Modernizing Unbundling and Resale Requirements in an Era of Next-Generation Networks and Services, 1636-1674 [2020-25254]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 86, Number 5 (Friday, January 8, 2021)]
[Rules and Regulations]
[Pages 1636-1674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25254]



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Vol. 86

Friday,

No. 5

January 8, 2021

Part III





 Federal Communications Commission





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47 CFR Part 51





Modernizing Unbundling and Resale Requirements in an Era of Next-
Generation Networks and Services; Final Rule

Federal Register / Vol. 86 , No. 5 / Friday, January 8, 2021 / Rules 
and Regulations

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[WC Docket No. 19-308; FCC 20-152; FRS 17221]


Modernizing Unbundling and Resale Requirements in an Era of Next-
Generation Networks and Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission eliminates unbundling 
requirements, subject to reasonable transition periods, for enterprise-
grade DS1 and DS3 loops here there is evidence of actual and potential 
competition, for broadband-capable DS0 loops and subloops in the most 
densely populated areas, for operations support systems nationwide 
except for the purposes of managing remaining UNEs, number portability, 
and interconnection, and for voice-grade narrowband loops, multiunit 
premises subloops, and network interface devices nationwide. The 
Commission preserves unbundling requirements for DS0 loops in less 
densely populated areas and DS1 and DS3 loops in areas without 
sufficient evidence of competition. The Commission further eliminates 
unbundled dark fiber transport provisioned from wire centers within a 
half-mile of competitive fiber networks, but provides an eight-year 
transition period for existing circuits so as to avoid stranding 
investment and last-mile deployment by competitive LECs that may harm 
consumers. The Report and Order also forbears from remaining Avoided-
Cost Resale obligations. In all, the Commission ends unbundling and 
resale requirements where they stifle technology transitions and 
broadband deployment, but preserves unbundling requirements where they 
are still necessary to realize the 1996 Act's goal of robust intermodal 
competition benefiting all Americans.

DATES: Effective February 8, 2021.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact Megan Danner, Competition Policy Division, Wireline Competition 
Bureau, at [email protected], 202.418.1151.

SUPPLEMENTARY INFORMATION: The full text of this document, WC Docket 
No. 19-308; FCC 20-1522, adopted on October 27, 2020, and released on 
October 28, 2020, is available for public inspection on the 
Commission's website at: https://docs.fcc.gov/public/attachments/FCC-20-152A1.pdf.

I. Introduction

    1. The Telecommunications Act of 1996 (the 1996 Act) changed the 
focus of telecommunications law and policy from the regulation of 
monopolies to the encouragement of robust intermodal competition. Few 
of its effects were as consequential as ending the local exchange 
monopolies held by incumbent local exchange carriers (LECs) and opening 
local markets to competition. To facilitate new entry into the local 
exchange market, the 1996 Act imposed special obligations on incumbent 
LECs, including requirements to offer these new competitive carriers 
unbundled network elements and retail telecommunications services for 
resale, both on a rate-regulated basis.
    2. In the nearly quarter-century since the passage of the 1996 Act, 
the telecommunications marketplace has transformed from a marketplace 
dominated by monopolies to a marketplace characterized by competition 
and technological innovation. Former monopolist incumbent LECs are now 
one of many intermodal competitors, facing fierce competition from 
competitive LECs, cable providers, and wireless providers, among 
others. And that competition has itself shifted from siloed markets to 
the internet, as increasingly local and long distance voice, data, 
video, and nearly all communications technologies are delivered via 
broadband connections. The Commission has repeatedly adjusted the 
incumbent LEC-specific obligations in the 1996 Act to account for 
changed circumstances.
    3. In this document, we continue on that path of modernizing our 
unbundling and resale regulations. We eliminate unbundling 
requirements, subject to a reasonable transition period, for 
enterprise-grade DS1 and DS3 loops where there is evidence of actual 
and potential competition, for broadband-capable DS0 loops in the most 
densely populated areas, and for voice-grade narrowband loops 
nationwide. But we preserve unbundling requirements for DS0 loops in 
less densely populated areas and DS1 and DS3 loops in areas without 
sufficient evidence of competition. We eliminate unbundled dark fiber 
transport provisioned from wire centers within a half-mile of 
competitive fiber networks, but provide an eight-year transition period 
for existing circuits so as to avoid stranding investment and last-mile 
deployment by competitive LECs that may harm consumers. In all, we end 
unbundling and resale requirements where they stifle technology 
transitions and broadband deployment, but preserve unbundling 
requirements where they are still necessary to realize the 1996 Act's 
goal of robust intermodal competition benefiting all Americans.

II. Background

    4. The 1996 Act and implementing Commission regulations imposed a 
number of obligations on incumbent LECs to promote competitive entry 
into the telecommunications marketplace, including obligations to 
unbundle network elements to other carriers on a rate-regulated basis 
and to offer telecommunications services for resale on a rate-regulated 
basis. In the 24 years since the passage of the 1996 Act, the 
Commission has continually reviewed and, when warranted, reduced 
incumbent LEC unbundling and resale obligations to encourage 
competition and development of advanced telecommunications capability 
within the changing communications marketplace. The Commission has 
consistently aimed to promote sustainable facilities-based competition, 
recognizing that permanent unbundling obligations can reduce incentives 
for both incumbent and competitive LECs to deploy next-generation 
networks.

A. The 1996 Act's Market-Opening Provisions

    5. Before the enactment of the 1996 Act, incumbent LECs controlled 
more than 99% of the local voice marketplace because of their 
``virtually ubiquitous'' networks and subsequently low relative 
incremental costs. To open this monopolized market, Congress required, 
among other things, incumbent LECs to offer their competitors unbundled 
network elements and telecommunications services for resale on a 
discounted basis.
    6. Unbundled Network Elements. Section 251(c)(3) of the 
Communications Act of 1934, as amended (the Act) sets forth incumbent 
LECs' unbundling obligations. Following Congress's directive that the 
Commission determine which network elements should be subject to the 
unbundling rules, the Commission created a list of unbundled network 
elements (UNEs) that competitive LECs can lease from incumbent LECs in 
order to provide competitive local service. When identifying network 
elements subject to unbundling obligations, section 251(d)(2) requires 
that the Commission consider, ``at a minimum,'' whether ``the failure 
to provide access to such network elements would impair the ability of 
the telecommunications

[[Page 1637]]

carrier seeking access to provide the services that it seeks to 
offer.'' The statute also requires that the Commission determine 
whether access to proprietary network elements is ``necessary.'' 
However, the Commission does not currently require incumbent LECs to 
make any proprietary network elements available on an unbundled basis. 
The identified UNEs were then to be made available at cost-based rates. 
Parties may negotiate agreed-upon rates for UNEs, which the state must 
then approve. If the parties cannot come to an agreement, the rates are 
set by state arbitration and will be ``based on the cost (determined 
without reference to a rate-of-return or other rate-based proceeding) 
of providing the interconnection or network element'' and ``may include 
a reasonable profit.''
    7. The impairment inquiry considers whether a hypothetical 
``reasonably efficient competitor'' would be impaired when lack of 
access to a particular network element creates a barrier to entry that 
renders entry uneconomic. The Commission presumes that the reasonably 
efficient competitor would use ``reasonably efficient technologies and 
take advantage of existing alternative facilities deployment where 
possible.'' The impairment inquiry makes reasonable inferences about 
competition, including that if competitive providers have successfully 
entered using their own facilities in one market, other providers could 
enter similar markets on a similar basis. The Commission's impairment 
determinations account for the existence of intermodal competition, as 
``[t]he fact that an entrant has deployed its own facilities--
regardless of the technology chosen--may provide evidence that any 
barriers to entry can be overcome.'' Furthermore, the courts and the 
Commission have interpreted section 251(d)(2)'s ``at a minimum'' 
language to allow the Commission to consider other factors ``rationally 
related to the goals of the Act,'' even where impairment exists. The 
Commission has identified broadband deployment, as called for by 
section 706 of the 1996 Act, as one such goal.
    8. When first implementing section 251(d)(2) and adopting the 
unbundling requirements, the Commission acknowledged that the 
availability of UNEs to competitive LECs ``is a necessary precondition 
to the development of self-provisioned network facilities.'' Consistent 
with its preference for facilities-based competition, the Commission 
expected UNEs to provide competitors a means to enter the local 
marketplace in order to obtain a sufficient subscriber base and revenue 
to support the development of their own competitive facilities. The 
Commission also recognized that rural areas face higher deployment 
costs and longer deployment timeframes.
    9. Avoided-Cost Resale. In addition to unbundling obligations, 
section 251 includes an Avoided-Cost Resale provision that requires 
incumbent LECs to ``offer for resale at wholesale rates any 
telecommunications service that the carrier provides at retail to 
subscribers who are not telecommunications carriers.'' Congress defined 
the methodology to determine wholesale rates as ``retail rates . . . 
excluding the portion thereof attributable to any marketing, billing, 
collection, and other costs that will be avoided by the local exchange 
carrier.'' As a practical matter, incumbent LECs implement this 
Avoided-Cost Resale obligation by incorporating in their 
interconnection agreements with competitive LECs discounted rates 
established by each state for the incumbent LECs' telecommunications 
services. The Avoided-Cost Resale obligations in section 251(c)(4) go 
beyond the more general resale requirement in section 251(b)(1) of the 
Act, which applies to incumbent and competitive LECs alike, and does 
not include a wholesale discount rate mandate. Avoided-Cost Resale 
services are predominately used by competitive LECs today to provision 
legacy TDM voice services to business and government customers.
    10. Forbearance. Section 10 of the Act, as amended by the 1996 Act, 
requires the Commission to forbear from applying any requirement of the 
Act or one of its regulations to a telecommunications carrier or 
telecommunications service if and only if the Commission determines 
that: (1) Enforcement of the requirement ``is not necessary to ensure 
that the charges, practices, classifications, or regulations by, for, 
or in connection with that telecommunications carrier or 
telecommunications service are just and reasonable and are not unjustly 
or unreasonably discriminatory,'' (2) enforcement of that requirement 
``is not necessary for the protection of consumers,'' and (3) 
``forbearance from applying that requirement is consistent with the 
public interest.'' Forbearance is warranted only if all three criteria 
are satisfied. In making the public interest determination, the 
Commission must also consider, pursuant to section 10(b) of the Act, 
``whether forbearance from enforcing the provision or regulation will 
promote competitive market conditions.''
    11. The Commission has broad discretion in analyzing whether the 
forbearance criteria have been satisfied, and ``the agency [may] 
reasonably interpret[] the statute to allow the forbearance analysis to 
vary depending on the circumstances.'' When the Commission undertakes a 
competitive analysis, ``the statute imposes no particular mode of 
market analysis or level of geographic rigor.'' In addition, the 
Commission can consider the section 706 goal of fostering the 
deployment of advanced telecommunications capabilities in making 
forbearance decisions. In considering forbearance from unbundling 
obligations, the Commission is entitled to rely on its expert 
predictive judgment and may balance ``the positive short-term impact of 
unbundling'' against the ``longer-term positive impact that not 
unbundling would have . . . .'' Furthermore, the Commission may forbear 
without conducting a competitive analysis when changed circumstances 
have rendered a regulatory requirement unnecessary for other reasons.
    12. Unbundling and Resale Obligations Since 1996. Pursuant to the 
provisions of the 1996 Act, the Commission has over the years 
reassessed and, when warranted, reduced its unbundling and resale 
requirements to account for changes in communications service markets 
where competition among incumbent and competitive LECs has flourished. 
Congress expressly authorized the Commission to forbear from any 
regulatory obligations, including section 251(c) obligations, once the 
agency determined that they are no longer necessary, and encouraged the 
Commission to use forbearance and other means to encourage deployment 
of advanced telecommunications capability and remove barriers to 
infrastructure deployment. With respect to forbearing from section 
251(c), Congress first required that section to be fully implemented. 
The Commission has specifically found that section 251(c) has been 
fully implemented--i.e., that the Commission has adopted rules 
implementing the statute and that those rules have become effective.
    13. In its initial orders implementing section 251(c)(3), the 
Commission adopted nationwide unbundling obligations for local loops 
used to serve mass market and enterprise customers on a technology-
neutral basis, for dedicated and shared interoffice transport, and 
various other network elements. The courts rejected these initial 
attempts, in whole or in part, for a variety of reasons, including that 
overly-broad unbundling is inappropriate. For example, the

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Supreme Court vacated the Commission's first order implementing broad 
unbundling regulations because it failed ``to apply some limiting 
standard, rationally related to the goals of the Act,'' as the Act 
requires. In a separate opinion, Justice Breyer observed that ``given 
the Act's basic purpose, it requires a convincing explanation of why 
facilities should be shared or unbundled where a new entrant could 
compete effectively without the facility, or where practical 
alternatives to that facility are available.'' Justice Breyer went on 
to explain that unbundling ``by itself does not automatically mean 
increased competition. It is in the un shared, not in the shared, 
portions of the enterprise that meaningful competition would likely 
emerge.'' The D.C. Circuit later vacated and remanded the Commission's 
next attempt to adopt unbundling rules, because, among other things, 
the agency failed to weigh potential negative effects of unbundling on 
incentives to invest in facilities-based competition, failed to analyze 
impairment on a sufficiently granular level, and did not adequately 
consider the role of intermodal competition. Citing Justice Breyer's 
separate opinion, the D.C. Circuit explained that ``mandatory 
unbundling comes at a cost, including disincentives to research and 
development by both incumbent LECs, competitive LECs and the tangled 
management inherent in shared use of a common resource.''
    14. Following the D.C. Circuit's remand, the Commission issued the 
Triennial Review Order in 2003 (68 FR 52276, Sept. 2, 2003), at the 
same time as the local markets were seeing the increased deployment of 
next-generation fiber-based loops. Considering section 251(c)(3)'s ``at 
a minimum'' language, the Commission declined to require unbundling for 
most fiber-based loops because it seemed likely to undermine important 
goals of the 1996 Act, specifically the exhortation in section 706 to 
encourage deployment of advanced telecommunications capability to all 
Americans by removing barriers to investment. The Commission recognized 
that unbundling fiber-based loops could reduce incentives for both 
incumbent and competitive LECs to deploy advanced facilities. The 
Commission reasoned that refraining from imposing such obligations 
would increase incentives for incumbent LECs to develop and deploy 
innovative new networks, while forcing competitive LECs to ``seek 
innovative network access options to serve end users and to fully 
compete against incumbent LECs in the mass market,'' with consumers 
benefitting from the race to build next-generation networks and 
increased competition in broadband service. The Court of Appeals for 
the D.C. Circuit affirmed the Commission's decision not to require the 
unbundling of fiber-based loops, but remanded many other aspects of the 
Triennial Review Order, including the Commission's nationwide 
impairment determinations with respect to dedicated transport elements 
and its decision that wireless carriers were impaired without access to 
unbundled dedicated transport.
    15. In 2004, in response to the D.C. Circuit's remand, the 
Commission adopted the Triennial Review Remand Order (70 FR 8940, Feb. 
24, 2005). Acknowledging that certain markets were already sufficiently 
competitive and that competition could be expected to develop in 
markets with similar characteristics, the Commission limited incumbent 
LECs' DS1 and DS3 loop unbundling obligations to buildings served by 
incumbent LEC wire centers without sufficient competitive presence and 
service demand. It also limited the DS1, DS3, and dark fiber 
interoffice transport unbundling obligations depending on the level of 
current and anticipated competition by classifying wire centers into 
tiers ``based on indicia of the potential revenues and suitability for 
competitive transport deployment.'' The Commission also declined to 
require unbundling of network elements for competitors to use 
exclusively for providing long distance and mobile voice services 
because of the presence of pervasive competition in those markets that 
occurred without reliance on UNEs. Although the Commission declined to 
eliminate unbundling requirements for competitors seeking to offer 
local telephone service, despite evidence of some intermodal 
competition, it acknowledged that ending those unbundling obligations 
``might someday be appropriate, upon findings of sufficient facilities-
based competition in the local exchange market.'' The Commission 
ultimately imposed unbundling obligations only in those situations 
where it found unbundling ``does not frustrate sustainable, facilities-
based competition.''
    16. While the Triennial Review Remand Order was the last time the 
Commission applied its impairment inquiry to consider the extent to 
which unbundling obligations should apply, the Commission has refined 
and reduced its unbundling rules by forbearing from UNE loop and 
transport obligations where there is evidence of facilities-based 
deployment and competition, or that continued unbundling requirements 
slow the transition to next-generation services. For example, in 2005, 
the Commission granted the incumbent LEC Qwest relief from UNE loop and 
transport obligations in portions of its service territory in the Omaha 
Metropolitan Statistical Area (MSA) where a facilities-based cable 
competitor had substantially built out its local network in competition 
with Qwest. The Commission relied on the ``substantial intermodal 
competition'' presented by the cable competitor, Cox, over its ``own 
extensive facilities'' and, though noting that it had earlier 
determined that intermodal competition from cable providers ``had not 
blossomed into a full substitute'' for wireline voice service, 
determined that Cox had changed those circumstances within the Omaha 
MSA as a result of its investment in the network infrastructure in that 
area. In 2007, the Commission granted similar relief to ACS of 
Anchorage in wire centers located in the Anchorage study area ``where 
the level of facilities-based competition by the local cable operator 
[GCI] ensures that market forces will protect the interests of 
consumers and that such regulation, therefore, is unnecessary.'' In 
2015, to further its goal of advancing the TDM to IP transition for 
next generation networks and services, the Commission eliminated one of 
the last unbundling requirements applicable to next-generation networks 
by granting forbearance on a forward-looking basis to incumbent LECs 
from the requirement to make available a 64 kbps voice-grade channel 
over overbuilt fiber loops.
    17. More recently, in 2019, in response to USTelecom's petition for 
forbearance, we granted forbearance from certain loop and transport 
unbundling and resale obligations that had become increasingly outdated 
due to competitive fiber deployment, technological change, and 
intermodal competition. Throughout this Order, when referencing the BDS 
Remand Order/UNE Transport Forbearance Order (84 FR 38566, Aug. 7, 
2019), we cite the portions containing the Commission's findings in 
response to the Eighth Circuit's partial remand of Business Data 
Services in an internet Protocol Environment et al., WC Docket Nos. 16-
143 et al., Report and Order, 32 FCC Rcd 3459 (2017) (82 FR 25660, June 
2, 2017) (BDS Order), as the BDS Remand Order, and we cite the portions 
addressing aspects of the May 2018 forbearance petition filed by 
USTelecom--The Broadband Association (USTelecom) as the UNE Transport 
Forbearance Order. In two

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orders (the UNE Transport Forbearance Order (84 FR 38566, Aug. 7, 2019) 
and UNE Analog Loop and Avoided-Cost Resale Forbearance Order (34 FCC 
Rcd 6503, Aug. 2, 2019), collectively, 2019 UNE Forbearance Orders), we 
determined that forbearance from unbundling obligations was warranted 
for: (1) DS1/DS3 dedicated interoffice transport (UNE DS1/DS3 
Transport) between price cap incumbent LEC wire centers within a half 
mile of competitive fiber network deployment; (2) two-wire and four-
wire analog voice-grade copper loops, including the attached equipment 
(UNE Analog Loops) for price cap incumbent LECs throughout the entirety 
of their service areas; and (3) Avoided-Cost Resale obligations 
throughout the entirety of price cap incumbent LECs' service areas. We 
found that these obligations, which are overwhelmingly used to provide 
TDM-based local voice service, were no longer necessary based on ``the 
sweeping changes in the communications marketplace'' since 1996, 
including the increasing migration of consumers of all types to 
``newer, any-distance voice services over next-generation wireline and 
wireless networks,'' as well as the wide range of intermodal 
competitors in the voice marketplace. We further found that ``the 
public interest is no longer served by maintaining these legacy 
regulatory obligations and their associated costs.''
    18. Current Unbundling and Resale Requirements. Currently, the 
Commission's unbundling rules, subject to forbearance as described 
above, require that incumbent LECs unbundle (1) mass market copper 
digital and xDSL-capable loops (collectively, UNE DS0 Loops) 
nationwide; (2) UNE Analog Loops in non-price cap incumbent LEC service 
areas; (3) the TDM capabilities, features, and functionalities of 
hybrid fiber-copper loops nationwide; (4) enterprise loops (i.e., DS1 
and DS3 loops) subject to the limitations adopted in the Triennial 
Review Remand Order reflecting current and potential competition (UNE 
DS1 and DS3 Loops); (5) subloops, including subloops for multiunit 
premises wiring, nationwide; (6) network interface devices nationwide; 
(7) dedicated interoffice transport (i.e., DS1, DS3, and dark fiber 
transport) subject to limitations reflecting potential competition in 
the Triennial Review Remand Order and our forbearance for UNE DS1/DS3 
Transport in wire centers within a half mile of competitive fiber in 
the UNE Transport Forbearance Order; (8) operations support systems 
nationwide; and (9) 911/E911 databases nationwide. As discussed above, 
the Commission has at times granted requested forbearance relief to 
petitioning carriers for particular UNEs in specific geographic 
markets. Incumbent LECs are also required to maintain access to a 64 
kbps channel over fiber loops for existing customers. The Commission 
has not found impairment with respect to any new unbundled network 
elements since 2004. In addition, non-price cap incumbent LECs must 
offer Avoided-Cost Resale to requesting carriers in their local 
exchange service areas.
    19. In November 2019, we adopted the Modernizing Unbundling and 
Resale Requirements in an Era of Next-Generation Networks and Services 
Notice of Proposed Rulemaking (NPRM) (85 FR 472, Jan. 6, 2020) to 
comprehensively reexamine the Commission's current unbundling rules in 
light of the substantial changes in voice and broadband service 
competition in the communications landscape. The NPRM sought comment on 
proposals to modernize and update incumbent LECs' remaining unbundling 
and resale obligations to better reflect the current marketplace 
realities of intermodal voice and broadband competition. The sole 
unbundling obligation that the NPRM did not propose to modify or 
eliminate is the requirement to unbundle 911/E911 databases. The 
Commission also sought comment on the costs and benefits of its 
proposals, as well as proposed transition time frames.
    20. Various parties, particularly incumbent and competitive LECs, 
vigorously debated the issues raised by the NPRM in comments and reply 
comments filed in February and March 2020, and in ex parte letters 
filed thereafter. On August 5, 2020, INCOMPAS, USTelecom, and many of 
their respective members (Joint Parties), ``in recognition of the 
current state of competition in the communications marketplace,'' filed 
a compromise resolution (Compromise Proposal) in this docket for the 
Commission to consider regarding whether and to what extent incumbent 
LECs must continue to provide access to unbundled DS0 loops and 
associated copper subloops, DS1 loops, DS3 loops, and OSS. 
Specifically, aside from the trade associations, INCOMPAS and 
USTelecom, the parties to this agreement include: Many of USTelecom's 
incumbent LEC members--AT&T Services, Inc., CenturyLink, Inc. (now 
Lumen), Consolidated Communications, Inc., Frontier Communications 
Corp., and Verizon Communications Inc.--and many of INCOMPAS' 
competitive LEC members--Allstream Business US, LLC, Digital West, 
First Communications, LLC, Biddeford Internet Corporation d/b/a GWI, 
IdeaTek Telecom, Mammoth Networks and Visionary Broadband, SnowCrest 
ISP & SnowCrest Telephone, Socket Telecom, LLC, TelNet Worldwide, Inc., 
and TPx Communications. Windstream Services, LLC signed as a member of 
both trade associations, in its capacity as an incumbent LEC and 
competitive LEC. The Joint Parties discussed but did not reach a 
compromise regarding dark fiber transport at that time and avoided-cost 
resale. The Joint Parties did not discuss UNE Analog Loops in non-price 
cap areas, 64 kbps voice-grade channels over last-mile fiber loops, 
Multiunit Premises UNE Subloops, NIDs, and the TDM capabilities, 
features, and functionalities of hybrid loops. The Joint Parties 
emphasized that the Compromise Proposal was a ``bargained-for, 
negotiated outcome that reflects trade-offs and concessions between'' 
nearly every interested competitive LEC and incumbent LEC in this 
docket that have previously disputed the appropriate scope of the 
Commission's unbundling rules at the Commission, in this proceeding and 
in other proceedings, and in court. The Joint Parties further noted 
that the Compromise Proposal ``necessarily departs in at least some 
ways from the specific positions each individual signatory has advanced 
in this proceeding,'' but each proposal is a direct response to the 
record in this proceeding. The Joint Parties also assert that these 
resolutions are lawful and are logical outgrowths of the NPRM 
proposals, ``within the reasonable range of conclusions supported by 
the record,'' and in the public interest.
    21. On September 14, 2020, INCOMPAS, USTelecom, and many of their 
respective members, representing a majority of buyers and sellers of 
UNE Dark Fiber Transport, additionally reached a compromise proposal 
with regard to UNE Dark Fiber Transport. The parties agreed that the 
Commission should forbear and find non-impairment vis-a-vis Tier 3 wire 
centers located within half a mile of alternative fiber, subject to an 
eight-year transition period for existing UNE Dark Fiber Transport.

B. Today's Communications Marketplace

    22. The communications marketplace has dramatically transformed 
since Congress passed the 1996 Act. Incumbent LECs controlled 99.7% of 
the local telephone service market at that time. Incumbent LECs' 
wireline voice subscriptions now account for only approximately 39% of 
all wireline voice

[[Page 1640]]

subscriptions and only 9% of all voice subscriptions across all 
technologies. The fixed voice marketplace, once monopolized by 
incumbent LECs, now includes cable companies offering VoIP, fixed 
wireless providers, over-the-top VoIP providers, as well as competitive 
and incumbent LECs. As for fixed broadband, incumbent LECs are just one 
of many intermodal competitors, providing only about 22% of residential 
broadband subscriptions at or above 25/3 Mbps, which the Commission has 
defined as advanced telecommunications capability. Connections data are 
collected at the census tract level. Incumbent LEC affiliation is 
determined at the holding company level and the census block level. The 
incumbent LEC's connections are counted as within the incumbent's study 
area if any portion of its study area overlaps the census tract. Cable 
providers provide approximately 75% of 25/3 Mbps residential 
subscriptions. As of December 31, 2019, 99% of Americans had access to 
three providers of mobile voice and broadband. As of the date of this 
Order, December 2019 is the latest data available to the Commission, so 
we cannot report coverage after the T-Mobile/Sprint merger, and this 
data treats T-Mobile and Sprint as separate providers. Finally, as the 
Commission found in the BDS Order, the enterprise market is subject to 
``intense competition,'' with 95% of census blocks with business data 
services demand in price cap MSAs, representing 99% of business 
establishments, featuring at least one competitive provider in addition 
to the incumbent LEC.
    23. The communications marketplace has also seen rapid 
technological change. In the enterprise services marketplace, DS1 and 
DS3 loops, dominated by incumbent LECs, have been increasingly replaced 
by packet-based services, provided by a range of providers who benefit 
from a ``considerably more level playing field'' compared to TDM-based 
services. The copper-to-fiber and TDM-to-IP transitions have also 
increasingly reached residential consumers, as incumbent LECs have been 
retiring last-mile copper and replacing it with fiber or fixed wireless 
technologies. And of course, American consumers have themselves 
transitioned to newer technologies, increasingly moving from fixed 
legacy voice to fixed or nomadic voice over internet protocol (VoIP) 
and mobile voice services, and from DSL to broadband provided over 
fiber and fixed and mobile wireless. The widespread deployment of 5G 
wireless networks will only accelerate this process.

III. Discussion

    24. In this document, we modernize our unbundling rules in light of 
the dramatic changes to the communications marketplace since 2004, when 
the Commission last examined unbundling obligations through the 
impairment lens. We eliminate, subject to a transition period, 
unbundling obligations for loops, transport, and other elements where 
record evidence shows that they are no longer necessary for reasonably 
efficient competitors to enter the market. Recognizing that some 
unbundling obligations have continued benefits in providing competitive 
telecommunications services and broadband access in rural areas, where 
competitive entry is harder because of entry barriers to fixed 
broadband services, including sunk costs, we maintain several 
unbundling requirements, including for mass market broadband-capable 
loops in less densely populated areas. Sunk costs are investments that 
have no scrap value or value in an alternative use, e.g., a fiber cable 
connecting a customer's location to the provider's network. Most 
wireline network costs are sunk for at least twenty years. In addition, 
entrants may face other entry barriers including achieving scale 
economies and absolute cost disadvantages. Scale economies can be a 
barrier to entry if entrants are likely to attract fewer customers than 
competitors, making it more difficult for the entrant to compete 
against its competitors if it faces higher average cost and the market 
retail price is close to its competitor's average cost. Absolute cost 
advantages can occur if the incumbent providers have privileged access 
to resources. An incumbent firm may also have other first mover 
advantages, e.g., because they have a relatively high penetration rate 
for their services and consumers face high costs in switching 
providers. We find that our impairment and forbearance findings, when 
taken together with the necessary transition periods and conditions we 
adopt for each element, best fulfill our statutory responsibilities and 
promote our policy objectives.

