Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Application by SBC Communications Inc., Southwestern Bell Telephone Company, And Southwestern Bell Communications Services, Inc. d/b/a Southwestern Bell Long Distance Pursuant to Section 271 of the Telecommunications Act of 1996 To Provide In-Region, InterLATA Services In Texas ) ) ) ) ) ) ) ) ) ) ) ) CC Docket No. 00-65 MEMORANDUM OPINION AND ORDER Adopted: June 30, 2000 Released: June 30, 2000 By the Commission: Commissioner Furchtgott-Roth concurring and issuing a statement. Paragraph I. INTRODUCTION 1 II. BACKGROUND 8 A. STATUTORY FRAMEWORK 8 B. HISTORY OF THIS APPLICATION 12 C. TEXAS COMMISSION AND DEPARTMENT OF JUSTICE EVALUATIONS 17 III. ANALYTICAL FRAMEWORK 21 A. OVERVIEW 21 B. COMPLIANCE WITH UNBUNDLING RULES 28 C. SCOPE OF EVIDENCE IN THE RECORD 34 1. Procedural Framework 34 2. Ex Parte Submissions 41 D. FRAMEWORK FOR ANALYZING COMPLIANCE WITH STATUTORY REQUIREMENTS 43 1. Legal Standard 44 2. Evidentiary Case 47 IV. COMPLIANCE WITH SECTION 271(C)(1)(A) 59 A. BACKGROUND 59 B. DISCUSSION 60 V. CHECKLIST COMPLIANCE 61 A. CHECKLIST ITEM 1 – INTERCONNECTION 61 1. Non-Pricing Aspects of Interconnection 61 2. Pricing of Interconnection 79 B. CHECKLIST ITEM 2 – UNBUNDLED NETWORK ELEMENTS 91 1. Operations Support Systems 92 2. UNE Combinations and Other Issues 213 3. Pricing of Network Elements 231 C. CHECKLIST ITEM 3 – POLES, DUCTS, CONDUITS AND RIGHTS OF WAY 243 1. Background 243 2. Discussion 245 D. CHECKLIST ITEM 4 – UNBUNDLED LOCAL LOOPS 246 1. Background 246 2. Discussion 251 E. CHECKLIST ITEM 5 – UNBUNDLED LOCAL TRANSPORT 331 1. Background 331 2. Discussion 332 F. CHECKLIST ITEM 6 – UNBUNDLED LOCAL SWITCHING 336 1. Background 336 2. Discussion 337 G. CHECKLIST ITEM 7 343 1. 911 and E911 Access 343 2. Directory Assistance/Operator Services 345 H. CHECKLIST ITEM 8 – WHITE PAGES DIRECTORY LISTINGS 352 1. Background 352 2. Discussion 355 I. CHECKLIST ITEM 9 – NUMBERING ADMINISTRATION 359 1. Background 359 2. Discussion 361 J. CHECKLIST ITEM 10 – DATABASES AND ASSOCIATED SIGNALING 362 1. Background 362 2. Discussion 364 K. CHECKLIST ITEM 11 – NUMBER PORTABILITY 369 1. Background 369 2. Discussion 371 L. CHECKLIST ITEM 12 – LOCAL DIALING PARITY 373 1. Background 373 2. Discussion 375 M. CHECKLIST ITEM 13 – RECIPROCAL COMPENSATION 378 1. Background 378 2. Discussion 379 N. CHECKLIST ITEM 14 – RESALE 387 1. Background 387 2. Discussion 388 VI. SECTION 272 COMPLIANCE 394 A. BACKGROUND 394 B. DISCUSSION 395 1. Structural, Transactional, and Accounting Requirements of Section 272 397 VII. PUBLIC INTEREST ANALYSIS 416 A. OVERVIEW 416 B. COMPETITION IN LOCAL EXCHANGE AND LONG DISTANCE MARKETS 419 C. ASSURANCE OF FUTURE COMPLIANCE 420 1. Performance Remedy Plan 422 2. Key Elements of the Enforcement Plan 423 D. OTHER ARGUMENTS 431 VIII. SECTION 271(D)(6) ENFORCEMENT AUTHORITY 434 IX. CONCLUSION 437 X. ORDERING CLAUSES 438 APPENDIX A: LIST OF COMMENTERS APPENDIX B: SWBT OSS OVERVIEW I. INTRODUCTION 1. On April 5, 2000, SBC Communications Inc., Southwestern Bell Telephone Company, and Southwestern Bell Communications Services, Inc. d/b/a Southwestern Bell Long Distance (collectively, SWBT) filed its second application for authorization under section 271 of the Communications Act of 1934, as amended, to provide interLATA services in the State of Texas. Although SWBT initially filed for in-region, interLATA authority for the State of Texas on January 10, 2000, that application was withdrawn at SWBT’s request. We therefore take no action with respect to SWBT’s first application. In this Order, we grant SWBT’s second application to enter the in-region, interLATA market in Texas based on evidence that SWBT has taken the statutorily required steps to open its local exchange and exchange access markets to competition. 2. This approval marks, for the first time, an application that is supported by both the Department of Justice and relevant state commission, in this case the Texas Public Utility Commission (Texas Commission). The success of this application is due, in large part, to the extensive review conducted by both the Department of Justice and the Texas Commission. 3. We applaud the efforts of the Texas Commission, which has expended significant time and effort overseeing SWBT’s implementation of the requirements of section 271. For more than two years, the Texas Commission has worked with SWBT and competing carriers to identify and resolve a number of key issues related to SWBT’s compliance with the Act. As a result of the Texas Commission’s efforts, competition has taken root, and is expanding in local telecommunications markets, which ultimately benefits consumers. The Texas Commission utilized a number of effective methods to ensure that the local markets in Texas are open to competition today, and will remain so in the future. Of particular note, the Texas Commission ensured that its section 271 review process was open to participation by all interested parties, and supplemented its review of the operational readiness of SWBT’s OSS with an independent third party test. As part of its section 271 review, the Texas Commission also developed clearly defined performance measurements and standards, and adopted a performance remedy plan to discourage backsliding. In a continuing effort to refine and monitor performance measurements, the Texas Commission has a six month review process in place. The Texas Commission is currently considering modifying existing measurements and adding new measurements based on input from SWBT and competing carriers. 4. In addition to overseeing SWBT’s implementation of the requirements to section 271 approval, the Texas Commission has actively implemented our rules issued under section 251, including the Commission’s pricing standards and the rules relating to advanced services. Moreover, to address the concerns raised by the Department of Justice and commenters with respect to SWBT’s initial application, the Texas Commission conducted a further review with respect to a number of key section 271 issues. Because of those efforts, this second application by SWBT is an improvement over its first one, especially in those areas identified as deficient by the Department of Justice in its evaluation of SWBT’s first application. Furthermore, we accord the Texas Commission’s verification of SWBT’s compliance substantial weight based on the totality of its efforts and the extent of expertise it has developed on section 271 issues. 5. The fact that SWBT has implemented the competitive checklist in Texas can be seen in the degree of entry into the local exchange market. According to SWBT, it has unbundled more than 302,000 loops (including nearly 244,000 loops as part of an unbundled network element platform or “UNE-P”). SWBT also reported resale of approximately 349,000 access lines to competitors (including 191,000 residential lines). The Department of Justice estimates that competitors have captured approximately eight percent of access lines in SWBT’s territory in Texas. 6. In addition to competition for voice services, SWBT provisioned nearly 7,000 unbundled loops to broadband competitors for provision of xDSL services. Although this is only a fraction of SWBT’s ADSL customer base in Texas, recent implementation of our line sharing requirements will give xDSL providers additional opportunities to compete for residential and small business customers on an equal footing with SWBT’s separate affiliate for advanced services. Monthly order volumes for unbundled xDSL-capable loops are steadily increasing, as are UNE-P volumes. Additionally, another branded player for voice services— WorldCom—joined AT&T in the Texas market in April with a focus on residential customers. 7. As we noted in the Bell Atlantic New York Order, the grant of this application merely closes a chapter. It does not end the story. SWBT must continue to comply with the checklist obligations set forth in section 271, and the separate affiliate requirements of section 272. As noted throughout this Order, should the evidence demonstrate that SWBT ceases to comply with the requirements of the Act, enforcement action may be appropriate. Most notably, section 271(d)(6) authorizes the Commission to suspend or revoke the authorization granted herein. II. BACKGROUND A. Statutory Framework 8. In the 1996 Act, Congress conditioned BOC provision of in-region, interLATA service on compliance with certain provisions of section 271. Pursuant to section 271, BOCs must apply to this Commission for authorization to provide interLATA services originating in any in-region state. Congress has directed the Commission to issue a written determination on each application no later than 90 days after the application is filed. 9. To obtain authorization to provide in-region, interLATA services under section 271, the BOC must show that: (1) it satisfies the requirements of either section 271(c)(1)(A), known as “Track A” or 271(c)(1)(B), known as “Track B”; (2) it has “fully implemented the competitive checklist” or that the statements approved by the state under section 252 satisfy the competitive checklist contained in section 271(c)(2)(B); (3) the requested authorization will be carried out in accordance with the requirements of section 272; and (4) the BOC’s entry into in- region, interLATA market is “consistent with the public interest, convenience, and necessity.” The statute specifies that, unless the Commission finds that these four criteria have been satisfied, the Commission “shall not approve” the requested authorization. 10. Section 271(d)(2)(A) requires the Commission to consult with the Attorney General before making any determination approving or denying a section 271 application. The Attorney General is entitled to evaluate the application “using any standard the Attorney General considers appropriate,” and the Commission is required to “give substantial weight to the Attorney General’s evaluation.” 11. In addition, the Commission must consult with the relevant state commission to verify that the BOC has one or more state approved interconnection agreements with a facilities- based competitor, or a Statement of Generally Available Terms and Conditions (SGAT), and that either the agreement(s) or general statement satisfy the “competitive checklist.” Because the Act does not prescribe any standard for Commission consideration of a state commission’s verification under section 271(d)(2)(B), the Commission has discretion in each section 271 proceeding to determine the amount of weight to accord the state commission’s verification. The Commission has held that, although it will consider carefully state determinations of fact that are supported by a detailed and extensive record, it is the Commission’s role to determine whether the factual record supports the conclusion that particular requirements of section 271 have been met. As noted in the Introduction, we accord the Texas Commission’s verification of SWBT’s compliance substantial weight based on the totality of its efforts and the extent of its expertise on section 271 issues. Like the New York Commission, whose section 271 verification we also accorded substantial weight, the Texas Commission directed a lengthy, rigorous and open collaborative process with active participation by Commission staff and competitive LECs. The Texas Commission also developed a comprehensive performance measurement and remedy plan, which it continues to monitor and refine. In addition, the Texas Commission has taken the lead on a number of emerging technical and legal issues related to provisioning of xDSL-capable loops. We thus place substantial weight on the Texas Commission’s comments in this matter, as they reflect its role not only as a driving force behind these proceedings, but also as an active participant in bringing competition for local telecommunications services to Texas. B. History of this Application 12. In March 1998, SWBT filed with the Texas Commission a draft application to provide in-region, interLATA authority in the State of Texas. On April 7, 1998, after a number of technical conferences and collaborative meetings, the Texas Commission concluded that SWBT had not demonstrated compliance with the requirements of section 271(c). Shortly thereafter, on June 1, 1998, the Texas Commission issued Order Number 25 in which it listed 129 key issues that needed to be resolved before it could recommend approval of SWBT’s application. 13. To facilitate the resolution of the issues identified in Order Number 25, the Texas Commission invited SWBT and interested competing carriers to participate in a series of collaborative meetings and workshops and technical conferences, known as the “Texas 271 Collaborative Process.” During this process, staff of the Texas Commission, SWBT, and competing carriers worked collaboratively to identify and resolve a number of key issues related to SWBT’s compliance with section 271, including the operational readiness of SWBT’s OSS, and the development of a performance monitoring and enforcement mechanism. Another key component of the Texas Commission’s section 271 proceeding was the development and adoption of a model interconnection agreement, which is referred to as the “Texas 271 Agreement” or “T2A.” The Texas Commission ensured that its collaborative process was open to participation by all interested parties and, as a result, received and reviewed a massive record of public comments. 14. In connection with its review of the operational readiness of SWBT’s OSS, the Texas Commission retained Telcordia (formerly Bellcore) to conduct an independent third party evaluation of SWBT’s OSS. The Telcordia test was intended to address a multitude of issues, including the ability of SWBT’s OSS to handle commercial volumes of orders, and SWBT’s implementation of the performance measurements that had been approved by the Texas Commission during its collaborative process. Following the completion of initial and follow-up testing, Telcordia issued a final report, in which it concluded that SWBT’s OSS were “operationally ready to handle commercial volumes of transactions.” 15. Upon concluding that all outstanding issues relating to SWBT’s compliance with section 271 had been resolved, the Texas Commission voted at its December 16, 1999 open meeting to unanimously support SWBT’s section 271 application. 16. As noted above, on January 10, 2000, SWBT filed an application with this Commission to provide in-region, interLATA service in the State of Texas. On April 5, 2000, SWBT filed an extensive supplement to its January 10 Application. Recognizing that such new evidence was filed shortly before the expiration of the 90-day statutory deadline, in its April 5 filing, SWBT requested that the Commission “restart the clock” on its January 10 Application. Alternatively, SWBT asked the Commission to treat its supplemental filing as: (1) a withdrawal of the January 10 Application; and (2) a resubmission of a new application, which incorporates both the January 10 and April 5 filings. On April 6, 2000, the Commission granted SWBT’s alternative request to withdraw its January 10 Application and to initiate a new application pursuant to section 271 based on the record generated in response to the January 10 and April 5 filings. Throughout this Order, the January 10 filing will be referred to as the “Texas I Application,” and the April 5 filing will be referred to as the “Texas II Application.” C. Texas Commission and Department of Justice Evaluations 17. The Texas Commission submitted its evaluation of SWBT’s Texas I and Texas II Applications to this Commission on January 31, 2000 and April 26, 2000, respectively. The Texas Commission advises the Commission that SWBT has taken the statutorily required steps to open its local markets to competition. Specifically, the Texas Commission states that SWBT has met its obligation under section 271(c)(1)(A) by entering into interconnection agreements with at least 17 competing carriers that are serving residential and business customers either exclusively or predominantly over their own facilities. In addition, the Texas Commission states that the record developed in the Texas proceeding establishes that SWBT has a legal obligation, under its interconnection agreements and state-approved tariffs, to provide the 14 items required under section 271’s checklist, and that SWBT is meeting its legal obligation to provide these 14 items. 