Electronic Comment Filing System

FEB 122002 DOCKET FILE COPY ORIGINAL flCet:IVfD Before the Federal Communications Commission Washington, D.C. 20554 RM 10329 CC Docket No. 00-51 CC Docket No. 00-229 CC Docket Nos. 98-147, 96-98,98-141 CC Docket No. 96-149 --........... :~~~ Dl'l'Ir.E~1!IE 1lf.C!lfl1l!1l' ) ) ) ) CC Docket No. 01-321 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Petition ofU S West, Inc., for a Declaratory Ruiing Preempting State Commission Proceedings to Regulate U S West's Provision ofFederaJly Tariffed Interstate Services PerfolTIlance Measurements and Standards For Special Access Services In the Matter of Petition ofAssociation for Local Telecommunications Services for Declaratory Ruling Implementation ofthe Non-Accounting Safeguards Of Sections 271 and 272 ofthe Communications Act of 1934, as amended 2000 Biennial Regulatory Review - Telecommunications Service Quality Reporting Requirements AT&T Corp. Petition to Establish Performance Standards, Reporting Requirements, and Self-Executing Remedies Needed to Ensure Compliance by ILECs With Their Statutory Obligations Regarding Special Access Services VoiceStream Wireless Corporation Brian T. O'Connor Vice President, Legislative & Regulatory Affairs Harold Salters Director, Federal Regulatory Affairs VoiceStream Wireless Corporation 401 9th Street, NW, Suite 550 Washington, DC 20004 Telephone: (202) 654-5900 Facsimile: (202) 654-5963 Dated: February 12, 2002 VoiceStream Wireless Reply Comments CC Docket No. 01-321 SUMMARY Page 2 0[22 February 12, 2002 The comments convincingly demonstrate that it is crucial for the Commission to adopt standards, comprehensive performance metrics and reporting requirements govern- ing ILEC provision ofspecial access services. CMRS providers and other competitive carriers make such extensive use oflLEC special access facilities that they are properly characterized as being fundamental building blocks for competitive offerings. The dis- maliLEC performance regarding special access services has a direct and negative impact on competition in the retail telecommunications market, and lLECs have both the incen- tive and the ability to distort competition in the retail market and to favor their own ser- vices through the power they wield in the wholesale special access market. lLEC objections to performance standards are not supported by any record evi- dence. The special access market is not competitive. Special access customers and state regulators emphasize that ILEC market power is overwhelming and, even yet, growing. CMRS carriers are especially vulnerable to ILEC abuses in the special access market be- cause lLECs have unlawfully refused to alternatively provide ONEs to them and because CMRS carriers must deploy widely dispersed cell sites throughout their service areas and, in the vast majority ofcases, CMRS carriers have no choice but to use lLEC special ac- cess facilities. ILEC resistance to performance standards/metrics is undercut by the fact that lLECs already maintain data concerning their special access performance, whether for in- terna! purposes or to meet existing federal/state reporting requirements and, therefore, 2 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 3 of22 February 12,2002 their additional cost ofpublishing their performance data is not significant. Unless the Commission requires ILECs to publish their performance data, it will not have the tools to remedy the extensive problems and ILECs will lack the incentive to fix the problem. It is important to emphasize that the current situation is ofthe ILEC's own doing. The minimal regulatory intervention that competitive carriers seek would not have been nec- essary had ILECs even provided a minimally acceptable grade ofservice. To the extent smaller ILECs face undue burdens, VoiceStream supports adopting less stringent metrics and frequency ofreporting Jor these smaller entities. Given that smaller ILECs exert as much, and often more, dominance in the special access market in their service territories as compared to larger ILECs, any exemption ofsmaller ILECs from performance metric obligations cannot be justified. VoiceStream supports the Performance Measurements and Standards proposal advanced by the Joint Competitive Industry Group as clear, workable and enforceable and asks for one supplemental requirement. Reflecting the crucial role that special access services represent for the CMRS industry, VoiceStream urges that a separate reporting category be established for CMRS, distinguishing between entities affiliated, and unaf- [diated, with the ILEC. Only in this manner can independent CMRS carriers obtain in- fonnation as to the true nature ofthe competitive environment they face with respect to their ILEC-affiliated CMRS competitors. 3 VoiceStream Wlfeless Reply Comments CC Docket No. 01-321 Table of Contents Page 4 0[22 February 12,2002 REPLY COMMENTS OF VOICESTREAM WIRELESS CORPORATION I. ILEC OBJECTIONS TO PERFORMANCE STANDARDS LACK MERIT 6 II. WHILE THERE IS NO BASIS TO EXEMPT SMALLER ILECS, A DIFFERENT REGULATORY APPROACH IS WARRANTED......... 