[Federal Register Volume 62, Number 87 (Tuesday, May 6, 1997)]
[Rules and Regulations]
[Pages 24585-24587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11682]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 96-128; DA 97-678]


Pay Telephone Reclassification and Compensation

AGENCY: Federal Communications Commission.

ACTION: Final rule; waiver.

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SUMMARY: On April 4, 1997, the Common Carrier Bureau (``Bureau'') 
clarified and granted a limited waiver of the Commission's interstate 
tariffing requirements for unbundled features and functions, as set 
forth in the Payphone Reclassification Proceeding, CC Docket No. 96-128 
[``Payphone Order'' 61 FR 52307 (October 7, 1997); ``Order on 
Reconsideration'' 61 FR 65341 (December 12, 1996)]. Local exchange 
carriers (``LECs'') must comply with these requirements, among others, 
before they are eligible to receive the compensation from interexchange 
carriers (``IXCs'') that is mandated in that proceeding. Because some 
LECs are not in full compliance with the Commission's federal tariffing 
requirements for unbundled features and functions under the Payphone 
Order and Order on Reconsideration, the Bureau granted all LECs a 
limited waiver of the deadline for filing the federal tariffs for 
unbundled features and functions, to the extent necessary, to enable 
LECs to file the required federal tariffs within 45 days after the 
release of the Bureau's order, with a scheduled effective date no later 
than 15 days after the date of filing.

DATES: Effective: April 4, 1997.

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

SUPPLEMENTARY INFORMATION:

Synopsis of Order

    1. The Bureau clarified here that the unbundled features and 
functions addressed in the Payphone Reclassification Proceeding are 
network services similar to basic service elements (``BSEs'') under the 
Open Network Architecture (``ONA'') regulatory framework. BSEs are 
defined as optional unbundled features that an enhanced services 
provider may require or find useful in configuring its enhanced 
service. In this case, the unbundled features are payphone-specific, 
network-based features and functions used in configuring unregulated 
payphone operations provided by payphone service providers (``PSPs'') 
or LECs. Some of the LECs use terms such as tariffed ``options'' and 
``elective features'' for network services that other LECs call 
features and functions. Options and elective features must be federally 
tariffed in the same circumstances as features and functions must be 
federally tariffed, depending on whether they are provided on a bundled 
basis with the basic network payphone line (state tariff), or 
separately on an unbundled basis (federal and state tariffs).
    2. The Bureau also clarified that the requirement to file federal 
tariffs applies only to payphone-specific, network-based, unbundled 
features and functions provided to others or taken by a LEC's 
operations, such as answer supervision and call screening, with the 
following qualifications discussed below. It agreed with the Regional 
Bell Operating Company (``RBOC'') Coalition that the federal tariffing 
requirement does not apply to non-network services, such as inside wire 
services. Moreover, as suggested by the RBOC Coalition, the Bureau did 
not include in this federal tariffing requirement features and 
functions that are generally available to all local exchange customers 
and are only incidental to payphone service, such as touchtone services 
and various custom calling features. In addition, the Bureau clarified 
that payphone-specific, network-based features and functions must be 
federally tariffed now only if the LEC provides them separately and on 
an unbundled basis from the basic payphone line, either to its payphone 
operations or to others, because the payphone orders did not require 
additional unbundling of features and functions by April 15 beyond 
those that the LEC chooses to provide. As required by the Payphone 
Reclassification Proceeding, however, a state may require further 
unbundling, and PSPs may request additional unbundled features and 
functions from BOCs through the ONA 120-day service request process.
    3. The Bureau concluded that the Payphone Reclassification 
Proceeding does not prohibit the mixing and matching of payphone 
services between federal and state tariffs by LEC and independent 
payphone operations. This conclusion applies only to payphone services 
and does not affect Computer III requirements. In Computer III, the 
Commission did not allow such mixing and matching because: (1) Mixing 
and matching could result in mismatch of basic service arrangements 
(``BSA'') and BSEs costs and revenues; (2) it could undermine state 
policies; (3) states may impose terms and conditions on BSAs/BSEs that 
differ from those of the FCC; and (4) other jurisdictional problems. 
Unlike Computer III, however, Section 276 provides the Commission with 
jurisdiction over all tariffing of payphone services. The Commission 
has delegated to each state the review, pursuant to federal guidelines, 
of payphone tariffs filed in the state. Given that the federal 
guidelines for tariffing discussed above are the same in the state and 
federal jurisdictions, there is no undermining of state policies or the 
creation of jurisdictional conflicts. Moreover, in this case, mixing 
and matching provides a safeguard to ensure that unbundled features are 
available at rates that comply with the guidelines established in the 
Payphone Reclassification Proceeding. The Bureau concluded that the 
separations issues, if any, raised by allowing mixing and matching are 
outweighed, in this case, by the importance of this safeguard to ensure 
that unbundled features and functions are available at rates that 
comply with the guidelines established in the Payphone Reclassification 
Proceeding.
    4. Upon reviewing the contentions of the RBOC Coalition and the 
language it cites from the two orders in the Payphone Reclassification 
Proceeding, the Bureau concluded that while the individual BOCs are not 
in full compliance with the requirements of the Payphone 
Reclassification Proceeding,

