[Federal Register Volume 62, Number 34 (Thursday, February 20, 1997)]
[Proposed Rules]
[Pages 7744-7747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4027]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[CC Docket No. 96-152, FCC 97-35]


Implementation of the Telecommunications Act of 1996: 
Telemessaging, Electronic Publishing, and Alarm Monitoring Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Further Notice of Proposed Rulemaking (FNPRM), released 
February 7, 1977, seeks comment on the meaning of certain terms in 
section 274 of the Telecommunications Act of 1996, (Act), which governs 
Bell Operating Companies' provision of electronic publishing services. 
The intent of the FNPRM is to compile a record in sufficient detail for 
us to determine the meaning of those terms in this context.

DATES: Comments are due on or before April 4, 1997 and reply comments 
are due on or before April 25, 1997. Written comments by the public on 
the proposed and/or modified information collections are due April 4, 
1997 and reply comments must be submitted no later than April 25, 1997. 
Written comments must be submitted by the Office of Management and 
Budget (OMB) on the proposed and/or modified information collections on 
or before April 21, 1997.

ADDRESSES: Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 
222, Washington, D. C. 20554, with a copy to Janice Myles of the Common 
Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D. C. 20554. 
Parties should also file one copy of any documents filed in this docket 
with the Commission's copy contractor, International Transcription 
Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D. C. 
20037. In addition to filing comments with the Secretary, a copy of any 
comments on the information collections contained herein should be 
submitted to Dorothy Conway, Federal Communications Commission, 1919 M 
Street, N.W., Room 234, Washington, D. C. 20554, or via the Internet to 
[email protected], and to Timothy Fain, OMB Desk Officer, 725--17th 
Street, N.W.,10236 NEOB, Washington, D. C. 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Lisa Sockett, Attorney, Common Carrier 
Bureau, Policy and Program Planning Division, (202) 418-1580. For 
additional information concerning the information collections contained 
in this FNPRM contact Dorothy Conway at 202-418-0217, or via the 
Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's FNPRM 
adopted February 6, 1997 and released February 7, 1997 (FCC 97-35). 
This FNPRM contains proposed or modified information collections 
subject to the Paperwork Reduction Act of 1995 (PRA). It has been 
submitted to the Office of Management and Budget (OMB) for review under 
the PRA. The OMB, the general public, and other Federal agencies are 
invited to comment on the proposed or modified information collections 
contained in this proceeding. The full text of this FNPRM is available 
for inspection and copying during normal business hours in the FCC 
Reference Center, 1919 M St., Room 239, N.W., Washington, D. C. The 
complete text also may be obtained through the World Wide Web, at 
http://www.fcc.gov/Bureaus/Common Carrier/Orders/fcc9735.wp, or may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 2100 M St., N.W., Suite 
140, Washington, D. C. 20037.
    Paperwork Reduction Act: This FNPRM contains either a proposed or 
modified information collection. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and OMB to comment on the information collections contained in 
this FNPRM, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. Public and agency comments are due at the same time as 
other comments on this FNPRM; OMB notification of action is due April 
21, 1997. Comments should address: (a) whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the Commission, including whether the information shall have 
practical utility; (b) the accuracy of the Commission's burden 
estimates; (c) ways to enhance the quality, utility, and clarity of the 
information collected; and (d) ways to minimize the burden of the 
collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: None.
    Title: Section 274(b)(3)(B)--Written Contracts Filed with the 
Commission and Made Publicly Available (CC Docket No. 96-152, FNPRM).
    Form No.: N/A.
    Type of Review: New collection.

----------------------------------------------------------------------------------------------------------------
                                              No. of                                                            
         Information Collection             respondents       Estimated  time per        Total annual  burden   
                                             (approx.)             response                                     
----------------------------------------------------------------------------------------------------------------
Written contracts filed with the                       7  \1/4\ hour per contract...  3--150 hours per          
 Commission.                                                                           respondent (21--1050     
                                                                                       hours total).            
Written contracts made publicly                        7  \3/4\ hour per contract...  9--450 hours per          
 available.                                                                            respondent (63--3150     
                                                                                       hours total).            
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 21--3,150 hours for all respondents.
    Respondents: Businesses or other for profit.
    Estimated costs per respondent: $0.
    Needs and Uses: The Commission proposes the information collections 
to implement section 274(b)(3)(B) of the Act. The information may be 
used by the Commission, unaffiliated electronic publishing providers 
competing with electronic publishing providers affiliated with the BOC, 
and any other member of the public interested in monitoring the BOCs' 
compliance with the Act.

