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 does  not  require  incumbent  LECs  to  trench  new  cable  or  otherwise  to  construct  transmission  facilities  so  that  requesting  carriers  can  access  them  as  UNEs  at  cost-  based 
 rates,  but  it  clarifies  that  the  incumbent  LEC’s  unbundling  obligation  includes  all  transmission  facilities  deployed  in  its  network. 


 o  Section  271  Issues  –  The  requirements  of  section  271(  c)(  2)(  B)  establish  an  independent 
 obligation  for  BOCs  to  provide  access  to  loops,  switching,  transport,  and  signaling,  under  checklist  items  4-  6  and  10,  regardless  of  any  unbundling  analysis  under  section  251. 


 Where  a  checklist  item  is  no  longer  subject  to  section  251  unbundling,  section  252(  d)(  1)  does  not  operate  as  the  pricing  standard.  Rather,  the  pricing  of  such  items  is  governed  by 
 the  “just  and  reasonable”  standard  established  under  sections  201  and  202  of  the  Act. 
 o  Clarification  of  TELRIC  Rules  –  The  order  clarifies  two  key  components  of  its  TELRIC 
 pricing  rules  to  ensure  that  UNE  prices  send  appropriate  economic  signals  to  incumbent  LECs  and  competitive  LECs.  First,  the  order  clarifies  that  the  risk-  adjusted  cost  of 


 capital  used  in  calculating  UNE  prices  should  reflect  the  risks  associated  with  a  competitive  market.  The  order  also  reiterates  the  Commission’s  finding  from  the  Local 
 Competition  Order  that  the  cost  of  capital  may  be  different  for  different  UNEs.  Second,  the  Order  declines  to  mandate  the  use  of  any  particular  set  of  asset  lives  for  depreciation, 
 but  clarifies  that  the  use  of  an  accelerated  depreciation  mechanism  may  present  a  more  accurate  method  of  calculating  economic  depreciation. 


 o  Fresh  Look  –  The  Commission  will  retain  its  prior  determination  that  it  will  not  permit 
 competitive  LECs  to  avoid  any  liability  under  contractual  early  termination  clauses  in  the  event  that  it  converts  a  special  access  circuit  to  an  UNE. 


 o  Transition  Period  –  The  Commission  will  not  intervene  in  the  contract  modification 
 process  to  establish  a  specific  transition  period  for  each  of  the  rules  established  in  this  Order.  Instead,  as  contemplated  in  the  Act,  individual  carriers  will  have  the  opportunity 


 to  negotiate  specific  terms  and  conditions  necessary  to  translate  the  Commission’s  rules  into  the  commercial  environment,  and  to  resolve  disputes  over  any  new  contract  language 
 arising  from  differing  interpretations  of  the  Commission’s  rules. 
 o  Periodic  Review  of  National  Unbundling  Rules  –  The  Commission  will  evaluate  these 
 rules  consistent  with  the  biennial  review  mechanism  established  in  section  11  of  the  Act.  These  reviews,  however,  will  not  be  performed  de  novo  but  according  to  the  standards  of 


 the  biennial  review  process. 
 Further  Notice  of  Proposed  Rulemaking 
 o  The  Commission  opens  a  further  notice  of  proposed  rulemaking  to  seek  comment  on 
 whether  to  modify  the  Commission’s  interpretation  of  section  252(  i)  –  the  Commission’s  so-  called  pick-  and-  choose  rule.  The  Commission  tentatively  concludes  that  a  modified 


 approach  would  better  serve  the  goals  embodied  in  section  252(  i),  and  sections  251-  252  generally,  by  promoting  more  meaningful  commercial  negotiations  between  incumbent 
 LECs  and  competitive  LECs. 
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