[Federal Register Volume 61, Number 174 (Friday, September 6, 1996)] [Rules and Regulations] [Pages 47284-47355] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-22045] [[Page 47283]] _______________________________________________________________________ Part III Federal Communications Commission _______________________________________________________________________ 47 CFR Parts 51 and 52 Telecommunications Act of 1996: Implementation of Local Competition Provisions; Final Rule Federal Register / Vol. 61, No. 174 / Friday, September 6, 1996 / Rules and Regulations [[Page 47284]] FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 51 and 52 [CC Docket No. 96-98, 95-185, 92-237, FCC 96-333] Implementation of the Local Competition Provisions of the Telecommunications Act of 1996 AGENCY: Federal Communications Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In enacting the Telecommunications Act of 1996 (1996 Act) Congress sought to establish a pro-competitive, deregulatory national policy framework for the telecommunications industry. In adding a new Section 251 to the Communications Act of 1934, Congress set forth a blueprint for ending monopolies in local telecommunications markets. In this Second Report and Order the Commission adopts rules implementing certain provisions of Section 251. Specifically, this order adopts rules requiring local exchange carriers to provide dialing parity and nondiscriminatory access to their competitors; and requiring incumbent local exchange carriers to give public notice of certain network changes. In addition, this order adopts rules regarding number administration and addresses various petitions concerning numbering issues. These actions will serve to implement the statute, eliminate operational barriers to competition, and provide for effective use of numbering resources. EFFECTIVE DATE: October 7, 1996, except that the collection of information subject to approval by the Office of Management and Budget (OMB) that are contained in sections 51.211(c), 51.213, 51.217, 51.305(g), 51.307(e), 51.325, 51.327, 51.329, 51.331, 51.333, 51.335 and 52.19(b) which are effective November 15, 1996. FOR FURTHER INFORMATION CONTACT: For information concerning Dialing Parity, Nondiscriminatory Access and Network Information Disclosure, contact Lisa Boehley, (202) 418-2320, Network Services Division, Common Carrier Bureau. For information concerning Numbering Administration contact Marian Gordon, (202) 418-2320, Network Services Division, Common Carrier Bureau. SUPPLEMENTARY INFORMATION: This Second Report and Order contains new or modified information collections subject to the Paperwork Reduction Act of 1995 (PRA). It has been submitted to the Office of Management and Budget (OMB) for review under the PRA. OMB, the general public, and other federal agencies are invited to comment on the proposed or modified information collections contained in this proceeding. This is a synopsis of the Commission's Second Report and Order and Memorandum Opinion and Order, (FCC 96-333) adopted on August 8, 1996 and released on August 8, 1996. The full text of this Order is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C. The complete text also may be purchased from the Commission's copy contractor, International Transcription Service, Inc., (202) 857-3800, 2100 M Street N.W., Suite 140, Washington, D.C. 20037. PAPERWORK REDUCTION ACT: This Second Report and Order contains either a new or modified information collection. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collections contained in this order, as required by the Paperwork Reduction Act of 1995, Public Law No. 104-13. OMB notification of action is due September 6, 1996. Comments should address: (a) whether the new or modified collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents including the use of automated collection techniques or other forms of information technology. OMB Approval Number: None. Title: Implementation of the Local Competition Provisions of the Telecommunications Act of 1996--Second Report and Order and Memorandum Opinion and Order, CC Dockets No. 96-98 and 95-185. Form No.: N/A. Type of Review: New Collections. Respondents: Business or other for-profit, including small businesses, and state and local governments. ---------------------------------------------------------------------------------------------------------------- No. of Est. time per Total annual Section/title respondents response burden ---------------------------------------------------------------------------------------------------------------- Dialing parity implementation plans............................. 1,350 100 135,000 Justification for noncompliance................................. 20 9 180 Sharing of directory listings................................... 500 36 18,000 Provision of technical information.............................. 500 24 12,000 Public notice of network changes................................ 500 72 36,000 Burden of proof................................................. 75 8 600 Submission of area code relief plans............................ 30 40 1,200 ---------------------------------------------------------------------------------------------------------------- Total Annual Burden: 202,980. Estimated Costs Per Respondent: $0. Needs and Uses: The new or modified information collections in this Second Report and Order will be used to ensure that affected telecommunications carriers fulfill their obligations under the Communications Act, as amended. Synopsis of Second Report and Order Adopted: August 8, 1996. Released: August 8, 1996. Table of Contents Section Paragraph I. Introduction and Overview............................... 1 A. Actions to Implement Section 251(b)(3)................ 4 1. Dialing Parity...................................... 4 2. Nondiscriminatory Access............................ 12 B. Actions to Implement Section 251(c)(5)................ 16 C. Actions Taken to Implement Section 251(e)............. 18 II. Dialing Parity Requirements............................ 22 A. In General............................................ 22 1. The Need for Minimum Nationwide Dialing Parity Standards............................................. 23 a. Background and Comments........................... 23 [[Page 47285]] b. Discussion........................................ 25 2. Scope of the Dialing Parity Requirements............ 26 a. Background........................................ 26 b. Comments.......................................... 27 c. Discussion........................................ 29 B. Implementation of the Toll Dialing Parity Requirements 31 1. Presubscription Method of Achieving Toll Dialing Parity................................................ 31 a. Background........................................ 31 b. Comments.......................................... 33 c. Discussion........................................ 34 2. Categories of Domestic, Long Distance Traffic Subject to Presubscription............................ 35 a. Background........................................ 35 b. Comments.......................................... 36 c. Discussion........................................ 37 3. Separate Presubscription for International Calls.... 43 a. Background and Comments........................... 43 b. Discussion........................................ 45 4. Full 2-PIC Presubscription Method................... 46 a. Background........................................ 46 b. Comments.......................................... 48 c. Discussion........................................ 49 5. Deployment of Presub-scription Software in Each End Office................................................ 51 a. Background........................................ 51 b. Comments.......................................... 52 c. Discussion........................................ 54 C. Implementation Schedule for Toll Dialing Parity....... 55 1. Background and Comments............................. 55 2. Discussion.......................................... 59 D. Implementation of the Local Dialing Parity Requirements............................................ 64 1. In General.......................................... 64 a. Background........................................ 64 b. Comments.......................................... 65 c. Discussion........................................ 67 2. Local Dialing Parity Methodologies.................. 69 a. Background and Comments........................... 69 b. Discussion........................................ 71 3. Non-Uniform Local Calling Areas..................... 72 a. Background........................................ 72 b. Comments.......................................... 73 c. Discussion........................................ 75 E. Consumer Notification and Carrier Selection Procedures 76 a. Background........................................ 76 b. Comments.......................................... 77 c. Discussion........................................ 80 F. Cost Recovery......................................... 82 a. Background........................................ 82 b. Comments.......................................... 83 c. Discussion........................................ 92 G. Unreasonable Dialing Delays........................... 96 III. Nondiscriminatory Access Provisions................... 97 A. Definition of the Term ``Nondiscriminatory Access''... 97 1. Background.......................................... 97 2. Comments............................................ 98 3. Discussion.......................................... 101 B. Nondiscriminatory Access to Telephone Numbers......... 106 1. Definition.......................................... 106 2. Commission Action to Enforce Access to Telephone Numbers............................................... 107 C. Nondiscriminatory Access to Operator Services......... 108 1. Definition of ``Operator Services''................. 108 a. Background and Comments........................... 108 b. Discussion........................................ 110 2. Definition of ``Nondiscriminatory Access to Operator Services''............................................ 112 a. Background........................................ 112 b. Comments.......................................... 113 c. Discussion........................................ 114 3. Commission Action to Ensure Nondiscriminatory Access to Operator Services.................................. 119 a. Background and Comments........................... 119 b. Discussion........................................ 121 4. ``Branding'' Requirements for Operator Services..... 123 a. Background........................................ 123 b. Comments.......................................... 126 c. Discussion........................................ 128 D. Nondiscriminatory Access to Directory Assistance and Directory Listings...................................... 130 1. Definition of ``Nondiscriminatory Access to Directory Assistance and Directory Listings''......... 130 a. Background........................................ 130 b. Comments.......................................... 131 c. Discussion........................................ 133 2. Commission Action to Implement Nondiscriminatory Access to Directory Assistance and Directory Listings. 138 a. Background and Comments........................... 138 b. Discussion........................................ 141 3. Branding of Directory Assistance.................... 146 a. Background and Comments........................... 146 b. Discussion........................................ 148 4. Alternative Dialing Arrangements for Directory Assistance............................................ 149 a. Background and Comments........................... 149 b. Discussion........................................ 151 E. Unreasonable Dialing Delay............................ 152 1. Definition and Appropriate Measurement Methods...... 152 a. Background and Comments........................... 152 b. Discussion........................................ 156 2. Specific Technical Standard for Dialing Delay....... 163 a. Background and Comments........................... 163 b. Discussion........................................ 164 IV. Network Disclosure..................................... 165 A. Scope of Public Notice................................ 166 1. Definition of ``Information Necessary for Transmission and Routing''............................ 166 a. Background and Comments........................... 166 b. Discussion........................................ 171 2. Definition of ``Services''.......................... 175 a. Background and Comments........................... 175 b. Discussion........................................ 176 3. Definition of ``Interoperability''.................. 177 a. Background and Comments........................... 177 b. Discussion........................................ 178 4. Changes that Trigger the Public Notice Requirement.. 179 a. Background and Comments........................... 179 b. Discussion........................................ 182 5. Types of Information to be Disclosed................ 183 a. Background........................................ 183 b. Comments.......................................... 184 c. Discussion........................................ 188 B. How Public Notice Should be Provided.................. 192 1. Dissemination of Public Notice Through Industry Fora and Publications...................................... 192 a. Background........................................ 192 b. Comments.......................................... 193 c. Discussion........................................ 198 2. When Should Public Notice of Changes Be Provided?... 203 a. Background........................................ 203 b. Comments.......................................... 206 c. Discussion........................................ 214 C. Relationship with other Public Notice Requirements and Practices............................................... 237 1. Relationship of Sections 273(c)(1) and 273(c)(4) with Section 251(c)(5)................................ 237 a. Background........................................ 237 b. Comments.......................................... 238 c. Discussion........................................ 240 [[Page 47286]] 2. Relationship of Sections 251(a) and 251(c)(5) with Section 256........................................... 241 a. Background........................................ 241 b. Comments.......................................... 242 c. Discussion........................................ 244 D. Enforcement and Safeguards............................ 245 1. Enforcement Mechanisms.............................. 245 a. Background and Comments........................... 245 b. Discussion........................................ 247 2. Protection of Proprietary Information, Network and National Security..................................... 249 a. Background and Comments........................... 249 b. Discussion........................................ 254 V. Numbering Administration................................ 261 A. Designation of an Impartial Number Administrator...... 262 1. Background.......................................... 262 2. Comments............................................ 263 3. Discussion.......................................... 264 B. Delegation of Numbering Administration Functions...... 267 1. Delegation of Matters Related to Implementation of New Area Codes........................................ 268 a. Background........................................ 268 b. Comments.......................................... 269 c. Discussion........................................ 271 2. Area Code Implementation Guidelines................. 273 a. Background........................................ 273 b. Comments.......................................... 275 c. Discussion........................................ 281 3. Texas Public Utility Commission's Area Code Relief Order for Dallas and Houston.......................... 294 a. Background........................................ 294 b. Petition and Comments............................. 295 c. Discussion........................................ 304 4. Delegation of Additional Numbering Administration Functions............................................. 309 a. Background........................................ 309 b. Comments.......................................... 311 c. Discussion........................................ 315 5. Delegation of Existing Numbering Administration Functions Prior to Transfer........................... 323 a. Background........................................ 323 b. Comments.......................................... 324 c. Discussion........................................ 328 C. Cost Recovery for Numbering Administration............ 336 1. Background.......................................... 336 2. Comments............................................ 337 3. Discussion.......................................... 342 D. Section 271 Competitive Checklist Requirement that the BOCs Provide Non-Discriminatory Access to Numbers for Entry into In-region InterLATA Services................. 344 1. Background and Comments............................. 344 2. Discussion.......................................... 345 VI. Final Regulatory Flexibility Analysis.................. 346 A. Need for and Purpose of this Action................... 347 B. Summary of Issues Raised by the Public Comments in Response to the Initial Regulatory Flexibility Analysis. 349 C. Description and Estimate of the Small Entities Subject to the Rules............................................ 361 D. Summary of Projected Reporting, Recordkeeping and Other Compliance Requirements........................... 378 E. Report to Congress.................................... 398 VII. Ordering Clauses...................................... 399 I. Introduction and Overview 1. In February, 1996, Congress passed and the President signed into law, the Telecommunications Act of 1996 (1996 Act).1 The 1996 Act erects a ``procompetitive, de-regulatory national framework designed to accelerate rapid private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition.'' 