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Commission Document Attachment

DA-13-616A2

Federal Communications Commission

DA 13-616

APPENDIX A

I.

Allegations in the Complaint Concerning AT&T’s Failure to Allow Use of Non-Designed
DS-0 Loops in a Commingled Network

Below is a selection of allegations from STS’s Complaint that form the basis, in part, for the
claims in Counts I through IX and XIII:1
·
In April 2005, STS and BellSouth had “detailed discussions on the following topics: (i) costs of
the network, including, without limitation, the initial (non-recurring) and operating (recurring)
costs, (ii) numbers of lines at the [serving wire centers] and (iii) diagrams of the commingled
network architecture.”2
·
“In 2005, when [BellSouth] solicited STS to sell it a commingled network to move STS’s
embedded base of customers, [BellSouth] assured STS that unbundled copper loops non-designed
(“UCL-ND”) could serve as the local loop.”3
·
In April 2005, the parties discussed “the tremendous cost savings to STS of this BellSouth
designed commingled network.”4
·
In May 2005, BellSouth sent technical information to STS concerning the DS0 loops that could
be used in STS’s planned network. The only loops mentioned in the information BellSouth
provided to STS were UCL-ND and SL1 loops. “No mention was made of utilizing Service
Level 2 . . . loops.”5
·
In June 2005, BellSouth, “in order to sell STS . . . [an] expensive Special Access SMARTring,”
“represent[ed] to STS that more expensive UNE loops such as SL2s were not required in this
BellSouth designed commingled network.”6
·
“STS’s commingled network was designed by BellSouth utilizing UCL-ND and/or SL1 loops,
and was sold to and approved by STS based on this key representation.”7
·
“In March 2006, after STS was committed to going forward with its commingled network, AT&T
told STS that UCL-ND would not work in this commingled network, but rather a more expensive
loop, service level (‘SL1’) one was needed.”8
·
“By the end of March [2006] the situation had degraded further as BellSouth informed STS that
even the SL1 loop recently suggested would not work, and instead only the much more expensive
SL2 would work.”9
·
“In March 2006, prior to and during the negotiations of the present Interconnection Agreement
between STS and Bellsouth (n/k/a AT&T), AT&T represented to STS that the only DS0 UNE
loop available in a commingled arrangement was a Service Level 2, or SL2, and that it was
technically infeasible to provide a SL1 loop in a commingled arrangement. * * * BellSouth/ATT
knew at the time the representation was made that the representations were false. * * * The


1 The quotations that appear in appendix omit internal footnotes used in the original.
2 Complaint at para. 46
3 Complaint at para. 223
4 Complaint at para. 48
5 Complaint at para. 51
6 Complaint at para. 58
7 Complaint at para. 233
8 Complaint at 225; see id. at para. 68.
9 Complaint at para. 72; see id. at para. 227.

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DA 13-616

above misrepresentations by AT&T were done in bad faith, for the purpose of discouraging
commingling and raising barriers to entry for its competitors.”10
·
“An SL2 loop requires STS to pay approximately 15% more per month for each customer loop
over the monthly charges for a SL1 loop. It more than doubles the initial investment in non-
recurring charges that STS must pay to convert an existing or new customer to its commingled
network above a SL1 loop. In fact, due to STS’s customer make-up the initial investment in SL2
loops could be up to four (4) times the cost of using SL1s. On average STS’ installation costs of
an SL2 is approximately 3.6 times greater than the installation costs of an SL1.”11
·
“Initially, AT&T stated that STS could use the least expensive local loop for this commingled
network, unbundled copper loop non–designed (‘UCL-ND’). After hooking STS on acquiring
the network by the low costs of the UCL-ND, BellSouth advised STS, that UCL-ND’s could not
be used in a commingled arrangement. Then AT&T instructed STS to utilize a more expensive
DS0 loop – a Service Level 1 (‘SL1’). When AT&T failed or refused to migrate lines or add new
customers to the commingled network utilizing SL1s, AT&T mandated an even more expensive
DS0 loop – the SL2 loop. AT&T’s sales tactics are commonly referred to as a ‘bait and
switch.’”12
·
“AT&T made a conscious decision to break the law and either not commingle DS0s, or make it as
expensive and as burdensome as possible to discourage CLECs from commingling DS0s.”13
·
“It is undeniable that [the] BellSouth designed commingled network utilizing SL1s as the local
loop is technically feasible and BellSouth’s refusal to convert is nothing more than
anticompetitive and monopolistic behavior.”14
·
“AT&T’s reasons for not permitting STS to commingle UCL-ND and SL1 loops have nothing to
do with technical infeasibility, but instead appear to be geared towards raising STS’s barriers to
entry as they relate to commingling and prevent STS from effectively competing with AT&T for
residential and small business customers.”15

II.

