[Federal Register Volume 63, Number 163 (Monday, August 24, 1998)]
[Rules and Regulations]
[Pages 45134-45139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22598]
[[Page 45133]]
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Part V
Federal Communications Commission
_______________________________________________________________________
47 CFR Parts 51, 64, and 68
_______________________________________________________________________
Deployment of Wireline Services Offering Advanced Telecommunications
Services; Final Rule and Proposed Rule
Federal Register / Vol. 63, No. 163 / Monday, August 24, 1998 / Rules
and Regulations
[[Page 45134]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 51, 64, and 68
[CC Docket Nos. 98-147, 98-11, 98-26, 98-32, 98-15, 98-78, 98-91; FCC
98-188]
Deployment of Wireline Services Offering Advanced
Telecommunications Services
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In the order we clarify that sections 251 and 252 apply to
advanced telecommunications facilities and services offered by an
incumbent local exchange carrier (LEC) and that the facilities and
equipment used by incumbent LECs to provide advanced services are
network elements and subject to section 251(c). We deny requests to
forbear from application of sections 251(c) and/or 271, and we deny
requests for large-scale changes in LATA boundaries. We have taken
these steps to meet one of the fundamental goals to promote innovation
and investment by all participants in the telecommunications
marketplace.
EFFECTIVE DATE: September 23, 1998.
FOR FURTHER INFORMATION CONTACT: Linda Kinney, Assistant Division
Chief, Policy and Program Planning Division, Common Carrier Bureau, at
202-418-1580 or via the Internet at lkinney@fcc.gov or Jordan
Goldstein, Attorney, Policy and Program Planning Division, Common
Carrier Bureau, at 202-418-1580 or via the Internet at
jgoldste@fcc.gov. Further information may also be obtained by calling
the Common Carrier Bureau's TTY number: 202-418-0484. For additional
information concerning the information collections contained in this
Order contact Judy Boley at (202) 418-0214, or via the Internet at
jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
adopted August 6, 1998, and released August 7, 1998. The full text of
this Order is available for inspection and copying during normal
business hours in the FCC Reference Center, 1919 M St., N.W., Room 239,
Washington, D.C. The complete text also may be obtained through the
World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/
98188, or may be purchased from the Commission's copy contractor,
International Transcription Service, Inc., (202) 857-3800, 1231 20th
St., N.W., Washington, D.C. 20036.
Synopsis of Order
A. Applicability of Section 251(c) to Incumbent Local Exchange Carriers
1. Introduction
1. In this section, we address several issues that ALTS raises in
its petition for a declaratory ruling. First, as described in greater
detail below, we grant the ALTS petition to the extent it asks the
Commission to clarify that the obligations of sections 251 and 252 of
the Act apply to advanced services and the facilities used to provide
those services. We hold that, pursuant to the Act and our implementing
orders, incumbent LECs are required to (1) provide interconnection for
advanced services; and (2) provide access to unbundled network
elements, including conditioned loops capable of transmitting high-
speed digital signals, used by the incumbent LEC to provide advanced
services. We also note that under the plain terms of the Act, incumbent
LECs have an obligation to offer for resale, pursuant to section
251(c)(4), all advanced services that they generally provide to
subscribers who are not telecommunications carriers. Finally, for the
reasons discussed below, we conclude that incumbent LECs have an
obligation under the statute and our implementing rules to offer
collocation arrangements that reduce unnecessary costs and delays for
competitors and that optimize the amount of space available for
collocation.
2. Statutory Classification of Advanced Services
2. Before turning to the specific declaratory rulings requested by
ALTS, we first must address the regulatory classification of ``advanced
services.'' The specific obligations of the 1996 Act depend on
application of the statutory categories established in the Act's
definitions section. In particular, we consider whether advanced
services constitute ``telecommunications services,'' and, if so, what
type of telecommunications service.
a. Telecommunications services. (1) Background. 3. The obligations
imposed by sections 251 and 252 of the Act are triggered by the
provision of a ``telecommunications service.'' Thus, for example,
section 251(a) requirements apply to each ``telecommunications
carrier,'' which is to say, each ``provider of telecommunications
services.'' Section 251(c)(3) obligates incumbent LECs to provide
unbundled access to ``network elements,'' which is to say,
``facilit[ies] or equipment used in the provision of a
telecommunications service.'' The Act defines ``telecommunications
service'' to mean ``the offering of telecommunications for a fee
directly to the public * * *.'' It defines ``telecommunications'' to
mean ``the transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or
content of the information as sent and received.''
