02-22784. 2000 Biennial Regulatory Review of Adopting Technical Criteria and Approving Terminal Equipment

AGENCY:

Federal Communications Commission.

ACTION:

Final rule; reconsideration.

SUMMARY:

In this document, the Commission addresses requests to reconsider portions of the Commission's Report and Order published Wednesday, January 24, 2001 (66 FR 7579) that modified its rules governing the connection of terminal equipment to the public switched telephone network to streamline the standards development and approval processes for terminal equipment.

DATES:

Effective October 9, 2002.

FOR FURTHER INFORMATION CONTACT:

John Hays, Industry Analysis and Technology Division, Wireline Competition Bureau, voice 202-418-0875, fax [phone].

SUPPLEMENTARY INFORMATION:

In the Order on Reconsideration, the Commission addressed several issues raised in ex parte comments or in petitions for reconsideration and subsequent pleadings.

The Commission clarified, pursuant to a request by the Administrative Council for Terminal Attachments (Administrative Council) seeking clarification of § 68.602(c), that a formal contract is not required between the Administrative Council and its sponsors. In establishing § 68.602(c), the Commission intended to ensure that the nature of the arrangement between the Administrative Council and its sponsor(s) is subject to public disclosure. The Administrative Council states that it will develop a statement of work or similar document pertaining to its relationship with its sponsors, and make the document available online and from the secretariat upon request. The Commission found that this would be sufficient for purposes of compliance with § 68.602(c).

The Commission denied petitions to reconsider the supplier's declaration of conformity (SDoC) procedure established in the Report and Order, stating that the Commission has long permitted testing of part 68 equipment by non-accredited laboratories, with few documented problems, and has required laboratory accreditation only in instances where the test procedures are sufficiently complex so as to raise concerns about the tests being performed properly. The Commission found no such concerns with the tests required for part 68 terminal equipment. Moreover, the Commission stated that commenters' concerns that use of the SDoC process will lead to non-compliant equipment are unfounded.

The Commission granted Industry Canada's request to delete the requirement in § 68.321 of the rules that responsible parties be located within the United States. The Commission amended § 68.321 to specify that responsible parties must designate an agent for service of process that maintains an office within the United States.

The Commission denied the petition by the American National Standards Institute to accept standards development by the Canvass method of consensus for technical criteria, but granted the American National Standards Institute petition as to appeals procedures. The Commission found that the Organization and Standards Committee methods of development provide additional assurance of public participation, similar to that provided in a rulemaking proceeding, by allowing open participation. Thus, the Commission intends to ensure that interested parties have a voice in drafting the standards at an early stage in the standards development process. Notwithstanding the American National Standards Institute's finding that the Canvassing method ultimately provides a similar level of due process afforded by the other two methods, the Commission found that for the purpose of developing technical criteria, it is essential for all interested parties to have an opportunity to enjoy full participation in the standards development process from the outset of that process.

In addition, the Commission clarified on its own motion that after technical criteria are published, and the 30-day public notice period passes, technical criteria will be deemed to be presumptively valid and remain so during appeal, unless they are subsequently invalidated by the standards development organization, the Administrative Council, the American National Standards Institute, or the Commission.

The Commission granted the requests of several petitioners to eliminate the provisions in §§ 68.354(d) and 68.612 requiring the manufacturer(s) of terminal equipment to be identified on the label and in the database of approved terminal equipment. The Commission found that current business practices often are that the licensing entity, whose name is on the product, contracts with several manufacturers to produce the equipment. In such case the relevant entity is the licensing party, not the manufacturer. These contract manufacturers are numerous and may change frequently and, perhaps most importantly, their identities are proprietary information for the licensing entity.

The Commission also denied petitions to retain the technical rules for type B surge requirements. The Commission stated that the privatized system is the most efficient and responsive method for addressing future updates to the technical criteria for terminal equipment. It found that BellSouth's concerns, that the Type B surge requirements would be eliminated under the privatized system, are unfounded. The Commission pointed out that the Administrative Council has no discretion unilaterally to remove the Type B surge requirements. Standards development organizations that meet the requirements of the Report and Order are the only entities that may formulate changes to, or ultimately eliminate, technical criteria. Such standards development organizations must permit open participation in the development or amendment of technical requirements, and they must follow consensus procedures. The Administrative Council merely publishes these criteria after ensuring the Commission's requirements were met. Moreover, the Commission retains de novo review, appeals and enforcement jurisdiction in the event of an appeal of technical criteria.

On its own motion, the Commission amended § 68.162(e)(5)(i) to clarify that the Administrative Council is responsible for publishing technical criteria, and § 68.162(g) to provide that certificates issued by Telecommunications Certification Bodies be given to the Administrative Council rather than to the Commission.