Allegations in the Complaint Concerning AT&T’s Failure to Provide Seamless Bulk
Migration

Below is a selection of allegations from STS’s Complaint that form the basis, in part, for the
claims in Counts XI through XII:
·
In January 2005, STS “specifically inquired of . . . BellSouth employees about the process that
would be used to cutover STS’s embedded base of UNE-P lines to its own switch . . . and
requested information about the sufficiency of BellSouth’s Bulk migration process to convert
STS’S embedded base of UNE-P customers . . . once the commingled network was installed.”16 .


10 Complaint at paras. 285, 288, 291.
11 Complaint at para. 73; see id. at para. 229.
12 Complaint at para. 163.
13 Complaint at para. 175.
14 Complaint at para. 192.
15 Complaint at para. 237 see id. at para. 291.
16 Complaint at para. 31.
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·
In 2005, BellSouth assured STS that “(i) the commingled network could be built, (ii) STS’s
embedded base of UNE-P customers could be migrated to the commingled network prior to the
termination of the transition period set forth in the TRRO, and (iii), the network could be built
and operated profitably.”17
·
“In March 2006, over three (3) months after STS was ready to convert its embedded base,
BellSouth informed STS that no such conversion process existed.”18
·
“. . . On March 28, 2006 [BellSouth] sent [STS] an e-mail stating that BellSouth had no ordering
process for the conversion of UNE-P to a UNE-L terminating into a multiplexer other than the
manual Local Service Request (“LSR”). . . . [N]ot only was the process being suggested by
[BellSouth] manual in nature, it was not a conversion process at all, but instead a much more
expensive disconnect of existing service and provision of new service that would undoubtedly, in
addition to the greater expense, leave STS customers out of service for a significant period of
time.”19
·
“Despite a request by STS, AT&T has refused to develop a conversion process whether batch
migration (batch hot cut) or other type of process, for migrating UNE-P lines to commingled
arrangements, in violation of 47 CFR §51.309(f) which requires AT&T to ‘perform the functions
necessary to commingle’ a UNE with a wholesale service.”20
·
“In prior testimony before the FCC and state commissions, BellSouth claimed it could do batch
hot cuts in a seamless manner in its campaigns to have the FCC terminate UNE-P.”21
·
“AT&T refuses to perform bulk migrations (or individual migrations), develop an electronic or
manual bulk migration process, or even develop a single manual or mechanized conversion
process for DS0 UNE-Ls in a commingled arrangement in order to migrate STS’s embedded base
of UNE-P lines to its commingled network, or to convert new DS0 lines to this commingled
network.”22
·
“AT&T’s failure to convert STS’s lines in a seamless manner violates 47 CFR § 316 (b) which
requires such conversions to occur ‘without adversely affecting the service quality perceived by
the requesting carrier’s end-user customer.’”23
·
“AT&T’s failure to convert seamlessly and failure to properly and efficiently repair problems in
STS’S commingled network violates 47 CFR § 311 (a) and (b) which requires the quality of, and
the access to, the unbundled network be the same for all telecommunications companies and for
itself.”24
·
“AT&T attempts to make commingling utilizing DS0s so difficult that CLECS are discouraged
from doing commingling. AT&T’s failure to perform the functions necessary to permit STS to


17 Complaint at para. 45.
18 Complaint at para. 75.
19 Complaint at para. 78.
20 Complaint at para. 196; see id. at para. 164.
21 Complaint at 274.
22 Complaint at 178.
23 Complaint at 203.
24 Complaint at 204.
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DA 13-616

commingle UNEs with wholesale services and its failure to provide seamless conversions raises
STS’S barriers to entry and makes commingling uneconomic for CLECs.”25

III.

