F I N A L D R A F T
BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554
In the Matter of ) ) Application by SBC Communications Inc., ) Pacific Bell Telephone Company, and ) Southwestern Bell Communications Services, ) CC Docket No. ______Inc. d/b/a Pacific Bell Long Distance for ) Provision of In-Region, InterLATA Services in ) California )
AFFIDAVIT OF LINDA G. YOHE
DISTRICT OF ) ) COLUMBIA )
TABLE OF CONTENTS 272 COMPLIANCE AFFIDAVIT
SUBJECT PARAGRAPH PROFESSIONAL EXPERIENCE AND EDUCATIONAL 2 BACKGROUND PURPOSE OF AFFIDAVIT 4
DEVELOPMENTS IN LIGHT OF THE FCC’S SBC 271 6 ORDERS REQUIREMENTS OF SECTION 272(a)1 OF THE ACT 7
REQUIREMENTS OF SECTION 272(b)(1) OF THE ACT 10
REQUIREMENTS OF SECTION 272(b)(3) OF THE ACT 16
REQUIREMENTS OF SECTION 272(b)(4) OF THE ACT 18
REQUIREMENTS OF SECTION 272(c)(1) 20
PRODUCT DEVELOPMENT 29
REQUIREMENTS OF SECTION 272(e)(1) OF THE ACT 31 F I N A L D R A F T
SUBJECT PARAGRAPH REQUIREMENTS OF SECTION 272(e)(2) OF THE ACT 38
REQUIREMENTS OF SECTION 272(e)(3) OF THE ACT 42
REQUIREMENTS OF SECTION 272(e)(4) OF THE ACT 44
REQUIREMENTS OF SECTION 272(g) OF THE ACT 46
SBC’s SECTION 272 COMPLIANCE PROGRAM 49
CONCLUSION 56
SERVICES SBCS DOES/WILL OBTAIN FROM ATTACHMENT A SHARED SERVICES AFFILIATE FORMAT FOR INFORMATION DISCLOSURES ATTACHMENT B PURSUANT TO SECTION 272(e)(1) LETTER DATED MARCH 20, 2000 ATTACHMENT C
LETTER DATED JULY 18, 2000 ATTACHMENT D
272 COMPLIANCE INFORMER MESSAGE FROM ATTACHMENT E STATE PRESIDENTS 272 WEBSITE – TRAINING SCHEDULE ATTACHMENT F
LETTER DATED AUGUST 21, 2000 ATTACHMENT G
EMPLOYEE COMPLIANCE GUIDE ATTACHMENT H
2 F I N A L D R A F T
I, Linda G. Yohe, being of lawful age and duly sworn upon my oath, do hereby depose and state as follows:
1. My name is Linda G. Yohe. My current business address is 1401 I Street NW, Suite
1100, Washington, D.C. 20005. I am Executive Director-Federal Regulatory for SBC
Telecommunications, Inc. I have federal regulatory responsibilities for certain structural
separation issues for SBC Communications Inc. (“SBC”).
PROFESSIONAL EXPERIENCE AND EDUCATIONAL BACKGROUND
2. I received a Bachelor of Business Administration degree in Accounting from Stephen F.
Austin State University in 1978. In 1985, I received a Masters of Business
Administration degree from Southern Methodist University. I have over 22 years of
experience with Southwestern Bell Telephone Company (“SWBT”) and SBC, during
which I have held numerous management positions in the Finance, Information Services,
External Affairs, Marketing and Regulatory organizations. In 1999, I accepted my current
assignment.
3. I am a member of SBC’s 272 Oversight Team and am familiar with the requirements
adopted by the Federal Communications Commission (“FCC” or “Commission”) in its
Non-Accounting Safeguards Order and other orders issued in CC Docket No. 96-149.1 In
these capacities, I am among those responsible for ensuring that SBC complies with the
non-accounting obligations set forth in Section 272 of the Federal Telecommunications
Act of 1996 (“the Act”).
