In fact, the overall quality of SBC’s releases is improving, as demonstrated by the decline

in the number of defects opened after a release. See id. ¶ 18. For example, for the LSOG

version 5.0 release for the Midwest region in April 2002, there were 265 defects opened in the

first seven days following the release, as compared to 217 and 167 defects associated with the

release of versions 5.01 and 5.02, respectively, over the same period. See id. For the June 2003

LSOG version 6.0 release, there were only 169 defects in the first seven days following the

release. See id. This improvement demonstrates that SBC’s efforts to minimize defects continue

to be successful. SBC also addresses any defects that do arise in a timely manner, focusing on

those that have been identified as critical to a CLEC’s performance. See id. ¶¶ 19-20. For

example, since June 16, 2003, a total of 40 defects categorized as “Severity 1” have been

identified as critical issues for CLEC production, and as of August 5, 2003, all of those defects

were closed or cancelled. See id. ¶ 19. Moreover, through the CMP, SBC continues to provide

CLECs with timely notifications and information regarding defects and maintenance releases.

See id. ¶ 20.

       E.       Miscellaneous OSS Issues

       Pre-Order Interface Availability. Contrary to AT&T’s claims, outages on the CORBA

pre-ordering interface have not denied it a meaningful opportunity to compete. See AT&T’s

DeYoung/Willard Decl. ¶ 51. Indeed, SBC’s performance under PM 4 confirms that all three of

SBC’s pre-ordering interfaces  CORBA, EDI and Verigate  were available almost the entire

time they were scheduled to be available. See Brown/Cottrell/Lawson Reply Aff. ¶ 42; see also

id. ¶ 50.24 AT&T does not contest that SBC Midwest meets the relevant benchmarks under PM

       24
          Specifically with respect to CORBA, PM 4 results for the months of May through July
2003 reflect that CORBA was unavailable for only approximately 4.81 hours out of a total


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4, but argues instead that the Commission should rely on AT&T’s own, self-serving data to

measure SBC’s performance. See id. ¶ 43. Viewed in light of AT&T’s vociferous criticisms of

SBC Midwest’s data in this proceeding (and in Michigan), this contention is stunning. SBC’s

performance data measured under PM 4 are calculated according to business rules that have been

agreed upon after close collaboration with the CLECs, have been approved by the state

commissions, and are in the process of being tested by BearingPoint. AT&T’s data – what it

describes as “impacted user minutes” and “defects per million” – are derived from a

methodology that hasn’t been explained, using calculations that have not been reviewed, and

with raw data that have not been tested. See id. ¶¶ 43-44. Nor is it the case that this

Commission should simply take AT&T’s data at face value. As the evidence makes clear, for

example, AT&T has regularly submitted trouble tickets complaining of degraded service or

unavailability of pre-order interfaces, only for SBC to find (based on SBC’s investigation) that

the problem is on AT&T’s side of the interface. See id. ¶¶ 48-49. AT&T’s data, in short, are

facially unreliable. AT&T’s gambit is plainly no substitute for the performance data on which

SBC Midwest relies in its application.

       Notwithstanding the overall performance reflected in those data, SBC continues

constantly to monitor its systems to detect slow-downs and to quickly identify and address any




scheduled availability of 1,652 hours – for an average availability of 99.7% over the three-month
period in the Midwest region – well exceeding the 99.5% benchmark for this measure. In May,
there were 0.3 hours of unavailability, or an almost perfect total of 99.95% of the 564 scheduled
hours of availability. In June, there were 2.9 hours of unavailability, for an overall result of
99.44% availability – missing the benchmark by 0.06% and, in July, CORBA was available
99.72% of the scheduled hours. See Brown/Cottrell/Lawson Reply Aff. ¶ 42.



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potential issues.25 See id. ¶ 52. As a result, many issues are addressed before they become user-

affecting problems, and those that become problems are usually corrected quickly. See id.

Moreover, SBC continues to investigate ways to improve the availability and response of its

systems, and has made numerous enhancements to its infrastructure and monitoring capabilities.

For example, one significant upgrade in progress is a migration of its middleware operating

environment to new software which will enhance SBC’s failover capabilities and reduce single

points of failure, minimizing the effects of any hardware or system software problems in the

middleware environment, and further improving the stability of SBC’s interfaces. See id. ¶ 53.

       IP Addresses. AT&T claims that, by limiting AT&T to three IP addresses, SBC denies

AT&T the ability to establish a disaster recovery plan for its operations in the Midwest region.

See AT&T’s DeYoung/Willard Decl. ¶¶ 27-33. But SBC’s connection policies provide CLECs

with multiple connectivity options, including three Trading Partner ID and Internet Protocol (IP)

address combinations per function (ordering and pre-ordering), per environment (test and

production), and per region. See Brown/Cottrell/Lawson Reply Aff. ¶ 108. Moreover, SBC’s

policy in no way prohibits AT&T from establishing a disaster recovery plan for the Midwest

region – as evidenced by the fact that AT&T has established such plans in SBC’s West and

       25
          PM 4 is designed to measure, and does in fact measure, the impact of interruptions to
interface availability on the CLEC community. As set forth in the business rules, if the interface
is completely unavailable, 100% of the outage duration is counted against SBC. In the cases
where an interface is partially available, an “availability factor” – which is stated as a percentage,
and represents the impact of degraded service to the CLEC community as a whole – is applied to
the calculation of downtime. SBC’s Availability Team determines the availability factor on a
case-by-case basis. Under the business rules, any CLEC that disagrees that the PM 4 results
capture the impact of outages in a given month is free to raise that issue with the state
commission. To the knowledge of SBC’s PM staff who would be involved in such a complaint,
neither AT&T nor any other CLEC has raised such an issue with a state commission. See
Brown/Cottrell/Lawson Reply Aff. ¶ 42.



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Southwest Regions under the exact same limitation on IP addresses that applies in the Midwest

region. See id. ¶ 109. Given that this same policy applies to all CLECs operating in SBC’s 13-

state region, SBC’s policy limiting CLECs to three IP addresses is not discriminatory in any

sense. See id. ¶ 110.

       In sum, SBC Midwest’s OSS showing stands unrebutted. The third-party tests, the state

commission reviews, and the performance data all point in one direction. Against that mass of

evidence, CLECs’ scattershot allegations fail to call into question SBC Midwest’s showing of

checklist compliance.

V.     ADDITIONAL ISSUES

       Several additional issues that commenters have raised do not fit into the broader

categories discussed above. None of these issues is meritorious or calls into question the BOC

Applicants’ compliance with the requirements of section 271.

       A.      Pricing of Interconnection and UNEs

               1.       Collocation Power Pricing

       AT&T and NuVox allege that Ohio Bell’s and Indiana Bell’s rates for collocation power

are not cost-based. Like most SBC ILECs, Ohio Bell and Indiana Bell charge collocators for

power on the basis of the capacity ordered, not on the basis of the electrical energy or power

actually consumed. Thus, for example, if a CLEC were to order two 20-AMP power leads to its

collocation arrangement, Ohio Bell and Indiana Bell would charge the monthly recurring rate for

each lead at 20 AMPs per lead (for a total of 40 AMPs), even though the CLEC may ultimately

use less than the full amperage it ordered. See Alexander Reply Aff. ¶¶ 8-9 (Reply App., Tab 1).

According to AT&T and NuVox, that practice is not cost-based and TELRIC-compliant and



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therefore runs afoul of the statute and Commission rules. See AT&T Comments at 49-51;

NuVox Comments at 2.

       As an initial matter, however, the Commission need not address this issue in the context

of this section 271 application. Although the PUCO has expressly confirmed the validity and

lawfulness of Ohio Bell’s charging practices in this regard,26 these practices are nonetheless the

subject of a complaint proceeding now pending before the PUCO, and the same parties that raise

this issue here are parties to that proceeding. See Alexander Reply Aff. ¶ 3. Similarly, the IURC

is presently entertaining a dispute regarding this same issue. See id. As the Commission has

held twice before – in cases that also involved challenges to a 271 applicant’s collocation power

charges – the pendency of this matter before the state commission makes it unnecessary for the

Commission to resolve this issue in this context. See Pennsylvania Order ¶ 108 (“Although we

have an independent obligation to ensure compliance with the checklist, section 271 does not

compel us to preempt the orderly disposition of intercarrier disputes by the state commissions.”);

Massachusetts Order ¶¶ 200-203. In those cases, as here, “parties . . . presented no evidence that

[the BOC applicant] [wa]s not fully cooperating with the efforts of the [state commission] to

resolve these issues.” Pennsylvania Order ¶ 108. Accordingly, in those cases, as here, “these

disputes do not cause [the applicant] to fail” the checklist. Id.

