[Federal Register Volume 64, Number 56 (Wednesday, March 24, 1999)]
[Rules and Regulations]
[Pages 14141-14148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6726]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 51 and 64
[CC Docket No. 95-20; FCC 99-36]
Computer III Further Remand Proceedings: Bell Operating Company
Provision of Enhanced Services
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Report and Order released March 10, 1999 streamlines the
Commission's Comparably Efficient Interconnection (CEI) and network
information disclosure rules. The Report and Order frees the Bell
Operating Companies (BOCs) from the requirement that they obtain pre-
approval of their CEI plans and plan amendments from the Commission
before initiating or altering an intraLATA information service. This
change to the CEI rules will result in new information services being
available to the public sooner. The Report and Order clarifies the
network information disclosure rules, and relieves the interexchange
carriers (IXCs) and competitive local exchange carriers (Competitive
LECs) from these reporting requirements. As a result, these carriers
will no longer perform a task the Commission has found to be
unnecessary.
DATES: Effective April 23, 1999, except for Secs. 51.325, 64.702, and
Subpart G of Part 64, which contain information collection requirements
which have not been approved by the Office of Management and Budget
(OMB) and which will be effective June 2, 1999. Written comments by the
public on the modified information collections are due April 23, 1999.
Written comments must be submitted by OMB on the modified information
collections on or before May 24, 1999.
FOR FURTHER INFORMATION CONTACT: Jonathan Reel, Attorney, Common
Carrier Bureau, Policy and Program Planning Division, (202) 418-1580 or
via the Internet at jreel@fcc.gov. Further information may also be
obtained by calling the Common Carrier Bureau's TTY number: 202-418-
0484. For additional information concerning the information collections
contained in this Order contact Judy Boley at (202) 418-0214, or via
the Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order adopted February 24, 1999, and released March 3, 1999. This
Report and Order contains new or modified information collections
subject to the Paperwork Reduction Act of 1995 (PRA). It has been
submitted to the Office of Management and Budget (OMB) for review under
the PRA. OMB, the general public, and other federal agencies are
invited to comment on the proposed information collections contained in
this proceeding. The full text of this Report and Order is available
for inspection and copying during normal business hours in the FCC
Reference Center, 445 12th Street, N.W., Washington, D.C. The complete
text also may be obtained through the World Wide Web, at http://
www.fcc.gov/Bureaus/Common Carrier/Orders/fcc9936.wp, or may be
purchased from the Commission's copy contractor, International
Transcription Service, Inc., (202) 857-3800, 1231 20th St., N.W.,
Washington, D.C. 20036.
Regulatory Flexibility Certification: As required by the Regulatory
Flexibility Act, the Report and Order contains a Final Regulatory
Flexibility Analysis which is set forth in the Report and Order. A
brief description of the analysis follows. The Report and Order removes
the network information disclosure requirements from interexchange
carriers and competitive local exchange carriers. These carriers are
thus relieved of the burden associated with the requirements, and for
that reason the Commission continues to foresee no significant economic
impact on a substantial number of small entities.
Paperwork Reduction Act: This Report and Order contains either a
new or modified information collection. The Commission, as part of its
continuing effort to reduce paperwork burdens, invites the general
public and the Office of Management and Budget (OMB) to comment on the
information collections contained in this Order, as required by the
Paperwork Reduction Act of 1995, Public Law No. 104-12. Written
comments by the public on the information collections are due 30 days
after date of publication in the Federal Register. OMB notification of
action is due May 24, 1999. Comments should address: (a) whether the
new or modified collection of information is necessary for the proper
performance of the functions of the Commission, including whether the
information shall 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: 3060-0817.
Title: Computer III Further Remand Proceedings: Bell Operating
Company Provision of Enhanced Services, CC Docket No. 95-20.
Form No.: N/A.
Type of Review: Revised collection.
[[Page 14142]]
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No. of Estimated time
Information collection respondents per response Total annual
(approx.) (house) burden
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Section 51.325............................................... 500 72 36,000
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Total Annual Burden: 36,000 hours (no change in burden).
Respondents: Businesses or other for-profit.
Estimated costs per respondent: $0.
Needs and Uses: The Commission no longer requires Bell Operating
Companies (BOCs) to file their Comparably Efficient Interconnection
(CEI) plans with the Commission and to obtain pre-approval of CEI plans
and amendments before initiating or altering an intraLATA information
service. Instead, we require BOCs to post their CIE plans and plan
amendments on their publicly accessible Internet sites linked to and
searchable from the BOC's main Internet page, and to notify the Common
Carrier Bureau of the posting. The Commission also extended the
disclosure requirements in 47 CFR Section 51.325(a) to require
incumbent LECs to provide public notice of any network changes that
will affect the manner in which Customer Premises Equipment (CPE) is
attached to the network. The requirements will be used to ensure that
the affected carriers comply with Commission policies and regulations
safeguarding against potential anticompetitive behavior in the
provision of information services.
Synopsis of Order
I. Introduction
1. In the Telecommunications Act of 1996 (1996 Act), Congress
directed the Commission to examine its rules every two years and repeal
or modify those found to be no longer in the public interest.