18. In its evaluation of SWBT’s Texas II Application, the Texas Commission acknowledges the Department of Justice’s finding that SWBT’s initial application was deficient in certain critical areas. To address these concerns, the Texas Commission states that it conducted a further review. Specifically, the Texas Commission states that it reexamined the evidence with respect to: (1) the integration of SWBT’s pre-ordering and ordering interfaces; (2) the coordination, timing and quality of SWBT “hot cut” process; and (3) SWBT’s provisioning of loops used by competing carriers to provide advanced services. Based on the evidence presented in SWBT’s Texas I Application, and its further review, the Texas Commission concludes that SWBT has taken the statutorily required steps to open its local markets to competition. 19. The Department of Justice filed its evaluation of SWBT’s Texas I Application on February 14, 2000. In this evaluation, the Department of Justice recommended that SWBT’s application be denied. The Department of Justice submitted evaluations of SWBT’s Texas II Application on May 12 and June 13, 2000. In its May 12 evaluation, the Department of Justice concluded that SWBT’s performance with respect to interconnection trunking had sufficiently improved to alleviate its concerns with respect to this issue. It stated, however, that it would provide the Commission with its analysis of SWBT’s performance in providing DSL- capable loops, hot cuts for analog loops, and UNE-platform after it had reviewed SWBT’s April performance data. In its June 13, 2000 evaluation, the Department of Justice recommends approval of SWBT’s application to provide long distance service in Texas, subject to certain qualifications. 20. In recommending approval of SWBT’s Texas II Application, the Department of Justice notes that SWBT has addressed many of the deficiencies associated with its first application. More specifically, the Department of Justice concludes that SWBT has significantly improved the process by which it measures and reports its performance in providing unbundled loops for DSL services, and has demonstrated improvement in its ability to provision DSL- capable loops in a nondiscriminatory manner. Indeed, the Department of Justice concludes that recent data indicate that SWBT “is now providing parity under virtually all measures relating to the provisioning of DSL loops.” The Department of Justice further finds that SWBT has demonstrated improvement in cutting over a loop to a competing carrier through both the coordinated hot cut (CHC) and frame due time (FDT) processes. Finally, the Department of Justice states that commercial data with respect to competing carriers’ ability to compete via the UNE-platform are encouraging. Indeed, the Department of Justice notes that entry by competing carriers using the UNE-platform has increased steadily over the last few months. III. ANALYTICAL FRAMEWORK A. Overview 21. As part of our determination that SWBT has satisfied the requirements of section 271, we consider whether SWBT has fully implemented the competitive checklist in subsection (c)(2)(B). In demonstrating compliance with each item on the competitive checklist, a BOC must demonstrate that it has a concrete and specific legal obligation to furnish the item upon request pursuant to state-approved interconnection agreements that set forth prices and other terms and conditions for each checklist item, and that it is currently furnishing, or is ready to furnish, the checklist item in quantities that competitors may reasonably demand and at an acceptable level of quality. 22. Section 271 conditions authorization to enter the long-distance market on a BOC’s compliance with the terms of the competitive checklist, and those terms generally incorporate by reference the core local competition obligations that sections 251 and 252 impose on all incumbent LECs. In a variety of proceedings since 1996, this Commission has discharged its statutory authority to issue comprehensive rules and orders giving specific content to those obligations, often in considerable detail. In determining whether a BOC applicant has met the local competition prerequisites for entry into the long-distance market, therefore, we evaluate its compliance with our rules and orders in effect at the time the application was filed. 23. Despite the comprehensiveness of our local competition rules, there will inevitably be, at any given point in time, a variety of new and unresolved interpretive disputes about the precise content of an incumbent LEC’s obligations to its competitors, disputes that our rules have not yet addressed and that do not involve per se violations of self-executing requirements of the Act. Several commenters seek to use this section 271 proceeding as a forum for the mandatory resolution of many such local competition disputes, including disputes on issues of general application that are more appropriately the subjects of industry-wide notice-and- comment rulemaking. Indeed, those commenters would apparently compel this Commission to resolve those disputes in this proceeding, and to resolve each one in favor of SWBT, as a precondition to determining that SWBT has met the statutory obligations of section 271. 24. The position of those commenters is irreconcilable with this statutory scheme. There may be other kinds of statutory proceedings, such as certain complaint proceedings, in which we may bear an obligation to resolve particular interpretive disputes raised by a carrier as the basis for its complaint. But the section 271 process simply could not function as Congress intended if we were generally required to resolve all such disputes as a precondition to granting a section 271 application. 25. First, Congress designed section 271 proceedings as highly specialized, 90-day proceedings for examining the performance of a particular carrier in a particular State at a particular time. Such fast-track, narrowly focused adjudications -- generally dominated by extremely fact-intensive disputes about an individual BOC’s empirical performance -- are often inappropriate forums for the considered resolution of industry-wide local competition questions of general applicability. If Congress had intended to compel us to use section 271 proceedings for that purpose, it would not have confined our already intensive review to an extraordinarily compressed 90-day timetable. 26. Second, Congress designed section 271 to give the BOCs an important incentive to open their local markets to competition, and that incentive presupposes a realistic hope of attaining section 271 authorization. That hope would largely vanish if a BOC’s opponents could effectively doom any section 271 application by freighting their comments with novel interpretive disputes and demand that authorization be denied unless each one of those disputes is resolved in the BOC’s favor. Indeed, if that were the required approach, the BOCs would face enormous uncertainty about the steps they need to take to win section 271 authorization, and they would therefore lose much of their incentive to cooperate in opening their local markets to competition in the first place. That result would disserve the public interest in greater competition in both local and long-distance markets, and it would defeat the congressional intent underlying this statutory scheme. 27. Finally, simply as a matter of statutory construction, few of the substantive obligations contained in the local competition provisions of sections 251 and 252 are altogether self-executing; they rely for their content on the Commission’s rules. That is most obviously true in the case of our legislative rules under section 251(d)(2) identifying “what network elements should be made available,” but it is also true of our many other rules and orders giving content to the broadly-worded provisions of the 1996 Act. Our rules vary with time, redefining the statutory obligations that govern the market. Just as our long-standing approach to the procedural framework for section 271 applications focuses our factual inquiry on a BOC’s performance at the time of its application, so too may we fix at that same point the local competition obligations against which the BOC’s performance is generally measured for purposes of deciding whether to grant the application. Nothing in section 271 or any other provision of the Act compels us to require a BOC applicant to demonstrate compliance with new local competition obligations that were unrecognized at the time the application was filed. B. Compliance With Unbundling Rules 28. One element of the required showing, as explained in more detail below, is that the applicant satisfies the Commission’s rules governing unbundled network elements. It is necessary to clarify the aspects of the new rules governing incumbent LECs’ unbundling and line sharing obligations with which we expect SWBT to demonstrate compliance in this proceeding. We note that both the UNE Remand Order and the Line Sharing Order introduced new rules which did not become binding until after SWBT filed its second section 271 application for Texas, on April 5, 2000. We conclude that, for the purpose of evaluating compliance with checklist item 2, we require SWBT to demonstrate that it is currently in compliance with the rules in effect on the date of filing, but do not require SWBT to demonstrate that it complies with rules that become effective during the pendency of its application. 29. We emphasize that, on an ongoing basis, SWBT must comply with all of the Commission’s rules implementing the requirements of sections 251 and 252 upon the dates specified by those rules. This includes such rules that have taken effect since the date SWBT filed its application, such as the new unbundling rules that became effective on May 18, 2000. 30. In the Local Competition First Report and Order, the Commission established a list of seven unbundled network elements (UNEs) which incumbent LECs were obliged to provide. This obligation was codified in section 51.319 of the Commission’s rules (rule 319). In January 1999, the Supreme Court vacated rule 319 and instructed the Commission to revise the standards under which the unbundling obligation is determined and to reevaluate the network elements subject to the unbundling requirement. On November 5, 1999, we released the UNE Remand Order, in which we reevaluated the unbundling obligations of incumbent LECs and promulgated a new rule 319, pursuant to the Supreme Court’s direction and sections 251(c)(3) and 251(d)(2) of the Act. With certain exceptions, the new rule 319 and other requirements set forth in the UNE Remand Order took effect on February 17, 2000, 30 days after publication in the Federal Register. The remaining aspects of the new rule 319 did not take effect until 120 days after the publication date, or May 18, 2000. Therefore, on April 5, 2000, when SWBT filed its re-application for section 271 authorization in Texas, certain aspects of the new rule 319 were not yet in effect. 31. In order to demonstrate compliance with checklist item 2, SWBT must demonstrate that it complies fully with those portions of the new rule 319 that took effect in February 2000, and thus were binding on the date SWBT filed this second application. Indeed, in the Texas I proceeding, SWBT had already committed to demonstrate compliance with the requirements of the UNE Remand Order that took effect in February 2000. No commenter has objected to SWBT’s position. 32. For the purpose of evaluating whether its application satisfies section 271, we do not require SWBT to demonstrate that it complies with those portions of the new rule 319 that took effect in May 2000. Although SWBT, like all other incumbent LECs, was required to comply with rule 319 in May 2000, we believe it would be unfair to require SWBT to demonstrate compliance with rules that become effective after it submits an application for section 271 authorization, in advance of the effective date for other incumbent LECs. In addition, were we to require SWBT to supplement the record with additional evidence demonstrating its compliance with the new UNE Remand rules once they became effective on May 18, 2000, such a re-opening of the record would be administratively complicated and inconsistent with our well-established procedural framework for section 271 applications. A similar procedural situation was presented in the Bell Atlantic New York proceeding. Bell Atlantic filed its application for section 271 authorization in New York after the UNE Remand Order had been adopted but before it had taken effect and, thus, at a time when no binding section 319 rule was in effect. Bell Atlantic suggested, and we agreed, that it would be reasonable for the Commission to use the original seven network elements identified in former rule 319 in evaluating compliance with checklist item 2 of its application. We declined to require Bell Atlantic to demonstrate compliance with the new rule 319 because we recognized that the new rule would not take effect until after the release of the Bell Atlantic New York Order, and because we believed it would be unfair to require Bell Atlantic to demonstrate compliance with new rules weeks or months before the rule became binding on other incumbent LECs. We thus find SWBT’s approach to rule 319 to be reasonable, and consistent with our analysis in the Bell Atlantic New York Order. 33. For similar reasons, as discussed below, we do not require SWBT to prove that it has implemented the OSS and other loop facility modifications necessary to accommodate requests for line sharing as required in the Line Sharing Order. C. Scope of Evidence in the Record 1. Procedural Framework 34. Section 271 proceedings are, at their core, adjudications that the Act requires the Commission to complete within ninety days of the application filing. The statute also requires us to consult with the Department of Justice and the relevant state commission in reviewing the application. In the context of this statutory framework, the Commission has established procedural rules governing BOC section 271 applications. Among other things, these rules provide an opportunity for parties other than the Department of Justice and the relevant state commission to comment on section 271 applications. 35. Under our procedural rules governing BOC section 271 applications, we expect that a section 271 application, as originally filed, will include all of the factual evidence on which the applicant would have the Commission rely in making its findings. An applicant may not, at any time during the pendency of its application, supplement its application by submitting new factual evidence that is not directly responsive to arguments raised by parties commenting on its application. This includes the submission, on reply, of factual evidence gathered after the initial filing. In an effort to meet its burden of proof, however, a BOC may submit new factual information after the application is filed, if the sole purpose of that evidence is to rebut arguments or facts submitted by other commenters. The new evidence, however, must cover only the period placed in dispute by commenters and may, in no event, post-date the filing of the comments (i.e., day 20). In the event that the applicant submits new or post-dated evidence in replies or ex parte filings and the evidence is not directly responsive to commenting parties, we retain the discretion to start the 90-day review process anew or to accord such evidence no weight. 