Federal Communications Commission FCC 07-13
Before the
Federal Communications Commission
Washington, D.C.  20554
In the Matter of
Petition of Qwest Communications International 
Inc. for Forbearance from Enforcement of the 
Commission’s Dominant Carrier Rules As They 
Apply After Section 272 Sunsets
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WC Docket No. 05-333
MEMORANDUM OPINION AND ORDER
Adopted:  February 20, 2007  Released: March 9, 2007
By the Commission:  Commissioners Copps and Adelstein concurring and issuing a joint statement;
Commissioner McDowell not participating.
TABLE OF CONTENTS
Para.
I. INTRODUCTION...................................................................................................................... 1
II. BACKGROUND ........................................................................................................................ 2
A. COMMISSION REGULATION OF INTERSTATE INTERLATA TELECOMMUNICATIONS 
SERVICES........................................................................................................... 2
B. QWEST’S FORBEARANCE PETITIONS ............................................................................... 5
III. DISCUSSION ............................................................................................................................ 8
A. INTRODUCTION............................................................................................................... 8
B. SCOPE OF QWEST’S PETITION ....................................................................................... 11
C. SUFFICIENCY OF QWEST’S PETITION ............................................................................. 12
D. MARKET ANALYSIS ...................................................................................................... 14
1. Relevant Product Markets ................................................................................ 15
a. Mass Market Services.......................................................................... 15
b. Enterprise Services .............................................................................. 21
2. Relevant Geographic Markets........................................................................... 25
a. Mass Market Services.......................................................................... 26
b. Enterprise Services .............................................................................. 27
3. Market Participants.......................................................................................... 29
a. Mass Market ....................................................................................... 29
b. Enterprise Market................................................................................ 30
4. Analysis of Traditional Market Power Factors.................................................. 31
a. Mass Market Services.......................................................................... 32
b. Retail Enterprise Services .................................................................... 42
5. Qwest Control of Bottleneck Access Facilities .................................................. 47
E. APPLICATION OF FORBEARANCE CRITERIA TO QWEST’S PETITION ................................ 48
1. Section 10(a)(1) – Charges, Practices, Classifications, and Regulations............. 50
a. Exclusionary Market Power................................................................. 53
b. Specific Relief ..................................................................................... 55
c. Safeguards .......................................................................................... 63
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2. Section 10(a)(2) – Protection of Consumers...................................................... 73
3. Section 10(a)(3) – Public Interest ..................................................................... 75
F. INTERNATIONAL SERVICES ........................................................................................... 81
IV. ORDERING CLAUSES ........................................................................................................... 82
APPENDIX A – COMMENTERS
APPENDIX B – MARKET DATA 
APPENDIX C – SERVICE QUALITY MEASUREMENT PLAN FOR INTERSTATE 
 SPECIAL ACCESS
I. INTRODUCTION
1. This Order addresses a petition filed by Qwest Communications International Inc. (Qwest),1
which asks the Commission to forbear, pursuant to section 10 of the Communications Act of 1934, as 
amended (Communications Act or Act),2 from applying the Commission’s dominant carrier rules to 
Qwest’s provision of in-region, interstate, interLATA telecommunications services on an integrated basis.3  
For the reasons set forth below, we find that, provided Qwest complies with certain conditions and 
continuing statutory obligations, it is appropriate to forbear from section 203 of the Act and our rules for 
dominant carriers so that Qwest may provide in-region, interstate, interLATA telecommunications services
on an integrated basis subject to nondominant carrier regulation.4
  
1 See Petition of Qwest Communications International Inc. for Forbearance from Enforcement of the Commission’s 
Dominant Carrier Rules As They Apply After Section 272 Sunset Pursuant to 47 U.S.C. §160 (filed Nov. 22, 
2005), as amended by Petition of Qwest Communications International Inc. for Forbearance from Enforcement of 
the Commission’s Dominant Carrier Rules As They Apply After Section 272 Sunset Pursuant To 47 U.S.C. § 160
(filed Nov. 30, 2005) (Qwest Petition). On December 8, 2005, the Commission issued a Public Notice seeking 
comment on the Qwest Petition.  See Pleading Cycle Established for Comments on Qwest’s Petition for 
Forbearance from Enforcement of the Commission’s Dominant Carrier Rules As They Apply After Section 272 
Sunsets, WC Docket No. 05-333, Public Notice, 20 FCC Rcd 19389 (2005) (Public Notice).  On November 14, 
2006, the Commission, pursuant to Section 10(c) of the Act, extended by 90 days the date by which Qwest’s 
petition would be deemed granted in the absence of a Commission decision that the petition fails to meet the 
standards for forbearance under section 10(a) of the Act.  Petition of Qwest Communications International, Inc. for 
Forbearance from Enforcement of the Commission’s Dominant Carrier Rules As They Apply After Section 272 
Sunset Pursuant to 47 U.S.C. § 160, WC Docket No. 05-333, Order, 21 FCC Rcd 13426 (Wireline Comp. Bur. 
2006) (Qwest Extension Order).  On February 20, 2007, we issued a Public Notice summarizing the terms of this 
Order. FCC Conditionally Grants Qwest Forbearance Relief From Dominant Carrier Regulation of In-Region, 
Interstate, InterLATA Telecommunications Service Provided on an Integrated Basis, WC Docket 05-333, Public 
Notice, FCC 07-12 (rel. Feb. 20, 2007).
2 47 U.S.C. § 160.
3 For the sake of convenience, we use the phrase “on an integrated basis” to refer to service provided through 
Qwest’s Bell Operating Company (BOC) affiliates or through other Qwest affiliates that are not compliant with 
section 272 or the Commission’s rules implementing that section.  See 47 U.S.C. § 272. We also use the term 
“long distance services” to refer to interLATA telecommunications services.  This term encompasses high-capacity 
services provided to enterprise customers as well as traditional voice services.
4 We note that AT&T, BellSouth, and Verizon have also filed petitions seeking forbearance from, or waiver of, 
various requirements that would apply to their provision on an integrated basis of in-region, interstate, interLATA
telecommunications services.  Petition of the Verizon Local and Long Distance Telephone Companies for 
Forbearance Under 47 U.S.C. § 160(c) with Regard to Certain Dominant Carrier Regulations for In-Region 
Interexchange Services, WC Docket No. 06-57 (filed Feb. 28, 2006) (Verizon Forbearance Petition); Petition of 
AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) with Regard to Certain Dominant Carrier Regulations for 
(continued….)
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II. BACKGROUND
A. Commission Regulation of Interstate InterLATA Telecommunications Services
2. In a series of orders in the Competitive Carrier proceeding, the Commission distinguished two 
kinds of carriers – those with individual market power (dominant carriers) and those without market power 
(nondominant carriers).5 The Commission found it appropriate to continue to subject dominant carriers to 
full Title II regulation.6 The Commission further found, however, that because nondominant carriers lack 
market power, “application of our current regulatory procedures to nondominant carriers imposes 
unnecessary and counterproductive regulatory constraints upon a marketplace that can satisfy consumer 
demand efficiently without government intervention,”7 and that it was appropriate to streamline regulation 
of such carriers.8 AT&T was found to be dominant in the provision of long distance services both because 
of its large long distance market share and its control of bottleneck local facilities.9
(Continued from previous page)    
In-Region, Interexchange Services, WC Docket No. 06-120 (filed June 2, 2006) (AT&T Forbearance Petition); 
BellSouth Corporation’s Petition for Waiver, CC Docket No. 05-277 (filed Sept. 19, 2005) (BellSouth Waiver 
Petition) (seeking waiver of certain requirements that would apply to the provision of in-region, interexchange 
services after the section 272 separate affiliate requirements sunset); Petition of the Verizon Local and Long 
Distance Telephone Companies for Interim Waiver with Regard to Certain Dominant Carrier Regulations for In-
Region Interexchange Services, WC Docket No. 06-57 (filed Feb. 28, 2006) (Verizon Waiver Petition) (same).
5 Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations 
Therefor, CC Docket No. 79-252, Notice of Inquiry and Proposed Rulemaking, 77 FCC 2d 308 (1979); First 
Report and Order, 85 FCC 2d 1 (1980) (Competitive Carrier First Report and Order); Further Notice of Proposed 
Rulemaking, 84 FCC 2d 445 (1981); Second Further Notice of Proposed Rulemaking, FCC 82-187, 47 Fed. Reg. 
17308 (1982); Second Report and Order, 91 FCC 2d 59 (1982) (Competitive Carrier Second Report and Order); 
Order on Reconsideration, 93 FCC 2d 54 (1983); Third Further Notice of Proposed Rulemaking, 48 Fed. Reg. 
28292 (1983); Third Report and Order, 48 Fed. Reg. 46791 (1983); Fourth Report and Order, 95 FCC 2d 554 
(1983) (Competitive Carrier Fourth Report and Order), vacated, AT&T v. FCC, 978 F.2d 727 (D.C. Cir. 1992), 
cert. denied, MCI Telecommunications Corp. v. AT&T, 509 U.S. 913 (1993); Policy and Rules Concerning Rates 
for Competitive Carrier Services and Facilities Authorizations Therefor, Fifth Report and Order, 98 FCC 2d 1191 
(1984) (Competitive Carrier Fifth Report and Order); Sixth Report and Order, 99 FCC 2d 1020 (1985), vacated, 
MCI Telecommunications Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985) (Competitive Carrier Sixth Report and 
Order), aff’d, MCI v. AT&T, 512 U.S. 218 (1994) (collectively, the Competitive Carrier proceeding); see 47 C.F.R. 
§ 61.3(q), (y).
6 Competitive Carrier First Report and Order, 85 FCC 2d at 10-11, para. 26.
7 Id. at 20, para. 54.
8 Id. at 11, para. 27.  Specifically, nondominant carriers generally are not subject to direct rate regulation, are 
subject to reduced tariff obligations, and are accorded presumptive streamlined treatment under section 214 of the 
Act.  See id. at 30-49, paras. 85-147; see also 47 C.F.R. §§ 1.773(a)(ii), 61.23(c), 63.03(b), 63.71(c).
9 See Competitive Carrier First Report and Order, 85 FCC 2d at 22-23, para. 62.  With respect to long-distance 
market shares, the Commission found that AT&T had “significant market power” in the Message 
Telecommunications Service (MTS) and Wide Area Telecommunications Service (WATS) market and in the 
private line service market.  Id. at 23, paras. 63-64.  With respect to control of bottleneck facilities, the 
Commission found that “[c]ontrol of bottleneck facilities is present when a firm or group of firms has sufficient 
command over some essential commodity or facility in its industry or trade to be able to impede new entrants.”  Id.
at 21-22, para. 59.  AT&T was found to have such control by virtue of the fact that it controlled “access to 80% of 
the nation’s telephones.” Id. at 22-23, para. 62.
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3. In February 1996, the Telecommunications Act of 1996 became law.10 Upon enactment, the 
1996 Act permitted the BOCs to provide interLATA services that originate outside of their regions.11  
However, the 1996 Act conditioned the BOCs’ provision of in-region, interLATA services on their 
compliance with certain provisions of section 271 of the Act.12 Under section 271, the Commission was 
required to determine, inter alia, whether the BOC seeking permission to provide such services had 
complied with certain market-opening requirements contained in section 271 and with the safeguards 
imposed by section 272 of the Act and the Commission rules implementing that section.13 Section 272 
requires, inter alia, that a BOC provide in-region, interstate, interLATA service only through a structurally 
separate affiliate that meets the requirements of section 272(b) (section 272 separate affiliate).14
4. In the LEC Classification Order, the Commission addressed the issue of whether, once a BOC 
was authorized to provide in-region, interstate, interLATA telecommunications services, its provision of 
such services should be subject to dominant carrier obligations.15 In that Order, the Commission focused 
its analysis on:  (1) whether the section 272 separate affiliate could unilaterally raise prices of in-region, 
interstate, interLATA telecommunications services by restricting its own output; and (2) whether the BOC 
could indirectly raise prices of those services by increasing the price of essential inputs that its rivals need 
to offer their services.16 The Commission found that the section 272 separate affiliates were unlikely to be 
  
10 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (1996 Act).  The 1996 Act amended 
the Communications Act of 1934.
11 See 47 U.S.C. § 271(b)(2).
12 47 U.S.C. § 271.
13 Id.
14 47 U.S.C. §§ 272(a)(1) and (b).  The Commission adopted rules implementing section 272 in the Non-
Accounting and Accounting Safeguards Orders. See Implementation of the Accounting Safeguards Under the 
Telecommunications Act of 1996, CC Docket No. 96-150, Report and Order, 11 FCC Rcd 17539 (1996) 
(Accounting Safeguards Order); Order on Reconsideration, 14 FCC Rcd 11396 (1996); Second Order on 
Reconsideration, 15 FCC Rcd 1161 (2000); Implementation of the Non-Accounting Safeguards of Section 271 and 
272 of the Communications Act of 1934, as amended, CC Docket No. 96-149, First Report and Order and Further 
Notice of Proposed Rulemaking, 11 FCC Rcd 21905 (1996) (Non-Accounting Safeguards Order); First Order on 
Reconsideration, 12 FCC Rcd 2297 (1997) (First Order on Reconsideration), Second Order on Reconsideration, 12 
FCC Rcd 8653 (1997) (Second Order on Reconsideration), aff’d sub nom. Bell Atlantic Tel. Cos. v. FCC, 131 F.3d 
1044 (D.C. Cir. 1997), Third Order on Reconsideration, 14 FCC Rcd 16299 (1999) (Third Order on 
Reconsideration).
15 See Regulatory Treatment of LEC Provision of Interexchange Services Originating in the LEC’s Local 
Exchange Area and Policy and Rules Concerning the Interstate, Interexchange Marketplace, CC Docket Nos. 96-
149 & 96-61, Second Report and Order in CC Docket No. 96-149 and Third Report and Order in CC Docket No. 
96-61, 12 FCC Rcd 15756, 15762-63, para. 6, & 15802, para. 82 (1997) (LEC Classification Order), recon. 
denied, Second Order on Reconsideration and Memorandum Opinion and Order, 14 FCC Rcd 10771 (1999) 
(Second Reconsideration Order).
16 See LEC Classification Order, 12 FCC Rcd at 15802-03, para. 83.  In that Order, the Commission distinguished
between “classical” (or “Stiglerian”) market power, which “is the ability of a firm profitably to raise and sustain its 
price above the competitive level by restricting its own output,” and “exclusionary” (or “Bainian”) market power, 
which is the “ability of a firm profitably to raise and sustain its price significantly above the competitive level by 
raising its rivals’ costs and thereby causing the rivals to restrain their output.”  Id. (citing Thomas G. 
Krattenmaker, Robert H. Lande & Steven C. Salop, Monopoly Power and Market Power in Antitrust Law, 76 GEO.
L. J. 241, 249-53 (1987)).
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able unilaterally to raise the prices of in-region, interstate, interLATA telecommunications services,17 and 
that, although the BOCs possessed market power over bottleneck access facilities, they would not be able 
to raise the prices of those services indirectly by raising rivals’ costs.18  
5. The Commission further found that dominant carrier regulations were “generally designed to 
prevent a carrier from raising prices by restricting its own output rather than to prevent a carrier from 
raising its prices by raising its rivals’ costs.”19 Moreover, it found that dominant carrier regulation could 
“dampen competition” and would impose significant costs and burdens on the BOC section 272 separate 
affiliates.20 Based on these findings, the Commission concluded that, so long as the BOCs provided in-
region, interstate, interLATA telecommunications services through section 272 separate affiliates, these 
affiliates should be treated as nondominant in the provision of such services.21 The Commission 
recognized, however, that the structural separation requirements in section 272 would sunset three years 
after the BOCs were authorized to provide in-region, interLATA telecommunications services.22 The 
Commission stated that it could not predict how competition would develop over that period or what 
safeguards, if any, would be needed after the section 272 safeguards sunset.23 Subsequently, the 
Commission made clear that, following sunset of the section 272 safeguards, to the extent a BOC chooses 
to provide in-region, interstate, interLATA telecommunications services on an integrated basis, it would be 
subject to dominant carrier regulation.24
B. Qwest’s Forbearance Petitions
6. In June 2004, Qwest filed a petition requesting, inter alia, that the Commission forbear from 
applying its dominant carrier regulation to Qwest’s provision of telecommunications services in the Omaha 
Metropolitan Statistical Area (MSA).25 The Commission granted Qwest’s request to forbear from applying 
its price cap, rate of return, tariffing, and 60-day discontinuance rules to interstate mass market exchange 
  
17 LEC Classification Order, 12 FCC Rcd at 15810-12, paras. 96-97.
18 Id. at 15812-33, paras. 98-130.
19 Id. at 15804, para. 85. 
20 Id. at 15806-08, paras. 88-90.
21 See id. at 15834-35, paras. 133-34.
22 Id. at 15835, n.391; see 47 U.S.C. § 272(f)(1) (specifying that the requirements of section 272, other than those 
in section 272(e), sunset with respect to BOC provision of interLATA telecommunications services three years 
after a BOC is authorized to provide such services, unless the Commission extends such three-year period by rule 
or order).  We note that section 272(f)(3) preserves the Commission’s authority to prescribe safeguards under other 
sections of the Act.  See 47 U.S.C. § 272(f)(3).
23 LEC Classification Order, 12 FCC Rcd at 15835, n.391.
24 Section 272(f)(1) Sunset of the BOC Separate Affiliate and Related Requirements, WC Docket No. 02-112, 
Memorandum Opinion and Order, 17 FCC Rcd 26869, 26870, paras. 1-2, nn.5, 8 (2002) (Sunset Order) (citing 
LEC Classification Order, 12 FCC Rcd at 1576, n.12); see Competitive Carrier Fifth Report and Order, 98 FCC 
2d at 1198-99, n.23 (determining that the Commission would classify the BOCs as dominant in the provision of 
interstate, interLATA telecommunications services until it determined what safeguards, if any, would be necessary 
for the BOCs or their affiliates to qualify for nondominant treatment).
25 Petition of Qwest Corporation for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan 
Statistical Area, WC Docket No. 04-223 (filed June 21, 2004) (Qwest Omaha Petition).
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access services, and mass market broadband Internet access transmission services in the Omaha MSA.26  
The Commission denied forbearance with regard to Qwest’s other telecommunications services, including 
Qwest’s enterprise services, because Qwest had failed to provide sufficient information to meet the 
statutory forbearance criteria.27
7. In the instant petition, Qwest states that the section 272 structural safeguards have sunset in all 
its in-region states as of December 3, 2006,28 and it asks the Commission, pursuant to section 10 of the 
Act, to forbear from enforcing its dominant carrier rules with respect to Qwest’s provision of in-region,
interstate, interLATA telecommunications services on an integrated basis.29 Specifically, Qwest requests 
that the Commission forbear from enforcing its part 61 tariffing and price cap requirements and “any other 
Commission dominant carrier rules” as they might be applied to Qwest’s provision of in-region, interstate,
interLATA telecommunications services on an integrated basis.30
III. DISCUSSION
A. Introduction
8. We conditionally grant in part Qwest’s request for forbearance from the application of 
dominant carrier regulation to its provision, on an integrated basis, of in-region, interstate, interLATA 
telecommunications services. Specifically, we forbear from applying section 203 of the Act and certain 
dominant carrier tariffing, price cap, rate of return, discontinuance, and transfer of control rules to Qwest’s 
  
