[Federal Register Volume 62, Number 26 (Friday, February 7, 1997)]
[Rules and Regulations]
[Pages 5757-5778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3113]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 61

[CC Docket No. 96-187; FCC 97-23]


Implementation of Section 402(b)(1)(a) of the Telecommunications 
Act of 1996 (Tariff Streamlining Provisions for Local Exchange 
Carriers)

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In light of the passage of the Telecommunications Act of 1996 
(1996 Act), which provides for streamlined tariff filings by local 
exchange carriers (LECs), the Commission is issuing this Report and 
Order to implement the

[[Page 5758]]

specific streamlining requirements of the Act. The Report and Order 
determines that the statutory effect of LEC tariffs subject to 
streamlined regulation being ``deemed lawful'' is that a LEC tariff 
will be lawful upon its effective date unless it is supended by the 
Commission prior to that time. In addition, the Report and Order finds 
that all LEC tariff filings, not just those proposing a rate decrease 
or increase, are eligible for streamlined treatment. Finally, the 
Report and Order adopted additional measures to streamline the 
administration of the LEC tariff review process.

EFFECTIVE DATE: February 8, 1997.

FOR FURTHER INFORMATION CONTACT: Patrick Donovan or Dan Abeyta at (202) 
418-1520, Common Carrier Bureau, Competitive Pricing Division. For 
additional information concerning the information collections contained 
in this Report and Order, contact Dorothy Conway at (202) 418-0217, or 
via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in CC Docket No. 96-187 (FCC 97-23) adopted on January 30, 
1997 and released on January 31, 1997. The full text of this Report and 
Order is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M St., N.W., 
Washington, D.C. 20037. The complete text may also be obtained through 
the World Wide Web, at http:/www.fcc.gov/Bureau/Common/Carrier/Order/
fcc9723.wp or may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc. (202) 857-3800, 2100 M St., 
NW., Suite 140 Washington, DC 20037.

Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act, the Report and Order 
contains a Final Regulatory Flexibility Analysis which is set forth in 
the Report and Order. A brief description of the analysis follows.
    Pursuant to section 604 of the Regulatory Flexibility Act, the 
Commission performed a comprehensive analysis of the Report and Order 
with regard to small entities. This analysis includes: (1) A succinct 
statement of the need for; and objectives of the Commission's decisions 
in the Report and Order; (2) a summary of the significant issues raised 
by the public comments in response to the initial regulatory 
flexibility analysis, a summary of the Commission's assessment of these 
issues, and a statement of any changes made in the Report and Order as 
a result of the comments; (3) a description of and estimate of the 
number of small entities and small incumbent LECs to which the Report 
and Order will apply; (4) a description of the projected recordkeeping 
and other compliance requirements of the Report and Order, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
compliance with the requirement; (5) a description of the steps the 
Commission has taken to minimize the significant economic impact on 
small entities consistent with the stated objectives of applicable 
statutes, including a statement of the factual, policy, and legal 
reasons for selecting the alternative adopted in the Report and Order 
and why one of the other significant alternatives to each of the 
Commission's decisions which affect small entities was rejected.
    The rules adopted in this Report and Order are necessary to 
implement the provisions of the Telecommunications Act of 1996.

Paperwork Reduction Act

    1. On November 27, 1996, the Office of Management and Budget (OMB) 
approved all of the proposed changes to our information collection 
requirements in accordance with the Paperwork Reduction Act. We have, 
however, decided not to adopt several of the information collection 
requirements proposed in the NPRM and we have modified others. For 
example, we declined to adopt the proposal to require the LECs to 
include a summary and legal analysis with their tariff filings, but we 
will require that LEC tariff filings include a statement in tariff 
transmittal letters clearly indicating that the tariff is being filed 
on a streamlined basis under section 204(a)(3) of the Act and whether 
the tariff filing contains a proposed rate increase, decrease or both 
for purposes of section 204(a)(3). We conclude that these requirements 
and modifications constitute a new ``collection of information,'' 
within the meaning of the Paperwork Reduction Act of 1995, 44 U.S.C. 
Secs. 3501-3520. These requirements and modifications have been 
approved by OMB. An agency may not conduct or sponsor and a person is 
not required to respond to a collection of information unless it 
displays a currently valid control number.
    2. The Commission concurs with OMB's recommendation that we 
consider input from the industry before implementing a system for the 
electronic filing of tariffs and related pleadings.
    OMB Approval Number: 3060-0745.
    Expiration Date: August 31, 1997.
    Title: Implementation of Section 402(b)(1)(A) of the 
Telecommunications Act of 1996 (Tariff Streamlining Provisions for 
Local Exchange Carriers) CC Docket No. 96-187.
    Respondents: Business or other for-profit, including small 
businesses.

------------------------------------------------------------------------
                                                                Annual  
                                                 Number of       hour   
            Proposed requirement                respondents   burden per
                                                               response 
------------------------------------------------------------------------
Electronic filing...........................              50          72
Separate filing for rate decreases..........              10           4
Identification/labelling of streamlined                                 
 tariffs....................................              50           9
------------------------------------------------------------------------

    Total Annual Burden: 4090.
    Estimated Costs Per Respondents: $3,400.
    Total Estimated Annual Reporting and Recordkeeping Costs: $170,000.
    Needs and Uses: The information collections adopted in this Report 
and Order will be used to ensure that affected telecommunications 
carriers fulfill their obligations under the Communications Act, as 
amended.
    Public reporting burden for the collections of information is as 
noted above. Send comments regarding the burden estimate or any other 
aspect of the collection of information, including suggestions for 
reducing the burden to the Record Management Branch, Washington, D.C. 
20554.

Synopsis of Report and Order

I. Introduction

    3. On February 8, 1996, the ``Telecommunications Act of 1996''

[[Page 5759]]

(1996 Act) became law. The intent of this legislation is ``to provide 
for a pro-competitive, de-regulatory national policy framework designed 
to accelerate rapid private sector deployment of advanced 
telecommunications and information technologies and services to all 
Americans by opening all telecommunications markets to competition.'' 
This Report and Order adopts rules to implement section 
402(b)(1)(A)(iii) of the 1996 Act, which adds section 204(a)(3) to the 
Communications Act. This section provides for streamlined tariff 
filings by local exchange carriers (LECs). In the NPRM, 61 FR 49987 
(September 24, 1996), we proposed measures to implement the tariff 
streamlining requirements of section 204(a)(3). Twenty-nine parties 
filed comments and twenty-one filed replies.

II. The 1996 Act

    4. Section 402(b)(1)(A)(iii) of the 1996 Act adds new subsection 3 
to section 204(a) of the Communications Act of 1934 (the Act):
    (3) A local exchange carrier may file with the Commission a new or 
revised charge, classification, regulation, or practice on a 
streamlined basis. Any such charge, classification, regulation, or 
practice shall be deemed lawful and shall be effective 7 days (in the 
case of a reduction in rates) or 15 days (in the case of an increase in 
rates) after the date on which it is filed with the Commission unless 
the Commission takes action under paragraph (1) before the end of that 
7-day or 15-day period as is appropriate.
    Section 402 of the 1996 Act also amends section 204(a) of the Act 
to provide that the Commission shall conclude any hearings initiated 
under this section within five months after the date the charge, 
classification, regulation, or practice subject to the hearing becomes 
effective. Section 402(b)(4) of the 1996 Act provides that these 
amendments shall apply to any charge, classification, regulation, or 
practice filed on or after one year after the date of enactment of the 
Act, i.e., February 8, 1997.
    5. Under the 1996 Act, a LEC is defined as ``any person that is 
engaged in the provision of telephone exchange service or exchange 
access.'' A LEC ``does not include a person insofar as such person is 
engaged in the provision of commercial mobile radio service under 
section 332(c), except to the extent that the Commission finds that 
such service should be included in the definition of such term.''

III. Streamlined LEC Tariff Filings Under Section 402 of the 1996 Act

A. Commission Authority Under the 1996 Act to Defer LEC Tariffs 
Eligible for Streamlined Treatment
    6. In the NPRM, we stated that by adopting section 204(a)(3) 
Congress intended to streamline LEC tariff filings by providing that 
they would become effective within seven or fifteen days notice unless 
suspended and investigated by the Commission. Section 203(b)(2) of the 
Act, however, provides that the Commission may defer the effective date 
of tariffs for up to 120 days. In the NPRM, we tentatively concluded 
that Congress intended to foreclose the exercise of our general 
deferral authority under section 203(b)(2) of the Act with respect to 
the tariffs eligible for streamlined treatment. We solicited comment on 
this tentative conclusion.
    7. ALLTEL Telephone Services Corporation (ALLTEL), Ameritech, Bell 
Atlantic, BellSouth Corp. (BellSouth), Cincinnati Bell Telephone (CBT), 
GTE Services Corp. (GTE), NYNEX Telephone Companies (NYNEX), Pacific 
Telesis Group (Pacific Telesis), Southwestern Bell Telephone Company 
(SWBT), United States Telephone Association (USTA), and US West, Inc. 
(US West) agree with the tentative conclusion set out in the NPRM that 
the Commission does not have discretion to defer for up to 120 days 
tariffs that LECs may file under the new streamlining provisions. GTE 
asserts that granting the Commission such discretion would enable 
competitors to continue to use the tariff review process to delay 
implementation of LEC pricing changes, a result that GTE contends would 
be contrary to Congressional intent to accelerate the tariff review 
process. NYNEX asserts that the Commission's deferral authority is 
derived from section 203(b)(1) of the Act while section 204(a)(3) 
provides for streamlined tariff filings. NYNEX concludes that, because 
there is no provision in section 204(a)(3) for deferring streamlined 
tariffs, Congress did not intend the deferral authority in section 203 
to be applicable to tariffs filed pursuant to section 204. In contrast, 
AT&T Corp. (AT&T), America's Carrier Telecommunications Association 
(ACTA), and Telecommunications Resellers Association (TRA) contend that 
the 1996 Act does not affect the Commission's authority to defer LEC 
tariff filings. According to AT&T, Congress could not have intended to 
preclude the Commission from deferring tariff filings made by monopoly 
LECs while retaining the authority to defer tariff filings made by 
carriers who face significant competition. MCI Communications 
Corporation (MCI) states that the Commission's deferral authority is 
foreclosed only for rate increases and decreases and that the 
Commission may continue to exercise its deferral authority for all 
other LEC tariffs. The General Services Administration (GSA) contends 
that the Commission retains its deferral authority because Congress did 
not amend section 203(b)(1).
    8. Neither the statute nor the legislative history to the 1996 Act 
directly addresses whether Congress intended to foreclose our exercise 
of deferral authority with respect to LEC streamlined tariffs. We 
conclude that the more recent and specific provisions of the 1996 Act 
take precedence over our general deferral authority in section 203. We 
believe continued application of the general deferral authority 
contained in section 203 to LEC tariffs filed on a streamlined basis 
under the specific provisions set out in new section 204(a)(3) would be 
contrary to Congressional intent. Accordingly, we adopt our tentative 
conclusion in the NPRM that we may not defer LEC tariffs filed under 
the tariff streamlining provisions of the 1996 Act.
B. Effect of Streamlined LEC Tariff Filings Being ``Deemed Lawful''
    9. Section 204(a)(3) of the Act provides that LEC tariffs filed on 
a streamlined basis ``shall be deemed lawful.'' The 1996 Act and the 
legislative history are silent regarding the specific legal 
consequences of this provision. In the NPRM, we tentatively concluded 
that, by specifying that LEC tariffs shall be ``deemed lawful,'' 
Congress intended to change the current regulatory treatment of LEC 
tariff filings. The Commission set forth two possible interpretations 
of ``deemed lawful.''
    10. Under the first interpretation, a tariff that becomes effective 
without suspension and investigation would be a ``lawful'' tariff. It 
could subsequently be found unlawful in a rate prescription proceeding 
under section 205, or in a complaint proceeding under section 208. The 
Commission, however, could not award refunds or damages for the time 
that the rate was in effect but could only order tariff revisions or 
award damages on a prospective basis. This would differ radically from 
the current practice, where a rate that goes into effect without 
suspension and investigation is the ``legal'' rate, leaving carriers 
liable for damages, for the time the tariff was in effect, subject to 
the applicable two-year statute of

[[Page 5760]]

limitations set out in section 415(a) of the Act, if the tariff is 
subsequently found unlawful.
    11. Under the second interpretation, the statutory language would 
be construed to establish higher burdens for suspension and 
investigation by presuming LEC tariffs lawful. Under this 
interpretation, the statutory language ``unless the Commission 
[suspends and investigates the tariff] before the end of that 7-day or 
15-day period,'' would not apply to the ``deemed lawful'' phrase, but 
only to the ``shall be effective'' phrase of section 204(a)(3). We 
noted in the NPRM that Congress did not otherwise amend the statutory 
scheme for tariffs filed by interstate communications common carriers. 
Therefore, the Commission or parties to a tariff proceeding could rebut 
the presumption of lawfulness in the truncated pre-effective tariff 
review process established by the 1996 Act. Tariffs would still be 
subject to complaint and/or investigation, and refunds or damages could 
be awarded for any time that the tariff was in effect, subject to the 
applicable statute of limitations.
    12. We also solicited comment on other possible interpretations of 
``deemed lawful.'' We stated in the NPRM that we would adopt the 
interpretation that would best implement the intent of the 1996 Act's 
tariff streamlining provisions. We also solicited comment on the impact 
of these interpretations of ``deemed lawful'' on small entities, both 
LECs and other small entities, that might be customers of LEC tariffed 
services. In particular, we solicited comment on the relative burdens 
that would be imposed on small entities by possible interpretations of 
``deemed lawful.''
    13. The LECs and USTA support adoption of the first interpretation 
of ``deemed lawful.'' They favor the position that tariffs filed on a 
streamlined basis are lawful unless the Commission takes action prior 
to the effective date of the tariffs and that retroactive damage awards 
for successful challenges to LEC tariffs are prohibited by the 1996 
Act. According to these parties, this interpretation of ``deemed 
lawful'' is consistent with the precedent established in Arizona 
Grocery. There the U.S. Supreme Court held that a tariff rate that is 
allowed to become effective is considered the ``legal'' rate, that is, 
the rate that the carrier is required to collect and the customer to 
pay under the filed rate doctrine. The lawfulness of an effective rate, 
however, remains subject to challenge either pursuant to a section 
204(a)(1) hearing, a complaint proceeding initiated pursuant to section 
208 of the Act, or an investigation established under section 205 of 
the Act. If, after completion of one of these proceedings, the 
Commission determines that some element of the effective tariff is 
unlawful, the Commission may order the filing carrier to pay damages, 
pursuant to section 207 of the Act, on a prospective basis only. The 
Supreme Court, these commenters point out, has held that an agency 
generally may not retroactively subject a carrier to refund liability 
if the agency subsequently declares the tariff rate to be unreasonable.
    14. Furthermore, these commenters maintain that Congress intended 
to alter the regulatory treatment for LEC tariff filings by adjudging 
streamlined LEC filings lawful by operation of the statute without need 
for a regulatory hearing and determination. BellSouth, for example, 
argues that, if the Commission does not exercise its discretion to 
suspend and investigate a LEC tariff filing, then the statute deems the 
filing to be lawful upon its effective date. In addition, BellSouth 
maintains that the statute confers upon the tariff the same status that 
previously could only be acquired through a Commission determination or 
adjudication. Pacific Telesis argues that, in determining Congressional 
intent, the starting point is the text of the statute and that, where 
as here, the statute is clear, no further inquiry is needed. According 
to Pacific Telesis, the phrase ``shall be deemed lawful'' expressly 
mandates that a filed tariff be treated, by operation of law, as lawful 
at the time of filing. It further states that the next phrase, ``and 
shall be effective,'' states a separate requirement regarding the time 
within which the tariff applies and therefore any consideration by the 
Commission of the tariff, even in the pre-effective period, must 
recognize this lawful status. SWBT argues that the ``shall be deemed 
lawful'' language of the 1996 Act limits any subsequent Commission 
review of a section 208 complaint challenging a LEC tariff filed on a 
streamlined basis. According to SWBT, the complainant in a section 208 
proceeding would have the insurmountable burden of overcoming the 
Commission's prior determination that the tariff is lawful. Thus, SWBT 
believes that a tariff revision that becomes effective under the 
streamlined procedures would be the lawful rate until the Commission 
concluded in a section 205 proceeding that a different charge, 
classification, or regulation would be lawful in the future. In 
addressing the question of limitation on damages, NYNEX asserts that 
several factors should minimize customers' concern about possible 
overcharges. NYNEX maintains that the Commission still has the 
authority to suspend and investigate a tariff that appears unlawful and 
to impose an accounting order. According to NYNEX, this action should 
serve to protect customers' rights to obtain damages if the tariff is 
later found to be unlawful at the conclusion of an investigation. In 
addition, NYNEX contends that, even if an unlawful tariff has gone into 
effect, a five-month time limit on investigations and complaint 
proceedings imposed by the 1996 Act will limit the time during which 
potentially unlawful rates would be in effect. Finally, NYNEX points 
out that, with increased competition, customers will have other choices 
if a LEC attempts to charge unlawful rates. USTA supports adoption of 
the first interpretation of ``deemed lawful,'' arguing that the 
statutory language provides that tariffs filed on a streamlined basis 
shall be deemed lawful unless the Commission takes action pursuant to 
section 204(a)(1).
    15. The remainder of the commenting parties oppose adoption of the 
first interpretation of ``deemed lawful.'' They are concerned that 
customers would be precluded from recovering damages for overpayments 
where a tariff was later found to be unlawful. MFS states that the 
first interpretation would create a ``perverse incentive'' for LECs to 
overcharge because they would be allowed to continue to collect such 
payments for the duration of any later tariff investigation or 
complaint proceeding. The only burden on the LECs would be defending 
their position in a complaint or investigation proceeding. Ad Hoc 
Telecommunications Users Committee (Ad Hoc) states that the LECs' 
analysis of the first interpretation of ``deemed lawful'' overlooks the 
Communications Act requirement that carrier rates be just and 
reasonable and that consumers be protected from unjust and unreasonable 
rates. Furthermore, Ad Hoc maintains that, contrary to the LECs' 
position, customers are not protected from unlawful rates due to the 
availability of other options because the marketplace has yet to reach 
a competitive state. In addition, MCI, AT&T, and GSA contend that this 
interpretation must be rejected because Congress gave no indication 
that it intended to limit customers' remedies.
    16. GSA notes that, in the NPRM, the Commission recognized that the 
Act and its legislative history do not provide an explanation of the 
term ``deemed lawful.'' According to GSA, it would be

