98-20745. Procedures to Be Followed When Formal Complaints are Filed Against Common Carriers

[Federal Register Volume 63, Number 149 (Tuesday, August 4, 1998)]
[Rules and Regulations]
[Pages 41433-41450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20745]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CC Docket No. 96-238; FCC 98-154]


Procedures to Be Followed When Formal Complaints are Filed 
Against Common Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted a Second Report and Order that created 
an Accelerated Docket that provides for a decision, within 60 days, of 
formal complaint proceedings that are accepted onto the Accelerated 
Docket. The Accelerated Docket will stimulate the growth of competition 
for telecommunications services by ensuring the prompt resolution of 
disputes that may arise between market participants as well as allow 
for the prompt disposal of complaints that are without substantial 
merit.

DATES: Effective October 5, 1998, except for Secs. 1.115, 1.721, 1.724, 
1.726, 1.729, 1.730 and 1.733, which contain information collection 
requirements that are not effective until approved by the Office of 
Management and Budget. The FCC will publish a document in the Federal 
Register announcing the effective date for those sections. Written 
comments by the public on the information collections are due September 
3, 1998.

FOR FURTHER INFORMATION CONTACT: Dorothy Attwood or Frank Lamancusa 
[phone]. For additional information concerning the information 
collections contained in this Report and Order contact Judy Boley at 
202-418-0214, or via the Internet at [e-mail]. Direct all 
comments on the information collections to Timothy Fain, Office of 
Management and Budget, Room 10236 NEOB, Washington, DC 20503, (202) 
395-3561 or via internet at [e-mail], and Judy Boley, Federal 
Communications Commission, Room 234, 1919 M Street, NW,

[[Page 41434]]

Washington, DC 20554 or via internet to [e-mail].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Report and Order in CC Docket No. 96-238, adopted on July 9, 1998, and 
released on July 14, 1998. The full text of the Second Report and Order 
is available for inspection and copying during normal business hours in 
the FCC Reference Center, Room 239, 1919 M Street, NW., Washington DC. 
The complete text of this decision may also be purchased from the 
Commission's duplicating contractor, International Transcription 
Services, 1231 20th Street NW, Washington DC 20036, [phone].
    This Report and Order contains 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. The Commission is requesting emergency OMB review of the 
information collections with approval by September 11, 1998. Persons 
wishing to comment on this information collection should submit 
comments on or before September 11, 1998.

Paperwork Reduction Act

    This Second Report and Order contains modified information 
collections. The Commission, as part of its continuing effort to reduce 
paperwork burdens, invites the general public to comment on the 
information collections contained in this Order, as required by the 
Paperwork Reduction Act of 1995, Pub. L. 104-12. The Commission has 
requested emergency OMB review of the collections with an approval by 
September 11, 1998. Persons wishing to comment on this information 
collection should submit comments on or before September 11, 1998. 
Comments should address: (1) 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 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: 3060-0411.
    Title: Amendment of Rules Governing Procedures to Be Followed When 
Formal Complaints are Filed Against Common Carriers.
    Form No.: N/A.
    Type of Review: Revision.
    Respondents: Individuals or households; businesses or other for 
profit, including small business; not-for-profit institutions; state, 
local or tribal government.

----------------------------------------------------------------------------------------------------------------
                                                                                  Est. time per    Total annual 
                         Section/title                              Number of       respondent        burden    
                                                                   respondents       (hours)          (hours)   
----------------------------------------------------------------------------------------------------------------
a. Requests for Inclusion on Accelerated Docket................             300              0.5             150
b. Pleadings...................................................              80              4               320
c. Automatic Document Production Requirements..................              80             20             1,600
d. Discovery...................................................              80             20             1,600
e. Status Conference...........................................              80              3               240
f. Proposed Findings of Fact and Conclusions of Law............              80              5               400
g. Minitrials Submissions......................................              80              3               240
h. Minitrial Transcript........................................              80             10               800
i. Applications for Review of Staff Decisions..................              20             15               300
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 5,650 hours (for new and/or modified 
collections only).
    Estimated Costs Per Respondent: $150.00 for each respondent that 
files a complaint against a common carrier that is accepted onto the 
Accelerated Docket; it is estimated that 40 complaints will be accepted 
onto the Accelerated Docket in the next year.
    Needs and Uses: The information has been and is currently being 
used by the Commission to determine the sufficiency of complaints and 
to resolve the merits of disputes between the parties.
    The Second Report and Order requires any party to a complaint or 
prospective complaint that wishes to be on the new docket to transmit 
to the Chief of the Common Carrier Bureau's Enforcement Division a 
request seeking the inclusion of its dispute on the Accelerated Docket. 
If the dispute for which inclusion on the docket is sought is the 
subject of a pending complaint, the request must be in writing, 
transmitted by facsimile or by hand, with a copy to the other parties 
by the same mode of transmission. When a complainant has been admitted 
onto the Accelerated Docket before filing its complaint, it is required 
to file with its complaint a letter indicating that the complaint has 
been accepted for treatment on the new docket.
    The Second Report and Order requires the complaint to include a 
detailed explanation of the alleged violation; answers are required to 
set out fully the nature of any defense, and to respond specifically to 
all material allegations of the complaint. The rules dispense, in 
Accelerated Docket proceedings, with the requirement that parties 
provide extensive legal analysis, proposed findings of fact and 
conclusions of law with their initial pleadings and with the 
requirement that they support their initial pleadings with affidavits. 
Defendants are allowed ten days to file an answer.
    The Second Report and Order requires copies of documents within a 
party's possession, custody or control that are likely to bear 
significantly on the issues in a complaint proceeding to be produced 
with that party's complaint, answer or the reply statements in its pre-
status-conference filing, if applicable. The rules adopt a production 
standard that is narrower than all relevant documents with the goal of 
reducing the number of documents subject to production.
    The Second Report and Order requires that parties seeking discovery 
beyond that available by the automatic document production request such 
additional discovery in the filing that they are required to make two 
days before the initial status conference. These requests may include, 
and Commission staff may order, additional document production, 
depositions of persons with relevant knowledge and/or responses to 
interrogatories. Additionally, any party that intends to rely on expert 
testimony must identify its expert and provide a brief expert 
statement.
    The Second Report and Order requires parties to submit to the 
staff, two business days, before the initial status conference, a 
listing of the

[[Page 41435]]

stipulations and the discovery issues on which they have reached 
agreement. If necessary, parties are permitted to submit separate 
statements of disputed factual and legal issues. Where appropriate, a 
complainant's pre-status-conference filing may respond to any 
affirmative defenses that the defendant may have raised in its answer.
    The Second Report and Order further requires parties to submit 
proposed findings of fact and conclusions of law no less than two days 
before the beginning of the minitrial. Parties may, but are not 
required to, submit revised proposed findings of fact and conclusions 
of law within three days after the conclusion of the minitrial. 
Separate briefs are not permitted in Accelerated Docket proceedings.
    Under the Second Report and Order, parties to Accelerated Docket 
proceedings are required to present evidence and argument in support of 
their cases to Commission staff during a hearing-type proceeding. Three 
days before the minitrial, parties are required to exchange exhibits 
that they may introduce during the proceeding and lists of witnesses 
whom they may call.
    The Second Report and Order requires parties to Accelerated Docket 
proceedings to arrange for the preparation of, and file with the 
Commission three days after the minitrial, a stenographic transcript of 
the minitrial proceedings.
    Finally, the Second Report and Order requires parties to 
Accelerated Docket proceedings that wish to obtain review of the 
staff's decision or recommended decision to file their application for 
review or challenge to the initial decision with the Commission within 
15 days of the release of the staff decision.

Summary of Second Report and Order

I. Introduction

    1. In enacting the Telecommunications Act of 1996 (the ``1996 
Act''), Congress stressed the importance of establishing a ``pro-
competitive, deregulatory'' national policy framework for the 
telecommunications industry. In furtherance of that goal, we issued, in 
this docket's First Report and Order, 63 FR 990 (January 7, 1998), 
revised rules governing formal complaints filed with the Commission 
that allege unlawful conduct by telecommunications carriers. These new 
rules grew out of the shortened deadlines for resolution of certain 
categories of complaints imposed in the 1996 Act, and they had as their 
goal the prompt resolution of all complaints in order to ``reduce 
impediments to robust competition in all telecommunications markets.''
    2. On November 25, 1997, a Public Notice, 62 FR 66321 (December 18, 
1997), issued seeking further comment on certain issues raised in this 
proceeding. Specifically, the Public Notice sought comment on the 
creation of an ``Accelerated Docket'' for complaint adjudication that 
would (1) provide for the presentation of live evidence and argument in 
a hearing-type proceeding and (2) operate on a 60-day time frame, or on 
some other schedule that is more compressed than that for a formal 
complaint proceeding conducted under the new procedures set out in the 
First Report & Order.
    3. In this Second Report and Order, we adopt rules that will govern 
the Accelerated Docket. Briefly stated, the new complaint procedures 
that we adopt today provide for the decision, within 60 days, of formal 
complaint proceedings that are accepted onto the Accelerated Docket, 
with the additional possibility of en banc hearing, before the full 
Commission, of applications for review of the staff decision. In order 
to expedite the complaint process in this manner, we require that 
parties seeking to place their disputes on the Accelerated Docket first 
meet for pre-filing settlement discussions supervised by Commission 
staff. Once a complaint has been filed and accepted onto the 
Accelerated Docket the defendant will have ten days to file its answer. 
Both the complainant and the defendant will be required to serve on 
their opponents, with their respective initial pleadings, those 
documents that are likely to bear on the issues in the proceeding and a 
list of individuals likely to have relevant knowledge. Ten days after 
the answer is filed, Commission staff will hold an initial status 
conference, at which the parties may request further discovery, 
including a limited number of depositions, which we expect to play an 
important role in Accelerated Docket proceedings. Between 40 and 45 
days after the filing of a complaint, a minitrial will be held at which 
the parties will have the opportunity to present evidence and make 
argument in support of their respective positions. Commission staff 
shall issue its decision no more than sixty days after the matter is 
placed on the Accelerated Docket. Review by the full Commission will be 
available through an application for review. In appropriate cases, the 
Commission may hold en banc hearings to decide applications for review 
of Accelerated Docket proceedings.
    4. As discussed below, the rules that we adopt herein modify 
certain deadlines and procedural requirements for complaint proceedings 
accepted onto the Accelerated Docket. In general, the new rules will 
govern admission onto the Accelerated Docket, procedural and scheduling 
aspects of Accelerated Docket proceedings, the breadth of discovery 
available in such proceedings, and the hearing-type procedure in which 
Accelerated Docket proceedings typically will culminate. To the extent 
that the rules set out in this Second Report & Order do not 
specifically cover some procedural aspect of a proceeding on the 
Accelerated Docket, the rules promulgated with the First Report & Order 
will govern.

