[Federal Register Volume 62, Number 16 (Friday, January 24, 1997)]
[Proposed Rules]
[Pages 3638-3653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1676]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[CC Docket No. 96-254; FCC 96-472]


Implementation of Section 273 of the Communications Act of 1934, 
as Amended by the Telecommunications Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is issuing this Notice of Proposed Rulemaking 
(NPRM) to initiate a proceeding concerning the Bell Operating 
Companies' (BOCs') manufacture of telecommunications equipment and 
customer premises equipment (CPE) pursuant to Section 273 of the 
Communications Act of 1934, as amended by the Telecommunications Act of 
1996. In general, under Section 273, a BOC may provide 
telecommunications equipment and may manufacture both 
telecommunications equipment and CPE once the Commission authorizes the 
BOC to provide in-region, interLATA services pursuant to Section 271. 
The Commission seeks comment on procedures governing collaboration, 
research and royalty agreements, nondiscrimination standards, and the 
reporting and disclosure of protocols and other technical requirements 
for connecting to the BOC's network. Section 273 also limits the 
manufacturing activities of Bellcore and other entities that develop 
industry-wide standards or generic requirements, or conduct 
certification activities. The Commission seeks comment on proposed 
measures to implement these provisions of Section 273. In addition, the 
Commission seeks comment on the effects of the BOCs' proposed sale of 
Bellcore on its implementation of Section 273.

DATES: Comments are due on or before February 24, 1997 and Reply 
Comments are due on or before March 26, 1997. Written comments must be 
submitted by the Office of Management and Budget (OMB) on the proposed 
and/or modified information collections on or before March 25, 1997.

ADDRESSES: To file formally in this proceeding, interested parties must 
file an original and six copies of all comments, reply comments, and 
supporting comments, with the reference number ``CC Docket 96-254'' on 
each document. Those parties wishing each Commissioner to receive a 
personal copy of their comments must file an original plus eleven 
copies. Parties must send comments and reply comments to the Office of 
the Secretary, Federal Communications Commission, 1919 M Street, N.W. 
Room 222, Washington, D.C. 20554. Parties must also provide four copies 
to Secretary, Network Services Division, Common Carrier Bureau, 2000 M 
Street, N.W., Room 235, Washington, D.C. 20554. Parties must also 
provide one copy of any documents filed in this docket to the 
Commission's copy contractor, International Transcription Services, 
Inc., 2100 M Street, N.W., Suite 140, Washington, D.C. 20037. In 
addition to filing comments with the Secretary, a copy of any comments 
on the information collections contained herein should be submitted to 
Dorothy Conway, Federal Communications Commission, Room 234, 1919 M 
Street, N.W., Washington, D.C. 20554, or via the Internet to 
[email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 
725-17th Street, N.W., Washington, D.C. 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Gregory Cooke, Attorney, Network 
Services Division, Common Carrier Bureau, (202) 418-2351. For 
additional information concerning the information collections contained 
in this NPRM contact Dorothy Conway, (202) 418-0217, or via the 
Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking adopted December 10, 1996, and released December 
11, 1996. (FCC 96-472). This NPRM contains proposed or modified 
information collections subject to the Paperwork Reduction Act of 1995 
(``PRA''). It has been submitted to the Office of Management and Budget 
(``OMB'') for review under the PRA. OMB, the general public, and other 
Federal agencies are invited to comment on the proposed or modified 
information collections contained in this proceeding. The full text of 
this Notice of Proposed Rulemaking is available for inspection and 
copying during normal business hours in the FCC Reference Center (Room 
239), 1919 M St., NW., Washington, D.C. and is also available from the 
FCC's World Wide Web site, http://www.fcc.gov. The complete text also 
may be purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 2100 M St., NW., Suite 
140, Washington D.C. 20037.

Paperwork Reduction Act

    This NPRM contains either a proposed or modified information 
collection. The Commission, as part of its continuing effort to reduce 
paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collections 
contained in this NPRM, as required by the Paperwork Reduction Act of 
1995, Public Law No. 104-13. Public and agency comments are due at the 
same time as other comments on this NPRM; OMB notification of action is 
due March 25, 1997. Comments should address: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
burden estimates; (c) ways to enhance the quality, utility, and clarity 
of the information collected; and (d) ways to minimize the burden of 
the collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: None.
    Title: Implementation of Section 273 of the Communications Act of 
1934, as amended by the Telecommunications Act of 1996.
    Form No.: N/A.
    Type of Review: New collection.

[[Page 3639]]



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                                                                                                        Total   
                                                                                                        annual  
                                                                                                     capital and
                                                                                                       startup  
                                                                                                      costs and 
                                    No. of     Estimated                   Total      Total annual      total   
     Information collection      respondents    time per    Frequency      annual        cost to        annual  
                                  (approx.)     response    (per year)     burden      respondents    operation 
                                                (hours)                   (hours)          \1\           and    
                                                                                                     maintenance
                                                                                                         and    
                                                                                                     purchase of
                                                                                                       services 
----------------------------------------------------------------------------------------------------------------
Proposed Provision of                                                                                           
 Information on Protocols and                                                                                   
 Technical Requirements                                                                                         
 (Section 273(c)(1))...........        \2\ 7            8           25        1,400       $140,000       $77,000
Access By:                                                                                                      
    Competitors to Information                                                                                  
     (Section 273(c)(3)).......        \2\ 7            2           25          350         35,000        77,000
    Proposed Provision of                                                                                       
     Planning Information to                                                                                    
     Interconnecting Carriers                                                                                   
     (Section 273(c)(4)).......        \2\ 7            2           75        1,050        105,000        77,000
    Proposed Requirements for                                                                                   
     Standard-Setting Entities                                                                                  
     (Section 273(d)(4)(A))....           50            5           10        2,500        250,000             0
    Sunset of Manufacturing                                                                                     
     Safeguards and Procedural                                                                                  
     Requirements (Section                                                                                      
     273(d)(6))................           50           20            1        1,000        100,000            0 
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\1\ Assuming cost of preparation to be $100/hr.                                                                 
\2\ Regional Holding Companies (``RHCs''). These seven RHCs control all of the Bell Operating Companies         
  (``BOCs''). Each RHCs typically files information with the Commission on behalf of all of the BOCs under its  
  control.                                                                                                      

    Total Annual Burden: 6300 hours.
    Respondents: Businesses or others for profit, including small 
businesses.
    Needs and Uses: The NPRM seeks comments on a number of issues, the 
resolution of which may lead to the imposition of information 
collections subject to the Paperwork Reduction Act. The information 
collections proposed are required under the Telecommunications Act of 
1996, Public Law No. 104-104. These information collections will also 
be used to ensure that the BOCs, standards-setting organizations, 
equipment manufacturers, and certification entities fulfill their 
obligations under Section 273. The NPRM seeks comment on potential 
overlap between existing information collections and the information 
collections required under Section 273 and proposed in the NPRM.

Synopsis of Notice of Proposed Rulemaking

    1. Introduction and Background: On February 8, 1996, the 
Telecommunications Act of 1996 (``1996 Act'') became law.3 Through 
this legislation, Congress sought to establish a ``pro-competitive, de-
regulatory national policy framework'' for the United States 
telecommunications industry.4 The 1996 Act includes provisions 
that are intended to promote competition in markets that are already 
open to new competitors. Congress entrusted to this Agency the 
responsibility for establishing the rules that will implement most 
quickly and effectively the national telecommunications policy embodied 
in the 1996 Act.5
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    \3\ The Telecommunications Act of 1996, Public Law No. 104-104, 
110 Stat. 96 (1996) (codified at 47 U.S.C. Secs. 151 et seq.).
    \4\ Jt. Statement of Managers, S. Conf. Rep. No. 104-230, 104th 
Cong., 2d Sess. 1 (1996) (``Joint Explanatory Statement'').
    \5\ According to Representative Fields, ``[Congress] is 
decompartmentalizing segments of the telecommunications industry, 
opening the floodgates of competition through deregulation, and most 
importantly, giving consumers choice * * * and from these choices, 
the benefits of competition flow to all of us as consumers--new and 
better technologies, new applications for existing technologies, and 
most importantly * * * lower consumer price.'' 142 Cong. Rec. H1149 
(Feb. 1, 1996) (statement of Rep. Fields).
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    2. Section 273 seeks to facilitate BOC entry into manufacturing 
while preserving the competitive nature of these markets by permitting 
a BOC to manufacture telecommunications equipment and CPE only after 
the BOC: (1) has been authorized to provide inter-LATA service pursuant 
to Section 271(d) (which, inter alia, requires the BOC to have 
demonstrated that it has implemented certain network access provisions 
contained in Section 271(c)(2)(B) and that BOC provision of interLATA 
service is in the public interest); 6 (2) has established a 
separate subsidiary that complies with Section 272 (which contains 
certain structural safeguards and other provisions to facilitate 
detection of prohibited acts as well as to prevent discrimination and 
cross-subsidization); 7 and (3) has met the requirements of 
Section 273 (which, inter alia, requires BOC disclosure of certain 
technical information, prohibits discriminatory equipment procurement 
decisions, and imposes constraints on certain standards-setting, and 
certification, entities).8
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    \6\ 47 U.S.C. Sec. 273(a).
    \7\ 47 U.S.C. Sec. 272(a)(2)(A).
    \8\ 47 U.S.C. Sec. 273(a).

    3. Section 273(a): Authorization. Section 273(a) explicitly 
authorizes BOCs and BOC affiliates 9 to ``manufacture and 
provide'' telecommunications equipment,10 and ``manufacture'' 
customer premises equipment 11 once they obtain authority to offer 
in-region, interLATA service

[[Page 3640]]

