******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. In the Matter of ) ) Bell Atlantic Telephone Companies ) CCB/CPD 98-27 Establishment of New Rate Elements ) to Offer Enterprise SONET Service ) ME MORANDUM OPINION AND ORDER Adopted: March 16, 1999 Released: March 17, 1999 By the Deputy Chief, Common Carrier Bureau: 1. On April 2, 1998, Bell Atlantic Telephone Companies (Bell Atlantic) filed a petition pursuant to section 69.4(g)(1)(i) of the Commission's Rules, 47 C.F.R.  69.4(g)(1)(i), to permit them to establish three new rate elements to establish switched access versions of Bell Atlantic's existing special access services: Enterprise SONET Service (ESS) and Intellilight Customer Assurance Network service (ICAN). 2. SONET uses a fiber ring network configuration to provide redundant, reliable, high- speed transmission services. ESS provides SONET-based transport of DS1 and DS3 special access services from the end user's serving wire center to the customer's Network Access Point in the same Local Access Transport Area (LATA). Bell Atlantic proposes to establish an ESS Ring Transport Channel rate element for its switched access ESS service. ICAN provides SONET-based transport of DS1, DS3, OC3 and OC3c special access services from the end user's premises to the customer's point of presence in the same LATA. Bell Atlantic proposes to establish an ICAN Point-of-Presence (POP) Entrance Ring and an ICAN Transport Channel rate element for its switched access ICAN service. Bell Atlantic states that the high-capacity asynchronous services that are currently available do not provide the survivability of SONET and cannot be connected seamlessly with ESS and ICAN special access networks. Bell Atlantic further states that the new rate elements will be offered at the same rates as the comparable rate elements are offered in the ESS and ICAN special access tariffs. 3. Bell Atlantic contends that its petition is in the public interest for the following reasons. First, Bell Atlantic has received customer requests that its special access rate structure be made available for a switched access version of these services. Second, Bell Atlantic states that these new services will give customers additional competitive choices with no harm to the competitive market. Third, Bell Atlantic states that its switched access ESS and ICAN services will enable Bell Atlantic to compete with other providers that already offer both SONET and asynchronous transport of switched access services. Fourth, Bell Atlantic states that its petition is consistent with the Communications Act of 1934, as amended, and the Commission's policy to introduce new technologies and services to the public and to promote competition. On April 6, 1998, the Commission released a Public Notice requesting comments on Bell Atlantic's Petition. No comments were filed. 4. Under section 69.4(g) of the Commission's rules, local exchange carriers (LECs) "may establish one or more switched access rate elements for a new service . . . upon approval of a petition demonstrating that . . . the new rate element or elements would be in the public interest. A new service is any service which adds to the range of options already available to customers. A new service may, but need not, include a new technology or functional capability. Prior to the adoption of section 69.4(g), the Commission required carriers seeking to obtain new switched access rate elements to demonstrate good cause, under the general standard for waiver of the Commission's rules. As interpreted by the courts, this required that a petitioner demonstrate that "special circumstances warrant a deviation from the general rule and that such a deviation will serve the public interest." The Common Carrier Bureau (Bureau) has previously granted Part 69 waivers to enable carriers to establish new rate elements "that are tailored precisely to their respective services" stating that "the creation of new rate elements would advance the goals of the Commission's access charge regime by enabling the carriers to better match relevant costs and rate elements," thus allowing recovery of costs from the customers using those services. Indeed, the Bureau has granted Part 69 waivers allowing certain carriers, including Bell Atlantic, to establish new rate elements to recover the costs of their SONET-based switched transport services. Based on detailed descriptions of SONET technology, the Bureau has found that the existing transport rules do not reflect the manner in which SONET-based switched transport costs are incurred and that precluding LECs from recovering costs in a manner that reflects the way those costs are incurred may result in one group of transport customers paying costs incurred to serve other transport customers. Accordingly, the Bureau has concluded, in several cases, that special circumstances existed and that it would serve the public interest to grant a waiver to create new SONET-based transport rate elements. The Bureau has also granted similar public interest petitions under section 69.4 (g). 5. For the same reasons, we conclude that it would be in the public interest to permit Bell Atlantic to establish rate elements for its switched access ESS and ICAN. Based on our review of Bell Atlantic's petition, we find that Bell Atlantic's proposed switched access versions of its ESS and ICAN constitute new services pursuant to section 61.42(g) of the Commission's rules. Bell Atlantic's proposed services add to the range of options already available to switched access customers. Our existing Part 69 transport rate elements do not include rate elements that reflect the costs of Bell Atlantic's SONET-based transport service. Granting Bell Atlantic's petition to establish the ESS Ring Transport Channel, ICAN POP Entrance Ring, and ICAN Transport Channel rate elements will allow Bell Atlantic to respond to its competitors' SONET-based offerings, its customers' requests to route switched access services over ESS and ICAN facilities, and provide more efficient and reliable service. Allowing Bell Atlantic to use a rate structure that more accurately reflects the way in which the costs of providing these services are incurred, will result in more efficient use of Bell Atlantic's existing network resources and the introduction of new services to customers. Accordingly, we grant Bell Atlantic's petition to establish its ESS Ring Transport Channel, ICAN POP Entrance Ring, and ICAN Transport Channel switched access rate elements for its SONET-based transport services. 1. Accordingly, IT IS ORDERED, pursuant to section 69.4(g)(1)(i) of the Commission's rules, 47 C.F.R.  69.4(g)(1)(i), the petition filed by Bell Atlantic IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Yog R. Varma Deputy Chief Common Carrier Bureau