13 III. VOICESTREAM SUPPORTS THE JOINT COMPETITNE INDUSTRY GROUP PROPOSAL, BUT THE PROPOSAL SHOULD BE EX PANDED TO INCLUDE A SEPARATE CATEGORY OF DATA IN- VOLVING CMRS CARRIERS 16 IV. THERE ARE MORE EFFECTNE TOOLS THAN SUNSETTING TO TERMINATE REPORTING REQUIREMENTS IF AND WHEN THEY BECOME UNNECESSARy 20 V. CONCLUSION 21 4 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Before the Federal Communications Commission Washington, D.C. 20554 Page 5 of22 February 12, 2002 F~J~1 2 2002 ,,,,,_~lll)lW~\CIl OFFICE 01' 1IIl!!lft~0il!Jl1r In the Matter of Performance Measurements and Standards For Special Access Services Petition ofU S West, Inc., for a Declaratory Ruling Preempting State Commission Proceedings to Regulate U S West's Provision ofFederally Tariffed Interstate Services Petition ofAssociation for Local Telecommunications Services for Declaratory Ruling Implementation ofthe Non-Accounting Safeguards Of Sections 271 and 272 ofthe Communications Act of 1934, as amended 2000 Biennial Regulatory Review - Telecommunications Service Quality Reporting Requirements AT&T Corp. Petition to Establish Performance Standards, Reporting Requirements, and Self-Executing Remedies Needed to Ensure Compliance by ILECs With Their Statutory Obligations Regarding Special Access Services ) ) ) ) CC Docket No. 01-321 ) ) ) CC Docket No. 00-51 ) ) ) ) CC Docket Nos. 98-147, ) 96-98,98-141 ) ) ) CC Docket No. 96-149 ) ) ) ) CC Docket No. 00-229 ) ) ) ) RM 10329 ) ) REPLY COMMENTS OF VOICESTREAM WIRELESS CORPORATION VoiceStream Wireless Corporation ("VoiceStream") submits this reply to the comments filed in this proceeding. The comments persuasively demonstrate the critical need for the adop- tion ofperfonnance measurements and standards for incumbent local exchange carrier ("ILEC") interstate special access services. Poor ILEC installation, maintenance and repair of special ac- cess facilities have an en0D110US negative impact on competition in the retail market for tele- 5 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 60f22 February 12, 2002 communications services, given that commercial mobile radio service ("CMRS") providers and other competitive carriers make such extensive use ofspecial access facilities in their networks. I. ILEC OBJECTIONS TO PERFORMANCE STANDARDS LACK MERIT ILECs contend that perfonnance standards are unnecessary because the special access market is competitive. They alternatively assert that the costs ofpreparing reports based on data they already possess outweigh the benefits ofpublishing their special access installation, mainte- nance and repair data. Importantly, the problem with these arguments is that the ILECs do not recite a single fact in support. In fact, all available evidence confinns that the special access market is not competitive and that the preparation ofreports that would reveal discriminatory or unreasonable conduct would impose no substantial burdens on the ILECs - although some ILECs may find disclosure oftheir perfonnance to be humiliating. A. ILEC Myth No.1: The Special Access Market Is Robustly Competitive ILECs assert that reporting requirements and measurement standards are unnecessary be- cause the market for their special access services is "rife with competition" and "vigorously competitive."] The simple response is that not a single user ofthese facilities - whether a CMRS provider,2 a competitive LEC,) a long distance carrier,4 or a non-carrier corporation spe- cial access customerS - agrees with this assertion. Moreover, every state regulator participating I Verizon Comments at 4 and 6. See also Qwest Comments at 6-9; SBC Comments at 2-3 and 8-10; United States Telecom Association ("USTA") Comments at 2. 2 See, c.g, Comments filed by VoiceStream Wireless and AT&T Wireless. , See, e.g, Comments filed by the AssoClation for Local Teleconununications Services ("ALTS"); Association of ConunUl11cations Enterprises ("ASCENT"); DlRECTV Broadband Comments; Cable & Wireless Comments; and Competitive Telecortll1lUnications Association ("CompTel"). 4 See, e.g, Comments filed by AT&T, Sprint, and WorldCom. 5 See, e.g., Conunents filed by the Ad Hoc Telecommunications Users Committee ("Users Committee") and the American Petroleum Institute. 6 VoiceSlream Wireless Reply Comments CC Docket No. 01-321 Page 7 of22 February 12, 2002 in this proceeding urges the Commission to adopt national standards 6 For example, New York recognizes that the problem is extensive and can be solved only through imposition offederal standards: Verizon's provision of special services has been less than adequate. * * * The ILECs are still the dominant providers ofthese services and uneven perfonnance threatens to undennine competition. For example, Verizon, on average, met only 74% ofits appointments on carrier service requests, but met 94% ofits retail cus- . 7 tomer appomtments. In making their assertions regarding competitiveness, ILECs rely on the number of CLECs that have collocation facilities at certain oftheir wire centers. 