Consistent with the directive of Congress, in 1998 the Commission
undertook a comprehensive biennial review of the Commission's rules to
promote ``meaningful deregulation and streamlining where competition or
other considerations warrant such action.''
2.In this Report and Order (Order) the Commission evaluates the
utility of two of the regulatory safeguards we employ to prevent
carriers that control local exchange and exchange access facilities
from using their market power for anticompetitive purposes in the
provision of intraLATA information services. The first safeguard we
review is the requirement that Bell Operating Companies (BOCs) file
service-specific Comparably Efficient Interconnection (CEI) plans, and
obtain the Commission's approval of those plans, prior to initiating or
altering their intraLATA information services. The other safeguards we
review are the Commission's network information disclosure
requirements, which seek to prevent anticompetitive behavior by
ensuring that Information Service Providers (ISPs) and others have
timely access to information affecting interconnection to the BOCs'',
AT&T's, and other carriers' networks.
3. Our consideration of these two issues is part of a larger
proceeding to reexamine issues relating to the safeguards applied
primarily to the provision of information services by the BOCs. In
January 1998, the Commission released a Further Notice of Proposed
Rulemaking (Further NPRM) in the Computer III proceeding to reevaluate
structural and nonstructural safeguards in light of recent
developments, among them a remand from the United States Court of
Appeals for the Ninth Circuit (California III), and the enactment of
the 1996 Act. We also intended to repeal or modify any safeguards that
we determine to be ``no longer necessary in the public interest.'' In
the Further NPRM, the Commission sought to strike a reasonable balance
between the goal of reducing and eliminating those regulatory
requirements it could, and the recognition that certain safeguards may
still be necessary.
4. We conclude that although the BOCs must continue to comply with
their CEI obligations, they should no longer be required to file or
obtain pre-approval of CEI plans and plan amendments before initiating
or altering an intraLATA information service. Instead, we will require
the BOCs to post their CEI plans and plan amendments on their publicly
accessible Internet sites, and to notify the Common Carrier Bureau upon
such posting. We also conclude that the network information disclosure
rules set forth in the Computer II and Computer III proceedings have
been effectively superseded by the disclosure rules that the Commission
adopted pursuant to the 1996 Act, and we therefore eliminate those
rules. We retain the Computer II network disclosure requirement that
incumbent local exchange carriers (LECs) must disclose network changes
that could affect the manner in which customer premises equipment (CPE)
is attached to the interstate network.
5. This modification of our CEI rules should reduce substantially
the burden of compliance with these requirements by the BOCs. By
eliminating the need to obtain pre-approval of the BOCs' CEI plans, we
remove the delay that has sometimes hampered the BOCs in their
introduction of new intraLATA information services. Requiring the BOCs
to post CEI plans on their publicly accessible Internet sites should
not delay the introduction of innovative information services, because
posting and service initiation may occur simultaneously. Also, by
limiting the notification aspect of the requirement to a single-page
letter stating the Internet address and path to the relevant CEI plan,
the new procedure minimizes the administrative burden associated with
the plans. Removing the CEI plan pre-approval process allows BOCs to
bring new services to consumers sooner. At the same time, by requiring
BOCs to post their CEI plans on the Internet, we ensure that the
information which the BOCs' competitors still need will continue to be
widely and conveniently available.
6. By removing the Computer II and Computer III network disclosure
regimes, we reduce from three to one the sources to which an incumbent
LEC must look to ascertain its disclosure obligations. All of the
Commission's network disclosure obligations now reside together in
sections 51.325-335 of our rules, which clarifies and streamlines the
network disclosure regulation that remains. In addition, by eliminating
the Computer II ``all carrier'' rule, we remove entirely the regulatory
burden of network information disclosure obligations from both IXCs and
competitive LECs. Instead, we rely on market forces to ensure network
disclosure by those sectors of the telecommunications industry that we
find to be subject to competitive pressures, and in which no carrier
enjoys the degree of market power that could make anti-competitive
nondisclosure appealing. The measures we adopt in this Order thus carry
out the Commission's obligation to review our rules to determine
whether they are no longer necessary in the public interest as a result
of meaningful economic competition.
[[Page 14143]]
II. Comparably Efficient Interconnection Plan Requirements
A. Background
7. Since its Computer I proceeding, the Commission has adopted a
variety of regulatory tools to prevent improper cost allocation and
access discrimination against ESPs in the provision of enhanced
services, both by the BOCs, and, before divestiture, by their
predecessor in interest, AT&T. In the Computer II proceeding, the
Commission required the then-integrated Bell System to establish
structurally separate affiliates for the provision of enhanced services
in order to address the concern over AT&T's incentive and ability to
engage in anticompetitive activity. Following the divestiture of AT&T
in 1984, the Commission extended the structural separation requirements
of Computer II to the BOCs. In Computer III, the Commission determined
that the costs of structural separation outweighed the benefits, and
that nonstructural safeguards could protect competitive ESPs from
improper cost allocation and discrimination by the BOCs while avoiding
the inefficiencies associated with structural separation.