1 First Report and Order and Further Notice of Proposed Rulemaking, Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, 11 FCC Rcd 21905, (1996) (“Non-Accounting Safeguards Order”).
1 F I N A L D R A F T
PURPOSE OF AFFIDAVIT
4. In order for the FCC to approve SBC's California 271 application, it must find, pursuant
to Section 271(d)(3)(B), that "the requested authorization will be carried out in
accordance with the requirements of [S]ection 272." The purpose of my affidavit is to
demonstrate that Pacific Bell Telephone Company ("Pacific Bell"), in its relationship with
Southwestern Bell Communications Services, Inc. doing business as Pacific Bell Long
Distance ("SBCS"), the Section 272 affiliate designated by SBC to provide in-region
interLATA services originating in California when authorized to do so, will operate in
accordance with that authorization by complying with the structural separation
requirements and nondiscrimination safeguards (i.e., Non-Accounting Safeguards) of
Section 272 of the Act.2
5. As noted, my affidavit principally covers compliance with the Section 272 Non-
Accounting Safeguards. The Affidavit of Robert Henrichs discusses Pacific Bell’s
compliance with the Section 272 Accounting Safeguards. The Affidavit of Joe Carrisalez
addresses Section 272 compliance by SBCS.
DEVELOPMENTS IN LIGHT OF THE FCC’S SBC 271 ORDERS
6. In its January 22, 2001 SBC Kansas/Oklahoma Order3 granting SBC’s Kansas and
Oklahoma joint 271 application, the FCC concluded that SBC had demonstrated its
compliance with Section 272 of the Act and with the FCC’s rules implementing Section
2 Any Pacific Bell affiliate designated to provide in-region interLATA services originating in California or other SBC in-region states will be subject to the same Section 272 requirements as the affiliate described in this application. 3 Memorandum Opinion and Order, Application by SBC Communications Inc., Southwestern Bell Telephone Company, and Southwestern Bell Communications Services, Inc. d/b/a Southwestern Bell Long Distance Pursuant to Section 271 of the Telecommunications Act of 1996 to Provide In-Region, InterLATA Services in Kansas and Oklahoma, CC Docket No. 00-217, FCC 01-29, ¶¶ 256-265 (rel. Jan. 22, 2001) (“SBC Kansas/Oklahoma Order”).
2 F I N A L D R A F T
272. The material statements of fact made in this affidavit are the same as those that were
made in my affidavit filed in support of SBC’s Kansas and Oklahoma joint 271
application. Pacific Bell maintains the same structural separation and nondiscrimination
safeguards in California as SWBT does in Kansas, Oklahoma and Texas. These
circumstances provide additional support for the FCC’s determination that SBC will
operate in accordance with the structural separation requirements and nondiscrimination
safeguards of Section 272 of the Act.
REQUIREMENTS OF SECTION 272(a)(1) OF THE ACT
7. Section 272(a)(1) requires that Bell Operating Companies (“BOCs”), such as Pacific Bell,
be separate from any affiliate that provides certain interLATA services, and that the
separate affiliate meets the requirements of subsection (b) of Section 272.
8. SBCS is completely separate from Pacific Bell, the BOC seeking Section 271 relief in the
state of California. Pacific Bell is a corporation organized under the laws of the state of
California and is a wholly owned subsidiary of Pacific Telesis Group (“PTG”), which is
wholly owned by SBC. Pacific Bell does not own any stock of SBCS; correspondingly,
SBCS does not own any stock of Pacific Bell, as described in the Affidavit of Joe
Carrisalez.
9. Pacific Bell provides various telecommunications and related services in California,
including:
i. Telephone exchange service;
ii. IntraLATA telephone toll service;
iii. Exchange access service;
iv. Resold local exchange services, unbundled network elements and
interconnection; 3 F I N A L D R A F T
v. Operator services and certain other regulated (and non-regulated) services .
