[Federal Register Volume 60, Number 184 (Friday, September 22, 1995)]
[Rules and Regulations]
[Pages 49232-49234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23405]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 91-35; FCC 95-374]


Operator Service Access and Payphone Compensation

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: On April 9, 1992, the Commission adopted a Second Report and 
Order prescribing an interim mechanism by which competitive payphone 
owners (``PPOs'') may collect compensation from certain interexchange 
carriers (``IXCs'') for originating interstate access code calls from 
their payphones. In the Memorandum Opinion and Order on 
Reconsideration, adopted August 17, 1993, the Commission substantially 
affirmed the Second Report and Order, although the Commission modified 
it in certain respects. Upon further reconsideration the Commission now 
affirms the Reconsideration Order, making one additional modification 
and a clarification with the intended effect of facilitating the 
payment of compensation by IXCs to PPOs. First, the Commission directs 
each PPO submitting an affidavit as verification of a compensation 
claim to include evidence that the particular payphone is owned by the 
PPO seeking compensation, and that the payphone was in working order 
during the period in question. Second, the Commission clarifies that 
IXCs to which the customer-owned coin-operated telephone (``COCOT'') 
lists are provided must pay local exchange carriers (``LECs'') 
reasonable charges for the costs of generating those lists. Third, the 
Commission rejects RCI's request that we exempt from compensation 
obligations those IXCs whose operator services consist of 1-800 and 
950-10XX access code calls to preexisting accounts. The Commission also 
rejects RCI's request that we allow OSPs to remove themselves from the 
payphone compensation list at any time. Fourth, the Commission reverses 
our previous decision denying Allnet's request to be removed from the 
list of OSPs with payphone compensation obligations on the grounds that 
it is not a provider of ``operator services,'' a defined by the 
Telephone Operator Consumer Services Improvement Act.

EFFECTIVE DATE: October 23, 1995.

FOR FURTHER INFORMATION CONTACT:
Michael Carowitz, 202-418-0960, Enforcement Division, Common Carrier 
Bureau.

SUPPLEMENTARY INFORMATION: 

Synopsis of Order

A. Affidavit Procedure for Payphones Not Appearing on COCOT Lists

    Upon reconsideration of the requirement that PPOs must submit 
sufficient verification information to IXCs when their payphones do not 
appear on COCOT lists, the Commission affirms its conclusion that the 
affidavit procedure the Commission established in the Reconsideration 
Order, 58 FR 57748 (1993), provides PPOs a ``last resort'' procedure 
when other procedures and informal negotiations fail to resolve LEC 
COCOT list problems. The Commission further concludes, however, that 
additional information would assist the IXCs in verifying their 
compensation obligations for competitive payphones not appearing on LEC 
COCOT lists. Accordingly, the Commission directs each PPO submitting an 
affidavit to include evidence that a particular payphone is owned by 
the PPO seeking compensation, and that the payphone was in working 
order during the period in question. Such evidence of the payphone's 
operability should include, at a minimum, the telephone bill for the 
last month of the billing quarter indicating use of a line screening 
service. The Commission believes that the inclusion of such evidence 
will serve the interest of all parties by allowing IXCs to pay 
legitimate claims more quickly. The Commission also believes that the 
potentially significant penalties for the submission of fraudulent 
affidavits will continue to protect the IXCs against the misuse claims 
if good-faith negotiations between the relevant parties fail to resolve 
the dispute.

B. LEC Recovery of the Costs of Producing the COCOT Lists

    The Commission articulates with more specificity what it held in 
the Reconsideration Order: that LECs may recover their reasonable costs 
in generating and producing the COCOT lists through direct charges to 
the IXCs that use them. The COCOT lists are produced exclusively to 
assist the IXCs in verifying their compensation obligations to PPOs. 
Because the COCOT lists are produced to assist the IXCs pursuant to FCC 
rules and are not included in state-tariffed payphone service, the 
Commission rejects MCI's argument that the lists are generated ``as a 
by-product of the provision of LEC payphone service to PPOs.'' Even if 
the IXCs choose not to receive the COCOT lists, they are still 
responsible for compensating PPOs for each eligible competitive 
payphone in the amount of $6 per month. In sum, the LEC COCOT lists are 
provided for the convenience of the IXCs, who, if requested, must pay 
the LECs a reasonable charge.

