IV. Parties' Positions

A. AT&T

AT&T states that its interconnection agreements with Verizon require Verizon to provide AT&T with access to Local Switching and Common Transport regardless of the switching technology deployed by Verizon. According to AT&T, the record established that it is technically feasible for Verizon to provide AT&T with access to Local Switching and Common Transport through the five central offices at issue regardless of how Verizon deploys its Nortel Succession switches (Nortel switches). AT&T views its complaint as a breach of contract case, and believes that Verizon's failure to provide these network elements by unilaterally discontinuing them after installing packet switches would breach AT&T's interconnection agreements, absent a valid amendment to them. According to AT&T, the hardware or technology used is irrelevant to Verizon's obligation to provide these elements, and Verizon must provide these elements whether through its existing switches or a replacement switch.

B. Telescape, Wholesale Airtime, nii; ACN; Call America and Navigator

These CLECs, like AT&T, believe that their interconnection agreements with Verizon require Verizon to provide unbundled local switching, regardless of the technology Verizon uses to do so. Telescape, Call America, and Navigator also argue that the Commission may require Verizon to continue to provide unbundled local switching under its independent state authority to compel compliance with California's unbundling policy. ACN also requests that the Commission find that Verizon's conduct in refusing to provide unbundled switching to ACN is anticompetitive.

C. MCI

As stated above, MCI did not file a motion for summary judgment, but opposed Verizon's motion for summary judgment. Additionally, MCI requested and participated in hearings on the issues set forth above.

MCI believes that Verizon's motion should be denied because the law is not sufficiently settled for the Commission to grant judgment. MCI states that the FCC has declined to unbundle packet switches only for broadband, or advanced services, and has consistently required CLEC access to UNEs needed to provide narrowband services. MCI also states that, under its interconnection agreement with Verizon, Verizon is required to provide unbundled local switching regardless of the technology used.

With respect to the factual issues which were the subject of evidentiary hearings, MCI states that the Nortel switch as deployed by Verizon has circuit switching capabilities that could support UNE-P customers, because Verizon is deploying the switch with a re-deployed enhanced network module (ENET) circuit switching fabric which can support UNE-P. MCI states that Verizon's decision to remove the UNE-P customers from the ENET is a policy choice, and not a technical decision. MCI also argues that Verizon tried but failed to create "pure" packet switching in order to eliminate competition. MCI believes that Verizon would need to make only straightforward modifications to the re-deployed ENET to support this traffic with circuit switching rather than packet switching. According to MCI, it is also technically feasible for Verizon to operate its circuit switch and the Nortel switch at the same time.

In sum, MCI maintains that Verizon has three technical alternatives to providing unbundled local switching: (1) use the ENET being re-deployed with the Nortel switch to support UNE-P customers; (2) use the packet switching fabric being deployed with the Nortel switch to support UNE-P customers; or (3) leave in place the existing DMS-100 circuit switch to support UNE-P customers, and operate the Nortel switch in parallel.

D. Verizon

Verizon states that federal law and the FCC have never required unbundled packet switching. Verizon similarly states that its interconnection agreements with the CLECs, adopted under and incorporating federal law, have never required unbundled packet switching and do not require it now. Verizon states that the interconnection agreements can only be interpreted against this backdrop of federal law, both because they are the means of effectuating federal law and because the agreements themselves specifically state that the duties they impose are congruent with the requirements of federal law.

Verizon also states that federal law prohibits this Commission from making a determination under its independent state authority that packet switches are a network element subject to unbundling. According to Verizon, the FCC's determination not to require the unbundling of packet switches preempts inconsistent state regulation, and means that no such regulation is appropriate. Verizon also argues that the interconnection agreements at issue here explicitly restrict Verizon's unbundling obligations to those required by federal law, and federal law precludes the unbundling of packet switches. Therefore, according to Verizon, in the absence of any explicit agreement to unbundle packet switches, the Commission cannot interpret the interconnection agreements to impose such an unbundling requirement. Verizon further believes that its interconnection agreements do not contain unbundling obligations that exceed those set forth by the FCC.

Verizon states that although its Nortel switches have both packet and circuit switching capability, as currently configured, the switches are packet switches and cannot support UNE-P traffic in a TDM mode without being modified. Verizon elaborates that its Nortel switch is a packet switch, and the fact that it has continued to serve a few data lines which could not be supported by the packet switching fabric over the ENET does not alter this conclusion.

Verizon believes that modifications, or "operational workarounds" to perpetuate UNE-P, would be costly, time consuming, and present serious operational challenges. Therefore, Verizon believes making these modifications is not feasible.

Verizon first believes that such modifications would not be technically feasible because any switching overlay would be fraught with problems.⁶ Verizon further states that operational "workarounds" to perpetuate UNE-P would be costly. Verizon's witness, Danny Peeler, is Nortel's solution architect for the Nortel succession switches. Peeler states that he spoke to a Nortel director who does commercial costing and the director told Peeler the cost would be in the millions. Peeler also stated that making such modifications would take at least six months.

Verizon also states that duplicative deployment of both switches is not feasible from a business perspective, again because such deployment is costly and time consuming.