       In any event, Ohio Bell’s and Indiana Bell’s collocation power charges – and, in

particular, their application of those charges to CLECs on the basis of the power capacity the

CLECs order – are fully consistent with this Commission’s rules. As explained in the Reply

       26
          See Report and Evaluation, Investigation Into SBC Ohio’s (formerly Ameritech Ohio)
Entry Into In-Region InterLATA Service Under Section 271 of the Telecommunications Act of
1996, Case No. 00-942-TP-COI, at 44 (June 26, 2003) (App. C-OH, Tab 129).



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Affidavit of Scott Alexander, central office equipment runs on “direct current,” or “DC,” power

(as opposed to the “alternating current,” or “AC,” that powers most households). See Alexander

Reply Aff. ¶ 7. To supply DC power, the ILEC must build, maintain, and manage central office

DC power plants. And, critically, the scale of that enterprise is driven by the aggregate power

demand of the parties that place equipment and facilities requiring such power in the central

office in question. So, for example, if AT&T orders two 20-AMP power leads to its collocation

cage, Ohio Bell must be able at any given time to deliver the full 40 AMPs of requested power,

and it accordingly must have the power plant – including the batteries, rectifiers, generators, and

other equipment – in place to deliver that volume. See id. ¶¶ 7-9.

       AT&T is thus demonstrably wrong to suggest that Ohio Bell incurs costs to supply power

to AT&T only when AT&T actually uses power. See AT&T Comments at 50-51; see generally

AT&T’s Noorani Decl. As noted above, Ohio Bell must construct, maintain, and manage the

overall power plant in order to supply AT&T and other collocated carriers with continuous DC

power at the level ordered. See Alexander Reply Aff. ¶¶ 7-10, 21-23. By foreclosing recovery

of the costs associated with this plant, AT&T’s proposal would leave Ohio Bell in the untenable

position of being contractually obligated to supply AT&T’s full demand of power at any given

time, yet precluded from recovering the costs of doing so. See id. ¶ 10.27 Indeed, the

Commission has specifically rejected the notion that power measurement is the most accurate

way to recover DC power plant costs in collocation arrangements. See id. ¶ 26 (citing Second

Report and Order, Local Exchange Carriers’ Rates, Terms, and Condition for Expanded

       27
         NuVox’s contention (at 10) that the “Power Delivery” rate captures these costs is
simply wrong. “Power Delivery” covers the costs of facilities that deliver power. See Alexander
Reply Aff. ¶ 21. The costs of the power itself must be recovered elsewhere. See id.



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Interconnection Through Physical Collocation for Special Access and Switched Transport, 12

FCC Rcd 18730 (1997)).

       AT&T is also wrong – or duplicitous – in claiming that, where a CLEC orders two power

leads, one is merely a backup from which the CLEC “generally do[es] not draw power.” AT&T

Comments at 50. This characterization – which is based on sworn testimony filed with AT&T’s

Comments, see id. at 50 & n.109 – is directly contrary to testimony (also sworn) that AT&T

sponsored in a Texas collocation rate proceeding. There, AT&T’s witness testified that

collocated equipment with, for example, a “40-amp load” would “typically” be fed “off of two

fuses,” such that, “if you needed 40 amps of power, you would only require to put 20 amps on

each side.” See Testimony of Steven Turner on behalf of AT&T, PUC Docket No. 21333, at 347

(Tex. PUC Sept. 27, 2000) (Attach. A to Alexander Reply Aff.); see also Alexander Reply Aff.

¶ 15.28 AT&T’s testimony here simply cannot be reconciled with its testimony there. This

inconsistency demonstrates (among other things) the wisdom of this Commission’s practice of

deferring complex, fact-based issues like the one at issue here to the state commissions that the

statute charges with addressing such issues in the first instance. Again, this precise issue is now

pending before the PUCO and the IURC, and those bodies are best positioned to draw the

appropriate inferences from AT&T’s opportunistic change in position.29

       28
          Indeed, as recently as last month, AT&T expressly confirmed that, in a typical CLEC
collocation arrangement, power is typically drawn over both leads. See Alexander Reply Aff.
¶¶ 16-17.
       29
          It is also worth noting that the power rates AT&T and NuVox primarily challenge here
– Ohio Bell’s $6.96 per AMP and Indiana Bell’s $6.09 per AMP – are extremely low when
compared to rates charged in other states. See Alexander Reply Aff. ¶ 23. Indeed, those rates
are barely half the rate charged by Wisconsin Bell ($12.07 per AMP). See id. Moreover,
AT&T, MCI, and several other CLECs recently stipulated that the Wisconsin rate is within the
range that a reasonable application of TELRIC would produce. See id. ¶¶ 3 n.3, 23.


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               2.      Illinois Loop Prices

       Alone among commenters, ACN contends that Illinois Bell’s UNE rates – and, in

particular, its loop rates – violate Checklist Item 2. ACN et al. Comments at 30-34. The basis

for this contention is not that the rates now in effect violate TELRIC. Indeed, those rates are

among the lowest – if not the absolute lowest – in the country, and CLECs generally have sought

to defend them in every imaginable forum. See Wardin Reply Aff. ¶ 45 (Reply App., Tab 13);

see also id. ¶ 56 n.43, 57-59. ACN’s claim instead is that Illinois Bell’s loop rates might

increase in the future, if and when the Seventh Circuit reverses a recent district court order that

enjoined recently enacted state legislation that, as applied by the ICC, would have increased

Illinois Bell’s loop rates. As we explain below, the hypothetical nature of this claim renders it

irrelevant to the matter at hand.

               a. Some background is necessary to understand the nature of ACN’s claim. As

explained in SBC’s opening brief (at 45-46 & n.65), the ICC set the bulk of SBC’s UNE rates in

its February 1998 ICC TELRIC Order.30 That order used two cost inputs of significance here.

First, it used a fill factor of approximately 80% for all loops. See Wardin Reply Aff. ¶ 46.

Second, it adopted depreciation schedules prescribed by this Commission for other regulatory

purposes. See id. Largely as a result of those decisions – which served to depress the TELRIC

costs set by the ICC well below Illinois Bell’s efficient forward-looking costs – the ICC set loop

rates that are among the lowest in the country. As the Reply Affidavit of W. Karl Wardin

       30
          Second Interim Order, Investigation into Forward Looking Cost Studies and Rates of
Ameritech Illinois for Interconnection, Network Elements, Transport and Termination of Traffic
and Illinois Bell Telephone Company, Proposed Rates, Terms and Conditions for Unbundled
Network Elements, Docket Nos. 96-0486/0569, Consol. (ICC Feb. 17, 1998) (“ICC TELRIC
Order”) (App. M, Tab 19).



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explains, under the existing rates established by the ICC, CLECs can lease a loop from SBC for

under $3 in downtown Chicago, for approximately $7 in the suburbs, and for $11.40 in rural

areas. See id. ¶ 45.

       Recognizing the investment-dampening effect that such rock-bottom rates were having in

the state – and responding to a chorus of appeals from business leaders and labor unions alike –

the Illinois General Assembly exercised its longstanding supervisory power over the ICC. See

id. ¶¶ 47-49. It did so, however, in a narrow, targeted fashion. Rather than setting rates itself,

the General Assembly directed the ICC to continue to perform that function, but to apply cost

standards that more accurately reflect the forward-looking costs of an efficient carrier.

Specifically, the General Assembly stated that “existing actual total usage” of loop facilities for

ILECs operating under price caps “is the most reasonable projection” of forward-looking usage,

and it accordingly directed the ICC to “employ current . . . actual total usage on a going forward

basis in establishing cost based rates.” 220 Ill. Comp. Stat. 5/13-408(a) (2003).31 With respect

to depreciation, the Legislature directed the ICC to use economic lives as reflected in Illinois

Bell’s books of accounts as reported under Securities and Exchange Commission (“SEC”)

regulations.

       The ICC then initiated a proceeding to revise Illinois Bell’s loop rates consistent with the

General Assembly’s direction. That proceeding involved discovery, filed testimony, and three

rounds of comments, and it concluded with the ICC’s issuance, on June 9, 2003, of an order


       31
           The General Assembly’s standard was plainly rational, given that Illinois Bell’s
existing fill levels – which Illinois Bell had developed after more than a decade of operating
under price-cap regulation specifically designed to encourage it to engineer its network in an
efficient manner – are forward-looking. See Wardin Reply Aff. ¶ 51.