8. Under Computer III and our Open Network Architecture rules, the
BOCs are permitted to provide enhanced services on an integrated basis
through the regulated entity, subject to certain nonstructural
safeguards. One of the safeguards the Commission instituted in the
Computer III decision requires the BOCs to obtain Commission approval
of, and to comply with, a service-specific Comparably Efficient
Interconnection (CEI) plan in order to offer a new enhanced service. In
these CEI plans, the BOC must explain how it would offer to competitive
ESPs, on a non-discriminatory basis, all the underlying basic services
that the BOC uses to provide its own enhanced service offering. The
Commission indicated that such a CEI requirement, itself a form of
interconnection making basic network facilities and services available
to the public.
9. The Commission in 1998 released a Further NPRM to reexamine the
issues of structural and nonstructural safeguards in light of further
developments. We observed in the Further NPRM that the BOCs remain the
dominant providers of local exchange and exchange access services in
their in-region states, and thus continue to have the ability to engage
in anticompetitive behavior against competitive ISPs. The Commission
also acknowledged that Congress recognized, in passing the 1996 Act,
that competition will not immediately supplant monopolies. In addition,
we noted that Congress required the Commission to conduct a biennial
review of regulations that apply to operations or activities of any
provider of telecommunications service, and to repeal or modify any
regulation we determine to be ``no longer necessary in the public
interest.''
10. In the Further NPRM, the Commission tentatively concluded that
we should eliminate the requirement that BOCs file CEI plans and obtain
Commission approval for those plans prior to providing new intraLATA
information services. Given the protection afforded by the Commission's
ONA requirements and the 1996 Act, we tentatively concluded that the
administrative costs associated with BOC preparation and agency review
of CEI plans outweighed their utility as an additional safeguard
against access discrimination, and that the preparation and review of
CEI plans could delay the introduction of new information services by
the BOCs, without commensurate regulatory benefits. Finding that the
burden imposed by these requirements outweighed their benefit as
additional safeguards against access discrimination, we tentatively
concluded that we should eliminate the requirement that BOCs file CEI
plans, and obtain Bureau approval for those plans, prior to providing
new information services. We also tentatively concluded that lifting
the CEI plan filing requirement would further our statutory obligation
to review and eliminate regulations that are ``no longer necessary in
the public interest.'' We sought comment on these tentative conclusions
and our supporting analysis.
B. Discussion
1. Introduction
11. We believe that compliance with the Commission's CEI
requirements remains conducive to the operation of a fair and
competitive market for information services. Based on the record before
us in this proceeding, and as we discuss below, we conclude that the
BOCs' CEI plans have continuing importance in that they provide non-BOC
ISPs with helpful information regarding their interconnection rights,
options, and methods. These plans thus ensure that non-BOC ISPs have
access to the underlying basic services that the BOCs use for their own
information service offerings, access which enables those non-BOC ISPs
to provide competitive offerings. We find that neither the protection
afforded by ONA nor the effect of the 1996 Act has yet rendered the CEI
plans superfluous as an effective means of making this information
available and of promoting BOC compliance with their interconnection
obligations. For these reasons, we do not at this time eliminate the
requirement that BOCs publicly disclose in a written document how they
will comply with the Commission's CEI parameters.
12. We further conclude, however, that, although the BOCs must
continue to prepare CEI plans, we should no longer require BOCs to file
their CEI plans with the Commission, or obtain the Commission's
approval of these plans, before initiating a new or changing an
existing intraLATA information service. We conclude that the chief
burdens associated with the CEI requirements--the administrative burden
associated with filing the plans, and the delay in the introduction of
new services--can be eliminated without compromising the efficient
dissemination of the information contained in the BOC CEI plans. We
eliminate the requirement that BOCs file with the Commission and obtain
from the Commission approval of their CEI plans. In its place, we
require the BOCs to post on their publicly accessible Internet page,
linked to and searchable from the BOC's main Internet page, their CEI
plan for any new or altered intraLATA information service offering, and
to notify the Common Carrier Bureau at the time of the posting.
2. Benefits of Public Disclosure of CEI Compliance
13. From the nine parameters of a BOC's CEI plan, an ISP can obtain
detailed information regarding the following: Interface Functionality;
Unbundling of Basic Services; Resale; Technical Characteristics;
Installation, Maintenance, and Repair; End User Access; CEI
Availability; Minimization of Transport Costs; Availability to All
Interested ISPs.
14. We agree with non-BOC ISPs and other commenters that CEI plans
provide useful information that is either not available, or not
available in as much detail, from other sources. Moreover, we conclude
that the BOCs' CEI plans present this information in a more usable form
than is otherwise available to ISPs. The nine parameters of a CEI plan
unite in a single document the disparate pieces of information that a
BOC makes available to its competitors through other avenues. Such a
collection of information in a single CEI plan is significantly useful
to competitive ISPs. In addition, CEI plans describe the availability
of comparable interconnection to services, as distinct
[[Page 14144]]
from the building-block elements of services described in ONA filings,
and so provide competitive ISPs with a different and frequently more
appropriate level of access to the public switched network.
15. Also, based on these circumstances, we do not believe that our
progress in implementing the 1996 Act has reduced the threat of
discrimination sufficiently to warrant removal of these additional
safeguards at this time.
