[Federal Register Volume 62, Number 34 (Thursday, February 20, 1997)]
[Proposed Rules]
[Pages 7744-7747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4027]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Chapter I
[CC Docket No. 96-152, FCC 97-35]
Implementation of the Telecommunications Act of 1996:
Telemessaging, Electronic Publishing, and Alarm Monitoring Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Further Notice of Proposed Rulemaking (FNPRM), released
February 7, 1977, seeks comment on the meaning of certain terms in
section 274 of the Telecommunications Act of 1996, (Act), which governs
Bell Operating Companies' provision of electronic publishing services.
The intent of the FNPRM is to compile a record in sufficient detail for
us to determine the meaning of those terms in this context.
DATES: Comments are due on or before April 4, 1997 and reply comments
are due on or before April 25, 1997. Written comments by the public on
the proposed and/or modified information collections are due April 4,
1997 and reply comments must be submitted no later than April 25, 1997.
Written comments must be submitted by the Office of Management and
Budget (OMB) on the proposed and/or modified information collections on
or before April 21, 1997.
ADDRESSES: Comments and reply comments should be sent to Office of the
Secretary, Federal Communications Commission, 1919 M Street, N.W., Room
222, Washington, D. C. 20554, with a copy to Janice Myles of the Common
Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D. C. 20554.
Parties should also file one copy of any documents filed in this docket
with the Commission's copy contractor, International Transcription
Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D. C.
20037. In addition to filing comments with the Secretary, a copy of any
comments on the information collections contained herein should be
submitted to Dorothy Conway, Federal Communications Commission, 1919 M
Street, N.W., Room 234, Washington, D. C. 20554, or via the Internet to
dconway@fcc.gov, and to Timothy Fain, OMB Desk Officer, 725--17th
Street, N.W.,10236 NEOB, Washington, D. C. 20503 or via the Internet to
fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Lisa Sockett, Attorney, Common Carrier
Bureau, Policy and Program Planning Division, (202) 418-1580. For
additional information concerning the information collections contained
in this FNPRM contact Dorothy Conway at 202-418-0217, or via the
Internet at dconway@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's FNPRM
adopted February 6, 1997 and released February 7, 1997 (FCC 97-35).
This FNPRM contains proposed 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. The OMB, the general public, and other Federal agencies are
invited to comment on the proposed or modified information collections
contained in this proceeding. The full text of this FNPRM is available
for inspection and copying during normal business hours in the FCC
Reference Center, 1919 M St., Room 239, 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/fcc9735.wp, or may be
purchased from the Commission's copy contractor, International
Transcription Service, Inc., (202) 857-3800, 2100 M St., N.W., Suite
140, Washington, D. C. 20037.
Paperwork Reduction Act: This FNPRM contains either a proposed or
modified information collection. The Commission, as part of its
continuing effort to reduce paperwork burdens, invites the general
public and OMB to comment on the information collections contained in
this FNPRM, as required by the Paperwork Reduction Act of 1995, Public
Law 104-13. Public and agency comments are due at the same time as
other comments on this FNPRM; OMB notification of action is due April
21, 1997. Comments should address: (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission's burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
OMB Approval Number: None.
Title: Section 274(b)(3)(B)--Written Contracts Filed with the
Commission and Made Publicly Available (CC Docket No. 96-152, FNPRM).
Form No.: N/A.
Type of Review: New collection.
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No. of
Information Collection respondents Estimated time per Total annual burden
(approx.) response
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Written contracts filed with the 7 \1/4\ hour per contract... 3--150 hours per
Commission. respondent (21--1050
hours total).
Written contracts made publicly 7 \3/4\ hour per contract... 9--450 hours per
available. respondent (63--3150
hours total).
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Total Annual Burden: 21--3,150 hours for all respondents.
Respondents: Businesses or other for profit.
Estimated costs per respondent: $0.
Needs and Uses: The Commission proposes the information collections
to implement section 274(b)(3)(B) of the Act. The information may be
used by the Commission, unaffiliated electronic publishing providers
competing with electronic publishing providers affiliated with the BOC,
and any other member of the public interested in monitoring the BOCs'
compliance with the Act.
