Article 271 of the Federal Telecommunication Act

Who decides whether Qwest can enter the long-distance business?

The Federal Communications Commission (FCC) makes the final decision on whether Qwest can offer long-distance service to its local phone customers. The FCC, however, is required to consult the state regulatory authorities and the Department of Justice. The state process builds the evidentiary record and examines whether the applicant has complied with a detailed, 14-point checklist. In effect, the Arizona Corporation Commission's process is seen as a necessary first step because the Commission makes a recommendation to the FCC. The FCC also consults with the Department of Justice to obtain input and a recommendation.


What has happened so far?
Qwest's predecessor, US WEST, applied to the Arizona Corporation Commission in 1999. Since then, the Commission, Qwest, consumer groups and current or potential competitors such as AT&T, Worldcom and Cox Communications have participated in an open and collaborative workshop process to determine Qwest's compliance with specific criteria outlined in the 1996 Act. The Commission has held dozens of workshops and hearings and catalogued reams of testimony in preparation for a final recommendation.
In addition, a comprehensive "military style" test was performed by an independent third party. The test is commonly referred to as the OSS Test, or Operational Support Systems Test. It is designed to examine every step of every wholesale transaction that Qwest handles from an initial call for service to installation and billing. Thousands of wholesale transactions are monitored to assess Qwest's ability to process transactions ordered by competitive phone companies. Calling it a "military style" test refers to the fact that systems are tested, modified if necessary and re-tested until the systems work correctly and then, the company passes. The OSS Test was completed earlier this year.

A Test Advisory Group - consisting of Qwest, ACC representatives, Cap Gemini/Ernst & Young (the test administrator) and competitors - was formed to develop the testing standards. Group participation by all parties ensured openness and allowed all parties to contribute to the testing and evaluation process.


What areas are evaluated during the OSS Test?
There are four tests that comprise the OSS Test. They are:
Functionality Test - This is a test of Qwest's processes to ensure that the company can provide operational functionality to competitors. The test examines pre-ordering, ordering, provisioning, maintenance and repair as well as billing. The Functionality Test began in December 2000 and continued through a couple of phases into the first part of 2002.
Retail Parity Evaluation - This phase of the OSS Test evaluates whether a competitor using the Qwest Operational Support System can provide a level of service to the end user that is substantially similar to the service Qwest provides its own customers. The test compares pre-order, order, maintenance and repair transactions provided by the competitive entity and also by Qwest.
Retail Parity testing began in August 2000 and ended in December 2001. No other state has executed a test of this kind. This test was unique to Arizona and the other 13 states in Qwest's 14-state territory are not conducting this test.
Capacity Test - Comprised of three components, this test evaluates Qwest's ability to handle multiple kinds of transactions in current as well as projected volumes. The test was conducted in the summer of 2001.

Relationship Management - The objective of this test was to measure and evaluate how Qwest manages its relationship with competitors. This included all facets of Qwest's business practices from internal and external communications to policies and procedures. The test began in May 2000 and continues beyond the 271 process through an ongoing change management process.


What else is the Commission evaluating?
Section 271 of the 1996 Act contains a 14-point checklist. Hearings, workshops and testimony have taken place on all of the checklist items. The checklist items are:
1. Interconnection
2. Non-discriminatory access to network elements
3. Non-discriminatory access to poles, ducts, conduits and rights of way
4. Unbundled local loops
5. Unbundled local transport
6. Unbundled local switching
7. Non-discriminatory access to 911, directory assistance and operator services
8. White pages directory listings
9. Non-discriminatory access to telephone numbers
10. Non-discriminatory access to databases and signaling
11. Number portability
12. Local dialing parity
13. Reciprocal compensation
14. Resale of telecommunications services
Independent of the checklist items, Qwest will need to provide the following to the FCC as part of their application for approval under Section 271:
  • Copies of all interconnection agreements (agreements entered into under Section 252)
  • Status of federal court challenges involving the applicant
  • A summary and complete record of Arizona Corporation Commission proceedings examining compliance with Section 271
  • A statement describing Qwest's efforts to resolve disputed issues
  • Documentation showing how Qwest plans to meet Section 272 requirements (This section requires the applicant to set up a separate subsidiary that will provide the long-distance service.)
  • Documentation showing how granting permission to enter the long-distance market will serve the public interest.
How can I learn more about the checklist items?

These checklist items are explained in detail in the 1996 Act. Final Commission Orders or Staff reports on checklist items can be found on the Arizona Corporation Commission's website at: /divisions/utilities/telecom/qwest271-checklist.asp.


How many workshops and meetings has the ACC held?
As stated earlier, Qwest's predecessor, US WEST, filed the initial application in 1999. Here are some interesting facts and figures about the process:
  • The ACC held more than 40 initial and follow-up workshops lasting in excess of 100 days.
  • Before the OSS Test started, the parties had to develop and agree on (or agree to disagree on, as the case may be) certain testing standards. There were 9 workshops on test designs and performance measurement standards.
  • There were more than 50 meetings of the Test Advisory Group before and during the OSS Test.
  • The independent OSS Test administrator, Cap Gemini/Ernst & Young, issued many reports during the testing process. Cap Gemini responded to thousands of written questions and participated in more than 7 workshops before issuing its final OSS Test report on March 29, 2002.
  • Commissioners held 5 public comment sessions around the state to gather input regarding whether Qwest's entry into the long distance business is in the public interest.
  • The ACC has had more than 12 separate Open Meetings to discuss, vote on or get progress updates on the 271 process.
  • Time was allotted at each and every workshop for public comment and/or input from interested parties to ensure that the evaluation process was open, fair and participatory.
What happens if and when Qwest enters the long-distance business?

The process is far from over. In the final plan approved by the Commissioners, if and when Qwest gets approval from the FCC to enter the long-distance market, the company will have to meet detailed performance criteria outlined in the Qwest Performance Assurance Plan.


When will the ACC make a final decision?
There are a few checklist items remaining that the Commissioners have to vote on in Open Meetings. The Commissioners also have to vote on the OSS Test findings.
Finally, the Administrative Law Judge will make a final recommendation to the Commissioners on whether Qwest should be able to enter the long-distance market. The Commissioners will have the opportunity to review the recommendations of the Administrative Law Judge and accept, reject or amend the Judge's findings.
While many people have tried to predict the date for a final decision, almost all of those predictions have proven false! The Commissioners have directed the Staff and all parties to the process to conduct a careful, thorough, thoughtful review of all elements involved in the 271 process. The Commissioners have also stated firmly that the process should not be rushed as it has the potential to change the face of telecommunications in Arizona. Having said that, we are nearing the end of the process and many of the final steps are penciled out. Barring any unforeseen events, a final recommendation from the Commission is likely to come this fall.