[Federal Register Volume 59, Number 122 (Monday, June 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15443]


[[Page Unknown]]

[Federal Register: June 27, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61, 64, and 69

[CC Docket 91-141, FCC No. 94-118]

 

Expanded Interconnection With Local Telephone Company Facilities

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission required Tier 1 local exchange carriers (LECs) 
(except members of the National Exchange Carrier Association (NECA)) to 
provide to interested third parties, including competitive access 
providers (CAPs), interexchange carriers, (IXCs), and end users, 
signalling information necessary to provide tandem switching services. 
These parties will thus, for the first time, be able to carry traffic 
of multiple IXCs from LEC end offices to their own tandems, switch 
traffic at that point, and deliver the traffic to the appropriate IXC. 
LECs must offer signalling information from their equal access end 
offices pursuant to tariff.

EFFECTIVE DATE: September 15, 1994.

FOR FURTHER INFORMATION CONTACT:
Gary L. Phillips (202) 632-4048 or Linda L. Haller (202) 632-1298.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Report and Order in CC Docket No. 91-141, adopted May 19, 1994, and 
released May 27, 1994. The full text of this decision 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 of this decision also may be purchased from the 
Commission's copy contractor, International Transcription Service, 
Inc., 2100 M Street, NW., Suite 140, Washington, DC 20037, (202) 857-
3800.

Paperwork Reduction Act

    Public reporting burden for this collection of information is 
estimated to average 37 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of this collection of information, including 
suggestions for reducing the burden, to the Federal Communications 
Commission, Records Management Division, Paperwork Reduction Project, 
Washington, DC 20554 and to the Office of Management and Budget, 
Paperwork Reduction Project, Washington, DC 20503.

Summary of the Order

    1. The Commission found that this decision represents another step 
in a series of efforts to remove barriers to competition in interstate 
access services. It stated that while the Commission's earlier expanded 
interconnection decisions opened the door to competition in special 
access and switched transport transmission services, interconnectors, 
however, had to rely on LECs to perform the switching functions 
necessary to provide switched transport. The Commission concluded that 
the Order will enable interconnectors, as well as other parties, to 
provide tandem switching functions for switched transport services.
    2. The Commission concluded that LEC-provision of signalling 
information will open the door to third parties to provide competitive 
tandem switching services. By further reducing barriers to competition 
in switched access services, this action will benefit all users of 
tandem switching, especially small IXCs that tend to rely heavily on 
tandem-switched transport, who will benefit from more competitively 
priced tandem switching services. The Commission also found that its 
action should promote more efficient use and deployment of the 
country's telecommunications networks, encourage technological 
innovation, and exert downward pressure on access charges and long-
distance rates, all of which should contribute to economic growth and 
the creation of new job opportunities. In addition, these measures 
should increase access to diverse facilities, which could improve 
network reliability.
    3. The Commission required Tier 1 LECs (except NECA pool members) 
to provide signalling information necessary for tandem switching from 
LEC equal access end offices to any interested third party (hereinafter 
sometimes referred to as ``tandem switching providers'' or ``TSPs''). 
(Tier 1 LECs are those with $100 million or more in annual regulated 
revenues for a sustained period of time.) In end offices in which 
common channel signalling (CCS or SS7) is available, TSPs shall have 
the option of receiving signalling information via SS7 or multi-
frequency (MF) signalling. The provision of this information will be 
treated as a new service under the Commission's price caps regime. Tier 
1 LECs must file tariff amendments to reflect the availability of 
signalling information from LEC equal access end offices within ninety 
days of the publication of the Order in the Federal Register. Based on 
the record and in light of prior decisions on pricing flexibility in 
the Switched Transport Expanded Interconnection Order and in the 
Transport proceeding, the Commission did not grant LECs additional 
pricing flexibility at this time. The Commission also found that the 
transport interconnection charge is sufficient to protect support flows 
potentially affected by the provision of signalling information.