2 Section 101 of the 1996 Act adds new section 251 to the Communications Act of 1934. Congress intended that the provisions of this new section would help competition grow in the market for exchange and exchange access and related telecommunications services. It directed the Commission to adopt rules that would implement the requirements of this section no later than August 8, 1996.3 We note, however, that, under section 251(f), certain rural or small local exchange carriers (LECs) are exempt or may seek relief from the rules we adopt herein.4 --------------------------------------------------------------------------- \1\ Telecommunications Act of 1996, Public Law No. 104-104, 110 Stat. 56 (1996) (1996 Act), to be codified at 47 U.S.C. 151 et. seq. \2\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996). \3\ 47 U.S.C. 251(d)(1). \4\ 47 U.S.C. 251(f) (1) and (f)(2). We note that the term ``United States'' means ``the several States and Territories, the District of Columbia, and the possessions of the United States, but does not include the Canal Zone.'' 47 U.S.C. 153(50). --------------------------------------------------------------------------- 2. We began this rulemaking proceeding on April 19, 1996.5 The First Report and Order, which addressed issues that were raised in this docket, decided that the Commission should establish national rules implementing section 251.6 The First Report and Order interprets and implements, inter alia, sections 251 (a), (b)(1), (b)(4), (b)(5), (c)(1), (c)(2), (c)(3), (c)(4), and (c)(6). That order promulgates rules to open the local exchange and exchange access markets to competition by eliminating legal and technical barriers to such competition. This Second Report and Order and Memorandum Opinion and Order (Order) promulgates rules to implement the parts of section 251 that relate to the elimination of certain operational barriers to competition. Specifically, this Order addresses local exchange carriers' obligations to provide their competitors with dialing parity and nondiscriminatory access to certain services and functionalities; 7 incumbent local exchange carriers' duty to make network information disclosures; 8 and numbering administration.9 In this Order we also deny the Petition for Expedited Declaratory Ruling on the area code relief plan for Dallas and Houston that the Texas Public Utility Commission (Texas Commission) filed with this Commission on May 9, 1996.10 We also address petitions for clarification or reconsideration in the Ameritech and NANP proceedings.11 --------------------------------------------------------------------------- \5\ Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96-98, Notice of Proposed Rulemaking, FCC 96-182 (released April 19, 1996) (NPRM) 61 FR 18311 (April 25, 1996). \6\ Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96-98, Interconnection between Local Exchange Carriers and Commercial Mobile Radio Service Providers, CC Docket No. 95-185, First Report and Order, FCC 96-235 (released August 8, 1996) (hereinafter First Report and Order) at section II. \7\ 47 U.S.C. 251(b)(3). \8\ 47 U.S.C. 251(c)(5). \9\ 47 U.S.C. 251(e)(1). \10\ In the Matter of Area Code Relief Plan for Dallas and Houston, Ordered by the Public Utility Commission of Texas, Petition for Expedited Declaratory Ruling filed May 9, 1996. \11\ See In the Matter of Proposed 708 Relief Plan and 630 Numbering Plan Area Code by Ameritech--Illinois, IAD File No. 94- 102, Declaratory Ruling and Order, 10 FCC Rcd 4596 (1995) (Ameritech Order) 60 FR 19255 (April 17, 1995) and Administration of the North American Numbering Plan, CC Docket No. 92-237, Report and Order, 11 FCC Rcd 2588, 2591 (1995) (NANP Order) 60 FR 38737 (July 28, 1995). --------------------------------------------------------------------------- 3. Dialing parity, nondiscriminatory access, network disclosure, and numbering administration issues are critical issues for the development of local competition. As stated in the First Report and Order, incumbent local exchange carriers have little incentive to [[Page 47287]] provide access to potential competitors to their networks. In other words, potential competitors in the local and long distance markets face numerous operational barriers to entry notwithstanding their legal right to enter such markets. The dialing parity, nondiscriminatory access, and network disclosure requirements should remove those barriers to entry. The rules we adopt herein will benefit consumers by making some of the strongest aspects of local exchange carrier incumbency--the local dialing, telephone numbers, operator services, directory assistance, and directory listing--available to all competitors on an equal basis. A. Actions To Implement Section 251(b)(3) 1. Dialing Parity 4. Section 251(b)(3) of the 1996 Act directs each local exchange carrier (LEC) 12 to provide dialing parity to competing providers of telephone exchange and telephone toll service.13 This requirement means that customers of these competitors should not have to dial extra digits to have their calls routed over that LEC's network. To implement this statutory requirement, we adopt broad guidelines and minimum federal standards that build upon the experiences and accomplishments of state commissions. Although the 1996 Act requires a LEC to provide dialing parity only to providers of telephone exchange and toll services, section 251(b)(3) does not limit the type of traffic or service for which dialing parity must be afforded to those providers. We conclude, therefore, that section 251(b)(3) requires LECs to provide dialing parity to providers of telephone exchange or toll service with respect to all telecommunications services that require dialing to route a call and encompasses international, interstate, intrastate, local and toll services. --------------------------------------------------------------------------- \12\ The 1996 Act defines the term ``local exchange carrier'' as ``any person that is engaged in the provision of telephone exchange service or exchange access. Such term does not include a person insofar as such person is engaged in the provision of commercial mobile service under section 332(c), except to the extent that the Commission finds that such provider should be included in the definition of such term.'' 47 U.S.C. 153(26). For purposes of the dialing parity and nondiscriminatory access obligations that we impose pursuant to section 251(b)(3), we find that commercial mobile radio service (CMRS) providers are not LECs. See infra para. 29. \13\ According to the 1996 Act, the term ``dialing parity'' means ``that a person that is not an affiliate of a local exchange carrier is able to provide telecommunications services in such a manner that customers have the ability to route automatically, without the use of any access code, their telecommunications to the telecommunications services provider of the customer's designation from among 2 or more telecommunications services providers (including such local exchange carrier).'' 47 U.S.C. 153(15). --------------------------------------------------------------------------- (5) With respect to toll service, we further find that section 251(b)(3) requires, at a minimum, that customers be entitled to choose different presubscribed, or preselected, carriers for both their intraLATA and interLATA toll calls. In states, like Alaska and Hawaii, that have no LATAs,14 customers must be able to choose different presubscribed carriers for both their intrastate and interstate toll calls. Based on this finding, we adopt a rule requiring all LECs to implement intraLATA and interLATA toll dialing parity, using the ``full 2-PIC'' presubscription method.15 The toll dialing parity requirement we adopt is defined by LATA boundaries given that the Bell Operating Companies' (BOCs') operations are likely to be shaped by LATA boundary restrictions for a period of unforeseeable duration. Given that implementation of the 1996 Act over time may diminish the significance of LATA boundaries, however, we permit states to redefine the toll dialing parity requirement based on state, rather than LATA, boundaries where a state deems such a requirement to be pro-competitive and otherwise in the public interest.16 --------------------------------------------------------------------------- \14\ 47 U.S.C. 153(25). According to the 1996 Act, a LATA is a ``local access and transport area.'' It is a ``contiguous geographic area-- (A) established before the date of enactment of the Telecommunications Act of 1996 by a Bell operating company such that no exchange area includes points within more than 1 metropolitan statistical area, consolidated metropolitan statistical area, or State, except as expressly permitted under the AT&T Consent Decree; or (B) established or modified by a Bell operating company after such date of enactment and approved by the Commission.'' \15\ We note that the abbreviation ``PIC'' in the past has stood for the term ``primary,'' or ``preferred, interexchange carrier.'' While we retain the acronym ``PIC,'' we define the term to include any toll carrier for purposes of the presubscription rules that we adopt in this Order. For a discussion of the full 2- PIC presubscription methodology, see infra section II.B(4). \16\ To illustrate, if the presubscription requirement were based on LATA boundaries, a customer would be entitled to choose a primary carrier for all intraLATA toll calls and a separate, or the same, primary carrier for all interLATA toll calls. If the presubscription requirement were based on state boundaries, a customer would be entitled to choose a primary carrier for all intrastate toll calls and a separate, or the same, primary carrier for all interstate toll calls. --------------------------------------------------------------------------- 6. In order to facilitate the orderly implementation of toll dialing parity, we require each LEC, including a BOC, to submit a plan to the state regulatory commission for each state in which it provides telephone exchange service setting forth the LEC's plan for implementing toll dialing parity, including the methods it proposes to enable customers to select alternative providers. In the event that a state elects not to evaluate such a plan sufficiently in advance of the date on which a LEC is required to implement toll dialing parity, we require the LEC to file its plan with the Commission. The Commission will act upon such a plan within 90 days of the date on which it is filed with the Commission. 7. Under the toll dialing parity implementation schedule we adopt, we require each LEC, including a BOC, to implement toll dialing parity no later than February 8, 1999. In addition, we require a LEC, including a BOC, to provide toll dialing parity throughout a state coincident with its provision of in-region, interLATA or in-region, interstate toll services in that state. LECs, other than BOCs, that are either already offering or plan to begin to provide in-region, interLATA or in-region, interstate toll services before August 8, 1997, must implement toll dialing parity by August 8, 1997. We note that smaller LECs, for which this implementation schedule may be unduly burdensome, may petition their state commission for a suspension or modification of the application of this requirement.17 --------------------------------------------------------------------------- \17\ 47 U.S.C. 251(f)(2). --------------------------------------------------------------------------- 8. Those states desiring to impose more stringent presubscription methodologies, e.g., multi-PIC or smart-PIC,18 will retain the flexibility to impose such additional requirements. We also announce our intention to issue a Further Notice of Proposed Rulemaking addressing the technical feasibility and nationwide availability of a separate presubscription choice for international calling based on the use of multi-PIC or smart-PIC technologies. --------------------------------------------------------------------------- \18\ The multi-PIC or smart-PIC presubscription method would enable subscribers to select multiple carriers for various categories of toll traffic. For a discussion of multi-PIC and smart- PIC presubscription methodologies, see infra section II.B(4). --------------------------------------------------------------------------- 9. Pursuant to the local dialing parity requirements of section 251(b)(3), we require a LEC to permit telephone exchange service customers, within a defined local calling area, to dial the same number of digits to make a local telephone call, notwithstanding the identity of the customer's or the called party's local telephone service provider. We decline at this time to prescribe additional guidelines to address the methods that LECs may use to accomplish local dialing parity given our finding that local dialing parity will be achieved upon implementation of the number portability and interconnection requirements of section 251, as well as [[Page 47288]] the provisions requiring nondiscriminatory access to telephone numbers found in section 251(b)(3). 10. We also decline to adopt federal consumer education programs or procedures that would inform consumers of the existence of competitive telecommunications providers. Instead, we leave decisions regarding consumer education and carrier selection procedures to the states. We conclude that, in order to ensure that dialing parity is implemented in a pro-competitive manner, national rules are needed for the recovery of dialing parity implementation costs. 11. Section 271 of the 1996 Act requires BOCs to provide intraLATA toll dialing parity throughout a state coincident with the exercise of their authority to offer interLATA services originating within the state.19 BOC entry into the interLATA market is conditioned upon their offering ``nondiscriminatory access to such services or information as are necessary to allow the requesting carrier to implement local dialing parity in accordance with the requirements of Section 251(b)(3).'' 20 --------------------------------------------------------------------------- \19\ 47 U.S.C. 271(e)(2)(A). \20\ 47 U.S.C. 271(c)(2)(B)(xii). We decline to address section 271(c)(2)(B) issues in this Order. We will consider each BOC's application to enter in-region, interLATA services pursuant to section 271(c)(2)(B) on a case-by-case basis to determine whether the BOC has complied with section 271(c)(2)(B)(xii). --------------------------------------------------------------------------- 2. Nondiscriminatory Access 12. Section 251(b)(3) also requires all LECs to permit competing providers of telephone exchange service and toll service ``nondiscriminatory access to telephone numbers, operator services, directory assistance and directory listings.'' 21 We conclude that ``Nondiscriminatory access,'' as used in section 251(b)(3), encompasses both: (1) Nondiscrimination between and among carriers in rates, terms and conditions of access; and (2) the ability of competing providers to obtain access that is at least equal in quality to that of the providing LEC. This definition of ``nondiscriminatory access'' in section 251(b)(3) recognizes the more general application of that section to all LECs, whereas section 251(c) places more specific duties upon incumbent LECs in terms of nondiscriminatory access. We conclude that the term ``nondiscriminatory access to telephone numbers'' requires all LECs to permit competing providers access to telephone numbers that is identical to the access the LEC provides to itself. --------------------------------------------------------------------------- \21\ 47 U.S.C. 251(b)(3). --------------------------------------------------------------------------- 13. We conclude that the term ``operator services,'' for purposes of section 251(b)(3), means any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call. Such a definition includes busy line verification, emergency assistance, operator-assisted directory assistance, and any other such services used to arrange for the billing and/or completion of telephone calls. We further conclude that any customer of a telephone service provider that provides operator services should be able to obtain these services by dialing ``0'' or ``0-plus the desired telephone number.'' If a dispute arises regarding a competitor's access to operator services, the burden will be upon the providing LEC to demonstrate, with specificity, that it has permitted nondiscriminatory access and that any disparity is not caused by network elements within its control. To the extent that operator services use any information services and adjuncts that are not ``telecommunications services,'' of which resale is required under 251(b)(1), LECs are required to make available such services to competing providers in their entirety as a requirement of nondiscriminatory access under 251(b)(3).22 Finally, we find that the refusal of a LEC providing nondiscriminatory access to comply with reasonable requests of competing providers to ``brand'' resold operator services as those of the reseller, or to remove its brand, creates a presumption that the LEC is unlawfully restricting access to operator services. --------------------------------------------------------------------------- \22\ Id. --------------------------------------------------------------------------- 14. We conclude that the requirement in section 251(b)(3) of nondiscriminatory access to directory assistance means that LECs that provide directory assistance must permit access to this service to competing providers that is at least equal in quality to the access that the LEC provides to itself. We impose obligations upon all LECs to satisfy the requirement of nondiscriminatory access to directory listings. If a LEC provides directory assistance, that LEC must permit competing providers to have access to its directory assistance, so that any customer of a competing provider can access any listed number on a nondiscriminatory basis, notwithstanding the identity of the customer's local service provider. Further, we require LECs to share directory listings with competing service providers, in ``readily accessible'' tape or electronic formats, upon request, and in a timely manner. To the extent that all or part of directory assistance services are not ``telecommunications services,'' of which resale is required under 251(b)(1), LECs must make available such services in their entirety as part of their obligation to permit nondiscriminatory access to competing providers.23 This requirement thus extends to any information services and adjuncts used to provide directory assistance. Finally, as with the branding of resold operator services, we find that the refusal of a LEC providing nondiscriminatory access to directory assistance to ``brand'' resold directory assistance services as those of the reseller, or to remove its brand, creates a presumption that the LEC is unlawfully restricting access to directory assistance. --------------------------------------------------------------------------- \23\ Id. --------------------------------------------------------------------------- 15. We also conclude that section 251(b)(3)'s requirement of nondiscriminatory access and its prohibition of unreasonable dialing delays applies to both the provision of local and toll dialing parity. We conclude that the dialing delay experienced by customers of a competing provider should not be greater than that experienced by customers of a LEC providing dialing parity or nondiscriminatory access, for identical calls or call types. Finally, we conclude that the statutory obligation to avoid unreasonable dialing delays places a duty on LECs that provide dialing parity, or nondiscriminatory access to operator services or directory assistance, to process all calls from competing providers on the same terms as calls from its own customers. B. Actions To Implement Section 251(c)(5) 16. In addition to the duties imposed by section 251(b)(3) on all LECs, new section 251(c)(5) imposes upon incumbent LECs the duty to ``provide reasonable public notice of changes in the information necessary for the transmission and routing of services using that local exchange carrier's facilities or networks, as well as of any other changes that would affect the interoperability of those facilities or networks.'' 24 We adopt broad guidelines [[Page 47289]] to implement section 251(c)(5). We also specify how public notice must be made whenever an upcoming change may affect the way in which a competing service provider transmits, routes, or otherwise provides its services. --------------------------------------------------------------------------- \24\ An incumbent LEC, with respect to an area, is defined under the 1996 Act as ``the local exchange carrier that: (A) on the date of enactment of the Telecommunications Act of 1996, provided telephone exchange service in such area; and (B)(i) on such date of enactment, was deemed to be a member of the exchange carrier association pursuant to section 69.601(b) of the Commission's regulations (47 CFR 69.601(b)); or (ii) is a person or entity that, on or after such date of enactment, became a successor or assign of a member described in clause (i).'' 47 U.S.C. 251(h)(1). --------------------------------------------------------------------------- 17. We conclude that ``information necessary for transmission and routing'' in section 251(c)(5) means any information in the incumbent LEC's possession that affects a competing service provider's performance or ability to provide either information or telecommunications services. We define ``interoperability'' as the ability of two or more facilities, or networks, to be connected, to exchange information, and to use the information that has been exchanged. C. Actions Taken To Implement Section 251(e) 18. New section 251(e)(1) restates the Commission's authority over matters relating to the administration of numbering resources by giving the Commission ``exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States.'' 25 This section also requires the Commission to ``create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis.'' 26 Finally, section 251(e)(2) provides that the cost of establishing telecommunications numbering administration arrangements ``shall be borne by all telecommunications carriers on a competitively neutral basis as determined by the Commission.'' 