[[Page 5761]]

unreasonable for the Commission to adopt the first interpretation of 
``deemed lawful'' absent a clear indication that Congress intended to 
make a fundamental change to the regulatory framework for LEC tariffs. 
GSA argues as well that Congress made no corresponding changes to other 
sections of the Act designed to assure that LEC rates are reasonable, 
and that this interpretation of section 204(a)(3) would appear to be in 
conflict with these sections. GSA maintains that, without changes to 
these sections, Congress could not have intended this radical departure 
from existing tariff regulatory procedures. Capital Cities/ABC, Inc., 
CBS, Inc., National Broadcasting Company, Inc., and Turner Broadcasting 
System, Inc. (CapCities) contend that the new section 204(a)(3) of the 
Act does not modify the long-standing statutory scheme of pre-effective 
tariff review by the Commission on its own initiative or upon complaint 
of interested parties, and potential refunds if carrier tariffs which 
have been allowed to become effective are found unlawful after 
investigation and opportunity for hearing. Rather, CapCities argues, 
section 204(a)(3) serves to extend formally to dominant LECs a 
variation of the streamlined tariff filing mechanism that the 
Commission has applied in various forms to other tariff filings.
    17. The other non-LEC parties likewise support the adoption of the 
second interpretation of ``deemed lawful.'' AT&T, for example, contends 
that the purpose of the ``deemed lawful'' provisions is to establish a 
presumption of lawfulness for the relevant tariffs during pre-
effectiveness review. AT&T contends that this presumption is, as the 
NPRM suggests, analogous to that accorded to LEC rate filings that are 
within applicable price cap limits, or to filings by non-dominant 
carriers under section 1.773 of the Commission rules. Therefore, AT&T 
maintains that tariffs filed pursuant to Section 204(a)(3) should not 
be suspended unless a petitioner makes a showing similar to the four-
part test required under section 1.773. Moreover, AT&T contends that, 
because incumbent LECs retain significant market power and therefore 
are more likely than carriers facing competition to charge unreasonable 
rates, petitioners challenging a tariff filed pursuant to section 
204(a)(3) should be required to show only that it is ``more likely than 
not'' that the disputed tariff is unlawful, rather than ``a high 
probability'' that the tariff will be found unlawful. Accordingly, AT&T 
argues that, because of the LECs' market position, petitions 
challenging their tariffs should have a lower threshold showing than 
petitions filed against tariffs proposed by nondominant carriers.
    18. MFS takes a position similar to AT&T, claiming that the 
Commission should adopt rules that presume section 204(a)(3) filings 
are lawful and assign the burden of proof to those wishing to challenge 
the lawfulness of the filing. Sprint Corp (Sprint) maintains that the 
second interpretation is ``clearly the correct one.'' Sprint also 
states that there is nothing in the statute itself nor in the 
legislative history that indicates a Congressional intent to overturn 
well established precedent that holds that an effective tariff 
establishes only the legal rate and not the lawful rate, citing Arizona 
Grocery.
    19. With respect to how the Commission should interpret ``deemed 
lawful,'' KMC Telecom Inc. (KMC), ACTA, TRA and SWBT discussed the 
effect the Commission's decision would have on small entities. KMC 
opposes adoption of the first interpretation of ``deemed lawful'' 
because it states that such a finding would render the pre-effective 
tariff review process meaningless for small competitors because it 
would be nearly impossible for them to monitor and review all LEC 
tariff filings sufficiently to overcome any presumption of lawfulness 
within the limited time period for filing petitions. KMC further states 
that, if the deadline for opposing tariffs is missed, then the only 
relief available is the filing of a formal complaint, which involves a 
lengthy and costly process that is not a practical remedy for a small 
company. ACTA states that, as a practical matter, precluding damages as 
a remedy will endanger the viability of small carriers because the LECs 
could litigate protested issues indefinitely without any threat of 
liability for damages. TRA states that LECs should not be permitted to 
charge and retain unreasonable rates while being exempt from paying 
damages for such unlawful charges. SWBT states that adoption of an 
interpretation of ``deemed lawful'' that would limit participation in 
review would not negatively impact small carriers because ``their 
current participation in the tariff review process is rare, and * * * 
Commission policy assumes that there is no need to allow for small 
entity/customer participation in the tariff filings of non-dominant 
carriers.''
    20. Based on our analysis of the statute in light of the record 
compiled in this proceeding and relevant judicial precedent, we adopt 
the first interpretation of ``deemed lawful.'' In reaching this 
conclusion, we determine that this interpretation is compelled by the 
language of the statute viewed in light of relevant appellate 
decisions, and that our alternative approach outlined in the NPRM is 
not a permissible reading of this statutory provision.
    21. The first step in statutory construction is to look at the 
language of the statute. In the NPRM, we suggested that the statutory 
phrase, ``deemed lawful,'' may be interpreted in two different ways. 
Appellate cases, however, have consistently found that the term 
``deemed,'' in this context, is not ambiguous. Developed in the context 
of energy rate regulation, this precedent states that the term ``deemed 
to be reasonable'' must be read to establish a conclusive presumption 
of reasonableness. In addition, we note that in this context the courts 
have explained that, while a rate contained in a properly filed tariff 
is the legal rate, a rate is ``lawful'' only if it is reasonable. 
Accordingly, we conclude that, because section 204(a)(3) uses the 
phrase ``deemed lawful,'' it must be read to mean that a streamlined 
tariff that takes effect without prior suspension or investigation is 
conclusively presumed to be reasonable and, thus, a lawful tariff 
during the period that the tariff remains in effect. For the reasons 
discussed below, we do not find, however, that the Commission is 
precluded from finding, under section 208, that a rate will be unlawful 
if a carrier continues to charge it during a future period or from 
prescribing a reasonable rate as to the future under section 205. Given 
the unambiguous meaning of the term ``deemed lawful,'' we see no reason 
to resort to the legislative history (although there is none on point) 
in concluding that this term denotes a conclusive presumption. In light 
of this statutory language as viewed under relevant appellate case law, 
we find that this interpretation is required in order to give effect to 
the language of the statute and therefore decline to adopt the 
alternative interpretation suggested in the NPRM. We find further, 
however, that the ``deemed lawful'' language does not govern 
streamlined tariff filings that become effective after suspension in 
those instances where the Commission suspends and initiates an 
investigation of a LEC tariff within the 7 or 15 day notice periods 
specified in section 204(a)(3). In those cases, the LEC streamlined 
tariffs would not be ``deemed lawful'' under section 204(a)(3) because 
they were suspended and set for investigation. Rather, they would be 
``legal'' until the Commission

[[Page 5762]]

concluded an investigation and made a determination as to their 
lawfulness. The lawfulness of such tariffs would be determined by the 
orders issued by the Commission at the conclusion of those proceedings.
    22. We recognize that our interpretation of section 204(a)(3) will 
change significantly the legal consequences of allowing tariffs filed 
under this provision to become effective without suspension. Under 
current practice, a tariff filing that becomes effective without 
suspension or investigation is the legal rate but is not conclusively 
presumed to be lawful for the period it is in effect. Indeed, if such a 
tariff filing is subsequently determined to be unlawful in a complaint 
proceeding commenced under section 208 of the Act, customers who 
obtained service under the tariff prior to that determination may be 
entitled to damages. In contrast, tariff filings that take effect, 
without suspension, under section 204(a)(3) that are subsequently 
determined to be unlawful in a section 205 investigation or a section 
208 complaint proceeding would not subject the filing carrier to 
liability for damages for services provided prior to the determination 
of unlawfulness. We find, based on the language of the statute, that 
this is the balance between consumers and carriers that Congress struck 
when it required eligible streamlined tariffs to be deemed lawful.
    23. Further, section 204(a)(3) does not mean that tariff provisions 
that are deemed lawful when they take effect may not be found unlawful 
subsequently in section 205 or 208 proceedings. No language in section 
204(a)(3) states or requires us to infer such a limitation, nor is 
there any legislative history suggesting such a limitation. As the 1996 
Act did not amend section 205 or 208, nor refer to them in amending 
section 204, it did not limit our authority either to conduct tariff 
investigations under section 205 or to process complaint proceedings 
commenced under section 208. In fact, the language of section 205, 
which was not changed by the 1996 Act, makes clear that the Commission 
may find that a rate ``is or will'' be in violation of the Act and 
prescribe ``what will be the just and reasonable charge'' for the 
future. The ``deemed lawful'' language in section 204(a)(3) changes the 
current regulatory scheme only by immunizing from challenge those rates 
that are not suspended or investigated before a finding of 
unlawfulness. It does nothing to change the Commission's ability to 
prescribe rates as to the future under section 205 or to find under 
section 208 that a rate will be unlawful if charged in the future. Even 
where the agency has made an affirmative finding of lawfulness, which 
would not be the case where a tariff has become effective without 
suspension under section 204(a)(3), the tariff remains subject to 
further review under section 205. Thus, a rate that is ``deemed 
lawful'' can also be reevaluated as to its future effect under sections 
205 and 208 and the Commission may prescribe a rate as to the future 
under section 205.
    24. In this decision, we do not adopt the view of Pacific Telesis 
that the phrase ``shall be deemed lawful and shall be effective 7 days 
* * * or 15 days * * * after the date on which it is filed'' mandates 
that a tariff be treated as lawful at the time of filing. In our view, 
the better reading of section 204(a)(3) is that a streamlined tariff 
becomes both effective and ``deemed lawful'' 7 or 15 days after the 
date on which it is filed. Congress did not amend the Act to eliminate 
the Commission's suspension authority for LEC tariffs and therefore, 
Congress did not intend that LEC tariffs be deemed lawful when filed. 
Moreover, it would be illogical if, for example, a tariff could be 
considered lawful before it even takes effect and while another tariff 
is already in place.
    25. We also conclude that the Commission may find a tariff 
provision that is ``deemed lawful'' under section 204(a)(3) to be 
unlawful at the conclusion of a section 205 investigation or 208 
complaint proceeding based on a preponderance of the evidence presented 
in either proceeding. We currently employ this standard in section 205 
and 208 proceedings and find nothing in section 204(a)(3) requiring us 
to establish a higher evidentiary standard for determining the 
prospective lawfulness of a streamlined tariff provision. Further, we 
decline to impose a higher burden as a matter of policy.
    26. In adopting the first interpretation of ``deemed lawful,'' we 
have considered the comments of KMC, ACTA, and TRA, which expressed a 
concern that adoption of this interpretation would be unfair to small 
consumers and competitors of LECs. With respect to KMC's concern that 
the adoption of the first interpretation would make it difficult for 
small competitors to challenge LEC tariff filings, we note that all 
parties, including small entities, will have the same opportunity to 
challenge tariff filings eligible for streamlined regulation before 
they become effective or to initiate a section 208 complaint proceeding 
after the filings become effective. These procedures will permit small 
businesses to participate fully in pre-effective review of LEC tariffs 
and to obtain a determination of the lawfulness of a LEC tariff after 
it has gone into effect. Small businesses will be able to protect 
against this possible impact on them caused by ``deemed lawful'' 
treatment of LEC tariffs by participating in the pre-effective tariff 
review process. In addition, the program of electronic filing of 
tariffs that we discuss in Section III, D, 1, infra. will facilitate 
participation by small entities in the tariff review process. To the 
extent that small entities will have greater difficulty than larger 
entities in participating in the tariff review process, we note that 
the shortened time period for pre-effective review of LEC tariffs is 
required by the 1996 Act and that, as explained above, we are compelled 
by the language in the statute as interpreted by relevant judicial 
precedent to adopt the first interpretation of ``deemed lawful.''
C. LEC Tariffs Eligible for Filing on a Streamlined Basis
1. Types of Tariff Filings Eligible for Streamlined Filing
    27. The first sentence of section 204(a)(3) provides that LECs may 
file ``a new or revised charge, classification, regulation, or practice 
on a streamlined basis.'' The NPRM observed that this suggests that LEC 
tariff filings that propose any change, including rate increases and 
decreases, may be eligible for streamlined filing. The second sentence 
of section 204(a)(3) provides for specified effective dates only for 
tariffs proposing rate increases or decreases. In the NPRM, we 
tentatively concluded that all LEC tariff filings that involve changes 
to the rates, terms, and conditions of existing service offerings, 
regardless of whether they involve a rate increase or decrease, would 
be eligible for streamlined treatment, with the possible exception of 
tariffs for new services.
    28. Concerning new services, the NPRM asked whether the phrase ``a 
new or revised charge'' included tariffs introducing entirely new 
services or whether the word ``new'' refers only to new charges, 
classifications, regulations, or practices for existing services. The 
NPRM therefore solicited comment on whether section 204(a)(3) applies 
to new or revised charges associated with existing services, but not to 
charges associated with new services. The NPRM stated that this 
approach may be preferable as a matter of policy, to the extent 
permissible under the statute, because it would permit the Commission 
and interested parties

