EXECUTIVE SUMMARY OF THE RATEPAYER ADVOCATE

EXECUTIVE SUMMARY OF THE RATEPAYER ADVOCATE'S REPLY BRIEF IN VERIZON-NJ'S 271 PROCEEDING BEFORE THE BPU

Filed December 17, 2001, Docket No. TO0190541

In addition to finding that Verizon-NJ's application complies with the section 271 requirements, a recommendation to grant Verizon-NJ interLATA authority hinges upon the state of competition in New Jersey's local exchange market, the effect of such a grant on the public interest, and the prospect that competition and the public interest will be protected long after section 271 is granted. The initial briefs filed by the Ratepayer Advocate demonstrated that Verizon has made an insufficient showing on these important issues. The initial briefs show that the local exchange market in New Jersey is still a monopoly, with no choice for consumers and no competitive providers in a position to provide a choice.

Verizon's contention that it has complied with the competitive checklist of section 271 is deficient in a number of ways. In many instances, Verizon-NJ relies on promises of future compliance which as a matter of law is inadequate proof of compliance with the checklist items. In addition, Verizon-NJ offers only an unsubstantiated hope that its OSS procedures and UNE prices will in fact have non-discriminatory, pro-competitive results. The day may come when Verizon-NJ can affirmatively demonstrate that it has met the requirements of section 271, but that day has yet to arrive. Till then, the Board must withhold a favorable recommendation on section 271 authority until Verizon-NJ has in fact delivered on all its promises, and has shown that its OSS and UNE rates are promoting rather than suppressing competition.

The Board must affirmatively require Verizon-NJ to seriously address the public interest implications of its request. Verizon NJ has virtually ignored the public interest requirement and has made no showing that approval of its request for long distance authority will promote and protect the public interest. Instead, Verizon-NJ argues that in this proceeding the Board should overlook the public interest, despite the Board's recognized, clear duty to make this a paramount consideration in all proceedings.

Finally, the Ratepayer Advocate urges the Board to establish mechanisms for safeguarding competition and the public interest after any grant of section 271 authority. To this end, the Board should, prior to recommending section 271 authority for Verizon-NJ, establish a state Universal Service Fund to protect the right of all New Jersey citizens to affordable service provided on competitive terms. Furthermore, the Board should help ensure that competition will endure by ordering structural separation or at least functional-structural separation with strict code of conduct requirements.

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