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Verizon Pennsylvania, et al. v. PA PUC, et al, No. 11-2712 (3rd Cir.)

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Released: April 13, 2012
Case: 11-2712 Document: 003110868291 Page: 1 Date Filed: 04/13/2012
BRIEF FOR AMICUS CURIAE FEDERAL COMMUNICATIONS COMMISSION
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 11-2712
VERIZON PENNSYLVANIA INC. AND VERIZON NORTH LLC,
PLAINTIFFS/APPELLEES,
V.
PENNSYLVANIA PUBLIC UTILITY
COMMISSION, ET AL.,
DEFENDANTS/APPELLANTS.
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA, CIVIL ACTION NO. 08-CV-03436
AUSTIN C. SCHLICK
GENERAL COUNSEL
PETER KARANJIA
DEPUTY GENERAL COUNSEL
RICHARD K. WELCH
DEPUTY ASSOCIATE GENERAL COUNSEL
LAURENCE N. BOURNE
COUNSEL
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740

Case: 11-2712 Document: 003110868291 Page: 2 Date Filed: 04/13/2012

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................................................... ii
STATEMENT OF INTEREST .........................................................................1
QUESTIONS PRESENTED .............................................................................2
STATEMENT OF THE CASE .........................................................................3
I.
STATUTORY AND REGULATORY BACKGROUND.........................3
II. THE PROCEEDINGS BELOW ................................................................7
ARGUMENT ..................................................................................................10
I.
THE COMMISSION’S CONSIDERED CONSTRUCTION
OF ITS RULES IN THIS AMICUS BRIEF IS ENTITLED
TO DEFERENCE ....................................................................................10
II. THE RULE 51.5 DEFINITION OF “FIBER-BASED
COLLOCATOR,” AS EXPLAINED IN THE TRRO,
SUPPORTS THE DISTRICT COURT’S RULING UNDER
THE FACTS OF THIS CASE .................................................................11
A.
A CLEC That Connects To Dark Fiber Strands Leased
From A CFP Through A Verizon CATT May Qualify As
A “Fiber-Based Collocator” Under Rule 51.5. ...................................11
B.
Although The Commission Has Not Definitively
Addressed Whether A CLEC Must Lease Dark Fiber
From A CFP On An IRU Basis To Qualify As A “Fiber-
Based Collocator,” That Question Should Not Be
Outcome-Determinative On The Facts Of This Case. ........................18
CONCLUSION ...............................................................................................21
i

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TABLE OF AUTHORITIES

CASES

Ansari v. Qwest Commc’ns Corp., 414 F.3d 1214
(10th Cir. 2005) .............................................................................................9
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366
(1999) ........................................................................................................3, 4
Auer v. Robbins, 519 U.S. 452 (1997) ............................................................10
Covad Commc’ns Co. v. FCC, 450 F.3d 528 (D.C.
Cir. 2006)................................................................................................ 5, 14
Qwest Corp. v. Colo. Pub. Utils. Comm’n, 656 F.3d
1093 (10th Cir. 2011) ............................................................................. 6, 10
Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) ..............................................10
Talk America, Inc. v. Michigan Bell Tel. Co., 131
S. Ct. 2254 (2011) .................................................................................. 4, 10
Verizon Commc’ns Inc. v. FCC, 535 U.S. 467
(2002) ........................................................................................................3, 5
Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535
U.S. 635 (2002) .............................................................................................3
Verizon Pennsylvania, Inc., et al. v. Pennsylvania
Public Util. Comm’n, 2011 WL 2111118 *2-*3
(E.D. Pa. May 26, 2011)..................................................... 7, 8, 9, 11, 18, 19

ADMINISTRATIVE DECISIONS

Review of the Section 251 Unbundling Obligations
of Incumbent Local Exchange Carriers, Report
and Order and Order on Remand, 18 FCC Rcd
16978 (2003) ("TRO"), vacated in part and
remanded, U.S. Telecom Assn'n v. FCC
, 359 F.3d
554 (D.C. Cir. 2004)......................................................................... 9, 13, 20
Unbundled Access to Network Elements, Order on
Remand, 20 FCC Rcd 2533 (2005) ("TRO"),
aff'd, Covad Commc'ns Co. v. FCC, 450 F.3d 528
(D.C. Cir. 2006)........................................................ 5, 6, 7, 9, 13, 14, 17, 19
ii

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STATUTES AND REGULATIONS

47 U.S.C. § 153(35) ..........................................................................................4
47 U.S.C. § 251(c)(3) ........................................................................................4
47 U.S.C. § 251(c)(6) ........................................................................................5
47 U.S.C. § 251(d)(2)................................................................................. 4, 12
47 U.S.C. § 252(d)(1)........................................................................................5
47 C.F.R. § 51.5 ................................................................... 2, 7, 12, 15, 16, 21
47 C.F.R. § 51.505(b)........................................................................................5
iii

Case: 11-2712 Document: 003110868291 Page: 5 Date Filed: 04/13/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 11-2712
VERIZON PENNSYLVANIA INC. AND VERIZON NORTH LLC,
PLAINTIFFS/APPELLEES,
V.
PENNSYLVANIA PUBLIC UTILITY
COMMISSION, ET AL.,
DEFENDANTS/APPELLANTS.
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT
OF PENNSYLVANIA, CIVIL ACTION NO. 08-CV-
03436
BRIEF FOR AMICUS CURIAE FEDERAL COMMUNICATIONS COMMISSION
At this Court’s invitation, the Federal Communications Commission
(“FCC” or “Commission”) respectfully files this brief as amicus curiae.