Background

    4. The Commission stated that it has taken several initiatives to 
increase competition in the long-distance market. First, in 1992, in 
the Special Access Expanded Interconnection Order, the Commission 
required Tier 1 LECs, except NECA pool members, to provide expanded 
interconnection for interstate special access to all interested 
parties.\1\ The Commission also stated that in 1993, it adopted the 
Switched Transport Expanded Interconnection Order, in which the 
Commission required LECs providing expanded interconnection for special 
access to provide expanded interconnection for switched transport 
service as well.\2\ In that order, the Commission opened the 
opportunity for interconnectors to provide alternative transmission 
services to LEC-provided direct-trunked transport and entrance 
facilities by collocating transmission facilities in LEC end offices, 
tandems, serving wire centers (SWCs), and certain remote nodes. The 
Commission stated that as a result of those two actions, 
interconnectors are now able to provide special access and switched 
transport transmission services in competition with the LECs.
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    \1\Expanded Interconnection with Local Telephone Company 
Facilities, Report and Order and Notice of Proposed Rulemaking, 7 
FCC Rcd 7369 (1992), 57 FR 54323 (November 18, 1992), vacated in 
part and remanded in part, Bell Atlantic v. FCC, No. 92-1619 (D.C. 
Cir. June 10, 1994), recon., 8 FCC Rcd 127 (1992), recon., 8 FCC Rcd 
7341 (1991).
    \2\Expanded Interconnection with Local Telephone Company 
Facilities, Second Report and Order and Third Notice of Proposed 
Rulemaking, 8 FCC Rcd 7374 (1993), 58 FR 48756 (September 17, 1993), 
appeal pending sub nom. Bell Atlantic v. FCC, No. 93-1743 (D.C. 
Cir., filed November 12, 1993).
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    5. The Commission stated that only LECs, however, currently can 
provide tandem switching functions. Third parties cannot now provide 
such functions because they generally do not have access to the 
signalling information necessary to switch and route traffic to IXCs. 
Thus, virtually all tandem-switched transport currently must be routed 
through LEC tandems and switched by the LECs at that point; 
interconnectors can provide only the link between the LEC tandem and 
the IXC point-of-presence (POP).
    6. The Commission stated that in a Second Notice of Proposed 
Rulemaking (Notice),\3\ which is the subject of this proceeding, it 
proposed to broaden the scope of its access initiatives to address this 
limitation. Specifically, the Commission proposed to require LECs to 
provide other parties to offer tandem switching functions. Under this 
proposal, interconnectors would be able to offer tandem-switched 
transport, using their own tandems, in competition with the LECs. In 
addition, third parties, such as IXCs, could obtain economies by 
aggregating their traffic from end offices on a single direct trunk, 
routing that traffic to a third-party tandem, and switching it at that 
point.
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    \3\Expanded Interconnection with Local Telephone Company 
Facilities, Second Notice of Proposed Rulemaking, 7 FCC Rcd 7740 
(1991), 56 FR 52496 (October 21, 1991).
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Technical Requirements and Network Modifications

    7. The Commission stated that the record identifies four types of 
signalling information used to provide switched transport: (1) The 
Carrier Identification Code (CIC), which identifies the caller's 
selected IXC; (2) the OZZ, which indicates the specific IXC trunk group 
that is to carry the call; (3) the Automatic Number Identification 
(ANI), which identifies the billed number; and (4) the Called Number 
Identification (CNI), which identifies the called telephone number. 
IXCs may use different trunk groups to carry different classes of 
calls. For example, 0+ calls may be carried on a different trunk group 
than direct-dialed domestic calls. The OZZ digits indicate the call 
type, and thus the trunk group, onto which a particular call should be 
routed.