[[Page 7745]]
Synopsis of Further Notice of Proposed Rulemaking
I. Further Notice of Proposed Rulemaking
A. Meaning of ``Control'' and ``Financial Interest''
1. We concluded above, in Part III.A, that a BOC engaged in the
provision of electronic publishing is subject to section 274 only to
the extent that it controls, or has a financial interest in, the
content of the information being disseminated over its basic telephone
services. The record compiled in this proceeding, however, does not
provide sufficient detail for us to determine the meaning of
``control'' and ``financial interest'' in this context. By clarifying
these terms, we believe we will be in a better position to determine
when, and under what circumstances, a BOC's participation in a service
constitutes BOC provision of electronic publishing service subject to
the requirements of section 274.
i. Meaning of ``Control''
2. The term ``control'' in section 274(i)(4) is defined according
to regulations promulgated by the Securities and Exchange Commission
implementing the Securities Exchange Act of 1934. As defined
thereunder, the term ``control'' means ``the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise.'' We tentatively conclude
that this definition, which defines the term ``control'' in a corporate
context, is inappropriate for determining the meaning of ``control'' in
the present context, i.e., when a BOC has ``control'' of the content of
information transmitted via its basic telephone service. We therefore
seek comment on how we should determine whether a BOC has ``control''
of the content of the information being disseminated under section 274.
3. For example, we seek comment on whether an ownership interest is
required for a BOC to have ``control'' of the content of the
information. If so, we seek comment on the percentage of ownership
interest necessary for the BOC to be deemed to be in ``control'' of the
content of the information. Alternatively, we seek comment on whether
``control'' should be broadly interpreted to include the ability of a
BOC, when acting as a gateway provider, to limit the types of
information to which its gateway connects. NYNEX suggests that this
ability does not imply the type of ``control'' over the underlying
information being transmitted and, therefore, does not constitute
electronic publishing. We seek comment on this interpretation.
ii. Meaning of ``Financial Interest''
4. We also seek comment on the meaning of the term ``financial
interest.'' We tentatively conclude that a BOC has a ``financial
interest'' in the content of the information when the BOC owns the
information or has a direct or indirect equity interest in the
information being disseminated via its basic telephone services. We
seek comment on this tentative conclusion. We also seek comment on
other forms of BOC participation that should be considered indicia of
``financial interest.'' For example, NYNEX maintains that a ``financial
interest'' in the content of the information should not be interpreted
to include receipt of compensation by a BOC for managing and presenting
the content of unaffiliated entities as part of its gateway services.
Alternatively, PacTel contends that a ``financial interest'' must be a
legally protected property interest.'' We seek comment on these
interpretations.
5. In addition, we seek comment on whether we should establish a de
minimis exception to the financial interest requirement once financial
interest has been established. For example, if a BOC has a financial
interest in only one percent of the content of the information, should
it be required to provide the electronic publishing service through a
``separated affiliate'' or ``electronic publishing joint venture''? If
not, should the BOC be required to do so if it has a financial interest
of ten percent? We seek comment on the percentage of financial interest
in an electronic publishing service, as defined in section 274(h), that
makes a BOC subject to the requirements of section 274.
B. Meaning of ``Transaction'' in Section 274(b)(3) and the
Requirements of Section 274(b)(3)(B)
6. Section 274(b)(3) provides that a separated affiliate or
electronic publishing joint venture established pursuant to section
274(a) and the BOC with which it is affiliated shall ``carry out
transactions (A) in a manner consistent with such independence, (B)
pursuant to written contracts or tariffs that are filed with the
Commission and made publicly available, and (C) in a manner that is
auditable in accordance with generally accepted accounting standards.''
We note that the clause in section 274(b)(3)(B), ``pursuant to written
contracts or tariffs that are filed with the Commission,'' can be read
to require the filing of both contracts and tariffs with the
Commission, or only the filing of tariffs. In addition, the phrase
``and made publicly available,'' could refer only to ``tariffs'' or
also to ``written contracts.'' Although the Accounting Safeguards NPRM
(61 FR 40161 (August 1, 1996)) sought comment on section 274(b)(3), no
commenters in that proceeding specifically addressed these issues
regarding section 274(b)(3)(B).
7.``Filed with the Commission.'' We seek comment on whether BOCs
should be required under section 274(b)(3)(B) to file both written
contracts and tariffs on Commission premises. We note that, pursuant to
existing practice, BOCs are already required to file tariffs with the
Commission. We also note that section 211 of the Communications Act
imposes a general requirement on common carriers to ``file with the
Commission'' copies of ``contracts, agreements, or arrangements with
other carriers, or with common carriers not subject to the provisions
of [the Communications Act]'' relating to communications traffic. Our
rules implementing this section, however, require only that certain
carriers file certain types of contracts with the Commission.'' As to
the remaining contracts within the scope of section 211, carriers are
permitted to comply with section 211 by keeping the contracts on their
premises such that they are ``readily accessible to Commission staff
and members of the public upon reasonable request.'' We invite parties
to comment on whether we can and should adopt these procedures to
implement the statutory language in section 274(b)(3)(B).
