[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Rules and Regulations]
[Pages 7131-7132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2948]



=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[DA 95-36]


Bell Operating Companies' Joint Petition for Waiver of Computer 
II Rules

AGENCY: Federal Communications Commission.

ACTION: Memorandum Opinion and Order.

-----------------------------------------------------------------------

SUMMARY: On October 18, 1994, the United States Court of Appeals for 
the Ninth Circuit remanded in part the Commission's BOC Safeguards 
Order (57 FR 4373 (February 5, 1992)), which had established procedures 
for the Bell Operating Companies (BOCs) to offer enhanced services on a 
structurally integrated basis. This Memorandum Opinion and Order 
concluded that, because the Ninth Circuit decision generally returned 
the regulation of BOC enhanced services to a Comparably Efficient 
Interconnection (CEI) plan framework, waivers would only be necessary 
for new enhanced services or market trials, and for those existing 
services and market trials that were not covered by previously-approved 
CEI plans. In order to avoid possible service disruptions and customer 
confusion, the Common Carrier Bureau clarified the requirements for BOC 
provision of enhanced services, and granted the BOCs any necessary 
interim waivers to: Provide existing enhanced services pursuant to CEI 
plans approved prior to the lifting of structural separation; continue 
providing other existing enhanced services, pending FCC review of CEI 
plans for those services; file CEI plans for any new enhanced services; 
continue to perform research and planning activities and technical 
trials for enhanced services; continue existing market trials, 
conditioned on their filing the market trial notification required 
under the CEI plan regime; and begin market trials of new enhanced 
services pursuant to the market trial requirements of the CEI plan 
regime.

EFFECTIVE DATE: January 13, 1995.

FOR FURTHER INFORMATION CONTACT: [[Page 7132]] 
Rose Crellin at (202) 418-1571 or Kevin Werbach at (202) 418-1597, 
Policy and Program Planning Division, Common Carrier Bureau.

SUPPLEMENTARY INFORMATION: This is a summary of the Common Carrier 
Bureau's Memorandum Opinion and Order, DA 95-36, adopted January 11, 
1995 and released January 11, 1995. The full text of this decision is 
available for inspection and copying during normal business hours in 
the FCC Dockets Branch (Room 239), 1919 M Street NW., Washington, DC. 
The complete text of this decision may also be purchased from the 
Commission's copy contractor, International Transcription Services, 
Inc., 2100 M Street NW., Suite 140, Washington, DC 20037.