A. The Need for, and Benefits of, the Accelerated Docket

    5. The Public Notice sought comment on whether there existed a need 
for the hearing-type process and the shortened deadline for complaint 
adjudication that would be available with the Accelerated Docket. 
Additionally, the Public Notice sought comment on how the Commission 
could work cooperatively with the states to ensure that the interests 
of both the Commission and the states were protected.
    6. We believe that important benefits will flow from the expedition 
of the complaint process in cases appropriate for inclusion on the 
Accelerated Docket. The Accelerated Docket will provide prompt 
resolution of carrier-related disputes and it frequently will allow 
carriers to obtain more extensive discovery from their opponents than 
has been routinely available in formal complaint proceedings. 
Additionally, it will provide for the full and effective presentation 
of each party's case in a hearing-type proceeding. The Accelerated 
Docket will minimize the opportunity for carriers to continue to engage 
in anti-competitive practices because the lawfulness of those practices 
will be subject to expedited review under our new procedures, and 
market entrants will be able to obtain adjudication of their complaints 
much more quickly than in the past. We believe, therefore, that the 
Accelerated Docket will facilitate the market's continuing movement 
toward the full competition that Congress envisioned when it enacted 
the 1996 Act.
    7. In addition to the benefits that we envision flowing to 
competitive market entrants, we believe that in certain instances the 
incumbent local carriers also are likely to enjoy a substantial benefit 
from the new docket. The Accelerated Docket will provide the incumbent 
carriers with a means of obtaining the expedited disposal of certain 
complaints filed against them. On balance, therefore, we believe that

[[Page 41436]]

any additional burdens that may be imposed on parties by the 
Accelerated Docket are more than offset by the resulting benefits, both 
to the carriers themselves and to the public.
    8. We are unpersuaded by the various commenters' criticisms of the 
Accelerated Docket. The proposed timeframe for resolving complaints on 
the Accelerated Docket is not unreasonable or inconsistent with due 
process. As with the new rules issued in the First Report & Order, 
parties to Accelerated Docket proceedings will have full notice of 
their opponents' contentions well before the 60-day period for 
conclusion of the proceeding begins to run. During the mandatory pre-
filing settlement discussions, parties will fully explore, under the 
supervision of Commission staff, the facts surrounding, and legal bases 
for, each side's claims and defenses. Furthermore, matters not 
reasonably susceptible to resolution within the sixty-day framework we 
have established, whether due to factual or legal complexity or any 
other reason, will not be accepted onto the Accelerated Docket.
    9. We also reject the argument that we should refrain from issuing 
rules for the Accelerated Docket until we have accumulated additional 
experience under the First Report & Order. We do not view the new 
docket as something that merely builds, with minor modifications, on 
the generally applicable formal complaint process; rather, we believe 
that it will give rise to substantial benefits independent of the 
current process. Extensive examination of proceedings under the general 
rules, therefore, is not necessarily a prerequisite to setting up the 
Accelerated Docket. Moreover, we will continue to monitor the 
experience with both sets of rules. This will allow us to make further 
improvements in the future as it appears to be appropriate.

B. Subject Matter for the Accelerated Docket

    10. Under the rules that we adopt today, we confer on the staff 
administering the Accelerated Docket broad discretion to determine 
which formal complaints relating to common carrier services it will 
accept onto the docket. In exercising this discretion, the Bureau 
should consider several different factors. First among these is the 
extent to which it appears that the parties to the dispute have 
exhausted the reasonable opportunities for settlement during the 
supervised pre-filing settlement discussions.
    11. Second, to the extent that the expedited resolution of a 
particular dispute appears likely to advance competition in the 
relevant telecommunications markets, it may be appropriate for 
inclusion on the Accelerated Docket.
    12. Third, the Bureau staff shall also consider whether the issues 
presented by a particular proceeding appear to be suited for decision 
under the constraints imposed by the Accelerated Docket. For example, 
if the dispute appears to involve more distinct questions than may be 
litigated effectively under the expedited procedures, staff would be 
within its discretion to refuse the case. Another factor for 
consideration in this category likely will be whether the complaining 
party has chosen to bifurcate its liability claims from its damages 
claims. Similarly, if it appears that factual discovery will be so 
extraordinarily complex and time-consuming that it cannot effectively 
be conducted under the compressed schedule of the Accelerated Docket, 
the staff administering the docket also would be within its discretion 
to decline the case.
    13. Fourth, in determining whether to admit a dispute to the 
Accelerated Docket, staff shall consider any suggestions that the 
complaint fails to state a cognizable claim or raises issues outside of 
the Commission's established jurisdiction.
    14. Fifth, the staff administering the Accelerated Docket also has 
discretion to refuse a complaint proceeding where it appears that one 
party would be unreasonably limited in its ability effectively to 
conduct discovery or prepare its case because of an overwhelming 
resource advantage of the opposing party.
    15. Beyond the factors listed above, we expect that, in accepting 
matters onto the Accelerated Docket, the Bureau staff will consider 
such other issues as it deems appropriate and conducive to the prompt 
and fair adjudication of the complaint proceedings before it.

C. Jurisdictional Considerations

    16. Nothing in this report and order should be interpreted to 
expand the Commission's jurisdiction to adjudicate disputes under the 
Act. We also recognize that the Eighth Circuit's decision on review of 
our Local Competition Order places limits on the Commission's authority 
in section 208 enforcement proceedings. Questions of our jurisdiction 
to adjudicate individual complaint proceedings will be decided on a 
case-by-case basis as they arise. Furthermore, we are hopeful that 
contact and careful coordination with the relevant state commissions 
will reduce the potential for state concerns about jurisdictional 
issues. Accordingly, we direct that the staff administering the 
Accelerated Docket take all appropriate steps to inform the appropriate 
state utility commissions where it appears that such action is 
appropriate.

II. Pre-Filing Requirements

    17. The Public Notice sought comment on whether it would be useful 
for parties on the Accelerated Docket to participate in staff 
supervised settlement discussions before a complaint was filed. The 
notice asked whether one criterion for acceptance onto the Accelerated 
Docket should be adequate notice, through these pre-filing discussions, 
of the issues a complainant would raise in its complaint. It asked 
whether such supervised pre-filing settlement discussions would 
implicate the Commission's ex parte rules, and it sought suggestions on 
how to protect confidential or proprietary information that the parties 
might exchange during these discussions. Additionally, the Public 
Notice sought comment on which parties to a dispute could seek 
inclusion on the Accelerated Docket.

A. Staff Supervision of Pre-Filing Discussions

    18. We believe that requiring supervision of the parties' pre-
filing discussions will provide substantial benefits in the Accelerated 
Docket. We believe that one way in which the Accelerated Docket will 
speed the development of competition is by facilitating the informal 
resolution of many disputes before complaints are even filed. 
Involvement of Commission staff in the parties' pre-filing discussions 
will serve to make those talks run more smoothly and be more 
productive. Staff involvement in the discussions also may help the 
parties to focus their dispute in a way that will be most conducive to 
the short schedule of the Accelerated Docket if a complaint ultimately 
is filed. We are unpersuaded by the argument that staff participation 
in settlement discussions will unnecessarily prolong that phase of 
proceedings. Our commitment to the prompt adjudication of disputes 
affecting competition extends to the pre-filing stage of proceedings. 
We are confident that requiring staff involvement in the mandatory pre-
filing settlement discussions will not slow this phase of proceedings.
    19. We do not believe that it would be improper for the individual 
staff member who conducts the pre-filing discussions to handle the 
matter after a complaint has been filed. Federal courts repeatedly have 
held that a judge's participation in settlement discussions,

[[Page 41437]]

by itself, provides no basis for recusing the judge from deciding the 
case; it does not create the kind of personal or extra-judicial 
knowledge that requires disqualification. Only when a judge conducts 
himself in a manner that may raise questions about his impartiality is 
there proper ground for recusal. We see no reason to adopt a stricter 
rule than that of the federal courts on this issue.

B. Procedure for Acceptance to the Accelerated Docket

    20. We conclude that the Accelerated Docket will be most effective 
if either party to a dispute may request inclusion on it. Requiring 
mutual agreement of the parties, as suggested by some commenters, would 
give either party veto power over the process and substantially reduce 
the docket's effectiveness at stimulating a competitive environment. 
However, we believe that the ends of the Accelerated Docket would not 
be well served if the staff had the discretion to place a proceeding on 
the docket absent a request from at least one party.
    21. A prospective complainant who wishes to have its dispute 
handled on the Accelerated Docket shall contact the Bureau either by 
phone or in writing to seek assistance in reaching a negotiated 
resolution to the matter. If it appears from the preliminary 
information supplied by the prospective complainant that the dispute 
may be appropriate for handling under the procedures that we set out 
today, the staff will schedule the appropriate pre-filing settlement 
talks. Based on the progress of these negotiations, the nature of the 
dispute as revealed during the discussions, and other considerations, 
including those outlined above, Commission staff will determine whether 
the matter is appropriate for Accelerated Docket treatment. Once the 
staff determines that a dispute is appropriate for the Accelerated 
Docket and if the parties remain unable to resolve their differences 
during the supervised settlement discussions, the complainant shall 
submit with its complaint a letter indicating that it has gained 
acceptance onto the docket. So that the staff immediately may begin 
work on the matter, a complainant shall, at the time it files its 
complaint, serve a copy on the staff who supervised the settlement 
talks. Such a complaint, once it is filed and accepted onto the 
Accelerated Docket, will be handled by the Bureau under the rules set 
out herein.
    22. As some commenters recommend, we believe that it is also 
important that defendants be able to request that their proceeding be 
included on the Accelerated Docket. We therefore adopt a rule under 
which a defendant may seek inclusion on the Accelerated Docket by 
contacting the Bureau no more than five days after receiving service of 
a complaint. In order to comply with our ex parte rules, such contact 
shall be by a facsimile or hand-delivered letter of which a copy also 
is transmitted in the same manner to the complainant. A defendant 
seeking admission to the Accelerated Docket will be required to file 
its answer within 10 days of receiving service of the complaint, as 
required by this Second Report and Order. Within two business days of a 
defendant's request letter, the determination will be made whether to 
grant the request and accept the proceeding onto the Accelerated 
Docket. If it appears that the parties have not conducted sufficient 
pre-filing settlement discussions, the staff may schedule supervised 
settlement talks, as discussed above. If appropriate, the progress of 
the matter after the filing of the answer may be postponed during these 
discussions. Once a proceeding has been accepted onto the Accelerated 
Docket at the defendant's request, the staff will also set a schedule 
for both sides' production of documents and the remainder of the 
proceeding. After the staff has scheduled the production of documents, 
matters accepted onto the docket at a defendant's request will proceed 
according to the schedule otherwise applicable to Accelerated Docket 
proceedings.
    23. It appears that certain complaints already pending in the 
Bureau's Enforcement Division may benefit from, and be appropriate for, 
the expedited procedures of the new docket. Accordingly, during the 
thirty days following the effective date of these rules, either party 
to a complaint proceeding then pending before the Bureau's Enforcement 
Division and in which an answer previously has been served, or is past 
due, may contact the staff administering the Accelerated Docket to 
request inclusion of the matter on the docket. A party making such a 
request shall do so by facsimile or hand-delivered letter of which a 
copy is sent contemporaneously to the opposing party or parties by the 
same mode of transmission.

C. Ex Parte and Confidentiality Issues

    24. After reviewing the matter, we believe that staff involvement 
in the pre-filing discussions poses no potential for a prohibited ex 
parte contact. Our ex parte rules restrict the actions of parties to 
complaint proceedings only after a complaint has been filed. Typically, 
contacts between a single party and Commission staff under these rules 
will occur before the filing of a complaint and therefore will not 
implicate our rules. We believe that the main potential for ex parte 
contact that these rules create is the situation in which a defendant 
requests the inclusion of its proceeding on the Accelerated Docket. As 
we note above, however, such requests must be made by letter, a copy of 
which shall be provided to the complainant at the same time and by the 
same mode of transmission as used for the Commission staff. This will 
pose no danger of an improper ex parte contact.
    25. In the event that parties engaged in the required supervised 
settlement discussions should have occasion to exchange confidential or 
proprietary documents, they may negotiate a confidentiality agreement 
that is acceptable to both sides. If the parties are unable to reach 
agreement on a confidentiality agreement, they shall be governed by 47 
CFR 1.731.

III. Pleading Requirements

    26. The Public Notice noted the new pleading requirements under the 
First Report & Order, and stated that these requirements likely would 
also apply to Accelerated Docket proceedings. It requested comment on 
the reasonableness of requiring that the defendant's answer be filed 
within seven calendar days of the complaint in order to accommodate the 
expedited nature of the new docket.

A. Content Requirements for Pleadings

    27. After review and careful consideration of the comments on this 
topic, we have concluded that it is appropriate to modify slightly the 
content requirements for initial pleadings on the Accelerated Docket. 
As discussed in the First Report & Order, we believe that a full 
presentation, by both parties, of the relevant facts will ``improve the 
utility and content of pleadings'' and help to ``speed resolution of'' 
complaints. We also believe, however, that the key to the success of 
the Accelerated Docket will be its ability to move the parties to 
narrow, focused issues as quickly as possible so that evidence on those 
issues may be presented at the minitrial. Given the opportunity for 
parties to present evidence at the minitrials, we are less concerned 
with the formal presentation of evidence through affidavits 
accompanying the pleadings than we are with having the parties promptly 
reach issue. Thus, as set out in 47 CFR 1.721(a)(5), promulgated with 
the First Report & Order, the complaint:

shall include a detailed explanation of the manner and time period 
in which a

[[Page 41438]]

defendant has allegedly violated the Act, Commission order, or 
Commission rule in question, including a full identification or 
description of the communications, transmissions, services, or other 
carrier conduct complained of and the nature of any injury allegedly 
sustained by the complainant.