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setting revised loop rates. See Wardin Reply Aff. ¶¶ 55-56. The revised loop rates are on

average $2 less than SBC had proposed, and they would result in a statewide average UNE-P

rate of approximately $19, substantially below the national average of approximately $22. See

id. ¶¶ 45, 56.

        A federal district court, however, acting at the request of AT&T, MCI, and other CLECs,

enjoined implementation of the statute and prevented the ICC’s newly prescribed rates from

taking effect. See Voices for Choices v. Illinois Bell Tel. Co., No. 03 C 3290, 2003 U.S. Dist.

LEXIS 9548 (N.D. Ill. June 9, 2003), appeals pending, Nos. 03-2735 & 03-2766 (7th Cir.). The

court’s reasoning was two-fold. First, on the theory that the 1996 Act grants “rate-making

authority with respect to [UNE] rates” exclusively to “state commissions, not . . . states

themselves,” the court concluded that the General Assembly’s attempt to participate in that

function “usurp[ed]” the role of the ICC. Id. at *16-*17. Second, the court concluded that the

legislation, by requiring the ICC to use actual fill factors and depreciation as reported to the SEC,

“effectively repealed” the FCC’s pricing rules, which in its view “clearly bar[] any such

emphasis on the incumbent’s actual practices.” Id. at *13, *20. The district court’s order is now

on appeal to the Seventh Circuit. See Wardin Reply Aff. ¶ 58.

                 b. The status quo, then, is that the loop rates in place in Illinois are those set by

the ICC in the ICC TELRIC Order. Accordingly, it is those rates on which Illinois Bell relies in

this Application. And, contrary to ACN’s apparent contention, it is those rates alone that this

Commission should review, without regard to the ongoing litigation over the Illinois legislation.

That is so for three reasons.




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       First, Commission precedent supports that result. In several applications, the

Commission has reviewed UNE rates that were pending on appeal at the time. See, e.g., New

Hampshire/Delaware Order ¶¶ 126-131; Pennsylvania Order ¶ 53 (citing MCI Telecomms. Corp.

v. Bell Atlantic-Pennsylvania, Inc., No. 97-CV-1857 (M.D. Pa. June 30, 2000), appeal (then)

pending, No. 00-2257 (3d Cir.); California Order ¶ 24 n.59 (citing AT&T Communications of

California, Inc. v. Pacific Bell Tel. Co., 228 F. Supp. 2d 1086 (N.D. Cal. 2002), appeals (then)

pending, Nos. 02-16751, et al. (9th Cir.)). The pendency of those appeals in each of those cases

rendered it possible that the rates in place at the time of the Application would be revised at some

point in the future, and that, as a result, the CLECs would ultimately be required to pay more

than they were in fact paying at the time of the Application. In particular, if the courts had ruled

that the challenged rates were unlawful, the state commissions would have been entitled to “undo

what [wa]s wrongfully done by virtue of [the prior] order.” United Gas Improvement Co. v.

Callery Props. Inc., 382 U.S. 223, 229 (1965); see Natural Gas Clearinghouse v. FERC, 965 F.2d

1066, 1073-74 (D.C. Cir. 1992) (per curiam) (the “general principle of agency authority to

implement judicial reversals” includes “retroactive rate adjustments when [the agency’s] earlier

order reversed on appeal improperly disallowed a higher rate”). Yet in none of these cases did

the Commission consider the pendency of the appeal as relevant to the question of whether the

rates in question satisfied Checklist Item 2. Instead, the Commission simply applied its ordinary

analysis and concluded that the rates relied upon in the Application were consistent with the

checklist. See, e.g., New Hampshire/Delaware Order ¶¶ 130-131 (“[A]lthough there may be

some degree of uncertainty concerning the ultimate outcome of the pending appeal, such

uncertainty does not warrant denial of Verizon’s New Hampshire section 271 application. Until



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that appeal is resolved, competitive LECs have the relative certainty of the collocation power

rates established by the New Hampshire Commission.”).

        Those cases are directly on point here. Although the pending litigation in the Seventh

Circuit does not involve a direct challenge to the rates at issue in the Application, its potential

result – a change in the effective rate of a UNE during the time the Commission considers the

Application – is the same. Indeed, here, there is at least arguably less uncertainty than was at

issue in those cases, for the range of possible results is narrow – either Illinois Bell will lose its

appeal (in which case the rates in place today will remain in effect and the CLECs will have no

retrospective obligation) or it will win it (in which case the loop rate will be as ordered by the

ICC on June 9, 2003, and CLECs will be required to make Illinois Bell whole back to that date).

In the cases noted above, by contrast, the range of possible results was at least arguably less

confined, creating more uncertainty regarding the CLECs’ ultimate obligation. Yet the

Commission did not let that uncertainty distract it from the question at issue in those cases:

whether the rates on which the BOC applicant relied satisfied Checklist Item 2. The

Commission should keep that same focus here.

        Second, any other result would impermissibly intrude on the Seventh Circuit’s

consideration of the appeal from the Voices for Choices district court order. If the Commission

were to opine on the lawfulness of the June 9 rates set by the ICC, it would necessarily have to

consider whether the underlying standards – in particular, those for fill factors and depreciation

rates – are consistent with TELRIC. See, e.g., Massachusetts Order ¶¶ 38-39. The Seventh

Circuit, however, is presently considering that very question. As noted above, the district court

enjoined the legislation in part because it determined that the use of an actual fill factor and



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depreciation schedules as reported to the SEC are prohibited by the FCC’s rules. One of the

critical questions before the Seventh Circuit, then, is whether the ICC may use Illinois Bell’s

actual fill factor and depreciation as reported to the SEC in setting UNE rates. A Commission

evaluation of the June 9 rates set by the ICC would almost certainly cover the same ground.

        It is well established that, in such circumstances, the Commission should avoid

interference with litigation pending in federal court. As the Supreme Court has explained, where

“primary jurisdiction” to resolve a particular question is in the courts, a federal agency should

not act to “frustrat[e]” the exercise of that jurisdiction. California v. Federal Power Comm’n,

369 U.S. 482, 490 (1962); cf. Marine Shale Processors, Inc. v. EPA, 81 F.3d 1371, 1377 (5th Cir.

1996) (cautioning against agency action that would necessarily resolve issues pending in a

district court action). Commission review of the June 9 rates ordered by the ICC would self-

evidently interfere with the Seventh Circuit’s resolution of the case before it, and the

Commission is accordingly duty-bound to avoid such interference if at all possible.

        And such avoidance is clearly possible. As the Commission has explained time and

again, “federal courts must be presumed to apply the law correctly,” and the Commission

therefore has no obligation to inject itself into pending federal court proceedings merely by

virtue of its obligation to examine checklist compliance. Texas Order ¶ 237. In this case, that

principle means that the Commission should restrict its review to the rates now in effect, and

leave it to the Seventh Circuit to determine whether the June 9 rates established by the ICC ever

take effect.

        Third, notwithstanding the fact that the ICC’s June 9 rates are consistent with the 1996

Act and this Commission’s rules and precedent, Illinois Bell is willing to reduce any alleged



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uncertainty associated with the pending litigation in the Seventh Circuit. Specifically, in the

event that (a) the Commission approves Illinois Bell’s Application and (b) the Seventh Circuit

lifts the injunction presently preventing the ICC’s June 9 rates from taking effect, Illinois Bell

voluntarily commits to true-up its loop rates to a level that is no greater than the loop rates that

would pass a “benchmark” comparison to the Texas loop rates that this Commission reviewed

and approved in the Texas Order and that are presently in effect in that state, for the period from

June 9, 2003, through the date this Commission approves Illinois Bell’s Application. This step –

which the Commission can and should consider in connection with its review of this checklist

item32 – clarifies that the rates currently before the Commission will not be retroactively replaced

by rates that, while consistent with TELRIC, nevertheless have not been reviewed and approved

by this Commission in a section 271 proceeding. It accordingly provides the Commission

additional reason, if any were necessary, to address only the rates in effect in Illinois today. See,

e.g., California Order ¶ 42; Minnesota Order ¶ 49.