Summary of Memorandum Opinion and Order

    1. In the Computer III proceeding, beginning with the Phase I Order 
(51 FR 24350 (July 3, 1986)), the Commission reversed its earlier 
decision to require the Bell Operating Companies (BOCs) to establish 
structurally separate subsidiaries for the provision of enhanced 
services. Enhanced services use the existing telephone network to 
deliver services--such as voice mail, E-Mail, and gateways to on-line 
databases--beyond a basic transmission offering. The commission 
established a two-step process in Computer III for the removal of 
structural separation restrictions. Initially, BOCs were permitted to 
offer individual enhanced services on a structurally integrated basis 
once they had received FCC approval of service-specific Comparably 
Efficient Interconnection (CEI) plans. Those plans were required to 
detail how the BOCs would make the underlying network services used by 
their own enhanced service offerings available to competing enhanced 
service providers (ESPs) on an equal access basis.
    2. In the second stage of Computer III, BOCs were required to 
develop Open Network Architecture (ONA) plans detailing how they would 
unbundle and make available basic network services, and describing how 
they would comply with other nonstructural safeguards. Upon FCC 
approval of the initial BOC ONA plans, the remaining structural 
separation requirements were to be lifted. Following a remand from the 
Court of Appeals for the Ninth Circuit, the Commission strengthened and 
reaffirmed its regime of nonstructural safeguards in the 1991 BOC 
Safeguards Order (57 FR 4373 (February 5, 1992)). Between 1992 and 
1993, the Common Carrier Bureau granted full structural relief to the 
BOCs upon a showing that they had complied with the requirements of the 
BOC Safeguards Order, and those decisions were subsequently ratified by 
the Commission.
    3. In October 1994, the Ninth Circuit partially remanded the BOC 
Safeguards Order. The court concluded that the Commission had scaled 
back its conception of ONA, and had not explained how the more limited 
version of ONA represented in the approved BOC ONA plans provided 
sufficient protection to justify fully lifting structural separation. 
In light of this decision, on November 14, 1994, the BOCs jointly filed 
a petition for an interim waiver (BOC Petition). The BOC Petition 
requested permission to continue offering existing enhanced services on 
a structurally integrated basis; to continue integrated research, 
development, and market trials; and to offer new integrated enhanced 
services associated with video dialtone service offerings.
    4. In this Memorandum Opinion and Order, the Common Carrier Bureau 
(Bureau) clarified the requirements that will govern BOCs' enhanced 
service offerings, pending further Commission action on remand, and 
issued an interim waiver. Specifically, the Bureau concluded that, 
after the partial remand of the BOC Safeguards Order, the BOCs may 
generally provide enhanced services that comply with the CEI plan 
regime in effect before the Commission completely lifted structural 
separation requirements. The Bureau granted the BOCs a limited waiver 
to continue providing those enhanced services that they first offered 
after the CEI plan approval requirement had expired, conditioned on 
their filing CEI plans for those services within sixty days after the 
release of the waiver order. The Memorandum Opinion and Order also 
granted the BOCs a limited waiver to continue existing market trials 
initiated after the expiration of the CEI plan approval requirement, 
conditioned on the BOCs' filing market trial notifications within sixty 
days after the release of the waiver order. To the extent that the 
decision remanding the BOC Safeguards Order might be regarded as 
returning regulation to the Computer II framework of full structural 
separation, the Memorandum Opinion and Order granted the BOCs limited 
waivers of the Computer II structural separation requirements.
    5. The Bureau concluded that the safeguards provided by the CEI 
plan regime would protect against potential anticompetitive conduct by 
the BOCs during the pendency of remand proceedings. The Memorandum 
Opinion and Order noted that the BOCs currently offer enhanced services 
on an integrated basis to approximately five million customers, and 
determined that service disruptions and customer confusion were 
possible in the absence of a waiver. The Bureau observed that it had 
granted a similar waiver following the first remand of Computer III in 
1990, and that waiver was not subsequently challenged before the 
Commission or in court. Given these considerations, the Bureau 
determined that it would be in the public interest to provide the BOCs 
with a limited waiver to allow them to offer integrated enhanced 
services subject to defined safeguards until the Commission acted on 
remand.
    6. Accordingly, the Bureau granted any necessary waivers to enable 
the BOCs to: (1) Provide existing enhanced services pursuant to CEI 
plans approval prior to the lifting of structural separation; (2) 
continue providing other existing enhanced services, pending Commission 
consideration of CEI plans for those services; (3) file CEI plans for 
any new enhanced services; (4) continue to perform research and 
planning activities and technical trials for enhanced services; (5) 
continue existing market trials, conditioned on their filing the market 
trial notifications required under the CEI plan regime; and (6) begin 
market trials of new enhanced services pursuant to the market trial 
requirements of the CEI plan regime. The Bureau declined to treat 
video-dialtone-related enhanced services differently from other new 
enhanced services.

Ordering Clauses

    1. Accordingly, IT IS ORDERED that pursuant to Secs. 0.91, 0.291, 
and 1.3 of the Commission's Rules, 47 CFR Secs. 0.91, 0.291, and 1.3, 
the BOC Joint Contingency Petition for Interim Waiver of the Computer 
II Rules, IS GRANTED to the extent described herein and otherwise 
Denied.
    2. It is further ordered that this order is effective upon issuance 
of the Ninth Circuit's mandate in California III.

List of Subjects in 47 CFR Part 64

    Communications common carriers; Computer technology.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-2948 Filed 2-6-95; 8:45 am]
BILLING CODE 6712-01-M