27 In this Order, we address whether further action is required to create or designate an impartial entity to administer telecommunications numbering. We clarify the states' role in number administration, and provide direction to states wishing to use area code overlay plans. We also clarify how cost recovery for numbering administration will occur. We deny the petition for expedited declaratory ruling filed by the Texas Commission based on our finding that the Texas Commission's wireless-only area code overlay plan violates the guidelines set forth in our Ameritech Order. We authorize Bellcore and the incumbent LECs to perform number administration functions as they did prior to the enactment of the 1996 Act until such functions are transferred to the new North American Numbering Plan Administrator. --------------------------------------------------------------------------- \25\ 47 U.S.C. 251(e)(1). \26\ Id. \27\ 47 U.S.C. 251(e)(2). --------------------------------------------------------------------------- 19. We conclude that we have taken appropriate action to designate an impartial number administrator pursuant to section 251(e)(1). We further conclude that the Commission should retain its authority to set policy with respect to all facets of numbering administration to ensure the creation of a nationwide, uniform system of numbering that is essential to the efficient delivery of interstate and international telecommunications services and to the development of a competitive telecommunications services market. While we retain this policy-making authority, we authorize the states to resolve matters involving implementation of new area codes subject to the guidelines set forth in this Order. 20. In this Order, we also prohibit the use of service-specific or technology-specific area code overlay plans. States may employ all- services overlays only if they also mandate 10-digit dialing for all local calls within the area affected by the area code change and ensure the availability of at least one central office code in the existing area code to every entity authorized to provide local exchange service in that area, including CMRS providers. 21. To fulfill the mandate of section 251(e)(2), we require that (1) only ``telecommunications carriers,'' as defined in section 3(44) of the 1996 Act, shall contribute to the costs of numbering administration; 28 and (2) that such contributions shall be based on each contributor's gross revenues from its provision of telecommunications services reduced by all payments for telecommunications services and facilities that have been paid to other telecommunications carriers. --------------------------------------------------------------------------- \28\ The term ``telecommunications carrier'' means ``any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226). A telecommunications carrier shall be treated as a common carrier under this Act only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.'' 47 U.S.C. 153(44). --------------------------------------------------------------------------- II. Dialing Parity Requirements A. In General 22. With dialing parity a telephone customer can preselect any provider of telephone exchange service or telephone toll service without having to dial extra digits to route a call to that carrier's network. Until now, in most states, telephone customers wishing to have their intraLATA toll calls carried by a carrier other than their current provider of telephone exchange service had to dial a five- or seven-digit prefix or access code before dialing the called party's telephone number.29 Presubscription to a carrier other than a customer's telephone exchange service provider has not been an option for interstate, intraLATA toll calls or in most states for intrastate, intraLATA toll calls.30 In states where intrastate, intraLATA toll dialing parity is available, a customer may presubscribe to a carrier other than his or her provider of telephone exchange service and have all of that customer's intrastate, intraLATA toll calls carried by that selected carrier simply by dialing ``1'' plus the area code and telephone number of the called party.31 The section 251(b)(3) dialing parity obligation will foster vigorous local exchange and long distance competition by ensuring that each customer has the freedom and flexibility to choose among different carriers for different services without the burden of dialing access codes. --------------------------------------------------------------------------- \29\ Sometimes referred to as ``10XXX'' or ``101XXXX'' dialing, callers may reach a long distance carrier in states where such dialing arrangements are authorized by dialing a five-digit carrier access code (``10XXX,'' with ``XXX'' representing a three-digit carrier identification code) or a seven digit carrier access code (``101XXXX,'' with ``XXXX'' representing a carrier identification code). \30\ An ``interstate, intraLATA toll call'' is a call that: (1) Crosses a state boundary but does not cross a LATA boundary; and (2) is subject to a charge. A call from Philadelphia, Pennsylvania to Cherry Hill, New Jersey (currently handled by Bell Atlantic) is an example of such a call. \31\ It is our understanding that some form of intraLATA toll dialing parity is available or has been ordered in Alaska, Arizona, Connecticut, Florida, Georgia, Illinois, Kentucky, Michigan, Minnesota, New Jersey, New York, Ohio, Pennsylvania, West Virginia, Wisconsin and Wyoming. See Ex parte letter from Charles D. Cosson, USTA, to William F. Caton, Acting Secretary, Federal Communications Commission, filed in CC Docket No. 96-98, July 10, 1996, at 2. --------------------------------------------------------------------------- The Need for Minimum Nationwide Dialing Parity Standards a. Background and Comments 23. Section 251(b)(3) imposes on all LECs the ``duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service.'' 32 In the NPRM, we sought comment on whether the Commission should adopt nationwide dialing parity standards and, if so, what those standards should be.33 --------------------------------------------------------------------------- \32\ 47 U.S.C. 251(b)(3). \33\ NPRM at paras. 206, 207, 209-213, 218, 219. --------------------------------------------------------------------------- 24. A majority of commenters urge the Commission to adopt uniform nationwide dialing parity guidelines, [[Page 47290]] but commenters differ on how detailed such federal rules should be. For example, the Telecommunications Resellers Association maintains that specific national standards are needed to ensure that competing providers are able to utilize common network designs in multiple markets and to prevent incumbent LECs from ``gaming'' or ``manipulating the processes'' of the states.34 Ameritech urges the Commission to adopt ``broad rules that afford sufficient flexibility to accommodate local conditions.'' 35 Other commenters, such as Bell Atlantic, opposing the adoption of federal dialing parity standards, assert that the proponents of such standards have failed to demonstrate how they or consumers have been harmed by ``locally tailored implementation'' of dialing parity in the intraLATA toll markets.36 Without such a demonstration, argues Bell Atlantic, the Commission should not interfere with states' activities.37 Cincinnati Bell Telephone Company (CBT) likewise opposes federal standards, maintaining that so long as a state regulatory commission adopts a toll dialing parity arrangement that ``offers consumers a choice from at least two carriers, one of which is the local exchange carrier, the requirements of the 1996 Act have been met.'' 38 --------------------------------------------------------------------------- \34\ Telecommunications Resellers Association reply at 8-9. \35\ Ameritech reply at i. \36\ Bell Atlantic reply at 2. \37\ Id. \38\ CBT comments at 5. --------------------------------------------------------------------------- b. Discussion 25. We conclude that the purpose of the statutory dialing parity requirements--to facilitate the introduction of competition in the local and toll markets--is best served by the adoption of broad guidelines and minimum federal standards that build upon the states' experiences. We conclude that such minimum nationwide standards will facilitate competition to the extent that new entrants seeking to offer regional or national services will not be subjected to an array of differing state standards and timetables.39 We note that our conclusion to adopt nationwide dialing parity standards is consistent with our conclusion in the First Report and Order that nationwide standards to implement other section 251 provisions are necessary to facilitate competition by serving as a backdrop against which interconnection negotiations and arbitration can occur.40 We are persuaded that, contrary to the views of Bell Atlantic, the failure to adopt minimum federal standards would harm both new entrants and consumers by delaying the introduction of competition and imposing additional costs on competitors, including small entities, particularly when different network configurations are required in each market. We conclude that uniform standards--in some cases minimum, uniform standards--will speed competitive entry by more promptly opening the local and toll markets to competition. --------------------------------------------------------------------------- \39\ We note that section 271(e)(2)(B) precludes most states from requiring a BOC to implement intraLATA toll dialing parity in a state before the BOC has received authority to provide in-region, interLATA services in such state or before three years after enactment of the 1996 Act, whichever is earlier. 47 U.S.C. 271(e)(2)(B). \40\ See First Report and Order at section II. --------------------------------------------------------------------------- 2. Scope of the Dialing Parity Requirements a. Background 26. Under section 251(b)(3) a LEC must provide dialing parity only to competing providers of telephone exchange service and telephone toll service.41 The scope of the obligation to provide dialing parity, however, is not limited to a particular type of traffic or service. Section 251(b)(3) makes no distinction among international, interstate and intrastate traffic for purposes of the dialing parity provisions.42 The statutory definition of ``dialing parity'' also contains no such distinctions and, instead, speaks generally in terms of the provision of ``telecommunications services'' by ``a person that is not an affiliate of a local exchange carrier.'' 43 Based on the absence of any such distinctions in defining the scope of the dialing parity requirements, the NPRM tentatively concluded that section 251(b)(3) creates a duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service with respect to all telecommunications services that require dialing to route a call, and encompasses international as well as interstate and intrastate, local and toll services.44 --------------------------------------------------------------------------- \41\ 47 U.S.C. 251(b)(3). \42\ Id. \43\ 47 U.S.C. 153(15). \44\ NPRM at para. 206. --------------------------------------------------------------------------- b. Comments 27. Numerous parties express support for the Commission's tentative conclusion.45 Several parties qualify their support for this conclusion, however, by asserting that the duty to provide dialing parity to competing providers of telephone toll service applies to international calls only to the extent that it entitles a customer to route automatically, without the use of an access code, all of the customer's international calls to his or her presubscribed interLATA long distance carrier.46 These parties maintain that section 251(b)(3) does not require LECs to provide customers a separate presubscription choice for international calling.47 --------------------------------------------------------------------------- \45\ See, e.g., MFS comments at 2; California Commission comments at 3. \46\ See, e.g., Sprint comments at 4-5; SBC comments at 5. \47\ Id. --------------------------------------------------------------------------- 28. A broad range of parties also support the tentative conclusion that section 251(b)(3) imposes a duty on the LEC to provide both local and toll dialing parity.48 Two parties reject this tentative conclusion, arguing that the dialing parity requirements apply only to local calling and do not extend to toll services.49 Specifically, Lincoln Telephone and the Pennsylvania Commission contend that Congress addressed toll dialing parity only in section 271(e)(2) of the 1996 Act as it relates to the conditions under which a BOC may enter the in- region, interLATA toll business and question the Commission's authority to implement toll dialing parity requirements.50 U S WEST similarly argues that section 251(b)(3) imposes only a duty to provide local dialing parity and suggests that the only affirmative obligation to provide toll dialing parity is contained in the equal access provisions of section 251(g) of the 1996 Act, which, U S WEST states, applies only to the BOCs and GTE.51 Lincoln Telephone makes the additional argument that competitive providers wishing to enter the intraLATA toll market should be required to ``share responsibility for serving the entire LATA, rather than simply selecting the lowest cost customers from the most profitable exchanges without regard to that practice's effect on other customers.'' 52 The imposition of such a requirement, according to Lincoln Telephone, would ``reflect a commitment to affordable universal service.'' 53 --------------------------------------------------------------------------- \48\ See, e.g., Excel comments at 6; MCI comments at 2; BellSouth comments at 9. \49\ Lincoln Telephone comments at 2-3; Pennsylvania Commission comments at 1-2. \50\ Id. \51\ U S WEST comments at 4-5. \52\ Lincoln Telephone comments at 5. \53\ Id. at 6. --------------------------------------------------------------------------- c. Discussion 29. We adopt our tentative conclusion that section 251(b)(3) creates a duty to provide dialing parity to competing [[Page 47291]] providers of telephone exchange service and telephone toll service with respect to all telecommunications services that require dialing to route a call, and encompasses international as well as interstate and intrastate, local and toll services.54 We note that section 251(b)(3) does not limit the types of traffic or services for which dialing parity must be provided to competing providers of telephone exchange and telephone toll service. The reference to these types of providers clearly shows that dialing parity must be provided for exchange service and toll service. Nothing in the statutory language limits the scope of the dialing parity obligation to exchange and toll services or distinguishes among the various types of telecommunications services in imposing the dialing parity obligations. This conclusion is further supported by the statutory definition of dialing parity insofar as it refers to the provision of ``telecommunications services'' generally without distinction among various types of telecommunications services.55 In addition, we are not persuaded that section 251(g) relieves certain LECs of the duty to provide toll dialing parity. That section contains no reference or cross reference to dialing parity or to section 251(b)(3). Section 251(g) preserves the equal access obligations already imposed on the BOCs and GTE, but does not exempt them or other LECs from the toll dialing parity requirements. Finally, we note that CMRS providers are not required to provide dialing parity or nondiscriminatory access under section 251(b)(3) because the Commission has not determined that CMRS providers are LECs and section 332(c) of the Communications Act of 1934 provides that a ``person engaged in the provision of commercial mobile services * * * shall not be required to provide equal access to common carriers for the provision of toll services.'' 56 --------------------------------------------------------------------------- \54\ NPRM at para. 206. \55\ The issue of whether a separate presubscription choice is required for international, interstate, and intrastate toll calls is discussed more fully in section II.B(2) infra. \56\ 47 U.S.C. 332(c)(8). --------------------------------------------------------------------------- 30. Finally, concerning Lincoln Telephone's proposal to require competitive providers of intraLATA toll service to serve an entire LATA, rather than merely certain low cost customers within a LATA, we note that Lincoln Telephone, in essence, is asking us to condition a carrier's receipt of dialing parity upon that carrier's assuming the obligation of an ``eligible'' telecommunications carrier.57 We find neither the language of section 251(b)(3) nor its legislative history supports the conclusion that Congress intended to condition a carrier's right to receive the benefits of dialing parity upon its assuming the obligations of an eligible telecommunications carrier. The issue of encouraging carriers to provide universal service throughout a service territory is beyond the scope of this proceeding.58 Also, for the Commission to make LATA-wide or state-wide service a precondition of entry into that LATA or state would be to erect a major legal barrier to entry, particularly for smaller telecommunications services providers, that is contrary to the basic thrust of the 1996 Act. --------------------------------------------------------------------------- \57\ An eligible telecommunications carrier is a common carrier that offers all services that are supported by federal universal service support mechanisms under section 254(c) and that uses ``media of general distribution'' to advertise the availability of those services and its charges for them. 47 U.S.C. 214(e)(1). The issue of which services should receive support from universal service support mechanisms is being addressed by the Commission and the Federal-State Joint Board on universal service, as required by new section 254 of the Communications Act, as amended by the 1996 Act. See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Notice of Proposed Rulemaking and Order Establishing Joint Board, FCC 96-93, (released March 8, 1996) (Universal Service NPRM) (proposing rules to implement section 254 of the 1996 Act) 61 FR 10499 (March 14, 1996). \58\ See Universal Service NPRM. --------------------------------------------------------------------------- B. Implementation of the Toll Dialing Parity Requirements 1. Presubscription Method of Achieving Toll Dialing Parity a. Background 31. The statutory definition of dialing parity provides that the customer must have the ability to choose ``from among 2 or more telecommunications services providers (including such local exchange carrier).'' 59 The definition also provides that customers must be able to exercise this choice by being able ``to route automatically without the use of access codes, their telecommunications to the telecommunications services provider of the customer's designation.'' 60 Thus, LECs are precluded from relying on access codes as a means of providing dialing parity to competitive service providers.61 The 1996 Act, however, does not specify what methods should be used to implement dialing parity. The NPRM tentatively concluded that presubscription represents the most feasible method of achieving dialing parity in long distance markets consistent with the statutory definition of dialing parity and sought comment as to this tentative conclusion.62 In this context, the NPRM defined ``presubscription'' as the process by which a customer preselects a carrier to which all of a particular category or categories of calls on the customer's line will be routed automatically.63 --------------------------------------------------------------------------- \59\ 47 U.S.C. 153(15). \60\ Id. \61\ Id. \62\ NPRM at para. 207. \63\ Id. --------------------------------------------------------------------------- 32. As stated in the NPRM, presubscription to a carrier other than the customer's local exchange carrier has not been available for interstate, intraLATA toll calls nor has it been available in most states for intrastate, intraLATA toll calls.64 Instead, LECs automatically carry these calls rather than routing them to a presubscribed carrier of the customer's choice. If the state from which the customer is calling has authorized competition, but has not ordered presubscription in the intraLATA toll market, a customer wishing to route an intraLATA toll call to an alternative carrier typically must dial the carrier access code of the alternative carrier. --------------------------------------------------------------------------- \64\ Id. at para. 208. --------------------------------------------------------------------------- b. Comments 33. Nearly all parties concur in the Commission's tentative conclusion that presubscription represents the most feasible method of achieving toll dialing parity consistent with the statutory definition of dialing parity.65 PacTel and Lincoln Telephone suggest that presubscription is not required to achieve toll dialing parity so long as customers can reach competing toll carriers through the use of carrier access codes.66 Finally, BellSouth argues that the toll dialing parity requirement is satisfied by ``removing the intraLATA default to the incumbent LEC, thus assuring that no additional digits need to be dialed in order to reach carriers competing with the incumbent LEC for intraLATA toll service.'' 