[[Page 7745]]

Synopsis of Further Notice of Proposed Rulemaking

I. Further Notice of Proposed Rulemaking

A. Meaning of ``Control'' and ``Financial Interest''
    1. We concluded above, in Part III.A, that a BOC engaged in the 
provision of electronic publishing is subject to section 274 only to 
the extent that it controls, or has a financial interest in, the 
content of the information being disseminated over its basic telephone 
services. The record compiled in this proceeding, however, does not 
provide sufficient detail for us to determine the meaning of 
``control'' and ``financial interest'' in this context. By clarifying 
these terms, we believe we will be in a better position to determine 
when, and under what circumstances, a BOC's participation in a service 
constitutes BOC provision of electronic publishing service subject to 
the requirements of section 274.
i. Meaning of ``Control''
    2. The term ``control'' in section 274(i)(4) is defined according 
to regulations promulgated by the Securities and Exchange Commission 
implementing the Securities Exchange Act of 1934. As defined 
thereunder, the term ``control'' means ``the possession, direct or 
indirect, of the power to direct or cause the direction of the 
management and policies of a person, whether through the ownership of 
voting securities, by contract, or otherwise.'' We tentatively conclude 
that this definition, which defines the term ``control'' in a corporate 
context, is inappropriate for determining the meaning of ``control'' in 
the present context, i.e., when a BOC has ``control'' of the content of 
information transmitted via its basic telephone service. We therefore 
seek comment on how we should determine whether a BOC has ``control'' 
of the content of the information being disseminated under section 274.
    3. For example, we seek comment on whether an ownership interest is 
required for a BOC to have ``control'' of the content of the 
information. If so, we seek comment on the percentage of ownership 
interest necessary for the BOC to be deemed to be in ``control'' of the 
content of the information. Alternatively, we seek comment on whether 
``control'' should be broadly interpreted to include the ability of a 
BOC, when acting as a gateway provider, to limit the types of 
information to which its gateway connects. NYNEX suggests that this 
ability does not imply the type of ``control'' over the underlying 
information being transmitted and, therefore, does not constitute 
electronic publishing. We seek comment on this interpretation.
ii. Meaning of ``Financial Interest''
    4. We also seek comment on the meaning of the term ``financial 
interest.'' We tentatively conclude that a BOC has a ``financial 
interest'' in the content of the information when the BOC owns the 
information or has a direct or indirect equity interest in the 
information being disseminated via its basic telephone services. We 
seek comment on this tentative conclusion. We also seek comment on 
other forms of BOC participation that should be considered indicia of 
``financial interest.'' For example, NYNEX maintains that a ``financial 
interest'' in the content of the information should not be interpreted 
to include receipt of compensation by a BOC for managing and presenting 
the content of unaffiliated entities as part of its gateway services. 
Alternatively, PacTel contends that a ``financial interest'' must be a 
legally protected property interest.'' We seek comment on these 
interpretations.
    5. In addition, we seek comment on whether we should establish a de 
minimis exception to the financial interest requirement once financial 
interest has been established. For example, if a BOC has a financial 
interest in only one percent of the content of the information, should 
it be required to provide the electronic publishing service through a 
``separated affiliate'' or ``electronic publishing joint venture''? If 
not, should the BOC be required to do so if it has a financial interest 
of ten percent? We seek comment on the percentage of financial interest 
in an electronic publishing service, as defined in section 274(h), that 
makes a BOC subject to the requirements of section 274.
    B. Meaning of ``Transaction'' in Section 274(b)(3) and the 
Requirements of Section 274(b)(3)(B)
    6. Section 274(b)(3) provides that a separated affiliate or 
electronic publishing joint venture established pursuant to section 
274(a) and the BOC with which it is affiliated shall ``carry out 
transactions (A) in a manner consistent with such independence, (B) 
pursuant to written contracts or tariffs that are filed with the 
Commission and made publicly available, and (C) in a manner that is 
auditable in accordance with generally accepted accounting standards.'' 
We note that the clause in section 274(b)(3)(B), ``pursuant to written 
contracts or tariffs that are filed with the Commission,'' can be read 
to require the filing of both contracts and tariffs with the 
Commission, or only the filing of tariffs. In addition, the phrase 
``and made publicly available,'' could refer only to ``tariffs'' or 
also to ``written contracts.'' Although the Accounting Safeguards NPRM 
(61 FR 40161 (August 1, 1996)) sought comment on section 274(b)(3), no 
commenters in that proceeding specifically addressed these issues 
regarding section 274(b)(3)(B).
    7.``Filed with the Commission.'' We seek comment on whether BOCs 
should be required under section 274(b)(3)(B) to file both written 
contracts and tariffs on Commission premises. We note that, pursuant to 
existing practice, BOCs are already required to file tariffs with the 
Commission. We also note that section 211 of the Communications Act 
imposes a general requirement on common carriers to ``file with the 
Commission'' copies of ``contracts, agreements, or arrangements with 
other carriers, or with common carriers not subject to the provisions 
of [the Communications Act]'' relating to communications traffic. Our 
rules implementing this section, however, require only that certain 
carriers file certain types of contracts with the Commission.'' As to 
the remaining contracts within the scope of section 211, carriers are 
permitted to comply with section 211 by keeping the contracts on their 
premises such that they are ``readily accessible to Commission staff 
and members of the public upon reasonable request.'' We invite parties 
to comment on whether we can and should adopt these procedures to 
implement the statutory language in section 274(b)(3)(B).
    8. ``Made Publicly Available.'' We tentatively conclude that 
section 274(b)(3)(B) requires that both written contracts and tariffs 
be made ``publicly available.'' As noted above, BOCs are already 
required to make their tariffs and certain written contracts with other 
carriers publicly available by filing them with the Commission and make 
others contracts accessible upon reasonable request. We find that 
interpreting this section to require all contracts, as well as tariffs, 
to be made ``publicly available,'' is necessary to ensure that BOCs are 
complying with the nondiscrimination and accounting safeguards of the 
Act and to enable competitors to detect discrimination and potential 
improper cost allocations by the BOCs. We seek comment on this 
tentative conclusion.
    9. Assuming that section 274(b)(3)(B) does not require BOCs to file 
all their written contracts with separated affiliates or electronic 
publishing joint ventures on Commission premises, we

