[Federal Register Volume 62, Number 144 (Monday, July 28, 1997)]
[Notices]
[Pages 40350-40356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19776]
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FEDERAL COMMUNICATIONS COMMISSION
[CC Docket No. 96-159; FCC 97-244]
Petitions for Limited Modification of LATA Boundaries to Provide
Expanded Local Calling Service (ELCS) at Various Locations
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: In this Memorandum Opinion and Order adopted July 3, 1997 and
released July 15, 1997, the Commission grants 23 requests for limited
modification of local access and transport area (LATA) boundaries to
permit certain Bell Operating Companies (BOCs) to provide expanded
local calling service (ELCS) in various communities. The order also
sets forth guidelines for future LATA modification requests. The order
will allow the BOCs to provide ELCS in communities whose borders extend
accross existing LATA boundaries.
FOR FURTHER INFORMATION CONTACT: Pamela Gerr, (202) 418-2357, or Robin
Smolen, (202) 418-2353, both of the Network Services Division, Common
Carrier Bureau.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Memorandum Opinion and Order, (FCC 97-244) adopted on July 3, 1997 and
released on July 15, 1997. The full text of this Order is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M Street NW, Washington, DC 20554.
The complete text may also be purchased from the Commission's copy
contractor, International Transcription Service, Inc., (202) 857-3800,
1231 20th Street NW, Washington, DC 20036.
Paperwork Reduction Act
OMB Control No.: 3060-0782.
Expiration Date: 01/31/98.
Title: Petitions for Limited Modification of LATA Boundaries to
Provide Expanded Local Calling Service (ELCS) at Various Locations.
Form No.: N/A.
Respondents: Business or other for profit.
Estimated Annual Burden: 20 respondents; 8 hours per response
(avg). x 5 responses annually; 800 total annual burden hours.
Estimated Annual Reporting and Recordkeeping Cost Burden: $0.
Frequency of Response: On occasion.
Needs and Uses: The Commission has provided voluntary guidelines
for filing expanded local calling service requests. These guidelines
will allow the Commission to conduct smooth and continuous processing
of these requests. The collection of information will enable the
Commission to determine if there is a public need for expanded local
calling service in each area subject to the request. Your response is
voluntary.
Public reporting burden for the collection of information is as
noted above. Send comments regarding the burden estimate or any other
aspect of the collection of information, including suggestions for
reducing the burden to Performance Evaluation and Records Management,
Washington, DC 20554. An agency may not conduct or sponsor and a person
is not required to respond to a collection of information unless it
displays a currently valid control number.
Synopsis of Memorandum Opinion and Order
I. Introduction
1. Five Bell Operating Companies (BOCs) have filed petitions
1 with the Commission requesting relief from the effects of
certain local access and transport area (LATA) boundaries.2
The petitions were filed pursuant to section 3(25) of the
Communications Act of 1934, as amended, which permits modification of
LATA boundaries by Bell Operating Companies (BOCs), if such
modifications are approved by the Commission.3 The petitions
request LATA relief in order to provide expanded local calling service
(ELCS) 4 between communities that lie on different sides of
existing LATA boundaries (ELCS requests).5 The petitions
were placed on public notice 6 and comments and replies were
filed.7
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\1\ Petitions were filed by Ameritech, Bell Atlantic, BellSouth
Telecommunications, Inc. (BellSouth), Southwestern Bell Telephone
Company (SWBT), and US West Communications, Inc. (US West). These
petitions and the associated LATA modification requests are listed
in Appendix A. A LATA modification (LM) file number has been
assigned to each request. See Appendix A.
\2\ LATAs define the geographic areas within which a BOC may
provide service. See infra paras. 3, 9. A LATA is defined as ``a
contiguous geographic area (A) established before the date of
enactment of the Telecommunications Act of 1996 by a Bell operating
company such that no exchange area includes points within more than
1 metropolitan statistical area, consolidated metropolitan
statistical area, or State, except as expressly permitted under the
AT&T Consent Decree; or (B) established or modified by a Bell
operating company after such date of enactment and approved by the
Commission.'' Section 3(25) of the Communications Act of 1934, as
amended, 47 U.S.C. 153(25).
\3\ See 47 U.S.C. 153(25).
\4\ A local calling area consists of one or more telephone
exchanges and is an area within which subscribers can place calls
without incurring any additional charge over their regular monthly
service charge. See United States v. Western Electric, 569 F. Supp.
990, 1003 n.59 (D.D.C. 1983) (hereinafter Western Electric). Local
calling areas are established by state regulatory commissions. See
id. at 990, 1002 n.54. ELCS (also known as extended area service or
EAS) allows local telephone service rates to apply to nearby
telephone exchanges, thus providing an expanded local calling area.
See id.
\5\ These LATA modification requests are summarized in Appendix
B.
\6\ See Public Notice, ``Commission Seeks Comment on Petitions
for Waiver of LATA Boundaries to Provide Expanded Local Calling
Service in Texas and North Carolina,'' DA 96-1190, released July 26,
1996 (First Public Notice); Public Notice, ``Comment Requested on
Petitions for Limited Modification of LATA Boundaries to Provide:
(1) Expanded Local Calling Service (ELCS) in Nebraska, North
Carolina, Ohio, Oregon, Pennsylvania, Texas, and Virginia, and
Between Ohio and West Virginia, and Virginia and West Virginia; and
(2) Integrated Services Digital Network (ISDN) in Hearne, Texas,''
DA 97-109, released January 15, 1997 (Second Public Notice).