The Affidavit of Joe Carrisalez addresses the establishment of and the provision of
services by the separate Section 272 affiliate in accordance with Section 272(a).
REQUIREMENTS OF SECTION 272(b)(1) OF THE ACT
10. Section 272(b)(1) of the Act provides that the required separate affiliate “shall operate
independently from the BOCs.”
11. Pacific Bell and SBCS have operated independently from each other and, for as long as
the requirements of Section 272 and related Commission regulations remain in effect,
will continue to do so. While Congress did not specify what it meant by the term
“operate independently,” the FCC, in its December, 1996, Non-Accounting Safeguards
Order and in subsequent orders, set out four restrictions under the operating
independently standard: 1) no joint BOC-Section 272 affiliate ownership of switching
and transmission facilities, 2) no joint BOC-Section 272 affiliate ownership of the land
and buildings on which such facilities are located, 3) no provision by the BOC or by any
other non-Section 272 affiliate of Operations, Installation & Maintenance (“OI&M”)
services with respect to the Section 272 affiliate’s switching and transmission facilities,4
and 4) no provision by the Section 272 affiliate of OI&M services with respect to the
BOC’s switching and transmission facilities. Pacific Bell complies with all of these
requirements.
12. Where SBCS will provide its own in-region interLATA long distance products and
services in California by reselling wholesale network services obtained from one or more
4 Memorandum Opinion and Order, Application of BellSouth Corp., BellSouth Telecommunications., Inc., and BellSouth Long Distance, Inc., for Provision of In-Region, InterLATA Services in Louisiana, 13 FCC Rcd 20599 (1998) (“Second Louisiana Order”).
4 F I N A L D R A F T
unaffiliated, underlying carriers, the unaffiliated carrier(s) will perform the OI&M
functions of its own switching and transmission facilities. In those instances where SBCS
owns or leases its switching and transmission facilities, SBCS will either perform OI&M
itself or contract with an unaffiliated party to provide OI&M, for as long as the
Commission’s OI&M prohibition remains in effect.
13. Pacific Bell and its non-Section 272 affiliates do not perform any OI&M functions
associated with SBCS’s switching or transmission facilities, and they will not perform
such functions for as long as they are prohibited from doing so by the Commission. In
addition, SBCS does not provide OI&M services in connection with Pacific Bell’s
switching and transmission facilities, and will not do so for as long as such services
remain prohibited under Section 272 as interpreted by the Commission.
14. Notwithstanding the OI&M restrictions identified above, Pacific Bell is allowed to obtain
such OI&M services from a Section 272 affiliate regarding sophisticated equipment in the
event they purchase such equipment from a Section 272 affiliate.5 At this time, Pacific
Bell has no existing plans to purchase such sophisticated equipment from SBCS or to
have SBCS install or maintain such equipment for Pacific Bell.
15. SBCS may negotiate with Pacific Bell on an arm’s length basis to obtain transmission and
switching facilities from Pacific Bell, to arrange for collocation of facilities, or to provide
or to obtain services other than those expressly prohibited in the Non-Accounting
Safeguards Order.6 To the extent that SBCS and Pacific Bell may enter into such
transactions, they will do so on an arm’s length basis in accordance with the
Commission’s rules and regulations.
5 Non-Accounting Safeguards Order, 11 FCC Rcd at 21984-85, ¶ 164. 6 Id. at 21982-83, ¶¶ 160-161, 21990-91, ¶ 178.
5 F I N A L D R A F T
REQUIREMENTS OF SECTION 272(b)(3) OF THE ACT
16. Section 272(b)(3) of the Act provides that the required separate affiliate “shall have
separate officers, directors and employees from the [BOC] of which it is an affiliate.”