8 However, CLECs can provide a competitive alternative only ifthey have facilities at the other end where the connec- tion is needed- whether the location is a cell site or a particular customer. The data compiled in the nation's most competitive market, New York City, confinns that CLECs currently serve only a tiny fraction ofthe locations served by the incumbent LEC 9 Therefore, clearly CLECs them- selves do not have ubiquitous networks as these ILECs suggest and therefore, CMRS carriers cannot rely on CLECs for alternative sources ofspecial access. 10 ILECs also point to the Pricing Flexibility Order as suggesting that the Commission has already detennined that the special access market is competitive. I I In fact, in that Order the 6 See, e.g, Comments filed by the Illinois Commerce Commission ("ICC"); the Minnesota Department ofCom merce; the New York State Department ofPublic Service ("NYDPS"); and the Public Utility Commission ofTexas. 7 NYDPS Comments at 2 and 3. Given this disparate installation data, Verizon's assertion that its processes "assure that all special access orders are provisioned in a nondiscriminatory manner, regardless ofthe identify ofthe cus tomer (Verizon Comments at 11), is not credible. 8 See, e.g, USTA Comments at 3-5; Verizon Comments at 5-6; Qwest Comments at 8. , See. e.g, AT&T Comments at 8-10; ASCENT Comments at 4. lU See "How Effort to Open Local Phone Markets Helped the Baby Bells," Wall St. Journal, pp. A-I, A-14 (Feb. 11, 2002) 11 See, e,g., Verizon Comments at 7-9; BellSouth COl1nnents at 12-14. 7 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 80[22 February 12,2002 Commission explicitly declined to find that the special access market is sufficiently competitive to justify classifying ILECs as non-dominant. 12 In addition, all available evidence in markets where ILECs currently possess pricing flexibility confirms that the special access market is not competitive. For example, although in these markets ILECs have the flexibility to negotiate off- tariffpricing plans, ILECs generally refuse to depart from their non-price cap regulated tariffs. 13 In addition, as the Ad Hoc Users Committee documents, ILEC rates are "higher in markets where the Commission has granted ILECs Phase II pricing flexibility than in markets subject to price cap regulation - an outcome that is exactly the opposite ofwhat a competitive market would produce.,,14 Verizon asserts that "[p]oor [ILEC] service will result in marketplace penalties" because special access customers will "take their business to an alternative provider.,,15 VoiceStream wishes this were the case. VoiceStream's comments demonstrated, however, that in the New York MTA during 2000 and 2001, Verizon missed 72 percent ofthe Firm Order Commitment ("FOC") dates that Verizon itselfestablished for VoiceStream circuits. 16 Given this dismal per- formance record, does the Commission really believe that VoiceStream would keep using Veri- zon ifit could use alternative providers ofspecial access circuits? In summary, all available evidence confirms what special access customers already know: in most locations, ILECs possess a dominant market position in the special access market. What makes this dominance so dangerous is that competitive carriers use ILEC special access 12 See Pricing Flexibility Order, 14 FCC Rcd 14221, 14300~151 (1999). l ' See, e.g, AT&T Wireless Comments at12~13. ]4 Users Committee Comments at 2-3 and Appendix 1 (emphasis in original). 15 Verizon Comments at 20-21. 8 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 9 of22 February 12,2002 facilities as fundamental network building blocks for their own competitive retail services. Thus, poor ILEC special access circuit performance adversely affects competition in the retail market for telecommunications, and gives ILECs both the incentive and the ability to skew this competi- tion in favor oftheir own retail services. B. ILEC Myth No.2: Competitive Carriers Do Not Need Special Access Facili- ties BellSouth alone asserts that, because ofthe availability ofunbundled network elements ("UNEs"), it is "incontrovertible that ILEC special access is not necessary for CLECs to compete with ILECs.,,17 While BellSouth's argument might have some merit ifUNEs were universally available, I R the fact remains that BellSouth and other ILECs have unlawfully refused to provide UNEs to VoiceStream and other CMRS carriers. Section 251(c)(3) imposes a clear duty on ILECs to provide UNEs. The Act defines a "network element" to include "a facility or equipment used in the provision ofa telecommunica- tions service.,,19 The transport circuits that CMRS carriers use to connect their mobile switching centers ("MSCs") with their base stations are "a facility ... used in the provision ofa telecom- munications service." Yet, despite this unequivocal statutory mandate, BellSouth and other ILECs have consistently refused to provide to VoiceStrearn the UNEs it has requested. 16 See VoiceStream Comments at 9. Missing 72% ofFOC dates is not, as Verizon would have the FCC believe, an "isolated problem." Verizon Comments at 3. 