The AT&T-McLeodUSA Principles For The Advancement Of Facilities-Based Competition

Telecom Policy Report, July 14, 2004

The AT&T-McLeodUSA proposed principles have emerged at a time when the FCC is the midst of crafting new rules governing wholesale interconnection arrangements. Essentially, AT&T and McLeodUSA want the FCC to do the following:

* Competitors should continue having access to the Bells' high capacity transport facilities as well as "special access" infrastructure -- i.e., DS0, DS1 and DS3 lines -- at "stable, forward-looking cost-based rates."

* Competitors need to have access to loop and transport combinations, sans anti-competitive restrictions and at cost-based rates. Competitors need to be assured that they will be able to provide both voice and data functionality on those loops and transport facilities.

* Competitors currently using "platforms of the Bells' unbundled network facilities (UNE-P) should be allowed the opportunity for an orderly transition to the more capital intensive UNE-L (facilities-based) competition. (UNE-L is a strategy in which a competitor owns and operates its own switches. The UNE-L competitor needs only one thing from the incumbent: access to the local loop. In fact, the "L" in UNE-L stands for "loop.")

* Current wholesale prices for UNE-P should remain in place until the end of this year. The Bells have already said they would keep these prices in place until that time. With respect to wholesale price increases after Jan. 1, 2005, AT&T and McLeodUSA are asking for "a phased, gradual increase going forward."

* The so-called "batch hot cuts" required to install UNE-L must be affordable, operationally efficient and supported by federal standards to ensure consistency across markets, AT&T and McLeodUSA said. This may be a bit tough to enforce. The Bells have not enjoyed much success in switching large volumes of customers from their own services to competitive providers in a timely or errorfree manner.

* CLECs should be allowed continued access to the incumbents' full loop functionality without restrictions resulting from actions that the Bells might take in the near future. AT&T and McLeodUSA fear the incumbents could cause some of their UNE-L competitors some serious problems if and when the Bells begin replacing or decommissioning some of their copper loops and replacing them with non-copper material such as fiber. Source: AT&T, McLeodUSA

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