State regulators in N.C., Ida., N.D. and Me. say they agree with the FCC’s Triennial Review Order (TRO) conclusion that unbundled switching isn’t required for effective local competition in the enterprise market for large business customers, but left open windows for CLECs to contest that conclusion. Meanwhile, Qwest told all its state commissions that it planned to challenge the need for unbundled switching in the mass market for residential and small business customers.

The neighboring state commissions of Cal. and Ore. drew exactly opposite conclusions on whether they needed to conduct the 90-day case to challenge the FCC’s presumption that unbundled switching isn’t essential for local competition in the “enterprise” market for large business customers served by DS-1 or larger loops. Meanwhile, several other states set deadlines for CLECs to request a challenge to the FCC’s presumption.

State regulators around the country are taking up the issues referred to them in the FCC’s Triennial Review Order (TRO) on network unbundling. The commissions of Ill., Ind., Mich., Ohio and Wis. plan to hold a regional workshop session at Ill. Commerce Commission headquarters Oct. 16-17 to prioritize the issues and establish paths for communication and information exchange. The N.C. Utilities Commission (NCUC)established 2 dockets to address TRO issues. One is for the 90-day review on whether competition in the large- business local market segment would be impaired without access to unbundled switching (Case P-100, Sub 133P). The agency told the state’s 4 largest incumbents to file by Sept. 19 information on how many UNE combinations of DS-1 loops and unbundled switching they had in service. CLECs have until Oct. 3 to challenge the presumption that unbundled switching isn’t needed for effective large-business competition. The other docket (Case P-100, sub 133Q) is the 9-month case on the mass market’s need for unbundled switching. No procedural schedule has been set. The Tenn. Regulatory Authority (TRA) gave parties until Sept. 24 to file their challenges to the FCC’s presumption that unbundled local switching wasn’t needed in the large-business market. The TRA (Case 03-00490) said challengers must identify the specific markets that would be impaired absent unbundled switching and provide evidence to support their impairment claims. The Mass Dept. of Telecom & Energy (DTE) plans hearings Nov. 12-14 in its TRO docket (Case DTE 03-59) on switching for large business customers, with final briefs by Dec. 4. The Mich. PSC asked SBC to respond by Sept. 24 on whether it planned to amend the cost studies underlying its wholesale rates in the wake of publication of the full TRO. SBC in May asked the PSC to increase its UNE rates to cost and comments were to be filed by Nov. 10. The PSC last month acknowledged the TRO could affect the UNE price case and said the procedural schedule could be changed if amendments were needed because of the TRO.

State regulators plan to spend the next 2 weeks poring over the text of the FCC’s newly released Triennial Review order on network unbundling, preparing detailed summaries of what the order does and what the FCC expects from the states with regard to unbundled network element platforms (UNE-P) and other complex network unbundling issues being referred to state commissions, officials said. With release of the full order Thurs., the state commissions put into motion their plans for implementing the communication and information- sharing channels they have been setting up on a national and regional basis for the past 6 months.

In an opinion released Wed., the 11th U.S. Appeals Court, Atlanta, granted EchoStar a stay of the permanent injunction imposed by the U.S. Dist. Court, Miami, in June in a case in which local broadcasters disputed EchoStar’s ability to provide distant network signals to its customers (CD June 12 p11).

LOS ANGELES -- New studies indicate that the reality genre can offer advertisers special marketing and branding opportunities, in both traditional spots and product placement. Studies by Initiative Media in conjunction with MIT show that the more interaction viewers have with a TV program, the more attentive they are to the commercials and the better they are able to recall the ad message.

EchoStar announced it planned to redeem $245 million of its 9-1/8% senior notes due 2009. The redemption, which will reduce EchoStar DBS’s interest expense, will be effective Sept. 3 for a total of $267 million. Following the redemption, $455 million of the principle amount will remain, the company said.

With release of the FCC’s Triennial Review order on network unbundling policy said to be imminent, state regulators believe they're about to see the fruit of their months of preparation for addressing unbundled network element platforms (UNE-Ps) and the other complex network unbundling issues that the FCC order is referring to the states.

BellSouth officials said Tues. they were concerned that the same legal vulnerabilities that caused the courts to overturn previous FCC UNE decisions were at issue in the pending Triennial UNE Review order. “Our concern here is that the FCC is doing a lot of the same things over again,” BellSouth Gen. Attorney Jonathan Banks said at a media briefing on the upcoming order. BellSouth Vp Herschel Abbott noted the pending order is the FCC’s 3rd attempt to make a decision on unbundled network elements that met judicial scrutiny. “The FCC has not yet issued an order that passed judicial muster with unbundled network elements,” he said. Banks said one of the biggest controversies was the presumption of impairment used for switching. In voting on the order in Feb., the FCC was 3-2 against eliminating switching from the national UNE list, which kept the UNE platform intact and gave state regulators authority to determine whether switching, or any other UNE, should be dropped. The order included a “presumption” that switches serving large businesses no longer had to be unbundled, but it gave states 90 days to rebut that national finding. The provision would include businesses served by high-capacity loops such as DS-1. The order also had a “presumption” that switches used for the mass market should remain unbundled unless states disagreed during a 9-month period. “The FCC appears as if they are going to order us to unbundle these things just presuming impairment but not finding it,” Banks said, and courts previously have held found that unbundling can’t be ordered without a finding of impairment. “If there’s no finding of impairment, ordering unbundling of switching for the mass markets is going to be plainly wrong and inconsistent with the D.C. Circuit and the Supreme Court,” he said. Another closely watched area is how the Commission defines “mass market” in the order, which appears to be taking up a definition different from previous ones, Banks said. Saying the FCC’s majority presumed impairment for the mass market and no impairment for large business, he said the FCC in the past drew the line for a big business at 4 or more lines. Referring to DS-1 level switching facilities, a new line would be drawn at 24 lines, he said. “It’s a far, far higher threshold than the 4-line cutoff that they used to use,” Banks said. “To expand the availability of switching to 4-line customers all the way up to 24-line customers seems to be exactly what the courts have said not to do.” He said the D.C. Circuit seemed to be saying that drawing the line at 4 was in itself too broad, meaning an expansion to 24 lines would create a problem if it were to resurface before the court. Even after the 9-month period in which states decide whether switching should remain a UNE, the order appears to keep intact a 3-year period during which switching would have to be supplied by incumbents at UNE rates, Banks said. He said that would be hard for the Commission to explain to the courts “since there’s no finding of impairment, in fact they've never legally found impairment in switching.” Another closely scrutinized area of the order is how the FCC directs the states to conduct proceedings on switching impairment, Banks said. One question is whether the Commission essentially is turning over impairment decisions to the states or is giving them a tight list that constrains what they do to simply implementing the FCC decision.

BOSTON -- ILECs and IXCs on both sides of the UNE-P debate pitched their respective views to state legislatures Fri. at the National Conference of State Legislatures (NCSL) Spring Conference here. A panel Fri. summarized the new role of state PUCs in using “impairment” criteria from the FCC at the local level in determining whether to keep UNE-P. The predictable messages from AT&T and MCI to keep the UNE-P liberal and by Verizon “to consider local investment” and eliminate the UNE-P were somewhat misdirected in a room filled with state lawmakers, few of whom were likely to have telecom as their top priority.