16. Posting CEI plans on their publicly accessible Internet sites
should not hamper the BOCs in their introduction of innovative
information services, because posting and service initiation may occur
simultaneously. The substance of notification to the Bureau may be
limited to the Internet address and path to the relevant CEI plan or
amended plan; the form may consist of a letter to the Secretary with a
copy to the Bureau.
3. Elimination of Filing and Pre-approval of CEI Plans
17. Based on the record before us, we conclude that the CEI plan
filing and pre-approval process has significant disadvantages without
commensurate advancement of our regulatory goal of ensuring fair and
equal interconnection.
4. CEI Plans for Telemessaging, Alarm Monitoring, and Payphone Services
a. Section 260 Telemessaging and Section 275 Alarm Monitoring Services
18. In the Telemessaging and Electronic Publishing Order, 62 FR
7690, February 20, 1997, and the Alarm Monitoring Order, 62 FR 16093,
April 4, 1997, respectively, the Commission concluded that the Computer
II, Computer III, and ONA requirements continue to govern the BOCs'
provision of intraLATA telemessaging services and alarm monitoring
services.
19. For the same reasons we lift the CEI filing and pre-approval
requirement for other intraLATA information services provided by the
BOCs on an integrated basis, we also lift the requirement for section
260 telemessaging and section 275 alarm monitoring services. We also
require the BOCs to post on their Internet sites CEI plans for new or
modified telemessaging or alarm monitoring services, and to notify the
Bureau of the posting. As with other BOC intraLATA information
services, we believe this approach minimizes a BOC's administrative
burden, and eliminates regulatory delay; provides competitive ISPs with
essential information; promotes the Commission's ability to monitor and
enforce BOC access and interconnection obligations; and appropriately
acknowledges the degree that competitive providers of telemessaging and
alarm monitoring services must still depend on the basic services of
the incumbent LEC--usually a BOC--for access to their customers.
b. Section 276 Payphone Services
20. In the Further NPRM, we noted that section 276 directs the
Commission to prescribe a set of nonstructural safeguards for BOC
provision of payphone services that must include, at a minimum,
``nonstructural safeguards equal to those adopted in the Computer
Inquiry-III (CC Docket No. 90-623) proceeding.'' In implementing
section 276, the Commission required the BOCs, among other things, to
file CEI plans describing how they would comply with various
nonstructural safeguards. The Bureau approved the BOCs' CEI plans to
provide payphone service on April 15, 1997. In the Further NPRM, we
sought comment regarding whether to relieve the BOCs from the
requirement of filing amendments to their CEI plans for payphone
services, and how such a step would comport with the statutory
requirement in section 276.
21. We now conclude that the BOCs should not be required to file or
obtain approval of CEI plans for new payphone services or for
amendments to their existing payphone plans. As with other applications
of CEI, we find that the benefits of CEI plans may be largely preserved
by instead requiring the BOCs to post on their Internet pages CEI plans
for new or amended payphone services. Consistent with our application
of CEI to intraLATA information services that BOCs provide on an
integrated basis, we believe that, under current market conditions,
such posting disseminates valuable interconnection information, and
facilitates our enforcement of BOC interconnection responsibilities, at
minimum cost to the BOCs.
5. IntraLATA Information Services Provided Through 272 and 274
Affiliates
a. Background
22. In the Further NPRM, we observed that, under our current rules,
a BOC may provide an intraLATA information service either on an
integrated basis pursuant to an approved CEI plan, or on a structurally
separate basis pursuant to the Commission's Computer II rules. We noted
that, in addition to the factors cited by the Commission in the
Computer III Phase I Order, 51 FR 24350, July 3, 1986, the advent of
the 1996 Act may affect our analysis of the relative costs and benefits
of structural and nonstructural safeguards. In this context, we noted
that the Act's local competition provisions should in time provide for
alternate sources of access to basic services, thereby diminishing the
BOCs' ability to engage in anticompetitive behavior against competitive
ISPs.
23. Section 272 Separate Affiliates. In the Non-Accounting
Safeguards Order, 62 FR 2927, January 21, 1997, the Commission noted
that section 272 of the Act imposes specific separate affiliate and
nondiscrimination requirements on BOC provision of interLATA
information services, but that section 272 does not address BOC
provision of intraLATA information services. We concluded that, pending
the conclusion of the Computer III Further Remand proceeding, BOCs may
continue to provide intraLATA information services on an integrated
basis, in compliance with the Commission's nonstructural safeguards--
including CEI--established in the Computer III and ONA proceedings. In
the Further NPRM, however, we tentatively concluded that the BOCs
should not have to file CEI plans for any information services they
offer through section 272 separate affiliates, notwithstanding that
section 272's requirements are not identical to the Commission's
Computer II requirements. We also reasoned that our concern regarding
access discrimination would be sufficiently addressed by requirements
set forth in section 272 and the Commission's orders implementing that
section.
24. Section 274 Electronic Publishing. In the Telemessaging and
Electronic Publishing Order, the Commission concluded that our Computer
II, Computer III, and ONA requirements continue to govern the BOCs'
provision of intraLATA electronic publishing services.