Requirement to Provide Signalling Information

    8. The Commission stated that currently, LECs transmit ANI and CNI 
to their access customers on originating Feature Group D trunks from 
LEC end offices and tandems. They do not, however, transmit the CIC and 
OZZ codes to third parties because IXCs do not need this information to 
route and bill calls. Thus, these latter codes are dropped by the LECs 
from the signalling data stream after trunk selection has taken place. 
In the case of direct-trunked traffic, the CIC and OZZ codes are 
dropped at the originating end office; in the case of tandem-switched 
traffic, they are dropped at the tandem. Because the CIC and OZZ codes 
are needed for tandem switching and are not currently provided to third 
parties, these data are the focus of this proceeding.
    9. The Commission affirmed its tentative conclusion that broader 
interconnection requirements to facilitate access competition are in 
the public interest. In accordance with this finding, the Commission 
required Tier 1 LECs (except NECA pool members) to provide signalling 
information from equal access end offices so that third parties may 
install their own tandems to provide tandem-switching services. Third 
parties may collocate at LEC end offices and provide their own tandem-
switched transport between those end offices and their tandems, or they 
may purchase LEC transport to their tandems. We do not require LECs to 
provide signalling information for tandem-switching from their tandems 
since we find that the record does not support the establishment of 
such a requirement at this time.
    10. The Commission concluded that the availability to third parties 
of signalling information needed for tandem switching could provide 
significant public benefits. It would facilitate broader access 
competition by enabling interconnectors to offer competitive interstate 
tandem-switching and transport services. In addition, it would increase 
opportunities for small IXCs to gain economies of scale by sharing 
direct-routed transport facilities and providing their own tandem-
switching. The Commission found that as it stated in the Notice, 
broader access competition should exert downward pressure on tandem-
switched transport rates, while fostering more efficient provisioning 
of these services by new competitors and LECs. The Commission also 
concluded that in addition, competition should encourage innovation and 
investment in new technologies and could offer increased network 
reliability through route diversity and redundancy. IXCs would benefit 
from greater competition in the tandem-switched service market. Small 
IXCs would especially benefit because they tend to rely more heavily on 
tandem-switched transport than larger IXCs. The Commission also stated 
that in addition, by promoting competition in tandem-switched transport 
services and facilitating the use of direct-trunked transport by small 
IXCs, these measures should help ensure more rational cost-based 
pricing relationships between direct-trunked and tandem-switching 
transport services, thereby lessening the need for regulatory controls 
and fostering more efficient use of these services. All of these 
benefits should contribute to economic growth--by enabling IXCs to use 
more efficient transport arrangements, by fostering better, more 
reliable, and more rationally priced access services, as well as by 
creating new market opportunities for interconnectors.
    11. The Commission also concluded that LECs can make signalling 
information available from their end offices at very little cost. 
Indeed, the record indicates that the costs to LECs of providing such 
information from end offices may well be de minimis, involving only a 
simple change in the end office routing table. The Commission stated 
that while a few LECs baldly assert that the costs of providing 
signalling could be significant, these LECs do not substantiate their 
allegations with cost estimates or data. Nor do they distinguish 
between end-office generated and tandem-generated signalling 
information. The Commission found that moreover, no party has shown 
that the necessary modifications to LEC billing systems would be 
unreasonably costly or burdensome, or that the asserted need to change 
industry standards to accommodate the passage of CIC and OZZ codes over 
Feature Group D represents a significant barrier to the implementation 
of this proposal. The Commission concluded that any such measures could 
be accomplished without undue burden or cost.
    12. The Commission stated that it was not persuaded that 
competitive tandem switching services would require assignment of CICs 
to IXCs. The record fails to indicate that any entity would actually 
seek to offer or use that kind of routing dynamic. Even without 
additional CIC assignments, IXCs would be able to designate a primary 
route and an overflow route for their traffic, thereby securing the 
benefits of both route and carrier diversity. Moreover, IXCs could vary 
routing between a LEC and third party tandem on an end-office-by-end-
office basis or, perhaps, based on OZZ codes--thereby designating one 