Similarly, the answer ``shall advise the complainant and the Commission 
fully and completely of the nature of any defense, and shall respond 
specifically to all material allegations of the complaint.'' As 
discussed at greater length below, initial pleadings on the Accelerated 
Docket also shall include that portion of the information designation 
discussed in the First Report & Order which lists individuals believed 
to have firsthand knowledge of the facts alleged with particularity in 
the pleadings.
    28. Given the relatively rapid pace of the Accelerated Docket, we 
have decided to dispense with certain pleading requirements set out in 
the First Report & Order. First, we will not require that parties to 
Accelerated Docket proceedings provide extensive legal analysis, 
proposed findings of fact and conclusions of law with their initial 
pleadings. Rather, parties will be required to submit proposed findings 
of fact and conclusions of law shortly before the minitrial that 
typically will take place in proceedings on this docket. Similarly, 
during this minitrial, parties will have the opportunity to present 
legal argument regarding their claims and defenses, and we therefore 
believe that this material may be omitted from the initial pleadings 
without substantially slowing down the process. We emphasize, however, 
that our decision not to require extensive legal analysis should not be 
interpreted as sanctioning notice-pleading or a similar omission of the 
full factual and legal basis for a party's pleadings. Rather, we expect 
that the complaint and answer will fully set out the facts and legal 
theories on which the parties premise their claims and defenses.
    29. Additionally, we have decided to dispense with the requirement 
that parties to Accelerated Docket proceedings support their initial 
pleadings with affidavits, as required in 47 CFR 1.721(a)(5), (a)(11) 
and 1.724(g). We believe that the opportunity to present live testimony 
at the minitrial and the more extensive discovery available on the 
Accelerated Docket will render unnecessary the requirement that parties 
support their pleadings with affidavits. We have also decided to 
dispense, in Accelerated Docket proceedings, with the requirement that 
parties include in their information designations a description of all 
relevant documents in their possession. As we discuss below, parties 
will be required automatically to produce with their initial pleadings 
those documents that bear the appropriate relevance relationship with 
the issues in the proceeding.

B. Timing of the Answer

    30. After consideration of the comments regarding the timing of the 
answer, we have concluded that an appropriate answer period for the 
Accelerated Docket is ten days. Thus, a defendant's answer, as well as 
the discovery documents subject to automatic production discussed 
below, will be due ten calendar days after the defendant receives 
service of a complaint on the Accelerated Docket. As noted in the First 
Report & Order, defendants will have substantial advance notice of the 
facts and legal theories underlying a complaint from the pre-filing 
settlement discussions that are now required in all complaint 
proceedings.
    31. Notwithstanding the criticisms that several commenters level at 
the short answer period proposed in the Public Notice, we strongly 
believe that the ten-day period we have adopted is appropriate. First, 
we note that the Act expressly grants the Commission broad discretion 
to conduct its ``proceedings in such manner as will best conduce to the 
proper dispatch of business and to the ends of justice.'' Courts 
applying this language in reviewing the Commission's procedural rules 
regularly have recognized the Commission's wide authority in questions 
of its own procedures. Thus, in FCC v. Schreiber, 113 U.S. 279, 290 
(1965), the Court noted that the Commission ``should be free to fashion 
(its) own rules of procedure and to pursue methods of inquiry capable 
of permitting (it) to discharge (its) multitudinous duties.'' In 
Florida Cellular Mobile Communications Corp. v. FCC, 28 F.3d 191, 198 
(D.C. Cir. 1994), the court stated, in the context of a licensing 
dispute, that there ``can be no doubt of the FCC's authority to impose 
strict procedural rules.''
    32. Apart from complying with the relevant statute, the primary 
limitation on agency procedures is that they must comply with the 
requirements of due process. Through the supervised pre-filing 
settlement discussions, potential defendants will have full notice of 
the likely claims against them substantially in advance of the filing 
of a complaint. We believe that, when combined with this pre-filing 
period, the ten-day answer period comports with the requirements of due 
process. By diligently reviewing their records and conducting the 
appropriate interviews both before and after the complaint is filed, 
defendants should have ample opportunity to gather the information 
necessary both to file their answer and to produce the documents that, 
as we discuss below, must be served with it. We recognize that an 
answer period of this short duration will put defendants and their 
counsel to a greater burden than may exist under the 20-day answer 
period in the more generally applicable rules. However, defendants in 
Accelerated Docket proceedings will be required to assemble 
substantially less information before filing their answer than is 
required under the rules set out in the First Report & Order. Thus, 
Accelerated Docket defendants will not be required to prepare proposed 
findings of fact and conclusions of law or affidavits regarding the 
facts pleaded in their answers. Nor will they be required to create the 
index of relevant documents required under the First Report & Order.
    33. Due process analysis focuses on whether a procedural limitation 
is so severe that a party is prevented from preparing an effective 
defense. We are aware of no authority, and the commenters cite none, 
holding that an expedited procedure of the type that we implement today 
amounts to a denial of due process. Only SBC attempts to cite specific 
legal authority to support its due process argument, and it relies 
principally on a decision from 1900 that is plainly inapposite. In 
Roller v. Holly, 176 U.S. 398 (1900), the Court found a denial of due 
process when a summons directed the recipient in Virginia to appear in 
a Texas court five days later to defend himself. The Court did not hold 
that, as an absolute matter, five days was too little time to respond 
effectively to process of the type involved in that case. Rather, the 
Court relied on the fact that the trip from Virginia to Texas would 
require four of the five available days and the respondent would have 
had only one day in which to prepare his case. The Court emphasized 
that the adequacy of a response period turned on whether it permitted a 
defendant sufficient time ``to prepare his defense and for his 
journey.''
    34. We find the Roller decision, written in the era before 
commercial automobiles, airplanes, facsimile machines and e-mail, to be 
of no probity in evaluating the propriety of a 10-day answer period 
nearly 100 years later. Defendants on the Accelerated Docket will have 
the full ten-day answer period, as well as the pre-filing period,

[[Page 41439]]

to conduct their investigation and prepare their answer. Accordingly, 
we believe that the answer period we adopt for the Accelerated Docket 
is adequate.

IV. Discovery

    35. The Public Notice sought comment on a variety of issues 
surrounding the conduct of discovery in an expedited process like that 
proposed for the Accelerated Docket. The Public Notice inquired whether 
parties to Accelerated Docket proceedings should be required 
automatically to produce documents that bear the appropriate relevance 
relationship to the issues in the complaint proceeding, and it asked 
when such production should take place. Furthermore it sought comment 
on whether the parties should be required to submit all discovery 
requests and disputes to the responsible staff in advance of the 
initial status conference, discussed below, so that the staff could 
issue its decision on these matters at the status conference, after 
consultation with the parties. The Public Notice also asked what 
measures would be appropriate sanctions for parties that failed to 
provide discovery as ordered.

A. Timing of Automatic Document Production

    36. A rule requiring the production of the most central, but not 
all relevant, documents with the complaint and answer is most likely to 
lead to the realization of our goal of creating a docket that is both 
effective and faster than the current system for adjudicating 
complaints. Furthermore, we believe that the production of documents we 
require by today's rules actually may make the document portion of the 
discovery process demand less of the parties' time and move more 
quickly than the process in the First Report & Order, which requires 
that parties provide their opponents with an index giving substantial 
information about each discoverable document. We believe that requiring 
production of the actual documents should reduce the uncertainty and 
disputes that may arise from the creation of a description of each 
document. We also believe that parties will expend markedly fewer 
resources in assembling and producing the appropriate documents than 
they would in assembling the documents and then preparing the detailed 
index required under the First Report & Order. Thus, our rule for the 
Accelerated Docket requiring automatic production of documents meeting 
the appropriate standard will likely increase the speed and 
effectiveness of the discovery that each party obtains.

B. Content of Automatic Document Production

    37. The Public Notice sought comment on what standard should be 
adopted to guide the automatic production of documents on the 
Accelerated Docket. In particular, the Public Notice suggested the 
possibility of using the standard in the local rule governing automatic 
disclosure in the U.S. District Court for the Eastern District of 
Texas. This standard requires the automatic production, early in the 
discovery phase, of ``all documents, data compilations, and tangible 
things in the possession, custody, or control of the party that are 
likely to bear significantly on any claim or defense.''
    38. After review and consideration of the various comments 
regarding the appropriate standard, we have determined that, on the 
Accelerated Docket, the parties' automatic document production will be 
governed by the ``likely to bear'' standard proposed in the Public 
Notice. Thus, at the time the parties file their initial pleadings in 
an Accelerated Docket proceeding, they will be required to produce to 
each other all documents, data compilations, and tangible things ``in 
the possession, custody, or control of the party that are likely to 
bear significantly on any claim or defense.'' This standard will 
include materials: (1) That would not support the disclosing party's 
contentions; (2) that are likely to have an influence on or affect the 
outcome of a claim or defense; (3) that reflect the relevant knowledge 
of persons who, if their potential testimony were known, might 
reasonably be expected to be deposed or called as a witness by any of 
the parties; or (4) that competent counsel would consider reasonably 
necessary to prepare, evaluate or try a claim or defense. 
Fundamentally, if a party would expect to proffer a document at the 
minitrial as an exhibit in support of its case, the party should 
produce the document. Similarly, if the party would expect its 
opponent, if it had the document, to proffer it as an exhibit against 
the party, the document also should be produced.
    39. Despite most commenters' lack of enthusiasm for this standard, 
we adopt it because we believe that it will lead to the most manageable 
system for the initial, automatic document productions on the 
Accelerated Docket. We are not persuaded by the comments asserting that 
the standard is so vague that it will lend itself to abuse by counsel 
or that it will be difficult to enforce. We have no reason to suspect 
that the ``likely to bear standard'' is any more susceptible to 
manipulation by counsel than is the relevance standard. Nor does the 
standard appear to be inherently more difficult for an adjudicator to 
apply in deciding discovery disputes or imposing sanctions.
    40. What we envision this standard as likely to avoid is the 
production of every single document that is relevant, even if only 
tenuously so, to the issues in a complaint proceeding. We believe that 
the parties' needs for discovery would be poorly served by a rule 
requiring such broad production in a process that runs as quickly as 
the new docket will. We are hopeful that the ``likely to bear'' 
standard will focus both parties'' production efforts on the documents 
of core relevance to a particular proceeding. Thus, it should reduce 
the volume of documents produced by each side and ensure that the party 
receiving a production will be able fully to review the material in the 
time available in Accelerated Docket proceedings. If necessary, at a 
later date, we may refine or modify the standard to ensure fair and 
expeditious completion of the initial document production on the 
Accelerated Docket.
    41. We note that, both with their initial document productions and 
subsequent productions that may be ordered, parties may have occasion 
to produce documents for which they wish to request confidential 
treatment. Production of such documents shall be made in accordance 
with 47 CFR 1.731. In the rare case in which a producing party believes 
that 47 CFR 1.731 will not provide adequate protection for its 
assertedly confidential material, it may request either that the 
opposing party consent to greater protection, or that the staff 
supervising the proceeding order greater protection.