       In sum, the Commission’s intervention at this point is simply not necessary to ensure that

the rates the CLECs pay for loops in Illinois comply with the Commission’s pricing rules. 33



       32
          Illinois Bell’s commitment is directly responsive “to criticism in the record” regarding
the pendency of the Seventh Circuit litigation, and it is made at a time in the proceeding that
ensures that all “interested parties have . . . an opportunity to evaluate” and comment upon it to
the extent necessary. California Order ¶¶ 29-30. By providing additional certainty regarding
Illinois Bell’s rates, moreover, this step consititutes “positive action that will foster the
development of local competition.” Id. ¶ 30. Under well-established precedent, consideration of
this commitment is appropriate here. See, e.g., id. ¶¶ 26-31; Rhode Island Order ¶¶ 7-17; New
Hampshire/Delaware Order ¶¶ 11-16; Virginia Order ¶¶ 78-85.
       33
            In the unlikely event the Commission elects to review the June 9 loop rates established
by the ICC, it must conclude that they are consistent with the Commission’s rules. In particular,
the fill factor utilized in those rates falls comfortably within the range used in rates this
Commission has approved previously. See Wardin Reply Aff. ¶ 53. Likewise, the Commission


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               3.      Nonrecurring EEL Charges

       Globalcom challenges Illinois Bell’s NRCs for one specific type of network element

combination: a non-collocated DS1 enhanced extended loop (“EEL”). See Globalcom

Comments at 4-17.34 Specifically, Globalcom asserts that those NRCs are substantially higher

than corresponding rates in other states, and that Illinois Bell accordingly fails to satisfy

Checklist Item 2. See id. at 6-9.35

       From the outset, Globalcom’s contention faces a steep uphill battle. The NRCs in

question were established by the ICC in dockets to which Globalcom was a party. See Wardin

Reply Aff. ¶¶ 13-17. Yet Globalcom never once challenged those rates, either on the grounds it

presses here or any other. See id. ¶ 15. Moreover, in its section 271 review, the ICC engaged in

a searching review of those previously established rates, and Globalcom again declined to object.

See id. ¶ 18. This Commission has made clear that, “[w]hen a party raises a challenge related to

a pricing issue for the first time in the Commission’s section 271 proceedings without showing

why it was not possible to raise it before the state commission,” the Commission “may exercise

[its] discretion to give this challenge little weight.” California Order ¶ 19. Globalcom has not



has specifically held that the use of depreciation schedules “use[d] for financial accounting
purposes” is consistent with TELRIC. See Kansas/Oklahoma Order ¶ 76.
       34
         Globalcom also challenges the NRCs for this UNE combination in Wisconsin. That
challenge is refuted in the Reply Affidavit of Scott T. VanderSanden (Reply App., Tab 12).
       35
           Globalcom half-heartedly asserts that Illinois Bell’s NRCs for a noncollocated DS1
EEL amount to a violation of the public interest. Globalcom Comments at 17. But Globalcom
does not attempt to satisfy this Commission’s demanding standards for making such a claim.
See, e.g., Vermont Order ¶¶ 68-69. The claim should thus be rejected out-of-hand. See
BellSouth Five-State Order ¶ 290 (summarily rejecting MCI’s claim that UNE rates violated the
public interest where MCI did not attempt to satisfy the standards set out in the Vermont Order).



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even attempted to explain why it was not possible to raise its concerns before the ICC, and, in

light of its participation in the dockets in which the rates in question were set and reviewed, see

Wardin Reply Aff. ¶¶ 13-17, it presumably cannot do so. This is accordingly a paradigm

instance in which the Commission should exercise its “discretion to give th[e] challenge little

weight.” California Order ¶ 19; see Vermont Order ¶ 20 (“it is both impracticable and

inappropriate for [this Commission] to make many of the fact-specific findings the parties seek

in this section 271 review, when many of the [state commission’s] fact-specific findings have not

been challenged below”).

       Even if the Commission credits Globalcom’s newly raised challenge, moreover, it must

under well-established precedent reject it if Illinois Bell “provides a reasonable explanation

concerning the issue.” California Order ¶ 19. The Reply Affidavit of W. Karl Wardin provides

such a “reasonable explanation.” Specifically, the NRCs at issue are simply the sum of the

charges that apply to the constituent elements of the combination in question. See Wardin Reply

Aff. ¶¶ 4, 13-14, 35, 38. The ICC set those rates on the basis of TELRIC principles in

proceedings in which all parties had an opportunity to participate, and, since then, no party has

ever disputed them. See id. ¶¶ 5-7. Moreover, the ICC reviewed those rates in connection with

its section 271 review and it expressly concluded that they were reasonable. Id. ¶ 18; see ICC

Final Order ¶¶ 847-848, 887. In view of the ICC’s repeated endorsement of the rates in question

and the absence of any challenges – by any party – to them, Illinois Bell’s “explanation” for

relying on them in this Application is plainly “reasonable.”

       Globalcom nevertheless asserts that the NRCs at issue are unlawful because they are

higher than rates in other states. See Globalcom Comments at 6-9. But this Commission has



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consistently recognized that “mere evidence that [a state’s rate] . . . is higher than the

comparable . . . rate [in another state] does not demonstrate that the [state commission]

committed any clear error when it adopted the rate.” Vermont Order ¶ 37; see New Jersey Order

¶ 59. And, contrary to Globalcom’s assertion (at 6-9), the Commission’s “benchmark” analysis

is not to the contrary. That analysis is relevant only where a party has identified a potential

TELRIC error in the rate that the Commission elects not to resolve, see, e.g., Virginia Order ¶

89, or where the Bell company does not defend the TELRIC-based nature of the rate in question,

see, e.g., Arkansas/Missouri Order ¶¶ 67-68. Neither circumstance is present here. The

operative principle here is thus the Commission’s steadfast refusal to “apply [the] benchmark

analysis to reject UNE rates arrived at through a proceeding that correctly applied TELRIC

principles.” Vermont Order ¶ 26.

       In addition to being legally irrelevant, moreover, Globalcom’s contention that Illinois

Bell’s EEL rates are out-of-line with those in other states is wrong. For one thing, Globalcom’s

calculation of what CLECs pay in other states is in many respects incorrect. See Wardin Reply

Aff. ¶¶ 32-33. More significantly, as the ICC expressly found, when the NRCs at issue are

considered in conjunction with the recurring rates that apply to the same UNE combination,

Illinois Bell’s rates are comparable to rates charged in other states, including states with section

271 approval. See Wardin Reply Aff. ¶¶ 20-22; ICC Final Order ¶¶ 847-848. Indeed,

Globalcom emphasizes the EEL rates charged by Pacific Bell in California, and even goes so far

as to suggest that the Commission mandate that Illinois Bell adopt those rates in Illinois. See

Globalcom Comments at 25-26. But, as the Reply Affidavit of W. Karl Wardin explains, when

one considers both recurring and nonrecurring rates over a 24-month period, a CLEC would



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actually pay less for the EEL in question in Illinois than it would in California. See Wardin

Reply Aff. ¶ 21.

       Globalcom disparages this mode of analysis – and, in particular, the consideration of

recurring and nonrecurring rates together – as “specious” and “farcical.” Globalcom Comments

at 10. But, adjectives aside, it offers nothing to call the analysis into question. Again, Illinois

Bell’s burden here is, at most, to provide a “reasonable explanation” in defense of the NRCs at

issue. At bottom, Globalcom’s challenge is based on the factual assertion that Illinois Bell’s

NRCs for a particular type of EEL prevent Globalcom from competing in the local market in

Illinois. In assessing the validity of that challenge, it is self-evidently “reasonable” to consider

what Globalcom would actually pay in total for that type of EEL over a relevant period of time.

       Commission precedent confirms as much. Although the Commission has never

addressed the precise question at issue here, it has made clear in related circumstances that, when

considering how specific Bell company rates in an applicant state compare to rates in other

states, the relevant question is the aggregate price paid by the CLEC. Specifically, in

determining whether Bell company rates satisfy the “benchmark” analysis, the Commission

consistently aggregates the rates of “non-loop” elements – i.e., the switch port, end-office switch

usage, common transport, and signaling – and compares those rates as a whole to the rates

charged in the benchmarked state. See, e.g., Virginia Order ¶ 100. That approach, the

Commission has reasoned, “reflects the practicalities of how UNEs are purchased and used.” Id.

¶ 110. “Because transport and switching UNEs are . . . not purchased separately,” it would




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“‘promote form over substance’” to review them on a disaggregated basis.” Id. (quoting Sprint

Communications Co. v. FCC, 274 F.3d 549, 561 (D.C. Cir. 2001)).36

       So too here. CLECs do not order the installation of a DS1 EEL for its own sake. Rather,

they order that installation for the purpose of serving a particular customer, usually for a

particular minimum period of time. See Triennial Review Order37 ¶ 421 (customers served by

DS1 loops “are more willing to enter long-term contracts, allowing competitive LECs a greater

ability to recover the nonrecurring costs associated with providing service”). It would thus

“promote form over substance” to consider the NRCs of that EEL in isolation, without

considering the recurring rate as well. And, because Illinois Bell’s recurring and nonrecurring

rates for a new DS1 EEL together fall comfortably within the range that a CLEC would pay

elsewhere, those rates must be considered reasonable.