as primary for a particular type of traffic and another for a different 
type of traffic. No IXC indicates that these options are insufficient, 
at least for now. Therefore, the Commission found, no additional CIC 
code assignments would have to be made to accommodate competitive 
tandem-switched networks.
    13. The Commission also found that the record belies any contention 
that third parties do not really want signalling information and that 
IXCs do not really want to use competitively-provided tandem-switching 
services. The Commission found that the vast majority of parties, 
including IXCs, CAPs, users, and some LECs, argue that unbundled 
signalling information would allow development of alternatives to LEC 
tandem-switched transport services and they urge us to make such 
information available. The Commission stated that even if the measures 
that it now takes do not produce an immediate change in the access 
market, they will be beneficial in the long-term. By eliminating 
barriers to competition in the provision of tandem-switched services, 
this action will pave the way to a more competitive access market in 
the future. The Commission also stated that the availability of 
signalling information to third parties could, in itself and even 
without actual entry into the market by competitive tandem-switching 
providers, subject LEC pricing to some additional competitive 
pressures. Since the costs of providing signalling information from 
equal access end offices are so small, the Commission concluded, these 
benefits are well worth the costs. The Commission also stated that LECs 
should be required to offer signalling information from equal access 
end offices is not based on application of the test that governs LEC 
BSE offerings since signalling information is not a BSE, but that, 
nevertheless, its conclusion was based on the same type of cost/benefit 
considerations.
    14. The Commission stated that it appears that providing signalling 
information from LEC tandems would require software upgrades to those 
tandems. In addition, the record indicates that tandem-provided 
signalling may be of less utility to TSPs than end office-provided 
signalling. Although some parties claim generally that tandem-provided 
signalling could provide a useful adjunct to other forms of 
interconnection, they do not explain with any specificity how they 
could use such an architecture, or how a two-tandem architecture could 
actually be competitively viable, either from a service quality or 
pricing standpoint. Therefore, based on the current record, the 
Commission did not require LECs to provide this service at this time.
    15. The Commission clarified that in proposing access to LEC 
signalling information from LEC end offices and tandems, it did not 
intend to require LECs to reconfigure their SS7 networks. Thus, the 
Commission held that LECs may provide end-office-generated signalling 
information through STPs, and they may require TSPs that are 
terminating traffic to transmit signalling formation to LEC end offices 
through LEC STPs. The Commission recognized that STPs perform important 
network screening functions and did not require LECs to decentralize 
those functions by deploying them in every switch. Moreover, the record 
does not indicate that TSPs would seek to interconnect via SS7 at end 
offices, rather than at STPs. Rather, as some parties pointed out, it 
would be far more efficient for them to interconnect at STPs.
    16. Regarding billing of terminating traffic, the Commission stated 
that, consistent with its earlier expanded interconnection measures, 
the customer of record of the terminating LEC should be billed by the 
terminating LEC for services provided by that LEC. If the TSP is the 
customer of record, the LEC should bill the TSP directly. If the TSP's 
customer is the customer of record, then the TSP must provide the LEC 
with billing tapes so that the LEC may properly count and bill access 
minutes. The Commission rejected the suggestion of some LECs that all 
discrepancies between TSP-provided billing tapes and LEC billing 
records be resolved in favor of the LECs. The Commission stated that 
TSPs and LECs can and should establish fair and reasonable procedures 
to resolve billing discrepancies.
    17. The Commission stated that it does not base its decision that 
LECs must, in some instances, accept billing tapes from TSPs on a co-
carrier model. It required LECs to make signalling information 
available to any third party, not just providers of competitive tandem-
switched transport services. Thus, small IXCs may use signalling 
information as a way to aggregate their traffic on direct-trunked 
transport facilities purchased from a LEC so that they can enjoy the 
same scale economies as larger IXCs. In that situation, the IXC 
ordering the signalling and transport would be a reseller or 
aggregator, not a co-carrier. Indeed, if the meet-point billing model 
applied, TSPs would not be able to purchase direct-trunked transport 
from a LEC, since LEC tandem-switched transport rates to the ``meet-
point'' would apply.