26 Petition of Qwest Corporation for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan 
Statistical Area, WC Docket No. 04-223, Memorandum Opinion and Order, 20 FCC Rcd 19415, 19424, para. 15 
(2005) (Qwest Omaha Order), appeal pending, Qwest Corp. v. FCC & USA, No. 04-1450 (D.C. Cir. filed Dec. 12, 
2005).
27 Id. at 19426, para. 19.
28 Qwest Petition at n.6.  The Commission granted Qwest interLATA authority for its final in-region state on 
December 3, 2003.  See Application by Qwest Communications International Inc. for Authorization To Provide In-
Region, InterLATA Services in Arizona, WC Docket No. 03-194, Memorandum Opinion and Order, 21 FCC Rcd 
7169 (2003).  The provisions of section 272 (other than those in section 272(e)) applicable to Qwest’s provision of 
in-region, interstate, interLATA telecommunications services sunset for the operations of Qwest in its final in-
region state by operation of law on December 3, 2006.  See Section 272 Sunsets for Qwest in the State of Arizona 
by Operation of Law on December 3, 2006 Pursuant to Section 272(f)(1), WC Docket No. 02-112, Public Notice, 
21 FCC Rcd 14157 (Wireline Comp. Bur. 2006) (Arizona Sunset Notice); see also Section 272 Sunsets for Qwest 
Communications International Inc. in the States of New Mexico, Oregon, and South Dakota by Operation of Law 
on April 15, 2006 Pursuant to Section 272(f)(1), WC Docket No. 03-11, Public Notice, 21 FCC Rcd 3980 (Wireline 
Comp. Bur. 2006); Section 272 Sunsets for Qwest Communications International Inc. in the State of Minnesota by 
Operation of Law on June 26, 2006 Pursuant to Section 272(f)(1), WC Docket No. 03-90, Public Notice, 21 FCC 
Rcd 6904 (Wireline Comp. Bur. 2006); Section 272 Sunsets for Qwest Communications International Inc. in the 
States of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington, and Wyoming by 
Operation of Law on December 23, 2005 Pursuant to Section 272(f)(1), WC Docket 02-112, Public Notice, 20 FCC 
Rcd 20396 (Wireline Comp. Bur. 2005) (Qwest Multistate Sunset Notice). Qwest therefore became free to provide 
in-region, interLATA telecommunications services on an integrated basis on December 3, 2006. 
29 Qwest Petition at 1.
30 See Qwest Petition at 1-2; see also Qwest Reply at 11; Letter from Timothy M. Boucher, Corporate Counsel, 
Qwest, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-333 at 8 (filed Dec. 7, 2006) (Qwest Dec. 7, 
2006 Ex Parte Letter).  For a discussion of the specific regulations from which Qwest seeks forbearance, see infra
Part III.B.
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provision of in-region, interstate, interLATA telecommunications services on an integrated basis, subject to 
the conditions set forth in part III.E.1.c of this Order.31  We deny the remainder of Qwest’s request to the 
extent either it requests forbearance from any other statutory provision or Commission rule, or could be 
construed as seeking forbearance from the application of any dominant carrier regulation to Qwest’s
provision of telecommunications services other than in-region, interstate, interLATA telecommunications 
services.
9. As Qwest indicates in its petition,32 our current rules force it to choose between two different 
regulatory regimes in providing in-region, interstate, interLATA telecommunications services, both of 
which impose significant burdens and costs.  Qwest either can provide these services on a nondominant 
carrier basis through a section 272 separate affiliate, or it can provide these services on an integrated basis, 
subject to dominant carrier regulations, including rate regulation and tariff-filing requirements.  Based on 
the record before us, we conclude that, as applied to Qwest, both of these regulatory regimes impose costs 
that exceed their benefits.  The provision of interstate, interLATA telecommunications services through a 
section 272 separate affiliate denies Qwest the economies of scope and scale that its competitors are able to 
realize.  Providing interstate, interLATA telecommunications services through a section 272 affiliate 
requires Qwest, inter alia, to operate independently of the BOC and maintain separate officers, directors, 
and employees from the BOC.33 These restrictions are inefficient not only because they impose additional 
costs (such as those for duplicative facilities), but also because they prevent Qwest from taking advantage 
of the economies of scope and scale associated with an integrated operation.  These restrictions may also 
prevent Qwest and the affiliates from quickly responding to technological and marketplace developments.34  
These restrictions and their associated costs make Qwest a less effective competitor in the market.35  
10. On the other hand, if Qwest chooses to provide in-region, interstate, interLATA 
telecommunications services on an integrated basis, it would be subject to dominant carrier regulation, 
which imposes its own significant costs and burdens, including the costs associated with dominant carrier 
  
31 Part III.E.1.b, below, sets forth the specific relief we grant Qwest.
32 Qwest Petition at 3. 
33 See 47 U.S.C. § 272(b); see generally Accounting Safeguards Order, 11 FCC Rcd at 17588-17632, paras. 111-
205; Non-Accounting Safeguards Order, 11 FCC Rcd at 21976-017, paras. 146-236.
34 Cf. Appropriate Framework for Broadband Access to the Internet over Wireline Facilities; Universal Service 
Obligations of Broadband Providers, CC Docket No. 02-33; Review of Regulatory Requirements for Incumbent 
LEC Broadband Telecommunications Services, CC Docket No. 01-337; Computer III Further Remand 
Proceedings:  Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review –
Review of Computer III and ONA Safeguards and Requirements, CC Docket Nos. 95-20, 98-10; Conditional 
Petition of the Verizon Telephone Companies for Forbearance Under 47 U.S.C. § 160(c) with Regard to 
Broadband Services Provided Via Fiber to the Premises; Petition of the Verizon Telephone Companies for 
Declaratory Ruling or, Alternatively, for Interim Waiver with Regard to Broadband Services Provided Via Fiber 
to the Premises, WC Docket No. 04-242; Consumer Protection in the Broadband Era, WC Docket No. 05-271,
Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd 14853, 14895, para. 79 (2005) (Wireline 
Broadband Internet Access Services Order), petitions for review pending, Time Warner Telecom v. FCC, No. 05-
4769 (and consolidated cases) (3rd Cir. filed Oct. 26, 2005).
35 See Letter from Timothy M. Boucher, Qwest Corporate Counsel, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 05-333 at 7-9 (filed Jan. 16, 2007) (Qwest Jan. 16, 2007 Ex Parte Letter) (listing, among other 
burdens, mandatory tariffing requirements that would restrict Qwest’s ability to respond to competitors’ pricing 
initiatives and require Qwest to give advance notice to competitors of its pricing plans and promotions; stringent 
transfer of control and discontinuance provisions; and depreciation rules and associated reporting requirements). 
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price regulation, tariff-filing requirements, and reporting requirements.36 As the Commission recognized in 
the LEC Classification Order, these regulatory requirements would restrict Qwest’s ability to respond to 
competitors’ pricing and product initiatives, and give competitors advance notice of Qwest’s own pricing 
plans and new products.37 By impeding Qwest’s ability to compete, these requirements could also dampen 
competition.38 The relief we grant Qwest today allows it to take advantage of the economies associated 
with integration, while avoiding the unnecessary costs and burdens of the existing regulatory regimes, and 
should result in increasing competition in the markets for interstate, interLATA telecommunications 
services.
B. Scope of Qwest’s Petition
11. The first step in our forbearance review is to identify the specific relief Qwest requests in its 
petition, including the statutory provisions and Commission regulations that Qwest identifies in its petition 
and in subsequent clarifications.39 In its petition, Qwest seeks the ability to provide in-region, interstate, 
interLATA telecommunications services on an integrated basis free of dominant carrier regulation.40 In its 
petition and subsequent submissions, Qwest indicates that this relief will require that the Commission 
forbear with respect to its in-region, interstate, interLATA telecommunications services from:  (1) sections 
214 (a), (c), and (d) of the Act, which apply to “entry and discontinuance of services or transfers of control 
by dominant carriers” and any portion of section 272 of the Act that would require Qwest to provide in-
region, interstate, interLATA telecommunications services “through a Section 272 affiliate or any other 
separate affiliate in order to be deemed non-dominant;”41 (2) sections 61.28, 61.31-.38, 61.41-.49, 61.58-
.59, 65.1(b)(1), 65.1(b)(3), and 65.600 of our rules,42 which set forth dominant carrier price cap and rate of 
return regulations and require dominant carriers to file tariffs on up to 15-days notice with cost support; (3) 
sections 63.03, 63.10, 63.18, 63.19, 63.21, 63.23, and 63.60-.90 of our rules,43 which apply to entry and 
  
36 Id. at 7-9; see also LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-90; see also Qwest Reply at 6-
7, n.21 (asserting that the reason “no Regional BOC has chosen to operate as a dominant carrier in states where 
272 has sunset [is] . . . that it is uneconomical to do so”).
37 See LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-90; see also Qwest Jan. 16, 2007 Ex Parte 
Letter at 6-7.
38 See generally LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-89.
39 See Review of Regulatory Requirements for Incumbent LEC Broadband Telecommunications Services, CC 
Docket No. 01-337, Memorandum Opinion and Order, 17 FCC Rcd 27000, 27010, para. 18 (2002) (SBC Advanced 
Services Forbearance Order).
40 Qwest Petition at 1-2.
41 Id. at 2, n.6; Qwest Reply at 11; Qwest Jan. 16, 2007 Ex Parte Letter at 9.
42 Qwest Petition at 2; Qwest Reply at 11; Qwest Jan. 16, 2007 Ex Parte Letter at 6-8.  Specifically, Qwest seeks 
relief from the following rules:  47 C.F.R. § 61.28 (tariffing requirements for dominant international carriers); 47 
C.F.R. §§ 61.31-.38 (tariffing requirements for dominant carriers); 47 C.F.R. §§ 61.41-.49 (general requirements 
for carriers subject to price cap regulation); 47 C.F.R. §§ 61.58-.59 (tariff notice requirements for price cap 
carriers); 47 C.F.R. § 65.1(b)(1) (application of rate of return prescription procedures and methodologies for 
interstate access services); 47 C.F.R. § 65.1(b)(3) (application of rate of return prescription procedures and 
methodologies for price cap carriers offering rate of return services); 47 C.F.R. § 65.600 (reporting requirements 
for carriers subject to rate of return regulation).
43 Qwest Petition at 2, n.6; Qwest Reply at 11; Qwest Jan. 16, 2007 Ex Parte Letter at 9; see 47 C.F.R. § 63.03 
(procedures for domestic transfer of control applications); 47 C.F.R. § 63.10 (regulatory classification of U.S. 
international carriers); 47 C.F.R. § 63.18 (notification and approval of U.S. international carriers affiliated with 
(continued….)
Federal Communications Commission FCC 07-13
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discontinuance of services or transfers of control by dominant carriers; and (4) sections 43.21, 43.43, and 
43.51 of our rules,44 which impose contract filing and reporting requirements.
C. Sufficiency of Qwest’s Petition
12. Before we examine the merits of Qwest’s petition, we address certain procedural objections.  
First, COMPTEL maintains that Qwest’s petition is premature because Qwest’s in-region, interstate, 
interLATA telecommunications services currently are not subject to dominant carrier regulation, and 
because Qwest has made no decision as to how it will offer these long distance services in the future.45  
COMPTEL argues that, under our SBC IP Forbearance Denial Order,46 the petition therefore should be 
denied on the ground that the requested relief is hypothetical.47 We disagree. Because Qwest is now free to 
provide in-region, interstate, interLATA telecommunications services on an integrated basis, and because 
our existing rules will subject Qwest to dominant carrier regulation if it chooses to do so, those rules bear 
directly on Qwest’s near-term plans for its corporate structure.  Qwest’s petition therefore is neither 
hypothetical nor premature.  Furthermore, we find COMPTEL’s argument to be inconsistent with the D.C. 
Circuit’s subsequent holding, on appeal of the SBC IP Forbearance Denial Order, that “the Commission 
may not refuse to consider a [forbearance] petition’s merits solely because the petition seeks forbearance 
from uncertain or hypothetical regulatory obligations.”48 Thus, we must consider Qwest’s petition on its 
merits regardless of how Qwest currently provides its in-region, interLATA telecommunications services.  
Moreover, it would be unreasonable to require Qwest to first assume all of the dominant carrier obligations 
it seeks to avoid before it may petition for forbearance from them.  Such obligations are clearly predictable 
and identifiable in any event.
13. Second, other commenters argue that it is improper or unwise for us to consider Qwest’s 
petition until we have completed the Section 272 Sunset proceeding,49 which examines related issues as 
they affect the industry at large.50 They argue that addressing Qwest’s petition prior to completing that 
(Continued from previous page)    
foreign carriers); 47 C.F.R. § 63.19 (procedures for discontinuing international services); 47 C.F.R. § 63.21 
(conditions that apply to international section 214 authorizations); 47 C.F.R. § 63.23 (conditions that apply to 
resale-based international common carriers); 47 C.F.R. §§ 63.60-90 (definitions, rules, and procedures that apply 
to the discontinuance, reduction, outage, and impairment of services).
44 Qwest Petition at 2; Qwest Reply at 11; Qwest Jan. 16, 2007 Ex Parte Letter at 9-10; see 47 C.F.R. § 43.21 
(affiliate transactions); 47 C.F.R. § 43.43 (reports of proposed changes in depreciation rates); 47 C.F.R. § 43.51 
(filing of carrier contracts and concessions).
45 COMPTEL Comments at 3-4, 6.
46 Petition of SBC Communications Inc. for Forbearance from the Application of Title II Common Carrier 
Regulation to IP Platform Services, WC Docket No. 04-29, Memorandum Opinion and Order, 20 FCC Rcd 9361 
(2005) (SBC IP Forbearance Denial Order), remanded, AT&T Inc. v. FCC, 452 F.3d 830 (D.C. Cir. 2006) (AT&T 
v. FCC).
47 COMPTEL Comments at 1, 3-4, 6.
48 AT&T v. FCC, 452 F.3d at 837.
49 Section 272(f)(1) Sunset of the BOC Separate Affiliate and Related Requirements, WC Docket No. 02-112, 
Notice of Proposed Rulemaking, 17 FCC Rcd 9916 (2002) (Section 272 Sunset NPRM); Section 272(f) Sunset of 
the BOC Separate Affiliate and Related Requirements, WC Docket No. 02-112, Further Notice of Proposed 
Rulemaking, 18 FCC Rcd 10914 (2003) (Section 272 Sunset and Independent LEC Further NPRM).
50 See, e.g., AT&T Comments at 5-6; COMPTEL Comments at 6-7; Level 3 Comments at 4.  
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rulemaking could distort our analysis or cause us to prejudge issues pending in that broader rulemaking 
proceeding.51 We disagree.  Section 10(c) provides that a forbearance petition “shall be deemed granted if 
the Commission does not deny the petition” within one year, which can be extended by an additional 90 
days.52 Because this statutory period of one year plus ninety days ends on February 20, 2007, Qwest will 
obtain the relief sought in its petition as of that date absent a Commission decision denying that relief.  In 
these circumstances, we find the better course is to address Qwest’s petition within the period specified in 
section 10(c), rather than to allow Qwest to obtain the relief it seeks subject to any action we subsequently 
may take in the Section 272 Sunset rulemaking.
D. Market Analysis
14. In the Competitive Carrier Proceeding, the Commission determined that dominant carrier 
regulation was not necessary to ensure just, reasonable and nondiscriminatory rates and practices where a 
carrier lacked individual market power.53 In the LEC Classification Order, the Commission elaborated on 
the conditions under which a carrier could exercise market power.54 Consistent with this Commission 
precedent, we begin our analysis by first defining the relevant product and geographic markets.55 We then 
consider whether Qwest could exercise market power with respect to in-region, interstate, interLATA 
telecommunications services if it provides such services on an integrated basis, by either:  (1) unilaterally 
raising the retail price of its in-region, interstate, interLATA telecommunications services (i.e., exercising 
“classical” market power); or (2) using its control over bottleneck local facilities to raise its rivals’ costs 
(i.e., exercising “exclusionary” market power).  We conclude that Qwest lacks classical market power in 
regard to these services, but may continue to have exclusionary market power by reason of its control of 
bottleneck facilities.
  
51 See, e.g., AT&T Comments at 5-6 (arguing that addressing Qwest’s Petition unreasonably puts Qwest’s 
concerns before the needs of the entire industry); COMPTEL Comments at 6-7; Level 3 Comments at 4.
52 47 U.S.C. § 160(c).
53 See, e.g., Competitive Carrier First Report and Order, 85 FCC 2d at 19, para. 51, & 20-21, paras. 55-56.
54 See LEC Classification Order, 12 FCC Rcd at 15802-04, paras. 83-85.
55 A relevant product market has been defined as the smallest group of competing products for which a 
hypothetical monopoly provider of the products would profitably impose at least a “‘small but significant and 
nontransitory’ increase in price.”  Horizontal Merger Guidelines, issued by the U.S. Department of Justice and the 
Federal Trade Commission, §§ 1.11, 1.12 (Apr. 2, 1992, revised Apr. 8, 1997) (DOJ/FTC Guidelines); see also 
Application of EchoStar Communications Corporation, General Motors Corporation, and Hughes Electronics 
Corporation, CS Docket No. 01-348, Hearing Designation Order, 17 FCC Rcd 20559, 20605-06, para. 106 (2002) 
(EchoStar/DirecTV Order).  A relevant geographic market has been defined “as the region where a hypothetical 
monopolist that is the only producer of the relevant product in the region would profitably impose at least a ‘small 
but significant and nontransitory’ increase in the price of the relevant product, assuming that the prices of all 
products provided elsewhere do not change.”  EchoStar/DirecTV Order, 17 FCC Rcd at 20609, para. 117 (citing 
DOJ/FTC Guidelines § 1.21).
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1. Relevant Product Markets
a. Mass Market Services
15. Based on the record in this proceeding and consistent with the SBC/AT&T and Verizon/MCI
merger orders,56 we identify two relevant product markets for our mass market analysis: (1) stand-alone 
long distance services; and (2) bundled local and long distance services.  Also, consistent with those orders, 
we consider both the demand for “access” and demand for “usage” when defining our relevant product 
markets.57
i. Stand-Alone Long Distance Services
16. Consistent with the Commission’s findings in the SBC/AT&T and Verizon/MCI Merger Orders, 
there is significant evidence in the record here that long distance service purchased on a stand-alone basis is 
becoming a fringe market.  This evidence includes the 2004 decision by legacy AT&T to cease marketing 
long distance services and the declining proportion of consumers that choose a long distance provider 
different from their local service provider.58  Nonetheless, out of an abundance of caution and to ensure 
consistency with Commission precedent,59 we analyze stand-alone long distance as a separate, relevant 
product market.  
  
56 SBC Communications Inc. and AT&T Corp. Applications for Approval of Transfer of Control, WC Docket No. 
05-65, Memorandum Opinion and Order, 20 FCC Rcd 18290, 18336-46, paras. 82-99 (2005) (SBC/AT&T Order); 
Verizon Communications Inc. and MCI, Inc. Application for Approval of Transfer of Control, WC Docket No. 05-
75, Memorandum Opinion and Order, 20 FCC Rcd 18433, 18477-87, paras. 83-100 (2005) (Verizon/MCI Order).  
We use the term “BOC/IXC Orders” to refer collectively to the SBC/AT&T Order and the Verizon/MCI Order.  In 
prior proceedings, the Commission has defined mass market customers as residential and small business customers 
that purchase standardized offerings of communications services.  See, e.g., Application of WorldCom, Inc. and 
MCI Communications Corporation for Transfer of Control of MCI Communications Corporation to WorldCom, 
Inc., CC Docket No. 97-211, Memorandum Opinion and Order, 13 FCC Rcd 18025, 18040, para. 24 (1998) 
(WorldCom/MCI Order); Application of Ameritech Corp. and SBC Communications Inc. for Consent to Transfer 
Control of Corporations Holding Commission Licenses and Lines Pursuant to Sections 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, Memorandum Opinion and Order, 14 FCC Rcd 14712, 14746, para. 68 (1999) (SBC/Ameritech Order).
57 SBC/AT&T Order, 20 FCC Rcd at 18336-37, para. 84; Verizon/MCI Order, 20 FCC Rcd at 18477-78, para. 85.  
As the Commission explained, a consumer requires “access” in order to connect to a communications network, 
whether it be a wireline telephone network, a mobile wireless network, or the public Internet.  Because a mass 
market consumer today can choose one or more access providers, his demand for usage – i.e., how much of a 
service he actually consumes – will be determined by the set of access providers he has chosen, the prices and
terms set by those access providers, and other personal characteristics of the consumer.  Thus, for example, if a 
consumer has a wireless phone, a wireline phone, and a broadband connection plus an interconnected voice over 
Internet Protocol (VoIP) service subscription, he can make a long distance call using either a phone or through the 
broadband connection.  To the extent that consumers view these choices as reasonable substitutes, they are in the 
same product market for purposes of our analysis.  See EchoStar/DirecTV Order, 17 FCC Rcd at 20606, para. 106.
58 In the SBC/AT&T Order and Verizon/MCI Order, the Commission determined that the stand-alone market was 
becoming a fringe market based upon documentary evidence submitted in those proceedings.  There is no 
information in this proceeding to cause us to reconsider this conclusion.  See SBC/AT&T Order, 20 FCC Rcd at 
18342, para. 91; Verizon/MCI Order, 20 FCC Rcd at 18483, para. 92.
59 See SBC/AT&T Order, 20 FCC Rcd at 18336, para. 82; Verizon/MCI Order, 20 FCC Rcd at 18477, para. 83. 
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17. As discussed below, we consider two alternative measures of market share in analyzing stand-
alone long-distance services.  The first measure considers only consumers with a presubscribed wireline 
long-distance carrier.  This approach is consistent with the approach the Commission adopted in the 
SBC/AT&T and Verizon/MCI merger orders.60  We recognize that this approach is overly narrow, however, 
and will tend to overstate Qwest’s market position, because it ignores the facts that all presubscribed 
interexchange customers can also make interLATA calls using transaction services (such as prepaid calling 
cards and dial-around services), and that a majority of these customers also subscribe to mobile wireless 
service and can make interLATA calls using their wireless phones.61 In order to capture the possibility of 
such usage substitution, we therefore also perform a second market share calculation, which attempts to 
take into account the ability of presubscribed customers to engage in usage substitution.62  
18. In prior orders, the Commission has found that it may be appropriate to define narrower relevant 
product markets based on customer class if service providers engage in price discrimination.63 Both the 
record and the long-distance carriers’ web sites indicate that carriers generally offer multiple alternative 
long-distance service packages to mass-market customers, which vary in terms of their monthly recurring 
charges and per-minute charges.64 These alternative packages appear designed to appeal to customer 
groups with differing demand patterns for long-distance services.  While such pricing plans generally 
benefit consumers, we believe that certain consumers who make relatively few long-distance calls that
subscribe only to a wireline long-distance provider and do not subscribe to mobile wireless service or 
broadband Internet access service may not face the same wide choice of alternative providers.  Moreover, 
  
