September 15, 1999
  
     PRESS STATEMENT OF COMMISSIONER MICHAEL K. POWELL,
                     DISSENTING IN PART
  
       Re:  Third Report and Order and Fourth Further Notice of Proposed Rulemaking,
       Implementation of the Local Competition Provisions in the Telecommunications
       Act of 1996 (CC Docket No. 96-98)
  
       As I have tried to impress on many occasions, the Supreme Court gave us a tall
  order in AT&T Corp. v. Iowa Utilities Bd.   The Court rejected the previous Commission's
  decision to provide competitive carriers with unbridled access to every element of the
  incumbent's network at steeply discounted, cost-based prices.  In particular, the Court rejected
  the previous Commission's presumption in favor of unbundling the entire incumbent network,
  subject to potential exclusions that, in any event, never materialized.  That approach, the Court
  admonished, gave no effect to the limiting "necessary" and "impair" standards of section
  251(d)(2).  In place of this presumption, the Court ordered the Commission to surmount a high
  factual hurdle:  the burden of demonstrating that each network element is unbundled only to
  the extent that, without it, competitive local exchange carriers (CLECs) would be impaired
  from providing service.  
  
       I sincerely applaud my colleagues for the steps they have taken to consider the
  availability of switching outside the incumbent's network, including self-provisioning.  It is on
  the basis of many of these steps that I am able to support much of the decision in this area.  For
  my part, however, I do not believe the Commission has met its burden of showing that failure
  to unbundle switching would impair CLECs from providing service in the densest areas of the
  largest markets.  Thus, I would have been prepared to leave switching off the unbundling list
  for the provision of service to all customers in access Zone 1, regardless of their size or type,
  and regardless of whether the incumbent is providing the "extended link" or EEL.  
  
  As the record amply demonstrates, the vast majority of CLEC switches are
  concentrated in these zones, amounting to multiple companies providing switch-based
  alternative service in the market.  The tele-density in these zones, moreover, suggests that if
  CLECs truly wish to, they could take advantage of opportunities to serve relatively many
  residential customers per square mile, which would make residential customers in these zones
  easier and cheaper to serve, particularly in multiple dwelling units (MDUs).  In addition, in light
  of the existence of special access and our related decisions today regarding loop and transport,
  CLECs can potentially serve many residential and other customers even beyond Zone 1.  Based
  on the evidence of significant CLEC deployment and the comments of many CLECs that
  currently use their own switches, I am unpersuaded that CLECs would be materially impaired
  if they could not obtain unbundled switching in Zone 1.  
  
  With respect to the EEL, I am certainly persuaded that this functionality (which allows
  transmission from the CLEC's switch to its customers via the incumbent's facilities) will make
  it easier for CLECs to provide service.  But the question the Court has mandated that we
  answer is not whether access to parts of the incumbent's network makes it easier for CLECs
  but whether denial of such access would "impair" CLECs' ability to provide service within the
  meaning of section 251(d)(2).  If parts of the incumbent network satisfy this standard, then the
  Act requires that we make them available.  What our decision today does is to muddy an
  already complicated analysis.  On the one hand, we insist that we cannot mandate the EEL
  pending the Eighth Circuit's resolution of the appeal of our authority to require combinations
  of elements.  On the other hand, in the face of repeated and well-documented incumbent
  requests to remove switching as an unbundled element, we provide strong and direct incentives
  to incumbents to provide the EEL as a condition of such removal.  To make matters worse, we
  do so even though we also conclude that our existing rules permit CLECs to obtain the same
  functionality as the EEL, at least in many circumstances, by simply converting special access
  services to network elements.  I think the cleaner approach would have been either to wait for
  the Eighth Circuit's combination ruling or simply decide whether the EEL should be made
  available as its own network element.
  
  Having said all that, I do generally support most of the remainder of the item, and I commend
  my colleagues and the Common Carrier Bureau for their diligence and hard work in working
  through these issues.  Despite my misgivings about a few of the bottom lines, I fully recognize
  that an enormous amount of blood, sweat and tears have gone into the decisions we reach here. 
  (I have cried some of these tears myself.)  The Bureau, in particular, is to be commended for
  bringing us this far in our efforts to grapple with the voluminous and highly-complex record
  that the parties have developed in this docket.