36. This precedent has served the Commission well by deterring incomplete filings from the BOCs. In particular, the rule is designed to prevent applicants from presenting part of their initial prima facie showing for the first time in reply comments. The rule has enabled us properly to manage our own internal consideration of the application and ensures that commenters are not faced with a “moving target” in the BOC’s section 271 application. We continue to believe, as a general matter, that it is highly disruptive to our processes to have a record that is constantly evolving. We emphasize, however, that our precedent makes clear that this rule is a discretionary one. 37. We do not expect that a BOC, in its initial application, will anticipate and address every foreseeable argument its opponents might make in their subsequent reply comments, but we have previously stated that a BOC must address in its initial application all facts that the BOC can reasonably anticipate will be at issue. Through state proceedings, BOCs should be able reasonably to identify and anticipate certain arguments and allegations that parties will make in their filings before the Commission. 38. In addition, the Commission has found that a BOC’s promises of future performance to address particular concerns raised by commenters have no probative value in demonstrating its present compliance with the requirements of section 271. In order to gain in- region, interLATA entry, a BOC must support its application with actual evidence demonstrating its present compliance with the statutory conditions for entry, instead of prospective evidence that is contingent on future behavior. Thus, we must be able to make a determination based on the evidence in the record that a BOC has actually demonstrated compliance with the requirements of section 271. Changes or upgrades (e.g., development of new processes for providing access to checklist items) that post-date the application will not be relied upon for checklist compliance, but may provide us with further assurances that the applicant will continue to satisfy the conditions of market entry in the future. 39. With this procedural framework in mind, we find it appropriate to consider in connection with this application SWBT’s Texas performance data for the month of April 2000, even though the month contains a few days that extend beyond the comment filing date, April 26, 2000. We believe that it would be administratively burdensome and would not result in any material change to the submitted data if we were to formalistically require SWBT to omit the last four days of April from its reports for the purposes of this proceeding. SWBT’s state-approved procedures are geared toward generating performance reports on a monthly basis, and competitive LECs have become accustomed to receiving them in the same form. 40. Moreover, generation of a special report, e.g., covering only the dates from April 1 to April 26, 2000, would pose a greater risk of manipulation or miscalculation and would presumably make it more difficult for competitive LECs to compare the reported data with their own records, which they have become accustomed to receiving in monthly reports. We find the monthly performance reports created in the ordinary course of business and according to established procedures to be inherently more reliable than any abbreviated report. In addition, submission of a second set of April performance data (consisting of hundreds of pages of nearly duplicative material) would make an already voluminous and complex docket even more difficult for interested parties to follow. Additionally, a partial month of data arguably would be less valuable for examining trends from previous full months. For these reasons we do not believe that any party to this proceeding is prejudiced by our decision to include consideration of the last four days of SWBT’s April performance reports. 2. Ex Parte Submissions 41. Under the procedural rules governing section 271 applications, we strongly encourage parties to set forth their views comprehensively in their formal submissions (i.e., Brief in Support, oppositions, supporting comments, etc.), and not to rely on subsequent ex parte presentations. At the same time, the Commission expressly provided that parties may file ex partes. Our procedural Public Notice thus clearly contemplates that parties may file written ex partes, when appropriate, to clarify the record. We take this opportunity to clarify that like reply comments, ex partes must be directly responsive to arguments raised by parties commenting on the application. Such ex partes may, however, elaborate on, or provide additional explanation or detail in response to requests from Commission staff or in direct response to post-reply ex parte filings. 42. Nothing in our procedural rules or past precedent precludes the Commission and the staff from requesting clarification or an explanation about information or data contained in the filings specified above. Indeed, our procedural Public Notice expressly recognizes that the Commission may request additional information from the applicant, as the page limit for ex partes does not apply to written material filed in response to direct requests from Commission staff. It is critical to the agency’s deliberative process that the Commission and staff fully understand the evidence and arguments presented in the BOC’s section 271 application, arguments raised in opposition, and responses made by parties on reply. Accordingly, the Commission retains the discretion to request additional information from the applicant or other parties that elaborates on positions set forth in the original application, comments, or reply comments. We emphasize that we are not departing from our view that the applicant should set forth its position in a clear and concise manner in its formal filings. However, it is imperative that, as part of the Commission’s deliberative process, we have the ability to engage in an ongoing dialogue with parties to ensure that we have a clear and accurate understanding of the information contained in all formal submissions. D. Framework for Analyzing Compliance with Statutory Requirements 43. In this section, we discuss two aspects of the framework for analyzing compliance with the statutory requirements of section 271. First, we discuss the legal standards we have enunciated in past orders for determining whether a BOC is meeting the statutory nondiscrimination requirements. Second, we discuss the evidentiary requirements of a BOC’s section 271 application and, in particular, the types of showings we will find probative in deciding whether a BOC has met the statutory standards. 1. Legal Standard 44. In order to comply with the requirements of section 271’s competitive checklist, a BOC must demonstrate that it has “fully implemented the competitive checklist in subsection (c)(2)(B).” In particular, the BOC must demonstrate that it is offering interconnection and access to network elements on a nondiscriminatory basis. Previous Commission orders addressing section 271 applications have elaborated on this statutory standard. First, for those functions the BOC provides to competing carriers that are analogous to the functions a BOC provides to itself in connection with its own retail service offerings, the BOC must provide access to competing carriers in “substantially the same time and manner” as it provides to itself. Thus, where a retail analogue exists, a BOC must provide access that is equal to (i.e., substantially the same as) the level of access that the BOC provides itself, its customers, or its affiliates, in terms of quality, accuracy, and timeliness. For those functions that have no retail analogue, the BOC must demonstrate that the access it provides to competing carriers would offer an efficient carrier a “meaningful opportunity to compete.” 45. We do not view the “meaningful opportunity to compete” standard to be a weaker test than the “substantially the same time and manner” standard. Where the BOC provides functions to its competitors that it also provides for itself in connection with its retail service, its actual performance can be measured to determine whether it is providing access to its competitors in “substantially the same time and manner” as it does to itself. Where the BOC, however, does not provide a retail service that is similar to its wholesale service, its actual performance with respect to competitors cannot be measured against how it performs for itself because the BOC does not perform analogous activities for itself. In those situations, our examination of whether the quality of access provided to competitors offers “a meaningful opportunity to compete” is intended to be a proxy for whether access is being provided in substantially the same time and manner and, thus, is nondiscriminatory. 46. Finally, we note that a determination of whether the statutory standard is met is ultimately a judgment we must make based on our expertise in promoting competition in local markets and in telecommunications regulation generally. We have not established, nor do we believe it appropriate to establish, specific objective criteria for what constitutes “substantially the same time and manner” or a “meaningful opportunity to compete.” We look at each application on a case-by-case basis and consider the totality of the circumstances, including the origin and quality of the information before us, to determine whether the nondiscrimination requirements of the Act are met. Whether this legal standard is met can only be decided based on an analysis of specific facts and circumstances. 2. Evidentiary Case 47. We have set forth above the analytical framework that we use in assessing whether a BOC has demonstrated compliance with the statutory requirements of section 271. At the outset, we reemphasize that the BOC applicant retains at all times the ultimate burden of proof that its application satisfies all of the requirements of section 271, even if no party files comments challenging its compliance with a particular requirement. 48. The evidentiary standards governing our review of section 271 applications are intended to balance our need for reliable evidence against our recognition that, in such a complex endeavor as a section 271 proceeding, no finder of fact can expect proof to an absolute certainty. While we expect the BOC to demonstrate as thoroughly as possible that it satisfies each checklist item, the public interest standard, and the other statutory requirements, we reiterate that the BOC needs only to prove each element by “a preponderance of the evidence,” which generally means “the greater weight of evidence, evidence which is more convincing that the evidence which is offered in opposition to it.” 49. As we held in the Second BellSouth Louisiana Order, we first determine whether the BOC has made a prima facie case that it meets the requirements of a particular checklist item. The BOC must plead, with appropriate supporting evidence, facts which, if true, are sufficient to establish that the requirements of section 271 have been met. Once the BOC has made such a showing, opponents must produce evidence and arguments to show that the application does not satisfy the requirements of section 271, or risk a ruling in the BOC’s favor. 50. When considering commenters’ filings in opposition to the BOC’s application, we look for evidence that the BOC’s policies, procedures, or capabilities preclude it from satisfying the requirements of the checklist item. Mere unsupported evidence in opposition will not suffice. Although anecdotal evidence may be indicative of systemic failures, isolated incidents may not be sufficient for a commenter to overcome the BOC’s prima facie case. Moreover, a BOC may overcome such anecdotal evidence by, for example, providing objective performance data that demonstrate that it satisfies the statutory nondiscrimination requirement. 51. We will look to the state to resolve factual disputes wherever possible. Indeed, we view the state’s and the Department of Justice’s roles to be similar to that of an “expert witness.” Given the 90-day statutory deadline to reach a decision on a section 271 application, the Commission does not have the time or the resources to resolve the enormous number of factual disputes that inevitably arise from the technical details and data involved in such a complex endeavor. Accordingly, as discussed above, where the state has conducted an exhaustive and rigorous investigation into the BOC’s compliance with the checklist, we may give evidence submitted by the state substantial weight in making our decision. 52. To make a prima facie case that the BOC is meeting the requirements of a particular checklist item under section 271(c)(1)(A), the BOC must demonstrate that it is providing access or interconnection pursuant to the terms of that checklist item. In particular, a BOC must demonstrate that it has a concrete and specific legal obligation to furnish the item upon request pursuant to state-approved interconnection agreements that set forth prices and other terms and conditions for each checklist item, and that it is currently furnishing, or is ready to furnish, the checklist item in quantities that competitors may reasonably demand and at an acceptable level of quality. 53. The particular showing required to demonstrate compliance will vary depending on the individual checklist item and the circumstances of the application. We have given BOCs substantial leeway with respect to the evidence they present to satisfy the checklist. Although our orders have provided guidance on which types of evidence we find more persuasive, “we reiterate that we remain open to approving an application based on other types of evidence if a BOC can persuade us that such evidence demonstrates nondiscriminatory treatment and other aspects of the statutory requirements.” In past orders we have encouraged BOCs to provide performance data in their section 271 applications to demonstrate that they are providing nondiscriminatory access to unbundled network elements to requesting carriers. We have concluded that the most probative evidence that a BOC is providing nondiscriminatory access is evidence of actual commercial usage. Performance measurements are an especially effective means of providing us with evidence of the quality and timeliness of the access provided by a BOC to requesting carriers. 54. A number of state commissions, including Texas, have established a collaborative process through which they have developed, in conjunction with the incumbent and competing carriers, a set of measures, or metrics, for reporting of performance in various areas. Through such collaborative processes, Texas has also adopted performance standards for certain functions, typically where there can be no comparable measure based on the incumbent LEC’s retail performance. We strongly encourage this type of process, because it allows the technical details that determine how the metrics are defined and measured to be worked out with the participation of all concerned parties. We also strongly support the efforts of state commissions to build and oversee a process that ensures the development of local competition that Congress intended. An extensive and rigorous evaluation of the BOC’s performance by the states provides greater certainty that barriers to competition have been eliminated and the local markets in a state are open to competition. 