60 See SBC/AT&T Order, 20 FCC Rcd at 18347, n.309; Verizon/MCI Order, 20 FCC Rcd at 18489, n.308.
61 See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18342-44, paras. 92-99; Verizon/MCI Order, 20 FCC Rcd at 18484-
85, paras. 93-95 (finding that customers substitute, at least to some extent, mobile wireless services and transaction 
services for interLATA calls made through their presubscribed wireline carrier); see also Letter from Melissa 
Newman, Vice President-Federal Regulatory, Qwest to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-
333, Attach. A at 4 (filed Jan. 10, 2007) (Qwest Jan. 10, 2007 Ex Parte Letter) (providing Yankee Group Report, 
Pervasive Substitution Precedes Displacement and Fixed-Mobile Convergence in Latest Wireless Trends (Dec. 
2005) (December 2005 Yankee Group Report) that states [REDACTED] of households have a wireless phone).  
The Bureau of Labor Statistics estimated that, in 2004, approximately 52 percent of U.S. households subscribe to 
both a wireline and a mobile wireless provider.  Clyde Tucker, J. Michael Brick, Brian Meekins, and David 
Morganstein, Household Telephone Service and Usage Patterns in the United States in 2004, at 4, available at 
http://www.bls.gov/ore/pdf/st040130.pdf (Household Telephone Survey).
62 Qwest uses residential white pages listings to estimate the number of consumers served by facilities-based 
providers.  See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. 1.f.  We therefore include facilities-based VoIP 
services in these calculations to the extent that consumers of these services are listed in residential white pages 
listings.  Because of limitations in available data, our calculations do not include over-the-top VoIP services or 
transaction services (such as prepaid calling cards).  The exclusion of these services will tend to overstate Qwest’s 
market position.  For the reasons given in the SBC/AT&T Order and Verizon/MCI Order, we reject Qwest’s 
suggestion that we should include e-mail and instant messaging in the relevant service markets for long distance 
services provided to mass market consumers.  SBC/AT&T Order, 20 FCC Rcd at 18342, para. 91, n.282; 
Verizon/MCI Order, 20 FCC Rcd at 18484, para. 92 n.282; Qwest Dec. 7, 2006 Ex Parte Letter, Attach., 
Declaration of Dennis W. Carlton, Hal Sider, and Allan Shampine (Qwest Carlton/Sider/Shampine Decl.) at paras. 
32-33.  
63 See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18323, para. 60; Verizon/MCI Order, 20 FCC Rcd at 18465, para. 
60.  
64 For example, Qwest advertises three domestic long distance plans on its website: an unlimited long distance 
plan for $25 per month; a usage-based plan with a $4.99 monthly recurring charge and a $0.05 per minute usage-
based charge; and a usage-based plan with a $0.99 monthly recurring charge and a $0.15 per minute usage-based 
charge.  See http://www.qwest.com/residntial/productsandservices/ld/domestic/index.html (visited Jan. 9, 2007).
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although there is insufficient information in the record for us to conclude that such customers constitute a 
separate relevant product market, we are concerned, as was the Commission in the AT&T Reclassification 
Proceeding,65 that competition for such customers may not be as intense as it is for higher volume long-
distance users.
ii. Bundled Local and Long Distance Services 
19. Consistent with the SBC/AT&T and Verizon/MCI merger orders, we also find it appropriate to 
define and examine a separate relevant product market for bundled local and long distance services.66  
Because of the varied marketing strategies and limitations in the data, we define a local and long distance 
service bundle,67 for purposes of this proceeding only, as a customer’s purchase of local and long distance 
services from the same carrier, regardless of whether these services are purchased together as part of an 
advertised bundle from a single carrier or the consumer creates the bundle by selecting separately-offered 
local and long distance service plans from the same provider.  The evidence indicates that a majority of 
consumers purchase local and long distance services from a single provider today and that this percentage 
has been increasing over time.68 We find that this trend is likely to continue and that the stand-alone 
wireline long distance market is steadily declining in size relative to the bundled services market.69
20. Several other factors support our defining a separate relevant product market for bundled local 
and long distance services.  First, we find that Qwest’s marketing and pricing strategies are designed to 
  
65 Motion of AT&T Corp. to be Reclassified as a Non-Dominant Carrier, Order, 11 FCC Rcd 3271, 3315-16, 
paras. 84-85 (1995) (AT&T Reclassification Order).
66 See SBC/AT&T Order, 20 FCC Rcd at 18344-45, paras. 95-96; Verizon/MCI Order, 20 FCC Rcd at 18485-86, 
paras. 96-97.  
67 The economics literature generally discusses two types of bundles:  a pure bundle, where the bundled services are 
only sold together and are not sold individually; and a mixed bundle, where the bundled services are sold 
individually, as well as in a package.  In a mixed bundle, the package generally is sold at a discount relative to the 
sum of the individual service component prices.  See, e.g., Barry Nalebuff, Bundling, Tying and Portfolio Effects, 
DTI Economics Paper No. 1, at 14-15 (2003), available at http://www.dti.gov.uk/files/file14774.pdf.  There is 
significant variation across providers as to whether they offer a pure bundle or a mixed bundle of communications 
services.
68 The Commission reports that as of December, 2005, 58 percent of regional BOC retail local consumer lines and 
88 percent of competitive local exchange carrier (competitive LEC) lines were presubscribed to the local provider’s 
long distance service, compared with 52 percent of regional BOC lines and 80 percent of competitive LEC lines as 
of June 2005.  See Local Telephone Competition:  Status as of December 31, 2005, at Table 6 (Industry Analysis 
and Technology Div., Wireline Comp. Bur. July 2006); Local Telephone Competition:  Status as of June 30, 2005, 
at Table 6 (Industry Analysis and Technology Div., Wireline Comp. Bur. April 2006); see also SBC/AT&T Order, 
20 FCC Rcd at 18344-45, paras. 95-96; Verizon/MCI Order, 20 FCC Rcd at 18485-86, paras. 96-97.  We note, 
however, that as of December 2006, only [REDACTED] of Qwest’s retail local consumer lines were presubscribed 
to Qwest’s long distance service.  Letter from Melissa Newman, Vice President-Federal Regulatory, Qwest to 
Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-333, Attach. 1.ii (corrected) (filed Jan. 17, 2007) (Qwest 
Jan. 17, 2007 Ex Parte Letter).
69 We note that the Commission had anticipated that a bundled product market might become a relevant product 
market sometime after the BOCs completed the section 271 process.  See, e.g., Applications of NYNEX 
Corporation and Bell Atlantic Corporation for Consent to Transfer Control of NYNEX Corporation and Its 
Subsidiaries, Memorandum Opinion and Order, 12 FCC Rcd 19985, 20010-11, paras. 39-42 (1997) (Bell 
Atlantic/NYNEX Order); WorldCom/MCI Order, 13 FCC Rcd at 18038-39, para. 22 n.60.  Qwest completed the 
section 271 process in December 2003.  See supra n.28.
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encourage subscription to a bundled service package.70 Second, the evidence in the record indicates that 
intermodal competition between wireline services and services provided on alternative service platforms, 
such as facilities-based VoIP and mobile wireless, has been increasing and is likely to continue to 
increase.71  These intermodal services tend to be offered as a bundle of local and long distance services.72  
These findings suggest that competition is increasingly occurring between bundled offerings, rather than 
between a bundled package offered by an intermodal competitor and stand-alone local and long distance 
services offered by incumbent LECs. 
b. Enterprise Services
21. Retail enterprise customers purchase a variety of different communications services, including 
local voice, long distance and international voice, and data services.73 In addition, enterprise customers 
frequently purchase high-capacity transmission services,74 including Frame Relay,75 Asynchronous 
  
70 For example, Qwest’s advertising suggests that consumers can save by purchasing bundled services.  See  
http://pcat.qwest.com/pcat/bundlesMain.do?salesChannel=res. (visited Jan. 16, 2007).
71 See North American Numbering Plan Numbering Resource Utilization/Forecast Report, Confidential Form 502 
Filings; Numbering Resource Optimization, CC Docket 99-200, Report and Order and Further Notice of Proposed 
Rulemaking, 15 FCC Rcd 7574 (2000) (indicating that, as of June, 2006, cable companies provided service to over 
1 million phone numbers); Qwest Jan.10, 2007 Ex Parte Letter, Attach. A at 8 (citing Yankee Group report that 
forecasts [REDACTED]; Qwest Jan. 16, 2007 Ex Parte Letter, Attach. 1.g at 5-8.
72 Promotional information for facilities-based VoIP providers generally appears to focus on bundled offerings.  
See, e.g., Optimum Voice, What is It?, available at http://www.optimum.com/voice/what.jsp (visited Feb. 16, 2007) 
(Cablevision’s product “offers unlimited local, regional and long-distance calling within the United States, Puerto 
Rico and Canada”); Comcast, Services for You, available at 
http://www.comcast.com/Benefits/VoiceBenefits.ashx?.link1k=59 (visited Feb. 16, 2007) (offering “unlimited local 
and long distance”); Time Warner Cable, Unlimited Calling, available at 
http://www.timewarnercable.com/corporate/products/digitalphone/unlimitedcallingdigitalphone.html (visited Feb. 
16, 2007) (offering “unlimited calls anywhere in the U.S. and Canada for one low monthly price”).  Mobile 
wireless service providers likewise promote bundled offerings.  See, e.g., Cingular Wireless, Cingular Plans, 
available at http://www.cingular.com/cell-phone-service/cell-phone-plans/?_requestid=87830 (“Never pay domestic 
long distance or roaming charges!”); T-Mobile, T-Mobile Stick Together, available at http://www.t-
mobile.com/templates/generic.aspx?passet=Pln_Lst_MyFavesLrnDemo (“Unlimited nationwide calling to any five 
numbers* on any network, even landlines.”); Verizon Wireless, America’s Choice, at 
http://www.verizonwireless.com/b2c/store/controller?item=planFirst&action=viewPlanList&sortOption=priceSort
&typeId=1&subTypeId=1&catId=323 (“Unlimited Domestic Long Distance”).
73 See SBC/AT&T Order, 20 FCC Rcd at 18321-22, para. 57; Verizon/MCI Order, 20 FCC Rcd at 18463, para. 56.
74 The specific technology used by the individual enterprise customer depends on availability, needed capacity, 
services required, and desired service quality levels.  Enterprise services could include some number of DS0 
circuits or high-capacity circuits of DS1 or higher bandwidth, such as DS3, and OCn circuits.  See, e.g., Review of 
the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers; Implementation of the Local 
Competition Provisions of the Telecommunications Act of 1996; Deployment of Wireline Services Offering 
Advanced Telecommunications Capability, CC Docket Nos. 01-338, 96-98, 98-147, Report and Order and Order 
on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978, 17155-56, para. 298 (2003) 
(Triennial Review Order) (discussing services typically purchased by enterprise customers).  A DS0 is a two-wire 
basic connection, which operates at 64,000 bits per second (bps), the worldwide standard speed for digitizing voice 
conversation using pulse code modulation.  HARRY NEWTON, NEWTON’S TELECOM DICTIONARY, 273 (20th ed., 
2004) (defining “DS-0”) (NEWTON’S TELECOM DICTIONARY).  A DS1 is a four-wire connection equivalent to 24 
DS0s.  A DS3 is equivalent to 28 DS1s.  These circuits may be purchased by customers from state and federal 
tariffs.  See Triennial Review Order, 18 FCC Rcd at 17155-56, para. 298.  
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Transfer Mode (ATM),76 Gigabit Ethernet,77 and similar services provided via emerging technologies.78  
Retail enterprise customers also purchase other facilities and customer premises equipment (CPE).79  
22. Consistent with Commission precedent and with the record in this proceeding,80 we find that the 
services offered to enterprise customers fall into a number of separate relevant product markets.  More 
specifically, we find that long distance voice and data services constitute distinct relevant product markets.
23. We have less information about the substitutability of different transmission services.  While there 
are data indicating that the number of customers for Frame Relay is declining on a nationwide basis, while 
the number of IP transmission services customers is increasing,81 we do not have data on elasticities (and 
cross elasticities) of demand for particular transmission services.  Similarly, we lack sufficient information 
about the migration time, price differences, and service quality differences that customers face when 
deciding to change from one transmission service to another.  Thus, the evidence is insufficient for us to 
define precisely the boundaries of those transmission service markets.  Given the data available in the 
record, and for purposes of this proceeding only, we focus on four services:  long distance voice services, 
Frame Relay, T1, and T3 services.82
(Continued from previous page)    
75 Frame Relay is a high-speed data service that allows local area networks (LANs) to be connected across a public 
network. See TELECOMMUNICATIONS INDUSTRY ASSOCIATION, 2006 TELECOMMUNICATIONS MARKET REVIEW AND 
FORECAST 138 (2006) (TIA 2006 MARKET REVIEW).  A T-1 provides the same speed and capacity service as a DS1.  
See Triennial Review Order, 18 FCC Rcd at 17104-05, para. 202 n.634.  Similarly, a T-3 provides the same speed 
and capacity service as a DS3.
76 ATM service can guarantee different quality of service levels to meet various customer needs.  ATM offers 
higher reliability and greater capacity because it combines the advantages of circuit-switched and packet-switched 
networks, guaranteeing the delivery of information that is intolerant of delays, while allocating bandwidth more 
efficiently.  See TIA 2006 MARKET REVIEW at 140-42.
77 Gigabit Ethernet is a LAN standard that allows a network to accommodate the high-bandwidth requirements of 
converged voice, video, and data network applications.  See TIA 2006 MARKET REVIEW at 125.
78 Enterprises are increasing their use of IP Virtual Private Networks (IP-VPNs), which deliver private network 
services over shared IP-based backbones; and carriers are migrating to Multiprotocol Label Switching (MPLS), 
which provides label switching to move packets between network locations.  See TIA 2006 MARKET REVIEW at 
134-36.  MPLS is similar to other circuit-switched, ATM, and Frame Relay network protocols, except that MPLS 
is not dependent on a particular technology.  See, e.g., MPLS Resource Center, The MPLS FAQ, available at
http://www.mplsrc.com/faq1.shtml#MPLS%20History (visited July 31, 2006).
79 See SBC/AT&T Order, 20 FCC Rcd at 18322, para. 57.
80 See SBC/AT&T Order, 20 FCC Rcd at 18322, para. 58; Verizon/MCI Order, 20 FCC Rcd at 18464, para. 58; 
Qwest Jan. 16, 2007 Ex Parte Letter, Attachs. 3-4.
81 From 1997 through 2002, the number of Frame Relay ports more than tripled to 1.3 million; since then, 
however, the market has shifted to IP-VPNs, and Frame Relay port growth has dropped.  See TIA 2006 MARKET 
REVIEW at 140.  From 2000 through 2005, ATM service revenues nearly tripled, from $1.1 billion to $2.70 billion.  
Id. at 143.  The number of ATM ports in the United States reached a peak of 40,000 in 2005, however, and that 
number was expected to decline in 2006.  Id. at 142.  As newer technologies emerge, ATM’s role as a backbone 
technology appears to be declining as enterprise customers increase their use of IP-VPNs.  Id.
82 Our analysis of particular product markets is determined by the availability of data in this record.  Qwest has 
provided data for its region from a third party vendor (Harte-Hanks).  These data are based on a 
(continued….)
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24. In previous orders, the Commission has found it appropriate to define separate relevant product 
markets based on the class of customer (particularly where there is “price discrimination”).83 As the 
Commission previously has discussed, however, there does not appear to be industry-wide consensus as to 
how to differentiate one class of enterprise customers from another.84 The Commission generally has 
found, however, that a number of factors influence how carriers price their services to particular types of 
customers, including:  the customer’s total telecommunications spending; the types of services and 
technologies ordered; the customer’s total employee count; the customer’s total annual revenues; and 
whether the customer obtains customized services.85 Based on the data available to us in the record, we 
find it appropriate to focus our analysis on two categories of business customers: small/medium businesses 
and large enterprises.86
2. Relevant Geographic Markets
25. The Commission previously has recognized that each customer location constitutes a separate 
relevant geographic market.  For reasons of administrative practicality, however, the Commission has 
aggregated customers facing similar competitive choices to create larger relevant geographic markets.87  
a. Mass Market Services
26. The data in the record are not sufficiently detailed to define localized relevant geographic 
markets in which customers face similar competitive choices.  Accordingly, consistent with the approach 
adopted in, and for the reasons given in, the SBC/AT&T and Verizon/MCI merger orders, we analyze stand-
(Continued from previous page)    
telecommunications survey that queries businesses about their contracting for services, including long distance 
voice services, ATM, Frame Relay, T1, and T3 services.  In general, we limit our analysis to geographic areas with 
at least 30 observations.  We exclude the “UNSPECIFIED” category from our analysis because it represents 
incomplete responses. The survey for ATM services includes at least 30 observations [REDACTED].  Qwest Jan. 
16, 2007 Ex Parte Letter, Attachs. 4.a-b.  
83 See SBC/AT&T Order, 20 FCC Rcd at 18323, para. 60; Verizon/MCI Order, 20 FCC Rcd at 18465, para. 60. 
84 See SBC/AT&T Order, 20 FCC Rcd at 18323-24, para. 61; Verizon/MCI Order, 20 FCC Rcd at 18465-66, 
para. 61.  
85 See SBC/AT&T Order, 20 FCC Rcd at 18323-24, para. 61; Verizon/MCI Order, 20 FCC Rcd at 18465-66, 
para. 61.
86 See SBC/AT&T Order, 20 FCC Rcd at 18323-24, para. 61; Verizon/MCI Order, 20 FCC Rcd at 18465-66, 
para. 61.  Qwest defines two broad customer categories, enterprise customers (customers with 11 or more telephone 
access lines at a business location) and small business customers (customers with fewer than 11 telephone lines at a 
business location). Qwest Jan. 16, 2007 Ex Parte Letter, Attach. 3 at 1.  Our analysis of particular enterprise 
customer classes is determined by the availability of data in this record.  The Harte-Hanks customer count data for 
enterprise customers submitted by Qwest is segmented into [REDACTED].  See Qwest Jan. 16, 2007 Ex Parte 
Letter, Attachs. 4.a-b.  These business segments do not, however, generally conform to the categorization schemes 
used by Qwest, and in a number of cases include markets with fewer than 30 observations. We therefore analyze a 
small/medium category utilizing aggregated Harte Hanks [REDACTED] data and a large enterprise category
utilizing Harte Hanks [REDACTED] data. 
87 See SBC/AT&T Order, 20 FCC Rcd at 18345-46, paras. 62, 97-99; Verizon/MCI Order, 20 FCC Rcd at 18466-
67, paras. 62, 98-100.
Federal Communications Commission FCC 07-13
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alone long distance and bundled local and long distance services in Qwest’s franchise area within each 
state.88  
b. Enterprise Services
27. The data in the record are likewise not sufficiently detailed to define localized relevant geographic 
markets in which all enterprise customers face the same competitive choices.  Consistent with Commission 
precedent, we will use the most disaggregated data available in performing our structural analysis for 
different types of business services and for certain broad classes of business customers.  For enterprise 
customers with single locations in Qwest’s region, we use the most disaggregated data in this record to 
complete our analysis.  We present data at the state level because that is the most disaggregated data 
available that allows us to assess Qwest’s presence in its franchise areas for the services and customer 
classes considered in this Order.89
28. For larger, multi-location enterprise customers, we find that these customers typically seek service 
from a provider that can serve all their locations, and generally only a few carriers serving a particular 
location have such capabilities.  In light of the fact that there are relatively few providers that can offer a 
high level of ubiquitous service, the Commission in previous orders has concluded that this geographic 
market should encompass all the geographic locations where these multi-location business customers may 
have a presence.90  Because of limitations in the data, however, we will use Qwest’s various states for 
analyzing all classes of business customers.91
  