[[Page 24586]]

they have made a good faith effort to comply with the requirements. The 
RBOC Coalition conceded that the Commission's payphone orders mandate 
the federal tariffing of some payphone services, namely those that the 
LEC provides to its own payphone operations. In addition, the RBOC 
Coalition stated that it will take whatever action is necessary to 
comply with the Commission's orders in order to be eligible to receive 
payphone compensation at the earliest possible date. Therefore, because 
the RBOC Coalition has indicated its intent to comply with the 
Commission's requirements, as established by the Payphone 
Reclassification Proceeding, and because the Coalition's narrower 
reading of what payphone services need to be federally tariffed is 
based on its good faith efforts to comply with the Commission's rules, 
the Bureau adopted an order, which contained a limited waiver of the 
federal tariffing requirements for unbundled features and functions a 
LEC must meet before it is eligible to receive payphone compensation. 
Because other LECs may also have failed to file all the federal tariffs 
for unbundled features and functions required by the Payphone Order and 
the Order on Reconsideration, the Bureau applied the limited waiver to 
all LECs, with the limitations set forth below.
    5. In the Payphone Order and Order on Reconsideration, the 
Commission required that LECs file federal tariffs by January 15, 1997 
with a 90-day review period for unbundled features and functions. 
Consistent with its conclusions outlined above and in the interests of 
bringing LECs into compliance with the requirements of the Payphone 
Reclassification Proceeding, the Bureau waived for 60 days the 
requirement that LECs have ``in effect * * * interstate tariffs for 
unbundled functionalities associated with [payphone] lines'' by April 
15, 1997. The Bureau also waived both the January 15th filing deadline 
and the 90-day review period for interstate tariffs. LECs must file 
interstate tariffs for unbundled features and functions, as required by 
the Payphone Reclassification Proceeding, as clarified herein, within 
45 days after the release date of this order under the streamlined 
tariff review process. These tariffs will be effective no later than 15 
days after filing, unless suspended or rejected. Any LEC that files 
federal tariffs for unbundled functionalities, as clarified herein, 
within 45 days of the release date of the instant Order will be 
eligible to collect the payphone compensation provided by the Payphone 
Reclassification Proceeding on April 15, 1997, as long as that LEC has 
complied with all of the other requirements set forth in paragraph 131 
(and paragraph 132 for the BOCs) of the Order on Reconsideration. If a 
LEC fails to file all of the requisite federal tariffs within 45 days, 
or if the federal tariffs for a particular LEC are not in effect after 
60 days from the date of release of this Order, the LEC will not be 
eligible to receive the payphone compensation provided by the Payphone 
Reclassification Proceeding.
    6. Waiver of Commission rules is appropriate only if special 
circumstances warrant a deviation from the general rule and such 
deviation serves the public interest. Because the Commission is 
required to review incoming tariffs for the unbundled features and 
functions associated with payphone service, which have not been 
previously filed at the interstate level, the Bureau found that special 
circumstances existed to grant a limited waiver of brief duration to 
address this responsibility. In addition, for the reasons stated above, 
the Bureau's grant of a waiver in a limited circumstance, would not 
undermine, and is consistent with, the Commission's overall policies in 
CC Docket No. 96-128 to reclassify LEC payphone assets and ensure fair 
PSP compensation for all calls originated by payphones. Moreover, the 
Bureau's review of the interstate tariffs that are the subject of this 
limited waiver will enable it to determine whether these tariffs have 
been filed in accordance with its rules. Accordingly, the Bureau 
granted a limited waiver subject to the filing of federal tariffs for 
