Background

XO has an ICA with SBC, which became effective March 2, 2000. On August 21, 2003, the Federal Communications Commission (FCC) released its Triennial Review Order (TRO)¹ which, among other things, required the incumbent local exchange carriers such as SBC to provide access to certain unbundled network elements (UNEs). Following the effective date of the TRO, SBC notified XO that it wanted to negotiate conforming changes to the parties' ICA to implement requirements of the TRO. The parties agreed that negotiations commenced on November 25, 2003, and the deadline to request arbitration was May 3, 2004.

On May 3, 2004, XO filed a timely request for arbitration pursuant to Section 252(b) of the Communications Act of 1934. (47 C.F.R. Section 252.) The request for arbitration involved 7 disputed issues in the negotiations between XO and SBC.

Shortly thereafter, SBC moved to dismiss the request for arbitration, arguing the Commission does not have jurisdiction to adjudicate disputes arising under an existing ICA, including negotiations to amend it. SBC's motion for dismissal was denied by ruling of June 8, 2004.

SBC filed its response to the arbitration on May 28, 2004, wherein SBC added 14 issues of its own to the arbitration request. XO moved to dismiss 5 of the 14 issues added by SBC. XO's motion was denied by ruling of June 22, 2004.

An initial arbitration meeting was held on June 8, 2004, and a schedule was set for the arbitration. On June 28, 2004, XO filed a motion to withdraw its arbitration request, arguing that subsequent events have overtaken the arbitration. Specifically, XO contends that a June 16, 2004 order by the D.C. Circuit Court of Appeals vacating portions of the TRO suggests parties should engage in further negotiations and modifications of their positions. XO's motion was denied at a prehearing conference of November 10, 2004 and a schedule for briefing was established.

In briefs filed December 15, 2004, XO updated the positions it took in its earlier filings, noting that federal law had changed twice since XO's May 2004 arbitration request. XO's latest positions generally involve adoption of language for the contract amendment based on an amendment adopted by the Illinois Commerce Commission (the "Illinois Amendment") in a comparable arbitration between affiliates of XO and SBC that resolved virtually all of the same issues.

Reply briefs were filed on January 7, 2005. An arbitration hearing was held on January 20, 2005, as well as a further prehearing conference to understand the parties' latest positions.

¹ Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, CC Docket No. 01-338, Report and Order and Further Notice of Proposed Rulemaking, (rel. Aug. 21, 2003) (Triennial Review Order).