(2) Discussion. 4. We conclude that advanced services are
telecommunications services. The Commission has repeatedly held that
specific packet-switched services are ``basic services,'' that is to
say, pure transmission services. xDSL and packet switching are simply
transmission technologies. To the extent that an advanced service does
no more than transport information of the user's choosing between or
among user-specified points, without change in the form or content of
the information as sent and received, it is ``telecommunications,'' as
defined by the Act. Moreover, to the extent that such a service is
offered for a fee directly to the public, it is a ``telecommunications
service.''
5. Incumbent LECs have proposed, and are currently offering, a
variety of services in which they use xDSL technology and packet
switching to provide members of the public with a transparent,
unenhanced, transmission path. Neither the petitioners, nor any
commenter, disagree with our conclusion that a carrier offering such a
service is offering a ``telecommunications service.'' An end-user may
utilize a telecommunications service together with an information
service, as in the case of Internet access. In such a case, however, we
treat the two services separately: the first service is a
telecommunications service (e.g., the xDSL-enabled transmission path),
and the second service is an information service, in this case Internet
access.
6. We note that, pursuant to the Commission's Computer Inquiry and
Open Network Architecture (ONA) proceedings, BOCs are permitted to
offer information services on either an integrated basis, i.e. through
the regulated telephone company, or through a separate affiliate. The
BOCs are obligated, however, to unbundle and make available to
competing information service providers (ISPs): (1) the network
services that underlie the BOCs' own information services (pursuant to
the Computer Inquiry proceedings); and (2) additional network services
that the BOCs do not use in their information service offerings
(pursuant to ONA). We note
[[Page 45135]]
that BOCs offering information services to end users of their advanced
service offerings, such as xDSL, are under a continuing obligation to
offer competing ISPs nondiscriminatory access to the telecommunications
services utilized by the BOC information services. In the NPRM, we seek
comment on whether we should apply any similar safeguards if a BOC
affiliate offers advanced services in conjunction with a BOC
information service.
b. Telephone exchange service or exchange access. (1) Background.
7. Certain obligations under section 251 turn on whether the carrier is
providing ``telephone exchange service'' or ``exchange access.''
Pursuant to section 251(c)(2), an incumbent LEC must provide
interconnection only ``for the transmission and routing of telephone
exchange service and exchange access.'' Section 251(b) applies to each
``local exchange carrier''; section 153(26), in turn, defines ``local
exchange carrier'' to include any person ``engaged in the provision of
telephone exchange service or exchange access.''
8. Prior to 1996, the Communications Act defined ``telephone
exchange service'' to include ``service within a telephone exchange, or
within a connected system of telephone exchanges within the same
exchange area operated to furnish to subscribers intercommunicating
service of the character ordinarily furnished by a single exchange and
which is covered by the exchange service charge.'' In the 1996 Act,
Congress expanded that definition to include ``comparable service
provided through a system of switches, transmission equipment, or other
facilities (or combination thereof) by which a subscriber can originate
and terminate a telecommunications service.'' The Act defines
``exchange access'' to mean ``the offering of access to telephone
exchange services or facilities for the purpose of the origination or
termination of telephone toll services.''
(2) Discussion. 9. We conclude that advanced services offered by
incumbent LECs are either ``telephone exchange service'' or ``exchange
access.'' At this time, we do not decide whether, or to what extent,
specific xDSL-based services offered by incumbent LECs are ``telephone
exchange service'' as opposed to ``exchange access.'' We note, however,
that this question has been raised in other pending proceedings, and we
will continue to address it on a case-by-case basis.
10. Nothing in the statutory language or legislative history limits
these terms to the provision of voice, or conventional circuit-switched
service. Indeed, Congress in the 1996 Act expanded the scope of the
``telephone exchange service'' definition to include, for the first
time, ``comparable service'' provided by a telecommunications carrier.
The plain language of the statute thus refutes any attempt to tie these
statutory definitions to a particular technology. Consequently, we
reject US WEST's contention that those terms refer only to local
circuit-switched voice telephone service or close substitutes, and the
provision of access to such services.