Allegations in FPSC Complaint About AT&T’s Failure to Allow Use of Non-Designed DS-0
Loops in a Commingled Network

26
·
“Commencing in January 2005, STS inquired of BellSouth regarding its products, prices, and the
feasibility of working with BellSouth to develop a facility to which STS’s UNE-P base of
customers could be migrated in a profitable manner in compliance with the section 227 of the
TRRO and the decisions of this Commission.”27
·
“Commencing in February 2005 and continuing throughout the remainder of the year, BellSouth
advised STS on numerous occasions that UNE-L (‘Unbundled Voice Grade Loops’) could be
used such as Unbundled Network Element (‘UNE’) of Unbundled Cooper Loops Non-Designed
or Unbundled Voice Grade Loops SL, the cost of which were provided for in the parties’ TRRO
Addendum.”28
·
“BellSouth verified the cost of the network and transition of the embedded base, verified that the
UNE of Unbundled Copper Loops Non-Designed in combination with ACCESS (Enhanced
Extended Links EELS Commingled) could be used for the conversion of the embedded base, and
evidenced that, based upon these costs, this network would be profitable to build and operate.”29
·
“Throughout these discussions, STS requested and received assurances from BellSouth regarding
the net cost on a per line basis for this network in order to ensure that it was economically
feasible and practical to invest the substantial monies required to build and install the network,
and to ensure that the end product would be profitable.”30
·
“In the beginning of February 2006 . . . BellSouth reaffirmed that Unbundled Copper Loops Non-
designed and Unbundled Voice Grade Loops SL 1 could be used in the commingled network
designed and built by BellSouth.”31
·
“[I]in February 2006, BellSouth stated for the first time that the only UNE that it would allow
STS to use is UVL-SL2.”32
·
“Prior to February 2006, BellSouth had never mentioned the UVL-SL2.”33


25 Complaint at 261.
26 STS’s FCC Comments contain very similar allegations as those in STS’s FPSC Complaint, so in the interest of
brevity we will not quote or paraphrase them here. See, e.g., FCC Comments at 7, 10-13, 15, paras. 19, 32, 34-35,
37-41, 45.
27 FPSC Complaint at 6, para. 8.
28 FPSC Complaint at 9, para. at 26.
29 FPSC Complaint at 10, para. 28.
30 FPSC Complaint at 8, para. 19.
31 FPSC Complaint at 10, para. 29
32 FPSC Complaint at 13, para. 44.
33 FPSC Complaint at 13, para. 45.
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·
“Prior to February 2006, Bellsouth advised STS that the UCL-ND could be used for every STS
customer. In fact, the entire network was based upon the utilization of the UCL-ND in
combination with transport.”34
·
“The installation costs of the SL-2s were substantially higher than the UCL-ND installation costs,
which created an economic barrier for the migration of the company’s embedded base of
business. Moreover, the monthly recurring rates for the SL-2s were substantially greater than the
recurring rates for the UCL-NDs. Such non-recurring rates for migrating an embedded base and
the recurring rates made it impossible for any reasonably efficient CLEC to operate profitably in
competition with BellSouth using this type of UNE or UNE combination.”35
·
“From the inception, BellSouth knew that the network it proposed and designed would never
work in conjunction with its arbitrary commingling rules.”36
·
“[A]t no time throughout the entire process until February 2006 did BellSouth advise STS that the
design it had engineered and the cost it had projected were not feasible.”37
·
“BellSouth’s misrepresentations . . . were either intentional or done with reckless disregard for
the truthfulness of the representation, and made with the intended or expected result that the
higher cost would drive STS out of business, since the increased cost made the continued
operation of STS’s business unprofitable.”38
·
“BellSouth’s conduct is in bad faith and violates the directives . . . in the TRRO.” (citing passage
from paragraph 233 of the TRRO stating, inter alia, that “the failure of an incumbent LEC or
competitive LEC to negotiate in good faith under section 251(c)(1) of the Act . . . may subject
that party to enforcement action.”).39
·
“BellSouth’s refusal to construct and price the network according to its design is a violation of the
[Act, as construed by the Commission].” [TRO].40
·
“In spite of its representations and in violation of its commitments, BellSouth refused or was
unable to transition STS’s embedded base of customers in a timely manner to the network that
BellSouth has designed and implemented. As a direct and proximate result of BellSouth’s false
and fraudulent misrepresentations, and refusal and/or inability to honor its commitments, STS’s
network is not functional for the intended purpose of converting the embedded base of UNE-P
customers.”41


