On March 17, 2000, the United States Court of Appeals for the District of Columbia Circuit affirmed in part and vacated and remanded in part the FCC’s order (“FCC Order”) concerning carriers’ rights to collocate their equipment at the incumbent local exchange carriers’ (“ILEC”) facilities. Under the Telecommunications Act of 1996 (“1996 Act”), ILECs must provide for physical collocation of competitor’s equipment “necessary for interconnection or access to unbundled network elements at the premises of the local exchange carrier.” The Court of Appeals held that the FCC’s definition of “necessary,” and in one respect its definition of “physical collocation,” were unduly broad. The Court of Appeals affirmed all other aspects of the FCC Order.
The FCC Order required ILECs to:
(1) permit collocation of any equipment that is “used or useful” for either interconnection or access to unbundled network elements, regardless of other functionalities inherent in such equipment;
(2) offer competitors both caged and cageless collocation;
(3) offer collocation space in both the ILECs’ central offices and in adjacent controlled environmental vaults or similar structures;
(4) to the extent technically feasible, provide competitors with the option of collocating equipment in any unused space within the ILECs’ premises;
(5) refrain from imposing unreasonable minimum space requirements on competitors that wish to collocate at the ILECs’ facilities; and
(6) bear the initial costs of preparing collocation space for their competitors, as opposed to requiring the first competitor to collocate at the facility to bear the entire cost of preparing new collocation space as an up-front charge.
The Court of Appeals vacated and remanded the rulings referred to in (1) and (4) above and affirmed the other holdings. The Court of Appeals held that the FCC’s requirement that ILECs collocate any competitors’ equipment that is used or useful for interconnection or access to unbundled elements, regardless of other functionalities inherent in such equipment, appears inconsistent with the statutory requirement that the ILECs must only allow collocation of equipment necessary for either interconnection or access to unbundled network elements.
With respect to the proper interpretation of “physical collocation” under the 1996 Act, the Court of Appeals rejected the FCC’s holding that ILECs, to the extent technically feasible, must give competitors the option of collocating equipment in any unused space within the ILECs’ premises. The Court of Appeals held that the FCC could not justify a result in which a competitor, as opposed to the ILEC, could choose where to establish collocation on the ILECs’ property, subject only to technical feasibility.