under Section 271(d) and comply with any other rules and regulations 
that result from this proceeding. We tentatively conclude that Section 
273(a) allows a BOC to manufacture and provide telecommunications 
equipment and to manufacture CPE, in compliance with the rules we adopt 
in this proceeding, once that BOC has obtained authority to offer 
interLATA service in any of its in-region states. We seek comment on 
this tentative conclusion.
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    \9\ The term ``Bell operating company'' is defined in the 1996 
Act, and includes the successors and assigns of Bell operating 
companies that provide ``wireline telephone exchange service,'' but 
does not include an ``affiliate'' of a Bell operating company, other 
than another Bell operating company or its successor or assigns. 47 
U.S.C. Sec. 153(4). ``Affiliate'' is defined in the 1996 Act, 47 
U.S.C. Sec. 153(1), to mean a person that directly or indirectly 
owns or controls, is owned or controlled by, or is under common 
ownership or control with, another person. For the purpose of 
determining affiliate status under Section 153(1), ``owned'' means 
an equity interest of more than ten percent. 47 U.S.C. Sec. 153(1). 
For Bellcore, however, the equity interest creating an affiliate 
relationship with a BOC is significantly less. Section 273(d)(1)(B) 
precludes Bellcore from becoming a BOC manufacturing affiliate, but 
allows for limited BOC ownership of Bellcore under Section 
273(d)(8)(A). The latter paragraph states ``[t]he term `affiliate' 
shall have the same meaning as in Section 3 of this Act, except 
that, for purposes of paragraph (1)(B)--(i) an aggregate voting 
equity interest in Bell Communications Research, Inc., of at least 5 
percent of its total voting equity, owned directly or indirectly by 
more than 1 otherwise unaffiliated Bell operating company, shall 
constitute an affiliate relationship; and (ii) a voting equity 
interest in Bell Communications Research, Inc., by any otherwise 
unaffiliated Bell operating company of less than 1% of Bell 
Communications Research's total voting equity shall not be 
considered to be an equity interest under this paragraph.''
    \10\ ``Telecommunications equipment'' means ``equipment, other 
than customer premises equipment, used by a carrier to provide 
telecommunications services, and includes software integral to such 
equipment (including upgrades).'' 47 U.S.C. Sec. 153(45).
    \11\ ``Customer premises equipment'' means ``equipment employed 
on the premises of a person (other than a carrier) to originate, 
route, or terminate telecommunications.'' 47 U.S.C. Sec. 153(14).
    4. Section 273(a) also states that ``neither a Bell operating 
company nor any of its affiliates may engage in such manufacturing in 
conjunction with a Bell operating company not so affiliated or any of 
its affiliates.'' 12 BOCs under the ownership or control of a 
common Regional Holding Company (``RHC'') would appear to meet the 
statutory definition of ``affiliates;'' therefore, we tentatively 
conclude that this provision prevents joint manufacturing between or 
among (1) unaffiliated RHCs; (2) unaffiliated BOCs that are not under 
the ownership or control of a common RHC; and (3) an RHC and a BOC that 
is not affiliated with that RHC. We seek comment on this tentative 
conclusion.
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    \12\ Section 273(d)(1)(B) precludes Bellcore from becoming a BOC 
manufacturing affiliate, but allows for limited BOC ownership of 
Bellcore under Section 273(d)(8)(A). The latter paragraph states 
``[t]he term `affiliate' shall have the same meaning as in Section 3 
of this Act, except that, for purposes of paragraph (1)(B)--(i) an 
aggregate voting equity interest in Bell Communications Research, 
Inc., of at least 5 percent of its total voting equity, owned 
directly or indirectly by more than 1 otherwise unaffiliated Bell 
operating company, shall constitute an affiliate relationship; and 
(ii) a voting equity interest in Bell Communications Research, Inc., 
by any otherwise unaffiliated Bell operating company of less than 1% 
of Bell Communications Research's total voting equity shall not be 
considered to be an equity interest under this paragraph.''
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    5. Section 273(h) defines the term ``manufacturing'' to have ``the 
same meaning as such term has under the AT&T Consent Decree.'' The U.S. 
District Court for the District of Columbia, which supervised the 
Decree, determined that the terms ``manufacture'' and ``manufacturing'' 
extend to the ``design, development and fabrication'' 13 of 
telecommunications equipment, CPE, and the ``software integral to 
[this] equipment hardware, also known as firmware.'' 14 Although 
Section 273 defines only the gerund ``manufacturing,'' we tentatively 
conclude that we should also accord the verb ``manufacture'' a meaning 
that extends to include the activities identified by the District Court 
and that is consistent with the definition of ``manufacturing'' 
provided in the statute. We seek comment on this interpretation.
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    \13\ United States v. Western Elec. Co., 675 F. Supp. at 662.
    \14\ Id. at 667 n.54.
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    6. Section 273(b): BOC Collaboration and Research and Royalty 
Agreements. Notwithstanding the restrictions on BOC entry into 
manufacturing imposed by Section 273(a), Section 273(b) explicitly 
permits BOCs to collaborate with manufacturers, engage in research 
activities related to manufacturing, and enter into royalty agreements 
with manufacturers. Specifically, Section 273(b)(1) permits a BOC to 
engage ``in close collaboration with any manufacturer of customer 
premises equipment or telecommunications equipment during the design 
and development of hardware, software, or combinations thereof related 
to such equipment.'' We seek comment on the types of activities that 
would constitute ``close collaboration'' permissible under this 
section. We tentatively conclude that the broad language of Section 
273(b)(1) does not permit close collaboration in either of the 
following two situations: (1) between a BOC or an RHC and the 
manufacturing affiliate of another unaffiliated BOC or RHC; or (2) 
between the manufacturing affiliates of two unaffiliated BOCs or RHCs. 
Conversely, we tentatively conclude that Section 273(b)(1) does permit 
joint collaboration between a BOC-affiliated manufacturer and a non-BOC 
affiliated manufacturer. We request comment on these tentative 
conclusions.
    7. Section 273(b)(2) also permits BOCs, notwithstanding the 
conditions imposed by Section 273(a), to ``(A) engage[] in research 
activities related to manufacturing; and (B) enter[] into royalty 
agreements with manufacturers or telecommunications equipment.'' We 
seek appropriate definitions for the terms ``research activities'' and 
``royalty agreements'' that will preserve BOC incentives to research 
and develop innovative products, solutions and technologies, consistent 
with the language of Section 273(b)(2), while minimizing potentially 
anticompetitive incentives. We also seek comment on other ways to 
protect against potential anticompetitive abuses and seek comment on 
the relationship between Section 273(b)(2) and other sections of the 
Act which may require disclosure of information, including, but not 
limited to, Sections 251(c)(5), 251(e)(2), or 273(c)(1).
    8. Section 273(c): BOC Information Requirements. Information with 
respect to the technical characteristics of a network is essential for 
manufacturers of telecommunications equipment and CPE. 
Telecommunications equipment and CPE manufacturers' products cannot be 
used in or with a network unless they comply with the technical 
specifications and protocols necessary for incorporation in or 
interoperation with that network.15 Changes in technical 
specifications, protocols or both can foreclose competition or render 
potential competition less likely if an affiliated manufacturer can 
learn of such changes and then modify, or create new, products to be 
compatible with those changes in advance of the rest of the 
market.16
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    \15\ United States v. AT&T, 552 F. Supp. at 190-91; Computer and 
Business Equip. Mfrs. Assoc. Petition for Declaratory Ruling 
Regarding Section 64.702(d)(2) of the Commission's Rules and the 
Policies of the Second Computer Inquiry, Report and Order, 93 
F.C.C.2d 1226, 1236-37 (1983).
    \16\ See generally, Carl Shapiro, Antitrust in Network 
Industries, Address before the American Bar Association (March 27, 
1996). We will place a copy of this address in the docket file of 
this proceeding.
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    9. Our Computer Inquiry III rules recognize some of these concerns 
by, inter alia, requiring carriers offering enhanced services or 
providing customer premises equipment to disclose to the public ``all 
information relating to network design and technical standards and 
information affecting changes to the telecommunications network which 
would affect either intercarrier interconnection or the manner in which 
customer premises equipment is attached to the interstate network prior 
to implementation and with reasonable advance notification.'' 17 
In addition, the Commission's ``all carrier'' rule obligates ``all 
carriers owning basic transmission facilities [to release] all 
information relating to network design * * * to all interested parties 
on the same terms and conditions, insofar as such information affects 
either intercarrier interconnection or the manner in which 
interconnected [customer-premises equipment]

[[Page 3641]]

operates.'' 18 The Commission's rules also require carriers to 
disclose network changes to customers ``[i]f such changes can be 
reasonably expected to render any customer's terminal equipment 
incompatible with telephone company communications facilities, or 
require modification or alteration of such terminal equipment, or 
otherwise materially affect its use or performance'' 19 Common 
carriers have also filed network specifications as part of their 
tariffs so that customers may select from among features offered with a 
package of services. To the extent that the notice and filing 
requirements imposed on carriers by the 1996 Act (including, 
especially, Sections 273(c)(1) and 273(c)(4)) may duplicate these or 
other existing Commission notice and filing requirements related to 
network interconnection, we seek comment on suggestions to consolidate 
those requirements and the proposed text of rules that would achieve 
that objective.
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    \17\ 47 CFR Sec. 64.702(d)(2). See, e.g., Amendment to Sections 
64.702 of the Commission's Rules and Regulations (Third Computer 
Inquiry); and Policy and Rules Concerning Rates for Competitive 
Common Phase II Carrier Service and Facilities Authorizations 
Thereof, Report and Order, 2 FCC Rcd 3072, 3087 (1987), 52 FR 20714, 
June 3, 1987 (``Phase II Order'')., recon., 3 FCC Rcd 1150 (1988), 
53 FR 8629, March 16, 1988 (``Phase II Reconsideration Order''), 
further recon., 4 FCC Rcd 5927 (1989), 55 FR 29022, July 17, 1990 
(``Phase II Further Reconsideration Order''); Phase II Order vacated 
sub. nom. California v. FCC, 905 F.2d 1217 (9th Cir. 1990) 
(``California I''); Computer III Remand Proceeding, 5 FCC Rcd 7719 
(1990), 56 FR 964, January 10, 1991 (``ONA Remand Order''), recon., 
7 FCC Rcd 909 (1992), 57 FR 5391, February 14, 1992, pets. for 
review denied sub. nom. California v. FCC, 4 F.3d 1505 (9th Cir. 
1993) (``California II''); BOC Safeguards Order, 6 FCC Rcd 7571 
(1991), 57 FR 4373, February 5, 1992, vacated in part and remanded 
sub. nom. California v. FCC, 39 F.3d 919 (9th Cir. 1994) 
(``California III''), cert. denied, 115 S. Ct. 1427 (1995).
    \18\ Amendment of Section 64.702 of the Commission's Rules and 
Regulations (Second Computer Inquiry), Memorandum Opinion and Order 
on Reconsideration, 84 F.C.C.2d 50, 82-83 (1980), 46 FR 5984, 
January 21, 1981, further recon., 88 FCC 2d 512 (1981), 46 FR 59976, 
December 8, 1981, aff'd sub nom. Computer and Communications Indus. 
Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 
938 (1983).
    \19\ 47 CFR Sec. 68.110(b). Certain past references to this rule 
also use the term ``all carrier rule.'' In this proceeding, we use 
that term to refer to our part 64 rule, above, and refer to 47 CFR 
Sec. 68.110(b) specifically by number, if necessary.
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    10. The legislative safeguards of Section 273(c) reduce the 
potential for anticompetitive conduct that might otherwise accompany 
the information advantage enjoyed by a network owner that also 
manufactures network equipment.20 Section 273(c) requires the BOCs 
to disclose certain information relating to their network standards. 
Disclosure of that information may promote competition by facilitating 
interconnectivity 21 and interoperability,22 alerting 
competitors and others to changes in standards, and preventing the 
imposition of unreasonable licensing fees by the BOCs. 23
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    \20\ See Joint Explanatory Statement at 154.
    \21\ The 1996 Act defines ``public telecommunications network 
interconnectivity'' as ``the ability of two or more public 
telecommunications networks used to provide telecommunications 
service to communicate and exchange information without 
degeneration, and to interact in concert with one another.'' 47 
U.S.C. Sec. 256(d).
    \22\ In the context of Section 251(c)(5), we recently defined 
``interoperability'' as ``the ability of two or more facilities, or 
networks, to be connected, to exchange information, and to use the 
information that has been exchanged.'' Implementation of the Local 
Competition Provisions in the Telecommunications Act of 1996, Second 
Report and Order and Memorandum Opinion and Order, FCC 96-333, 61 FR 
47284, September 6, 1996, at para. 178 (citing IEEE Standard 
Dictionary of Electrical and Electronics Terms 461 (J. Frank ed. 
1984)).
    \23\ Cf. 47 U.S.C. Sec. 251(c), which imposes specific 
interconnection obligations on incumbent LECs. Inter alia, Section 
251 obligates incumbent LECs to negotiate interconnection agreements 
in good faith (Section 251(c)(1)), requires that interconnection be 
provided ``on rates, terms, and conditions that are just, reasonable 
and nondiscriminatory'' (Section 251(c)(2)(D)), and requires that 
incumbent LECs provide reasonable public notice of changes in 
necessary information (Section 251(c)(5)). Accordingly, Sections 
251(c) and 273(c) appear to overlap to some extent.
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    11. Although the information disclosure requirements of Section 
273(c) apply on their face to all BOCs, Section 273(c) is contained 
within a statute that otherwise addresses BOC obligations in the 
manufacturing context. We seek comment on whether Section 273(c) 
applies to all BOCs or only to BOCs that are authorized to manufacture 
under Section 273(a).
    12. Section 273(c)(1): Section 273(c)(1) requires a BOC, ``in 
accordance with regulations prescribed by the Commission, [to] maintain 
and file with the Commission full and complete information with respect 
to the protocols and technical requirements for connection with and use 
of its telephone exchange service facilities.'' 24 A BOC also is 
required to ``report promptly to the Commission any material changes or 
planned changes to protocols and technical requirements for connection 
with and use of its telephone exchange service.'' We seek comment on 
how each of the terms in this subsection that are not defined by the 
1996 Act (such as ``protocols'' and ``technical requirements'') should 
be defined. Because our current rules regarding network information, 
discussed above, address the needs of other carriers, information 
service providers (``ISPs''), enhanced service providers (``ESPs''), 
and other members of the public for information about network 
capabilities,25 and not the specific needs of manufacturers who 
wish to develop new network products, we tentatively conclude that our 
existing rules do not satisfy the filing requirements of Section 
273(c)(1). We seek comment on the need for specific disclosure rules to 
implement Section 273(c) in light of this tentative conclusion, as well 
as the specific language that commenters may conclude should appear in 
them.
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    \24\ 47 U.S.C. Sec. 273(c)(1) (emphasis supplied). Compare this 
provision with the all carrier rule and 47 CFR Sec. 68.110(b), 
above.
    \25\ See, e.g., 47 CFR Secs. 64.702(d)(2), 68.110(b).
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    13. Although Section 273(c)(1) mandates full disclosure of the 
protocols and technical requirements used for network connection, in 
network markets, the announcement of the impending availability of a 
product prior to its actual availability also may have anticompetitive 
effects.26 While the potential harm associated with early 
disclosure in this context may not be as great as those associated with 
excessive secrecy, we seek comment on the potential effects of early 
disclosure of products, protocols or technical requirements. 
Specifically, we request that commenters address: (1) whether early 
disclosure or late disclosure of information has a greater potential to 
damage the operations of carriers, manufacturers, and other market 
participants; (2) the extent to which early disclosure of planned 
products, technical specifications, or protocols could stifle the 
development of competing products, technical specifications, or 
protocols; (3) whether any provision of the Communications Act fully 
addresses the potential problems associated with early disclosure; and 
(4) whether we should exempt bona fide equipment trials from Section 
273(c)(1)'s disclosure requirements, as we did in the context of 
carriers' Section 251(c)(5) network disclosure obligations.27
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    \26\ See, e.g., id. at 123-24; Farrell, Joseph, and Garth 
Saloner, Installed Base and Compatibility: Innovation, Product 
Preannouncements, and Predation, Amer. Econ. Rev., Vol. 76, No. 5 at 
940-55 (Dec. 1986).
    \27\ Implementation of the Local Competition Provisions in the 
Telecommunications Act of 1996, Second Report and Order and 
Memorandum Opinion and Order, FCC 96-333, at para. 260.
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    14. The BOCs are required to ``maintain'' the information described 
in Section 273(c)(1) in addition to filing it with the Commission. We 
tentatively conclude that, in fulfilling their obligation to 
``maintain'' this information, the BOCs must keep it ``full and 
complete,'' accurate, and up-to-date. In addition, because the BOCs' 
obligation to ``maintain'' this information is contained within a 
section of a statute otherwise addressing public disclosure 
requirements through Commission filings, we tentatively conclude that 
each BOC must keep the relevant information within its service area in 
a form that is available for inspection by the public upon reasonable 
request. By doing so, the BOCs would: (1) maintain the information in a 
form that is available at a location physically close to those parties 
that are most likely to need it; and (2) promote competition by making 
the information more widely available than it would be if the 
Commission were the sole source. We seek comment on this tentative 
conclusion. We also seek comment on how long we should