A. UNE Loops

    25. Loops are the ``last mile of a carrier's network,'' connecting 
end-users to the network to access voice, broadband, and other 
technologies. Under existing law, incumbent LECs must provide at least 
some limited unbundled access nationwide to (1) DS1 and DS3 loops and 
associated subloops, (2) DS0 loops and associated subloops, and (3) the 
TDM-capabilities, features, and functionalities of hybrid copper-fiber 
loops. Subject to previous grants of forbearance, incumbent LECs must 
also provide unbundled access to UNE Analog Loops in non-price cap 
incumbent LEC service areas and to 64-kbps channels over fiber loops 
that were ordered before 2015.
1. UNE DS1 and DS3 Loops
    26. We proposed in the NPRM to find that competitive LECs are no 
longer impaired in those counties and study areas deemed competitive in 
the BDS Order and Rate-of-Return (RoR) BDS Order (83 FR 67098, Dec. 28, 
2018) (collectively, Competitive Counties), subject to a carve-out for 
UNE DS1 Loops used for residential purposes. Based on the record in 
this proceeding, as well as the Commission's findings in the BDS Order, 
we adopt a modified version of this proposal and find that unbundled 
access to DS1 and DS3 loops in the Competitive Counties, where demand 
for business data services is most highly concentrated, is unwarranted 
because competitive LECs are no longer impaired without access to these 
UNEs, and thus, incumbent LECs no longer need to provide unbundled 
access in these locations, subject to the transition periods and 
associated conditions we adopt. Moreover, we find that continued 
unbundling of those network elements is not warranted because it 
frustrates the congressionally mandated policy goal of ensuring the 
deployment of next-generation networks and services. Further, 
independent of our non-impairment finding, we find that, subject to the 
transition periods and conditions, forbearance from these obligations 
in the Competitive Counties is warranted. The record overwhelmingly 
supports this conclusion. INCOMPAS, USTelecom, and most of their 
members participating in this proceeding agree that both the non-
impairment finding and forbearance conclusions are appropriate for the 
Competitive Counties, subject to the transition periods and associated 
conditions we also adopt. None of these findings, however, apply to 
non-competitive counties, where UNE DS1 and DS3 Loops will remain 
available, subject to the limits established in the Triennial Review 
Remand Order. Finally, we decline to adopt a residential carve-out for 
UNE DS1 Loops, finding that the costs and burdens associated with such 
an exemption outweigh the benefits.
    27. Background. Our rules require that incumbent LECs make DS1 and 
DS3

[[Page 1641]]

loops, which are predominantly used to provision service to enterprise 
customers, available as UNEs on a limited basis. These loops operate at 
a total digital signal speed of 1.544 Mbps and 44.736 Mbps, 
respectively. The Commission adopted these unbundling requirements for 
DS1 and DS3 loops more than 16 years ago. The Commission based its 
impairment analysis at that time on two factors: The existence of 
actual competition and the inference to be drawn from the potential for 
competition in similar markets. The Commission found that ``the 
presence of fiber-based collocations in a wire center service area is a 
good indicator of the potential for competitive deployment of fiber 
rings'' and ``a wire center service area's business line count is 
indicative of its location in or near a large central business 
district, which is likely to house multiple competitive fiber rings 
(and thus numerous splice points) with laterals to multiple 
buildings.'' When viewed together, the Commission explained, these 
characteristics ``are likely to correspond with actual self-deployment 
of competitive LEC loops or to indicate where deployment would be 
economic and potential deployment likely.'' It thus found that 
competitive LECs were not impaired without unbundled access to DS1 
loops only in wire centers where there are at least 60,000 business 
lines and four or more fiber-based collocators. It also found that 
competitive LECs were not impaired without unbundled access to DS3 
loops in wire centers where there are at least 38,000 business lines 
and four or more fiber-based collocators.
    28. In explaining these findings, the Commission noted that its 
``selection of specific criteria is not an exact science, and the 
Commission may exercise line-drawing discretion when rendering 
determinations based on agency expertise, our reading of the record 
before us, and a desire to provide an easily implemented and reasonable 
bright-line rule to guide the industry.'' The Commission limited the 
availability of these UNEs to ten UNE DS1 Loops and one UNE DS3 Loop 
per building, respectively, finding that competitors are more likely to 
self-provision higher capacity loops at a certain level of bandwidth 
demand because of the greater economic feasibility resulting from the 
fact that ``revenue opportunities increase with the capacity level.'' 
It also indicated that even these revised unbundling obligations were 
designed to be removed ``over time as carriers deploy their own 
networks and downstream local exchange markets exhibit the same robust 
competition that characterizes the long distance and wireless 
markets.''
    29. In the more recent BDS Order, the Commission undertook a 
comprehensive analysis of the business data services market. Business 
data services refers to the dedicated point-to-point transmission of 
data at certain guaranteed speeds and service levels using high-
capacity connections. This analysis focused extensively on the market 
for TDM-based DS1 and DS3 channel terminations, which are functionally 
identical products to UNE DS1 and DS3 Loops. The Commission found that 
``[t]o a large extent in the business data services market, the 
competition envisioned in the [1996 Act] has been realized,'' and ``any 
prior advantage an incumbent might have enjoyed at lower bandwidths is 
now less competitively relevant in light of customer demand that 
attracts a number of traditional and non-traditional competitors that 
are improving legacy cable networks and expanding with new facilities 
to meet demand.''
    30. Relying upon the most comprehensive data collected from both 
purchasers and providers of BDS services to date, including circuit-
based and packet-based BDS providers and significant providers of best-
efforts services, and Form 477 data, the Commission created a 
Competitive Market Test to determine which counties are competitive for 
purposes of business data services. Best-efforts services are internet 
access services generally marketed to residential and small business 
consumers, rather than enterprise consumers. Unlike dedicated packet-
based BDS, best-efforts services often provide asymmetrical speeds and 
lack service performance guarantees. While the Commission found in the 
BDS Order that best-efforts services generally did not directly compete 
with fiber-based BDS, the Commission found that the underlying 
facilities used to provision best-efforts services were being 
modernized to provide competitive BDS. Providers report their broadband 
deployment to the Commission semi-annually using FCC Form 477. The 
Eighth Circuit upheld the portion of the BDS Order adopting the 
Competitive Market Test, while remanding other portions of the BDS 
Order on notice grounds. The Commission determined that combining these 
two data sets would ``approximate the full spectrum of competition in 
the business data services market, including competition from medium-
term entrants.'' The Commission determined that basing the Competitive 
Market Test on ``the geographic unit of a county or county-equivalent'' 
would ``significantly reduce[] the over-and under-inclusivity issue 
posed by MSAs [metropolitan statistical areas] . . . and avoid[]the 
administrability issues posed by smaller geographic units of measure.'' 
It went on to determine that ``nearby [non-incumbent LEC wireline] 
competitors'' with ``nearby networks'' are ``effective competitor[s] in 
meeting BDS demand at a location if it either delivers BDS to a 
location or has a network within one half mile of the location with BDS 
demand, and/or is a cable company with a widespread HFC [hybrid fiber 
coax] network that surrounds the location with BDS demand.'' The 
Commission determined that a county will be deemed competitive when 
either (1) at least 50% of the locations with BDS demand within the 
county are within a half mile of a competitive provider's network, or 
(2) a cable competitor's network serves at least 75% of the census 
blocks with BDS demand within the county.
    31. Impairment Analysis. UNE DS1 and DS3 Loops are functionally 
equivalent to DS1 and DS3 BDS end-user channel terminations, with the 
only real difference being their respective prices. Indeed, UNE DS1 and 
DS3 Loops and DS1 and DS3 BDS end-user channel terminations use the 
very same incumbent LEC facilities. So where there is evidence that 
competition for BDS DS1 and DS3 end-user channel terminations exists, 
as demonstrated by the Competitive Market Test, such competition also 
exists for UNE DS1 and DS3 Loops. And that competition includes packet-
based alternatives to DS1 and DS3 Loops, which are more versatile and 
capable of handling the increasingly higher bandwidth needs of business 
customers, thus demonstrating that DS1 and DS3 loops are no longer a 
reasonably efficient technology to enter the enterprise marketplace in 
the Competitive Counties. The existence of actual and potential 
competition, intermodal or otherwise, in the Competitive Counties leads 
us to conclude that unbundling DS1 and DS3 loops is unwarranted even in 
the face of some level of impairment. Finally, continuing the 
unbundling obligations for DS1 and DS3 loops is at odds with Congress's 
mandate in section 706 that we take action to encourage the deployment 
of advanced telecommunications capabilities. Thus, consistent with our 
proposal in the NPRM, we find that where the Commission in the BDS 
proceeding found actual or potential competition, and subject to the 
transition periods in this Order, competitive LECs seeking to

[[Page 1642]]

enter the business data services market are no longer impaired without 
unbundled access to DS1 and DS3 Loops, and those UNE requirements are 
no longer necessary.
    32. Given the demands for ever-increasing broadband speeds, and 
packet-based services, we find that a reasonably efficient competitor 
would not use UNE DS1 and DS3 Loops as a reasonably efficient 
technology for entering the enterprise services market in the 
Competitive Counties. The communications marketplace today is 
dramatically different from the one that existed when the Commission 
last addressed impairment over a decade ago. Incumbent LECs were the 
dominant providers of TDM-based DS1s and DS3s in 2004, and cable was 
only beginning to make inroads into the enterprise services market at 
that time. Today, TDM-based DS1 and DS3 loops are becoming obsolete in 
the face of increasing bandwidth demands and the transition to IP-based 
networks and services. Their availability will become further 
constrained as incumbent LECs move forward with retiring their copper 
facilities, deploying packet-based services, and phasing out TDM 
services like DS1 and DS3 business data services. Indeed, the 
Commission found in the BDS Order that ``[f]unctionally, TDM and 
packet-based services are broadly interchangeable in the business data 
services realm as both are used to provide connectivity for data 
network and point-to-point transmissions and both services can be 
delivered over the same network infrastructure.'' It thus went on to 
find that ``legacy TDM business data services suppliers would be 
constrained by the threat of potential customer loss to packet-based 
business data services suppliers.'' And it noted the diminishing use 
and availability of UNE DS1 and DS3 Loops. One competitive LEC 
commenter in this proceeding made this clear when it noted that the 
bandwidth available through bonding multiple DS1 loops ``might let a 
small business survive until another solution can be found.'' But where 
competition, or the potential for competition, exists, such other 
solution has, by definition, been found because that competition comes 
from facilities-based providers using non-incumbent LEC facilities. And 
that competition includes packet-based services, which are scalable for 
the ever-increasing bandwidth needs of enterprise customers. In light 
of this next-generation competition, we find that a reasonably 
efficient competitor would not use UNE DS1 and DS3 Loops when seeking 
to enter the enterprise marketplace in the Competitive Counties. Thus, 
where the Competitive Market Test has shown that a particular county or 
study area is competitive, we no longer require incumbent LECs to make 
UNE DS1 and DS3 Loops available after an appropriate transition period.
    33. This actual and potential competition comes in many forms, 
including from cable and fixed wireless providers who entered, or are 
entering, the market without reliance on UNEs. The record demonstrates 
that cable providers are even more significant competitors for 
enterprise services today than they were when the Commission explained 
their significance three years ago in the BDS Order. And while the 
Commission previously found that fixed wireless had a limited role in 
the BDS marketplace, it noted ``the promise of 5G technology to provide 
quality high-bandwidth fixed wireless services to businesses in urban 
areas'' and found that ``fixed wireless services should be included in 
the product market discussion because they may have a competitive 
effect on the market.'' This is the competition envisioned by the 1996 
Act, and we would be remiss to not take into account competition from 
these providers. Indeed, in the context of affirming the Commission's 
decision not to require incumbent LECs to unbundle the broadband 
capabilities of hybrid loops, the D.C. Circuit stated ``we agree with 
the Commission that robust intermodal competition from cable providers 
. . . means that even if all CLECs were driven from the broadband 
market, mass market consumers will still have the benefits of 
competition between cable providers and ILECs.'' To ignore this 
competition and to allow continued reliance on UNEs in these areas 
would slow the transition to next-generation services, in contravention 
of the goals of section 706 and our preference for sustainable 
facilities-based competition, goals we are permitted to consider based 
on our ``at a minimum'' authority.
    34. We realize that the BDS Order examined competition on a county 
level, whereas the Commission made its 2004 impairment findings based 
on an analysis of the smaller geographical level of wire centers. The 
Commission specifically found that ``basing the competitive market test 
at the county level strikes the best balance between being sufficiently 
granular and administratively feasible,'' a finding upheld by the 
Eighth Circuit. This concept of striking a balance between granularity 
and administrability is equally relevant and important in the UNE 
context. We infer from the level of competition in the Competitive 
Counties now and the growth in competitive providers deploying in areas 
previously outside their footprints that these locations will 
ultimately become competitive. Thus, while some customers within a 
Competitive County may not currently have available to them the 
competition relied on by the Commission in deeming that county to be 
competitive, that number will be relatively small and will likely 
shrink over time. Indeed, the Commission noted in the BDS Order that it 
expected as much. This approach is consistent with the Commission's use 
of the impairment inquiry in 2004, when the Commission ``dr[e]w 
reasonable inferences regarding the prospects for competition in one 
geographic market based on the state of competition in other, similar 
markets.''
    35. Some competitive LEC commenters assert that the Commission's 
reliance on the BDS Order's competitive findings is at odds with ``the 
level of competition required by the [Triennial Review Remand Order's] 
findings.'' We disagree. We note that INCOMPAS, along with the majority 
of its members that have filed comments in this proceeding, signed the 
Compromise Proposal that states that the competitive providers are no 
longer impaired in the Competitive Counties without access to UNE DS1 
and DS3 Loops. As the Commission specifically found in the BDS Order, 
for the purposes of enterprise services, ``the largest benefits from 
competition come from the presence of a second provider, with added 
benefits of additional providers falling thereafter, in part because, 
consistent with other industries with large sunk costs, the impact of a 
second provider is likely to be particularly profound in the case of 
wireline network providers.'' This is consistent with the Commission's 
conclusion in the Restoring internet Freedom Order (83 FR 7852, Feb. 
22, 2018) that the presence of two wireline internet service providers 
``can be expected to produce more efficient outcomes than any regulated 
alternative'' relevant to our consideration in this context. Moreover, 
the competitive findings in the BDS Order support our findings of (1) 
no impairment, (2) the existence of intermodal competition supporting 
unbundling even in the face of some level of impairment, and (3) that 
eliminating this unbundling obligation furthers the goal of advancing 
deployment of next-generation facilities and services. The Commission 
found in the BDS Order, ``[t]o a large extent in the business data 
services market, the

[[Page 1643]]

competition envisioned in the Telecommunications Act of 1996 . . . has 
been realized.'' The existence of wireline competitors in the 
Competitive Counties demonstrates that market entry and thus 
competition without UNE DS1 and DS3 Loops is possible in these areas. 
Indeed, we found in last year's BDS Remand Order that the vast majority 
of business locations in Competitive Counties are served by wire 
centers within a half-mile of competitive fiber. And the Commission 
found in the BDS Order that the level of competition based on the 
Competitive Market Test was likely understated and that it will only 
continue to grow, and the competition that existed at the time of the 
2015 Data Collection will not recede because those competitors have 
already incurred substantial sunk costs. Those competitors, including 
intermodal competitors providing advanced telecommunications capability 
over next-generation networks, did not need to rely on UNE DS1 and DS3 
Loops to enter these markets. We thus disagree with commenters who 
assert that a reasonably efficient competitor would still need to rely 
on UNE DS1 and DS3 Loops to enter a new market.
    36. We also disagree with competitive LEC objections to the 
Commission taking into consideration competition from cable providers 
in conducting its impairment analysis. Cable providers are much more 
significant competitors for enterprise services than they were 15 years 
ago when the Commission initially considered their role in the 
marketplace for determining unbundling obligations for DS1 and DS3 
loops. Indeed, only three years later in the Qwest Omaha Order (20 FCC 
Rcd 19415, Dec. 2, 2005), the Commission viewed such providers as a 
source of competition for forbearance purposes. Fast forward almost a 
decade to the BDS Order, and the Commission noted the dramatic strides 
of cable providers in becoming ``formidable competitors'' over their 
own fiber and hybrid facilities in the business data services market. 
Cable providers now offer robust enterprise-grade business services 
that were not widely available in 2004, as found by the Commission in 
the BDS Order, including for multi-regional customers with low to 
medium bandwidth needs who still require enterprise-grade features. The 
Commission previously also found that 5G networks ``have the potential 
to represent a significant additional source of competition for the 
provision of business data services.'' And the BDS marketplace has only 
become more competitive in the seven years since the data collected in 
the 2015 Data Collection.
    37. We also reject commenter arguments concerning the Triennial 
Review Remand Order's finding that the availability of UNEs at that 
time served to constrain business data service pricing (such services 
were called special access services at the time). Today, the widespread 
intermodal competition and entry for enterprise services constrains 
pricing, making ``synthetic'' UNE-based competition unnecessary, 
particularly as the continued obligation to provide UNEs in Competitive 
Counties could reduce investment incentives for packet-based services. 
We reiterate that the 1996 Act's market-opening provisions were 
intended to foster competition, not support specific competitors or 
business models. We find the evidence of facilities-based competition 
for products and services here to be sufficient to demonstrate that 
reasonably efficient competitors have the ability to deploy their own 
services without the use of UNEs. While certain competitive LEC 
commenters may wish to continue relying on UNE DS1 and DS3 Loops for 
their business models, this does not mean that a reasonably efficient 
competitor is impaired without access to those UNEs. Indeed, the 
business data services on which these commenters rely are now subject 
to competition from other business data services, including through 
cable deployment that developed without the reliance on UNEs, an 
indication that there is no longer impairment.
    38. We are further unpersuaded by commenter assertions that the 
findings in the BDS Order are flawed because they are based on Form 477 
data, which have recently been the subject of challenges regarding 
their accuracy. As the Commission made clear in the BDS Order, its 
findings were not based solely on Form 477 data. Rather, its findings 
were based largely on the 2015 Data Collection (with respect to 
traditional competitive LECs). The Commission used the Form 477 data to 
supplement the 2015 Data Collection with respect to cable providers, 
which added only an additional 0.5% of all competitive counties and 
county equivalents.
    39. Forbearance Analysis. Independent of our finding of non-
impairment for UNE DS1 and DS3 Loops, we find that the forbearance 
criteria are met for UNE DS1 and DS3 Loop requirements in the same 
geographical areas--i.e., the Competitive Counties. In doing so, we 
have the flexibility to conduct our forbearance analysis based on the 
specific circumstances at issue. Although we forbear from our UNE DS1 
and DS3 Loop requirements in the Competitive Counties, we conclude that 
competitive LECs will be able to obtain DS1 and DS3 services as 
business data services or through section 251(b)(1) resale. And because 
the marketplace for DS1 and DS3 BDS channel terminations is 
competitive, the marketplace will discipline the prices of those 
services.
    40. Section 10(a)(1). We conclude that enforcement of UNE DS1 and 
DS3 Loop obligations is not necessary to ensure just and reasonable 
rates. To the extent competitive LECs seek to continue purchasing DS1 
and DS3 services, they are able to do so through commercial offerings. 
The Commission found in the BDS Order that market pressure from 
competitive alternatives, including packet-based services, will ensure 
reasonable prices. Thus, the existence of competitive alternatives 
already available or that could economically be made available will 
ensure reasonable prices and no harm to consumers. Indeed, we find that 
competition will more effectively ensure just and reasonable rates more 
effectively than maintenance of these UNE requirements. Accordingly, 
although these UNE obligations may have served to constrain DS1 and DS3 
prices at reasonable levels 16 years ago, they no longer serve that 
purpose.
    41. Section 10(a)(2). We find that the evolving marketplace and the 
statutory and regulatory safeguards that work to ensure just and 
reasonable rates also ensure that consumers will not be harmed by 
forbearance from enforcement of the UNE DS1 and DS3 Loops obligations. 
And as with ensuring just and reasonable rates, we find that 
competition will better protect consumers--in this instance, enterprise 
customers--from harm than continued enforcement of these outdated 
unbundling obligations. Moreover, absent the availability of UNE DS1 or 
DS3 Loops, competitors will still be able to purchase DS1 and DS3 end-
user channel terminations as business data services via commercial 
agreements or pursuant to section 251(b)(1) resale, albeit at a higher 
price. Such higher prices, resulting from marketplace dynamics rather 
than regulatory mandates, will serve to encourage end-user customers to 
migrate to next-generation services, thus helping to advance Congress's 
goal as stated in section 706. The rules adopted in 2004 and still in 
force today placed limits on UNE DS1 and DS3 Loop availability, both by 
wire center characteristics and by the numerical cap. Competitors, 
including incumbent LECs outside of

[[Page 1644]]

their incumbent territories, already use DS1 and DS3 BDS end-user 
channel terminations to compete, including facilities purchased from 
other competitive LECs and from cable providers. And DS1 and DS3 end-
user channel terminations are increasingly becoming obsolete in light 
of the pressure for applications requiring increasing bandwidth. 
Indeed, the Commission found in the BDS Order that ``use and 
availability of UNEs is diminishing.''
    42. Section 10(a)(3). Finally, we find that forbearing from the UNE 
DS1 and DS3 Loop obligations in Competitive Counties is in the public 
interest as it promotes the policy of ensuring the deployment of next-
generation networks and services. The Commission has found that 
``[p]acket-based services represent the future of business data 
services'' and ``will lead to greater returns on investment and in 
turn, greater incentives for facilities-based entry into the business 
data services market.'' Continuing to enable reliance on legacy lower-
speed technologies unnecessarily reduces incentives and thus slows this 
deployment in the face of competitive alternatives as well as 
commercially available DS1 and DS3 products at market-based prices. We 
find that the benefit of encouraging the deployment of advanced 
telecommunications capabilities and next-generation networks outweighs 
any loss of competitors in the market as long as some level of 
competition remains.
    43. UNE DS1/DS3 Loops in Non-Competitive and Grandfathered 
Counties. We decline to extend our DS1 and DS3 loop unbundling relief 
to non-competitive and grandfathered counties, consistent with our 
proposal in the NPRM. A number of incumbent LEC commenters take the 
position that we should eliminate unbundling obligations for DS1 and 
DS3 loops in non-competitive counties as well, arguing that the 
existence of continued price cap regulation in those counties obviates 
the need for UNE DS1 and DS3 Loops. However, the fact that price cap 
regulation continues in these counties does not demonstrate that either 
the non-impairment or forbearance standard has been met. The 
Commission's findings in the BDS Order about actual and potential 
competition in these areas indicate that there is insufficient evidence 
to conclude that competition in the enterprise market currently exists 
or is likely to exist in the near future without the use of UNEs, and 
the continued existence of price cap regulation does not undermine 
those findings. Nor is there sufficient evidence in this proceeding to 
conclude that reasonably efficient competitors could enter in these 
areas without the use of UNE DS1 and DS3 Loops. And UNE DS1 and DS3 
requirements in these locations continue to be necessary for the 
protection of consumers and for the public interest, based on the 
limited degree of competition found in those areas in the BDS Order.
    44. We also decline to eliminate UNE DS1 and DS3 requirements in 
grandfathered counties, as one commenter requests. The BDS Order did 
not find these counties competitive based on the Competitive Market 
Test, but rather refrained from imposing new price cap regulation 
because they were previously granted Phase II pricing flexibility. In 
the BDS Order, the Commission determined not to reimpose price cap 
regulation in these counties because it favored a ``conservative'' 
approach to avoid regulatory disruption, rather than on other 
considerations, such as the underlying conditions when those areas were 
granted Phase II pricing flexibility. The interest in a conservative 
approach to regulatory disruption weighs in favor of retaining UNE DS1 
and DS3 Loops in the grandfathered counties, as those UNEs are 
currently available in these locations and were not affected by Phase 
II pricing flexibility.
    45. No DS1 Residential Exemption. In the NPRM, we proposed 
exempting from any non-impairment findings UNE DS1 Loops used for 
providing mass market broadband in rural census blocks of Competitive 
Counties. We decline to adopt such an exemption. The record in this 
proceeding does not support such an exemption, and we find that the 
burdens to incumbent LECs of administering any such exemption outweigh 
any benefits. The number of existing UNE DS1 Loops in rural census 
blocks of Competitive Counties is exceedingly small in the first place, 
and the subset of such loops used for residential purposes is orders of 
magnitudes smaller. According to AT&T, fewer than one percent of the 
UNE DS1 Loops it sells in rural census blocks within Competitive 
Counties serve residential addresses. We find that the small number of 
these UNEs used in rural areas does not warrant such treatment, 
particularly because the BDS Order found these specific areas to be 
competitive for DS1 and DS3 channel terminations. According to AT&T, 
fewer than one percent of the UNE DS1 Loops it sells in rural census 
blocks within Competitive Counties serve residential addresses. This is 
not surprising given that competitive LECs use UNE DS1 and DS3 Loops 
almost exclusively to provision service to enterprise customers. 
Moreover, to administer the proposed exemption on a going forward 
basis, incumbent LECs would be required to make costly modifications to 
their processes, which they would then need to update and monitor. Some 
incumbent LECs state they would also have to manually validate whether 
each new address, of which they receive hundreds daily, qualified for 
the exemption. One incumbent LEC commenter describes in detail the 
system changes necessary for a carrier to implement such an exemption 
and the substantial cost involved in implementing those changes. For 
example, Verizon describes the changes it would have to implement in 
order to accommodate a rural residential DS1 exemption, ``at a 
minimum'': (1) ``Create a new ``yes/no'' field in its provisioning and 
inventory systems to determine whether each individual end user address 
in Verizon's territory (millions of addresses) is located in census 
blocks subject to relief . . . [and] constantly update this data, 
including to incorporate the hundreds of new addresses added on a daily 
basis;'' (2) ``Build intelligence into the ordering system to limit the 
availability of the [DS1] UNE loops to only census blocks not subject 
to relief; (3) ``Modify billing systems if required to bill the UNE 
loops subject to relief at a different rate from those loops not 
subject to relief (e.g., a different rate during a transition 
period);'' and (4) ``validating the residential and broadband 
classification of the circuit.'' Indeed, the cost per provider for 
implementing such changes could be ``at least hundreds of thousands of 
dollars.'' While INCOMPAS and NWTA point to one competitive LEC's use 
of UNE DS1 Loops to serve some residential customers based upon filings 
made in the 2018 USTelecom forbearance proceeding, neither this 
competitive LEC nor any other individual competitive LEC indicated any 
such use in in their filings in this proceeding or supported such an 
exemption. INCOMPAS and NWTA also pointed to Virginia Global, but that 
citation suffers from the same infirmities as the citation to Sonic. 
While INCOMPAS initially called for expanding the proposed exemption to 
enterprise customers, it was a party to the Compromise Proposal, which 
did not provide a DS1 exemption for residential or enterprise customers 
in the Competitive Counties. Because of the negligible benefits and 
significant costs, we decline to provide a residential DS1 exemption.
    46. Transition Period. In the NPRM, we proposed a uniform 
transition period