\7\ Comments were filed by AT&T Corp. (AT&T), Intelcom Group
(U.S.A.), Inc. (Intelcom), the North Carolina Utilities Commission
and the Public Staff-North Carolina Utilities Commission (North
Carolina PUC), the Public Utilities Commission of Ohio (Ohio PUC),
the Virginia State Corporation Commission (Virginia Commission), and
Western Reserve Telephone Company (Western Reserve). Reply comments
were filed by BellSouth, the North Carolina PUC, and Southwestern
Bell. Numerous informal comments were also filed by individuals,
businesses, and local government entities in support of individual
LATA modification requests.
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2. There are 24 ELCS requests before the Commission.8
For the reasons discussed below, we grant 23 of the ELCS requests and
order amendment of one request.9 We also provide guidelines
for future ELCS requests.
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\8\ SWBT's petition for LATA relief in order to provide
integrated services digital network (ISDN) in the Hearne, Texas
LATA, see supra note 6, and Ameritech's request to provide ELCS from
the Aurora, Northfield and Twinsburg, Ohio exchanges to the Akron,
Ohio exchange, see id.; see also Public Notice, ``Commission
Requests Comment on Whether Section 271 of the Communications Act
Authorizes Ameritech to Carry Certain ELCS Traffic Across a LATA
Boundary,'' released June 27, 1997, will be addressed in separate
orders.
\9\ See US West's Scio/Albany request, NSD-LM-97-25, Appendix A.
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II. Background
A. ELCS Requests Under the Consent Decree
3. On August 24, 1982, the United States District Court for the
District of Columbia (Court) entered an order (Consent Decree) that
required AT&T to divest its ownership of the BOCs.10 The
[[Page 40351]]
Court divided all Bell territory in the continental United States into
geographic areas called LATAs.11 Under the Consent Decree,
the BOCs were permitted to provide telephone service within a LATA
(intraLATA service), but were not permitted to carry traffic across
LATA boundaries (interLATA service).12 InterLATA traffic was
to be carried by interexchange carriers.13
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\10\ United States v. American Telephone and Telegraph Co., 552
F. Supp. 131 (D.D.C. 1982), aff'd sub nom. Maryland v. United
States, 460 U.S. 1001 (1983).
\11\ See Western Electric, 569 F. Supp. at 993, 994.
\12\ Id. at 994.
\13\ Id.
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4. The LATAs did not cover territory served by independent
telephone companies (ITCs).14 The Court, however, did
classify some independent exchanges as ``associated'' with a particular
LATA.15 Traffic between a LATA and an associated exchange
was treated as intraLATA, and could be carried by the BOC, while
traffic between a LATA and an unassociated exchange was treated as
interLATA, and could not be carried by the BOC.16 The ITCs
were not subject to the restrictions imposed by the Consent Decree, and
could carry traffic regardless of whether that traffic crossed LATA
boundaries.17
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\14\ See id. at 1008 n.85.
\15\ See United States v.Western Electric Co., Inc., 569 F.
Supp. 1057, 1110-13 & n.234 (D.D.C. 1983).
\16\ See id.; Western Electric, 569 F. Supp. at 1008-09.
\17\ Western Electric, 569 F. Supp. at 1008, 1010, 1113.
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5. In establishing the LATAs, the Court recognized that there were
existing local calling areas 18 that would cross the newly
created LATA boundaries.19 The Court stated that the LATAs
were not intended to interfere with local calling areas that had been
established by state regulators.20 Accordingly, the Court
granted ``exceptions'' to permit BOCs to carry interLATA traffic if
necessary to preserve existing ELCS arrangements.21 The
Court found that such exceptions were consistent with the purposes of
the Consent Decree because (1) they were limited in scope, (2) they
would avoid additional charges being imposed on ratepayers, and (3) it
was unlikely that toll traffic potentially subject to competition would
be affected.22
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\18\ See supra note 4.
\19\ Western Electric, 569 F. Supp. at 995, 1002 n.54.
\20\ Id. at 995.
\21\ Id. at 1002 n.54.
\22\ Id.
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6. The Court subsequently received more than a hundred requests for
waivers of the Consent Decree to permit new interLATA ELCS routes. The
requests for new ELCS routes were generally initiated by local
subscribers who asked their state commission to approve an expanded
local calling area. If the proposed ELCS route was intraLATA it could
be ordered by the state commission; if the route was interLATA, the BOC
would also have to obtain a waiver from the Court. The Court developed
a streamlined process for handling such requests both because of the
large number of requests involved and because most of the requests were
non-controversial. Under this process, the BOC would submit its waiver
request to the Department of Justice (DOJ). DOJ would review the
request and then submit the request to the Court along with DOJ's
recommendation.
7. In evaluating such requests, DOJ and the Court considered the
number of customers or access lines involved.23 They also
considered whether there was a sufficiently strong community of
interest between the exchanges to justify granting a waiver of the
Consent Decree to allow local calling.24 In particular, they
considered the state commission's community of interest finding and any
additional evidence supporting this finding. A community of interest
could be demonstrated by such evidence as: (1) Poll results indicating
that customers in the affected exchange were willing to pay higher
rates to be included in an expanded local calling area; 25
(2) usage data indicating a high level of calling between the
exchanges; and (3) narrative statements describing how the two
exchanges were part of one community and how the lack of local calling
between the exchanges caused problems for community
residents.26 The Court was willing to grant waivers when the
competitive effects were minimal and a sufficient community of interest
across LATA boundaries was shown.27 The Court frequently
granted waivers to permit interLATA ELCS.
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\23\ See United States v. Western Electric Company, Inc., No.