C. Depositions and Other Discovery

    42. As indicated in the Public Notice, we contemplate that, in many 
instances, parties to Accelerated Docket proceedings will have the 
opportunity to depose certain key witnesses who have personal knowledge 
of the relevant issues in dispute. We believe that a limited number of 
depositions in proceedings on this docket will serve our goal of 
ensuring that the parties fully may develop their cases so that staff 
decisions in the proceedings will be both fully informed and rendered 
with the speed that a complete record allows. In order to facilitate 
the scheduling of such depositions within the time constraints of the 
Accelerated Docket, we believe that parties should be required to 
exchange information about individuals with knowledge relevant to the 
issues of a proceeding. We require that parties on the

[[Page 41440]]

Accelerated Docket provide, with their initial pleadings, a designation 
containing the name, address, and position of each individual believed 
to have firsthand knowledge of the facts alleged with particularity in 
its pleading, along with a general description of the relevant facts 
within any such individual's knowledge. Alternatively, this designation 
may refer to the paragraph numbers of the appropriate pleading as a 
means of describing the scope of an individual's knowledge.
    43. In its filings before the initial status conference, a party 
may request approval to conduct the depositions of individuals with 
knowledge relevant to a complaint proceeding, including those 
individuals listed in an opponent's information designation; in their 
pre-status-conference filings, parties also may request additional 
document production or, where appropriate, interrogatories. We expect 
that, where the requested discovery is reasonable and consistent with 
the applicable time constraints, staff will be inclined to grant it. In 
order to ensure diligence and completeness in each party's designation 
of individuals with relevant knowledge, no party, absent a showing of 
good cause, will be permitted to call as a witness at a minitrial, or 
otherwise offer evidence from, any individual in that party's employ 
who does not appear on the party's information designation with a 
general description of the issues on which the individual will offer 
evidence.
    44. As with fact witnesses, it is important that parties have an 
opportunity to explore the substance of, and the basis for, expert 
testimony offered by an opponent. Given the rapid pace of Accelerated 
Docket proceedings, however, it will be necessary for such witnesses to 
be identified, and for the substance of their testimony to be 
disclosed, as quickly as possible. A complainant who plans to introduce 
expert evidence for a purpose other than to rebut the defendant's 
expert evidence will be required to identify the witness or witnesses 
in the information designation accompanying its complaint. In addition 
to identifying its expert witness, complainants also will be required 
to provide, at the time they file their complaint, a brief statement of 
the opinions to be expressed by the expert, the basis and reasons 
therefor and any data or other information that the witness considered 
in forming her opinions, as is required in Federal Rule of Civil 
Procedure 26(a)(2)(B).
    45. We require that defendants who intend to rely on expert 
testimony identify their experts at the time that they file their 
answer. Defendants shall also disclose the other material relating to 
their expert witnesses that is required of complainants; however this 
disclosure may be made in the defendant's filing that is due two days 
before the initial status conference. If a complainant chooses to rely 
on previously unidentified experts to rebut any portion of the 
defendant's case, the complainant shall identify such experts and make 
the other required disclosures about their testimony at the initial 
status conference. By the end of the initial status conference, the 
parties will have provided full disclosure of any expert testimony on 
which they intend to rely, and they will be in a position to seek staff 
approval to depose expert witnesses from whom they may want additional 
discovery.
    46. In light of the numerous tasks that the parties will be 
required to complete at the beginning of Accelerated Docket 
proceedings, we see no purpose to routinely allowing the service of 
interrogatories before the initial status conference. Accordingly, the 
rules that we adopt today provide that parties to Accelerated Docket 
proceedings may propound interrogatories only after the initial status 
conference and with the permission of the staff supervising the 
proceeding. At the initial status conference, when the parties request 
leave to take depositions or request additional document production, 
they may also seek staff approval to serve a limited number of 
interrogatories on their opponent. The decision of whether to permit 
such interrogatories shall be within the discretion of the staff 
administering the proceeding.

D. Sanctions

    47. The Public Notice sought comment on what types of sanctions 
would be appropriate for parties who had failed to comply with their 
discovery obligations in Accelerated Docket proceedings. In a process 
that will move at the pace of the Accelerated Docket, it will be 
crucial that staff be able effectively to compel prompt action and 
adherence to its discovery orders. Without such sanction authority, a 
recalcitrant party likely would be able to delay a proceeding enough 
that many of the docket's projected benefits would vanish.
    48. We strongly believe that swift and effective sanctions will be 
necessary to ensure against attempts to prolong Accelerated Docket 
proceedings through discovery delay or abuse. Appropriate sanctions 
should also deter attempts to affect the substance of proceedings by 
improperly withholding information. We believe it will encourage the 
parties' strict compliance with discovery obligations for us to grant 
the staff administering the Accelerated Docket broad discretion to 
respond to discovery violations with the sanction that it deems to be 
appropriate.

V. Status Conferences

    49. The Public Notice sought comment on the timing and content 
requirements for the initial status conference in the Accelerated 
Docket proceedings. It proposed that, to accommodate the time 
constraints of the Accelerated Docket, the initial conference take 
place 15 calendar days after the filing of the complaint and that the 
parties be required to meet before the conference to discuss a variety 
of issues to be covered at the conference, including issues in dispute 
and questions of discovery and scheduling. It also proposed that the 
parties be required to draft a joint statement summarizing the issues 
on which they agreed and their remaining disputes, and to submit the 
statement to the Commission two days before the initial status 
conference.

A. Timing of Initial Status Conference

    50. After careful consideration of the comments on this issue, we 
direct that the initial status conference in Accelerated Docket 
proceedings will take place ten calendar days after the answer is due 
to be filed. This will place the conference twenty days after the 
service of the complaint, rather than fifteen as proposed in the Public 
Notice. We recognize that this interval of time will require that 
counsel and parties work with substantial diligence and efficiency. 
However, we view this short time period as necessary to effectuate the 
speedy adjudication of disputes that is our main goal for the 
Accelerated Docket.

B. Issues to Be Addressed At Initial Status Conference

    51. The Public Notice proposed that, before the status conference, 
the parties meet and confer about a variety of issues, including 
settlement prospects, discovery, issues in dispute, stipulations, and a 
schedule for the remainder of the proceeding. It also proposed that, 
before the status conference, the parties report jointly in writing to 
the Commission about the results of their discussions on these issues, 
including disputed and stipulated facts, and key legal issues.
    52. We believe that early discussion of the specific facts in 
dispute will assist the parties in focusing on the issues of central 
relevance to the proceeding; it is therefore critical to the overall 
success

[[Page 41441]]

of the Accelerated Docket. We require that, before the initial status 
conference, the parties discuss, and attempt to reach agreement on, 
discovery issues and the factual issues to which they can stipulate; 
they shall submit to the staff, two business days before the initial 
conference, a listing of these stipulations and the discovery issues on 
which they have reached agreement. Parties may conduct these meetings 
either in person or by telephone conference call.
    53. Additionally, the complainant's submission before the initial 
status conference shall respond, as appropriate, to any affirmative 
defenses that the defendant may have raised in its answer. We believe 
that, given the constraints of the Accelerated Docket, it will be more 
efficient to require a complainant to respond to affirmative defenses 
in this manner than it would be to provide for the filing of a separate 
reply.
    54. At the initial status conference, the responsible staff will 
review the parties' disputed and stipulated issues of fact. Based on 
the factual issues that appear from this material, the staff will 
determine what additional discovery, beyond the initial disclosures, 
the parties may take. Thus, at the status conference, parties should be 
prepared to demonstrate specifically how the discovery they seek 
relates to particular issues in dispute. The discovery that the staff 
may grant at this status conference includes depositions and additional 
document production. Indeed, in light of the relative efficiency of 
depositions as a discovery tool, we expect that the staff typically 
will grant a limited number of depositions appropriate to the issues 
in, and complexity of, a particular case. Given the truncated nature of 
the Accelerated Docket, we believe that interrogatories will be of 
limited usefulness. However, at the initial conference, the staff may 
grant permission to propound interrogatories if it appears that they 
will function as an effective alternative to some other form of more 
time-consuming discovery. As noted elsewhere, where discovery requests 
are reasonable, we expect that staff will be inclined to grant them.
    55. At the initial status conference, the Commission staff also 
will establish a schedule for the remainder of the proceeding, setting 
the deadlines for completion of discovery, the pre-hearing submissions 
discussed below, the minitrial and any post-hearing submissions.
    56. Commenters also raise the issue of whether a defendant in an 
Accelerated Docket proceeding should be required to post a bond or to 
escrow funds to cover potential damages. Under the First Report & 
Order, the Commission may order a defendant who has lost the liability 
phase of a bifurcated proceeding to post a bond or escrow funds pending 
resolution of damages issues. We decline to modify the escrow rules 
issued with the First Report & Order. The staff administering the 
Accelerated Docket will retain the same discretion as staff does under 
the First Report & Order to require a defendant that has been found 
liable to post a bond or escrow funds pending a determination of 
damages.

VI. Minitrials

    57. The Public Notice sought comment on one of the unique 
characteristics under consideration for the Accelerated Docket, a 
hearing-type proceeding or ``minitrial'' to be conducted during each 
action. The notice stated that such a proceeding likely would offer 
certain advantages over the all-paper proceeding currently used for 
formal complaints. It noted that, given the need for dispatch on the 
Accelerated Docket, the minitrial likely would occur between 40 and 45 
days after the filing of a complaint. Furthermore, the Public Notice 
stated that, in order to expedite these minitrials, consideration was 
being given to allotting to each party a set amount of time in which to 
present its case.

A. Utility of Minitrial Process

    58. We strongly believe that minitrials held at the end of 
Accelerated Docket proceedings will substantially increase the quality 
and clarity of the record on which complaints are decided. As 
commenters note, live testimony will permit Commission staff to gauge 
credibility in a manner that is impossible in paper proceedings. 
Furthermore, live testimony will allow the parties and the decision 
maker to flesh out both factual and legal issues in a way that cannot 
be accomplished within the static limitations of an all-paper process. 
A related benefit of live proceedings is that they will permit the 
decision maker to focus the parties on those issues that it deems to be 
central to the dispute; the decision maker will not be required simply 
to accept the dispute in the posture presented by the parties' briefs.
    59. Another benefit that we envision as likely to result from 
minitrials is the direct participation of parties' employees in the 
adjudicative process. We believe that the experience of testifying 
during a minitrial may give carriers' employees a more immediate 
appreciation of their individual roles in effectuating compliance with 
the Act. Thus, having once been called as a witness to explain their 
actions, employees whose regular duties may have an impact on their 
employer's compliance with the Act may be more inclined to consider 
that impact when executing their daily duties. We believe that this 
procedure may emphasize the strictures of the Act in a way that cannot 
be accomplished under a paper process in which carrier employees' 
involvement with the process typically is restricted to the preparation 
of an affidavit to be presented by the carrier's counsel.
    60. Given the above benefits that we view as likely to arise from 
minitrials, we believe that, on balance, the advantages of the process 
outweigh the drawbacks identified by some commenters. We recognize that 
preparing for a minitrial to be held 40 days after the filing of a 
complaint may require counsel for both sides to expend some more effort 
and time than required to prepare and submit a brief under our general 
complaint rules. However, this increased burden is justified by the 
more complete record, and the consequently more informed decision, that 
likely will emerge from the process.