[[Page 5763]]

greater opportunity to review tariffs that propose to introduce new 
services since those filings are more likely to raise sensitive pricing 
issues than revisions to tariffs for services that have already been 
subject to review.
    29. The LECs, Ad Hoc, TRA, Sprint, USTA, AT&T, National Exchange 
Carrier Association (NECA), and GSA support our tentative conclusion 
that the streamlining provisions of the 1996 Act apply to tariffs 
proposing changes to a rate, term, or condition as well as to rate 
increases and decreases. Generally, these commenters contend that 
almost any change in the terms and conditions of an existing service, 
regardless of whether the change involves a rate increase or decrease, 
will affect the overall rate or cost to the consumer and therefore 
should be subject to streamlining. Ameritech contends that the plain 
meaning of the first sentence of section 204(a)(3) clearly states that 
LECs may file a new or revised charge, classification, regulation, or 
practice on a streamlined basis. Ameritech concludes from this language 
that Congress intended streamlining to apply to all tariff revisions, 
not just those involving rate increases or decreases. While AT&T and 
NECA agree with the Commission's tentative conclusion that streamlining 
should apply to changes in rates, terms, and conditions of existing 
services, as well as to rate increases and decreases, they note that 
the statute does not specify time periods for consideration of 
suspension or deferral in the case of changes to a ``classification, 
regulation, or practice'' to an existing service. AT&T recommends that 
the Commission require LECs to file such tariffs thirty days prior to 
the tariff's proposed effective date. NECA suggests that the Commission 
adopt a rule that permits tariff filings containing only terms and 
conditions only to be filed on seven days' notice.
    30. Time Warner Communications Holdings, Inc. (TW Comm), MCI, and 
the Association for Local Telecommunications Services (ALTS) disagree 
with the tentative conclusion in the NPRM, arguing that the statute is 
clear that streamlining applies only to rate increases and decreases to 
existing services. MCI, for example, argues that changes to terms and 
conditions should not be eligible for streamlined treatment because the 
second sentence of section 204(a)(3) applies reduced notice periods 
only to rate increases or decreases. In addition, MCI contends that, 
given the LECs' continued market share, there is still a ``substantial 
possibility'' that any proposed terms and conditions in LEC tariffs 
will result in unreasonable discrimination in violation of section 202 
of the Act. MCI asserts that proposed changes to LEC tariffs that do 
not include rate increases or decreases should be subject to more 
thorough scrutiny than would be possible under the streamlining 
provisions of the 1996 Act.
    31. While the LECs, USTA, the Competitive Telecommunications 
Association (CompTel), and GTE support the Commission's tentative 
conclusion that section 204(a)(3) should be construed to include 
changes to existing rates, they disagree with the Commission's stated 
inclination to exclude new services from streamlined treatment. NYNEX 
maintains that the terms ``new or revised charge, classification or 
practice'' in section 204(a)(1) are repeated in section 204(a)(3) and 
that the Commission has consistently interpreted the former section as 
giving it authority to investigate and impose an accounting order for 
all types of tariffs, including those for new services and revised 
rates for existing services. If the Commission interpreted the terms 
``new'' and ``revised'' for purposes of section 204(a)(3) to exclude 
tariffs proposing new services, NYNEX argues that it would imply that 
the Commission does not have authority under section 204(a)(1) to order 
investigations or conduct complaint proceedings of any tariffs 
proposing new services. US West argues that streamlining new services 
will facilitate competition by allowing the LECs to respond quickly to 
changing market conditions, such as the introduction of new services by 
their competitors, and to reward innovation. Ameritech and USTA further 
argue that it would not be in the public interest to permit LECs' 
competitors, but not the LECs, to introduce new services on an 
expedited basis. GTE maintains that, when the first two sentences of 
the statute are considered together, it is clear that tariffs proposing 
new services, as described in the first sentence, are to be afforded 
the streamlined treatment described in the second sentence.
    32. A number of commenters believe that new services should be 
excluded from eligibility for streamlined treatment. ALTS argues that 
tariffs for new services should not be eligible for streamlined 
treatment because they do not involve changes in rates and they are 
more likely to raise policy questions than rate changes. MCI takes a 
similar position, stating that the statute is clear that the 
streamlining provisions apply only to ``a new or revised charge, 
classification, regulation, or practice'' associated with existing 
services. Both ALTS and MCI maintain that the current 45-day notice 
period for new services is reasonable and should be retained. Sprint 
believes that new services are not covered by the streamlining 
provisions because the word ``new'' in the statute does not modify or 
relate to a new service, but rather relates to a new charge, term, 
condition, or practice for an existing service. In addition, Sprint 
maintains that charges for new services are neither rate reductions nor 
rate increases and, thus, are not eligible for streamlining under the 
language of the statute. Ad Hoc asserts that, because LECs have market 
power, the Commission should construe the statute narrowly to ensure 
that LEC tariffs for new services are thoroughly reviewed. GSA is in 
favor of excluding new services from streamlining because of the 
complexity of new service offerings. GSA supports a policy of giving 
such tariffs a higher level of scrutiny.
    33. We find that all LEC tariffs involving rate increases, 
decreases, and/or changes to the rates, terms, and conditions of 
existing services are eligible for streamlining. We also conclude that 
LEC tariffs introducing new services are eligible for streamlined 
filing. Making all LEC tariffs eligible for streamlining will provide a 
consistent reading of section 204(a)(3) and section 204(a)(1) by 
establishing that all tariff filings are subject to the provisions of 
section 204. We agree with NYNEX that we have consistently interpreted 
section 204(a)(1) as giving the Commission authority to investigate and 
impose an accounting order on all types of tariffs, including those for 
new services. Making all LEC tariffs eligible for streamlining will 
continue this practice as well as give greatest effect to Congressional 
intent to streamline the LEC tariff process. In addition, we find that 
this interpretation will simplify the administration of the LEC tariff 
process by making it unnecessary for the Commission, carriers, or 
interested persons to determine whether a particular tariff qualifies 
for streamlining. Accordingly, we determine that all LEC tariffs are 
eligible for streamlined filing.
2. Optional Nature of LEC Streamlined Tariff Filings
    34. Section 204(a)(3) states that LECs ``may'' file under 
streamlined provisions. In the NPRM, we tentatively concluded that LECs 
may elect to file on longer notice periods than those provided for in 
section 204(a)(3), but that, if they chose to do so, such tariffs would 
not be ``deemed lawful.''
    35. SWBT, ALLTEL, USTA, NYNEX, NECA, and GTE disagree with the 
Commission's tentative conclusion and

[[Page 5764]]

contend that tariffs should be deemed lawful whether or not they are 
filed on a streamlined basis. USTA and SWBT, for example, maintain 
that, while the statute may give LECs the option to file their tariffs 
on a streamlined basis, a determination that the tariff is ``deemed 
lawful'' is not dependant on whether the LEC filed on a streamlined 
basis. ACTA and TRA support the Commission's tentative conclusion.
    36. We determine, as set out in the NPRM, that LECs may, but are 
not required to, file tariffs on a streamlined basis. As noted above, 
the first sentence of section 204(a)(3) states that LECs ``may'' file a 
tariff on a streamlined basis. We also interpret this section to mean 
that, if a LEC chooses not to avail itself of the streamlining 
provisions, then the tariff would be filed pursuant to the general 
tariffing requirements set out in section 203 of the Act and governed 
by the notice periods set out in section 61.58 of our rules. In 
addition, LEC tariffs filed outside the scope of section 204(a)(3) 
shall not be ``deemed lawful'' because, by definition, they are not 
filed pursuant to that section and are not, therefore, accorded the 
treatment provided for in that section. We also conclude that we may 
exercise our deferral authority with respect to such tariffs.
    37. In the NPRM, we tentatively concluded that section 204(a)(3) 
does not preclude the Commission from exercising its forbearance 
authority under section 10(a) of the Act to establish permissive or 
complete detariffing of LEC tariffs.
    38. Most of the commenters agree with the tentative conclusion set 
out in the NPRM that the Commission has forbearance authority to reduce 
or eliminate filing requirements for LEC tariffs. Pacific Telesis 
believes that the Commission has forbearance authority to remove tariff 
filing requirements when competition develops to the point where 
regulation is unnecessary. GSA states that nothing in either section 
204(a)(3) or section 10(a) of the 1996 Act restricts the Commission 
from applying its forbearance authority to LEC tariff filings. CompTel 
and ACTA, on the other hand, argue that the general provisions of 
section 10(a) are overridden by the specific language of new section 
204(a)(3), which requires LECs to file tariffs. They contend that this 
interpretation is consistent with general statutory construction 
principles mandating that specific provisions take precedence over more 
general ones. They further argue that any interpretation of the statute 
that gave the Commission authority to eliminate LEC tariff filing 
requirements entirely would void the new streamlining provisions.
    39. We affirm our tentative conclusion that we may exercise 
forbearance authority to reduce or eliminate tariff filing requirements 
for LECs, including the filing of tariffs eligible for streamlined 
treatment. Section 10(a) accords the Commission general authority to 
forbear from enforcing almost any provision of the Act applicable to 
common carriers if specific preconditions are met. The only limitation 
on this authority is provided in subsection 10(d), which states that 
the Commission may not forbear from applying certain interconnection 
requirements on incumbent LECs set out in section 251(c) of the 1996 
Act or from authorizing Bell Operating Company interLATA entry pursuant 
to section 271 of the 1996 Act until ``those requirements have been 
fully implemented.'' Absent any express limitation on our authority to 
forbear from applying tariffing requirements of section 203 of the Act, 
we conclude that we have authority to do so under section 10(a). In 
addition, we find it difficult to construe section 204(a)(3), which 
states that LECs ``may'' file streamlined tariffs, and our section 10 
forbearance authority to mean that the statute imposes a requirement 
that LECs ``must'' file tariffs. Rather, we find that Congress intended 
to reduce or eliminate regulation as competition develops and to 
provide for the detariffing of LEC services under appropriate 
conditions.
4. Applications of Section 204(a)(3) of the Act to Tariff Filings of 
Nondominant LECs
    40. As noted above, under the 1996 Act, a LEC is defined as ``any 
person that is engaged in the provision of telephone exchange service 
or exchange access.'' The NPRM did not address the application of 
section 204 to nondominant LECs.
    41. Several of the commenters assert that the 1996 Act's 
streamlined tariffing provisions should not apply to nondominant LECs. 
They argue that there is nothing in the 1996 Act or its legislative 
history to suggest that Congress intended to increase the current one-
day's notice period for nondominant LECs. In any event, MCI asserts 
that, if the Commission determines that Section 204(a)(3) applies to 
nondominant LECs, it should forbear from applying Section 204 (a)(3) to 
nondominant providers of interstate access service that do not have 
market power.
    42. The statute does not distinguish between incumbent LEC and 
competitive LECs for purposes of Section 204. Therefore, we conclude 
that all LECs, including nondominant LECs, to the extent they file 
tariffs, are eligible to file tariffs on a streamlined basis. At this 
time, we have not addressed the extent to which nondominant LECs are 
required to comply with our tariffing rules. Two petitions before the 
Commission will provide an opportunity for us to do so. As noted above, 
the statute also provides that LECs ``may'' file under streamlined 
provisions. We have interpreted this section to mean that LECs may 
choose to use these streamlined provisions, but that tariffs filed 
outside of the scope of these provisions are governed by the general 
tariffing provisions of section 203. Accordingly, we also conclude that 
Section 204(a)(3) does not limit the ability of nondominant LECs to 
file tariffs on one-day's notice under Sec. 61.23(c) of our rules. We 
also conclude that such tariffs would not be eligible for ``deemed 
lawful'' treatment, but that such tariffs would continue to enjoy the 
presumption of lawfulness accorded all nondominant carrier filings 
under Sec. 1.773(a)(ii) of our rules.
D. Streamlined Administration of LEC Tariffs
1. Electronic Filing
    43. In the NPRM, we proposed establishing a program for electronic 
filing of tariffs and associated documents. We sought comment on: (a) 
whether or not to establish an electronic filing program; (b) whether 
such a system should be operated by the Commission or carriers; (c) 
whether tariffs should be filed in a specified database format; and (d) 
what system security measures should be adopted.
    44. Nearly every commenter supports establishing an electronic 
filing system. Many commenters suggest, however, that, before we 
implement a mandatory system of electronic filing, we initiate either 
an industry working group or issue a further NPRM to ensure the 
security of the program and to discuss its functional requirements. 
Sprint asserts that the industry is not ready to participate in an 
electronic filing system because there are no industry standards 
regarding systems, format, or software. There is also disagreement 
regarding whether participation in the system should be mandatory or 
not. None of the commenters includes a precise time frame for 
implementing such a system, although Frontier Corp. (Frontier) states 
that it should be implemented before the LEC streamlining provisions 
take effect.

[[Page 5765]]

    45. Commenters are divided on who should design and maintain the 
system. Some commenters support having the Commission maintain and 
control the system. Other commenters support a system designed by the 
Commission but run by carriers subject to Commission oversight over 
access and security. MFS and McLeod Telemanagement, Inc. (McLeod) 
suggest that a third-party contractor should maintain the system.
    46. Most commenters advocate the use of an Internet-based system. 
Some of these commenters support a system of dial-up access in addition 
to the Internet-based system. USTA favors utilization of the World Wide 
Web over the use of bulletin boards or dial-in databases. It argues 
that bulletin boards are slower than the World Wide Web, and dial-in 
databases require specific software, which are difficult to administer. 
Ameritech, BellSouth, and CITI propose specific systems, such as EDGAR, 
the electronic filing system of the SEC. NYNEX, SWBT, and ACTA propose 
that the Commission post notices of tariff filings on its Web page, 
which would be linked to LEC Web pages where the LECs would post their 
tariffs. USTA proposes a system with company-specific sections on the 
FCC's Web page. NECA proposes that the Commission set up separate 
servers for providing information and posting of tariffs for public 
review, which would permit anonymous log-ons to the public server.
    47. Ameritech suggests that the system adopted by the Commission 
should accommodate multiple platforms and software packages rather than 
specify a database that would require re-drafting tariffs into a 
standardized system. GSA and CITI, however, contend that the Commission 
should prescribe a standardized format for tariff filings. AT&T and 
USTA suggest that the system be structured to allow carriers to 
download tariffs in spreadsheet formats and as ASCII text files.
    48. Many commenters suggest methods to prevent unauthorized changes 
to tariffs, such as using: password or PIN number protection; 
electronic signatures; and encryption devices. NTCA recommends that the 
Commission ensure that a permanent record of historically filed tariffs 
is maintained. Ad Hoc and AT&T urge that the notice period not begin to 
run until the filing is posted. GSA and AT&T propose that we establish 
a return receipt confirmation to specify the date of filing and 
commencement of the notice period. Several commenters urge the 
Commission to require that filings be posted on the system at a 
specified time early in the day of filing, i.e., 10 a.m. Pacific 
Telesis and U.S. West oppose this suggestion.
    49. We find that a program for the electronic filing of tariffs and 
associated documents would facilitate administration of tariffs. An 
electronic filing program could afford filing parties a quick and 
economical means to file tariffs while giving interested parties 
virtually instant notification and access to the tariffs. In addition, 
we conclude that participation in such a system should be mandatory for 
all LECs, because, if some LECs are allowed to continue to file on 
paper, we would not realize the full benefit of electronic filing. An 
electronic filing system also should not impose undue burdens on LECs, 
but rather reduce their overall administrative burdens. Accordingly, 
subject to the availability of adequate funding, we will establish a 
program for the electronic filing of tariffs and associated documents, 
such as transmittal letters, requests for special permission, and cost 
support documents. We will require LECs to file this information 
electronically. Our program will also permit filing of petitions to 
suspend and investigate and responsive documents electronically and we 
encourage parties to do so. Because a database system would place 
significant strictures on filing, including a significant alteration of 
the format of current tariffs, we will not require that tariffs and 
associated documents be filed in a database format. Instead, our 
electronic filing program will permit entities to file electronically 
consistent with their current formats. We further determine that the 
Commission, at least at the initial stage of implementation, will be 
responsible for administering the electronic filing program. We may 
consider other alternatives at a later time.
    50. We delegate authority to the Chief, Common Carrier Bureau to 
establish this program including determinations concerning transition 
mechanisms, establishment of procedures to assure security, when the 
program should be initiated, and any other issues that may arise 
regarding the initiation of the electronic filing program. We direct 
the Bureau to consult with industry and potential users informally and 
share plans for its proposed implementation and make any necessary 
adjustments in light of industry and user views, as appropriate. We 
also direct the Bureau to permit filing of, and access to, LEC tariffs 
and associated documents by means of the Internet. We direct the Bureau 
to implement this program in coordination with other electronic filing 
initiatives within the agency.
2. Exclusive Reliance on Post-Effective Tariff Review
    51. We currently rely on pre- and post-effective review of tariffs 
to ensure LEC compliance with Title II of the Communications Act. In 
the NPRM, we solicited comment on whether we can, and should, in 
implementing the streamlined tariff provisions of the 1996 Act, adopt a 
policy of relying exclusively on post-effective tariff review, at least 
for certain types of tariff filings, to oversee LEC compliance with the 
Act. In the NPRM, we asked whether exclusive reliance on post-effective 
review could significantly streamline the tariff review process while 
continuing to provide an opportunity for evaluation of the lawfulness 
of tariffs. We sought comment on whether, under such a policy, we 
should retain the discretion to conduct a pre-effective tariff review 
in individual cases. We also solicited comment on the extent to which 
section 204(a), which provides that when a tariff is filed, the 
Commission may either on its own initiative or ``upon complaint'' 
suspend and investigate the tariff, limits our ability to rely 
exclusively on post-effective tariff review.
    52. Commenters generally oppose relying exclusively on post-
effective tariff review. AT&T states that Congress did not intend to 
eliminate pre-effective review of LEC tariffs. To find otherwise, AT&T 
explains, would permit LECs to impose rates and terms on customers that 
would stay in effect until such time as the Commission could conclude 
an investigation. In addition, AT&T contends that such a finding would 
negate section 204(a), which authorizes the Commission to initiate an 
investigation when a complaint is filed or upon its own initiative 
``whenever there is filed any new or revised charge, classification, 
regulation or practice.'' CompTel points out that reliance solely on 
post-effective review would be particularly inappropriate if the 
Commission interprets the term ``deemed lawful'' as changing the legal 
status of tariffs. Under this scenario, CompTel claims that consumers 
would be denied any protection from LEC tariff filings that are given 
the force of an affirmative finding of lawfulness and reviewed only 
after taking effect. According to CompTel, consumer remedies would be 
further limited by the Commission's inability to suspend a tariff after 
it has become effective.
    53. Sprint, Frontier, and NECA are the only commenters that favor 
our proposal to rely solely on post-effective review of tariffs. 
According to NECA, relying on post-effective tariff review

