1. Telecommunications Act of 1996 Signed into law, February 8, 1996 “ An Act to promote competition and reduce regulation in order to secure lower prices and higher quality service for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”

2. Section 251 Interconnection General duty of telecommunications carriers –To interconnect directly or indirectly with facilities and equipment of other telecom carriers –Not to install network features, functions, or capabilities that do not comply with standards and guidelines for interconnectivity or for ADA compatibility

3. Section 251(LECs) Obligations of all Local Exchange Carriers –Resale: duty not to prohibit or impose unreasonable conditions on resale of its telecom services –Number portability: ability of users to retain telephone number at same location without impairment when switching carriers –Dialing parity: no dialing delays for DA, Operator, etc. –Access to rights of way: access to poles, ducts, conduits –Reciprocal compensation: for transport and termination of telecommunications

4. Section 251(ILECs) Additional obligations of ILECs –Duty to negotiate in good faith –Interconnection with own network for transmission and routing of telephone exchange service and exchange access at any technically feasible point in the network that is at least equal in quality to that provided to itself at rates that are just and reasonable and nondiscriminatory

5. Section 251 (ILECs) –Unbundled access: nondiscriminatory access to network elements on an unbundled basis at any technically feasible point at rates, terms, and conditions that are just, reasonable and nondiscriminatory; and in a manner that will allow requesting carriers to combine such elements in order to provide telecom service –Resale: sell at wholesale rates any telecom service that the ILEC provides retail to subscribers who are not telecom carriers; states may prohibit a reseller from buying wholesale rates available to one category of customer and selling to another category (residential versus business customer for example)

6. Section 251 (ILECs) –Notice of changes: reasonable public notice of network changes –Collocation: duty to provide at just and reasonable rates physical collocation of equipment necessary for interconnection or access to unbundled elements at the premise of the ILEC; may provide virtual collocation if can prove to state commission that physical is not practical

7. 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 Preservation of state access regulations –So long as they are consistent with requirements of Section 251 and don’t prevent implementation of this section

8. Section 252 Pricing Prices for interconnection and for UNEs to be based on cost, to be nondiscriminatory, and may include a reasonable profit –Cost to be determined without reference to rate-of-return or rate-based proceeding Wholesale prices: on the basis of retail sales less marketing, billing, collection and other avoidable costs

9. Section 252 Pricing, continued Charges for transport and termination of traffic (reciprocal compensation) –Based on reasonable approximation of additional costs of terminating such calls –Bill and keep possible –State commission not to engage in any rate regulation proceeding to set the charges

10. UNE’s Original List of UNEs –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

11. UNE Remand Order 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, E911 Database –Access to loop qualification information

12. More additions Line Sharing Order –Added as a network element access to the high-frequency portion of the local loop to a requesting competitive LEC on loops that carry the ILECs basic telephone service Line Splitting (January 2001) –One or more competitors to provide voice and data over same line

13. Court action on UNE’s Supreme Court vacated unbundling rules and UNEs—”impair” and “necessary” –Led to FCC’s UNE Remand Order Proprietary network elements necessary if lack would “preclude” providing service Lack of access to non-proprietary network elements would impair if “materially diminished” ability to provide service Eighth Circuit –Vacated superior quality rules –Vacated requirement that ILECs combine UNEs even if not formerly combined

14. More court action D.C. Circuit in May of 2002 –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 didn’t take into account the state of competition in broadband services coming from cable or satellite alternatives

15. First Triennial Review of UNEs (FCC 01-361) Incorporates other proceedings—EEL’s, high- capacity loops; local switching; next generation networks Asks 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—asks if should first identify impairments and then define network elements to specifically address impairment

16. More on Triennial Review Asks whether to modify or limit ILEC unbundling obligations to encourage investment in new construction—should fiber loops be de-listed? Asks whether inter-modal providers be seen as competitive alternatives to the ILEC network Asks to what extent universal service and access charge issues should be considered in unbundling analysis Asks if unbundling rules should differ based on –Type of customer CLEC seeks to serve –Type of carrier the CLEC is –Geographic considerations

17. Even more on triennial review Asks for comments regarding the impact of removal of unbundling requirements that might overlap the requirements of Section 271 Asks for comments regarding the role of the States in implementing unbundling requirements—should the Commission establish national standards that the States will apply, taking into account the situation in that state? Asks to what extent should address financial impact created by changes to UNE availability to all affected carriers and access providers

18. Collocation The duty to provide on rates, terms, and conditions that are just, reasonable, and nondiscriminatory, for physical collocation of equipment necessary for interconnection or access to unbundled network elements at the premises of the local exchange carrier, except that the carrier may provide for virtual collocation if the local exchange carrier demonstrates to the State commission that physical collocation is not practical for technical reasons or because of space limitations.

19. More on collocation Must be permitted to all buildings or similar structures owned or leased by ILEC that house network facilities and all ILEC structures on public rights of way Collocation of all equipment necessary for interconnection or access to unbundled elements, no requirement to collocate equipment for enhanced services or for switching—however, concept of “necessary” interpreted broadly by the FCC

20. Collocation Space—first come, first served basis State commissions must determine if virtual rather than physical collocation is allowed because of lack of space—BOC to provide State commission with floor plans Security arrangements—caged collocation in the original order

21. Advanced Services Collocation Order—added requirements CLEC could collocate equipment that had additional functionalities and could use them BOC had to remove obsolete equipment and offer collocation in adjacent spaces If BOC claimed lack of space, had to provide CLEC with tour of facility; also had to relinquish space held for future use before denying virtual collocation due to lack of space BOC had to allow cage-less or shared cage collocation and could not require security provisions more stringent than it followed

22. DC Circuit Rejected idea that necessary meant used or useful—rejected efficiency argument to allow collocation of equipment not necessary for interconnection Rejected idea that the CLEC could choose where to collocate Found that BOC could require CLEC to use separate floor or entrance Did, however, uphold the FCC regarding the prorating of space preparation costs to CLECs based on proportion of space occupied.

23. 2001 FCC Collocation Order “necessary”—if inability to deploy equipment would, as a practical, economic, or operational matter, preclude carrier from obtaining interconnection or access to UNEs Multifunction equipment “necessary” only if primary function is interconnection or access to UNEs Must allow collocation switching and routing equipment—traditional circuit switches do not have to be allowed because of large size ILEC doesn’t have to allow CLEC to maintain cross- connects outside physical location in the ILEC’s office, but ILEC does have to provide cross-connects between CLECs Made other changes in keeping with the DC Circuit remand order