82-0192, slip op. at 3 n.8 (D.D.C. July 19, 1984) (hereinafter July
1984 Order).
\24\ See e.g., United States v. Western Electric Company, Inc.,
No. 82-0192 slip op. at 2, 3 n.3 (D.D.C. Jan. 31, 1985) (hereinafter
Jan. 1985 Order); United States v. Western Electric Company, Inc.,
No. 82-0192 (D.D.C. Dec. 3, 1993) (hereinafter Dec. 3, 1993 Order);
United States v. Western Electric Company, Inc., No. 82-0192 (D.D.C.
Dec. 17, 1993) (hereinafter Dec. 17, 1993 Order).
\25\ See July 1984 Order, at 2 n.5.
\26\ See Jan. 1985 Order, at 2-3 & n.3.
\27\ See July 1984 Order; Jan. 1985 Order; United States v.
Western Electric Company, Inc., No. 82-0192, slip op. at 2 (D.D.C.
May 18, 1993) (hereinafter May 1993 Order).
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8. The Court granted waivers for more than a hundred flat-rate,
non-optional ELCS plans 28 that allow the provision of
traditional local telephone service between nearby exchanges. Under
such plans, subscribers pay no extra charge for calls beyond their
established monthly service charge (the plan involves a flat-rate), and
all subscribers in the exchange are included in the plan (the plan is
non-optional).29 The Court refused, however, to grant
waivers for optional or measured-rate ELCS plans.30 Under
optional plans, subscribers may chose to pay an additional monthly
charge for an expanded local calling area,31 while under
measured-rate plans, subscribers pay measured-rates based on such
factors as duration, distance, and time of day.32 The Court
found that granting waivers for such ELCS arrangements could have an
anticompetitive effect because these services were similar to the toll
service normally provided by interexchange carriers, and that these
arrangements were basically discounted toll service for calls that
would otherwise be carried competitively.33 The Court was
especially concerned that the discount appeared to result from the fact
that BOCs, unlike interexchange carriers, did not have to pay access
charges on such calls.34 The Court also noted that, in the
case of optional or measured-rate plans, the state commission had not
found a sufficient community of interest between the exchanges to
justify traditional local service, (i.e., flat-rate, non-optional
ELCS).35 Finally, the Court expressed concern that allowing
new exceptions for measured-rate or optional plans could lead to a
``piecemeal dismantling'' of the prohibition on the BOCs'' provision of
interLATA service.36
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\28\ See e.g., Western Electric, 569 F. Supp. at 1002 n.54;
July 1984 Order; Jan. 1985 Order.
\29\ Id.
\30\ See e.g., Western Electric, 569 F. Supp. at 1002 n.54
(optional ELCS plans denied); May 1993 Order (optional ELCS plan
denied); Dec. 3, 1993 Order (measured-rate ELCS plan denied); Dec.
17, 1993 Order (measured-rate, optional ELCS plan denied).
\31\ Id.
\32\ See Dec. 3, 1993 Order.
\33\ See Western Electric, 569 F. Supp. at 1001, 1002 n.54;
Dec. 17, 1993 Order at 3-4; Dec. 3, 1993 Order.
\34\ Dec. 17, 1993 Order at 5.
\35\ See id. at 4; See also May 1993 Order, at 4.
\36\ See May 18, 1993 Order at 4.
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B. ELCS Requests Under the Telecommunications Act of 1996
9. On February 8, 1996, the Telecommunications Act of 1996 (1996
Act) became law, amending the Communications Act of 1934
(Act).37 Pursuant to the 1996 Act, matters previously
subject to the Consent Decree are now governed by the Act.38
Section
[[Page 40352]]
271(b)(1) of the Act prohibits a BOC from providing ``interLATA
services originating in any of its ``in-region'' States'' 39
until the BOC takes certain steps to open its own market to competition
and the Commission approves the BOC's application to provide such
service.40 In addition, while the Commission may forbear
from applying certain provisions of the Act under certain
circumstances,41 the Commission may not forbear from section
271.42 Section 3(25)(B) of the Act provides that BOCs may
modify LATA boundaries, if such modifications are approved by the
Commission.43
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\37\ Pub. L. 104-104, 110 Stat. 56 (1996).
\38\ Section 601(a)(1) of the 1996 Act states that ``(a)ny
conduct or activity that was, before the date of enactment of this
Act, subject to any restriction or obligation imposed by the AT&T
Consent Decree shall, on and after such date, be subject to the
restrictions and obligations imposed by the Communications Act of
1934 as amended by this Act and shall not be subject to the
restrictions and obligations imposed by such Consent Decree.'' On
April 11, 1996, the Court issued an order terminating the AT&T
Consent Decree and dismissing all pending motions under the Consent
Decree as moot, effective February 8, 1996. See United States v.
Western Electric Company, Inc., No. 82-0192, 1996 WL 255904 (D.D.C.
Apr. 11, 1996).
\39\ Section 271(i)(1) of the Act defines ``in-region State'' as
a state in which a Bell operating company or any of its affiliates
was authorized to provide wireline telephone exchange service
pursuant to the reorganization plan approved under the Consent
Decree, as in effect on the day before the date of enactment of the
Telecommunications Act of 1996. 47 U.S.C. 271(i)(1). Section 3(21)
of the Act defines ``interLATA service'' as ``telecommunications
between a point located in a local access and transport area and a
point located outside such area.'' 47 U.S.C. 153(21).
\40\ 47 U.S.C. 271(b)(1). Section 271(f), however, provides that
BOCs are not prohibited from engaging in an activity to the extent
that such activity was previously authorized by the Court. See 47
U.S.C. 271(f). Thus, BOCs may continue to serve previously
authorized interLATA ELCS routes. Id.