[[Page 5766]]

would eliminate the need for filing of petitions and allow tariffs to 
go into effect within the streamlined notice periods, thereby 
furthering the intent of the 1996 Act to accelerate the tariff review 
process. Sprint asserts that post-effective review of LEC tariffs will 
suffice, provided that the Commission adopts the position that ``deemed 
lawful'' only creates a rebuttable presumption of lawfulness. The 
remedies provided under sections 205 and 208 of the Act would still be 
available, and LEC customers could recover damages for tariffs found to 
be unlawful as of the effective date of the tariff filing, according to 
Sprint.
    54. We conclude that pre-effective tariff review is required by the 
statute which contemplates pre-effective tariff review by identifying 
specific actions that we can take, i.e., suspension and investigation, 
prior to the effective date of the tariff. In addition, eliminating 
pre-effective tariff review would restrict the opportunity for 
interested parties to obtain review of potentially unlawful tariffs. We 
further find that pre-effective review is a useful tool to assure 
carriers' compliance with sections 201 through 203 of the Act. 
Therefore, we will retain our practice of pre-effective review. We will 
continue to rely additionally on post-effective tariff review, 
including the section 208 complaint process and in section 205 tariff 
investigations.
3. Pre-Effective Tariff Review of Streamlined Tariff Filings
    55. In the NPRM, we solicited comment on what measures, if any, the 
Commission should take to facilitate decision-making within seven or 
fifteen days concerning whether to suspend and investigate tariffs 
filed pursuant to section 204(a)(3).
 a. Summaries and Legal Analyses
    56. In the NPRM, we solicited comment on whether we should 
establish requirements that LECs file summaries of proposed tariff 
revisions with their streamlined tariff filings in order to provide a 
more complete description than under current requirements, and that LEC 
tariffs filed on a streamlined basis be accompanied by an analysis 
showing that they are lawful under applicable rules.
    57. With the exception of Ameritech, the LECs unanimously oppose 
the Commission's proposal to require them to file a summary with tariff 
filings. All of the LECs also oppose a requirement that they file an 
analysis demonstrating that the tariff filing is lawful. LECs argue 
that these requirements would impose increased burdens, contrary to the 
deregulatory goals of the 1996 Act. They also argue that the 
information contained in the proposed summaries is already provided in 
the Description and Justification (D&J) section of tariff transmittals. 
Ameritech further states that requiring a legal analysis is 
inconsistent with the directive in section 204(a)(3) that LEC tariffs 
are deemed lawful and that the burden of demonstrating otherwise should 
rest on parties opposing the filing. NYNEX states that the Commission 
should adopt reduced tariff support requirements for streamlined tariff 
filings. Finally, CBT states that the legal analysis requirement would 
have a chilling effect on small and mid-size LECs that may be sensitive 
to legal fees.
    58. Non-LEC commenters support these possible requirements, stating 
that they would assist the Commission and the public in reviewing 
tariff filings without imposing a significant burden on the LECs. 
CapCities suggests that the summaries include details, on a service-by-
service basis, of the rate or service impact of the proposed tariff and 
the reasons in support of the proposed changes.
    59. We will not impose any additional requirements for supporting 
information concerning LEC tariff filings at this time. Although a 
summary and legal analysis could be useful to the Commission and the 
public, we find that it is not necessary to require it as part of our 
initial implementation of streamlined LEC tariff filings because we are 
not convinced that it would expedite the tariff review process. 
Instead, we will gain experience from our initial administration of 
streamlined LEC tariffs and revisit this issue if necessary.
b. Presumptions of Unlawfulness
    60. In the NPRM, we solicited comment on whether it would be 
consistent with the 1996 Act to establish presumptions of unlawfulness 
for narrow categories of tariffs, such as tariffs facially not in 
compliance with our price cap rules, that would permit suspension and 
designation of issues for investigation through abbreviated orders or 
public notices. We solicited comment on what kinds of tariffs could be 
accorded this presumption.
    61. All LECs oppose establishing presumptions of unlawfulness. They 
argue that these presumptions would be contrary to section 204(a)(3). 
For example, Bell Atlantic argues that, ``[t]here is no way to 
reconcile [establishing presumptions of unlawfulness] with the 
statutory mandate, that absent direct action by the Commission, tariff 
filings are `deemed lawful' within 7 to 15 days.'' Pacific Telesis 
explained that, ``[b]y deeming LEC tariffs lawful at the time of 
filing, Congress created a presumption of continuing lawfulness which 
puts the burden on the party challenging the tariff to overcome the 
presumption.''
    62. The Interexchange Carriers (IXCs) support the proposal, 
suggesting further that the Commission should reject any tariff filing 
that is facially inconsistent with any existing rule or regulation. 
CompTel states that the presumptions would help the Commission serve 
its dual mandates of protecting consumer interests and expediting the 
tariff review process.
    63. We will not establish presumptions of unlawfulness for any 
categories of tariffs. Such presumptions would be inconsistent with the 
legislative intent of this provision. Instead, consistent with our 
current practice, we intend to utilize the tariff review process to 
identify problematic tariffs that warrant suspension. We note, however, 
that tariffs that facially do not comply with our rules, such as out-
of-band price cap filings, will, for that reason, continue to have a 
high probability of rejection or suspension and investigation.
c. Treatment of Tariffs Containing Both Rate Increases and Decreases
    64. The 1996 Act provides that LEC tariffs that propose to decrease 
rates shall be effective in 7 days and tariffs proposing rate increases 
shall be effective in 15 days. The statute is silent on which notice 
period will apply to tariffs that contain both increases and decreases. 
In the NPRM, we tentatively concluded that the 15-day notice period 
should apply to such tariffs and that carriers wishing to take 
advantage of the 7-day notice period should file rate decreases in 
separate transmittals.
    65. Non-LEC commenters support the Commission's proposal. They 
argue that it is necessary to protect the interest of customers to 
challenge rate increases, and that, therefore, the longer notice period 
shall apply. All the LECs, except BellSouth, oppose this requirement 
because requiring separate transmittals would purportedly increase the 
regulatory burden on LECs. As an alternative, NYNEX, SWBT, and Pacific 
Telesis suggest that the Commission look at the overall effect on the 
Actual Price Index (API) for a service category to determine if a 
tariff filing should be classified as an increase or a decrease. They 
explain that most access services contain numerous individual rate 
elements, so that a tariff that reduces most rate elements for a 
particular service may nonetheless contain rate increases for 
individual elements. ALLTEL suggests that small and mid-

[[Page 5767]]

 sized companies be permitted to define rate increases and decreases at 
the access category level. CBT suggests that all of the increases and 
decreases in a given transmittal be aggregated and the applicable 
notice period determined by the net overall change.
    66. USTA states that price cap LECs should continue to identify 
increases or decreases at the rate element level pursuant to the 
current Part 61 rules. It further proposes that the Commission ensure a 
streamlined approach for small and mid-sized LECs by permitting rate-
of-return LECs to define rate increases or decreases at the access 
category level and file accordingly. USTA also proposes that LECs under 
Optional Incentive Regulation be permitted to define rate increases at 
the basket level. Finally, USTA proposes the elimination of those Part 
61 rules that require non-price cap LECs to list increases or decreases 
in specific rate elements in tariff transmittals.
    67. Ad Hoc opposes the LECs' suggestion that the Commission use API 
calculations to determine whether the tariff should be considered a 
rate increase or decrease because section 204(a)(3) of the Act 
specifically provides for a fifteen-day notice period whenever a LEC 
files a tariff with a rate increase. Ad Hoc argues that, with the use 
of the API, there may be significant increases that are balanced out by 
decreases, thereby shortening the time interested members of the public 
would otherwise have to review the proposed rate increase. Ad Hoc also 
states that customers typically purchase only some of the services made 
available in a carrier's tariff offering so there is the risk that 
members of the public could be subjected to rate increases without 
proper time to respond.
    68. Several commenters also address the need for establishing new 
notice periods for streamlined tariffs that propose changes in terms 
and conditions and for new services. AT&T proposes that the Commission 
require that LECs file tariffs proposing changes in terms and condition 
30 days prior to the tariff's proposed effective date. GTE states that, 
because there is ``no functional difference'' between an increase in 
rates and a new service, new services should be subject to the same 15-
day notice period as price increases. Pacific Telesis suggests that the 
Commission treat new services as rate reductions and apply the 7-day 
notice period. Pacific Telesis maintains that new services, like rate 
reductions, benefit the public and therefore should be implemented as 
quickly as possible.
    69. We conclude that the 15-day notice period will apply whenever a 
tariff filing includes both rate increases and rate decreases and limit 
the application of the 7-day notice period to tariffs that only contain 
a rate decrease. Therefore, whenever a tariff transmittal includes an 
increase to any rate element, the longer notice period will apply even 
if other rates in the same transmittal are simultaneously decreased. 
Our conclusion is supported by the statute, which specifically provides 
for a 15 day notice period whenever a LEC files a tariff with a rate 
increase. We reject arguments advanced by the LECs that this approach 
is contrary to the concept of streamlining or that this will increase 
the regulatory burden on them. Rather, this result will permit LECs to 
propose rate increases and decreases in the same tariff filing. All of 
the carriers' rate changes will still receive streamlined treatment. 
Rate decreases will be subject to the longer notice period because of 
the carriers' decision to include them in the same tariff filing as a 
rate increase. Carriers are free to take full advantage of the shorter 
7 day notice period by transmitting rate decreases in a separate 
filing. We also reject the LECs' various suggestions to base the 
applicable notice period on the net effect of changes to rate elements 
either at the access category level, basket level, or API. This will 
assure that customers that purchase only some elements of a tariff will 
receive the 15-days' notice that Congress intended for rate increases, 
even though rates for other elements decrease and even though rates 
measured at some aggregate level may decrease. In addition, we find 
that review of such calculations would unnecessarily complicate the 
tariff review process.
    70. We further determine that the 15-day notice period shall also 
apply to tariffs that change terms and conditions or apply to new 
services even where there is no rate increase or decrease. This will 
result in the most efficient implementation of section 204(a)(3) by 
minimizing analysis of each filing to determine whether or not it 
should be considered a rate increase, decrease, or a change in terms 
and conditions. Thus, under the rules we establish, all LEC tariff 
transmittals, other than those that solely reduce rates, shall be filed 
on 15-days' notice. If there are other significant changes, the tariff 
transmittal will be subject to a 15-day notice period.
d. Mechanisms to Identify Contents of Filings
    71. In the NPRM, we proposed requiring carriers to identify 
specifically tariffs filed pursuant to section 204(a)(3) and whether 
the transmittal contains a rate increase, decrease or both. We 
solicited comment on requiring either a label or a statement in the 
transmittal letter to achieve this result.
    72. Only SWBT opposes our proposal. It explains that the proposal 
is unnecessary because the LECs currently provide this information by 
making a notation on tariff pages indicating that it contains either an 
increase or reduction, and through the Description and Justification 
(D&J) accompanying a new or restructured tariff. USTA also states that 
the D&J accompanying LEC tariffs adequately informs interested parties 
of the contents of a filing. USTA argues, however, that, should the 
Commission adopt such a requirement, it should apply to tariff filings 
of LEC competitors as well. Ad Hoc, ALLTEL, BellSouth, and TRA support 
the proposal to require LECs to identify such tariffs in the 
transmittal letter.
    73. We will require that all LECs display prominently in the upper 
right hand corner of the tariff transmittal letters a statement 
indicating that the tariff is being filed on a streamlined basis under 
section 204(a)(3) of the Act and whether it is being filed on 7- or 15-
days' notice. While review of the LEC tariff including notations on 
tariff pages and the D&J would inform interested parties of the 
contents of the filing, this statement by the carrier will allow the 
Commission and the public to identify quickly whether the tariff is 
eligible for streamlined treatment and the notice period to be applied 
to the filing, without imposing any undue burdens on carriers. Without 
such a statement, we will treat a tariff transmittal as filed outside 
of section 204(a)(3), i.e., not on a streamlined basis.
e. Commission Notification to Interested Parties
    74. In the NPRM, we sought comment on the best mechanism for 
alerting Commission staff and interested parties about the contents of 
LEC tariff filings. The NPRM proposed that we provide affirmative 
notice of LEC tariff filings to interested parties via e-mail. We 
sought comment on whether we should adopt the proposal before, or, only 
when, electronic filing of tariffs is implemented.
    75. Most commenters support the proposal. McLeod suggests that the 
Commission require LECs to send notification to interested parties in 
order to preserve Commission resources. CapCities suggests that the 
LECs notify interested parties by facsimile as well as by e-mail. Only 
NECA and SWBT oppose the proposal. They argue that e-mail notification 
will be unnecessary upon implementation of an electronic filing system, 
and that parties already