25. In the Further NPRM, we tentatively concluded that, just as
BOCs should not be required to file CEI plans for intraLATA information
services they provide through a section 272 affiliate, so too the
requirement should be lifted for electronic publishing services or
other information services that BOCs provide through a section 274
affiliate.
b. Discussion
26. In this Order, we adopt our tentative conclusion that BOCs
should not be required either to file or to obtain pre-approval of CEI
plans for information services that are offered through section 272 or
section 274 separate affiliates. The reasons that persuade us to
eliminate the CEI filing
[[Page 14145]]
and approval process in the context of intraLATA information services
that a BOC offers on an integrated basis --reduction of administrative
burden and elimination of delay--apply with at least equal force to the
intraLATA services that a BOC chooses to offer through a section 272 or
section 274 separate affiliate. The requirements Congress set forth in
sections 272 and 274 substantially reduce our concern regarding access
discrimination, so there is even less reason to delay the introduction
of an intraLATA information service pending our review of a CEI plan.
That the pre-approval process might also delay the introduction of
combined intra-and interLATA integrated information services is a
further reason to eliminate the requirement.
27. Moreover, Congress has instructed us to repeal or modify any
regulation we determine to be ``no longer necessary in the public
interest.'' That Congress itself has addressed in sections 272 and 274
concerns over discriminatory interconnection and misallocation of funds
makes pre-Act regulation by the Commission targeted to the same
concerns the object of our special scrutiny. Because we believe that
structural separation protects against discriminatory interconnection
better than do nonstructural safeguards such as CEI, we see no reason
at this time to impose on the BOCs even the relatively light burden of
posting CEI plans on the Internet for intraLATA information services
they provide through a separate subsidiary. Accordingly, we will no
longer require the BOCs to formulate CEI plans before initiating or
altering any intraLATA information service offered through a section
272 or 274 affiliate.
6. Pending CEI Matters
a. Background
28. In the Further NPRM, we sought comment on whether, if we
adopted our tentative conclusion to eliminate the CEI plan filing
requirement for the BOCs, we should also dismiss as moot all pending
CEI matters, including approval of pending CEI plans, pending CEI plan
amendments, and requests for CEI plan waivers, on the condition that
the BOCs must comply with any new or modified rules that we might
establish.
b. Discussion
29. We now believe that the Commission's section 208 enforcement
process is far better suited than the CEI plan pre-approval process to
addressing the complex and highly fact-specific issues that arise in
certain CEI plans. In certain instances these issues fall outside the
scope of the nine CEI parameters. The section 208, formal complaint
process is set up to conduct the fact-finding, arbitration, and
adjudication necessary to resolve CEI-related disputes. Moreover,
through use of the Commission's Accelerated Docket or revised complaint
procedures, parties would have swifter resolution and closure of their
CEI-related disputes. For these reasons, we are confident that all
parties, BOCs and non-BOCs, will be better served by the information-
and enforcement-based system we adopt today, and we dismiss all pending
requests for approval of CEI plans and CEI plan amendments.
30. We also dismiss without prejudice any pending petitions for
reconsideration or applications for review of orders approving CEI
plans. We believe that these complicated, fact-specific issues may be
more appropriately and more quickly resolved in the enforcement setting
than in the context of a CEI plan. Accordingly, parties affected by
such ancillary issues may file section 208 formal complaints with the
Commission. Should they file such a complaint, those parties with
previously pending challenges to CEI plans may, as appropriate, rely on
their already existing record, rather than developing a factual record
through the procedures normally applicable to formal complaints.
III. Network Information Disclosure Requirements
A. Background
31. In the Further NPRM, we addressed the Commission's network
information disclosure rules. These rules seek to prevent
anticompetitive behavior by ensuring that ISPs and others have timely
access to information affecting interconnection to the BOCs', AT&T's,
and other carriers' networks. Prior to the 1996 Act, the rules
established in the Commission's Computer II and Computer III
proceedings governed the disclosure of network information. Section
251(c)(5) of the Act requires incumbent LECs to ``provide reasonable
public notice of changes in the information necessary for the
transmission and routing of services using that local exchange
carrier's facilities or networks, as well as of any other changes that
would affect the interoperability of those facilities or networks.'' In
the Local Competition Second Report and Order, 61 FR 47284, September
6, 1996, the Commission adopted network information disclosure
requirements to implement section 251(c)(5). Although we discussed our
existing network information disclosure requirements in conjunction
with the requirements of section 251(c)(5) in the Local Competition
Second Report and Order, we did not address in that proceeding whether
our Computer II and Computer III network information disclosure
requirements should continue to apply independent of our section
251(c)(5) network information disclosure requirements. In the Further
NPRM, we sought comment on the extent to which the Commission should
retain the network information disclosure rules established in the
Computer II and Computer III proceedings in light of the disclosure
requirements stemming from section 251(c)(5) of the 1996 Act.