[[Page 7746]]

seek comment on the means by which a BOC and its separated affiliate or 
electronic publishing joint venture must make their contracts 
``publicly available'' pursuant to section 274(b)(3)(B). In 
interpreting a similar requirement in section 272(b)(5), which requires 
that BOCs and their section 272 affiliates reduce their transactions to 
writing and make them available for public inspection, we found that a 
BOC must make information ``available for public inspection'' pursuant 
to that section by making it available at its corporate headquarters 
and not the RBOC corporate headquarters or the corporate headquarters 
of the BOC's holding company. We stated that this information must 
include a certification statement identical to the certification 
statement currently required to be included with all Automated 
Reporting and Management Information System (``ARMIS'') reports. We 
also concluded that detailed written descriptions of transactions 
between BOCs and their section 272 affiliates must be made available to 
the public on the Internet within ten days of the transaction. We 
therefore seek comment on whether, for written contracts within section 
274(b)(3)(B) that we decide need not be filed on Commission premises, 
we should interpret the ``publicly available'' requirement of this 
section in the same manner as we interpreted the ``available for public 
inspection'' requirement in section 272(b)(5). Commenters disagreeing 
with this approach should explain why, and propose alternative 
approaches.
    10. Meaning of ``Transaction.'' We also seek comment on what 
constitutes a ``transaction'' for purposes of section 274(b)(3). We 
note that, for purposes of section 272(b)(5), we concluded that only 
once the BOC and its affiliate have agreed upon the terms and 
conditions for telephone exchange and exchange access does the 
agreement constitute a ``transaction.'' We also found that an agreement 
between a BOC and its affiliate for the provision of unbundled elements 
and facilities pursuant to explicit terms and conditions also 
constitutes a ``transaction.'' We seek comment here on whether we 
should adopt similar conclusions in the context of section 274(b)(3). 
We note, however, that section 274(d) requires BOCs to provide 
``network access and interconnections for basic telephone service to 
electronic publishers at just and reasonable rates that are tariffed 
(so long as rates for such services are subject to rate regulation).'' 
We therefore tentatively conclude that, although section 274(b)(3)(B) 
provides that transactions must be carried out pursuant to ``written 
contracts or tariffs,'' the specific transactions described in section 
274(d) may only be carried out pursuant to tariff (so long as such 
services are subject to rate regulation). We seek comment on this 
tentative conclusion.
C. Procedural Matters
i. Ex Parte Presentations
    This FNPRM is a non-restricted notice-and-comment rulemaking 
proceeding. Ex parte presentations are permitted, in accordance with 
the Commission's rules, provided that they are disclosed as required.
ii. Regulatory Flexibility Certification
    12. Section 603 of the Regulatory Flexibility Act, (RFA) as 
amended, requires an initial regulatory flexibility analysis in notice 
and comment rulemaking proceedings, unless we certify that ``the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' A ``small entity'' is an entity 
that is independently owned and operated; is not dominant in its field 
of operation; and meets any additional criteria established by the 
Small Business Administration (SBA). SBA regulations define small 
telecommunications entities in SIC code 4813 (Telephone Companies 
Except Radio Telephone) as entities with fewer than 1,500 employees. 
This proceeding pertains to the BOCs which, because they are dominant 
in their field of operation and have more than 1,500 employees, do not 
qualify as small entities under the RFA. We also note that none of the 
BOCs is a small entity because each BOC is an affiliate of a Regional 
Holding Company (RHC), and all of the BOCs or their RHCs have more than 
1,500 employees. We therefore certify, pursuant to section 605(b) of 
the RFA, that the tentative conclusions, if adopted, will not have a 
significant economic impact on a substantial number of small entities. 
The Secretary shall send a copy of this FNPRM, including this 
certification and statement, to the Chief Counsel for Advocacy of the 
Small Business Administration. A copy of this certification will also 
be published in the Federal Register.
iii. Initial Paperwork Reduction Act of 1995 Analysis
    13. This FNPRM contains either a proposed or modified information 
collection. As part of its continuing effort to reduce paperwork 
burdens, we invite the general public and the OMB to take this 
opportunity to comment on the information collections contained in this 
FNPRM, as required by the Paperwork Reduction Act of 1995, Public Law 
104-13. Public and agency comments are due at the same time as other 
comments on this FNPRM; OMB comments are due 60 days from the date of 
publication of this FNPRM in the Federal Register. Comments should 
address: (a) whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
iv. Comment Filing Procedures
    14. Pursuant to applicable procedures set forth in Sections 1.415 
and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before April 4, 1997, and reply 
comments on or before April 25, 1997. To file formally in this 
proceeding, you must file an original and six copies of all comments, 
reply comments, and supporting comments. If you want each Commissioner 
to receive a personal copy of your comments, you must file an original 
and eleven copies. Comments and reply comments should be sent to the 
Office of the Secretary, Federal Communications Commission, 1919 M 
Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice 
Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, 
Washington, D.C., 20554. Parties should also file one copy of any 
documents filed in this docket with the Commission's copy contractor, 
International Transcription Services, Inc., 2100 M Street, N.W., Suite 
140, Washington, D.C., 20037. Comments and reply comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C., 
20554.
    15. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with Section 1.49 and all other 
applicable sections of the Commission's Rules. See 47 CFR 1.49. 
However, we require here that a summary be included with all comments 
and reply comments, regardless of length. This summary may be paginated 
separately from the rest of