[[Page 5768]]

have procedures in place to monitor filings.
    76. Several supporters of the proposal suggest that additional 
notification requirements be placed on the LECs. MCI, KMC, and MFS urge 
the Commission to require that a carrier provide advance public notice 
of its intention to transmit a tariff filing and identify the service 
that would be affected. The LECs express strong opposition to these 
suggestions, stating that requiring advance notice would violate the 
Congressional mandate to streamline the tariff review process. TRA, the 
only commenter to address whether the proposal should be implemented 
immediately or upon implementation of the electronic filing system, 
advocated the former.
    77. We find that e-mail notification is a simple, informal method 
of assisting parties in complying with the expedited notice periods 
required under the 1996 Act. Affirmative notice of tariff filings for 
the convenience of interested parties is possible without expending 
significant Commission resources. Despite the assertions from SWBT and 
NECA that parties have other means of learning of tariff filings, 
affirmative notice by e-mail will provide a useful way for interested 
parties to learn of tariff filings. Accordingly, we will notify by e-
mail interested persons who request such notice of LEC tariff filings 
eligible for streamlined treatment. We delegate to the Chief, Common 
Carrier Bureau authority to establish this mechanism and to institute a 
means of receiving requests from interested persons. We envision that 
this e-mail notification will be provided on the day after the filing 
is made with the Commission. We emphasize that notice by e-mail will 
not constitute legal notice of filings, and failure of the Commission 
to provide the affirmative notice for any reason will not extend 
comment periods. In view of our decision, we see no benefit in 
requiring LECs to send e-mail notification of filings to interested 
parties. We also reject suggestions that we establish an additional 
requirement that LECs furnish advance notice of tariff filings. That 
requirement is not necessary to provide adequate notice to interested 
parties of LEC tariff filings.
4. NPRM Period and Filing Procedures
a. Deadlines for Petitions and Replies
    78. As indicated in the NPRM, we need to establish new filing 
periods for petitions to suspend and reject LEC transmittals filed on 
7- or 15-days' notice. The current pleading cycles listed in section 
1.773 of our rules will not accommodate the filing of petitions and 
replies in response to LEC tariff changes made on 7-days' notice. In 
the NPRM, we proposed to require that petitions against those LEC 
tariff filings that are effective within 7 or 15 days of filing must be 
filed within 3 days after the date of the tariff filing and replies 2 
days after service of the petition.
    79. Most of the commenting LECs, as well as GSA, support the 
Commission's proposal to require that petitions be filed within 3 days 
of the tariff filing and that replies be filed within 2 days of service 
of the petition. NYNEX, MCI, AT&T, CapCities, and Ad Hoc state there is 
no reason to have the same filing periods for both tariffs filed on 15-
days' notice and tariffs filed on 7-days' notice. AT&T and SWBT suggest 
shorter notice periods for replies than the Commission's proposal. 
Ameritech and Pacific Telesis sharply criticize AT&T's proposal for 
replies as one-sided and overly restrictive.
    80. We agree with commenters who recommend establishing different 
filing periods for petitions and replies based on whether the tariff 
filing at issue was filed on 7-days' notice or 15-days' notice. We 
require that petitions against LEC tariff transmittals that are 
effective 7 days from filing must be filed within 3 calendar days from 
the date of tariff filing, and replies must be filed within 2 calendar 
days of service of petition. We reject SWBT's suggestion that petitions 
be required on the business day following the filing, as well as AT&T's 
suggestion that replies be required on the calendar day following 
service of the petition, because these proposals unreasonably 
abbreviate the amount of time within which to submit filings.
    81. With respect to LEC tariff filings that are effective on 15-
days' notice, we agree with NYNEX, CapCities, and Ad Hoc, that the 
current filing schedule set forth in sections 1.773(a)(2)(ii) and 
1.773(b)(1)(ii) is sufficient. These rules require petitions to be 
filed within 7 calendar days of the tariff filing. Replies must be 
filed within 4 days of service of the petition.
b. Other Issues Relating to Computation of Time
    82. The Act is silent on whether the new statutory notice periods 
refer to calendar days or working days. In the NPRM, we tentatively 
concluded that the statutory notice periods refer to calendar days, not 
working days. All the LECs, except Bell Atlantic, and USTA, agree that 
calendar days should be used in computing notice periods. Bell Atlantic 
argues that filings should not be calculated on a calendar day basis 
because this would leave inadequate time for the Commission to review 
the tariff. ACTA also disagrees with the Commission's tentative 
conclusion because of concerns that LECs will strategically submit 
tariffs at times that limit the ability of interested parties to review 
them. We interpret the statutory notice periods set out in section 
204(a)(3) of the Act to refer to calendar days. This interpretation is 
consistent with the present computation of time set forth in section 
1.773(a)(3) of the rules, which uses calendar days when calculating 
dates for filing petitions to suspend or reject a tariff. We find that 
using calendar days is consistent with existing Commission practice and 
best fulfills the intent of Congress to shorten the tariff review 
process.
    83. The NPRM proposed that, when a due date falls on a holiday or 
weekend, the document shall be filed on the next business day. The 
LECs, the only parties to address this issue, support this proposal. We 
adopt the proposal as stated in the NPRM. This is consistent with 
sections 1.4(g) and 1.773(a)(3) of the Commission's rules. Therefore, 
when a due date falls on a holiday or weekend, the document shall be 
filed on the next business day.
    84. The NPRM also proposed including intermediate holidays and 
weekends in computing time periods for petitions and replies. All 
comments received support this proposal. We adopt the proposal as 
stated in the NPRM, which is consistent with existing Commission 
practice set forth in section 1.773(a)(3). Therefore, intermediate 
holidays and weekends will be included in computing time periods.
c. Hand Delivery
    85. Section 61.33(d) requires the transmittal letter of any tariff 
filing made on less than 15-days' notice to include the name, address, 
and facsimile number of the person designated to receive service of 
petitions against the filing. Section 1.773(a)(4) of the Commission's 
rules requires that petitions against a filing made on less than 15-
days' notice be served personally or by facsimile. The NPRM proposed 
requiring that petitions and replies be hand-delivered to all affected 
parties where the filing party is a commercial entity.
    86. NECA, GSA, and Pacific Telesis support the Commission's 
proposal. USTA and SWBT support requiring hand delivery of petitions, 
but not replies. CBT and MCI state that facsimile service is sufficient 
with confirmed receipt. In the alternative, MCI suggests that required 
hand delivery be limited to parties with a

[[Page 5769]]

representative in Washington, D.C. TRA states that facsimile 
transmissions should be added to hand delivery requirements as a 
consideration for small carriers with limited budgets. BellSouth states 
that only minor changes to sections 61.33 and 1.773(a)(4) are necessary 
to carry out the goals of the Commission. BellSouth proposes changing 
these rules to apply to tariffs and petitions filed on 15-days' notice 
or less.
    87. We find that in-hand service of petitions and reply pleadings 
will facilitate full participation by carriers and interested persons 
in the Commission's review of LEC tariffs, particularly in view of the 
shortened statutory notice periods in section 204(a)(3) and the 
implementing rules adopted here. In light of the comments of TRA, we 
also find that it is important to provide for service by facsimile 
transmission as an alternative to hand delivery. Therefore, we will 
amend sections 61.33 and 1.773(a)(4) to apply to tariffs and to all 
associated documents filed on 15-days' notice or less, and require that 
such tariff filings include, among other things, the facsimile number 
of the individual designated by the filing carrier to receive personal 
or facsimile service of petitions and that petitions and replies in 
connection with such tariff filings be served by hand or by facsimile.
d. Elimination of Public Comment Period
    88. In the NPRM, we sought comment on whether we should eliminate 
the public comment period during the 7- or 15-days' notice period. Only 
CBT supports our proposal to eliminate the public comment period. MCI, 
NYNEX, Ad Hoc, and Pacific Telesis all oppose the proposal as contrary 
to the right of the public to seek suspension and investigation of a 
tariff under section 204(a) of the Act. As discussed above, we will 
retain pre-effective tariff review as a useful tool for ensuring that 
LEC tariffs are just and reasonable. Public participation in tariff 
proceedings serve the public interest. Accordingly, we will not 
eliminate the public comment period for LEC tariffs filed on 7- or 15-
days' notice.
e. Protective Orders
    89. We regularly receive requests by carriers for confidential 
treatment of cost data filed with tariff transmittals. In many cases, 
we also receive requests under the Freedom of Information Act (FOIA) 
for cost information for which a filing carrier has requested 
confidential treatment. As a practical matter, we frequently will be 
unable to respond to these requests within the 7- and 15-days tariff 
review periods established by the 1996 Act. In the NPRM, we sought 
comment on whether we should routinely impose a standard protective 
order whenever a carrier claims in good faith that information 
qualifies as confidential under relevant Commission precedent. We also 
solicited comment regarding the terms that we should include in a 
standard protective order and the types of data that should be eligible 
for confidential treatment.
    90. The majority of the parties commenting on this proposal oppose 
the use of a standard protective order, albeit for conflicting reasons. 
AT&T contends that we do not have the authority to issue a standard 
protective order because nothing in the FOIA or in the 1996 Act 
relieves us of our obligation to determine whether information in our 
possession may properly be withheld from the public despite the 
shortened tariff review process. AT&T states that, although Exemption 4 
of the FOIA protects certain trade secrets and financial data from 
disclosure, it is well-settled that an agency invoking a FOIA exemption 
bears the burden of establishing its right to withhold information from 
the public. Therefore, AT&T concludes, we cannot simply accept a 
submitting party's assertion that tariff support materials are 
confidential. Moreover, AT&T asserts, data that are subject to a 
protective order are not automatically covered by Exemption 4. An 
agency still must demonstrate that the information in question is 
exempt from FOIA disclosure. Bell Atlantic takes the position that 
there is no legal requirement that cost support data must be available 
to the public. Moreover, even if there were such a requirement, Bell 
Atlantic contends, there would be no reason to continue following such 
a rule given the current level of competition. USTA also favors 
elimination of cost support data for streamlined tariff filings and 
states that, if this proposal were adopted, there would be no need for 
protective orders. In the alternative, USTA favors the use of standard 
protective agreements on a case-by-case basis. Ad Hoc maintains that 
the openness of the tariff review process would be compromised if data 
are routinely withheld from disclosure.
    91. Ameritech, NYNEX, and TW Comm support, to some extent, the 
routine use of standard protective orders. Ameritech first argues that 
it supports elimination of the requirement to file cost support data. 
To the extent, however, that this requirement is retained, Ameritech 
favors the use of standard protective orders. Ameritech contends that 
the use of protective orders provides protection to data that in its 
view are intrinsically proprietary while enabling the tariff review 
process to go forward. Ameritech supports using the model protective 
order it submitted with a number of other parties in GC Docket No. 96-
55. While NYNEX supports the use of a standard protective order, it 
also wants carriers to have the option of seeking nondisclosure of 
highly sensitive data under certain circumstances. TW Comm states that 
the use of protective orders should be limited to those circumstances 
where a LEC demonstrates that confidential treatment of its data is 
necessary to prevent competitive harm. If the LEC makes such a showing, 
TW Comm suggests, the data should be made available to interested 
persons under a narrowly-drawn protective order. TW Comm states that 
the terms of the protective order should be limited only to protecting 
the legitimate competitive interests of the LEC. TW Comm maintains that 
this goal could be accomplished by narrowly limiting access to the 
material to those persons who are preparing petitions in opposition to 
the tariff or participating in a tariff investigation.
    92. TRA contends that, if a carrier chooses to use streamlined 
tariff procedures, it forfeits its right to request confidential 
treatment of its cost support data. SWBT opposes this position. CBT 
argues that, while it generally supports the use of protective orders, 
it recognizes that they do not afford absolute protection against 
disclosure of data. CBT maintains that it would be preferable for us to 
determine that the new competitive environment has caused a fundamental 
change in the nature of tariff proceedings and that the public interest 
in open tariff proceedings is now outweighed by the submitting party's 
need to protect competitively sensitive information. CBT suggests, 
therefore, that competitors' requests to review competitively sensitive 
information be rejected. GSA maintains that standard protective orders 
should be imposed on a routine basis. It contends that LECs should be 
able to prevent disclosure of their data and that interested parties 
should be able to petition the Commission for access. Further, GSA 
proposes that the Commission establish standards for a LEC to prevent 
disclosure of its cost support data, but GSA does not suggest what 
these standards should be.
    93. It is evident that existing procedures for responding to 
requests for confidential treatment or for disclosing supporting cost 
data under

[[Page 5770]]

the FOIA cannot be completed in the limited time available for 
streamlined tariff review. We find that use of standard protective 
orders for purposes of streamlined LEC tariff review will properly 
serve the dual purpose of permitting limited access to important 
information by interested persons while protecting proprietary 
information from public disclosure. We have used protective orders in a 
variety of proceedings to protect competitively sensitive material from 
public disclosure while allowing interested parties to have access to 
potentially decisional documents. In so doing, the Common Carrier 
Bureau stated that * * * the competitive threat posed by widespread 
disclosure under FOIA may outweigh the public benefit in disclosure. In 
such instances, disclosure under a protective order or agreement may 
serve the dual purpose of protecting competitively valuable information 
while still permitting limited disclosure for a specific public 
purpose.
    Accordingly, we are issuing, in this Report and Order, a standard 
protective order for use in review of LEC tariff filings submitted 
pursuant to section 204(a)(3). The Bureau will use the protective order 
where the submitting party includes with the tariff filing a showing by 
a preponderance of the evidence to support its case that the data 
should be accorded confidential treatment consistent with the 
provisions of the FOIA or makes a sufficient showing that the 
information should be subject to a protective order. This is the 
standard applicable in section 0.459 of our rules to requests that 
materials or information submitted to us be withheld from public 
disclosure. Therefore, at a minimum, the submitting party must comply 
with Section 0.459 (b) and (c) of the rules regarding the supporting 
information that must be included in its request for confidentiality. 
Because of the shortened LEC tariff notice periods in the 1996 Act, the 
Bureau will not have time to issue written determinations concerning 
whether the data are entitled to confidential treatment and still 
complete the tariff review process. Instead, it will routinely employ 
the standard protective order in the pre-effective tariff review 
process to permit meaningful participation by interested parties, so 
long as the carrier has made a good faith showing in support of 
confidential treatment. During the course of any follow-on 
investigation of tariffs filed under section 204(a)(3), the Bureau can 
make any further determination as necessary concerning a carrier's 
entitlement to confidentiality. We can and will employ appropriate 
sanctions against any carriers that abuse opportunities to obtain 
confidential treatment.
    94. This will fully comport with our obligations under the FOIA. We 
are not, as AT&T suggests, ignoring our obligation to determine whether 
information qualifies for nondisclosure under either the FOIA or our 
confidentiality rules as submitting parties will continue to be 
required to make a persuasive showing that the data in question meet 
these standards. Moreover, the use of protective orders will prevent 
the unlimited disclosure of sensitive financial data, and will thereby 
protect the competitive interests of the filing party. Thus, this 
approach appropriately balances the competing interests at stake. We, 
therefore, decline to adopt the approaches proposed by CBT and TRA that 
propose either that all tariff support material be made public or that, 
alternatively all such material should be held in absolute confidence. 
We also believe that protective orders will afford adequate protection 
to even the highly sensitive data referenced by NYNEX. In addition, we 
find that ruling on individual requests, as NYNEX proposes, will cause 
unacceptable delays during a very short tariff review process and our 
goal in using standard protective orders is to eliminate the 
opportunity for such delays. Accordingly, we find that the routine use 
of a standard protective order in LEC streamlined tariff proceedings 
will eliminate delay during this shortened tariff review process as 
well as address the concerns of various parties concerning the 
protection of competitively sensitive financial data. Routine use of a 
standard protective order will also serve the public interest by 
enabling interested parties to comment, as provided for in the rules, 
in LEC streamlined tariff review proceedings. The NPRM in this 
proceeding only proposed use of a standard protective order in the pre-
effective review of streamlined tariffs filed pursuant to section 
204(a)(3). Thus, the standard protective order adopted here is not 
required to be used in tariff investigations, although its use is not 
precluded in those investigations where we find it appropriate.
    95. As noted above, the NPRM sought comment on whether the 
Commission should routinely impose a protective order and what terms 
should be included in such a standard protective order. The NPRM also 
cited to GC Docket No. 96-55, 61 FR 16424 (April 15, 1996) in which a 
model protective order has been released for public comment. While, as 
described below, the standard protective order adopted herein is 
similar to the standard protective order released for public comment in 
that proceeding, our decision here is not binding upon any final 
Commission decision in GC Docket No. 96-55, which is intended to create 
a standard protective order for use in Commission proceedings 
generally. We note, however, that a number of the commenters in this 
proceeding incorporated by reference their comments submitted in GC 
Docket No. 96-55.
    96. The standard protective order we adopt is similar to the model 
protective order in GC Docket No. 96-55, but includes several changes 
that were suggested by comments in this proceeding, as well as 
additional clarifying changes that we are adopting sua sponte. 
Significant modifications to the draft model protective order in GC 
Docket No. 96-55 include: (i) clarifying that consultants under 
contract to the Commission must execute a Declaration that they will 
abide by the protective order, unless they have signed a general non-
disclosure agreement as part of their agreement with the Commission; 
(ii) clarifying that unauthorized use of Confidential Information, as 
well as unauthorized disclosure, is prohibited and subject to 
sanctions; (iii) clarifying that the prohibition on the unauthorized 
disclosure or use of the Confidential Information remains binding 
indefinitely unless the Submitting Party otherwise agrees; (iv) 
specifying that possible sanctions for violation of a protective order 
include disbarment from Commission proceedings, forfeitures, cease and 
desist orders, and a denial of access to Confidential Information in 
that and other Commission proceedings; (v) clarifying that the 
Protective Order is also an agreement between the Reviewing Parties and 
the Submitting Party; and (vi) clarifying that the Submitting Party 
retains all rights and remedies available at law or equity against any 
party using confidential information in a manner not authorized by the 
protective order. We note that the model protective order, as 
originally proposed, already contains the requirement proposed by the 
Joint Parties to require each person examining Confidential Information 
to execute a declaration agreeing to be bound by the terms of the 
protective order. Finally, because of the requirement for expedited 
tariff review, we have modified the provision in paragraph 7(b), which 
would have permitted parties to give certain entities access to 
confidential material if the Commission gave its approval. Because