Collocation

    18. The Commission affirmed its tentative conclusion that physical 
collocation of switching equipment should not be required. Virtually 
every commenter that addressed this issue supported the tentative 
conclusion and the reasoning behind it. Thus, the parties agreed that 
there is no competitive or technical benefit to locating switching 
equipment in LEC offices; that switching equipment is too large and too 
heavy to be collocated in LEC space; and that interconnectors would 
prefer to place their switching equipment on their own premises for 
monitoring purposes. The Commission found that the arguments offered in 
support of mandatory collocation were not convincing. It stated that no 
one has shown why the line-drawing process between switching and 
transmission equipment would be unmanageable or that collocation is 
necessary to ensure fair and nondiscriminatory treatment of 
interconnectors by LECs. The Commission's tariffing and general 
nondiscrimination requirements should provide sufficient protection 
against unfair or unreasonably discriminatory LEC rates and practices.

Pricing

    19. The Commission concluded that LEC provision of CIC and OZZ data 
to TSPs from LEC end offices will constitute a new service under the 
price caps regime, which covers all Tier 1 LECs. New services add to 
the range of options already available to customers. While LECs 
currently transmit CIC and OZZ codes to their own access tandems, they 
do not provide this information to their customers. Therefore, these 
data add to the range of options of LEC customers and hence represent a 
new service. While LECs appear to be able to provide this new service 
without implementing new technology, the need--or absence of need--for 
new technology does not dictate the categorization of the service under 
price caps. Rather, this factor affects the costs and thus the price 
that LECs may charge for a new service.
    20. LECs will be required to make a cost-based showing under the 
price caps new services test. This showing will enable the Commission 
to ensure that signalling services are reasonably priced. The 
Commission will not use the net revenue test in reviewing LEC tariff 
filings. The Commission stated that this is consistent with its 
decision to eliminate the net revenue test for new service offerings 
under price caps. That test is unnecessary, both because of the 
Commission's requirement that LECs submit cost support for new 
services, and because LECs clearly lack incentives to underprice 
signalling services provided to competitive tandem-switching providers.
    21. The Commission concluded further that LECs must establish new 
rate elements for CIC and OZZ signalling data as a separate service 
category within the trunking basket. This category will be subject to 
an upper pricing band of 2%. The Commission stated that because LECs 
have no incentive to price signalling services at predatory levels, it 
saw no need for a lower band and therefore did not impose one. The 
Commission believes that these measures are necessary to prevent LECs 
from offsetting increases in the price of signalling information 
provided to TSPs with price reductions in the LECs' own tandem-switched 
transport rates.
    22. The Commission found that the co-carrier model does not aptly 
define the LEC/TSP relationship. It found that even though the 
Commission has stated in the past that cellular service providers are 
like co-carriers, it has never held that cellular interconnection 
charges should be imposed on all LEC customers or on all cellular 
users, rather than on the providers taking interconnection. Thus, a co-
carrier model does not necessarily dictate that the costs unique to 
providing a joint service should always be directly imposed on the 
LEC's customers or on all customers of the service in question. The 
Commission also stated that a cost recovery mechanism that would have 
all purchasers of switched transport or tandem-switched transport bear 
the costs of making signalling information available to TSPs, is 
inappropriate and that instead, TSPs should pay for such costs. The 
Commission found that this is consistent with its long-held view that 
costs should be paid by the cost causer.

Recovery of Support Flows

    23. The Commission stated that it appears from the record that 
there is no need for additional support mechanisms in conjunction with 
adoption of this Order. The transport interconnection charge is 
sufficient to protect support flows potentially affected by this 
decision.