[[Page 3642]]

require the BOCs to ``maintain'' this information.
    15. All of the BOCs now have sites on the Internet that are easily 
accessible to millions of users around the world. We tentatively 
conclude that one method by which the BOCs could satisfy their 
obligation to ``maintain'' information in accordance with Section 
273(c)(1) would be by placing the information on their publicly-
accessible World Wide Web sites or by making files available through 
other Internet protocols, such as FTP, Gopher, or electronic mail. We 
seek comment on this tentative conclusion, including comment on (1) 
whether we should impose requirements on BOCs choosing to use such 
Internet postings concerning the format and location of material to 
ensure that competitors can access the necessary files easily; and (2) 
whether information that cannot be made available as plain ASCII text 
could be posted using cross-platform formats such as Postscript or PDF 
(Adobe Acrobat), allowing users to view or print materials with freely-
available ``reader'' software.
    16. Section 273(c)(1) also requires the BOCs to ``report promptly 
to the Commission any material changes or planned changes'' to the 
information described in that section. We seek comment both on when and 
how such reports must be filed. For instance, we have recently 
concluded that network changes in the context of Section 251(c)(5) 
should be disclosed at the ``make/buy'' point because, at that point, 
carriers' plans are sufficiently developed to provide adequate and 
useful guidance to competing service providers.28 Disclosure of 
changes at the ``make/buy'' point, however, may not fully address the 
information needs of manufacturers. Information provided at the ``make/
buy'' point may come too late for a rival manufacturer that might 
otherwise attempt to offer a competing product that can serve a similar 
function to the product the BOC has chosen to manufacture or purchase. 
In addition, unlike Section 251(c)(5), which mandates the disclosure of 
certain network ``changes,'' Section 273(c)(1) requires disclosure of 
``planned changes.'' We seek comment, therefore, on whether a different 
disclosure standard would be appropriate in the context of Section 
273(c)(1). We also seek comment on the potential use by the BOCs of 
alternative methods of reporting to the Commission changes in protocols 
or technical requirements, such as the use of electronic mail.
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    \28\ Id. at para. 223.
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    17. We request that commenters submit draft rules implementing the 
information filing, maintenance, and disclosure requirements contained 
in Section 273(c)(1) including, for those parties advocating the use of 
Internet capabilities in the context of Section 273(c)(1), specific 
language that we should adopt to implement this option. In addition, we 
request comment on whether the FCC should provide information on its 
own Internet site, in the form of actual files and/or hypertext links 
to BOC Internet sites, to create a central on-line point of contact for 
materials describing technical requirements and protocols.
    18. Section 251(c)(5) requires all incumbent local exchange 
carriers, including all BOCs, ``to provide reasonable public notice of 
changes in the information necessary for the transmission and routing 
of services using that local exchange carrier's facilities or networks, 
as well as of any other changes that would affect the interoperability 
of those facilities and networks.'' We have recently adopted rules 
implementing this provision and describing incumbent LECs' network 
disclosure obligations under Section 251(c)(5).29 In light of 
these obligations, we seek comment on the relationship between the 
filing and information disclosure requirements of Section 273(c)(1), 
Section 251(c)(5), and our existing disclosure requirements under the 
rules discussed above. Specifically, we seek comment on (1) the degree 
of specificity of information that we should require the BOCs to 
disclose and the timing of that disclosure; (2) whether compliance with 
the network disclosure obligations of Section 251(c)(5), as implemented 
by the Commission, would satisfy the information disclosure 
requirements of Section 273(c)(1); and (3) the text of proposed rules 
that would govern disclosure of this information.
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    \29\ See Implementation of the Local Competition Provisions of 
the Telecommunications Act of 1996, Second Report and Order and 
Memorandum Opinion and Order, FCC 96-333, at Paras. 165-260.
---------------------------------------------------------------------------

    19. Section 273(c)(2): Section 273(c)(2) bars BOCs from disclosing 
``any information required to be filed under [Section 273(c)(1)] unless 
``that information has been filed promptly, as required by regulation 
by the Commission.'' We interpret this requirement to mean that BOCs 
may not disclose information described in Section 273(c)(1) until the 
BOC has made that information publicly available by filing it with this 
Commission. We request comment on this interpretation.
    20. We note that Section 273(b)(1) permits the BOCs to engage in 
``close collaboration with any manufacturer of customer premises 
equipment or telecommunications equipment during the design and 
development of hardware, software, and combinations thereof related to 
such equipment.'' Under Section 273(c)(1), however, each ``Bell 
Operating Company shall, in accordance with regulations prescribed by 
the Commission, maintain and file with the Commission full and complete 
information with respect to the protocols and technical requirements 
for connection with and use of its telephone exchange facilities.'' To 
ensure compliance with Section 273(c)(1), we seek to prevent ``close 
collaboration'' from resulting in the communication of technical 
information and protocols in advance of the disclosure requirement that 
is contained in Section 273(c)(2).30 Section 273(g) provides that 
this Commission ``may prescribe such additional rules and regulations 
as the Commission determines are necessary to carry out the provisions 
of this section, and otherwise prevent discrimination and cross-
subsidization in a Bell operating company's dealing with its affiliate 
and with third parties.'' 31 We seek comment as to how sections 
273(b)(1) and 273(g) may be made to work together in a manner that is 
both efficient and effective, and ask commenting parties to propose any 
rules necessary to harmonize those sections. In addition, commenters 
should provide data with respect to the measurement of costs and 
benefits that can be ascribed to specific rules that are proposed by 
parties to this proceeding.
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    \30\  47 U.S.C. Sec. 273(c)(2).
    \31\  47 U.S.C. Sec. 273(g).
---------------------------------------------------------------------------

    21. Section 273(c)(3): Under Section 273(c)(3) ``[t]he Commission 
may prescribe such additional regulations'' as may be needed to ensure 
that ``manufacturers have access to the information with respect to the 
protocols and technical requirements for connection with and use of 
telephone exchange service facilities that a Bell operating company 
makes available to any manufacturing affiliate or any unaffiliated 
manufacturer.'' As noted above in the context of Section 273(c)(1), our 
existing network disclosure rules address the information needs of 
other carriers, ISPs, ESPs, and other members of the public. Our rules 
have not, until now, focussed specifically on the needs of 
manufacturers for information affecting the design of end user 
equipment. We request comment on whether

[[Page 3643]]

regulations in addition to those already in place, or adopted under 
Section 273(c)(1), are needed to assure that manufacturers have access 
to the necessary information and, if so, what those regulations should 
be.
    22. Section 273(c)(4): Section 273(c)(4) requires the BOCs to 
provide ``to interconnecting carriers providing telephone exchange 
service, timely information on the planned deployment of 
telecommunications equipment.'' While the 1996 Act does not define 
``interconnecting carrier,'' we interpret this subparagraph to mean 
that a BOC must provide adequate notice to all telecommunications 
carriers providing local exchange service with whom the BOC has an 
interconnection arrangement.32 We request comment on this 
tentative conclusion. We also request comment on (1) the level of 
information this section requires BOCs to disclose; and (2) how far in 
advance a BOC needs to disclose this information for the disclosure to 
be considered ``timely.''
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    \32\  ``Telecommunications carrier'' includes ``any provider of 
telecommunications services, except that such term does not include 
aggregators of telecommunications services (as defined in section 
226).'' 47 U.S.C. Sec. 153(44).
---------------------------------------------------------------------------

    23. We seek comment on the relationship between the type of 
information required by Section 251(c)(5) and that required by Section 
273(c)(4). We also seek comment as to whether a BOC's Section 273(c)(4) 
filing could satisfy its obligation under Section 251(c)(5). In 
addition, we seek specific comment on whether the disclosure timetable 
we recently adopted to govern network disclosure under section 
251(c)(5) is either necessary or sufficient to meet the ``timely'' 
standard of section 273(c)(4). We seek comment as to how the Commission 
might minimize the administrative burden of the notice and filing 
requirements while still achieving Congress' objectives in establishing 
these reporting and notice requirements. We also seek comment on 
whether information filed to meet Section 64.702 or 68.110 requirements 
or filed as part of carrier exchange access tariffs could or should 
satisfy the requirements of Section 273(c)(4).
    24. Section 273(d): General Manufacturing Safeguards. Section 
273(d) limits the manufacturing activities of standard-setting 
organizations. Section 273(d) addresses three types of activities: 
standards development; industry-wide generic requirements development; 
and certification of telecommunications equipment and customer premises 
equipment. Section 273(d)(8) defines ``certification,'' 33 
``generic requirements'' 34 and ``industry-wide.'' 35 We 
tentatively conclude that these and the other definitions contained in 
Section 273(d)(8) are complete and self-explanatory, but seek comment 
as to whether any clarifications are required.
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    \33\ ``The term `certification' means any technical process 
whereby a party determines whether a product, for use by more than 
one Local Exchange Carrier, conforms with the specified requirements 
pertaining to such product.'' 47 U.S.C. Sec. 273(d)(8)(D). 
Certification here pertains to the private sector process of 
determining that equipment is in compliance with voluntary 
standards.
    \34\ ``The term `generic requirement' means a description of 
acceptable product attributes for use by local exchange carriers in 
establishing product specifications for the purchase of 
telecommunications equipment, customer premises equipment and 
software integral thereto.'' 47 U.S.C. Sec. 273(d)(8)(B).
    \35\ ``The term `industry-wide' means activities funded by or 
performed on behalf of local exchange carriers for use in providing 
wireline telephone exchange service whose combined total of deployed 
access lines in the United States constitutes at least 30 percent of 
all access lines deployed by telecommunications carriers in the 
United States as of the date of enactment of the Telecommunications 
Act of 1996.'' 47 U.S.C. Sec. 273(d)(8)(C).
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    25. While Section 273(d)(8) defines ``accredited standards 
development organization,'' 36 neither Section 273(d)(8), nor any 
other section of the Act defines ``standards.'' We seek comment on how 
``standards'' should be defined for purposes of implementation of the 
1996 Act to ensure that standards processes are open and accessible to 
the public. By establishing a clear definition of the term 
``standard,'' we seek (1) to clarify for manufacturers, BOCs, Bellcore 
and other interested parties the scope of those sections of the 1996 
Act that address standards development; and (2) to facilitate 
compliance with standards development regulations. We also seek to 
understand better the possible ways that we may distinguish among 
different types of activities that might be characterized as standards 
setting activities under Section 273(d). We request comment as to the 
generic and conceptual distinctions among different types of standards. 
For example, generic distinctions might be based on the type of entity 
creating the standard. Thus, it might be possible to distinguish 
between accredited standards (i.e., those standards developed by an 
accredited standards development organization, such as Committee T1) 
and ``de facto'' standards (i.e., those standards not developed by an 
accredited standards development organization). ``De facto'' standards 
might further be separated into ``de facto'' standards (1) created by a 
group of interested parties seeking to promote interoperability; (2) 
imposed upon an industry by a dominant entity or dominant entities; or 
(3) adopted without any explicit coordination by market participants 
that independently select the same or similar standards. On a 
conceptual level, we seek to understand the role of these different 
types of standards within the industry and their relative impact on 
manufacturing competition. We seek comment as to the meaning of the 
term ``industry'' as used in this section. Comments that address the 
conceptual issues associated with ``standards'' development will assist 
us in developing precise rules for standards setting entities.
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    \36\ ``The term `accredited standards development organization' 
means an entity composed of industry members which has been 
accredited by an institution vested with the responsibility for 
standards accreditation by the industry.'' 47 U.S.C. 
Sec. 273(d)(8)(E).
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    26. Section 273(d)(1): Application to Bell Communications Research 
or Manufacturers. Bell Communications Research, Inc., (``Bellcore'') 
was established on January 1, 1984, under the Plan of Reorganization as 
part of the divestiture of AT&T. Originally, called the Central 
Services Organization and consisting primarily of former Bell 
Laboratories employees, Bellcore was established to give support to the 
newly formed regional Bell Operating Companies in a manner similar to 
that which had been provided to AT&T by Bell Laboratories.37 
Today, Bellcore is the predominant source of industry-wide generic 
requirements; it conducts extensive technical certification of 
telecommunications equipment and it is a leading contributor and 
participant in standards developed by accredited standards development 
organizations.38 Since its creation, Bellcore has been owned and 
controlled jointly by the RHCs. The RHCs, however, have recently 
announced their agreement to sell Bellcore to Science Applications