[[Page 5771]]

of the shortened time periods for tariff review, we do not have time to 
entertain and rule on such requests.
    97. The Commission has, however, declined to adopt certain 
modifications proposed by commenters. The Joint Parties' proposed to 
limit the number of authorized representatives able to examine 
Confidential Information to a maximum of seven with various sub-limits, 
such as one inside counsel and one outside counsel per party. We 
believe such a limitation would unduly limit the ability of, for 
example, a partner in a law firm to obtain the counsel of associates 
and that the serious consequences of violating a Commission protective 
order make this limitation unnecessary. We also decline to adopt the 
Joint Party's suggestion to bar the copying of Confidential 
Information, because we believe that the proposal imposes an 
unnecessary burden on the review of such information. We will, however, 
modify the Protective Order to require a Reviewing Party to keep a 
written record of all copies made and to provide this record to the 
Submitting Party on reasonable request.
5. Annual Access Tariff Filings
    98. Section 69.3(a) of the Commission's rules requires LECs and the 
National Exchange Carrier Association (NECA) to submit revisions to 
their annual access tariffs on 90-days' notice to be effective on July 
1 of each year. We indicated in the NPRM that these filings are limited 
to changes in rate levels, and therefore, are eligible for filing on a 
streamlined basis. As part of the annual access tariff filings, LECs 
are required to file summary material, known as tariff review plans 
(TRPs), to support the revisions to rates in the annual access tariffs. 
The TRPs partially fulfill the requirements of sections 61.38, 61.39, 
and 61.41 through 61.50 of the Commission's rules regarding the 
supporting information that LECs must provide with their tariff 
filings. We use the TRPs to monitor the LECs' compliance with Part 61 
of the rules.
    99. In the NPRM, we proposed to modify the annual access filing 
process in light of requirements of the 1996 Act. With respect to 
carriers subject to price cap regulation, we proposed to require 
carriers that elect to file under streamlined procedures to file a TRP 
prior to the filing of the annual tariff revisions that excluded 
information regarding the carriers' proposed rates but included 
information regarding the carriers' pricing indices, and to make it 
available to the public. Under this approach, this agency and 
interested parties could examine the carriers' current and proposed 
price cap indices, exogenous cost adjustments, and supporting 
information in advance of the LECs' submissions of their prospective 
rates and required supporting documents. We sought comment on this 
approach and on whether we may, under the 1996 Act, require price cap 
LECs to submit their TRPs prior to the date that they file their annual 
access tariffs. Because the price cap TRP would not include information 
regarding a LEC's tariffed rates, charges, classifications, or 
practices, we tentatively concluded that the TRP would not trigger 
application of the notice periods of section 204(a)(3) and that we 
could require its submission prior to the filing of the annual access 
tariffs. We also solicited comment on the filing date we should 
establish for the related TRP if we adopt this approach. With respect 
to carriers subject to rate-of-return regulation, we proposed to 
require them to file their TRPs and annual access filings that propose 
rate increases fifteen days prior to the scheduled effective date of 
July 1. With respect to each of these proposals, we proposed in the 
NPRM that LECs may nevertheless elect to file under existing rules, and 
therefore, file their TRPs with the annual access tariffs.
    100. Frontier, CompTel, GSA, MCI, AT&T, ACTA, and, to some extent, 
Ameritech support the Commission's proposal to require the LECs to file 
their TRPs in advance of their annual access charge filing. They 
contend that it is within our jurisdiction as part of our regulatory 
oversight of access tariffs to require the advance filing of TRPs, and 
that this requirement will enable both this agency and consumers to 
review the support information fully before reviewing the access 
tariffs. While AT&T concurs with the NPRM's finding that revisions to 
annual access tariffs involve changes in rate levels and therefore 
qualify for streamlined treatment, it claims there is nothing in the 
1996 Act that prevents us from requiring that TRPs and cost support 
data be filed in advance of the access tariff filings. AT&T therefore 
recommends that we retain our current timetable, under which LECs are 
to file their TRPs 90 days prior to the effective date of their annual 
access tariffs. CompTel urges that we treat annual access tariffs filed 
without proper prior notice of the TRP as presumed unlawful.
    101. USTA and the LECs generally oppose requiring advance 
submission of the TRPs. They argue that the adoption of this proposal 
would impose an unnecessary burden on LECs, and would be inconsistent 
with the LEC tariff streamlining requirements of section 402 of the 
1996 Act. Furthermore, they contend that the TRPs have no significance 
without the inclusion of the proposed rates. For example, Sprint states 
that, without the rates, the TRP is pointless because the rates drive 
the indices. USTA contends that the EXG-1 chart and the PCI-1 chart are 
the only pages that do not reference rates and, therefore, could be 
submitted early. These pages, however, cannot be completed until NECA 
calculates Long Term Support, which is contained in the Common Line 
Basket. USTA further argues that none of the TRP information can even 
be filed until the LECs' and NECA's tariffs are completed. These 
parties argue, therefore, that the annual access filing and the TRP 
should be filed on the shortened statutory notice periods. CBT 
recommends that the TRP should be eliminated for all LEC carriers in 
order to establish symmetrical regulation for all types of carriers.
    102. Sprint and Ameritech acknowledge that at least some part of 
the TRP could be completed before the annual access tariff would 
actually be filed and that the information would be valuable to 
potential customers. Sprint argues that the LECs could be required to 
file their exogenous cost changes and PCI development 15 days prior to 
the filing of the annual access tariffs. Ameritech favors the 
submission of a modified TRP 15 days before the annual filing. 
Specifically, Ameritech suggests that price cap LECs file the following 
information for each price cap basket other than the common line 
basket: the PCI form showing the existing and proposed PCI; a 
description and explanation of any exogenous cost adjustments being 
made; and the proposed upper and lower bounds for the Service Band 
Indices. Ameritech states that, pending access reform, price cap LECs 
cannot file this information for the common line basket prior to their 
annual filings because of the interrelationship of NECA's calculation 
of long-term support and exogenous cost adjustments. Ameritech proposes 
that the price cap and rate-of-return LECs file a full TRP at the time 
of their annual filing. NYNEX suggests that the Commission use this 
proceeding to further streamline annual access tariff filings by 
eliminating the requirement for a detailed list of demand by rate 
elements, a discussion of how the indices were developed, and other 
required information.
    103. The chief purposes of TRPs are to: (i) justify LECs' exogenous 
cost adjustments to their PCIs; (ii) verify revisions to the price cap 
indices; and

[[Page 5772]]

(iii) verify that the proposed rates are within the established price 
caps. We find that the first two purposes can be accomplished through 
early filing of TRPs that do not contain proposed rates. Early filing 
of information concerning exogenous costs and recalculation of PCIs 
would facilitate review of price cap LECs' annual access filings. We 
disagree with the LECs' arguments that this information cannot be filed 
until the tariff is submitted and that the information will have no 
significance without the proposed rates. Price cap indices are a 
function of inflation, productivity, and exogenous cost changes. None 
of these factors is dependent on a LEC's specific rates. Early filing 
of changes in these areas would facilitate review of the annual access 
filings within the streamlined notice periods by resolving most of the 
major issues currently raised in the annual access proceedings.
    104. We also disagree with the arguments that the early submission 
of this TRP information is inconsistent with the streamlined notice 
provisions; to the contrary, as the statute contemplates, the actual 
tariff with rates will be filed on 7- or 15-days' notice. In addition, 
this submission of TRP information does not impose an unnecessary 
burden on price cap LECs. LEC are currently required to file TRPs at 
the time they file their annual access tariffs in order to comply with 
the cost support requirements of our rules. Early filing of the TRPs, 
absent rate information, will result in the filing of supporting 
information at the same time as under current rules, while allowing 
actual rates to be filed later on 7 or 15 days' notice. Accordingly, we 
will continue to require price cap LECs to file the TRP for their 
annual access filing, 90 days prior to July 1 of each year, but rate 
information need not be included. In view of the volume and complexity 
of the information submitted in the price cap carriers' TRPs, we 
conclude that any notice period less than 90 days would be inadequate 
to allow interested parties to review these filings carefully. 
Therefore, we reject Sprint's and Ameritech's proposals to file the TRP 
in 15 days. Finally, we conclude that NYNEX's suggestion to further 
streamline the annual access filing process is outside the scope of 
this proceeding. Non-price-cap LECs will be required to file their TRPs 
at the same time that they file their annual access tariffs. The notice 
period for non-price-cap annual access filings will be governed by the 
rules we adopt generally governing LEC streamlined filings. Thus, only 
annual access filings that solely decrease rates may be filed on 7-
days' notice. As stated above, LECs may elect to file under existing 
rules and, therefore, file their TRPs with annual access tariffs that 
are filed subject to the applicable notice periods of our rules.
6. Tariff Investigations
    105. Section 402 of the 1996 Act amends section 204(a) of the Act, 
effective February 8, 1997, to provide that the Commission shall 
conclude all hearings initiated under this section within five months 
after the date the charge, classification, regulation, or practice 
subject to the hearing becomes effective. Currently, we do not have 
procedural rules governing tariff investigations; instead, the 
procedures are established in the orders designating issues for 
investigation. We solicited comment on whether we should establish 
procedural rules to expedite the hearing process in light of the 
shortened period in which the Commission must complete tariff 
investigations. Specifically, we sought comment on whether we should 
establish time periods for pleading cycles, and page limits for 
pleadings and exhibits, and whether we should require the filing of 
proposed orders. We also noted that, while section 204 investigations 
may be initiated by the Bureau, they must be terminated by the full 
Commission under section 5(c) of the Communications Act. We solicited 
suggestions for reforms that will permit more expeditious termination 
of tariff investigations, such as the use of abbreviated orders without 
extensive findings, especially where we find that the tariff under 
investigation is lawful. We also solicited comment on whether we can, 
consistent with section 5(c) of the 1934 Act, as amended, terminate 
investigations by a pro forma order that adopts a decisional memorandum 
or order of the Common Carrier Bureau. Finally, we solicited comment on 
whether we should establish procedures for informal mediation of tariff 
investigation issues.
    106. Ad Hoc, USTA, NECA, Bell Atlantic, US West, and NYNEX support 
the adoption of procedural rules that would expedite the completion of 
tariff investigations within the five-month statutory deadline. NECA 
and Bell Atlantic support the use of abbreviated orders where we make a 
finding that a tariff is lawful. NYNEX proposed that we adopt the 
following filing schedule for investigations, calculated from the 
tariff's effective date: 21 days for the LECs to file the direct case; 
35 days for comments/oppositions to the direct case; and 49 days for 
replies. Under this schedule, we would have over three months to 
conclude the investigation. MCI favors the establishment of time 
periods for pleading cycles and page limits in the designation order. 
In addition, MCI suggests that the designation order could specify that 
the parties should file proposed orders. CBT, US West, and Ameritech 
support the use of pro forma orders to terminate investigations. US 
West supports the use of pro forma orders, provided that they are in 
fact full Commission determinations of the lawfulness of tariffs and 
thus final appealable orders. Ameritech opposes the imposition of 
mandatory informal mediation.
    107. GSA, AT&T, Bell Atlantic, and SWBT do not support the 
establishment of expedited procedures for investigations. GSA points 
out that section 204(a)(1) places the burden of proof for any rate 
changes or revisions on the carriers. In addition, GSA contends that we 
have the authority to reject a tariff if we find by our investigation 
that the proposed tariff is unjust and unreasonable. AT&T and Bell 
Atlantic suggest that we maintain our flexibility in conducting 
investigations so we may tailor procedures according to the 
requirements of a particular proceeding, rather than commit ourselves 
to any particular procedural rules.
    108. We agree with the commenters that oppose the establishment of 
specific rules for expediting tariff investigations at this time. 
Rather, we will continue to set out procedures in designation orders 
that best meet the needs of a particular proceeding. We have the 
discretion, for example, to set page limits, establish pleading cycles, 
or use pro forma designation orders. We find that retaining the 
flexibility to tailor each investigation individually is the best means 
of ensuring that tariff investigations are completed within the five 
month time limit. We also intend, to the extent we may do so while 
giving full consideration to all issues, to use abbreviated orders for 
terminating tariff investigations, subject to the new requirements of 
the 1996 Act. We also favor encouraging parties to use informal 
mediation to resolve tariff disputes, but will not impose such a 
requirement at this time. Moreover, in order to expedite the tariff 
review process and ensure that we conclude all tariff investigations 
within the five month statutory period, we delegate authority to the 
Chief, Common Carrier Bureau to work within the cost support rules to 
establish format requirements for cost data that must be submitted by 
carriers with certain tariffs. We note that we recently proposed rules 
to improve

[[Page 5773]]

the speed and effectiveness of the formal complaint process. In 
constrast to formal complaints, we can better provide for expedited 
tariff investigations by establishing procedural requirements on a 
case-by-case basis because those requirements can be closely tailored 
to the issues that have been revealed in the tariff review process.
7. Requirements
    109. Existing rules specifying notice periods for LEC tariffs must 
be amended to conform to the streamlined notice periods for LEC tariffs 
established in section 204(a)(3). For example, section 61.58 of our 
rules specifies the notice requirements for dominant carriers before 
new tariff proposals can go into effect. In particular, section 61.58 
states that carriers subject to rate-of-return regulation must file a 
tariff on either 15- 35-, or 45-days' notice, depending on the type of 
tariff at issue. Section 61.58(e) states that carriers subject to 
optional incentive regulation pursuant to section 61.50 of our rules 
must file a tariff on either 15- or 90-days' notice, depending on the 
type of tariff at issue. Finally, section 61.58(c) states that carriers 
subject to price cap regulation must file a tariff on either 14-, 45-, 
or 120-days' notice, depending on the type of tariff change. Therefore, 
in the NPRM we proposed to change section 61.58 of the Commission's 
existing rules governing notice periods for LEC tariff filings to make 
this section consistent with the streamlined notice periods of 7 and 15 
days required by the 1996 Act. The few comments filed regarding this 
section of the rules support our proposal. Accordingly, we are amending 
section 61.58 of the rules to establish notice periods consistent with 
the 1996 Act.

