[Federal Register Volume 62, Number 12 (Friday, January 17, 1997)]
[Proposed Rules]
[Pages 2636-2639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1133]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 69
[CC Docket No. 97-21] [FCC 97-11]
Changes to the Board of Directors of the National Exchange
Carrier Association, Inc.
AGENCY: Federal Communications Commission.
ACTION: Notice of Proposed rulemaking and notice of inquiry.
-----------------------------------------------------------------------
SUMMARY: On January 10, 1997, the Commission adopted a Notice of
Proposed Rulemaking (NPRM) and an accompanying Notice of Inquiry (NOI)
to amend the Commission's rules consistent with proposals to permit the
National Exchange Carrier Association (NECA) to change the size and
composition of its Board of Directors. In the NPRM, the Commission
tentatively concludes that the composition of NECA's Board of Directors
must be altered to make the Board more representative of all segments
of the telecommunications industry before NECA may be appointed as the
temporary administrator of the new universal service support
mechanisms, pursuant to the Universal Service proceeding in CC Docket
96-45. In the
[[Page 2637]]
Notice of Inquiry (NOI), the Commission seeks comment on how the
Commission might amend its rules to remove any regulatory barriers that
otherwise may prevent NECA from satisfying the Joint Board's criteria
for a neutral third party permanent administrator for the new universal
service support mechanisms. The NOI also seeks comment as to what, if
any, additional reforms the Commission should adopt with respect to the
administration of the current access tariff and pool revenue
distribution programs and whether, in connection with any such proposed
reforms, interested parties, in addition to NECA, should be entitled to
participate in a selection process to serve as the administrator of
those programs. The Commission seeks comment on the NPRM and NOI.
DATES: NPRM comments should be filed on or before January 27, 1997 and
NPRM reply comments should be filed on or before February 3, 1997. NOI
comments should be filed on or before March 3, 1997 and NOI reply
comments should be filed on or before April 3, 1997.
ADDRESSES: Interested parties must file an original and four copies of
their comments with the Office of the Secretary, Federal Communications
Commission, Room 222, 1919 M Street, NW., Washington, DC 20554.
Comments should reference CC Docket No. 96-. Parties should send one
copy of their comments to the Commission's copy contractor,
International Transcription Service, Room 140, 2100 M Street, NW.,
Washington, DC 20037. After filing, comments will be available for
public inspection during regular business hours in the FCC Reference
Center, Room 239, 1919 M Street, NW., Washington, DC 20554.
Parties are also asked to submit comments on diskette. Diskette
submissions would be in addition to and not a substitute for the formal
filing requirements addressed above. Parties submitting diskettes
should submit them to Sheryl Todd, Common Carrier Bureau, 2100 M
Street, NW., Room 8611, Washington, DC 20554. Such a submission should
be on a 3.5 inch diskette in an IBM compatible format using WordPerfect
5.1 for Windows software in a ``read only'' mode. The diskette should
be clearly labelled with the party's name, proceeding, and date of
submission. The diskette should be accompanied by a cover letter.
FOR FURTHER INFORMATION CONTACT: Sheryl Todd at 202-530-6040.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking and Notice of Inquiry adopted and released on
January 10, 1997 (FCC 97-11). The full text of this NPRM and NOI is
available for inspection and copying during normal business hours in
the FCC Reference Center, Room 239, 1919 M Street, Washington, DC
20554.
Summary of Notice of Proposed Rulemaking
1. On October 18, 1996, NECA requested that the Commission amend
section 69.602 of the Commission's rules to permit NECA to modify the
size and composition of its Board of Directors to reflect the interests
of competitive local exchange carriers (LECs), interexchange carriers,
wireless carriers, and non-carriers such as schools, libraries, rural
healthcare providers, and the states.
2. On March 8, 1996, the Commission initiated a rulemaking in CC
Docket 96-45, pursuant to section 254 of the Communications Act of 1934
(Communications Act), as amended by the Telecommunications Act of 1996
(1996 Act), to reform our system of universal service support. On
November 8, 1996, the Federal-State Joint Board (Joint Board) on
Universal Service released a Recommended Decision regarding numerous
universal service issues. The Joint Board recommended that NECA be
appointed as the temporary fund administrator of the universal service
support mechanisms for schools, libraries and health care providers in
order to provide supported telecommunications services to these
entities as quickly as possible. The Joint Board also recommended that,
prior to appointing NECA as temporary administrator, the ``Commission
permit NECA to add significant, meaningful representation'' for non-
incumbent LEC interests to the NECA Board of Directors.
3. NECA is an association of incumbent LECs. Along with
administering the interstate access tariff and revenue distributions
processes, NECA currently administers the existing universal service
fund, the Lifeline Assistance program, the long term support (LTS)
program and the interstate Telecommunications Relay Services (TRS)
fund. The universal service fund, the Lifeline Assistance program, and
the LTS program were designed to promote affordable telephone service
throughout the nation. The TRS fund is the cost recovery mechanism that
reimburses eligible TRS providers for interstate TRS minutes of use.