B. Structure of Minitrial

    61. Within the time limitations discussed below, minitrials will 
allow parties to Accelerated Docket proceedings to present all aspects 
of their case to the decision making authority. As stated in the Public 
Notice, the Accelerated Docket minitrials will not be subject to the 
on-the-record hearing requirements of the Administrative Procedure Act. 
Nonetheless, where possible, an Administrative Law Judge (``ALJ'') will 
preside at each minitrial. The ALJ or other presiding staff will run 
the minitrial, administer oaths to witnesses, and will be in charge of 
the timing system discussed below. Additionally, where an ALJ 
participates in the minitrial process, he will render any necessary 
procedural rulings in consultation with the staff member administering 
the proceeding who also will be present during the minitrial. Because 
the staff's prior participation in the proceeding will have given it 
substantial familiarity with the relevant issues, the Commission staff 
will serve as the decision maker in Accelerated Docket proceedings, and 
it, rather than the ALJ who runs the minitrial, will issue the decision 
in the proceeding.
    62. The rules we adopt provide for a ``chess-clock'' timing method. 
Thus, the ALJ or other Commission personnel who runs the minitrial will 
deduct from

[[Page 41442]]

each party's allotment any time that the party's counsel spends 
examining witnesses, otherwise presenting evidence or presenting 
argument. Additionally, the ALJ may exercise broad discretion in 
determining any time penalty or deduction that he deems appropriate for 
a party who appears intentionally to be slowing the process or 
attempting to delay its opponent's presentation. This timing method 
should ensure that minitrials are conducted quickly, in keeping with 
the goals of the Accelerated Docket, while maintaining fairness and 
allowing both parties an adequate opportunity to present evidence and 
argument.
    63. Under the rules that we adopt today, the Commission staff has 
broad discretion to allocate the amount of time for a minitrial that it 
believes to be appropriate based on the complexity of the issues and 
the amount and type of evidence that appears reasonably necessary for 
an adequate presentation of each party's case. Under the rules, the 
staff would be within its discretion to assign either side of a 
particular dispute more than half of the allowed time, but we expect 
that such instances will be very rare.
    64. We believe that a decision maker's observation of witness 
demeanor on direct examination is as important and revealing as it is 
on cross examination. Similarly, we believe that the filing of written 
direct testimony often would result in parties burdening the record 
with unnecessary or irrelevant information that simply would slow down 
the process of reaching a final decision. Accordingly, we decline to 
permit the introduction of written direct testimony on the Accelerated 
Docket. Both sides shall rely on live, rather than written, 
presentations of their cases at minitrials. We note, however, that the 
precise format of a party's presentation during a minitrial will be a 
question on which that party has wide latitude.
    65. It will aid in the efficient completion of minitrials for the 
parties to have notified each other, in advance, of the exhibits they 
may introduce and the witnesses they may call during the minitrial. We 
therefore require that, three days in advance of the scheduled 
beginning of the minitrial, each party shall serve by hand or 
facsimile, on all other parties to the proceeding, a copy of their 
exhibits and a list of witnesses that they may call. The ALJ presiding 
at the minitrial may then hear and rule on any witness or exhibit 
objections before the beginning of the hearing itself. As discussed 
below, relevance rarely will be an appropriate basis for objection 
during minitrials; we also expect that, owing to the administrative 
nature of the proceeding, other objections will be minimal.
    66. One commenter suggests that we apply certain portions of the 
Federal Rules of Evidence to the minitrial process. We decline to adopt 
the suggested evidentiary rules. Rather, we believe that the strict 
time limitations under which parties will operate in minitrials should 
serve to deter and sanction the introduction of extensive amounts of 
irrelevant material: the introduction of irrelevant evidence merely 
will reduce the time available for other, more pertinent portions of 
the proponent's case.
    67. We are hopeful that the minitrial process will serve as a more 
effective and informative alternative to the briefs that typically are 
filed in complaint proceedings. However, we also believe that it will 
aid the parties in focusing their presentations, and the responsible 
staff in promptly rendering a decision, if the parties submit some 
documentation outlining their arguments. Thus, we require that parties 
submit proposed findings of fact and conclusions of law two days before 
the beginning of the minitrial. In length, these shall not exceed 40 
pages per party. Additionally, no more than three days after the 
conclusion of the minitrial, parties may, but are not required to, 
submit revised proposed findings of fact and conclusions of law to 
respond to evidence and legal argument raised during the minitrial. 
This second set of submissions should permit the parties a final 
opportunity to explain complex technical issues involved in the 
proceeding and to rebut their opponents' arguments. This second set of 
submissions shall not exceed 20 pages per party.

VII. Damages

    68. The Public Notice sought comment on limiting the Accelerated 
Docket to bifurcated liability claims, with damages claims being 
handled separately under the procedures in the First Report & Order. 
The overwhelming majority of commenters support our proposal, although 
certain commenters recommend that Commission staff be permitted to 
determine damages issues on the Accelerated Docket when it appears to 
be appropriate.
    69. As we stated above, the staff administering the docket may 
consider a complaining party's decision to bifurcate its damages claims 
from the liability portion of its case in determining whether to accept 
a matter onto the Accelerated Docket. We believe that bifurcation of 
the issues in this manner generally will aid in the decision of 
complaint proceedings within the expedited timeframe of the new docket. 
We agree, however, that parties should have the option at least to 
request adjudication of their damages issues on the Accelerated Docket. 
Accordingly, the staff administering the docket will retain the 
discretion to accept a complaint presenting both liability and damages 
issues. Additionally, a complainant that has prevailed on the question 
of liability may request Accelerated Docket treatment for its 
subsequent damages complaint. We agree with the commenters asserting 
that damages issues should be resolved as quickly as possible after a 
finding of liability; however, we decline the invitation to set a 
deadline for the conclusion of the damages phase when the damages phase 
is not accepted onto the Accelerated Docket.

VIII. Other Issues

    70. The Public Notice also requested comment on whether it would be 
necessary to modify any other rules in order to accommodate the time 
constraints of the Accelerated Docket. Commenters have made several 
recommendations, including that we: (1) Limit the effect of Accelerated 
Docket decisions on future cases; (2) allow compulsory counterclaims to 
be pursued on the Accelerated Docket; and (3) issue a formal notice of 
proposed rulemaking in this proceeding.
    71. Precedential Value of Accelerated Docket Proceedings: Bell 
Atlantic suggests that rulings in Accelerated Docket proceedings be 
limited to the particular case in question and that they be accorded no 
preclusive or precedential effect in other proceedings or other forums. 
We decline to impose such a limit on Accelerated Docket proceedings. 
Rather, staff rulings on the docket will have the same precedential 
value as any other adjudicative decision issued under delegated 
authority.
    72. Counterclaims: CompTel suggests that counterclaims be permitted 
in Accelerated Docket proceedings if they arise from the same 
transaction or occurrence, and would be eligible for the Accelerated 
Docket if brought separately. In the First Report & Order, we 
prohibited all counterclaims in complaint proceedings, requiring that 
such claims be filed as separate, independent actions. We took this 
action to ensure that complaint proceedings would be resolved within 
the statutory deadlines in the 1996 Act. This reasoning applies with 
even greater force to the Accelerated Docket proceedings, which we 
expect to be resolved even more quickly than required by the statutory 
deadlines.

[[Page 41443]]

Defendants will be required to file any counterclaims that they may 
have as separate actions for which they will be required independently 
to seek inclusion on the Accelerated Docket.
    73. Need for Formal Notice of Proposed Rulemaking: BellSouth 
contends that the notice provisions of the Administrative Procedure Act 
(``APA'') require that, before issuing rules to govern the Accelerated 
Docket, we must issue a formal notice of proposed rulemaking, including 
specific proposed rules. We disagree. Section 553(b) of the APA 
requires that an agency afford interested parties adequate notice of, 
and an opportunity to comment on, the provisions that appear in the 
agency's final regulations. The Public Notice appeared in the Federal 
Register, and it contained adequate notice of the provisions we adopt 
today. Accordingly, we believe that no further notice is required to 
comply with the notice provisions of the APA.

IX. Review by the Commission

    74. Staff decisions issued on delegated authority after the 
minitrial will be, pursuant to our rules, immediately effective and 
binding on the parties. A party to the proceeding that seeks to 
challenge such a decision may do so by filing its application for 
review. Applications for review of Accelerated Docket staff decisions 
based on delegated authority will be due 15 calendar days after the 
release date of the staff decision. As under our current rules, the 
opposition to the application for review will be due 15 calendar days 
after the application for review is filed, and the party seeking review 
may file its reply 10 calendar days after the due date of the 
opposition.
    75. Alternatively, certain other Accelerated Docket proceedings 
will raise issues that may not be decided on delegated authority. Such 
staff decisions, issued after the minitrial, will not be immediately 
effective. Rather, these decisions will be recommended decisions, which 
the Commission will either adopt or modify. A party to the proceeding 
that seeks to challenge the staff decision before the Commission may do 
so by filing its comments on the recommended decision according to the 
same schedule as that applicable for applications for review on the 
Accelerated Docket. Opposition and reply comments similarly are 
permitted on the same schedule as that for applications for review.
    76. In the event that neither party files comments to challenge a 
recommended staff decision in an Accelerated Docket proceeding, the 
Commission will issue its order either adopting or modifying the staff 
decision within forty-five days of its release. If the staff's 
recommended decision is challenged by any party to the proceeding, the 
Commission will issue its order either adopting or modifying the 
decision no more than thirty days after the filing of the final 
comments on the decision.
    77. The Commission may summarily affirm a staff decision from the 
Accelerated Docket before it for review. Additionally, in cases where 
it appears that argument would aid in our decision, we may schedule an 
oral argument before the full Commission.

X. Conclusion

    78. In this Second Report & Order, we amend our rules governing 
formal complaint proceedings to create an Accelerated Docket, which 
will be administered by the Enforcement Division of the Common Carrier 
Bureau. The rules of practice and procedure relating to the Accelerated 
Docket will promote competition in all telecommunications markets by 
providing an expedited process for resolving complaints of 
unreasonable, discriminatory, or otherwise unlawful conduct by 
telecommunications carriers.
    79. We recognize that many of the procedures we adopt for the 
Accelerated Docket are, to a substantial extent, new and untried. 
Accordingly, we expect that both staff and the Commission will 
accumulate valuable experience in the implementation of these new 
rules. We will monitor closely the effect and utility of the 
Accelerated Docket procedures; and we expect to receive periodic 
reports from the Common Carrier Bureau regarding its administration of 
the new docket. Based on this information and within a year of the 
effective dates of these rules, we will consider revisions to these 
procedures to make them more effective.

XI. Final Regulatory Flexibility Analysis

    80. As required by the Regulatory Flexibility Act (``RFA''), an 
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in 
the notice of proposed rulemaking in this docket. The Commission sought 
written public comment on the proposals in the NPRM, including comment 
on the IRFA. The Commission has prepared this Final Regulatory 
Flexibility Analysis of the possible significant economic impact on 
small entities of the rules promulgated in this Second Report & Order. 
This present Final Regulatory Flexibility Analysis (``FRFA'') conforms 
to the RFA.

A. Need for and Objectives of the Implementation of the 
Telecommunications Act of 1996, Amendment of Rules Governing Procedures 
to be Followed When Formal Complaints Are Filed Against Common 
Carriers, Second Report and Order, and the Rules Adopted Herein

    81. The Commission is issuing this Second Report & Order to create 
an Accelerated Docket designed to provide for the prompt resolution of 
carrier-related disputes and to carriers to obtain more extensive 
discovery from their opponents than has been routinely available in 
formal complaint proceedings. Additionally, the new docket will provide 
for the full and effective presentation of each party's case in a 
hearing-type proceeding. Some of the requirements adopted in this 
Second Report & Order may have a significant impact on a substantial 
number of small businesses as defined by Section 601(3) of the RFA. 
Generally, the amended rules will: (1) Require parties to engage in 
staff-supervised pre-filing settlement discussions, (2) modify the form 
of initial pleadings, (3) shorten filing deadlines, (4) modify the 
discovery process, (5) provide for the live presentation of evidence to 
the decision maker, and (6) require provide for expedited briefing and 
review of staff decisions.

B. Summary of Significant Issues Raised by the Public Comments in 
Response to the IRFA

    82. In the IRFA, the Commission found that the rules we proposed to 
adopt in this proceeding may have a significant impact on a substantial 
number of small businesses as defined by section 601(3) of the RFA. The 
IRFA solicited comment on alternatives to our proposed rules that would 
minimize the impact on small entities consistent with the objectives of 
this proceeding. No comments were submitted directly in response to the 
IRFA. However, as described below in Section 5, we have taken into 
account those portions of the rules that appear likely to affect small 
entities.