17 BeliSouth Comments at 16-18. iR As other corrnnenters point out, UNEs are 110t universally available. Among other things, some ILECs refuse to combine network elements, and many ILECs refuse to provision UNEs when existing facilities are not available. See, e.g, AT&T Comments at 5-6. I' 47LJSc:. § 153(29). 9 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 10 of22 February 12, 2002 In another proceeding, VoiceStream and AT&T Wireless have asked the Commission to confirnl that an ILEC refusal to provision UNEs to CMRS carriers is unlawful 20 Until the Commission renders this confinuation order, and so long as ILECs choose to ignore their obliga- tions under the Act, CMRS carriers have no choice but to acquire their critical MSC-to-base sta- tion circuits from ILECs pursuant to their special access tariffs. One additional point bears mention concerning CMRS carrier use ofspecial access ser- vIces. ILECs would give the Commission the impression that the demand for special access fa- cilities is "geographically concentrated.,,21 This is not accurate, at least as applied to CMRS car- riers. Mobile customers demand ubiquitous coverage, which, in tum, requires CMRS carriers to disperse their cell sites widely throughout their licensed service areas. It is because ofthis dis- persion that, in many instances, CMRS providers have no choice but to use ILEC special access services. As AT&T Wireless correctly notes: AWS typically has no alternative but to utilize transport services from incumbent LEC special access tariffs. Incumbent LECs are the only carriers with ubiquitous transport networks that have facilities in place to or near the thousands ofloca lions 10 which AWS requires transport. 22 Thus, perhaps more than any other type ofcompetitive carrier, CMRS carriers remain particularly vulnerable to discriminatory and unsatisfactory ILEC provisioning ofspecial access facilities. 20 See VoiceSh'eam and AT&T Wireless Petition for Declaratory Ruling, CC Docket No. 96-98 (Nov. 19,2001). See also Review" ofthe Section 25J Unbundling Obligations ofIncumbent Local Exchange Carriers, CC Docket Nos. 01-339, 96-98 and 98-147, Notice ofProposed Rulemaking. FCC 01-361 (Dec. 20, 2001). 21 Verizon Comments at 6. 22 AT&T Wireless Comments- at 7. 10 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 11 of22 February 12, 2002 C. ILEC Myth No.3: Reporting Requirements Would Be Burdensome Some, but not all, ILECs contend that reporting requirements like those proposed by the Joint Competitive Industry Group ("JCIG") would place new burdens on them. SBC claims, for example, that the cost ofsuch reporting would be "enonnous" and would "increase significantly the cost ofproviding [special access] services.,,23 BellSouth is more careful in its claims, stating only that reporting requirements would "represent potential cost increases associated with pro- viding the service.,,24 These unsupported ILEC assertions defy reason and common sense, because the fact is that ILECs already maintain data concerning their special access perfonnance, whether for inter- nal purposes or for meeting existing reporting requirements (e.g., ARMIS, FCC merger condi- tions, state reporting requirements). Indeed, ILECs acknowledge that they already submit re- ports to individual special access customers (with Verizon stating that it provides reports to 51 different carriers)25 The measurement standards that competitive carriers ask the Commission to adopt would simply require ILECs to use unifonn definitions and metrics for data they already track. The proposed reports would also give individual carriers access to critical infonnation that they do not possess today - namely, infonnation pertaining to the ILEe's provisioning ofcircuits to oth- ers so each carrier can assess the ILEC's perfonnance regarding its own services. And while larger ILECs may be required to submit their data more frequently (e.g., monthly) and on a more 2J SBC Comments at 4. 24 BellSouth Comments at 11 (emphasis added). 25 See) ego Verizon Comments at 9; SBC Conunents at 12 (noting that its reports to WorldCom contain 38 different perfomlance measurements). II VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 12 of22 February 12, 2002 disaggregated basis (e.g., differentiating CMRS from IXC from CLEC), these proposals would impose no burden on ILECs. As AT&T correctly observes: Disaggregation simply involves proper coding when data are collected and repeti tive computations - a task readily and quickly accomplished by computers in the matter ofa few seconds 26 Further, imposition ofa single notification report on a national basis would inherently be less costly to the ILECs than a state-by-state reporting regime. ILECs additionally argue that the imposition ofreporting requirements on them, but not on CLECs that possess no market power would "distort competition": Imposing special access performance requirements only on incumbent LECs would ... skew competition by subjecting them to a different and more costly set ofregulatory requirements than their competitors. 