NECA presently has a 15-member Board of Directors that consists of five
directors from outside of the LEC industry, two directors representing
Bell Operating Companies (BOCs), two directors representing other LECs
having operating revenues in excess of $40 million, and six directors
representing LECs having annual operating of less than $40 million.
4. Under NECA's proposal, three directors would represent carrier
participants such as interexchange carriers, wireless carriers, and
competitive LECs, and three would represent non-carriers, such as
schools, libraries, rural health care providers, and states. Under
NECA's proposal, the new Board members would participate in NECA's
administration of the current universal service, Lifeline Assistance,
and LTS programs, as well as Board oversight of auditing, finance, and
general corporate matters. Access tariffs and pool revenue
distribution, however, would continue to be the responsibility of the
access charge committees, consisting of current members of NECA's
Board. We find that for NECA to act on this proposal, Sec. 69.602 of
the Commission's rules would require amendment in order to create a
fourth category or subset of six new directors, with three of those
directors representing non-incumbent LEC participants, such as
interexchange carriers, wireless carriers, and competitive LECs, and
three directors representing support beneficiaries of universal service
policies or other non-carriers, potentially including schools,
libraries, rural health care providers, and states.
5. In this Notice of Proposed Rulemaking (NPRM), we address NECA's
request and the Joint Board's recommendations and seek comment on how
the Commission should amend its rules so that NECA can reform its Board
of Directors in a manner that will enable it to become eligible to
serve as the temporary administrator of the universal service support
mechanisms. We tentatively conclude that, in order to be eligible to
serve as the temporary administrator, NECA's Board of Directors must
become more representative of the telecommunications industry as a
whole. Accordingly, in order to meet the implementation schedule
recommended by the Joint Board in its Recommended Decision and
consistent with the recommendation that the Commission appoint NECA as
temporary administrator of the new universal service support
mechanisms, this NPRM proposes to amend Sec. 69.602 of the Commission's
rules so that NECA may modify the size and composition of its Board of
Directors to make the Board more representative of the
telecommunications industry. We also
[[Page 2638]]
seek comment on whether other part 69 rule sections should be modified
in conjunction with the proposed rule changes to Sec. 69.602.
Notice of Inquiry
6. In the Recommended Decision released on November 8, 1996, the
Joint Board recommended that the permanent administrator of the new
universal service support mechanisms, including its Board of Directors:
(1) Be neutral and impartial; (2) not advocate specific positions to
the Commission in non-administration-related proceedings; (3) not be
aligned or associated with any particular industry segment; and (4) not
have a direct financial interest in the support mechanisms established
by the Commission. In declining to recommend NECA for the position of
permanent administrator, the Joint Board emphasized the importance of
the permanent administrator's ability to maintain an ``appearance of
impartiality'' and questioned NECA's ability to do this in light of its
current membership and governance. The Joint Board specifically cited
commenters' concerns that NECA's ability to appear to be a neutral
arbitrator among contributing carriers, its current membership of
incumbent LECs, and the advocacy role it has assumed in several
Commission proceedings created an appearance to non-LECs of NECA's bias
favoring incumbent LECs. The Joint Board further stated that ``[i]f
changes to its membership and governance render NECA a neutral, third-
party, NECA should be eligible to compete in the advisory board's
selection process'' for choosing a permanent administrator.
7. In this NOI, we seek comment as to how the Commission might
amend subpart G of its part 69 rules to remove any regulatory barriers
that otherwise may prevent NECA from making itself a neutral, third
party and satisfying the four criteria identified by the Joint Board.
We also seek comment on whether, and if so how, the Commission should
streamline its rules to enable NECA to change the composition of its
Board without unnecessary regulatory oversight. Alternatively, the
Commission could repeal the rules currently contained in part 69
constraining NECA's structure and functions so that NECA could make
whatever organizational changes it deems necessary without Commission
endorsement or sanction. If the Commission's oversight function of
NECA's structure and functions were diminished in this fashion, we seek
additional comment with respect to whether the interests of NECA's
current membership, as well as other carriers, could be adversely
affected by how NECA might administer tariffs and access charges.
8. In the Recommended Decision, the Joint Board also recommended
that the qualified applicant have the capacity to process large amounts
of data and bill large number of carriers. Accordingly, we seek comment
on whether existing Commission rules prevent NECA from satisfying these
criteria, and if so, how such rules should be amended.
