Section 251 and the Commission's rules
On August 8, 1996, the Commission adopted the first collocation rules designed to implement section 251(c)(6) of the Communications Act of 1934, as amended, ("the Act"), 47 U.S.C. § 251(c)(6). Section 251(c)(6) of the Act obligates incumbent local exchange carriers (LECs) to provide, "on rates, terms, and conditions that are just, reasonable, and nondiscriminatory, for physical collocation of equipment necessary for interconnection or access to unbundled network elements." The collocation requirement allows competing LECs to place their equipment on the incumbent LEC's premises. On March 31, 1999, the Commission issued additional collocation rules in the Advanced Services First Report and Order ("the Order"). The Order requires, among other things, that incumbent LECs offer cageless collocation arrangements, whereby a competing LEC obtains physical collocation space without having to build a protective cage around its own equipment. The Commission codified the cageless collocation requirement at section 51.323(k) of its rules, 47 C.F.R. § 51.323(k). Section 51.323(k) became effective on June 1, 1999. Competing LECs filed numerous applications for cageless collocation arrangements with GTE.
FCC/GTE Consent Decree
Later in 1999, the Enforcement Bureau received information from competing LECs alleging that GTE had refused to allow them to collocate using a cageless arrangement until August 1, 1999, two months after the effective date of Section 51.323(k). The Enforcement Bureau sent a Letter of Inquiry to GTE directing it to respond to these allegations. In its responses, GTE admitted that from June 1, 1999 to August 1, 1999, it denied and placed in a "hold status" 51 cageless collocation requests submitted by various competing LECs. GTE argued in its responses that, notwithstanding the effective date of the rule, a sentence in the Order directing incumbent LECs to offer the alternative collocation arrangements "as soon as possible" allowed it to defer offering cageless arrangements beyond the effective date of the rules. According to GTE, it was not required to consider cageless collocation requests before August 1, 1999, which, it asserted, represented the earliest date on which it could accept and process such requests.
On July 31, 2000, the Commission and GTE entered into a Consent Decree terminating the Enforcement Bureau's investigation. GTE, which by this time was a subsidiary of Verizon Communications, agreed to make a $2.7 million voluntary contribution to the U.S. Treasury and to expedite improvements in its collocation provisioning. The Commission, in its order granting GTE's merger with Bell Atlantic, required GTE to meet specific performance measurements regarding the percentage of competing LEC collocation applications responded to and completed on time by GTE. If GTE failed to meet these performance measurements, it agreed to begin making voluntary payments to the U.S. Treasury beginning nine months after the merger closing date. With this Consent Decree, GTE agreed to reduce from nine months to six months the amount of time after which it would make these voluntary payments.