[[Page 3644]]

International Corporation (``SAIC''), a large defense 
contractor.39
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    \37\ United States v. Western Electric Co., Civil Action No. 82-
0192, Plan of Reorganization, filed December 16, 1982, at 336; see 
United States v. Western Electric, 569 F. Supp. 1057, 1113-1118 
(D.D.C. 1983) (approving creation of Central Services Organization 
proposed in Plan of Reorganization), aff'd sub nom. California v. 
United States, 464 U.S. 1013 (1983).
    \38\ Bellcore indicates that, in 1996, its budget exceeds $1 
billion and it employs nearly 6,000 people. Over 4000 of these 
employees were ``highly trained and experienced engineers and 
scientists who provide a critical mass of telecommunications 
expertise and resources.'' These employees make Bellcore ``unique[] 
in its ability to provide end-to-end solutions for its customers.'' 
In addition, Bellcore's patent portfolio contains more than 680 
domestic and foreign patents. See Bellcore Ownership in Transition, 
undated briefing materials received Dec. 4, 1996. We will place a 
copy of these briefing materials in the docket file of this 
proceeding.
    \39\ Bellcore Owners Sell Business to Defense Contractor, 
Communications Daily, Nov. 22, 1996, at 1.
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    27. Section 273(d) limits the circumstances under which Bellcore or 
any successor entity or affiliate may manufacture telecommunications 
equipment or CPE. Section 273(d)(1)(B) prohibits Bellcore from 
``manufacturing telecommunications equipment or customer premises 
equipment as long as it is an affiliate of more than 1 otherwise 
unaffiliated Bell operating company or successor or assign of any such 
company.'' 40 BOCs that are commonly owned or controlled by a 
single RHC would appear to meet the 1996 Act's definition of 
affiliates. Accordingly, we tentatively conclude that Section 
273(d)(1)(B) prohibits Bellcore from manufacturing telecommunications 
equipment or CPE only as long as it is (1) affiliated with two or more 
otherwise unaffiliated RHCs; (2) affiliated with two or more BOCs that 
are not under the ownership or control of the same RHC, and are not 
otherwise affiliated; or (3) affiliated with an RHC and a BOC that is 
not otherwise affiliated with that RHC. We seek comment on this 
tentative conclusion.
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    \40\ Section 273(d)(1)(B) (emphasis supplied). This subsection 
further states that ``[n]othing in this subsection prohibits Bell 
Communications Research, Inc., or any successor entity, from 
engaging in any activity in which it is lawfully engaged on the date 
of enactment of the Telecommunications Act of 1996.'' 47 U.S.C. 
Sec. 273(d)(1).
---------------------------------------------------------------------------

    28. Section 273(d)(1)(A) provides that Bellcore ``shall not be 
considered a [BOC] or a successor or assign of a BOC at such time as it 
is no longer an affiliate of any [BOC].'' 41 Based on the limited 
information before us,42 we tentatively conclude that, if the 
announced sale of Bellcore to SAIC were eventually to be consummated, 
under Section 273(d)(1)(A), Bellcore would no longer be considered a 
BOC, a BOC affiliate, or a BOC successor or assign. As such, we 
tentatively conclude that it would be permitted to begin manufacturing 
telecommunications equipment and CPE in accordance with Sections 
273(d)(1)(B) and 273(d)(3). We seek comment on these tentative 
conclusions, including specific comment on these and other implications 
of Bellcore's sale.
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    \41\ 47 U.S.C. Sec. 273(d)(1)(A).
    \42\ Bellcore Owners Sell Business to Defense Contractor, 
Communications Daily, Nov. 22, 1996, at 1.
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    29. Section 273(d)(2): Proprietary Information. Section 273(d)(2) 
provides that: ``[a]ny entity which establishes standards for 
telecommunications equipment or customer premises equipment, or generic 
network requirements for such equipment, or certifies 
telecommunications equipment or customer premises equipment shall be 
prohibited from releasing or otherwise using any proprietary 
information, designated as such by its owner, in its possession as a 
result of such activity, for any purpose other than purposes authorized 
in writing by the owner of such information, even after such entity 
ceases to be so engaged.'' 43
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    \43\ 47 U.S.C. Sec. 273(d)(2).
---------------------------------------------------------------------------

    30. We seek to clarify to which entities this section should apply, 
how Section 273(d)(2) should be enforced, and what impact this section 
may have on accredited standards development organizations and industry 
forums and accordingly seek comment on these issues. While Section 
273(d)(4) sets procedures for use by ``any entity that is not an 
accredited standards development organization and that establishes 
industry-wide standards,'' Section 273(d)(2), on its face applies to 
``any entity that establishes standards.'' A comparison of the two 
provisions suggests that the term ``any entity that establishes 
standards'' encompasses a broader range of entities than does Section 
273(d)(4). Specifically, we tentatively conclude that Section 273(d)(2) 
applies to all entities that develop standards, and includes entities 
that create ``de facto'' standards. We seek comment on the extent to 
which Section 273(d)(2) also applies to ISO 9000 certification 44 
or interoperability testing in general. We also seek comment on the 
extent to which this section applies to BOCs' or other carriers' 
development of internal interfaces and protocols that might or might 
not be adopted more widely. 45 We also tentatively conclude that, 
because Section 273(d)(2) uses the terms ``standards'' or ``generic 
requirements'' rather than ``industry-wide standards,'' or ``industry-
wide generic requirements,'' this section applies to the establishment 
of any standard or requirement, not just those that are industry-wide. 
We seek comment on the validity of these tentative conclusions. 
Similarly, we seek comment on the types of certification activities 
that are encompassed by Sections 273(d)(2), Section 273(d)(3), and 
Section 273(d)(4), including comment on possible differences in the 
scope of certification activities encompassed by each.
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    \44\ The ISO 9000 Series, published by the International 
Standards Organization, is a set of three generic standards (ISO 
9001, ISO 9002, and ISO 9003) that ``provide quality assurance 
requirements and quality management guidance.'' ISO 9001 is a 
quality assurance standard for companies involved in the design, 
testing, manufacture, delivery, or service of products. ISO 9002 
covers manufacturing and installation. ISO 9003 addresses product 
testing. Newton, Harry, Newton's Telecom Dictionary 328 (11th Ed. 
1996).
    \45\ In this case, by ``internal interfaces and protocols,'' we 
intend to include both (1) those standards that are used only 
internally by the BOCs and are otherwise transparent to network 
interconnectors and/or users, at least in the absence of the 
unbundling or sale of individual network elements; and (2) those 
standards that are adopted by the BOCs on an ``individual'' basis, 
but which may nevertheless have the effect of foreclosing other 
alternative standards by virtue of the BOCs' substantial size and 
market share.
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    31. In addition, we seek specific comment as to whether, and if so, 
how, Section 273(d) applies to the activities of industry forums such 
as the ATM Forum 46 or the National ISDN User's Forum. 47 The 
work of these forums can be characterized in a variety of ways. For 
example, the ATM Forum maintains a World Wide Web page in which it 
describes its work product as ``specifications.'' The 
Telecommunications Industry Association (TIA) characterizes the ATM 
Forum as a ``standards development organization,'' 48 while the 
Network Reliability Council states that industry forums, like the ATM 
Forum, ``use and influence standards to create user application 
profiles of standards and implementation agreements based on options 
approved in standards.'' 49 We seek comment on whether the work 
product of these types of industry forums constitutes either a 
``standard'' or a ``generic requirement.'' Additionally, we seek 
comment as to whether these forums, if they have some relationship with 
``accredited standards

[[Page 3645]]

development organizations'' should themselves be considered 
``accredited standards development organizations'' for the purpose of 
this section of the Act. We also seek comment as to what type of 
relationship, if any, should lead to these industry forums being 
classified as ``accredited'' for the purposes of Section 273(d), and 
how ``accredited'' should be defined for the purpose of administering 
Section 273. We encourage commenters to address the advantages and 
disadvantages of interpreting this section to include industry forums 
as standards setting entities within the meaning of Section 273(d) of 
the Act, and further encourage commenters to address the impact on 
members of these groups of a finding that they are covered by Section 
273(d).
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    \46\ The ATM Forum is an international non-profit organization 
formed with the objective of accelerating the use of ATM products 
and services through a rapid convergence of interoperability 
specifications. In addition, the Forum promotes industry cooperation 
and awareness. The ATM Forum consists of over 700 member companies, 
and it remains open to any organization that is interested in 
accelerating the availability of ATM-based solutions.
    \47\ The North American ISDN Users' Forum (NIUF) objectives are 
to provide users the opportunity to influence developing ISDN 
technology to reflect their needs; to identify ISDN applications, 
develop implementation requirements and facilitate their timely, 
harmonized, and interoperable introduction; and to solicit user, 
product provider, and service provider participation in the process. 
In 1988, the National Institute of Standards and Technology (NIST) 
collaborated with industry to establish the NIUF. Members of NIST's 
Computer Systems Laboratory have served as the chair of the forum 
and have hosted the NIUF Secretariat. Over 300 organizations 
participate in the NIUF. The NIUF is open to all interested parties, 
product providers, and service providers.
    \48\ TIA Standards and Technology Annual Report 1995. We will 
place a copy of this document in the docket file of this proceeding.
    \49\ Network Reliability Council Increased Interconnection Task 
Group II Report (Dec. 1, 1995) at 57.
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    32. We also seek comment on the extent to which the preceding 
interpretations would require accredited standards organizations and 
industry forums to alter their existing practices and procedures for 
protecting proprietary information to comply with this provision of the 
Act, and the projected costs and benefits of such alterations. We 
recognize that the protection of proprietary information is vital to 
continued development of new technology and innovative network 
advances. Assuming accredited standards development organizations and 
industry forums must comply with Section 273(d)(2), we seek comment on 
and draft language for any rules that a commenting party asserts we 
should establish to mitigate any adverse effects of improper 
disclosure.
    33. Section 273(d)(3): Manufacturing Safeguards. Section 273(d)(3) 
has three parts. In general, Section 273(d)(3)(A) restricts the ability 
of an entity to manufacture and certify any particular class of 
telecommunications equipment or CPE and requires that such 
manufacturing be performed only through an affiliate separate from the 
certifying entity. Sections 273(d)(3)(B) and 273(d)(3)(C) impose 
specific separation requirements on the manufacturing affiliate and the 
certifying entity, respectively. Under Section 273(d)(3)(B), the 
entity's manufacturing affiliate must maintain books, records and 
accounts separate from those of the certifying affiliate, must not 
engage in joint manufacturing activities with the certifying entity, 
and must have segregated facilities and separate employees. Under 
Section 273(d)(3)(C), a certifying entity must not discriminate in 
favor of its manufacturing affiliate, must not disclose unaffiliated 
manufacturers' proprietary information without authorization, and must 
not permit any employee engaged in certification activities to 
participate in joint equipment sales or marketing activities with the 
certifying entity's manufacturing affiliate. We tentatively conclude 
that, if the sale of Bellcore to SAIC were to be consummated, Bellcore 
would be permitted to engage in manufacturing activities, but would 
need to comply with the structural and accounting safeguards of Section 
273(d)(3). We seek comment on this tentative conclusion.
    34. Section 273(d)(3)(A) states that ``any entity which certifies 
telecommunications equipment and customer premises equipment 
manufactured by an unaffiliated entity shall only manufacture a 
particular class of telecommunications equipment or customer premises 
equipment for which it is undertaking or has undertaken, during the 
previous 18 months, certification activity for such class of equipment 
through a separate affiliate.'' 50 While the terms 
``telecommunications equipment'' and ``customer premises equipment'' 
are defined in the Act, ``class'' is not defined by the Act. We 
tentatively conclude that we should define specific classes of 
equipment and that these classes should be based on existing industry 
classifications to the extent that they exist. We request comment that 
describes classifications currently used within the industry and 
proposed definitions for each class of equipment. We also seek comment 
on the practical effects of defining ``classes'' broadly, versus 
narrowly.
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    \50\ 47 U.S.C. Sec. 273(d)(3)(A).
---------------------------------------------------------------------------

