Posted: 01/1998

The OSS Obligation

Do Operational Support Systems Represent the
Final Hurdle to the InterLATA Market?

By Andrew O. Isar

A look at a recent proposed Illinois order reveals just how
close Ameritech may be to fulfilling its operational support
systems (OSS) requirements–at least in the opinion of an
Illinois Commission hearing examiner–while pointing to the need
for OSS performance standards. The Chicago-based regional Bell
operating company’s (RBOC’s) goal, the same as all its RBOC
siblings, is to gain entrance into the interLATA (long distance)
market.

To accomplish this, the telco must get its OSS–a variety of
systems and related databases used with supporting local service
preordering, ordering, provisioning, maintenance, repair and
billing–in order with the steps plotted out in the
Telecommunications Act of 1996. With the complexity, secrecy and
contentiousness surrounding the OSS offerings at all the RBOCs,
no wonder they have become the focus of furious debate over when
RBOCs may enter the interLATA market under Section 271 of the
Telecom Act.

OSS availability is discussed thoroughly in the Federal
Communications Commission’s (FCC’s) denial of
Ameritech-Michigan’s bid to enter the Michigan interLATA market.
Moreover, a recently proposed Illinois Commerce Commission (ICC)
order offers insight into how at least one state–charged with
making recommendations to the FCC regarding whether an RBOC has
met the act’s requirements for interLATA entry–is weighing the
evidence regarding the RBOC’s OSS availability to competitors.
The move also broaches the broader question of at what point
RBOCs should be allowed to enter their in-region long distance
market. At press time, no final decision has been released by the
ICC.

The Competitive Checklist

The Telecom Act mandates that RBOCs meet 14 specific tests
before being allowed into the interLATA market within their
current local service operating regions. These tests,
collectively termed the competitive checklist, include the
requirement that RBOCs provide or generally offer
nondiscriminatory access to OSS as an unbundled network element.

A major source of contention resides in whether RBOCs are, in
fact, providing competitors with nondiscriminatory access to OSS.
Another question is whether access that is being provided or
being made "generally available" meets the test set
forth in the act. States provide the FCC with their perspective
of whether an RBOC has met its obligations under the act, but the
FCC makes the final determination. The ICC has been one of the
first states to consider in great detail whether
Ameritech-Illinois meets the competitive checklist and OSS
requirements. The hearing examiner’s proposed findings, based on
an extensive record, reveal many of the considerations that
virtually all state regulators will be faced with in the near
future. These considerations will determine how soon RBOCs are to
be unleashed for entry into long distance.

OSS Provision

Before the ICC could determine whether Ameritech-Illinois had
met its obligations, first there had to be a determination of how
to interpret the statutory requirement that RBOCs
"provide" interconnection services and functions to
competitors. The hearing examiner partially sided with
Ameritech’s arguments that "provide," as used in the
act’s Section 271, should mean to "actually furnish" or
"make available" each of the 14 items specified in the
competitive checklist. But the hearing examiner took Ameritech’s
"make available" position one step further by
establishing specific evaluation standards or criteria, rather
than leaving the "make available" provisions ambiguous
and subject to continuing debate.

The ICC’s Evaluation Standards

According to the hearing examiner, an item is deemed
"available" only when the ICC finds "with
substantial certainty that each of the following standards is met
with respect to a given checklist item."

1. The item currently is available and can be ordered
immediately, and the competing carrier can receive within a
reasonable time the item in sufficient quantities and in a manner
that will allow it to provide services to its own customers on a
commercial basis.

2. All necessary systems are in place, allowing the RBOC to
provide an item immediately when the item has been requested or
actually is being furnished.

3. If applicable, through internal testing, the item has been
completed and, where possible, carrier-to-carrier testing also
has been completed.

4. The checklist item functions as expected.

5. The item can be provided to the requesting party on a
nondiscriminatory basis and at a quality level that is at parity
with the quality the RBOC itself receives.

The first four standards constitute operational criteria,
while the next sets qualitative criterion. Together they were
designed to cut through the contentious, open-ended issue of when
Ameritech could be found to have met its statutory obligations
and, for the first time, to establish definitive state tests for
meeting the competitive checklist.

Meeting the Test

The proposed order looks at whether Ameritech-Illinois had met
the act’s obligations to provide nondiscriminatory access to its
OSS. Checklist item two imposes an obligation on RBOCs to make
unbundled network elements available to competitors on a
nondiscriminatory basis, consistent with the act’s
interconnection requirements. OSS (and directory assistance) are
considered network elements under the FCC’s interconnection
rules. Ameritech-Illinois argued it had met its obligations to
provide a nondiscriminatory OSS, relying on a two-part test:
First, Ameritech’s systems were operationally ready and had
undergone sufficient testing to ensure competitors would be
provided with necessary capabilities. Second, Ameritech’s systems
were sufficiently capable of processing anticipated demand and
could be expanded as necessary. The RBOC generally contended that
as long as competitors have access to OSS interfaces, and not
necessarily to the OSS themselves, the OSS availability
requirement has been met.

