5.1.6 Definition of Lawful UNE (Issue No.: UNE 2)

Parties dispute the definition of Lawful UNE (Unbundled Network Elements (UNE) Appendix §§ 1.1.2 and 1.5). The FAR finds for MCIm.

SBC-CA contends that MCIm and the FAR address a subject different from the one actually at issue. According to SBC-CA, MCIm and the FAR treat this issue as a "change of law" issue and one which addresses the "transition" process and time frames when a UNE is declassified in the future. SBC-CA says the issue is really which of two interpretations of the ICA controls:

"(1) Are the UNEs listed in the ICA required to be provided only so long as they are mandatory under § 251(c)(3) of the Act [hereinafter, `Interpretation 1'] or

"(2) Are UNEs listed in the ICA still required to be provided, as a matter of contract law, even if they become no longer mandatory under § 251(c)(3) [hereinafter, `Interpretation 2']." (SBC-CA June 14, 2006 Statement, page 20.)

SBC-CA claims that MCIm seeks here to confuse UNEs that are mandatory under § 251(c)(3) with those that might be voluntarily agreed to by parties and subject to contract law. SBC-CA contends MCIm wants to create this ambiguity for its benefit in future disptues, while SBC-CA seeks by its language to avoid such disputes. SBC-CA asserts a future decisionmaker needs a clear and specific contractual standard to apply in resolving such disagreement. SBC-CA contends its language is essential for that purpose.

SBC-CA's concerns were addressed in the FAR:

"To the contrary, the adopted language [proposed by MCIm] requires the UNE to be both (1) `described in this Agreement' and (2) `required by Applicable Law.' (UNE Appendix § 1.5.) While `Applicable Law' is defined broadly (see General Definitions Appendix, page 2), it is not credible that applicable law as it specifically relates to UNEs can be interpreted as broadly as SBC-CA claims. Rather, UNE is a specific term in TA 96, as well as implementing decisions and regulations. No credible dispute can be reasonably foreseen. SBC-CA does not identify any UNE which it believes may be subject to such dispute. Moreover, SBC-CA's proposed language fails for other reasons as discussed above and, on balance, MCIm's proposal is superior." (FAR, page 135.)

We agree with the statement in the FAR declaring it is not credible that applicable law, as it specifically relates to UNEs, can be interpreted as broadly as SBC-CA claims. We also agree with SBC-CA's assertion the FAR (quoted above) provides clarity that Interpretation 1 is the intended meaning of the adopted ICA language. SBC-CA suggests replacing both parties' proposed language at UNE Appendix § 1.1.2 with a paraphrase from the FAR to secure this point. SBC-CA proposes:

"UNEs required by this Agreement shall be limited to those required by the Telecommunications Act and such implementing decisions and regulations as at the time may be in effect." (SBC-CA June 14, 2006 Statement, page 23.)

SBC-CA's proposal adds further clarity consistent with the FAR. It eliminates any confusion about application of contract law compared to TA 96 along with implementing decisions and regulations. Therefore, the conformed ICA filed pursuant to this decision should replace the current language in UNE Appendix § 1.1.2 (which states "intentionally omitted") with the sentence above.

5.2 Verizon Business

Verizon Business seeks reversal of the outcome in two areas.