1. Computer II Network Disclosure Rules
32. The Computer II network information disclosure rules consist of
two requirements: one, termed ``the separate subsidiary rule,'' that
depends on the existence of a Computer II separate subsidiary; and
another, termed ``the all carrier rule,'' that applies to all carriers
owning basic transmission facilities, independent of whether the
carrier has a separate subsidiary. The separate subsidiary network
disclosure requirement obligates the BOCs to disclose ``at a minimum, *
* * any network information which is necessary to enable all
[information] service * * * vendors to gain access to and utilize and
to interact effectively with [the BOCs'] network services or
capabilities, to the same extent that [the BOCs' Computer II separate
affiliate] is able to use and interact with those network services or
capabilities.'' In addition to technical information, the information
required includes marketing information, such as ``commitments of the
carrier with respect to the timing of introduction, pricing, and
geographic availability of new network services or capabilities.'' The
other component of the Computer II network disclosure rules, the all
carrier rule, encompasses ``all information relating to network design
* * * which would affect either intercarrier interconnection or the
manner in which customer premises equipment is attached to the
interstate network. * * *''
33. In the Further NPRM, we tentatively concluded that both
Computer II network disclosure requirements should continue to apply--
specifically, that the separate affiliate disclosure rule should
continue to apply to BOCs that operate a Computer II subsidiary, and
that the all carrier rule should continue to apply to
[[Page 14146]]
all carriers owning basic transmission facilities. We reasoned that the
Computer II separate subsidiary disclosure rule should continue to
apply to the BOCs because the rule encompasses some information, such
as marketing information, which falls outside the scope of section
251(c)(5), and because the rule requires disclosure under a more
stringent timetable than that required under section 251(c)(5). We
based our tentative conclusion that the all carrier rule should be
retained on two factors: first, that the rule requires carriers to
disclose network changes that affect CPE, whereas our section 251(c)(5)
rules require carriers to disclose only information that affects
competitive service providers; and second, that the rule applies to all
carriers, whereas section 251(c)(5) applies only to incumbent LECs.
2. Computer III Network Disclosure
34. The Computer III network information disclosure rules initially
were imposed on AT&T and the BOCs in the Phase I Order and Phase II
Order, 52 FR 20714, June 3, 1987. The Commission later extended the
Computer III network information disclosure rules and other
nondiscrimination safeguards to GTE in the GTE ONA Order. Under
Computer III, the scope of network information that carriers must
disclose is adopted from, and identical to, the Computer II
requirements.
35. In the Further NPRM, we tentatively concluded that the network
information disclosure rules for incumbent LECs that the Commission
established pursuant to section 251(c)(5) should supersede the
disclosure rules established in Computer III. We explained that, in our
view, the 1996 Act disclosure rules for incumbent LECs are as
comprehensive, if not more so, than the Computer III disclosure rules.
We invited parties who disagreed to explain why, in light of the
section 251(c)(5) rules, all or some aspects of the Computer III
disclosure rules might still be needed.
3. Section 251(c)(5) Network Disclosure Rules
36. The Commission promulgated the rules implementing the section
251(c)(5) network disclosure requirements in the Local Competition
Second Report and Order. The section 251(c)(5) network disclosure
requirements apply to all incumbent LECs, as the term is defined in
section 251(h) of the Act.
B. Discussion
37. We adopt our tentative conclusion that the network disclosure
rules adopted pursuant to section 251(c)(5) supersede the Computer III
disclosure rules. In addition, we remove the Computer II network
disclosure rules that affect BOCs providing information services
through a Computer II separate subsidiary. Finally, we eliminate the
Computer II all carrier rule, but we preserve in our section 51 rules
the requirement that incumbent LECs must disclose network changes that
could affect the manner in which CPE is attached to the interstate
network.
1. Computer III Network Disclosure Rules
38. We conclude that we should eliminate the Computer III network
disclosure rules. We agree with comments that the section 251(c)(5)
rules have rendered the Computer III network disclosure rules
redundant.
2. Computer II Network Disclosure Rules
39. In the Further NPRM we identified two Computer II requirements
that exceed the rules adopted pursuant to section 251(c)(5), the
separate subsidiary rule and the all carrier rule. We address the
separate subsidiary rule first.
a. The Separate Subsidiary Rule
40. In the Further NPRM, we recognized that some BOCs may be
providing certain intraLATA information services through a Computer II
subsidiary, rather than on an integrated basis under the Commission's
Computer III rules. We tentatively concluded that the Computer II
separate subsidiary disclosure rule should continue to apply in such
cases. We conclude that maintaining the Computer II separate subsidiary
network information disclosure rules is no longer necessary. We believe
that the protection from discriminatory interconnection afforded by
structural separation generally exceeds that provided by non-structural
safeguards alone. It follows that a BOC that uses a Computer II
separate affiliate should not be subject to more stringent network
disclosure obligations than a BOC that offers such services on an
integrated basis under the Commission's Computer III rules. Moreover,
Congress has instructed us to repeal or modify any regulation we
determine to be ``no longer necessary in the public interest.'' Because
we find that it is no longer necessary to retain the separate
subsidiary disclosure rule, we remove it.
b. The All Carrier Rule
41. We conclude that disclosure of network information by carriers
other than incumbent LECs is ``no longer necessary in the public
interest as a result of meaningful competition between providers. * *
*'' Because no single carrier now dominates the interexchange market,
no interexchange carrier (IXC) has the incentive or the ability to gain
an unfair advantage by withholding network information from ISPs. We
also find that no new entrants into the local exchange market possess
individual market power. Because IXCs and competitive LECs currently
lack individual market power, they also lack the incentive to create
incompatible network interfaces for existing services in order to
leverage that power into upstream or downstream markets.