[[Page 7747]]

the pleading (e.g., as ``i, ii''). We also direct all interested 
parties to include the name of the filing party and the date of the 
filing on each page of their comments and reply comments. All parties 
are encouraged to utilize a table of contents, regardless of the length 
of their submission. Parties may not file more than a total of ten (10) 
pages of ex parte submissions, excluding cover letters. This 10 page 
limit does not include: (1) written ex parte filings made solely to 
disclose an oral ex parte contact; (2) written material submitted at 
the time of an oral presentation to Commission staff that provides a 
brief outline of the presentation; or (3) written materials filed in 
response to direct requests from Commission staff. Ex parte filings in 
excess of this limit will not be considered as part of the record in 
this proceeding.
    16. Parties are also asked to submit comments and reply comments on 
diskette. Such diskette submissions would be in addition to, and not a 
substitute for, the formal filing requirements addressed above. Parties 
submitting diskettes should submit them to Janice Myles of the Common 
Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. 
Such a submission should be on a 3.5 inch diskette formatted in an IBM 
compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The 
diskette should be submitted in ``read only'' mode. The diskette should 
be clearly labelled with the party's name, proceeding, type of pleading 
(comment or reply comments) and date of submission. The diskette should 
be accompanied by a cover letter.
    17. Written comments by the public on the proposed and/or modified 
information collections are due April 4, 1997, and reply comments must 
be submitted not later than April 25, 1997. Written comments must be 
submitted by the OMB on the proposed and/or modified information 
collections on or before 60 days after date of publication in the 
Federal Register. In addition to filing comments with the Secretary, a 
copy of any comments on the information collections contained herein 
should be submitted to Dorothy Conway, Federal Communications 
Commission, Room 234, 1919 M Street, N.W., Washington, D.C., 20554, or 
via the Internet to [email protected], and to Timothy Fain, OMB Desk 
Officer, 10236 NEOB, 725--17th Street, N.W., Washington, D.C., 20503 or 
via the Internet to [email protected].

II. Ordering Clauses

    18. It is ordered that pursuant to sections 1, 2, 4, 201, 202, 274 
and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152, 154, 201, 202, 274, and 303(r), the further notice of 
proposed rulemaking is adopted.
    19. It is further ordered that the Secretary shall send a copy of 
the further notice of proposed rulemaking, including the regulatory 
flexibility certification, to the Chief Counsel for Advocacy of the 
Small Business Administration, in accordance with paragraph 603(a) of 
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-4027 Filed 2-19-97; 8:45 am]
BILLING CODE 6712-01-P