C. Certification Issues Raised by RCI's Petition for Clarification

    Although it styles its pleading as a petition for clarification, 
RCI in effect requests reconsideration of the Commission's holding in 
both the Second Report and Order, 57 FR 21038 (1992), and the 
Reconsideration Order. As such, the Commission declines to adopt RCI's 
proposal for either expanding the scope of the exemption from the 
obligation to pay compensation to PPOs or modifying the terms of the 
affidavit procedure. The exemption from the compensation obligation is 
intended to apply to carriers that receive access code calls from their 
own presubscribed lines because such carriers already pay a commission 
to the PPO for such calls. The Commission emphasized that ``if the 
carrier receives any user-initiated access code calls from payphones on 
which it is not the presubscribed carrier, that carrier [will] be 
required to participate in the compensation mechanism.'' RCI proposes 
to expand this exemption significantly to include access code calls 
from non-presubscribed lines for which 

[[Page 49233]]
the PPO would not receive compensation. The Commission concludes that 
this proposal is flatly inconsistent with the purpose of the narrow 
exemption and, accordingly, decline to adopt it.
    RCI argues that its proposed modification would be consistent with 
TOCSIA, which exempts from the statute's consumer protection 
requirements interstate telephone calls that are answered by automatic 
equipment and completed only if the caller inputs a PIN. This argument 
relies upon a statutory exclusion that removes from the definition of 
``operator services'' any calls that receive ``completion through an 
access code used by the consumer, with billing to an account previously 
established with the carrier by the consumer.''
    The Commission has previously rejected an identical argument by RCI 
that calls placed to 800 and 950 numbers from non-presubscribed lines 
should be excluded from the payphone compensation provisions. In the 
Second Report and Order, the Commission explained that the exclusions 
incorporated into TOCSIA's definition of ``operator services'' applied 
to the branding requirements imposed on OSPs by Section 226(b), and 
served to limit those requirements to situations in which they were 
necessary. The Commission found that the text of the payphone 
compensation provisions, when read in conjunction with the legislative 
history, makes clear that Congress intended that the Commission 
consider the need to prescribe compensation for PPOs for access code 
calls. In addition, RCI petitions the Commission to exclude ``800'' and 
``950'' calls from the definition of ``access code calls.'' RCI's 
request, however, amounts to an untimely petition for reconsideration 
of the Second Report and Order. As RCI acknowledges, the definition of 
``access codes'', as set forth in the Second Report and Order, states 
that ``[a]ccess codes include 10XXX in equal access areas and ``950'' 
Feature Group B dialing * * * anywhere, where the three-digit XXX 
denotes a particular IXC. Some OSPs use an 800 number as an access 
code.'' The period within which parties were authorized to seek 
reconsideration of this decision expired many months ago. We, 
accordingly, decline to consider RCI's late-filed petition.
    With regard to RCI's ``inconsistency'' argument that including 
``800'' and ``950'' calls to OSPs within the definition of compensable 
``access code calls'' would penalize OSPs for complying with the 
Commission's unblocking requirements, the Commission notes that it 
required OSPs to establish ``800'' and ``950'' access numbers as a 
means of permitting callers to reach the OSP whenever 10XXX calls were 
blocked from a particular competitive payphone. Thus, OSPs that are 
required to provide access from non-presubscribed payphones could do so 
through an access number, through 10XXX access, or through both. No 
matter how they provided access, these OSPs would be subject to the 
obligation to pay compensation to PPOs. In sum, because the Commission 
does not find any inconsistency between the definition of ``access code 
calls'' and the requirement that OSPs establish access numbers, the 
Commission declines to make the ``clarification'' requested by RCI.
    The Commission also declines to modify the requirement that the 
certification must be made within 30 days after the public notice of 
the FCC staff report entitled ``Long Distance Market Shares.'' To 
permit IXCs to seek at any time an exemption from the obligation to pay 
compensation, as RCI suggests, would undermine the efficient operation 
of the compensation mechanism and significantly increase the associated 
administrative costs. More specifically, because a single exemption 
alters the amount of compensation due from each OSP, the Commission 
would be required to readjust on a continuous basis the proportionate 
share of the $6 per payphone per month due from each OSP subject to the 
compensation obligation. In addition, each OSP paying compensation, and 
each PPO seeking compensation, would be required to make corresponding 
changes to their respective payment and accounting operations. The 
costs of such ongoing changes for all parties, including the 
Commission, could be unduly burdensome. Accordingly, the Commission 
denies RCI's request.