\41\ See 47 U.S.C. Sec. 160(a).
\42\ See 47 U.S.C. Sec. 160(d).
\43\ See 47 U.S.C. Sec. 153(25)(B).
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10. Since passage of the 1996 Act, the Commission has received six
petitions requesting LATA relief in order that ELCS can be offered. On
July 26, 1996 the Commission issued a public notice requesting comment
on petitions filed by BellSouth and SWBT for a ``waiver'' of LATA
boundaries.44 On January 15, 1997 the Commission issued a
Second Public Notice requesting comment on petitions filed by
Ameritech, Bell Atlantic, and US West, and allowing additional comment
on the petitions previously filed by BellSouth and SWBT.45
The Second Public Notice stated that, although several of the petitions
describe the relief requested as a ``waiver'' of LATA boundaries, all
of the petitions cited section 3(25) as the basis of the Commission's
jurisdiction to act upon these requests. Accordingly, the Commission
stated that it would treat all of these petitions as requests for
modification of LATA boundaries for the limited purpose of providing
the specific service indicated in the request. The Commission further
stated that the LATA boundaries would remain unchanged for all other
purposes.
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\44\ See supra note 6.
\45\ Id.
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III. Comments
11. In response to the First Public Notice, formal comments or
reply comments were filed by AT&T, BellSouth, Intelcom, 46
the North Carolina PUC, and SWBT. AT&T states that the Commission lacks
authority to waive LATA boundaries and that the petitions can only be
properly characterized as LATA modification requests if they propose to
move a LATA boundary so that certain calls previously classified as
intraLATA are now interLATA, and other calls previously classified as
interLATA are now intraLATA.47 AT&T further contends that
such LATA modification requests raise serious competitive issues
because, if granted, they will completely displace the interexchange
carrier currently providing that service.48 AT&T also states
that granting such requests could allow a BOC to ``chip away'' at the
prohibition against its provision of in-region interLATA service prior
to meeting the requirements of Section 271, thus reducing the BOCs'
incentive to open its own local market to competition.49
Accordingly, AT&T concludes that LATA modifications should be granted
``sparingly, if at all.'' 50 Like AT&T, Intelcom also has
expressed concern about possible anticompetitive effects 51
and states that the Commission should approach these and future LATA
modification requests with caution.52 Intelcom, however,
takes no position on the current petitions and states that the proposed
modifications would appear to have no more than a de minimis effect on
competition.53 BellSouth, the North Carolina PUC, and SWBT
all strongly support the grant of particular ELCS requests.
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\46\ Intelcom states that it is a provider of competitive local
access services and that it operates networks in numerous parts of
the country including some of the LATAs affected by the petitions in
this proceeding. Intelcom Comments at 2-3.
\47\ AT&T Comments at 2-3.
\48\ Id. at 4.
\49\ Id.
\50\ Id. at 5.
\51\ Intelcom Comments at 3-4.
\52\ Id. at 4.
\53\ Id.
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12. In response to the Second Public Notice, comments were filed by
the Ohio PUC, the Virginia Commission and Western Reserve. These
petitions all support granting particular ELCS requests. The Virginia
Commission, in its comments, also requests approval for a LATA boundary
modification to permit ELCS between the Waverly and Wakefield exchanges
in Virginia (Virginia Commission's Waverly/Wakefield request).
54 This request was not included in any of the LATA
modification petitions previously filed with the
Commission.55
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\54\ See Virginia Commission Comments at 1-2.
\55\ See supra para. 10.
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IV. Discussion
A. General Considerations
13. Section 3(25) of the Act defines LATA as those areas
established prior to enactment of the 1996 Act or established or
modified by a BOC after such date of enactment and approved by the
Commission. Section 271 of the Act prohibits a BOC from providing
interLATA services until such time as certain enumerated conditions are
satisfied. Section 10(d) prohibits the Commission from forbearing from
applying the requirements of section 271. Thus, for a BOC to provide
service on a new ELCS route that crosses existing LATA boundaries, the
statute appears to require that BOC either to modify the LATA so that
the route no longer crosses a LATA boundary and obtain Commission
approval therefor, or satisfy the requirements of section 271.
14. The state commissions have determined that certain communities
have an immediate need for traditional local telephone
service.56 None of the BOCs, however, have yet met the
section 271 requirements and there is no time limit by which they must
do so. Thus, requiring the BOCs to meet the section 271 requirements
would not be the most expeditious way to ensure that local telephone
service can be provided to these communities in a timely manner.
Furthermore, the section 271 requirements were intended to ensure that
BOCs do not prematurely enter into the interexchange market. Given the
small number of access lines involved for each of the proposed ELCS
areas in the petitions before the Commission, as well as the type of
service to be offered (i.e., traditional local service), it is highly
unlikely that provision of ELCS service would reduce a BOC's motivation
to open its own market to competition. Similarly, the small volume of
traffic would seem inconsequential to any interexchange carrier. Thus,
requiring the BOCs to meet the section 271 requirements prior to
offering this service would not further Congress's intent to guard
against competitive abuses.
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\56\ See infra para. 18.
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15. While it appears that LATA modification is the preferable means
by
[[Page 40353]]
which the BOCs can achieve the goal of providing ELCS service, a
modification of the boundary for all purposes in order to accommodate
the ELCS routes could be counterproductive. If an exchange were moved
to another LATA for all purposes, any existing local calling routes
between that exchange and the original LATA would be lost because such
traffic would now be interLATA and could no longer be carried by the
BOC. Instead the traffic would generally be carried by an interexchange
carrier charging long distance rates. Consequently, such action could
merely shift the same problem from one community to another.