67 BellSouth further argues that the Commission should confirm that such arrangements are consistent with the statutory dialing parity requirements.68 --------------------------------------------------------------------------- \65\ See, e.g., Ohio Commission comments at 6; NEXTLINK comments at 9. \66\ See, e.g., PacTel reply at 10 (``Toll dialing parity, on the other hand, should mean that customers can reach competing toll carriers on the same dialing basis, including through the use of carrier access codes, with an equal number of digits.''); Lincoln Telephone comments at 2-3. \67\ BellSouth comments at 11 n.23. \68\ Id. --------------------------------------------------------------------------- c. Discussion 34. We adopt our tentative conclusion that the dialing parity requirement for toll calling can best be achieved through presubscription because that method would enable customers to route a [[Page 47292]] particular category of traffic to a preselected carrier without having to dial access codes. We note that the use of access codes to route calls among competing providers of telephone toll service is precluded under the statutory definition of dialing parity.69 Accordingly, we disagree with those parties who contend that toll dialing parity can be achieved through the use of access codes in a manner that is consistent with the statutory definition of dialing parity.70 We also cannot conclude that the toll dialing parity requirement is satisfied by removing the intraLATA default, as BellSouth maintains.71 Removing the intraLATA default would not satisfy the toll dialing parity requirement unless the LEC also uses the full 2-PIC presubscription methodology discussed below.72 --------------------------------------------------------------------------- \69\ See 47 U.S.C. 153(15). \70\ Although the use of access codes to access competing providers of telephone toll service does not constitute dialing parity as defined in 47 U.S.C. 153(15), we do not intend to preclude their use where a customer wishes to route a call to a carrier other than his or her presubscribed intraLATA toll carrier. \71\ We understand BellSouth's reference to ``removing the intraLATA default'' to mean that BellSouth would modify its switches so they no longer automatically route all intraLATA toll calls to BellSouth and thus, would permit customers to choose an alternative intraLATA toll carrier. \72\ For a discussion of the full 2-PIC methodology, see section II.B(4) infra. --------------------------------------------------------------------------- 2. Categories of Domestic, Long Distance Traffic Subject to Presubscription a. Background 35. In the NPRM, the Commission sought comment as to the categories of long distance traffic (e.g., intrastate, interstate, and international traffic) for which a customer should be entitled to choose presubscribed carriers.73 The NPRM also sought comment on specific alternative methods for implementing local and toll dialing parity, including various forms of presubscription, in the interstate and intrastate long distance and international markets, that are consistent with the statutory requirements set forth in the 1996 Act.74 --------------------------------------------------------------------------- \73\ NPRM at para. 210. \74\ Id. at para. 209. --------------------------------------------------------------------------- b. Comments 36. Most parties appear to agree that customers should be entitled to presubscribe to two separate carriers for their toll calling.75 There is a lack of consensus in the record, however, regarding how the Commission should define the presubscription requirement. USTA, for example, argues that ``[a]ll telecommunications carriers, including LECs, should be permitted to define the scope of local service and toll service in response to market forces.'' 76 USTA further argues that the ``relevant distinction, for the long term, will be between intrastate and interstate toll traffic.'' 77 Sprint, on the other hand, argues in favor of maintaining a presubscription requirement based on LATA boundaries and recommends that customers continue to be allowed to choose separate intraLATA and interLATA toll carriers.78 Sprint urges us to maintain the LATA distinction, asserting that ``competition over the past 12 years has developed around the LATA concept, and presubscription has for the most part already occurred along these lines.'' 79 --------------------------------------------------------------------------- \75\ See, e.g., Ohio Consumers' Counsel comments at 2; see also MCI comments at 3 (recommending that call types subject to presubscription should include: 1-plus/0-plus interexchange, 7-digit interexchange and 1+555-1212 calls); cf. GTE comments at 9 (maintaining that decisions regarding appropriate presubscription categories should be left to state regulatory agencies on theory that states are best positioned to balance value of additional carrier choices against higher administrative and network design costs associated with increased number of presubscription choices). \76\ Ex parte letter from Charles D. Cosson, USTA, to William F. Caton, Acting Secretary, Federal Communications Commission, filed in CC Docket No. 96-98, June 17, 1996, at 2. \77\ USTA comments at 3 n.2; see also MFS reply at 12-13 (``The Commission should recognize that rules for intraLATA presubscription are transitory. At some point, when the BOCs and GTE are authorized to provide both interLATA and intraLATA service, the distinctions between interLATA and intraLATA calls will no longer be meaningful, and the Commission should be prepared to revisit and eliminate these distinctions.''). \78\ Sprint comments at 4. \79\ Id. At the same time, Sprint asks that we eliminate the intrastate intraLATA/interstate intraLATA distinction and make all intraLATA toll calls (both interstate and intrastate) subject to a single presubscription. --------------------------------------------------------------------------- c. Discussion 37. With respect to toll service, we conclude that section 251(b)(3) requires, at a minimum, that customers be entitled to choose presubscribed carriers for their intraLATA and interLATA toll calls. Because of the variations that exist among LATA boundaries and toll traffic within, and among, the various states, we have also concluded that each state should have the opportunity to determine whether customers should be able to presubscribe to carriers for intrastate toll service and for interstate toll service in lieu of the intraLATA and interLATA toll presubscription dichotomy that we have established as a minimum nationwide standard at this time. Although toll dialing parity typically has been based on LATA boundaries in multi-LATA states where it has been implemented, we do not impose a requirement that toll dialing parity be based only on LATA boundaries given our expectation that implementation of the 1996 Act eventually will diminish the significance of LATA boundaries.80 We are aware that BOCs remain subject to certain LATA boundary restrictions for at least the near- term and that some BOCs may find it technically infeasible, or otherwise undesirable, to implement toll dialing parity based on state boundaries.81 We thus conclude that states should be able to take the relevance of those factors into account, where applicable, and have the flexibility to require that toll dialing parity implementation be based on state boundaries where they determine that implementing toll dialing parity on the basis of state boundaries would be pro- competitive and otherwise in the public interest. In Alaska and Hawaii, states with no LATAs, toll dialing parity will continue to be based on state boundaries. --------------------------------------------------------------------------- \80\ USTA correctly notes that independent exchange carriers have not been subject to the interLATA line of business restrictions that were imposed on the BOCs pursuant to the AT&T Consent Decree. See United States v. American Telephone and Telegraph Co., 552 F. Supp. 226 (D.D.C. 1982). See USTA comments at 3 n.2. \81\ For example, where BOCs receive authority to provide in- region, interLATA services, they are required to provide such services through a separate affiliate for at least three years pursuant to section 272 of the 1996 Act. See 47 U.S.C. Secs. 272 (a)(2), (f)(1). Accordingly, it appears that the LATA distinction will remain relevant insofar as it will continue to define the geographic areas in which a BOC must provide toll services through an affiliate and those in which it may provide toll services directly. --------------------------------------------------------------------------- 38. We also direct each LEC to submit to the state regulatory commission for each state in which it provides telephone exchange service the LEC's plan for implementing toll dialing parity. That plan must contain detailed implementation information, including the proposed date for dialing parity implementation for that exchange that the LEC operates in each state, and the method it proposes for enabling customers to select alternative providers of telephone toll service. For a LEC, other than a BOC, the plan also must identify the LATA with which the LEC proposes to associate.82 --------------------------------------------------------------------------- \82\ States may require a LEC to provide other categories of information in its plan in addition to the information categories stated here. --------------------------------------------------------------------------- 39. We find that the states are best able to evaluate implementation plans in a way that will avoid service disruptions for subscribers and promote competition in the intrastate toll market. A LEC must first obtain state approval of its implementation plan before it implements toll dialing parity. If the LEC determines that a state commission elects not to evaluate the LEC's toll dialing parity implementation plan for [[Page 47293]] that state sufficiently in advance of the date on which a LEC is required to implement toll dialing parity pursuant to the Commission's rules, we direct the LEC to file its plan with the Commission.83 The Commission will release a public notice of any such LEC filings, in order to give interested parties an opportunity to comment. The LEC's plan will be deemed approved on the fifteenth day following release of the Commission's public notice unless, no later than the fourteenth day following the release of the Commission's public notice, either: (1) The Common Carrier Bureau notifies the LEC that its plan will not be deemed approved on the fifteenth day; or (2) an opposition to the plan is filed with the Commission and served on the LEC that filed the plan. The opposition must state specific reasons why the plan does not serve the public interest. --------------------------------------------------------------------------- \83\ See infra para. 62 , which sets forth the dates by which a dialing parity implementation plan must be filed with the Commission in the event that a state will not be evaluating the plan. --------------------------------------------------------------------------- 40. If one or more oppositions are filed, the LEC that filed the plan will have seven additional days (i.e., until no later than the twenty-first day following the release of the Commission's public notice) within which to file a reply to the opposition(s) and serve it on all parties that filed oppositions. The response shall: (a) Include information responsive to the allegations and concerns identified by the opposing party; and (b) identify possible revisions to the plan that will address the opposing party's concerns. In the case of such contested toll dialing parity plans, the Common Carrier Bureau will act on the plan within ninety days of the date on which the Commission released its public notice.84 In the event the Bureau fails to act within 90 days, the plan will not go into effect pending Bureau action. If the plan is not contested but did not go into effect on the fifteenth day after the Commission released its public notice, and the Common Carrier Bureau fails to act on the plan within ninety days of the date on which the Commission released its public notice, the plan will be deemed approved without further Commission action on the ninety-first day after the date on which the Commission released its public notice of the plan's filing. --------------------------------------------------------------------------- \84\ We delegate to the Chief, Common Carrier Bureau, the authority to approve, modify, or require the refiling of each plan that is filed with the Commission pursuant to this requirement. --------------------------------------------------------------------------- 41. A LEC's plan may not accomplish toll dialing parity by automatically assigning toll customers to itself, to a customer's currently presubscribed interLATA or interstate toll carrier, or to any other carrier except when, in a state that already has implemented intrastate, intraLATA toll dialing parity, the subscriber has selected the same intraLATA and interLATA presubscribed carrier. Finally, when LATA boundaries encompass parts of two adjacent states, we permit the LEC to implement in each state the procedures that that state approved for implementing toll dialing parity within its borders. If a state commission elects not to evaluate the LEC's intrastate toll dialing parity plan, we direct the LEC to file both its intrastate toll dialing plan and its interstate toll dialing plan with the Commission. The plans will be acted on in accordance with the procedures outlined above. 42. We note that the minimum intraLATA/interLATA toll presubscription requirement that we adopt in this Order is necessarily an interim measure. Specifically, we expect that the development of the ``multi-PIC'' or ``smart-PIC'' presubscription methodology will enable customers to presubscribe to multiple carriers for various categories of long-distance calling.85 Thus, in time, we anticipate that service markets, and the presubscription requirement in particular, will be defined by technological, economic and marketing considerations and that LATA or state boundary distinctions will diminish for purposes of the toll dialing parity requirements. As the record before us provides an inadequate basis for adopting more specific requirements now, we intend to monitor developments in this area and issue a Further Notice of Proposed Rulemaking to address these long range considerations so that end users will be able to preselect alternative providers for operator services, directory assistance, international and other services. --------------------------------------------------------------------------- \85\ The terms ``smart-PIC'' and ``multi-PIC'' have been defined differently in various contexts. For example, GVNW states that the multi-PIC presubscription method would permit customers to choose up to three different toll carriers, which, GVNW suggests, might include an intraLATA toll, interLATA toll and an international service provider. See GVNW comments at 6. GVNW states that the smart-PIC presubscription method would allow customers more than three carrier choices, ``as when a fourth PIC for interstate, intraLATA is needed.'' Id. In a recent state commission decision, the terms ``multi-PIC'' and ``smart-PIC,'' deemed to be synonymous, were defined as the ability to ``select multiple carriers for various subdivisions of their interLATA and intraLATA toll calls.'' Local Exchange Competition and Other Competitive Issues, Case No. 95-845-TP-COL, 164 P.U.R.4th 214 (Ohio Pub. Util. Comm'n Sept. 27, 1995). --------------------------------------------------------------------------- 3. Separate Presubscription for International Calls a. Background and Comments 43. The NPRM sought comment on whether customers should be entitled to choose a presubscribed carrier for international calls and on what Commission action, if any, is necessary to implement dialing parity for such calls.86 --------------------------------------------------------------------------- \86\ NPRM at para. 210. --------------------------------------------------------------------------- 44. Most parties maintain that the 1996 Act does not require, and the Commission should not mandate, a separate presubscription choice for international calling.87 Several parties take the position that the toll dialing parity requirement applies to international calling only to the extent that it entitles a customer to route automatically without the use of an access code the customer's international calls to the customer's presubscribed interLATA carrier.88 A number of parties contend that the technology required to support a separate presubscription choice for international calling, the so-called multi-PIC or smart-PIC methodology, is not currently available.89 USTA suggests that the cost of providing a separate presubscription choice for international calling should be weighed against the amount of customer demand for such an option, and the harm to consumers that may result from a potentially greater number of unauthorized carrier changes.90 AT&T, Ameritech, Sprint and the Indiana Commission urge the Commission to revisit the issue of a separate presubscription choice for international calling only after it is demonstrated to be technically and economically feasible.91 --------------------------------------------------------------------------- \87\ See, e.g., SBC reply at 3 n.6; AT&T comments at 4 n.4. \88\ See, e.g., SBC comments at 5. \89\ Ameritech comments at 18-19; Bell Atlantic reply at 3; CBT comments at 4-6; SBC comments at 5; U S WEST comments at 6; Sprint comments at 4-6; USTA reply at 2; cf. Sprint comments at 6 (noting implementation of multi-PIC system by GTE-Hawaiian Telephone Company that offers customers a separate international presubscription option). \90\ USTA comments at 3. \91\ Ameritech comments at 18-19; AT&T comments at 5 n.6; Sprint comments at 5; Indiana Commission Staff comments at 9. --------------------------------------------------------------------------- b. Discussion 45. While we believe that a separate presubscription choice for international calling is consistent with the intent of the 1996 Act because it could foster additional carrier competition, we recognize that technical limitations preclude our imposing such a [[Page 47294]] nationwide requirement at this time.92 To the extent that such a capability becomes technically feasible and is ordered in a particular state, we find that the deployment of a separate presubscription choice for international calling is consistent with the 1996 Act. We will address in a further notice at a future date the issue of how soon a separate presubscription choice for international calling will be technically feasible on a nationwide basis.93 --------------------------------------------------------------------------- \92\ Bell Atlantic reply at 3; CBT comments at 4-6; SBC comments at 5; U S WEST comments at 6; Sprint comments at 4-6; USTA reply at 2. \93\ Sprint comments at 6 (noting development of multi-PIC system by GTE-Hawaiian Telephone that offers customers a separate international presubscription option). It is our understanding that GTE Hawaiian Telephone Company has multi-primary interexchange carrier capability that enables customers in Hawaii to select three long-distance carriers, i.e., an intrastate, interstate, and international carrier. See ex parte letter from Clarence Clay M. Nagao, Chief Counsel, State of Hawaii Public Utilities Commission, Department of Budget and Finance, to Mr. William F. Caton, Acting Secretary, Federal Communications Commission, filed in CC Docket No. 96-98, July 2, 1996. We note that the