27 There is, however, nothing improper in imposing certain regulations only on those entities that possess market power.28 As the New York Commission has observed, "[b]ecause competitors rely on Verizon's facilities, ... Verizon represents a bottleneck to the development ofa healthy, competitive market for special services.,,29 26 AT&T Comments at 28. 27 SBC Comments at 14 and 15-16. See also Verizon Comments at 12-13; USTA Comments at 6. 28 See, eg, 47 U.S.c. § 2S1(c)(imposing certain obligations on ILECs but not CLECs). See also Policy and Rules Concerning Rates for Competitive Carrier Services, CC Docket No. 79-252. There is, therefore, no basis to the ILEC argument that asymmetrical reporting requirements "would be of dubious legality." Verizon Comments at 13. To the contrary, the Communications Act expressly pelmits the FCC to apply its regulations to a "class of telecOlmnunications carriers." 47 U.S.c. § 160(a). 29 New York Public Service Connuission, Opinion and Order Modifying Special Services Guidelines for Verizon New Yurk Conforming Tariffand RequiTing Additional Pe/formance Reporting, Case Nos. 00-C-20SI, 92-C-0665, at 9 (June 15,2001). 12 VoiceStream Wireless Reply Conunents CC Docket No. 01-321 Page 13 of22 February 12, 2002 It is important to remember that this proceeding would not have been necessary had ILECs been providing minimally acceptable service. The simple fact is, as the Commission has acknowledged, that benchmarking through the use ofmetrics constitutes "a relatively non- intrusive means ofimplementing pro-competitive policies and rules and ofevaluating incum- bent's compliance with such requirements.,,3o Users ofILEC special access services agree that ILEC reporting would be the most effective means to get a grasp on this serious and extensive problem and as a means to return existing ILEC special access provisioning to minimally accept- able levels. ILECs have had ample opportunity to address this problem without regulatory interven- tion. The status quo has not worked because, as VoiceStream has documented in its comments, the problem is getting worse, not better. Embarrassing ILECs by publishing their abysmal per- fonuance record appears to be the most cost-effective means to convince ILECs to repair the problems they themselves have created. The history ofILEC neglect ofspecial access provi- sioning merits imposition today ofperfonnance metrics that are publicly available and noted. II. WHILE THERE IS NO BASIS TO EXEMPT SMALLER ILECS, A DIFFERENT REGULATORY APPROACH IS WARRANTED Rural ILECs ask to be exempted from any reporting standards that the Commission may adopt on the ground that they have "only a small share ofthe special access market" and do "not provide services to competitive local exchange carriers due to the rural exemption in Section 251 (I) ofthe Communications Act. ,,31 In addition, the Small Business Administration ("SBA") 30 SBC/A meritech Merger Order, 14 FCC Red 14712, 14770~125 (1999). See also Verizon New York InterLA TA Order. 15 FCC Red 3953, 3974~53 (I 999)("Performance measurements are an especially effective means ofpro viding us with evidence ofthe quality and timeliness ofthe access provided by a BOC to requesting carriers.") 31 National Exchange Canier Association ("NECA"), National Rural Telecom Association ("NRTA"), and Organi zation for the Promotion and Advancement ofSmall Telecommunications Companies ("OPASTCQ") Joint Com- 13 VoiceStream Wireless Reply Conunents CC Docket No. 01-321 Page 14 of22 February 12,2002 apparently takes the position that rural ILECs are not dominant in their service areas. 32 These assertions misstate the issue, for in their service areas, smaller ILECs maintain a truly dominant (if not, monopoly) position in the provision of special access services. 33 Chainnan Powell has noted that wireless services represent the "best hope" for residential customers to enjoy a competitive alternative to the ILEC services. 34 This is particularly true in suburban and rural areas, where consumers rarely have a landline alternative to the ILEC's ser- vices. CMRS carriers cannot provide services that compete with the ILEC unless they can con- nect their mobile switching centers ("MSCs") with the base station (or cell site) equipment. In most suburban, and in virtually all rural areas, CMRS carriers have no choice but to use the spe- cial access services offered by smaller ILECs. That rural ILECs·are· small and may install rela- tively fewer numbers ofspecial access services does not change the fact that for the facilities they do install, these ILECs are rarely subject to competitive pressure. 35 In addition, smaller ILECs share the same incentives as the larger ILECs: they can use their dominance in the special access market to distort competition in the retail market, by hampering the ability ofCMRS car- riers to compete with the ILEC's fixed landline or affiliated cellular services. ments at 3; Small Independent Telephone Companies Connnents at ii. See also Connnents filed by Independent Telephone & Teleconnnunications Alliance ("ITTA"); National Telephone Cooperative Association ("NTCA"); Rural [LEC Coalition. 