[[Page 1645]]

for UNE DS1 and DS3 Loops that would provide a 36-month transition 
period for existing UNE DS1 and DS3 Loops without a period for new 
orders. Based on the record, we find that different transition plans 
for UNE DS1s and UNE DS3 Loops are warranted. Instead, for UNE DS1 Loop 
obligations, we adopt a two-part transition of 24 months for new orders 
and 42 months for existing UNE DS1 Loops. For existing UNE DS3 Loops, 
consistent with our proposal in the NPRM, we adopt a single transition 
period of 36 months with no additional period for placing new orders. 
Carriers may not convert existing special access circuits to UNEs after 
the effective date of this Order.
    47. Our decision to adopt modified and different transition 
timeframes for these enterprise UNE loops is based on both record 
evidence and the Compromise Proposal between and among a majority of 
incumbent and competitive LEC stakeholders and participants in this 
proceeding, each of which individually would have preferred a shorter 
or longer transition period having different accompanying conditions 
than what their compromise proposal suggests. The Commission has long 
found compromise proposals negotiated by interested parties 
representing different interests to be reasonable and to serve the 
public interest. We acknowledge, however, the need to base our findings 
on an independent rationale. We find the transition periods contained 
in the Compromise Proposal to be reasonable and in the public interest, 
based both on the record in this proceeding and because the proposal 
has been advanced by most of the major buyers and sellers of these 
UNEs. We therefore adopt the following transition timeframes for 
eliminating the availability of UNE DS1 and DS3 Loops. We also reject 
Verizon's assertion that we should modify the ``provision-then-
dispute'' process adopted in the Triennial Review Remand Order as we 
significantly reduce the availability of UNEs in this Order only to 
areas where they remain necessary, and there is no evidence in the 
record to support changing the process for obtaining UNEs in the 
limited areas where they remain.
    48. First, we permit competitive LECs to order new UNE DS1 Loops 
for 24 months after the effective date of this order. This timeframe 
will enable competitive LECs to continue to execute short-term business 
plans and honor contractual obligations with new or existing customers, 
including small businesses, while they determine which alternative 
voice service option will best serve their customers' needs. Second, we 
adopt a 42-month grandfathering period for UNE DS1 Loops for all 
competitive LEC customers. We adopt a 36-month grandfathering period 
for UNE DS3 Loops for all competitive LEC customers, with no period 
included for new orders. The record demonstrates that demand for UNE 
DS3 Loops is de minimis, justifying a shorter grandfathering period and 
no transition period for new orders, as compared to UNE DS1 Loops.
    49. We reject proposals for either a longer transition period or a 
shorter transition period and find the Compromise Proposal to be 
reasonable. Indeed, Puerto Rico Telephone Company, which was not a 
party to the INCOMPAS-USTelecom Compromise Proposal, supports the DS1 
relief, transition period, and associated conditions because as a 
whole, it ``strikes a reasonable balance that modernizes regulatory 
requirements and promotes competition,'' providing additional evidence 
of its reasonableness. We find that these transition periods will 
provide competitive LECs with sufficient time to make alternative 
arrangements, particularly given the availability of DS1 and DS3 BDS 
channel terminations as discussed above, without continuing to impose 
these burdensome and costly requirements on incumbent LECs for longer 
than necessary.
    50. The 42-month transition timeframe within which all UNE DS1 
Loops (including any new UNE DS1 Loops ordered during the first 24 
months) and the 36-month transition timeframe within which all UNE DS3 
Loops must be transitioned to alternative arrangements will commence on 
the effective date of this order. These transition periods should 
provide more than enough time for competitive LECs and their customers 
to transition to alternative voice and broadband service arrangements 
as evidenced by the willingness of the major competitive LEC trade 
association and the majority of its members to support this timeframe. 
Competitive LECs that have provided record information about the length 
of their customer contracts have typically referenced contract lengths 
of a minimum of three years with business or government customers. To 
the extent competitive LECs have entered into longer-term contracts 
with their customers without securing long-term contracts with their 
suppliers, they have done so at their own risk like any other business 
does, and we see no reasonable basis for accommodating that risk. 
Moreover, the fact that the major incumbent LECs currently subject to 
these unbundling obligations have agreed to support this transition 
timeframe suggests the burdens they claim to incur as a result of 
continuing to provide such UNEs during the transition are outweighed by 
the benefit of a compromised transition proposal.
    51. In addition, during the relevant transition periods for any 
competitive LEC customer, any UNE DS1 and DS3 Loops that a competitive 
LEC leases as of the effective date of this order shall be available 
for lease from the incumbent LEC at regulated UNE rates. Such rates are 
established either through negotiated interconnection agreements or 
through state-commission-arbitrated rates applying certain Commission-
developed pricing formulas. Our forbearance action is not intended to 
upset pre-existing interconnection agreements or other contractual 
arrangements that may currently exist nor pre-existing state-
commission-arbitrated rates during the transition period (including any 
already-adopted state commission scheduled changes in UNE rates), which 
should quell concerns of those fearing near-term price increases for 
UNE DS1 and DS3 Loops resulting from this Order. Of course, the 
transition mechanism we adopt is simply a default process, and 
competitive LECs and price cap LECs remain free to negotiate different 
arrangements superseding this transition period and replacing UNE DS1 
and DS3 Loop arrangements with negotiated commercial arrangements at 
any earlier time. We find this approach will ensure an orderly 
transition for end-user customers of affected competitive LECs by 
mitigating any immediate rate changes that could otherwise be 
experienced by these end users if current rates for UNE DS1 and DS3 
Loops were immediately eliminated. The transition timeframes we adopt 
will also work to ensure that consumers do not experience any undue 
service disruption as a result.
2. UNE DS0 Loops and Associated UNE Copper Subloops
    52. We proposed in the NPRM to find that competitive LECs are no 
longer impaired in urban census blocks without unbundled access to DS0 
loops. Based on the record in this proceeding, as well as Commission 
data, we adopt a modified version of this proposal and find that 
unbundled access to DS0 loops and their associated copper subloops in 
urbanized areas (areas of 50,000 or more people), the most densely 
populated areas of the country, is unwarranted because competitive LECs 
are no longer impaired without unbundled access to these UNEs. The 
Census Bureau divides the country into approximately eleven

[[Page 1646]]

million census blocks, the smallest unit of geography for which the 
Census Bureau provides demographic data. Census blocks are classified 
as being located in an urbanized area (where populations are over 
50,000) or an urban cluster (where populations range from 2,500-
50,000). Locations with fewer than 2,500 people are considered rural. 
As of the 2010 Census, 71.2% of Americans lived in urbanized areas, 
9.5% lived in urban clusters, and 19.3% lived in rural areas. The 
record overwhelmingly supports this conclusion. We decline to extend 
unbundling relief in census blocks in rural areas and urban clusters.
    53. Section 51.319(a)(1) of our rules requires incumbent LECs to 
make available on an unbundled basis digital copper loops and two-wire 
and four-wire copper loops conditioned to transmit digital signals 
(collectively, DS0s or UNE DS0 Loops). We exclude from the purview of 
this term UNE Analog Loops, which are addressed separately below. UNE 
DS0 Loops are used predominantly to serve residential and small and 
medium businesses. UNE Copper Subloops are the portions of the copper 
DS0 loops that are used to connect certain end-user premises with local 
loops.
    54. USTelecom, INCOMPAS, and most of their members participating in 
this proceeding agree that, subject to the applicable transition period 
and associated conditions we adopt for UNE DS0 Loops in this Order, 
competitive LECs are no longer impaired without access to UNE DS0 Loops 
in urbanized areas. We agree with this assessment. We also find that 
continued unbundling of those network elements in urbanized areas 
frustrates the goal of ensuring deployment of advanced communications 
capability. Independently, we conclude that forbearance from the UNE 
DS0 Loop obligation is warranted in urbanized areas, subject to the 
transition period and associated conditions we adopt. Our findings of 
non-impairment and forbearance from UNE DS0 Loops and UNE Copper 
Subloops requirements do not apply to UNE DS0 Loops and associated UNE 
Copper Subloops in less densely populated urban clusters or rural areas 
where the record and Commission data do not provide sufficient evidence 
of entry by facilities-based competitors, intermodal or otherwise, 
without the use of UNE DS0 Loops.
    55. Background. The current unbundling requirements for DS0 loops 
and copper subloops were adopted more than 17 years ago. At that time, 
the Commission found nationwide impairment without unbundled access to 
DS0 loops. In doing so, it noted that fiber deployment for the mass 
market was still in its infancy, wireless was not yet a suitable option 
for providing mass market broadband, and cable telephony had not 
developed sufficiently to be considered a substitute for traditional 
wireline telephony.
    56. In the past 17 years, the communications marketplace has 
dramatically changed. The most recent data at the time that the DS0 
unbundling requirements were adopted showed that wireline switched 
access was the leading form of telecommunications, and incumbent LECs 
were the dominant providers of wireline switched access. It followed 
that unbundling requirements were focused on providing competitive LECs 
with the network elements, such as local loops, to provide wireline 
switched access in competition with incumbent LECs. The data available 
in early 2003 reported 187.5 million wireline switched access lines, 
with incumbent LECs providing approximately 167.5 million of those 
lines, about 88% of the total. Cable providers reported serving only 2% 
of all switched access lines (via coaxial cable) in the reported data 
available when the Commission adopted the Triennial Review Order. Other 
forms of wireline voice lines, including interconnected VoIP, were so 
negligible that they were unreported. Over the last 17 years, wireline 
switched access lost its role as the leading technology for 
telecommunications. The most recent data reported 38.4 million total 
wireline switched access lines, with incumbent LECs providing 29.9 
million of those lines, less than one-fifth of the wireline switched 
access lines they provided in 2003. In the interim, interconnected VoIP 
went from being irrelevant and thus unreported until 2008, to the most 
recent data showing 69.5 million interconnected VoIP lines reported, 
outnumbering wireline switched access lines from all providers. 
Wireline switched access lines now account for just 8% of all retail 
voice subscriptions across all technologies, and those provided by 
incumbent LECs are only about 39% of all wireline end-user 
subscriptions (both switched access and interconnected VoIP). Overall, 
incumbent LECs serve over fixed lines only 9% of all voice 
subscriptions across all technologies. At the same time wireline 
switched access line counts were decreasing, wireless voice 
subscribership was increasing. December 2002 data reported 136.2 
million mobile wireless subscribers. As of December 31, 2019, that 
number had nearly tripled, reaching 355.7 million. And according to the 
Centers for Disease Control, most adults live wireless-only households, 
having increased from 45% to 61.3% between 2014 and 2019 and accounting 
for more than 80% of Americans between the ages of 25 and 34 and 73% of 
Americans between the ages of 35 and 44.
    57. The change over 17 years has been even more dramatic for 
broadband. In 2003, the Commission defined advanced services as 
transmission speeds of more than 200 kbps both upstream and downstream, 
and found just over 20 million mass market advanced service lines in 
use. The Commission now defines fixed broadband as speeds of at least 
25/3 Mbps, and it was available to approximately 96% of all Americans 
by the end of 2019. We exclude Barrier Communications Corporation's 
deployment data from our analysis because of inaccuracies and 
overstatements in that company's Form 477 filings. While the Commission 
does not yet consider satellite broadband to be a substitute for 
wireline broadband, the Commission found that ``[i]f we include 
satellite service in our estimate, the December 2018 data shows that 
fixed 25/3 Mbps service is deployed to nearly every American.'' 
Further, more than 87% of Americans had access to fixed speeds of 250/
25 Mbps by the end of 2019. Deployment of last-mile fiber loops, which 
was not widespread in 2003, has expanded extensively. Between 2014 and 
2019, residential subscription to a fiber based broadband service more 
than doubled, increasing from 8.3 million to 16.7 million. And mobile 
broadband, provided via LTE technology, which did not even exist in 
2004, is now available in geographic areas covering virtually all 
Americans. Approximately 96% of Americans now have access to both 25/3 
Mbps terrestrial broadband and \5/1\ Mbps Mobile LTE broadband.
    58. Continuing Marketplace Changes. Competition in the mass market 
communications space is likely to continue to grow, as barriers to 
entry have rapidly fallen for broadband providers using fixed wireless 
technology in densely populated areas. Industry analysts and incumbent 
wireline providers believe that 5G may allow wireless providers to 
capture a significant share of the residential broadband marketplace. 
T-Mobile committed, as a condition of its merger with Sprint, to roll 
out an in-home broadband service in millions of households, with a goal 
of serving the majority of zip codes by 2024. These 5G plans, and those 
of the other two

[[Page 1647]]

national wireless providers, are most advanced in dense urbanized areas 
where the deployment business case is most compelling. Other providers, 
including Starry, are also deploying fixed wireless technologies to 
serve urban areas in different frequency bands. And wireless as an 
intermodal alternative to wireline voice and broadband service is only 
going to increase further as 5G deployment progresses, further pushing 
DS0 loops into obsolescence. Cable providers have expanded their 
broadband networks beyond their current footprints to ready themselves 
for competition from forthcoming 5G services.
    59. Impairment Analysis. We find sufficient evidence of facilities-
based competition and competitive entry in urbanized area census blocks 
without reliance on UNE DS0 Loops and UNE Copper Subloops to determine 
that competitive LECs in those locations are no longer impaired without 
access to those UNEs, and that policy considerations weigh against 
maintaining these requirements. Because UNE Copper Subloops are used to 
connect DS0 loops to end-user premises, our conclusions about UNE DS0 
Loops apply equally to UNE Copper Subloops. Because of the many 
competitive alternatives available to customers in urbanized areas, we 
find that elimination of these unbundling requirements will not impact 
the provision of 9-1-1 service. Our conclusion is based on three 
related findings. First, robust intermodal competition, particularly 
from cable providers, now exists in urbanized areas, meaning that in 
these areas, ``the costs cognizable under the Act of unbundling that 
UNE outweigh the benefits of unbundling, even if some level of 
impairment might be present.'' Second, reasonably efficient competitors 
seeking to provide broadband and voice services in urbanized areas 
would use fixed wireless or other technologies, and not copper-based 
DS0 loops. Third, in light of this actual intermodal competition and 
potential competition from entering providers, continuing to require 
incumbent LECs to offer UNE DS0 Loops reduces incentives to invest and 
slows the transition to next-generation networks, in contravention of 
statutory goals we consider under section 251(d)(2) of the Act.
    60. Intermodal competition in the form of cable competition alone 
is enough to establish the existence of sufficient competition even in 
the absence of UNEs. Nearly all households in urbanized areas (98%) 
live in census blocks served by cable broadband with speeds of at least 
25/3 Mbps, and incumbent LECs have deployed broadband meeting this 
speed threshold in 73% of these areas. Incumbent LEC affiliation is 
determined at the holding company level and for all census block which 
the incumbent LEC's study area overlaps the census block. We exclude a 
provider's deployment if the provider is not an incumbent LEC and whose 
last mile connection is based upon a copper technology (i.e., FCC Form 
477 Technology Codes 10, 11, 12, 20 and 30). In addition, 84% of 
households in urbanized areas live in census blocks served by at least 
two 25/3 Mbps providers without the use of UNEs, and 90% of households 
live in census blocks served by at least two 10/1 Mbps providers 
without the use of UNEs. For purposes of this analysis, we exclude 
deployment of non-incumbent LECs that report broadband based upon 
copper facilities on the assumption that these firms are likely using 
UNEs. Finally, because urbanized area census blocks are relatively 
small, to the extent that a facilities-based provider already serves 
one customer in a given census block, economies of scale are more 
likely to accrue to serve additional customers in that census block, as 
the Commission long ago noted. There are, on average, 0.057 square 
miles in a rural census block, 0.017 square miles in an urban cluster 
census block, and 0.028 square miles in an urbanized area census block.
    61. Moreover, it is our predictive judgment, supported by the 
record, that reasonably efficient competitors seeking to enter the 
fixed voice and broadband marketplace in urbanized areas for 
residential and small business customers are likely to use a variety of 
technologies, including fixed wireless, rather than relying upon the 
existing copper-based local loop network or building a similar network. 
That is, the use of DS0 loops to enter the broadband and voice 
marketplace in urbanized areas is no longer a reasonably efficient 
technology. Indeed, the three national mobile wireless carriers 
continue to invest in 5G-based fixed wireless service, which will 
provide additional fixed-service choices for voice and broadband 
services, particularly in dense urbanized areas where 5G is being first 
deployed and where small cell technology is most efficiently used. And 
other fixed wireless providers are similarly deploying innovative 
solutions. The record also indicates that a range of providers are 
deploying fiber-to-the-home networks, including but not limited to 
incumbent and competitive LECs. To the extent competitive LECs claim 
they remain dependent upon UNE DS0 Loops in these urbanized areas to 
serve new customers in order to obtain the necessary scale and revenue 
to fund such fiber-to-the-home builds, we no longer find these claims 
compelling. These competitive LECs are not ``new entrants'' in these 
urbanized areas any longer, and network expansion like that for other 
types of technology providers should no longer be based on unnecessary 
unbundled DS0 loops. These and other technologies, rather than copper 
loops, are reasonably efficient methods of entry into urbanized areas 
today.
    62. Our conclusions about actual and potential competition are 
supported by our ``at a minimum'' authority under section 251(d)(2). We 
are not only permitted to look to the impact of unbundling requirements 
on broadband deployment as ``rationally related to the goals of the 
Act,'' but are required to take this important policy goal into 
account. We reject the Electronic Frontier Foundation's argument that 
we should reconsider our decisions in the 2000s to end the unbundling 
of fiber-to-the-home loops. As the Commission has consistently found, 
unbundling fiber-based loops could reduce the incentives for both 
incumbent and competitive LECs to invest in next-generation networks, 
and there is no evidence to suggest that unbundling's effect on 
incentives to invest would be any different in low-income urban 
markets. In doing so, we find that continued unbundling of DS0 loops 
would inhibit, rather than promote, broadband deployment and the 
transition to next-generation networks and services in urbanized areas, 
because continued unbundling at regulated rates could artificially slow 
the transition away from legacy services and reduce incentives to 
invest in more advanced technologies, such as fixed wireless and fiber-
based networks.
    63. While we proposed in the NPRM a finding of no impairment in 
urban census blocks, which would include both urbanized areas (areas of 
50,000 or more people) and urban clusters (areas with at least 2,500 
but less than 50,000 people), based on the record and our own data, we 
conclude that we should limit that finding only to urbanized area 
census blocks. The data show that there are fewer competitor options in 
census blocks categorized as urban clusters and rural areas than in 
urbanized area census blocks. For example, as of December 31, 2019, 
approximately 84% of households in urbanized areas lived in census 
blocks with two or more providers of 25/3 Mbps broadband, compared to 
59% of households in urban clusters and 42% in rural areas. Incumbent 
LEC affiliation is determined

[[Page 1648]]

at the holding company level and for all census block which the 
incumbent LEC's study area overlaps the census block. We exclude a 
provider's deployment if the provider is not an incumbent LEC and whose 
last mile connection is based upon a copper technology (i.e., FCC Form 
477 Technology Codes 10, 11, 12, 20 and 30). We therefore reject 
arguments that we should extend relief to urban clusters. By limiting 
DS0 loop unbundling relief to urbanized areas, we also obviate the 
concerns of commenters that consumers in less densely populated areas, 
particularly urban clusters, may lose their only source of competition 
or lose access to high-speed broadband altogether. Commission staff 
analysis of FCC Form 477 deployment data as of December 31, 2019 and of 
study area maps indicates that approximately 42,000 households have a 
single provider option for 25/3 Mbps that may rely on UNE DS0 Loops, 
based on the number of households who live in census blocks where a 
single provider reports 25/3 Mbps deployment for residential customers 
over a copper wire loop. The identification of the provider as a CLEC 
is based upon the provider's holding company name and incumbent LEC 
study area maps that indicate that the provider is not the incumbent 
LEC. About 35,000 of these households live in rural areas and urban 
clusters where UNE DS0 Loops will remain available. We believe that the 
approximately 7,000 households who live in urbanized areas (just 0.008% 
of the 88 million households in urbanized areas) with only one provider 
of 25/3 Mbps will not be negatively affected by our action today for 
two reasons. First, as discussed below, we provide a two-part 
transition period for UNE DS0 Loops in urbanized areas, including a 2-
year period for new orders and a 4-year period for existing orders. 
Second, we believe that these areas may be among the ripest for entry 
by competitive providers, including fixed wireless providers, based on 
their relative density and now that UNE DS0 loops will no longer be 
available in these areas after the transition.
    64. Forbearance Analysis. The facts supporting our finding of non-
impairment equally support an independent finding that forbearance from 
our UNE DS0 Loop and UNE Copper Subloop requirements in urbanized area 
census blocks is appropriate. As with UNE DS1 and DS3 Loops, we find 
that forbearance is appropriate based on our analysis of the specific 
circumstances at issue. Competitive LECs wanting to continue offering 
the same services currently provisioned over UNE DS0 Loops in urbanized 
areas will have access to commercial alternatives, subject to the 
existence of ``suitable facilities'' after the transition. And because 
the marketplace for mass market last-mile loops is competitive, as 
discussed above, the marketplace will discipline the prices of those 
services.
    65. Section 10(a)(1). We conclude that enforcement of UNE DS0 Loop 
obligations in urbanized area census blocks is not necessary to ensure 
just and reasonable rates. Intermodal competition in urbanized areas 
has increased dramatically since the Commission adopted the current DS0 
loop unbundling obligations, and mass market customers in urbanized 
areas now have numerous voice and broadband options available to them. 
The competitive pressures posed by those intermodal competitors will 
serve to constrain incumbent LEC rates for commercial replacement 
offerings to UNE DS0 Loops. Both actual and potential competition force 
incumbent LECs to compete on price in order to retain, and grow, their 
existing customer bases. Competition overall constrains incumbent LEC 
rates to end users. And incumbent LECs have an incentive to make 
wholesale inputs available at reasonable rates so that they will 
continue to earn revenues from competitive LECs rather than losing 
those revenues to intermodal competitors. The record supports 
forbearing from this unbundling obligation, as enforcement of the 
obligation is not necessary to ensure just and reasonable rates in this 
competitive environment.
    66. Section 10(a)(2). We find that the evolving marketplace and the 
statutory and regulatory safeguards that work to ensure just and 
reasonable rates also ensure that consumers will not be harmed by 
forbearance from enforcement of the UNE DS0 Loop obligation. Most 
importantly, consumers in urbanized areas now have a multitude of 
intermodal competitors, with others attempting to enter, vying for 
their voice and broadband business. The fact that these competitors use 
more modern technologies than copper-based local loops supports our 
decision in this document. As we found in the UNE Analog Loops and 
Avoided-Cost Resale Forbearance Order, ``regulations that subsidize 
end-user customers to remain on legacy services and technologies run 
counter to the Commission's goal of facilitating technology transitions 
to the long-term benefit of all consumers.'' We also note that there is 
evidence that wholesale alternatives to UNE DS0 Loops currently exist 
in certain areas or are starting to emerge. For example, according to 
CenturyLink, at least three large cable providers launched products 
intended to serve as alternatives to UNE Analog Loops shortly after the 
Commission adopted the UNE Analog Loops and Avoided-Cost Resale 
Forbearance Order. And CenturyLink itself offers a UNE DS0 Loop 
wholesale alternative in areas in which it was previously granted 
forbearance. Moreover, incumbent LECs have committed to making 
wholesale alternatives commercially available ``where suitable 
facilities exist'' ``in any area in which unbundled DS0 loops are no 
longer available,'' which competitive LECs can use to provide service.
    67. Section 10(a)(3). Finally, we find that forbearing from the UNE 
DS0 Loop obligation in urbanized area census blocks is in the public 
interest as it promotes the policy of facilitating the deployment of 
next-generation networks and services and encouraging the transition 
away from legacy facilities. As we noted in the UNE Analog Loops and 
Avoided-Cost Resale Forbearance Order, end users transitioning from TDM 
to new technologies and services ``will experience the benefits the 
Commission has recognized as flowing from that transition,'' including 
``not only the benefits from the technologies themselves but also from 
the vibrant competition associated with next-generation [] services.'' 
Indeed, extensive intermodal competition has already developed in these 
areas. Retaining UNE DS0 Loop obligations in this competitive 
environment in urbanized area census blocks could actually harm the 
facilities-based competitive options that are currently available and 
developing, because the use of UNEs at cost-based rates may allow 
providers using legacy technologies to undercut new entrants using 
fixed wireless and other advanced technologies, as well as reducing 
competitive LECs' incentives to invest in advanced technologies. And 
continued reliance on legacy services by end users reduces the 
incentive of incumbent and competitive LECs alike to deploy advanced 
networks and services. We therefore find retaining this requirement in 
urbanized areas would have an adverse effect on the public interest. 
The Commission has previously expressed its preference for facilities-
based competition.
    68. Geographic Area. Certain commenters urge us to find that 
competitive LECs are not impaired without access to all UNE DS0 Loops 
or that we should forbear from this obligation on a nationwide basis. 
We

[[Page 1649]]

disagree. Two of these commenters (USTelecom and AT&T) subsequently 
entered into a joint compromise proposal that appears to limit their 
request for relief to urbanized areas subject to certain conditions. 
While broadband deployment and competitive entry may be increasing in 
urban clusters and rural areas, competitive broadband availability in 
these areas continues to lag behind densely populated urbanized areas, 
and the costs of deployment are inherently higher as density falls.
    69. Alternatively, other commenters urge us to make our findings of 
no impairment or forbearance on a county basis rather than on a census 
block basis, as proposed in the NPRM, for purposes of administrative 
efficiency. Still others request that we implement our findings on a 
wire center basis, to provide incumbent LECs with flexibility in 
implementation. We disagree that a geographic basis other than census 
blocks is the best geographic area to rely upon. The Commission's Form 
477 data is reported on a census block level, thus making that 
geographic boundary the most appropriate for measuring the extent of 
competitive facilities-based deployment by technology and the 
availability of competitive broadband alternatives for households. 
While incumbent LECs provision UNEs at the wire center level, and some 
wire centers serve both urbanized areas and urban cluster and rural 
census blocks, to the extent an incumbent LEC does not wish to take 
measures to distinguish between the different types of census blocks, 
we find that it is better to err on the side of overinclusiveness for 
UNE DS0 Loops, to avoid eliminating such UNE access for customers 
located in rural areas and urban clusters. Indeed, the Commission erred 
on the side of overinclusiveness when defining Tier 3 Wire Centers for 
the purpose of where to unbundle transport.
    70. Cable Deployment. Certain commenters assert that reliance on 
cable deployment as evidence of non-impairment is inappropriate due to 
cable provider first-mover advantages, because they already had 
extensive facilities deployed for providing video service and had an 
established customer base. We disagree. For one, our impairment and 
forbearance analyses require us to consider competition from all 
sources. When affirming the Commission's decision not to require the 
unbundling of the broadband capabilities of hybrid loops, the D.C. 
Circuit held that ``robust intermodal competition from cable 
providers'' was sufficient evidence of competition, in itself, to 
justify the Commission's decision. The same extensive investment in the 
legacy cable video network that enabled cable companies to provide 
competitive voice and broadband service in competition with incumbent 
LECs and served as the underpinning of the Commission's decision to 
refrain from unbundling hybrid loop broadband capabilities applies 
equally to our decision today for UNE DS0 Loops. If the Commission was 
permitted to rely on cable deployment to support a decision not to 
unbundle the broadband capabilities of hybrid loops, we may rely on it 
to support our decision to eliminate unbundling for DS0 loops here. 
Moreover, we can consider the effects of intermodal competition in our 
decision to weigh other factors when considering whether to order 
unbundling, particularly the incentives for broadband deployment, based 
on our section 251(d)(2) authority.
    71. Form 477 Data. Some commenters assert that we should not rely 
on Form 477 data to support competition findings because of flaws in 
that data. We disagree. Our UNE DS0 Loop relief in this Order is 
limited to urbanized areas. The census blocks in those areas are 
generally extremely small, meaning even in the unlikely event a 
provider is serving only one or a few locations in these census blocks, 
we can infer that the other locations in the census block are extremely 
likely to be served in the near future. Indeed, based on the most 
recent Form 477 data, cable's footprint increased by over 645,000 
households, or 1.8 million people, from December 2018 to December 2019. 
Our assumption of such a deployment strategy, considering the high 
fixed costs of broadband deployment, is a ``reasonable inference[] 
regarding the prospects for competition in one geographic market from 
the state of competition in other, similar markets,'' as we are 
required to make per the United States Telecom Ass'n v. FCC, 359 F.3d 
554 (D.C. Cir. 2004) decision (USTA II decision).
    72. 5G and Other Nascent Technologies. Certain commenters assert 
that we should not rely on potential 5G deployment to support findings 
of potential competition sufficient to find non-impairment. Again, as 
we explain above, DS0 loops are no longer a reasonably efficient 
technology to provide voice or broadband services in urbanized areas. 
We must look not only to existing competition in making an impairment 
finding, but to all sources of potential competition as well. And the 
impairment inquiry specifically ``presume[s] that a requesting carrier 
will use reasonably efficient technology.'' As we have indicated, we 
believe it is increasingly likely to be fixed wireless technology, 
whether provided by 5G or other means. We therefore ``explicitly reject 
arguments that support unbundling based on the costs associated with a 
particular architecture or approach--even an architecture or approach 
employed by the incumbent LEC--where entry using a more efficient 
available technology would permit economic entry.''
    73. ``Natural Forbearance.'' Certain commenters assert that the 
Commission's copper retirement rules provide incumbent LECs an avenue 
for ``natural forbearance'' and thus assert that we should not provide 
UNE DS0 Loop relief through deregulatory means. Because section 
251(c)(3)'s requirements do not apply to fiber facilities (other than 
dark fiber transport), see 47 CFR 51.319, an incumbent LEC may obtain 
unbundling relief by deploying fiber or other next-generation networks 
and then retiring its copper facilities pursuant to our network change 
disclosure rules. Incumbent LECs retire their copper facilities through 
a notice-only process, without the need to seek our authorization. The 
continued unbundling obligation, commenters assert, thus acts as an 
incentive for incumbent LECs to deploy fiber. We are unpersuaded. 
First, unbundling imposes significant economic costs not recognized by 
this argument. Second, unbundling requirements lack sufficient 
countervailing benefits in densely populated urbanized areas, given the 
degree of competition and potential entry that already exists in those 
areas separate from the incumbent LEC's decision whether or not to 
retire copper in that area. Given the existence of competition in 
urbanized areas that does not rely on access to UNE DS0 Loops, we find 
that this one-sided regulation giving certain competitive LECs an 
economic advantage where others have entered the market without such an 
advantage is unwarranted, and incumbent LECs should no longer have to 
bear this lopsided burden.
    74. Single Competitor Not Enough to Find Non-Impairment. Certain 
commenters also oppose the proposed finding of non-impairment in the 
NPRM because, they assert, a single competitor is not sufficient to 
show that competitive providers are not impaired without unbundled 
access to the particular network element. However, we find evidence of 
existing and potential intermodal competition in urbanized areas. Nor 
is this argument consistent with the D.C. Circuit's holding in the USTA 
II decision that the presence of intermodal competition from cable 
providers alone was

