For a Limited Time Only: Unbundled network element platform reborn in New York

Although the 8th Circuit Court ruled last year that incumbent carriers were not required to do so, Bell Atlantic last week said it would recombine unbundled network elements for competitors for up to six years in New York state. The move is part of a plan Bell Atlantic officials hope will position the company to offer long-distance in that state by January 1999.

The plan, which has received conditional approval from the New York Public Service Commission, calls for the carrier to recombine UNEs for competitive local exchange carrier customers for up to six years in rural areas and up to four years in urban areas-except where at least two CLECs have collocated in Bell Atlantic central offices. For business customers, CLECs will pay an extra $6 per line in urban areas and an extra $2 in rural areas for rebundling. There will be no rebundling charge for residential customers.

Because a rebundled platform enables CLECs to offer service without building their own networks, it could help bring competition to the residential market, where few CLECs have installed facilities.

"The biggest problem that exists today is providing a competitive local choice for the mass market," said Bob Atkinson, senior vice president of legal, regulatory and external affairs for Teleport Communications Group, the New York-based CLEC that AT&T plans to purchase. "The unbundled network element platform gives us the opportunity to address that market earlier than if we build our own facilities."

Other Bell regional holding companies may not be willing to follow Bell Atlantic's lead in offering such a platform, however.

"What's good for New York is not necessarily good for Mississippi or Alabama," said a BellSouth spokesman. "Most of our commissions have ruled that a UNE platform is tantamount to resale. The act doesn't require it, and the 8th Circuit Court said we don't have to do it."

Other elements of Bell Atlantic's plan drew mixed reviews-including a plan for an independent third party to test how well the carrier's operations support system (OSS) can process CLEC orders. While praising the use of a third-party tester, Heather Burnett Gold, president of the CLECs' Association for Local Telecommunications Services, said testing under live conditions should be part of that plan.

Competitors also questioned Bell Atlantic's proposal to offer discounts to other carriers if statistics show the level of service that Bell Atlantic offers competitors' customers is below what it offers its own customers. Such discounts could be about 34 cents a month per line for a UNE that costs $12.50 a month, said Bill Allan, vice president of regulatory affairs at Bell Atlantic. He added that costs vary and that discounts will increase if a discrepancy continues.

"We do not believe the penalties are significant enough to remove the incentive to a monopoly to serve its competitors with poor service," said Robert LoPardo, regional director of public policy for MCI.

Bell Atlantic's schedule calls for OSS testing, which determines PSC approval, to be completed in time for a September filing with the FCC. The commission then would have 90 days to rule on the carrier's long-distance request.

One analyst said Bell Atlantic's announcement simply "validates reality." New York "has had competition for a long time," said Frank Dzubeck, president of Communications Network Architects, Washington. "Bell Atlantic saw a way to make itself look like a hero without impacting its financial statement at all."

The $1.5 billion network upgrade Bell Atlantic announced last week will be used partly to support long-distance service, said Lawrence T. Babbio Jr., president and CEO of Bell Atlantic's Network Group.