11. We note that in a typical xDSL service architecture, the
incumbent LEC uses a DSLAM to direct the end-user's data traffic into a
packet-switched network, and across that packet-switched network to a
terminating point selected by the end-user. Every end-user's traffic is
routed onto the same packet-switched network, and there is no technical
barrier to any end-user establishing a connection with any customer
located on that network (or, indeed, on any network connected to that
network). We see nothing in this service architecture mandating a
conclusion that advanced services offered by incumbent LECs fall
outside of the ``telephone exchange service'' or ``exchange access''
definitions set forth in the Act.
12. US WEST's reliance on the fact that the Commission in the Local
Competition Order, 61 FR 45476, August 29, 1996, noted that CMRS
carriers ``provide local, two-way switched voice service,'' as part of
the analysis leading to its conclusion that such carriers provide
telephone exchange service, is misplaced. The Commission nowhere
suggested that two-way voice service is a necessary component of
telephone exchange service. It certainly did not suggest that two-way
voice service is a necessary component of exchange access.
13. We also reject U S WEST's contention that it is not subject to
section 251(c) for its provision of advanced services because such
services are neither ``telephone exchange services'' nor ``exchange
access services.'' To the extent that it offers advanced services, U S
WEST contends, it is not acting as a ``local exchange carrier'' or
``incumbent local exchange carrier,'' and the obligations imposed by
section 251(c) on incumbent local exchange carriers do not apply.
Because we have determined that advanced services offered by incumbent
LECs are telephone exchange service or exchange access, we need not and
do not address the section 251(c) obligations of an incumbent local
exchange carrier offering services other than telephone exchange
service or exchange access.
3. Interconnection
a. Background. 14. Section 251(a) of the Act requires all
``telecommunications carriers'' to ``interconnect directly or
indirectly with the facilities and equipment of other
telecommunications carriers.'' Section 251(c)(2) imposes
interconnection obligations on incumbent LECs for purposes of
transmitting and routing telephone exchange or exchange access traffic.
b. Discussion. 15. We agree with ALTS that the interconnection
obligations of section 251 of the Act apply equally to facilities and
equipment used to provide data transport functionality and voice
functionality. Because advanced services that provide members of the
public with a transparent, unenhanced transmission path are
telecommunications services, all carriers offering such services are
subject to the requirements of section 251(a), including the
interconnection obligation set out in section 251(a)(1). In addition,
because such services offered by an incumbent LEC are either
``telephone exchange services'' or ``exchange access,'' the incumbent
LEC is subject to the interconnection obligations of section 251(c).
Thus, any telecommunications carrier in need of interconnection with an
incumbent LEC network ``for purposes of transmitting and routing
telephone exchange traffic or exchange access traffic or both'' is
entitled to interconnection pursuant to section 251(c)(2) of the Act.
16. For purposes of determining the interconnection obligation of
carriers, the Act does not draw a regulatory distinction between voice
and data services. In particular, the Commission drew no such
distinction in the Local Competition Order, when it required incumbent
LECs to offer interconnection with competitors for the transmission and
routing of telephone exchange and exchange access traffic. Thus, the
interconnection obligations of incumbent LECs apply to packet-switched
as well as circuit-switched services.
17. The ability of competitive LECs to interconnect with incumbent
LEC data networks ``will permit all carriers, including small entities
and small incumbent LECs, to plan regional or national networks using
the same interconnection points in similar networks nationwide.'' Our
rules make it possible for competing telecommunications providers to
offer seamless service to end-users by
[[Page 45136]]
interconnecting with incumbents' networks. We therefore grant the ALTS
request that we declare that the interconnection obligations of
sections 251(a) and 251(c)(2) apply to incumbents' packet-switched
telecommunications networks and the telecommunications services offered
over them.
18. We reject BellSouth's argument that Congress intended that
section 251(c) not apply to new technology not yet deployed in 1996.
Nothing in the statute or legislative history indicates that it was
intended to apply only to existing technology. Moreover, Congress was
well aware of the Internet and packet-switched services in 1996, and
the statutory terms do not include any exemption for those services.