17. In its Non-Accounting Safeguards Order, the FCC concluded that this requirement simply
dictates that the same person may not serve simultaneously as an officer, director or
employee of both a BOC and its Section 272 affiliate.7 Further, the FCC concluded in its
Second Louisiana Order that BellSouth had made a prima facie showing of compliance
by demonstrating, in accordance with the language of the statute, that the Section 272
affiliate “has separate officers, directors and employees from the Bell operating company
of which it is an affiliate.”8 SBCS has separate officers, directors and employees who do
not and will not serve simultaneously as officers, directors or employees of Pacific Bell.
Pacific Bell and SBCS have separate sets of officers who make independent operational
decisions for their respective companies, and such officers operate under the oversight of
separate boards. The Affidavit of Joe Carrisalez provides, as an attachment, a list of the
present officers and directors of Pacific Bell and SBCS; no name appears simultaneously
on a Pacific Bell and SBCS list.
REQUIREMENTS OF SECTION 272(b)(4) OF THE ACT
18. Section 272(b)(4) requires that the Section 272 separate affiliate may not obtain credit
under any arrangement that would permit a creditor, upon default, to have recourse to the
assets of a BOC.
19. Pacific Bell has not co-signed nor will it co-sign any contract or enter into any other
arrangement with SBCS that would allow a creditor to obtain recourse to any of Pacific
7 Id. 21990-91, ¶ 178. 8 Second Louisiana Order, 13 FCC Rcd 20789, ¶ 329.
6 F I N A L D R A F T
Bell’s assets in the event of default by SBCS. I have verified with corporate treasury at
SBC that Pacific Bell is not a co-signor to any agreement extending credit to SBCS.
REQUIREMENTS OF SECTION 272(c)(1)
20. Section 272(c)(1) of the Act requires that a BOC not discriminate in favor of its Section
272 affiliate in the provision or procurement of goods, services, facilities and information
or in the establishment of standards.
21. Pacific Bell will not discriminate in favor of SBCS in the provision or procurement of
goods, services, facilities and information, or in the establishment of standards. Pacific
Bell will make available to unaffiliated entities all goods, services, facilities and
information that Pacific Bell provides to SBCS (other than joint marketing) in a manner
consistent with Section 272 and the Non-Accounting Safeguards Order. Where Pacific
Bell offers services or facilities on a tariffed basis, they will be provided to SBCS at the
same rates, and on the same terms and conditions, as are available to nonaffiliated entities
under the applicable tariffs.
22. Pacific Bell will provide unaffiliated interexchange carriers with the same exchange
access, interconnection, collocation, unbundled network elements, access to operating
support systems and resold services that it may provide to SBCS and will do so by using
the same service parameters, such as interfaces, intervals, standards, procedures and
practices used to serve other carriers.
23. Pacific Bell has not transferred ownership of its Official Services Network to SBCS. To
the extent that Pacific Bell may contemplate doing so, it will ensure that its Section 272
affiliate and unaffiliated entities have an equal opportunity to obtain ownership of this
facility, pursuant to the Non-Accounting Safeguards Order. Also, Pacific Bell currently
7 F I N A L D R A F T
does not and will not use its Official Services Network except as is permissible by the Act
or for those services previously authorized under the Act as described in Section 271(f).
24. Pacific Bell has established an account team, based in California, which services the
SBCS account in the same manner as the SBC BOC account teams service other
interexchange carriers of similar size. SBCS must direct any request for goods, services,
facilities and information of Pacific Bell through its assigned account team, just as
AT&T, WorldCom, Sprint and other similarly situated carriers do. The SBC BOC
account team for SBCS coordinates Section 272 compliance issues directly with the 272
Oversight Team to ensure compliance with all aspects of Section 272.
25. In addition, Pacific Bell will not disclose any individually identifiable Customer
Proprietary Network Information (“CPNI”) to SBCS except to the extent such disclosure
is consistent with Section 222 of the Act and Commission rules.