16. Thus, we believe that LATA modifications for a ``limited
purpose'' that would authorize BOCs to provide only flat-rate, non-
optional local calling service between specific exchanges, would best
achieve the desired goals discussed in paragraph 14. Modification of
the LATA for the limited purpose of providing the ELCS routes would
avoid the anomalous situations described above. In addition, limited
modifications would reduce the potential for anticompetitive effects to
a greater degree than general LATA modifications because the former
limit the amount of additional traffic that the BOC may carry whereas
the latter would permit the BOC to offer any type of service, including
toll service, between the new exchange and any other point in its LATA.
17. LATA modification for a limited purpose is both consistent with
the statute and serves the public interest. Nothing in the statute or
legislative history indicates that a LATA cannot be modified for a
limited purpose. As explained above, LATA waiver requests to permit
precisely the type of ELCS traffic at issue here were regularly and
routinely granted by the Court under the terms of the AT&T Consent
Decree. Although Congress did not include corresponding authority when
it amended the Communications Act, Congress did acknowledge the
possible need for changes to the LATA boundaries by enacting section
3(25). Nothing in either the statute or the legislative history
suggests a decision by Congress intentionally to eliminate the ability
of a locality, with a demonstrated community of interest that happens
to straddle a LATA boundary, to obtain reasonably priced telephone
service. Thus a broad reading of the term ``modify'' in section 3(25)
is reasonable. Moreover, we will consider each individual request
carefully, weighing the community need for the modification against the
potential harm from BOC anticompetitive activity. We find that this
weighing can best be accomplished by considering those factors
previously considered by the Court.57
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\57\ See supra paras. 7-8 (describing factors considered by the
Court).
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B. ELCS Requests
1. Flat-rate, Non-optional ELCS
18. Twenty-three of the pending requests seek limited modifications
of LATA boundaries in order to provide flat-rate, non-optional ELCS
(i.e., traditional local service).58 We find that these
twenty-three requests demonstrate a strong community need for the
proposed ELCS routes. We note that each of the proposed ELCS routes, in
the twenty-three requests, was approved by a state commission.
Furthermore, each request includes a demonstration of need for the
proposed modification.59 In particular, each request
indicates that the ELCS route was approved after the state commission
found there was a sufficient community of interest between the
exchanges to justify such service. Each request also documented this
community of interest through additional evidence including: (1) Poll
results showing that subscribers were willing to pay higher monthly
rates in order to be included in the expanded local calling area; (2)
usage data showing a high level of calling between the potentially
affected exchanges; and (3) narrative statements explaining why the
exchanges to be part of the ELCS area should be considered part of one
community. These statements indicated that many community services
(such as hospitals, doctors offices, schools, stores, public
transportation facilities, and government offices) were located in a
nearby community in the adjacent LATA, and that the need to make
interLATA toll calls for such services caused significant expenses for
residents. We note that granting ELCS petitions removes the proposed
routes from the competitive interexchange market and that some LATA
modifications could reduce the BOCs' incentive to open their own
markets to competition pursuant to section 271. The LATA modifications
proposed here, however, would expand the petitioning BOCs' provision of
local service to limited areas and each request involves only a small
number of customers or access lines.60 Given the limited
amount of traffic and the type of service involved, we find that the
proposed modifications will not have a significant anticompetitive
effect on the interexchange market or on the BOCs' incentive to open
their own markets to competition. Finally, we note that several
commenters strongly urge the Commission to grant particular ELCS
requests,61 and that no commenter has argued that any one of
these 23 requests should be denied.
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\58\ These 23 requests are summarized in Appendix B.
\59\ See id.
\60\ The number of customers in these exchanges ranged from 724
in the Claremont exchange, see Appendix B (summary of Bell
Atlantic's Claremont/Waverly request), to 7,495 in the Gloucester
exchange. Id. (summary of Bell Atlantic's Gloucester requests).
\61\ See Comments of BellSouth, the North Carolina PUC, the Ohio
PUC, SWBT, the Virginia Commission and Western Reserve. There were
also numerous informal comments from local residents, businesses and
local government entities supporting various ELCS requests.
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19. We conclude that, in each of the twenty-three requests, the
need for the proposed ELCS routes outweighs the risk of potential
anticompetitive effects. Furthermore, we are approving these
modifications solely for the limited purpose of allowing the BOC to
provide a particular type of service, namely, flat-rate, non-optional
local calling service, between specific exchanges or geographic
areas.62 In each case, the LATA is not modified to permit
the BOC to offer any other type of service, or calls that originate or
terminate outside the specified areas. Thus, flat-rate, non-optional
ELCS between the specified exchanges will be deemed intraLATA, and the
provisions of the Act governing intraLATA service will
apply.63 Other types of service between the specified
exchanges will be deemed interLATA, and the provisions of the Act
governing interLATA service will apply.64
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\62\ See Appendix A.
\63\ The BOC can provide the service without meeting the section
271 requirements, see 47 U.S.C. Sec. 271(a), and a separate
affiliate is not required. See 47 U.S.C. 272(a)(2)(B).
\64\ The BOC cannot provide other types of service (such as
measured-rate, optional, or toll service) between the specified
exchanges without meeting the section 271 requirements, see 47
U.S.C. 271(a).