D. Allnet's Request To Be Removed From List of IXCs Required to Pay 
Compensation to PPOs

    Since Allnet filed its petition for reconsideration of the 
Commission's decision not to remove Allnet from the list of 
compensation payors, the Court of Appeals for the District of Columbia 
decided the Florida Public Telecommunications case. Although it does 
not directly address the issue of who is a ``provider of operator 
services,'' and it instead concerns an earlier Commission decision 
about the scope of compensable calls, Florida Public Telecommunications 
provides guidance on how the specific terms of TOCSIA are to be read in 
the context of the legislative purpose of that statute. As relevant to 
the statutory interpretation arguments advanced by Allnet, the rule of 
Florida Public Communications is that the plain meaning of the 
statutory language of TOCSIA must govern unless the Commission can show 
that Congress intended a different result.
    While Allnet has always maintained that it was not a provider of 
``operator services,'' as defined by TOCSIA, the Commission has 
answered in the past that Allnet is, however, a recipient of interstate 
access code calls originated by competitive payphones. Indeed, Allnet 
provides long-distance service to transient customers through 1-800 
access numbers with billing to a preestablished account. This service 
clearly fits within the Commission's definition of compensable access 
code calls. Because TOCSIA is concerned with providing callers with 
access to the OSP of their choice, the Commission reasoned that a 
carrier that receives interstate access code calls should share the 
burden of paying compensation to PPOs for their origination. To this 
end, the Commission adopted a procedure in the Reconsideration Order 
whereby a carrier could certify that it did not receive any access code 
calls to be exempted from the obligation to pay compensation.
    In applying the Florida Public Telecommunications guidelines for 
interpreting TOCSIA to the instant case, the Commission finds that even 
if a carrier receives interstate access code calls from competitive 
payphones, it must also be a provider of ``operator services,'' as 
defined by TOCSIA in Section 226(a)(7). If a carrier, such as Allnet, 
provides only the services that fall within the definition's 
exclusions, e.g., ``with billing to an account previously established 
with the carrier by the consumer,'' and does not otherwise provide 
``operator services,'' the Commission cannot require it to pay 
compensation under TOCSIA. Thus, under its rules and pursuant to 
TOCSIA, a carrier is not required to pay compensation under the interim 
flat-rate compensation mechanism, as established by the Commission's 
Second Report and Order, unless: (1) it receives access code calls; and 
(2) it is a provider of ``operator services.''
    Based on Allnet's repeated statements that it does not provide 
``operator services'' as defined by TOCSIA, the Commission finds that 
while it fits within the first part (``receives access code calls'') of 
this two-part test for compensation payors, Allnet does not meet the 
second part (``provides `operator services'''). Therefore, upon 
reconsideration, the Commission 

[[Page 49234]]
removes Allnet from the list of compensation payors retroactive to the 
advent of the interim flat-rate compensation mechanism. The Commission 
does not expect that use of this two-part test will impact the status 
of any of the other carriers currently required to pay compensation. 
Because the Commission is removing Allnet from the list of carriers 
required to pay compensation to PPOs, it need not decide the other 
related issues raised by Allnet, such as whether it was given 
appropriate notice by the Commission that it was to be included among 
the compensation payors.

Ordering Clauses

    Accordingly, pursuant to authority contained in Sections 1, 4, 201-
205, and 226 of the Communications Act of 1934, as amended, 47 U.S.C. 
Secs. 151, 154, 201-205, and 226, It is Ordered that the policies, 
rules, and requirements set forth herein are ADOPTED.
    It is Further Ordered that MCI's Petition for Further 
Reconsideration and Clarification of the Reconsideration Order is 
DENIED in part and GRANTED in part, as described herein.
    It is Further Ordered that RCI's Petition for Clarification of the 
Reconsideration Order is Denied.
    It is Further Ordered that the petition for reconsideration filed 
by Allnet is GRANTED in part, as described herein.
    It is Further Ordered that this Memorandum Opinion and Order on 
Further Reconsideration will be effective October 23, 1995.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Operator service access, Payphone 
compensation, Telephone.

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

Amendment to the Code of Federal Regulations

    Title 47 of the CFR, Part 64, is amended as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

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

    Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154, 
unless otherwise noted. Interpret or apply secs. 201-4, 218, 225, 
226, 227, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 201-4, 218, 
225, 226, 227, unless otherwise noted.

    2. Section 64.1301 is amended by revising paragraph (f) to read as 
follows:


Sec. 64.1301  Competitive payphone compensation.

 * * * * *
    (f) A competitive payphone owner (PPO) that seeks compensation for 
competitive payphones that are not included on a LEC COCOT list 
satisfies its obligation to provide alternative reasonable verification 
to an IXC if it provides to that IXC:
    (1) A notarized affidavit, signed by the president of the company, 
attesting that each of the payphones for which the PPO seeks 
compensation is a competitive payphone that was in working order as of 
the last day of the compensation period); and
    (2) Corroborating evidence that each such payphone is owned by the 
PPO seeking compensation and was in working order on the last day of 
the compensation period. Corroborating evidence shall include, at a 
minimum, the telephone bill for the last month of the billing quarter 
indicating use of a line screening service.

[FR Doc. 95-23405 Filed 9-21-95; 8:45 am]
BILLING CODE 6712-01-M