STATEMENT OF INTEREST

The FCC has primary responsibility for implementing and enforcing
the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et seq. (“the
Act”). The FCC has an interest in ensuring that the Act, its implementing
rules, and its precedents are correctly interpreted.

Case: 11-2712 Document: 003110868291 Page: 6 Date Filed: 04/13/2012

QUESTIONS PRESENTED

The Court, pursuant to its Order dated March 14, 2012, invited the
FCC to set forth its position on two questions:
1. Do competitive local exchange carriers (“CLECs”) that
connect to dark fiber strands leased from competitive fiber
providers (“CFPs”) through a Verizon Competitive Alternate
Transport Terminal (“CATT”) qualify as “fiber-based
collocators” under 47 C.F.R. § 51.5 for purposes of determining
whether requesting carriers are impaired without access to
certain unbundled network elements at Verizon wire centers?
Answer: As explained in Argument Section II.A., below, such
CLECs may qualify as “fiber-based collocators” if, at a
minimum, they enter into collocation arrangements in the
Verizon wire center, and supply their own optronic equipment to
light the dark fiber.
2. To what extent does the answer to Question 1 depend on the
ability of those CLECs to light the dark fiber strands or on the
contracting parties’ agreement to lease the dark fiber strands on a
long-term indefeasible right of use basis?
Answer: As explained in Argument Section II.A. below, the
CLEC must, among other requirements to qualify as a “fiber-
based collocator,” supply the optronics to light the dark fiber.
As explained in Argument Section II.B., below, the Commission
has not clearly addressed the question whether the contracting
parties must agree to lease the dark fiber strands on an
indefeasible right of use (“IRU”) basis in order for the CLEC to
qualify as a “fiber-based collocator.” However, the answer to
that question should not be outcome-determinative in this case.
The district court found, as a matter of fact, that the CFP-to-
CLEC dark fiber leases at issue in this case involve IRU
arrangements, and the PUC’s appellate briefs present no basis to
challenge that finding.
2

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STATEMENT OF THE CASE

I.

STATUTORY AND REGULATORY BACKGROUND

1. For most of the last century, American consumers could purchase
local telephone service from only one source: their incumbent local exchange
carrier (“incumbent LEC” or “ILEC”). Until the 1990s, regulators treated
local telephone service as if it were a natural monopoly. As a result, states
typically granted an exclusive franchise in each local service area to the
incumbent LEC that owned and operated the local telephone network. See
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371 (1999).
In the Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56
(codified, in pertinent part, at 47 U.S.C. §§ 251-252) (“the 1996 Act”),
Congress fundamentally altered this regulatory framework “to achieve the
entirely new objective of uprooting . . . monopolies.” Verizon Commc’ns Inc.
v. FCC, 535 U.S. 467, 488 (2002). The 1996 statute amends the
Communications Act to create “a new telecommunications regime designed
1
to foster competition in local telephone markets” by imposing “a host of
2
duties” on incumbent LECs. Foremost among these duties is the incumbent

1 Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635, 638 (2002).
2 AT&T, 525 U.S. at 371.
3

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LEC’s obligation “to share its network with competitors.” AT&T, 525 U.S. at
371 (citing 47 U.S.C. § 251(c)(3)).
Section 251(c)(3) of the Act “requires [an] incumbent LEC[] to lease
[to its competitors] ‘on an unbundled basis’ – i.e., a la carte – network
elements specified by the [FCC].” Talk America, Inc. v. Michigan Bell Tel.
3
Co., 131 S. Ct. 2254, 2258 (2011). This requirement “makes it easier for a
competitor to create its own network without having to build every element
from scratch.” Talk America, 131 S. Ct. at 2258. When determining which
non-proprietary network elements incumbent LECs must offer to their
competitors on an unbundled basis, the FCC must consider, “at a minimum,”
whether the incumbent LEC’s failure to provide access to such elements
would “impair” a competitor’s ability to provide service. 47 U.S.C. §
4
251(d)(2). Unbundled network elements (“UNEs”) that are offered pursuant

