[Federal Register Volume 60, Number 186 (Tuesday, September 26, 1995)]
[Proposed Rules]
[Pages 49539-49541]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23778]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61 and 69

[CC Docket No. 94-1; CC Docket No. 93-124; CC Docket No. 93-197; FCC 
95-393]


Price Cap Performance Review for Local Exchange Carriers; 
Treatment of Operator Services Under Price Cap Regulation; Revisions to 
Price Cap Rules for AT&T

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: On March 30, 1995, the Federal Communications Commission 
adopted a First Report and Order in CC Docket No. 94-1, revising its 
price cap regulations applicable to local exchange carriers (LECs). In 
that Order, the Commission also stated that it would consider adopting 
further rule revisions in the near future.
    In this FNPRM, the Commission seeks comment on how the price cap 
rules should be adjusted as the competition faced by local exchange 
carriers (LECs) develops in the future. The Commission also seeks 
comments on whether its rules on rate structure should be modified to 
make it easier for LECs to introduce new services.

DATES: Comments must be submitted on or before November 20, 1995. Reply 


[[Page 49540]]
Comments must be submitted on or before December 20, 1995.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., 
Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT:
Steven Weingarten or Richard Lerner, Tariff Division, Common Carrier 
Bureau, (202) 418-1530.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking adopted September 14, 1995 and 
released September 20, 1995. The full text of this Commission decision 
is available for inspection and copying during normal business hours in 
the FCC Public Reference room (Room 230), 1919 M St., N.W., Washington, 
D.C. The complete text of this decision may also be purchased from the 
Commission's copy contractor, International Transcription Service, 
Suite 140, 2100 M Street, N.W., Washington, D.C. 20037.

Regulatory Flexibility Analysis

    We have determined that Section 605(b) of the Regulatory 
Flexibility Act of 1980, 5 U.S.C. Sec. 605(b), does not apply to these 
rules because they do not have a significant economic impact on a 
substantial number of small entities. The definition of a ``small 
entity'' in Section 3 of the Small Business Act excludes any business 
that is dominant in its field of operation. Local exchange carriers do 
not qualify as small entities because they have a nationwide monopoly 
on ubiquitous access to the subscribers in their service area. The 
Commission also has found all exchange carriers to be dominant in its 
competitive carrier proceeding. See 85 FCC 2d 1, 23-24 (1980). To the 
extent that small telephone companies will be affected by these rules, 
we hereby certify that these rules will not have a significant effect 
on a substantial number of ``small entities.''