32 See Initial Regulatory Flexibility Analysis, Docket No. 01-321, at 1) 31. )) NTCA's arguments conceming the Section 252(I) exemption for IUral ILECs has no applicability to CMRS carri ers since IUral [LECs have long provided Type I and Type 2 interconnection to CMRS carriers. See NTCA Com ments at 4. Besides, as NTCA recognizes, the FCC has ample authority over Section 251(1) exempt ILECs under Sections 20I and 202 of the Act. See id. at 3. " See Hon. MIchael K. Powell, DIgital Broadband Migration II, FCC Press Conference (Oct. 23, 2001). See also Han. Michael K. Powell, Remarks before the Association for Local Teleconnnunications Services (Nov. 30,2001) (noting the growing importance of wireless services in offering competitive choices for consumers.); Han. Michael K. Powell, Forrester Research Telecom FOlurn (May 21, 2001) ("[W]e underestimate the value ofwireless as a sub stitute for local services."). 14 _.... - ---- .-------------- VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 15 of22 February 12,2002 Smaller ILEC provisioning of special access circuits to CMRS carriers will become even more important in the future. New entrant PCS licensees like VoiceStream, Leap Cornmunica- tions and Sprint PCS, continue to expand the geographic reach oftheir networks, and are begin- ning to provide services that compete with the smaller ILEC's landline services and the mobile services provided by the smaller ILEC's affiliated incumbent cellular carrier. Consequently, CMRS carriers are among the most exposed customers to deficiencies in smaller ILEC special access service installation, maintenance and repair. In addition, only last week the Commission noted that the provision ofhigh-speed DSL Internet service "may not be economically viable in many rural areas for rural telephone carriers" and that the provision ofadvanced services (e.g., GPRS, EDGE, and IxRTT) and eventually third generation services, by VoiceStream and other CMRS carriers offers "significant potential for expanding the availability of advanced telecommunications to more Americans"; The successful deployment of3G wireless services may significantly expand availability ofadvanced services, especially to consumers that are currently un derserved by wireline connections. 36 Given the monopoly position held by most smaller ILECs in the provision of special access fa_ ci lities, the risk is very real that such ILECs will exercise their power to delay competitive entry - whether to protect their landline services or their affiliated incumbent cellular services. VoiceStream acknowledges that a smaller ILEC's service area is often quite different than the dense population served by the largest ILECs and that this difference may affect the amount oftime a smaller ILEC needs to install a special access facility. The answer to this dif- ]5 ITTA's asseliion - "the market governs [rural ILEC] perfOlmance standards" (ITTA Comments at 9) - is not surprisingly made without factual support. 36 See Third SectIOn 706 Report. CC Docket No. 98-146, FCC 02-33, atp. 5,1) 80 and 1) 114 (Feb. 6, 2002). 15 VOIceStream Wireless Reply Comments CC Docket No. 01-321 Page 16 of22 February 12, 2002 ference is not to exempt smaller ILECs from performance measurements altogether, since they possess anti-competitive incentives and abilities that equal or exceed those ofthe larger ILECs. Rather, as Sprint points out, the answer is to adopt different, less stringent performance meas- urements for smaller ILECs 37 VoiceStream further appreciates that smaller ILECs may not have the automated systems possessed by the largest ILECs, although automated systems probably are much less important given the fewer special access circuits that smaller ILECs install 38 Again, the answer to this dif- ference is not to exempt smaller ILEC from reporting requirements altogether. Rather, as the Commission itselfrecognizes, the answer to require smaller ILECs to report their performance data less frequently (e.g., twice a year vs. monthly).39 The fact is that smaller ILECs wield as much (and often more) dominance in the special access market in their service territories than the power held by the largest ILECs in their service territories. While adjusting the frequency and detail ofperformance reports is certainlyjustified, exempting smaller ILECs from all obligations cannot be justified. III. VOICESTREAM SUPPORTS THE JOINT COMPETITIVE INDUSTRY GROUP PROPOSAL, BUT THE PROPOSAL SHOULD BE EXPANDED TO INCLUDE A SEPA RATE CATEGORY OF DATA INVOLVING CMRS CARRIERS On January 22,2002, a group ofCLECs and !XCs jointly submitted for the Cornmis- sion's consideration proposed Performance Measurements and Standards for ILEC special access 37 See Sprint Comments at iii and 11-15. 