ONA Framework

    24. The Commission concluded that unbundled CIC and OZZ data are 
not BSEs as defined in its ONA orders and that there is no public 
policy reason to treat them equivalently. BSEs are ``optional unbundled 
features . . . that an ESP may require or find useful in configuring an 
enhanced service.''\4\ The Commission found that there has been no 
showing that the CIC and OZZ data that are the subject of the Order 
will be used by ESPs to provide enhanced services. Rather, these data 
will be used by TSPs to provide basic network services. Thus, these 
data do not fall within the Commission's definition of a BSE.
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    \4\Filing and Review of Open Network Architecture Plans, 4 FCC 
Rcd 1, 36 (1988(, 54 FR 3453 (January 24, 1989).
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    25. The Commission also found that no party demonstrated that it 
would be in the public interest to treat CIC and OZZ codes as BSEs. The 
Commission stated that while some parties argued that the four-part 
test that LECs use in determining whether to offer an ESP-requested BSE 
should apply, it has relied on similar considerations in assessing the 
relative costs and benefits of LEC-provided signalling information. The 
Commission also stated that the ``flagging'' requirements associated 
with BSEs, under which BOCs must identify BSEs that they intend to use 
themselves, are irrelevant: There is no dispute that LECs use CIC and 
OZZ data for tandem-switched transport service. The Commission also 
found that there would be no added benefit from a pricing standpoint in 
treating CIC and OZZ data as BSEs, since it has already held that the 
new services test applies to their initial rates.

Tariffing and Implementation

    26. The Commission required Tier 1 LECs (except NECA members) to 
file tariffs, with requisite cost support, for the provision of CIC and 
OZZ codes within ninety days from publication of this Order in the 
Federal Register, to be effective on forty-five days' notice. The 
Commission found that the record in this proceeding shows that LECs can 
provide CIC and OZZ codes to third parties from equal access end 
offices simply by modifying their end office routing tables, without 
purchasing new end office software and without making other costly and 
time-consuming modifications. The Commission concluded that under the 
circumstances, there is no reason why the LECs cannot tariff this 
offering for all of their equal access end offices within ninety days 
of publication of this Order in the Federal Register.

LEC Pricing Flexibility

    27. The Commission did not grant LECs additional pricing 
flexibility but stated that it will continue to examine these issues in 
a broader context in future consideration of pending access reform 
petitions. The Commission also stated that it has already addressed 
virtually all of the specific proposals suggested by LECs in the 
Switched Transport Expanded Interconnection Order and the First 
Transport Reconsideration. Thus, LECs may offer density zone pricing 
and volume and term discounts under certain conditions. In addition, 
they may price transport between their tandems and SWCs on a flat-rate 
basis. The Commission also stated that it had considered and rejected 
in the Switched Transport Expanded Interconnection Order various other 
requests for flexibility. For example, the Commission rejected the 
suggestion that LECs receive the same pricing flexibility as their 
competitors, noting that giving LECs too much flexibility could stifle 
competitive entry and harm customers of less competitive services. The 
Commission also declined to eliminate service category pricing bands, 
stating that these bands serve important public policy goals. The 
Commission found that no party had shown that providing signalling 
information to TSPs warrants a different outcome. Nor had any party set 
forth any other specific pricing flexibility request related to 
providing signalling information. The Commission also found that no 
party had demonstrated that the availability of signalling information 
warrants authorization of LEC contract tariffs. The Commission has 
limited contract carriage to services found to be ``substantially 
competitive.'' The Commission concluded that while the measures it now 
takes should permit alternatives to LEC tandem-switched access services 
to develop, it could not conclude that these services are now subject 
to substantial competition.
    28. The Commission concluded that for these reasons, it would not 
to grant LECs additional pricing flexibility in conjunction with its 
decision to make tandem signalling information available. The 
Commission stated, however, that this decision is not intended to 
prejudge broader questions regarding the possible need for access 
charge reform. The Commission stated that by opening the door to 
greater competition in the provision of tandem-switched services, it is 
continuing the process of removing barriers to the development of a 
more competitive access market in which CAPs and other entities can 
participate.

