FCC to keep in mind... In determining what UNEs to make available, must consider whether –Access to proprietary elements is necessary –Failure to provide access would impair the ability of the carrier to provide services it seeks to offer

History of UNE’s August 1, 1996: FCC established list of UNE’s –Local loops –Network interface devices –Local and tandem switching –Interoffice transmission facilities –Signaling networks and call-related databases –Operations support systems –Operator services and directory assistance

January 17, 1997: Eighth Circuit Court of Appeals –Vacated superior quality rules –Vacated requirement that IELCs combine UNEs even if not formerly combined January 25, 1999: Supreme Court found that the FCC had misinterpreted the necessary and impair standard in the Telecom Act and vacated Section of the FCC Rules

September 15, 1999: FCC’s UNE Remand Order –Proprietary network elements necessary if lack would “preclude” providing service –Lack of access to non-propriety network elements would impair if “materially diminished” ability to provide service –Added Unbundled access to dark fiber Unbundling of subloops and inside wire Unbundled access to packet switching in limited circumstances Unbundled access to dark fiber transport Unbundled access to calling name database, and E911 database Access to loop qualification information

September 17, 1999: Eighth Circuit Court of Appeals vacated the TELRIC standard for setting UNE rates

November 18, 1999: FCC’s Line Sharing Order –Added as a network element access to the high-frequency portion of the local loop to a requesting CLEC on loops that carry the ILECs’ basic telephone service January 19, 2001: FCC’s Line Splitting Order –One or more competitors to provide voice and data over same line

May 13, 2002: US Supreme Court reaffirmed the FCC’s TELRIC pricing rules and additional combination rules May 24, 2002: DC Circuit Court of Appeals vacated and remanded FCC’s UNE Remand Order and Line Sharing Order –Called for more “nuanced” concept of impairment— FCC was calling for unbundling in all markets regardless of state of competition in that market –Line sharing order did not take into account the state of competition in broadband services coming from cable or satellite alternatives

February 20, 2003: FCC announced adoption of new UNE rules August 21, 2003: FCC finally issued the Triennial Review Order

Triennial Review Asked for comments on how to measure “necessary” and “impair” –Practice has been to set forth network element definition and then make determination whether lack of access to element would be impairment—asked if should first identify impairments and then defined network elements to specifically address impairment

Asked whether to modify or limit ILEC unbundling obligations to encourage investment in new construction—how to treat fiber loops Asked if unbundling rules should differ based on –Type of customer CLEC seeks to serve –Type of carrier the CLEC is –Geographic considerations

UNE Triennial Review Highlights –FCC’s earlier UNE decisions had been remanded for further review by both the Supreme Court and the DC Circuit Remand revolved around interpretation of “impairment” Unbundling rules were seen as overly permissive –Only one commissioner voted for the order in its entirety; the other four all dissented on some issues –State commissions will be determining the future of UNEs—one state at a time –The order makes a distinction between typical voice services and future broadband services in its treatment of UNEs; also makes a distinction between traditional circuit switching and newer packet switching services

Back to the drawing board! August 28 and 29, 2003: US Telecom Association and the four RBOCs petitioned the D.C. Circuit Court of Appeals to overturn portions of the Triennial Review Order because it does not comply with the court’s findings in May 2002 in “USTA v. FCC” (which led to the Triennial Review) October 8, 2003: US Court of Appeals for the Second Circuit (NY) issued a temporary stay for the provisions of the order that limit ability of CLECs to serve enterprise customers using the UNE-P platform—in response to two petitions from CLECs March 2004: US Court of Appeals for the DC Circuit found most of the Triennial Review unlawful

Order on Remand February 2005: FCC attempts to make some distinctions about markets in which there is no impairment for trunks, for high capacity loops, and for mass market local circuit switching –No impairment in large wire centers for trunks or high capacity loops Phase out plan –Phase out of local circuit switching