38 VoiceStream believes that it IS highly unlikely that smaller LECs nsing automated systems would face "costly and expensive overhaul" ofthese systems (see ITTA Comments at 7) since the raw perfonnance inputs are relatively standardized within the indnstry (e.g., FOC date). Besides, a smaller ILEC believing that any system modifications cannot be cast justified can seek an appropriate waiver to submit instead the data that its automated systems record. 19 See Initial Regulatory Flexibility Analysis, Docket No. 01-321,at~35. It is also important that smaller ILECs be required to maintain their special access performance data so the infonnation is available in the event a complaint is lodged. 16 Voice Stream Wireless Reply Comments CC Docket No. 01-321 Pagel7of22 February 12,2002 services 40 This document proposes measures and standards thai the Commission and state regu- lators can use to detect discriminatory and unreasonable performance with respect to installation, maintenance and repair of special access facilities - information that is not currently available. Not surplisingly, since CLECs and IXCs prepared the proposal, the proposal would have ILECs submit performance reports segregating unaffiliated CLEC/IXC data from affiliated ILEC data. The Joint Competitive Industry Group Proposal contains a uniform set ofclear, practical, workable and enforceable measurements, and VoiceStream therefore supports and endorses the proposal. The proposal would also impose minimal or no implementation burdens on ILECs be- cause the metrics are similar (ifnot identical) to those used with other regulatory reports, whether ARMIS, merger conditions or state reporting requirements 4 ! As VoiceStream and others have pointed out,42 however, CMRS carriers also make ex- lensive use of ILEC special access facilities in connecting their mobile switching centers ("MSCs") to their subtend base stations (or cell sites). As ofJune 2001, the CMRS industry col- lectively operated over 114,000 cell sites (contrasted with only 24,000 in June 1996, a growth of nearly 500 percent), and the vast majority ofthese sites are served by ILEC special access facili- ties 43 Indeed, as noted above, CMRS carriers are generally more vulnerable to unreasonable and discriminatory ILEC special access practices because ILECs refuseto provide UNEs to CMRS carriers and because CMRS carriers need facilities in dispersed locations, locations that fre- quently only ILECs serve. 40 See Letter from Joint Competitive Indnstry Group to the Hon. Michael K. Powell, FCC Chairman, Docket No. 01-321 (Jan. 22, 2002)("Joint Competitive Industry Group Proposal"). 41 See, e.g., WorldCom CODmlents at 43-44. 42 See. e.g., VoiceStream Comments at 3-4; AT&T Wireless Conunents at 3-4; Sprint Comments at 3. 43 See CTIA's Semi-Annual Wireless Industry Survey Requests, June 1985 to June 2001. 17 VoiceStrearn Wireless Reply Conmlents CC Docket No. 01-321 Page 18 of22 February 12,2002 Accordingly, while endorsing the Joint Competitive Industry Group Proposal, Voic- eStream further agrees with AT&T Wireless that the Commission should expand the reported data to include CMRS carriers' use ofspecial access service. 44 American consumers perceive and have increasingly employed CMRS as a competitive substitute for local exchange as well as long distance services. A USA Today/Gallup poll showed that 18 percent ofcellphone users employed cellphones as their primary phone 45 Already, approximately two percent ofAmerican households have completely "cut the cord" and rely exclusively on CMRS. Reputable projec- tions indicate that proportion rising to II percent by 2006, and to a strong, and perhaps over- whelming, majority share by 2012 46 As VoiceStream and AT&T Wireless demonstrated in their comments, CMRS providers are vitally dependent on timely, non-discriminatory provision ofILEC special access circuits. Given the current and forecasted ability ofCMRS to provide true facilities-based competition to [LECs, VoiceStream concurs with AT&T Wireless' conclusion that it is crucial that one ofthe repOliing categories document ILEC perfoffilance in provisioning special access circuits to CMRS carriers, both affiliated and unaffiliated, and segregate this data from other users (e.g., CLECs, IXCS)47 Separating these categories ofCMRS-only reports is especially necessary in light ofthe January I, 2002 sunset ofthe "separate affiliate rule" that required ILECs providing in-region broadband CMRS to do so through a separate affiliate. 48 The imposition ofa separate, two-part, CMRS reporting category is the only comprehensive method by which the Commission " See AT&T Wireless Comments at 15 and 18-19. 45 Sec liSA TODAY, "18% See Cellphones As Their Main Phones," at B-1 (Feb. 1,2002). 46 See Cnet News.com, "Study: Consumers Go Wireless At Home," (Jan. 29, 2002). See also USA TODAY, supra ("vast majority [employing CMRS as main phone] in ten years.") ~7AT&T \Vireless Conmlents at 18. 18 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 19 of22 February 12, 2002 can provide independent CMRS carriers with information as to whether ILEC-affiliated CMRS competitors are experiencing similar difficulties with special access circuit provisioning or are being given preferential treatment by the ILEC parent. 