arrangement by which GTE Hawaiian Telephone Company provides a third carrier choice for international calling is a unique, interim solution that uses a combination of carrier identification codes and switch routing databases. This solution is not suitable for nationwide deployment because the switch database is too limited in size and the supply of CICs too small to support an adequate number of interLATA/ international carrier combinations in many areas of the country. Ex parte letter from F.G. Maxson, GTE Service Corporation, to William F. Caton, Acting Secretary, Federal Communications Commission, filed in CC Docket No. 96-98, August 6, 1996. --------------------------------------------------------------------------- 4. Full 2-PIC Presubscription Method a. Background 46. In the NPRM, the Commission sought comment as to whether the Commission should adopt a nationwide presubscription methodology for implementing the toll dialing parity requirements.94 The NPRM also noted that states have adopted a variety of intraLATA toll dialing parity requirements and implementation methodologies.95 --------------------------------------------------------------------------- \94\ NPRM at para. 210. \95\ Id. --------------------------------------------------------------------------- 47. Among the presubscription methodologies that states have examined are the ``modified 2-PIC,'' the ``full 2-PIC,'' and the ``multi-PIC'' or ``smart-PIC'' methods.96 The modified 2-PIC method generally allows a customer to presubscribe to a telecommunications carrier for all interLATA toll calls and to presubscribe to either the customer's presubscribed interLATA carrier or the customer's local exchange carrier for all intraLATA toll calls. The full 2-PIC method generally allows customers to presubscribe to a telecommunications carrier for all interLATA toll calls and to presubscribe to another telecommunications carrier (including, but not limited to, the customer's local exchange carrier) for all intraLATA toll calls. The multi-PIC or smart-PIC methods, as known today, would allow customers to presubscribe to multiple carriers, each one of which would be selected to transport a specified component of toll traffic. --------------------------------------------------------------------------- \96\ Id. --------------------------------------------------------------------------- b. Comments 48. Nearly all parties favor adoption of the full 2-PIC method.97 Few parties favor deploying the modified 2-PIC method.98 Likewise, few commenters favor immediate deployment of the multi-PIC method.99 Several parties suggest that the multi-PIC or smart-PIC methodology and technology may warrant consideration in the future, but is currently unavailable.100 Others maintain that the Commission should conclude that the 2-PIC approach is consistent with the 1996 Act based on the theory that the 1996 Act does not require more than a two-PIC capability to achieve toll dialing parity.101 --------------------------------------------------------------------------- \97\ See, e.g., Michigan Commission Staff comments at 4; MCI comments at 5-6, Pennsylvania Commission comments at 2; SBC reply at 2; PacTel reply at 10-11. \98\ See, e.g., Sprint comments at 5; USTA comments at 3. \99\ GSA/DOD reply at 4 (In initial comments, ``GSA favored a 'multi-PIC' arrangement. * * * Although there was conceptual support for eventual implementation of the 'multi-PIC' methodology, it is clear that the technical and economic feasibility of this approach has not yet been demonstrated.''); GVNW comments at 6 (``[T]he FCC should not require [the smart-PIC method] on a nationwide basis or schedule, as this will result in uneconomic network upgrades, added costs for the incumbent LECs, and higher prices to customers and competitors''). \100\ See, e.g., Ameritech comments at 18-19; AT&T comments at 5 n.6; CBT comments at 4; GVNW comments at 3; Indiana Commission Staff comments at 9; Sprint comments at 5. \101\ SBC reply at 3; GTE reply at 12-13. --------------------------------------------------------------------------- c. Discussion 49. We adopt in this Order the full 2-PIC method as the minimum presubscription standard. Under our rules and pursuant to section 251(d)(3),102 however, state commissions may impose more stringent presubscription requirements, such as multi-PIC or smart-PIC. --------------------------------------------------------------------------- \102\ 47 U.S.C. 251(d)(3). --------------------------------------------------------------------------- 50. We adopt the full 2-PIC method as the minimum presubscription standard at this time for several reasons. We conclude that, as compared with the modified 2-PIC method, the full 2-PIC method will maximize choice for consumers and open the long-distance telecommunications markets to a greater number of competitive services providers, including smaller providers, and thus is more consistent with the congressional objectives underlying enactment of section 251(b)(3). Second, this method clearly is preferred by the majority of state regulators and telecommunications service providers.103 Third, as compared with the multi-PIC method, the technology for the full 2-PIC method is widely available and well defined. By contrast, there is no evidence in the record to support a finding that the technical and economic feasibility of the multi-PIC method has been demonstrated on a nationwide basis. We conclude that this national standard should speed competitive entry into the intraLATA and intrastate toll markets while providing states that are considering a more stringent presubscription method, i.e., multi-PIC or smart-PIC, flexibility to impose such additional requirements. Until the Commission considers the issue of multi-PIC or smart-PIC methods in a further notice, we believe that the states are best situated to evaluate the technical feasibility and economic impact of such methods on LECs, including smaller LECs, in their jurisdictions. --------------------------------------------------------------------------- \103\ See, e.g., Pennsylvania Commission comments at 2; SBC reply at 2; PacTel reply at 10-11. --------------------------------------------------------------------------- 5. Deployment of Presubscription Software in Each End Office a. Background 51. With end office equal access, presubscription software is installed at each end office switch within the LEC's service areas. Toll calls are then directly routed at each end office switch to the presubscribed provider of telephone toll service. With centralized equal access, presubscription software is installed at a central tandem switch location. With the latter, toll calls are routed from an end office to a tandem switch for presubscription information.104 Providers of telephone toll service may connect at the tandem to receive this traffic rather than at each individual end office that is associated with the tandem. --------------------------------------------------------------------------- \104\ In this context, presubscription information refers to the information that is used by the switch to determine which interconnecting carrier carries and bills for the call. --------------------------------------------------------------------------- b. Comments 52. MCI raises the issue of whether presubscription software should be deployed in each end office or at a single tandem location and proposes that the Commission require end office equal access rather than centralized equal access.105 Specifically, MCI argues that end office equal access represents a superior form of access to the extent that [[Page 47295]] it enhances redundancy and reduces post dial delays.106 Centralized equal access should not be permitted, MCI maintains, insofar as that approach requires that all end offices receive the equal access features from the tandem and any interruption in service from the tandem can affect a larger number of subscribers on the system.107 In addition, because calls are routed from the end office to the tandem and back, MCI contends that centralized equal access would result in significant post-dial delay.108 MCI does suggest, however, that in areas that ``would not otherwise convert to interLATA or intraLATA equal access, centralized equal access provides consumers at least a limited form of carrier choice.'' 109 --------------------------------------------------------------------------- \105\ MCI comments at 5. \106\ Id. \107\ Id. \108\ Id. MCI does not attempt to define or quantify the term ``significant.'' \109\ Id. at 5 n.7. --------------------------------------------------------------------------- 53. Two commenters who are centralized equal access providers oppose MCI's position.110 Specifically, Iowa Network Services and MIEAC counter that centralized equal access is not inferior to end office equal access and repeatedly has been found to serve the public interest by the Commission and numerous state regulatory commissions.111 MIEAC takes issue with MCI's argument that centralized equal access is inferior to end office equal access, noting that recent technological advances, and the use of SS7 trunk signaling, in particular, have improved call set up times and reduced post dial delay.112 Iowa Network Services calls the argument that centralized equal access provides less network redundancy a ``red herring'' and notes its recent installation of a redundant fiber ring facility to connect its participating exchanges, which will allow instant rerouting of traffic in the case of a facilities equipment failure.113 Iowa Network Services also operates a ``diversity access tandem'' that provides switch redundancy should its primary tandem fail.114 MIEAC argues that centralized equal access networks fully comply with the toll dialing parity requirement of section 251(b)(3) insofar as these networks support 2-PIC presubscription.115 Finally, MIEAC and Iowa Network Services contend that centralized equal access represents an appropriate method of providing equal access in rural areas where it otherwise would not be technically or economically feasible.116 --------------------------------------------------------------------------- \110\ See generally Iowa Network Services joint reply; MIEAC reply. \111\ Iowa Network Services joint reply at 4-7; MIEAC reply at 2-4. \112\ MIEAC reply at 3. \113\ Iowa Network Services joint reply at 5. \114\ Id. \115\ MIEAC reply at 3-4. \116\ Id. at 5-7; Iowa Network Services joint reply at 2 (noting that centralized equal access fosters intraLATA and interLATA competition by making equal access technology available in exchanges where installation of end office equal access is economically or technically infeasible). --------------------------------------------------------------------------- c. Discussion 54. The issue of presubscription software deployment was not raised in the NPRM and, as a result, few commenters address it. We conclude that the record is not sufficient for us to require LECs, pursuant to section 251(b)(3), to provide end office equal access rather than centralized equal access to competing providers of telephone toll service. No specific information is provided, let alone consensus reached in this record, on such threshold issues as the technical and economic feasibility of placing the software in one location over another. We note that while MCI and Iowa Network Services disagree generally on the benefits of deployment locations, neither addresses such important implementation issues as whether different switching equipment owned by various companies might provide obstacles to deployment, or the relevant costs associated with one deployment scheme over another. Iowa Network Services, we further note, does not address how its proposal would comport with the Commission's generally prescribed requirement under which most LECs are required to implement equal access at end offices.117 Based on the reasons stated above, and based on our concern regarding the harm that could come to small telecommunications services providers if we adopt MCI's proposal, we decline to adopt at this time a requirement prescribing the location for deployment of presubscription software under section 251(b)(3). --------------------------------------------------------------------------- \117\ See generally MTS and WATS Market Structure, CC Docket No. 78-72, Phase III, 100 F.C.C. 2d 860 (1985) 50 FR 52964 (December 27, 1985). --------------------------------------------------------------------------- C. Implementation Schedule for Toll Dialing Parity 1. Background and Comments i. Timetable for BOCs 55. Section 271(e)(2)(A) requires a BOC to provide intraLATA toll dialing parity throughout a state ``coincident with'' its exercise of authority to provide in-region, interLATA services in that state.118 Section 271(e)(2)(B) precludes most states from imposing intraLATA toll dialing parity requirements on a BOC before the earlier of the date on which a BOC is authorized to provide in-region, interLATA services in a state or three years from the date of enactment of the 1996 Act.119 The NPRM sought comment on what implementation schedule should be adopted for all LECs.120 --------------------------------------------------------------------------- \118\ 47 U.S.C. 271(e)(2)(A). \119\ 47 U.S.C. 271(e)(2)(B). Exceptions from this requirement are made for single-LATA states and states that issued an order by December 19, 1995, requiring intraLATA toll dialing parity. Id. \120\ NPRM at para. 212. --------------------------------------------------------------------------- 56. The BOCs generally argue that section 271(e)(2) establishes the relevant implementation schedule for all BOCs and, thereby, obviates the need for a nationwide implementation schedule for BOCs.121 For example, Ameritech argues that, except in single-LATA states and where a state has previously ordered intraLATA presubscription, section 271(e)(2) requires a BOC to implement intraLATA toll dialing parity ``coincident with its exercise of in-region, interLATA authority'' or three years after enactment of the 1996 Act.122 Other parties urge the Commission to require BOCs to implement toll dialing parity in advance of these dates on the theory that only the states, and not the Commission, are constrained by the limitations in section 271(e)(2)(B).123 Frontier suggests that the Commission mandate that dialing parity be made available immediately for interstate, intraLATA toll calls.124 AT&T asserts that ``except as provided in section 271(e)(2)(B), the Commission should require all Tier 1 LECs to implement dialing parity, utilizing the Full 2-PIC method, by January 1, 1997.'' 125 NYNEX maintains that the Commission should recognize and give effect to state orders granting deferrals or waivers of the toll dialing parity requirements.126 --------------------------------------------------------------------------- \121\ See, e.g., Ameritech comments at 19. \122\ Id. \123\ See, e.g., Sprint comments at 6 n.3. \124\ Frontier comments at 2. \125\ AT&T comments at 5. \126\ NYNEX comments at 3 n.7. --------------------------------------------------------------------------- ii. Timetable for All Other LECs 57. For all other LECs, other than BOCs, the 1996 Act provides no timetable for implementing toll dialing parity. The NPRM sought comment on what implementation schedule should be adopted for all LECs.127 --------------------------------------------------------------------------- \127\ NPRM at para. 212. --------------------------------------------------------------------------- 58. USTA argues that there is no need for a uniform implementation schedule and suggests that the Commission permit states to adopt their own timetables.128 PacTel similarly opposes our adoption of an implementation [[Page 47296]] schedule and advocates that all LECs be permitted to design their own schedules based on ``local conditions and state requirements.'' 129 In contrast, MCI urges the Commission to adopt an implementation schedule based on the concern that incumbent LECs, if permitted to design their own timetables, would delay implementation because they lack incentive to implement dialing parity quickly. TCC proposes that non-BOC incumbent LECs should be required to provide toll dialing parity by no later than January 1, 1997.130 NECA argues that a LEC's obligation to provide dialing parity should be triggered only upon the receipt of a bona fide request from a competitive toll provider.131 Finally, MFS suggests that incumbent LECs be required to implement intraLATA toll dialing parity within a year of the effective date of the rules, or by the date previously ordered by a state commission.132 MFS also asks the Commission to adopt rules specifying that in any geographic area where a BOC is not required to provide intraLATA presubscription pursuant to section 271(e)(2)(A), no other LEC in that geographic area will be required to provide toll dialing parity until the BOC is required to provide it.133 --------------------------------------------------------------------------- \128\ USTA reply at 3-4. \129\ PacTel reply at 12. \130\ TCC comments at 4. \131\ NECA reply at 3-4; see also Rural Tel. Coalition comments at 6-7; GVNW comments at 5. \132\ MFS comments at 6. \133\ Id.; cf. Ohio Commission comments at 9 (new entrant LECs should be required to implement intraLATA toll dialing parity coincident with their offering of local telephone service since new entrants can equip their network switches to provide dialing parity before installation). --------------------------------------------------------------------------- 2. Discussion 59. As discussed above, we require all LECs to provide intraLATA and interLATA toll dialing parity no later than February 8, 1999. In addition, we require a LEC, including a BOC, to provide toll dialing parity throughout a state based on LATA boundaries coincident with its provision of in-region, interLATA or in-region, interstate toll services in that state. As discussed below, for non-BOC LECs that currently are providing, or within a year of release of this Order begin to provide, in-region, interLATA or in-region, interstate toll service, we provide a grace period during which those LECs will be able to provide such toll service before having to provide toll dialing parity to their customers. Moreover, non-BOC LECs that implement intraLATA and interLATA toll dialing parity may choose whichever LATA within their state that they deem to be most appropriate to define the area within which they will offer intraLATA toll dialing parity. State commissions in ruling upon such a choice of LATA association shall determine whether the proposed LATA association is pro-competitive and otherwise in the public interest. We note, however, as discussed above, that states may redefine the toll dialing parity requirement based on state, rather than LATA, boundaries where a state deems such a requirement to be pro-competitive and otherwise in the public interest. 