4. Unbundled Network Elements
a. Background. 19. We next consider the unbundling obligations of
section 251(c)(3). Section 251(c)(3) requires incumbent LECs to
``provide, to any requesting telecommunications carrier for the
provision of a telecommunications service, nondiscriminatory access to
network elements on an unbundled basis at any technically feasible
point on rates, terms, and conditions that are just, reasonable, and
nondiscriminatory * * *.'' Section 153(29) defines ``network element''
to include any ``facility or equipment used in the provision of a
telecommunications service'' along with the ``features, functions, and
capabilities that are provided by means of such facility or
equipment.'' The Commission noted in the Local Competition Order,
however, that section 251(d)(2) gave it authority ``to refrain from
requiring incumbent LECs to provide all network elements for which it
is technically feasible to provide access.'' In considering whether to
refrain from requiring the unbundling of a particular network element,
the Commission is to weigh the standards set out in section 251(d)(2),
as well as any other standards the Commission considers consistent with
the objectives of the 1996 Act.
20. So as to ``promote efficient, rapid, and widespread new
entry,'' the Commission identified a minimum list of seven network
elements that incumbent LECs must make available to new entrants. The
Commission did not identify DSLAMs or packet switches as network
elements that incumbent LECs must unbundle. It emphasized, however,
that its list was a minimum one, because an exhaustive list would not
accommodate changes in technology or differing local conditions.
Further, the Commission noted that it might identify ``additional, or
perhaps different'' unbundling requirements in the future.
b. Discussion. (1) Loops. 21. We grant the ALTS request for a
declaratory ruling that incumbent LECs are required, pursuant to
section 251(c)(3) of the Act, to provide unbundled loops capable of
transporting high speed digital signals. ALTS asserts that competitive
LECs are having extreme difficulty obtaining the digital loops needed
to provide advanced services. We agree with ALTS that, if we are to
promote the deployment of advanced telecommunications capability to all
Americans, competitive LECs must be able to obtain access to incumbent
LEC xDSL-capable loops on an unbundled and nondiscriminatory basis.
22. In the Local Competition Order, the Commission identified the
local loop as a network element that incumbent LECs must unbundle ``at
any technically feasible point.'' It defined the local loop to include
``two-wire and four-wire loops that are conditioned to transmit the
digital signals needed to provide services such as ISDN, ADSL, HDSL,
and DS1-level signals.'' To the extent technically feasible, incumbent
LECs must ``take affirmative steps to condition existing loop
facilities to enable requesting carriers to provide services not
currently provided over such facilities.'' For example, if a carrier
requests an unbundled loop for the provision of ADSL service, and
specifies that it requires a loop free of loading coils, bridged taps,
and other electronic impediments, the incumbent must condition the loop
to those specifications, subject only to considerations of technical
feasibility. The incumbent may not deny such a request on the ground
that it does not itself offer advanced services over the loop, or that
other advanced services that the competitive LEC does not intend to
offer could be provided over the loop. As the Commission stated in the
Local Competition Order, ``section 251(c)(3) does not limit the types
of telecommunications services that competitors may provide over
unbundled elements to those offered by the incumbent LEC.''
23. The incumbent LECs' obligation to provide requesting carriers
with fully functional conditioned loops extends to loops provisioned
through remote concentration devices such as digital loop carriers
(DLC). The Commission concluded in the Local Competition Order that it
was ``technically feasible'' to unbundle loops that pass through an
integrated DLC or similar remote concentration devices, and required
incumbent LECs to unbundle such loops for competitive LECs.
24. To the extent that a competitive LEC cannot obtain
nondiscriminatory access to an xDSL-capable loop, or any other loop
capabilities to which it is entitled by virtue of section 251(c)(3) and
the Local Competition Order, the competitive LEC can pursue remedies
before the Commission and the appropriate state commissions. We note
that the Commission has recently adopted an expedited complaint process
to resolve these types of competitive issues in an accelerated fashion.
25. Under our existing rules, incumbent LECs are also required to
provide competing carriers with nondiscriminatory access to the
operations support systems (OSS) functions for pre-ordering, ordering,
and provisioning loops. If new entrants are to have a meaningful
opportunity to compete, they must be able to determine during the pre-
ordering process as quickly and efficiently as can the incumbent,
whether or not a loop is capable of supporting xDSL-based services. An
incumbent LEC does not meet the nondiscrimination requirement if it has
the capability electronically to identify xDSL-capable loops, either on
an individual basis or for an entire central office, while competing
providers are relegated to a slower and more cumbersome process to
obtain that information. In the NPRM below, we seek comment on whether
we should adopt any additional rules to ensure that competing providers
have nondiscriminatory access to the loop information they need to
provide advanced services.