    35. The breadth of the term ``class'' may also affect how quickly 
the sunset provision contained in Section 273(d)(6) becomes effective. 
If classes are defined more narrowly, it may be easier for the 
Commission to make a determination that the requirements of Section 
273(d)(3) should be terminated with respect to a specific class, but it 
would have many such determinations to make. Conversely, if the 
Commission defined ``class'' broadly, it would be more difficult for 
the Commission to make a determination that the requirements of Section 
273(d)(3) should be terminated, but there would be a much smaller 
number of determinations needed.
    36. We also seek comment on how to interpret the phrase ``during 
the previous 18 months'' in Section 273(d)(3)(A). 51 One 
interpretation of the italicized phrase is that if, at the date on 
which an entity seeks to manufacture equipment, that entity is 
currently certifying equipment, or has within the previous 18 months 
certified equipment within a particular class, it may manufacture 
equipment within that class only through a separate affiliate. If an 
entity that certifies equipment seeks to manufacture equipment within a 
particular class of equipment and within the previous 18 months that 
entity has not certified equipment within that same class, it may 
manufacture equipment directly. A second possible interpretation of the 
phrase is that if the certification entity was certifying equipment and 
manufacturing equipment within the same class within 18 months prior to 
the effective date of the 1996 Act, the entity may continue to do so 
without creating a separate affiliate. We seek comment on the proper 
interpretation of this phrase.
---------------------------------------------------------------------------

    \51\ 47 U.S.C. Sec. 273(d)(3)(A).
---------------------------------------------------------------------------

    37. Section 273(d)(3)(B) specifies particular separate affiliate 
requirements, such as the maintenance of separate books, records and 
accounts. The Commission has issued a separate NPRM addressing 
affiliate transactions that fall within the scope of that section. 
52 In addition to these accounting safeguards, however, Section 
273(d)(3)(C) states that the certification entity, inter alia, shall 
``not discriminate in favor of its manufacturing affiliate in the 
establishment of standards, generic requirements, or product 
certification.'' We tentatively conclude that our existing 
nondiscrimination rules are inadequate in the context of Section 
273(d)(3)(C) because these rules do not address the ability of a 
certification entity to discriminate in favor of its manufacturing 
affiliate. Unlike Section 202, which prohibits ``unjust or unreasonable 
discrimination,'' Section 273(d)(3)(C) uses no adjectives to modify the 
meaning of the verb ``discriminate.'' We seek comment, therefore, on 
whether Congress intended to impose a stricter standard for compliance 
with Section 273(d)(3)(C) by enacting a flat prohibition on all 
discrimination. 53 The verb, ``to discriminate'' means to ``make a 
clear distinction'' or to ``act on the basis of

[[Page 3646]]

prejudice.'' 54 We tentatively conclude, therefore, that Section 
273(d)(3)(C) requires the certification entity to provide its services 
to its manufacturing affiliate on terms, conditions or rates that are 
at least as good as those it provides to unaffiliated manufacturers. We 
seek comment on this tentative conclusion, including comment on (1) any 
specific concerns that we should address in this proceeding; (2) the 
language of proposed rules, if any, that a party asserts we should 
adopt to address these dangers; and (3) the relationship, if any, 
between Section 273(d)(3)(C) and Section 272(c)(1), which prohibits a 
BOC from discriminating between an affiliate and any other entity in, 
inter alia, the establishment of standards. We tentatively conclude 
that the other prohibitions that are contained in Section 
273(d)(3)(C)(ii-iii) are clear and that no clarification or additional 
rules appear to be necessary to implement this section.
---------------------------------------------------------------------------

    \52\ Implementation of the Telecommunications Act of 1996: 
Accounting Safeguards Under the Telecommunications Act of 1996, 
Notice of Proposed Rulemaking, 11 FCC Rcd 9054, 9099-9102 (1996), 61 
FR 40161, August 1, 1996, corrected 61 FR 41208, August 7, 1996.
    \53\ We sought comment on a similar issue in Implementation of 
the Non-Accounting Safeguards of Sections 271 and 272 of the 
Communications Act of 1934, as amended; and Regulatory Treatment of 
LEC Provision of Interexchange Services Originating in the LEC's 
Local Exchange Area, CC Docket No. 96-149, Notice of Proposed 
Rulemaking, FCC 96-308, para. 72 (released July 18, 1996), 61 FR 
39397, July 29, 1996.
    \54\ Webster's II New Riverside University Dictionary, Riverside 
Publishing Co., at 385 (1994).
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    38. Section 273(d)(4): Manufacturing Limitations for Standards-
Setting Organizations. Section 273(d)(4) prescribes procedures that are 
intended to be open to all interested parties in the process for 
setting and establishing industry-wide standards and generic 
requirements for telecommunications equipment and CPE. 55 These 
procedures apply to standards-setting activities by ``any entity that 
is not an accredited standards development organization and that 
establishes industry-wide standards for telecommunications equipment or 
customer premises equipment, or industry-wide generic network 
requirements for such equipment, or that certifies telecommunications 
equipment or customer premises equipment manufactured by an 
unaffiliated entity.'' Additionally, this section imposes requirements 
to assure fair, even-handed certification processes, 56 and 
prohibits anticompetitive behavior. 57
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    \55\ 47 U.S.C. Sec. 273(d)(4)(A).
    \56\ 47 U.S.C. Sec. 273(d)(4)(B).
    \57\ 47 U.S.C. Sec. 273(d)(4)(C)-(D).
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    39. Section 273(d)(4) potentially could encompass a wide range of 
entities or alliances of entities. Bellcore would appear to fall 
squarely within the ambit of Section 273(d)(4); we seek comment, 
however, on whether the sale of Bellcore to SAIC or another entity 
unaffiliated with the BOCs could affect the applicability of this 
section to Bellcore. We also seek comment on the potential additional 
scope of this section, including the extent to which it could apply to 
research, development, or adoption of standards, specifications, or 
generic requirements by large carriers, other entities, or alliances. 
In addition, we seek comment on these specific issues: (1) the ability 
of the RHCs, Bellcore or other carriers to circumvent the requirements 
of 273(d)(4) by designating standards or generic requirements as, for 
example, ``internal,'' ``non industry-wide,'' ``optional,'' company-
specific ``specifications,'' etc.; (2) the appropriate definition, and 
treatment, of such de facto standards or requirements that may not be 
adopted through the 273(d)(4) processes, including the relationship 
between these standards and the definition of ``industry-wide'' 
standards contained in 273(d)(8)(C); and (3) the adequacy of 273(d)(5) 
and our recently-adopted default dispute resolution processes 58 
to address the anti-competitive harms that may result from the 
establishment of such standards or requirements. Furthermore, we seek 
comment on the appropriate treatment of standards developed or adopted 
by large entities or alliances (e.g., individual RHCs, GTE, or 
alliances) (a) in the event the entity or alliance were to control at 
least 30% of the deployed access lines in the United States, as defined 
in 273(d)(8)(C); and (b) in the event that the entity or alliance were 
to control fewer than 30% of such lines.
---------------------------------------------------------------------------

    \58\ Implementation of Section 273(d)(5) of the Communications 
Act of 1934, as Amended by the Telecommunications Act of 1996--
Dispute Resolution Regarding Equipment Standards, Report and Order, 
11 FCC Rcd 12955 (1996), 61 FR 24897, May 17, 1996.
---------------------------------------------------------------------------

    40. Section 273(d)(4)(A) specifies procedures to be followed by any 
entity subject to Section 273(d)(4) in establishing and publishing any 
industry-wide standard, industry-wide generic requirement, or 
``substantial modification'' thereto for telecommunications equipment 
or customer premises equipment. We seek comment on what should be 
deemed to constitute a ``substantial modification.'' Specifically, we 
ask commenters to address whether the Commission should define 
``substantial modification'' precisely or whether we should establish 
factors that should be considered in determining what constitutes a 
``substantial modification.'' With regard to factors to be considered, 
we request comment on what factors, such as impact on network 
reliability, performance, security, and interoperability, might be 
established to assess what constitutes a ``substantial modification.'' 
Furthermore, we seek comment on the appropriate weight that should be 
given to each individual factor proposed.
    41. Section 273(d)(4)(A) imposes five duties upon any entity, 
``that is not an accredited standards development organization'' and 
that establishes an industry-wide standard or generic requirement. 
Section 273(d)(4)(A)(i) requires any such entity to ``issue a public 
notice of its consideration of a proposed industry-wide standard or 
industry-wide generic requirement.'' The 1996 Act does not specify what 
constitutes adequate ``public notice.'' We seek comment on the means of 
publication most likely to ensure broad knowledge of the impending 
activity.
    42. We tentatively conclude that publications such as the Bellcore 
Digest of Technical Information 59 and publications on the World 
Wide Web similar to that of the ATM Forum would constitute adequate 
public notice because these forms of notice are available to the public 
at reasonable expense, provide a summary of the proposed work, provide 
contact information, and set tentative dates for when the requirement 
or specification will be available. We seek comment on this tentative 
conclusion and on any additional factors that should be considered in 
determining generally what should constitute adequate ``public 
notice.'' We also seek comments listing other publications or means of 
providing ``public notice'' that would meet the public notice 
requirement. To the extent that public notice can be provided by 
placing material on World Wide Web sites, we seek comment on whether 
and how the public could reasonably be informed of the location of this 
information. We also seek comment on whether public notice could be 
provided by posting information through the Internet on relevant Usenet 
newsgroups, or on a new newsgroup established for this purpose. In 
addition, we seek comment as to whether public notice should be 
provided by electronic mail, either by sending information directly to 
interested parties or by posting information on relevant Internet 
``mailing lists.'' Finally, we seek comment on the role that the ATIS 
industry forums and TIA groups might play in ensuring interested 
parties have access to industry-wide generic requirement and standard 
development processes.
---------------------------------------------------------------------------

    \59\  The annual subscription fee is $110. Bellcore, Digest of 
Technical Information, Jan. 1996. We are concerned that fees for 
``publications'' that satisfy this ``public notice'' requirement 
remain inexpensive.
---------------------------------------------------------------------------

    43. Section 273(d)(4)(A)(ii)-(v) states


[[Page 3647]]


    ``(ii) Such entity shall issue a public invitation to interested 
parties to fund and participate in such efforts on a reasonable and 
nondiscriminatory basis, administered in such a manner as not to 
unreasonably exclude any interested industry party;
    (iii) Such entity shall publish a text for comment by such 
parties as have agreed to participate in the process pursuant to 
clause (ii), provide such parties a full opportunity to submit 
comments, and respond to comments from such parties;
    (iv) Such entity shall publish a final text of the industry-wide 
standard or industry-wide generic requirement, including the 
comments in their entirety, of any funding party which requests to 
have its comments so published; and
    (v) Such entity shall attempt, prior to publishing a text for 
comment, to agree with the funding parties as a group on a mutually 
satisfactory dispute resolution process which such parties shall 
utilize as their sole recourse in the event of a dispute on 
technical issues as to which there is disagreement between any 
funding party and the entity conducting such activities, except that 
if no dispute resolution process is agreed to by all parties, a 
funding party may utilize the dispute resolution procedures 
established pursuant to paragraph (5) of this subsection.''