42. We conclude that, in contrast to the incumbent LECs, the IXCs
and competitive LECs are not likely to gain the individual market power
that would allow them profitably to withhold information necessary for
interconnection to their networks in order to increase market power in
upstream or downstream markets. Thus, we find that regulatory
intervention to ensure network information disclosure is no longer
needed for all carriers, but only for incumbent LECs, whose duty to
disclose network changes that will affect other service providers is
already defined by the section 251(c)(5) network disclosure rules. This
conclusion comports with our statutory obligation to eliminate
regulations that are no longer necessary due to meaningful economic
competition among providers.
43. Although we relieve IXCs and competitive LECs from the
specific, routine network information disclosure obligations previously
required under the all carrier rule, we emphasize that the
Communications Act imposes certain nondiscrimination requirements on
all common carriers providing interstate communication services. Among
them, section 201 provides that all common carriers have a duty ``to
establish physical connections with other carriers,'' and to furnish
telecommunications services ``upon reasonable request therefor.'' We
conclude in this proceeding that, if a carrier fails to disclose
network information that enables other entities to interconnect to the
carrier's basic telecommunications facilities and services in a just
and reasonable manner, such action would violate section 201 of the
Act. Moreover, all common carriers remain subject to the
nondiscrimination requirements in section 202 of the Act. The
Commission will not hesitate to use its enforcement authority to
determine whether any carrier's network information disclosure
practices are unjust or unreasonable.
[[Page 14147]]
44. We further conclude that the Computer II network information
disclosure rules that extend disclosure requirements to CPE should be
retained, but that their application should be limited to incumbent
LECs only. The primary purpose of network information disclosure in
this context is not to protect intercarrier interconnection, but rather
to give competitive manufacturers of CPE adequate advance notice when a
carrier intends to alter its network in a way that may affect the
manner in which CPE is attached to the network. Our concern has been
that to the extent that a company with control over underlying
transmission facilities also manufactures CPE, that company may have
the incentive and ability to leverage its control of those facilities
to favor its affiliate's CPE over that of competitive manufacturers. We
note that section 201 interconnection and section 202 nondiscrimination
obligations also apply in the context of CPE. We conclude that failure
to disclose network changes that affect CPE could give incumbent LECs a
significant head start in providing fully compatible equipment, and
could thereby adversely affect competition in the CPE market.
45. Although we find it necessary to retain a network information
disclosure requirement that extends incumbent LECs' disclosure
obligations to CPE, we see no point in subjecting incumbent LECs to two
separate sets of network information disclosure rules, each with its
own timing, triggering, and notice requirements. Instead, we simplify
our disclosure requirements to the extent feasible. We therefore remove
from our rules the Computer II all carrier requirement, and instead
extend the disclosure requirements in section 51.325(a) of our rules to
require incumbent LECs to provide public notice of any network changes
that will affect the manner in which CPE is attached to the network. By
amending section 51.325(a) of our rules to include a CPE disclosure
requirement to, we continue to require incumbent LECs to disclose that
information.
IV. Procedural Matters
A. Final Regulatory Flexibility Certification
46. This regulatory flexibility certification supplements our prior
certifications and analyses in this proceeding. The Regulatory
Flexibility Act (RFA) requires that a regulatory flexibility analysis
be prepared for notice-and-comment rulemaking proceedings, unless the
agency certifies that ``the rule will not, if promulgated, have a
significant economic impact on a substantial number of small
entities.'' The RFA generally defines ``small entity'' as having the
same meaning as the terms ``small business,'' ``small organization,''
and ``small governmental jurisdiction.'' In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act. A small business concern is one which:
(1) is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (SBA). The SBA defines
small businesses under the category ``Telephone Communications, Except
Radiotelephone,'' to be those employing no more than 1,500 persons.
47. The Commission, in the previous Further Notice of Proposed
Rulemaking (Further NPRM) in this proceeding, stated in the Initial
Regulatory Flexibility Certification that the Further NPRM pertained to
Bell Operating Companies (BOCs), each of which is an affiliate of a
Regional Holding Company (RHC), as well as to GTE and AT&T. Because
each BOC is dominant in its field of operations and all of the BOCs as
well as GTE and AT&T have more than 1,500 employees, we previously
certified that the proposed action would not have a significant
economic impact on a substantial number of small entities. No commenter
addressed this previous certification. Subsequently, however, it has
became clear that the changes to the Commission's network information
disclosure requirements will also affect IXCs and competitive LECs,
because the present Report and Order removes the network information
disclosure requirements from interexchange carriers (IXCs) and
competitive local exchange carriers (LECs). At present, because these
additional carriers are relieved of any burden associated with the
requirements, we continue to foresee no significant economic impact on
a substantial number of small entities, and therefore so certify
regarding the rules adopted. In addition, this removal of regulation
produces no reporting, recordkeeping, or other compliance requirement.