55. We caution, however, that adoption by a state of a particular performance standard pursuant to its state regulatory authority is not determinative of what is necessary to establish checklist compliance under section 271. We recognize that metric definitions and incumbent LEC operating systems will likely vary among states, and that individual states may set standards at a particular level that would not apply in other states and that may constitute more or less than the checklist requires. Therefore, in evaluating checklist compliance in each application, we consider the BOC’s performance within the context of each respective state. For example, where a state develops a performance benchmark with input from affected competitors and the BOC, such a standard may well reflect what competitors in the marketplace feel they need in order to have a meaningful opportunity to compete. 56. We emphasize that, because the Commission is statutorily required to determine checklist compliance, we must independently evaluate whether a BOC is fulfilling the nondiscrimination requirements of section 271. Nevertheless, in making our evaluation we will examine whether the state commission has adopted a retail analogue or a benchmark to measure BOC performance and then review the particular level of performance the state has required. If the state commission has made these determinations in the type of rigorous collaborative proceeding described above, we are much more likely to find that they are reasonable and appropriate measures of parity. Accordingly, we are inclined to rely on such standards and measurements in our own analysis but may reach a different conclusion where justified. 57. In determining that SWBT has satisfied each element of the competitive checklist, we rely, among other factors, on performance data collected and submitted by SWBT. Several commenters challenge the validity of certain data submitted by SWBT, however, including performance data collected and reported pursuant to the performance measurements developed under the auspices of the Texas Commission. We reject the contention that SWBT’s data are generally invalid because they have not been audited, and thus cannot be relied upon to support its application. We note that the data submitted by SWBT in this proceeding have been subject to scrutiny and review by interested parties. To a large extent, moreover, the accuracy of the specific performance data relied upon by SWBT is not contested. Where particular SWBT data are disputed by commenters, we discuss these challenges in our checklist analysis, below. In such instances, we first look to the results of data reconciliations between SWBT and competing carriers. In other instances, we examine data collected and submitted by commenters in addition to SWBT’s data. 58. The determination of whether a BOC’s performance meets the statutory requirements necessarily is a contextual decision based on the totality of the circumstances and information before us. There may be multiple performance measures associated with a particular checklist item, and an apparent disparity in performance for one measure, by itself, may not provide a basis for finding noncompliance with the checklist. Other measures may tell a different story, and provide us with a more complete picture of the quality of service being provided. Whether we are applying the “substantially same time and manner” standard or the “meaningful opportunity to compete” standard, we will examine whether any differences in the measured performance are large enough to be deemed discriminatory under the statute. For this reason, and because standards established by the Texas Commission are not necessarily determinative of checklist compliance, we note that SWBT’s failure of individual performance measurements does not, in itself, warrant denial of this application. IV. COMPLIANCE WITH SECTION 271(C)(1)(A) A. Background 59. In order for the Commission to approve a BOC’s application to provide in-region, interLATA services, a BOC must first demonstrate that it satisfies the requirements of either section 271(c)(1)(A) (Track A) or 271(c)(1)(B) (Track B). To qualify for Track A, a BOC must have interconnection agreements with one or more competing providers of “telephone exchange service . . . to residential and business subscribers.” The Act states that “such telephone service may be offered . . . either exclusively over [the competitor’s] own telephone exchange service facilities or predominantly over [the competitor’s] own telephone exchange facilities in combination with the resale of the telecommunications services of another carrier.” The Commission concluded in the Ameritech Michigan Order that, when a BOC relies upon more than one competing provider to satisfy section 271(c)(1)(A), each carrier need not provide service to both residential and business customers. B. Discussion 60. We conclude that SWBT demonstrates that it satisfies the requirements of Track A based on the interconnection agreements it has implemented with competing carriers in Texas. Specifically, we find that AT&T, Birch, CoServ, ETS, Optel, Sage, and KMC all provide telephone exchange service either exclusively or predominantly over their own facilities to residential subscribers and to business subscribers. The Texas Commission also concludes that SWBT has met the requirements of section 271(c)(1)(A). None of the commenting parties, including the competitors cited by SWBT in support of its showing, challenge SWBT’s assertion in this regard. V. CHECKLIST COMPLIANCE A. Checklist Item 1 – Interconnection 1. Non-Pricing Aspects of Interconnection a. Background 61. Section 271(c)(2)(B)(i) of the Act requires a section 271 applicant to provide “[i]nterconnection in accordance with the requirements of sections 251(c)(2) and 252(d)(1).” Section 251(c)(2) imposes a duty on incumbent LECs “to provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection with the local exchange carrier’s network . . . for the transmission and routing of telephone exchange service and exchange access.” In the Local Competition First Report and Order, the Commission concluded that interconnection referred “only to the physical linking of two networks for the mutual exchange of traffic.” Section 251 contains three requirements for the provision of interconnection. First, an incumbent LEC must provide interconnection “at any technically feasible point within the carrier’s network.” Second, an incumbent LEC must provide interconnection that is “at least equal in quality to that provided by the local exchange carrier to itself.” Finally, the incumbent LEC must provide interconnection “on rates, terms, and conditions that are just, reasonable, and nondiscriminatory, in accordance with the terms of the agreement and the requirements of [section 251] and section 252.” 62. To implement the equal-in-quality requirement in section 251, the Commission’s rules require an incumbent LEC to design and operate its interconnection facilities to meet “the same technical criteria and service standards” that are used for the interoffice trunks within the incumbent LEC’s network. In the Local Competition First Report and Order, the Commission identified trunk group blockage and transmission standards as indicators of an incumbent LEC’s technical criteria and service standards. In prior section 271 applications, the Commission concluded that disparities in trunk group blockage indicated a failure to provide interconnection to competing carriers equal-in-quality to the interconnection the BOC provided to its own retail operations. 63. In the Local Competition First Report and Order, the Commission concluded that the requirement to provide interconnection on terms and conditions that are “just, reasonable, and nondiscriminatory” means that an incumbent LEC must provide interconnection to a competitor in a manner no less efficient than the way in which the incumbent LEC provides the comparable function to its own retail operations. The Commission’s rules interpret this obligation to include, among other things, the incumbent LEC’s installation time for interconnection service and its provisioning of two-way trunking arrangements. Similarly, repair time for troubles affecting interconnection trunks is useful for determining whether a BOC provides interconnection service under “terms and conditions that are no less favorable than the terms and conditions” the BOC provides to its own retail operations. 64. Competing carriers may choose any method of technically feasible interconnection at a particular point on the incumbent LEC’s network. Incumbent LEC provision of interconnection trunking is one common means of interconnection. Technically feasible methods also include, but are not limited to, physical and virtual collocation and meet point arrangements. The provision of collocation is an essential prerequisite to demonstrating compliance with item 1 of the competitive checklist. In the Advanced Services First Report and Order, the Commission revised its collocation rules to require incumbent LECs to include shared cage and cageless collocation arrangements as part of their physical collocation offerings. To show compliance with its collocation obligations, a BOC must have processes and procedures in place to ensure that all applicable collocation arrangements are available on terms and conditions that are “just, reasonable, and nondiscriminatory” in accordance with section 251(c)(6) and our implementing rules. Data showing the quality of procedures for processing applications for collocation space, as well as the timeliness and efficiency of provisioning collocation space, helps the Commission evaluate a BOC’s compliance with its collocation obligations. b. Discussion 65. We conclude, as described below, that SWBT demonstrates it provides equal-in- quality interconnection on terms and conditions that are just, reasonable, and nondiscriminatory in accordance with the requirements of sections 251(c)(2) and as specified in section 271. We further find that SWBT meets its burden of proof that it designs its interconnection facilities to meet “the same technical criteria and service standards” that are used for the interoffice trunks within its own network. We also find that SWBT makes interconnection available at any technically feasible point, and that it is providing collocation in Texas in accordance with the Commission’s rules. We note that the Texas Commission finds that SWBT has satisfied all aspects of this checklist item. (i) Interconnection Trunking 66. Based on our review of the record, we are persuaded that SWBT provides competing carriers with interconnection trunking that is equal-in-quality to the interconnection SWBT provides to its own retail operations, and on terms and conditions that are just, reasonable, and nondiscriminatory. SWBT makes interconnection available in Texas through interconnection agreements, including its state-approved T2A agreement. SWBT receives orders for interconnection trunks through the Access Service Request (ASR) process, and accepts ASRs through an electronic application-to-application interface, through a proprietary OSS system, and through manual orders. SWBT provides performance data to measure the quality of interconnection service provided to competing carriers. 67. Trunk Blockage. In prior section 271 applications, we relied on trunk blockage data to evaluate a BOC’s interconnection quality. SWBT’s performance data demonstrates that in the months leading up to its Texas II application, SWBT provided interconnection that is equal-in-quality to the interconnection it provides in its own network. Specifically, SWBT’s statewide performance data measuring the percentage of calls blocked on outgoing traffic (trunk blockage from SWBT end office and tandem to competitive LEC end office) demonstrates that in the three months immediately preceding its Texas II section 271 application, SWBT was in compliance with the relevant benchmark established in Texas (i.e., blockage not to exceed one percent on these trunks). 68. We find that allegations of some competitive LECs, that they have been unable to obtain the number of interconnection trunks they requested in a timely manner appear to be the exception rather than the rule. Indeed, as we discuss throughout this section, we find that SWBT’s performance data indicate that it is providing nondiscriminatory interconnection trunking. To the extent there may have been some problems with trunk provisioning, we agree with the Department of Justice that such issues have been adequately resolved. 69. Competitive LECs allege that they have encountered problems ordering trunks from SWBT which has resulted in blockage on competitive LEC networks, in some cases leading to customer complaints and lost or forgone sales. TWTC, which provided the most extensive history of its blockage problems, stated that its most severe blockage occurred in Houston during the conversion of the SWBT and TWTC interconnection facilities from one-way to two-way trunks during the second half of 1999. TWTC acknowledges that the blocking ended in mid- October, 1999. Furthermore, we note that SWBT implemented improvements approved by the Texas Commission during supplemental proceedings in November and December 1999 to respond to competitive LEC concerns. As stated above, SWBT meets the state benchmark for PM 70 for January, February, March and April. We also note that, as of October, over 75% of the trunks provisioned in Texas were two-way trunks. In the future, if competitive LECs allege that blocking is occurring on outgoing calls from the competitive LEC network to the BOC network, and that such blockage is not being captured by the state-approved performance measure, then competitive LECs should provide evidence, such as reliable performance data, along with a showing of why the BOC is responsible for the blockage. Should such evidence develop in the future in Texas, we will consider whether enforcement action pursuant to section 271(d)(6) is warranted. 70. Missed Due Dates. We find that other aspects of SWBT’s performance data further indicate it is providing nondiscriminatory interconnection trunking in Texas. SWBT’s performance data concerning the percentage of missed due dates for provisioning of interconnection trunks show that in the months preceding its Texas II application, SWBT provided parity or better performance to competitors. Recently implemented modifications in reporting give us added assurance that SWBT will continue to provide timely installation of interconnection trunks. In response to competitive LEC concerns that the performance measurement does not capture “held orders,” the Texas Commission implemented a new measure, PM 73.1, to capture the percentage of held interconnection trunk orders greater than 90 calendar days. SWBT asserts that there were no held orders greater than 90 days between January and March. We find that SWBT has satisfied the benchmark. Further, commenters have not raised any new allegations of inadequate or overlong trunk provisioning. We note that the Department of Justice agrees that SWBT’s performance is satisfactory with respect to this measurement. 71. Average Installation Intervals. SWBT’s performance data that measure the average time for installation of interconnection trunks demonstrate that SWBT meets the state benchmark in February, March and April. We have considered the concerns of the Telecommunications Resellers Association and others in addition to the Department of Justice, and find that the extensive review by the Texas Commission of SWBT’s operational processes and empirical performance data satisfactorily addresses their concerns. We therefore reject the concerns raised in the record regarding SWBT’s average installation interval performance as those concerns relate largely to last year’s performance. The data submitted as part of the instant application indicate SWBT meets the state benchmark. 