BellSouth, SBC land long-distance approvals

BellSouth late yesterday became the first Bell company to gain FCC approval to provide long-distance service throughout its region when the commission approved its application for Florida and Tennessee. Also yesterday, SBC Communications received Section 271 approval for California.

While the commissioners were in accord on BellSouth’s application, they were not regarding SBC’s. Commissioner Kevin Martin dissented on the grounds that the California Public Utility Commission had determined that SBC had failed to complete two of the 14 checklist items required for approval, and that the application was not “in the public interest.”

Said Martin: “I believe approval of this application at this point is premature.”

Specifically, the CPUC found that SBC had failed to satisfy checklist item number two, which requires the state commission to determine that the rates charged by the incumbent carrier are non-discriminatory and based on the TELRIC formula. According to Martin, SBC’s application contained a DS3 rate in California of $1837, more than triple the rate it charges in Texas, a rate that Martin said was not TELRIC-compliant. He added that the PUC concluded in June that the rate was not cost-based, as the TELRIC formula prescribes.

Further, Martin said SBC amended the rate to $573, with “significant conditions attached,” 45 days after filing the application with the FCC. Though the commission is allowed to waive the “complete-as-filed” requirement governing 271 applications due to special circumstances, Martin said SBC’s California application did not meet the criteria for doing so.

Another problem, according to Martin, was the CPUC’s determination that SBC had not adequately met its obligation to provide advanced, i.e., DSL, services via resale, as required by checklist number 14. Martin was particularly troubled by allegations that SBC’s interconnection agreement with one competitive carrier required the CLEC to support SBC’s California application.

“Even more troubling is the majority’s refusal to consider any of this information,” Martin said. “I believe that the CPUC’s determination of checklist noncompliance is sufficient to warrant, at the very least, a more thorough consideration and analysis of this issue.”

However, FCC Chairman Michael Powell said in a statement that the commission had “painstakingly” evaluated the questions left open by the CPUC. “In the end, the exhaustive record compiled in this docket convinces me that [SBC] has met all relevant requirements for long-distance entry,” Powell said.

Powell added that while the FCC is obligated to consider the input of state commissions on 271 applications, it is not bound to reach the same conclusions. “Congress required this commission to exercise its independent judgment in reviewing [271] applications,” Powell said.

With the Bells inching ever closer to completing the 271 approval process throughout their regions – Verizon has just two states and the District of Columbia to go, while Qwest has 271 applications pending for nine of its 14 states – an AT&T spokeswoman said it was imperative that the commission retain the UNE platform to preserve the long-distance/local telecom balance envisioned by Congress when it drafted the Telecom Act, a balance she said was “teetering on the precipice.”

“The FCC will either shore up the foundation by ensuring competitive access to the UNE platform with meaningful state involvement, or it will renege on the promise Congress made to consumers in 1996 and allow telephone rates to increase and service quality to decrease.”