       That is especially so, moreover, in light of the fact that the challenged NRCs are interim.

The ICC has specifically identified the NRCs that Globalcom places at issue as subject to

reexamination, and, contrary to Globalcom’s contention (at 14-17), Illinois Bell expects that

reexamination to proceed irrespective of the outcome of the litigation (discussed above) relating

to the Illinois General Assembly’s authority to set standards for loop rate inputs. See Wardin



       36
          Similarly, in approving SWBT’s nonrecurring charges for UNE-P in Kansas, the
Commission noted evidence demonstrating that, when “amortized over the period of time that a
competitive LEC would likely have a continuing business relationship with an end user,” the
nonrecurring costs in question yielded “total monthly costs” – i.e., recurring plus nonrecurring –
“less than for a competitive LEC operating in a comparable-sized exchange in Texas.”
Kansas/Oklahoma Order ¶ 61 n.171.
       37
        Report and Order and Order on Remand and Further Notice of Proposed Rulemaking,
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, CC
Docket Nos. 01-338, et al., FCC 03-36 (rel. Aug. 21, 2003) (“Triennial Review Order”).



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Reply Aff. ¶ 23, 25-26. Interim rates, the Commission has explained, “are a sufficient basis for

granting a section 271 application” where the rates are “reasonable under the circumstances,

where the state commission has demonstrated its commitment to [the Commission’s] pricing

rules, and provision is made for refunds or true-ups once permanent rates” are established. E.g.,

Texas Order ¶ 241. Each of these requirements is satisfied here. As explained above, the NRCs

at issue are reasonable under the “circumstances” – which, again, include the failure of any party

to object to them before the ICC. E.g., Wardin Reply Aff. ¶ 18. As demonstrated throughout

this Application, the ICC has demonstrated its commitment to the Commission’s pricing rules.

And, as noted in the Reply Affidavit of W. Karl Wardin (¶ 19), the interim rates at issue are

subject to true-up.

       The adequacy of these interim rates is in no way undermined by Illinois Bell’s filing of

cost studies that, in some respects, propose costs lower than the rates Illinois Bell is charging

today. See Globalcom Comments at 12-13. For one thing, those same cost studies in many

related respects show costs that are higher than what Illinois Bell is charging today. See Wardin

Reply Aff. ¶ 29. Thus, if the cost studies alone are to be dispositive, then it must be the case that

Illinois Bell’s rates are in many respects too low. And, in any case, as the D.C. Circuit has

explained, far from being dispositive, those cost studies are irrelevant:

       [A] state’s TELRIC rates could not always reflect the most recently available
       information, since rate determinations consume substantial periods of time and cannot be
       constantly undertaken. Indeed, a process of Penelope-like unraveling and reinvention
       would, like hers, prove endless. And in upholding TELRIC, the Supreme Court
       affirmatively invoked the likelihood of a regulatory lag, saying that such a lag would
       prevent TELRIC prices from dropping so low as to unduly tempt CLECs to rely on
       ILEC-supplied UNEs rather than build their own facilities.




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WorldCom, Inc. v. FCC, 308 F.3d 1, 8 (D.C. Cir. 2002) (citation omitted). Thus, under binding

precedent, Illinois Bell’s proposed costs in no way undermine the reasonableness of its ICC-

approved NRCs for new DS1 EELs.

       Finally, in an effort to resolve this issue on a business-to-business basis, Illinois Bell has

offered to charge Globalcom, on an interim basis and subject to true up, the nonrecurring rates

for the EEL in question in accordance with the proposed rates that, as Globalcom itself

emphasizes, Illinois Bell filed with the ICC. See Wardin Reply Aff. ¶¶ 40-41. Here too, then,

Illinois Bell has responded to criticism in the record in a manner intended to address the needs of

its wholesale customers and to facilitate competition. See supra pp. 54-55 & n.32. This step

underscores the reasonableness of Illinois Bell’s nonrecurring EEL charges and further supports

a finding that those charges comply with Checklist Item 2 and Commission precedent.

               4.     Additional Pricing Claims

       The few additional pricing-related issues raised in this proceeding are likewise

insufficient to rebut the BOC Applicants’ showing of checklist compliance.

       First, Z-Tel broadly contends that SBC is “discriminating” among CLECs by charging

different rates to different CLECs. Z-Tel Comments at 4-6; see also DOJ Eval. at 17. But Z-Tel

can point to no portion of the statute or Commission precedent suggesting that SBC must

necessarily charge every CLEC the lowest rate for every element, regardless of the language in

the CLECs’ interconnection agreements. In the absence of such a showing, Z-Tel’s allegations

fail to rebut the BOC Applicants’ showing of compliance on any checklist item. See, e.g.,

California Order, App. C, ¶ 4 (“disputes over an incumbent LEC’s precise obligations . . . that

FCC rules have not addressed and that do not involve per se violations of self-executing



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requirements of the Act” are not germane to the Commission’s section 271 review);

Maryland/D.C./West Virginia Order ¶ 22 (“the Act authorizes the state commissions to resolve

specific carrier-to-carrier disputes arising under the local competition provisions”); see also

Alexander Reply Aff. ¶¶ 46-48.38

       Second, and relatedly, the IURC conditions its support of Indiana Bell’s application on

this Commission’s conclusion that Indiana Bell’s challenge to a state tariffing requirement does

not call into question Indiana Bell’s “‘concrete and specific legal obligation’” to offer

interconnection and UNEs at IURC-approved rates. See IURC Comments at 3-4 (quoting

Michigan Order ¶ 110).

       The challenge to which the IURC refers is Indiana Bell’s federal court appeal of the

IURC order mandating that Indiana Bell tariff all UNEs and interconnection terms, apparently so

that CLECs may purchase them off-the-shelf, rather than through an interconnection agreement.

See Butler Aff. ¶ 61 & n.39 (citing Cause No. 40611, Indiana Bell Tel. Co. v. IURC, Case IP01-

0219-C-Y/S (S.D. Ind. filed Feb. 16, 2001)). Significantly, Indiana Bell’s challenge is intended

to preserve the viability of the “concrete and specific legal obligations” contained in the

interconnection agreements it negotiates and arbitrates under the 1996 Act. As the Seventh

Circuit recently explained, a tariff requirement of the sort in place in Indiana “interfere[s] with

the procedures established by the federal act.” Wisconsin Bell, Inc. v. Bie, Nos. 02-3854 & 02-

       38
           Z-Tel also contends that SBC Midwest fails to adhere to the modification procedures in
its interconnection agreements, by insisting on “impermissible” language in exchange for
lowering the rates in Z-Tel’s agreements. See Z-Tel Comments at 8. This claim appears to be
moot, as Z-Tel and SBC Midwest appear to have resolved – at least in principle – the dispute that
gave rise to it. See Alexander Reply Aff. ¶ 40. In any event, this claim is premised on an
inaccurate and incomplete characterization of the business-to-business negotiations between
SBC and Z-Tel. See id. ¶¶ 49-51.



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3897, 2003 WL 21911195, at *3 (7th Cir. Aug. 12, 2003). Accordingly, even if Indiana Bell is

successful in that appeal, it will remain bound by its interconnection agreements themselves,

which furnish the requisite “concrete and specific legal obligations” to offer UNEs and

interconnection at IURC-approved rates on which Indiana Bell relies in this Application. See

Alexander IN Aff. ¶ 7.

       Finally, ACN objects to the interim status of Illinois Bell’s rates for dark fiber, subloops,

and the CNAM database. ACN et al. Comments at 35. Interestingly, ACN cites comments

provided by ICC staff in the Illinois state proceeding to support its challenge. See id. It was on

the basis of these comments (and others like them) that the ICC required Illinois Bell to lower its

CNAM database query rate, as well as certain recurring and nonrecurring subloop rates. See

Wardin Reply Aff. ¶¶ 67-70; Wardin Aff. ¶ 11d, f. With these adjustments, the ICC has

expressly found that these interim rates – as well as the interim rate for dark fiber – are

reasonable. See Wardin Aff. ¶ 18 & n.25 (citing ICC Final Order ¶¶ 887-889). ACN provides

no reason for this Commission to reach a contrary conclusion. Moreover, each of these rates is

subject to true-up to the resolution of now-pending rate investigations. See id. ¶ 18. The interim

nature of these rates accordingly provides no basis on which to question Illinois Bell’s checklist

compliance. See, e.g., Texas Order ¶¶ 88-90.