C. Description and Estimate of the Number of Small Entities to Which 
the Rules Adopted in the Report and Order in CC Docket No. 96-238 Will 
Apply

    83. We first discuss the estimated number of potential 
complainants, which may include entities that are not telephone 
companies. Next we discuss generally the estimated number of potential 
defendants, which would be included in the total number of small 
telephone companies falling within the

[[Page 41444]]

SBA definitions of small business concerns and small businesses. Then, 
we discuss the number of small businesses within the SIC subcategories, 
and attempt further to refine those estimates to correspond with the 
categories of telephone companies that are commonly used under our 
rules.
1. Potential Complainants
    84. Section 208(a) provides that formal complaints against a common 
carrier may be filed by ``[a]ny person, any body politic or municipal 
organization.'' Beyond this definition, the FCC has no control or 
information regarding the filing frequency of complaints, nor 
identities of parties that will file complaints. The filing of 
complaints depends entirely upon the complainant's perception that it 
has a cause of action against a common carrier subject to the Act, as 
amended, and it is the complainant's decision to file its complaint 
with the FCC. Therefore we are unable at this time to estimate the 
number of future complainants that would qualify as small business 
concerns under the SBA's definition.
    85. As noted, the RFA includes ``small businesses,'' ``small 
organizations'' (non-profits), and ``small governmental 
jurisdictions.'' Nationwide, there are 4.44 million small business 
firms, according to SBA reporting data. A small organization is 
generally ``any not-for-profit enterprise which is independently owned 
and operated and is not dominant in its field.'' Nationwide, there are 
275,801 small organizations. Last, ``small governmental jurisdiction'' 
generally means ``governments of cities, counties, towns, townships, 
villages, school districts, or special districts, with a population of 
less than 50,000.'' As of 1992, there were 85,006 such jurisdictions in 
the United States.
2. Potential Defendants
    86. Estimate of Potential Defendants that may be Classified as 
Small Businesses. Section 208(a) provides for the filing of formal 
complaints for ``anything done or omitted to be done by any common 
carrier subject to this Act.'' The FCC has no control as to the filing 
frequency of complaints. This inability to predict the number of future 
defendants necessitates conducting this FRFA based on the number of 
potential small business defendants, which is the number of common 
carriers that qualify as small business concerns under the SBA's 
definition.
    87. Total Number of Telephone Companies Affected. The decisions and 
rules adopted herein may have a significant effect on a substantial 
number of small telephone companies identified by the SBA. The United 
States Bureau of the Census (``Census Bureau'') reports that, at the 
end of 1992, there were 3,497 firms engaged in providing telephone 
service, as defined therein, for at least one year. It seems reasonable 
to conclude, therefore, that no more than 3,497 telephone service firms 
are small entity telephone service firms or small incumbent LECs that 
may be affected by this Order. We estimate below the potential 
defendants affected by this order by service category.
    88. Wireline Carriers and Service Providers. Of the 2,321 non-
radiotelephone companies listed by the Census Bureau, 2,295 companies 
(or, all but twenty-six) were reported to have no more than 1,000 
employees. Consequently, we estimate that there are no more than 2,295 
small entity telephone communications companies (other than 
radiotelephone companies) that may be affected by the actions taken in 
this Report and Order.
    89. Non-LEC wireline carriers. According to our most recent data, 
we estimate that there are no more than 130 small entity IXCs; fifty-
seven small entity CAPs; twenty-five small entity OSPs; 271 small 
entity pay telephone service providers; and 260 small entity providers 
of resale telephone service; and thirty ``other'' toll carriers that 
might be affected by the actions and rules adopted in this Report and 
Order.
    90. Local Exchange Carriers. According to our most recent data we 
estimate that there are no more than 1,347 small LECs (including small 
incumbent LECs) that may be affected by the actions taken in this 
Report and Order.
    91. Radiotelephone (Wireless) Carriers: We estimate that there are 
no more than 1,164 small entity radiotelephone companies that might be 
affected by the actions and rules adopted in this Report and Order.
    92. Cellular and Mobile Service Carriers: We estimate that there 
are no more than 792 small entity Cellular Service Carriers and no more 
than 138 small entity Mobile Service Carriers that might be affected by 
the actions and rules adopted in this Report and Order.
    93. Broadband PCS Licensees. Based on available data, we conclude 
that the number of broadband PCS licensees that might be affected by 
the decisions in this Report and Order includes, at a minimum, the 183 
winning bidders that qualified as small entities in the Blocks C 
through F broadband PCS auctions.

D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    94. Below, we analyze the projected reporting, recordkeeping, and 
other compliance requirements that may apply to small entities and 
small incumbent LECs, and we mention some of the skills needed to meet 
these new requirements. Overall, we anticipate that the impact of these 
rules will be beneficial to small businesses and other filers. By 
requiring supervised pre-filing settlement discussions, and offering a 
faster alternative for the resolution of competitive disputes, these 
rules will assist in the settlement of disputes without litigation, and 
they will result in the speedier disposition of complaints that are 
actually filed. Moreover, Commission staff retains the discretion to 
refuse to accept a complaint proceeding onto the Accelerated Docket if 
it appears that such acceptance would place an inordinately high burden 
on one party, including small business entities.
    95. Supervised Settlement Discussions. The amended rules will 
require a prospective complainant to notify Commission staff of its 
intention to file a complaint and then to participate in staff-
supervised, pre-filing settlement discussions before its complaint, 
once filed, will be accepted onto the Accelerated Docket. Similarly, 
the amended rules require a defendant seeking admission to the 
Accelerated Docket to submit its written request to the staff and then 
to participate in any supervised settlement discussions that the staff 
deems appropriate. Although these supervised negotiation requirements 
may delay slightly a complainant's filing of a formal complaint or the 
progress of a proceeding in which a complaint has already been filed, 
we conclude that these requirements will serve to settle or narrow 
disputes, or to facilitate the compilation and exchange of relevant 
documentation or other information prior to the filing of a formal 
complaint with the Commission.
    96. Pleadings and Discovery. The amended rules require complaints 
and answers to be accompanied by copies of all documents within the 
filing party's possession, custody or control which are likely to bear 
significantly on any claim or defense in the proceeding. The defendant 
must file its answer within ten days after service of the complaint. No 
separate reply pleading shall be permitted, but complainants that would 
otherwise file a reply may include that material in their pre-status-
conference filing. In addition to the automatic

[[Page 41445]]

document production that will accompany both parties' initial 
pleadings, parties may include in their pre-status-conference filings, 
requests for additional discovery, including requests for depositions, 
interrogatories or additional document production.
    97. Status Conferences. An initial status conference will take 
place ten calendar days after the filing of the answer unless otherwise 
ordered by the staff. Before this status conference, the parties shall 
have conferred regarding: (1) Discovery; (2) issues in dispute; (3) 
facts to which they can stipulate; (4) factual and legal issues in 
dispute. The parties shall submit, two days before the initial status 
conference, a joint statement of stipulated facts and, if possible, 
joint statements regarding agreed discovery and disputed issues. Where 
opposing parties cannot agree on discovery issues or on a joint 
statement of disputed issues, each party shall submit, two days before 
the status conference, a separate statement on these issues.
    98. These amended rules may place a greater burden on parties, 
including small business entities, to file their answers and provide 
copies of discoverable documents to their opponents within a short 
period of time. However, in many other respects, the rules pleading, 
discovery and status conference rules under the Accelerated Docket are 
significantly less burdensome than under the rules applicable more 
generally to formal complaint proceedings. For example, it will be 
substantially less burdensome for defendant simply to provide copies of 
the appropriate documents to their opponents than it will be to compile 
the document inventory required in other formal complaint proceedings. 
Additionally, in light of the substantial time that it may take to 
negotiate joint statements of disputed issues, parties on the 
Accelerated Docket are permitted to submit separate statements 
containing this information. These rules will enable the Commission to 
resolve many preliminary issues efficiently at the initial status 
conference and thereby prevent the parties from wasting resources 
through delay. Furthermore, the rules will enable the parties quickly 
to receive substantial discovery through an automatic document 
production. This should substantially speed parties' preparation of 
their cases.
    99. Minitrials and Petitions for Review. Between forty and forty-
five days after a complaint is filed in an Accelerated Docket 
proceeding, the parties will participate in a minitrial proceeding at 
which they will present their case through live testimony and/or 
argument of counsel. Parties will be required to file proposed findings 
of fact and conclusions of law two days before the minitrial; rebuttal 
proposed findings of fact and conclusions of law may be filed three 
days after the conclusion of the minitrial. Once the staff has issued a 
decision, any application for review by the Commission will be due 
fifteen days after the release of the decision. Oppositions to the 
application for review will be due fifteen days after the application; 
and replies in support of the application will be due ten days 
thereafter.
    100. These amended rules may place a burden on parties, including 
small business entities, to prepare the required proposed findings of 
fact and conclusions of law and to prepare and present their cases at 
the minitrial. However, this burden will be offset by a corresponding 
reduction in the work that the parties would have been required to 
expend preparing briefs under the generally applicable formal complaint 
rules. Additionally, the compressed briefing deadlines will impose some 
additional burden on parties filing applications of review of staff 
decisions. These rules will permit parties to present their cases 
directly to the Commission staff and to respond immediately to 
questions or concerns that the staff may have. Furthermore, the 
compressed briefing schedule for applications for review will ensure 
that the review process for Accelerated Docket proceedings progresses 
quickly, thereby affording the parties a decision by the full 
Commission in as short a time as possible.
    101. As noted above, Commission staff retains the discretion to 
decline to admit a formal complaint proceeding to the Accelerated 
Docket where it appears that such admission would place an unreasonable 
burden on a party to the proceeding, including a small business entity. 
It is also important to note that these rules apply only to section 208 
complaints that are filed with the Commission. Complainants wishing to 
participate in a less accelerated process, for example, may file their 
complaints in federal district court.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    102. These amended rules may place a greater burden on a small 
business entity to provide greater discovery early in the process and 
to litigate their cases more quickly than in the past. However, we 
conclude that the rules do not significantly alter the level of 
evidentiary and legal support that would be ultimately required of 
parties in formal complaint actions pursuant to the past rules. 
Additionally, potentially higher initial costs may be somewhat offset 
by the prompt resolution of complaints and the avoidance of protracted 
and costly discovery proceedings and briefing requirements. It has been 
noted, for example, that the overall litigation costs of ``rocket 
docket'' cases in the U.S. District Court for the Eastern District of 
Virginia are lower than the costs of cases that take longer to resolve. 
Indeed, by requiring better and more complete submissions earlier in 
the process, these amended rules reduce the need for discovery and 
other information filings, thereby significantly reducing the burden on 
small business entities.
    103. Overall, we conclude that there will be a significant positive 
economic impact on small entity carriers that, as a result of the new 
Accelerated Docket, will find their complaints resolved more 
expeditiously than in the past. The establishment of these rules of 
practice and procedure, by providing a forum for prompt resolution of 
complaints of unreasonable, discriminatory, or otherwise unlawful 
conduct by BOCs and other telecommunications carriers, will foster 
robust competition in all telecommunications markets.

F. Report to Congress

    104. The Commission will send a copy of the Amendment of Rules 
Governing Procedures to be Followed When Formal Complaints Are Filed 
Against Common Carriers, Second Report & Order, including this FRFA, in 
a report to be sent to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801 
(a)(1)(A). A summary of this Report and Order and this FRFA will be 
sent to the Chief Counsel for Advocacy of the Small Business 
Administration.

XII. Ordering Clauses

    105. Accordingly, it is ordered that pursuant to sections 1, 4, 
201-205, 208, 260, 271, 274, and 275 of the Communications Act of 1934, 
as amended, 47 U.S.C. 151, 154, 201-205, 208, 260, 271, 274, and 275, 
the policies, rules, and requirements set forth herein are adopted.
    106. It is further ordered that the Second Report & Order is 
adopted and will become effective October 5, 1998, except for 
Secs. 1.115, 1.721, 1.724, 1.726, 1.729, 1.730 and 1.733, which contain 
information collection requirements that are not effective until 
approved by the Office of Management and Budget. The FCC will publish a 
document in the Federal Register announcing the effective date for 
those sections. Written

[[Page 41446]]

comments by the public on the information collections are due September 
3, 1998.
    107. It is further ordered that the Commission's Office of Public 
Affairs shall send a copy of this Second Report & Order, including the 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with paragraph 603(a) of the Regulatory 
Flexibility Act, Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601, et seq. 
(1981).

List of Subjects in 47 CFR Part 1

    Communications common carriers.

Federal Communications Commission,
Magalie Roman Salas,
Secretary.

Rule Changes

    Part 1 of title 47 of the Code of Federal Regulations is amended as 
follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for part 1 continues to read as follows:

    Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j), 
155, 225, and 303(r).

