******************************************************** 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 ) ) Petition to Establish Part 69 Rate ) CCB/CPD 98-21 Elements to Offer Switched Access ) Rate Elements for SONET-Based Service ) MEMORANDUM OPINION AND ORDER Adopted: March 16, 1999 Released: March 17, 1999 By the Deputy Chief, Common Carrier Bureau: 1. On March 18, 1998, U S West Communications, Inc., (U S West), 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 it to establish eight new rate elements to establish a switched access version of U S West's Synchronous Optical Network SONET Ring Service (SRS). 2. SONET uses a fiber ring network configuration to provide redundant, reliable, high- speed transmission services. SRS is currently provided at speeds of 1.544 Mbps or 44.736 Mbps on fiber facilities configured in a ring architecture and is available in specific locations. U S West proposes to establish the following rate elements utilizing the same rate structure used in its SRS special access tariff. The On-Net Entrance Facility, provided at speeds of 1.544 Mbps and 44.736 Mbps, is the connection from the customer's premises to its serving wire center (SWC). The CO Node and OC3 CO Port provides the connections from the customer's premises to its SWC when service is provided at a speed of 155.52 Mbps. The On-Net Transport Channel provides SONET transport across the SRS ring. The Central Office Multiplexing provides the capability to convert a higher speed channel into lower speed channels. The Central Office Connecting Channel provides a connection within the same SRS wire center on the SONET ring between the Off-Net Switched Direct-Trunked Transport and SRS On-Net Transport Channel. The Central Office Multiplexer to Multiplexer Connecting Arrangement allows a customer to interconnect an individual channel of one multiplexer to an individual channel of another multiplexer at the 1.544 Mbps level. The Remote Node is an optional service that allows a customer whose SWC is on the SRS network to obtain its optical interface at its premises from U S West. The Remote CO Node and Remote OC3 CO Port provides the termination for traffic at non-SWC offices on the SRS network to which switched access service is being routed. 3. U S West contends that its petition is in the public interest for the following reasons. First, U S West states that it has received customer requests for non-dedicated SRS. Second, U S West states that the proposed rate elements will expand customers choices and increase network reliability and performance. Third, U S West states that its petition would allow it to establish rate elements which better reflect the manner in which SRS is provided and costs are incurred. On March 23, 1998, the Commission released a Public Notice requesting comments on U S West'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 U S West, 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 U S West to establish rate elements for its switched access SRS. Based on our review of U S West's petition, we find that U S West's proposed switched access version of its SRS constitutes a new service pursuant to section 61.42(g) of the Commission's rules. U S West's proposed service adds 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 U S West's SONET-based transport service. Granting U S West's petition to establish the On-Net Entrance Facility, CO Node and OC3 CO Port, On-Net Transport Channel, Central Office Multiplexing, Central Office Connecting Channel, Central Office multiplexer to Multiplexer Connecting Arrangement, Remote Node, and Remote CO Node and Remote OC3 CO Port will allow U S West to provide switched access service customers more choices and more efficient and reliable services. Allowing U S West 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 U S West's existing network resources and the introduction of new services to customers. Accordingly, we grant U S West's petition to establish its proposed switched access rate elements for its SONET-based transport services. 6. 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 U S West IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Yog R. Varma Deputy Chief Common Carrier Bureau