26. The FCC explicitly declined to prohibit the sharing of services other than OI&M services.
To the contrary, the FCC endorsed this sharing to encourage the type of economies of
scale and scope that lead to a fully competitive marketplace.9 This is consistent with the
fact that Congress did not require regional Bell companies to operate Section 272
affiliates separately from those holding companies, only that they be operated
independently from the BOCs.
27. Pacific Bell and other SBC affiliates therefore may provide SBCS any services not barred
by the FCC, including administrative and other services. If Pacific Bell provides such
services to SBCS, it will provide the same services to other entities in accordance with
the terms of the Non-Accounting Safeguards Order, in a non-discriminatory manner and
pursuant to the same rates, terms, and conditions. If a shared services affiliate (i.e., a
9 Non-Accounting Safeguards Order, 11 FCC Rcd at 21990-93, ¶¶ 178-182. 8 F I N A L D R A F T
non-BOC affiliate that provides services to the SBC family of companies and not to third
parties) provides SBCS administrative services, the nondiscrimination requirements of
section 272(c)(1) do not attach to those services. [Attachment A outlines the services
SBCS either currently obtains or plans to obtain from shared services affiliates.]
However, if the shared services affiliate uses any BOC goods, services, facilities or
information to provide services to SBCS, the BOC will make these “inputs” available on
a nondiscriminatory basis. In addition, under Section 272(g), Pacific Bell and other of its
SBC affiliates may provide joint marketing services to SBCS, on an exclusive basis after
Section 271 relief in each respective state, because the provision of such services is not
subject to Section 272(c)(1).10
28. In order to ensure that BOC non-public information is appropriately safeguarded by
certain employees in shared services affiliates, SBC’s 272 Oversight Team has adopted a
policy requiring “siloing” of employees who perform services for a Section 272 affiliate
such as SBCS, i.e., separation of these employees from employees with access to BOC
non-public information. To the extent that there may be a risk of sharing BOC non-
public information with employees performing services for SBCS implementing this
control will help to ensure continued compliance with 272(c)(1), as it relates to Pacific
Bell’s non-public information.
10 Id. at 22048, ¶ 296.
9 F I N A L D R A F T
PRODUCT DEVELOPMENT
29. For as long as FCC rules require, to the extent that Pacific Bell plans, develops or designs
new services for or with SBCS, it will also plan, develop or design new services with
other entities on a nondiscriminatory basis, in accordance with the Non-Accounting
Safeguards Order.11 Pacific Bell’s policy is to develop services for unaffiliated
interexchange carriers on a nondiscriminatory basis.
30. Pacific Bell will continue to participate in public standards-setting bodies and will also
continue to negotiate interconnection arrangements on a nondiscriminatory basis with any
requesting telecommunications carrier. Pacific Bell will not discriminate in favor of
SBCS in the establishment of any standards, including but not limited to industry-wide
standards, that affect the interconnection or interoperability of public network operations.
New local exchange or exchange access services and new interfaces that affect
interconnection or interoperability, including any carrier-specific interfaces that Pacific
Bell may introduce, will be made available to all carriers at the same time and on the
same terms and conditions as they are made available to SBCS.
REQUIREMENTS OF SECTION 272(e)(1) OF THE ACT
31. Section 272(e)(1) provides that a BOC shall fulfill any request for exchange service and
exchange access services within a period no longer than the period in which it provides
such telephone exchange and exchange access to itself or its affiliate.
32. Pacific Bell will fulfill equivalent service requests received for telephone exchange and
exchange access service from SBCS and from nonaffiliated entities within equivalent
intervals, as required by the Non-Accounting Safeguards Order.12 Requests of a similar
11 Id. at 21987, ¶ 169. 12 Non-Accounting Safeguards Order, 11 FCC Rcd at 22019, ¶ 240.
10 F I N A L D R A F T
size, level of complexity and geographic location will be fulfilled on an equivalent basis,
using the same organizations and systems. Service requests received from nonaffiliated
entities will be fulfilled within a period of time no longer than the period within which
Pacific Bell respond to an equivalent request from SBCS.