IV. Effective Date

    110. Section 402(b)(4) of the 1996 Act provides that the LEC tariff 
streamlining provisions shall apply to any charge, classification, 
regulation, or practice filed on or after one year after the effective 
date of the 1996 Act, i.e., February 8, 1997. Section 553(d) of the 
Administrative Procedure Act (APA) provides that the required 
publication in the Federal Register of changes to the Code of Federal 
Regulations shall not be made less than thirty days before the 
effective date except, inter alia, as otherwise provided by the agency 
for good cause found and published with the rule. We find that it is 
necessary for our rules implementing the LEC streamlined tariff 
provisions of the 1996 Act to be effective at the time those statutory 
provisions become effective. Section 402(b)(4) of the 1996 Act is self-
effectuating and will become effective on February 8, 1997, regardless 
of whether the rules adopted in this proceeding have become effective. 
Making these rules effective by February 8, 1997 will assist parties in 
complying with the LEC tariff streamlining provisions of the 1996 Act 
and will avoid possible confusion to LECs and their customers that 
could result if the Commission's existing LEC tariffing rules remain in 
effect after February 8, 1997. This constitutes good cause for making 
these rules effective earlier than thirty days prior to their 
publication in the Federal Register. We note as well, that much of this 
order is devoted to interpretation of the statute and promulgation of 
procedural rules, subject matters that are not subject to the thirty 
day period mandated by section 553(d) of the APA. Accordingly, we are 
making the rules adopted in this proceeding effective February 8, 1997.

V. Final Regulatory Flexibility Analysis

    111. As required by section 603 of the Regulatory Flexibility Act, 
5 U.S.C. 603 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) 
was incorporated in the NPRM to implement section 402(b)(1)(a) of the 
Telecommunications Act of 1996, which provides for streamlined tariff 
filings by local exchange carriers. We sought written public comment on 
the IRFA proposals in the NPRM. Our Final Regulatory Flexibility 
Analysis (FRFA) in this Report and Order conforms to the RFA, as 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA). None of the comments specifically addressed IRFA.
    112. Need for and Objectives of the Proposed Rule: We promulgate 
the rules in this Report and Order to implement section 204(a) of the 
Communications Act of 1934, as amended by section 402 of the 
Telecommunications Act of 1996. Section 402 provides for streamlined 
tariff filings by local exchange carriers. In accordance with section 
204(a), our implementing rules will implement streamlined tariff filing 
requirements by LECs with the minimum regulatory and administrative 
burden on telecommunications carriers. The objective of these rules is 
to ``streamline the procedures for revision by local exchange carriers 
of charges, classifications and practices.''
    113. Summary of Significant Issues Raised by the Public Comments In 
Response to the IRFA: While none of the commenters specifically 
addressed the Commission's IRFA, we received several comments regarding 
the impact that the various alternatives facing the Commission would 
have on small companies. For instance, with respect to how the 
Commission should interpret ``deemed lawful,'' commenters including 
KMC, ACTA, TRA, and SWBT discussed the effect the Commission's decision 
would have on small entities.
    114. With respect to treatment of tariff filings that include both 
increases and decreases, ALLTEL suggests that small and mid-sized 
companies be permitted to define rate increases and decreases at the 
access category level, and CBT suggests that all of the increases and 
decreases in a given transmittal be aggregated with the applicable 
notice period based on the net change. USTA proposes that the 
Commission ensure a streamlined approach for small and mid-sized LECs 
by permitting rate-of-return LECs to define rate increases or decreases 
at the access category level and file accordingly. USTA also proposes 
that LECs under Optional Incentive Regulation be permitted to define 
rate increases at the basket level.
    115. We have also received comments from various parties regarding 
several discrete issues. For example, with respect to electronic 
filing, USTA states that the Commission must consider the impact on 
small LECs who may wish to file their own tariffs but do not have the 
resources to implement electronic filing at this time. Hence, USTA 
maintains that electronic filing should not be mandatory. Regarding our 
proposal in the NPRM that each LEC submit an analysis accompanying its 
tariff filing demonstrating that the transmittal is lawful, CBT states 
that this requirement would have a chilling effect on small and mid-
size LECs that are sensitive to increased legal fees. TRA states that 
facsimile transmissions should be added to hand delivery requirements 
as a consideration for small carriers with limited budgets.
    116. Description and Estimate of the Number of Small Entities To 
Which the Proposed Rules Will Apply: The RFA defines a ``small 
business'' to be the same as a ``small business concern'' under the 
Small Business Act (SBA), 15 U.S.C. Sec. 632, unless the Commission has 
developed one or more definitions that are appropriate to its 
activities. Under the SBA, a ``small business concern'' is one that: 
(1) is independently owned and operated; (2) is not dominant in its 
field of operation; and (3) meets any additional criteria established 
by the SBA. SBA has defined a small business for Standard Industrial 
Classification (SIC) category 4813 (Telephone Communications, Except 
Radiotelephone) to be small entities when they have fewer than 1500 
employees.

[[Page 5774]]

    117. Total Number of Telephone Companies Affected. Many of the 
decisions and rules adopted herein may have a significant economic 
impact on a substantial number of small telephone companies identified 
by SBA. The United States Bureau of the Census (``the Census Bureau'') 
reports that, at the end of 1992, there were 3,497 firms engaged in 
providing telephone service, as defined therein, for at least one year. 
This number contains a variety of different category of carriers, 
including local exchange carriers, interexchange carriers, competitive 
access providers, cellular carriers, mobile service carriers, operator 
service providers, pay telephone operators, PCS providers, covered SMR 
providers, and resellers. It seems certain that some of those 3,497 
telephone service firms may not qualify as small entities or small 
incumbent LECs because they are not ``independently owned and 
operated.''
    118. Our rules governing the streamlining of the LEC tariff process 
apply to all LECs. These companies may have fewer than 1,500 employees 
and thus fall within the SBA's definition of small telecommunications 
entity, we do not believe that such entities should be considered small 
entities within the meaning of the RFA. Because the small incumbent 
LECs subject to these rules are either dominant in their field of 
operations or are not independently owned and operated, consistent with 
our prior practices, they are excluded from the definition of ``small 
entity'' and ``small business concerns.'' Accordingly, our use of the 
terms ``small entities'' and ``small businesses'' does not encompass 
small incumbent LECs. Out of an abundance of caution, however, for 
regulatory flexibility analysis purposes, we will consider small 
incumbent LECs that arguably might be defined by SBA as ``small 
business concerns.''
    119. Local Exchange Carriers. Neither this agency nor SBA has 
developed a definition of small providers of local exchange service 
(LECs). The closest applicable definition under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of LECs nationwide of which we are aware appears to be the data that we 
collect annually in connection with Telecommunications Relay Service 
(TRS). According to our most recent data, 1,347 companies reported that 
they were engaged in the provision of local exchange service. Although 
it seems certain that some of these carriers are not independently 
owned and operated, or have fewer than 1,500 employees, we are unable 
at this time to estimate with greater precision the number of LECs that 
would qualify as small business concerns under SBA's definition. We 
conclude that there are fewer than 1,347 small incumbent LECs that may 
be affected by the proposals in this Report and Order.
    120. Potential Petitioners Subject to 47 CFR 1.773: Section 1.773 
of the Commission's rules apply to any entity who files a petition to 
suspend or reject a new tariff filing. Petitioners may be other 
telecommunications businesses, competitors of LECs or end users (i.e., 
consumers). It is not possible to determine with any specificity the 
primary field of business of an end user, nor is it possible to 
determine whether they may be a small entity. Therefore, for purposes 
of this FRFA, we have included general information about small 
businesses, small governmental jurisdictions, and small not-for-profit 
establishments, as well as telecommunications entities as potential 
petitioners that may be impacted by this R & O. An individual 
petitioner is not considered a small business under the RFA.
    121. Small Businesses (Workplaces). Workplaces encompass 
establishments for profit and nonprofit, plus local, state and federal 
governmental entities. SBA guidelines to the SBREFA state that about 
99.7 percent of all firms are small and have fewer than 500 employees 
and less than $25 million in sales or assets. There are approximately 
6.3 million establishments in the SBA database.
    122. Governmental Jurisdictions. The definition of a small 
governmental jurisdiction is one with a population of less than 50,000. 
There are 85,006 governmental jurisdictions in the nation. This number 
includes such jurisdictions as states, counties, cities, utility 
districts and school districts. There are no figures available on what 
portion of this number has populations of fewer than 50,000. However, 
this number includes 38,978 counties, cities and towns, and of those, 
37,566, or 96 percent, have populations of fewer than 50,000. The 
Census Bureau estimates that this ratio is approximately accurate for 
all governmental entities. Thus, of the 85,006 governmental 
jurisdictions, we estimate that 96 percent, or 81,600, are small 
jurisdictions.
    123. Small Organizations. The Commission has not established a 
definition of small organization therefore, we will use the definition 
under the RFA. The RFA defines a small organization as any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field. There are approximately 257,038 total non-profit 
organizations in the United States.
    124. Total Number of Telephone Companies Affected. See supra para. 
115.
    125. Local Exchange Carriers. See supra para. 117.
    126. Interexchange Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of IXCs nationwide of which 
we are aware appears to be the data that we collect annually in 
connection with TRS. According to our most recent data, 97 companies 
reported that they were engaged in the provision of interexchange 
services. Although it seems certain that some of these carriers are not 
independently owned and operated, or have more than 1,500 employees, we 
are unable at this time to estimate with greater precision the number 
of IXCs that would qualify as small business concerns under SBA's 
definition. Consequently, we estimate that there are fewer than 97 
small entity IXCs that may be affected by the decisions and rules 
adopted in this Order.
    127. Competitive Access Providers. Neither the Commission nor SBA 
has developed a definition of small entities specifically applicable to 
providers of competitive access services (CAPs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of CAPs nationwide of which 
we are aware appears to be the data that we collect annually in 
connection with the TRS. According to our most recent data, 30 
companies reported that they were engaged in the provision of 
competitive access services. Although it seems certain that some of 
these carriers are not independently owned and operated, or have more 
than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of CAPs that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 30 small entity CAPs.
    128. Wireless (Radiotelephone) Carriers. SBA has developed a 
definition of small entities for radiotelephone (wireless) companies 
(SIC 4812) as an entity with 1,500 or less employees. The Census Bureau

[[Page 5775]]

reports that there were 1,176 such companies in operation for at least 
one year at the end of 1992. According to SBA's definition, a small 
business radiotelephone company is one employing fewer than 1,500 
persons. The Census Bureau also reported that 1,164 of those 
radiotelephone companies had fewer than 1,000 employees. Thus, even if 
all of the remaining 12 companies had more than 1,500 employees, there 
would still be 1,164 radiotelephone companies that might qualify as 
small entities if they are independently owned are operated. Although 
it seems certain that some of these carriers are not independently 
owned and operated, we are unable at this time to estimate with greater 
precision the number of radiotelephone carriers and service providers 
that would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 1,164 small entity 
radiotelephone companies.
    129. Cellular Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of cellular services. The closest applicable definition under 
SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies (SIC 4812). The most reliable 
source of information regarding the number of cellular service carriers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS. According to our most recent data, 
789 companies reported that they were engaged in the provision of 
cellular services. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of cellular service carriers that would qualify as 
small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 789 small entity cellular service 
carriers.
    130. Mobile Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. The closest 
applicable definition under SBA rules is for radiotelephone (wireless) 
companies (SIC 4812). The most reliable source of information regarding 
the number of mobile service carriers nationwide of which we are aware 
appears to be the data that we collect annually in connection with the 
TRS. According to our most recent data, 117 companies reported that 
they were engaged in the provision of mobile services. Although it 
seems certain that some of these carriers are not independently owned 
and operated, or have more than 1,500 employees, we are unable at this 
time to estimate with greater precision the number of mobile service 
carriers that would qualify under SBA's definition. Consequently, we 
estimate that there are fewer than 117 small entity mobile service 
carriers.
    131. Broadband PCS Licensees. The broadband PCS spectrum is divided 
into six frequency blocks designated A through F. As set forth in 47 
CFR section 24.720(b), the Commission has defined ``small entity'' in 
the auctions for Blocks C and F as a firm that had average gross 
revenues of less than $40 million in the three previous calendar years. 
Our definition of a ``small entity'' in the context of broadband PCS 
auctions has been approved by SBA. The Commission has auctioned 
broadband PCS licenses in Blocks A, B, and C. We do not have sufficient 
data to determine how many small businesses bid successfully for 
licenses in Blocks A and B. There were 90 winning bidders that 
qualified as small entities in the Block C auctions. Based on this 
information, we conclude that the number of broadband PCS licensees 
affected by the decisions in this Order includes, at a minimum, the 90 
winning bidders that qualified as small entities in the Block C 
broadband PCS auctions.
    132. At present, no licenses have been awarded for Blocks D, E, and 
F of broadband PCS spectrum. Therefore, there are no small businesses 
currently providing these services. However, a total of 1,479 licenses 
will be awarded in the D, E, and F Block broadband PCS auctions, which 
commenced on August 26, 1996. Eligibility for the 493 F Block licenses 
is limited to entrepreneurs with average gross revenues of less than 
$125 million. We cannot estimate, however, the number of these licenses 
that will be won by small entities under our definition, nor how many 
small entities will win D or E Block licenses. Given that nearly all 
radiotelephone companies have fewer than 1,000 employees and that no 
reliable estimate of the number of prospective D, E, and F Block 
licensees can be made, we assume for purposes of this FRFA, that a 
majority of the licenses in the D, E, and F Block Broadband PCS 
auctions.
    133. SMR Licensees. Pursuant to 47 CFR section 90.814(b)(1), the 
Commission has defined ``small entity'' in auctions for geographic area 
800 MHz and 900 MHz SMR licenses as a firm that had average annual 
gross revenues of less than $15 million in the three previous calendar 
years. This definition of a ``small entity'' in the context of 800 MHz 
and 900 MHz SMR has been approved by the SBA. The rules adopted in this 
Order may apply to SMR providers in the 800 MHz and 900 MHz bands that 
either hold geographic area licenses or have obtained extended 
implementation authorizations. We do not know how many firms provide 
800 MHz or 900 MHz geographic area SMR service pursuant to extended 
implementation authorizations, nor how many of these providers have 
annual revenues of less than $15 million. We assume, for purposes of 
this FRFA, that all of the extended implementation authorizations may 
be held by small entities.
    134. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees affected by the rule adopted in this Order includes these 60 
small entities. No auctions have been held for 800 MHz geographic area 
SMR licenses. Therefore, no small entities currently hold these 
licenses. A total of 525 licenses will be awarded for the upper 200 
channels in the 800 MHz geographic area SMR auction. However, the 
Commission has not yet determined how many licenses will be awarded for 
the lower 230 channels in the 800 MHz geographic area SMR auction. It 
is not possible to ascertain how many small entities will win these 
licenses. Given that nearly all radiotelephone companies have fewer 
than 1,000 employees and that no reliable estimate of the number of 
prospective 800 MHz licensees can be made, we assume, for purposes of 
this FRFA, that a majority of the licenses may be awarded to small 
entities.
    135. Resellers. Neither the Commission nor SBA has developed a 
definition of small entities specifically applicable to resellers. The 
closest applicable definition under SBA rules is for all telephone 
communications companies (SIC 4812 and 4813 combined). The most 
reliable source of information regarding the number of resellers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS. According to our most recent data, 
206 companies reported that they were engaged in the resale of 
telephone services. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of resellers