34 FPSC Complaint at 13, para. 46.
35 FPSC Complaint at 13, para. 47.
36 FPSC Complaint at 14, para.49.
37 FPSC Complaint at 14, para. 50.
38 FPSC Complaint at 15, para. 54.
39 FPSC Complaint at 16, paras. 60-61.
40 FPSC Complaint at 16, para. 62.
41 FPSC Complaint at 5, para. 5.
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IV.

Allegations FPSC Complaint Concerning AT&T’s Failure to Provide Bulk Migration

42
·
“Commencing in January 2005, STS inquired of BellSouth regarding its products, prices, and the
feasibility of working with BellSouth to develop a facility to which STS’s UNE-P base of
customers could be migrated in a profitable manner in compliance with the section 227 of the
TRRO and the decisions of this Commission.”43
·
“Commencing in the first days of 2005, and continuing throughout the year, BellSouth advised
STS that it had the ability and procedures in place to use Bulk Migration in the conversion
process for STS’s embedded base.”44
·
BellSouth made “written and oral promises” “regarding the viability of the network, . . . the cost
of transitioning STS’s embedded UNE-P base to the network by the ‘Bulk Migration
Process,’ . . . [and] the cost of maintaining and servicing the network . . . .”45
·
“On every occasion, BellSouth assured and represented to STS that BellSouth could convert
STS’s embedded base through the ‘Bulk Migration’ process . . . .”46
·
“Multiple times, STS inquired of BellSouth whether it had commingling procedures in place and
the ability to use Bulk Migration (“Batch Hot Cut Procedures”) to convert the embedded base to
STS’s network . . . .”47
·
“BellSouth continually assured STS that the ‘Bulk Migration’ process would work and that STS’s
embedded base of UNE-P customers would be timely converted to STS’s [commingled] network
. . . .”48
·
“Until STS representatives attended a December 2005 training class for Bulk Migration given by
BellSouth, there was no indication, whatsoever, that the Bulk Migration Process would not be
available for STS.”49
·
“In February 2006, for the first time, BellSouth conceded that it had no Bulk Migration Process in
place for the migration of STS’s embedded base of UNE-P customers to the commingled
network, and the migration would have to be handled manually.”50
·
“BellSouth knew or should have known since the commencement of negotiations in January 2005
that there was no Bulk Migration in place to convert the embedded base through the commingling
rules of the TRRO.”51


42 STS’s FCC Comments contain very similar allegations as those in STS’s FPSC Complaint, so in the interest of
brevity we will not quote or paraphrase them here. See, e.g., FCC Comments at 3-5, 7, 10-13, 15, paras.
9,11,14,19, 31-32, 34-38, 41, 43, 45.
43 FPSC Complaint at 6, para. 8.
44 FPSC Complaint at 9, para. 23.
45 FPSC Complaint at 4-5, para. 5.
46 FPSC Complaint at 7, para. 14.
47 FPSC Complaint at 9, para. 22.
48 FPSC Complaint at 8, para. 18.
49 FPSC Complaint at 9, para. 24.
50 FPSC Complaint at 13, para. 43.
51 FPSC Complaint at 13, para. 48.
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·
“In spite of its representations and in violation of its commitments, BellSouth refused or was
unable to transition STS’s embedded base of customers in a timely manner to the network that
BellSouth had designed and implemented.”52
·
“BellSouth’s misrepresentations . . . were either intentional or done with reckless disregard for
the truthfulness of the representation, and made with the intended or expected result that the
higher cost would drive STS out of business, since the increased cost made the continued
operation of STS’s business unprofitable.”53
·
“BellSouth’s actions . . . are reprehensible, a violation of numerous federal and state law, and
contrary to the public interest.”54
·
“BellSouth’s refusal to construct and price the network according to its design is a violation of the
[Act, as construed by the Commission].”55


52 FPSC Complaint at 5, para. 5.
53 FPSC Complaint at 15, para. 54.
54 FPSC Complaint at 15, para. 55.
55 FPSC Complaint at 16, para. 62.
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