33. For example, Pacific Bell will respond to requests from SBCS for initial installation
requests, subsequent requests for improvement, upgrades or modifications of service, or
repair and maintenance of exchange and exchange access services, with the same terms
and conditions as are available to unaffiliated telecommunications carriers, using the
industry standard formats. Due date intervals will be assigned on a non-discriminatory
basis in accordance with published standards, except for orders that exceed specified
quantities, in which case Pacific Bell will negotiate interval parameters with SBCS or the
unaffiliated carrier on a nondiscriminatory basis. Pacific Bell will not favor SBCS in
conducting such negotiations.
34. Similarly, Pacific Bell will not discriminate in favor of SBCS with regard to requests for
exchange or exchange access in the installation, maintenance and repair of exchange
access services. Pacific Bell will use the same procedures, systems, and personnel to
maintain and repair comparable services, regardless of which carrier or customer is
receiving the service.
35. All interexchange carriers, including SBCS, use or will use the same centralized repair
centers for reporting trouble to Pacific Bell. In establishing repair commitments, Pacific
Bell will accord priority, in accordance with the National Security Emergency
Preparedness guidelines, to trouble reports for known critical services, such as hospitals
and police and fire departments. Non-critical trouble tickets will be handled on a first-in,
11 F I N A L D R A F T
first-out basis, with priority given to total outages. Technicians will be dispatched based
upon commitment intervals and not by the identity of the carrier.
36. Pacific Bell will not discriminate between SBCS and unaffiliated interexchange carriers
in the processing of presubscribed interexchange carrier (“PIC”) change orders.
37. The Affidavit of Gwen S. Johnson addresses Pacific Bell’s performance measurements
system applicable to its provision of nondiscriminatory access to unbundled network
elements and interconnection services which will assist in confirmation of
nondiscriminatory performance in Pacific Bell’s dealings with its Section 272 affiliates.
Consistent with SBC’s Texas 271 application and SBC’s Kansas and Oklahoma joint 271
application,13 SBC will provide the information proposed by the FCC in its Further
Notice of Proposed Rulemaking in CC Docket No. 96-149 [Attachment B] in connection
with Section 272(e)(1).
REQUIREMENTS OF SECTION 272(e)(2) OF THE ACT
38. Section 272(e)(2) requires that a BOC provide unaffiliated carriers with the same goods,
services, facilities and information regarding exchange access that the BOC provides to
its Section 272 affiliate.14
39. Pacific Bell will not discriminate between SBCS and unaffiliated providers with regard to
any goods, services, facilities or non-public information covered by Section 272(e)(2).
For example, Pacific Bell will not discriminate regarding the dissemination of technical
information and interconnection standards related to exchange access services. Pacific
Bell will provide any required public notice of network changes that will affect a
competing telecommunications carrier’s performance or ability to provide service or will
13 SBC Texas Order, n. 1198; SBC Kansas/Oklahoma Order, n. 816. 14 Id. at 22023-24, ¶ 248.
12 F I N A L D R A F T
affect Pacific Bell’s interoperability with other telecommunications carriers. Distribution
will be made to all entities requesting notice, all interconnecting carriers, and all entities
on Pacific Bell’s distribution lists for technical information and interconnection
standards. Until public notice has been given in accordance with the FCC’s rules, Pacific
Bell will not disclose to SBCS, or to any other affiliated or unaffiliated
telecommunications carrier, information about planned network changes that are subject
to the FCC’s network disclosure requirements.
40. Pacific Bell does not and will not disclose to SBCS, without the consent of the carrier
involved, any unaffiliated carrier’s proprietary information, including, but not limited to,
carrier proprietary information about network configuration or interconnection
arrangements, exchange access usage, customer preferred interexchange carrier
selections, and purchases of telephone exchange services or network elements from
Pacific Bell.
