Federal Communications Commission DA 00-305 ******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect or Word 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 No. 99-14 Elements to Offer Switched Access ) Transport in Conjunction with ) Managed Bandwidth SONET Services ) MEMORANDUM OPINION AND ORDER Adopted: February 16, 2000 Released: February 18, 2000 By the Deputy Chief, Common Carrier Bureau: 1. On April 7, 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 switched access rate elements to be used in conjunction with its Managed Bandwidth Synchronous Optical Network (MBSS) based Service. For the reasons stated below, we grant U S West's petition. 2. A Synchronous Optical Network (SONET) uses a fiber ring network configuration to provide redundant, reliable, high-speed transmission services. MBSS is a high-capacity SONET ring platform service, which uses an optical interface and provides for a high level of network survivability. U S West proposes to establish the following rate elements: the MBSS Entrance Package, the Dual Wire Center, the MBSS On-Net Transport Channel at 155.52 Mbps, the MBSS On-Net Transport Channel at 44.736 Mbps, the MBSS On-Net Transport Channel at 1.544 Mbps, the MBSS Off-Net Transport Channel at 155.52 Mbps, the MBSS Off-Net Transport Channel at 44.736 Mbps, and the MBSS Off-Net Transport Channel at 1.544 Mbps. U S West states that the proposed rate elements would be employed when a customer purchasing MBSS wishes to jointly use the underlying SONET architecture to provide Switched Access Services. 3. U S West contends that its petition is in the public interest for the following reasons. First, U S West states that the proposed rate elements will expand customers' choices and provide for a more economical rate structure. Second, U S West states that it has received customer requests for routing of switched access services over their MBSS facilities under the rules for shared use. Third, U S West states that denial of its petition could result in inefficient deployment of additional capital and under-utilization of established network resources. Fourth, U S West states that its proposed rate elements will maintain pricing parity between switched and special access transport services. U S West states that its petition would allow it to establish rate elements to reflect more accurately the cost characteristics associated with carrying switched access traffic over a customer's SONET-based platform. On April 13, 1999, the Commission released a Public Notice requesting comments on U S West's Petition. No comments were filed. 4. At the time the instant petition was filed, section 69.4(g) of the Commission's rules provided that 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 MBSS based service. Based on our review of U S West's petition, we find that U S West's proposed switched access version of its MBSS based service 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 MBSS Entrance Package, the Dual Wire Center, the MBSS On-Net Transport Channel at 155.52 Mbps, the MBSS On-Net Transport Channel at 44.736 Mbps, the MBSS On-Net Transport Channel at 1.544 Mbps, the MBSS Off-Net transport Channel at 155.52 Mbps, the MBSS Off-Net Transport Channel at 44.736 Mbps, and the MBSS Off-Net Transport Channel at 1.544 Mbps 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