8. ``Made Publicly Available.'' We tentatively conclude that
section 274(b)(3)(B) requires that both written contracts and tariffs
be made ``publicly available.'' As noted above, BOCs are already
required to make their tariffs and certain written contracts with other
carriers publicly available by filing them with the Commission and make
others contracts accessible upon reasonable request. We find that
interpreting this section to require all contracts, as well as tariffs,
to be made ``publicly available,'' is necessary to ensure that BOCs are
complying with the nondiscrimination and accounting safeguards of the
Act and to enable competitors to detect discrimination and potential
improper cost allocations by the BOCs. We seek comment on this
tentative conclusion.
9. Assuming that section 274(b)(3)(B) does not require BOCs to file
all their written contracts with separated affiliates or electronic
publishing joint ventures on Commission premises, we
[[Page 7746]]
seek comment on the means by which a BOC and its separated affiliate or
electronic publishing joint venture must make their contracts
``publicly available'' pursuant to section 274(b)(3)(B). In
interpreting a similar requirement in section 272(b)(5), which requires
that BOCs and their section 272 affiliates reduce their transactions to
writing and make them available for public inspection, we found that a
BOC must make information ``available for public inspection'' pursuant
to that section by making it available at its corporate headquarters
and not the RBOC corporate headquarters or the corporate headquarters
of the BOC's holding company. We stated that this information must
include a certification statement identical to the certification
statement currently required to be included with all Automated
Reporting and Management Information System (``ARMIS'') reports. We
also concluded that detailed written descriptions of transactions
between BOCs and their section 272 affiliates must be made available to
the public on the Internet within ten days of the transaction. We
therefore seek comment on whether, for written contracts within section
274(b)(3)(B) that we decide need not be filed on Commission premises,
we should interpret the ``publicly available'' requirement of this
section in the same manner as we interpreted the ``available for public
inspection'' requirement in section 272(b)(5). Commenters disagreeing
with this approach should explain why, and propose alternative
approaches.
10. Meaning of ``Transaction.'' We also seek comment on what
constitutes a ``transaction'' for purposes of section 274(b)(3). We
note that, for purposes of section 272(b)(5), we concluded that only
once the BOC and its affiliate have agreed upon the terms and
conditions for telephone exchange and exchange access does the
agreement constitute a ``transaction.'' We also found that an agreement
between a BOC and its affiliate for the provision of unbundled elements
and facilities pursuant to explicit terms and conditions also
constitutes a ``transaction.'' We seek comment here on whether we
should adopt similar conclusions in the context of section 274(b)(3).
We note, however, that section 274(d) requires BOCs to provide
``network access and interconnections for basic telephone service to
electronic publishers at just and reasonable rates that are tariffed
(so long as rates for such services are subject to rate regulation).''
We therefore tentatively conclude that, although section 274(b)(3)(B)
provides that transactions must be carried out pursuant to ``written
contracts or tariffs,'' the specific transactions described in section
274(d) may only be carried out pursuant to tariff (so long as such
services are subject to rate regulation). We seek comment on this
tentative conclusion.
C. Procedural Matters
i. Ex Parte Presentations
This FNPRM is a non-restricted notice-and-comment rulemaking
proceeding. Ex parte presentations are permitted, in accordance with
the Commission's rules, provided that they are disclosed as required.
ii. Regulatory Flexibility Certification
12. Section 603 of the Regulatory Flexibility Act, (RFA) as
amended, requires an initial regulatory flexibility analysis in notice
and comment rulemaking proceedings, unless we certify that ``the rule
will not, if promulgated, have a significant economic impact on a
substantial number of small entities.'' A ``small entity'' is an entity
that is independently owned and operated; is not dominant in its field
of operation; and meets any additional criteria established by the
Small Business Administration (SBA). SBA regulations define small
telecommunications entities in SIC code 4813 (Telephone Companies
Except Radio Telephone) as entities with fewer than 1,500 employees.