[[Page 1650]]

sufficient to support eliminating unbundling obligations for hybrid 
loops. In any event, competitive providers will still have access to 
UNE DS0 Loops in census blocks in rural and urban cluster areas after 
the relief we grant in this order becomes effective, thus largely 
obviating the concerns of these commenters.
    75. Transition Period. While the NPRM proposed a three-year 
transition period and sought comment on a six-month period for new 
orders, numerous stakeholders have negotiated and proposed an 
alternative transition timeframe that we find to be reasonable based on 
the record in this proceeding and which we adopt instead. We condition 
our relief from UNE DS0 Loop and associated UNE Copper Subloop 
obligations on a two-part transition, consistent with the Compromise 
Proposal. First, we permit competitive LECs to order new UNE DS0 Loops 
for an additional 24 months after the effective date of this order. 
This timeframe will enable competitive LECs to continue to execute 
short-term business plans, honor contractual obligations with new or 
existing customers, including small businesses, and replace UNE DS0 
Loops lost through end-user customer moves or loop degradation, while 
they determine which alternative voice service option will best serve 
their customers' needs. Second, we adopt a 48-month grandfathering 
period for all competitive LEC customers. The 48-month transition 
timeframe within which all UNE DS0 Loops (including any new UNE DS0 
Loops ordered during the first 24 months) must be transitioned to 
alternative arrangements will commence on the effective date of this 
order. Industry organizations and their members, accounting for the 
lion's share of buyers and sellers of these UNEs, agree that this 48-
month period is reasonable and should provide more than enough time for 
competitive LECs and their customers to transition to alternative 
service arrangements. Competitive LECs typically have contract lengths 
of a minimum of three years with business or government customers. To 
the extent competitive LECs have entered into longer-term contracts 
with their customers without securing long-term contracts with their 
suppliers, they have done so at their own risk like any other business 
does, and we see no reasonable basis for accommodating that risk.
    76. We reject proposals calling for either a longer transition 
period or a shorter transition period. We find this four-year period to 
be a reasonable time frame that is sufficient to enable competitive 
LECs in these urbanized areas to transition away from depending on UNE 
DS0 Loops without stranding any investments they may have made while 
not burdening incumbent LECs with the costs of unbundling longer than 
necessary. We note that Puerto Rico Telephone Company, which was not a 
party to the INCOMPAS-USTelecom Compromise Proposal, supports the UNE 
DS0 relief, transition period, and associated conditions as a 
``reasonable balance.''
    77. During the relevant transition period for any competitive LEC 
customer, any UNE DS0 Loops that a competitive LEC leases as of the 
effective date of this Order shall be available for lease from the 
incumbent LEC at regulated UNE rates. Such rates are established either 
through negotiated interconnection agreements or through state-
commission-arbitrated rates applying certain Commission-developed 
pricing formulas. Our forbearance action is not intended to upset pre-
existing interconnection agreements or other contractual arrangements 
that may currently exist nor pre-existing state-commission-arbitrated 
rates during the transition period (including any already-adopted state 
commission scheduled changes in UNE rates), which should quell concerns 
of those fearing near-term price increases for UNE DS0 Loops resulting 
from this Order. However, beginning with month 37 of the grandfathering 
period, incumbent LECs may raise their prices by up to 25%. Delaying 
any price increase for the first three years of the transition period 
should obviate concerns about economic pressure accompanying any such 
increase. However, allowing a price increase during the final year of 
the transition will further incentivize competitive LECs to transition 
their customers off of legacy networks. And incumbent LECs will be 
entitled to charge market rates after month 48, when the grandfathering 
period will expire. And incumbent LECs have committed to providing 
commercial alternatives for DS0s at the end of the transition period 
where the facilities exist to do so. Of course, the transition 
mechanism we adopt is simply a default process, and competitive and 
incumbent LECs remain free to negotiate different arrangements 
superseding this transition period and replacing UNE DS0 Loop 
arrangements with negotiated commercial arrangements at any earlier 
time. We find this approach will ensure an orderly transition for end-
user customers of affected competitive LECs by mitigating any immediate 
service disruption or rate changes that could otherwise be experienced 
by these end users if current rates for these UNE DS0 Loops were 
immediately eliminated.
3. UNE Narrowband Voice-Grade Loops
    78. In the NPRM, we proposed to eliminate all remaining narrowband 
voice-grade loop unbundling obligations. We find that competitors are 
no longer impaired without access to these elements, nationwide. 
Moreover, we find that continued unbundling of these network elements 
is no longer justified because it contravenes the Congressionally-
mandated policy goal of ensuring the deployment of next-generation 
networks and services. We also adopt our proposal and independently 
find that forbearance from the remaining UNE Narrowband Voice-Grade 
Loop obligations nationwide is warranted.
    79. Background. Under our current rules, incumbent LECs must 
provide three specific types of unbundled narrowband voice-grade loops: 
UNE Analog Loops, 64 kbps voice-grade channels over last-mile fiber 
loops when an incumbent LEC retires copper (UNE 64 kbps Voice-Grade 
Channel Over Fiber Loops), and the TDM capabilities of hybrid loops 
(UNE Hybrid Loops) (collectively, UNE Narrowband Voice-Grade Loops).
    80. UNE Analog Loops are one type of copper loop that incumbent 
LECs must make available to competitors under the Commission's rules 
implementing section 251(c)(3). Notably, UNE Analog Loops are capable 
of providing only legacy TDM voice service, often referred to as plain 
old telephone service, or ``POTS.'' UNE Analog Loops, by definition, 
are not capable of providing or supporting digital communications, 
including modern IP-based services or even digital subscriber line 
(DSL) service. In the recent USTelecom forbearance proceeding, we 
granted forbearance relief from unbundling requirements for UNE Analog 
Loops to price cap incumbent LECs in their service areas. We granted 
this relief due to extensive intermodal competition present in the 
voice marketplace, the harmful marketplace distortions generated by 
outdated regulations, and because the continued existence of UNE Analog 
Loops reduced incentives for both incumbent and competitive LECs to 
invest in their own facilities and to transition to next-generation 
networks.
    81. UNE Hybrid Loops are another type of loop that incumbent LECs 
must make available to competitors under the Commission's rules 
implementing section 251(c)(3). Hybrid loops are local loops ``composed 
of both fiber optic

[[Page 1651]]

cable, usually in the feeder plant, and copper wire or cable, usually 
in the distribution plant.'' Our rules currently require that incumbent 
LECs unbundle either (1) a TDM voice-grade capable 64 kbps channel or 
(2) a spare copper loop if the requesting carrier seeks to provide 
narrowband services, and only the TDM features, functions, and 
capabilities of hybrid loops if the requesting carrier seeks to 
provision broadband services. UNE Hybrid Loops are used to provide the 
``exact same legacy TDM-based services that could be provided with UNE 
Analog Loops.'' The only difference is that UNE Hybrid Loops ``provide 
those services partially over fiber facilities, rather than over 
copper-only facilities.'' In the Triennial Review Order, the Commission 
declined to order unbundling of the packet-based capabilities of hybrid 
loops, because unbundling ``these next-generation network elements 
would blunt the deployment of advanced telecommunications 
infrastructure by incumbent LECs and the incentive for competitive LECs 
to invest in their own facilities, in direct opposition to the express 
statutory goals authorized in section 706.''
    82. The UNE 64 kbps Voice-Grade Channel Over Fiber Loops obligation 
was created when the Commission eliminated unbundled access to fiber-
based local loops because, among other reasons, requiring unbundling of 
fiber-based local loops would ``undermine important goals of the 1996 
Act,'' particularly the section 706 goal to encourage the deployment of 
advanced telecommunications capability to all Americans. The Commission 
found, however, that where an incumbent LEC has retired its copper 
facilities, lack of access to an incumbent LEC fiber loop would impair 
a competitive carrier in its provision of narrowband voice services it 
had been providing over the unbundled copper loop. In essence, this 
``very limited'' requirement was intended to prevent incumbents from 
exercising their ``sole control'' over the disposition of copper loops 
(by retiring the copper loop and replacing it with a fiber-based local 
loop) to disrupt competitors' provision of narrowband services. By 
2015, the Commission recognized that this requirement itself could 
undermine incentives for broadband deployment and granted forbearance 
on a forward-looking basis to incumbent LECs from the requirement to 
make available a 64 kbps voice-grade channel over overbuilt fiber 
loops. This 64 kbps unbundling requirement remains in the Code of 
Federal Regulations. The Commission found that this unbundling 
requirement could impede copper loop retirements and the ongoing 
transition from copper to fiber and from legacy TDM-based services to 
next-generation networks and services. While the Commission found that 
this UNE had a ``decreasingly relevant purpose'' as a safeguard to 
protect narrowband voice competition during the copper-to-fiber 
transition, it nevertheless retained the 64 kbps voice-grade channel 
unbundling obligation for existing users.
    83. UNE Narrowband Voice-Grade Loops, be they UNE Analog Loops, UNE 
Hybrid Loops, or UNE 64 kbps Voice-Grade Channel Over Fiber Loops, are 
used, if at all, almost exclusively for the provision of switched 
access voice-grade service, which we have found customers are migrating 
away from in favor of IP- and wireless-based voice services provided by 
multiple intermodal providers. Our conclusions in the UNE Analog Loop 
and Avoided-Cost Resale Forbearance Order were based on Form 477 data, 
which is collected on a nationwide basis. Indeed, in 2019, incumbent 
LEC legacy networks provided only about 8% of retail voice 
subscriptions across all technologies, serve a minority of both wired 
residential connections and wired business connections, and face 
growing competition from voice service alternatives including 
facilities-based fixed voice providers such as cable companies 
providing VoIP, mobile wireless facilities-based providers and 
resellers, and VoIP providers offering over-the-top services via 
broadband.
    84. Impairment Analysis. Consistent with our NPRM proposal to 
eliminate these obligations, we find that competitors are not impaired 
without access to UNE Narrowband Voice-Grade Loops due to the 
widespread availability of intermodal competition, the declining number 
of incumbent LEC voice subscriptions, the lack of demand for these 
UNEs, and the migration away from legacy TDM services. Section 
251(d)(2) mandates that the Commission consider ``at a minimum'' 
whether access to proprietary network elements is necessary and a 
competitor would be impaired without access to such network elements. 
We find that continued unbundling of these network elements contravenes 
the congressionally mandated policy goal of ensuring the deployment of 
next-generation networks and services.
    85. UNE Analog Loops. We find that competitors are not impaired 
without access to UNE Analog Loops nationwide. Today, there are a 
multitude of competitive alternatives for voice services that do not 
rely on an incumbent LEC's legacy network. We find there is no longer 
any credible basis to claim competitors are impaired without access to 
these UNE Analog Loops. First, voice-grade copper loops are no longer a 
reasonably efficient technology to enter the voice marketplace, in 
light of facilities-based and over-the-top alternatives to provide 
voice service. A reasonable entrant would use any of a number of newer 
technologies and services capable of providing advanced voice and 
broadband services, including wireless technologies. And a number of 
over-the-top voice capabilities are available that could also be used 
to enter the voice market today without constructing network 
facilities, instead relying on the broadband capabilities of other 
providers' networks.
    86. Second, intermodal competition for voice services is so 
advanced that competitive providers, including cable providers, 
wireless providers, and other VoIP providers, have come to dominate the 
voice service marketplace. The level of competition, much of which 
evolved without UNEs, is such that the cost of unbundling can no longer 
be justified. As the Commission noted in 2004, impairment can only be 
found for low-capacity loops ``if no alternatives outside the 
incumbent's network are available.''
    87. Finally, the declining share of incumbent LEC switched-access 
voice subscriptions in recent years and the prevalent deployment of 
facilities-based alternatives indicates that incumbent LECs no longer 
have a unique position in the voice service market. We further find 
that continued unbundling of these network elements that serve only to 
preserve outdated legacy voice services slows the transition to next-
generation networks and services in contravention of our significant 
policy objectives in promoting the deployment of advanced 
telecommunications capabilities. Our decision to eliminate UNE 
Narrowband Voice-Grade Loop obligations furthers the Commission's 
ultimate goal of fostering the deployment of next-generation networks 
and services and consumers' migration to next-generation services.
    88. UNE Hybrid Loops. Nationwide elimination of UNE Hybrid Loop 
obligations is also appropriate because reasonably efficient 
competitors are not impaired without access to these UNEs--i.e., no 
reasonably efficient competitor would seek to enter today's voice-
service market by using a loop solely capable of providing TDM service. 
The ``widespread deployment of facilities-based alternatives'' to the 
TDM-based services provided over UNE

[[Page 1652]]

Hybrid Loops and the fact that intermodal competition for voice 
services is so advanced indicates there is no basis for competitors to 
claim they are impaired without access to TDM-based services, 
particularly those provided over UNE Hybrid Loops. Further, competitive 
LECs no longer face significant barriers to entering the voice market 
without access to the TDM-based services provided over UNE Hybrid Loops 
owned by incumbent LECs. Competitors have come to dominate the voice 
service marketplace using technologies that do not include TDM-based 
voice. The declining amount of incumbent LEC voice subscriptions and 
the de minimis demand for the TDM-based services provided over UNE 
Hybrid Loops demonstrates that access to these UNEs are not necessary 
for a reasonably efficient competitor to enter today's voice-service 
marketplace. For these reasons, no reasonably efficient competitor 
would seek to enter today's voice service market by using a loop solely 
capable of providing TDM service, just as we find with respect to UNE 
Analog Loops. Rather, such an entrant using its own facilities would 
provide any of a number of newer technologies and services capable of 
providing both voice and broadband services, or provide over-the-top 
service relying on other providers' broadband networks. Moreover, 
eliminating access to the TDM capabilities of UNE Hybrid Loops will 
reduce potential delays to the TDM-to-IP transition and will promote 
broadband deployment that will benefit American consumers and 
businesses, supporting important goals of the Act.
    89. Grandfathered UNE 64 kbps Voice-Grade Channel Over Fiber Loops. 
We also eliminate the remaining previously grandfathered UNE 64 kbps 
Voice-Grade Channel Over Fiber Loops obligation as reasonably efficient 
carriers are not impaired without continuing access to these 
grandfathered arrangements. The de minimis use of the grandfathered UNE 
64 kbps Voice-Grade Channel Over Fiber Loops demonstrates that 
continued access to these UNEs is not necessary for a reasonably 
efficient competitor to enter today's voice-service marketplace. As 
with the remaining UNE Analog Loops and UNE Hybrid Loops, no 
competitive LECs or other party in the record has specifically 
indicated that any provider is relying upon these grandfathered UNEs to 
provide voice services today. And even where some competitive LECs may 
continue to do so, this use does not overcome the compelling evidence 
of competitive voice alternatives that warrant a finding of non-
impairment. In sum, the impact of eliminating these grandfathered UNEs 
is negligible given the lack of demand for this grandfathered UNE and 
the migration from legacy TDM voice service to newer technologies and 
services. A reasonably efficient competitor would not look to UNE 64 
kbps Voice-Grade Channel Over Fiber Loops as a reasonably efficient 
technology for entering the voice services marketplace today. 
Competitors are therefore not impaired without access to the remaining 
grandfathered UNE 64 kbps Voice-Grade Channel Over Fiber Loops. And 
eliminating these remaining channels that perpetuate outdated 
technology will further reduce potential delays to the TDM-to-IP 
transition, facilitating the goals of the Act.
    90. Forbearance--Analog Loops. Section 10(a)(1). As a separate and 
independent ground for eliminating UNE Narrowband Voice-Grade Loops 
requirements nationwide, we conclude that the remaining UNE Analog Loop 
obligations are unnecessary to ensure that the charges for voice 
services are just and reasonable for the same reasons set forth in the 
UNE Analog Loop and Avoided-Cost Resale Forbearance Order. No party has 
advanced a theory under which incumbent LECs could engage in 
unreasonable practices and classifications regarding the remaining UNE 
Analog and UNE Hybrid Loops without also being able to charge unjust 
and unreasonable rates. As there is no record evidence to the contrary, 
we find that that the circumstances in non-price cap areas are 
indistinguishable from those in price cap areas with respect to these 
UNEs that can only be used to provision voice-grade service. Further, 
competitors have not specifically indicated that they are purchasing or 
relying upon these UNEs to provide voice services in non-price cap 
areas where other voice alternatives do not exist. Because of lack of 
record evidence of use of UNE Narrowband Voice-Grade Loops, we also 
reject the argument that we should expand the rural exemption to 
include these loops. In fact, very few of these UNEs still exist in 
non-price cap areas. Price-cap incumbent LECs account for over 99% of 
UNE loops provisioned to competitors. The record shows virtually 
uniform support for eliminating the requirements for voice-grade loops 
due to the changing voice-services marketplace and lack of demonstrated 
need for these requirements. TPx contends that ``[t]he Commission 
should evaluate whether the loss of analog voice loops makes 
competition and pricing conditions better or worse in the residential 
voice market before it de-lists additional DS0 UNEs based on a claimed 
competitive residential voice service market,'' but does not 
specifically challenge extending unbundling relief to the remaining UNE 
Analog Loops. We previously forbore from UNE Analog Loop requirements 
for price cap incumbent LECs in light of the ``overwhelming evidence 
demonstrating the increasing migration from legacy TDM voice service to 
IP-based and wireless voice communications capabilities provided by 
multiple intermodal providers.'' UNE Analog Loops in non-price cap 
areas are used to provide the exact same outdated TDM-based services as 
UNE Analog Loops in price cap areas. Moreover, UNE DS0 Loops, which can 
also be used to provide voice service, will still be available in rural 
and urban cluster census blocks, which account for approximately 85% of 
the population residing in census blocks overlapping non-price cap 
study areas. We find that it is in the incumbent LECs' interest to 
continue to serve wholesale customers. In fact, incumbent LECs have 
committed to offer commercial replacements in areas where UNE DS0 Loops 
will no longer be available. UNE DS0 Loops are provided over the very 
same facilities as UNE Analog Loops, only without the TDM equipment 
placed on the loops by the incumbent LEC to limit the loop to voice-
grade service. We therefore find that forbearance from the remaining 
UNE Analog Loop requirements in non-price cap areas will not result in 
unjust or unreasonable voice service rates.
    91. Section 10(a)(2). We also find that enforcement of the 
remaining UNE Analog Loop obligations is unnecessary for the protection 
of consumers for the reasons discussed above and in the UNE Analog Loop 
and Avoided-Cost Resale Forbearance Order. Specifically, we find that 
forbearance will not result in unjust or unreasonable rates for 
consumers, nor will consumers risk losing service given that 
competitive LECs continue to have other means by which to offer 
consumers voice service. While a handful of commenters express concern 
about increased costs leading to increased prices for consumers, the 
``explosion of competition [in the voice service market] amply protects 
consumers far better than narrow, technology-specific Commission 
dictates ever could.'' Moreover, the majority of non-price cap 
incumbent LECs are rural LECs, most of which qualify for the rural 
exemption from all section 251(c) requirements, including

[[Page 1653]]

UNE Analog Loops. They therefore already have no obligation to offer 
their telecommunications services to competitive LECs at UNE prices 
while the rural exemption remains in place. Further, UNE DS0 Loops will 
remain available in urban clusters and rural areas after forbearance, 
and incumbent LECs have committed to provide commercial alternatives to 
UNE DS0 Loops after they are eliminated in urbanized areas. Those UNEs 
not only afford the same voice capabilities as UNE Analog Loops, they 
have the added advantage of being capable of carrying broadband 
service. While retaining UNE DS0 Loops or UNE Narrowband Voice-Grade 
Loops impose costs on incumbent LECs, we find DS0s are worth keeping 
available in urban clusters and rural areas because of the benefits 
DS0s have for rural broadband. The narrowband-only capability of UNE 
Narrowband Voice-Grade Loops does not have the same benefits for 
consumers. Additionally, this forbearance continues to facilitate the 
TDM-to-IP transition, which benefits all consumers in the long term.
    92. Section 10(a)(3). Moreover, we find that forbearance from the 
remaining UNE Analog Loops requirements is consistent with the public 
interest for the same reasons we detailed in the UNE Analog Loop and 
Avoided-Cost Resale Forbearance Order--that is, reducing reliance on 
outdated technology encourages competition based on next-generation 
networks and broadband services. Forbearance from outdated unbundling 
rules will promote next-generation infrastructure deployment by both 
incumbent LECs and competitive LECs that otherwise would have relied on 
UNEs. We reject arguments that we should refrain from forbearance 
because of a lack of commercial alternatives for voice-grade analog 
loops. Again, UNE DS0 Loops, which afford the same voice capabilities 
as UNE Analog Loops and are also capable of carrying broadband service, 
will remain available after forbearance in rural areas and urban 
clusters. Additionally, at least one major incumbent LEC is now 
offering commercial alternatives to UNE Analog Loops, and the other 
major incumbent LECs have agreed to offer commercial alternatives to 
UNE DS0 Loops once they are no longer available as UNEs. Finally, the 
Act requires us to protect competition, not competitors, and we do not 
believe that the continued availability of UNE Analog Loops is 
necessary in light of the competitive nature of today's voice 
marketplace. We thus grant nationwide forbearance from the remaining 
UNE Analog Loop requirements as ``it is no longer necessary to require 
. . . once-upon-a-time market-opening obligations that today amount to 
disparate regulatory burdens that frustrate the transition to advanced 
communications services offered over next-generation networks.''
    93. UNE Hybrid Loops. We also forbear, on a nationwide basis, from 
our regulations requiring access to UNE Hybrid Loops. The fact that UNE 
Hybrid Loops are ``used to provide the exact same legacy TDM-based 
services'' that can be provided with UNE Analog Loops supports 
forbearance from this UNE requirement for the same reasons that we 
forbore from UNE Analog Loops in price-cap areas in the UNE Analog Loop 
and Avoided-Cost Resale Forbearance Order and in non-price cap areas 
today. There is broad record support for eliminating the requirements 
for UNE Hybrid Loops nationwide, and no party claims to use or rely on 
this UNE, nor does any party argue that the obligation should remain in 
place. Moreover, as the Commission found when it forbore from the 64 
kbps voice channel over fiber in 2015, the requirement to provide 
access to unbundled legacy elements when incumbent LECs upgrade their 
copper loops to modern facilities can slow the transition to next-
generation networks and services. Therefore, forbearance from the 
remaining UNE Hybrid Loop requirements meets the requirements of 
section 10(a) of the Act. We conclude that, because no carriers claim 
to use this UNE, pursuant to section 10(a)(1), forbearance from the UNE 
Hybrid Loop obligation will not result in unjust or unreasonable voice 
service rates, and we also find that enforcing the UNE Hybrid Loop 
obligation is unnecessary for the protection of consumers pursuant to 
section 10(a)(2). Forbearance from these obligations is also consistent 
with the public interest pursuant to section 10(a)(3) as it will remove 
an unnecessary regulatory burden and promote next-generation 
infrastructure deployment by both incumbent LECs and competitive LECs 
that otherwise would have relied on UNEs. We thus grant nationwide 
forbearance from the UNE Hybrid Loop requirements.
    94. Grandfathered UNE 64 kbps Voice-Grade Channel Over Fiber Loops. 
We also conclude that nationwide forbearance from the requirement that 
competitive LECs continue to receive unbundled access to the previously 
grandfathered 64 kbps voice-grade channels over fiber loops is 
appropriate pursuant to the requirements of section 10(a) of the Act. 
The Commission forbore from this requirement on a nationwide basis for 
all incumbent LECs in 2015 but grandfathered the obligation as to 
existing UNE 64 kbps Voice-Grade Channels Over Fiber Loops. The record 
indicates that there are only a small number of grandfathered UNE 64 
kbps Voice-Grade Channel Over Fiber Loops that are still being used. 
Indeed, no commenter argues this obligation should be preserved. To the 
extent competitors still rely on the grandfathered 64 kbps voice-grade 
channel over fiber loops, the three-part forbearance standard would be 
met for the same reasons it is met with respect to the remaining UNE 
Analog Loops and UNE Hybrid Loops. We note the lack of clarity in 
Commission precedent as to the precise status of this grandfathering 
obligation and find that we need not resolve it in this Order because 
elimination is justified based on the fact that no commenters argue to 
retain the UNE obligations for these 64 kbps voice-grade channels. 
Specifically, even if the cost for incumbent LECs to maintain the 
legacy equipment and systems is low, continuing to maintain and support 
this obligation solely to protect narrowband legacy voice service is no 
longer necessary to ensure just and reasonable rates or protect 
consumers in light of our prior findings about the state of the voice 
services marketplace and the de minimis use of these unbundled 64 kbps 
channels provisioned over fiber.
    95. Transition Period. The NPRM proposed a transition period of 
three years and sought comment on whether we should include a six-month 
period for new orders for all UNE Narrowband Voice-Grade Loops. Based 
on record evidence that UNE Narrowband Voice-Grade use is de minimis 
and that no commenter has indicated new orders are being placed, we 
find a three-year transition period appropriate for these UNEs and is 
consistent with the UNE Transport Forbearance Order and the UNE Analog 
Loop and Avoided-Cost Resale Forbearance Order, each of which provided 
three-year transition periods, ``to fully ensure that current and 
potential competition plays its expected role'' to ensure consumers 
currently using these services are not harmed, and for competitive LECs 
``to replace their embedded base of legacy TDM customer premises 
equipment and other increasingly obsolete TDM-based peripheral devices 
with new IP-capable equipment.'' In other contexts, the Commission 
similarly has adopted a uniform transition period of three years to 
allow existing customers to facilitate their transition to alternative 
facilities or arrangements in other deregulatory actions. We find that 
this transition

[[Page 1654]]

period supplies the necessary incentives for both incumbent and 
competitive LECs alike to deploy their own next-generation networks as 
expeditiously as possible, while ensuring that end users do not 
experience undue service disruption. Thus, competitive LECs must 
transition to alternative facilities or services within this three-year 
transition period that will begin on the effective date of this Order.
    96. No commenters specifically argued for a longer or shorter 
transition period for UNE Narrowband Voice-Grade Loops. We disagree 
with commenters who made more general assertions that the transition 
period for these and other UNEs should be shorter than three years for 
existing customers. We reason that three years is appropriate in this 
case to alleviate any potentially negative impact on previous 
investments in legacy customer premises equipment and service 
disruption.
    97. We also disagree with commenters who made general assertions 
there should be a longer transition period to place new orders and for 
existing customers to continue services. UNE Narrowband Voice-Grade 
Loops are no longer an ``integral part of the competitive landscape,'' 
and thus three years is sufficient to protect against service 
disruption, based on the record evidence that these UNEs are not 
extensively leased or relied upon nationwide. We find that a period 
longer than three years is unjustified and not in the public interest 
as it does not coincide with the Commission's policy goal of advancing 
next-generation networks and services.
    98. As with all UNE relief, we recognize that the transition 
mechanism we adopt today is simply a default process, and carriers 
remain free to negotiate alternative arrangements superseding this 
transition period. Our transition mechanism also does not replace or 
supersede any commercial arrangements carriers have reached for the 
continued provision of facilities or services. Therefore, we adopt a 
three-year transition of existing UNE Narrowband Voice-Grade Loops, 
commencing on the effective date of this Order.

