The FCC denied Verizon’s petition for forbearance from applying t...

company’s Sec. 272 affiliate from sharing OI&M functions with the Bell or another Bell affiliate. However, the FCC said Sec. 10(d) of the Act prohibited it from granting the Verizon petition because “the relevant parts of section 272 are incorporated by reference into section 271, and are, therefore, included within the section 10(d) limitation on forbearance from section 271 until it is ‘fully implemented.'” The FCC also said Sec. 272 was “fully implemented” on a state-by-state basis 3 years after the grant of Sec. 271 authority in a state. In a companion order, the FCC also asked for comment on whether it should modify the rules adopted to implement Sec. 272(b)(1)’s “operate independently” requirement. Specifically, the Commission said it sought comment on: (1) Whether the OI&M sharing prohibition was an overbroad means of preventing cost misallocation or discrimination by Bell companies against unaffiliated rivals. (2) Whether the prohibition against joint ownership by Bells and their Sec. 272 affiliates of switching and transmission facilities, or the land and buildings on which such facilities were located, should be modified or eliminated. Comments are due 15 days and replies 25 days after the notice is published in the Federal Register. Commenting on the Verizon decision, FCC Chmn. Powell concurred in part and dissented in part saying he was “troubled” by the Commission’s unwillingness to consider Verizon’s request for forbearance from the ban on sharing OI&M functions. He said despite Congress having granted the Commission “powerful and sweeping forbearance authority to address situations such as this” in Sec. 10 of the Act, “my colleagues prefer addressing the continued viability of our OI&M rules in the context of a notice and comment rulemaking. I hope to conclude that rulemaking expeditiously.” In a separate statement, Comr. Abernathy dissented, saying the Commission could forbear from the OI&M rule without implicating Sec. 10(d) of the Act and without deciding whether Sec. 271 was “fully implemented” because the OI&M restriction wasn’t a requirement of the statute: “The Commission adopted this prophylactic ban notwithstanding that more limited degrees of separation could have faithfully implemented the statutory requirement that the Bell company and its long distance affiliate ‘operate independently.'” Abernathy said she disagreed with the Commission’s conclusion that Sec. 271(d)(3) hadn’t been fully implemented “even after the grant of section 271 authorization throughout Verizon’s service territory. Had the Commission reached the merits of the forbearance analysis under section 10(a), I would have been inclined to conclude that the prohibition on sharing OI&M functions is not necessary to ensure just and reasonable rates or practices, to protect consumers or to promote the public interest.” Both Abernathy and Comr. Martin said they were “pleased” the Commission was reviewing its requirements regarding OI&M rules. Said Martin: “Although I had reservations about the statutory authority to allow the Commission to forbear from the statute, I support the notice asking whether these rules are required.” However, he said he concurred in the notice, because he was “disappointed” by the FCC’s failure to support a tentative conclusion to eliminate those rules: “In my view, sufficient evidence exists to tentatively conclude that the [OI&M] sharing prohibition is an overbroad means of preventing improper cost allocation or discrimination as required by the statute.” Martin also said he was “confused” why some commissioners advocated complete elimination of any OI&M requirement as in the public interest in one item, but didn’t support the same “tentative conclusion” in the other one: “If they were willing to decide the issue finally today, why are they unwilling to make the same conclusion tentatively?” -- (96- 149)