Other Issues

Reciprocity

    29. The Commission declined to impose reciprocal signalling 
obligations on interconnectors at this time. It found, first, that 
requests for reciprocal obligations are beyond the scope of this 
proceeding. The Notice proposed that LECs provide signalling 
information to third parties. The Commission stated that it did not 
propose to impose reciprocal requirements on these third parties, and 
that it declined to broaden this proceeding to consider such 
requirements here. The Commission stated that second, LEC requests for 
reciprocity seem to assume that only CAPs will purchase signalling 
information. As noted, this information must be made available to any 
interested party, including IXCs. LECs requesting reciprocity fail to 
address the implications of their proposal with respect to these other 
types of TSPs. The Commission stated that third, except in the few 
instances where CAPs have end offices, interconnectors simply do not 
have the signalling information to provide to the LECs, and the LECs 
have not demonstrated specific, present needs for such information. The 
Commission found furthermore, that TSPs do not possess market power. It 
stated, for example, that the Commission had previously declined to 
impose reciprocal obligations on interconnectors, noting, inter alia, 
that CAPs and other interconnectors do not control bottleneck 
facilities.

Jurisdictional Measurement and Reporting

    30. The Commission found that most parties agree that the customer 
of record should be responsible for reporting the PIU factor for 
terminating traffic when the LEC cannot itself measure jurisdiction. 
The Commission stated that this is consistent with existing reporting 
arrangements that have worked satisfactorily. If the customer of record 
is a TSP, it shall be the responsibility of that TSP to compile PIU 
reports based on data from those to whom it provides tandem-switching. 
If the customer of record is an IXC or other purchaser of access, that 
entity shall continue to provide PIU reports directly to the LEC 
providing terminating access.

Separations Issues

    31. The Commission concluded that the signalling information 
requirement does not raise separations issues that should be referred 
to a Joint Board. The record does not show that providing signalling 
information will raise any significant issues beyond those already 
referred to the Joint Board in the Switched Transport Expanded 
Interconnection Order. As noted, the costs associated with LEC 
provision of CIC and OZZ codes from equal access end offices should be 
minimal. The Commission found that therefore, these costs or the 
revenues derived from providing signalling information do not require 
Joint Board consideration. The Notice stated that the Commission did 
not intend to refer to the Joint Board broader separations issues. The 
Commission stated that these matters would be more properly addressed 
in the context of a comprehensive separations review proceeding.

Conclusion

    32. The Commission concluded that in this Order, it took another 
step in its ongoing effort to promote competition in the interstate 
access market. Tier 1 LECs (except NECA members) are required to 
provide signalling information from equal access end offices to 
interested third parties. This measure will allow third parties to 
provide tandem switching and thereby promote development of 
alternatives to LEC-provided tandem-switched transport service. CAPs 
may develop their own tandem-switching networks; other TSPs may use 
tandem-switching to achieve scale economics attending the aggregation 
of traffic. The Commission found that by promoting access to diverse 
facilities and providers, this action should permit more efficient use 
and deployment of interstate access services, increase network 
reliability and redundancy, encourage innovation, and exert downward 
pressure on access charges and long-distance rates. These benefits 
should, in turn, contribute to economic growth and the creation of new 
job opportunities.

Regulatory Flexibility Analysis

    33. The Commission stated that in the Notice, it certified that the 
proposed rule changes would not have a significant economic impact on a 
substantial number of small business entities, as defined by 
Sec. 601(3) of the Regulatory Flexibility Act.\5\ It also stated that 
the Notice provided that to the extent that a PIU reporting requirement 
would apply to small entities, it would not have a significant economic 
impact on a substantial number of small business entities. The 
Commission found that no commenting party disagreed with its analysis. 
The Secretary shall send a copy of this Report and Order, including the 
certification, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with Sec. 605(b) of the Regulatory 
Flexibility Act, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. Secs.  601 
et seq.
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    \5\Notice, 7 FCC Rcd at 7749, 57.
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Ordering Clauses