       B.      Loop Provisioning

       A few commenters allege that SBC’s loop provisioning processes result in so-called

“unproductive truck rolls.” Specifically, these parties contend that, in some instances, even

though the CLEC has received a SOC indicating that a new line has been provisioned, the

CLEC’s inside wire vendor arrives at the customer premises to find that the line is not in fact



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ready. As a result, these parties contend that the CLEC must submit a trouble report to SBC’s

Local Operations Center to prompt completion of work that should have been done already, and

that it must then re-dispatch its own technician to complete the inside wire work. See AT&T

Comments at 58; Access One Comments at 6-7; Forte Comments at 3-5.

       On occasion, the scenario these commenters describe does happen. When a CLEC orders

a non-migration “cut through” UNE-P – i.e., a new service arrangement to a customer premise

that is already connected to a central office main distribution frame – SBC Midwest attempts to

provision the order without dispatching a technician to the field. See Muhs Reply Aff. ¶ 5

(Reply App., Tab 10). Instead, SBC Midwest typically runs a line test (known as a Program

Scan Test, or “PST”) and, if the test is successful, completes the order and sends a SOC to the

CLEC. Id. ¶¶ 5-6. If the test is unsuccessful, SBC attempts to ascertain the cause and correct it,

at which point it re-runs the test and, if successful, completes the order. Id. ¶ 6.

       As with all complex processes, there are times when this process works imperfectly.

Sometimes, for example, the PST reports a false positive – i.e., it appears that the line is

working, but in fact it is not. Other times, SBC’s attempt to respond to an unsuccessful PST is

itself unsuccessful, and SBC mistakenly does not re-test the line prior to completing the order.

See id. ¶ 7. In both cases, the scenario described by these commenters will come to pass – i.e.,

SBC Midwest will issue a SOC, but the line will not in fact be working. Id. ¶ 7 & n.9.

       Critically, however, these unfortunate occurrences do not call into question the BOC

Applicants’ checklist compliance. For one thing, they are extremely rare. AT&T alleges that it

experienced 756 “unproductive truck rolls” in Illinois, Ohio, and Michigan during the three-

month period from April through June 2003. Even taking that allegation as true – itself a risky



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proposition, see supra Part I (discussing AT&T’s allegations with respect to billing); Part IV.A

(same with respect to collocation power) – it represents an extremely low percentage of AT&T

orders on which the scenario described above could have occurred. See Muhs Reply Aff. ¶ 9;

see also id. ¶ 15 (discussing installation trouble reports for Forte). For another, the process

described above is followed regardless of whether the new cut-through order is a retail or a

wholesale order, id. ¶ 5, and commenters have provided no reason to think that the CLECs are

experiencing a disproportionate share of “unproductive truck rolls.” Such “unproductive truck

rolls” therefore do not reflect discrimination of any kind, nor are they depriving CLECs of a

meaningful opportunity to compete.

       Even so, SBC Midwest is taking steps to reduce the frequency of these occurrences still

further. In particular, SBC Midwest has put in place procedures to reinforce the process of re-

testing a line after taking any corrective action spawned by an unsuccessful PST. See Muhs

Reply Aff. ¶ 8. In addition, SBC has verified the programming script that runs the PST itself to

ensure that it works properly. Id. With these steps in place, SBC Midwest hopes and expects

“unproductive truck rolls” will become even more rare for both it and the CLECs alike. But, in

any event, as noted, the SBC Midwest processes in place today are nondiscriminatory and

provide CLECs a meaningful opportunity to compete. Nothing more is required to satisfy the

checklist.

       C.      Reciprocal Compensation for the Exchange of Local Traffic

       AT&T alleges that Ohio Bell fails to pay tandem rates for the termination of local traffic

in accordance with 47 C.F.R. § 51.711(a)(3). See AT&T Comments at 51-52. In particular,

AT&T takes issue with a PUCO decision that awarded AT&T tandem rates in most



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circumstances, except where AT&T has established direct trunks to an Ohio Bell end office. See

id.; see also Arbitration Award, AT&T Communications of Ohio, Inc.’s and TCG Ohio’s

Petition for Arbitration of Interconnection Rates, Terms, and Conditions and Related

Arrangements with Ameritech Ohio, Case No. 00-1188-TP-ARB (PUCO June 21, 2001) (App.

E-OH, Tab 38).

       For one thing, however, the contract language AT&T attacks is irrelevant to this

proceeding. Ohio Bell does not rely on the AT&T agreement to meet its obligations under

Checklist Item 13, but relies instead on its agreement with Ohiotelnet.com. See Alexander Reply

Aff. ¶ 58. And, as the Commission has held, “substantive arguments” directed at

interconnection agreement language that a BOC applicant “does not rely on . . . to demonstrate

compliance” with the checklist are beside the point. California Order ¶ 115 n.418. Insofar as it

is relevant here, Ohio Bell’s agreement with Ohiotelnet.com mirrors in all relevant respects the

language of Commission Rule 51.711(a)(3), and indeed no party disputes that it satisfies the

requirements set out in that Rule. See Alexander Reply Aff. ¶ 58. The Commission need go no

further to resolve this issue. See Texas Order ¶ 78.

       That is especially so in view of the fact that AT&T’s challenge to the PUCO’s resolution

of this issue – as well as Ohio Bell’s cross-challenge – is now pending in federal district court.

See Alexander Reply Aff. ¶ 57. As the Commission has held time and again, “[t]he 1996 Act

authorizes the state commissions to resolve specific carrier-to-carrier disputes arising under the

local competition provisions, and it authorizes the federal district courts to ensure that the results

of the state arbitration process are consistent with federal law.” Texas Order ¶ 88. And,

“[a]lthough [the Commission] ha[s] an independent obligation to ensure compliance with the



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checklist, section 271 does not compel [it] to preempt the orderly disposition of intercarrier

disputes” in this manner. Id. The Commission has emphasized that “federal courts must be

presumed to apply the law correctly.” Id. ¶ 237. Resolution of AT&T’s complaint here –

particularly where the agreement language in question is not even relied upon by Ohio Bell –

would reflect a profoundly contrary view, and would conflict with the Commission’s practice of

deferring such issues where it is clear they will be resolved appropriately in the ordinary course.

See California Order ¶ 143 (rejecting similar claim under Checklist Item 13 on the basis of the

Commission’s “confidence” that it would be “resolve[d] . . . consistent with [Commission] rules”

pursuant to the procedural requirements set out in the Act).

       In the unlikely event the Commission elects to resolve this issue on the merits – and

thereby to intrude on a matter now pending in federal district court – it should reject AT&T’s

claim out-of-hand. By its terms, AT&T’s argument is predicated on the assertion that

Commission Rule 51.711(a)(3) requires an ILEC to pay tandem switching rates to a CLEC in

any case in which the CLEC demonstrates that its switch is “capable of ‘serv[ing] a geographic

area comparable to the area served by [the ILEC’s] tandem switch.’” AT&T Comments at 51

(quoting 47 C.F.R. § 51.711(a)(3)) (emphasis added); see id. at 53. The Commission’s rule does

not, however, use the term “capable of,” nor does it suggest that a CLEC is entitled to tandem

rates merely if it can show that its switch could serve an area comparable to the ILEC’s tandem

switch. Instead, the rule states that compensation at tandem rates is appropriate where the CLEC

switch “serves” a geographic area comparable to that of the ILEC. 47 C.F.R. § 51.711(a)(3).

Accordingly, numerous courts have recognized that the so-called “geographic use” test created

by this rule requires the CLEC to demonstrate, at a minimum, that its switch actually serves an



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area comparable to that of the ILEC tandem, not that it conceivably could do so. See, e.g., MCI

WorldCom Communications, Inc. v. Pacific Bell Tel. Co., No. C-00-2171 VRW, 2002 WL

449662, at *5 (N.D. Cal. Mar. 15, 2002); MCI Telecomms. Corp. v. Michigan Bell Tel. Co., 79

F. Supp. 2d 768, 791 (E.D. Mich. 1999).

       The only support AT&T can muster for its view to the contrary is the staff’s order in the

Virginia Arbitration proceeding.39 But, as the Commission itself has explained, the Virginia

Arbitration Order is an “interlocutory staff ruling” that is presently on review before the full

Commission, which is “currently considering whether to vacate, modify or affirm it.”40 That

order is accordingly not final, and any perceived inconsistency between it and the PUCO’s

resolution of this issue provides no basis for concluding that Ohio Bell fails to satisfy Checklist

Item 13. See, e.g., Pennsylvania Order ¶ 92 (“new interpretative disputes concerning the precise

content of an incumbent LEC’s obligations to its competitors, disputes that our rules have not yet

addressed and that do not involve per se violations of the Act or our rules, are not appropriately

dealt with in the context of a section 271 proceeding”).