(2) Other Network Elements. 26. We further grant ALTS' petition to
the extent that ALTS requests a declaratory ruling that advanced
services are telecommunications services, and that the facilities and
equipment used to provide advanced services are network elements
subject to the obligations in section 251(c). Given our conclusion
above that advanced services offered by incumbent LECs are
telecommunications services, all equipment and facilities used in the
provision of advanced services are ``network elements'' as defined by
section 153(29).
27. We seek comment in the NPRM below on the specific unbundling
obligations that would apply to the network elements used to provide
advanced services. We note, for example, that the section 251(c)(3)
unbundling requirement is subject to the question of technical
feasibility. We seek comment in the NPRM on whether the Commission
should weigh any
[[Page 45137]]
criteria under section 251(d)(2) other than those expressly listed in
that provision to determine the extent to which network elements used
to provide advanced services should be unbundled.
5. Resale Obligations Under Section 251(c)(4)
(a) Background. 28. Section 251(c)(4) requires incumbent LECs to
offer for resale at wholesale rates ``any telecommunications service
that the carrier provides at retail to subscribers who are not
telecommunications carriers.'' The Commission held in the Local
Competition Order that this obligation extends to all
telecommunications services, not merely voice services, that an
incumbent LEC provides to subscribers who are not telecommunications
carriers. The Commission concluded that an incumbent LEC must establish
a wholesale rate for every retail service that: (1) meets the statutory
definition of a ``telecommunications service,'' and (2) is provided at
retail to subscribers who are not telecommunications carriers. The
Commission concluded, however, that exchange access services are
generally offered to telecommunications carriers rather than retail
subscribers, and thus were not subject to the provisions of section
251(c)(4).
(b) Discussion. 29. Given our determination above that advanced
services offered by incumbent LECs are telecommunications services, by
the plain terms of the Act, incumbent LECs have the obligation to offer
for resale, pursuant to section 251(c)(4), all advanced services that
they generally provide to subscribers who are not telecommunications
carriers. The Commission in the Local Competition Order similarly
emphasized that the resale obligation extends to all such
telecommunications services, including advanced services.
30. To the extent that advanced services are local exchange
services, they are subject to the resale provisions of section
251(c)(4). In the Local Competition Order, however, the Commission
concluded that exchange access services are not subject to the
provisions of section 251(c)(4) because ``[t]he vast majority of
purchasers of interstate access services are telecommunications
carriers, not end users.'' To the extent that advanced services are
exchange access services, we believe that advanced services are
fundamentally different from the exchange access services that the
Commission referenced in the Local Competition Order and concluded were
not subject to section 251(c)(4). We expect that advanced services will
be offered predominantly to residential or business users or to
Internet service providers. None of these purchasers are
telecommunications carriers. We examine this issue further and propose
specific requirements in the NPRM below.
6. Collocation
a. Background. 31. In order to provide advanced services, new
entrants may need to collocate equipment on the incumbent LEC's
premises for interconnection and access to network elements. Congress
recognized competing providers' need for collocation in section
251(c)(6) of the Act, which requires incumbent LECs to provide ``for
the physical collocation of equipment necessary for interconnection or
access to unbundled network elements at the premises of the local
exchange carrier, except that the carrier may provide for virtual
collocation if the local exchange carrier demonstrates to the State
commission that physical collocation is not practical for technical
reasons or because of space limitations.'' In the Local Competition
Order, the Commission implemented specific minimum requirements to
implement the collocation requirements of section 251(c)(6). The
Commission adopted rules for, among other things, space allocation and
exhaustion, types of equipment that could be collocated, and LEC
premises where parties could collocate equipment.
32. ALTS asserts that excessive rates and unreasonably burdensome
terms and conditions for collocation are blocking competitive entry
into data service markets. As a result, ALTS requests that we initiate
proceedings to help ensure implementation of section 251 and 252 of the
Act with respect to deployment of advanced services. Among other
requests, ALTS asks us to exercise our authority under section
251(c)(6) of the Act and establish additional rules governing
collocation arrangements.