3 A “network element” is defined as “a facility or equipment used in the
provision of a telecommunications service,” 47 U.S.C. § 153(35), and
includes, among other things, “the local loops (wires connecting telephones
to switches), the switches (equipment directing calls to their destinations),
and the transport trunks (wires carrying calls between switches) that
constitute a local exchange network,” AT&T, 525 U.S. at 371.
4 The 1996 Act also directs the FCC to consider whether unbundled access
to proprietary network elements is “necessary.” 47 U.S.C. § 251(d)(2). This
case, however, does not concern access to proprietary elements.
4

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to section 251(c)(3) must be made available at regulated, cost-based rates. 47
5
U.S.C. § 252(d)(1).
2. In its Triennial Review Remand Order (“TRRO”), the FCC adopted
rules to implement the unbundling provisions of the Communications Act,
6
including section 251(d)(2)’s test for “impairment.” The rules set out in the
TRRO impose unbundling obligations only in situations where competitive
LECs (or “CLECs”) “genuinely are impaired without access to particular
network elements and where unbundling does not frustrate sustainable,
facilities-based competition.” TRRO, 20 FCC Rcd at 2535 (¶ 2). The rules
also “remove unbundling obligations over time as carriers deploy their own
networks and downstream local exchange markets exhibit . . . robust
competition.” Id. at 2536 (¶ 3).
As relevant here, the FCC in the TRRO found a “correlation” between
7
the presence of fiber-based collocations by competing carriers in a particular

5 The Supreme Court has upheld the FCC’s methodology for calculating
those cost-based rates as lawful and consistent with the statute. Verizon, 535
U.S. 467; see also 47 C.F.R. § 51.505(b) (specifying methodology).
6 Unbundled Access to Network Elements, Order on Remand, 20 FCC Rcd
2533 (2005) (“TRRO”), aff’d, Covad Commc’ns Co. v. FCC, 450 F.3d 528
(D.C. Cir. 2006).
7 “Collocation” generally involves a CLEC’s lease of space in an incumbent
LEC’s wire center in order to place equipment necessary for interconnection
or access to unbundled network elements. See, e.g., 47 U.S.C. § 251(c)(6).
5

Case: 11-2712 Document: 003110868291 Page: 10 Date Filed: 04/13/2012
ILEC wire center (i.e., the place in the incumbent LEC’s network where
loops and transport facilities attach to the switch) and the existence of a
“revenue opportunity” sufficient to encourage CLECs to create their own
8
facilities in the areas served by that wire center. Id. at 2558-59 (¶ 43).
Based on that finding, the FCC used the presence of such CLEC collocations
as a proxy for lack of impairment: When the number of fiber-based
collocations in an ILEC wire center reaches a specified threshold, CLECs that
operate in the area served by the wire center may be deemed economically
capable of deploying their own high-capacity loops and transport facilities
(i.e., no longer “impaired” without access to those UNEs at cost-based rates).
9
Id. at 2588-94 (¶¶ 93-102).
We discuss in more detail below what a CLEC must do to qualify as a
“fiber-based collocator” under the FCC’s rules (see Argument Section II). In
general, the Commission defined that term to cover “competitive carrier

8 The Commission also found a correlation between such revenue
opportunities and a large number of business lines in an ILEC wire center.
Id.
9 The FCC similarly adopted specific thresholds for the number of business
lines in a wire center, which the agency also used as a proxy for lack of
impairment. See generally Qwest Corp. v. Colo. Pub. Utils. Comm’n, 656
F.3d 1093 (10th Cir. 2011). For some UNEs, a LEC is required to reach the
numeric thresholds for both fiber-based collocations and business lines in
order to establish non-impairment. TRRO, 20 FCC Rcd at 2536-37 (¶ 5).
6

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collocation arrangement[s], with active power supply, that ha[ve] a non-
incumbent LEC fiber-optic cable that both terminates at the collocation
facility and leaves the wire center.” Id. at 2593 (¶ 102); see also 47 C.F.R. §
51.5 (defining “fiber-based collocator”).

II.

THE PROCEEDINGS BELOW


1. In September 2007, a group of CLECs asked the Pennsylvania
Public Utility Commission (the “PUC”) to interpret the FCC’s regulatory
definition of a “fiber-based collocator” as it applies to certain collocation
arrangements involving Verizon’s Competitive Alternative Transport
10
Terminal offering. Verizon’s tariffed CATT offering permits a CLEC that
provides fiber (known as a competitive fiber provider or “CFP”) to bring its
own fiber-optic cable into a Verizon wire center, from where the CFP can,
among other things, lease dark fiber strands to other CLECs that have their
own equipment collocated in the same Verizon wire center. Verizon PA at *2
11
& n.5; see also Joint Stipulation ¶ 7. When the CFP leases dark fiber in
such an arrangement, the CLEC uses its own optronic equipment located in

10 Verizon Pennsylvania, Inc., et al. v. Pennsylvania Public Util. Comm’n,
2011 WL 2111118 *2-*3 (E.D. Pa. May 26, 2011) (“Verizon PA”).
11 “[D]ark fiber is fiber optic cable that has been deployed by a carrier but
has not yet been activated through connections to optronics that ‘light’ it, and
thereby render it capable of carrying communications.” TRRO, 20 FCC Rcd
at 2607 (¶ 133).
7

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its collocation space in the Verizon wire center to activate the dark fiber
strands it has leased, and thereby transmit telephone voice service or data
traffic into and out of the wire center. Verizon PA at *2; see also Joint
Stipulation ¶¶ 10-12.

