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John M. Garvey, Esq. on Logix Communications, L.P. v. Public Utility Commission of Texas et al., 521 F.3d 361, 2008 U.S. App. LEXIS 5638, 44 Comm. Reg. (P & F) 890 (5th Cir. 2008)


The Fifth Circuit’s decision in Logix Communications, L.P. v. Public Utility Commission of Texas et al., 2008 U.S. App. LEXIS 5638, will likely make it more difficult for competitive local exchange carriers (CLECs) to gain access to certain unbundled network elements (UNEs) in key urban areas. John M. Garvey discusses Logix, which upheld AT&T’s method of counting business lines for purposes of determining unbundling requirements. He writes:
 
Section 251 of the Telecommunications Act of 1996 (‘the 1996 Act”), Pub. L. No. 104-104, 110 Stat. 56, codified at 47 U.S.C. § 151 et seq., mandates that incumbent local exchange carriers (“ILECs”) lease UNEs at cost-based rates to CLECs. Before unbundling is required, however, Section 251(d) of the 1996 Act requires the FCC to determine whether “the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer.” Over a number of years, the FCC has increasingly restricted the availability of certain UNEs under this impairment standard. Without UNE availability, CLECs would need to self-provision or lease the facility at market-based rates. The FCC’s restricting of UNE availability reflects its policy preference for a market structure of facilities-based carriers, rather than a larger number of smaller companies piggybacking on existing network providers to access end-users at regulated wholesale rates.
 
     Most significantly for purposes of Logix Communications, L.P. v. Public Utility Commission of Texas et al., 2008 U.S. App. LEXIS 5638 (5th Cir. 2008) (“Logix Communications”), the FCC’s Triennial Review Remand Order (“TRRO”) in 2005, limited among other things the unbundling of high-capacity loops and interoffice transport. The FCC held that DS1 loops need not be unbundled in wire centers with at least 60,000 “business lines” and four fiber-based collocators, and DS3 loops need not be unbundled in wire centers with at least 38,000 business lines and four fiber based collocators. With regard to dedicated transport, the FCC determined that DS1 transport need not be unbundled in wire centers serving at least 38,000 business lines or four fiber-based collocators, and that dedicated DS3 transport or dark fiber transport need not be unbundled in wire centers with at least 24,000 business lines or three fiber-based collocators.
 
     The primary issue addressed by the Fifth Circuit in Logix Communications was the interpretation of the TRRO’s metric used in evaluating whether high-capacity loops and interoffice transport need to be unbundled by the ILEC. As the Fifth Circuit explained, the TRRO meant “to provide a metric for determining when an ILEC’s failure to provide CLEC’s with UNE access would impair competition. The analysis looks to the volume of business in a particular wire center to determine impairment.” The FCC’s rationale for such an approach is that line density in a switching area is a reasonable proxy in determining when a CLEC can earn sufficient revenues to self-provision the facility in that geographic area. If such revenues are possible, the impairment standard under the 1996 Act would not be satisfied and the facilities should no longer be available as UNEs.
 
(citations omitted)
 
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