The Commission declined to take further action on a 1998 Biennial Review proceeding regarding signal power limitations, but allowed the industry to develop standards if it determines such standards are appropriate and reasonable. In addition, the Commission clarified that the Administrative Council shall publish the technical criteria that have been the subject of its streamlined waiver proceedings.

Procedural Matters

Paperwork Reduction Act

The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found not to impose new or modified reporting and recordkeeping requirements or burdens on the public.

Final Regulatory Flexibility Certification

In the Report and Order, the Commission concluded that privatizing the terminal equipment registration process would reduce unnecessary costs and delays currently imposed upon suppliers and the Commission without measurably increasing the possibility of harm to the network. The Commission found that registration of terminal equipment shall continue, but that suppliers may show compliance with the technical criteria through one of two means. First, suppliers may seek approval of terminal equipment's compliance with the relevant technical criteria from private Telecommunications Certification Bodies. In the alternative, suppliers may show compliance through the SDoC method of equipment approval. Upon weighing the substantial benefits of accelerating the terminal equipment approval process against the unlikely possibility of any cost increases associated with harm to the PSTN that may result from a decreased presence of the Commission in the approval process, the Commission concluded that is no longer in the public interest for it to continue its Part 68 registration functions.

This Order on Reconsideration affirms the Commission's findings with regard to these provisions, and hence the economic effect on small businesses will not change from that discussed in the Report and Order. Therefore, we certify that the requirements of this Order on Reconsideration will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of this Order on Reconsideration including a copy of this Certification, in a report to Congress pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, this Order on Reconsideration and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register. See 5 U.S.C. 605(b).

Ordering Clauses

Accordingly, it is ordered that, pursuant to the authority contained in Sections 1-4, 201-205 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205 and 303(r), this order on reconsideration in CC Docket No. 99-216 and order terminating proceeding in CC Docket No. 98-163 is hereby adopted and Part 68 of the Commission's rules are amended as set forth. It is further ordered that the amendments of the Commission's rules as set forth are adopted, effective October 9, 2002.

It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Order on Reconsideration, including the Supplemental Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 68

• Communications common carriers
• Terminal equipment
• Technical criteria

Federal Communications Commission.

Marlene H. Dortch,

Secretary.

Rule Changes

For the reasons discussed in the preamble, the Federal Communications Commission amends part 68 of the Code of Federal Regulations as follows:

PART 68—CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK

1. The authority citation for part 68 continues to read as follows:

Authority: 47 U.S.C. 154, 303.

2. Section 68.162(f)(5)(i) and (g)(1) are revised to read as follows:

§ 68.162

Requirements for Telecommunication Certification Bodies.

* * * * *

(f) * * *

(5) * * *

(i) Grant a waiver of Commission rules or technical criteria published by the Administrative Council, or certify equipment for which Commission rules or requirements, or technical criteria do not exist, or for which the application of the rules or requirements, or technical criteria is unclear.

* * * * *

(g) * * *

(1) A Telecommunications Certification Body shall supply a copy of each approved application form and grant of certification to the Administrative Council for Terminal Attachments.

* * * * *

3. Section 68.321 is revised to read as follows:

§ 68.321

Location of responsible party.

The responsible party for a Supplier's Declaration of Conformity must designate an agent for service of process that is physically located within the United States.

4. Section 68.354(d) is revised to read as follows:

§ 68.354

Numbering and labeling requirements for terminal equipment.

* * * * *

(d) Labeling developed for terminal equipment by the Administrative Council on Terminal Attachments shall contain sufficient information for providers of wireline telecommunications, the Federal Communications Commission, and the U.S. Customs Service to carry out their functions, and for consumers to easily identify the responsible party of their terminal equipment. The numbering and labeling scheme shall be nondiscriminatory, creating no competitive advantage for any entity or segment of the industry.

* * * * *

5. Section 68.602(c) is revised to read as follows:

§ 68.602

Sponsor of the Administrative Council for Terminal Attachments.

* * * * *

(c) After the Administrative Council for Terminal Attachments is populated, the sponsors are responsible for fulfilling secretariat positions as determined by the Administrative Council for Terminal Attachments. The Administrative Council shall post on a publicly available web site and make available to the public in hard copy form the written agreement into which it enters with the sponsor or sponsors.

6. Section 68.612 is revised to read as follows:

§ 68.612

Labels on terminal equipment.

Terminal equipment certified by a Telecommunications Certification Body or approved by the Supplier's Declaration of Conformity under this part shall be labeled. The Administrative Council for Terminal Attachments shall establish appropriate labeling of terminal equipment. Labeling shall meet the requirements of the Federal Communications Commission and the U.S. Customs Service for their respective enforcement purposes, and of consumers for purposes of identifying the responsible party and model number.