The CLECs that initiated the administrative proceedings below asked
the PUC to find that neither the CFP that obtains the CATT arrangement from
Verizon, nor the collocated CLECs that lease dark fiber strands from the
CFP, count as fiber-based collocators for purposes of determining whether
CLECs are impaired at a wire center. Verizon PA at *3. Such a finding that
the CFP and collocated CLECs are not fiber-based collocators would
maximize Verizon’s network element unbundling obligations. By contrast,
Verizon asked the PUC to rule that both the CFP with the CATT arrangement
and any unaffiliated CLECs leasing dark fiber strands from the CFP should
be counted as fiber-based collocators, thereby minimizing Verizon’s
unbundling obligations. Id. The PUC ruled that the CFP leasing the tariffed
CATT arrangement from Verizon counts as a fiber-based collocator, but that
a CLEC leasing the CFP’s dark fiber strands does not. Id.
Verizon appealed to the United States District Court for the Eastern
District of Pennsylvania the PUC’s ruling that a CLEC that leases dark fiber
from a CFP should not be counted as a fiber-based collocator. Id.
8

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2. The district court identified the issue before it as “whether a
competitive carrier that has collocated equipment in a Verizon wire center
and accesses through the [CATT] dark fiber strands within a CFP’s fiber-
optic cable is a fiber-based collocator as the FCC defines the term.” Verizon
PA at *4. Construing the Commission’s definition of “fiber-based collocator”
in Rule 51.5 and the agency’s description of that rule in the TRRO, the district
court answered that question in the affirmative, so long as the CLEC leases
the dark fiber pursuant to an “indefeasible right of use” (or “IRU”) and
supplies the optronic equipment to “light” the fiber and transmit
12
communications into and out of the wire center. Verizon PA at *4-*6.
Based on the language of the governing dark fiber contract in this case, the

12 An IRU has been generally described as “an exclusive, long-term lease,
granted by an entity holding legal title to a telecommunications cable or
network, of a specified portion of a telecommunications cable, such as
specified fiber optic strands within an optical fiber cable, or the
telecommunications capacity of a cable or network, such as specific channels
of a given bandwidth.” Ansari v. Qwest Commc’ns Corp., 414 F.3d 1214,
1215 n.2 (10th Cir. 2005). For purposes of Rule 51.5’s definition of “fiber-
based collocator,” the Commission has indicated that “comparable”
arrangements will be treated in the same manner as “a long-term IRU.”
Review of the Section 251 Unbundling Obligations of Incumbent Local
Exchange Carriers
, Report and Order and Order on Remand, 18 FCC Rcd
16978, 17231 ¶ 408 & n. 1263 (2003) (“Triennial Review Order” or “TRO”),
vacated in part and remanded, U.S. Telecom Ass’n v. FCC, 359 F.3d 554
(D.C. Cir. 2004). See also TRRO, 20 FCC Rcd at 2593 n.292 (citing TRO
n.1263).
9

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district court further concluded, as a matter of fact, that CLECs were leasing
dark fiber from the relevant CFP on an IRU basis. Id. at *5 n.12.

3. Following briefing by the PUC and Verizon on the PUC’s appeal of
the district court’s ruling, this Court invited the FCC to file an amicus brief
addressing the two questions identified above. See page 2, above; Order,
Third Circuit No. 11-2712 (filed March 14, 2012).

ARGUMENT

I.

THE COMMISSION’S CONSIDERED CONSTRUCTION
OF ITS RULES IN THIS AMICUS BRIEF IS ENTITLED
TO DEFERENCE

An “agency’s reading of its own rule is entitled to substantial
deference.” Riegel v. Medtronic, Inc., 552 U.S. 312, 328 (2008). Indeed, an
agency’s construction of its own rule is “controlling” when, as in this case,
the interpretation reflects a “fair and considered judgment” and is not “plainly
erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S.
452, 461-62 (1997) (quotation marks and citation omitted). This rule of
deference applies to the FCC’s interpretation of its own regulations, as set
forth in an amicus brief that (like this brief) reflects the agency’s fair and
considered view on the question. Talk America, 131 S. Ct. at 2261 (deferring
to FCC rule interpretation contained in amicus brief); see also Qwest Corp.,
656 F.3d at 1098, 1101-02 (deferring to FCC amicus brief setting forth proper
10

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interpretation of the business line rule for purposes of unbundling
obligations).