60. We decline to adopt the recommendations of parties that urge us to require BOCs to provide toll dialing parity in a state before the earlier of the date on which those BOCs receive authority to provide in-region, interLATA services in that state or February 8, 1999. Subject to the requirements of the 1996 Act, we do, however, authorize states to determine whether a more accelerated implementation schedule should be utilized for LECs operating within their jurisdictions.134 Where a state issued an order by December 19, 1995 requiring a BOC to implement toll dialing parity in advance of the implementation deadlines we establish, we do not intend to extend the toll dialing parity implementation deadline for the BOC beyond the implementation deadline established by that state. In addition, where a state issued an order prior to the release of this Order requiring a LEC, other than a BOC, to implement toll dialing parity in advance of the implementation deadlines we establish, we do not intend to extend the toll dialing parity implementation deadline for the LEC beyond the implementation deadline established by that state. --------------------------------------------------------------------------- \134\ See 47 U.S.C. 271(e)(2)(b). --------------------------------------------------------------------------- 61. We further conclude that LECs, other than BOCs, that begin providing in-region, interLATA or in-region, interstate toll services before August 8, 1997, including LECs that currently offer such services, are not required to implement toll dialing parity until August 8, 1997.135 We do not mandate compliance with the toll dialing parity requirement by these LECs ``coincident with'' their provision of in-region, interLATA or in-region, interstate toll services because it would place certain carriers in violation of this order upon its release and would impose an unreasonably short timetable on others. To the extent that a LEC is unable to comply with the August 8, 1997 deadline, that LEC is required to notify the Commission's Common Carrier Bureau by May 8, 1997. The notification must state, in detail, the justification for the LEC's inability to comply by August 8, 1997 and set forth the date by which it will be able to implement toll dialing parity.136 Finally, we have considered the arguments of LECs that seek to make their toll dialing parity obligation contingent upon the receipt of a bona fide request and conclude that special implementation schedules for smaller LECs are unnecessary because these LECs may petition their state commission, pursuant to section 251(f)(2), for a suspension or modification of the application of the dialing parity requirements.137 --------------------------------------------------------------------------- \135\ We note that the 1996 Act distinguishes between in-region services, for which BOCs must receive Commission authority to provide under section 271(d)(1), 47 U.S.C. 271(d)(1), and out-of- region services, which BOCs are currently authorized to provide. See 47 U.S.C. 271(b)(1), (b)(2). We note that for non-BOC LECs, it is the provision of toll services outside of the LEC's study area or the provision of interstate toll services that triggers the duty to provide toll dialing parity. We use the term in-region, interLATA or in-region interstate toll services to include those toll services, the provision of which by a LEC triggers the LEC's duty to provide toll dialing parity. \136\ As recently noted in the context of waiver petitions for certain caller identification rules, the Commission will not hesitate to take enforcement action, including monetary fines and other remedial measures against carriers that are unable to provide a compelling justification for failing to comply with Commission rules, particularly when they have been given a reasonable period within which to comply. See Rules and Policies Regarding Calling Number Identification Service--Caller ID, CC Docket No. 91-281, Memorandum Opinion and Order, DA 96-875 (1996) 61 FR 20746 (May 8, 1996). \137\ 47 U.S.C. 251(f)(2). --------------------------------------------------------------------------- 62. In summary, we establish the following toll dialing parity implementation schedule and filing deadlines for all LECs: (a) Each LEC, including a BOC, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries no later than February 8, 1999. If the state commission elects not to evaluate a LEC's toll dialing parity implementation plan,138 the LEC must file that plan with the Commission not later than 180 days before February 8, 1999. --------------------------------------------------------------------------- \138\ For a discussion of the content of and procedures relating to the toll dialing parity implementation plans, see section II.B(2) supra. --------------------------------------------------------------------------- (b) Except as provided in subparagraph (c) below, a LEC, including a BOC, that begins to provide in-region, interLATA toll services or in- region, interstate toll services in a state before February 8, 1999, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries coincident with its provision of in-region, interLATA or in-region, interstate toll services. If the state commission elects not to evaluate its toll dialing parity implementation [[Page 47297]] plan, the LEC must file such plan with the Commission not later than 180 days before the date on which it begins to provide in-region, interLATA toll services. (c) A LEC, other than a BOC, that begins to provide in-region, interLATA or in-region, interstate toll services in a state before August 8, 1997, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries by August 8, 1997. If the LEC is unable to comply with this August 8, 1997, implementation deadline, the LEC must notify the Commission's Common Carrier Bureau by May 8, 1997. At that time it must state its justification for noncompliance by August 8, 1997, and set forth the date by which it will be able to implement toll dialing parity. If the state commission elects not to evaluate the LEC's toll dialing parity implementation plan, the LEC must file such plan with the Commission not later than 90 days after publication of this Order in the Federal Register. 63. We further conclude that the 1996 Act does not authorize the Commission to give effect to a state order that purports to grant a BOC a deferral, waiver or suspension of the BOC's obligation to implement dialing parity. We note that section 251(f)(2) provides procedures for suspending or modifying application of the dialing parity requirements only for certain LECs, i.e., those ``with fewer than 2 percent of the Nation's subscriber lines installed in the aggregate nationwide.'' 139 Given that section 251 contains no comparable procedures for larger LECs, we are persuaded that Congress intended the dialing parity requirements that we adopt pursuant to section 251(b)(3) to apply, without exception, to all LECs with 2 percent or more of the Nation's subscriber lines. --------------------------------------------------------------------------- \139\ 47 U.S.C. 251(f)(2). --------------------------------------------------------------------------- D. Implementation of the Local Dialing Parity Requirements 1. In General a. Background 64. The NPRM tentatively concluded that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider.140 The NPRM sought comment on this tentative conclusion.141 --------------------------------------------------------------------------- \140\ NPRM at para. 211. \141\ Id. --------------------------------------------------------------------------- b. Comments 65. Nearly all parties concur with the Commission's proposed interpretation of the local dialing parity requirements of section 251(b)(3).142 Ameritech contends, however, that the 1996 Act requires only that local calls between competing LECs be dialed without the use of an access code.143 Ameritech states that, while the Senate version of the dialing parity provision would have required LECs to provide customers with the ability ``to dial the same number of digits'' when using any carrier providing telephone exchange and exchange access service in the same area, Congress narrowed the dialing parity obligation in the final legislation to require only that calls between competing LECs be dialed without the use of an access code.144 In response to Ameritech's proposed interpretation of the local dialing parity requirements, the Ohio Consumers' Counsel asserts that it does ``not believe that consumers would see any real functional difference between having to dial extra digits and having to dial an access code'' and, thus, urges that customers not be required to dial access codes or extra digits when using a competing provider's services.145 --------------------------------------------------------------------------- \142\ See, e.g., ALTS comments at 4; GTE comments at 8; Ohio Commission comments at 8. \143\ Ameritech comments at 3-4. Notwithstanding its interpretation of the local dialing parity requirements, Ameritech notes that it has exceeded these requirements by establishing interconnection arrangements that allow customers of competing LECs to complete calls by dialing the same number of digits. Id. at 4. \144\ Id. \145\ Ohio Consumers' Counsel reply at 2. --------------------------------------------------------------------------- 66. Ameritech also asks the Commission to clarify that ``the dialing parity obligation applies only to competing carriers that provide both telephone exchange service and telephone toll service (i.e., competing LECs).'' 146 Finally, USTA urges the Commission to clarify that section 251(b)(3) does not include an obligation to provide dialing parity to CMRS providers.147 USTA contends that the provision of dialing parity to CMRS providers by LECs would complicate implementation of ``sender pays'' arrangements that have been adopted in certain states if dialing parity were interpreted to preclude the use of extra digits and/or recorded announcements associated with a ``sender pays'' arrangement.148 USTA expresses concern that customers may receive bills for calling CMRS customers without advance notice that they are going to be billed for such calls.149 --------------------------------------------------------------------------- \146\ Ameritech comments at 3 n.6 (emphasis in original). \147\ USTA comments at 5. \148\ Id. In this context, the term ``sender pays'' refers to an arrangement under which a customer who originates a call to a CMRS customer pays the cost of airtime for terminating the call. Under a sender pays arrangement, the customer typically receives information regarding the price of the call before the call is placed. Once the customer receives this information, the customer then may decide whether or not to complete the call. Sender pays arrangements are atypical insofar as it is the CMRS customer who generally pays the cost of airtime for terminating calls. \149\ Id. --------------------------------------------------------------------------- c. Discussion 67. We adopt our tentative conclusion that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider. As we stated in the NPRM, we believe that this interpretation of the dialing parity requirement as applied to the provision of telephone exchange service would best facilitate the introduction of competition in local markets by ensuring that customers of competitive service providers are not required to dial additional access codes or personal identification numbers in order to make local telephone calls. We disagree with Ameritech's view that Congress intended only to preclude the use of access codes and did not intend to preclude the dialing of extra digits. The fact that Congress ultimately adopted a dialing parity definition that precludes ``the use of any access code'' 150 does not constrain the Commission from precluding the dialing of extra digits, including access codes. Given that the statute does not define the term ``access code,'' we conclude that our interpretation of the local dialing parity requirement will avoid potential disputes concerning what is and what is not an ``access code.'' We are also persuaded by the argument advanced by the Ohio Consumers' Counsel that consumers would not perceive a functional difference between having to dial extra digits and having to dial an access code when using a competing provider's services. --------------------------------------------------------------------------- \150\ 47 U.S.C. 153(15). --------------------------------------------------------------------------- 68. We conclude that Ameritech's additional argument that the dialing parity obligation applies only to competing carriers that provide both telephone exchange service and telephone toll service, represents an impermissibly narrow reading of the statute. We find that the phrase ``providers of telephone exchange service and telephone toll service'' [[Page 47298]] imposes an obligation on LECs to provide dialing parity to providers of solely telephone exchange service, to providers of solely telephone toll service, or to providers of both telephone toll and exchange service. We believe that this interpretation is consistent with both the language of the statute and Congress' intent to encourage the entry of new competitors in both the local and toll markets.151 We reject USTA's argument that the section 251(b)(3) dialing parity requirements do not include an obligation to provide dialing parity to CMRS providers.152 To the extent that a CMRS provider offers telephone exchange service, such a provider is entitled to receive the benefits of local dialing parity. Regarding USTA's argument that applying section 251(b)(3) in a way that benefits CMRS providers could complicate implementation of sender pays arrangements in some states, we conclude that the record before us is insufficient to determine whether, or under what circumstances, sender pays arrangements, including those requiring the dialing of extra digits or recorded announcements, are consistent with the 1996 Act. Although we do not intend to preclude the states from lawfully enforcing legitimate consumer protection policies that do not have an anticompetitive impact, we cannot conclude on this record that the arrangements USTA describes would be permissible. Finally, given our expectation that local dialing parity will be achieved through LECs' compliance with other section 251 requirements, we do not adopt a timetable for implementing the local dialing parity requirements. --------------------------------------------------------------------------- \151\ As the U.S. Court of Appeals for the Fifth Circuit stated in Peacock v. Lubbock Compress Company, ``the word `and' is not a word with a single meaning, for chameleonlike, it takes its color from its surroundings.'' The court held that ``[i]n the construction of statutes, it is the duty of the Court to ascertain the clear intention of the legislature. In order to do this, Courts are often compelled to construe `or' as meaning `and,' and again `and' as meaning `or'.'' Peacock v. Lubbock Compress Company, 252 F.2d 892, 893 (5th Cir. 1958) (citing United States v. Fisk, 70 U.S. 445, 448 (1865). \152\ See section X of the First Report and Order for a discussion of the applicability of section 251 to CMRS providers. --------------------------------------------------------------------------- 2. Local Dialing Parity Methodologies a. Background and Comments 69. In the NPRM, we stated our expectation that the local dialing parity obligations would not be achieved through presubscription.153 Rather, we anticipated that a customer's ability to select a telephone exchange service provider and make local telephone calls without dialing extra digits will be accomplished through the unbundling, number portability and interconnection requirements of section 251.154 The NPRM sought information and comment as to how the local dialing parity requirement should be implemented.155 --------------------------------------------------------------------------- \153\ NPRM at para. 207 n.284. \154\ Id. \155\ NPRM at paras. 209, 211. --------------------------------------------------------------------------- 70. The parties generally agree that local dialing parity will be accomplished through implementation of the unbundling, number portability and interconnection requirements of section 251.156 Parties add to this list the 1996 Act's equal access requirements.157 A few parties contend that local dialing parity is assured once competing providers of telephone exchange service are permitted nondiscriminatory access to telephone numbers.158 --------------------------------------------------------------------------- \156\ See, e.g., SBC comments at 3 n.4; NEXTLINK comments at 8. \157\ See, e.g., BellSouth comments at 9. \158\ See, e.g., U S WEST comments at 6. --------------------------------------------------------------------------- b. Discussion 71. We anticipate that local dialing parity will be achieved upon implementation of the number portability and interconnection requirements of section 251. We also concur with the view that the ability of competing local exchange service providers to receive telephone numbers on a nondiscriminatory basis is critical to the achievement of local dialing parity. We believe that the interconnection requirements that section 251(c)(2) imposes on incumbent local exchange carriers will reduce the likelihood that customers of a competing LEC will have to dial an access code to reach a customer of the incumbent LEC insofar as the two networks are connected. Number portability will ensure that customers switching local service providers will not need to dial additional digits to make local telephone calls. Likewise, allowing every telecommunications carrier authorized to provide local telephone service, exchange access, or paging service in an area code to have at least one NXX in an existing area code also reduces the potential local dialing disparity that may result if competing LECs can only give customers numbers from a new area code. We therefore decline to prescribe now any additional guidelines addressing the methods that LECs may use to accomplish local dialing parity. We also conclude that, contrary to the views expressed by some parties, the provision of nondiscriminatory access to telephone numbers, by itself, does not fulfill the local dialing parity mandate of section 251(b)(3). Given that acquisition of a central office code by a LEC would not necessarily ensure that the LEC's customers would be relieved of an obligation to dial extra digits, access codes or some other special dialing protocol, the provision of nondiscriminatory access to telephone numbers does not by itself ensure local dialing parity. Rather, we find that under section 251(b)(3) each LEC must ensure that its customers within a defined local calling area be able to dial the same number of digits to make a local telephone call notwithstanding the identity of the calling party's or called party's local telephone service provider. 3. Non-Uniform Local Calling Areas a. Background 72. The NPRM tentatively concluded that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider.159 The NPRM did not address the potential dialing parity implications of non-uniform local calling areas 160 nor did it address the potential impact of our proposed interpretation of the local dialing parity obligation on local calling area boundaries.161 --------------------------------------------------------------------------- \159\ NPRM at para. 211. \160\ We use the term ``non-uniform local calling area'' to refer to a situation in which a telephone exchange service provider's local calling area is either larger or smaller than that of another telephone exchange service provider that is providing telephone exchange service in the same geographic area. \161\ Insofar as parties contend that the section 251(b)(3) dialing parity requirements compel the use of a ten-digit dialing plan for local calls within an area code overlay (see, e.g., MFS comments at 3-5), we note that these concerns are addressed more fully below in paragraphs 286 through 287. --------------------------------------------------------------------------- b. Comments 73. A number of parties express concern about the potential interrelationship between our proposed interpretation of the local dialing parity requirements and local calling area boundaries.162 For example, WinStar cautions the Commission that by requiring that customers ``within a defined local calling area'' be able to dial the same number of digits to make a local telephone call, certain parties may interpret this to require that a competing provider of local exchange service must define its local calling area [[Page 47299]] to match the local calling area of the incumbent LEC.163 GSA/DOD maintains that dialing is not truly at parity if different carriers have different definitions of the geographic areas in which calls can be made with seven-digit dialing.164 To address the potential dialing parity issue that may arise when a new entrant's ``network coverage'' is more limited than the incumbent LEC's, GSA/DOD recommends that the Commission adopt rules that ensure that local calling areas are consistently defined for LEC wholesale and retail services.165 --------------------------------------------------------------------------- \162\ See, e.g., WinStar comments at 10-11; GSA/DOD comments at 4-5; Florida Commission comments at 3. \163\ WinStar comments at 10-11 (``The Commission should proceed carefully to ensure that it does not inadvertently limit carriers from experimenting with local calling areas.''); see also, U S WEST comments at 6 (where dialing parity disputes arise over fact that local calling areas of two competing LECs do not match, states should resolve such disputes since they are familiar with local calling areas and calling patterns in that state). \164\ GSA/DOD comments at 4. \165\ Id. at 5. --------------------------------------------------------------------------- 74. GTE contends that ``[s]o long as new entrants have the technical ability to deploy equipment necessary to offer the same seven-digit dialing as the incumbent LEC, dialing parity should be deemed to exist even if one or more of the new entrants ultimately chooses to provide ten-digit dialing.'' 