FCC APPROVES VERIZON APPLICATION FOR LONG DISTANCE IN MASS.

Verizon filed its first application for Sec. 271 authority in Mass. Sept. 22 but withdrew it Dec. 18 after FCC Common Carrier Bureau said it didn’t have enough information to substantiate company’s claim that it offered competitors nondiscriminatory access to DSL lines. Similar concerns had been expressed by Dept. of Justice in Oct. Company refiled its application Jan. 16, saying it had addressed issues that concerned agencies. FCC said Mon, that it was satisfied with competitive situation and that: (1) Competitors served more than 513,000 local phone lines using their own facilities. (2) Competitors were serving another 93,000 phone lines using unbundled loops. (3) They also served more than 238,000 business lines and more than 30,000 residential lines using resale.

Comr. Tristani said she dissented because there wasn’t enough proof that Verizon was providing unbundled switching to competitors at cost-based rates, as required by Telecom Act. “With the stakes so high, the Commission cannot afford to let Verizon into the Massachusetts long distance market before the company has fully demonstrated compliance with the market opening requirements of Sec. 271,” she said. “The availability of unbundled network elements [UNEs at cost-based rates is an essential ingredient… for entering the residential market” in Mass., she said.

Chmn. Powell acknowledged in separate statement that Verizon’s application had “some weaknesses” and said its switching rate was “central concern.” Rate “is clearly higher than those we have seen in some other states,” he said. However, it was lower than that set by Mass. Dept. of Telecom & Energy, “recognizing the Commission’s concern that the state-set rate might not be appropriately cost-based,” he said. Verizon chose instead to offer rate FCC approved in N.Y., Powell said. He said some competitors say N.Y. rate wasn’t appropriate either because N.Y. regulators were on verge of revising it. That isn’t “idle concern” but “we cannot properly reject an application from one state… on the basis of speculation regarding the outcome of another state’s future rate proceeding,” Powell said. However, he said, this doesn’t mean Verizon’s switching rate is “forever insulated.” If N.Y. regulators change rate, FCC might require Verizon to take like action on Mass. rate, he said.

Agency emphasized that it had “a number of enforcement tools at its disposal,” including imposition of penalties or suspension of Sec. 271 authorization if Verizon didn’t continue to comply with open market requirements of Sec. 271 checklist. FCC official said company would be able to start service once Commission decision was published in Federal Register, which she said probably would be April 26.

ALTS said it was disappointed because it had “repeatedly pointed to the overwhelming evidence in the record establishing that Verizon is not in compliance with the Sec. 271 checklist.” “Verizon has essentially been rewarded for ignoring the law and its obligations to open its market to competitors,” ALTS Pres. John Windhausen said. ALTS Gen. Counsel Jonathan Askin said, “We trust that the FCC and [Mass. regulators] will vigilantly monitor Verizon’s post-Sec. 271 activity.”

Verizon said it would begin “surprise-free” long distance service as soon as order was final. It said results in N.Y. market showed “Verizon offers dramatic value for consumers.” Company plans to hire more than 100 employees this year to serve new long distance customers in state, it said. Verizon Senior Vp- Public Policy Tom Tauke said: “Today’s decision levels the playing field” because until now only company’s competitors could offer customers packages of local calling, long distance, video and data service. USTA Interim Pres. Gary Lytle said FCC approval “is solid proof that Verizon has complied” with Telecom Act.

Consumer Federation of America (CFA) accused FCC of “abandoning local competition” by approving Verizon application. Commission has “dealt a serious blow to residential telephone consumers,” said Mark Cooper, CFA research dir. He said FCC had allowed Verizon to sell long distance service “before it has opened its monopoly service areas to alternative local service providers.” He said consumers in Mass. wouldn’t see same savings as in N.Y. and Tex. because Verizon hadn’t met same standards in Mass. as were met in other 2 states.