88 See SBC/AT&T Order, 20 FCC Rcd at 18346, para. 99; Verizon/MCI Order, 20 FCC Rcd at 18487, para. 100.  
We reject Qwest’s suggestion that we define the relevant geographic market for mass market services as the nation 
or Qwest’s entire in-region territory. Qwest December 7, 2006 Ex Parte Letter at 4 (arguing that there is no 
evidence in this record that would cause us to reconsider our prior finding on the relevant geographic market for 
long distance services provided to mass market consumers).  Although we acknowledge that, in the LEC 
Classification Order, the Commission only distinguished between a BOC’s in-region territory and its out-of region 
territory, the Commission also stated that “the market to purchase a plan is a localized market, not a national one, 
and that it would consider a smaller relevant geographic market if it found evidence that there is, or could be, a 
lack of competition in a particular market.”  LEC Classification Order, 12 FCC Rcd at 15794, para. 66; see also
SBC/AT&T Order, 20 FCC Rcd 18345-46, paras. 97-98; Verizon/MCI Order, 20 FCC Rcd 18486-87, paras. 98-99.  
We further recognize that the competitive choices customers face may vary within a state (e.g., cable companies 
may provide cable VoIP in some areas of a state but not others), and that Qwest might be able to offer more 
localized promotions for bundled service offerings.  While these factors suggest that we should define the relevant 
geographic market at a more disaggregated level than Qwest’s franchise area within each of its in-region states, the 
data in the record are not sufficiently detailed for us to perform such a disaggregated analysis.  We find, however, 
as we did in the SBC/AT&T Order and the Verizon/MCI Order, that analyzing the data at the franchise level is 
reasonable, particularly given that Qwest’s pricing for stand-alone long distance service does not vary across its 
franchise areas.  See http://www.qwest.com/residential/productsandservices/ld/domestic/index.html (visited Jan. 4, 
2007).
89 Cf. SBC/AT&T Order, 20 FCC Rcd at 18324-25, para. 62; Verizon/MCI Order, 20 FCC Rcd at 18466-67, para. 
62 (adopting similar approach).  We analyze state-level data, by the size of the enterprise, for four service 
classifications:  long distance voice; Frame Relay; T1; and T3.  To avoid relying on results that are based on too 
few observations, we present results only for those markets for which there are at least 30 observations.
90 See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18325, para. 63; Verizon/MCI Order, 20 FCC Rcd at 18467, para. 
63.
91 The Commission previously has recognized that large business customers with multiple locations throughout the 
United States may constitute a separate relevant product market.  See, e.g., SBC/AT&T Order, 20 FCC Rcd at 
(continued….)
Federal Communications Commission FCC 07-13
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3. Market Participants
a. Mass Market
29. The record indicates that Qwest faces competition from a variety of providers of retail mass 
market services.  These competitors include competitive wireline local exchange and long-distance carriers, 
stand-alone long distance providers, facilities-based VoIP providers, cable circuit-switched service 
providers, and wireless carriers, to the extent that consumers use their services as a replacement for local or 
long distance services.92
b. Enterprise Market
30. Likewise, the record indicates that there are numerous categories of competitors providing 
services to enterprise customers.  These include interexchange carriers, competitive LECs, data/IP network 
providers, cable companies, other incumbent LECs, VoIP providers, systems integrators, and equipment 
vendors.93
4. Analysis of Traditional Market Power Factors
31. We consider first whether Qwest currently has such a significant presence in the relevant 
markets for interstate, interLATA telecommunications services that it has the ability unilaterally and 
profitably to raise the price of such services.  Our analysis examines Qwest’s market shares for the 
aforementioned relevant product markets, trends in its market share, demand substitutability, and supply 
substitutability.  
a. Mass Market Services
32. We conclude that Qwest lacks individual, classical market power with respect to the mass 
market interstate, interLATA telecommunications services.  Although the market share calculations for 
stand-alone interstate, interLATA telecommunications services indicate a moderately high level of 
concentration in certain of Qwest’s franchise areas, we find that these calculations significantly overstate 
Qwest’s market position in those markets, particularly when one considers other market factors that affect 
market power.  As discussed in greater detail below, we are concerned, as was the Commission in the 
AT&T Reclassification Order,94 that Qwest residential customers who make few long distance calls and 
who do not also subscribe to wireless or broadband Internet access service may have fewer competitive 
choices among interstate, interLATA long distance providers and may not be able to avoid the impact of a 
(Continued from previous page)    
18325, para. 63; Verizon/MCI Order, 20 FCC Rcd at 18467, para. 63.  While this record contains only limited, 
relatively dated data on this customer class, these data suggest that there are at least three other carriers that have 
significantly larger market presence than Qwest Letter from Timothy M. Boucher, Corporate Counsel, Qwest, to 
Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-333, Appendix 1 at 15 (filed Jan. 22, 2007) (Qwest Jan. 
22, 2007 Ex Parte Letter).
92 As discussed above, we do not include over-the-top VoIP for purposes of this market analysis.  See supra n.62; 
see also Letter from Melissa Newman, Vice President-Federal Regulatory, Qwest to Marlene H. Dortch, Secretary, 
FCC, WC Docket No. 05-333, Attachs. 1.b, 1.c, 1.d (filed Jan. 8, 2007) (Qwest Jan. 8, 2007 Ex Parte Letter); 
Qwest Jan. 10, 2007 Ex Parte Letter, Attach. 1.f.
93 See Qwest Jan. 16, 2007 Ex Parte Letter, Attachs. 4.a-b.
94 AT&T Reclassification Order, 11 FCC Rcd at 3313-14, paras. 81-82.
Federal Communications Commission FCC 07-13
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price increase by engaging in usage substitution.  We also are concerned that these customers may not 
receive the information regarding their monthly long distance usage that they need to make informed 
choices among alternative long-distance calling plans.  However, as discussed below, Qwest has committed 
itself to continue offering certain calling plans and providing adequate long distance usage information.95  
We find that Qwest’s commitments adequately address these concerns.96
i. Stand-Alone Long Distance Market Share
33. Consistent with the Commission’s analysis in the SBC/AT&T and Verizon/MCI Merger 
Orders, we first consider Qwest’s market share of wireline customers that have a presubscribed 
interexchange carrier.97 Using this methodology, the data in the record suggest that Qwest has a significant 
market share in most of its franchise areas in the Qwest territory.98 Under this approach, Qwest’s market 
share of stand-alone long distance services ranges from [REDACTED] percent to [REDACTED] percent, 
with a median market share of [REDACTED] percent.99
34.  As discussed above, however, these market shares are likely to overstate Qwest’s share of the 
interstate long distance market, and its potential market power, for a number of reasons.  First, this analysis 
is limited to customers who have a presubscribed interexchange carrier (PIC), but in recent years, an 
increasing number of customers are choosing to have no PIC.  For example, data submitted by Qwest show 
that, with respect to its mass market wireline customers, only [REDACTED] have Qwest as their PIC, 
while [REDACTED] have no PIC.100 More importantly, this approach to calculating market shares fails 
to take into account possible usage substitution between wireless and wireline long distance services (for 
  
95 See Letter from Melissa E. Newman, Vice President, Federal Regulatory, Qwest, to Marlene H. Dortch, 
Secretary, FCC, WC Docket No. 05-333, Attach. at 1 (filed Feb. 8, 2007) (Qwest Feb. 8, 2007 Ex Parte Letter).
96 See infra Part III.E.1.c.
97 See SBC/AT&T Order, 20 FCC Rcd at 18347, n.309; Verizon/MCI Order, 20 FCC Rcd at 18489, n.308.
98 Market share calculations for each of Qwest’s franchise areas are provided in Appendix B, Table 1.  Our 
analysis of concentration in the mass market relies upon data for residential customers because of the 
administrative difficulty of distinguishing small business data from data for other classes of businesses.  An 
analysis of market shares of residential consumers is likely to accurately represent an analysis of market shares for 
the entire mass market because residential customers and small businesses have similar patterns of demand, are 
served primarily through mass marketing techniques, purchase similar volumes and communications services, and 
would likely face the same competitive alternatives within a geographic market.  Thus, we conclude that an 
analysis of market share of residential consumers is likely to accurately represent Qwest’s position in the mass 
market as a whole.  See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18347, para. 102, n.307; Verizon/MCI Order, 20 
FCC Rcd at 18488, para. 103, n.306.  
99 We base our analysis of the stand-alone long distance market on Qwest’s local exchange customers with a PIC, 
Qwest’s interexchange customers that do not subscribe to Qwest’s local service, the number of resold lines leased 
by Qwest’s competitors, the number of Qwest Platform Plus lines leased by Qwest’s competitors, and Qwest’s 
estimate of facilities-based lines.  See Qwest Jan. 8, 2007 Ex Parte Letter, Attachs. 1.b, 1.d; Qwest Jan. 10, 2007 
Ex Parte Letter, Attach. 1.f; Qwest Jan. 17, 2007 Ex Parte Letter, Attachs. 1.a.i (corrected), 1.a.ii (corrected).  
This analysis implicitly assumes that customers that receive local services from a competitive LEC generally 
subscribe to that carrier for their long distance services.  We believe this to be a reasonable assumption given that 
fewer than [REDACTED] Qwest interexchange customers did not subscribe to Qwest’s local service in December 
2006.  See Qwest Jan. 16, 2007 Ex Parte Letter, Attach. 2. 
100 See Qwest Jan. 17, 2007 Ex Parte Letter, Attach. 1.ii (corrected).
Federal Communications Commission FCC 07-13
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customers that subscribe to both wireless and wireline telephone services) or between wireline and over-the-
top VoIP (for customers that subscribe to both wireline telephone service and broadband Internet access 
service).  While we lack the data necessary to estimate the impact of usage substitution between traditional 
wireline long-distance service and long-distance service provided by over-the-top VoIP, we can calculate 
market shares in a way that attempts to capture usage substitution between wireline and wireless long-
distance service providers.101 Taking such wireline-wireless usage substitution into account, Qwest’s 
market share ranges from [REDACTED] percent to [REDACTED] percent, with a median market share 
of [REDACTED] percent.  Given the large and growing percentage of consumers who subscribe to both a 
wireline service provider and a wireless and/or broadband Internet access service provider,102 and who thus 
have the ability to shift usage in response to price changes, we find that these market share numbers are 
likely to provide a more accurate picture of Qwest’s market power in the stand-alone long distance market.  
We note in this regard that Qwest’s extremely limited presence as a wireless service provider (it exclusively 
resells wireless service and has captured only [REDACTED] of wireless subscribers in the Qwest 
states)103 strongly suggests that if the price of bundled wireline service or stand-alone long distance service 
goes up, few of Qwest’s customers will switch to a Qwest wireless service.
ii. Bundled Local and Long Distance Market Shares  
35. As discussed above, an increasing number of customers are shifting to bundled service 
offerings and away from stand-alone long-distance offerings.  While we recognize the conceptual 
difficulties associated with estimating market shares for this bundled services market, we believe that we 
have adopted a conservative approach, which, if anything, will again tend to overstate Qwest’s market 
position.104 We estimate that, for its franchise areas within its in-region states, Qwest’s market share of 
  
101 This analysis focuses on those customers that subscribe to both a wireline and a mobile wireless service.  Our 
analysis assumes that 10 percent of households have cut-the-cord and that [REDACTED] of households subscribe 
to a mobile wireless services provider.  See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. A at 4 (citing December 
2005 Yankee Report that [REDACTED] of households subscribe to wireless services); see also id. at Attach. 1.f; 
Qwest Jan. 8, 2007 Ex Parte Letter, Attachs. 1.b, 1.d, 1.h, 1.j; Qwest Jan 17, 2007 Ex Parte Letter, Attachs. 1.a.i 
(corrected), 1.a.11 (corrected).  We estimate Qwest’s market share of the stand-alone long distance market by 
calculating the following:  (Qwest’s local lines with Qwest as a presubscribed interexchange carrier + Qwest’s 
interexchange customers that do not have Qwest as a local service provider + Qwest’s estimate of its residential 
mobile wireless subscribers – Qwest’s estimate of its residential mobile wireless subscribers that have cut-the-cord) 
/ (the number of competitive LEC residential lines + Qwest’s residential lines with a presubscribed interexchange 
carrier + the estimated number of residential wireless lines that have not cut-the-cord).  
102 See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. A at 4 (citing December 2005 Yankee Report that 
[REDACTED] of households have a mobile wireless phone); High-Speed Services for Internet Access:  Status as 
of June 30, 2006, at Table 3 (Industry Analysis and Technology Div., Wireline Comp. Bur. Jan. 2007) (High-
Speed Services Jan. 2007 Report), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
270128A1.pdf.
103 See Qwest Jan. 8, 2007 Ex Parte Letter, Attach. 1.j.i.
104 Our analysis here focuses on those customers that subscribe to a bundle of local and long distance services from 
the same carrier.  Moreover, for wireless customers, this analysis only considers customers who have “cut the 
cord.”  Consumers that subscribe to local service from one carrier and long distance service from another carrier 
are included in our analysis of the stand-alone long distance market.  See supra Part III.D.4.a.i.
Federal Communications Commission FCC 07-13
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bundled local and long distance services ranges from [REDACTED] percent to [REDACTED] percent, 
with a median market share of [REDACTED] percent.105  
iii. Other Factors  
36. Traditionally, the Commission, in evaluating whether a carrier possesses individual market 
power, has considered not only current market share, but also such factors as trends in market share, 
elasticity of demand, and elasticity of supply.106 Consideration of these factors further supports our 
conclusion that Qwest lacks individual market power with respect to mass market, interstate, interLATA 
telecommunications services.
37. We begin by considering trends in market shares.  We acknowledge that Qwest’s share of the 
stand-alone long distance market, measured in terms of presubscribed wireline customers, has increased 
over the past three years.  While such an increase might normally be an indicator of market power, there 
are several reasons to reject such an inference here.  First, since Qwest entered the market with a zero 
market share only slightly more than three years ago, it is to be expected that its market share would be 
increasing.  Second, reflecting the decline in the stand-alone long-distance market, legacy AT&T and MCI, 
traditionally the two largest stand-alone interexchange carriers, decided in 2004 to cease marketing such 
services; this has led to a decrease in their market share and a concomitant increase in Qwest’s.  A more 
important trend, however, has been the increasing number of consumers who now subscribe to multiple 
access services, including wireless service and broadband Internet access services (which permits 
customers then to subscribe to an over-the-top VoIP service).107 This increase in access choices has 
allowed customers to engage in increasing usage substitution.  This trend evidence provides further support 
for our finding that Qwest lacks market power in the provision of mass market interstate, interLATA 
telecommunications services.
  
105 Like our analysis of the stand-alone long distance market, see supra n.101, our analysis of this bundled market 
assumes that 10 percent of households have cut-the-cord.  See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. A at 4
(citing December 2005 Yankee Report); see also id. at Attach 1.f; Qwest Jan. 8, 2007 Ex Parte Letter Attachs. 1.b, 
1.d, 1.h, 1.j; Qwest Jan. 17, 2007 Ex Parte Letter , Attach. 1.a.i (corrected).  We estimate Qwest’s share of this 
bundled market by calculating the following:  (Qwest’s local lines with Qwest as a presubscribed interexchange 
carrier + Qwest’s estimate of its residential mobile wireless subscribers that have cut-the-cord) / (the number of 
competitive LEC residential lines + Qwest’s local lines with Qwest as a presubscribed interexchange carrier + the 
estimated number of mobile wireless lines used by households that have cut-the-cord).
106 See, e.g., AT&T Reclassification Order, 11 FCC Rcd at 3346, para. 139.
107 See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. A at 4 (citing December 2005 Yankee Report that 
[REDACTED] of households have a mobile wireless phone); High-Speed Services Jan. 2007 Report at Table 3.  
We note that these market developments have occurred since the Commission adopted the LEC Classification 
Order in 1997.  Specifically, at that time, personal communications service (PCS) carriers were only beginning to 
initiate services in a relatively small number of markets.  See Implementation of Section 6002(b) of the Omnibus 
Budget Reconciliation Act of 1993, Second Report, 12 FCC Rcd 11266, 11290 (1997) (reporting that PCS 
licensees had initiated services in portions of 29 major trading areas).  Mobile wireless carriers had not yet begun 
to offer regional or national calling plans that permit consumers to place what would have been toll calls without 
incurring additional per minute charges.  See Annual Report and Analysis of Competitive Market Conditions With 
Respect to Commercial Mobile Services, 16 FCC Rcd 13350, 13377 (2001) (reporting that, in 1998, AT&T 
became the first wireless carrier to offer a large bucket of minutes plan with a  regional or national footprint, but 
that virtually all of the major operators offered similar plans by 2001).  Further, few customers had access to, or 
subscribed to broadband Internet Access Service.  High-Speed Services Jan. 2007 Report at Table 3 (showing less 
than 3.2 million subscribers nationwide in 2000).
Federal Communications Commission FCC 07-13
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38. In addition, the Commission traditionally considers demand substitutability factors.  The 
record in this proceeding does not include data sufficient for us to estimate precisely the own-price 
elasticity of demand for stand-alone long distance or bundled local and long distance services. Nor does the 
record permit us to determine the cross-elasticity of demand between interstate, interLATA 
telecommunications services provided by wireline carriers and similar services provided by wireless 
carriers and over-the-top VoIP providers.  Nevertheless, the evidence in the record is consistent with the 
Commission’s previous finding that customers are highly sensitive to changes in the price of wireline 
interstate, interLATA telecommunications services and that customers are willing to shift usage to wireless 
and over-the-top VoIP providers in response to changes in relative prices.108 More specifically, the increase 
in the number of customers subscribing to competitive wireline and cable services suggests an increase in 
the elasticity of demand for Qwest’s services.109 In addition, the increase in subscriptions to broadband 
Internet access services (which permits customers then to subscribe to an over-the-top VoIP service with a 
long distance component),110 the increase in subscriptions to mobile wireless services,111 and the migration 
of wireline minutes to mobile wireless minutes indicate that consumers are increasingly finding that these 
alternatives services serve as substitutes for traditional wireline long-distance services offered by Qwest 
and other carriers.112  
39. Finally, with respect to supply substitutability, we note that the Commission, in the LEC 
Classification Order, found that there was significant excess capacity for the provision of interstate 
interLATA telecommunications services, which would permit competitors to expand their output should a 
BOC attempt to raise the price of these services.113 Moreover, in the recent BOC/IXC Orders, the 
Commission reaffirmed its finding that the wholesale interexchange service market is competitive due to 
substantial excess capacity.114 There is no evidence in this record that would cause us to reevaluate this 
finding.
40. Accordingly, based on the foregoing market analysis, we find that Qwest lacks individual, 
classical market power in the provision of the mass market services considered in this Order.  Despite this 
  
108 See Qwest Jan. 10, 2007 Ex Parte Letter, Attach. A at 4 (citing December 2005 Yankee Report that 
[REDACTED] of households have a mobile wireless phone); High-Speed Services Jan. 2007 Report at Table 3.
109 See Appendix B, Table 1; see also infra n.71; Qwest Jan. 10, 2007 Ex Parte Letter, Attach. 1.f.
110 High-Speed Services Jan. 2007 Report at Table 3. We base this conclusion on the Commission’s findings in 
the SBC/AT&T Order and Verizon/MCI Order. See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18369-72, paras. 147-
52; Verizon/MCI Order, 20 FCC Rcd at 18337-40, paras. 86-88.  There is no evidence in the record to suggest that 
consumers within the Qwest region would view VoIP services differently than would consumers in other BOC 
regions.  
111 See Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile 
Services, WT Docket No. 06-17, Eleventh Report, 21 FCC Rcd 10947, 11009-11, paras. 157-61 (2006) (Eleventh 
CMRS Competition Report). 
112 See, e.g., id. at 11027, para. 206; Universal Service Contribution Methodology, WC Docket No. 06-122, Report 
and Order and Notice of Proposed Rulemaking, 21 FCC Rcd 7518 (2006) (Universal Service Contribution 
Methodology Order), appeal pending, Vonage Holdings Corp. v. FCC & USA, No. 06-1276 (D.C. Cir. filed July 
18, 2006).
113 LEC Classification Order, 12 FCC Rcd at 15811, para 97.
114 See, e.g., SBC/AT&T Order, 20 FCC Rcd at 18369-72, paras. 147-52; Verizon/MCI Order, 20 FCC Rcd at 
18510-12, paras. 145-51.  
Federal Communications Commission FCC 07-13
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general finding, the record does raise two areas of potential concern.  The first concern relates to low 
volume long distance users that do not also subscribe to a wireless service provider or broadband Internet 
access provider.  In the AT&T Reclassification Proceeding, the Commission expressed concern that, while 
AT&T lacked individual market power in the provision of mass market, interstate interLATA 
telecommunications services, customers that make few long distance calls might nevertheless be harmed by 
the elimination of price cap regulation for AT&T’s Basket One services.115 In response, AT&T offered 
certain commitments to protect low volume consumers, which the Commission accepted and made 
conditions of its Order.116 Here, we are concerned that consumers that make few long distance calls and 
that do not subscribe to wireless service or broadband Internet access service may face fewer competitive 
choices among interstate, interLATA long-distance providers, and may not be able to avoid the impact of a 
price increase by engaging in usage substitution.  We address this concern in part III.E.1.c, below.
41. Our second concern relates to a potential information failure that may prevent consumers from 
selecting the most cost-effective long distance plan.  Consumers today that subscribe to wireline unlimited 
long distance plans often are not informed of their monthly usage of wireline long distance minutes.  
Without such information on their toll usage, however, they may have insufficient information to determine 
whether it might be more cost-effective for them to select a long-distance plan that offers a limited number 
of toll minutes or charges long-distance calls on a per-minute basis.  In this regard, we agree with the New 
Jersey Ratepayer Advocate that a consumer needs transparency in pricing to ensure that he chooses the 
carrier that best suits his needs.117  We address this concern in part III.E.1.c, below.
b. Retail Enterprise Services 
42. We conclude that Qwest lacks individual, classical market power with respect to interstate, 
interLATA telecommunications services for the enterprise market.  In evaluating whether Qwest possesses 
individual market power, we consider Qwest’s market share, Qwest’s competitors’ market share, trends in 
Qwest’s market shares, factors affecting demand substitutability, and supply substitutability.  Although we 
find that Qwest’s market shares for certain of the relevant products are relatively high,118 we nonetheless 
conclude that Qwest lacks individual market power with respect to the relevant enterprise services that are 
considered in this proceeding.  
i. Market Shares
43. We reject the market share data initially submitted by Qwest for interLATA service revenues 
for enterprise and small business customers because the market shares are based [REDACTED] and are 
not based upon Qwest’s individual franchise areas.119 We instead use data Qwest subsequently submitted 
to calculate market shares and Herfindahl-Hirschman Index (HHI) estimates for Qwest and its competitors 
for long distance voice and data enterprise services for geographic areas for which we have sufficient 
  