166 To illustrate its point that all local calls cannot be dialed using the same number of digits, NYNEX notes that in the New York City Metro LATA local calls span three different area codes, with seven-digit dialing within an area code and ten-digit dialing between area codes.167 Finally, the Florida Commission expresses concern regarding the potential customer confusion that may result if customers in local calling areas are required to dial ten rather than the currently dialed seven digits to make local ``Extended Calling Service'' calls.168 --------------------------------------------------------------------------- \166\ GTE comments at 8 n.10. \167\ NYNEX comments at 3 n.6. \168\ Florida Commission comments at 3. --------------------------------------------------------------------------- c. Discussion 75. A telephone call requiring seven-digit dialing is not necessarily a local call 169 and a telephone call requiring ten- digit dialing is not necessarily a toll call.170 Disparity in local dialing plans, by itself, does not contravene our interpretation of the local dialing parity requirements unless such plans are anti- competitive in effect.171 By requiring that all customers ``within a defined local calling area'' be able to dial the same number of digits to make a local telephone call, we do not intend to require a competing provider of local exchange service to define its local calling area to match the local calling area of an incumbent LEC. We further do not intend to require a competing provider of telephone exchange service that voluntarily chooses to provide ten-digit as opposed to seven-digit dialing in a local calling area to modify its dialing plan in this instance in order to conform to the dialing plan of another LEC. No other commenter addressed GSA's proposal that the Commission adopt rules that ensure that local calling areas are consistently defined for LEC wholesale and retail services. Therefore, we conclude that the record is insufficient to permit us to take such action at this time. --------------------------------------------------------------------------- \169\ We note that several states permit seven-digit dialing for toll calls. North American Numbering Plan, Area Codes 1996 Update, Bellcore (January 1996) at 14. For example, within the 518 area code a call from Clifton Park, New York to Hague, New York is a toll call that can be dialed with seven digits. \170\ Section 3(48) defines ``telephone toll service'' as ``telephone service between stations in different exchange areas for which there is made a separate charge not included in contracts with subscribers for exchange service.'' 47 U.S.C. 153(48). By contrast, charges for calls within a local calling area generally are not assessed on a per call basis. Thus, the construct of local calling areas serves as the basis by which carriers price their services. \171\ See, e.g., the discussion at paras. 281-291 regarding the discriminatory and anticompetitive nature of a service-specific or technology-specific overlay in connection with area code relief plans. --------------------------------------------------------------------------- E. Consumer Notification and Carrier Selection Procedures a. Background 76. Section 251(b)(3) does not specifically require that procedures be established to permit consumers to choose among competitive telecommunications providers (e.g., through balloting).172 The NPRM sought comment as to whether the Commission should require LECs to notify consumers about carrier selection procedures or impose any additional consumer education requirements.173 We also sought comment on an alternative proposal that would make competitive telecommunications providers responsible for notifying customers about carrier choices and selection procedures through their own marketing efforts.174 --------------------------------------------------------------------------- \172\ 47 U.S.C. 251(b)(3). \173\ NPRM at para. 213. \174\ Id. --------------------------------------------------------------------------- b. Comments 77. Several parties contend that the responsibility for consumer education should be borne, at least in part, by the incumbent LECs 175 and claim that incumbent LECs are uniquely situated to assist in this function.176 Conversely, others maintain that responsibility for the notification and education of consumers should be imposed on the carriers seeking those customers' business, as part of those carriers' marketing efforts.177 GSA/DOD favors letting carriers ``fight it out among themselves,'' noting that carriers themselves will have every incentive to make sure that prospective customers are aware of their choices.178 PacTel suggests that states are in the best position to assess the informational needs of their citizens.179 Several commenters express concern that any customer notification requirement must recognize that the details of any such notification plan should reflect local circumstances, including local carrier selection options, rates and dialing plans.180 Ameritech maintains that a ``carrier-neutral customer notification of the toll dialing parity selection processes is in the public interest and should be a part of the implementation of any toll dialing parity plan.'' 181 --------------------------------------------------------------------------- \175\ See, e.g., ACSI comments at 10; Ameritech comments at 20; California Commission comments at 4. \176\ See, e.g., Illinois Commission comments at 67; ACSI comments at 10 (incumbent LECs should be required to provide bill inserts to customers alerting them to opportunity to select alternative service provider). \177\ See, e.g., CBT comments at 5; Bell Atlantic comments at 5; Frontier comments at 4; BellSouth reply at 4; GTE reply at 15. \178\ GSA/DOD comments at 6. \179\ PacTel comments at 13. \180\ See, e.g., Ameritech comments at 21; GTE comments at 12; PacTel reply at 13. \181\ Ameritech comments at 20. --------------------------------------------------------------------------- 78. While several commenters urge the Commission to adopt rules for balloting,182 the majority of parties urge us to reject this option.183 Parties that oppose balloting argue that such decisions should be left to the individual states 184 and claim that balloting is confusing to customers,185 costly,186 and forces consumers to make selections before they might otherwise choose to do so.187 Commenters also argue that competition for customers will ensure that carriers notify customers as to how their services can be obtained.188 In stating its opposition to a balloting requirement, MFS observes that: \182\ See, e.g., NEXTLINK comments at 9; Excel comments at 7. \183\ See, e.g., Ohio Consumers' Counsel comments at 3; SBC reply at 1; MFS reply at 12; CBT reply at 3-4. \184\ See, e.g., Florida Commission comments at 2; PacTel reply at 13. \185\ See, e.g., Ohio Commission comments at 7. \186\ See, e.g., GTE comments at 13; Sprint comments at 4. \187\ Ameritech comments at 20. \188\ See, e.g., GTE comments at 13; U S WEST comments at 8. --------------------------------------------------------------------------- [[Page 47300]] The long-distance market today differs markedly from the situation in the mid-1980's, when non-dominant carriers were virtually unknown to most consumers and balloting was mandated as a way of educating consumers to their ability to choose a carrier. No such education is needed today, because most consumers are well aware of their long-distance choices, and the carriers have readily --------------------------------------------------------------------------- available means of contacting those who are not.189 \189\ MFS comments at 6. --------------------------------------------------------------------------- 79. Commenters also raised a number of issues related to consumer notification and carrier selection methods. For example, PacTel asserts that ``the default carrier for both existing and new customers who do not actively choose an intraLATA toll provider should be the dial-tone provider.'' 190 Sprint agrees that ``existing customers who are currently obtaining intraLATA toll service from the dial tone provider, and do not indicate a desire to change carriers, should remain with that intraLATA toll provider.'' 191 Sprint rejects PacTel's proposal, however, ``to default new customers who do not choose an intraLATA toll provider to the dial tone provider.'' 192 Concerning whether customers should be assessed a ``PIC change charge'' when they select an alternative provider of telephone toll or telephone exchange service, parties propose allowing customers a ``grace period'' during which they could switch carriers without charge.193 The Ohio Consumers' Counsel supports a cap on the cost of initiating both local and toll service with a new carrier, noting that a ``customer's old carrier should not be able to impose an `exit fee' upon the customer who switches.'' 194 Finally, GVNW urges that the Commission's rules, complaint procedures and penalties for ``slamming'' be applied to any carrier selection procedures that the Commission adopts with respect to local exchange service providers.195 --------------------------------------------------------------------------- \190\ PacTel comments at 11. \191\ Sprint reply at 5-6 n.8. \192\ Id. On a related issue, AT&T urges the Commission to intercede where abuse of the customer notification process occurs, such as when a LEC uses its ``provision of exchange service to influence toll PIC choices.'' AT&T comments at 6 n.9. AT&T adds that the Commission should prohibit LECs from extending interLATA PIC ``freezes'' to intraLATA traffic. Id. \193\ Ohio Commission comments at 7 (proposing 90 day grace period with a charge for subsequent changes); Citizens Utilities comments at 6-7 (proposing 6 month grace period). \194\ Ohio Consumers' Counsel reply at 2. \195\ GVNW comments at 7. --------------------------------------------------------------------------- c. Discussion 80. We agree with those commenters who observe that competitive providers of telephone exchange and telephone toll service have an incentive to make consumers aware of the choices available, and we perceive no need to prescribe detailed consumer notification or carrier selection procedures at this time. We do believe, however, that states may adopt such procedures. The states are best positioned to determine the consumer education and carrier selection procedures that best meet the needs of consumers and telecommunications services providers in their states. Thus, states may adopt consumer education and carrier selection procedures that will enable consumers to select alternative carriers for their local and toll services. We further agree that a customer notification requirement should take into consideration local circumstances. The states may adopt balloting, consumer education and notification requirements for services originating within their states, that are not anti-competitive in effect. States also may adopt measures to prevent abuse of the customer notification and carrier selection processes. All such procedures, however, must be consistent with the guidelines set forth above with respect to the requisite categories of toll traffic for which consumers must be entitled to presubscribe and the toll presubscription method that we require carriers to implement. We note that the consumer notification requirements already imposed by states' intrastate, intraLATA toll dialing parity orders have required LECs to inform customers either once or twice of their opportunity to choose an alternative carrier.196 We anticipate that any subsequently imposed consumer notification requirements would be no more be burdensome, and, in particular, would not require more than two notifications to consumers of their opportunity to choose alternative carriers to transport their intraLATA toll calls. --------------------------------------------------------------------------- \196\ See, e.g., Adoption of rules relating to intra-Market Service Area presubscription and changes in dialing arrangements related to the implementation of such presubscription, Interim Order (Ill. Comm. Comm'n. Apr. 7, 1995). --------------------------------------------------------------------------- 81. We conclude that ``dial-tone providers'' should not be permitted automatically to assign to themselves new customers who do not affirmatively choose a toll provider. New customers of a telephone exchange service provider who fail affirmatively to select a provider of telephone toll service, after being given a reasonable opportunity to do so, should not be assigned automatically to the customer's dial- tone provider or the customer's preselected interLATA toll or interstate toll carrier. Rather, we find that consistent with current practices in the interLATA toll market, such nonselecting customers should dial a carrier access code to route their intraLATA toll or intrastate toll calls to the carrier of their choice until they make a permanent, affirmative selection. This action eliminates the possibility that a LEC could designate itself automatically as a new customer's intraLATA or intrastate toll carrier without notifying the customer of the existence of alternative carrier choices. Finally, notwithstanding our decision to entrust the issues of consumer notification and carrier selection to the states, we emphasize that all telecommunications carriers remain subject to the requirements of section 258 as well as any verification or ``anti-slamming'' 197 procedures that the Commission may adopt to prevent unauthorized changes in a customer's selection of a provider of telephone exchange or telephone toll service.198 --------------------------------------------------------------------------- \197\ The Commission has defined slamming as the unauthorized conversion of a customer's interexchange carrier by another interexchange carrier, an interexchange resale carrier, or a subcontractor telemarketer. Cherry Communications, Inc. Consent Decree, 9 FCC Rcd 2986, 2987 (1994). \198\ Section 258 makes it unlawful for any telecommunications carrier to ``submit or execute a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification procedures as the Commission shall prescribe.'' 47 U.S.C. 258(a). The section further provides that: [a]ny telecommunications carrier that violates the verification procedures described in subsection (a) and that collects charges for telephone exchange service or telephone toll service from a subscriber shall be liable to the carrier previously selected by the subscriber in an amount equal to all charges paid by such subscriber after such violation. 47 U.S.C. 258(b). Section 258 extends the slamming prohibition to all telecommunications carriers, not just interexchange carriers, as is the case under the Commission's current Part 64 rules. See 47 CFR Sec. 64.1100. --------------------------------------------------------------------------- F. Cost Recovery a. Background 82. In the NPRM, the Commission noted that the 1996 Act does not specify how LECs will recover the costs associated with providing dialing parity to competing providers.199 The Commission therefore sought comment on: (1) What, if any, standard should be used for arbitration to determine the dialing parity implementation costs that LECs should be permitted to recover; and (2) how those costs should be recovered.200 --------------------------------------------------------------------------- \199\ NPRM at para. 219. \200\ Id. --------------------------------------------------------------------------- b. Comments 83. At the outset, we note that there does not appear to be a consensus among commenters as to either of the [[Page 47301]] two cost recovery issues raised in the NPRM. The parties are generally divided into two positions: (1) Interexchange carriers and competitive carriers prefer a Commission standard under which carriers could recover from competing providers only the specific incremental costs of providing intraLATA toll dialing parity; and (2) incumbent LECs and several states prefer that no national standards be developed, and that cost recovery issues be left either to the states or to intercarrier negotiations. 84. AT&T suggests that carriers only be entitled to recover incremental costs directly associated with the implementation of dialing parity, and states that the Commission should ``explicitly exclude (a) recovery of costs intended to reimburse an incumbent carrier for revenues it expects to lose as a result of implementing dialing parity * * * as well as (b) costs associated with network upgrades that are not necessary to implement dialing parity.'' 201 AT&T further suggests that the Commission mandate an ``Equal Access Recovery Charge'' on all providers of toll service based on minutes of use subject to dialing parity, and that this charge be tariffed separately from any access charges, approved by the state commission, and amortized over a period not to exceed eight years.202 --------------------------------------------------------------------------- \201\ AT&T comments at 7. \202\ Id. --------------------------------------------------------------------------- 85. MCI appears to agree with AT&T's proposal, stating that ``incremental costs incurred to implement dialing parity should be recovered from all carriers that carry intraLATA toll on a presubscribed basis in accordance with cost causative principles.'' 203 MCI also suggests that dialing parity costs be recovered on a minutes-of-use basis, as an addition to the local switching rate element, which would be separately identified in a tariff, and that Commission rules for cost recovery be ``presumptively correct'' (i.e., states can depart from such rules if they can show their mechanism is more effective).204 Several parties urge the Commission to draw upon its cost recovery paradigms for interLATA equal access, and apply the same basic principles to the intraLATA toll market.205 --------------------------------------------------------------------------- \203\ MCI comments at 3. \204\ Id. at 7-8. \205\ See, e.g., GVNW comments at 8; MCI comments at 7. --------------------------------------------------------------------------- 86. Many other competitive providers also advocate various forms of incremental cost recovery, on a per-minutes of use basis, to be assessed against all providers of presubscribed intraLATA toll services; such costs could include, for example, hardware costs, software costs, and consumer education costs.206 GSA/DOD asks the Commission to ``view LEC claims for large cost compensation with considerable skepticism,'' and suggests that the Commission ``distribute any verifiable incremental costs associated with achieving dialing parity as a percentage surcharge on the bills of all carriers, including the incumbent LECs.'' 207 --------------------------------------------------------------------------- \206\ See, e.g., Citizens Utilities comments at 6; GSA/DOD comments at 6-8. \207\ GSA/DOD comments at 6-7, 8. --------------------------------------------------------------------------- 87. Taking the opposite view, BOC commenters, together with GTE and USTA, argue that there is essentially no need for the Commission to adopt cost recovery measures for dialing parity, and that cost recovery issues are best left for the states to address.208 Several state public utility commissions also argue that, given the state-specific nature of intraLATA cost recovery issues, and the omission of a specific cost-recovery standard from Congress in section 251(b)(3), the individual states are in the best position to address these issues.209 In support of these arguments, some state commenters have provided the Commission with detailed descriptions of their current mechanisms for recovering intraLATA presubscription costs.210 --------------------------------------------------------------------------- \208\ See Bell Atlantic comments at 5; GTE comments at 20-21; NYNEX comments at 10-11; PacTel comments at 17; SBC comments at 9; USTA comments at 4. \209\ See Illinois Commission comments at 72; Indiana Commission comments at 9; Ohio Consumers' Counsel comments at 4; and Ohio Commission comments at 11. \210\ Id.; see also Louisiana Commission comments at 7. --------------------------------------------------------------------------- 88. Ameritech argues that dialing parity costs ``should be recovered under normal regulatory principles from the cost-causer,'' and Bell Atlantic argues that ``only carriers who will benefit from intraLATA presubscription should pay the costs. Unless interexchange carriers bear the full costs of implementing intraLATA presubscription, exchange carrier customers who do not switch intraLATA toll carriers and do not benefit from presubscription would ultimately be required to pay for it.'' 211 On the other extreme, the Telecommunications Resellers Association states that incumbent LECs should ``shoulder the full financial burden of remedying this competitive imbalance [in the intraLATA toll market].'' 