6. Process for ILECs and CLECs to Negotiate Access to Loop Facilities

For the reasons discussed above - the lack of actual harm to competitors or customers, the limited build-out of fiber facilities, the limited removal or plans for removal of copper facilities, and our pro-investment policies - we decline to adopt the proposed CALTEL rules. Instead, we have balanced the competing interests of the CLECs and the ILECs and the previously discussed policy goals of our State and the FCC in the TRO, in establishing the following process below.

Specifically, we will require an ILEC that plans to retire a copper loop and replace it with FTTH or FTTC loops, to file concurrently with our Commission's Communications Division a copy of the notice of network change that it files with the FCC pursuant to 47 C.F.R. 51.333.⁵¹ By FTTH loop, we refer to the FCC's definition, which is a "local loop consisting entirely of fiber optic cable (and the attached electronics), whether lit or dark fiber, that connects a customer's premises with a wire center."⁵² Further, we will use the FCC's definition of FTTC, which is a "fiber transmission facility connecting to copper distribution plant that is not more than 500 feet from the customer's premises."⁵³ The ILEC shall also concurrently serve the notice on all CLECs that are interconnected with the ILEC, regardless of whether a CLEC is currently serving a customer on that loop or not.⁵⁴ If a CLEC files an objection to the copper retirement with the FCC pursuant to 47 C.F.R. 51.333(c), the CLEC shall file a copy of such objection with the Communications Division at the same time.

Any CLEC that seeks to use the relevant copper loop facility shall provide to the incumbent carrier within 20 days of the notice's filing with the FCC, a request for negotiations with the ILEC either to purchase the copper loop facility or to reach a fair and equitable agreement with the ILEC on price, terms and conditions to access loop facilities. The CLEC shall include in its request for negotiations the following information:

a. whether the CLEC seeks to purchase the copper loop facility, or whether the CLEC seeks only to maintain access to a loop facility;

b. the number of current or planned customers on the copper UNE;

c. the services that the CLEC provides over the loop facility or plants to provide over the facility; and

d. the number of UNEs that the CLEC currently purchases.

We will require the ILEC to enter into good faith negotiations with the CLEC for a period of 60 days either to sell the copper loop facility at issue; or to reach a fair and equitable agreement with the CLEC on price, terms and conditions to ensure continued CLEC access to loop facilities for a commercially reasonably time period. A fair and equitable agreement for access to the copper loop should include all fair and reasonable costs to the ILEC for preserving and maintaining access to the copper loop facility for the requesting party, vis-à-vis the retirement of the copper loop facility. For example, the price of access to the copper loops where the ILEC has retired its copper plant should include the total costs of operating and maintaining or preserving the copper cable, and all associated facilities used to provide the leased loops. If a requesting party seeks to purchase the copper facility from the ILEC, the price shall be the fair market value of the copper facility to the ILEC, and all maintenance and operating costs of the copper facility shall be the responsibility of the purchasing party from the date of purchase.

We reiterate that it is this Commission's policy under Pub. Util. Code § 709 to promote the development and deployment of new technologies and the ubiquitous availability of a wide choice of state-of-the-art services. We are reluctant to contravene the national policies set forth in the FCC's TRO, especially as its policy to encourage the deployment of fiber and broadband services is consistent with our own state's policies to encourage broadband deployment. The California Legislature has expressed its goal to "[c]omplement efforts to increase investment in broadband infrastructure and close the digital divide."⁵⁵ Given these express state and federal goals, we are exempting the ILECs from Section 851 requirements regarding copper loop retirement, and from additional detailed rules requiring affirmative approval before an ILEC may replace copper facilities with FTTC or FTTH facilities. The process we establish above promotes state and federal goals for broadband deployment, ensures competitive neutrality, is consistent with the FCC's TRO, and provides opportunities for the competitive carriers to negotiate access to loop facilities while not unduly delaying the ILECs' ability to retire copper facilities.

⁵¹ By "copper loop," we mean the transmission facility from an incumbent LEC central office that connects to the loop demarcation point at an end-user customer premises. TRO at n.638.

⁵² TRO at n.802. The FCC notes that other fiber in the loop architectures exist, including "fiber to the curb." Verizon has explained that it is not retiring copper loops and placing FTTH or FTTC loops in an area until it is economically advantageous to do so. Verizon builds its fiber network to a distribution hub that serves approximately 200 to 400 customers. At that distribution hub, if an individual customer requests fiber-based service, Verizon will install fiber to the customer's premise, but does not retire the copper drop at that time. Verizon notes that, when there are enough customers in a distribution hub that have migrated to the fiber-based service, it may then migrate its remaining customers to the fiber-network and retire all its copper loops at that distribution hub at that time. Verizon OIR Comments, Appendix B, at paras. 30-35. In contrast, AT&T acknowledges that its fiber network plans currently use copper plant from the remote terminals at the feeder-distribution interface of the access network to the customer premises. AT&T Reply Comments, Appendix A, at 12-13. AT&T asserts that it may, however, alter its network plans in the future such that it would deploy fiber closer to the end-user premises.

⁵³ In the Matter of Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket Nos. 01-338, 96-98, 98-147, Triennial Review Order on Reconsideration, FCC 04-248 at ¶10 (Oct. 2004).

⁵⁴ This means that the ILEC should at a minimum serve the Communications Division staff and all CLECs interconnected with the ILEC with the copies of the copper retirement notices at the same time as it files the notices with the FCC.

⁵⁵ Pub. Util. Code § 5810(a)(1)(E).