72. In conclusion, our decision that SWBT satisfies the requirements of this checklist item is based on the following: its trunk group blockage rates for competitors pass the state benchmark, its rate of missed due dates for trunk installations is lower for service to competitors than for service to itself, and its average time to install interconnection trunks passes the state benchmark. (ii) Collocation 73. SWBT has demonstrated that its collocation offering in Texas satisfies the requirements of sections 271 and 251 of the Act. SWBT provides physical and virtual collocation through a state-approved tariff. In its application, SWBT indicates that shared, cageless, and adjacent collocation options are available in Texas, and that it has taken other steps to implement the collocation requirements contained in the Advanced Services First Report and Order. SWBT provides terms for physical collocation in its physical collocation tariff, as well as in a physical collocation handbook that it incorporates into the tariff by reference. SWBT’s collocation performance data indicate that SWBT processed requests for collocation within time frames established by the Texas Commission. SWBT stated that it has provided 655 physical collocation arrangements in 166 different SWBT central offices in Texas. Except where a competitive LEC places a large number of collocation orders in the same 5-business day period, SWBT responds to each request within 10 days. SWBT provides three measurements (disaggregated into various submeasures) for collocation: Percentage of Missed Collocation Due Dates (PM 107), Average Delay Days for SWBT Missed Due Dates (PM 108), and Percent of Requests Processed within the Tariffed Timelines (PM 109). Where data points are available, SWBT’s data indicates it meets the measures for the months of January, February, and March. 74. SWBT makes virtual collocation available through its virtual collocation tariff, with notification and installation intervals for all tariffed equipment established in SWBT’s Interconnector’s Collocation Services Handbook for Virtual Collocation. In addition, SWBT states that competitive LECs may negotiate custom-tailored interconnection arrangements on request. The Texas Commission agrees that SWBT’s revised physical collocation offerings comply with the Advanced Services Order. Further, SWBT’s collocation offering underwent an active and thorough review at the state level. The Texas Commission addressed the provisioning of collocation space and established standard provisioning intervals for caged, cageless, and virtual collocation. 75. We disagree with ALTS and the CLEC Coalition that SWBT’s practice of walling in its own equipment as a “reasonable security measure” violates our collocation rules. Our rules as they existed at the time of filing did not explicitly prohibit this practice. Therefore, we find that these allegations do not rise to the level of non-compliance for this checklist item. In addition, we believe that Metromedia Fiber Network Services’ (MFNS) alleged difficulties negotiating collocation arrangements with SWBT are best resolved through the section 252 negotiation and arbitration process or through the section 208 complaint process. (iii) Technically Feasible Points of Interconnection 76. We conclude that SWBT provides interconnection at all technically feasible points, and therefore demonstrates compliance with the checklist item. SWBT asserts that it makes each of its standard methods of interconnection available at the line side or trunk side of the local switch, the trunk connection points of a tandem switch, central office cross-connect points, out-of-band signaling transfer points, and points of access to UNEs. SWBT demonstrates that it has an approved state interconnection agreement that spells out readily available points of interconnection, and provides a process for requesting interconnection at additional, technically feasible points. 77. We disagree with AT&T that SWBT has violated its obligation to permit competing carriers to select interconnection points. The existing language in the interconnection agreement between SWBT and AT&T states that “in each SWBT exchange area in which AT&T offers local exchange services, the parties will interconnect their network facilities at a minimum of one mutually agreeable point of interconnection.” This portion of the interconnection agreement between SWBT and AT&T, however, was negotiated and, therefore, does not have to comply with section 251. Consequently, AT&T’s experience does not constitute evidence of a failure by SWBT to provide interconnection at all technically feasible points for purposes of section 271 review. 78. Section 251, and our implementing rules, require an incumbent LEC to allow a competitive LEC to interconnect at any technically feasible point. This means that a competitive LEC has the option to interconnect at only one technically feasible point in each LATA. The incumbent LEC is relieved of its obligation to provide interconnection at a particular point in its network only if it proves to the state public utility commission that interconnection at that point is technically infeasible. Thus, new entrants may select the “most efficient points at which to exchange traffic with incumbent LECs, thereby lowering the competing carriers’ costs of, among other things, transport and termination.” Indeed, “section 251(c)(2) gives competing carriers the right to deliver traffic terminating on an incumbent LEC’s network at any technically feasible point in the network, rather than obligating such carriers to transport traffic to less convenient or efficient interconnection points.” We note that in SWBT’s interconnection agreement with MCI (WorldCom), WorldCom may designate “a single interconnection point within a LATA.” Thus, SWBT provides WorldCom interconnection at any technically feasible point, and section 252(i) entitles AT&T, or any requesting carrier, to seek the same terms and conditions as those contained in WorldCom’s agreement, a matter any carrier is free to take up with the Texas Commission. 2. Pricing of Interconnection a. Background 79. As discussed above, checklist item 1 requires a BOC to provide “interconnection in accordance with the requirements of sections 251(c)(2) and 252(d)(1).” Section 251(c)(2) requires incumbent LECs to provide interconnection “at any technically feasible point within the carrier’s network … on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.” Section 252(d)(1) requires state determinations regarding the rates, terms, and conditions of interconnection to be based on cost and to be nondiscriminatory, and allows the rates to include a reasonable profit. 80. Interconnection trunking, physical and virtual collocation, and meet-point arrangements are among the technically feasible methods of interconnection. Shared cage and cageless collocation arrangements must be part of an incumbent LEC’s physical collocation offerings. To comply with its collocation obligations, an incumbent LEC must make collocation arrangements available on “rates, terms, and conditions that are just, reasonable, and nondiscriminatory.” The Commission’s pricing rules require, among other things, that incumbent LECs provide collocation based on the total element, long-run, incremental cost (TELRIC). 81. Although the U.S. Court of Appeals for the Eighth Circuit stayed the Commission’s pricing rules in 1996, the Supreme Court restored the Commission’s pricing authority on January 25, 1999. In reaching its decision, the Court acknowledged that section 201(b) “explicitly grants the FCC jurisdiction to make rules governing matters to which the 1996 Act applies.” Furthermore, the Court determined that section 251(d) also provides evidence of an express jurisdictional grant by requiring that “the Commission [shall] complete all actions necessary to establish regulations to implement the requirements of this section.” The Court also held that the pricing provisions implemented under the Commission’s rulemaking authority do not inhibit the establishment of rates by the states. The Court concluded that the Commission has jurisdiction to design a pricing methodology to facilitate local competition under the 1996 Act, including pricing for interconnection and unbundled access, as “it is the States that will apply those standards and implement that methodology, determining the concrete result.” b. Discussion 82. Based on the evidence in the record, we find that SWBT offers interconnection in Texas to other telecommunications carriers at just, reasonable, and nondiscriminatory rates, in compliance with checklist item 1. SWBT states that it provides interconnection at TELRIC- based rates that are just, reasonable, and nondiscriminatory. SWBT provides terms for physical collocation in its physical collocation tariff, as well as in a physical collocation handbook that it incorporates into the tariff by reference. SWBT makes virtual collocation available through its virtual collocation tariff. SWBT says it will also negotiate custom- tailored interconnection arrangements on request. According to SWBT, TELRIC-based charges apply to custom work even if no rate has been established previously. SWBT states that it pro-rates its site preparation charges and allocates them based on the percentage of the total space each competitive LEC uses. SWBT also says that it pro-rates its collocation charges so that the first competitive LEC to enter the premises is not responsible for all the site preparation costs. 83. The Texas Commission states in its evaluation that SWBT has satisfied the requirements of checklist item 1. According to the Texas Commission, SWBT provides interconnection trunking at just, reasonable, and nondiscriminatory terms and conditions. The state commission says that SWBT makes interconnection available through the Texas Commission-approved 271 agreement, and that the Texas-approved physical and virtual collocation tariffs comply with sections 251 and 271 of the Act. 84. We stress that we place great weight on the Texas Commission’s active review of SWBT’s pricing elements in its 271 application. The Texas Commission has encouraged active and open participation by all carriers in setting rates through numerous proceedings, reviewed costs studies and conflicting testimonies, arbitrated pricing issues and incorporated its findings into interconnection agreements, and has demonstrated its commitment to applying the pricing standards of sections 251 and 252 of the Act as implemented by our rules. 85. As the Texas Commission explains, “[t]he collocation tariffs contain interim rates, subject to true-up, for all aspects and methods of available collocation.” AT&T argues that the interim nature of these rates proves fatal to SWBT’s application in light of our discussion of interim rates in the Bell Atlantic New York Order. We disagree. In that order, we stated that: a BOC’s application for in-region interLATA authority should not be rejected solely because permanent rates may not yet have been established for each and every element or nonrecurring cost of provisioning an element. We believe that this question should be addressed on a case-by-case basis. If the uncertainty caused by the use of interim rates can be minimized, then it may be appropriate, at least for the time being, to approve an application based on the interim rates contained in the relevant tariff. 86. We concluded that the interim nature of Bell Atlantic’s xDSL rates posed no obstacle to the approval of its application. We reasoned that the xDSL rate dispute was relatively new, that the New York Commission has a track record of setting other prices at TELRIC rates, and that the interim rates would be subject to a refund or true-up once final rates were set. Although we noted that competitive “[u]ncertainty will be minimized if the interim rates are for a few isolated ancillary items,” we did not say that the disputed items must be ancillary in character to ensure compliance with the checklist. 87. This case again presents the question of the significance of interim rates for purposes of adjudicating a section 271 application. We again conclude that the section 271 process could not function as Congress intended if we adopted a general policy of denying any section 271 application accompanied by unresolved pricing and other intercarrier disputes. Our experience has demonstrated that, at any given point in time at which a section 271 application might be filed, the rapidly evolving telecommunications market will have produced a variety of unresolved, fact-specific disputes concerning the BOC’s obligations under sections 251 and 252. BOCs and their competitors can be expected to take opposite positions in those disputes, and the adjudicated resolution ultimately will often fall somewhere in between the positions of the opposing parties. If uncertainty about the proper outcome of such disputes were sufficient to undermine a section 271 application, such applications could rarely be granted. Congress did not intend such an outcome. 88. The 1996 Act authorizes the state commissions to resolve specific carrier-to- carrier disputes arising under the local competition provisions, and it authorizes the federal district courts to ensure that the results of the state arbitration process are consistent with federal law. Although we have an independent obligation to ensure compliance with the checklist, section 271 does not compel us to preempt the orderly disposition of intercarrier disputes by the state commissions, particularly now that the Supreme Court has restored our pricing jurisdiction and has thereby directed the state commissions (and the federal courts on review) to follow our pricing rules in their disposition of those disputes. For those reasons, the mere presence of interim rates will not generally threaten a section 271 application so long as an interim solution to a particular rate dispute is reasonable under the circumstances, the state commission has demonstrated its commitment to our pricing rules, and provision is made for refunds or true-ups once permanent rates are set. As discussed below, the interim rates in dispute here meet that standard. 89. AT&T argues that the interim nature of SWBT’s collocation rates demands that we deny the section 271 application. We disagree. As we explained in the Bell Atlantic New York Order, we examine interim rates under section 271 on a case-by-case basis. We conclude that the state has made reasonable efforts to set interim collocation rates in accordance with the Act and the FCC’s rules. The Texas Commission set the interim rates pursuant to TELRIC standards so that competitive LECs could obtain collocation while the state incorporated the Commission’s findings in the March 31, 1999, Advanced Services Order. AT&T argues that the interim caged collocation rates are not TELRIC-based, and stem instead from outdated tariffs that include costs for things such as asbestos removal and separate entryways that the FCC has since deemed improper. AT&T admits, however, that the Texas Commission reduced one of the elements of the caged collocation rates by 30 percent to accommodate that fact. AT&T argues that the reduction is insufficient to conform the caged collocation rates to TELRIC standards, but we view it as a reasonable attempt by the state commission to set an interim TELRIC-based rate pending its final determination. Moreover, the Texas Commission based the majority of the interim rates, at least with regard to physical collocation, from a TELRIC model developed by AT&T and MCI, albeit with some modifications. 