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Verizon Pennsylvania, Inc., et al. v. Pennsylvania Public Utility Commission.

May 26, 2011

VERIZON PENNSYLVANIA, INC., ET AL.
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION., ET AL.



The opinion of the court was delivered by: Ditter, J.

MEMORANDUM AND ORDER

This case is essentially an appeal from a state regulatory agency's interpretation of federal regulations issued under the Telecommunications Act of 1996. Plaintiffs, Verizon Pennsylvania, Inc. and Verizon North, Inc. (hereinafter "Verizon"), have filed a motion for summary judgment on Count I of their complaint. In Count I, Verizon challenges the Pennsylvania Public Utility Commission's ("PUC") *fn1 interpretation of federal regulations that control Verizon's obligations to provide access to wire centers at a reduced cost in order to promote competition among providers of telephone services. The defendants and defendant-intervenors have responded. A reply and sur-reply have also been filed. For the reasons that follow, Verizon's motion for summary judgment is GRANTED.

I. The Telecommunications Act of 1996

Central to the resolution of this motion is the Telecommunications Act of 1996 ("Act"), legislation enacted by Congress to break the monopoly telephone companies had over local telephone service. Under the Act, incumbent local exchange carriers, like Verizon, are required to allow a competitive local exchange carrier to connect its equipment to their existing network. This permits the competitive carrier to compete without having to bear the full costs of building its own telecommunications network.

The Federal Communications Commission ("FCC") promulgated regulations to implement the Act that require companies like Verizon to provide various network elements to its competitors at a low, regulated rate. 47 U.S.C. § 251 (2005) (the best rate is known as "TELRIC"). *fn2 This obligation is referred to as "unbundling," *fn3 and it requires incumbent providers like Verizon to "interconnect with and [] rent parts of their networks to new entrants -- especially those parts of a local network that it is least economic for a new entrant to duplicate." Bellsouth Telecomm., Inc. v. Ky. Pub. Serv. Comm'n , 693 F. Supp. 2d 703, 705-6 (E.D. Ky. Feb. 22, 2010) (quoting Qwest Corp. v. Pub. Utils. Comm'n of Colorado , 479 F.3d 1184, 1187 (10 th Cir. 2007). "Unbundling" of network elements, and those unbundled network elements, are referred to as "UNEs."

Two types of incumbent provider facilities that are required to be made available as UNEs in certain locations are "transport" and high capacity "loops." In this case, "transport" refers to those facilities that carry traffic between Verizon wire centers. "Loops" refer to those facilities that carry traffic from an end-user's premises to a switch of the serving carrier's network. FCC regulations set the standard for making impairment and unbundling determinations. See 47 U.S.C. § 251(d)(2); United States v. Telecomm. Ass'n v. FCC , 359 F.3d 554, 565-58 (D.C. Cir. 2004), cert. denied , 542 U.S. 925 (2004) (" USTA II ").

Verizon is only required to unbundle those network elements for which, among other requirements, the "failure to provide access to such network elements would impair" the ability of other carriers to provide competitive service and cannot be forced to unbundle where those standards are not met. 47 U.S.C. § 251(d)(2)(B). If there is presently sufficient competition so a wire center is not impaired, unbundling is not required.

II. Factual and Procedural Background *fn4

A Competitive Fiber Provider ("CFP") is an independent company unaffiliated with an incumbent local exchange carrier like Verizon. Its business is the leasing of dark fiber transport to competitive carriers as an alternative to those competitive carriers using their own or Verizon's fiber transport. Verizon makes space available to the CFP in its wire center and charges the CFP pursuant to its tariff for using the space. As a wholesale provider of fiber capacity, a CFP may bring into a Verizon wire center (through the wire center cable vault), a high capacity, fiber-optic cable with a minimum of 72 and a maximum of 432 dark fiber strands for distribution to other competitive carriers.

A competitive carrier that leases from a CFP must have its own collocation arrangement in the wire center that includes active electrical power and optronics equipment capable of lighting the dark fiber strands it is obtaining.

As a result of certain technology that is unique to Verizon, a CFP can access a shared alternate splice point near the wire center cable vault for the purpose of terminating CFP fiber facilities at the terminal for distribution via CAT Terminal ("CAT") collocation arrangements. *fn5

This arrangement permits the competitive carrier to lease dark fiber strands within a CFP's fiber-optic cable. Those strands become dedicated to the competitive carrier. Using its own optronics equipment in its collocation arrangement, the competitive carrier lights the dark fiber strands that it has leased, and in that way transmits telephone or data traffic into and out of the wire center.

A competitive carrier may lease dark fiber that comes from the CFP as its only fiber-based transport leaving the wire center. It is also possible for a competitive carrier to lease dark fiber from the CFP and also to have a separate fiber facility from its collocation leaving the wire center, where, for example, the facilities leased from the CFP were used to provide survivability or over-flow capacity.

As stated in the tariff, a competitive carrier that leases dark fiber strands from a CFP is not responsible for supplying, installing, and ...


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