9. Finally, we seek comment as to what, if any, additional reforms
the Commission should adopt with respect to the administration of the
current access tariff and pool revenue distribution programs and
whether, in connection with any such proposed reforms, interested
parties, in addition to NECA, should be entitled to participate in a
selection process to serve as the administrator of one or more of those
programs. As noted above, NECA currently administers the CL and TS
access tariff pools, the existing universal service fund, the Lifeline
Assistance program, the LTS program, and the TRS fund. Consistent with
the de-regulatory and pro-competitive spirit of the 1996 Act, we seek
comment regarding whether additional amendments to the Commission's
part 69 rules are needed with respect to the administration of these
programs and whether the administration of one or more of the programs
should be subject to a competitive bidding process. In light of the
Commission's recent reappointment of NECA to an additional four-year
term as administrator of the TRS fund and given that NECA's
reappointment to that fund was unopposed, we do not seek comment at
this time on NECA's role as TRS administrator. Accordingly, we seek
comment on whether administration of the CL and TS access tariff pools,
the Lifeline Assistance program, and the LTS program should remain the
exclusive province of NECA or whether other interested parties should
be entitled to participate in a selection process to serve as the
administrator of those programs. We request from those commenters
advocating other parties' participation in the selection process
suggestions on how such participation could be effectuated and what
changes to our rules would be necessary to effectuate these changes.
Procedural Matters
10. This is a non-restricted notice and comment rulemaking
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed as provided in the
Commission's rules.
11. We invite comment on the proposals and tentative conclusions
set forth above. Pursuant to applicable procedures set forth in
Secs. 1.415 and 1.419 of the Commission's rules, interested parties may
file NPRM comments on or before January 27, 1997 and NPRM reply
comments on or before February 3, 1997. Interested parties may file NOI
comments on or before March 3, 1997 and NOI reply comments on or before
April 3, 1997. To file formally in this proceeding, you must file an
original and six copies of all comments, reply comments, and supporting
comments. If you want each Commissioner to receive a personal copy, you
must file an original plus eleven copies. You should send comments and
reply comments to Office of the Secretary, Federal Communications
Commission, 1919 M Street, NW., Room 222, Washington, DC 20554. Five
courtesy copies should also be sent to Tejal Mehta at 2100 M Street,
NW., Room 8611, Washington, DC 20554. Parties should also file one copy
of any document filed in this docket with the Commission's copy
contractor, International Transcription Services, Inc. (ITS), 2100 M
Street, NW., Suite 140, Washington, DC 20037. ITS's telephone number is
202-857-3800. Comments and reply comments will be available for public
inspection during regular business hours in the FCC Reference Center,
Room 239, 1919 M Street, NW., Washington, DC 20554. Comments and reply
comments must include a short and concise summary of the substantive
arguments raised in the pleading. For further information concerning
this proceeding, contact Sheryl Todd, Accounting and Audits Division,
Common Carrier Bureau at 202-530-6001.
Initial Regulatory Flexibility Analysis
12. Section 603 of the Regulatory Flexibility Act (RFA), as
amended, requires an Initial Regulatory Flexibility Analysis in notice
and comment rulemaking proceedings, unless the head of the agency
certifies that ``the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities.'' The NPRM
portion of this proceeding applies only to NECA and concerns the
proposal to amend the Commission's rules to modify the size and
composition of NECA's current Board of Directors to make the Board more
representative of the telecommunications industry as a whole.
13. For the purposes of this NPRM, the RFA defines a ``small
business'' to be the same as a ``small business
[[Page 2639]]
concern'' under the Small Business Act, unless the Commission has
developed one or more definitions that are appropriate to its
activities. Under the Small Business Act, a ``small business concern''
includes a small organization, which is defined as a non-profit
enterprise that is not independently owned and operated and is not
dominant in its field. NECA is a non-profit, quasi-governmental
association that was initially created to administer the Commission's
interstate access tariff and revenue distribution processes. Therefore,
NECA is not a small organization within the meaning of the RFA.
Furthermore, these proposals do not apply to other ``small business
concerns'' since they propose to modify the composition of NECA's Board
of Directors. For this reason, we tentatively conclude that these
proposals would not have a significant economic impact on a substantial
number of small entities.
14. We therefore certify, pursuant to Section 605(b) of the RFA,
that these proposals would not have a significant economic impact on a
substantial number of small entities. We seek comment on this tentative
conclusion. The Commission shall publish this certification in the
Federal Register, and shall provide a copy of this NPRM, including this
certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
Ordering Clauses
15. Accordingly, It is ordered that, pursuant to Secs. 1, 4(i),
201-205, 218-220, 254 and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 201-05, 218-20, 254 and 403, notice is
hereby given of proposed amendments to Part 69 of the Commission's
rules, 47 CFR part 69, as described in this notice of proposed
rulemaking.
16. Accordingly, it is ordered that, pursuant to sections 1, 4(i),
201-205, 218-220, 254 and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 201-05, 218-20, 254 and 403, notice is
hereby given of proposals described in this notice of inquiry.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-1133 Filed 1-16-97; 8:45 am]
BILLING CODE 6712-01-M