    We have recently limited the definition of a ``funding party'' in 
the context of Section 273(d)(5)'s dispute resolution processes to 
include only parties that ``provide actual funding to support the 
standards-setting process,'' specifically excluding parties that merely 
post a ``performance bond'' or provide ``in-kind'' support. 60 We 
tentatively conclude that this definition should apply in the context 
of Section 273(d)(4)(A) as well, and that the remainder of the 
requirements imposed by Section 273(d)(4)(A) (ii)-(v) are self-
explanatory. We request comment on these tentative conclusions.
---------------------------------------------------------------------------

    \60\ Implementation of Section 273(d)(5) of the Communications 
Act of 1934 as amended by Telecommunications Act of 1996--Dispute 
Resolution Regarding Equipment Standards, Report and Order, 11 FCC 
Rcd at 12969.
---------------------------------------------------------------------------

    44. Section 273(d)(4)(B) sets forth procedures that an entity must 
follow when it ``engages in product certification for 
telecommunications equipment or customer premises equipment 
manufactured by unaffiliated entities.'' Such activity must be 
performed pursuant to ``published'' and ``auditable'' criteria, and 
must use ``available industry-accepted testing methods and standards.'' 
We tentatively construe the phrase ``auditable criteria'' to mean 
criteria that, when applied in a certification process, are 
sufficiently precise that a neutral third party would be able to 
replicate each certification and determine whether each certification 
had, or had not, been performed in an unbiased manner. We request 
comment on the validity of this construction, and also request comment 
as to whether the ``Generally Accepted Auditing Standards'' that have 
been propounded by the American Institute of Certified Public 
Accountants are adequate for this purpose. 61 We seek comment on 
what should constitute publication and how we should determine if the 
criteria used to perform the product certification are auditable. In 
addition, we seek comment as to how the term ``industry accepted 
testing methods'' should be defined; whether such testing methods 
currently exist and, if so, what they are; and what constitutes 
``industry accepted.'' We also request comment as to how we should 
determine whether a testing method is ``industry accepted.'' More 
narrowly, in this context, we seek comment on whether the term 
``industry'' includes all telecommunications service providers, or 
those providers and all manufacturers, or subsets of these or 
additional categories. We request that commenters address whether any 
particular types of entities specifically should be included in, or 
excluded from, the term ``industry?''
---------------------------------------------------------------------------

    \61\ See e.g., AICPA Codification of Statements on Auditing 
Standards, AU 320.32, 320.36, 320.37 (1996).
---------------------------------------------------------------------------

    45. Section 273(d)(4)(C) prohibits any entity that is not an 
accredited standards development organization and that establishes 
industry-wide standards from undertaking ``any actions to monopolize or 
attempt to monopolize the market for such services.'' We seek comment 
on how best to implement this provision.
    46. Section 273(d)(4)(D) states that any entity that is not an 
accredited standard development organization shall not ``preferentially 
treat its own telecommunications equipment or customer premises 
equipment or that of its affiliate, over that of any other entity in 
establishing and publishing industry-wide standards or industry-wide 
generic requirements for, and in certification of telecommunications 
equipment and customer premises equipment.'' We seek comment on how 
best to implement this provision. We suggest that parties interested in 
commenting on these issues propose rules that they believe would most 
efficiently, and effectively, enforce these provisions of the 1996 Act. 
For example, one form of ``preferential treatment'' we can identify at 
this time would be preferential licensing of proprietary technology. We 
seek comment as to whether the Commission should require, as do the 
International Organization for Standardization (``ISO'') and the 
American National Standard Institute (``ANSI''), that participants 
agree to license proprietary technology on ``reasonable'' terms before 
that technology is incorporated into an official standard. We request 
that commenters advocating such Commission action define terms that 
should be considered ``reasonable,'' and that commenters opposing such 
Commission action discuss other possible approaches to this potential 
problem. In addition, we seek comment on whether we should use existing 
ANSI, ISO, or other rule structures as a model for developing 
Commission rules in this area, including specific comment on the 
features of existing rule structures that work well, and potential gaps 
that should be addressed.
    47. Section 273(d)(5) requires that the Commission prescribe a 
dispute resolution process to be used if all parties cannot agree on a 
dispute resolution process when establishing and publishing any 
industry-wide standard or generic requirement. Because this Commission 
has already issued a Report and Order addressing Section 273(d)(5), 
that section will not be addressed further here.62
---------------------------------------------------------------------------

    \62\ See Implementation of Section 273(d)(5) of the 
Communications Act of 1934 as amended by Telecommunications Act of 
1996--Dispute Resolution Regarding Equipment Standards, Report and 
Order, 11 FCC Rcd 12955.
---------------------------------------------------------------------------

    48. Section 273(d)(6): Sunset. Section 273(d)(6) defines the 
circumstances under which the Commission must lift the manufacturing 
safeguards of Section 273(d)(3) and the procedural safeguards of 
Section 273(d)(4), providing that:

    The requirements of paragraphs (3) and (4) shall terminate for 
the particular relevant activity when the Commission determines that 
there are alternative sources of the industry-wide standards, 
industry-wide generic requirements or product certification for a 
particular class of telecommunications equipment or [CPE] available 
in the United States. Alternative sources shall be deemed to exist 
when such sources provide commercially viable alternatives that are 
providing services to customers. The Commission shall act on any 
application for such a determination within 90 days after receipt of 
such application, and shall receive public comment on such 
application.63
---------------------------------------------------------------------------

    \63\ 47 U.S.C. Sec. 273(d)(6).

    We seek to identify those factors that the Commission should use in 
making the determination required by Section 273(d)(6). We tentatively 
conclude that factors that should be addressed include the number of 
entities developing standards, developing generic requirements or 
conducting certification work; the ability of these entities to

[[Page 3648]]

compete with each other; and the length of time during which those 
entities have been conducting the relevant activity. We also seek 
comment as to what factual record the Commission should compile in 
making the determination required by Section 273(d)(6), including 
specific procurement documents or other information the Commission 
should require applicants to submit under this section. We ask that 
commenters addressing this issue provide specific comments on 
appropriate ways in which the Commission can balance its need to 
develop an adequate factual record on such applications against its 
statutory obligation to act within 90 days.
    49. In addition, we seek comment on how we should define two 
phrases within Section 273(d)(6). The first, ``class of 
telecommunications equipment or CPE,'' was examined in our earlier 
discussion of Section 273(d)(3). We request comment as to whether that 
analysis should apply to this phrase as used in Section 273(d)(6) and 
whether other considerations inherent in the implementation of Section 
273(d)(6) should require a different interpretation or rule. The second 
phrase we seek to define is ``commercially viable alternatives that are 
providing services to customers.'' The term ``alternatives'' in this 
phrase suggests that the number of entities conducting a relevant 
activity is a factor we should consider, and that a minimum of two 
entities must be conducting a relevant activity. We seek comment as to 
whether the existence of two entities conducting a relevant activity is 
both a necessary and sufficient condition for termination of the 
Section 273(d) (3) and (4) safeguards. In addition, it appears that, to 
assess the viability of entities, it is necessary to determine if the 
alternative entities are competitive and to examine the duration of 
their existences. We believe that such as analysis is necessary to 
ensure that we keep in place the manufacturing safeguards set by 
statute until they are no longer necessary. Finally, we seek comment on 
the relationship among (1) the phrase ``commercially viable 
alternatives that are providing services to customers;'' (2) the phrase 
``alternative sources of industry-wide standards, industry-wide generic 
requirements, or product certification;'' and (3) the definition of the 
term ``industry-wide'' contained in Section 273(d)(8)(C).
    50. While we do not want to lift statutory safeguards prematurely, 
we also would seek to eliminate them as promptly as possible once they 
are not needed. With this in mind, we tentatively conclude that the 
regulations developed to implement Section 273(d) (3) and (4) should 
not apply to certification pursuant to Part 15 (Radio Frequency 
Devices) or registration pursuant to Part 68 (Connection of Terminal 
Equipment to the Telephone Network) of the Commission's rules.64 
We seek comment on this tentative conclusion.
---------------------------------------------------------------------------

    \64\ 47 CFR Parts 15 and 68.
---------------------------------------------------------------------------

    51. Section 273(d)(7) states that in administering Section 273(d), 
the Commission ``shall have the same remedial authority as the 
Commission has in administering and enforcing the provisions of this 
title with respect to any common carrier subject to this Act.'' 
Finally, Section 273(d)(8) defines several terms used in Section 
273(d). We tentatively conclude that the language of these paragraphs 
requires no further clarification at this time. We seek comment on this 
tentative conclusion.
    52. Section 273(E): BOC Equipment Procurement and Sales. Section 
273(e) governs BOC practices in procuring and selling 
telecommunications equipment. With the exception of Section 273(e)(4), 
the provisions of Section 273(e) apply on their face to all BOCs. 
Section 273(e), however, is contained within a statute that otherwise 
addresses BOC obligations in the manufacturing context. We seek comment 
therefore, on whether the requirements of Section 273(e) applies to all 
BOCs or only to BOCs that are authorized to manufacture under Section 
273(a).
    53. To prevent Bell Operating Companies from favoring entities with 
whom they have a telecommunications equipment manufacturing 
relationship, Section 273(e)(1) requires that ``[i]n the procurement or 
awarding of supply contracts for telecommunications equipment, a Bell 
operating company, or any entity acting on its behalf, for the duration 
of the requirement for a separate subsidiary including manufacturing 
under this Act--(A) shall consider such equipment, produced or supplied 
by unrelated persons; and (B) may not discriminate in favor of 
equipment produced or supplied by an affiliate or related person.''
    54. The Act provides no definition of the word ``consider.'' As a 
consequence, we first look to the ordinary meaning of that word. 
``Consider'' means to ``think about seriously'' or ``bear in mind.'' 
65 This definition suggests that Section 273(e)(1)(A) would be 
satisfied if a BOC merely opened its procurement and sales processes to 
entities other than itself or its affiliate(s). We request comment as 
to (1) whether this definition of ``consider'' is sufficient, or 
whether some other definition would be more consistent with the intent 
of Congress; and (2) any specific actions that a BOC must take in 
fulfilling this statutory obligation.
---------------------------------------------------------------------------

    \65\ Webster's II New Riverside University Dictionary, Riverside 
Publishing Co., at 301 (1994).
---------------------------------------------------------------------------

    55. In contrast, Section 273(e)(1)(B) unequivocally prohibits BOCs 
from discriminating in favor of equipment produced or supplied by an 
affiliate or related person. Accordingly, the language of Section 
273(e)(1)(B) seems to make it clear that the procurement decision may 
not rest solely on the BOC's relationship with the supplying entity and 
that, in addition to opening its procurement and sales processes, a BOC 
may need to take affirmative steps to ensure that it does not favor 
proposals from ``affiliates or related persons'' for reasons other than 
merit. Section 272(a)(2)(A) requires a BOC to engage in manufacturing 
only through a separate affiliate and Section 272(c)(1) provides that 
the BOC ``may not discriminate between that . . . affiliate and any 
other entity in the provision or procurement of goods, services, 
facilities and information, or in the establishment of standards.'' 
With respect to this Section 272(c)(1) prohibition, we tentatively 
concluded that, ``at minimum, that BOCs must treat all other entities 
in the same manner as they treat their affiliates, and must provide and 
procure goods, services, facilities and information to and from these 
other entities under the same terms, conditions, and rates.'' 66 
We seek comment on: (1) whether the word ``discriminate'' has any 
different import in the context of Section 273(e)(1)(B) than it does in 
Section 272(c)(1); (2) what specific actions or types of actions by or 
on behalf of a BOC would be considered discriminatory in this context; 
and (3) what affirmative steps, if any, a BOC would need to take to 
ensure that it does not discriminate, in violation of Section 
273(e)(1)(B).
---------------------------------------------------------------------------

    \66\ Implementation of the Non-Accounting Safeguards of Sections 
271 and 272 of the Communications Act of 1934, as amended; and 
Regulatory Treatment of LEC Provision of Interexchange Services 
Originating in the LEC's Local Exchange Area, CC Docket No. 96-149, 
Notice of Proposed Rulemaking, FCC 96-308, para. 73 (released July 
18, 1996).
---------------------------------------------------------------------------

    56. While the prohibition contained in Section 272(c)(1) applies to 
affiliates, the prohibition contained in Section 273(e)(1)(B) applies 
to ``affiliates and related persons.'' This use of the term ``related 
persons'' suggests that the discrimination prohibition in Section 
273(e)(1)(B) may apply to a larger class of entities than that 
contained in

[[Page 3649]]

Section 272(c)(1) and corresponds with the use in Section 273(e)(1)(A) 
of the term ``unrelated persons.'' We seek comment on the meaning of 
the terms ``unrelated persons'' and ``related persons.'' These terms 
suggest that the BOCs not be permitted to discriminate in favor of 
parties with whom they have some type of relationship.67 We seek 
comment as to specific types of relationships that would make an entity 
a ``related person'' for purposes of Section 273(e). We note that 
Section 273(d)(8)(A) defines ``affiliate'' as having the same meaning 
as in Section 3 except that, for purposes of Section 273(d)(1)(B) an 
``aggregate voting interest in [Bellcore] of at least 5 percent of its 
total voting equity, owned directly or indirectly by more than 1 
otherwise unaffiliated [BOC], shall constitute an affiliate 
relationship.'' In contrast, no such specificity is provided with 
regard to the meaning of ``related person.'' We request that commenters 
provide the language of any rules that they assert would be needed to 
ensure that a BOC does not discriminate in favor of either affiliates 
or related persons, in violation of Section 273(e)(1)(B).
---------------------------------------------------------------------------

    \67\ Webster's II New Riverside University Dictionary at 992 
(defining ``related'' as ``connected'' or ``associated'').
---------------------------------------------------------------------------