115 AT&T’s Basket One services included residential and small business services.  See AT&T Reclassification 
Order, 11 FCC Rcd at 3277, para. 8.
116 See AT&T Reclassification Order, 11 FCC Rcd at 3315, para. 84.
117 New Jersey Ratepayer Advocate Comments at 12.
118 See Appendix B, Tables 2-3.
119 We note that Qwest submitted multiple sets of market share estimates.  See, e.g., Qwest TNS Dec. 7, 2006 Ex 
Parte Letter at 12-14; Qwest Carlton/Sider/Shampine Decl. at paras. 22-26; Qwest Jan. 16, 2007 Ex Parte Letter, 
Attach. 5.a.i.
Federal Communications Commission FCC 07-13
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data.120 In general, the market share calculations indicate a moderate level of concentration in most 
franchise areas for many relevant services for large enterprise customers with significant operations in 
Qwest’s region.121 Qwest’s median statewide market share for long distance voice services is 
[REDACTED] percent for the states within its region.122 Qwest’s median statewide market share for 
Frame Rely data services is [REDACTED] percent for the states within its region.123 Qwest’s median 
statewide market share for T1 data services is [REDACTED] percent for the states within its region.124  
Qwest’s median statewide market share for T3 data services is [REDACTED] percent for the states within 
its region.125
44. Similarly, the market share calculations indicate a moderate level of concentration in most 
franchise areas for many relevant services for small/medium business customers with significant operations 
in Qwest’s region.  Qwest’s median statewide market share for long distance voice services is 
[REDACTED] percent for the states within its region.126 Qwest’s median statewide market share for 
Frame Rely data services is [REDACTED] percent for the states within its region.127 Qwest’s median 
statewide market share for TI data services is [REDACTED] percent for the states within its region.128  
45. The aforementioned market shares and accompanying estimates of level of concentration 
suggest that Qwest operates in a moderately concentrated market for long distance voice services and the 
  
120 The HHI is calculated as the sum of the squares of the market shares of each firm participating in a relevant 
market.  The HHI can range from nearly zero in the case of an atomistic market to 10,000 in the case of a pure 
monopoly.  Because the HHI is based on the squares of the market shares of the participants, it gives 
proportionately greater weight to carriers with larger market shares.  See DOJ/FTC Guidelines § 1.5. 
121 Our analysis of Qwest’s market position is based upon analysis of third-party data supplied by Qwest.  Qwest 
Jan. 16, 2007 Ex Parte Letter, Attachs. 4.a-b.  These business segments do not generally conform to the 
categorization schemes used by Qwest; and thus may overstate or understate the actual level of concentration in 
each relevant geographic market.  See supra para. 24.  In general, we limit our analysis to geographic areas with at 
least 30 observations.  We exclude the “UNSPECIFIED” category from our analysis because it represents 
incomplete responses.
122 Appendix B, Table 2.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].
123 Appendix B, Table 2.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of  
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].  
124 Appendix B, Table 2.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of  
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].  
125 Appendix B, Table 2.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of  
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].  
126 Appendix B, Table 3.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].  
127 Appendix B, Table 3.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of  
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].
128 Appendix B, Table 3.  Qwest’s market share ranges from [REDACTED] with an accompanying HHI of  
[REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED].  There were sufficient 
observations to consider T3 services only for [REDACTED].  Qwest market share is [REDACTED] and the HHI 
for this market is [REDACTED].  
Federal Communications Commission FCC 07-13
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data services evaluated in this Order.  These data further suggest that a significant number of competitors 
operate within each of these markets. 
ii. Other Factors
46. Although the record in this proceeding does not include estimates of either the price elasticity 
of demand or the elasticity of supply for interstate, interLATA telecommunications services within Qwest’s 
region, the Commission’s findings in the recent BOC/IXC Orders help to inform our analysis here.  
Specifically, we find no reason to expect the companies operating within Qwest’s region to behave 
differently from those that operate in the other BOC territories.  Thus, consistent with the Commission’s 
conclusions in the recent BOC/IXC Orders, we find that enterprise customers tend to be sophisticated 
purchasers of communications services, whether they are located solely within Qwest’s region, or have 
locations both inside and outside Qwest’s region.  Because these users tend to make their decisions about 
communications services by using either communications consultants or employing in-house 
communications experts, we expect them to be aware of the multitude of choices available to them.  
Accordingly, we find that the current level of competition for these services in the Qwest franchise area,
together with the safeguards that we impose in this Order, are sufficient to support a grant of Qwest’s 
forbearance petition.129
5. Qwest Control of Bottleneck Access Facilities
47. We next consider whether Qwest, if it provides in-region, interLATA telecommunications 
services on an integrated basis, could indirectly raise the price of those services by raising rivals’ costs 
through its control over bottleneck facilities.130  Qwest asserts that it faces “significant” competition within 
its region from “wireline, wireless, and other forms of intermodal competition,”131 that its retail access line 
base has “declined significantly,”132 and that its “connection share” of the residential local exchange market 
is declining.133  Qwest has failed, however, to present persuasive evidence that it no longer possesses 
exclusionary market power within its region as a result of its control over a ubiquitous telephone exchange 
service and exchange access network.  We therefore assume, for the purposes of this proceeding, that 
Qwest continues to possess exclusionary market power within its region by reason of its control over these 
bottleneck access facilities.134
  
129 See SBC/AT&T Order, 20 FCC Rcd at 18332-33, para. 75; Verizon/MCI Order, 20 FCC Rcd at 18474, para. 75.
130 See LEC Classification Order, 12 FCC Rcd at 15812-13, paras. 98, 100.
131 Qwest Petition at 8-9; see generally Qwest Petition, Teitzel Decl. at 4-17; Qwest Reply, Teitzel Rebuttal Decl. 
at 2-11.
132 Qwest Petition, Teitzel Decl. at 2.
133 Id. at 3-4.
134 See LEC Classification Order, 12 FCC Rcd at 15835, para. 134; see also Level 3 Comments at 3, 9-11 (arguing 
that Qwest has significant market power in the provision of access to end-user locations throughout its territory); 
AdHoc Reply at 20-24.
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E. Application of Forbearance Criteria to Qwest’s Petition
48. The goal of the 1996 Act is to establish “a pro-competitive, de-regulatory national policy 
framework.”135 An integral part of this framework is the requirement, set forth in section 10 of the 1996 
Act, that the Commission forbear from applying any provision of the Act, or any of the Commission’s 
regulations, if the Commission makes certain specified findings with respect to such provisions or 
regulations.136 Specifically, the Commission is required to forbear from any statutory provision or 
regulation if it determines that:  (1) enforcement of the regulation is not necessary to ensure that charges, 
practices, classifications, or regulations are just and reasonable, and are not unjustly or unreasonably 
discriminatory; (2) enforcement is not necessary to protect consumers; and (3) forbearance is consistent 
with the public interest.137 In making this determination, the Commission must also consider pursuant to 
section 10(b) “whether forbearance from enforcing the provision or regulation will promote competitive 
market conditions.”138  
49. We apply below the criteria of section 10 to the statutory provisions and regulations from 
which Qwest seeks relief,139 and we conditionally forbear from applying dominant carrier regulation to 
Qwest’s provision, on an integrated basis, of in-region, interstate, interLATA telecommunications services.  
Qwest therefore may provide these services on an integrated basis subject to nondominant carrier 
regulation, pursuant to the obligations set forth herein.
1. Section 10(a)(1) – Charges, Practices, Classifications, and Regulations
50. Section 10(a)(1) of the Act requires that we consider whether the statutory provisions and 
regulations from which Qwest seeks forbearance are necessary to ensure that the “charges, practices, 
classifications, or regulations . . . for [] or in connection with that . . . telecommunications service are just 
and reasonable and are not unjustly or unreasonably discriminatory” if Qwest provides such services on an 
integrated basis.140 In its petition, Qwest argues that, in light of in-region, interLATA telecommunications 
  
135 Joint Explanatory Statement of the Committee of Conference, S. Conf. Rep. No. 230, 104th Cong., 2d Sess. 113 
(1996).
136 47 U.S.C. § 160(a).
137 Id. 
138 47 U.S.C. § 160(b).
139 In its Reply, the New Jersey Ratepayer Advocate asserts that any exercise of our forbearance authority in section 
10 would “violate separation of powers, equal protection, [the 10th] amendment, and [the 11th] amendment.”  New 
Jersey Ratepayer Advocate Reply at 15.  The New Jersey Ratepayer Advocate makes no attempt to develop this 
argument, and we find the New Jersey Ratepayer Advocate’s assertion insufficient to call into question section 10’s 
constitutionality.  See Sprint Corp. v. FCC, 331 F.3d 952, 960 (D.C. Cir. 2003) (Administrative Procedure Act 
does not require the Commission to respond to conclusory comments); MCI WorldCom v. FCC, 209 F.3d 760, 765 
(D.C. Cir. 2000) (holding that a party did not raise an argument with sufficient force to obligate the Commission to 
respond); Application by Verizon Maryland Inc., Verizon Washington, D.C. Inc., Verizon West Virginia Inc., Bell 
Atlantic Communications Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon 
Enterprise Solutions), Verizon Global Networks Inc., and Verizon Select Services Inc., for Authorization To 
Provide In-Region, InterLATA Services in Maryland, Washington, D.C., and West Virginia, WC Docket No. 02-
384, Memorandum Opinion and Order, 18 FCC Rcd 5212, 5282 n.469 (2003) (regulatory agencies are not
required to address arguments not stated with sufficient force or clarity).
140 47 U.S.C. § 160(a)(1).
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competition, dominant carrier regulation is no longer necessary to ensure that the charges, practices, 
classifications, and regulations in connection with Qwest’s provision, on an integrated basis, of in-region, 
interstate, interLATA telecommunications services are just, reasonable, and not unreasonably 
discriminatory, and that Qwest therefore satisfies this forbearance criterion.141
51. As our market analysis makes clear, we find that Qwest generally lacks classical market power 
in the provision of in-region, interstate, interLATA telecommunications services.142 We therefore find that 
Qwest will likely be unable to raise and maintain the prices of its in-region, interstate, interLATA 
telecommunications services above competitive levels.  For the same reason, we find that Qwest will likely 
be unable to impose and maintain unjust or unreasonable practices, classifications, and regulations for 
these services.  Faced with similar findings in the LEC Classification Order, the Commission concluded 
that, when carriers lack classical market power, the benefits of dominant carrier regulation are outweighed 
by its burdens.143 Consistent with this precedent, we find that classical market power concerns generally do 
not require that we apply dominant carrier regulation to Qwest’s provision of in-region, interstate, 
interLATA telecommunications services on an integrated basis.
52. Despite this general finding, we are concerned, as was the Commission in the AT&T 
Reclassification Order,144 that Qwest residential customers who make few long distance calls and who do 
not also subscribe to wireless or broadband Internet access service may have fewer competitive choices 
among interstate, interLATA long distance providers and may not be able to avoid the impact of a price 
increase by engaging in usage substitution.  We also are concerned that these customers may not receive the 
information regarding their monthly long distance usage that they need to make informed choices among 
alternative long-distance calling plans.  As discussed below,145 however, Qwest has committed itself to 
continue offering certain calling plans and providing billing information.146 We find that Qwest’s 
commitments adequately address these concerns. Given these commitments, we also find, consistent with 
the Commission’s findings in the AT&T Reclassification and LEC Classification Orders,147 that Qwest’s 
possibly having classical market power with regard to these residential customers does not require that we 
apply dominant carrier regulation to Qwest’s provision, on an integrated basis, of in-region, interLATA, 
telecommunications services in order to ensure that the charges, practices, classifications, and regulations 
for these services will be just, reasonable, and not unjustly or unreasonably discriminatory.
a. Exclusionary Market Power
53. Our assumption that Qwest continues to possess exclusionary market power raises the question 
whether it is necessary to apply dominant carrier regulation to any in-region, interstate, interLATA 
  
141 See Qwest Petition at 15-16.
142 See supra part III.D.4.
143 LEC Classification Order, 12 FCC Rcd at 15804, para. 85, 15806-08, paras. 88-90, and at 15812-33, paras. 98-
130.
144 AT&T Reclassification Order, 11 FCC Rcd at 3313-14, paras. 81-82.
145 See infra Parts III.E.1.c.iii, III.E.1.c.iv. 
146 See Letter from Melissa E. Newman, Vice President, Federal Regulatory, Qwest, to Marlene H. Dortch, 
Secretary, FCC, WC Docket No. 05-333, Attach. at 1 (filed Feb. 8, 2007) (Qwest Feb. 8, 2007 Ex Parte Letter).
147 LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-90; AT&T Reclassification Order, 11 FCC Rcd 
at 3291, para. 33.
Federal Communications Commission FCC 07-13
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telecommunications services that Qwest provides on an integrated basis to ensure that the charges, 
practices, classifications, or regulations in connection with those services are just, reasonable, and not 
unjustly or unreasonably discriminatory.  We conclude that it is not.  Dominant carrier regulation of 
Qwest’s in-region, interstate, interLATA telecommunications services is not the most effective and cost-
efficient way to address exclusionary market power concerns resulting from Qwest’s control of any 
bottleneck access facilities that Qwest’s competitors must access in order to provide competing services.148  
Indeed, the existing safeguards we discuss below and the additional safeguards we adopt in this Order 
address these concerns far more directly than would the application of dominant carrier regulation to 
Qwest’s in-region, interstate, interLATA telecommunications services.  Consistent with the LEC 
Classification Order, we conclude that, to the extent dominant carrier regulation addresses exclusionary 
market power, “the burdens imposed by such regulation outweigh[] its benefits.”149  
54. Although we recognize that the sunset of the section 272 structural safeguards has eliminated
certain of the safeguards the Commission relied upon in the LEC Classification Order, other safeguards 
will continue to apply. In particular, Qwest still will be subject to:  dominant carrier regulation of its 
access services, including price cap regulation of most telephone exchange and exchange access services;150
the Commission’s accounting and cost allocation rules and related reporting requirements;151 equal access 
obligations under longstanding Commission precedent and section 251(g) of the Act;152 section 251 
obligations;153 and the continuing general obligation to provide service on just, reasonable, and not 
unreasonably discriminatory rates, terms, and conditions pursuant to sections 201 and 202 of the Act.154 In 
  
148 See LEC Classification Order, 12 FCC Rcd at 15762-63, para. 6 (concluding that “regulating BOC in-region 
interLATA affiliates as dominant carriers generally would not help to prevent improper allocation of costs, 
discrimination by the BOCs against rivals of their interLATA affiliates, or price squeezes by the BOCs or the BOC 
interLATA affiliates”).
149 Id.
150 Qwest is not subject to price cap regulation for:  (1) the exchange access services for which it has been granted 
phase II pricing flexibility; (2) certain services for which it was granted forbearance from dominant carrier 
regulation in the Omaha MSA; and (3) certain of its services that are provided pursuant to rate of return 
regulation.  See Access Charge Reform, CC Docket Nos. 96-262, 94-1, 98-157, CCB/CPD File No. 98-63, Fifth 
Report and Order and Further Notice of Proposed Rulemaking, 14 FCC Rcd 14221 (1999) (Pricing Flexibility 
Order), aff’d sub nom. WorldCom, Inc. v. FCC, 238 F.3d 449 (D.C. Cir. 2001); see also 47 U.S.C. §§ 203(b), 
204(a)(3); 47 C.F.R. §§ 61.38, 61.41, 61.58; Implementation of Section 402(b)(1)(A) of the Telecommunications 
Act of 1996, CC Docket No. 96-187, Report and Order, 12 FCC Rcd 2170, 2182, para. 19, 2188, para. 31, 2191-
92, para. 40, & 2202-03, para. 67 (1997); Qwest Omaha Order, 20 FCC Rcd at 19424, para. 15.
151 For example, Qwest is required to file on an annual basis a cost allocation manual (CAM) describing how it 
allocates costs between regulated and nonregulated activities, and to have an independent auditor audit that CAM
every two years.  See 47 C.F.R. §§ 43.21(d), 64.901-.905; see also 47 C.F.R. §§ 32.23(c), 32.5280. Qwest also is 
subject to certain reporting requirements under the Commission’s Automated Reporting Management Information 
System (ARMIS).  See Automated Reporting Requirements for Certain Class A and Tier 1 Telephone Companies 
(Parts 31, 43, 67, and 69 of the FCC's Rules), CC Docket No. 86-182, Report and Order, 2 FCC Rcd 5770 (1987)
(ARMIS Order), modified on recon., 3 FCC Rcd 6375 (1988) (ARMIS Reconsideration Order); see also 47 C.F.R. 
§ 43.21.
152 47 U.S.C. § 251(g); MTS and WATS Market Structure, Phase III, Docket No. 78-72, Report and Order, 100 
FCC 2d 860 (1985); Investigation into the Quality of Equal Access Services, Memorandum Opinion and Order, 60 
Rad. Reg. 2d (P&F) 417, 419, 1986 WL 291752 (1986).
153 47 U.S.C. § 251.
154 47 U.S.C. §§ 201, 202.
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addition, the nondiscrimination requirement in section 272(e)(1) of the Act and the imputation requirement 
in section 272(e)(3) of the Act (which we discuss in part III.E.1.c.ii, below)155 continue to apply.156  Finally, 
in order to address concerns that Qwest might attempt to raise rivals’ costs by discriminating in the 
provision of special access services, we impose as a condition of this Order the obligation that Qwest 
comply with its commitment to implement a special access performance metrics plan.157 We find that these 
continuing existing safeguards, along with the conditions we impose here, are adequate to prevent the 
exercise of exclusionary market power by Qwest.
b. Specific Relief
i. Relief Granted 
55. The Commission grants Qwest the relief set forth below with respect to, and only with respect 
to, Qwest’s provision, on an integrated basis, of in-region, interstate and international, interLATA 
telecommunications services.  To the extent our predictive judgment regarding the state of competition 
proves incorrect, aggrieved parties may file appropriate petitions with the Commission and the Commission 
has the option of revisiting this forbearance ruling.158  For the sake of clarity, we emphasize that we do not 
forbear from the application to Qwest of any rule that applies to carriers classified as nondominant in the 
provision of in-region, interstate or international, interLATA telecommunications services.  
56. Price Cap, Rate of Return, and Tariffing Forbearance for Qwest’s Provision of In-region, 
Interstate and International, InterLATA Telecommunications Services.  In light of our analysis above, we 
find that, subject to the conditions set forth in part III.E.1.c, below, enforcement of certain of our price cap, 
rate of return, and tariffing rules with respect to Qwest’s provision of in-region, interstate, interLATA 
telecommunications services on an integrated basis is not necessary to ensure that Qwest’s charges, 
  
155 47 U.S.C. § 272(e).
156 We note that the safeguards adopted in the Non-Accounting Safeguards and the Accounting Safeguards Orders
to implement these provisions also remain in effect.
157 See infra Part III.E.1.c.i.
158 See Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the Communications Act of 1934, as 
Amended, for Forbearance from Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area, WC Docket No. 
05-281, Memorandum Opinion and Order, FCC 06-188, n.159 (rel. Jan. 30, 2007); Federal-State Joint Board on 
Universal Service, Petition of TracFone Wireless, Inc. for Forbearance from 47 U.S.C. § 214(e)(1)(A) and 47 
C.F.R. § 54.201(i), CC Docket No. 96-45, Order, 20 FCC Rcd 15095, 15099, para. 6, n.25 (2005) (stating that if 
the Commission’s “predictive judgment proves incorrect and these conditions prove to be inadequate safeguards, 
then parties can file appropriate petitions with the Commission and the Commission has the option of 
reconsidering the forbearance ruling”); see also Petition for Forbearance of the Verizon Telephone Companies 
Pursuant to 47 U.S.C. § 160(c), 19 FCC Rcd 21496, 21509, para. 26, n.85 (2004) (Broadband 271 Forbearance 
Order), aff’d sub nom. EarthLink, Inc. v. FCC, 462 F.3d 1 (D.C. Cir. 2006); Petition of SBC Communications Inc. 
for Forbearance from Structural Separation Requirements of Section 272 of the Communications Act of 1934, as 
Amended, and Request for Relief to Provide International Directory Assistance Services, CC Docket No. 97-172, 
Memorandum Opinion and Order, 19 FCC Rcd 5211, 5223-24, para. 19, n.66 (2004) (stating in a forbearance 
decision that to the extent carriers believe, in the future, that circumstances have changed and discriminatory 
practices have emerged with respect to these particular routes, they are free to file petitions); CellNet 
Communications, Inc. v. FCC, 149 F.3d 429, 442 (6th Cir. 1998) (upholding the Commission’s predictive 
judgment stating that “[i]f the FCC’s predictions about the level of competition do not materialize, then it will of 
course need to reconsider its sunsetting provision in accordance with its continuing obligation to practice reasoned 
decision-making”).
Federal Communications Commission FCC 07-13
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practices, classifications, or regulations in connection with those services are just, reasonable, and not 
unjustly or unreasonably discriminatory.  Specifically:  (1) Qwest will not be required to, and is in fact 
barred from, filing tariffs for in-region, interstate, interLATA telecommunications services pursuant to 
sections 61.31-.38 and 61.43 of our rules;159 (2) Qwest will not be required to establish an “interexchange 
basket” pursuant to section 61.42(d)(4) of our rules,160 to the extent that section 61.42(d)(4) would require 
the establishment of an interexchange basket for the integrated provision of interexchange services covered 
by this Order; and (3) we will forbear from applying section 61.28 of our rules to Qwest’s provision of in-
region, international telecommunications services on an integrated basis to the extent that, and only to the 
extent that, Qwest would be treated as a dominant carrier under section 61.28 for no other reason than its 
provision, on an integrated basis, of in-region, international telecommunications services.161 To the extent 
that Qwest otherwise would be treated as a dominant carrier under section 61.28, our forbearance action 
has no effect on that treatment.162
57. Discontinuance and Streamlined Transfer of Control Forbearance.  In light of our analysis 
above, we find that, subject to the conditions set forth in part III.E.1.c, below, enforcement of certain of our 
discontinuance and streamlined transfer of control rules with respect to Qwest’s provision of in-region, 
interstate, interLATA telecommunications services on an integrated basis is not necessary to ensure that 
Qwest’s charges, practices, classifications or regulations in connection with those services are just, 
reasonable, and not unjustly or unreasonably discriminatory.  Specifically, we forbear from applying 
sections 63.03, 63.19, 63.21, 63.23, and 63.60-.90 of our rules to Qwest’s provision of in-region, 
interstate, interLATA telecommunications services to the extent that, and only to the extent that, Qwest 
would be treated as a dominant carrier under these rules for no reason other than its provision of those 
services on an integrated basis.163 To the extent that Qwest otherwise would be treated as a dominant 
carrier under these rules, that treatment shall continue.164
  