Summary of Further Notice of Proposed Rulemaking

    In this FNPRM, the Commission seeks comment on a number of possible 
changes to the LEC price cap plan. The proposed changes to the price 
cap plan fall into three basic categories: (1) clarifying and modifying 
the Commission's tariff filing requirements; (2) amending the price cap 
rules to permit greater pricing flexibility; and (3) modifying the 
structure of the price cap baskets and service categories.
    The FNPRM seeks comment on whether the Commission's new service 
rules for LEC price cap services should be relaxed by reducing the 
notice and cost support requirements for facilitate the introduction of 
new services. One suggested approach would be to ease the rules 
applicable to certain new service filings upon a showing that those 
services are subject to competition; a second suggested approach would 
be to define a class of services that do not raise competitive 
concerns, and ease the regulatory requirements applicable to those 
services. The FNPRM also seeks comment on whether the Commission should 
eliminate the requirement that a LEC obtain a waiver of the access 
charge rules in Part 69 of the Commission's rules before introducing 
certain switched access services.
    The FNPRM seeks comment on whether the lower service band index 
limit should be eliminated and whether the Commission should permit any 
other additional downward pricing flexibility. It also seeks comment on 
whether the Commission should allow alternative pricing plans (APPs) to 
be introduced on shorter notice than new services and without cost 
support, with certain limitations similar to those proposed for the 
AT&T price cap plan in an earlier order. The FNPRM also asks under what 
conditions the Commission should permit individual case basis (ICB) 
rates, including how long those rates should be permitted to remain in 
effect before requiring generally available averaged rates and what 
cost support requirements should apply. The FNPRM also seeks comment on 
whether any LECs that reduce prices pursuant to any pricing 
flexibilities granted in response to the FNPRM should be prohibited 
from raising their rates by more than one percent annually.
    The FNPRM seeks comment on whether any revisions to the price cap 
baskets and service categories should be made and under what 
circumstances they should be made in the future and whether any service 
categories can be consolidated. It also consolidates the Price Cap 
Performance Review docket with another proceeding, Treatment of 
Operator Services Under Price Cap Regulation, CC Docket No. 93-124, 
Notice of Proposed Rulemaking, and seeks comment on whether operator 
services or call completion services should be in their own service 
categories or combined with another new or pre-existing service 
category.
    The FNPRM seeks comment on whether any or all relaxed regulatory 
treatment or additional pricing flexibility proposed should be 
conditioned on a demonstration that barriers to entry have been 
removed, and if so, what demonstration should be required. The FNPRM 
seeks comment on what product and geographic markets should be used for 
any such assessment of competitive conditions. The FNPRM also seeks 
comment on what impact the proposed pricing flexibility would have on 
interstate toll rates.
    The FNPRM seeks comment on whether LEC services should be removed 
from price cap regulation and made subject to streamlined regulation 
upon a showing of ``substantial competition,'' the same standard as 
applies to AT&T services, and whether the Commission should consider 
the same factors--deemed responsiveness, supply responsiveness, pricing 
history and market share--in evaluating whether that standard has been 
met. It also seeks comment on whether the LECs should be permitted to 
offer contract carriage for services that are subject to streamlined 
regulation, subject to the same conditions as AT&T. The FNRPM seeks 
comment on whether the Commission should adopt rules now that would 
define the conditions price cap LECs must meet to be considered 
nondominant, what those conditions should be and whether a LEC should 
be regulated as nondominant for certain services or within certain 
geographic markets but not for others.
    The FNPRM also seeks comment on whether the sharing and X-Factors 
applicable to a particular LEC should be tied to the degree of 
competition it faces or the degree of pricing flexibility it receives. 
Finally, it seeks comment on whether the AT&T price cap plan should be 
modified to treat any changes in the access rates charged by LECs' 
competitors as exogenous costs.

Ordering Clauses

    Accordingly, it is ordered that notice is hereby given of the 
rulemaking described above and that comment is sought on those issues.
    It is further ordered that pursuant to applicable procedures set 
forth in Section 1.399 and 1.411 et seq. of the Commission's Rules, 47 
C.F.R. 1.399, 1.411 et seq., comments SHALL BE FILED with the 
Secretary, Federal Communications Commission, Washington D.C. 20554 no 
later November 20, 1995. Reply comments SHALL BE FILED no later than 
December 20, 1995. To file formally in this proceeding, participants 
must file an original and four copies of all comments, reply comments, 
and supporting comments. If participants want each Commissioner to 
receive a personal copy of their comments, an original plus nine copies 
must be filed. In addition, parties should file two copies of any such 
pleading with the Tariff Division, Common Carrier 

[[Page 49541]]
Bureau, Room 518, 1919 M Street, N.W., Washington, D.C. 20554, and one 
copy of any pleadings should be submitted on computer disk to the 
Industry Analysis Division, Common Carrier Bureau, Room 534, 1919 M 
Street, N.W., Washington, D.C. 20554. Comments and reply comments will 
be available for public inspection during regular business hours in the 
FCC Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C. 
20554.

List of Subjects

47 CFR Part 61

    Communications common carriers, Telephone.

47 CFR Part 69

    Communications common carriers, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-23778 Filed 9-25-95; 8:45 am]
BILLING CODE 6712-01-M