DE 97-229 BELL ATLANTIC Arbitration Regarding Request for Recognition of Dark Fiber as an Unbundled Network Element Order Clarifying Commission Order No. 22,942 and Approving Contract Language Consistent with that Order O R D E R N O. 22,990 July 24, 1998 In its Order No. 22,942, the New Hampshire Public Utilities Commission (Commission) resolved a dispute between New England Telephone & Telegraph Company d/b/a Bell Atlantic-New Hampshire (Bell Atlantic) and Vitts Corporation (Vitts) regarding Vitt's bona fide request, made pursuant to the Interconnection Agreement of the Parties, for provision of Dark Fiber under 252(c)(3) of the Telecommunications Act of 1996 (the TAct). The Commission found that Dark Fiber is a network element subject to the unbundling requirement of 251 of the TAct. This order addresses two matters that have arisen as a result of Order No. 22,942. I. BELL ATLANTIC'S REQUEST FOR CLARIFICATION AND/OR RECONSIDERATION By letter dated June 2, 1998, Bell Atlantic requested clarification and/or reconsideration of one portion of Order No. 22,942, the order finding Dark Fiber a network element. Bell Atlantic suggests that the Commission misstated an aspect of the application of the impairment standard. The impairment standard involves consideration of whether a failure to provide access to a network element would impair the ability of a new entrant to provide a service it seeks to offer. On page 18 of Order No. 22,942, we stated that the impairment standard "need not include an investigation as to whether Vitts has an alternate source for the network element." Citing language in 283 and 285 of the FCC's First Report and Order in CC Docket No. 96-98, Bell Atlantic argues that, while the Commission need not consider alternative sources other than the incumbent local exchange company (emphasis in Bell Atlantic's letter), the Commission must evaluate impairment by comparing the quality or costs of the service as provided over the network element requested compared with providing that service over other unbundled elements in the incumbent LEC's network. (Emphasis in Bell Atlantic's letter.) Because our order contains the comparison described here and finds that our decision would be the same "even if we were required to deny access to Dark Fiber only if an alternative network element were available," Bell Atlantic does not aver that the requested clarification would alter the ultimate conclusion in the case. However, for future disputes, Bell Atlantic wishes to establish what it considers the correct application of the standard for determining whether network elements must be made available on an unbundled basis. The 8th Circuit's review of the FCC's First Report and Order, at 811, which we cited in our order, considers certain petitioners' assertions that the FCC unreasonably decided in 283 that the impairment standard in 251(d)(2)(A) does not require an inquiry into whether a competing carrier could obtain a network element from another source. Bell Atlantic correctly points out that 283 declined to interpret 251(d)(2)(A) as meaning that ILECs need not provide proprietary elements if requesting carriers can obtain the requested proprietary element from a source other than the incumbent. The FCC's stated rationale for declining this interpretation is because it would require new entrants to duplicate unnecessarily "even a part of the incumbent's network," generating delay and higher costs for new entrants so as to thwart the goals of the TAct. The 8th Circuit upheld the FCC's decision with regard to proprietary network elements. Although Dark Fiber is not a proprietary network element, we believe that Order No. 22,942 should be clarified in the manner suggested by Bell Atlantic. More specifically, an analysis of whether a network element, whether proprietary or not, must be unbundled need not include an investigation of sources other than the ILEC for the network element. However, an investigation of other sources within the ILEC is appropriate when applying the impairment standard. II. CONTRACT LANGUAGE In compliance with the procedural order in this docket, Order No. 22,800, on June 16, 1998, Vitts and Bell Atlantic jointly filed proposed contract language amending the Interconnection Agreement to reflect the provision of Dark Fiber as an unbundled network element. We have reviewed the proposed contract language and find that it accurately reflects the conditions we deemed appropriate in order to insure that Competitive Local Exchange Carriers (CLECs) obtain the benefits of the network element without jeopardizing the integrity of the Bell Atlantic network system or the quality of service provided to Bell Atlantic customers. In compliance with our order, the amended contract language establishes a Dark Fiber Price Schedule identical to that agreed upon in an Interconnection Agreement between XCOM and Bell Atlantic-Massachusetts. We note that these are interim prices that will be superseded by the Dark Fiber prices to be established for New Hampshire when docket DE 97-171 is concluded. We find that the proposed language is just and reasonable and meets the requirements of the TAct. Based upon the foregoing, it is hereby ORDERED, that Commission Order No. 22,942 is clarified to the effect that an analysis of whether a network element must be unbundled need not include an investigation of sources other than the ILEC for the network element; and it is FURTHER ORDERED, that the proposed contract language filed with the Commission by Vitts and Bell Atlantic on June 16, 1998 is hereby approved. By order of the Public Utilities Commission of New Hampshire this twenty-fourth day of July, 1998. Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger Chairman Commissioner Commissioner Attested by: Thomas B. Getz Executive Director and Secretary