Ameritech-Illinois Up to the Challenge

The ICC staff and other intervenors argued that
Ameritech-Illinois had failed to meet its OSS obligations. They
pointed to Ameritech’s reliance on manual order processing of
unbundled local loop orders, the need to use multiple interfaces
for ordering individual network components and a lack of
carrier-to-carrier testing. AT&T highlighted myriad problems
with Ameritech’s OSS interfaces, including high order-rejection
rates, processing delays and "unacceptable levels of manual
intervention."

MCI mirrored AT&T’s criticisms of Ameritech’s OSS, noting
further concerns with the fragmented nature of the RBOC’s OSS;
for example, the need to use different interfaces for different
ordering functions in what should otherwise be a single system.
MCI also underscored several programming bugs and design flaws.
Sprint argued that OSS, in general, should be deemed
operationally ready only when users (competitive providers), and
not just the RBOC, agree that the systems are, in fact,
functional. TCG pointed to limited OSS use for specific
functions.

In developing its decision on Ameritech’s compliance with the
act’s nondiscriminatory OSS availability requirements, the
hearing examiner relied on its five compliance standards. The
proposed decision fell into what some might characterize as a bad
news-good news scenario for competitive local exchange carriers
(CLECs). Ameritech’s OSS would be found to be operational. Of the
first standard, the commercial availability of OSS, the hearing
examiner proposed to find that the systems are currently
available and can be ordered immediately, within a reasonable
time and in sufficient quantities to meet demand. The hearing
examiner also found Ameritech had met its second standard by
providing OSS immediately when requested. Of the third standard,
the hearing examiner found that Ameritech-Illinois had met its
obligation through internal testing of OSS and, where possible,
through carrier-to-carrier testing.

Yet, the hearing examiner concluded that Ameritech-Illinois
had failed to provide OSS that would function as expected.
Moreover, he determined that Ameritech’s systems were not yet
provided at parity with the quality Ameritech-Illinois provides
OSS to itself. Although the hearing examiner stated that
"strict parity" should be demanded, a standard he felt
would be impossible to meet, the hearing examiner found it would
take time for Ameritech-Illinois to meet the parity standard. He
concluded the parity standard should be based on what end-users
perceive to be parity and, given the numerous problems
experienced by competitors, the net effect was that
Ameritech-Illinois offered a lower quality of OSS than it
provided itself.

Implications and the Need

The proposed ICC order is significant in underscoring the
importance OSS availability plays in competitive entry and the
strong likelihood that OSS will remain a final hurdle for
in-region long distance market entry, possibly for some time to
come. The FCC’s Ameritech-Michigan order bears this out. In
Illinois at least, Ameritech-Illinois was found to have met all
but four of the 14 checklist items. OSS topped the list.

Moreover, the ICC’s findings are significant in that they
establish evaluation standards for all competitive checklist
items including OSS–standards that have not widely appeared in
other states’ OSS evaluations. In a South Carolina Public Service
Commission order, dated July 31, regarding BellSouth
Telecommunications Inc.’s (BST’s) entry into the South Carolina
interLATA market, the South Carolina Commission relied heavily on
BST testimony and on AT&T’s experiences in accessing BST’s
OSS. It found that BST’s competitors could obtain adequate access
to the company’s OSS. The South Carolina Commission’s decision
appeared highly subjective in the absence of specific evaluation
standards, such as those proposed by the ICC and the evaluation
criteria used by the FCC.

This past spring, LCI International Telecomm Corp. (LCI) asked
the FCC to establish national OSS performance standards for
evaluation of RBOC compliance. LCI likened the varied federal and
state approaches to OSS evaluations to a tower of Babel, where no
one spoke the same language. Several state regulatory agencies,
including the California and Wisconsin commissions, generally
support the concept of broad uniform national guidelines. The
evaluation criteria established by the ICC demonstrates the
benefit of establishing OSS evaluation guidelines and adds
credence to LCI’s petition.

As the FCC’s findings on Ameritech-Michigan’s and other RBOC
applications to provide in-region long distance and the proposed
ICC standards demonstrate, more evaluation criteria likely will
be established by default.

For now, RBOCs vehemently oppose OSS evaluation standards,
arguing that these standards–like other operating
standards–should be based solely on interconnection agreements
between competitors and RBOCs. Yet, when was the last time an
RBOC competitor, with the possible exception of the nation’s four
or five largest carriers or smaller carriers in unique special
cases, could hope to arbitrate, much less negotiate, entirely
favorable terms that RBOCs did not control? OSS evaluation
standards–such as those developed by the ICC–and OSS
performance standards–such as those proposed by LCI–could, if
adopted nationally, establish consistency in gauging RBOC
fulfillment of the act’s OSS requirement in what may otherwise
become a patchwork quilt of state evaluation criteria. Such a
mixed bag of approaches could ultimately and–to borrow a term
from the Department of Justice–irreversibly affect
telecommunications competition forever.

Andrew Isar, founder and president of Harbor Consulting
Group Inc., a Washington State-based regulatory consulting firm,
can be contacted at (253) 265-3910 or via e-mail at [email protected].