49 Although the Commission imposed no reporting regime in conjunction with the ILEC in-region CMRS "separate affiliate rule," this proceeding on special access performance poses a unique opportunity for the Commission to fa- cilitate a meaningful evaluation ofthe competitive environment. IV. THERE ARE MORE EFFECTIVE TOOLS THAN SUNSETTING TO TERMI NATE REPORTING REQUIREMENTS IF AND WHEN THEY BECOME UNNECES SARY The Commission has asked whether it should adopt a sunset for any new performance measures, and ILECs not surprisingly advocate adoption ofa short sunset date, e.g., "no later than two years after adoption.,,50 There are numerous problems with a sunset date in a context like this. First, any sunset date that the Commission may establish would necessarily be arbi- trary. The date may be too late for some carriers and premature for others. Indeed, the fact there is such a wide disparity in special access perfonnance among different ILECs alone suggests that one, industry-wide sunset date would be inappropriate. In addition, grant ofSection 271 ap- proval would serve to increase, rather than decrease, an RBOCs incentive to discriminate against non-affiliated special access customers. This increased RBOC incentive is supported by the New York Commission's recent findings about V erizon's poor special access provisioning perform- ance. 48 47 CFR § 20.20(1) 49 AT&T \VireJess Conmlents at 6-7; Sprint Comments at 3-4. 50 See, e,g, Venzon Comments at 19. 19 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 20 of22 February 12, 2002 An automatic sunset date also would have the real potential to be counterproductive, be- cause it would reduce an ILEC's incentive to comply with its statutory obligations. As World- Com explains: [A]n automatic sunset date would provide incumbent LECs with an incentive to strategically delay their implementation of, and compliance with, Commission or ders until the sunset date arrives. 51 hnportantly, a sunset date is not needed to avoid creating a regulatory program that will take on "a life ofits own."S2 Section II ofthe Act specifically requires the Commission to re- view biennially "all regulations," and this biennial review will necessarily include the perforrn- ance measures the Commission adopts in this proceeding S3 In addition, any ILEC believing that the performance measures are no longer required can seek a waiver or petition the Commission to forbear from applying any requirements54 ILECs should be rewarded for good performance. Ifa given ILEC consistently meets the benchmarks over time, VoiceStream, for one, would have no problem with relieving that ILEC ofits reporting obligations so long as the ILECs perform- ance does not deteriorate yet again. V. CONCLUSION VoiceStream agrees with the Illinois Commerce Commission's recommendation that the FCC "listen to the marketplace" in rendering its decision: 51 WorldCom Comments at 45. 52 Verizon Comments at 20. 5) See 47 V.S.c. § 161(a). " See 47 V.S.c. § 160; 47 C.F.R. § 1.3. Importantly, the Commission's forbearance powers include the ability to grant relief to a single telecommunications carrier or a class oftelecommunications carrier. See 47 U.S.c. § 160(a). 20 VoiceStream Wireless Reply Comments CC Docket No. 01-321 Page 21 of22 February 12,2002 Special access facilities are affected with a public interest ifcarriers must have them to compete, thereby making them an important component to a healthy competitive marketplace.55 As New York correctly observes, a "global economy is dependent upon high-speed telecommu- nications circuits and special services are vitally important to the economic well being ofcom- petitors and business customers.,,56 Competition in the retail telecommunications market cannot flourish so long as ILECs exercise their market power over wholesale special access inputs com- petitive carriers need to pro.vide their retail services. Further, as demonstrated above, CMRS car- riers that offer the "best hope" to provide competition for an ILEC's residential and Internet ac- cess services remain especially vulnerable to discriminatory and unreasonable ILEC special ac- cess performance practices. 55 ICC Comments at 2. " NYDPS Comments at 1-2. 21 VOIceStream Wireless Reply Comments CC Docket No. 01-321 Page 22 of22 February 12, 2002 For all the foregoing reasons, VoiceStream urges the Commission to adopt the Joint Competitive Industry Group Proposal, modified to recognize a separate CMRS carrier provision- ing reporting classification with separate reports for affiliated and unaffiliated CMRS carriers. Respectfully submitted, VoiceStream Wireless Corporation By: \s\ Brian T. O'Connor Brian T. O'Connor Vice President, Legislative & Regulatory Affairs Harold Salters Director, Federal Regulatory Affairs VoiceStream Wireless Corporation 401 9th Street, NW, Suite 550 Washington, DC 20004 Telephone: (202) 654-5900 Facsimile: (202) 654-5963 Dated: February 12, 2002 22