B. Multiunit Premises UNE Subloops and Network Interface Devices

    99. In the NPRM, we proposed to eliminate UNE Subloops, including 
Multiunit Premises UNE Subloops, in the same geographic areas where we 
eliminated the underlying UNE Loop, and we take action consistent with 
that proposal as to UNE Copper Subloops above. Based on the record in 
this proceeding and in the interest of regulatory parity, however, we 
diverge from the proposal in the NPRM as to Multiunit Premises UNE 
Subloops and find that competitors are no longer impaired without 
access to Multiunit Premises UNE Subloop obligations nationwide and 
that access to this stand-alone UNE is not necessary for competitors to 
deploy their own facilities. We also independently find that 
forbearance is warranted for Multiunit Premises UNE Subloops separate 
and apart from our impairment analysis. We further find that 
competitors are no longer impaired without access to the UNE Network 
Interface Devices (NID) requirement and consistent with the NPRM, 
independently find that forbearance from this obligation is also 
appropriate because the record indicates that stand-alone NIDs are not 
necessary for competitive LECs to access potential customers. 
Therefore, we eliminate these unbundling obligations on a nationwide 
basis.
    100. Multiunit Premises UNE Subloops. Subloops are portions of a 
loop or ``smaller included segment[s] of an incumbent LEC's local loop 
plant.'' Competitive LECs generally order subloops with the intention 
of taking ``the competitor all the way to the customer.'' Our rules 
impose UNE obligations for two types of subloops--copper subloops, 
discussed above, and multiunit premises subloops. The Commission's 
rules separately address Multiunit Premises UNE Subloops due to 
previously-found specific ``impairments associated with facilities-
based entry in multiunit buildings or campus environments.'' The rule 
states that incumbent LECs must offer unbundled access to these 
subloops necessary to access wiring at or near a multiunit customer 
premises, i.e., all incumbent LEC loop plant between the minimum point 
of entry at a multiunit premise and the point of demarcation. Unlike 
copper subloops, the Multiunit Premises UNE Subloop includes the 
entirety of the loop plant regardless of the capacity level or type of 
loop the requesting carrier will provision to its customer, that is, 
including fiber or hybrid loops. The Multiunit Premises UNE Subloop 
also includes any inside wiring owned and controlled by the incumbent 
LEC.
    101. Impairment Analysis. The record demonstrates that incumbent 
LECs ``no longer have a unique competitive position in multiunit 
premises'' and thus, the very reason for requiring incumbent LECs to 
provide Multiunit Premises UNE Subloops no longer exists. Section 
251(d)(2) mandates that the Commission consider ``at a minimum'' 
whether access to proprietary network elements is necessary and a 
competitor would be impaired without access to such network elements. 
The Commission enacted these particular unbundling obligations to 
address issues related to facilities-based competitors accessing the 
customer's location where access to the premises was controlled or 
managed by someone other than the customer. In 2003, the Commission 
explained that incumbent LECs had ``first-mover advantages'' with 
respect to access to customers in multiunit premises because of their 
prior exclusive access. This no longer holds true today. In fact, the 
incumbent LEC ``frequently is not the `incumbent' in the multiunit 
premise,'' and ``it is the owner of the property, and not the 
[incumbent] LEC or another provider, that typically controls access to 
the property.'' Competitive LECs do not assert the contrary is true. 
Indeed, cable companies are often the incumbent provider in the MTE. 
Moreover, competitive LECs ``can economically run their own high-
capacity facilities to multiunit premises,'' and the Commission's rules 
prohibit LECs from entering into exclusive access contracts with the 
owners of commercial and residential multiunit premises. Therefore, we 
find that there is no evidence that incumbent LECs face lower barriers 
to entry to serve multiunit premises than competitive LECs. As such, 
incumbent LECs ``enjoy no particular advantage in deploying to 
[multiunit] premises'' and competitive LECs are no longer impaired 
without access to Multiunit Premises UNE Subloops.
    102. INCOMPAS and NWTA assert that competitive LECs ``serving MTEs 
face significant barriers to entry because of the many anticompetitive 
practices imposed by MTE owners and managers''--not incumbent LECs--and 
allude to these anticompetitive practices as ``incumbent providers and 
MTE owners entering into sale-and leaseback agreements''--which are 
largely agreements between cable providers and building owners. Indeed, 
most of the arguments against sale-and-leaseback arrangements in the 
MTE Docket contend that they are used by building owners and cable 
providers to circumvent the Commission's cable inside wiring rules, 
which only apply to certain video providers and not incumbent LECs. 
This argument is not directed at incumbent LECs, nor does it 
demonstrate that incumbent LECs face lower barriers to entry than 
competitive

[[Page 1655]]

LECs, and is therefore inapplicable in the UNE context. We find that 
this argument is more appropriately suited for our current MTE 
proceeding where many incumbent LECs are also calling for action 
related to what they claim are anticompetitive practices of MTE owners 
and incumbent providers, often cable providers.
    103. Granting relief from this stand-alone requirement will not 
disrupt any policy decisions that we may make in other proceedings 
examining competition in multiunit premises. Although competitive LECs 
have asserted that special barriers still exist to accessing multiunit 
premises, we find that concerns about access to multiunit premises 
should be and would be better addressed in the MTE proceeding, where we 
are considering ways to improve competitive broadband access to 
multiple tenant environments, and where any action we take would apply 
to a broader group of providers rather than only incumbent LECs. The 
Commission found in the Triennial Review Remand Order, ``it would be 
inappropriate to distort our unbundling analysis in an effort to solve 
alleged deficiencies in other aspects of our regulatory regime.'' It 
thus left ``building-specific impediments to be addressed in other 
Commission proceedings, or in other fora, as appropriate.'' Indeed, the 
Commission has on multiple occasions broadened its rules prohibiting 
providers from entering into exclusive building access agreements with 
MTE owners so that similar rules now apply to incumbent LECs serving 
residential and commercial properties, competitive LECs, and 
multichannel video programming distributors subject to section 628 of 
the Act. Any remaining barriers to accessing multiunit premises wiring 
are independent of accessing the Multiunit Premises UNE Subloop, and no 
commenters in this proceeding demonstrate that incumbent LECs maintain 
special advantages in multi-tenant environments today. We clarify that 
our findings today and our decision to eliminate the Multiunit Premises 
UNE Subloop requirement do ``not in any way prejudice the distinct set 
of questions regarding the effect on competition of restrictions 
imposed by a building owner.''
    104. The record further supports nationwide elimination of 
Multiunit Premises UNE Subloops as only a de minimis number of 
multiunit premises subloops are currently being sold, especially on a 
stand-alone basis. As there is already a lack of demand and usage, 
reasonably efficient competitors would not generally be impaired by 
lack of access to this UNE subloop. Moreover, no commenter has 
presented compelling evidence regarding the necessity of this stand-
alone UNE.
    105. Forbearance. We also find that forbearance is warranted for 
Multiunit Premises UNE Subloops separate and apart from our non-
impairment finding. As evidenced by the current record only a de 
minimis number of multiunit premises subloops are currently being sold, 
especially on a stand-alone basis. The record also supports forbearing 
from this requirement as it is economical for competitive LECs to run 
their own high-capacity facilities to MTEs. Moreover, incumbent LECs 
``at risk of losing revenue when traffic shifts from their facilities 
to competitive offerings will seek to preserve such revenues, in whole 
or in part, by offering commercial access to their facilities.'' 
Sections 201 and 202 of the Act would also prohibit incumbent LECs from 
engaging in unreasonably discriminatory behavior. Thus, preservation of 
this UNE obligation is not necessary to ensure just, reasonable, and 
nondiscriminatory rates and terms per section 10(a)(1) of the Act.
    106. The Commission's rules prohibiting LECs from entering into 
exclusive access contracts with the owners of residential multiunit 
premises serves to protect consumers in accordance with section 
10(a)(2) of the Act. Multiunit Premises UNE Subloops are also 
unnecessary to protect consumers given their lack of use. We further 
find that retaining this requirement would not be in the public 
interest as it would contravene the Commission's and the 1996 Act's 
broadband deployment goals--that is, ``it would deter competitors from 
deploying their own facilities to reach the premises and ensuring 
durable competition for the business of its tenants.'' Elimination of 
unbundling mandates will incentivize and promote new deployment by 
competitive LECs and broader commercial access to the incumbent LECs' 
facilities to thereby achieve lasting facilities-based competition 
consisted. Therefore, consistent with section 10(a)(3) of the Act, 
forbearing from Multiunit Premises UNE Subloops would serve the public 
interest. Accordingly, we find that forbearance from Multiunit Premises 
UNE Subloops meets the statutory requirements of section 10(a) of the 
Act.
    107. Network Interface Devices. The network interface device, or 
NID, which is always located at the customer's premises, is defined as 
any means of interconnecting the incumbent LEC's distribution plant to 
wiring at a customer premises location. Apart from its obligation to 
provide the NID functionality as part of an unbundled loop or subloop, 
an incumbent LEC must also offer nondiscriminatory access to the NID on 
an unbundled, stand-alone basis to requesting carriers for the purpose 
of connecting the competitor's own loop facilities. Forbearance from 
this obligation would necessarily coincide with and follow our 
forbearance proposals related to loops and subloops and previous 
forbearance grants related to loops. An incumbent LEC must permit a 
requesting carrier to connect its own loop facilities to on-premises 
wiring through the incumbent LEC's NID. The need for unbundled access 
to an incumbent LEC's NID arose to address scenarios, typically in 
multiunit locations, where access to the inside wire on the premises 
was controlled by a premises owner that did not want additional NIDs 
installed on their premises, or where a customer had no need for a 
duplicate NID.
    108. Impairment. We find that reasonably efficient competitors are 
no longer impaired without access to the UNE NID requirement. 
Competitive and incumbent LECs have described substantially changed 
circumstances in the last two-plus decades such that this network 
element no longer serves any meaningful purpose. Competitive LECs have 
stated that ``[a]s a practical matter, [they] do not purchase network 
interface device elements separate from unbundled loops.'' Incumbent 
LECs are on record stating that there is ``virtually no demand'' for 
stand-alone UNE NIDs. AT&T even specifies that it sells no UNE NIDs, 
and ``has not sold any in some time.'' Competitive LECs have not 
indicated that there are still cases where the NID is the sole means of 
accessing this customer premise's wire. The record demonstrates that 
continued access to these UNEs is not necessary for a reasonably 
efficient competitor to enter today's marketplace. As competitors LECs 
``acknowledge they are not impaired without access to stand-alone 
unbundled NIDs, there can be no argument that such access is 
necessary.''
    109. Forbearance. As proposed in the NPRM, we also independently 
find that forbearance from the UNE NID obligation is appropriate 
because the record indicates that stand-alone NIDs are no longer 
necessary for competitive LECs to access potential customers. Stand-
alone UNE NIDs no longer serve a meaningful purpose and demand for this 
UNE is non-existent. We find that the lack of stand-alone UNE NIDs 
indicates that forbearance from the obligation easily meets the 
statutory

[[Page 1656]]

requirements of section 10(a) of the Act. Because carriers are not 
using this UNE, enforcement of the UNE NID obligation is not necessary 
to ensure just and reasonable rates or practices. Nor is this 
obligation necessary to protect consumers, given its lack of use. 
Finally, because the UNE NID obligation consists of a regulatory burden 
that serves no beneficial purpose, forbearance from the requirement is 
consistent with the public interest.
    110. Transition Period. In the NPRM, we proposed a uniform three-
year transition period for all Multiunit Premises UNE Subloops and UNE 
NIDs. We adopt this three-year transition period for existing customers 
and no period for new orders, consistent with our proposal in the NPRM. 
We find a three year transition period appropriate for the same reasons 
we did so in the 2019 UNE Forbearance Orders. Based on record evidence 
regarding lack of usage or reliance on these UNEs and the fact that no 
commenter has indicated new orders are being placed for either of these 
UNEs, we find a three-year transition period is appropriate, and a 
timeframe for new orders to continue to be unnecessary. We find that 
this transition period supplies the necessary incentives for both 
incumbent and competitive LECs alike to deploy their own next-
generation networks as expeditiously as possible, while ensuring that 
end users do not experience undue service disruption. We disagree with 
generalized arguments in favor of longer or shorter transition periods 
because we believe a three-year transition for existing UNEs allows 
competitive LECs to make alternative arrangements, without unduly 
slowing the transition away from these UNEs. Thus, competitive LECs 
must transition to alternative facilities or services within this 
three-year grandfathering period. The transition period will begin on 
the effective date of this Order.

C. UNE Dark Fiber Transport

    111. Consistent with our proposal in the NPRM, we find that 
competitive LECs are not impaired without access to UNE Dark Fiber 
Transport at wire centers that are within a half mile of alternative 
fiber, subject to the transition period we adopt. The record supports 
this finding. Independently, we also forbear from our regulations 
requiring incumbent LECs to provide UNE Dark Fiber Transport from the 
same wire centers. To sustain the non-impairment finding and 
forbearance conclusions, and to avoid stranding substantial investment 
in last-mile networks by competitive LECs, which provide numerous 
consumers with competitive advanced services over the facilities today 
that in many instances would not be replicable in the short and medium 
terms, we provide an eight-year transition period for existing UNE Dark 
Fiber Transport.
    112. Background. Dark fiber transport, otherwise known as 
``interoffice dark fiber,'' is fiber-optic cable deployed between 
incumbent LEC wire centers that has not been ``lit'' through the 
addition of optronic equipment that would make it capable of carrying 
telecommunications. The Commission's unbundling rules require incumbent 
LECs to unbundle their interoffice dark fiber and make it available to 
a requesting carrier where the requested transport involves at least 
one Tier 3 wire center end point. Where obligated pursuant to our 
unbundling rules, the incumbent LEC is required to lease its unused, 
unlit fiber, subject to availability, allowing the competitive LEC to 
deploy its own electronics to light the dark fiber and provision last-
mile service to end users served from the terminating wire center as if 
such dark fiber were part of its own fiber network.
    113. The Triennial Review Remand Order, in setting the current 
unbundling requirements more than fifteen years ago, examined both 
actual competition and inferences that could be drawn about potential 
competition. In analyzing potential competition, the Commission found 
that both the number of fiber-based collocators and a wire center's 
service area's business line count were indicative of actual and 
potential competition for transport. The Commission concluded at that 
time that unbundling was warranted for dark fiber transport originating 
or ending in Tier 3 wire centers because those routes ``show a 
generally low likelihood of supporting actual or potential competitive 
transport deployment.'' For purposes of UNE Dark Fiber Transport, a 
Tier 3 wire center is any wire center that does not qualify as either a 
Tier 1 wire center (which has at least four fiber-based collocators or 
at least 38,000 business lines, 47 CFR 51.319(d)(3)(i)), or a Tier 2 
wire center (which has at least three fiber-based collocators or at 
least 24,000 business lines, 47 CFR 51.319(d)(3)(ii)). By contrast, the 
Commission found that unbundling was not required on other routes 
because a reasonably efficient competitor already had or could 
potentially deploy or obtain dark fiber transport.
    114. In the UNE Transport Forbearance Order, we concluded that the 
presence of nearby competitive fiber creates a sufficiently dynamic 
marketplace for DS1 and DS3 transport, which protects competition and 
consumers and furthers the public interest. In that Order, the 
Commission forbore from UNE DS1/DS3 Transport obligations for price cap 
incumbent LECs at wire centers within a half mile of competitive fiber. 
To administer that forbearance, the Bureau released a list of 
approximately 11,000 Tier 2 and Tier 3 wire centers identified as 
having competitive fiber located within a half mile. The Commission 
concluded that the presence of alternative fiber within a half mile 
creates competitive marketplace dynamics, observing that a 
``facilities-based competitor within a half mile of a location solely 
served by an incumbent LEC sufficiently restrains incumbent LEC 
pricing.''
    115. In the NPRM, we sought comment on our proposal to find that 
competitive LECs are not impaired without access to unbundled dark 
fiber transport to wire centers that are within a half mile of 
alternative fiber. The proposal used the same factual underpinning as 
the UNE Transport Forbearance Order, in which the Commission forbore 
from UNE DS1/DS3 Transport obligations for price-cap incumbent LECs at 
wire centers within a half mile of competitive fiber. However, unlike 
the UNE Transport Forbearance Order, which examined whether the 
presence of nearby competitive fiber protected competition and 
consumers and furthered the public interest, the NPRM observed that the 
impairment inquiry asks only whether a ``reasonably efficient 
competitor within a half mile of alternative fiber'' could either 
obtain such transport at competitive rates or by building its own 
network. The Commission also rejected arguments that nearby provider-
owned fiber should not be treated as a competitive alternative for UNE 
DS1/DS3 Transport because other fiber providers are generally 
uninterested in providing competitive DS1/DS3 transport service and, in 
particular, cable providers are ill-suited or unwilling to provide such 
service due to the unique characteristics of their networks. We found 
that the evidence competitive LECs relied on was outdated and failed to 
reflect continued fiber deployment, particularly BDS transport, in the 
past 15 years. We therefore determined that even if cable companies 
were unwilling to provide transport, the existence of such networks, 
which serve end users in the same vicinity as the competitor, is likely 
sufficient to temper price increases and result in reasonably 
competitive outcomes in the medium term. We also sought comment on 
whether our

[[Page 1657]]

observations about competitive fiber located within a half mile of wire 
centers in the DS1/DS3 transport market in the UNE Transport 
Forbearance Order were applicable to interoffice dark fiber and could 
support a reasonable inference of no impairment for competitors leasing 
UNE Dark Fiber Transport that are similarly situated. Lastly, we sought 
comment on whether to extend forbearance to UNE Dark Fiber Transport 
obligations for the same wire centers subject to our UNE DS1/DS3 
Transport forbearance.
    116. Impairment Analysis. Based on the record before us, we 
conclude that competitive LECs are no longer impaired without access to 
UNE Dark Fiber Transport provisioned from wire centers within a half 
mile of competitive fiber. The Commission has long envisioned the use 
of UNEs by competitors as a stepping stone to deployment of their own 
facilities. The impairment inquiry considers whether a hypothetical 
reasonably efficient competitor would be impaired when lack of access 
to a particular network element creates a barrier to entry that renders 
entry uneconomic. The record demonstrates that competitive LECs have in 
fact widely deployed facilities without the need for UNE Dark Fiber 
Transport. But while a competitive LEC may prefer UNE Dark Fiber 
Transport, ``that has no bearing on the fact that the existence of a 
nearby fiber network suggests the ability of a reasonably efficient 
competitor to self-provision its own fiber network in competition with 
the incumbent LEC, regardless of whether that network owner offers lit 
fiber services or dark fiber facilities.'' Indeed, ``[t]he fact that an 
entrant has deployed its own facilities--regardless of the technology 
chosen--may provide evidence that any barriers to entry can be 
overcome.'' Thus, we ask only whether a competitive LEC could ``provide 
the services that it seeks to offer,'' irrespective of whether it uses 
lit or unlit fiber, as we presume that a competitive LEC could ``take 
advantage of existing alternative facilities deployment where 
possible.''
    117. Absent UNE Dark Fiber Transport, competitive LECs have been 
able to use alternatives such as commercial dark fiber, access to which 
has expanded greatly since we ordered UNE Dark Fiber Transport. 
Further, as we observed in the NPRM and the 2017 BDS Order, competitive 
LECs have been deploying their own fiber facilities at an accelerating 
rate over the past two decades, a result of declining costs and 
increases in potential revenues due to growing demand. We expect, then, 
that even the data contained in the BDS Order underreports the 
deployment of competitive fiber today, as it has likely improved in the 
intervening years since the data was collected. Additionally, some 
competitive LECs have even deployed their own dark fiber transport to 
replace the unbundled transport leased from incumbent LECs.
    118. The rules we adopt in this document modernize our dark fiber 
unbundling requirements to reflect changes in the marketplace since 
2004, when we last revised our UNE Dark Fiber Transport rules. At that 
time, the Commission limited the extent to which incumbent LECs were 
obligated to provide UNE Dark Fiber Transport by finding that, under 
the impairment standard, competitive LECs are not impaired without 
access to UNE Dark Fiber Transport where both wire centers are 
classified as either Tier 1 or Tier 2 wire centers. As a result, the 
unbundling obligations for interoffice dark fiber only applied where at 
least one terminating end point is a Tier 3 wire center. The Commission 
has described Tier 3 wire centers as those that ``show a generally low 
likelihood of supporting actual or potential competitive transport 
deployment.'' We refer to these Tier 3 wire centers as ``UNE 
triggering'' wire centers. In this document, however, the record 
reflects that alternative fiber with respect to Tier 3 wire centers has 
expanded tremendously, indicating that competitive LECs are no longer 
impaired without the use of UNE Dark Fiber Transport where there is 
competitive fiber with a half-mile. One commenter suggests that the 
Commission should also ``consider expanding its rural exemption for all 
elements of its NPRM, should it adopt its proposals,'' including UNE 
Dark Fiber Transport. However, as discussed below, neither the 
impairment inquiry nor the forbearance criteria distinguish as between 
rural and urban communities. While we may, for example, extrapolate 
from routes when examining impairment, and look to, e.g., consumer harm 
under forbearance, as we explain, the record demonstrates that UNE Dark 
Fiber Transport is no longer necessary--even in rural communities. 
Additionally, the fact that dark fiber may be useful for 5G, ultimately 
has no bearing on either inquiry.
    119. While we observed in the NPRM that stakeholders disagreed as 
to the relevance of UNE Dark Fiber Transport in the current marketplace 
and whether or not competitive LECs are impaired without its continued 
use, the majority of commenters in the record now concede that 
competitive LECs are no longer impaired without access to new UNE Dark 
Fiber Transport. Incumbent LECs urge the Commission to find no 
impairment and contend generally that these UNEs are no longer 
justified. AT&T argues that ``[t]hanks to the massive data collection 
in the BDS proceeding, . . . the Commission now has far more 
information about the actual extent of competitive transport deployment 
than it did in 2005'' when it found no impairment for dark fiber 
transport vis-[agrave]-vis Tier 1 and Tier 2 wire centers. AT&T 
observes that according to BDS data, ``competitors have continued to 
deploy their own facilities in and near Tier 3 wire centers,'' with 
``competitive supply at thousands of Tier 3 wire centers,'' suggesting 
that a ``reasonably efficient competitor can feasibly deploy its own 
facility to serve such wire centers.''
    120. The record demonstrates that where alternative fiber exists 
within a half mile of a wire center, entry is possible--i.e., competing 
providers have been able to offer service to the area, irrespective of 
the technology they use. Because the impairment inquiry is technology 
agnostic, arguments as to the substitutability of dark fiber are 
irrelevant. As we explained in the NPRM, ``[w]hile the Commission has 
previously differentiated lit from dark fiber, that has no bearing on 
the fact that the existence of a nearby fiber network suggests the 
ability of a reasonably efficient competitor to self-provision its own 
fiber network in competition with the incumbent LEC, regardless of 
whether that network owner offers lit fiber services or dark fiber 
facilities.''
    121. We disagree with commenters that argue that new UNE Dark Fiber 
Transport remains essential to entry even where alternative fiber 
exists. Competitive LECs have claimed that unbundled dark fiber is 
essential to provisioning service, reaching new customers, and that 
alternative fiber is sometimes unavailable. Several competitive LECs 
have in fact used unbundled access to interoffice dark fiber and other 
UNEs to obtain a sufficient customer base within an incumbent LEC's 
local market, thus generating enough revenue to eventually build a 
competing fiber network. The use of UNE Dark Fiber Transport has then 
allowed many competitors to gradually deploy their own last-mile fiber 
networks to offer service to consumers, competing directly with 
incumbent LECs for market share. These arguments fail to engage with 
the impairment standard, however. While UNE Dark Fiber Transport may 
have helped new entrants to enter the market at the time when we 
initially ordered

[[Page 1658]]

unbundling, that does not bear on the argument of whether unbundling of 
dark fiber continues to be necessary today. Further, these commenters 
fail to demonstrate that where alternative fiber is available--lit or 
unlit--new entrants remain impaired. The existence of alternative 
fiber--regardless of the technology used--indicates that a reasonably 
efficient competitor can enter the market. One commenter argues that in 
considering the issue of alternative fiber, the Commission should 
differentiate between ``commercially owned dark fiber and dark fiber 
funded and controlled by government entities, who do not typically make 
fiber commercially available,'' and reiterates the argument that CLECs 
sometimes do not make their own dark fiber commercially available. 
However, even if some alternative fiber is government subsidized or 
controlled--no alternative data is advanced to suggest how much of it 
is--as explained above, whether or not such fiber is commercially 
available has no bearing on the analysis. Additionally, with respect to 
the issue of public safety, no argument is made that eliminating UNE 
Dark Fiber Transport will create issues for, e.g., accessing 9-1-1, and 
we do not find that any such public-safety issue arises. Whether a new 
entrant uses commercial dark fiber or deploys their own network has no 
bearing on the fact that entry is economically feasible.
    122. One commenter argues that the impairment inquiry cannot simply 
look at whether there is alternative fiber within a half mile of a wire 
center; rather, it contends that a more granular analysis of whether 
alternative fiber reaches the same destination is necessary to 
determine if entry into a particular market is economically feasible, 
because switching to alternative fiber is otherwise not an option for 
existing providers. However, the impairment inquiry only asks if a 
reasonably efficient competitor could enter the market, as evidenced 
here by the existence of alternative fiber. Whether these competitors 
then make their fiber commercially available for other providers is not 
at issue. One commenter has contended that the ``presence of 
competitive fiber within a half-mile of a wire center provides no 
insight as to the economic viability of such fiber deployments.'' 
However, the Commission may use proxies and draw inferences therefrom 
rather than analyzing every route individually. In so doing, however, 
Uniti Fiber claims that the Commission must evaluate routes that are 
``similarly situated with regard to `barriers to entry,' '' and that 
``inferring no impairment in all areas where competitive fiber may be 
located within a half mile of the wire center'' fails to satisfy the 
``nuanced approach to impairment demanded'' by the courts. However, we 
need not analyze on a specific-route basis ``when and by whom such 
competitive fiber was deployed, whether the fiber is actually used to 
provide service in that market, or of the remaining operational and 
economic barriers to transport deployment'' as Uniti Fiber urges. Such 
a level of granularity would require a case-by-case assessment of 
impairment, an approach criticized by courts that have instead approved 
of examining ``facilities deployment along similar''--not identical--
``routes . . . .'' And we can and must also draw reasonable inferences 
about deployment by examining similar markets. Further, this 
alternative fiber suggests the existence of sufficient demand to 
justify entry absent dark fiber transport UNEs, and competitive LEC 
commenters ignore potential revenue opportunities despite highlighting 
hypothetical costs and barriers. Although commenters argue that 
existing networks would be harmed by eliminating UNE Dark Fiber 
Transport, largely due to reliance interests, we take into account such 
concerns in adopting a transition period. And while competitive LECs 
point to various success stories of the kind envisioned by the 
Commission when it unbundled dark fiber for Tier 3 wire centers, 
ultimately we must ask only whether providers are now impaired without 
access to it on an unbundled basis.
    123. Further, incumbent LECs claim they see little demand for 
unbundled dark fiber from competitive LECs and argue that UNE Dark 
Fiber Transport constitutes a small proportion of available dark fiber 
transport overall. Verizon reiterates that it both uses and sells a de 
minimis amount of UNE Dark Fiber Transport. Incumbent LECs argue, 
conversely, that the marketplace for commercial dark fiber transport is 
thriving, with AT&T explaining that it purchases a large amount of 
commercial dark fiber transport outside its incumbent franchise areas. 
According to USTelecom, the record evidence presented by competitive 
LECs shows their progress in replacing UNE Dark Fiber Transport with 
their own interoffice transport, further indicating that competitive 
LECs ``have largely, if not entirely, moved on from reliance on these 
UNEs.'' Additionally, use of UNE Dark Fiber Transport for provisioning 
service to rural areas appears minimal. This not only reinforces our 
finding of no impairment but also independently, when coupled with the 
Commission's findings regarding the competitiveness of the market 
without reliance on UNEs, persuades us that unbundling should be 
eliminated pursuant to our ``at a minimum'' authority even assuming 
arguendo some level of impairment in light of the costs of unbundling.
    124. Forbearance Analysis. In addition to supporting our finding of 
non-impairment, the record independently compels us to forbear from our 
UNE Dark Fiber Transport requirements in the same wire centers. 
Forbearance is appropriate based on our analysis of the specific 
circumstances at issue. We find that the criteria for forbearance are 
met and therefore do so with respect to our regulations requiring 
incumbent LECs provide UNE Dark Fiber Transport from these wire 
centers, subject to the transition period and conditions we adopt.
    125. Section 10(a)(1). We conclude that UNE Dark Fiber Transport 
obligations from Tier 3 wire centers with alternative fiber within a 
half mile are not necessary to ensure just and reasonable rates. We 
limit our forbearance only to those wire centers where alternative 
fiber is present within a half mile of the wire center, which creates 
market pressure to keep rates down. And given the incentives for 
providers, we expect those currently using UNE Dark Fiber Transport to 
either deploy alternative fiber themselves or to use commercially 
available dark fiber or other transport alternatives, which should 
further temper rates. We therefore conclude that unbundling obligations 
are no longer necessary from these wire centers to ensure just and 
reasonable rates.
    126. Section 10(a)(2). We find that the evolving marketplace and 
the statutory and regulatory safeguards that work to ensure just and 
reasonable rates also ensure that consumers will not be harmed by 
forbearance from requiring UNE Dark Fiber Transport from wire centers 
within a half mile of alternative fiber. With the availability of 
alternative fiber offerings, incumbent LECs face pressure to constrain 
rates and to act to retain existing customers. Although not all 
alternative fiber is dark fiber, such a distinction is ultimately 
irrelevant to consumers: they are concerned about the end product, not 
the specific technology used for middle-mile transport. And while 
competitive LECs transitioning off of UNE Dark Fiber Transport may look 
to commercial dark fiber as an alternative, where no such alternative 
exists, we nevertheless anticipate that the timeframe provided

[[Page 1659]]

for in our transition coupled with the incentives for competitive LECs 
to deploy their own network facilities as the record indicates they 
have been doing should ensure that consumers continue receiving 
service.
    127. Section 10(a)(3). Finally, we find that forbearing from UNE 
Dark Fiber Transport from these wire centers is in the public interest 
as it promotes the policy of ensuring the deployment of next-generation 
networks and services. Competition is the preferred method by which the 
Commission safeguards the public interest. We have found that 
``disparate treatment of similarly situated competitors creates 
marketplace distortions that may harm consumers,'' and forbearance 
eliminates such distortions. Not only must the Commission consider 
whether forbearance will promote competition, but ``[i]f the Commission 
determines that such forbearance will promote competition among 
providers of telecommunications services, that determination may be the 
basis for a Commission finding that forbearance is in the public 
interest'' under section 10(a)(3). Further, we expect that forbearance 
will promote deployment of a provider's own fiber, thus facilitating 
deployment of additional next-generation networks.
    128. Transition Period. For competitive LECs currently offering 
services reliant on UNE Dark Fiber Transport, substantial costs, 
including sunk costs, have been incurred to use such facilities, 
including, for example, the deployment of fiber-based last-mile 
networks and enterprise connections, as well as the addition of 
expensive optronic equipment. These sunk investments in many cases 
would be rendered useless if a competitive LEC were forced off of UNE 
Dark Fiber Transport too quickly, and the record indicates that 
competitive LECs would be unable to continue serving some markets. We 
therefore grandfather existing UNE Dark Fiber Transport for eight years 
so as to avoid risking abandonment of services and stranding 
significant investments reliant on existing dark fiber. This timeframe 
strikes the appropriate balance between the competing interests of the 
various stakeholders as well as enjoys support by the majority of those 
stakeholders as reflected in the record today. We have found such 
compromises reasonable and in the public interest.
    129. Such a transition period for existing UNE Dark Fiber Transport 
avoids stranding significant investment by competitive LECs and 
negatively impacting their customers, including those in remote 
locations. Competitive LECs claim that a loss of UNE Dark Fiber 
Transport would result in abandoned service in such areas. 
Specifically, investment into fiber to the home and fiber rings may be 
abandoned, and some recent awards of government support grants for 
broadband deployment (e.g., CAF II (83 FR 15982, April 13, 2018)) rely 
on UNE Dark Fiber Transport for construction. The Connect America Fund 
Phase II program is a part of the Universal Service High-Cost program 
designed to expand broadband and voice services to places where they 
are unavailable, and the Commission provides funding to subsidize new 
network infrastructure or upgrades.
    130. Incumbent LECs, however, argue that UNE Dark Fiber Transport 
constitutes a small portion of their dark fiber transport overall. 
Because this unbundled element comprises such a minute portion of 
incumbent LECs' business, this suggests that a lengthier period than we 
adopt for other UNEs today would have a relatively smaller effect on 
incumbent LECs. And as we have explained, the ``at a minimum'' language 
in section 251(d)(2) allows the Commission to consider other factors 
``rationally related to the goals of the Act,'' including deployment of 
broadband, access to which may be impaired. Given the relatively 
smaller cost to incumbent LECs, we thus find that permitting 
competitive LECs to continue using UNE Dark Fiber Transport will avoid 
potential waste and safeguard existing customers.
    131. One commenter also argued that competitive LECs should only be 
allowed to maintain UNE Dark Fiber Transport subject to capacity 
limits. The commenter claimed that the Commission should ``make clear 
that purchasers are limited to using [UNEs] for transport capacities of 
no more than the equivalent of 12 DS3s,'' claiming that in the 
Triennial Review Remand Order, ``the Commission found that requesting 
carriers are not impaired without access to transport facilities above 
12 DS3s on a given transport route.'' As such, they believe it would be 
inconsistent to allow competitive LECs to use dark fiber to ``carry 
almost any capacity depending on the electronics the CLEC attaches to 
it,'' which they argue is a ``severe anomaly in the Commission's 
unbundling rules.''
    132. However, the rationale for limiting transport with respect to 
DS3s is inapplicable as applied to dark fiber. In the Triennial Review 
Remand Order, we set the 12-DS3 capacity limit to ``establish a 
safeguard to limit access to a carrier that has attained a significant 
scale on such a route indicating that more than sufficient potential 
revenues exist to justify deployment . . . .'' As INCOMPAS and NWTA 
explain, in so limiting transport capacities, we undertook an analysis 
of competitors' revenue potential--something commenters seeking 
capacity limitations fail to do here. And unlike DS3s, dark fiber 
requires significant investment by competitive LECs to enable it to 
carry traffic, which also limits the amount of bandwidth that can be 
realistically transported. INCOMPAS/NWTA also claim that per-Mbps 
revenue has declined over time, and that the record does not provide an 
economic rationale for limiting the extent to which competitive LECs 
can upgrade the electronics attached to dark fiber for additional 
capacity.
    133. Many incumbent LECs argued for a short transition period for 
existing UNE Dark Fiber Transport of only a few years. Prior to 
agreeing to an eight-year transition period, various incumbent LECs or 
their representatives argued for transition periods as short as 18 
months but no longer than three to five years. However, we agree with 
competitive LECs that argue that these timelines are too short under 
the circumstances. For example, proponents of a longer transition 
timeframe argue than an abbreviated transition periods ``downplay[] the 
costs of, and other barriers to, overbuilding existing, unused 
interoffice dark fiber transport routes,'' which even over ``the short 
period of a few years'' can ``easily run[] into the tens, if not 
hundreds, of millions of dollars.'' In addition, we recognize that 
carriers may face other deployment issues, including state and local 
restrictions such as on rights-of-way, ``attaching facilities to 
bridges or prohibitions on boring river levees,'' as well as other 
``local terrain challenges,'' at least in some areas dark fiber might 
not be easily replaceable in some areas in the short term. Considering 
these possibilities at the same time competitive LECs are transitioning 
to alternative solutions for unbundled loops that they may be relying 
on, the result could be that higher capacity advanced services may 
become unavailable in some areas where competitive LECs providing these 
services currently rely on UNE Dark Fiber Transport. Given the costs 
and time needed for deploying new replacement transport facilities at 
the same time these same competitive LECs are deploying alternative 
loop facilities, customers of these services could be forced to go 
without for potentially significant periods of time. Our longer 
transition period addresses this potential unintended consequence.