41. For as long as SBCS is required to be a separate affiliate, Pacific Bell will not provide any
goods, facilities, services, or information concerning its provision of exchange access to
SBCS unless such goods, facilities, services, or information are made available to other
providers of interLATA telecommunications services in that market on the same terms
and conditions. If SBCS purchases exchange access services from Pacific Bell, then
SBCS will purchase such services on rates, terms and conditions available to other
providers of interLATA telecommunications services and in a manner consistent with
applicable state and federal regulatory requirements.
13 F I N A L D R A F T
REQUIREMENTS OF SECTION 272(e)(3) OF THE ACT
42. Section 272(e)(3) requires that a BOC charge its Section 272 affiliate or impute to itself
rates for telephone exchange service and exchange access that are no less than the rate
charged to any unaffiliated interexchange carrier.
43. Currently, SBCS purchases telecommunications services from Pacific Bell at the same
rates, terms, and conditions (including volume and term discounts) as are available to
unaffiliated providers. SBCS will continue to purchase services from Pacific Bell at the
same rates, terms and conditions as are available to unaffiliated providers.
REQUIREMENTS OF SECTION 272(e)(4) OF THE ACT
44. Section 272(e)(4) requires that if the BOC provides interLATA or intraLATA facilities to
its Section 272 affiliate, then such services will be provided on a nondiscriminatory basis
to unaffiliated interexchange carriers.
45. For as long as SBCS is required to be a separate affiliate, Pacific Bell will provide
interLATA or intraLATA facilities or services to SBCS only if such services or facilities
are made available to all carriers at the same rates and on the same terms and conditions,
and Pacific Bell will record any transactions between Pacific Bell and SBCS in the
manner prescribed in the Accounting Safeguards Order.15 SBCS’s purchases of such
services, if any, will be made in the manner prescribed by the FCC. In all such cases, the
rates, terms, and conditions made available to SBCS will also be made available to all
unaffiliated entities.
15 Report and Order, Implementation of the Telecommunications Act of 1996: Accounting Safeguards Under the Telecommunications Act of 1996, 11 FCC Rcd 17539 (1996) (“Accounting Safeguards Order”).
14 F I N A L D R A F T
REQUIREMENTS OF SECTION 272(g) OF THE ACT
46. Section 272(g)(1) of the Act provides that the Section 272 affiliate “may not market or
sell telephone exchange services provided by the [BOC] unless [the BOC] permits other
entities offering the same or similar service [as the Section 272 affiliate] to market and
sell its telephone exchange services.”
47. If Pacific Bell permits SBCS to market or sell Pacific Bell’s telephone exchange services,
then Pacific Bell will ensure that it complies with the provisions of Section 272(g)(1).
48. When SBCS receives authorization to provide in-region interLATA services in
California, SBC plans to joint market local and long distance service in compliance with
the marketing provisions of Section 272(g) and the Non-Accounting Safeguards Order.16
The FCC evaluated joint marketing issues and equal access issues in its December 24,
1997, South Carolina Order.17 In that Order, the FCC concluded that BellSouth’s
approach to joint marketing, which allowed BellSouth to market its LD affiliate’s service
in full compliance with its equal access obligations, was appropriate under Section
272(g).18 The FCC reaffirmed this approach in its October 13, 1998, Second Louisiana
Order.19 SBC’s joint marketing activities will comply with the approach approved by the
FCC in these orders, for as long as such orders remain in effect.