b. Discussion. 33. We conclude that the availability of cost
efficient collocation arrangements is essential for the deployment of
advanced services by facilities-based competing providers. Given
incumbent LECs' statutory duty to provide physical collocation on just,
reasonable, and nondiscriminatory rates, terms, and conditions, we
believe that incumbent LECs have a statutory obligation to offer cost
efficient and flexible collocation arrangements. In addition, we expect
that incumbent LECs will fulfill their statutory collocation duty by
taking steps to offer collocation arrangements that permit new entrants
to provide advanced services using equipment that the new entrant
provides. Such steps include offering collocation to competing
providers in a manner that reduces unnecessary costs and delays for the
competing providers and that optimizes the amount of space available
for collocation. We conclude that measures that optimize the available
collocation space and that reduce costs and delays for competing
providers are consistent with an incumbent LEC's obligation under both
the statute and our rules. In addition, we agree with ALTS that we
should build upon our current physical and virtual collocation
requirements adopted in the Expanded Interconnection and Local
Competition proceedings to ensure that our rules promote, to the
greatest extent possible, the rapid deployment of advanced
telecommunications capability to all Americans. We, therefore, propose
specific additional physical and virtual collocation requirements in
the NPRM below.
B. Forbearance and LATA Boundary Modifications
1. Background
34. As discussed above, sections 251(c)(3) and (4) require
incumbent LECs to provide nondiscriminatory access to unbundled network
elements and to offer for resale, at wholesale rates, any
telecommunications service the carrier provides at retail. Section
271(b)(1) provides that a BOC or BOC affiliate ``may provide interLATA
services originating in any of its in-region States'' only ``if the
Commission approves the application of such company for such State
under [section 271(d)(3)].'' Under section 271(d)(3), the Commission
may grant a BOC authorization to originate in-region, interLATA
services only if it finds that the BOC has met the competitive
checklist set forth in section 271(c)(2)(B) and other statutory
requirements.
35. Section 706(a) of the 1996 Act instructs the Commission and
each state commission to ``encourage the deployment on a reasonable and
timely basis of advanced telecommunications capability to all Americans
* * * by utilizing, in a manner consistent with the public interest,
convenience, and necessity, price cap regulation, regulatory
forbearance, measures that promote competition in the local
telecommunications market, or other regulating methods that remove
barriers to infrastructure investment.''
36. Section 10 of the Communications Act requires the Commission to
forbear from applying any regulation or any
[[Page 45138]]
provision of the Communications Act to telecommunications carriers or
telecommunications services, or classes thereof, if the Commission
determines that certain conditions are satisfied. Section 10(d)
specifies, however, that ``[e]xcept as provided in section 251(f), the
Commission may not forbear from applying the requirements of section
251(c) or 271 under [section 10(a)] until it determines that those
requirements have been fully implemented.''
37. In their petitions, Ameritech, U S WEST, Bell Atlantic, and SBC
seek regulatory relief from the application of section 251 and/or
section 271 through Commission forbearance from applying those sections
or through LATA boundary changes. Recognizing that the Commission may
not forbear from application of sections 251(c) and 271 under section
10(a) until the requirements in those sections have been fully
implemented, petitioners seek forbearance pursuant to section 706(a).
Petitioners contend that section 706(a) constitutes an independent
grant of forbearance authority that encompasses the ability to forbear
from sections 251(c) and 271. Ameritech, Bell Atlantic, and U S WEST
seek regulatory relief not only to provide xDSL-based services to end
users, but also to obtain freedom to become Internet backbone
providers. Ameritech and U S WEST, notwithstanding their request here
for LATA boundary changes, argue that this relief would not affect
their compliance with section 271 for voice services.
2. Discussion
a. Forbearance. 38. After reviewing the language of section 706(a),
its legislative history, the broader statutory scheme, and Congress'
policy objectives, we agree with numerous commenters that section
706(a) does not constitute an independent grant of forbearance
authority or of authority to employ other regulating methods. Rather,
we conclude that section 706(a) directs the Commission to use the
authority granted in other provisions, including the forbearance
authority under section 10(a), to encourage the deployment of advanced
services.
39. To determine whether section 706(a) constitutes an independent
grant of forbearance authority, we look first to the text of the
statute. We recognize that the language of section 706 directs the
Commission to encourage the deployment of advanced services ``by
utilizing * * * regulatory forbearance * * * .'' It is not clear from
the text of section 706(a), however, whether Congress intended that
provision to constitute an independent grant of forbearance authority,
or, alternatively, a directive that the Commission use forbearance
authority granted elsewhere, in encouraging the deployment of advanced
services.