212 --------------------------------------------------------------------------- \211\ Ameritech comments at 10; Bell Atlantic comments at 5. \212\ Telecommunications Resellers Association comments at 8. --------------------------------------------------------------------------- 89. The reply comments reveal substantial disagreement among carriers from the two opposing positions. Interexchange carriers and competitive carriers reject the suggestion that they shoulder the full cost burden for intraLATA dialing parity, and urge that, at a minimum, costs be spread among all service providers that enjoy dialing parity.213 AT&T states that ``the proposal by Ameritech and Bell Atlantic to recover implementation costs exclusively from their competitors underscores the need for explicit national rules * * * [n]othing could be more * * * harmful to competition, than allowing incumbent LECs to charge a fee for new entrants for the ``privilege'' of competing with them.'' 214 GSA/DOD also urges the Commission to ``reject'' the proposals of Bell Atlantic and SBC.215 MFS correctly notes that there was ``little consensus'' on this issue, and states ``it is entirely inappropriate in a competitive environment that an individual carrier's costs be recovered from its competitors.'' 216 The Ohio Consumer's Counsel states that Ameritech's ``cost- causer'' proposal ``ignores the fact that the benefits of dialing parity are network-wide.'' 217 --------------------------------------------------------------------------- \213\ See, e.g., Sprint reply at 12; Telecommunications Resellers Association reply at 7; WinStar reply at 12. \214\ AT&T reply at iii. \215\ GSA/DOD reply at 8. \216\ MFS reply at 14. \217\ Ohio Consumers' Counsel reply at 4. --------------------------------------------------------------------------- 90. Incumbent LECs maintain that the Commission should not set national cost recovery standards, and that this matter remains the prerogative of the states.218 GTE ``strongly opposes'' AT&T's suggestions, and PacTel states that ``LECs cost recovery should not be limited by noncompensatory incremental methodologies or unreasonably long amortization requirements.'' 219 SBC asserts that the proposals of MCI and AT&T are ``examples of regulatory micro- management, are inconsistent with Congressional intent, and would also * * * place the major burden of dialing parity cost recovery squarely on the backs of incumbent LECs.'' 220 --------------------------------------------------------------------------- \218\ See Bell South reply at 4; Bell Atlantic reply at 5; NYNEX reply at 4; PacTel reply at 18; and USTA reply at 5. \219\ PacTel reply at iii. \220\ SBC reply at 8. --------------------------------------------------------------------------- 91. GCI states that ``costs should be recovered in a competitively neutral manner because all LECs, not just incumbent LECs, must meet this obligation.'' 221 Western Alliance contends that ``costs incurred to achieve dialing parity should be included in the investment recoverable through explicit [[Page 47302]] universal (service) supports.'' 222 Finally, NECA argues that there is no need for the Commission to prescribe specific cost recovery mechanisms.223 --------------------------------------------------------------------------- \221\ GCI reply at 2. \222\ Western Alliance reply at 2 n.6. \223\ NECA reply at 2. --------------------------------------------------------------------------- c. Discussion 92. We conclude that, in order to ensure that dialing parity is implemented in a pro-competitive manner, national rules are needed for the recovery of dialing parity costs. We further conclude that these costs should be recovered in the same manner as the costs of interim number portability, as mandated in our recent Number Portability Order.224 Our authority to promulgate national cost recovery rules derives from section 251(d) of the 1996 Act and section 4(i) of the 1934 Act. In section 251(d), Congress directed the Commission to take the necessary steps to implement section 251. Section 4(i) of the 1934 Act authorizes us to take any action we consider ``necessary and proper'' to further the public interest in the regulation of telecommunications. Because we determine that dialing parity is crucial to the development of local exchange competition, we conclude that we should establish pricing principles for the recovery of dialing parity costs. Accordingly, we reject the arguments of incumbent LECs and others who oppose national standards for cost recovery of the network upgrades required to achieve dialing parity. --------------------------------------------------------------------------- \224\ Telephone Number Portability, CC Docket No. 95-116, FCC 96-286 (July 2, 1996) (Number Portability Order) 61 FR 38605 (July 25, 1996). --------------------------------------------------------------------------- 93. Many of the network upgrades necessary to achieve dialing parity, such as switch software upgrades, are similar to those required for number portability. Moreover, with both dialing parity and number portability, customer inconvenience represents the barrier to effective competition Congress intends to eliminate, whether that inconvenience results from the dialing of extra digits in the case of dialing parity, or notification of family, friends and business contacts when a customer is forced to change his or her number. For these reasons, we determine that our recent Number Portability Order provides guidance regarding which costs incumbent LECs should be able to recover in implementing dialing parity, as well as how such costs should be recovered. The rules adopted in the Number Portability Order apply only to currently-available number portability mechanisms. We sought further comment on cost recovery for long-term number portability, because long-term number portability will involve a different kind of system than currently available solutions. We tentatively concluded that under section 251(e)(2), the same cost recovery principles should apply to long-term number portability. In the case of dialing parity, there is a similar distinction between currently-available solutions (i.e., full 2-PIC presubscription), and long-term solutions (i.e., multi-PIC or smart-PIC methodologies). Like number portability, we may need to revisit the issue of an appropriate cost recovery standard once other presubscription technologies become available on a nationwide basis. 94. In the Number Portability Order, we concluded that costs for number portability should be recovered on a competitively-neutral basis.225 We also concluded that any recovery mechanism should: (1) Not give one service provider an appreciable, incremental cost advantage over another service provider, when competing for a specific subscriber; and (2) not have a disparate effect on the ability of competing service providers to earn a normal return.226 We therefore reject the arguments of those commenters that assert that only new entrants should bear the costs of implementing dialing parity, because such an approach would not be competitively neutral. We also concluded in the Number Portability Order that LECs could only recover the incremental costs of implementing number portability. Because we determine that number portability and dialing parity share significant technical similarities and overcome similar barriers to competition, we conclude that we should impose the same cost standard for dialing parity costs that we have adopted for number portability costs. We therefore agree with AT&T that LECs may not recover from other carriers under a dialing parity cost recovery mechanism any network upgrade costs not related to the provision of dialing parity. --------------------------------------------------------------------------- \225\ Section 251(e)(2) of the 1996 Act states that ``the cost of establishing * * * number portability shall be born by all telecommunications carriers on a competitively neutral basis, as determined by the Commission.'' This statutory provision does not apply to the dialing parity requirement. \226\ Number Portability Order at paras. 121-140. --------------------------------------------------------------------------- 95. In our Number Portability Order, we concluded that the costs of long-term number portability that could be recovered through a competitively-neutral mechanism included installation of number portability-specific switch software, implementation of SS7 and IN or AIN capability, and the construction of number portability databases.227 We determined that states could use several allocators, including gross telecommunications revenues, number of lines, and number of active telephone numbers, to spread number portability costs across all telecommunications carriers.228 Applying the same cost recovery principles to dialing parity, we conclude that LECs may recover the incremental costs of dialing parity- specific switch software, any necessary hardware and signalling system upgrades, and consumer education costs that are strictly necessary to implement dialing parity. These costs must be recovered from all providers of telephone exchange service and telephone toll service in the area served by a LEC, including that LEC, using a competitively- neutral allocator established by the state.229 Although, under section 251(e)(2), number portability costs must be recovered from all telecommunications carriers, section 251(b)(3) only requires that dialing parity be provided to providers of telephone exchange service and telephone toll service. Therefore, we conclude that a competitively-neutral recovery mechanism for dialing parity should only allocate costs to this more limited class. States may use any of the allocators described in the Number Portability Order, or any other allocator that meets the criteria we have established. States should apply the principles we adopt today, and the other guidelines for recovering costs of currently available number portability measures, in establishing more specific cost recovery requirements for dialing parity. --------------------------------------------------------------------------- \227\ Id. at para. 122. \228\ Id. at paras. 134-36. \229\ We recognize that, unlike the case for number portability costs, states would not be able to establish a cost allocator based on numbers of lines because such an allocator could not apportion costs on a competitively neutral basis where dialing parity is provided to a CMRS provider. We expect that states will establish a competitively neutral allocator that can be used to apportion costs among all providers. --------------------------------------------------------------------------- G. Unreasonable Dialing Delays 96. For a discussion of the section 251(b)(3) prohibition on unreasonable dialing delays, as that section applies to the provision of local and toll dialing parity, see section III(E) below. III. Nondiscriminatory Access Provisions A. Definition of the Term ``Nondiscriminatory Access'' 1. Background 97. Section 251(b)(3) requires all LECs to permit ``nondiscriminatory access'' to [[Page 47303]] telephone numbers, operator services, directory assistance, and directory listings to competing providers of telephone exchange service, and to competing providers of telephone toll service.230 In the NPRM, we tentatively concluded that ``nondiscriminatory access'' requires each LEC to permit the same degree of access that the LEC itself receives for the services specified in section 251(b)(3).231 The Commission also asked for specific comment on whether the nondiscriminatory access provisions of section 251(b)(3) also impose a duty on LECs to resell operator and directory assistance services to competing providers.232 --------------------------------------------------------------------------- \230\ 47 U.S.C. 251(b)(3). \231\ See NPRM at para. 214. \232\ See NPRM at paras. 216, 217. --------------------------------------------------------------------------- 2. Comments 98. A number of commenters concur that, as proposed in the NPRM, ``nondiscriminatory access'' should require each LEC to permit the same access to these services that the LEC itself receives.233 Bell Atlantic argues, however, that access need not be strictly equal, but must ``simply be of a type that will permit the other carrier to provide comparable services with no difference in quality perceptible to callers.'' 234 Bell Atlantic cites the Modification of Final Judgment (MFJ) for the proposition that ``equal access'' does not require ``strict technical equality of services and facilities,'' but rather it requires that consumers should perceive no qualitative differences.235 Sprint objects to Bell Atlantic's use of ``customer perception'' as the nondiscriminatory access standard, arguing that this standard would allow the incumbent LEC to ``discriminate against its competitors in ways not visible to the end user.'' 236 --------------------------------------------------------------------------- \233\ See, e.g., AT&T reply at iii-iv; ACSI comments at 9; California Commission comments at 5; Excel comments at 8; Florida Commission comments at 5; MCI comments at 2; and Telecommunications Resellers Association comments at 5. \234\ See Bell Atlantic comments at n.11. \235\ Id. at 6, citing United States v. Western Electric Co., 569 F. Supp. 1057, 1063 (D.D.C. 1983). Bell Atlantic also states that the Commission followed this approach in a 1985 ``equal access'' order. Id. at 11, citing In the Matter of MTS and WATS Market Structure (Phase III), Report and Order, CC Docket No. 78-72, 100 F.C.C. 2d. 860, 877 (1985) (MTS and WATS Order (III)). \236\ Sprint reply at 9-10. --------------------------------------------------------------------------- 99. Ameritech requests a clarification that a LEC's duty under section 251(b)(3) is owed only to ``providers of telephone exchange and telephone toll service.'' 237 Ameritech also argues that because Congress did not expressly impose a strict equality standard in section 251(b)(3), as it did in section 251(c)(2)(C) for incumbent LECs, ``the only logical interpretation is that LECs are required to provide access * * * that is nondiscriminatory among carriers.'' 238 The Ohio Consumer's Counsel responds that ``Ameritech is claiming that giving all other carriers an equal level of degraded access, i.e., inferior to that provided to itself, is 'non-discriminatory.' Surely Congress contemplated nothing of the sort, as is recognized even by other incumbent LECs.'' 239 --------------------------------------------------------------------------- \237\ Ameritech comments at 11. \238\ Id. at 12-13. Section 251(c)(2)(C) imposes a duty on incumbent LECs to provide interconnection that is ``at least equal in quality to that provided by the local exchange carrier to itself or to any subsidiary, affiliate, or any other party to which the carrier provides interconnection.'' 47 U.S.C. 251(c)(2)(C). \239\ Ohio Consumers' Counsel reply at 3. --------------------------------------------------------------------------- 100. As for resale, a number of commenters agree that LECs should make operator and directory assistance services available for resale to competing providers under section 251(b)(3), in order to further nondiscriminatory access to such services.240 On the other hand, several commenters contend that this provision does not imply any resale requirements.241 AT&T argues that resale is not required under section 251(b)(3), because ``to the extent that a local exchange carrier provides transmission with, or as part of, its operator services, the service must be made available for resale under sections 251(b)(1) and 251(c)(4) of the Act.'' 242 Bell Atlantic takes a similar approach, arguing that, to the extent that a LEC provides operator and directory assistance services that are ``telecommunication services,'' the service must be made available for resale by LECs under section 251(b)(1), and, if the services are telecommunication services offered to retail customers, incumbent LECs must offer them for resale at wholesale prices under section 251(c)(4).243 --------------------------------------------------------------------------- \240\ See, e.g., ALTS comments at n.4; MCI reply at 3; MFS reply at 10; and Telecommunications Resellers Association comments at ii. \241\ See, e.g., GTE comments at 16; Ameritech comments at n.16; NYNEX comments at 6-7. \242\ AT&T comments at n.13. \243\ Bell Atlantic comments at 8. --------------------------------------------------------------------------- 3. Discussion 101. We conclude that the term ``nondiscriminatory access'' means that a LEC that provides telephone numbers, operator services, directory assistance, and/or directory listings (``providing LEC'') 244 must permit competing providers to have access to those services that is at least equal in quality to the access that the LEC provides to itself. We conclude that ``nondiscriminatory access,'' as used in section 251(b)(3), encompasses both: (1) Nondiscrimination between and among carriers in rates, terms and conditions of access; and (2) the ability of competing providers to obtain access that is at least equal in quality to that of the providing LEC.245 LECs owe the duty to permit nondiscriminatory access to competing providers of telephone exchange service and to providers of telephone toll service, as the plain language of the statute requires. Such competing providers may include, for example, other LECs, small business entities entering the market as resellers, or CMRS providers. --------------------------------------------------------------------------- \244\ We use the term ``providing LEC'' throughout this section to refer to the LEC that is permitting nondiscriminatory access to its services pursuant to section 251(b)(3). The term ``competing provider'' refers to a provider of telephone exchange service or a provider of telephone toll service that seeks nondiscriminatory access from a providing LEC. \245\ See also corresponding definition of ``nondiscriminatory'' in the First Report and Order at section V for the purposes of section 251(c)(2). --------------------------------------------------------------------------- 102. Section 251(b)(3) requires that each LEC, to the extent that it provides telephone numbers, operator services, directory assistance, and/or directory listings for its customers, must permit competing providers nondiscriminatory access to these services.246 Any standard that would allow a LEC to permit access that is inferior to the quality of access enjoyed by that LEC itself is not consistent with Congress' goal to establish a pro-competitive policy framework. --------------------------------------------------------------------------- \246\ See also First Report and Order at section V. --------------------------------------------------------------------------- 103. We are not persuaded by Bell Atlantic's statement that the standard for nondiscriminatory access should focus only upon ``customer perceptions'' of service quality. Such a standard overlooks the potential for a providing LEC to subject its competitors to discriminatory treatment in ways that are not visible to the customer, such as the imposition of disparate conditions between similarly- situated carriers on the pricing and ordering of services covered by section 251(b)(3). While invisible to the customer, such conditions can severely diminish a competitor's ability to provide exchange and/or toll service on the same terms as the LEC permitting the access. 104. The MTS and WATS Order (III) does not preclude us from requiring LECs to permit access that is at least equal in quality to the access the LEC itself receives.