90. The Texas Commission has set up a schedule to set permanent rates, and has indicated to the parties that the interim rates are subject to a refund or true-up, an approach apparently urged by AT&T. AT&T acknowledges that the Texas Commission has directed use of the AT&T/MCI model in setting permanent physical and virtual collocation rates. Further cost studies were due April 12, 2000, and a hearing was scheduled for June 15-16, 2000. Based on the record, we believe that the Texas Commission has taken a reasonable approach. We conclude that the uncertainty surrounding the interim rates has been minimized, and we have confidence that the Texas Commission will set permanent rates that are in compliance with the Act and our rules. Consequently, we find that SWBT has met its obligations under this checklist item. B. Checklist Item 2 – Unbundled Network Elements 91. Our analysis under checklist item 2 addresses whether SWBT satisfies its obligation to provide nondiscriminatory access to unbundled network elements pursuant to section 251(c), at prices that meet the requirements of section 252(d). As discussed above, the Commission has identified a number of UNEs, including operations support systems (OSS), that incumbent LECs must make available under section 251(c)(3) as of the filing date of this application. In this section, we address whether SWBT provides access to OSS and to combinations of UNEs in accordance with section 251(c)(3) and our rules. We recognize, as we have in prior section 271 orders, that the duty to provide nondiscriminatory access to OSS functions is embodied in other terms of the competitive checklist as well. Aside from OSS, the other UNEs that SWBT must make available under section 251(c)(3) are also listed as separate items on the competitive checklist, and are addressed below in separate sections for each checklist item. 1. Operations Support Systems a. Background 92. Incumbent LECs use a variety of systems, databases, and personnel (collectively referred to as OSS) to provide service to their customers. The Commission consistently has found that nondiscriminatory access to OSS is a prerequisite to the development of meaningful local competition. For example, new entrants must have access to the functions performed by the incumbent’s OSS in order to formulate and place orders for network elements or resale services, to install service to their customers, to maintain and repair network facilities, and to bill customers. The Commission has determined that without nondiscriminatory access to the BOC’s OSS, a competing carrier “will be severely disadvantaged, if not precluded altogether, from fairly competing” in the local exchange market. 93. Section 271 requires the Commission to determine whether a BOC offers nondiscriminatory access to OSS functions. Section 271(c)(2)(B)(ii) requires a BOC to provide “nondiscriminatory access to network elements in accordance with the requirements of sections 251(c)(3) and 252(d)(1).” The Commission has determined that access to OSS functions falls squarely within an incumbent LEC’s duty under section 251(c)(3) to provide unbundled network elements under terms and conditions that are nondiscriminatory and just and reasonable, and its duty under section 251(c)(4) to offer resale services without imposing any limitations or conditions that are discriminatory or unreasonable. The Commission must therefore examine a BOC’s OSS performance to evaluate compliance with section 271(c)(2)(B)(ii) and (xiv). In addition, the Commission has also concluded that the duty to provide nondiscriminatory access to OSS functions is embodied in other terms of the competitive checklist as well. Consistent with prior orders, we examine SWBT's OSS performance directly under checklist items 2 and 14, as well as other checklist terms. 94. As part of its statutory obligation to provide nondiscriminatory access to OSS functions, a BOC must provide access that sufficiently supports each of the three modes of competitive entry envisioned by the 1996 Act – competitor-owned facilities, unbundled network elements, and resale. For OSS functions that are analogous to those that a BOC provides to itself, its customers or its affiliates, the nondiscrimination standard requires the BOC to offer requesting carriers access that is equivalent in terms of quality, accuracy, and timeliness. The BOC must provide access that permits competing carriers to perform these functions in “substantially the same time and manner” as the BOC. The Commission has recognized in prior orders that there may be situations in which a BOC contends that, although equivalent access has not been achieved for an analogous function, the access that it provides is nonetheless nondiscriminatory within the meaning of the statute. 95. For OSS functions that have no retail analogue, the BOC must offer access “sufficient to allow an efficient competitor a meaningful opportunity to compete.” In assessing whether the quality of access affords an efficient competitor a meaningful opportunity to compete, we will examine, in the first instance, whether specific performance standards exist for those functions. In particular, we will consider whether appropriate standards for measuring OSS performance have been adopted by the relevant state commission or agreed upon by the BOC in an interconnection agreement or during the implementation of such an agreement. If such performance standards exist, we will evaluate whether the BOC’s performance is sufficient to allow an efficient competitor a meaningful opportunity to compete. 96. We analyze whether SWBT has met the nondiscrimination standard for each OSS function using the two-step approach outlined in prior orders. First, we determine “whether the BOC has deployed the necessary systems and personnel to provide sufficient access to each of the necessary OSS functions and whether the BOC is adequately assisting competing carriers to understand how to implement and use all of the OSS functions available to them.” We next assess “whether the OSS functions that the BOC has deployed are operationally ready, as a practical matter.” 97. Under the first inquiry, a BOC must demonstrate that it has developed sufficient electronic (for functions that the BOC accesses electronically) and manual interfaces to allow competing carriers equivalent access to all of the necessary OSS functions. For example, a BOC must provide competing carriers with the specifications necessary for carriers to design or modify their systems in a manner that will enable them to communicate with the BOC’s systems and any relevant interfaces. In addition, a BOC must disclose to competing carriers any internal business rules and other formatting information necessary to ensure that a carrier’s requests and orders are processed efficiently. Finally, a BOC must demonstrate that its OSS is designed to accommodate both current demand and projected demand for competing carriers’ access to OSS functions. Although not a prerequisite, the Commission continues to encourage the use of industry standards as an appropriate means of meeting the needs of a competitive local exchange market. 98. Under the second inquiry, we examine performance measurements and other evidence of commercial readiness to ascertain whether the BOC’s OSS is handling current demand and will be able to handle reasonably foreseeable future volumes. The most probative evidence that OSS functions are operationally ready is actual commercial usage. Absent sufficient and reliable data on commercial usage, the Commission will consider the results of carrier-to-carrier testing, independent third-party testing, and internal testing in assessing the commercial readiness of a BOC’s OSS. Although we do not require OSS testing, a persuasive test will provide us with an objective means by which to evaluate a BOC’s OSS readiness where there is little to no evidence of commercial usage, or may otherwise strengthen an application where the BOC’s evidence of actual commercial usage is weak or is otherwise challenged by competitors, The persuasiveness of a third-party review, however, is dependent upon the qualifications, experience and independence of the third party and the conditions and scope of the review itself. If the review is limited in scope or depth or is not independent and blind, we will give it minimal weight. b. Discussion 99. For the reasons discussed more fully below, we conclude that SWBT has demonstrated that it provides nondiscriminatory access to its OSS. The Commission consistently has found that nondiscriminatory access to OSS is a prerequisite to the development of meaningful local competition, as well as providing access to other checklist items. For example, new entrants must have access to the functions performed by the incumbent’s OSS in order to formulate and place orders for network elements or resale services, to install service to their customers, to maintain and repair network facilities, and to bill customers. The evidence presented in this record shows that SWBT provides nondiscriminatory access to OSS pre- ordering, ordering, maintenance and repair, and billing functions. We base these findings primarily on evidence in the record of SWBT’s actual commercial performance, including SWBT’s performance measurements developed under the auspices of the Texas Commission. In addition, we find that the Telcordia third-party test provides some additional evidence of the functionality and capability of SWBT’s OSS. We also find that SWBT has instituted a change management process that will help to ensure that changes to SWBT’s OSS interfaces do not impede a carrier’s ability to access critical OSS functions. 100. Although the Department of Justice identified several areas of concern regarding the performance and readiness of SWBT’s OSS in the Texas 1 proceeding, it recommends approval of SWBT’s second application and states that it is “encourag[ed]” by recent developments with respect to OSS. The Department of Justice nonetheless expresses “lingering concerns” about several allegations raised by competitive LECs. We address each of these concerns below. Based on evidence submitted in this second proceeding, including evidence demonstrating that SWBT’s performance has improved in several critical areas, we find that the areas of concern identified by the Department of Justice do not merit denial of SWBT’s application, and conclude that SWBT has demonstrated that it provides nondiscriminatory access to its OSS. c. Independent Third Party Testing 101. The Texas Commission retained Telcordia (formerly Bellcore) as an independent third party to oversee a carrier-to-carrier test of the operational readiness of SWBT’s OSS and to evaluate the efficacy of the documentation and other processes SWBT makes available to competing carriers in Texas. With the help of the Technical Advisory Group (TAG), a group composed of the Texas Commission, several competitive LECs, and SWBT, Telcordia developed a Master Test Plan that outlined the general structure of the testing, and framed the specific requirements necessary for testing certain SWBT systems. The test consisted of a “functionality” test designed to evaluate and validate the ability of SWBT’s OSS systems to process different types of orders, and a “capacity” test designed to evaluate the ability of SWBT’s systems to handle reasonably foreseeable volumes of orders. The actual tests of SWBT’s OSS were conducted using electronic interfaces certain carriers had already developed for interconnecting with SWBT’s systems. Telcordia’s role was to validate the test design, monitor the test execution, validate the test results, and report the results of the testing. We applaud the Texas Commission for its significant role in developing a third-party test in Texas, for its oversight of Telcordia’s review of SWBT’s OSS readiness, and for its continuing role in ensuring that SWBT provides access to its OSS in a non-discriminatory manner. We continue to encourage strong state participation in ensuring that the BOCs’ OSS can support competitive entry into the local markets. 102. We view independent third party testing as a useful tool in determining whether a BOC’s deployment of OSS is nondiscriminatory. While there may be several ways to design and conduct a meaningful third party test, we have recognized that the persuasiveness of such a test is dependent on the conditions and scope of the review, and we thus encourage BOCs to pursue comprehensive OSS testing. The findings of a third party tester may be necessary to assess whether a BOC is providing nondiscriminatory access to its OSS, particularly if other evidence, such as data reflecting actual commercial usage, is not presented by the applicant. As we have stated previously, however, we consider actual commercial usage to be the most probative evidence that a BOC is providing nondiscriminatory access to its OSS. We thus first examine actual commercial usage in making our determination in this matter. 103. We find that the third party test conducted by Telcordia provides evidence of the functionality and capacity of SWBT’s OSS in several important areas. At the same time, however, we agree with several commenters and the Department of Justice that the Telcordia test was limited in scope and depth. This is not to say, as some commenters contend, that SWBT’s application is inadequate. Rather, this finding simply means that, in those substantive areas not covered by the Telcordia test, we will rely instead on other evidence, such as actual commercial usage, to assess whether SWBT provides nondiscriminatory access to its OSS. Throughout the following analysis, we describe various aspects of the Telcordia test, and identify the specific portions of the test upon which we rely. We also explain where we are unable to rely on Telcordia’s findings, such as when we find that a particular issue was not covered by the test. 104. Several commenters also challenge the blindness of the test process and Telcordia’s independence, and argue that Telcordia’s findings thus should be given little weight. We note, however, that the Texas Commission played an active role throughout the testing process and acted as “test manager.” The Texas Commission also describes specific efforts that were taken to maintain testing blindness. Based on our review of the evidence in the record describing the test process, and on the assurances provided by the Texas Commission, we find that the results of Telcordia’s test, in certain areas, provide meaningful evidence that is relevant to our analysis of SWBT’s OSS. d. Change Management Process 105. We conclude that SWBT demonstrates that it provides the documentation and support necessary to provide competing carriers nondiscriminatory access to its OSS. SWBT makes this demonstration by showing that it has an adequate change management process in place in Texas. The record also reflects that SWBT has adhered to its change management process over time. As a result, we find that SWBT provides access to its OSS in a manner that allows an efficient competitor a meaningful opportunity to compete. (i) Background 106. Competing carriers need information about, and specifications for, an incumbent’s systems and interfaces to develop and modify their systems and procedures to access the incumbent’s OSS functions. Thus, in order to demonstrate that it is providing nondiscriminatory access to its OSS, a BOC must first demonstrate that it “has deployed the necessary systems and personnel to provide sufficient access to each of the necessary OSS functions and . . . is adequately assisting competing carriers to understand how to implement and use all of the OSS functions available to them.” By showing that it adequately assists competing carriers to use available OSS functions, a BOC provides evidence that it offers an efficient competitor a meaningful opportunity to compete. As part of this demonstration, the Commission will give substantial consideration to the existence of an adequate change management process and evidence that the BOC has adhered to this process over time. 107. The change management process refers to the methods and procedures that the BOC employs to communicate with competing carriers regarding the performance of, and changes in, the BOC’s OSS system. Such changes may include updates to existing functions that impact competing carrier interface(s) upon a BOC’s release of new interface software; technology changes that require competing carriers to meet new technical requirements upon a BOC’s software release date; additional functionality changes that