159 See 47 C.F.R. §§ 61.31-.38 (tariffing requirements for dominant carriers); see also 47 C.F.R. § 61.43 (requiring 
annual price cap filings).  We also forbear from section 203 of the Act to the limited extent necessary to relieve 
Qwest of its section 61.31-.38 obligations, implementing that section of the Act, to file tariffs for in-region 
interexchange services it provides on an integrated basis and to prohibit Qwest from filing such tariffs.  See Policy 
and Rules Concerning the Interstate, Interexchange Marketplace, Implementation of Section 254(g) of the 
Communications Act of 1934, CC Docket No. 96-61, Second Report and Order, 11 FCC Rcd 20730 (1996)
(Detariffing Order); Policy and Rules Concerning the Interstate, Interexchange Marketplace, Implementation of 
Section 254(g) of the Communications Act of 1934, CC Docket No. 96-61, Order on Reconsideration, 12 FCC 
15014 (1997) (Reconsideration Order); Policy and Rules Concerning the Interstate, Interexchange Marketplace, 
Implementation of Section 254(g) of the Communications Act of 1934, CC Docket No. 96-61, Second Order on 
Reconsideration and Erratum, 14 FCC Rcd 6004 (1999) (Second Reconsideration Order).
160 47 C.F.R. § 61.42(d)(4) (interexchange basket for services that are not classified as access services).
161 47 C.F.R. § 61.28 (tariffing requirements for dominant international carriers).
162 See infra Part III.F (addressing Qwest’s in-region, international telecommunications services).
163 See 47 C.F.R. § 63.03 (procedures for domestic transfer of control applications); 47 C.F.R. § 63.19 (procedures 
for discontinuing international services); 47 C.F.R. § 63.21 (conditions that apply to international section 214 
authorizations); 47 C.F.R. § 63.23 (conditions that apply to resale-based international common carriers); 47 C.F.R. 
§§ 63.60-90 (definitions, rules, and procedures that apply to the discontinuance, reduction, outage, and impairment 
of services).
164 Our forbearance with respect to section 63.03 extends only to those circumstances in which Qwest seeks to 
assign or transfer control of assets used solely for the purpose of providing in-region, interstate, interLATA 
(continued….)
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58. Contract Filing and Reporting Forbearance.  In light of our analysis above, we find that, 
subject to the conditions set forth in part III.E.1.c, below, enforcement of section 43.51 of our rules with 
respect to Qwest’s provision of in-region, interstate, interLATA telecommunications services on an 
integrated basis is not necessary to ensure that Qwest’s charges, practices, classifications, or regulations in 
connection with those services are just, reasonable, and not unjustly or unreasonably discriminatory.  
Specifically, the Commission will forbear from applying section 43.51 of our rules to Qwest’s provision of 
in-region, interstate, interLATA telecommunications services on an integrated basis to the extent that, and 
only to the extent that, Qwest would be treated as a dominant carrier under section 43.51 for no other 
reason than its provision of in-region, interstate, interLATA telecommunications services on an integrated 
basis.165 To the extent that Qwest otherwise would be treated as a dominant carrier under section 43.51, 
that treatment shall continue.
ii. Relief Denied 
59. Sections 214 (a), (c), and (d) and 272 of the Act.  The Commission does not forbear from the 
application of any provision of sections 214 or 272 of the Act. As an initial matter, the provisions of 
section 272 (other than those in section 272(e)) have sunset throughout Qwest’s region,166 and we need not 
forbear from the provisions that have sunset to allow Qwest to provide in-region, interstate, interLATA 
telecommunications services subject to nondominant carrier regulation, as Qwest requests in its petition.  
Second, although we forbear in part from the application of our discontinuance and streamlined transfer of 
control rules as they relate to dominant carriers,167 our rules implementing sections 214(a), (c), and (d) also 
include discontinuance rules and transfer of control rules for nondominant carriers from which we do not 
forbear. Finally, enforcement of sections 214(a), (c), and (d) and section 272(e) remains necessary to 
ensure that the charges, practices, classifications, and regulations in connection with Qwest’s provision, on 
an integrated basis, of in-region, interstate or international, interLATA telecommunications services are 
just, reasonable, and not unjustly or unreasonably discriminatory.  Denying Qwest relief from the 
application of sections 214(a), (c), and (d) and section 272(e) also does not preclude Qwest from operating 
as it proposes in its petition because those provisions do not prevent Qwest from providing in-region, 
interstate, interLATA telecommunications services on an integrated basis subject to nondominant carrier 
regulation.168
60. Price Cap, Rate of Return, and Tariffing Forbearance for Qwest’s Provision of In-region, 
Interstate, InterLATA Telecommunications Services.  We need not forbear from the application of the 
other dominant carrier price cap, rate of return, and tariffing rules identified by Qwest (i.e., sections 61.41, 
61.45, 61.46-.49, 61.58-.59, 65.1(b)(1), 65.1(b)(3), and 65.600 of our rules) for Qwest to be able to 
(Continued from previous page)    
telecommunications services or to transfer control of an affiliate that does not jointly own any assets with another 
entity that uses such assets to provide services that are subject to dominant carrier regulation.
165 47 C.F.R. § 43.51 (filing of carrier contracts and concessions).
166 See supra n.28.
167 See supra para. 57.
168 We also do not forbear from the application of sections 63.10 and 63.18 of our rules, because the provisions in 
these rules that deal with dominant carriers apply only to carriers classified as dominant based on their affiliations 
with foreign carriers.  We therefore do not need to forbear from these rules for Qwest to operate as it proposes to 
operate.
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operate as it proposes in its petition.169 This is because our forbearance from sections 61.31-.38170 obviates 
the need for Qwest to file tariffs for any in-region, interstate, interLATA telecommunications services it 
chooses to provide on an integrated basis, and, as described below, the Commission treats, and will 
continue to treat, the costs and revenues associated with Qwest’s provision of in-region, interstate, 
interLATA telecommunications services on an integrated basis as nonregulated for accounting purposes.171  
For these same reasons, we do not forbear from the application of section 61.42(d)(4), except to the extent 
described in paragraph 56 above.172
61. Contract Filing and Reporting Requirements.  We do not forbear from two of the contract 
filing and reporting rules identified by Qwest,173 sections 43.21 and 43.43 of our rules.174 These rules are 
unrelated to the provision of the services for which Qwest seeks relief.  Qwest is subject to them because it 
is an incumbent LEC, not because it is classified as dominant in the provision of any service.  These rules 
are, in other words, carrier-specific, not service-specific, and forbearance from them based on an analysis 
of Qwest’s in-region, interstate and international, interLATA telecommunications services is unwarranted.
62. Other Matters.  On December 7, 2006, Qwest filed an ex parte presentation asserting that, 
under section 32.23(a) of the Commission’s rules, in-region, interLATA telecommunications services 
provided on an integrated basis should be treated as regulated for accounting purposes.175 Contrary to 
Qwest’s position,176 the condition in section 32.23(a) of the Commission’s rules upon which Qwest relies 
applies only “until such time” as the Commission decides the accounting treatment applicable to the 
activities in question.177 Here, the Commission has explicitly determined that the BOCs’ in-region,
  
169 See 47 C.F.R. § 61.41 (general price cap requirements); 47 C.F.R. § 61.45 (adjustments to the price cap index);
47 C.F.R. §§ 61.46-.49 (specific price cap implementation rules); 47 C.F.R. §§ 61.58-.59 (tariff notice 
requirements for price cap carriers); 47 C.F.R. § 65.1(b)(1) (application of rate of return prescription procedures 
and methodologies for interstate access services); 47 C.F.R. § 65.1(b)(3) (application of rate of return prescription 
procedures and methodologies for price cap carrier offering rate of return services); 47 C.F.R. § 65.600 (reporting 
requirement for carriers subject to rate of return regulation).
170 47 C.F.R. §§ 61.31-.38 (tariffing requirements for dominant carriers).
171 See infra para. 62.
172 Our forbearance action thus does not relieve Qwest of its obligation to establish or maintain an “interexchange 
basket” for services other than those covered by this Order.
173 Qwest Reply at 11 (citing 47 C.F.R. §§ 43.21, 43.43).
174 47 C.F.R. § 43.21 (affiliate transactions); 47 C.F.R. § 43.43 (reports of proposed changes in depreciation rates).  
But see supra para. 58 (granting limited forbearance from section 43.51).
175 See Qwest Dec. 7, 2006 Ex Parte Letter at 8.  Qwest did not, in its petition initiating this proceeding, seek 
forbearance from any of the Commission’s rules with respect to the accounting treatment of in-region, interLATA 
telecommunications services provided on an integrated basis.  See Qwest Petition, passim.
176 See Qwest Dec. 7, 2006 Ex Parte Letter at 8 (arguing that “in accordance with Section 32.23 of the 
Commission’s rules, in-region [interexchange] services should be accounted for as regulated services when such 
services are provided on an integrated basis by Qwest’s LEC”).  We construe Qwest’s Ex Parte analysis to refer 
only to in-region, interexchange or interLATA telecommunications services.  
177 See 47 C.F.R. § 32.23(a) (specifying that “[a]ctivities that have been deregulated at the interstate level, but not 
preemptively deregulated, will be classified for accounting purposes as regulated activities until such time as this 
Commission decides otherwise”) (emphasis added).
Federal Communications Commission FCC 07-13
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interLATA telecommunications services (services that Qwest currently offers through its section 272 
separate affiliates) are to be treated as nonregulated for accounting purposes.178 This treatment is 
consistent with the accounting treatment of incidental and out-of-region interLATA services provided on an 
integrated basis.179 Accordingly, absent a determination to the contrary, the provision of in-region, 
interLATA telecommunications services on an integrated basis will continue to be treated as nonregulated 
for accounting purposes.180 We note that Qwest does not address the policy concerns the Commission 
previously identified with respect to the treatment of in-region, interLATA telecommunications services 
provided on an integrated basis as regulated for accounting purposes.181 Nor do Qwest’s summary 
assertions late in this proceeding adequately address concerns regarding potential negative implications of 
regulated accounting treatment on state ratemaking.182
c. Safeguards
63. The relief we grant in this Order is conditioned on Qwest’s compliance with the following 
safeguards, which will apply to the extent Qwest chooses to provide in-region, interstate, interLATA 
telecommunications services on an integrated basis through the BOC or through another affiliate that is not 
a section 272 separate affiliate. These safeguards include:  (1) Qwest’s commitment to implement special 
access performance metrics to prevent non-price discrimination in the provision of special access services; 
  
178 See Accounting Safeguards Order, 11 FCC Rcd at 17620, para. 176 (directing that the BOCs treat services 
provided by their section 272 interLATA affiliates, such as affiliates providing in-region services, as nonregulated 
activities for accounting purposes).  The Accounting Safeguards Order does not limit the applicability of 
nonregulated accounting treatment for services provided by section 272 separate affiliates to specific services.
179 See Accounting Safeguards Order, 11 FCC Rcd at 17573, para. 76 (noting that treating out-of-region and 
certain types of incidental interLATA services as nonregulated for accounting purposes will achieve greater 
accuracy in safeguarding against cross-subsidization and will lessen the chance that costs associated with such 
services are inadvertently assigned to a local exchange or exchange access category).  Contrary to Qwest’s 
assertions, see Qwest Dec. 7, 2006 Ex Parte Letter at 8-9, n.19, the Commission’s decision in the Wireline 
Broadband Internet Access Services Order to treat as regulated the telecommunications transmission component of 
the wireline broadband Internet access services provides no support for treating Qwest’s provision of in-region, 
interLATA telecommunications services on an integrated basis as a regulated activity.  See Wireline Broadband
Internet Access Services Order, 20 FCC Rcd at 14924, para. 128.  As Qwest recognizes, the Commission found in 
that Order that the burdens of requiring nonregulated treatment for the broadband transmission services at issue in 
that Order outweighed the benefits.  See Qwest Dec. 7, 2006 Ex Parte Letter at 8-9, n.19 (citing Wireline 
Broadband Internet Access Services Order, 20 FCC Rcd at 14924-26, paras. 129-35).  Those transmission services 
had been treated as regulated up to that time, and thus it would have been burdensome to change the accounting 
treatment for them.  Here, Qwest’s interLATA telecommunications services are treated as nonregulated today, and 
continuing to treat them as nonregulated when integrated maintains the accounting status quo, consistent with the 
Commission’s rules and the Commission’s approach in the Wireline Broadband Internet Access Services Order.  
180 In its CAM updates filed pursuant to 47 C.F.R § 64.903(b), Qwest will describe how it will comply with part 64 
in allocating costs and revenues from these services between its regulated and nonregulated operations.  
181Accounting Safeguards Order, 11 FCC Rcd at 17572-73, para. 74 (concluding that “if interLATA 
telecommunications services . . . that may be provided by incumbent local exchange carriers on an integrated basis, 
were treated as regulated for accounting purposes, our part 64 rules would not prevent any improper cost 
allocations that may occur between local exchange and exchange access services and these interLATA 
telecommunications services”); id. at 17573, para. 76 (stating that “the Part 36 jurisdictional separations process 
and the Part 69 access charge process were not designed to prevent subsidization of competitive 
telecommunications services by subscribers to exchange and exchange access services”).
182 See Qwest Dec. 7, 2006 Ex Parte Letter at 8, n.18.
Federal Communications Commission FCC 07-13
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(2) an imputation requirement to help us evaluate whether Qwest engages in price discrimination in the 
provision of these services; (3) Qwest’s commitment to continue offering certain calling plans to protect 
residential customers who make few interstate, interLATA calls; and (4) Qwest’s commitment to ensure 
that its subscribers continue to receive in their bills the monthly usage information that they may need to 
make cost-effective decisions concerning alternative long-distance plans.  We will carefully monitor 
Qwest’s compliance with this condition and will not hesitate to take appropriate remedial action if 
necessary.  We also retain the authority to adjust these safeguards in the future as appropriate to reflect any 
competitive changes that might occur in the markets for interLATA telecommunications services within 
Qwest’s region.
i. Special Access Performance Metrics
64. As part of the Commission’s implementation of the section 272 structural safeguards, Qwest 
has implemented special access performance metrics designed to ensure that Qwest does not engage in non-
price discrimination in its provision of special access services.183 Once Qwest chooses to provide in-region, 
interstate or international, interLATA telecommunications services on an integrated basis, those metrics 
would cease to be available.  Therefore, Qwest has committed to implement special access metrics, detailed 
in Appendix C, which are similar to those imposed on AT&T and Verizon under the terms of the 
SBC/AT&T and Verizon/MCI Merger Orders.184 The metrics Qwest has committed to implement address 
order taking, provisioning, and maintenance and repair of Qwest’s DS0, DS1, DS3, and OCn services 
(collectively, covered special access services) and are designed to help ensure that Qwest provides special 
access services to unaffiliated entities in a non-discriminatory manner.185 The information Qwest records 
and reports to the Commission under these metrics will provide the Commission and other interested parties
with reasonable tools to monitor Qwest’s performance in providing these special access services to itself 
and its competitors.186
65. Qwest will implement these metrics to the extent it provides one or more of the covered special 
access services to Qwest’s own operations or to third parties.  Qwest will provide the Commission with its 
performance measurement results on a quarterly basis.  Those results shall consist of data collected in 
  
183 Qwest’s implementation of these metrics is reviewed as part of the biennial audits.  Qwest’s current biennial 
audit period began January 2, 2006, and will run until January 2, 2008 or until Qwest ceases providing in-region, 
interLATA telecommunications services through a section 272 separate affiliate, whichever occurs earlier. 
184 See Letter from Melissa E. Newman, Vice President, Federal Regulatory, Qwest, to Marlene H. Dortch, 
Secretary, FCC, WC Docket No. 05-333 (filed Feb. 9, 2007) (Qwest Feb. 9, 2007 Ex Parte Letter); see also
SBC/AT&T Order, 20 FCC Rcd at 18415-21 (App. F, Attach. A); Verizon/MCI Order, 10 FCC Rcd at 18563-69 
(App. G, Attach. A).
185 These metrics thus are consistent with Qwest’s obligation under section 272(e)(1) to “fulfill any requests from 
an unaffiliated entity for telephone exchange service and exchange access within a period no longer than the period 
in which it provides such telephone exchange service and exchange access to itself or to its affiliates.”  47 U.S.C. 
§ 272(e)(1).
186 For example, the “Firm Order Confirmation Timeliness” metric should provide data measuring whether Qwest 
confirms orders for the covered special access services within nondiscriminatory time frames.  Similarly, the 
“Percent Installation Services Met” and “New Installation Trouble Report Rate” metrics should measure whether 
Qwest provisions these special access services to itself and its competitors in nondiscriminatory time frames and 
with nondiscriminatory levels of quality.  In addition, the “Failure Rate/Trouble Rate” metric should measure 
whether Qwest provides its competitors with the same level of special access quality as that provided to its own 
operations.  Finally, the “Average Repair Interval/Mean Time to Restore” metric should measure whether Qwest 
repairs covered special access services in a nondiscriminatory manner.
Federal Communications Commission FCC 07-13
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accordance with the metrics set forth in Appendix C to this Order.  Such reports will be provided in an 
Excel spreadsheet format and will be designed to demonstrate the Qwest BOCs’ monthly performance in 
delivering the covered interstate special access services within each of the states in Qwest’s region.  These 
data will be reported on an aggregated basis for interstate special access services as identified in the 
attachment.  Qwest will provide performance measurement results (broken down on a monthly basis) for 
each quarter to the Commission by the 45th day after the end of the quarter with the exception of the New 
Installation Trouble Report Rate, which will be provided by the 60th day after the end of the quarter.  
Qwest will implement these metrics for the first full quarter following the effective date of this Order.187
This commitment shall terminate on the earlier of:  (i) 30 months and 60 days after the beginning of the 
first full quarter following the effective date of this Order; or (ii) the effective date of a Commission order 
adopting performance metrics for interstate special access services.
66. We conclude that the metrics and the associated reporting requirements that Qwest has 
committed itself to implement adequately address the parties’ concerns about Qwest’s incentive and ability 
to discriminate in its provisioning of special access services in order to impede competition in the market 
for interstate, interLATA telecommunications services.188  At the same time, these metrics should not in any 
way impede Qwest’s ability to compete.189
ii. Imputation
67. We also provide guidance to Qwest regarding its compliance with its ongoing obligations under 
section 272(e)(3) of the Act.190 That provision requires each BOC that uses access to its local network for 
  