       39
          Memorandum Opinion and Order, Petition of WorldCom, Inc., Pursuant to Section
252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia State
Corporation Commission Regarding Interconnection Disputes with Verizon Virginia Inc., and
for Expedited Arbitration, 17 FCC Rcd 27039 (2002) (“Virginia Arbitration Order”).
       40
           Brief for Respondents Federal Communications Commission and United States at 31-
32, Mountain Communications, Inc. v. FCC, No. 02-1255 (D.C. Cir. filed June 19, 2003); see
also Arbitration Award, Petition of Global NAPs Inc. for Arbitration Pursuant to Section 252(b)
of the Telecommunications Act of 1996 to Establish an Interconnection Agreement with Verizon
North Inc., Case No. 02-876-TP-ARB, at 10 (Ohio PUC Sept. 5, 2002) (the Virginia Arbitration
Order is not a “final decision nor a legally binding precedent”); Opinion and Order, Petition of
US LEC of Pennsylvania, Inc. for Arbitration with Verizon Pennsylvania Inc. Pursuant to
Section 252(b) of the Telecommunications Act of 1996, Docket No. A-310814F7000, at 17 (Pa.
PUC Apr. 17, 2003) (the Virginia Arbitration Order is “not conclusive” with respect to the
matters it addresses).



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       D.        Public Interest

       SBC demonstrated in the Application that there is overwhelming evidence, including the

repeated findings of this Commission itself, that section 271 approval accelerates both local and

long-distance competition. See SBC Br. at 124-30. An empirical study concludes that BOC

entry in New York and Texas resulted in a substantial reduction – from 9% to 23% – in the

amount consumers pay for long distance.41 The same study found statistically significant

evidence that CLECs have a substantially higher share of the local exchange market in states

where BOC entry has occurred.42 As Chairman Powell has noted, “[w]e see a correlation

between the process for approving applications and growing robustness in the markets.”43

       Commenters do not dispute that Bell company entry leads to lower long-distance prices

and increased competition in the local market. Nor do they question the public-interest benefits

that go along with these results. Instead, they offer conjectural scenarios in which these benefits

might be outweighed by other factors unique to the states covered by this Application. This

guesswork, however, falls far short of rebutting the well-established presumption that “BOC

entry into the long distance market will benefit consumers and competition if the relevant local

exchange market is open to competition consistent with the competitive checklist.”

Georgia/Louisiana Order ¶ 281.


       41
          See Jerry A. Hausman, Gregory K. Leonard & J. Gregory Sidak, The Consumer-
Welfare Benefits from Bell Company Entry into Long-Distance Telecommunications: Empirical
Evidence from New York and Texas 3 (Jan. 2002), at http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=289851.
       42
            See id.
       43
       See Rodney L. Pringle, Powell Says Innovation Will Drive Telecom Upswing,
Communications Today, June 6, 2001.



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       DLC/Project Pronto Unbundling. ACN contends that Illinois Bell’s entry into long

distance would be contrary to the public interest not because of anything Illinois Bell is doing

today, but because of something it purportedly did in the past. Specifically, ACN objects that

Illinois Bell has “[d]enied [c]ompetitors’ [sic] [a]ccess to DLC [l]oops.” ACN et al. Comments

at 44-51.

       As an initial matter, Illinois Bell has done no such thing. As the Affidavit of William C.

Deere explains, Illinois Bell offers CLECs access to loops served by universal digital loop carrier

(“UDLC”). See Deere IL Aff. ¶¶ 100-101. And, although it is technically infeasible to provide

such access to a loop served by integrated digital loop carrier (“IDLC”), where a CLEC orders

such a loop, Illinois Bell moves the requested loop to a spare, existing loop at no additional

charge. See id. ¶ 101. Indeed, even where there is no spare loop, Illinois Bell will perform the

construction necessary to install one in accordance with its “facilities modification,” or

“FMOD,” policy. Id. ¶¶ 101, 103-119; see Deere Reply Aff. ¶¶ 4, 7 (Reply App., Tab 7).

       ACN nevertheless argues that Illinois Bell’s policies in this regard have “frozen many

end users on the ILEC network.” ACN et al. Comments at 46. This claim has no basis in reality.

As of May of this year, Illinois Bell used IDLC to serve a grand total of 3% of working loops,

and it had not identified any IDLC loops in locations without alternative loops available. See

Deere IL Aff. ¶ 100; Deere Reply Aff. ¶ 5. Moreover, Illinois Bell’s prospective policy is to

install at least one UDLC at each location where IDLC is used. See Deere IL Aff. ¶ 102. In light

of these facts and this policy, it is unsurprising that ACN fails to identify even a single customer

who is in fact “frozen” on the ILEC network as a result of the deployment of IDLC.




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       Aside from its misplaced concerns about the prevalence of IDLC loops, ACN makes

much of the purported refusal of Illinois Bell to “unbundle” the packet-switching facilities

associated with Project Pronto. See ACN et al. Comments at 47. It is clear, however, that no

such unbundling is required under the applicable rules.44 Under those rules, packet switching

equipment need not be unbundled unless, among other things, Illinois Bell has refused to permit

CLECs to collocate at the Illinois Bell remote terminal. UNE Remand Order45 ¶ 313. The

evidence in the record makes clear that Illinois Bell permits such collocation. See Chapman Aff.

¶¶ 79-81. For this reason (among others), the Commission’s rules do not require unbundling of

the packet-switching functionality contained in Project Pronto. See Kansas/Oklahoma Order

¶¶ 244-245 (declining to require unbundling of Project Pronto facilities under the checklist in the

absence of “a specific factual situation” that would suggest such unbundling was required).

       Indeed, ACN appears to concede as much, and for that reason raises this claim under the

“public interest” standard instead of the checklist. But, for one thing, the Commission is

statutorily barred from expanding the “public interest” inquiry to encompass requirements within

the scope of, but not required by, the checklist. See 47 U.S.C. § 271(d)(4) (“[t]he Commission

may not, by rule or otherwise, . . . extend the terms used in the competitive checklist”). And, in

any event, the Commission itself has already rejected the notion that the deployment of Project

Pronto is contrary to the public interest. As the Commission expressly found, Project Pronto was

       44
           See Texas Order ¶ 22 (“[W]e evaluate [a BOC’s] compliance with our rules and orders
in effect at the time the application was filed.”) (emphasis added); New York Order ¶¶ 34, 236.
       45
        Third Report and Order and Fourth Further Notice of Proposed Rulemaking,
Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, 15
FCC Rcd 3696 (1999) (“UNE Remand Order”), petitions for review granted, United States
Telecom Ass’n v. FCC, 290 F.3d 415 (D.C. Cir. 2002), cert. denied, 123 S. Ct. 1571 (2003).



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designed to “speed the deployment of advanced services to consumers throughout SBC’s

territory, some 20 million of whom [we]re unable to receive any DSL service” previously.

Second Memorandum Opinion and Order, Applications of Ameritech Corp., Transferor, and

SBC Communications Inc., Transferee, for Consent To Transfer Control, 15 FCC Rcd 17521,

¶ 28 (2000). Moreover, Project Pronto “pave[d] the way” for CLECs “to compete for those

consumers” by creating a brand new entry vehicle – the wholesale Broadband Service Offering –

that CLECs could access in order to provide service in markets that were previously out of

reach. Id.

       To the extent ACN’s complaint is rooted in the notion that the “public interest” standard

required Illinois Bell to go further – and to make the packet switching capability encompassed in

Project Pronto available on an unbundled basis – that claim too is contrary to Commission

precedent. In the UNE Remand Order, the Commission declined to unbundled packet switching

generally on the theory that a contrary result would stifle the incentives of carriers to use such

technology, in contradiction to section 706 of the 1996 Act. See UNE Remand Order ¶¶ 314-

316. It is inconceivable that, in acting on the incentives created by the Commission’s own order,

Illinois Bell can be said to have acted contrary to the public interest.

       Performance Remedy Plans. AT&T disputes the adequacy of SBC’s plans in Illinois,

Ohio, and Wisconsin, on the theory that they are not “self-executing.” AT&T Comments at 86.

But the remedies in the plan are in fact “self-executing” as the Commission has used that term in

prior orders – i.e., the remedy amounts as a general matter are payable automatically, and SBC is

permitted to dispute those amounts only “in certain carefully designated circumstances.” Texas

Order ¶ 427; see Ehr Reply Aff. ¶¶ 27-30 & nn.34, 38 (Reply App., Tab 8).