[[Page 1660]]

    134. We do not believe that our eight-year transition period will 
significantly reduce incentives for continued deployment. Competitive 
LECs reliant on UNE Dark Fiber Transport have shown their propensity to 
deploy their own fiber as soon as they can to transition to their own 
network facilities and eliminate dependence on the incumbent LEC 
completely. We believe this transition timeframe will provide 
sufficient time for them to do so without unduly disrupting their 
customers and better advance broadband deployment than if these same 
competitors prematurely lost access to their existing UNE Dark Fiber 
Transport and instead withdrew from certain geographic markets 
entirely.
    135. On the other hand, we do not believe indefinite grandfathering 
would be appropriate. Although some commenters convincingly argue that 
a longer period of time than the three years proposed in the NPRM is 
necessary to transition off of UNE Dark Fiber Transport, they do not 
advance arguments that would suggest longer than eight years is needed. 
WorldNet, for example, contends that an exception should be made for 
Puerto Rico to grandfather UNE Dark Fiber Transport there indefinitely. 
However, their arguments fail to explain why eight years or another 
significant period of time would be insufficient to obtain alternative 
transport. Nor do they engage with either the impairment or forbearance 
inquiries: while they assert that the situation in Puerto Rico is 
unique, they do not explain why the presence of alternative fiber does 
not indicate that a reasonably efficient competitor should be able 
deploy or obtain alternative transport, or elaborate on any of the 
forbearance criteria. And although INCOMPAS and the NWTA have 
previously argued that ``no transition period would be able to offset 
the harms to consumers and fiber deployment,'' claiming some UNE Dark 
Fiber Transport ``is irreplaceable,'' INCOMPAS itself contends that 
recognizing the benefits of UNE Dark Fiber Transport and the challenges 
of transitioning therefrom is not itself an argument for ``permanent 
grandfathering.'' Meanwhile, competitive LECs have variously offered 
arguments for why incumbent LECs' proposals are insufficient, or in 
favor of longer timeframes for UNEs generally, e.g., of seven years 
minimum. Instead, we agree with the Joint Parties' explanation of how 
their proposal ``chart[s] a middle course that accommodates the various 
parties' needs.'' Indeed, Puerto Rico Telephone Company, which was not 
a party to the Compromise Proposal, agrees that it is supported by the 
record. As the advocates of the compromise proposal state, this 
transition period recognizes ``the fact that competitive LECs will 
simultaneously be impacted by transitions away from unbundled access to 
multiple elements integral to the operation of their networks, 
including DS0, DS1 and DS3 loops, in addition to dark fiber 
transport.'' We therefore provide a transition period of eight years 
for UNE Dark Fiber Transport ordered prior to the effective date of 
this Order.

D. Operations Support Systems

    136. In the NPRM, we proposed to forbear from the UNE Operations 
Support Systems (OSS) obligations except as used to manage UNEs. The 
NPRM did not propose to eliminate unbundled access for 911/E911 
databases. Thus, UNE OSS obligations remain for accessing 911/E911 
databases for any requesting carrier regardless of any Commission 
action herein providing UNE OSS relief. The record generally supports 
this approach, with the exception of local interconnection and local 
number portability where incumbent LECs maintain such databases. We 
find that competitors are not impaired without access to UNE OSS, 
except where carriers are continuing to manage UNEs and for purposes of 
local interconnection and local number portability. Independently, we 
forbear from applying UNE OSS requirements, except when unbundled OSS 
is used to manage other UNEs, local interconnection, and local number 
portability.
    137. Under our current rules, incumbent LECs must offer 
nondiscriminatory access to their operations support systems, or OSS, 
for qualifying services on an unbundled basis. OSS consists of pre-
ordering, ordering, provisioning, maintenance and repair, and billing 
functions supported by an incumbent LEC's databases and information. 
The Commission previously found that the UNE OSS ``requirement includes 
an ongoing obligation on the incumbent LECs to make modifications to 
existing OSS as necessary to offer competitive carriers 
nondiscriminatory access and to ensure that the incumbent LEC complies 
with all of its network element, resale and interconnection obligations 
in a nondiscriminatory manner.'' OSS is used to provision other UNEs, 
and it is also a separate stand-alone UNE that is used for 
interconnection and other purposes, including number porting. The 
Commission required incumbent LECs to provide OSS on an unbundled basis 
in the Triennial Review Order because it found that ``these functions 
are essential for carriers to serve mass market and enterprise 
customers'' and because competitive LECs providing these services are 
``impaired on a national basis without access to OSS.''
    138. Impairment Analysis. We find that competitors are not impaired 
without access to UNE OSS, except where carriers are continuing to 
obtain and manage UNEs and for purposes of local interconnection and 
local number portability. We note that our impairment and forbearance 
findings apply to UNE OSS maintained directly or indirectly by an 
incumbent LEC--i.e., it makes no difference ``whether the incumbent LEC 
maintains the OSS database itself or outsources the maintenance but 
retains control over the database.'' We find, based on the record, that 
UNE OSS is of little value when decoupled from UNE ordering and 
provisioning, and that there is limited usage of this stand-alone UNE 
in today's marketplace. NASUCA's reply asserts the same arguments 
raised by NCTA and INCOMPAS, most of which are covered in the 
Compromise Proposal and adequately address their concerns. NASUCA also 
asserts that OSS is used by competitive LECs to make ``changes to 
directory listings'' and eliminating the OSS UNE would ``impair the 
ability of competitors to offer service and in doing so would harm 
consumers who would suffer from incomplete and delayed directory 
information.'' To the extent NASUCA's directory listing assertion is a 
stand-alone argument, it is not developed enough to respond to its 
alleged effects on consumer harm. Nor do the competitive providers 
which would use directory listings claim that losing unbundled access 
to such listings would harm them or their end-user consumers. And 
assuming arguendo that directory listings are important to competitive 
providers, which we do not concede, we find, consistent with our 
discussion below, that it is in the interest of incumbent LECs to 
provide assistance with directory listings as part of their wholesale 
services. We agree with commenters that there is generally ``no need to 
offer regulated unbundled access to OSS in any circumstance where the 
Commission has eliminated access to the corresponding unbundled network 
facilities,'' except with respect to ordering local interconnection or 
number portability. As such, we find that the market conditions that 
warrant unbundling relief on the basis of non-impairment or forbearance 
above for UNE Loops of multiple types as well as

[[Page 1661]]

UNE Dark Fiber Transport and other network elements also warrant 
unbundling relief here. We therefore conclude that this UNE is 
generally not necessary for a reasonably efficient competitor to enter 
today's communications service marketplace, except for local 
interconnection and number portability. Moreover, we find that it is in 
the incumbent LEC's interest to offer necessary services, like OSS, 
when they provide commercial alternatives to UNEs or other wholesale 
products. As Sonic, a major purchaser of UNE Loops and Transport, 
explains, incumbent LECs ``have to maintain ordering systems and will 
have to manage the sharing of facilities if they offer wholesale 
services.''
    139. We decline to find lack of impairment with regard to UNE OSS 
used for interconnection and number portability, however, as the record 
indicates that UNE OSS still plays an important role with respect to 
these critical local competition tools. Some competitive LECs and cable 
providers raised network interconnection and number portability 
implications if this real-time electronic interface is not maintained. 
Consistent with these comments and the comments of the majority of the 
LEC stakeholders commenting on this issue recognizing the importance of 
preserving continued UNE OSS access for these purposes, we maintain the 
status quo of UNE OSS for purposes of local interconnection and local 
number portability.
    140. Forbearance. Consistent with the NPRM and the record, we 
independently forbear from the stand-alone UNE OSS obligation, except 
for carriers continuing to obtain and manage UNEs and for purposes of 
local interconnection and local number portability where the incumbent 
LEC maintains such databases. Based on the record as discussed above 
and the fact that no commenter opposed forbearance, except with regard 
to number portability and interconnection, we find that forbearance 
from the stand-alone UNE OSS obligation, except with respect to 
ordering local interconnection or number portability, meets the 
requirements of section 10(a) of the Act. The very limited use of this 
network element in today's marketplace except for the purposes for 
which we continue to make it available and the fact we retain it where 
it is used to manage UNEs is sufficient evidence that this stand-alone 
UNE OSS obligation is not necessary to ensure either just and 
reasonable rates or the protection of consumers pursuant to sections 
10(a)(1) and 10(a)(2). Moreover, the elimination of regulatory burdens 
that serve no purpose is consistent with the public interest pursuant 
to section 10(a)(3). For the same reasons discussed above, we decline 
to forbear with regard to its continued availability on an unbundled 
basis for local interconnection and number portability.
    141. We note that elimination of OSS unbundling obligations, as 
specified above, will not adversely impact public safety. Unbundled 
access to 911 and E-911 databases will remain available and the NPRM 
did not even propose to consider limiting access to this UNE, as will 
unbundled OSS requirements where UNEs are available and for purposes of 
local interconnection and local number portability. The NPRM did not 
propose to modify the E911/911 UNE. We find that the California Public 
Utility Commission's assertion that competitive LECs ``may struggle to 
resolve maintenance and repair issues that ultimately could adversely 
affect an end-user's ability to reach emergency services'' is misplaced 
as that concern relates to the maintenance of copper networks rather 
than OSS or unbundling generally and thus is not relevant to this 
proceeding. No commenter, including the competitive providers that use 
OSS or the California Public Utility Commission, specifically asserts 
that OSS is needed to resolve maintenance and repair issues, generally. 
Moreover, UNE OSS remains available to manage existing UNEs which 
includes aspects of maintenance and repair functions for such UNEs. As 
discussed above, we find that it is in the incumbent LEC's interest to 
offer associated services, like OSS, when they provide wholesale 
products.
    142. Transition Period. The transition period for UNE OSS used to 
order and manage UNEs phased out by this Order naturally coincides with 
the transition periods adopted for each such UNE described above. 
Incumbent LECs indicate they will also provide commercial access to 
their OSS systems to requesting carriers in any area in which unbundled 
OSS functionality is no longer available for particular network 
elements because of unbundling relief, ensuring a seamless transition 
away from UNE OSS, availability that coincides with transition 
timeframes for unbundled network elements.

E. Avoided-Cost Resale

    143. The NPRM proposed to extend the forbearance relief granted to 
price cap incumbent LECs for Avoided-Cost Resale requirements to non-
price cap carrier incumbent LECs. We adopt this proposal and grant 
relief from all remaining Avoided-Cost Resale requirements. Section 
251(c)(4) of the 1996 Act requires that incumbent LECs make available 
to requesting carriers at wholesale rates any telecommunications 
service they offer to their own non-carrier customers on a retail 
basis. The record supports forbearing from this obligation for non-
price cap incumbent LECs for many of the same reasons that justified 
forbearance from Avoided-Cost Resale obligations for price cap 
incumbent LECs.
    144. In August 2019, we granted price cap incumbent LECs 
forbearance from the Avoided-Cost Resale requirement based on ``the 
breadth of the voice service marketplace and the number of wholesale 
input alternatives to competitive LECs seeking to continue serving 
customers currently served by Avoided-Cost Resale'' and given that 
``Avoided-Cost Resale requirements . . . serve only to prolong 
dependence on legacy TDM voice services rather than pave the way for 
meaningful facilities-based competition over next-generation networks 
providing advanced communications capability.'' We followed that action 
by seeking comment in the NPRM on whether there are any reasons why we 
should not extend that forbearance to non-price cap incumbent LECs. The 
record in response to the NPRM does not provide any compelling reason 
to refrain from extending Avoided-Cost Resale forbearance herein to all 
incumbent LECs. Competitive LEC resellers' customer base is almost 
exclusively made up of business and government customers. As a result, 
forbearance from the Avoided-Cost Resale requirement will not impact 
mass market customers.
    145. As we found in the UNE Analog Loops and Avoided-Cost Resale 
Forbearance Order, competitive LECs almost exclusively use Avoided-Cost 
Resale to provision legacy TDM voice service to business and government 
customers. In many cases, these resold legacy voice lines are used for 
redundancy, and not competitive entry or as a primary voice line for 
customers of these services. Moreover, TDM service will remain 
available for purchase by competitive LECs, just not at wholesale 
rates. As noted elsewhere in this Order, no actions we take today 
eliminate the availability of legacy TDM-based service. According to 
Granite, the leading provider of Avoided-Cost Resale, the vast majority 
of TDM lines resold by competitive LECs are purchased via section 
251(b)(1) resale and commercial agreements rather than via Avoided-Cost 
Resale, and these options will remain available after forbearance from 
the Avoided-Cost Resale requirements. Commenters

[[Page 1662]]

responding to our NPRM do not provide any evidence that competitive 
circumstances are any different in non-price cap LEC service areas.
    146. The obligations and responsibilities imposed on incumbent LECs 
by the 1996 Act were ``designed to open monopoly telecommunications 
markets to competitive entry.'' This carefully crafted design applies 
equally to UNEs and Avoided-Cost Resale. Granite, the primary commenter 
on this issue, asserts that the Commission conflated UNEs and Avoided-
Cost Resale in granting forbearance from the latter in the UNE Analog 
Loop and Avoided-Cost Resale Forbearance Order. While one CLEC other 
than Granite did comment on Avoided-Cost Resale, it was in the larger 
context of its use of a ``combination of UNEs, avoided-cost resold 
services, and [its] own fiber network'' asserting that it uses Avoided-
Cost Resale where the incumbent LEC is the only source of wired voice 
service. When implementing section 251 of the 1996 Act, however, the 
Commission viewed Avoided-Cost Resale as an ``important entry strategy 
for many new entrants, especially in the short term when they are 
building out their own facilities'' and that ``in some areas and for 
some new entrants . . . it will remain an important entry strategy over 
the longer term.'' The Commission further noted that ``[R]esale will 
also be an important entry strategy for small businesses that may lack 
capital to compete in the local exchange market by purchasing unbundled 
elements or by building their own networks.'' Therefore, even at the 
time that Avoided Cost Resale was enacted, the Commission envisioned 
that new entrants would utilize the regulation only until they could 
deploy their own facilities. Indeed, for competitive LECs that engage 
in their own facilities-based deployments, Avoided-Cost Resale data 
suggests it is no longer, if it ever was, a particularly important 
entry strategy. The majority of competitive LEC commenters did not even 
address Avoided-Cost Resale in their comments filed in this proceeding. 
While WorldNet mentions resale in its comments in this proceeding, 
always as ``UNEs and resale,'' it never discusses why Avoided-Cost 
Resale is necessary. And the declaration submitted in support of 
WorldNet's comments discusses why UNEs are necessary, but it makes no 
mention at all of resale. As we noted in the UNE Analog Loops and 
Avoided-Cost Resale Forbearance Order, Avoided-Cost Resale was never 
intended to be the permanent business strategy it seems to have become 
for certain providers. Granite can hardly be considered the type of 
``small business'' that the Commission was referring to in 1996. Nor 
are the commenters opposing forbearance from this requirement ``new 
entrants''--Granite, for example, has been in business for nearly two 
decades and can hardly credibly claim Avoided-Cost Resale obligations 
in non-price cap service areas, or price-cap service areas for that 
matter, are necessary to sustain its existence in today's exceedingly 
competitive voice services marketplace. And even if it were, the Act 
does not protect specific competitors or business models where 
overwhelming evidence of pervasive competitive alternatives exist for 
consumers, including those that may currently take service from 
companies like Granite. Indeed, even ``if all CLECs were driven from 
the . . . market,'' the existence of ``robust intermodal competition'' 
from other providers warrants upholding the Commission's decision.
    147. Rural exemption. The majority of non-price cap incumbent LECs 
are rural LECs, most of which qualify for the rural exemption from all 
section 251(c) requirements, including Avoided-Cost Resale. They 
therefore have no obligation to offer their telecommunications services 
to competitive LECs at wholesale rates while the rural exemption 
remains in place. Indeed, competitive LECs such as Granite have 
admitted that they are unable to avail themselves of Avoided-Cost 
Resale in many rural areas because of the rural exemption. As a result, 
maintaining Avoided-Cost Resale in non-price cap areas provides little 
to no benefit to competitive LECs whose business model relies primarily 
on resold services. In such areas, resale under section 251(b)(1) is 
the only regulatory resale-related mechanism available to them. Section 
251(b)(1) obligations are not implicated by our actions here.
    148. Section 10(a)(1). We conclude that enforcement of Avoided-Cost 
Resale obligations is not necessary to ensure just and reasonable rates 
for voice-grade services. To the extent competition protects against 
rates, charges, practices, and classifications that are not just and 
reasonable, it logically follows that it also protects against charges, 
practices, and classifications that are unjust and unreasonable. Thus, 
to whatever extent the enforcement of section 251(c)(4) is not 
necessary to ensure just and reasonable rates, it necessarily follows 
that such enforcement prevents the opposite from occurring, that is, 
unjust and unreasonable rates. Competitive LECs such as Granite already 
purchase the majority of their resold services through either 
commercially negotiated agreements or section 251(b)(1) resale. While 
TPx has not made a similar statement, it also has not provided 
specifics regarding how many of its 12,000 resold lines are purchased 
via Avoided-Cost Resale and how many via other avenues. Moreover, TPx's 
comments themselves, versus the attached declaration, make no mention 
of Avoided-Cost Resale. Indeed, Granite has previously acknowledged 
that it purchases the majority of its resold services this way, arguing 
that it relies on the existence of Avoided-Cost Resale as leverage for 
negotiating better rates. Avoided Cost Resale was enacted to help 
jumpstart competition in the market; it was not intended to serve as a 
leveraging tool for individual competitors when negotiating agreements. 
We thus are unpersuaded by Granite's assertion that sections 251(b)(1), 
201, 202, and 208 will not serve as sufficient regulatory backstops to 
ensure unreasonable and unreasonably discriminatory rates. As we stated 
in the UNE Analog Loops and Avoided-Cost Resale Forbearance Order, 
``even if the rates paid by competitive LECs to resell voice service 
were to rise based on our grant of forbearance from Avoided-Cost 
Resale, there is no reason to believe that end-user rates will be 
unjust or unreasonable.'' Moreover, UNE DS0 Loops will remain available 
in rural and urban cluster census blocks, as will UNE DS1 and DS3 Loops 
in non-competitive counties, to the extent the incumbent LEC is not 
entitled to the rural LEC exemption. Competitive LECs thus will remain 
able to provision service to customers in those areas via means other 
than Avoided-Cost Resale to the same extent they are able to today. 
Granite asserts that the Commission should retain Avoided-Cost Resale 
in those areas in which it retains UNE DS0 Loops because they are 
provided over the same facilities. However, while many competitive LECs 
use UNE DS0 Loops as a stepping-stone to deployment of their own 
networks, as well as to provide high-speed broadband, those competitive 
LECs relying on Avoided-Cost Resale do so almost exclusively to 
provision only voice-grade services. Thus, while retaining UNE DS0 
Loops furthers the congressionally mandated goal of ensuring the 
provision of advanced services to all Americans, Avoided-Cost Resale 
does not. Alternative voice services are also available from intermodal 
competitors, and commercial replacements will be available where UNE 
Loops are being

[[Page 1663]]

phased out. The availability of these other voice services serves to 
constrain incumbent LEC rates for services previously purchased via 
Avoided-Cost Resale.
    149. Section 10(a)(2). We find that the evolving marketplace and 
the statutory and regulatory safeguards that work to ensure just and 
reasonable rates also ensure that consumers will not be harmed by 
forbearance from enforcement of the Avoided-Cost Resale obligation. 
Competitive LEC resellers' customer base is almost exclusively made up 
of business and government customers. As a result, forbearance from the 
Avoided-Cost Resale requirement will not impact mass market customers. 
Again, competitive LECs have made it clear that they purchase very few 
of the services they resell via Avoided-Cost Resale, and they will 
still have access to TDM-based services via commercial agreements and 
section 251(b)(1). While this may result in higher prices, this should 
serve to encourage end-user customers to migrate to next-generation 
services, thus helping to advance Congress's goal as stated in section 
706. They also will still be able to purchase a variety of wholesale 
inputs, including UNE DS0 Loops in rural and urban cluster census 
blocks and via UNE DS1 and DS3 Loops in non-competitive counties to the 
extent they are available today. Even if these competitive LECs choose 
not to stay in the market via UNEs rather than Avoided-Cost Resale, 
other competitors may choose to enter these markets via UNEs. And 
customers will also have access to various intermodal alternative 
services, to which they have increasingly been migrating.
    150. Section 10(a)(3). Finally, we find that forbearing from 
Avoided-Cost Resale obligations for non-price cap LECs is in the public 
interest as it promotes the important Commission policy of furthering 
the deployment of next-generation networks and services and encouraging 
the rapid transition to IP-based voice services and the benefits that 
accrue to the public at large from the widespread use of such services. 
Increased adoption rates of next-generation services provide incentives 
for incumbent and competitive LECs alike to expend precious resources 
on deployment of networks capable of supporting those services. To the 
extent end users are allowed to rely on the availability of legacy 
services, many will continue to do so and eschew the move to next-
generation networks and services.
    151. We reject Granite's argument that we cannot consider the 
public interest benefits of facilities-based competition and expediting 
the transition to next-generation networks in a forbearance analysis. 
Indeed, the D.C. Circuit has specifically approved of the Commission 
considering section 706 goals in a forbearance analysis. Moreover, 
section 10's public interest determination gives the Commission broad 
discretion as to what public interest factors it may consider in 
determining whether section 10(a)(3)'s prong has been met. Commenters 
raise no new arguments opposing forbearance from the Avoided-Cost 
Resale requirements to non-price cap LECs than they did in opposing 
forbearance from those requirements for price cap LECs, except to point 
to fewer alternatives being available in rural locales. We address 
their arguments in detail below. However, as we noted above, rural 
incumbent LECs are largely exempt from the Avoided-Cost Resale 
requirements.
    152. Moreover, we are unpersuaded that extending forbearance from 
Avoided-Cost Resale requirements to non-price cap incumbent LECs will 
provide incentives for incumbent LECs to harm competition and 
consumers. This argument stems almost wholly from the claimed potential 
for increased rates that might make particular competitors such as 
Granite unable to continue providing service to their end-user 
customers via commercial service offerings that Granite has negotiated 
with certain incumbent LECs. As we have repeatedly reminded Granite and 
others, however, the 1996 Act's market-opening provisions were put in 
place to protect competition, not specific competitors or particular 
business plans. And nothing in this Order eliminates the availability 
of TDM-based services. Eliminating the subsidy for legacy services that 
make them available at a lower price, though, may lead to greater 
adoption of next-generation services and further Congress's goal and 
the Commission's mission of encouraging the deployment of advanced 
communications capabilities.
    153. Line power. We disagree with commenters who assert that 
Avoided-Cost Resale should remain available because of the purported 
benefits of line-powered service. Some commenters claim that 
``traditional'' TDM service is line-powered and thus is more reliable 
than next-generation services that require backup power to function 
during power outages. We did not find this argument persuasive in the 
context of price cap areas, and we do not find it persuasive now as to 
non-price cap areas. To do otherwise would be inconsistent with 
incumbent LECs' ability to retire their line-powered copper networks 
and move their customers to fiber facilities without need for 
Commission authorization, a process the Commission has worked to 
expedite and facilitate over the past three years. Line-powered TDM 
service is available only to the extent that a carrier has not retired 
its copper loops, a business decision that is made by the carrier and 
not the Commission. No actions taken in this Order remove the 
availability of either copper-based facilities or legacy TDM-based 
services. As we have previously stated: ``Nothing about the rules at 
issue in this order require carriers to maintain line-powered copper 
loops--whether those loops may be retired is a subject of our copper 
retirement rules.'' However, incumbent LECs retiring their copper 
facilities must continue providing the same TDM-based service to their 
customers as before the retirement, just without line power, unless 
they also seek Commission authorization to discontinue that service. 
And in such a situation, the incumbent LEC must then comply with our 
technology transition discontinuance rules. As customer demand for TDM 
over copper continues to dwindle, incumbents are more likely to retire 
their copper and focus their resources on deploying next generation 
networks, at which point line power will not be as readily available. 
And the Commission has previously taken action to ensure that end users 
are aware of the need to take action to ensure that their non-copper-
based phone service continues to function in the event of a power 
outage. It is also inconsistent with our goal of speeding the 
transition to next generation networks and services and our policy to 
discourage ``reliance on outmoded legacy services.'' To the extent 
certain commenters suggest that copper-based TDM service is its own 
product market, we reject these claims as unsupported by sufficient 
evidence. Moreover, we have already declined to find TDM-based services 
in general to be their own product market. Moreover, the Commission has 
previously noted in other forbearance contexts that ``[p]erfect 
substitutability is not required.'' And nothing compels us to apply the 
type of market power analysis used in the Qwest Phoenix Order (25 FCC 
Rcd 8622, June 22, 2010) to our forbearance here for Avoided-Cost 
Resale. We now decline to find the even more narrow categorization of 
copper-based TDM service to be its own product market. To find 
otherwise would be inconsistent with the Commission's prior findings 
that copper retirements come within the purview of