187 We anticipate that Qwest’s performance under these metrics will be evaluated in connection with the CAM 
review process.
188 See, e.g., Level 3 Comments at 10 (stating that Level 3 and other buyers find it largely impossible to find viable 
alternatives to incumbent LEC special access services); AdHoc Reply at 8 (stating that enterprise networks are 
dependent upon Qwest’s access services); see also Triennial Review Order, 18 FCC Rcd at 17012, para. 45 
(recognizing that special access services provide competitors with wholesale inputs that they typically combine 
with other competitively provisioned services or facilities to build complete services for sale to retail customers), 
corrected by Errata, 18 FCC Rcd 19020 (2003), aff’d in part, remanded in part, vacated in part, United States 
Telecom Ass’n v. FCC, 359 F.3d 554 (D.C. Cir. 2004) (USTA II), cert. denied sub nom. National Ass’n Regulatory 
Util. Comm’rs v. United States Telecom Ass’n, 534 U.S. 925 (2004).
189 AdHoc maintains that the most effective measure for preventing potential price squeezes for access services is to 
ensure special access prices are at competitive levels.  See AdHoc Reply at 25-26.  Imposing dominant carrier 
regulation on Qwest in its provision of in-region, interstate and international, interLATA telecommunications 
services will not address AdHoc’s concerns.  Rather, the targeted safeguards adopted in this Order specifically 
address Qwest’s control over bottleneck access facilities in its region.  Accordingly, we find that, in comparison to 
dominant carrier regulation of those services, the safeguards adopted in this Order, together with other existing 
safeguards, provide a cost-effective means of limiting Qwest’s ability to use any market power it has in the local 
exchange and exchange access markets to impede competition in the enterprise market.
190 47 U.S.C. § 272(e)(3).  Imputation is an accounting and, at times, ratemaking device that reflects a policy 
decision to depart from historical costs in recognizing intra-company transactions.  In the context of access 
services, this Commission and state commissions have long recognized the potential for LECs to use their control 
over their local networks to impede competition in services for which local network access is a needed input.  See, 
e.g., Application of Access Charges to the Origination and Termination of Interstate, IntraLATA Services and 
Corridor Services, Memorandum Opinion and Order, FCC 85-172, 1985 FCC Lexis 3510, para. 9 & n.22 (Apr. 
12, 1985) (Corridor Services Order) (requiring that LECs impute access charges to themselves in calculating their 
interstate, intraLATA toll rates); see also 1998 Biennial Regulatory Review – Part 61 of the Commission’s Rules 
and Related Tariffing Requirements, CC Docket No. 98-131, Report and Order and First Order on 
(continued….)
Federal Communications Commission FCC 07-13
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the provision of its own services to “impute to itself . . . an amount for access . . . that is no less than the 
amount charged to any unaffiliated interexchange carriers for such access.”191 Consistent with this 
requirement, Qwest acknowledges that it must impute to itself, at its tariffed rates, charges for access 
services used to provide interLATA services.192 Qwest will revise its CAM filed pursuant to section
64.903 of our rules to include its imputation methodology, and the revised CAM will be subject to public 
comment.193
68. Qwest indicates that a significant reason underlying its desire to provide in-region, interstate, 
interLATA telecommunications services on an integrated basis is to realize the efficiencies of an integrated 
network over time.194 This integration will over time change both how Qwest’s in-region, interLATA 
network interconnects with its local network and the degree to which some facilities are jointly used to 
provide both local and interLATA services.  The degree of integration does not alter Qwest’s imputation 
obligation under section 272(e)(3).195 In order to ensure Qwest’s continued compliance with this 
obligation, we direct Qwest to continue to impute to itself its tariffed rates for access, including access 
provided over joint-use facilities, where it sells comparable access to unaffiliated interexchange carriers.196  
We also direct Qwest to modify its CAM as necessary to ensure that its imputation methodology remains 
consistent with section 272(e)(3) as Qwest changes the degree to which it integrates its interLATA and 
BOC operations.197
69. Finally, under our rules, amounts imputed to Qwest’s in-region, interLATA services pursuant 
to section 272(e)(3) must be debited to account 32.5280,198 which includes nonregulated operating 
revenue.199 To facilitate transparency of Qwest’s imputation of integrated, in-region, interLATA costs, we
(Continued from previous page)    
Reconsideration, 14 FCC Rcd 12293, 12312, para. 53 (1999) (requiring that price cap LECs offering 
interexchange services impute to themselves the same access charges that they impose on interexchange carriers).
191 47 U.S.C. § 272(e)(3); see also Accounting Safeguards Order, 11 FCC Rcd at 17577, para. 87 (“the BOC must 
impute to its integrated operations the highest rate paid for such access by unaffiliated carriers”).  This safeguard 
remains applicable to Qwest’s provision of in-region, interLATA telecommunications services.  See Non-
Accounting Safeguards Order, 11 FCC Rcd at 22035-36, para. 270. 
192 See Qwest Dec. 7, 2006 Ex Parte Letter at 9.
193 47 C.F.R § 64.903 (CAM requirements).
194 See Letter from Melissa E. Newman, Vice President, Federal Regulatory, Qwest, to Marlene H. Dortch, 
Secretary, FCC, WC Docket No. 05-333, Attach. at 3-6 (filed July 26, 2006).
195 47 U.S.C. § 272(e)(3).  The section 272(e)(3) obligation to impute an amount for access “that is no less than the 
amount charged to any unaffiliated interexchange carriers for such service” is unqualified; it does not vary with 
Qwest’s network configuration or how Qwest provides access to itself.  See id.
196 Accounting Safeguards Order, 11 FCC Rcd at 17577, para. 87 (stating that “where a BOC charges different 
rates to different unaffiliated carriers for access to its telephone exchange service, the BOC must impute to its 
integrated operations the highest rate paid for such access by unaffiliated carriers”).
197 47 C.F.R. § 64.903(b) (accuracy of CAMs).
198 47 C.F.R. § 32.5280 (nonregulated operating revenue).
199 47 C.F.R. § 32.5280; Accounting Safeguards Order, 11 FCC Rcd at 17576-77, para. 86; see also 47 C.F.R 
§ 64.901(b)(1) (specifying that tariffed services, such as exchange access services, provided to a nonregulated 
(continued….)
Federal Communications Commission FCC 07-13
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require Qwest, as a condition of this Order, to include the imputation charges it debits to account 32.5280 
in its ARMIS filings, accompanied by an explanatory footnote for each line item identifying the amount 
imputed.200 This requirement should pose at most a minimal additional burden to Qwest because Qwest 
already records imputation charges in a subsidiary record account for revenues derived from regulated 
services treated as nonregulated for federal accounting purposes,201 and already must file ARMIS 
reports.202
70. We conclude that such imputation requirements adequately address the parties’ concerns about 
Qwest’s incentives and ability to use its pricing of special access services to impede competition in the 
provision of in-region, interstate, intraLATA telecommunications services.203 At the same time, imputation 
requirements should not in any way impede Qwest’s ability to compete.  Instead, they should give Qwest, 
Qwest’s special access services customers, and the Commission meaningful information for evaluating 
whether Qwest’s imputation practices and procedures comply with section 272(e)(3).  We also believe that, 
in comparison with dominant carrier regulation, these imputation requirements provide a less costly but 
more effective method of assuring that Qwest will not discriminate between its own operations and its 
competitors in the pricing of special access services.
iii. Low Volume Usage Plans
71. As discussed above, although we find that Qwest generally lacks classical market power in the 
provision of interstate, interLATA telecommunications services, we are concerned that Qwest customers 
who make few long distance calls and who do not also subscribe to wireless or broadband Internet access 
service may have fewer competitive choices among interstate, interLATA long distance providers and may 
not be able to avoid the impact of a price increase by engaging in usage substitution.  To address this 
concern, Qwest has committed for two years to freeze the per-minute prices for two calling plans that it 
currently offers which are tailored to these customers’ needs, and not to increase the monthly fee that 
applies to one of these plans by more than one dollar.204  We find that this commitment helps protect 
against any classical market power that Qwest may have in relation to these customers in its provision of 
(Continued from previous page)    
operation must be charged to nonregulated activities at the tariffed rates and credited to the regulated revenue 
account for that service).
200 These data values with explanatory footnotes are to be provided in FCC Report 43-01, ARMIS Annual 
Summary Report, Table I, row 1045, columns (b) and (c); FCC Report 43-02, ARMIS USOA Report, Table I-1, 
row 5280, column (b); and in FCC Report 43-03, ARMIS Joint Cost Report, Table I, row 5280, columns (b), (d), 
and (j).
201 See 47 C.F.R. § 32.5280(c) (specifying that separate subsidiary record categories be maintained for 
nonregulated revenues).
202 See, e.g., ARMIS Order, 2 FCC Rcd at 5772, para. 22; see also 47 C.F.R. § 43.21.
203 See, e.g., AdHoc Reply at 8 (stating that enterprise networks are dependent upon Qwest’s access services); 
Level 3 Comments at 9-13.
204 Qwest Feb. 8, 2007 Ex Parte Letter, Attach. at 1.  Specifically, for 24 months after this Order becomes effective, 
Qwest commits to freeze the per minute price of both its Managed Long Distance Plan ($0.18 per minute; no 
monthly fee; predetermined monthly limit of $20.00) and its 15 Cent Single Rate Plan ($0.15 per minute, monthly 
fee of $0.99).  In addition, Qwest commits for the same period of time to charge no monthly fee for its Managed 
Long Distance Plan and not to raise the monthly fee for its 15 Cent Single Rate Plan by more than $1.00.  Id., 
nn.3-4.
Federal Communications Commission FCC 07-13
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interstate, interLATA telecommunications services and therefore helps ensure that these customers receive
those services at just and reasonable charges within the meaning of section 10(a)(1). Moreover, we find 
that this condition provides more effective and less costly protection than applying dominant carrier 
regulation to Qwest’s in-region, interstate, interLATA telecommunications services.205 We accordingly 
make Qwest’s adherence to this commitment a condition of our grant of forbearance.
iv. Monthly Usage Information
72. We also are concerned that long distance consumers need adequate information regarding their 
monthly usage in order to make informed choices among alternative long-distance calling plans.  To 
address this concern, Qwest has committed to continue to provide, for at least two years, the same thorough 
monthly usage information that it currently provides to all residential long distance customers, including 
customers who take bundled long distance plans.206  Again, we find that this commitment helps protect 
against any classical market power that Qwest may have in relation to these customers in its provision of 
interstate, interLATA telecommunications services, and we make Qwest’s adherence to it a condition of our 
grant of forbearance.  We also find that this condition will help ensure just and reasonable charges within 
the meaning of section 10(a)(1).  Moreover, we find that this condition is likely to be more effective and 
less costly than applying dominant carrier regulation to Qwest’s in-region, interstate, interLATA 
telecommunications services.
2. Section 10(a)(2) – Protection of Consumers
73. Section 10(a)(2) of the Act requires us to determine whether dominant carrier regulation of 
Qwest in its provision, on an integrated basis, of in-region, interstate long distance services is necessary to 
protect consumers.207 Qwest argues that, as a result of the level of competition in its region, application of 
dominant carrier rules is unnecessary to protect consumers.208 For reasons similar to those given in part 
III.E.1, we conclude that these regulations are not necessary for the protection of consumers.  More 
specifically, we find that, because Qwest lacks classical market power in the provision of in-region, 
interstate, interLATA telecommunications services, it rationally would not act in a way that was 
inconsistent with the best interests of consumers.  If, for example, it attempted to raise the prices or reduce 
the quality of its in-region, interstate, interLATA telecommunications services, Qwest would simply lose 
  
205 In this regard, we agree with the New Jersey Ratepayer Advocate that customers need transparency in pricing to 
ensure that they choose the carrier that best suits their needs.  See New Jersey Ratepayer Advocate Comments at 
12.  We reject, however, the New Jersey Ratepayer Advocate’s argument that we should apply our dominant carrier 
tariff rules to Qwest’s interstate long distance services in order to protect those consumers who make relatively few 
long distance calls.  Id. at 14.  To the extent that additional safeguards for these consumers are desirable, we 
disagree that dominant carrier tariff regulation is a necessary or appropriate regulatory response to this concern.  
See id.; New Jersey Ratepayer Advocate Reply at 6-7. Instead, we find that Qwest’s commitments offering low-
cost per-minute plans that are appropriate for such customers and, as discussed infra in Part III.E.1.c.iv, to 
continue providing informative invoices detailing long distance usage, will address this concern.
206 Qwest Feb. 8, 2007 Ex Parte Letter, Attach. at 1.  Qwest will provide the same usage information to all of its 
residential consumers of interstate, interexchange services, including new and bundled offerings.  Specifically, 
Qwest will provide the following usage information for in-region, interLATA calls:  the date of the call, the time of 
the call, the place called, the number called, the duration of the call, and amount charged for the call.  Id., n.5.  
207 47 U.S.C. § 10(a)(2).
208 Qwest Petition at 16.
Federal Communications Commission FCC 07-13
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market share as consumers shifted to other providers.209 Moreover, while we assume that Qwest still 
possesses exclusionary market power as a result of its control of bottleneck facilities, we find that existing 
safeguards and the conditions set forth above are adequate to address this concern.  Accordingly, based on 
our analysis of Qwest’s market power and other factors discussed above, we find that the Commission’s 
dominant carrier requirements are not necessary to protect consumers.
74. Moreover, with respect to the concerns discussed above,210 relating to Qwest residential 
customers that either make relatively few long distance calls or that lack sufficient monthly usage 
information, we find that the conditions we adopt today are adequate to address these issues.  Specifically, 
we take comfort in Qwest’s commitments to continue providing detailed monthly usage information to all 
residential customers who take Qwest’s long distance plans, and to continue offering plans that have either 
a nominal monthly charge or none at all, and are thus cost-effective for customers who make relatively few 
long distance calls.  Finally, we are not forbearing from other rules and obligations currently applicable to 
Qwest’s interstate, interLATA telecommunications services, including those related to 911, emergency 
preparedness, customer privacy, or universal service. Accordingly, we find that the application of 
dominant carrier rules described in this Order to any interstate long distance service that Qwest chooses to 
provide on an integrated basis is not necessary to protect customers and thus, that section 10(a)(2) is 
satisfied.
3. Section 10(a)(3) – Public Interest
75. We further find that, subject to the safeguards set forth in part III.E.1.c of this Order, it serves 
the public interest to forbear from imposing dominant carrier regulation on Qwest in its provision of in-
region, interstate, interLATA telecommunications services on an integrated basis.  In making this 
determination, we consider whether forbearance from enforcing the provisions at issue “will promote 
competitive market conditions, including the extent to which such forbearance will enhance competition 
among providers of telecommunications services.”211 Although we assume that Qwest continues to possess 
market power in the provision of local exchange and exchange access services within its region, we find 
that the burdens imposed by dominant carrier regulation outweigh the potential benefits in this case.  The 
factors upon which we base our conclusions above also convince us that granting Qwest relief from 
dominant carrier regulation for its interstate, interLATA telecommunications services is in the public 
interest and will help promote competitive market conditions and enhance competition among providers of 
telecommunications services as contemplated by section 10(b).
76. As previously discussed, under our current rules, Qwest faces the unappealing choice between 
two alternative regulatory regimes, both of which impose significant costs on Qwest itself and on society in 
general.212 Qwest can either provide its in-region, interstate, interLATA telecommunications services on a 
nondominant carrier basis through a section 272 separate affiliate, or it can provide these services on an 
integrated basis, subject to dominant carrier regulations (including rate regulation and tariff-filing 
requirements).  Based on the record before us, we conclude that, as applied to Qwest, both of these 
regulatory regimes impose costs that exceed their benefits.
  
209 Cf. Competitive Carrier First Report and Order, 85 FCC 2d at 31, para. 88 (noting that, if a carrier lacking 
market power imposed “unreasonably high rates” or “unreasonable terms or conditions,” it would lose market 
share as consumers shifted to competitors).
210 See supra Parts III.E.1.c.3, III.E.1.c.4.
211 47 U.S.C. § 160(b).
212 See supra para. 9.
Federal Communications Commission FCC 07-13
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77. If Qwest decides to provide interstate, interLATA telecommunications services through a
section 272 separate affiliate, then it will have to forego the economies of scope and scale that its 
competitors are able to realize.  For example, providing interstate, interLATA telecommunications services 
through a section 272 affiliate requires Qwest, inter alia, to operate independently of the BOC and 
maintain separate officers, directors, and employees from the BOC.213 These restrictions are inefficient not 
only because they impose additional costs on Qwest (such as requiring duplicative facilities), but also 
because they prevent Qwest from taking advantage of the economies of scope and scale associated with 
integrated operation.  These restrictions may also prevent Qwest and the affiliates from quickly responding 
to technological and marketplace developments.214  As a general matter, these restrictions and their 
associated costs make Qwest a less effective competitor in the market.
78. On the other hand, if Qwest chooses to provide interstate, interLATA telecommunications 
services on an integrated basis, it would be subject to dominant carrier regulation, which imposes its own 
significant costs and burdens, including the costs associated with dominant carrier price regulation, tariff-
filing requirements, and reporting requirements.215 As the Commission recognized in the LEC 
Classification Order, these regulatory requirements would restrict Qwest’s ability to respond to 
competitors’ pricing and product initiatives, and would give competitors advance notice of Qwest’s own 
pricing plans and new products.216 By impeding Qwest’s ability to compete, these requirements also could 
dampen competition. The relief we grant Qwest today is narrowly tailored to allow it to take advantage of 
the economies associated with integration and avoid the unnecessary costs and burdens of the existing 
regulatory regimes, while continuing to comply with the obligations described herein.  It also should result 
in increasing competition in the markets for interstate, interLATA telecommunications services.
79. Moreover, as discussed above, we find that dominant carrier regulation is neither necessary to 
ensure that “charges, practices, classifications, or regulations … are just and reasonable and not unjustly or 
unreasonably discriminatory,” nor to protect consumers.  Because we find that Qwest lacks classical 
market power in the provision of in-region, interstate, interLATA telecommunications services and that 
existing safeguards and the safeguards set forth in part III.E.1.c adequately address any ability Qwest 
might have to raise rivals’ costs, we conclude that imposing dominant carrier regulation on Qwest’s 
provision of interstate, interLATA telecommunications services would realize few benefits.  We further 
conclude that any benefits that might derive from imposing dominant carrier regulation on these services 
are far outweighed by the costs associated with such regulation.  Accordingly, we find that it is in the 
public interest to forbear to the extent described above.  Moreover, as discussed above, we find that 
forbearance will promote competitive market conditions by freeing Qwest to compete and innovate in the 
provision of interstate, interLATA telecommunications services.
80. Finally, the targeted safeguards set forth in this Order will place less of a burden on Qwest 
than would dominant carrier regulation and will better enable Qwest to compete in the interstate long 
  
213 See 47 U.S.C. § 272(b); see generally Accounting Safeguards Order, 11 FCC Rcd 17539; Non-Accounting 
Safeguards Order, 11 FCC Rcd 21905.
214 Cf. Wireline Broadband Internet Access Services Order, 20 FCC Rcd at 14895, para. 79.
215 Qwest Jan. 16, 2007 Ex Parte Letter at 7-9; see also LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 
88-90.
216 See LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-90; see also Qwest Jan. 16, 2007 Ex Parte 
Letter at 6-7.
Federal Communications Commission FCC 07-13
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distance market within its region.217  Accordingly, we conclude that forbearance from applying our 
dominant carrier rules to Qwest’s in-region, interstate, interLATA telecommunications services is 
consistent with the public interest and therefore satisfies the requirements of section 10(a)(3).
F. International Services
81. Consistent with the Commission’s conclusions in the LEC Classification Order, we find no 
practical distinctions between Qwest’s incentive and ability to use any in-region market power in its 
provision of international and interstate, interLATA telecommunications services.218 Therefore, as a 
general matter, we forbear from applying dominant carrier regulation to Qwest’s in-region provision of 
international services to the same extent that we forbear from applying those requirements to Qwest’s in-
region provision of domestic interstate services.  We do not forbear, however, from our dominant carrier 
rules that apply specifically to United States carriers that provide international telecommunications 
services.219 For example, to the extent that Qwest becomes affiliated, within the meaning of section 63.09
of our rules, with a foreign carrier that has the ability to discriminate against Qwest’s rivals through control 
of bottleneck services or facilities in a foreign destination market,220 Qwest will continue to be 
presumptively classified as dominant under section 63.10 of our rules and subject to the safeguards in that 
rule, which apply to carriers that we classify as dominant based on a foreign carrier affiliation.221  Thus, 
our framework for addressing issues raised by the provision of international services, either by Qwest or by 
a Qwest affiliate, will remain in effect.
IV. ORDERING CLAUSES
82. Accordingly, IT IS ORDERED that, pursuant to sections 4(i), 4(j), 10, 201, 202, 203, 214,
and 272, of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 160, 201, 202, 
203, 214, and 272, the Petition for Forbearance that was filed on November 22, 2005 by Qwest 
Communications International Inc. IS GRANTED to the extent set forth herein and SUBJECT TO THE 
CONDITIONS set forth herein and otherwise IS DENIED.
  
