[Federal Register Volume 60, Number 49 (Tuesday, March 14, 1995)]
[Rules and Regulations]
[Pages 13637-13639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5786]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 61
[CC Docket No. 90-132; FCC 95-2]
Competition in the Interstate Interexchange Marketplace
agency: Federal Communications Commission.
action: Final rule.
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summary: In this Memorandum Opinion and Order, the Commission responded
to petitions for reconsideration filed in response to the Interexchange
Order addressing the remaining issues raised on reconsideration. The
Interexchange Order examined the state of competition in the interstate
interexchange marketplace. At that time, the Commission concluded that
most business services were subject to substantial competition, and
therefore lifted or streamlined certain regulatory restrictions on AT&T
and other Interexchange Carriers (IXCs). In this Memorandum Opinion and
Order, the Commission generally affirmed the various regulatory reforms
adopted in the Interexchange Order, with certain minor clarifications
and modifications.
effective date: April 13, 1995.
for further information contact: Kevin Werbach at (202) 418-1580,
Policy and Program Planning Division, Common Carrier Bureau.
supplementary information: This is a summary of the Commission's
Memorandum Opinion and Order on Reconsideration adopted January 3,
1995, and release February 17, 1995. The full text of this decision is
available for inspection and copying during normal business hours in
the FCC Dockets Branch (Room 239), 1919 M Street NW., Washington, DC.
The complete text of this decision may also be purchased from the
Commission's copy contractor, International Transcription Services,
Inc., 2100 M [[Page 13638]] Street NW., Suite 140, Washington, DC
20037.
Summary of Order
1. On August 1, 1991, the Commission adopted the Interexchange
Order (56 FR 55235 (Oct. 25, 1991)), concluding an examination of the
state of competition in the interstate interexchange marketplace and
adapting its regulatory policies in light of this competition. The
Commission in the Interexchange Order found that most business services
are subject to substantial competition. Based on this conclusion, the
Commission further streamlined its regulation of most of AT&T's
business services, while retaining price cap regulation for two
services that were found to be less competitive--800 services and
analog private line services. The Commission also authorized all
interexchange carriers (IXCs) to offer service pursuant to
individually-negotiated contract rates that are generally available to
similarly situated customers. In addition, the Commission eliminated
nondiscrimination reporting requirements for AT&T services subject to
further streamlining, and the requirement that AT&T submit annually an
independent audit report on its installation and maintenance
procedures. Finally, the Commission eliminated the comparably efficient
interconnection (CEI) filing requirements and CEI parameters for AT&T's
provision of enhanced services that rely exclusively on basic services
subject to further streamlining.
2. Eleven parties filed petitions seeking reconsideration of the
Interexchange Order. The Commission addressed reconsideration requests
relating to the bundling of 800 services and inbound services with
other services in prior orders. This Memorandum Opinion and Order on
Reconsideration responds to the remaining issues on reconsideration,
and reaffirms the Interexchange Order with certain minor modifications.
3. The Commission affirmed its decision to permit IXCs to offer
services pursuant to individually-negotiated contracts. The Commission
rejected arguments that such ``contract carriage'' violated the
Communications Act of 1934, that contract carriage would lead to
predatory behavior by AT&T, that the presumption of lawfulness accorded
AT&T's contract-based tariffs was inconsistent with prior Commission
statements, that contract-based tariff filings would provide
insufficient information about rates, and that additional safeguards
should be imposed upon AT&T for its contract-based service offerings.
4. The Commission clarified its decision to apply the ``substantial
cause'' test to tariff revisions that alter material terms and
conditions of a long-term contract. In the Interexchange Order, the
Commission noted that tariff revisions by dominant carriers altering
material terms and conditions of a long-term service tariff are
considered reasonable only if the carrier can make a showing of
substantial cause for the revisions. The Commission cited earlier
decisions as holding that the same test applies to tariff revisions
that alter material terms and conditions of a long-term contract. In
response to petitions for reconsideration, the Commission first noted
that it was unlikely that AT&T would seek to unilaterally modify a
contract-based tariff, as such action could damage its relationship
with its customers. The Commission then explained that it would
consider on a case-by-case basis in light of all relevant circumstances
whether a substantial cause showing has been made. The Commission
concluded that commercial contract law principles are highly relevant--
but not necessarily determinative--to such a decision.