40. Because the language of section 706(a) does not make clear
whether section 706(a) constitutes an independent grant of forbearance
authority, we look to the broader statutory scheme, its legislative
history, and the underlying policy objectives to resolve the ambiguity.
We examine the structure of the 1996 Act as a whole. As the courts have
recognized, ``[t]he literal language of a provision taken out of
context cannot provide conclusive proof of congressional intent, any
more than a word can have meaning without context to illuminate its
use.'' Rather, when we are ``charged with understanding the
relationship between two different provisions within the same statute,
we must analyze the language of each to make sense of the whole.''
41. As stated above, section 10(d) expressly forbids the Commission
from forbearing from the requirements of sections 251(c) and 271
``until it determines that those requirements have been fully
implemented.'' There is no language in section 10 that carves out an
exclusion from this prohibition for actions taken pursuant to section
706.
42. If section 706(a) were an independent grant of authority, as
the BOCs argue, then it would allow us to forbear from applying
sections 251(c) and 271 regardless of whether either section were fully
implemented. Sections 251(c) and 271 are cornerstones of the framework
Congress established in the 1996 Act to open local markets to
competition. The central importance of these provisions is reflected in
the fact that they are the only two provisions that Congress carved out
in limiting the Commission's otherwise broad forbearance authority
under section 10. We find it unreasonable to conclude that Congress
would have intended that section 706 allow the Commission to eviscerate
those forbearance exclusions after having expressly singled out
sections 251(c) and 271 for different treatment in section 10.
43. We are not persuaded by Bell Atlantic's argument that a
conclusion that section 706(a) confers no independent authority would
make that section redundant. On the contrary, we conclude that section
706(a) gives this Commission an affirmative obligation to encourage the
deployment of advanced services, relying on our authority established
elsewhere in the Act. Our actions and proposals in this Order and NPRM
make clear that this obligation has substance.
44. Furthermore, we find nothing in the legislative history of
section 706 to indicate that Congress gave us independent authority in
section 706(a) to forbear from provisions of the Act. Section 706 was
adopted contemporaneously with the forbearance authority in section 10,
with section 706 contained in section 304 of the Senate version of the
Communications Act of 1996, and the forbearance authority that was
later included in section 10 contained in section 303 of that bill.
Thus, when enacting section 706, Congress was well aware of the
explicit exclusions of our forbearance authority in section 10(d).
Congress presumably would have stated explicitly that those exclusions
would not apply to forbearance under section 706 had it so intended. We
are not persuaded by Ameritech's argument that the statement in the
Senate Commerce Committee's Report that section 706 is intended as a
``fail-safe'' indicates that Congress provided independent forbearance
authority in section 706(a). The Senate Commerce Committee's Report
makes clear that section 706 ``ensures that advanced telecommunications
capability is promptly deployed by requiring the [Commission] to
initiate and complete regular inquiries,'' and then take immediate
action if it determines that such capability is not being deployed to
all Americans. The Report does not clarify, however, whether section
706 is an independent grant of regulatory authority or directs the
Commission to use regulatory measures granted in other provisions of
the Act.
45. Moreover, as a matter of policy, we believe that interpreting
section 706, not as an independent grant of authority, but rather, as a
direction to the Commission to use the forbearance authority granted
elsewhere in the Act, will further Congress' objective of opening all
telecommunications markets to competition, including the market for
advanced services. As discussed above, because of the central
importance of the requirements in sections 251(c) and 271 to opening
local markets to competition, we consider these sections to be
cornerstones of the framework Congress established in the 1996 Act. We
find that this conclusion that section 706 does not provide the
statutory authority to forbear from sections 251(c) and 271 will better
promote Congress' objectives in the Act.
46. For the foregoing reasons, we conclude that, in light of the
statutory language, the framework of the 1996 Act, its legislative
history, and Congress'
[[Page 45139]]
policy objectives, the most logical statutory interpretation is that
section 706 does not constitute an independent grant of authority.
Rather, the better interpretation of section 706 is that it directs us
to use, among other authority, our forbearance authority under section
10(a) to encourage the deployment of advanced services. Under section
10(d), we may not use that authority to forbear from applying the
requirements of section 251(c) and 271 prior to their full
implementation. Petitioners do not suggest that either section 251(c)
or section 271 has been fully implemented, and we have no record on
which to determine that either has been fully implemented. We,
therefore, deny the BOC requests that we forbear from applying the
requirements of sections 251(c) and 271. We seek comment in the NPRM
below on whether there are avenues other than forbearance that might
allow us to lessen the obligations of these sections in appropriate
circumstances.