217 See LEC Classification Order, 12 FCC Rcd at 15806-08, paras. 88-90; see also Qwest Jan. 16, 2007 Ex Parte 
Letter at 6-7.
218 LEC Classification Order, 12 FCC Rcd at 15838, para. 138.
219 47 C.F.R. § 63.10 (regulatory classification of United States international carriers); see LEC Classification 
Order, 12 FCC Rcd at 15838-39, para. 139 (preserving rules designed to address the incentive and ability of a 
foreign carrier to discriminate against the rivals of its United States affiliate).
220 We are not aware of any filings made by Qwest or by a Qwest affiliate, pursuant to section 63.11 or section 
63.18 of our rules, notifying the Commission that Qwest is affiliated with a foreign carrier that we then determined 
to possess market power in a foreign country.  Cf. Letter from Timothy M. Boucher, Qwest Corporate Counsel, to 
Marlene H. Dortch, Secretary, Federal Communications Commission, at 1, (filed Jan. 22, 2007) (Qwest Jan. 22, 
2007 Ex Parte Letter) (stating that Qwest is not affiliated with any foreign carrier that is a monopoly provider of 
telecommunications services in a relevant market in any destination country).
221 See 47 C. F.R. § 63.10. Qwest is presently classified as a nondominant provider of telecommunications services 
under section 63.10.  Qwest’s status under section 63.10 will not change if it provides international 
telecommunications services on an integrated basis, rather than through a section 272 separate affiliate.  See Qwest 
Jan. 22, 2007 Ex Parte Letter at 1.
Federal Communications Commission FCC 07-13
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83. IT IS FURTHERED ORDERED that, pursuant to sections 4(i), 4(j), 10, 201, 202, 203, 214,
and 272, of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 160, 201, 202, 
203, 214, and 272, and section 1.103(a) of the Commission’s rules, 47 C.F.R. § 1.103(a), the 
Commission’s forbearance decision SHALL BE EFFECTIVE on February 20, 2007.  Pursuant to 
Federal Communications Commission FCC 07-13
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sections 1.4 and 1.13 of the Commission’s rules, 47 C.F.R. §§ 1.4 and 1.13, the time for appeal shall run 
from the release date of this Order.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
 
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APPENDIX A
COMMENTERS
Commenter Abbreviation
AT&T Inc. AT&T
BellSouth Corporation BellSouth
Level 3 Communications, LLC Level 3
COMPTEL COMPTEL
New Jersey Division of the Ratepayer Advocate New Jersey Ratepayer Advocate
Reply Commenter Abbreviation
AdHoc Telecommunications Users Committee AdHoc
AT&T Inc. AT&T
New Jersey Division of the Ratepayer Advocate New Jersey Ratepayer Advocate
Qwest Communications International Inc. Qwest
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APPENDIX B 
MARKET DATA
Table 1 - Mass Market Customers (December 2006)
Long Distance Service Wireline and Wireless 
Long Distance Usage 
Local and Long Distance 
Bundle
Arizona
Colorado
Iowa
Idaho
Minnesota
Montana
North 
Dakota
Nebraska
New Mexico
Oregon
South 
Dakota
Utah
Washington
Wyoming
Minimum
Maximum
Median
REDACTED
Source: Market shares are calculated using data submitted in this proceeding.  See Qwest Jan. 8, 2007 
Ex Parte Letter, Attachs. 1.b, 1.d, 1.h, 1.j; Qwest Jan. 10, 2007 Ex Parte Letter, Attachs. 1.f, A at 4; 
Qwest Jan. 17, 2007 Ex Parte Letter, Attachs. 1.a.i (corrected), 1.a.ii (corrected), 1.a.iii (corrected), 
1.i.i (corrected).  See supra paras. 33-35 for the underlying assumptions.
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Table 2 – Large Enterprise Customers (2006)
Long Distance Voice Services
State Qwest Market Share Market HHI Number of Rivals in Market
Arizona
Colorado
Iowa
Idaho
Minnesota
Montana
North Dakota
Nebraska
New Mexico
Oregon
South Dakota
Utah
Washington
Wyoming
Minimum
Maximum
Median
REDACTED
Frame Relay
Arizona
Colorado
Iowa
Idaho
Minnesota
North Dakota
Nebraska
New Mexico
Oregon
South Dakota
Utah
Washington
Minimum
Maximum
Median
REDACTED
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Table 2 – Large Enterprise Customers (2006) (Continued)
T1 Services
State Qwest Market Share Market HHI Number of Rivals in Market
Arizona
Colorado
Iowa
Idaho
Minnesota
Montana
North Dakota
Nebraska
New Mexico
Oregon
South Dakota
Utah
Washington
Wyoming
Minimum
Maximum
Median
REDACTED
T3 Services
Arizona
Colorado
Iowa
Idaho
Minnesota
Oregon
Utah
Washington
Minimum
Maximum
Median
REDACTED
Source: Qwest Jan. 16, 2007 Ex Parte Letter, Attachs. 4.a-b (Franchise Area data).  Staff calculations 
based upon product market/geographic area combinations with at least 30 observations.  Large 
enterprise customers are defined as businesses with at least 250 employees.
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Table 3 – Small/Medium Business Customers (2006)
Long Distance Voice Services
State Qwest Market Share Market HHI Number of Rivals in Market
Arizona
Colorado
Idaho
Iowa
Minnesota
Montana
Nebraska
New Mexico
North Dakota
Oregon
South Dakota
Utah
Washington
Wyoming
Minimum
Maximum
Median
REDACTED
Frame Relay
Arizona
Colorado
Iowa
Minnesota
New Mexico
Oregon
Utah
Minimum
Maximum
Median
REDACTED
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Table 3 – Small/Medium Business Customers (2006) (Continued)
T1 Services
State Qwest Market Share Market HHI Number of Rivals in Market
Arizona
Colorado
Idaho
Iowa
Minnesota
Montana
Nebraska
New Mexico
North Dakota
Oregon
South Dakota
Utah
Washington
Wyoming
Minimum
Maximum
Median
REDACTED
T3 Services
Minnesota REDACTED
Source: Qwest Jan. 16, 2007 Ex Parte Letter, Attachs. 4.a-b (Franchise Area data).  Staff calculations 
based upon product market/geographic area combinations with at least 30 observations.  Small/medium 
businesses are businesses with 5 to 249 employees.
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APPENDIX C
SERVICE QUALITY MEASUREMENT PLAN 
FOR INTERSTATE SPECIAL ACCESS
Contents
Section 1:  Ordering
FOCT: Firm Order Confirmation (FOC) Timeliness
Section 2:  Provisioning
PIAM: Percent Installation Appointments Met
NITR: New Installation Trouble Report Rate
Section 3:  Maintenance and Repair
CTRR: Failure Rate/Trouble Report Rate
MAD: Average Repair Interval/Mean Time to Restore
Section 4:  Glossary
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Section 1:  Ordering
FOCT:  Firm Order Confirmation (FOC) Timeliness
Definition
Firm Order Confirmation (FOC) Timeliness measures the percentage of FOCs returned within the 
Company-specified standard interval.
Exclusions
· Service requests identified as “Projects” or “ICBs”
· Service requests cancelled by the originator 
· Weekends and designated holidays of the service center
· Unsolicited FOCs 
· Administrative or test service requests
· Service requests that indicate that no confirmation/response should be sent 
· Other exclusions as defined by each RBOC to reflect system and operational differences
Business Rules
Counts are based on the first instance of a FOC being sent in response to an ASR.  Activity starting on a 
weekend or holiday will reflect a start date of the next business day.  Activity ending on a weekend or 
holiday will be calculated with an end date of the last previous business day.  Requests received after the 
company’s stated cutoff time will be counted as a “zero” day interval if the FOC is sent by close of 
business on the next business day.  The standard interval will be that which is specified in the company-
specific ordering guide.
Calculation
Firm Order Confirmation (FOC) Interval = (a - b)
· a = Date and time FOC is returned
· b = Date and time valid access service request is received
Percent within Standard Interval = (c / d) X 100
· c = Number of service requests confirmed within the designated interval
· d = Total number of service requests confirmed in the reporting period 
Report Structure
· Non-Affiliates Aggregate
· RBOC Affiliates Aggregate 
- RBOC 272 Affiliates Aggregate 
Geographic Scope
· State
SQM Disaggregation (Percent FOCs returned within Standard Interval) 
· Special Access – DS0
· Special Access – DS1
· Special Access – DS3 and above
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Section 2:  Provisioning
PIAM:  Percent Installation Appointments Met
Definition
Percent Installation Appointments Met measures the percentage of installations completed on or before the 
confirmed due date.  
Exclusions
· Orders issued and subsequently cancelled 
· Orders associated with internal or administrative (including test) activities
· Disconnect Orders
· Other exclusions as defined by each RBOC to reflect system and operational differences
Business Rules 
This measurement is calculated by dividing the number of service orders completed during the reporting 
period, on or before the confirmed due date, by the total number of orders completed during the same 
reporting period.  Installation appointments missed because of customer caused reasons shall be counted as 
met and included in both the numerator and denominator. Where there are multiple missed appointment 
codes, each RBOC will determine whether an order is considered missed.  
Calculation 
Percent Installation Appointments Met = (a / b) X 100
· a = Number of orders completed on or before the RBOC confirmed due date during the reporting 
period
· b = Total number of orders where completion has been confirmed during the reporting period
Report Structure
· Non-Affiliates Aggregate
· RBOC Affiliates Aggregate 
- RBOC 272 Affiliates Aggregate 
Geographic Scope
· State
SQM Disaggregation 
· Special Access – DS0
· Special Access – DS1
· Special Access – DS3 and above
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NITR:  New Installation Trouble Report Rate
Definition
New Installation Trouble Report Rate measures the percentage of circuits or orders where a trouble was 
found in RBOC facilities or equipment within thirty days of order completion. 
Exclusions
· Trouble tickets issued and subsequently cancelled 
· Customer Provided Equipment (CPE) or customer caused troubles
· Troubles closed by the technician to disposition codes of IEC (Inter-exchange Carrier) or INF 
(Information) 
· RBOC troubles associated with administrative service 
· No Trouble Found (NTF) and Test OK (TOK) 
· Other exclusions defined by each RBOC to reflect system and operational differences
· Subsequent trouble reports
Business Rules
Only the first customer direct trouble report received within thirty calendar days of a completed service 
order is counted in this measure.  Only customer direct trouble reports that required the RBOC to repair a 
portion of the RBOC network will be counted in this measure.  The RBOC completion date is when the 
RBOC completes installation of the circuit or order.
Calculation
Trouble Report Rate within 30 Calendar Days of Installation = (a / b) X 100
· a = Count of circuits/orders with trouble reports within 30 calendar days of installation
· b = Total number of circuits/orders installed in the reporting period
Report Structure
· Non-Affiliates Aggregate
· RBOC Affiliates Aggregate 
- RBOC 272 Affiliates Aggregate 
Geographic Scope
· State
SQM Disaggregation 
· Special Access – DS0
· Special Access – DS1
· Special Access – DS3 and above
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Section 3:  Maintenance & Repair
CTRR:  Failure Rate/Trouble Report Rate
Definition
The percentage of initial and repeated circuit-specific trouble reports completed per 100 in-service circuits 
for the reporting period.
Exclusions
· Trouble reports issued and subsequently cancelled
· Employee initiated trouble reports
· Trouble reports/circuits associated with internal or administrative activities
· Customer Provided Equipment (CPE) or customer caused troubles
· Troubles closed by the technician to disposition codes of IEC (Inter-exchange Carrier) or INF 
(Information)
· Tie Circuits
· No Trouble Found (NTF) and Test OK (TOK)
· Other exclusions as defined by each RBOC to reflect system and operational differences
Business Rules
Only customer direct trouble reports that require the RBOC to repair a portion of the RBOC network will 
be counted in this report.  The trouble report rate is computed by dividing the number of completed trouble 
reports handled during the reporting period by the total number of in-service circuits for the same period.  
Calculation
Percent Trouble Report Rate = (a / b) X 100
· a = Number of completed circuit-specific trouble reports received during the reporting period
· b = Total number of in-service circuits during the reporting period
Report Structure
· Non-Affiliates Aggregate
· RBOC Affiliates Aggregate 
- RBOC 272 Affiliates Aggregate 
Geographic Scope
· State
SQM Disaggregation 
· Special Access – DS0
· Special Access – DS1
· Special Access – DS3 and above
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MAD:  Average Repair Interval/Mean Time to Restore
Definition
The Average Repair Interval/Mean Time to Restore is the average time between the receipt of a customer 
trouble report and the time the service is restored.  The average outage duration is only calculated for 
completed circuit-specific trouble reports.
Exclusions
· Trouble reports issued and subsequently cancelled
· Employee initiated trouble reports
· Trouble reports associated with internal or administrative activities
· Customer Provided Equipment (CPE) or customer caused troubles
· Troubles closed by the technician to disposition codes of IEC (Inter-exchange Carrier) or INF 
(Information)
· Tie Circuits
· No Trouble Found (NTF) and Test OK (TOK)
· Other exclusions as defined by each RBOC to reflect system and operational differences
Business Rules
Only customer direct trouble reports that require the RBOC to repair a portion of the RBOC network will 
be counted in this measure.  The average outage duration is calculated for each restored circuit with a 
trouble report.  The start time begins with the receipt of the trouble report and ends when the service is 
restored.  This is reported in a manner such that customer hold time or delay maintenance time resulting 
from verifiable situations of no access to the end user premise, other CLEC/IXC or RBOC retail customer 
caused delays, such as holding the ticket open for monitoring, is deducted from the total resolution interval 
(“stop clock” basis). 
Calculation
Repair Interval = (a – b)
· a = Date and time trouble report was restored
· b = Date and time trouble report was received
Average Repair Interval = (c / d)
· c = Total of all repair intervals (in hours/days) for the reporting period
· d = Total number of trouble reports closed during the reporting period
Report Structure
· Non-Affiliates Aggregate
· RBOC Affiliates Aggregate 
- RBOC 272 Affiliates Aggregate 
Geographic Scope
· State
SQM Disaggregation 
· Special Access – DS0
· Special Access – DS1
· Special Access – DS3 and above
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GLOSSARY
Access Service 
Request (ASR)
A request to the RBOC to order new access service, or request a change to 
existing service, which provides access to the local exchange company’s network 
under terms specified in the local exchange company’s special or switched access 
tariffs.
RBOC 272 Affiliates 
Aggregate
RBOC Affiliate(s) authorized to provide long distance service as a result of the 
Section 271 approval process.
RBOC Affiliates 
Aggregate
RBOC Telecommunications and all RBOC Affiliates (including the 272 Affiliate).  
Post sunset, comparable line of business (e.g., 272 line of business) will be 
included in this category.
Business Days Monday thru Friday (8AM to 5PM) excluding holidays
CPE Customer Provided or Premises Equipment 
Customer Not 
Ready
(CNR)
A verifiable situation beyond the normal control of the RBOC that prevents the 
RBOC from completing an order, including the following: CLEC or IXC is not 
ready to receive service; end user is not ready to receive service; connecting 
company or CPE supplier is not ready.
Firm Order 
Confirmation (FOC)
The notice returned from the RBOC, in response to an Access Service Request 
from a CLEC, IXC or affiliate, that confirms receipt of the request and creation of 
a service order with an assigned due date.
Unsolicited FOC An Unsolicited FOC is a supplemental FOC issued by the RBOC to change the 
due date or for other reasons, e.g., request for a second copy from the CLEC/IXC, 
although no change to the ASR was requested by the CLEC or IXC.
Project or ICB Service requests that exceed the line size and/or level of complexity that would 
allow the use of standard ordering and provisioning interval and processes.  
Service requests requiring special handling.
Repeat Trouble Trouble that reoccurs on the same telephone number/circuit ID within 30 calendar 
days
Service Orders Refers to all orders for new or additional lines/circuits.  For change order types, 
additional lines/circuits consist of all C order types with “I” and “T” action coded 
line/circuit USOCs that represent new or additional lines/circuits, including 
conversions for RBOC to Carrier and Carrier to Carrier.
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JOINT STATEMENT OF
COMMISSIONER MICHAEL J. COPPS AND
COMMISSIONER JONATHAN S. ADELSTEIN,
CONCURRING
Re: In the Matter of Petition of Qwest Communications International Inc. for Forbearance from 
Enforcement of the Commission’s Dominant Carrier Rules as They Apply After Section 272 
Sunset, WC Docket No. 05-333
In this Order, the Commission conditionally grants forbearance to allow Qwest to provide long 
distance services on an integrated basis and subject to non-dominant carrier regulations.  We support a 
conditional grant of relief here because the Commission must take into account the rapidly changing long 
distance market and the unique competitive position of the petitioner, and because this outcome is clearly 
superior to allowing this petition to be granted by Commission inaction without the safeguards described 
below.  This Commission repeatedly has recognized that Section 272 provides for structural and 
accounting safeguards that form the principal guarantees against improper accounting practices and cross-
subsidization.  We concur because we remain concerned that the Commission has not completed its 
industry-wide review of these issues and does not have in place a comprehensive mechanism for monitoring 
changes in the marketplace (e.g., in the long distance, wireless, and access markets) that would enable the 
Commission to reliably make decisions in this area.1
Nearly four years ago the Commission issued the Section 272 Sunset Further Notice, which was 
the second notice seeking comment on changes to the long distance market and the appropriate regulatory 
framework for carriers like the petitioner.  That proceeding – much like this forbearance petition –
addresses the important issue of what rules should govern Bell Operating Companies’ (BOCs) provision of 
long distance services after the sunset of the Section 272 separate affiliate and related requirements.  While 
we recognize that Congress specifically contemplated that Section 272’s separate affiliate and related 
requirements sunset after three years, we have repeatedly urged the Commission to engage in a rigorous 
analysis of the need for alternative safeguards on an industry-wide basis.2 Yet, rather than complete this 
rulemaking, the Commission adopts through this Order a combination of conditions – some voluntarily 
offered, others not – in order to facilitate the grant of a forbearance petition, which would raise serious 
questions if granted as filed.3
Although we would have preferred the Commission complete its Section 272 sunset proceeding, we 
recognize the efforts undertaken here to conduct a rigorous market analysis to provide a picture of 
petitioner’s unique circumstances and the competitive landscape in which it operates.  Indeed, there are 
notable changes to the long distance market in petitioner’s territory that the Commission must account for.  
For many, though not all, consumers, the available options are being reshaped by the rise of wireless, cable, 
  
1  See Joint Statement of Commissioner Michael J. Copps and Commissioner Jonathan S. Adelstein, Concurring, 
Section 272(f)(1) Sunset of the BOC Separate Affiliate and Related Requirements, Further Notice of Proposed 
Rulemaking, WC Docket No. 02-112, FCC 03-111 (May 19, 2003) (“Section 272 Sunset Further Notice”).
2 Such an approach is also contemplated in the statute, which specifically preserves the Commission’s ability to 
prescribe safeguards consistent with the public interest.  See 47 U.S.C. § 272(f)(3).
3 While these conditions help to mitigate the concerns we have regarding petitioner’s market power and the impact 
of integrating their businesses on residential and business consumers, petitioner does not exist in a vacuum and the 
question of whether these conditions are appropriate on an industry-wide basis is not before us.  The fact may well 
be that they are insufficient as applied to the situation of industry participants not present here.
Federal Communications Commission FCC 07-13
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and over-the-top VoIP services.  We have also seen an increasing trend toward the availability and 
desirability of bundled services.  We appreciate that this Order acknowledges these developments and takes 
steps to adjust our regulatory framework accordingly.  In particular, we find persuasive the relative market 
shares of the petitioner in the long distance, and, in particular, the wireless market, which make potential 
unlawful discrimination less likely and relief more compelling in this case.
At the same time, it is not clear that all customers have benefited as dramatically from these 
changes, as many customers lack an effective choice of providers due to price or availability.  It is 
imperative that the Commission remain vigilant about the continued evolution of this market.  The most 
notable change in the long distance market, of course, is the entry of the BOCs such as the petitioner, which 
less than 5 years ago did not even compete in the long distance market.  It therefore is important to 
remember that the market share levels analyzed in this Order have developed from a zero-baseline over a 
relatively short period of time.  We have also seen increasing consolidation in this industry, including the 
merger of the two largest independent long distance companies into the two largest incumbent LECs.  There 
have also been recent suggestions that the pricing for bundled services is evolving in a duopolistic manner, 
with higher prices for consumers.4 We have repeatedly stated that competition must mean more for 
consumers than a choice between two providers, a cable and telephone company, and such a result would 
be an unfortunate back-sliding for long distance customers.
We appreciate that the Commission does adopt some notable and necessary safeguards in this 
Order to address some of these concerns.  We were particularly pleased that the petitioner has committed to 
offering certain calling plans targeted for residential consumers who make relatively few long distance calls 
and to provide call detail information to enable consumers to make informed decisions about the most cost 
effective long distance plans.  Regrettably, the needs of low volume consumers are often overlooked, 
although they have a real need for our vigilance. 
This Order also makes some important findings with respect to the potential for price and 
performance discrimination.  Notably, the Order acknowledges that incumbent providers like the petitioner 
retain the ability to raise their rivals’ costs, and the Order maintains dominant carrier regulation for critical 
access services used by alternative long distance providers.  The Order correctly concludes that certain 
requirements of Section 272 will continue to apply and adopts rules for imputation and reporting that 
should help the Commission and competitors evaluate whether the petitioner is engaging in price 
discrimination.  In addition, we are pleased that petitioner has committed to comply with special access 
performance metrics to ensure that it does not engage in non-price discrimination in its provision of special 
access services.  
Although these conditions may not be tailored in exactly the manner we would have crafted, their 
adoption is certainly preferable to the granting of the forbearance petition as filed.  It is imperative for the 
Commission to monitor the effect of these safeguards, and we encourage the Commission to diligently 
verify whether its predictions about their sufficiency are accurate. In the meantime, we again encourage the 
Commission to return to its consideration of the Section 272 sunset rulemaking proceeding expeditiously 
and to evaluate the need for rigorous and more lasting conditions than the voluntary, time-limited conditions 
offered here.
  
4  See “Battle for the Bundle, 4Q06 Wireline Pricing Trends: Bells Turn the Corner on Price, Voice, & Data 
Bundles Up Y/Y”, Bank of America (Jan. 24, 2007) (noting that “data appear to support our view that the 
emerging cable/telecom competitive price structure is unfolding in a duopolistic manner”).