[[Page 1664]]

the section 251(c)(5) of the Act, requiring only that incumbent LECs 
provide adequate notice of network changes, and do not constitute a 
discontinuance of service under section 214(a) of the Act. Moreover, 
nothing of the sort is required by the Act, and indeed, finding that 
copper-based TDM service must be maintained would slow the transition 
to advanced services, in contravention of section 706 of the 1996 Act. 
Forbearing from this outdated regulation will incentivize carriers to 
redirect resources to next-generation networks, thus benefiting the 
public by allowing for more advanced telecommunications capabilities. 
As the Commission previously stated, ``[w]e will not impede the 
progress toward deployment of next-generation facilities for the many 
because of the reticence of an ever-shrinking few.''
    154. Regardless, when an incumbent LEC retires its copper, which it 
can do on 90-days' notice and without a need to first obtain Commission 
authorization, customers will still receive the same TDM-based service, 
albeit without the legacy feature of line power. At such point, when 
TDM service is provided over fiber, it requires the use of backup power 
to operate during power outages. In addition, where copper loops still 
exist and incumbent LECs provide voice telecommunications services over 
those loops, copper-based TDM service will remain available for resale 
under section 251(b)(1) regardless of our forbearance herein. 
Competitive LECs in non-price cap areas will also be able to purchase 
these services pursuant to commercially negotiated agreements, which is 
how they currently purchase the majority of their resold services.
    155. Opponents of forbearance also point to the occurrence of 
natural disasters to support the continued necessity of Avoided-Cost 
Resale, thereby limiting their argument to TDM-based services provided 
over copper rather than fiber facilities. However, those same natural 
disasters can and do lead to expedited copper retirements, meaning that 
the TDM-based services available for resale are no longer line powered. 
Indeed, copper tends to perform more poorly in many such situations 
whereas fiber is more resilient and faces lower outage risks from 
weather events and aging. The Commission specifically adopted rules in 
2017 expressly to accommodate such circumstances, as well as expedited 
copper retirements resulting from other circumstances outside the 
incumbent LEC's control. Assertions by the California PUC and Michigan 
PSC that we must consider public safety concerns are subject to this 
same response given that no actions taken in this Order remove the 
availability of legacy TDM-based services.
    156. One stop shop. Opponents of extending to non-price cap areas 
forbearance from Avoided-Cost Resale requirements point once again to 
their multi-location business customers. Because competitive LEC 
commenters opposing this relief have made no new arguments specific to 
non-price cap areas, we are not persuaded that the needs of these 
customers justify retaining this requirement for non-price cap 
incumbent LECs. First, rural LECs, which include many non-price cap 
incumbent LECs, are already exempt from the Avoided-Cost Resale 
requirements. Additionally, to the extent particular non-price cap 
incumbent LECs are not exempt from section 251(c)'s requirements, 
competitive LECs will still be able to purchase these services via 
section 251(b)(1) resale or commercial agreements. Finally, to the 
extent broadband is available to these locations, multi-location 
businesses can link their various locations in other ways, such as 
through a virtual private network via IP-based services.
    157. VoIP unavailable. The unavailability of broadband in certain 
areas and, thus, the unavailability of VoIP in those areas, does not 
render inappropriate extending forbearance from Avoided-Cost Resale 
requirements to non-price cap incumbent LECs, contrary to the 
assertions of certain commenters. First, approximately two-thirds of 
the Americans residing in rural areas and urban clusters (combined) 
have access to broadband service from cable providers, and at least 
three wireless providers are available almost universally. For those 
areas that lack access to broadband, many incumbent LECs in non-price 
cap areas qualify for the rural exemption under section 251(f), as 
noted above. Moreover, TDM service will remain available for resale 
under section 251(b)(1) in those areas absent the incumbent LEC seeking 
to discontinue those services. In order to discontinue service, the 
carrier would have to seek Commission authorization. 47 U.S.C. 214(a). 
And one of the factors the Commission considers when reviewing 
discontinuance applications is the adequacy of the available 
replacement service(s). Indeed, the Commission specifically adopted 
rules applicable to the discontinuance of legacy TDM-based voice 
service that encompass just such situations. Finally, the Commission 
continues its efforts to accelerate broadband deployment to unserved 
and underserved areas and close the digital divide. As a result, 
forbearing from the Avoided-Cost Resale requirements in non-price cap 
areas will have minimal effect.
    158. Deployment incentive. As discussed in the UNE Analog Loop and 
Avoided-Cost Resale Forbearance Order, forbearing from Avoided-Cost 
Resale requirements will encourage the transition to next-generation 
services by leveling the playing field between next-generation services 
and legacy TDM-based services. We reject Granite's argument that 
forbearing from the Avoided-Cost Resale requirement acts as a 
disincentive for incumbent LECs to deploy additional next-generation 
facilities by making incumbent LECs' TDM-based services delivered over 
copper more profitable. There is no such evidence in the record, and 
indeed Granite's argument is at odds with incumbent LECs' retirement of 
copper loops and replacement with next-generation alternatives. 
Moreover, the majority of customers in non-price cap areas have access 
to service by both cable and wireless providers, which incentivizes 
incumbent LECs to replace their aging copper facilities with next-
generation networks in order to remain competitive. We also reject 
Granite's argument that nationwide forbearance from the Avoided-Cost 
Resale requirement is inconsistent with our more granular treatment of 
UNE DS1 and DS0 Loops. Both UNE DS1 and DS0 Loops can be used to 
provide broadband services, and in balancing the costs of regulation 
with the potential benefits that these loops can provide for broadband 
deployment and access where competition is less developed and entry is 
less likely, we determine above that these UNE Loops should remain 
available in limited areas. But Avoided-Cost Resale does not provide 
similar benefits for broadband deployment, and therefore we do not 
believe that it would benefit the public interest to retain Avoided-
Cost Resale in any specific areas.
    159. Resale as backstop. Commenters opposing forbearance from 
Avoided-Cost Resale requirements assert that the Commission has always 
retained those requirements when granting forbearance from unbundling 
obligations, such as in the Qwest Omaha Order. But Qwest Omaha was 
decided 15 years ago, at a time when the market was dramatically 
different and TDM service played a much larger role than it does today. 
In addition, the Commission's decision there was based on the specific 
facts of that case. The Commission found in Qwest Omaha that section 
251(b)(1) resale was not an adequate substitute for avoided-cost resale 
because it lacked a

[[Page 1665]]

wholesale pricing requirement. However, that Order was adopted 15 years 
ago when the communications marketplace was very different from today's 
marketplace. In particular, the voice marketplace is replete with 
facilities-based competition, and incumbent LECs no longer have a 
dominant role in voice as whole or wireline voice in particular. 
Moreover, the Commission did not then have before it a record showing 
that the majority of resold services are purchased by means other than 
Avoided-Cost Resale.
    160. In any event, UNE DS0 Loops will remain available in rural and 
urban cluster census blocks, and UNE DS1 and DS3 Loops will continue to 
be available in non-competitive counties, to the extent the incumbent 
LEC is not entitled to the rural LEC exemption. Moreover, we find today 
and similarly found in the UNE Analog Loops and Avoided-Cost Resale 
Forbearance Order that the continued requirement to provide Avoided-
Cost Resale slows the transition to next generation services and 
undermines our goal of sustainable facilities-based competition. Thus, 
unlike in Qwest Omaha, we no longer need to retain Avoided-Cost Resale 
to ensure voice competition because technology has changed and we know 
there is competition in the voice market. The circumstances at issue 
here thus are distinguishable from those at issue in prior UNE 
forbearance orders that retained Avoided-Cost Resale as a regulatory 
backstop and alternative to facilities-based competition.
    161. Alternative Proposals. Granite makes two proposals with 
respect to retaining the Avoided-Cost Resale requirement. First, it 
proposes preserving the requirement solely for business and government 
customers. We have already disposed of this argument in the UNE Analog 
Loops and Avoided-Cost Resale Forbearance Order. Second, it proposes 
preserving the requirement where UNE DS0 Loops will remain available--
i.e., in rural and urban cluster census blocks. Granite argues that 
``where market conditions warrant retaining UNE DS0 loops, they equally 
warrant retaining Avoided-Cost Resale.'' However, competitive LECs use 
Avoided-Cost Resale to provision legacy TDM voice service, while UNE 
DS0 loops are used to provide both broadband and voice service. The 
Commission's policy of transitioning to next-generation services 
therefore warrants forbearance from Avoided-Cost Resale requirements 
even where market conditions support retaining UNE DS0 loops. We 
decline to adopt either proposal as both undermine the policy of 
encouraging consumers to transition to next-generation services and are 
unnecessary to protect consumers or the public interest.
    162. Pending appeal. INCOMPAS asserts that it is inappropriate for 
the Commission to extend forbearance from Avoided-Cost Resale 
requirements to non-price cap incumbent LECs while the appeal of the 
UNE Analog Loop and Avoided-Cost Resale Forbearance Order is pending. 
We disagree. That Order remains effective at this time, and this is a 
different proceeding with a new record upon which to consider extending 
Avoided-Cost Resale forbearance. Nothing in this record persuades us 
that a different conclusion is warranted.
    163. Transition Period. In the NPRM, we proposed a three-year 
transition period for this forbearance relief, and we sought comment on 
whether to include a six-month period for new orders. We adopt this 
proposal and do not include any period for new orders, conditioning our 
forbearance from non-price cap LEC Avoided-Cost Resale obligations on 
an appropriate transition period. Competitive LECs using Avoided-Cost 
Resale to fill in gaps where UNE Loops are unavailable and where they 
have not yet deployed their own fiber facilities will need to consider 
whether they can devote resources to deploying their own network 
facilities during the transition period or make alternative commercial 
arrangements. And competitive LECs operating on a purely resale basis 
will need time to negotiate new pricing arrangements under section 
251(b)(1) resale, negotiate entirely new commercial wholesale 
arrangements, or work with their customers to migrate them to IP-based 
voice services. However, unlike with UNEs, competitive LECs using 
Avoided-Cost Resale do not have to place new orders to address 
individual last-mile loops that have deteriorated or to deal with the 
residential churn that requires competitive LECs using UNE DS0 Loops to 
place new orders when a residential customer at a particular location 
moves and a new potential residential customer moves into that 
location.
    164. Accordingly, we condition our grant of forbearance from non-
price cap LEC Avoided-Cost Resale obligations on a three-year 
grandfathering period. This transition period will begin on the 
effective date of this Order. During the relevant transition period, 
any Avoided-Cost Resale services that a competitive LEC purchases as of 
the effective date of this order shall be available for purchase from 
the incumbent LEC at regulated rates. Wholesale discounts are 
established either through negotiated interconnection agreements or 
through state-commission-Avoided-Cost Resale rate studies applying 
certain Commission-developed pricing formulas. Our forbearance action 
is not intended to upset pre-existing interconnection agreements or 
other contractual arrangements that may currently exist nor pre-
existing state commission wholesale discount rates during the 
transition period (including any already-adopted state commission 
scheduled changes in the discount rates), which should quell concerns 
regarding near-term price increases following forbearance from Avoided-
Cost Resale obligations. As with the transition for price cap LEC 
Avoided-Cost Resale, we find this transition period will minimize the 
impact of any immediate rate increase for end-user customers of 
affected competitive LECs that could otherwise occur if current pricing 
for these services were immediately eliminated. Further, the process 
that we describe is a default process from which competitive LECs and 
non-price cap incumbent LECs remain free to deviate pursuant to mutual 
agreement. The transition timeframe we adopt will work to ensure that 
end-user customers do not experience any undue service disruption as a 
result. We find no reason to adopt any longer transition period and 
thus we reject INCOMPAS's proposed seven-year transition period. 
INCOMPAS relies on the seven-year transition period provided for in the 
T-Mobile/Sprint Order (34 FCC Rcd 10578, Nov. 5, 2019) ``for DISH to 
become a facilities-based provider.'' However, the most vocal opponent 
to eliminating the Avoided-Cost Resale requirement is Granite, which is 
not a facilities-based provider and has not professed any desire or 
intention to become one, and there is little record evidence suggesting 
Avoided-Cost Resale is used as a bridge to facilities-based 
competition. And neither INCOMPAS nor Granite provide any evidence that 
consumers will be harmed without a longer period.

F. Cost Benefit Analysis

    165. We take a dynamic and forward-looking approach to evaluate the 
benefits and costs of regulation. The Commission has discussed at 
length the failings of ex ante regulation and found that ex ante 
regulation is necessary only where competition cannot be relied upon to 
reasonably discipline the market. Our consideration of the relative 
benefits and costs of the obligations for UNE DS0 associated subloops, 
UNE DS1 and DS3 associated subloops follows the same reasoning as our 
consideration the underlying Loop obligations for these

[[Page 1666]]

services discussed in this section. To the extent that we find that the 
benefits of continuing UNE obligations exceed the costs of obligation, 
this analysis applies equally to the UNE OSS obligation necessary to 
provision UNEs and to support number portability. Further, the costs of 
the obligation to provision Multiunit Premises UNE Subloops, UNE Hybrid 
Loops, Grandfathered UNE 64 kbps Voice-Grade Channel Over Fiber Loops, 
UNE NIDs and UNE Narrowband Voice-Grade Loops exceed the benefits of 
continuing these obligations because there is no indication that these 
UNEs are used by competitors to any significant degree. Further in the 
case of Multiunit Premises UNE Subloops, the record indicates that the 
it is the owner of the property, not the incumbent LEC, that controls 
access to the property. Thus, competitive LECs concerns with access to 
the MTEs are beyond the scope of our actions here, and instead belong 
to the current MTE Docket. The obligation to offer UNEs and Avoided-
Cost Resale have been in place for over 23 years, and the Commission 
has long recognized that unbundling ``is an especially intrusive form 
of economic regulation.'' The Commission has found that these 
obligations can yield negative effects, including diminishing 
incentives to invest, inhibiting facilities-based competitive entry and 
forestalling the benefits of competition. Thus, we seek to eliminate 
UNEs and Avoided-Cost Resale where development of competition means the 
costs of continuing these obligations outweigh their benefits and where 
the statutory criteria for declining to impose such requirements are 
otherwise satisfied.
    166. UNE DS1 and DS3 Loops. We find that over the medium and long 
term the costs of maintaining the obligation to supply UNE DS1 and DS3 
Loops in those counties and study areas deemed competitive in the BDS 
Order and RoR BDS Order exceed any benefits such supply provides. 
First, the Commission has found UNE DS1 and DS3 Loops to be 
``particularly close substitutes'' for DS1 and DS3 business data 
services, and deregulated pricing for DS1 and DS3 business data 
services in the counties and study areas deemed competitive in the BDS 
Order and RoR BDS Order. The Commission has found that ex ante price 
regulation for DS1 and DS3 business data services to be unnecessary in 
these counties and study areas and that the costs of ex ante 
regulations exceed the benefits of ex ante regulation for DS1 and DS3 
business data services. Because UNE DS1 and DS3 Loops are close 
substitutes for DS1 and DS3 business data services, the Commission's 
conclusions as to the net costs of continued regulation of DS1 and DS3 
business data service should apply equally to UNE DS1 and DS3 Loops. 
Thus, the obligation to offer UNE DS1 and DS3 Loops is no longer needed 
where the Commission has found that market sufficiently competitive 
and/or found no need for continued regulation of DS1 and DS3 business 
data services. Second, the demand for UNE DS1 and DS3 Loops and DS1 and 
DS3 business data services have declined over time as competitive LECs 
have built out their own networks and migrated away from TDM-based 
services; thus suggesting that competitive LECs' need for these inputs 
has declined as these competitors have built their own facilities. 
Consequently, requiring the supply of UNE DS1 and DS3 Loops where 
relief has been granted for DS1 and DS3 business data services is 
likely to have a net expected cost in medium and long term. Finally, as 
there are no material operational or performance distinctions between 
UNE DS1 and DS3 Loops and DS1 and DS3 business data services and these 
services are used interchangeably, there is no benefit to have one 
regulatory paradigm for UNE DS1 and DS3 Loops and another for DS1 and 
DS3 business data services, particularly given the impact that a 
differential regulatory paradigm could have on firms' incentives to 
invest in their own networks and next-generation services.
    167. In the short term, however, we do not want to disrupt the 
services currently received by customers of competitive LECs that 
purchase UNE DS1 and DS3 Loops in these areas, particularly given the 
impact on businesses and consumers from the recession and COVID-19 
pandemic which has increased the need for reliable broadband services 
for businesses and consumers. Consequently, we find that the 42-month 
transition period for UNE DS1 Loops and the 36-month transition period 
for UNE DS3 Loops provides sufficient time for the competitive LECs to 
transition to alternative arrangements and/or to replace these 
productive inputs with their own facilities. As discussed in the DS1/
DS3 section, there is record evidence that the use of UNE DS3 Loops is 
de minimis, justifying a shorter transition period.
    168. UNE DS0 Loops. We find that the costs of maintaining the 
obligation to supply UNE DS0 Loops in urbanized areas exceed any 
benefits such supply provides. UNE obligations are heavy-handed and so 
carry substantive regulatory costs. They likely distort pricing and 
investment decisions, as well as choices of product offerings. In 
urbanized areas, we find that the benefits of the UNE DS0 obligation 
are negligible because the facilities-based competition such 
regulations are intended to foster is established to an extent that 
makes these rules redundant. Currently, 71% of mass market consumers in 
these areas can obtain broadband services meeting a 25/3 Mbps speed 
threshold from at least the incumbent LEC and a cable provider. This 
contrasts with 21% of consumers in rural areas and 27% of consumers in 
urban clusters. The corresponding figures for broadband services 
meeting a 10/1 Mbps speed threshold are 82% for urbanized areas, 36% 
for rural areas, and 59% for urban clusters. And competition and entry 
by fixed wireless providers continues to increase. Thus, competition 
between two facilities-based providers with near ubiquitous networks, 
and expected entry by fixed wireless providers, without the distortions 
of UNE regulation, will bring greater benefits over the medium term, 
than ongoing UNE requirements, which distort incumbent and competitive 
LECs' incentives to compete.
    169. In contrast, the record presents insufficient evidence of 
competitive changes to end UNE DS0 Loop obligations in urban clusters 
and rural areas. We find that: (1) Mass market customers in these areas 
often either do not have access to a high speed broadband service or 
can only obtain such service from a single provider, which sometimes is 
a competitive LEC that relies on UNE DS0 loops; and (2) certain 
competitors rely on UNE DS0 loops to connect their customers to their 
own fiber networks and are swapping out these loops for their own last 
mile facilities as they build out their fiber network to their end-
users' premises. Based on December 2019 Form 477 data, the proportion 
of households with either no or one provider option for 25/3 Mbps 
services was 57% in rural areas and 40% in urban clusters compared to 
16% in urbanized areas. As noted above, of the approximately 42,000 
thousand households who have a single option for 25/3 Mbps service that 
may rely upon UNE Loops, about 35,000 live in rural areas and urban 
clusters where UNE DS0 Loops will remain available. Thus, consistent 
with our initial imposition of UNE DS0 Loop requirements, access to UNE 
DS0 Loops in urban clusters and rural areas continues to support the 
development of competition and the deployment of advanced services in 
these areas.
    170. In urbanized areas, we find the two-part transition for UNE 
DS0s Loops appropriately balances the short-term

[[Page 1667]]

needs of the competitive LECs to maintain competitive supply while they 
extend their networks. Competitors claim that the immediate loss of UNE 
DS0 Loops would strand their investments and cause the cessation of 
services to their customers, particularly given the recession that has 
been caused by the COVID-19 pandemic. We find these claims credible as 
facility-based replacement of existing UNEs requires substantive time 
and effort.
    171. UNE Dark Fiber Transport. Consistent with the UNE Transport 
Forbearance Order, we find that the costs of maintaining the obligation 
to supply new UNE Dark Fiber Transport exceed any benefits such supply 
provides to wire centers that are within a half mile of alternative 
fiber. Such an obligation distorts the incumbent and competitive LECs' 
incentives to invest in transport networks, e.g., because it is 
unlikely UNE prices correctly reflect efficient costs in all 
circumstances. Similarly, competitive LECs may inefficiently prefer to 
purchase UNEs without any long-term obligations, rather than bearing 
the multi-decade risk deployment entails.
    172. We find that there are net benefits to competitors to retain 
use of their existing UNE Dark Fiber Transport for a significant period 
of time, however, because of the risk of stranding competitors' 
investments that rely upon this transport. This concern is sharpened by 
the recession caused by the COVID-19 pandemic, which has increased the 
need for broadband services, and has made it harder to finance 
deployment. Some competitive LECs rely on embedded UNE Dark Fiber 
Transport to support the investments they have made in networks, 
notably including last-mile facilities, which represent substantial 
investments that are sunk for many years. Competitively replacing the 
UNE Dark Fiber Transport they currently rely on would in some instances 
require significant investments (on the part of the providers or third 
parties) and would take substantial time. The result, in some 
instances, would be the cessation of services to existing customers and 
of planned new last-mile deployments. And the cost of continuing to 
provision existing UNE Dark Fiber Transport is comparatively low. 
Accordingly, we are persuaded there are significant net benefits to 
permit competitors' continued use of embedded UNE Dark Fiber Transport 
at existing terms and conditions for eight years.
    173. Avoided-Cost Resale and UNE Analog Loops. We find there are 
net costs of continuing the obligations to offer Avoided-Cost Resale 
and UNE Analog Loops. The Commission has found that the availability of 
these UNEs at subsidized prices distorts competitors' incentives to 
build their own last mile facilities and the deployment of next-
generation facilities, hindering the Commission's policy goals and 
reducing overall efficiency. The migration away from legacy TDM 
services is occurring in price-cap and non-price cap areas. The 
Commission forbore from imposing these obligations for price-cap LECs, 
and identical reasoning applies to non-price LECs. Allowing competitive 
LECs access to these services during the three-year transition period 
will allow an orderly transition to the more efficient end state. In 
addition, providers with customers that prefer legacy services and that 
rely upon Avoided-Cost Resale to provision those services, may continue 
to offer legacy services via section 251(b)(1) resale and commercial 
agreements.

G. Other Considerations

    174. SBA Response. We disagree with the Chief Counsel of the Small 
Business Administration that removing these UNE and resale obligations 
for which we grant relief today will prevent small competitive LECs 
from providing competitive services to consumers and from deploying 
their own networks, and that the benefits to adopting these changes 
will have unclear economic benefits. We eliminate UNEs and resale only 
where they are no longer necessary for competition and entry as the Act 
requires, and preserve them where they still serve a useful purpose. 
Moreover, the fact that INCOMPAS and USTelecom and almost all of their 
members who participated in this proceeding have reached a compromise 
as to several of the UNEs that SBA raises concerns about, provides us 
with additional assurance that eliminating certain UNEs subject to 
transition conditions will not unduly affect small businesses. We 
expect that the benefits from eliminating these UNEs and resale, 
including increased competition and deployment of next-generation 
facilities, will also extend to small businesses. Additionally, any 
small businesses relying on current UNE Dark Fiber Transport will 
retain all of their current rights for eight years. To the extent small 
businesses are burdened, we expect that this generous transition period 
will provide them sufficient time to act to avoid disruptions to their 
current business operations.
    175. Puerto Rico. Based on the record in this proceeding, we do not 
find that a longer grandfathering period is necessary for Puerto Rico 
for any UNE or resale obligations for which we grant relief. Although 
we provided a five-year, rather than three-year, grandfathering period 
for Puerto Rico due to the state of the economy and ongoing hurricane 
restoration efforts in the 2019 UNE Forbearance Orders, a unique 
transition period is not warranted here for Puerto Rico, and 
competitive LECs providing service there have been on notice for almost 
a year now that such UNEs may no longer be available. While we sought 
comment on a longer transition period for Puerto Rico in the NPRM, we 
did not propose a different transition timeframe. We find that we have 
provided a sufficient transition period for the UNE and resale 
obligations for which we grant relief, which should also provide more 
than enough time for competitive LECs in Puerto Rico to seamlessly 
transition their existing customers to alternative facilities or 
services. A longer transition would unnecessarily continue to impose 
outdated burdens solely placed on the incumbent LEC, undermining 
incentives for sustainable facilities-based competition, which is 
important to encourage as Puerto Rico continues to rebuild. Moreover, 
we clarify that the transition periods we adopt herein do not supersede 
or modify any previously-adopted transition periods applicable to 
Puerto Rico.
    176. We also reject WorldNet's argument that the Commission should 
exempt Puerto Rico from any elimination or reduction of UNE or resale 
obligations in this proceeding due to its unique economic 
circumstances. As WorldNet acknowledges, we recently decided not to 
exempt Puerto Rico with regard to the UNE and Avoided-Cost Resale 
obligations at issue in the UNE Analog Loop and Avoided-Cost Resale 
Forbearance Order. For similar reasons, namely, that reducing 
unbundling obligations will increase incentives for facilities-based 
deployment, our decision in this document applies to Puerto Rico. 
Importantly, customers in Puerto Rico will have a number of alternative 
options that will protect them from unreasonable rates and charges, 
aided in part by the Commission's ongoing work to implement the Uniendo 
a Puerto Rico Fund and ensure that the residents of the island have 
access to next-generation technologies that are resilient to hurricanes 
and other natural disasters. Even after our actions today, WorldNet 
will still be able to make voice services available to its customers 
via alternative arrangements such as commercial agreements with the 
incumbent LEC or other providers and section 251(b)(1) resale, or 
through

[[Page 1668]]

deployment of its own facilities-based voice services. Thus, we do not 
find it necessary to exempt Puerto Rico from the UNE and resale 
obligations that are eliminated or reduced today. Moreover, the 
transition timeframes that we have adopted should provide more than 
sufficient time for WorldNet to transition any of its existing 
customers to alternative facilities or services.
    177. Public Safety. With respect to concerns that the Commission 
``should carefully consider the impacts that its proposal . . . would 
have on public safety,'' we note that such issues have been considered 
with respect to each UNE element where the issue has been raised in the 
record as well as in the discussion of Avoided-Cost Resale. As 
discussed above, to the extent commenters raise issues about losing 
line power and TDM service over copper, this Order will not impact the 
availability of such features, nor does it affect the availability of 
9-1-1 functionality. And consistent with the NPRM, we retain the access 
to E911/911 database UNE without modification. We therefore find that 
our actions today will not affect issues related to public safety in 
any way.
    178. Form 477 Data. With respect to concerns that there are 
limitations related to our reliance on Form 477 data, such data is the 
best, most granular data currently available. Importantly, however, in 
this Order, we rely on Form 477 data primarily for nationwide findings 
in the UNE Narrowband Voice-Grade Loops and Avoided-Cost Resale 
sections, and on findings that apply to urbanized areas as compared to 
urban clusters and rural areas. Moreover, the nationwide findings we 
primarily rely on in the UNE Narrowband Voice-Grade Loops and Avoided-
Cost Resale sections are voice subscription counts rather than 
deployment data. While some parties in this proceeding have questioned 
the reliability of deployment data, none have questioned the validity 
of voice subscription counts. While some commenters criticize Form 477 
deployment data as overstating deployment because a provider need only 
serve one location in a census block for the block to be considered 
served, we note that in urbanized areas, where census blocks are 
extremely small, a provider that serves one location is very likely to 
be able to serve the other locations in the census block in the near 
future. To the extent commenters raise concerns about the precision of 
Form 477 data in specific areas, nothing in our Order relies on such 
specificity. The findings in the UNE DS1/DS3 and UNE Dark Fiber 
Transport sections are based on analyses that relied upon the 
comprehensive BDS Data Collection and the Commission's prior orders 
that relied upon those analyses. While the Commission is currently 
developing a new data collection to replace Form 477, it is primarily 
doing so to improve precision in specific areas, which, while 
undoubtedly important for Universal Service purposes, is not required 
for our more general findings to refine unbundling requirements. For 
purposes of this proceeding, as discussed above, we have accurately 
captured the ``current competitive landscape'' nationwide and find that 
our actions today will ``effectively foster competition and benefit 
consumers.''

IV. Procedural Matters

    179. Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM in 
this proceeding. The Commission sought written comment on the proposals 
in the NPRM, including comment on the IRFA. The present Final 
Regulatory Flexibility Analysis (FRFA) addresses comments received on 
the IRFA and conforms to the RFA.

