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 JOINT  STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS  AND 
 COMMISSIONER  JONATHAN  S.  ADELSTEIN,  CONCURRING 


 Re:  Section  272(  f)(  1)  Sunset  of  the  BOC  Separate  Affiliate  and  Related  Requirements  (WC  Docket  No.  02-  112);  2000  Biennial  Regulatory  Review  Separate  Affiliate 
 Requirements  of  Section  64.1903  of  the  Commission’s  Rules  (CC  Docket  No.  00-  175) 


 Today  the  Commission  seeks  comment  on  how  changes  to  the  competitive  landscape  impact  the  provision  of  in-  region  long  distance  service.  We  choose  to  concur 
 because  we  have  some  concerns  with  the  approach  the  Commission  has  taken  in  the  past  on  similar  issues  and  because  we  are  concerned  that  this  particular  item’s  construction 
 could  bias  the  outcome  of  our  current  proceeding. 
 Last  December,  the  Commission  decided  to  allow  the  separate  affiliate  requirements  in  section  272  to  sunset  in  New  York.  This  was  done  without,  we  believed, 
 the  detailed  requisite  market  analysis  and  over  the  objections  of  our  state  colleagues. 
 By  revisiting  these  issues  now  in  this  proceeding,  the  Commission  has  an  opportunity  to  get  them  right.  Structural  and  accounting  safeguards  are  our  principal 
 guarantees  against  improper  accounting  practices  and  cross-  subsidizations.  In  an  era  of  corporate  governance  problems  and  accounting  depredations,  this  Commission  has  an 
 especially  high  burden  to  overcome  if  it  chooses  to  eliminate  or  reduce  the  separate  affiliate  protections  that  help  prevent  and  detect  anticompetitive  behavior.  The  record 
 generated  in  response  to  today’s  item  is  critical.  To  conduct  an  analysis  with  appropriate  rigor,  we  ask  commenters  to  address  not  only  competition  in  the  end-  user  market  for  long 
 distance  service,  but  the  access  market  where  the  Commission  previously  has  acknowledged  that  incumbents  have  the  incentive  and  ability  to  exercise  market  power 
 through  control  of  local  bottleneck  facilities.  We  also  encourage  commenters  to  address  what,  if  anything,  has  changed  since  the  Commission  last  spoke  to  these  issues  in  the 
 LEC  Classification  Order.  With  the  state  of  competition  in  our  long  distance  markets  at  stake,  we  warn  that  cursory  analysis  based  on  weak  economics  will  not  suffice. 


 We  are  pleased  that  the  Commission  will  review  these  issues  for  both  Bell  Operating  Companies  and  rural  independent  carriers  in  a  coherent  and  reasoned  single 
 proceeding.  Like  our  colleagues,  we  intend  to  review  the  record  closely,  study  the  merits  of  all  possible  outcomes  and  determine  what  safeguards,  if  any,  are  necessary  to  prevent 
 anticompetitive  discrimination  in  the  market. 
 Our  concern  is  that  this  item  might  be  interpreted  by  some  as  leading  toward  a  predetermined  outcome.  What  we  are  in  search  of  here  is  absence  of  such  an  outcome 
 and  the  reality  of  an  open  and  unbiased  record.  We  look  forward  to  doing  everything  we  can,  with  the  Bureau  and  our  colleagues,  to  make  that  happen. 
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