may be used at the competing carrier’s option, on or after a BOC’s release date for new interface software; and changes that may be mandated by regulatory authorities. Without a change management process in place, a BOC can impose substantial costs on competing carriers simply by making changes to its systems and interfaces without providing adequate testing opportunities and accurate and timely notice and documentation of the changes. Change management problems can impair a competing carrier’s ability to obtain nondiscriminatory access to UNEs, and hence a BOC’s compliance with section 271(2)(B)(ii). (a) Discussion 108. In evaluating whether a BOC’s change management plan affords an efficient competitor a meaningful opportunity to compete, we first assess whether the plan is adequate. In making this determination, we assess whether the evidence demonstrates: (1) that information relating to the change management process is clearly organized and readily accessible to competing carriers; (2) that competing carriers had substantial input in the design and continued operation of the change management process; (3) that the change management plan defines a procedure for the timely resolution of change management disputes; (4) the availability of a stable testing environment that mirrors production; and (5) the efficacy of the documentation the BOC makes available for the purpose of building an electronic gateway. After determining whether the BOC’s change management plan is adequate, we evaluate whether the BOC has demonstrated a pattern of compliance with this plan. 109. We disagree with commenters that argue that SWBT’s failure to implement a change management plan that is identical to the one adopted by Bell Atlantic in New York is a basis for concluding that SWBT’s change management plan is inadequate. Indeed, because an effective change management plan is based on collaboration between a BOC and the carriers operating in its territory, we do not expect such plans to be identical in every state. The fact that SWBT’s and Bell Atlantic’s change management plans are different, yet equally allow the smooth and effective transition from one EDI release to another, is persuasive evidence that more than one type of change management plan is adequate for the purpose of demonstrating compliance with the requirements of section 271. (i) Adequacy of Change Management Plan 110. SWBT’s current change management process became effective in September 1999. We find that this process, which is the result of collaborative efforts between SWBT and competing carriers, provides an efficient competitor a meaningful opportunity to compete. As an initial matter, we note that SWBT’s change management documentation is clearly organized and readily accessible to competing carriers. The basic change management process is memorialized in a single document entitled “SWBT Competitive Local Exchange Carrier (CLEC) Interface Change Management Process” (Change Agreement). This document sets forth the process and procedures that govern the introduction, modification, and retirement of OSS interfaces. The change management plan is designed to accommodate five different types of changes: emergency changes; regulatory changes; changes in industry standards; changes initiated by SWBT; and changes requested by competing carriers. The dates and timelines associated with each type of change are clearly reflected in the change management documentation. The basic change management agreement, and any modifications thereto, are made available to competing carriers through SWBT’s website. 111. We further note that SWBT’s change management process provides for substantial input from competing carriers. For example, the document provides for regularly scheduled change management meetings between SWBT and competing carriers. The Agreement further requires SWBT to provide competing carriers with a “12-Month Development Plan,” which reflects SWBT’s plans for future OSS modifications. Moreover, the plan provides for feedback from competing carriers on proposed changes, and indicates that change releases will be based on consensus among the parties. We further note that the Change Agreement includes a schedule for the distribution of draft specifications or business rules, receipt of competing carrier comments on the documentation, and distribution of final documentation that is based on the consensus of the parties. 112. We also find that SWBT’s change management process includes many elements that provide assurances that changes to existing OSS interfaces will not disrupt competing carriers’ use of SWBT’s OSS. Specifically, the plan includes a process whereby competing carriers can decide whether or not to implement a new release (i.e., “go/no go” vote), and a process for identifying and resolving issues related to the change management process in a timely manner. Unresolved change management disputes could impede a carrier’s ability to access the BOC’s OSS, which, in turn, hampers that carrier’s ability to serve its customers. It, therefore, is critically important that change management disputes are handled expeditiously. We would be hesitant to find that a BOC has an adequate change management process in place if the change management plan does not define a mechanism for change management disputes to be handled in a timely manner. Finally, we note that the change management plan includes a requirement that SWBT support the current and most recent versions of software for its EDI Ordering and EDI/CORBA pre-ordering interfaces (i.e., “versioning”). Although versioning has not yet been implemented in Texas, the record indicates that versioning will be implemented in connection with the next EDI release, which is expected to occur in August 2000. 113. Some commenters argue that SWBT cannot rely on the change management plan described above to demonstrate compliance with section 271 because it has not been used in connection with a “major” EDI release, and has not been fully implemented. These commenters argue that section 271 compliance must be based on the two different change management plans SWBT actually has used over the past year. As noted above, the current plan became effective in September 1999. Any EDI releases that were implemented prior to this time were governed by a process that initially became effective in June 1998. According to some carriers, SWBT’s former change management plan was inadequate because it failed to include several elements that competing carriers regard as critical to their ability to modify and test changes on its side of the interface. WorldCom further maintains that SWBT should b required to implement performance measurements to ensure that SWBT will comply with the Change Agreement in the future. 114. We reject each of the foregoing claims. First, contrary to these carriers’ assertions, the record indicates that SWBT has followed the procedures outlined in its current change management plan since September 1999. In fact, this process was successfully used in connection with the EDI releases that were implemented on October 23, 1999, January 15, 2000 releases. Although the evidence indicates that these releases were not substantial, we note that the timelines, processes, and procedures set forth in the Change Agreement must be followed regardless of the scope of the release. We thus find that SWBT’s successful use of the current change management plan in connection with any EDI release is instructive in determining whether the change management plan in place in Texas affords competing carriers a meaningful opportunity to compete. We recognize that there may be circumstances in which it is necessary to assess a BOC’s ability to implement at least one significant software release. Indeed, given the nature and scope of the change management issues that could arise in connection with major software releases, we find that such a demonstration may be critical to another section 271 applicant’s demonstration that the change management plan it has in place is adequate. The evidence presented in this proceeding, including that SWBT’s change management plan was used successfully for at least two EDI releases, and Telcordia’s findings that SWBT’s change management process is effective, provides a sufficient basis upon which to determine whether the methods and procedures SWBT employs to communicate with competing carriers regarding OSS system performance and changes is adequate. 115. We recognize, as some commenters point out that, contrary to the documented change management plan, SWBT has not yet implemented versioning. As we previously have recognized, versioning is one of the most effective means of ensuring that system changes and enhancements do not adversely affect a carrier’s ability to access the BOC’s OSS. Given its importance, we find that versioning is integral to a section 271 applicant’s demonstration that the change management plan it has in place affords competing carriers a meaningful opportunity to compete. We do not find, however, that the lack of versioning has deprived carriers of a meaningful opportunity to compete in Texas, or otherwise demonstrates that the SWBT’s change management process is inadequate. We reach this conclusion on the basis of evidence demonstrating that SWBT has employed a number of other mechanisms to ensure the timely and effective transition from one EDI release to another. Should future evidence demonstrate that the resources SWBT makes available to assist carriers in EDI implementation and release testing become less effective before versioning is implemented, this may serve as a basis for concluding that its change management plan is inadequate, thus leading to a conclusion that the requirements of section 271 are not satisfied. 116. As noted above, SWBT has in place a number of mechanisms to ensure that releases are implemented in a timely and effective manner. Indeed, as we explain more fully below, SWBT notifies competing carriers of all system changes and enhancements well in advance of the target implementation date. In addition, SWBT provides numerous other information and human resources to competing carriers to ensure successful EDI implementation. We further note that the go/no-go vote procedure that has been in effect in Texas since July 1999. We find that this procedure, which permits any carrier that will be adversely affected by the implementation of a release to request that it be delayed, minimizes any adverse consequences associated with the lack of versioning. Given the effectiveness of these tools in ensuring the orderly implementation of EDI releases in the past, we reject AT&T’s contention that the lack of versioning in Texas exposes competing carriers and their customers to an “unreasonable risk.” Should the facts reveal at a later time that carriers are forced to transition to a new release prematurely, thereby impeding their ability to access SWBT OSS, enforcement action may be appropriate. Indeed, we find that scrutiny of SWBT’s change management procedures is particularly important until versioning is fully implemented. 117. Second, while we agree with competing carriers that the change management plan that was in place prior to September 1999 was deficient in a number of respects, this plan is not relevant to our determination of whether SWBT presently satisfies the requirements of section 271. Indeed, in determining section 271 compliance, we review the adequacy of the change management plan that is in place at the time the section 271 application is filed. We further review whether the BOC has demonstrated a pattern of compliance with this plan. As noted above, SWBT has adhered to an adequate change management plan in connection with the past three EDI releases. We do not expect any change management process to remain static. Rather, a key component of an effective change management process is the existence of a forum in which both competing carriers and the BOC can work collaboratively to improve the method by which changes to the BOC’s OSS are implemented. This certainly is the case in Texas where, as a result of concerns raised by competing carriers and to accommodate process improvements recommended by Telcordia, SWBT’s change management process has evolved over time. We believe it would be unreasonable to evaluate SWBT’s section 271 compliance based on a change management process that it no longer follows. 118. Finally, we disagree that the existence of performance measurements is the only basis upon which to ensure that a BOC will comply with the requirements of section 271, including the requirement that it adhere to its documented change management plan. Indeed, we note that, the Texas Commission has been extensively involved in the development of the Texas change management plan, and continues to handle disputes related to the change management process effectively and expeditiously. Moreover, pursuant to section 271(d)(6), the Commission retains the authority to enforce the requirements of section 271, even after such authority has been granted. Given the extensive oversight of the Texas Commission, and this Commission’s continuing enforcement authority under section 271(d)(6), we have no reason to believe that SWBT will disregard its obligation to maintain in Texas a change management plan that affords competing carriers a meaningful opportunity to compete. Evidence that SWBT fails to adhere to the agreed-upon change management process, thereby depriving competing carriers of a meaningful opportunity to compete, may result in an enforcement action under section 271(d)(6). (ii) Documentation Adequacy 119. We conclude that SWBT makes available sufficiently detailed interface design specifications to enable competing carriers to modify or design their systems in a manner that will enable them to communicate with the SWBT’s systems and any relevant interfaces. We, therefore, conclude that the EDI implementation and design specifications that SWBT makes available afford an efficient competitor a meaningful opportunity to compete. Competing carriers raise various arguments with respect to the adequacy of SWBT’s EDI interface development documentation. We believe that many of the issues cited by commenters (such as SWBT’s failure to provide a comprehensive, customized set of SWBT-specific EDI documentation) are important, and under a different set of circumstances, could seriously undermine a section 271 applicant’s assertion that it provides nondiscriminatory access to its OSS. 120. Under the facts of this proceeding, however, we find that SWBT’s documentation is adequate for the purpose of building an EDI gateway, and therefore affords an efficient competing carrier of a meaningful opportunity to compete. As an initial matter, we agree with SWBT and the Texas Commission that the adequacy of SWBT’s documentation is demonstrated by the fact that several competing carriers have constructed and are using EDI interfaces in a commercial environment. As SWBT explains, sixteen carriers are in production using SWBT’s EDI interface gateway, and additional carriers are in the process of testing EDI requirements. The fact that many of these carriers are placing high volumes of orders via EDI with relatively few rejects significantly undermines the assertion that these carriers’ EDI implementation efforts have been unsuccessful. Indeed, these carriers’ actual commercial experiences indicate that SWBT’s EDI documentation is sufficient. 121. We further note that SWBT makes available to competing carriers a vast number of resources for the purpose of EDI implementation. For example, each competing carrier operating in Texas is assigned an SWBT Account Manager, who is responsible for managing and assisting with all activities pertaining to the carrier’s working relationship with SWBT for local service. In addition, through its Information Services (IS) Call Center and OSS CLEC Support Team, SWBT is able to offer personalized assistance to carriers that experience OSS-related problems. Other resources provided by SWBT include interactional, OSS-related websites. Although not decisional in this case, we note that SWBT recently engaged the services of General Electric Global Exchange Services (GXS) to provide to competing carriers several hours of OSS-related technical assistance at no charge to the competing carrier. 