A. Need for, and Objectives of, the Rules

    180. In the NPRM, the Commission proposed to revise its unbundling 
and resale requirements to account for changes in communications 
service markets where competition has flourished, and sought 
comprehensive comments on these proposals. Thus, this Order provides a 
new regulatory framework that does away with obsolete regulatory 
obligations and promotes the deployment of competitive facilities and 
next-generation networks, spreading the benefits of innovation and 
facilities-based competition to market entrants and end-users alike, 
including small businesses in each category.
    181. Specifically, in the NPRM the Commission sought comment on 
proposals to eliminate: (1) UNE DS1 and DS3 loop obligations in 
counties and study areas deemed competitive in the BDS Order and RoR 
BDS Order; (2) UNE DS0 loops in urban census blocks; (3) UNE analog 
loop obligations where they still apply; (4) 64 kbps voice-grade 
channel over fiber loops obligations where they still apply; (5) 
unbundling requirements for the narrowband frequencies of hybrid loops; 
(6) UNE subloops in the particular instances or geographic areas where 
we propose to eliminate the unbundling obligation for the underlying 
loop to the customer's premises; (7) unbundled dark fiber transport to 
wire centers that are within a half mile of alternative fiber; (8) 
stand-alone UNE network interface device (NID) obligations; (9) 
operations support systems (OSS) unbundling obligations; and (10) 
Avoided-Cost Resale obligations in non-price cap areas. The unbundling 
requirement imposed by the 1996 Act were designed to promote 
competition, not specific competitors; as such, in evaluating the 
continued need for particular UNEs or Avoided-Cost Resale, we look to 
the existence of competition rather than the impact our actions will 
have on individual competitors.
    182. Drawing on the record in this proceeding along with data from 
a variety of sources, including findings in the BDS Order, RoR BDS 
Order, and Form 477 data, the Commission makes findings regarding 
actual and potential competition in different geographic areas. In 
those localities where competition is robust, the Commission finds that 
continuing to require incumbent LECs to provide access to the UNEs 
described above is counterproductive. Ending these requirements will 
minimize burdensome regulations and allow market forces to drive 
innovation and competitive pricing.
1. UNE DS1 and DS3 Loops
    183. Based on the record in this proceeding, as well as the 
conclusions drawn in the BDS Order, the Commission finds competitive 
LECs are no longer impaired without access to unbundled DS1 and DS3 
loops in those counties that are already competitive or where there is 
the potential for competition (collectively, ``Competitive Counties''). 
Therefore, these UNE requirements are no longer necessary nor 
appropriate in these locations. Even if there were continuing 
impairment, requiring provision of these UNEs would contravene the 
Commission's mandate to ensure the deployment of next-generation 
infrastructure. In the alternative, the Commission finds that 
forbearance from enforcing requirements for UNE DS1 and DS3 loops in 
Competitive Counties is appropriate. In these competitive localities, 
market forces will ensure fair pricing. None of these findings apply to 
non-competitive counties.
2. UNE DS0 Loops
    184. Based on the record in this proceeding, as well as Form 477 
data, the Commission finds that cable companies provide significant 
competition, and therefore competitive LECs are no longer impaired 
without access to unbundled DS0 loops in urbanized census blocks, and

[[Page 1669]]

independently forbears from the obligation. As such, UNE obligations 
are no longer appropriate in these areas. This finding does not apply 
to urban cluster census blocks nor rural census blocks.
3. UNE Narrowband Voice-Grade Loops, Multiunit Premises Subloops, and 
NIDs
    185. The Commission finds that competitors do not face significant 
barriers to entry into the voice-service market, and therefore forbear 
from any remaining UNE Narrowband Voice-Grade Loop obligations 
nationwide. The Commission also finds that impairment no longer exists 
without access to UNE Multiunit Premises Subloops and NIDs. Further, 
the Commission finds that competitive LECs are not impaired by lack of 
access to these UNEs, and that continued provision thereof contravenes 
the Commission's mandate to ensure deployment of next-generation 
networks.
4. UNE Dark Fiber
    186. The Commission finds that competitive LECs are not impaired 
without UNE dark fiber that is within a half mile from alternative 
fiber. Further, the Commission independently forbears from any UNE Dark 
Fiber Transport within a half mile from alternative fiber. However, 
access will be grandfathered for eight years for those who are already 
relying on it.
5. Operations Support Systems
    187. The Commission finds that competitive LECs are not impaired 
without access to OSS, except for the purposes of number portability 
and interconnection.
6. Avoided-Cost Resale
    188. For the same reasons the Commission granted price-cap 
incumbent LECs forbearance from the Avoided-Cost Resale requirement in 
2019, the Commission now extends that forbearance to non-price-cap 
incumbent LECs. The Commission finds that enforcement of these 
obligations is unnecessary to moderate end-user pricing nor to protect 
competitive LECs' ability to provide service due to the abundance of 
alternatives available across markets.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    189. In this section, we respond to comments filed in response to 
the IRFA. To the extent we received comments raising general small 
business concerns during this proceeding, those comments are discussed 
throughout the Order and are summarized in part E, below.
    190. We reject arguments that ending UNE access for competitive 
providers would damage their ability to compete in the affected markets 
because UNE loop obligations are being rolled back only in counties and 
study areas already deemed competitive, and access to dark fiber will 
be grandfathered for eight years for all providers currently utilizing 
it. Furthermore, the Commission's objective in finding non-impairment 
is to foster competition, not to promote any specific competitor. In 
making the impairment inquiry, we make the reasonable inference that if 
competitive providers have successfully entered one market using their 
own facilities, other providers can enter similar markets on a similar 
basis.
    191. We also reject the claim that removing access to UNEs will 
inhibit development of next-generation infrastructure. Indeed, we find 
that continuing provision of UNEs in areas with robust competition in 
place will result in stagnation of innovation and delay the deployment 
of new technologies such as 5G networks.
    192. With respect to whether small business customers will lose 
their choice in providers with the adoption of this Order, or may lose 
access all together if the only provider in their region is unable to 
provide service by way of UNEs, we note that because UNE loop 
obligations will only be removed in markets where competition is 
sufficiently robust. Additionally, we provide 8 years for competitive 
LECs to transition from UNE Dark Fiber Transport. While price increases 
are possible as a result of the transition to commercial pricing for 
some network elements, these increases do not constitute impairment.
    193. With respect to the suggestion that a significant number of 
small entities may be unaware of this proceeding and that the 
Commission should engage in educational outreach to inform them of it, 
we disagree with this assertion because the NPRM explained the proposed 
regulatory changes in detail and solicited comments from all parties. A 
summary of the NPRM was published in the Federal Register, and we 
believe that such publication constitutes appropriate notice to small 
businesses subject to the regulations.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    194. First, we disagree with the Chief Counsel's assertion that the 
Commission failed to consider in its IRFA the impact of the new 
regulations on small entities that will be directly impacted by the 
changes. To the contrary, the Commission specifically requested 
comments regarding economic impacts on small entities that may result 
from the changed regulations. Many such comments were submitted in 
response, allowing the Commission to consider the concerns of small 
competitive LECs and other entities throughout this Order. Though the 
Chief Counsel advises the Commission to issue a further notice of 
proposed rulemaking with a supplemental IRFA, we believe this is 
unnecessary because the NPRM described in detail the proposed changes 
to the regulatory framework, posed specific questions on how best to 
implement the changes, and sought comprehensive comments from all 
parties. As described in paragraph 193 of this RFA, a summary of the 
NPRM was published in the Federal Register, thus providing notice to 
all affected entities, including small entities.
    195. We disagree with the Chief Counsel's argument that removing 
these UNE obligations will prevent small competitive LECs from 
providing competitive services to consumers and from deploying their 
own networks. Indeed, the Commission is implementing these changes in 
order to promote facilities-based competition that will benefit large 
and small providers as well as end-users. Access to UNEs was always 
intended as a stepping stone for competitors to gain market entry and 
build their own networks, to be retired once competition was 
established. In evaluating the need for a given UNE the Commission 
considers the existence of competition, including intermodal 
competition, not the impact on any particular competitor. The 
Commission's impairment determinations consider the existence of 
intermodal competition because ``[t]he fact that an entrant has 
deployed its own facilities--regardless of the technology chosen--may 
provide evidence that any barriers to entry can be overcome.'' Further, 
examining these same facts, the Commission finds that the forbearance 
criteria are met, as competition will ensure that rates remain just and 
reasonable and protect consumers, while also promoting the public 
interest by spurring deployment of next-generation facilities. 
Additionally, those entities relying on dark fiber will have a 
significant period--eight years--to transition from UNE Dark Fiber 
Transport.
    196. Unbundling requirements for DS1 and DS3 loops will be removed 
only in those counties already determined to be competitive in the BDS

[[Page 1670]]

Order and RoR BDS Order. Furthermore, access to equivalent network 
elements is still available for purchase via commercial agreements, 
which supports a finding a non-impairment. Indeed, competitive 
providers already rely on these commercially available elements to 
compete. Obligations to provide UNE DS0 loops will cease only in 
urbanized census blocks where there is ample evidence of intermodal 
competition; urban cluster and rural census blocks, where the record 
does not provide evidence of robust competition, will retain the legacy 
UNE requirements.
    197. We disagree with the implication in the Chief Counsel's 
comments that the new regulations offer no economic benefit. In 
implementing these regulatory changes, the Commission is pursuing its 
congressionally mandated goal of ensuring deployment of next-generation 
networks and services. Pursuant to the provisions of the 1996 Act, the 
Commission revises its unbundling and resale requirements to account 
for changes in communications service markets where competition among 
incumbent and competitive LECs has flourished and UNEs are no longer 
necessary to facilitate market entry. Congress authorized the 
Commission to forbear from any regulatory obligations once the agency 
determined that they are obsolete, and encouraged the Commission to use 
forbearance and other means to encourage deployment of advanced 
telecommunications capability and remove barriers to infrastructure 
deployment. Promoting investment in innovation and advanced 
technologies can only provide greater economic benefits for all parties 
involved.

D. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    198. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of, the number of small entities that may 
be affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A ``small business concern'' is one which (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    199. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' SBA 
Advocacy contends that, for RFA purposes, small incumbent LECs are not 
dominant in their field of operation because any such dominance is not 
``national'' in scope. We have therefore included small incumbent LECs 
in this RFA analysis, although we emphasize that this RFA action has no 
effect on Commission analyses and determinations in other, non-RFA 
contexts.
    200. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. U.S. Census Bureau data for 
2012 show that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small.
    201. Incumbent Local Exchange Carriers. Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
incumbent local exchange services. The closest applicable NAICS Code 
category is Wired Telecommunications Carriers. Under the applicable SBA 
size standard, such a business is small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms 
operated the entire year. Of this total, 3,083 operated with fewer than 
1,000 employees. Consequently, the Commission estimates that most 
providers of incumbent local exchange service are small businesses that 
may be affected by our actions. According to Commission data, one 
thousand three hundred and seven (1,307) Incumbent Local Exchange 
Carriers reported that they were incumbent local exchange service 
providers. Of this total, an estimated 1,006 have 1,500 or fewer 
employees. Thus, using the SBA's size standard the majority of 
incumbent LECs can be considered small entities.
    202. Competitive Local Exchange Carriers, Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers and under that size standard, such a 
business is small if it has 1,500 or fewer employees. U.S. Census 
Bureau data for 2012 indicate that 3,117 firms operated during that 
year. Of that number, 3,083 operated with fewer than 1,000 employees. 
Based on these data, the Commission concludes that the majority of 
Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other 
Local Service Providers, are small entities. According to Commission 
data, 1,442 carriers reported that they were engaged in the provision 
of either competitive local exchange services or competitive access 
provider services. Of these 1,442 carriers, an estimated 1,256 have 
1,500 or fewer employees. In addition, 17 carriers have reported that 
they are Shared-Tenant Service Providers, and all 17 are estimated to 
have 1,500 or fewer employees. Also, 72 carriers have reported that 
they are Other Local Service Providers. Of this total, 70 have 1,500 or 
fewer employees. Consequently, based on internally researched FCC data, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, Shared-Tenant Service 
Providers, and Other Local Service Providers are small entities.
    203. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The closest applicable NAICS Code 
category is Wired Telecommunications Carriers. The applicable size 
standard under SBA rules is that such a business is small if it has 
1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate 
that 3,117 firms operated for the entire year. Of that number, 3,083 
operated with fewer than 1,000 employees. According to internally 
developed

[[Page 1671]]

Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange 
services. Of this total, an estimated 317 have 1,500 or fewer 
employees. Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities.
    204. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
OSPs. The closest applicable size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. U.S. 
Census Bureau data for 2012 show that there were 3,117 firms that 
operated that year. Of this total, 3,083 operated with fewer than 1,000 
employees. Thus under this size standard, the Commission estimates that 
the majority of firms in this industry are small entities. According to 
Commission data, 33 carriers have reported that they are engaged in the 
provision of operator services. Of these, an estimated 31 have 1,500 or 
fewer employees and 2 have more than 1,500 employees. Consequently, the 
Commission estimates that the majority of operator service providers 
are small entities.
    205. Local Resellers. The SBA has not developed a small business 
size standard specifically for Local Resellers. The SBA category of 
Telecommunications Resellers is the closest NAICs code category for 
local resellers. The Telecommunications Resellers industry comprises 
establishments engaged in purchasing access and network capacity from 
owners and operators of telecommunications networks and reselling wired 
and wireless telecommunications services (except satellite) to 
businesses and households. Establishments in this industry resell 
telecommunications; they do not operate transmission facilities and 
infrastructure. Mobile virtual network operators (MVNOs) are included 
in this industry. Under the SBA's size standard, such a business is 
small if it has 1,500 or fewer employees. U.S. Census Bureau data from 
2012 show that 1,341 firms provided resale services during that year. 
Of that number, all operated with fewer than 1,000 employees. Thus, 
under this category and the associated small business size standard, 
the majority of these resellers can be considered small entities. 
According to Commission data, 213 carriers have reported that they are 
engaged in the provision of local resale services. Of these, an 
estimated 211 have 1,500 or fewer employees and two have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of local resellers are small entities.
    206. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard for small businesses specifically applicable 
to ``Other Toll Carriers.'' This category includes toll carriers that 
do not fall within the categories of interexchange carriers, operator 
service providers, prepaid calling card providers, satellite service 
carriers, or toll resellers. The closest applicable size standard under 
SBA rules is for Wired Telecommunications Carriers. The applicable SBA 
size standard consists of all such companies having 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicates that 3,117 firms 
operated during that year. Of that number, 3,083 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of Other Toll Carriers can 
be considered small. According to internally developed Commission data, 
284 companies reported that their primary telecommunications service 
activity was the provision of other toll carriage. Of these, an 
estimated 279 have 1,500 or fewer employees. Consequently, the 
Commission estimates that most Other Toll Carriers are small entities.
    207. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging'' and ``Cellular and Other Wireless 
Telecommunications.'' Under both SBA categories, a wireless business is 
small if it has 1,500 or fewer employees. For the census category of 
Paging, Census Bureau data for 1997 show that there were 1,320 firms in 
this category, total, that operated for the entire year. Of this total, 
1,303 firms had employment of 999 or fewer employees, and an additional 
17 firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the great 
majority of firms can be considered small. For the census category 
Cellular and Other Wireless Telecommunications, Census Bureau data for 
1997 show that there were 977 firms in this category, total, that 
operated for the entire year. Of this total, 965 firms had employment 
of 999 or fewer employees, and an additional 12 firms had employment of 
1,000 employees or more. Thus, under this second category and size 
standard, the great majority of firms can, again, be considered small.
    208. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these small business size standards. In the Commission's auction for 
geographic area licenses in the WCS there were seven winning bidders 
that qualified as ``very small business'' entities, and one winning 
bidder that qualified as a ``small business'' entity.
    209. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census Bureau data for 2012 show that there were 967 firms that 
operated for the entire year. Of this total, 955 firms employed fewer 
than 1,000 employees and 12 firms employed of 1000 employees or more. 
Thus under this category and the associated size standard, the 
Commission estimates that the majority of Wireless Telecommunications 
Carriers (except Satellite) are small entities. Satellite 
Telecommunications. This category comprises firms ``primarily engaged 
in providing telecommunications services to other establishments in the 
telecommunications and broadcasting industries by forwarding and 
receiving communications signals via a system of satellites or 
reselling satellite telecommunications.'' Satellite telecommunications 
service providers include satellite and earth station operators. The 
category has a small business size standard of $35 million or less in 
average annual receipts, under SBA rules. For this category, U.S. 
Census Bureau data for 2012 show that there were a total of 333 firms 
that operated for the entire year. Of this total, 299 firms had annual 
receipts of less than $25 million. Consequently, we estimate that the 
majority of satellite

[[Page 1672]]

telecommunications providers are small entities.
    210. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The closest applicable SBA category is Wireless 
Telecommunications Carriers (except Satellite). Under the SBA small 
business size standard, a business is small if it has 1,500 or fewer 
employees. For this industry, U.S. Census Bureau data for 2012 show 
that there were 967 firms that operated for the entire year. Of this 
total, 955 firms had fewer than 1,000 employees and 12 firms had 1000 
employees or more. Thus under this category and the associated size 
standard, the Commission estimates that a majority of these entities 
can be considered small. According to Commission data, 413 carriers 
reported that they were engaged in wireless telephony. Of these, an 
estimated 261 have 1,500 or fewer employees and 152 have more than 
1,500 employees. Therefore, more than half of these entities can be 
considered small.
    211. Internet Service Providers (Broadband). While ISPs are only 
indirectly affected by our present actions, and ISPs are therefore not 
formally included within this present FRFA, we have addressed them 
informally to create a fuller record and to recognize their 
participation in this proceeding. Broadband internet service providers 
include wired (e.g., cable, DSL) and VoIP service providers using their 
own operated wired telecommunications infrastructure fall in the 
category of Wired Telecommunication Carriers. Wired Telecommunications 
Carriers are comprised of establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies. The SBA size standard for this category classifies a 
business as small if it has 1,500 or fewer employees. U.S. Census 
Bureau data for 2012 show that there were 3,117 firms that operated 
that year. Of this total, 3,083 operated with fewer than 1,000 
employees. Consequently, under this size standard the majority of firms 
in this industry can be considered small.
    212. Internet Service Providers (Non-Broadband). internet access 
service providers such as Dial-up internet service providers, VoIP 
service providers using client-supplied telecommunications connections 
and internet service providers using client-supplied telecommunications 
connections (e.g., dial-up ISPs) fall in the category of All Other 
Telecommunications. The SBA has developed a small business size 
standard for All Other Telecommunications which consists of all such 
firms with gross annual receipts of $35 million or less. For this 
category, U.S. Census Bureau data for 2012 show that there were 1,442 
firms that operated for the entire year. Of these firms, a total of 
1,400 had gross annual receipts of less than $25 million. Consequently, 
under this size standard a majority of firms in this industry can be 
considered small.
    213. All Other Telecommunications. The ``All Other 
Telecommunications'' category is comprised of establishments primarily 
engaged in providing specialized telecommunications services, such as 
satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing internet services or 
voice over internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry. The 
SBA has developed a small business size standard for ``All Other 
Telecommunications'', which consists of all such firms with annual 
receipts of $35 million or less. For this category, U.S. Census Bureau 
data for 2012 show that there were 1,442 firms that operated for the 
entire year. Of those firms, a total of 1,400 had annual receipts less 
than $25 million and 15 firms had annual receipts of $25 million to 
$49, 999,999. Thus, the Commission estimates that the majority of ``All 
Other Telecommunications'' firms potentially affected by our action can 
be considered small.

E. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements for Small Entities

    214. The objective of the new regulatory framework is to encourage 
the deployment of next-generation networks and to unburden incumbent 
LECs where there is substantial evidence of facilities-based 
competition and market entry. Beyond the benefits that providers will 
enjoy from a decreased regulatory burden on their day-to-day 
operations, these changes will not affect the reporting, recordkeeping, 
or other compliance requirements of carriers, including small entities.

F. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    215. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    216. In arriving at the conclusions described above, the Commission 
considered various alternatives, which it rejected or accepted for the 
reasons set forth in the body of this Order, and made certain changes 
to the rules to reduce undue regulatory burdens, consistent with the 
Communications Act and with guidance received from the courts. These 
efforts to reduce regulatory burden will affect both large and small 
carriers. The significant alternatives that commenters discussed and 
that we considered are as follows.
    217. Maintaining the status quo. The main alternative plan that was 
suggested in the comments was to simply leave the rules as they are. We 
decline to do so, in light of the importance of deployment of 
facilities-based competition and next-generation infrastructure, which 
is one of the central motivations behind this Order as well as the 
Commission's congressionally mandated goal.
    218. Business Data Services/DS1 & DS3 Loops. In this Order, we have 
limited unbundling of DS1 and DS3 loops to areas where there is 
insufficient evidence of competition. In reaching this conclusion, we 
considered comments from small competitive LECs, who in general would 
prefer greater access to these UNEs. We rejected their arguments on the 
ground that the reasonably efficient competitor would not rely on DS1 
or DS3 loops as reasonably efficient technology for market entry. 
Furthermore, we find that commenters do not adequately consider the 
prospect of competitive deployment nor the advantages held out by such

[[Page 1673]]

deployment, where feasible, for consumers and carriers alike.
    219. Transition Plans. The Order also sets out transition plans to 
govern the migration away from UNEs where a particular element is no 
longer available on an unbundled basis. We have considered various 
comments indicating that many small businesses have built their 
business plans on the basis of continued access to UNEs and have worked 
to ensure that the transition plans will give competing carriers a 
sufficient opportunity to transition to alternative facilities or 
arrangements. This alternative represents a reasonable accommodation 
for small entities and others, which we believe will ultimately result 
in an orderly and efficient transition. Therefore, as set forth in the 
Order, we have adopted plans to grandfather unbundled access to dark 
fiber loops for eight years where they are already in use; for DS1 
loops, a two-part transition of 24 months for new orders and 42 months 
for existing loops; for DS0 loops, a 24 month period for new orders and 
a 48-month grandfathering period for all competitive LEC customers; for 
OSS UNEs, a period equivalent to the respective UNE the OSS UNE is used 
to order and manage; and a three-year transition period for those who 
currently utilize other UNEs that will cease to be available.

G. Report to Congress

    220. The Commission will send a copy of the Report and Order, 
including this FRFA, in a report to be sent to Congress pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of the Report and Order, including this FRFA, to the Chief Counsel for 
Advocacy of the SBA. A copy of the Order and FRFA (or summaries 
thereof) will also be published in the Federal Register.
    221. Paperwork Reduction Act of 1995 Analysis. This document does 
not contain information collection(s) subject to the Paperwork 
Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, 
it does not contain any new or modified information collection burden 
for small business concerns with fewer than 25 employees, pursuant to 
the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4).
    222. Congressional Review Act. The Commission has determined, and 
the Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs that this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of this Report and Order to Congress and 
the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

V. Ordering Clauses

    223. Accordingly, it is ordered that, pursuant to sections 1-4, 10, 
201, 202, and 251 of the Communications Act of 1934, as amended, 47 
U.S.C. 151-154, 160, 201, 202, and 251, this Report and Order Is 
adopted and shall be effective thirty (30) days after publication in 
the Federal Register.
    224. It is further ordered that part 51 of the Commission's rules 
is amended as set forth in the Final Rules and shall be effective on 
the effective date announced herein.
    225. It is further ordered that the Commission shall send a copy of 
this Report and Order to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).
    226. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 51

    Communications, Communications common carriers, Telecommunications, 
Telephone.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 51 as follows:

PART 51--INTERCONNECTION

0
1. The authority citation for part 51 continues to read as follows:

    Authority: 47 U.S.C. 151-55, 201-05, 207-09, 218, 225-27, 251-
52, 271, 332 unless otherwise noted.


0
2. Section 51.319 is amended by:
0
a. Revising paragraph (a)(1) introductory text;
0
b. Adding paragraphs (a)(1)(v) and (vi);
0
c. Removing and reserving paragraph (a)(2)(ii) and removing paragraphs 
(a)(2)(iii) and (a)(3)(iii)(C);
0
d. Revising paragraph (a)(4)(i);
0
e. Adding paragraph (a)(4)(iii);
0
f. Revising paragraph (a)(5)(i);
0
g. Adding paragraph (a)(5)(iii);
0
h. Revising paragraph (b) introductory text;
0
i. Removing and reserving paragraph (b)(2);
0
j. Revising paragraph (b)(3)(i);
0
k. Removing paragraph (c);
0
l. Redesignating paragraph (d) through (f) as paragraph (c) through 
(e); and
0
m. Revising newly redesignated paragraphs (c)(2)(iv) and (e).
    The revisions and additions read as follows:


Sec.  51.319  Specific unbundling requirements.

    (a) * * *
    (1) Copper loops. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to the copper 
on an unbundled basis in census blocks defined as rural or urban 
cluster by the Census Bureau. A copper loop is a stand-alone local loop 
comprised entirely of copper wire or cable. For purposes of this 
section, copper loops include only digital copper loops (e.g., DS0s and 
integrated services digital network lines) as well as two-wire and 
four-wire copper loops conditioned to transmit the digital signals 
needed to provide digital subscriber line services, regardless of 
whether the copper loops are in service or held as spares. The copper 
loop does not include packet switching capabilities as defined in 
paragraph (a)(2)(i) of this section. The availability of DS1 and DS3 
copper loops is subject to the requirements of paragraphs (a)(4) and 
(5) of this section.
* * * * *
    (v) Transition period for narrowband loops. Notwithstanding any 
other provision of the Commission's rules in this part, an incumbent 
LEC shall continue to provide a requesting telecommunications carrier 
with nondiscriminatory access to two-wire and four-wire analog voice 
grade copper loops, the TDM-features, functions, and capabilities of 
hybrid loops, or to a 64 kilobits per second transmission path capable 
of voice grade service over the fiber-to-the-home loop or fiber-to-the-
curb loop for 36 months until February 8, 2024, provided such loop was 
being provided before February 8, 2021.
    (vi) Transition period for digital copper loops and two-wire and 
four-wire copper loops conditioned to transmit digital signals. 
Notwithstanding the remainder of paragraph (a)(1) of this section, an 
incumbent LEC shall continue to provide a requesting telecommunications 
carrier with nondiscriminatory access to copper loops as defined in 
this section for 48 months until February 10, 2025, provided that the 
incumbent LEC began providing such loop no later than

[[Page 1674]]

February 8, 2023. Incumbent LECs may raise the rates charged for such 
loops by no more than 25 percent during months 37 to 48 of this 
transition period and may charge market-based rates after month 48.
* * * * *
    (4) * * *
    (i) Availability of DS1 loops. (A) Subject to the cap described in 
paragraph (a)(4)(ii) of this section, an incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
a DS1 loop on an unbundled basis to any building not served by a wire 
center with at least 60,000 business lines and at least four fiber-
based collocators, but only if that building is located in:
    (1) Any county or portion of a county served by a price cap 
incumbent LEC that is not included on the list of counties that have 
been deemed competitive pursuant to the competitive market test 
established under Sec.  69.803 of this chapter; or
    (2) Any study area served by a rate-of-return incumbent LEC 
provided that study area is not included on the list of competitive 
study areas pursuant to the competitive market test established under 
Sec.  61.50 of this chapter.
    (B) Once a wire center exceeds both the business line and fiber-
based collocator thresholds, no future DS1 loop unbundling will be 
required in that wire center. A DS1 loop is a digital local loop having 
a total digital signal speed of 1.544 megabytes per second. DS1 loops 
include, but are not limited to, two-wire and four-wire copper loops 
capable of providing high-bit rate digital subscriber line services, 
including T1 services.
* * * * *
    (iii) Transition period. Notwithstanding paragraph (a)(4)(i) of 
this section, an incumbent LEC shall continue to provide a requesting 
telecommunications carrier with nondiscriminatory access to DS1 loops 
for 42 months until August 8, 2024, provided the incumbent LEC began 
providing such loop no later than February 8, 2023.
    (5) * * *
    (i) Availability of DS1 loops. (A) Subject to the cap described in 
paragraph (a)(5)(ii) of this section, an incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
a DS3 loop on an unbundled basis to any building not served by a wire 
center with at least 38,000 business lines and at least four fiber-
based collocators, but only if that building is located in one of the 
following:
    (1) Any county or portion of a county served by a price cap 
incumbent LEC that is not included on the list of counties that have 
been deemed competitive pursuant to the competitive market test 
established under Sec.  69.803 of this chapter; or
    (2) Any study area served by a rate-of-return incumbent LEC 
provided that study area is not included on the list of competitive 
study areas pursuant to the competitive market test established under 
Sec.  61.50 of this chapter.
    (B) Once a wire center exceeds the business line and fiber-based 
collocator thresholds, no future DS3 loop unbundling will be required 
in that wire center. A DS3 loop is a digital local loop having a total 
digital signal speed of 44.736 megabytes per second.
* * * * *
    (iii) Transition period. Notwithstanding paragraph (a)(5)(i) of 
this section, an incumbent LEC shall continue to provide a requesting 
telecommunications carrier with nondiscriminatory access to DS3 loops 
for 36 months after until February 8, 2024, provided such loop was 
being provided before February 8, 2021.
* * * * *
    (b) Subloops and network interface devices. An incumbent LEC shall 
provide a requesting telecommunications carrier with nondiscriminatory 
access to subloops on an unbundled basis in accordance with section 
251(c)(3) of the Act and this part and as set forth in this paragraph 
(b), provided that the underlying loop is available as set forth in 
paragraph (a) of this section. Notwithstanding any other provision of 
the Commission's rules in this part, an incumbent LEC shall continue to 
provide a requesting telecommunications carrier with nondiscriminatory 
access to the subloop for access to multiunit premises wiring and 
network interface devices on an unbundled basis for 36 months until 
February 8, 2024, provided such subloop or network interface device was 
being provided before February 8, 2021.
* * * * *
    (3) * * *
    (i) Technical feasibility. If parties are unable to reach agreement 
through voluntary negotiations as to whether it is technically 
feasible, or whether sufficient space is available, to unbundle a 
copper subloop at the point where a telecommunications carrier 
requests, the incumbent LEC shall have the burden of demonstrating to 
the state commission, in state proceedings under section 252 of the 
Act, that there is not sufficient space available, or that it is not 
technically feasible to unbundle the subloop at the point requested.
* * * * *
    (c) * * *
    (2) * * *
    (iv) Dark fiber transport. Dark fiber transport consists of 
unactivated optical interoffice transmission facilities. Incumbent LECs 
shall unbundle dark fiber transport between any pair of incumbent LEC 
wire centers except where, through application of tier classifications 
described in paragraph (d)(3) of this section, both wire centers 
defining the route are either Tier 1, Tier 2, or a Tier 3 wire center 
identified on the list of wire centers that has been found to be within 
a half mile of alternative fiber pursuant to the Report and Order on 
Remand and Memorandum Opinion and Order in WC Docket No. 18-14, FCC 19-
66 (released July 12, 2019). An incumbent LEC must unbundle dark fiber 
transport only if a wire center on either end of a requested route is a 
Tier 3 wire center that is not on the published list of wire centers. 
Notwithstanding any other provision of the Commission's rules in this 
part, an incumbent LEC shall continue to provide a requesting 
telecommunications carrier with nondiscriminatory access to dark fiber 
transport for eight years until February 8, 2029, provided such dark 
fiber transport was being provided before February 8, 2021.
* * * * *
    (e) Operations support systems. An incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
operations support systems on an unbundled basis only when it is used 
to manage other unbundled network elements, local interconnection, or 
local number portability, in accordance with section 251(c)(3) of the 
Act and this part. Operations support system functions consist of pre-
ordering, ordering, provisioning, maintenance and repair, and billing 
functions supported by an incumbent LEC's databases and information. An 
incumbent LEC, as part of its duty to provide access to the pre-
ordering function, shall provide the requesting telecommunications 
carrier with nondiscriminatory access to the same detailed information 
about the loop that is available to the incumbent LEC.

[FR Doc. 2020-25254 Filed 1-7-21; 8:45 am]
BILLING CODE 6712-01-P