48. The Commission will send a copy of the Report and Order,
including a copy of this final certification, in a report to Congress
pursuant to the Small Business Regulatory Enforcement Fairness Act of
1996. In addition, the Report and Order and this certification will be
sent to the Chief Counsel for Advocacy of the Small Business
Administration. Finally, the Report and Order (or summary thereof) and
certification will be published in the Federal Register.
V. Ordering Clauses
49. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 2, 4, 11, 201-205, 208, 251, 260, and 271-276,
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154,
161, 201-205, 208, 251, 260, and 271-276, that the policies, rules, and
requirements set forth herein are adopted, and that parts 51 and 64 of
the Commission's rules, 47 CFR Parts 51 and 64, are amended as set
forth in Rule Changes.
50. It is further ordered that, pursuant to 5 U.S.C. 553(d), the
rules, requirements, and amendments set forth herein shall take effect
30 days after the publication of this Report and Order in the Federal
Register, except for the amendments to parts 51 and 64 of the
Commission's rules, 47 CFR parts 51 and 64, as set forth in Rule
Changes, which, pursuant to 44 U.S.C. 3507(c), shall take effect 70
days after the publication of this Report and Order in the Federal
Register.
51. It is further ordered that, pursuant to the authority contained
in sections 1, 2, 4, and 201-204, of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154, and 201-204, the pending requests for
approval of CEI plans and CEI plan amendments listed in Attachment A
are dismissed.
52. It is further ordered that, pursuant to the authority contained
in sections 1, 2, 4, and 201-204, of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154, and 201-204, the pending petitions
for reconsideration or applications for review of orders approving CEI
plans listed in Attachment B are dismissed without prejudice.
53. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
Report and Order, including the Final Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration, in accordance with the Regulatory Flexibility Act, see
5 U.S.C. 605(b).
List of Subjects
47 CFR Part 51
Communications common carriers, Telecommunications.
47 CFR Part 64
Communications common carriers, Reporting and recordkeeping
requirements, Telephone.
[[Page 14148]]
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Attachment A--Pending Requests for Approval of CEI Plans or Amendments
1. Ameritech CEI Plan for Enhanced Services. DA 95-553. Plan
filed March 13, 1995.
2. Bell Atlantic Amendment to CEI Plan for Internet Access
Service. CCBPol 96-09. Amendment filed May 5, 1997.
3. Southwestern Bell Telephone Company CEI Plan for Internet
Support Services. CCBPol 97-05. Plan filed May 22, 1997.
4. US West CEI Plan for Alarm Monitoring. CCBPol 98-02. Plan
filed April 24, 1998.
5. BellSouth CEI Plan for Alarm Monitoring. CCBPol 98-03. Plan
filed June 12, 1998.
Attachment B--Pending Petitions for Reconsideration or Applications for
Review of Orders Approving CEI Plans
1. Reconsideration of Bell Atlantic Internet Access CEI Plan.
CCBPol 96-9. Petition for Reconsideration filed July 3, 1996.
2. Applications for Review of Payphone CEI Orders. CC Docket No.
96-28. Applications for Review filed May 5, 1997.
Rule Changes
For the reasons discussed in the Preamble, the Federal
Communications Commission amends 47 CFR parts 51 and 64 as follows:
PART 51--INTERCONNECTION
1. The authority citation for part 51 continues to read as follows:
Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54,
271, 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 151-55, 157,
201-05, 207-09, 218, 225-27, 251-54, 271, 332, unless otherwise
noted.
2. Section 51.325(a) is amended by revising paragraphs (a)(1) and
(a)(2) and adding a new paragraph (a)(3):
Sec. 51.325 Notice of network changes; Public notice requirement.
(a) * * *
(1) Will affect a competing service provider's performance or
ability to provide service;
(2) Will affect the incumbent LEC's interoperability with other
service providers; or
(3) Will affect the manner in which customer premises equipment is
attached to the interstate network.
* * * * *
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
3. The authority for part 64 continues to read as follows:
Authority: 47 U.S.C. 154, 254(k); secs. 403(b)(2)(B), (c), Pub.
L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. secs 201,
218, 226, 228, and 254(k) unless otherwise noted.
Subpart G of Part 64--[Amended]
Sec. 64.702 [Amended]
4. In the title of Subpart G of Part 64 and in paragraph (b) of
Sec. 64.702 remove the words ``Communications Common Carriers'' and
add, in their place, the words ``Bell Operating Companies.''
5. In Sec. 64.702, in paragraph (c), remove the words
``Communications Common Carrier'' and add, in their place, the words
``Bell Operating Company,'' and revise the last sentence of paragraph
(d)(2) to read as follows:
Sec. 64.702 Furnishing of enhanced services and customer-premises
equipment.
* * * * *
(d) * * *
(2) * * * Such information shall be disclosed in compliance with
the procedures set forth in 47 CFR 51.325 through 51.335.
* * * * *
[FR Doc. 99-6726 Filed 3-23-99; 8:45 am]
BILLING CODE 6712-01-P