122. Telcordia’s findings provide additional support for our conclusion that the documentation and resources provided by SWBT enable competing carriers to implement successfully EDI. As part of the Texas Commission’s third-party test, Telcordia performed an assessment of the usefulness of the documentation and related materials SWBT makes available to competing carriers for the purpose of implementing EDI. In its Documentation Analysis Report, Telcordia concluded that the resources made available by SWBT for the purpose of EDI implementation are “clear and comprehensive, and conform to applicable OBF pre-order and ordering guidelines.” Telcordia further found that the resources SWBT provides to competing carriers are easy to use and readily available to competing carriers. According to Telcordia, these findings were confirmed by the competing carriers it interviewed in connection with its documentation review. Indeed, in its Documentation Report, Telcordia noted that competing carriers consistently commented upon the responsiveness of SWBT employees to their concerns and issues raised during EDI implementation. 123. Moreover, many of the issues related to EDI implementation, including the adequacy of SWBT’s EDI documentation, are discussed fully and openly during regularly scheduled meetings between SWBT and competing carriers. The record indicates that, when a competing carrier expresses a concern about SWBT’s EDI documentation, SWBT responds to their concerns in an effective and timely manner. Given these findings, we are convinced that any problems associated with SWBT’s EDI documentation are minimal, and can be easily overcome. 124. We further note that, other than AT&T, no carrier claims that its EDI implementation efforts were unreasonably complicated, or accompanied by unreasonable expense and delay. With respect to AT&T, we are persuaded by SWBT’s claim that many of the problems associated with AT&T’s development efforts are unique to AT&T. Indeed, although AT&T claims that it took several years for it to construct an EDI gateway, other competing carriers were able to establish connectivity with SWBT’s EDI ordering gateway within a few months after receiving the EDI implementation documentation. In fact, SWBT explains that Allegiance Telecom implemented electronic bonding within 90 days of commencing the EDI implementation process. Moreover, there is some evidence in the record that suggests that AT&T itself is at least partially responsible for some of the problems it experienced during the early stages of its EDI implementation. 125. Finally, SWBT has convincingly explained that many of the problems associated with the EDI documentation utilized by AT&T have been resolved, and therefore should not similarly limit another carrier’s gateway development efforts. Indeed, we note that, through functionality testing, Telcordia indirectly tested the OSS documentation SWBT supplies to competing carriers. When testing activities revealed the need for improvements to the documentation, Telcordia verified SWBT’s implementation of those changes. Telcordia’s functionality review, therefore, provides additional indirect evidence that most of the problems related to SWBT’s EDI documentation have been resolved. We further note that, on April 11, 2000, SWBT initiated a documentation meeting with competing carriers. As a result of the concerns expressed by competing carriers during this meeting, SWBT implemented various improvements to assist carriers in accessing and utilizing its system documentation. Under our procedural framework, the process improvements that resulted from this meeting are not relevant to our determination of whether SWBT satisfies the requirements of section 271. We do note, however, that we are supportive of these and other steps taken by SWBT to facilitate entry into its local markets by competing carriers. (iii) Notification Adequacy and Timeliness 126. It is critical that a BOC provide timely, complete, and accurate notice of alterations to its systems and processes. Indeed, without timely notification and documentation, competing carriers are unable to modify their existing systems and procedures or develop new systems to maintain access to a BOC’s OSS, which, in turn, impedes a carrier’s ability to serve its customers. Previously, in reviewing a BOC’s change management process, we examined whether the BOC “established a pattern of compliance with the relevant notification and documentation intervals in its Change Agreement.” In making this determination, we relied, in part, on the performance measurements associated with the BOC’s compliance with the dates and timelines set forth in its Change Agreement. In this application, however, there are no performance measurements associated with SWBT’s compliance with its documented change management process. We thus limit our analysis of SWBT’s compliance with the change management process to competing carriers’ actual commercial experiences. As noted above, we do not rely on the processes and procedures set forth in SWBT’s former change management plan in evaluating SWBT’s compliance with the requirements of section 271 because we find that this plan is inadequate. We further note, however, that the notification intervals set forth in the former and current change management plans are essentially the same. Thus, in evaluating whether SWBT provides change management notification and documentation in a reasonable and timely manner, we assess whether SWBT has demonstrated a pattern of compliance with the intervals associated with both the current and former change management plans. 127. Based on the evidence presented in the record, we conclude that SWBT has demonstrated a pattern of compliance with its documented change management processes and procedures. As a preliminary matter, we find that the change management notification and documentation intervals set forth in SWBT’s change management plan are reasonable because they provide competing carriers with sufficient time to prepare for changes to SWBT’s interfaces and systems. Given our finding, as explained more fully below, that SWBT has demonstrated a pattern of compliance with these reasonable intervals, we conclude that SWBT provides competing carriers with change management notification and documentation in a manner sufficiently timely to allow an efficient competitor a meaningful opportunity to compete. 128. Our conclusion that SWBT generally has adhered to the reasonable timeframes set forth in its change management plan is based on the evidence in the record and Telcordia’s findings. As part of the Texas Commission’s third-party test, Telcordia assessed whether SWBT adhered to the notification intervals set forth in the change management plan in connection with the August and October 1999 EDI releases. With respect to these releases, Telcordia found that SWBT generally followed the documented change management process. More specifically, Telcordia found that SWBT distributed change management notification and documentation in a manner consistent with the intervals set forth in the Change Agreement, and that other activities outlined in the Change Agreement were carried out by SWBT in a reasonable and timely manner. 129. We disagree with AT&T and WorldCom that SWBT’s failure to follow strictly the intervals set forth in the Change Agreement has deprived competing carriers of a meaningful opportunity to compete. As an initial matter, we note that, whenever SWBT has introduced changes outside the intervals set forth in the change management plan, it has followed the “exceptions process,” which is specifically defined and provided for in the agreed-upon change management plan. Pursuant to the exceptions process, each change SWBT has sought to introduce under an expedited timeframe was discussed fully and openly at change management and other meetings held between SWBT and competing carriers. In addition, competing carriers were notified of the proposed changes via Accessible Letter. Thus, competing carriers were provided with timely notice of each exceptions change, and were given reasonable opportunity to comment and object. The record indicates that, when competing carriers express concerns about particular changes, SWBT has shown a willingness to accommodate their concerns. 130. Moreover, any carrier that would be affected by the change could have delayed the implementation of the release by invoking the “go/no-go vote” policy. Given that no carrier objected to SWBT’s implementation of the exceptions changes, we give little weight to the assertion that SWBT’s implementation of such changes impeded competing carriers’ ability to compete. Finally, we note that, in many instances, the changes implemented by SWBT pursuant to the exceptions process were for the purpose of accommodating system changes or enhancements specifically requested by competing carriers, or mandated by regulatory authorities. Accordingly, we find that, despite its use of the exceptions process, SWBT is implementing its change management plan in a way that provides adequate and timely notice to competing carriers. The evidence further demonstrates that SWBT sufficiently accommodates competing carriers’ change management concerns. At the same time, we expect SWBT’s use of the exceptions process should decrease as the changes requested by competing carriers and mandated by regulatory authorities are successfully implemented. 131. We caution BOCs against the use of any process that would effectively nullify the standard procedures outlined in the formal change management documentation. Indeed, as several commenters point out, part of the problem with deviating from the standard timelines set forth in the Change Agreement is that it requires competing carriers to make substantial changes to their systems within a significantly abbreviated timeframe, which could increase the risk of error. There is no evidence in this proceeding, however, that SWBT’s use of the exceptions process has adversely affected competing carriers’ ability to access SWBT’s OSS after new releases were implemented. Indeed, in view of the number of competing carrier-requested and regulatory-mandated changes SWBT has had to implement over the past year, we find that SWBT’s use of the exceptions process was limited to instances in which it was both necessary and unavoidable. We further find that SWBT’s exceptions process is reasonable given that that competing carriers are afforded an adequate opportunity to comment upon and object to each exceptions change. (iv) Testing Environment 132. As part of a sufficient change management process, a BOC must provide competing carriers with access to a stable testing environment to certify that their OSS will be capable of interacting smoothly and effectively with the BOC’s OSS. In addition, prior to issuing a new software release or upgrade, the BOC must provide a testing environment that mirrors the production environment in order for competing carriers to test the new release. If competing carriers are not given the opportunity to test new releases in a stable environment prior to implementation, they may be unable to process orders accurately and provision new customer services without delays. Moreover, the failure to provide a testing environment that mirrors production can result in competing carriers’ transactions succeeding in the testing environment but failing in production. 133. SWBT’s current test environment was made available to competing carriers on November 1, 1999. SWBT represents that that its current testing environment is sufficiently stable because it dedicated solely to testing by competing carriers. More specifically, SWBT explains that, in contrast to the testing environment that existed prior to November 1999, where the testing environment was shared between SWBT developers and testers and competing carriers, the current testing environment is physically separate from the production environment and is made available for the exclusive use of competing carriers. SWBT asserts that the stability of its testing environment is further demonstrated by the fact that internal testing of the release is completed before it is made available to competing carriers. According to SWBT, its testing environment adequately mirrors the production environment because “the functionality of the test environment is the same as the production environment and returns data in the identical fields and format.” In further support of its assertion that its testing environment is adequate, SWBT points out that its test plan defines a process whereby SWBT and competing carriers jointly develop testing scenarios and timeframes. 134. We conclude that SWBT’s test environment affords competing carriers an adequate opportunity to test SWBT OSS changes prior to implementation. We, therefore, find that the testing environment SWBT makes available provides competing carriers with a meaningful opportunity to compete. Specifically, we find that the record demonstrates that SWBT’s testing environment is stable, adequately mirrors the production environment, affords competing carriers an opportunity to develop test decks of representative pre-ordering and ordering transactions, and offers the extended testing periods that competing carriers need for EDI implementation and new release testing. We base this conclusion on the experience of the competing carriers that used the current testing environment to implement EDI and to test the January 15, 2000 release. The record indicates that three carriers that used the new test environment for EDI implementation achieved production status, and that two carriers used the new testing environment without substantial difficulty to test the requirements associated with the January 15, 2000 release. Thus, we find that the recent evidence from commercial usage suggests that SWBT’s testing environment works in the manner represented in its application. 135. In concluding that SWBT’s testing environment is adequate, we recognize that SWBT’s testing environment was not tested by a third party. Although such a test would have provided us with useful evidence concerning the adequacy of the testing environment SWBT makes available to competing carriers, we reject AT&T’s assertion that the absence of third party test is basis for concluding that SWBT’s section 271 application is deficient. Indeed, we find that the commercial evidence, as described above, is sufficient for the purpose of evaluating the adequacy of the testing environment SWBT makes available to competing carriers. 136. AT&T is the only commenter that raises several specific concerns with respect to the adequacy of SWBT’s EDI testing environment. One of its primary arguments is that SWBT’s EDI testing environment is deficient because it does not mirror the production environment. In support of this assertion, AT&T maintains that, in SWBT’s EDI testing environment, test orders do not flow-through as they would during production, but instead are manually monitored by SWBT as they progress through the testing process. AT&T claims that this approach is problematic because it denies competing carriers an opportunity to assess how the release will affect new or existing flow-through capability, and deprives competing carriers of an opportunity to assess how the relevant systems will actually respond in a production environment. AT&T further states that, because SWBT’s test environment does not take orders through the posting cycle in billing, but only through service order cre