5.1.2 Transit Traffic (Issue No.: NIM 26)

The FAR finds for MCIm, concluding that transit traffic has been included in prior ICAs and should be so here, is an integral part of indirect interconnection, and is subject to the Act. SBC-CA seeks reversal of the FAR. We are not persuaded.

The Arbitrator's general approach was to continue results from the 2001 ICA unless new facts or law justify a change. (FAR, page 6.) This is consistent with the parties' views. For example, MCIm says:

"parties' existing ICA, which was approved by the Commission, is prima facie evidence of just and reasonable rates, terms and conditions. Therefore, absent some compelling reason such as a change of law or material fact, the Commission should adopt the proposed language for disputed issues that most closely adheres to the provisions of the existing ICA." (MCIm Opening Brief, page 9.)

SBC-CA agrees saying: "where one party proposes and the other opposes a departure from the existing ICA language, the arbitrator should defer to the existing ICA outcomes unless the facts or law justify a departure." (SBC-CA Opening Brief, page 7.) This approach is sound.

On this issue, the FAR adopts MCIm's proposal, which was based on terms and conditions for transit traffic in the 2001 ICA. No party disputes that transiting was provided in the prior ICA. As found in the FAR, those provisions worked successfully, and no new facts or law justify a change. Further, as also noted in the FAR, transit service is consistent with the pro-competitive goals of the Act. No evidence was presented here demonstrating that it was unworkable in the 2001 ICA, or will be during the life of the 2006 ICA. Therefore, it should continue.

Moreover, MCIm shows that transit is an integral part of indirect interconnection and is subject to the Act. That is, each carrier has the duty to interconnect with other carriers directly or indirectly. (TA 96, §§ 251(a)(1) and 251(c) 2)(A).) The FAR explains that "when SBC-CA provides transit service it is providing indirect `interconnection with the local exchange carrier's network for the transmission and routing of telephone exchange service and exchange access.' (§ 251(c)(2)(A).)" (FAR, page 86.) The FCC recognizes the interrelationship between indirect interconnection and transit service saying:

"Shared transport between local tandem switches sometimes is used by competing carriers for `transiting' - a means of indirectly interconnecting with other competing carriers for the purpose of terminating local and intraLATA traffic." (TRO, ¶ 534, footnote 1640; emphasis added.)

Therefore, transit traffic is a method of indirect interconnection covered under §§ 251 and 252 of the Act.

SBC-CA states it will continue to provide transit service voluntarily, but cannot be ordered to do so as an obligation subject to compulsory arbitration under TA 96 § 252. SBC-CA is incorrect. Transiting is an obligation under § 251(c). In particular, § 251(c)(1) requires negotiation by the ILEC of all the duties in § 251(b) and (c). If unable to resolve by negotiation, the matter may be arbitrated. Pursuant to § 251(c)(2)(A), each ILEC is required to negotiate interconnection with any requesting CLEC for the transmission and routing of service and access. Any CLEC may interconnect directly or indirectly under § 251(a)(1). An indirect interconnection is a right given to each CLEC that the ILEC cannot by itself deny or vacate. The ILEC has the duty to negotiate the provision of interconnection, including indirect interconnection, and if negotiations fail, it may be arbitrated.

Thus, we affirm the outcome in the FAR.