Verizon applies for LD approval in Penn.

Verizon Communications on Thursday filed an application with the Federal Communications Commission (FCC) to provide long distance service in Pennsylvania.

The incumbent carrier said it submitted its best application to date and anticipates few problems winning the necessary approval, despite having to face “increasingly more stringent provisions” mandated by the FCC.

“We had a lot of difficulties – it was a rigorous process,” said Tom Tauke, senior vice president for public policy and external affairs. “The bar keeps being raised because of new requirements from the FCC. This FCC is ensuring that everybody lives by the rules. We’re living by the rules.”

Earlier this month, the Pennsylvania Public Utilities Commission (PUC) approved Verizon’s bid by a narrow 3-2 margin. Dissenting commissioners questioned whether Verizon had fully opened up its local exchange networks to competitors as required by the 1996 Telecommunications Act.

While Verizon acknowledged that it had not fully complied with every metric laid out in its FCC application, it said it had fulfilled more than 95 percent of the requirements and had witnessed far greater levels of competition in Pennsylvania than in New York and Massachusetts, the other states in which it provides long distance.

“The filing doesn’t have to be perfect,” said Dan Whelan, president of Verizon Pennsylvania. “It has to be legally adequate, and we feel our application is much more than just legally adequate.”

Verizon said competitors now control about 1 million access lines across the state, 16 percent of the lines in Pennsylvania. In addition Verizon has more than 370,000 trunk lines linking its network to competitors and has 2000 co-location arrangements for competitors’ equipment.

The FCC is increasingly looking for stronger evidence of a market being “irretrievably” open to competition, Tauke said, making it more and more difficult for Verizon to submit its applications quickly. Issues that are significant in one application are downplayed in an application for another region, he added. For example, "hot cuts" were a big issue in Massachusetts, but hardly a factor in Pennsylvania, he explained.

Pennsylvania has something of a battleground for Verizon. Last September, the PUC ordered the company to split its retail and wholesale operations, effectively forcing the incumbent to treat its retail operation function as it would any competitive carrier. In March, the PUC revised its decision, ruling that Verizon could continue to operate its wholesale and retail operations as a single business unit, but it must adhere to a strict code of conduct to ensure non-discriminatory access to its networks.

The FCC has 90 days to rule on the Pennsylvania application. During that period the U.S. Department of Justice will review the application for potential antitrust problems and submit a recommendation to the commission.