II.

THE RULE 51.5 DEFINITION OF “FIBER-BASED
COLLOCATOR,” AS EXPLAINED IN THE TRRO

,
SUPPORTS THE DISTRICT COURT’S RULING UNDER
THE FACTS OF THIS CASE

As explained below, the CLECs in this case are qualifying “fiber-based
collocator[s]” under the facts cited by the district court – specifically, each
CLEC (1) has its own collocation arrangement in the Verizon wire center, (2)
obtains dark fiber on an IRU basis from the CFP that maintains the CATT
arrangement with Verizon, and (3) supplies its own collocated optronic
equipment to activate the dark fiber and transmit communications into and
out of the wire center. Verizon PA at *4-*6.

A. A CLEC That Connects To Dark Fiber Strands Leased

From A CFP Through A Verizon CATT May Qualify As
A “Fiber-Based Collocator” Under Rule 51.5.

CLECs that have collocated optronic equipment in a Verizon wire
center and access through a Verizon CATT dark fiber strands within a CFP’s
fiber-optic cable may qualify as fiber-based collocators for purposes of
determining whether an ILEC wire center meets the non-impairment
threshold. The Commission’s rules define a “fiber-based collocator” as:
any carrier, unaffiliated with the incumbent LEC, that maintains
a collocation arrangement in an incumbent LEC wire center,
11

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with active electrical power supply, and operates a fiber-optic
cable or comparable transmission facility that
(1) Terminates at a collocation arrangement within the
wire center;
(2) Leaves the incumbent LEC wire center premises; and
(3) Is owned by a party other than the incumbent LEC or
any affiliate of the incumbent LEC, except as set forth
in this paragraph. Dark fiber obtained from an
incumbent LEC on an indefeasible right of use basis
shall be treated as non-incumbent LEC fiber-optic
cable….
47 C.F.R. § 51.5.

Elaborating on this definition in the rulemaking order that adopted it,
the Commission made clear that CLEC leases of both ILEC and non-ILEC
dark fiber may qualify to be counted as fiber-based collocations, if, at a
minimum, the CLEC has a collocation arrangement in the ILEC wire center
and powers the dark fiber with its own optronic equipment. Citing a prior
FCC order that had recognized certain CLEC leases of dark (but not lit) fiber
as indicative of non-impairment for purposes of 47 U.S.C. § 251(d)(2), the
Commission observed in the TRRO that “when a company has collocation
facilities connected to [such] fiber transmission facilities obtained on an
[IRU] basis from another carrier, including the incumbent LEC, these
12

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facilities shall be counted for purposes of this [fiber-based collocation]
13
analysis and shall be treated as non-incumbent LEC fiber facilities.”
Consistent with its view that the “fiber-based collocator” threshold for
non-impairment is a proxy for revenue opportunities sufficient to encourage
competitive investment in facilities, the Commission explained that a CLEC’s
use of another carrier’s dark fiber is evidence that it has “aggregated
sufficient revenues from traffic to justify deployment of [the] extensive
optronics” needed to activate the fiber and transmit communications. TRRO,
14
20 FCC Rcd at 2608 (¶ 134). Moreover, although a CLEC using another

13 TRRO, 20 FCC Rcd at 2593 n.292 (emphasis added) (citing TRO, 18
FCC Rcd at 17231 ¶ 408 & nn. 1263 & 1265). In the cited passages from the
TRO, the Commission explained that “when a company has obtained dark
fiber from another carrier on a long-term IRU basis and activated that fiber
with its own optronics
, that facility should be counted as a separate,
unaffiliated facility.” 18 FCC Rcd at 17231 (¶ 408) (emphasis added). See
id.
at 17231 n.1263 (stating that “when a company acquires dark fiber, but
not lit fiber, from another carrier on a long-term IRU or comparable basis,
that facility should be counted as a separate, unaffiliated facility”) (emphasis
added); accord id. at 17231 n.1265.
14 See also TRRO, 20 FCC Rcd at 2608-09 (¶ 135) (noting that because dark
fiber users “must still deploy significant facilities, including optronic
equipment and collocation arrangements in incumbent LEC offices,” the
leasing of dark fiber by a CLEC involves investment that “advances the
facilities deployment goals of the Act”); id. at 2634-35 n.496 (noting that
CLEC leasing of dark fiber transport “promotes competitive investment in the
requesting carriers’ own facilities – i.e., the optronics used to ‘light’ dark
fiber”).
13