    57. Section 273(e)(2) requires that ``[e]ach Bell operating company 
or any entity acting on its behalf shall make procurement decisions and 
award all supply contracts for equipment, services, and software on the 
basis of an objective assessment of price, quality, delivery, and other 
commercial factors.'' We seek comment on the scope of, and request 
appropriate definitions for, each of the terms ``equipment,'' 
``services,'' and ``software.'' For example, we seek comment on: (1) 
whether the scope of the term ``equipment,'' in this context, should be 
limited to telecommunications equipment and CPE; (2) what types of 
services the mandate of Section 273(e)(2) encompasses; and (3) whether 
the requirements of Section 273(e)(2) apply to the procurement of all 
software, only the software ``essential to [the] design and development 
of'' telecommunications equipment or CPE,68 or some other subset. 
We tentatively conclude that the remainder of this provision is self-
explanatory and that no further elaboration of this requirement is 
necessary in our rules. We seek comment on this tentative conclusion 
and request that parties that disagree with this tentative conclusion 
propose the language for rules to address their concerns.
---------------------------------------------------------------------------

    \68\ See United States v. Western Elec. Co., 675 F. Supp. at 667 
n.54
---------------------------------------------------------------------------

    58. We recognize that traditional, complaint-based enforcement 
techniques may be inadequate for the effective enforcement of Sections 
273(e)(1) and 273(e)(2). Even when confronted with clear violations of 
the strictures of these sections, a manufacturer may be reluctant to 
complain publicly because, in doing so, it might risk alienating one or 
more customers that represent a significant source of potential future 
sales. Accordingly, we request comment, including the text of proposed 
rules, on whether we need to develop additional enforcement mechanisms, 
such as mandatory auditing or reporting requirements, for use in 
enforcing Sections 273(e)(1) and 273(e)(2).
    59. Section 273(e)(3) provides that ``[a] Bell operating company 
shall, to the extent consistent with the antitrust laws, engage in 
joint network planning and design with local exchange carriers 
operating in the same area of interest. No participant in such planning 
shall be allowed to delay the introduction of new technology or the 
deployment of facilities to provide telecommunications services, and 
agreement with such other carriers shall not be required as a 
prerequisite for such introduction or deployment.'' 69 We seek 
comment on the extent to which current antitrust laws allow joint 
network planning and design and on appropriate definitions of the terms 
``area of interest'' and ``network planning and design.'' We also 
request comment on the need for, and the proposed text of, any rules 
that the Commission should adopt (1) to facilitate permissible, or bar 
impermissible, joint network planning and design; and (2) otherwise to 
ensure that the requirements of Section 273(e)(3) are achieved.
---------------------------------------------------------------------------

    \69\ 47 U.S.C. Sec. 273(e)(3).
---------------------------------------------------------------------------

    60. The Commission recently issued a Notice of Proposed Rulemaking 
in CC Docket No. 96-237 to implement Section 259, entitled 
``Infrastructure Sharing.'' 70 Section 259 requires incumbent LECs 
71 to make certain ``public switched network infrastructure, 
technology, information, and telecommunications facilities and 
functions'' available to defined ``qualifying carriers'' in the service 
areas where such qualifying carriers have requested and obtained 
designation as an eligible carrier under Section 214(e). 72 Some 
potential definitions of a BOC's ``area of interest,'' as that phrase 
is used in Section 273(e)(3), might subject a BOC and a Section 259-
defined qualifying carrier to obligations under both Section 259 and 
Section 273(e)(3). We believe, however, that the obligations imposed by 
Section 273(e)(3) are separate from, and consistent with, those imposed 
by Section 259. Because Section 273(e)(3) requires joint network 
planning and design among BOCs and LECs operating in the same ``area of 
interest,'' we believe that Section 273(e)(3) specifically contemplates 
joint network planning and design between a BOC and other LECs that may 
be the BOC's competitors, to the extent that such activities are 
consistent with the antitrust laws. In contrast, Section 259(b)(6) 
specifically provides that an incumbent LEC shall not be required to 
``engage in any [Section 259-derived] infrastructure sharing agreement 
for any services or access which are to be provided or offered to 
consumers by the qualifying carrier in such [LEC's] telephone exchange 
area.'' 73 In other words, apparently unlike Section 273(e)(3), 
Section 259 appears to apply only in instances where the qualifying 
carrier does not seek to offer certain services within the incumbent 
LEC's exchange area. 74 Accordingly, we

[[Page 3650]]

believe that the specific obligations imposed by Section 259 do not 
conflict with Section 273(e)(3)'s mandates. We seek comment on this 
interpretation, including comment on other possible implications for 
carriers that may be subject to obligations under both Section 259, as 
interpreted by the Commission in CC Docket No. 96-237, and Section 
273(e)(3).
---------------------------------------------------------------------------

    \70\ We will address issues relating to Section 259 in a 
separate proceeding. See Implementation of Infrastructure Sharing 
Provisions in the Telecommunications Act of 1996, CC Docket No. 96-
237, Notice of Proposed Rulemaking, FCC 96-456 (released Nov. 22, 
1996), 61 FR 63774, December 2, 1996 (``Infrastructure Sharing 
NPRM''). Section 259(a) requires the Commission to prescribe 
implementing regulations within one year of the date of enactment of 
the 1996 Act, i.e., by February 8, 1997.
    \71\ The term ``incumbent LEC'' is defined, for purposes of 
Section 259, in Section 251(h), which states:
    (1) DEFINITION--For purposes of this section, the term 
``incumbent local exchange carrier'' means, with respect to an area, 
the local exchange carrier that--
    (A) On the date of enactment of the Telecommunications Act of 
1996, provided telephone exchange service in such area; and
    (B) (i) On such date of enactment, was deemed to be a member of 
the exchange carrier association pursuant to section 69.601(b) of 
the Commission's regulations (47 CFR 69.601(b)); or
    (ii) Is a person or entity that, on or after such date of 
enactment, became a successor or assign of a member described in 
clause (i).
    47 U.S.C. Sec. 251(h).
    \72\ 47 U.S.C. Sec. 259. Section 259(d) defines a ``qualifying 
carrier'' as a telecommunications carrier that:
    (1) Lacks economies of scale or scope, as determined in 
accordance with regulations prescribed by the Commission pursuant to 
this section; and
    (2) Offers telephone exchange service, exchange access, and any 
other service that is included in universal service, to all 
consumers without preference throughout the service area for which 
such carrier has been designated as an eligible telecommunications 
carrier under Section 214(e).
    47 U.S.C. Sec. 259(d).
    \73\ 47 U.S.C. Sec. 259(b)(6).
    \74\ Infrastructure Sharing NPRM, at para. 11.
---------------------------------------------------------------------------

    61. Section 256, entitled ``Coordination for Interconnectivity,'' 
requires, inter alia, that the Commission establish procedures for 
Commission oversight of coordinated network planning by 
telecommunications carriers and other providers of telecommunications 
services for the effective and efficient interconnection of 
telecommunications networks used to provide telecommunications 
service.75 We seek comment on the relationship between the BOCs' 
obligations under Section 273(e)(3) and the obligations Section 
256(b)(1) imposes on all telecommunications carriers and other 
providers of telecommunications service. The newly revised charter for 
the Commission's Federal Advisory Committee, the Network Reliability 
and Interoperability Council (``NRIC''), asks the NRIC to provide 
recommendations on the implementation of Section 256, including 
specifically how the Commission can most efficiently conduct effective 
oversight of coordinated telecommunications network planning and 
design.76 We seek comment on the relationship between the NRIC's 
responsibility under Section 256 and the BOCs' obligations under 
Section 273(e)(3).
---------------------------------------------------------------------------

    \75\ 47 U.S.C. Sec. 256(b)(1).
    \76\ FCC Amends Charter of Network Reliability and 
Interoperability Council, 61 FR 26516, May 28, 1996. We will place a 
copy of the text of the Network Reliability and Interoperability 
Council Charter in the docket file of this proceeding.
---------------------------------------------------------------------------

    62. Section 273(e)(4) states that ``[n]either a Bell operating 
company engaged in manufacturing nor a manufacturing affiliate of such 
a company shall restrict sales to any local exchange carrier of 
telecommunications equipment, including software integral to the 
operation of such equipment and related upgrades.'' We tentatively 
conclude that this language is unambiguous and we seek comment on the 
validity of this conclusion. We also seek comment with respect to 
establishing criteria for determining when sales have been restricted. 
Commenters may address, for example, whether restriction should be 
measured by the volume of sales per unit of time, or by the type of 
equipment sold, or both, or by some other measure. We also request that 
commenters address: (1) Whether the Commission should require or 
perform periodic audits of BOC sales; (2) whether the Commission should 
collect information on procurement practices to enable us to detect 
anomalous behavior that might trigger an audit or investigation; and 
(3) whether the Commission should adopt other additional rules to 
implement this provision of the 1996 Act.
    63. Section 273(e)(5) states that ``[a] Bell operating company and 
any entity it owns or otherwise controls shall protect the proprietary 
information submitted for procurement decisions from release not 
specifically authorized by the owner of such information.'' We 
tentatively conclude that this language is unambiguous and self-
executing because it corresponds to the customary use of common legal 
instruments such as non-disclosure agreements and license agreements. 
We seek comment on this tentative conclusion.
    64. Section 273(F): Administration and Enforcement Authority. 
Section 273(f) provides that for ``the purposes of administering and 
enforcing the provisions of this section and the regulations prescribed 
thereunder, the Commission shall have the same authority, power, and 
functions with respect to any Bell operating company or any affiliate 
thereof as the Commission has in administering and enforcing the 
provisions of this title with respect to any common carrier subject to 
this Act.'' 77 We tentatively conclude that the Commission has 
broad authority to regulate all matters contemplated by Section 273 
under Sections 1,78 2(a),79 3,80 and 4(i) 81 of the 
Communications Act and seek comment on this tentative conclusion.
---------------------------------------------------------------------------

    \77\ 47 U.S.C. Sec. 273(f) (emphasis added).
    \78\ 47 U.S.C. Sec. 151.
    \79\ 47 U.S.C. Sec. 152(a), which states that the Communications 
Act ``applies to all interstate and foreign communications by wire 
or radio * * *.''
    \80\ 47 U.S.C. Secs. 153 (51) and (33), defines communications 
by wire and radio in a manner that incorporates all technologies and 
methods of operating.
    \81\ 47 U.S.C. Sec. 154(i) permits the Commission to perform 
``any and all acts * * * which may be necessary in the execution of 
its functions.''
---------------------------------------------------------------------------

    65. Section 273 addresses standards development, joint network 
planning, research and development, and collaboration with respect to 
entities that are not common carriers. While Sections 206 to 209 of the 
Communications Act provide statutory mechanisms for addressing 
complaints regarding common carrier matters,82 additional 
regulations may be needed to address violations of Section 273 by 
entities that are not common carriers. We seek comment on, and the 
proposed text of, any additional rules that may be necessary, or 
desirable, to enforce Section 273, in addition to those that presently 
exist to implement Sections 206 to 209, and 501 to 503 of the 
Communications Act, as amended.
---------------------------------------------------------------------------

    \82\ 47 U.S.C. Secs. 206-209.
---------------------------------------------------------------------------

    66. Although Section 273(d)(5) requires the Commission to prescribe 
a default process for use in resolving standards-setting 
disputes,83 it does not contain any specific directives to govern 
the resolution of complaints filed under other provisions of Section 
273. Particularly with respect to Sections 273(d)(2) through 273(d)(4), 
however, we recognize that accurate, efficient, and rapid resolution of 
alleged violations of Section 273 will be essential to the proper 
operation of this statutory section. We may find it beneficial to both 
the Commission and industry to amend our rules in order to increase the 
speed and efficiency of our complaint resolution processes and to meet 
better the demands of this and other sections of the 1996 Act. We are 
addressing potential means of accomplishing this goal in a separate 
proceeding 84 and we encourage commenters in that proceeding to 
address specific enforcement concerns relating to section 273 in 
particular and other sections of the 1996 Act in general.
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    \83\ 47 U.S.C. Sec. 273(d)(5).
    \84\ Implementation of the Telecommunications Act of 1996, 
Amendment of Rules to Be Followed When Formal Complaints Are Filed 
Against Common Carriers, CC Docket No. 96-238, Notice of Proposed 
Rulemaking, FCC 96-460, (released November 27, 1996), 61 FR 67978, 
December 26, 1996.
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    67. Section 273(G): Additional Rules and Regulations. Section 
273(g) states that ``[t]he Commission may prescribe such additional 
rules and regulations as the Commission determines are necessary to 
carry out the provisions of [Section 273], and otherwise to prevent 
discrimination and cross-subsidization in a Bell operating company's 
dealings with its affiliate and with third parties.'' 85 We seek 
comment on what, if any, additional rules should be adopted under this 
provision ``to prevent discrimination and cross-subsidization in a Bell 
operating company's dealings with its affiliate and with third 
parties,'' and we request that commenters proposing such rules do so in 
their initial comments, so that other parties may respond to the 
proposals during the reply comment period. We seek additional specific 
comment on whether the sale of Bellcore, as announced, creates a need 
for additional rules under this section.
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    \85\ 47 U.S.C. Sec. 273(g) (emphasis supplied).
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    68. Conclusion. Section 273 establishes the conditions under which

[[Page 3651]]

Bell Operating Companies may manufacture and provide telecommunications 
equipment, and manufacture customer premises equipment. It also sets 
forth safeguards against anticompetitive behavior in manufacturing 
markets by entities other than BOCs. With this NPRM, we seek to ensure 
that the safeguards that Congress enacted are effectively and 
efficiently administered. Our further objectives in this proceeding are 
to develop regulations that will foster technological innovation and 
competition in both the customer premises equipment and 
telecommunication equipment markets. We encourage commenters to propose 
innovative and administratively simple rules that will enable us to 
meet these objectives, and request that interested parties propose the 
text of any rules that they may deem appropriate to implement Section 
273. We further request that, in general, those commenters proposing 
such rules do so in their initial comments so that other parties may 
reply to them in their reply comments.