This proceeding pertains to the BOCs which, because they are dominant
in their field of operation and have more than 1,500 employees, do not
qualify as small entities under the RFA. We also note that none of the
BOCs is a small entity because each BOC is an affiliate of a Regional
Holding Company (RHC), and all of the BOCs or their RHCs have more than
1,500 employees. We therefore certify, pursuant to section 605(b) of
the RFA, that the tentative conclusions, if adopted, will not have a
significant economic impact on a substantial number of small entities.
The Secretary shall send a copy of this FNPRM, including this
certification and statement, to the Chief Counsel for Advocacy of the
Small Business Administration. A copy of this certification will also
be published in the Federal Register.
iii. Initial Paperwork Reduction Act of 1995 Analysis
13. This FNPRM contains either a proposed or modified information
collection. As part of its continuing effort to reduce paperwork
burdens, we invite the general public and the OMB to take this
opportunity to comment on the information collections contained in this
FNPRM, as required by the Paperwork Reduction Act of 1995, Public Law
104-13. Public and agency comments are due at the same time as other
comments on this FNPRM; OMB comments are due 60 days from the date of
publication of this FNPRM in the Federal Register. Comments should
address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
iv. Comment Filing Procedures
14. Pursuant to applicable procedures set forth in Sections 1.415
and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments on or before April 4, 1997, and reply
comments on or before April 25, 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 of your comments, you must file an original
and eleven copies. Comments and reply comments should be sent to the
Office of the Secretary, Federal Communications Commission, 1919 M
Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice
Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544,
Washington, D.C., 20554. Parties should also file one copy of any
documents filed in this docket with the Commission's copy contractor,
International Transcription Services, Inc., 2100 M Street, N.W., Suite
140, Washington, D.C., 20037. Comments and reply comments will be
available for public inspection during regular business hours in the
FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C.,
20554.
15. Comments and reply comments must include a short and concise
summary of the substantive arguments raised in the pleading. Comments
and reply comments must also comply with Section 1.49 and all other
applicable sections of the Commission's Rules. See 47 CFR 1.49.
However, we require here that a summary be included with all comments
and reply comments, regardless of length. This summary may be paginated
separately from the rest of
[[Page 7747]]
the pleading (e.g., as ``i, ii''). We also direct all interested
parties to include the name of the filing party and the date of the
filing on each page of their comments and reply comments. All parties
are encouraged to utilize a table of contents, regardless of the length
of their submission. Parties may not file more than a total of ten (10)
pages of ex parte submissions, excluding cover letters. This 10 page
limit does not include: (1) written ex parte filings made solely to
disclose an oral ex parte contact; (2) written material submitted at
the time of an oral presentation to Commission staff that provides a
brief outline of the presentation; or (3) written materials filed in
response to direct requests from Commission staff. Ex parte filings in
excess of this limit will not be considered as part of the record in
this proceeding.
16. Parties are also asked to submit comments and reply comments on
diskette. Such 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 Janice Myles of the Common
Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554.
Such a submission should be on a 3.5 inch diskette formatted in an IBM
compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The
diskette should be submitted in ``read only'' mode. The diskette should
be clearly labelled with the party's name, proceeding, type of pleading
(comment or reply comments) and date of submission. The diskette should
be accompanied by a cover letter.
17. Written comments by the public on the proposed and/or modified
information collections are due April 4, 1997, and reply comments must
be submitted not later than April 25, 1997. Written comments must be
submitted by the OMB on the proposed and/or modified information
collections on or before 60 days after date of publication in the
Federal Register. In addition to filing comments with the Secretary, a
copy of any comments on the information collections contained herein
should be submitted to Dorothy Conway, Federal Communications
Commission, Room 234, 1919 M Street, N.W., Washington, D.C., 20554, or
via the Internet to dconway@fcc.gov, and to Timothy Fain, OMB Desk
Officer, 10236 NEOB, 725--17th Street, N.W., Washington, D.C., 20503 or
via the Internet to fain__t@al.eop.gov.
II. Ordering Clauses
18. It is ordered that pursuant to sections 1, 2, 4, 201, 202, 274
and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
151, 152, 154, 201, 202, 274, and 303(r), the further notice of
proposed rulemaking is adopted.
19. It is further ordered that the Secretary shall send a copy of
the further notice of proposed rulemaking, including the regulatory
flexibility certification, to the Chief Counsel for Advocacy of the
Small Business Administration, in accordance with paragraph 603(a) of
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-4027 Filed 2-19-97; 8:45 am]
BILLING CODE 6712-01-P