    2. Section 1.115 is amended by adding paragraph (e)(4) to read as 
follows:


Sec. 1.115  Application for review of action taken pursuant to 
delegated authority.

* * * * *
    (e) * * *
    (4) Applications for review of final staff decisions issued on 
delegated authority in formal complaint proceedings on the Common 
Carrier Bureau's Accelerated Docket (see, e.g., Sec. 1.730) shall be 
filed within 15 days of public notice of the decision, as that date is 
defined in Sec. 1.4(b). These applications for review, oppositions and 
replies in Accelerated Docket proceedings shall be served on parties to 
the proceeding by hand or facsimile transmission.
* * * * *
    3. Section 1.720 is amended by revising the introductory paragraph 
to read as follows:


Sec. 1.720  General pleading requirements.

    Formal complaint proceedings are generally resolved on a written 
record consisting of a complaint, answer, and joint statement of 
stipulated facts, disputed facts and key legal issues, along with all 
associated affidavits, exhibits and other attachments. Commission 
proceedings may also require or permit other written submissions such 
as briefs, written interrogatories, and other supplementary documents 
or pleadings. Those formal complaint proceedings handled on the Common 
Carrier Bureau's Accelerated Docket are subject to pleading and 
procedural rules that differ in some respects from the general rules 
for formal complaint proceedings.
* * * * *
    4. Section 1.721 is amended by revising the section heading and the 
introductory text of paragraph (a), and by adding paragraph (e) to read 
as follows:


Sec. 1.721  Format and content of complaints.

    (a) Subject to paragraph (e) of this section governing Accelerated 
Docket proceedings, a formal complaint shall contain:
* * * * *
    (e) Complaints on the Accelerated Docket. For the purpose of this 
paragraph (e), the term document also shall include data compilations 
and tangible things.
    (1) Formal complaints that have been accepted onto the Accelerated 
Docket shall conform to the requirements set out in this section with 
the following listed exceptions:
    (i) The requirement in Sec. 1.720(c) and paragraphs (a)(5) and 
(a)(11) of this section that factual assertions be supported by 
affidavit shall not apply to complaints on the Accelerated Docket. 
Nevertheless, allegations of material fact, whether based on personal 
knowledge or information and belief, that cannot be supported by 
documentation remain subject to the provisions of Sec. 1.52.
    (ii) Complaints on the Accelerated Docket are not required to 
include proposed findings of fact, conclusions of law, and legal 
analysis relevant to the claims and arguments set forth in the 
complaint, as required in paragraph (a)(6) of this section. 
Nevertheless, complaints on the Accelerated Docket shall fully set out 
the facts and legal theories on which the complainant premises its 
claims.
    (iii) In light of the requirement for staff-supervised settlement 
negotiations in Sec. 1.730(b), complaints on the Accelerated Docket are 
not required to include a certification that the complainant has 
discussed or attempted to discuss the possibility of settlement with 
each defendant, as required in paragraph (a)(8) of this section.
    (iv) In light of the automatic document production required in 
Sec. 1.729(i)(1), complaints on the Accelerated Docket are not required 
to include a description of all relevant documents in the complainant's 
possession, custody or control, as required in paragraph (a)(10)(ii) of 
this section.
    (v) Complaints on the Accelerated Docket are not required to 
provide the description, required in paragraph (a)(10)(iii) of this 
section, of the manner in which the complainant identified persons with 
knowledge of, and documents relevant to, the dispute.
    (2) Formal complaints that have been accepted onto the Accelerated 
Docket will comply with the following requirements in addition to those 
requirements generally applicable in formal complaint proceedings:
    (i) As required in Sec. 1.729(i)(1), complaints on the Accelerated 
Docket shall be accompanied, when served on defendants, by copies of 
documents, within the complainant's possession, custody or control, 
that are likely to bear significantly on the issues raised in the 
complaint. Unless otherwise directed, these documents shall not be 
filed with the Commission.
    (ii) Complaints on the Accelerated Docket will bear the following 
notation in bold typeface above the normal caption on the first page: 
``Accelerated Docket Proceeding: Answer Due Within Ten Days of Service 
Date.''
    5. Section 1.724 is amended by revising paragraph (a) and by adding 
paragraph (k) to read as follows:


Sec. 1.724  Answers.

    (a) Subject to paragraph (k) of this section governing Accelerated 
Docket proceedings, any carrier upon which a copy of a formal complaint 
is served shall answer such complaint in the manner prescribed under 
this section within twenty days of service of the formal complaint by 
the complainant, unless otherwise directed by the Commission.
* * * * *
    (k) Accelerated Docket Proceedings. For the purpose of this 
paragraph (k), the term document also shall include data compilations 
and tangible things.
    (1) Any party named as a defendant in an Accelerated Docket formal 
complaint shall answer such complaint in the manner prescribed under 
this section within ten days of service of the complaint by the 
complainant, unless otherwise directed by the Commission. Except as set 
forth in this paragraph (k), answers in Accelerated Docket proceedings 
shall comply with the requirements of this section.
    (2) The requirement in Sec. 1.720(c) and paragraph (g) of this 
section that factual assertions be supported by affidavit shall not 
apply to answers in Accelerated Docket proceedings. Nevertheless, 
allegations of material fact, whether based on personal

[[Page 41447]]

knowledge or information and belief, that cannot be supported by 
documentation remain subject to the provisions of Sec. 1.52.
    (3) Answers on the Accelerated Docket are not required to include 
proposed findings of fact, conclusions of law, and legal analysis 
relevant to the defenses and arguments set forth in the answer, as 
required in paragraph (c) of this section. Nevertheless, answers on the 
Accelerated Docket shall fully set out the facts and legal theories on 
which the defendant premises its defenses.
    (4) In light of the requirement for staff-supervised settlement 
negotiations required in Sec. 1.730(b), answers on the Accelerated 
Docket are not required to include a certification that the defendant 
has discussed, or attempted to discuss, the possibility of settlement 
with the complainant, as required in paragraph (h) of this section.
    (5) As required in Sec. 1.729(i)(1), answers on the Accelerated 
Docket shall be accompanied, when served on complainants, by copies of 
documents, within the defendant's possession, custody or control, that 
are likely to bear significantly on the issues raised in the 
proceeding. Unless otherwise directed, these documents shall not be 
filed with the Commission. In light of this automatic document 
production requirement, answers on the Accelerated Docket are not 
required to include a description of all relevant documents in the 
defendant's possession, custody or control, as required in paragraph 
(f)(2) of this section.
    (6) Answers on the Accelerated Docket are not required to provide 
the description, required in paragraph (f)(3) of this section, of the 
manner in which the defendant identified persons with knowledge of, and 
documents relevant to, the dispute.
    (7) In Accelerated Docket proceedings, the defendant, as required 
in Sec. 1.729(i)(1), shall serve, contemporaneously with its answer, 
the complainant(s) with copies of documents, within the defendant's 
possession, custody or control, that are likely to bear significantly 
on the issues raised in the complaint and/or the answer.
    6. Section 1.726 is amended by revising paragraph (a) and adding 
paragraph (g) to read as follows:


Sec. 1.726  Replies.

    (a) Subject to paragraph (g) of this section governing Accelerated 
Docket proceedings, within three days after service of an answer 
containing affirmative defenses presented in accordance with the 
requirements of Sec. 1.724(e), a complainant may file and serve a reply 
containing statements of relevant, material facts that shall be 
responsive to only those specific factual allegations made by the 
defendant in support of its affirmative defenses. Replies which contain 
other allegations or arguments will not be accepted or considered by 
the Commission.
* * * * *
    (g) Accelerated Docket Proceedings. For the purpose of this 
paragraph (g), the term document also shall include data compilations 
and tangible things.
    (1) The filing of a separate pleading to reply to affirmative 
defenses is not permitted in Accelerated Docket proceedings. 
Complainants in such proceedings may include, in the Sec. 1.733(i)(4) 
pre-status-conference filing, those statements that otherwise would 
have been the subject of a reply.
    (2) In Accelerated Docket proceedings, the failure to reply, in the 
pre-status-conference filing, to an affirmative defense shall be deemed 
an admission of such affirmative defense and of any facts supporting 
such affirmative defense that are not specifically contradicted in the 
complaint.
    (3) If a complainant replies to an affirmative defense in its 
Sec. 1.733(i)(4), pre-status-conference filing, it shall include in 
that filing the information, required by paragraph (d)(1) of this 
section, identifying individuals with firsthand knowledge of the facts 
alleged in the reply.
    (4) An Accelerated Docket complainant that replies to an 
affirmative defense in its Sec. 1.733(i)(4), pre-status-conference 
filing also shall serve on the defendant, at the same time as that 
filing, those documents in the complainant's possession, custody or 
control that were not previously produced to the defendant and that are 
likely to bear significantly on the issues raised in the reply. Such a 
complainant is not required to comply with the remainder of the 
requirements in paragraphs (d) and (e) of this section.
    7. Section 1.727 is amended by revising paragraph (a) to read as 
follows:


Sec. 1.727  Motions.

    (a) A request to the Commission for an order shall be by written 
motion, stating with particularity the grounds and authority therefor, 
and setting forth the relief or order sought.
* * * * *
    8. Section 1.729 is amended by revising paragraph (a) and adding 
paragraph (i) to read as follows:


Sec. 1.729  Discovery.

    (a) Subject to paragraph (i) of this section governing Accelerated 
Docket proceedings, a complainant may file with the Commission and 
serve on a defendant, concurrently with its complaint, a request for up 
to ten written interrogatories. A defendant may file with the 
Commission and serve on a complainant, during the period starting with 
the service of the complaint and ending with the service of its answer, 
a request for up to ten written interrogatories. A complainant may file 
with the Commission and serve on a defendant, within three calendar 
days of service of the defendant's answer, a request for up to five 
written interrogatories. Subparts of any interrogatory will be counted 
as separate interrogatories for purposes of compliance with this limit. 
Requests for interrogatories filed and served pursuant to this 
procedure may be used to seek discovery of any non-privileged matter 
that is relevant to the material facts in dispute in the pending 
proceeding, provided, however, that requests for interrogatories filed 
and served by a complainant after service of the defendant's answer 
shall be limited in scope to specific factual allegations made by the 
defendant in support of its affirmative defenses. This procedure may 
not be employed for the purpose of delay, harassment or obtaining 
information that is beyond the scope of permissible inquiry related to 
the material facts in dispute in the pending proceeding.
* * * * *
    (i) Discovery in Accelerated Docket proceedings.
    (1) Each party to an Accelerated Docket proceeding shall serve, 
with its initial pleading and with any reply statements in the pre-
status-conference filing (see Sec. 1.726(g)(1)), copies of all 
documents in the possession, custody or control of the party that are 
likely to bear significantly on any claim or defense. For the purpose 
of this paragraph (i), document also shall include data compilations 
and tangible things. A document is likely to bear significantly on a 
claim or defense if it:
    (i) Appears likely to have an influence on, or affect the outcome 
of, a claim or defense;
    (ii) Reflects the relevant knowledge of persons who, if their 
potential testimony were known, might reasonably be expected to be 
deposed or called as a witness by any of the parties;
    (iii) Is something that competent counsel would consider reasonably 
necessary to prepare, evaluate or try a claim or defense; or

[[Page 41448]]

    (iv) Would not support the disclosing party's contentions.
    (2) In their Sec. 1.733(i)(4) pre-status-conference filings, 
parties to Accelerated Docket proceedings may request the production of 
additional documents. In their Sec. 1.733(i)(4) filings, parties may 
also seek leave to conduct a reasonable number of depositions, 
including depositions of expert witnesses, if any. When requesting 
additional discovery, each party shall be prepared at the status 
conference to justify its requests by identifying the specific issue or 
issues on which it expects to obtain evidence from each request.
    (3) Interrogatories shall not be routinely granted in Accelerated 
Docket proceedings. A party to an Accelerated Docket proceeding that 
prefers interrogatories to the other forms of available discovery, for 
reasons of convenience or expense, may seek leave in its 
Sec. 1.733(i)(4) pre-status-conference filing to propound a limited 
number of interrogatories.
    (4) Expert Witnesses.
    (i) Any complainant in an Accelerated Docket proceeding that 
intends to rely on expert testimony for a purpose other than to rebut a 
defendant's expert evidence, shall identify its expert witnesses in the 
information designation required by Sec. 1.721(a)(10)(i). In its 
Sec. 1.721(a)(10)(i) information designation, such a complainant shall 
also provide its expert statement. For purposes of this paragraph 
(i)(4), an expert statement shall include a brief statement of the 
opinions to be expressed by the expert, the basis and reasons therefor 
and any data or other information that the witness considered in 
forming her opinions.
    (ii) Any defendant in an Accelerated Docket proceeding that intends 
to rely on expert testimony shall identify its expert witnesses in the 
information designation required by Sec. 1.724(f)(1). Such a defendant 
shall provide its expert statement with its Sec. 1.733(i)(4), pre-
status-conference filing.
    (iii) Any complainant in an Accelerated Docket proceeding that 
intends to rely on previously undisclosed expert testimony to rebut any 
portion of the defendant's case shall identify the expert and provide 
the appropriate expert statement at the initial status conference.
    (iv) Expert witnesses shall be subject to deposition in Accelerated 
Docket proceedings under the same rules and limitations applicable to 
fact witnesses.
    9. Section 1.730 is revised to read as follows:


Sec. 1.730  The Common Carrier Bureau's Accelerated Docket.