Procedural Issues

A. Ex Parte Presentations

    69. This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's Rules. See generally 47 CFR Sections 1.1202, 1.1203, and 
1.1206(a).

B. Regulatory Flexibility Act

    70. We certify that the Regulatory Flexibility Act does apply to 
this rulemaking proceeding because there may be a significant economic 
impact on a substantial number of small business entities, as defined 
by Section 601(3) of the Regulatory Flexibility Act.86 The 
Secretary shall send a copy of this Notice of Proposed Rulemaking 
including this certification, to the Chief Counsel for Advocacy of the 
Small Business Administration in accordance with Section 603(a) of the 
Regulatory Flexibility Act.87
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    \86\ 5 U.S.C. Sec. 601(3).
    \87\ 5 U.S.C. Sec. 603(a) (as amended by the Contract With 
America Advancement Act of 1996, Public Law No. 104-121, 110 Stat. 
847, 866 (1996)).
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    71. Pursuant to Section 603 of the Regulatory Flexibility Act 
(RFA), the Commission has prepared the following Initial Regulatory 
Flexibility Analysis (IRFA) of the expected impact on small entities of 
the policies and rules proposed in the Notice of Proposed Rulemaking 
(NPRM). Written public comments are requested on the IRFA. These 
comments must be filed in accordance with the same filing deadlines as 
comments on the remainder of the NPRM, but they must have a separate 
and distinct heading designating them as responses to the regulatory 
flexibility analysis. The Secretary shall cause a copy of the NPRM, 
including the IRFA, to be sent to the Chief Counsel for Advocacy of the 
Small Business Administration in accordance with Section 603(a) of the 
Regulatory Flexibility Act.
    72. Reason for Action: The Commission, in compliance with Section 
273 of the Communications Act of 1934 (``Communications Act''), as 
amended by the Telecommunications Act of 1996 (``1996 Act''), proposes 
rules and procedures intended to ensure the prompt adoption of 
regulations to administer and enforce Section 273 provisions with 
minimum regulatory and administrative burden on telecommunications 
carriers. The rules proposed in the NPRM are necessary to implement 
Section 273, in which Congress imposes requirements affecting Bell 
Operation Companies (BOCs), Bellcore, and entities that develop 
standards, develop generic requirements and conduct certification 
activity. This NPRM proposes rules and seeks comment to implement 
Section 273 in a manner that is consistent with Congress's intent.
    73. Objectives and Legal Basis for Proposed Rules: The Commission's 
objective in issuing the NPRM is to propose and seek comment on rules 
enabling the Commission to administer and enforce Section 273 
effectively and efficiently, and in a manner that is consistent with 
the intent of Congress. The proposed action is authorized under 
Sections 1, 3, 4, 7, 201-209, 218, 251, 273, and 403 of the 
Communications Act, as amended, 47 U.S.C. Sections 151, 153, 154, 157, 
201-209, 218, 251, 273, and 403.
    74. Description and Estimated Number of Small Entities Affected: 
Section 273 authorizes the Commission to impose standards on the BOCs, 
Bellcore, and entities that develop standards, develop generic 
requirements and conduct certification activity. Neither BOCs nor 
Bellcore qualify as small business entities; for they are dominant in 
their field of operation. See RFA, Section 601(3). Conversely, the size 
of the entities that develop standards, develop generic requirements, 
and conduct certification activity is unknown and may include small 
business entities. Accordingly, we certify that the Regulatory 
Flexibility Act of 1980, as amended, does not apply to this rulemaking 
proceeding insofar as it pertains to BOCs or Bellcore since our rules 
are not likely to have a significant economic impact on a substantial 
number of small entities, as defined by section 601(3) of the 
Regulatory Flexibility Act.
    75. Our rules, however, may have a significant economic impact on a 
substantial number of small businesses insofar as they apply to 
entities that develop standards, develop generic requirements and 
conduct certification activity. We request comment on the number of 
possible small business entities that would fall under entities that 
develop standards, develop generic requirements, and conduct 
certification activity in addition to comment as to how to develop 
requirements that would effectively assist and not unduly burden 
qualifying small business entities.
    76. Reporting, Recordkeeping and Other Compliance Requirements: The 
NPRM requests comment on reasonable reporting requirements for BOCs as 
to network planning, design, and interconnection arrangements. 
Similarly, this IRFA seeks comment on measures that could be taken by 
the Commission to limit any burdensome requirements upon small business 
entities. It seeks comment on reasonable notice requirements for BOCs 
as to communicating planned deployment of telecommunications equipment 
to their interconnecting carriers.
    77. The Commission's action in this proceeding is in direct 
response to Congress's passage of the 1996, in particular Section 273. 
This NPRM only sets forth tentative conclusions as to Congress's 
intentions within Section 273. For an exhaustive recitation of the 
Commission's tentative conclusions, see the NPRM at paragraphs 8-11, 
18, 20-21, 26, 29, 37-38, 40, 43, 48, 50, 52-55, 59-62, 68, 71, 73-75.
    78. This NPRM also seeks comment on rules proposed to administer 
end enforce manufacturing safeguards potentially impacting entities 
that develop standards, develop generic requirements and conduct 
certification activities. Rules adopted in this proceeding may require 
reporting, recordkeeping, and may impose other procedural requirements. 
There are no other reporting requirements contemplated by the NPRM.
    79. Federal Rules which Overlap, Duplicate or Conflict with these 
Rules: The Commission seeks comment as to what overlap, if any, exists 
or may exist among the requirements that this Commission may adopt to 
implement Section 273 and the Commission's existing rules. For example, 
the Commission has identified two sources

[[Page 3652]]

of potential overlap in 47 CFR Sec. 64.702 and 47 CFR Sec. 68.110, and 
seeks comment as to how the procedures required in these existing rules 
may be adapted to minimize additional regulatory burdens.
    80. With respect to rules that may potentially affect BOCs, 
Bellcore, and entities that develop standards, develop generic 
requirements, or conduct certification activities, the Commission 
tentatively concludes that no overlap, duplication, or conflict with 
existing rules exists. The Commission seeks comment on this conclusion.
    81. Significant Alternatives to the Proposed Rules which Accomplish 
the Stated Objectives of Applicable Statutes and which Minimize any 
Significant Economic Impact of the Proposed Rules on Small Entities: As 
mentioned in paragraphs four and five of this IRFA, the Commission 
believes that our rules may have a significant economic impact on a 
substantial number of small businesses insofar as they apply to 
entities that develop standards, develop generic requirements and 
conduct certification activity. We request comment from the industry in 
regards to significant alternatives to the proposed rules which 
accomplish the stated objective of applicable statutes and which 
minimize any significant economic impact of the proposed rules on small 
entities.
    82. We advance that our tentative conclusions were reached with the 
interests and concerns of small businesses in mind. Although 
tentatively there will be no differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities, the Commission finds this to be 
unnecessary. The Commission seeks comment on this tentative conclusion.
    83. Additionally, the Commission tentatively concludes that the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for small entities will not be 
necessary. The Commission seeks comment on this tentative conclusion. 
Lastly, neither the use of performance rather than design standards by 
the Commission nor an exemption from coverage of the rule, or any part 
thereof, for such small entities is believed to be required as a result 
of actions taken by the Commission in the impending Report and Order. 
The Commission seeks comment on this finding.

C. Initial Paperwork Reduction Act of 1995 Analysis

    84. This NPRM contains either a proposed or modified information 
collection. As part of our continuing effort to reduce paperwork 
burdens, we invite the general public and the Office of Management and 
Budget (OMB) to take this opportunity to comment on the information 
collections identified in this NPRM, as required by the Paperwork 
Reduction Act of 1995.88 Public and agency comments are due at the 
same time as other comments on this NPRM; OMB comments are due 60 days 
from date of publication of this NPRM in the Federal Register. Comments 
should address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
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    \88\ Public Law No. 104-13, codified at 44 U.S.C. Secs. 3501-
3520.
---------------------------------------------------------------------------

D. Notice and Comment Provision

    85. Pursuant to applicable procedures set forth in Sections 1.415 
and 1.419 of the Commission's Rules, 47 CFR Sections 1.415 and 1.419, 
interested parties may file comments on or before February 24, 1997, 
and reply comments on or before March 26, 1997. To file formally in 
this proceeding, interested parties must file an original and six 
copies of all comments, reply comments, and supporting comments, with 
the reference number ``CC Docket 96-254'' on each document. Those 
parties wishing each Commissioner to receive a personal copy of their 
comments must file an original plus eleven copies. Parties must send 
comments and reply comments to the Office of the Secretary, Federal 
Communications Commission, 1919 M Street, N.W. Room 222, Washington, 
D.C. 20554. Parties must also provide four copies to Secretary, Network 
Services Division, Common Carrier Bureau, 2000 M Street, N.W., Room 
235, Washington, D.C. 20554. Parties must also provide one copy of any 
documents filed in this docket to the Commission's copy contractor, 
International Transcription Services, Inc., 2100 M Street, N.W., Suite 
140, Washington, D.C. 20037.
    86. Comments and reply comments will be available for public 
inspection during regular business hours in the FCC Reference Center 
(Room 239) of the Federal Communications Commission, 1919 M Street, 
N.W., Washington, D.C. 20554. Copies of comments and reply comments 
will also be available through the Commission's copy contractor: 
International Transcription Service, Inc. (ITS, Inc.), 2100 M Street, 
N.W., Suite 140, Washington, D.C. 20037 (202-857-3800).
    87. In order to facilitate review of comments and reply comments, 
both by parties and Commission staff, we require that comments not 
exceed sixty (60) pages, including all appendices and attachments 
(except the text of proposed rules), and that reply comments not exceed 
thirty (30) pages. We can foresee no circumstances in which these page 
limits would be waived. Comments and reply comments must also include a 
short, concise summary of each substantive argument raised in the 
pleading, regardless of length. The summary may be paginated separately 
from the rest of the pleading and will not count toward the page 
limitations established above.89
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    \89\ See 47 CFR Sec. 1.49.
---------------------------------------------------------------------------

    88. Written comments by the public on the proposed and/or modified 
information collections are due thirty days after publication of this 
Notice in the Federal Register and must have a separate and distinct 
heading designating the comments as responses to the regulatory 
flexibility analysis. Written comments must be submitted by the Office 
of Management and Budget (OMB) on the proposed and/or modified 
information collections on or before 60 days after date of publication 
in the Federal Register. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Dorothy Conway, Federal 
Communications Commission, Room 234, 1919 M Street, N.W., Washington, 
DC 20554, or via the Internet to [email protected] and to Timothy Fain, 
OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W., Washington, DC 
20503 or via the Internet to [email protected].

E. Ordering Clauses

    89. Accordingly, it is ordered that pursuant to Sections 1, 3, 4, 
7, 201-209, 218, 251, 273 and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. Secs. 151, 153, 154, 157, 201-209, 218, 251, 273, 
and 403 that this notice of proposed rulemaking is hereby adopted.
    90. It is further ordered that the Secretary shall send a copy of 
this notice of proposed rulemaking, including the regulatory 
flexibility certification to the Chief Counsel for

[[Page 3653]]

Advocacy of the Small Business Administration, in accordance with 
Section 603(a) of the Regulatory Flexibility Act, 5 U.S.C. Sec. 603(a).

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-1676 Filed 1-23-97; 8:45 am]
BILLING CODE 6712-01-P