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carrier’s dark fiber would not be supplying all of its own facilities, it would
nevertheless promote efficient competition. The Commission found that
“competing carriers using unbundled dark fiber transport can operate more
efficiently than when using lit transport, because the competing carrier itself
engineers and controls the network capabilities of the transmission and can
maximize the use of previously dormant fiber.” TRRO, 20 FCC Rcd at 2608
(¶ 135).
The PUC contends (Br. 7, 13-14) that CLEC leases of dark fiber
strands from a CFP cannot constitute fiber-based collocations because the
D.C. Circuit, in Covad, described a fiber-based collocator as “an arrangement
that allows a CLEC to interconnect its facilities with those owned and
operated by an ILEC.” 450 F.3d at 535 n.2. The quoted footnote from
Covad, however, did not purport to provide an exhaustive definition of a
fiber-based collocator – much less address the question whether CFP-to-
CLEC arrangements may qualify a competing local provider as a fiber-based
collocator under the FCC’s rule defining that term. Rather, that Covad
footnote, contained in the background section of the court’s opinion, simply
describes a common situation in which a fiber-based collocation exists.
Moreover, as discussed above, the TRRO makes clear that fiber-based
collocators include (at a minimum) carriers with IRU-based dark fiber leases
14

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from either ILECs or other CLECs, and nothing in the text of Rule 51.5 or the
Covad decision provides otherwise.
The PUC also asserts that CLECs must “own their own fiber-optic
cable” if they do not have an IRU dark fiber arrangement directly with the
ILEC. Reply Br. 3. That argument, however, is at odds with the plain text of
the rule. Subsection (3) of the “fiber-based collocator” definition expressly
provides that – except for IRUs involving ILEC-owned dark fiber – the fiber-
optic cable or comparable transmission facility must be “owned by a party
other than the incumbent LEC or any [ILEC affiliate].” 47 C.F.R. § 51.5
(emphasis added). Here, the CFP is a “party other than” the ILEC or its
affiliates.
The PUC further suggests that because the definition of “fiber-based
collocator” in Rule 51.5 covers “[d]ark fiber obtained from an incumbent
LEC on an [IRU] basis” but makes no comparable mention of non-ILEC dark
fiber, the rule should be read to exclude all non-ILEC dark fiber. PUC Reply
15
Br. 8. It is easy to see, however, why the Commission found it necessary in

15 See 47 C.F.R. § 51.5 (“A fiber-based collocator is any carrier . . . that . . .
operates a fiber-optic cable or comparable transmission facility that . . . (3) Is
owned by a party other than the incumbent LEC or any affiliate of the
incumbent LEC, except as set forth in this paragraph. Dark fiber obtained
from an incumbent LEC on an indefeasible right of use basis shall be treated
as non-incumbent LEC fiber-optic cable
.”) (emphasis added).
15

Case: 11-2712 Document: 003110868291 Page: 20 Date Filed: 04/13/2012
Rule 51.5 to address ILEC (but not CLEC) dark fiber in order to bring the
former within the “fiber-based collocator” definition. The rule generally
limits that term to a “fiber-optic cable or comparable transmission facility that
. . . (3) Is owned by a party other than the incumbent LEC.” 47 C.F.R. § 51.5
(emphasis added). The rule’s exception (see note 15, above) was thus
essential to expand the definition to cover ILEC-owned dark fiber provided
pursuant to an IRU, notwithstanding the otherwise applicable limitation that
the qualifying fiber be “owned” by a party other than the ILEC. By contrast,
including a CFP’s dark fiber within the definition requires no exception from
the limitation that it be “owned by a party other than the incumbent LEC.”
CFP dark fiber qualifies as “fiber-optic cable or comparable transmission
facility . . . owned by a party other than the [ILEC]” under the plain text of
the general rule.
Finally, the PUC argues broadly that treating CLECs as fiber-based
collocators on the basis of their use of CFP dark fiber violates the pro-
competitive purposes of the network element unbundling regime because,
among other things, the CLECs under such arrangements have “not made the
[requisite] investment and commitment to long-term presence in the wire
center.” Br. 27. As noted above, the Commission explained to the contrary
that dark fiber leases – when combined with CLEC-provided optronic
16

Case: 11-2712 Document: 003110868291 Page: 21 Date Filed: 04/13/2012
equipment – serve the unbundling regime’s policy goals by encouraging
investment in collocation space and optronic equipment, while enabling the
CLEC (via its optronic equipment) efficiently to control the network
capabilities of its transmissions. TRRO, 20 FCC Rcd at 2608-09 (¶ 135); id.
at 2634-35 n.496.
In sum, CLECs may be eligible for “fiber-based collocator” status
where, at a minimum, they (1) are collocated within the ILEC wire center, (2)
obtain dark fiber from a CFP that purchases the CATT collocation
arrangement from Verizon, and (3) activate the fiber with their own optronic
16
equipment to power communications into and out of the wire center. As we
explain below, whether the CLECs also must lease dark fiber from a CFP on
an IRU basis appears to be immaterial in this case, because the district court
concluded, as a matter of fact, that the relevant CLECs did so here, and the
PUC’s appellate briefs offer no basis to disturb that finding.