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2. Measured-Rate, Optional ELCS
20. US West requests a LATA modification in order to provide
measured-rate, optional ELCS from its Albany exchange in the Eugene,
Oregon LATA to the Scio Mutual Telephone Association's Scio
exchange.65 US West states that the Oregon state commission
requires carriers to offer both flat-and measured-rate options for all
ELCS routes in the state.66 Accordingly, US West's plan
would offer subscribers the
[[Page 40354]]
following options: (1) Unlimited calling for a flat monthly charge; (2)
a ``usage only'' option in which calls are charged at a set rate per
minute; and (3) a three or six hour ``measured usage''
package.67 US West argues that the proposed ELCS plan is not
the type of ``optional'' plan previously rejected by the Court because
subscribers would have to select one of the ELCS plans, and could not
choose between the ELCS plan and the service offered by an
interexchange carrier.68 US West also states that the Scio
exchange has approximately 1600 access lines,69 and that the
state commission found there was a ``community of interest'' between
the exchanges and that the ELCS route was necessary to meet the
``critical needs'' of Scio exchange customers.70
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\65\ See US West's Scio/Albany request, Appendices A and B.
\66\ This policy is intended to ``avoid the potential inequity
created by flat-rate (ELCS) whereby low-volume users support the
high volume (ELCS) users.'' See US West Petition, Appendix A at 8.
\67\ See Letter from John L. Traylor, Senior Attorney, US West,
Inc., to Common Carrier Bureau, Federal Communications Commission
(Feb. 14, 1997). These options and rates are for residential
subscribers. There are different rates and options offered to
business subscribers. Id.
\68\ Id.
\69\ See US West Petition at 4.
\70\ Id.
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21. We do not approve this proposed LATA modification. US West's
request is related to a measured-rate optional ELCS plan. Furthermore,
although the state commission found that there was a ``community of
interest'' between the exchanges, it did not make a specific finding
that there was a sufficient community of interest to warrant
traditional local service (i.e., flat-rate, non-optional ELCS).
Subscribers generally can be expected to prefer, and to benefit from,
reduced rate service to nearby areas but ELCS plans with optional or
measured-rate elements are similar to the toll services traditionally
offered by interexchange carriers. We find that modifying a LATA
boundary in order to permit a BOC to provide measured-rate service
would allow the BOC to provide what would otherwise be interLATA toll
service without first meeting the requirements of section 271. Allowing
LATA modifications for such ELCS plans might well lead to substantial
expansion of BOC service, without the BOC satisfying the section 271
requirements.71 The potential anticompetitive effect of
optional and measured-rate plans, and the lack of any showing of a need
for traditional local telephone service (i.e., flat-rate, non-optional
ELCS) between the Albany and Scio exchanges, leads us to deny US West's
request. While we recognize the state commission's interest in
providing additional choices to consumers, we will not approve such
optional or measured-rate plans for the reasons discussed above.
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\71\ Cf. May 1993 Order at 4.
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22. We note, however, that the Scio/Albany request was placed on
public notice and that no objections were filed. Moreover, because of
its general policy requiring both flat-and measured-rate options on all
ELCS routes, the state commission apparently never considered whether a
sufficient community of interest existed between the Albany and Scio
exchanges to justify flat-rate, non-optional ELCS. Under these
circumstances, we find that the public interest will best be served by
our giving US West an opportunity to seek further clarification from
the state commission. Accordingly, we direct US West to amend its
request within 60 days of the release date of this order to state
whether it has obtained a further ruling from the state commission that
addresses whether there is a sufficient community of interest to
warrant flat-rate, non-optional ELCS between the Albany and Scio
exchanges and states whether such service has been
approved.72 If no amendment is filed within the 60 day
period, the request will be dismissed without prejudice pursuant to
Section 1.748 of the Commission's rules.73
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\72\ We note that even if US West does not file such an
amendment at this time, our ruling here does not preclude relief to
residents of the Albany and Scio exchanges. First, the request may
be resubmitted at any time if the state commission determines that
the required community of interest exists. This service could also
be offered by an alternative provider, if available, and US West
will be able to offer interLATA service if it meets the requirements
of section 271.
\73\ 47 CFR 1.748(a). Section 1.748(a) provides that an
application may be dismissed without prejudice if the applicant
fails to comply with a request for additional information.
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V. Future LATA Modification Requests
23. The Common Carrier Bureau has authority to act on petitions to
modify LATA boundaries, consistent with the principles established in
this order, pursuant to the delegation of authority contained in
Secs. 0.91 and 0.291 of the Commission's rules.74 We
conclude that the following set of guidelines will assist the BOCs in
filing those LATA modification petitions that involve ELCS and the
Bureau in acting on those petitions.75 First, we request
that each ELCS petition be filed by the BOC 76 pursuant to
the application filing requirements set forth in Secs. 1.742 and 1.743
of the Commission's rules.77 Second, we ask that each
individual ELCS LATA modification request be the subject of a separate
petition.78 Third, we request that each petition be labeled
``Request for Limited Modification of LATA Boundaries to Provide ELCS
Between the (exchange name) and the (exchange name).'' Finally, we
request that each ELCS petition include the following information,
under separately numbered and labeled categories, as indicated below:
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\74\ 47 CFR 0.91, 0.291.
\75\ These guidelines have been approved by the Office of
Management and Budget (OMB) under OMB control number 3060-0782. See
Paperwork Reduction Act of 1995, Pub. L. 104-13.
\76\ See section 25(3) (LATAs may be ``modified by a Bell
operating company'').
\77\ 47 CFR 1.742-43.
\78\ See the 24 individual requests listed in Appendix A.
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(1) Type of service (e.g., flat-rate, non-optional ELCS);
(2) Direction of service (one-way, two-way; if one-way, indicate
direction of service);
(3) Exchanges involved (identity name of each exchange, the LATA
and state in which each exchange is located; if an exchange is located
in independent territory, indicate the LATA, if any, with which the
exchange is associated);79
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\79\ See supra para. 4.