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       What AT&T is really objecting to is not the “self-executing” nature of the plans, but

rather the fact that SBC has not made an open-ended agreement to incorporate any changes that

AT&T can dream-up and convince a state commission to adopt. Instead, SBC has reserved its

right to challenge such changes in the appropriate forum. But that reservation of rights is not

unique to the remedy plans AT&T challenges here; on the contrary, it was originally developed

in Texas during negotiations with CLECs about the remedy plan that this Commission approved

in Texas, Kansas, Oklahoma, Missouri, and Arkansas. See id. ¶ 31. Moreover, SBC’s

reservation of rights has nothing to do with the current requirements of the remedy plans at

issue, and it is therefore irrelevant to the question whether those plans provide an incentive to

avoid back-sliding in the wake of section 271 relief. As SBC has previously explained, the plans

plainly provide such an incentive, and they are therefore sufficient for purposes of section 271.

See Ehr IL Aff. ¶ 186; Ehr OH Aff. ¶ 169; Ehr WI Aff. ¶ 164; see also Ehr Reply Aff.

¶ 25 & n.30.46

       Commenters also contend that, although the amount of revenues at stake in each of the

performance plans at issue is equivalent to that at stake in numerous plans the Commission has

approved, these plans are different because, here, the BOC Applicants are unlikely to pay the full

amount. See, e.g., MCI Comments at 11; OCC Comments at 10-12. For one thing, however,

this complaint is not new. CLECs made it – and the Commission rejected it – in Kansas and

Oklahoma. Compare, e.g., Petition to Deny of Sprint Communications Company, L.P. at 70-72,

       46
           AT&T’s complaint that it did not have “any input” in the Ohio plan, AT&T Comments
at 87, is both untrue and irrelevant. As the record makes clear, AT&T was in fact heard by the
PUCO on the question of performance remedies. See Ehr Reply Aff. ¶¶ 46-47. In any case, the
Ohio plan was adopted from the plan in place in Texas, which AT&T played a central role in
designing (and which, of course, this Commission approved in the Texas Order).



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Joint Application by SBC Communications Inc., et al. for Provision of In-Region, InterLATA

Services in Kansas and Oklahoma, CC Docket No. 00-217 (FCC filed Nov. 15, 2000) (noting

that “SWBT’s caps for Kansas and Oklahoma are calculated in a manner consistent with Bell

Atlantic’s cap in New York and SWBT’s cap in Texas,” but contending that the remedies were

structured in a way that would make actual payments “exceptionally small”), with

Kansas/Oklahoma Order ¶ 274 (“We . . . disagree with commenters that suggest that [the amount

at risk in the Kansas and Oklahoma plans] is insufficient and fails to provide adequate assurance

of SWBT’s compliance in the future.”).

       In any event, the total amount of revenue at stake in these plans is largely beside the

point. Indeed, because the BOC Applicants’ wholesale performance is so outstanding – and

because it has every incentive to continue providing such performance in the wake of 271 relief –

SBC agrees that it is unlikely that it will ever pay the total amount of revenue at stake in the

plans. Instead, the relevant question is whether the performance payments generally are

structured in a way that provides the BOC Applicants a meaningful incentive to continue to

provide nondiscriminatory service.

       Particularly when considered in connection with the many other incentives the BOC

Applicants have to provide such service, the plans in question easily satisfy that test. As the

Reply Affidavit of James Ehr explains, the Ohio plan has the same remedy structure as the Texas

plan. See Ehr Reply Aff. ¶ 30 & n.39. And the “structural elements” of the Texas plan, the

Commission has held, are “reasonably designed to detect and sanction poor performance when it

occurs.” Texas Order ¶ 426. As for the Illinois, Indiana, and Wisconsin plans, the payment

structure is modeled on the Texas plan, but with less statistical testing to minimize misses due to



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random variation; more sustained increased payments resulting from consecutive months of

performance misses; and the application of a procedural cap – instead of a strict limit – on the

total of payments required to be made under the plans. See Ehr Reply Aff. ¶ 30 & n.38. These

differences render the plans more severe, not less, and therefore more worthy of this

Commission’s approval in this context.

       Finally, the IURC suggests that, because Indiana Bell has successfully challenged the

performance plan that the IURC attempted to impose, it may need FCC “assistance” in enforcing

the one to which SBC has agreed. IURC Comments at 4. The performance plan on which

Indiana Bell relies in this Application is part of interconnection agreements. See Ehr IN Aff.

Attach. A, § 5.4; Ehr Reply Aff. ¶ 33. The terms of that plan are therefore subject to

interpretation and enforcement by the IURC. See, e.g., MCI Telecomms. Corp. v. Illinois Bell

Tel. Co., 222 F.3d 323, 338 (7th Cir. 2000) (“A state commission’s authority to approve or reject

interconnection agreements under the Act necessarily includes the authority to interpret and

enforce, to the same extent, the terms of those agreements once they have been approved by that

commission.”). In addition, if the IURC were to abdicate its authority to interpret and enforce

this portion of Indiana Bell’s interconnection agreements, this Commission has held that it may

act in its place. See Memorandum Opinion and Order, Starpower Communications, LLC

Petition for Preemption of Jurisdiction of the Virginia State Corporation Commission, 15 FCC

Rcd 11277, ¶ 6 (2000). There is accordingly no reason to doubt that Indiana Bell’s performance

plan will be as effective in Indiana as SBC’s other plans have been elsewhere. See

Arkansas/Missouri Order ¶ 131 (“We disagree with commenters that submit that the Arkansas

Commission may have insufficient legal authority to effectively enforce the [remedy] plan”).



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        “No Facilities” Issues. Mpower asserts that SBC’s Application is not in the public

interest because it purportedly intends to adopt a more restrictive “no facilities” policy in the

wake of section 271 relief. See ACN et al. Comments at 40-41. Notably, neither Mpower nor

any other party takes issue with SBC Midwest’s existing policy – the only policy at issue in this

proceeding. In fact, the entire SBC Midwest FMOD policy was collaboratively developed in

conjunction with the CLECs and the state commissions, and it is clear as to when SBC Midwest

is obligated to build additional facilities as needed to complete a service order request. See

Deere Reply Aff. ¶ 7 & n.4. To be sure, SBC Midwest is presently evaluating the “no facilities”

requirements set forth in the Triennial Review Order to determine what, if any, changes to the

FMOD policy will be necessary to ensure compliance with those requirements when they take

effect, see id., but a prospective change in order to comply with Commission rules obviously

does not itself constitute a violation of the public interest.




                                                   77
                                                                             SBC’s Reply Comments
                                                          Illinois, Indiana, Ohio, and Wisconsin 271
                                                                                     August 29, 2003

                                     CONCLUSION

The Application should be granted.

                                               Respectfully submitted,


                                               _________________________
JAMES D. ELLIS                                 MICHAEL K. KELLOGG
PAUL K. MANCINI                                GEOFFREY M. KLINEBERG
MARTIN E. GRAMBOW                              COLIN S. STRETCH
JOHN T. LENAHAN                                LEO R. TSAO
KELLY M. MURRAY                                KELLOGG, HUBER, HANSEN,
ROBERT J. GRYZMALA                              TODD & EVANS, P.L.L.C.
RANDALL JOHNSON                                     1615 M Street, N.W.
TRAVIS M. DODD                                      Suite 400
JOHN D. MASON                                       Washington, DC 20036
    175 East Houston                                (202) 326-7900
    San Antonio, TX 78205
    (210) 351-3410                             Counsel for SBC Communications Inc., Illinois
                                                   Bell Telephone Company, Indiana Bell
Counsel for SBC Communications Inc.                Telephone Company Incorporated, The
                                                   Ohio Bell Telephone Company,
LOUISE SUNDERLAND                                  Wisconsin Bell, Inc., and Southwestern
MARK ORTLIEB                                       Bell Communications Services, Inc.
    225 West Randolph St., Floor 25
    Chicago, IL 60606                          MARY RYAN FENLON
    (312) 727-6705                             JON F. KELLY
                                                   150 East Gay Street, Room 4-A
Counsel for Illinois Bell Telephone Company        Columbus, OH 43215
                                                   (614) 223-3302
BONNIE K. SIMMONS
   240 North Meridian Street                   Counsel for The Ohio Bell Telephone
   Room 1831                                       Company
   Indianapolis, IN 46204
   (317) 265-3676                              PETER J. BUTLER
                                                   722 North Broadway, Floor 14
Counsel for Indiana Bell Telephone Company         Milwaukee, WI 53202
    Incorporated                                   (414) 270-4555

                                               Counsel for Wisconsin Bell Inc.

August 29, 2003




                                              78

				
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