16 Neither Verizon nor the PUC challenges the district court’s conclusion
that the CFP itself qualifies as a fiber-based collocator under the facts of this
case. Accordingly, that question is not presented on appeal and we express
no view on it.
17

Case: 11-2712 Document: 003110868291 Page: 22 Date Filed: 04/13/2012

B.

Although The Commission Has Not Definitively
Addressed Whether A CLEC Must Lease Dark Fiber
From A CFP On An IRU Basis To Qualify As A “Fiber-
Based Collocator,” That Question Should Not Be
Outcome-Determinative On The Facts Of This Case.

Verizon suggests (Br. 18 & n.16) that a CLEC that uses CFP dark fiber
need not lease the fiber on an IRU basis in order to qualify as a fiber-based
collocator, and this Court has invited the Commission to address that
question. As discussed below, neither the text of Rule 51.5 nor any
Commission order clearly addresses this question. Ultimately, however, the
answer should not be outcome-determinative in this case, because the district
court found, as a matter of fact, that the relevant CLECs “are leasing dark
fiber from other competitors through indefeasible right of use arrangements.”
Verizon PA at *5 n.12.
The PUC nominally disputes that the CFP-to-CLEC dark fiber
relationships in this case are IRUs. See, e.g., PUC Br. 9, 13, 15, 19. The
PUC’s theory appears to be that the CFP (absent a contractual obligation) is
not subject to all of the ILEC’s regulatory duties to serve other CLECs, and
that the CFP may be less likely than the ILEC to remain in the market.
Neither concern is pertinent to whether the contractual relationships CFPs
already have with the relevant CLECs in this case involve exclusive, long-
term leases that meet the definition of an IRU. The district court’s factual
18

Case: 11-2712 Document: 003110868291 Page: 23 Date Filed: 04/13/2012
determination on that question thus appears to be effectively unchallenged.
See Verizon PA at *5 & nn.11 & 12. Even if the PUC could be construed as
challenging the district court’s determination regarding the existence of an
IRU, its appellate briefs fail to point to any evidence presented below that
would raise a triable issue of fact on that issue. Accordingly, we submit that
the Court need not reach the issue to resolve this appeal.
The text of the “fiber-based collocator” definition in Rule 51.5
expressly requires that any ILEC-supplied dark fiber be provided to a CLEC
on an IRU basis in order for the CLEC to qualify under the rule. Nothing in
the text of the rule, however, expressly imposes such a requirement with
respect to non-ILEC dark fiber. The question therefore arises whether a
CLEC that “maintains a collocation arrangement” in an ILEC wire center,
“with active electrical power supply” (and optronic equipment) to “light”
dark fiber leased from a CFP on a non-IRU basis, “operates” a “fiber-optic
cable or comparable transmission facility” within the meaning of the rule.
Some language in the TRRO – which adopted the Rule 51.5 definition
– and the TRO suggests that the Commission assumed that qualifying CFP-to-
17
CLEC dark fiber arrangements would involve IRUs. These portions of the

17 See TRRO, 20 FCC Rcd at 2593 n.292 (“We find that when a company has
collocation facilities connected to fiber transmission facilities obtained on an
19

Case: 11-2712 Document: 003110868291 Page: 24 Date Filed: 04/13/2012
FCC’s orders do not, however, clearly state that an IRU is required for a
CFP-to-CLEC dark fiber arrangement to qualify as a fiber-based collocation.
Thus, although the Commission justifies requiring a long-term IRU
arrangement involving ILEC dark fiber on the grounds that it will prevent the
ILEC from engaging in “short-term gaming” of the number of qualifying
fiber-based collocators in order to free itself from unbundling obligations,
TRO, 18 FCC Rcd at 17231 n.1265, that rationale does not readily apply to
CFP-to-CLEC dark fiber arrangements. Other possible economic rationales
may exist for requiring CFP-to-CLEC IRUs, but the orders do not directly
18
present them. Ultimately, the lack of a definitive answer to the question of

indefeasible right of use (IRU) basis from another carrier, including the
incumbent LEC, these facilities shall be counted for purposes of this [fiber-
based collocator] analysis.”); TRO, 18 FCC Rcd at 17231 (¶ 408) (“We find
. . . that when a company has obtained dark fiber from another carrier on a
long-term IRU basis and activated that fiber with its own optronics, that
facility should be counted as a separate, unaffiliated facility.”); id. at 17231
n.1263 (stating that “when a company acquires dark fiber, but not lit fiber,
from another carrier on a long-term IRU or comparable basis, that facility
should be counted as a separate unaffiliated facility”); id. n.1265 (suggesting
possible correlation between an IRU lease (from an ILEC) and “operat[ing]”
unaffiliated fiber optic facilities).
18 As an economic rationale, one might argue that the presence of an IRU or
a comparable long-term lease commitment by the CLEC (to a CFP, as well as
an ILEC) provides evidence of significant revenue opportunities for the
CLEC at the wire center. A CFP-to-CLEC long-term IRU also could help
ensure that facilities-based competition at the wire center is not transitory, but
will be present for a significant period. The Commission’s orders, however,
do not directly present such reasoning.
20

Case: 11-2712 Document: 003110868291 Page: 25 Date Filed: 04/13/2012
whether qualifying CFP-to-CLEC dark fiber arrangements must be on an IRU
basis should be immaterial in this case, because, as discussed above, the
PUC’s appellate briefs provide no basis to disturb the district court’s
conclusion that the dark fiber at issue, in fact, was provided on an IRU basis.
Accordingly, this Court may resolve this appeal without determining whether
an IRU is required in every case in order for a CLEC to qualify as a “fiber-
based collocator.”