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(4) Name of carriers (name of carrier providing local service in
each exchange);
(5) State commission approval (include a copy of that approval);
(6) Number of access lines or customers (for each exchange);
(7) Usage data (e.g., average number of calls per access line per
month from exchange A to exchange B, from exchange B to exchange A,
and, if available, percent of subscribers making such calls each
month);
(8) Poll results (for each exchange in which a poll was required by
applicable state procedures and conducted in accordance with those
procedures. Indicate the amount of proposed rate increase in those
exchanges);
(9) Community of interest statement (a statement explaining why the
two exchanges should be considered part of a single community and why
community residents need the ELCS);
(10) Map (showing the exchanges and LATA boundary involved and
including a scale showing distance); and
(11) Other pertinent information (e.g., copies of state commission
reports, summary of hearing testimony).
24. If any of the above information is unavailable or inapplicable
to a particular ELCS petition (for example, if polling is not required
by state procedures), the petition should so indicate. A carrier will
be deemed to have made a prima facie case supporting grant of the
proposed modification if the ELCS petition: (1) Has been approved by
the state commission; (2) proposes only
[[Page 40355]]
traditional local service (i.e., flat-rate, non-optional ELCS); (3)
indicates that the state commission found a sufficient community of
interest to warrant such service; (4) documents this community of
interest through such evidence as poll results, usage data, and
descriptions of the communities involved; and (5) involves a limited
number of customers or access lines.80
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\80\ See supra para. 18 and note 60.
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25. We request that ELCS requests filed with the Commission, but
not addressed in this order (including the Virginia Commission's
Waverly/Wakefield request),81 be re-filed so that they
comply with these guidelines. Each petition will be assigned a LATA
modification (LM) file number and placed on public notice.
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\81\ See supra para. 12.
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VI. Conclusion
26. For the reasons set forth above, we approve the 23 requests for
LATA relief in order to provide flat-rate, non-optional ELCS. These
LATAs are modified solely for the limited purposes indicated in the
requests, and shall remain unchanged for all other purposes. In
addition, we allow US West an additional 60 days in which to amend its
Scio/Albany request. Finally, we establish guidelines to direct the
filing of future ELCS requests. These actions serve the public interest
by permitting minor LATA modifications when such modifications are
necessary to meet the needs of local subscribers and will not have any
significant effect on competition.
VII. Ordering Clauses
27. Accordingly, it is ordered, pursuant to sections 3(25) and 4(i)
of the Communications Act of 1934, as amended, 47 U.S.C. 153(25),
154(i), that the requests of Ameritech, Bell Atlantic, BellSouth
Telecommunications, Inc. (BellSouth), Southwestern Bell Telephone
Company (SWBT), and US West Communications, Inc. (US West), for LATA
modifications for the limited purpose of providing flat-rate, non-
optional ELCS at specific locations, identified in File Nos. NSD-LM-97-
2 through NSD-LM-97-24, are approved. These LATA boundaries are
modified solely for the purpose of providing flat-rate, non-optional
ELCS between points in the specific exchanges or geographic areas
indicated in the requests. The LATA boundary for all other services
shall remain unchanged.
28. It is further ordered, pursuant to sections 3(25) and 4(i) of
the Communications Act of 1934, as amended, 47 U.S.C. 153(25), 154(i),
that the Virginia State Corporation Commission's request for a LATA
modification to permit ELCS between the Waverly and Wakefield exchanges
is dismissed without prejudice.
29. It is further ordered, pursuant to sections 3(25) and 4(i) of
the Communications Act of 1934, as amended, 47 U.S.C. 153(25), 154(i),
that US West Communications, Inc. (US West) shall amend its request for
approval of a LATA modification to provide ELCS from the Albany
exchange in the Eugene, Oregon LATA to the Scio Mutual Telephone
Association's Scio exchange, File No. NSD-LM-97-25, as indicated
herein, within 60 days of the release date of this order. If no
amendment is filed, US West's LATA modification request will be
dismissed without prejudice.
30. It is further ordered that pursuant to section 416(a) of the
Act, 47 U.S.C. 416(a), the Secretary shall serve a copy of this order
upon the petitioners listed in Attachment A.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Attachment A--List of Petitions and LATA Modification Requests
Ameritech's November 12, 1996 Petition
1. Request to provide one-way, flat-rate, non-optional ELCS from
Ameritech's Duffy exchange in the Columbus, Ohio LATA to Bell
Atlantic's New Martinsville exchange in the Clarksburg, West
Virginia LATA (Ameritech's Duffy/New Martinsville request)--File No.
NSD-LM-97-2.
Bell Atlantic's January 14, 1997 Petition
2. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Waverly exchange in the Norfolk, Virginia
LATA and GTE's Claremont exchange (Bell Atlantic's Claremont/Waverly
request)--File No. NSD-LM-97-3.
3. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Hampton zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Gloucester exchange
(Bell Atlantic's Gloucester/Hampton zone request)--File No. NSD-LM-
97-4.
4. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Newport News zone of the Metropolitan
exchange area in the Norfolk, Virginia LATA and GTE's Gloucester
exchange (Bell Atlantic's Gloucester/Newport News zone request)--
File No. NSD-LM-97-5.
5. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Peninsula zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Gloucester exchange
(Bell Atlantic's Gloucester/Peninsula zone request)--File No. NSD-
LM-97-6.
6. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Poquoson zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Gloucester exchange
(Bell Atlantic's Gloucester/Poquoson zone request)--File No. NSD-LM-
97-7.
7. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Hampton zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Hayes exchange in the
Richmond, Virginia LATA (Bell Atlantic's Hayes/Hampton zone
request)--File No. NSD-LM-97-8.
8. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Newport News zone of the Metropolitan
exchange area in the Norfolk, Virginia LATA and GTE's Hayes exchange
in the Richmond, Virginia LATA (Bell Atlantic's Hayes/Newport News
zone request)--File No. NSD-LM-97-9.
9. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Peninsula zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Hayes exchange (Bell
Atlantic's Hayes/Peninsula zone request)--File No. NSD-LM-97-10.
10. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Poquoson zone of the Metropolitan exchange
area in the Norfolk, Virginia LATA and GTE's Hayes exchange (Bell
Atlantic's Hayes/Poquoson zone request)--File No. NSD-LM-97-11.
11. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Honaker exchange in the Roanoke, Virginia
LATA and GTE's Richlands exchange in the Bluefield, West Virginia
Independent Market Area (Bell Atlantic's Honaker/Richlands
request)--File No. NSD-LM-97-12.
12. Request to provide one-way, flat-rate, non-optional ELCS
from Bell Atlantic's Mason exchange in the Charleston, West Virginia
LATA to the Pomeroy and Middleport exchanges in Ohio (Bell
Atlantic's Mason/Pomeroy-Middleport request)--File No. NSD-LM-97-13.
13. Request to provide one-way, flat-rate, non-optional ELCS
from Bell Atlantic's New Florence exchange in the Pittsburgh,
Pennsylvania LATA to GTE's Johnstown exchange (Bell Atlantic's New
Florence/Johnstown request)--File No. NSD-LM-97-14.
14. Request to provide two-way, flat-rate, non-optional ELCS
between Bell Atlantic's Stone Mountain exchange in the Roanoke,
Virginia LATA and the Lynchburg exchange in the Lynchburg, Virginia
LATA (Bell Atlantic's Stone Mountain/Lynchburg request)--File No.
NSD-LM-97-15.
BellSouth Telecommunications' (BellSouth) July 2, 1996 Petition
15. Request to provide two-way, flat-rate, non-optional ELCS
between BellSouth's Raleigh exchange in the Raleigh, North Carolina
LATA and Carolina Telephone and Telegraph Company's (Carolina
Telephone) Franklinton and Louisburg exchanges (BellSouth's
Franklinton-Louisburg/Raleigh request)--File No. NSD-LM-97-16.
16. Request to provide two-way, flat-rate, non-optional ELCS
between BellSouth's Zebulon exchange in the Raleigh, North Carolina
LATA and Carolina Telephone's
[[Page 40356]]
Louisburg exchange (BellSouth's Louisburg/Zebulon request)--File No.
NSD-LM-97-17.
17. Request to provide two-way, flat-rate, non-optional ELCS
between BellSouth's Apex, Cary, and Raleigh exchanges in the
Raleigh, North Carolina LATA and Carolina Telephone's Pittsboro
exchange (BellSouth's Pittsboro/Apex-Cary-Raleigh request)--File No.
NSD-LM-97-18.
18. Request to provide two-way, flat-rate, non-optional ELCS
between BellSouth's Chapel Hill exchange in the Raleigh, North
Carolina LATA and the Saxapahaw exchange in the Greensboro, North
Carolina LATA (BellSouth's Saxapahaw/Chapel Hill request)--File No.
NSD-LM-97-19.
19. Request to provide two-way, flat-rate, non-optional ELCS
between BellSouth's Wilmington exchange and that portion of the
Scotts Hill exchange served by the 270 prefix in the Wilmington,
North Carolina LATA, and Carolina Telephone's Holly Ridge exchange
(BellSouth's Scotts Hill-Holly Ridge/Wilmington request)--File No.
NSD-LM-97-20.
Southwestern Bell Telephone Company's (SWBT) June 25, 1996 Petition
20. Request to provide two-way, flat-rate, non-optional ELCS
between SWBT's Albany exchange in the Abilene, Texas LATA and SWBT's
Breckenridge exchange in the Dallas, Texas LATA (SWBT's Albany/
Breckenridge request)--File No. NSD-LM-97-21.
21. Request to provide two-way, flat-rate, non-optional ELCS
between United/Centel's Pawnee exchange and SWBT's Kenedy and
Karnes/Fall City exchanges in the San Antonio, Texas LATA (SWBT's
Pawnee/Kenedy-Karnes-Fall City request)--File No. NSD-LM-97-22.
US West Communications' (US West) November 4, 1996 Petition
22. Request to provide flat-rate, non-optional ELCS from US
West's Omaha common service area in the Omaha, Nebraska LATA to
Lincoln Telephone & Telegraph Company's (LT&T's) 234 exchange
(serving the communities of Cedar Creek, Louisville, and Manley,
Nebraska) (US West's 234/Omaha request)--File No. NSD-LM-97-23.
23. Request to provide flat-rate, non-optional ELCS from US
West's Omaha common service area in the Omaha, Nebraska LATA to
LT&T's Murray exchange (US West's Murray/Omaha request)--File No.
NSD-LM-97-24.
US West Communications' (US West) November 4, 1996 Petition
24. Request to provide measured-rate, optional ELCS from US
West's Albany exchange in the Eugene, Oregon LATA to the Scio Mutual
Telephone Association's Scio exchange (US West's Scio/Albany
request)--File No. NSD-LM-97-25.
[FR Doc. 97-19776 Filed 7-25-97; 8:45 am]
BILLING CODE 6712-01-U