[[Page 5776]]

that would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 206 small 
resellers.
    136. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements: LECs subject to price cap regulation and LECs 
that elect to file tariffs subject to price cap regulation will be 
required to file their tariff review plans (TRP) prior to the filing of 
their annual tariff revisions. This requirement will not impose a 
significant burden on the LECs because they currently file TRPs at the 
time they file their annual access tariffs. Adoption of this proposal 
will require that the carriers allocate the resources needed to 
complete the TRPs prior to their filing of the annual access tariffs. 
In order to comply with this filing requirement, LECs will need to 
utilize tariff analysts and legal and accounting personnel. LECs have 
the personnel necessary to meet these requirements since they are 
already required to utilize staff with skills necessary to establish 
tariffs that comply with sections 201-205 of the Communications Act. 
Although this requirement that price cap LECs file their TRP prior to 
the filing of their annual tariff revisions will establish a new TRP 
filing deadline, we believe it is justified under the new streamlined 
tariff filing procedures. To date, we are not aware of any small 
entities that have elected to be subject to price cap regulation. 
Therefore, at the time these rules become effective, no small carriers 
will be required to file their TRPs prior to the filing of their annual 
tariff revisions. In the future, however, small entities that elect to 
be subject to price cap regulation pursuant to section 61.41(a)(3) of 
our rules will be required to comply with this reporting requirement.
    137. In addition, our requirement that all petitions and reply 
pleadings be hand served or served by facsimile transmission will not 
impose a significant burden on small entities. Facsimile and hand 
delivery service are readily available throughout the country for any 
entities that may not have their own capabilities in these areas.
    138. Significant Alternatives and Steps Taken By Agency to Minimize 
Significant Economic Impact on a Substantial Number of Small Entities 
and Small Incumbent LECs Consistent with Stated Objectives: We believe 
that our proposed actions to implement the specific streamlining 
requirements of section 204(a)(3) of the Communications Act, as well as 
additional steps for streamlining the tariff process, minimize the 
economic impact on small carriers that are eligible to file tariffs on 
a streamlined basis. For example, our proposal to establish a program 
for the electronic filing of tariffs will reduce the existing economic 
burden on carriers who are now required to file paper tariffs with the 
Commission. To the extent that specific concerns have been expressed 
regarding the ability of smaller companies to comply with electronic 
filing requirements, we conclude that this issue can be addressed by 
the Bureau in consultation with the industry when establishing the 
system.
    139. Under the new competitive provisions of the 1996 Act, there 
could be a number of new LECs entering the local exchange market that 
would be considered small businesses. To the extent that such carriers 
file tariffs and would be considered non-dominant, we conclude that our 
rules would not create any additional burdens because under section 
63.23(c), 47 CFR section 63.23(c), non-dominant carriers are permitted 
to file tariffs on one day's notice. Further, our determinations in 
this proceeding that will apply to such carriers will reduce 
administrative burdens for these carriers, to the extent they file 
tariffs pursuant to section 204(a)(3) of the Act.
    140. In adopting the first interpretation of ``deemed lawful,'' we 
have considered the comments of KMC, ACTA, and TRA which expressed a 
concern that adoption of this interpretation would be unfair to small 
consumers and competitors of LECs. With respect to KMC's concern that 
the adoption of the first interpretation would make it difficult for 
small competitors to challenge LEC tariff filings, as discussed above 
in Section III., B, all parties, including small entities, will have 
the same opportunity to challenge tariff filings eligible for 
streamlined regulation before they become effective or to initiate a 
section 208 complaint proceeding after the filings become effective. 
These procedures will permit small businesses to fully participate in 
pre-effective review of LEC tariffs and to obtain a determination of 
the lawfulness of a LEC tariff after it has gone into effect. To the 
extent that small entities will have greater difficulty than larger 
entities in participating in the tariff review process, we note that 
the shortened time period for pre-effective review of LEC tariffs is 
required by the 1996 Act and that, as explained above, we are compelled 
by the language in the statute as interpreted by relevant judicial 
precedent to adopt the first interpretation of ``deemed lawful.'' 
Similarly, as to ACTA's and TRA's concern that the adoption of the 
first interpretation will adversely affect small carriers and consumers 
by precluding damages as a remedy for the period that tariffs are 
effective but have been found unlawful subsequently in a section 205 or 
208 proceeding, we are compelled by the language in the statute as 
interpreted by relevant judicial precedent to adopt the first 
interpretation of ``deemed lawful.'' Small businesses will be able to 
protect against this possible impact on them caused by ``deemed 
lawful'' treatment of LEC tariffs by participating in the pre-effective 
tariff review process. Our program of electronic filing of tariffs will 
facilitate participation of small entities in the tariff review 
process.
    141. In choosing not to impose a requirement that carriers submit 
an analysis accompanying their tariff filings demonstrating that the 
filing is lawful, we have addressed the concerns of CBT that this 
requirement might have a chilling effect on small and mid-size LECs 
that are sensitive to increased legal fees.
    142. Finally, we have addressed the concern expressed by TRA that 
requiring hand delivery of petitions and replies could be prejudicial 
to small companies which may not be able to afford such service by 
adopting TRA's suggestion that facsimile transmission be added as an 
alternative to required hand delivery.
    143. With respect to treatment of tariff filings that include both 
increases and decreases, we have considered the various alternative 
suggestions provided by ALLTEL, CBT, and USTA to permit small LECs to 
aggregate the rate increases and decreases in their filings, and file 
those with a net rate decrease on 7 days' notice. As stated above, we 
have rejected these suggestions because we believe that this approach 
would be contrary to the plain language of the statute which clearly 
states that the longer, 15 days' notice period will apply ``in the case 
of an increase in rates.'' Moreover, we have concluded that by 
requiring tabulation of net increases and decreases, this approach 
would create confusion and add another step to an already brief review 
process.
    144. Report to Congress: The Commission shall send a copy of this 
Final Regulatory Flexibility Analysis, along with this Report and 
Order, in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
Sec. 801(a)(1)(A). A copy of this FRFA will also be published in the 
Federal Register.

[[Page 5777]]

VI. Final Paperwork Reduction Analysis

    145. On November 27, 1996, the Office of Management and Budget 
(OMB) approved all of the proposed changes to our information 
collection requirements in accordance with the Paperwork Reduction Act. 
We have, however, decided not to adopt several of the information 
collection requirements proposed in the NPRM and we have modified 
others. For example, we declined to adopt the proposal to require the 
LECs to include a summary and legal analysis with their tariff filings, 
but we will require that LEC tariff filings include a statement in 
tariff transmittal letters clearly indicating that the tariff is being 
filed on a streamlined basis under section 204(a)(3) of the Act and 
whether the tariff filing contains a proposed rate increase, decrease 
or both for purposes of section 204(a)(3). We conclude that these 
requirements and modifications constitute a new ``collection of 
information,'' within the meaning of the Paperwork Reduction Act of 
1995, 44 U.S.C. Secs. 3501-3520. These requirements and modifications 
are subject to OMB review and the Commission has requested emergency 
approval of these modifications to ensure that the requirements may be 
effective on February 8, 1997.
    146. The Commission concurs with OMB's recommendation that we 
consider input from the industry before implementing a system for the 
electronic filing of tariffs and related pleadings.

VII. Ordering Clauses

    147. Accordingly, It is ordered that pursuant to authority 
contained in sections 1,4(i), and 204(a)(3) of the Communications Act 
of 1934, as amended, 47 U.S.C. Secs. 151, 154(i) and 204(a)(3), Parts 1 
and 61 of the Commission's rules are amended as set forth below.
    148. It is further ordered that the policies, rules, and 
requirements set forth herein are adopted.
    149. It is further ordered that the policies, rules and 
requirements adopted herein shall be effective February 8, 1997.
    150. It is further ordered that authority is delegated to the 
Chief, Common Bureau, as set forth supra in paras. 48, 75 and 106.

List of Subjects in 47 CFR Parts 1 and 61.

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission
William F. Caton,
Acting Secretary.

Rule Changes

    Parts 1 and 61 of Title 47 of the Code of Federal Regulations are 
amended as follows:

PART 1--PRACTICE AND PROCEDURE

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

    Authority: 47 U.S.C. 151, 154, 204(a)(3), 303, and 309(j), 
unless otherwise noted.

    2. In Sec. 1.773, paragraphs (a)(2)(i) through (a)(2)(iv) are 
redesignated as paragraphs (a)(2)(ii) through (a)(2)(v), paragraphs 
(b)(1)(i) through (b)(1)(v) are redesignated as paragraphs (b)(1)(ii) 
through (b)(1)(vi), new paragraphs (a)(2)(i) and (b)(1)(i) are added, 
paragraphs (a)(4) and (b)(3) are revised to read as follows:


Sec. 1.773  Petitions for suspension or rejection of new tariff 
filings.

    (a) * * *
    (2) * * *
    (i) Petitions seeking investigation, suspension, or rejection of a 
new or revised tariff filed pursuant to section 204(a)(3) of the 
Communications Act made on 7 days notice shall be filed and served 
within 3 calendar days after the date of the tariff filing.
* * * * *
    (4) Copies, service. An original and four copies of each petition 
shall be filed with the Commission as follows: the original and three 
copies of each petition shall be filed with the Secretary, FCC room 
222, 1991 M Street, NW., Washington, DC 20554; one copy must be 
delivered directly to the Commission's copy contractor, International 
Transcription Service, Inc., 2100 M St., NW., Suite 140, Washington, 
DC. Additional, separate copies shall be served simultaneously upon the 
Chief, Common Carrier Bureau; the Chief, Competitive Pricing Division; 
and the Chief, Tariff and Price Analysis Branch of the Competitive 
Pricing Division. Petitions seeking investigation, suspension, or 
rejection of a new or revised tariff made on 15 days or less notice 
shall be served either personally or via facsimile on the filing 
carrier. If a petition is served via facsimile, a copy of the petition 
must also be sent to the filing carrier via first class mail on the 
same day of the facsimile transmission. Petitions seeking 
investigation, suspension, or rejection of a new or revised tariff 
filing made on more than 15 days notice may be served on the filing 
carrier by mail.
    (b)(1) * * *
    (i) Replies to petitions seeking investigation, suspension, or 
rejection of a new or revised tariff filed pursuant to section 
204(a)(3) of the Act made on 7 days notice shall be filed and served 
within 2 days after the date the petition is filed with the Commission.
* * * * *
    (3) Copies, service. An original and four copies of each reply 
shall be filed with the Commission, as follows: the original and three 
copies must be filed with the Secretary, FCC room 222, 1919 M Street, 
NW., Washington, DC 20554; one copy must be delivered directly to the 
Commission's Copy contractor, International Transcription Service, 
Inc., 2100 M St., NW/. Suite 140, Washington, DC. Additional separate 
copies shall be served simultaneously upon the Chief, Common Carrier 
Bureau; the Chief, Competitive Division; and the Chief, Tariff and 
Price Analysis Branch of the Competitive Pricing Division and the 
petitioner. Replies to petitions seeking investigation, suspension, or 
rejection of a new or revised tariff made on 15 days or less notice 
shall be served on petitioners personally or via facsimile. Replies to 
petitions seeking investigation, suspension, or rejection of a new or 
revised tariff made on more than 15 days notice may be served upon 
petitioner personally, by mail or via facsimile.

PART 61--TARIFFS

    3. The authority citation for part 61 continues to read as follows:

    Authority: Sections 1, 4(i), 4(j), 201-205, and 403 of the 
Communications Act of 1934, as amended; 47 U.S.C. 151, 154(i), 
154(j), 201-205, and 403, unless otherwise noted.

    4. Section 61.3(s) is revised to read as follows:


Sec. 61.3  Definitions.

* * * * *
    (s) Local Exchange Carrier. Any person that is engaged in the 
provision of telephone exchange service or exchange access as defined 
in section 3(26) of the Act.
* * * * *
    5. In section 61.33, paragraphs (d), (e), (f), and (g) are 
redesignated as paragraphs (e), (f), (g), and (h), new paragraph (d) is 
added and newly redesignated paragraph (e) is revised to read as 
follows:


Sec. 61.33  Letters of transmittal.

* * * * *
    (d) Tariffs filed pursuant to section 204(a)(3) of the 
Communications Act

[[Page 5778]]

shall display prominently in the upper right hand corner of the letter 
of transmittal a statement that the filing is made pursuant to that 
section and whether it is being filed on 7- or 15-days' notice.
    (e) In addition to the requirements set forth in paragraph (a) of 
this section, any carrier filing a new or revised tariff made on 15 
days' notice or less shall include in the letter of transmittal, the 
name, room number, street address, telephone number, and facsimile 
number of the individual designated by the filing carrier to receive 
personal or facsimile service of petitions against the filing as 
required under Sec. 1.773(a)(4) of this chapter.
    6. Section 61.49 is amended by adding new paragraph (l) to read as 
follows:


Sec. 61.49  Supporting information to be submitted with letters of 
transmittal for tariffs of carriers subject to price cap regulation.

* * * * *
    (l) In accordance with Secs. 61.41 through 61.49, local exchange 
carriers subject to price cap regulation that elect to file their 
annual access tariff pursuant to section 204(a)(3) of the 
Communications Act shall submit supporting material for their 
interstate annual access tariffs, absent rate information, 90 days 
prior to July 1 of each year.
    7. New section 61.51 is added to part 61 under the heading 
``Specific Rules for Tariff Publications'' to read as follows:


Sec. 61.51  LEC tariff filings requirements pursuant to section 
204(a)(3) of the Communications Act.

    (a) Local exchange carriers may file tariffs pursuant to section 
204(a)(3) of the Communications Act. Such tariffs shall be filed in 
accordance with the notice periods set forth in Sec. 61.58(d).
    (b) Local exchange carriers may elect not to file any tariffs 
pursuant to section 204(a)(3) of the Communications Act that may be 
eligible for filing under that section. Any such tariffs not filed 
pursuant to section 204(a)(3) of the Communications Act shall be filed 
in accordance with the notice requirements of Secs. 61.23 and 61.58.
    (c) Local exchange carrier tariff filings pursuant to section 
204(a)(3) must comply with the requirements of Secs. 61.38, 61.39, and 
61.41 through 61.50.
    (d) Local exchange carriers subject to price cap regulation that 
elect to file their annual access tariff pursuant to section 204(a)(3) 
of the Communications Act shall submit support material for their 
interstate annual access tariffs, in accordance with Sec. 61.49(l).
    8. Section 61.52 is amended by adding new paragraph (c) to read as 
follows:


Sec. 61.52  Form, size, type, legibility, etc.

* * * * *
    (c) Local exchange carriers shall file all tariff publications and 
associated documents, such as transmittal letters, requests for special 
permission, and cost support documents, electronically in accordance 
with the requirements established by the Chief, Common Carrier Bureau.
    9. Section 61.58 is amended by revising paragraph (a)(2), 
redesignating paragraphs (d) and (e) as paragraphs (e) and (f), and 
adding new paragraph (d) to read as follows:


Sec. 61.58  Notice requirements.

    (a) * * *
    (2) Except for tariffs filed pursuant to section 204(a)(3) of the 
Communications Act, the Chief, Common Carrier Bureau, may require the 
deferral of the effective date of any tariff filing made on less than 
120-days' notice, so as to provide for a maximum of 120-days' notice, 
or of such other maximum period of notice permitted by section 203(b) 
of the Communications Act, regardless of whether petitions under 
Sec. 1.773 of this chapter have been filed.
* * * * *
    (d) Tariffs filed pursuant to section 204(a)(3) of the 
Communications Act. Local exchange carriers filing tariffs pursuant to 
section 204(a)(3) of the Communications Act may file the tariff on 7-
days' notice if it proposes only rate decreases. Any other tariff filed 
pursuant to section 204(a)(3) of the Communications Act, including 
those that propose a rate increase or any change in terms and 
conditions of service other than a rate change, shall be filed on 15-
days' notice.

[FR Doc. 97-3113 Filed 2-6-97; 8:45 am]
BILLING CODE 6712-01-P