CONCLUSION

As set forth above, a CLEC qualifies as a “fiber-based collocator”
under 47 C.F.R. § 51.5 where it: (1) has its own collocation arrangement in
the Verizon wire center; (2) obtains dark fiber on an IRU basis from the CFP
that purchases the CATT arrangement from Verizon; and (3) supplies the
optronic equipment to activate, or “light,” the fiber and transmit
communications into and out of the wire center. Neither the text of Rule
51.5, nor any FCC order, clearly addresses the question whether the CFP-to-
CLEC dark-fiber lease must be on an IRU basis in order for the CLEC to
qualify as a fiber-based collocator. However, that question should not be
outcome-determinative given the district court’s conclusion that the pertinent
leases in this case were, in fact, IRU arrangements. On the basis of that
factual finding, which the PUC offers no basis to disturb, the FCC
21

Case: 11-2712 Document: 003110868291 Page: 26 Date Filed: 04/13/2012
respectfully submits that the Court should affirm the judgment of the district
court.
Respectfully
submitted,

AUSTIN C. SCHLICK
GENERAL COUNSEL
PETER KARANJIA
DEPUTY GENERAL COUNSEL
RICHARD K. WELCH
DEPUTY ASSOCIATE GENERAL
COUNSEL
/s/ Laurence N. Bourne
LAURENCE N. BOURNE
COUNSEL
FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
April 13, 2012
22

Case: 11-2712 Document: 003110868291 Page: 27 Date Filed: 04/13/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
VERIZON PENNSYLVANIA INC. AND VERIZON
NORTH LLC,
PLAINTIFFS/APPELLEES,
v.
NO. 11-2712
PENNSYLVANIA PUBLIC UTILITY COMMISSION, ET
AL.,
DEFENDANTS/APPELLANTS.
CERTIFICATE OF COMPLIANCE
I hereby certify that (1) this brief complies with the type-volume
limitation of Fed. R. App. 32(a)(7)(B) because the brief contains 4938 words,
excluding the parts of the brief exempted by Fed. R. App. 32(a)(7)(B)(iii),
and (2) this brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because
this brief has been prepared in a proportionally spaced typeface using
Microsoft Word in 14-point Times New Roman type.
Pursuant to Third Circuit Rule 31.1(c), I further certify that the text of
the electronic brief is identical to the text in the paper copies and that a virus

Case: 11-2712 Document: 003110868291 Page: 28 Date Filed: 04/13/2012
detection program, Symantec Endpoint Protection version 11.0.4014.26, has
been run on the file and that no virus was detected.
/s/ Laurence N. Bourne
Laurence N. Bourne
Counsel
Federal Communications Commission
Washington, D.C. 20554
(202) 418-1740 (Telephone)
(202) 418-2819 (Fax)
April 13, 2012
2

Case: 11-2712 Document: 003110868291 Page: 29 Date Filed: 04/13/2012
11-2712

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Verizon Pennsylvania Inc. and Verizon North LLC, Plaintiffs/Appellees,

v.

Pennsylvania Public Utility Commission, et al., Defendants/Appellants.

CERTIFICATE OF SERVICE

I, Laurence N. Bourne, hereby certify that on April 13, 2012, I electronically
filed the foregoing Brief for Amicus Curiae Federal Communications
Commission with the Clerk of the Court for the United States Court of
Appeals for the Third Circuit by using the CM/ECF system. Participants in
the case who are registered CM/ECF users will be served by the CM/ECF
system.
Steven Maniloff
Suzan D. Paiva
Montgomery, McCracken, Walker & Bell Atlantic Network Services, Inc.
Rhoads
1717 Arch Street
123 South Broad Street, 28th Floor
Philadelphia, PA 19103
Philadelphia, PA 19109
Counsel for: Verizon Pennsylvania
Counsel for: Verizon Pennsylvania
Inc., et al.
Inc., et al.
Louise G. Fink Smith
Joseph K. Witmer
Pennsylvania Public Utilities
Commission
400 North Street, 3rd Floor
Keystone Building
Harrisburg, PA 17120
Counsel for: Pennsylvania PUC, et
al.

/s/ Laurence N. Bourne

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