47. Ameritech also requests forbearance pursuant to section 706
from application of section 272's requirements if we grant its request
to forbear from applying section 271's requirements. Because we deny
that request for section 271 forbearance, we also deny Ameritech's
request for section 272 forbearance.
48. In addition, SBC requests forbearance, under section 10: (1)
from the dominant treatment of ADSL service to the extent that
treatment results in the imposition of tariff filing requirements and
other obligations under the Act and under parts 61 and 69 of the
Commission's rules; and (2) from the obligations of section 252(i).
Section 10(a) requires us to forbear from the application of a
statutory provision or regulation if we determine that specific
criteria are met. We conclude, on the record before us, that SBC has
not demonstrated that the relief it requests pursuant to section 10
meets these criteria. In particular, to the extent that advanced
services are offered by an incumbent LEC, we find, on the record before
us, that it is consistent with the public interest to subject such
incumbents to full incumbent LEC regulation. We therefore deny SBC's
requests for forbearance under section 10. We note, however, that, in
the NPRM below, we address the regulatory status of an advanced
services affiliate that competes without any unfair advantages derived
from its affiliation with the incumbent. In particular, we tentatively
conclude below that such an affiliate, to the extent it provides
interstate exchange access services, should, under existing Commission
precedent, be presumed to be nondominant and should not be required to
file tariffs for its provision of any interstate services that are
exchange access.
b. LATA Boundary Modifications. 49. As an alternative to
forbearance from enforcing section 271, Ameritech, Bell Atlantic and U
S WEST request that the Commission permit them to change LATA
boundaries pursuant to section 3(25) of the Communications Act in order
to create a large-scale ``LATA'' for packet-switched services. We
decline to grant petitioners' requests for large-scale changes in LATA
boundaries.
50. Although section 3(25)(B) of the Act permits a BOC to modify
LATA boundaries upon Commission approval, we conclude that petitioners'
requests for large-scale changes in LATA boundaries amount to more than
requests for ``modified'' LATAs as that term is used in section
3(25)(B). In MCI v. AT&T, the Supreme Court held that the Commission's
authority to ``modify'' portions of the Communications Act means
``moderate change'' and not ``basic and fundamental changes in the
scheme created by [the section at issue]'' We conclude that such large-
scale changes in LATA boundaries for packet-switched services as
proposed by petitioners would effectively eliminate LATA boundaries for
such services.
51. Such far-reaching and unprecedented relief could effectively
eviscerate section 271 and circumvent the procompetitive incentives for
opening the local market to competition that Congress sought to achieve
in enacting section 271 of the Act. We conclude, therefore, that the
requests for large-scale changes in LATA boundaries, such as
Ameritech's request for a global, ``data LATA,'' are functionally no
different than petitioners'' requests that we forbear from applying
section 271 to their provision of these services. It would exalt form
over substance if we were to grant the requested large-scale changes in
LATA boundaries. In the NPRM below, we seek comment on whether the
Commission should, in certain circumstances, modify LATA boundaries to
provide targeted relief.
C. Ordering Clauses
52. Accordingly, it is ordered that, pursuant to sections 1-4, 10,
201, 202, 251-254, 271, and 303(r) of the Communications Act of 1934,
as amended, 47 U.S.C. 151-154, 160, 201, 202, 251-254, 271, and 303(r),
the order is hereby adopted. The requirements adopted in this Order
shall become effective September 23, 1998.
53. It is further ordered that, pursuant to sections 1-4, 10, 201,
202, 251-254, 271, and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 151-154, 160, 201, 202, 251-254, 271, 272, and
303(r), the Petitions filed by ALTS, Ameritech, SBC, U S WEST, and Bell
Atlantic are granted to the extent described herein and otherwise
denied.
54. It is further ordered that, pursuant to sections 1-4, 10, 201,
202, 251-254, 271, and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 151-154, 160, 201, 202, 251-254, 271, and 303(r),
the Petition filed by the Alliance for Public Technology is granted to
the extent described herein.
List of Subjects in 47 CFR Parts 51, 64, and 68
Communications common carriers, Communications equipment, Local
exchange carrier, Telecommunications, Telephone.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-22598 Filed 8-21-98; 8:45 am]
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