5. The Commission refused to impose additional safeguards to ensure
that AT&T's provision of ``customized'' services, such as Tariff 12 and
contract services, does not impede competition in the customer premises
equipment (CPE) marketplace. The Commission concluded that no party had
demonstrated that customers are unaware of the relevant CPE bundling
rules, and that it has not been presented with any evidence that
systems integrators have been denied access to customized service
arrangements.
6. The Commission modified its decision in the Interexchange Order
to eliminate comparably efficient interconnection (CEI) requirements
for AT&T's provision of enhanced services that rely exclusively on
basic services subject to further streamlined regulation. The
Commission concluded that the distinction made in the Interexchange
Order between streamlined services that are coupled with nonstreamlined
services, and those that are not, was without a valid basis and should
be abandoned. Consequently, the Commission lifted CEI requirements for
any streamlined service provided by AT&T. AT&T was required to file a
CEI plan explaining how it will comply with CEI parameters for
nonstreamlined services only, for any enhanced service that AT&T
proposes to provide that relies on both streamlined and nonstreamlined
services.
7. The Commission denied requests that it prohibit AT&T from
including nonstreamlined services in its Tariff 12 offerings, or that
the Commission apply its bundling restrictions on 800 and inbound
services to other nonstreamlined services. The Commission noted that
its rationale for prohibiting AT&T from including 800 and inbound
services in future contract-based tariffs or Tariff 12s pending 800
number portability was based on specific findings about AT&T ability to
leverage its competitive advantage in the 800 marketplace. There are
sufficient distinctions, the Commission concluded, between 800 services
and other nonstreamlined services, and between contract-based tariffs
and Tariff 12 offerings, to justify the policies adopted in the
Interexchange Order.
8. Finally, the Commission addressed concerns related to its
treatment of analog private line service. The Commission denied
requests to reconsider what it meant by the term ``analog private line
service.'' The Commission did, however, order AT&T to remove analog
private line services provided to government entities through
contractual arrangements from Basket 3. This modification was designed
to limit AT&T's ability to subsidize rate decreases in some Basket 3
services with rate increases in other analog private line rate
elements. In light of this decision, the Commission recalibrated the
price cap index (PCI) and the actual price index (API) for Basket 3 to
reflect the removal of all analog private line services provided under
contract to government entities from this basket.
Ordering Clauses
1. Accordingly, pursuant to authority contained in sections 1, 4,
201-205, and 405 of the Communications Act of 1934, as amended, 47
U.S.C. 151, 154, 201-205, 405, It Is Ordered that the policies, rules
and requirements set forth herein Are Adopted, and Part 61 of the
Commission's Rules, 47 CFR Part 61, Is Amended as set forth in below,
effective April 13, 1995.
2. It is further ordered That the petitions for reconsideration of
AT&T, Ad Hoc, ARINC, Alascom, Broadcast Coalition, Citicorp, CompTel,
IDCMA, MCI, Sprint and WilTel are Granted in Part and Denied in Part.
List of Subjects in 47 CFR Part 61
Communications common carriers, Reporting and recordkeeping
requirements, Telephone. [[Page 13639]]
Amendatory Text
Title 47 of the Code of Federal Regulations, Part 61 is amended as
follows:
PART 61--TARIFFS
1. The authority citation for part 61 continues to read as follows:
Authority: Secs. 1, 4(i), 4(j), 201-205, and 403 of the
Communications Act of 1934, as amended; 47 U.S.C. 151, 154(i),
154(j), 201-205, and 403, unless otherwise noted.
2. Section 61.42(b)(3) is revised to read as follows:
Sec. 61.42 Price cap baskets and service categories.
* * * * *
(b) * * *
(3) The business services basket shall contain analog private
lines, including analog voice grade private line, unless provided under
contract to a government entity, and terrestrial television
transmission service.
* * * * *
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-5786 Filed 3-13-95; 8:45 am]
BILLING CODE 6712-01-M
