******************************************************** 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 ) Establishment of New Rate Elements ) CCB/CPD 98-39 to Offer NYNEX Enterprise SONET ) Private Network Service to Switched ) Transport Customers ) MEMORANDUM OPINION AND ORDER Adopted: March 16, 1999 Released: March 17, 1999 By the Deputy Chief, Common Carrier Bureau: 1. On May 29, 1998, Bell Atlantic Telephone Companies (Bell Atlantic), joined by New York Telephone Company and New England Telephone and Telegraph Company, 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 six new rate elements to establish a switched access version of Bell Atlantic's existing special access NYNEX Enterprise SONET Private Network Service (NESPNS). 2. SONET uses a fiber ring network configuration to provide redundant, reliable, high- speed transmission services. NESPNS allows a customer to designate particular SONET network capacity and locations, and this private network capability is configured within the larger Bell Atlantic SONET access network. NESPNS provides add/drop capabilities which enable customers to "add" or "drop" lower volumes of traffic from the high speed ring. Customers may also purchase extensions within the same central office to connect their NESPNS network to tariffed DS3 or DS1 asynchronous services. Under Section 69.110(b)(1) of the Commission's rules, 47 C.F.R.  69.110(b)(1), switched access entrance facilities may be provided and billed only in voice grade, DS1 and DS3 equivalents. Bell Atlantic seeks to carry traffic over switched access entrance facilities at the higher transmission rates of OC-3, OC-12 or OC-48 using SONET technology. 3. Bell Atlantic proposes to establish the following six rate elements utilizing the same rate structure used in its NESPNS special access tariff. The SONET Distribution Channels offer two fiber pairs providing SONET transmission paths between a customer premises and one or more serving telephone company wire centers. The Central Office Node provides multiplexing in the central office from the transmission capacity of the customer's NESPNS channel to lower SONET speeds or to DS3. The Channel Mileage specifies fixed and per-mile charges for interoffice transmission. The Premises Nodes provide multiplexing from the transmission capacity of the customer's NESPNS channel to OC-3, DS3 or DS1. This multiplexing will occur in designated telephone company space at the customer's premises on the network side of the rate demarcation point. The Premises Ports provide the cabling for connection to the Premises Nodes and to OC-3, DS3 or DS1 cards. The DS3/DS1 Extensions provided connections at the central office from the synchronous NESPNS to asynchronous DS3 and DS1 services. 4. Bell Atlantic contends that its petition is in the public interest for the following reasons. First, Bell Atlantic states that its petition is consistent with the Bureau's previous waivers granting the establishment of new rate elements to provide switched access services. Second, Bell Atlantic has received customer requests for high quality survivable SONET-based services. Third, Bell Atlantic states that the proposed rate element will give customers additional competitive choices with no harm to the competitive market. Fourth, Bell Atlantic states that its petition is consistent 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. According to Bell Atlantic, other providers already offer similar services to NESPNS in major markets within and adjacent to Bell Atlantic's service area. On June 8, 1998, the Commission released a Public Notice requesting comments on Bell Atlantic's Petition. No comments were filed. 5. 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. 6. 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). 7. 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 NESPNS. Based on our review of Bell Atlantic's petition, we find that Bell Atlantic's proposed switched access version of its NESPNS constitutes a new service pursuant to section 61.42(g) of the Commission's rules, 47 C.F.R.  61.42(g). Bell Atlantic'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 Bell Atlantic's SONET-based transport service. Granting Bell Atlantic's petition to establish the SONET Distribution Channels, Central Office Nodes, Channel Mileage, Premises Nodes, Premises Ports, and DS3/DS1 Extensions rate elements will allow Bell Atlantic to provide switched access service customers more choices and more efficient and reliable services. 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 SONET Distribution Channels, Central Office Nodes, Channel Mileage, Premises Nodes, Premises Ports, and DS3/DS1 switched access rate elements for its SONET-based transport services. 8. 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