*Pages 1--4 from C:\Pdf2Text\Ready4Text_in\pdf\40116.pdf* n Jim Lamoureux Senior Counsel SBC Telecommunications Inc. 1401 I Street NW, Suite 400 Washington, D. C. 20005 Phone 202 326- 8895 Fax 202 408- 8745 June 9,2004 VIA ECFS AND U. S. MAIL Mr. William Davenport Chief Investigations and Hearings Division Enforcement Bureau Federal Communications Commission 445 Twelfth Street, S. W. Washington D. C. 20554 Re: Applications of Ameritech Corp., Transferor, and SBC Communications, Inc., Transferee, For Consent to Transfer of Control of Corporations Holding Commission Licenses and Lines Pursuant to Section 214 and 310( d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission's Rules (CC Docket No. 98- 141)- Post Merger Audit Requirements Dear Mr. Davenport: SBC respectfblly requests that the Commission discontinue requiring SBC to conduct SBC/ Ameritech post- merger audits for all periods beginning on or after January 1,2004. ' Most of the merger conditions sunset prior to January 1,2004, and are not subject to audits for periods post- 2003. In addition, with the Enforcement Bureau Staff's approval, SBC has elected to include two conditions with a 2004 sunset in the scope of the 2003 compliance audit. Regardless of whether the Commission requires SBC to conduct additional audits, SBC will continue to be subject to certain merger compliance requirements and will report on its compliance on March 15 of each year pursuant to Merger Condition 26.2 There is, therefore, no productive reason for the Commission or SBC to devote their resources to further audits. As of June 1,2004, seventeen of the 25 SBC/ Ameritech operative merger conditions will have sunset. See Table 1. Thus, the amount of information provided to the Commission through the audit report will be substantially less than in prior years. Of the eight merger conditions that have not sunset, two of the conditions require SBC to maintain specific discounts for competitive local exchange carriers for 36 months on previously ordered eligible services and do not require additional action on the Company's part. Further, if SBC were to fall out of compliance with any of these conditions, the harmed party could file a complaint with the FCC. In addition, one of the remaining operative merger conditions is effectively self- policing. For Merger Condition 6, SBC will continue to file quarterly reports on its compliance with the deployment of xDSL in low income urban and rural wire centers. ' See SBC/ Ameritech Merger Conditions, Appendix C, Merger Condition 27, subparagraph 66 and 67. See SBUAmeritech Merger Conditions, Appendix C, Merger Condition 26, subparagraph 65 .c. 1 William H. Davenport June 9,2004 Page 2 of 4 In any event, the merger compliance reporting process, as required by Merger Condition 26, will continue to be in place through the sunset of the last merger ~ondition.~ Under the merger compliance reporting process, SBC will file merger reports on March 15 of each year, describing SBC’s compliance with the all open merger conditions. The merger reports are “prepared in a format substantially similar, in relevant respects, to the format of the independent auditor’s section of the audit report” described in Merger Condition 2T4 This report will allow the Commission and others to confirm SBC’s compliance with the merger conditions, without expending costly and time consuming resources necessary for an independent audit. SBC expects the merger condition audits for the years 2004 and beyond would cost at least one million dollars, above and beyond the time and resources that would be expended by SBC and Commission personnel to support and review the audits. The burdens of continued audits clearly outweigh any possible benefits. For these reasons, SBC requests that the Commission permit SBC to discontinue conducting SBC/ Amentech post- merger audits for all periods beginning on or after January 1, 2004. If you have any questions, please do not hesitate to contact me at (202) 326- 8895. CL Jim Lamoureux Senior Counsel SBC Telecommunications, Inc. cc: Hugh Boyle Hillary De Nigro Trent Harkrader Diana Lee Pete Young See SBC/ Ameritech Merger Conditions, Appendix C, Merger Condition 26, subparagraph 65 .c. See SBC/ Ameritech Merger Conditions, Appendix C, Merger Condition 27, subparagraph 66. f. 3 2 William H. Davenport June 9,2004 1 2 4 Page 3 of 4 Separate Affiliate for Advanced Services Discounted Surrogate Line Sharing Charge s Access to Loop Information for Advanced Services Table 1 SBC/ Ameritech Merger Conditions that have Sunset through June 1,2004 9 10 11 12 1 Co: zfirn I SBC/ Ameritech Merger Condition Restructuring OSS Charges OSS Assistance to Qualifiing CLECs Collocation Compliance Most- Favored- Nation Provisions for Out- of- Region and In- Region Arrangements 18 20 5 Alternative Dispute Resolution through Mediation Access to Cabling in Multi- Unit Pronerties Loop Conditioning Charges and Cost Studies ~~~~ 21 22 I 7 j Carrier- to- Carrier Performance Plan Out- of- Territory Competitive Entry InterLATA Services Pricing ~~ 24 25 13 Additional Service Quality Reporting NRIC Part i c inat i on Multi- state Interconnection and Resale Agreements I 17 I OfferingofUNEs Sunset Year 2003 2000 2003 2002 2004 - Compliance for 2004 included in scope of 2003 comdiance audit. 2002 2002 2002 2002 2002 2003 2002 2002 2002 ~~ 2004 - Compliance for 2004 included in scope of 2003 comdiance audit. 2002 2002 3 William H. Davenport June 9,2004 6 Page 4 of 4 Non- discriminatory Rollout of xDSL Services January 2005. 2005 - Complete after Indiana urban sunsets Table 2 SBC/ Ameritech Merger Conditions that Sunset after May 31,2004 Uniform and Enhanced OSS Unbundled Loop Discount Resale Discount UNE Platform Shared Transferred in Ameritech States Enhanced Lifeline Plans Condition Number 2003 - The Company must provide access to the OSS enhancements and additional interfaces for 36 months after they were deployed. 2003 - The Company remains obligated to discount loops ordered pursuant to this offering for 36 months for qualifying loops. 2002 - The Company remains obligated to provide the promotional discount ordered prior to the sunset of the offer for 36 months. 2002- The Company remains obligated to provide the promotional UNE platform for 36 months from date of installation. To be determined. 2004 - Complete after Arkansas sunsets in August 2004. SBC/ Ameritech Merger Condition Sunset Year 3 Advanced Services OSS 2005 - Complete after SBC East sunsets August I 2005. 8 :: 19 23 4