    34. Accordingly, it is ORDERED, pursuant to authority contained in 
Sections 1, 4(i), 201-205, and 214(d) of the Communications Act of 
1934, as amended, 47 U.S.C. 151(i), 154, 201-205, and 214(d), that 
Parts 61 & 69 of the Commission's rules, 47 CFR Secs. 61, 64, and 69, 
are AMENDED as set forth below.
    35. IT IS FURTHER ORDERED that the policies, rules, and 
requirements set forth herein ARE ADOPTED, effective eighty days after 
publication in the Federal Register.
    36. IT IS FURTHER ORDERED that the all LECs subject to this order 
shall file tariff amendments as specified herein within ninety days of 
publication of this order in the Federal Register, to be effective on 
forty-five days' notice.

List of Subjects in 47 CFR Parts 61, 64, and 69

    Communication Common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Amendatory Text

    Parts 61, 64, and 69 of Title 47 of the Code of Federal Regulations 
are amended as follows:

PART 61--TARIFFS

    1. The authority citation for Part 61 continues to read as follows:

    Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154. 
Interpret or apply sec. 203, 48 Stat. 1070; 47 U.S.C. 203.

    2. Section 61.42 is amended by adding paragraph (e)(2)(vii) to read 
as follows:


Sec. 61.42  Price cap baskets and service categories.

* * * * *
    (e) * * *
    (2) * * *
    (vii) Signalling for tandem switching, as described in Sec. 69.129 
of this chapter.
* * * * *
    3. Section 61.47 is amended by adding paragraph (g)(5) as follows:


Sec. 61.47  Adjustments to the SBI; pricing bands.

* * * * *
    (g) * * *
    (5) The upper pricing band for the ``Signalling for tandem 
switching'' service category shall limit the upward pricing flexibility 
for this service category, as reflected in its SBI, to two percent, 
relative to the percentage change in the PCI for the trunking basket, 
measured from the levels in effect on the last day of the preceding 
tariff year. There shall be no lower pricing band for this service 
category.
* * * * *

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    1. The authority citation for Part 64 continues to read as follows:

    Authority: Section 4, 48 Stat. 1066, as amended; 47 U.S.C. 154, 
unless otherwise noted. Interpret or apply secs. 201, 218, 225, 48 
Stat. 1070, as amended, 1077; 47 U.S.C. 201, 218, 225, unless 
otherwise noted.

    2. Section 64.1401 is amended by adding paragraph (i) to read as 
follows:


Sec. 64.1401  Expanded interconnection.

* * * * *
    (i) The local exchange carriers specified in paragraph (a) of this 
section shall offer signalling for tandem switching, as defined in 
Sec. 69.2(vv) of this chapter, at central offices that are classified 
as equal office end offices or serving wire centers, or at signal 
transfer points if such information is offered via common channel 
signalling.

PART 69--ACCESS CHARGES

    1. The authority citation for Part 69 continues to read as follows:

    Authority: Secs. 4, 201, 202, 203, 205, 218, 403, 48 Stat. 1066, 
1070, 1072, 1077, 1094, as amended, 47 U.S.C. 154, 201, 202, 203, 
205, 218, 403.

    2. Section 69.2 is amended by adding paragraph (vv) to read as 
follows:


Sec. 69.2  Definitions.

* * * * *
    (vv) Signalling for tandem switching means the carrier 
identification code (CIC) and the OZZ code, or equivalent information 
needed to perform tandem switching functions. The CIC identifies the 
interexchange carrier and the OZZ identifies the interexchange carrier 
trunk to which traffic should be routed.

    3. Section 69.129 is added to read as follows:


Sec. 69.129  Signalling for tandem switching.

    A charge that is expressed in dollars and cents shall be assessed 
upon the purchasing entity by a local telephone company for provision 
of signalling for tandem switching.

[FR Doc. 94-15443 Filed 6-24-94; 8:45 am]
BILLING CODE 6712-01-M