    (a) Parties to formal complaint proceedings within the 
responsibility of the Common Carrier Bureau (see Sec. 0.291 of this 
chapter) may request inclusion on the Bureau's Accelerated Docket. As 
set out in Secs. 1.720--1.736, proceedings on the Accelerated Docket 
are subject to shorter pleading deadlines and certain other procedural 
rules that do not apply to other formal complaint proceedings before 
the Common Carrier Bureau.
    (b) Any party that contemplates filing a formal complaint may 
submit a request to the Chief of the Common Carrier Bureau's 
Enforcement Division, either by phone or in writing, seeking inclusion 
of its complaint, once filed, on the Accelerated Docket. In appropriate 
cases, Commission staff shall schedule and supervise pre-filing 
settlement negotiations between the parties to the dispute. If the 
parties do not resolve their dispute and the matter is accepted for 
handling on the Accelerated Docket, the complainant shall file its 
complaint with a letter stating that it has gained admission to the 
Accelerated Docket. When it files its complaint, such a complainant 
shall also serve a copy of its complaint on the Commission staff that 
supervised the pre-filing settlement discussions.
    (c) Within five days of receiving service of a complaint, any 
defendant in a formal complaint proceeding may submit by facsimile or 
hand delivery, to the Chief of the Common Carrier Bureau's Enforcement 
Division, a request seeking inclusion of its proceeding on the 
Accelerated Docket. Such a defendant contemporaneously shall transmit, 
in the same manner, a copy of its request to all parties to the 
proceeding. A defendant submitting such a request shall file and serve 
its answer in compliance with the requirements of Sec. 1.724(k), except 
that the defendant shall not be required to serve with its answer the 
automatic document production required by Secs. 1.724(k)(7) and 
1.729(i)(1). In proceedings accepted onto the Accelerated Docket at a 
defendant's request, the Commission staff will conduct supervised 
settlement discussions as appropriate. After accepting such a 
proceeding onto the Accelerated Docket, Commission staff will establish 
a schedule for the remainder of the proceeding, including the parties' 
Sec. 1.729(i)(1) automatic production of documents.
    (d) During the thirty days following the effective date of these 
rules, any party to a pending formal complaint proceeding in which an 
answer has been filed or is past due may seek admission of the 
proceeding to the Accelerated Docket by submitting a request by 
facsimile or hand delivery to the Chief of the Common Carrier Bureau's 
Enforcement Division, with facsimile copies to all other parties to the 
proceeding by the same mode of transmission. If a pending proceeding is 
accepted onto the Accelerated Docket, Commission staff will conduct 
supervised settlement discussions if appropriate and establish a 
schedule for the remainder of the proceeding, including the parties' 
Sec. 1.729(i)(1) automatic production of documents if necessary.
    (e) In determining whether to admit a proceeding onto the 
Accelerated Docket, Commission staff may consider factors from the 
following, non-exclusive list:
    (1) Whether it appears that the parties to the dispute have 
exhausted the reasonable opportunities for settlement during the staff-
supervised settlement discussions.
    (2) Whether the expedited resolution of a particular dispute or 
category of disputes appears likely to advance competition in the 
telecommunications market.
    (3) Whether the issues in the proceeding appear suited for decision 
under the constraints of the Accelerated Docket. This factor may 
entail, inter alia, examination of the number of distinct issues raised 
in a proceeding, the likely complexity of the necessary discovery, and 
whether the complainant bifurcates any damages claims for decision in a 
separate proceeding. See Sec. 1.722(b).
    (4) Whether the complainant states a claim for violation of the 
Act, or Commission rule or order that falls within the Commission's 
jurisdiction.
    (5) Whether it appears that inclusion of a proceeding on the 
Accelerated Docket would be unfair to one party because of an 
overwhelming disparity in the parties' resources.
    (6) Such other factors as the Commission staff, within its 
substantial discretion, may deem appropriate and conducive to the 
prompt and fair adjudication of complaint proceedings.
    (f) If it appears at any time that a proceeding on the Accelerated 
Docket is no longer appropriate for such treatment, Commission staff 
may remove the matter from the Accelerated Docket either on its own 
motion or at the request of any party.
    (g) Minitrials.
    (1) In Accelerated Docket proceedings, the Commission may conduct a 
minitrial, or hearing-type proceeding, as an alternative to requiring 
that parties submit briefs in support of their cases. Minitrials

[[Page 41449]]

typically will take place between 40 and 45 days after the filing of 
the complaint. A Commission Administrative Law Judge (``ALJ'') 
typically will preside at the minitrial, administer oaths to witnesses, 
and time the parties' presentation of their cases. In consultation with 
the Commission staff, the ALJ will rule on objections or procedural 
issues that may arise during the course of the minitrial.
    (2) Before a minitrial, each party will receive a specific time 
allotment in which it may present evidence and make argument during the 
minitrial. The ALJ or other Commission staff presiding at the minitrial 
will deduct from each party's time allotment any time that the party 
spends presenting either evidence or argument during the proceeding. 
The presiding official shall have broad discretion in determining any 
time penalty or deduction for a party who appears to be intentionally 
delaying either the proceeding or the presentation of another party's 
case. Within the limits imposed by its time allotment, a party may 
present evidence and argument in whatever manner or format it chooses, 
provided, however, that the submission of written testimony shall not 
be permitted.
    (3) Three days before a minitrial, each party to a proceeding shall 
serve on all other parties a copy of all exhibits that the party 
intends to introduce during the minitrial and a list of all witnesses, 
including expert witnesses, that the party may call during the 
minitrial. Service of this material shall be accomplished either by 
hand or by facsimile transmission. Objections to any exhibits or 
proposed witness testimony will be heard before the beginning of the 
minitrial.
    (4) No party will be permitted to call as a witness in a minitrial, 
or otherwise offer evidence from, an individual in that party's employ, 
unless the individual appears on the party's information designation 
(see Secs. 1.721(a)(10)(i) or 1.724(f)(1)) with a general description 
of the issues on which she will offer evidence. No party will be 
permitted to present expert evidence unless the party has complied 
fully with the expert-disclosure requirements of Sec. 1.729(i)(4). The 
Commission may permit exceptions to the rules in this paragraph (g)(4) 
for good cause shown.
    (5) Two days before the beginning of the minitrial, parties shall 
file proposed findings of fact and conclusions of law. These 
submissions shall not exceed 40 pages per party. Within three days 
after the conclusion of the minitrial, parties may submit revised 
proposed findings of fact and conclusions of law to meet evidence 
introduced or arguments raised at the minitrial. These submissions 
shall not exceed 20 pages per party.
    (6) The parties shall arrange for the stenographic transcription of 
minitrial proceedings so that transcripts are available and filed with 
the Commission no more than three days after the conclusion of the 
minitrial. Absent an agreement to the contrary, the cost of the 
transcript shall be shared equally between the parties to the 
proceeding.
    (h) Applications for review of staff decisions issued on delegated 
authority in Accelerated Docket proceedings shall comply with the 
filing and service requirements in Sec. 1.115(e)(4). In those 
Accelerated Docket proceedings which raise issues that may not be 
decided on delegated authority (see 47 U.S.C. 155(c)(1); 47 CFR 
0.291(d)), the staff decision issued after the minitrial will be a 
recommended decision subject to adoption or modification by the 
Commission. Any party to the proceeding that seeks modification of the 
recommended decision may do so by filing comments challenging the 
decision within 15 days of its release by the Commission's Office of 
Public Affairs. (Compare Sec. 1.4(b)(2).) Opposition comments may be 
filed within 15 days of the comments challenging the decision; reply 
comments may be filed 10 days thereafter and shall be limited to issues 
raised in the opposition comments.
    (i) If no party files comments challenging the recommended 
decision, the Commission will issue its decision adopting or modifying 
the recommended decision within 45 days of its release. If parties to 
the proceeding file comments to the recommended decision, the 
Commission will issue its decision adopting or modifying the 
recommended decision within 30 days of the filing of the final 
comments.
    10. Section 1.733 is amended by revising paragraphs (a) 
introductory text and (b) and adding paragraph (i) to read as follows:


Sec. 1.733  Status conference.

    (a) In any complaint proceeding, the Commission may, in its 
discretion, direct the attorneys and/or the parties to appear before it 
for a status conference. Unless otherwise ordered by the Commission, 
and with the exception of Accelerated Docket proceedings, governed by 
paragraph (i) of this section, an initial status conference shall take 
place, at the time and place designated by the Commission staff, ten 
business days after the date the answer is due to be filed. A status 
conference may include discussion of:
* * * * *
    (b)(1) Subject to paragraph (i) of this section governing 
Accelerated Docket proceedings, parties shall meet and confer prior to 
the initial status conference to discuss:
    (i) Settlement prospects;
    (ii) Discovery;
    (iii) Issues in dispute;
    (iv) Schedules for pleadings;
    (v) Joint statement of stipulated facts, disputed facts, and key 
legal issues; and
    (vi) In a 47 U.S.C. 271(d)(6)(B) proceeding, whether or not the 
parties agree to waive the 47 U.S.C. 271(d)(6)(B) 90-day resolution 
deadline.
    (2) Subject to paragraph (i) of this section governing Accelerated 
Docket proceedings, parties shall submit a joint statement of all 
proposals agreed to and disputes remaining as a result of such meeting 
to Commission staff at least two business days prior to the scheduled 
initial status conference.
* * * * *
    (i) Accelerated Docket Proceedings.
    (1) In Accelerated Docket proceedings, the initial status 
conference will be held 10 days after the answer is due to be filed.
    (2) Prior to the initial status conference, the parties shall 
confer, either in person or by telephone, about:
    (i) Discovery to which they can agree;
    (ii) Facts to which they can stipulate; and
    (iii) Factual and legal issues in dispute.
    (3) Two days before the status conference, parties shall submit to 
Commission staff a joint statement of:
    (i) The agreements that they have reached with respect to 
discovery;
    (ii) The facts to which they have agreed to stipulate; and
    (iii) The disputed facts or legal issues of which they can agree to 
a joint statement.
    (4) Two days before the status conference, each party also shall 
submit to Commission staff a separate statement which shall include, as 
appropriate, the party's statement of the disputed facts and legal 
issues presented by the complaint proceeding and any additional 
discovery that the party seeks. A complainant that wishes to reply to a 
defendant's affirmative defense shall do so in its pre-status-
conference filing. To the extent that this filing contains statements 
replying to an affirmative defense, the complainant shall include, and/
or serve with the statement, the witness information and documents 
required in Sec. 1.726(g)(3)-(4). A defendant that intends to rely on

[[Page 41450]]

expert evidence shall include its expert statement in its pre-status 
conference filing. (See Sec. 1.729(i)(4)(ii).)

[FR Doc. 98-20745 Filed 8-3-98; 8:45 am]
BILLING CODE 6712-01-P