SBC’s SECTION 272 COMPLIANCE PROGRAM
49. SBC began compliance activities soon after the FCC’s Non-Accounting Safeguards Order
became effective. Several letters from SBC officers have been distributed to employees,
which emphasize the importance of compliance with Section 272 [See Attachments C
16 17 Non-Accounting Safeguards Order, 11 FCC Rcd at 22046-47, ¶¶ 291-292. Memorandum Opinion and Order, Application of BellSouth Corp., et al. Pursuant to Section 271 of the Communications Act of 1934, as amended, To Provide In-Region, InterLATA Services In South Carolina, 13 FCC Rcd 539 (1997) (“South Carolina Order”). 18 Id., 13 FCC Rcd at 670-72, ¶¶ 236-239. 19 Second Louisiana Order, 13 FCC Rcd at 20804-05, ¶ 358. 15 F I N A L D R A F T
and D]. SBC maintains information regarding Section 272 and affiliate transactions on
its corporate policy intranet website. Further, after the FCC grants Section 271
authorization to any SBC BOC in a particular state, the president of the BOC serving that
state will send additional correspondence to employees reminding them of the importance
of continuing to comply with Section 272. Attachment E demonstrates SBC’s
compliance to provide such correspondence to employees from the state presidents as
committed to in SBC’s previous 271 applications.
50. In addition, members of SBC’s 272 Oversight Team have conducted compliance training
in the SBC BOCs’ states and at SNET since the release of the FCC’s Non-Accounting
Safeguards Order. These sessions include employees affected by Section 272, including
SBCS employees and BOC employees providing services to SBCS. Training places
particular emphasis on the meaning and effect of, and the importance of complying with,
the structural separation and non-discrimination obligations set forth in Section 272. At
all sessions, employees are actively solicited to bring issues or questions to the 272
Oversight Team, on an ongoing basis. Written materials are distributed for later reference
or as a refresher.
51. In addition to face-to-face training sessions, the 272 Oversight Team provides training
through a live Web Conference media in which employees can attend via a company
intranet conferencing service aided by training material displayed simultaneously on their
own personal computer screen. This training has been developed in such a manner so as
to ensure that coverage with employees is consistent across SBC subsidiaries and can be
provided in a timely manner.
52. Corporate-wide training sessions continue as of the date of this affidavit and will continue
after 271 authorization is obtained in California. Information regarding 272 training, 16 F I N A L D R A F T
including the current 272 training schedule is posted on SBC’s intranet website, as
demonstrated in Attachment F.
53. SBC’s 272 Oversight Team regularly meets to provide multi-disciplined review of issues
and proposed activities between SBC’s BOCs, including Pacific Bell, and SBC’s Section
272 affiliates, including SBCS, and to undertake any other activity necessary to ensure
company-wide compliance with Section 272 of the Act. This team, consisting of Legal
and Regulatory managers as well as members of the Affiliate Oversight group, has
instituted several measures to ensure consistent review and compliance as described in
paragraphs 49-53.
54. For example, included in the Affidavit of Robert Henrichs is a copy of a letter that directs
all managers to coordinate with the 272 Oversight Team before engaging in any affiliate
transactions or other joint activities between existing or planned Section 272 subsidiaries
and any other SBC affiliate. In addition, letters have been distributed to officers and
senior managers describing the importance of Section 272 compliance and encouraging
managers to attend training sessions on the subject [See Attachment G].
55. Prior to SBCS offering interLATA services in California pursuant to authorization by the
FCC, the 272 Oversight Team will arrange to provide the attached employee compliance
guide [see Attachment H] to employees of SBC, Pacific Bell, SBCS, and other affiliates,
who need to know or should know the Section 272 compliance requirements. The
employee compliance guide is currently available to employees through SBC’s corporate
policy intranet website as demonstrated in Attachment F.
CONCLUSION
56. Pacific Bell maintains the same structural separation and nondiscrimination safeguards in
California as SWBT does in Kansas, Oklahoma and Texas. Consequently, the FCC 17 F I N A L D R A F T should conclude for California - as it did for SWBT in Kansas, Oklahoma and Texas – that Pacific Bell and SBCS will operate in compliance with Section 272 and the FCC’s rules implementing Section 272.
This concludes my affidavit.
18