unbundled features and functions within 45 days of the release date of 
the Bureau's order. The Bureau's order does not waive any of the other 
requirements set forth in paragraphs 131-132 of the Order on 
Reconsideration, including the requirement that a LEC have ``in effect 
intrastate * * * tariffs for unbundled functionalities.* * *''
    7. The Bureau denied the Motion by the American Public 
Communications Council (``APCC'') that requested that the Commission 
conclude that the BOCs are disqualified from receiving interim 
compensation pursuant to the Payphone Reclassification Proceeding. APCC 
argues that the BOCs have failed both to retariff their basic payphone 
services at cost-based rates, and to tariff separately from basic 
payphone lines coin service features and other unbundled features and 
functions. The Bureau clarified that the Payphone Reclassification 
Proceeding did not require, by April 15, 1997, the level of unbundling 
sought by APCC. LECs, including the BOCs, must comply with the state 
tariffing requirements of the Payphone Reclassification Proceeding. In 
response to APCC's contentions, the Bureau concluded that it did not 
have a record to determine whether the BOCs have complied with the 
state tariffing requirement for cost-based rates. As required by the 
Order on Reconsideration, however, LECs, including the BOCs, must be 
prepared to certify that they have complied with all the requirements 
of the Payphone Reclassification Proceeding, including those involving 
intrastate tariffs, subject to the limited waiver provided herein.
    8. The Bureau emphasized that LECs must comply with all of the 
enumerated requirements established in the Payphone Reclassification 
Proceeding, except as waived, before the LECs' payphone operations are 
eligible to receive the payphone compensation provided by that 
proceeding. Both independent PSPs and IXCs claim that some LECs have 
not filed state tariffs that comply with the requirements set forth in 
the Order on Reconsideration. These requirements are: (1) That payphone 
service intrastate tariffs be cost-based, consistent with Section 276, 
and nondiscriminatory; and (2) that the states ensure that payphone 
costs for unregulated equipment and subsidies be removed from the 
intrastate local exchange service and exchange access service rates. 
LEC intrastate tariffs must comply with these requirements by April 15, 
1997 in order for the payphone operations of the LECs to be eligible to 
receive payphone compensation. LECs that have not complied with these 
requirements will not be entitled to receive compensation.
    9. The Bureau disagreed with the RBOC Coalition regarding the 
applicability of the federal guidelines for state tariffing of payphone 
services. The Commission concluded in the Order on Reconsideration that 
it had jurisdiction over the tariffing of payphone services in order to 
implement Section 276. The plain language of the Order on 
Reconsideration provides that state tariffs for payphone services must 
be cost based, consistent with the requirements of Section 276, 
nondiscriminatory, and consistent with Computer III guidelines. The 
footnote referred to by the RBOC Coalition provides references to 
Commission orders describing the applicable Computer III guidelines.
    10. The guidelines for state review of intrastate tariffs are 
essentially the same as those included in the Payphone Order for 
federal tariffs. On

[[Page 24587]]

reconsideration, the Commission stated that although it had the 
authority under Section 276 to require federal tariffs for payphone 
services, it delegated some of the tariffing requirements to the state 
jurisdiction. The Order on Reconsideration required that state tariffs 
for payphone services meet the requirements outlined above. The Order 
on Reconsideration provides that states that are unable to review these 
tariffs may require the LECs to file the tariffs with the Commission.
    11. The Bureau clarified that, for purposes of meeting all of the 
requirements necessary to receive payphone compensation, the question 
of whether a LEC has effective intrastate tariffs is to be considered 
on a state-by-state basis. Under this approach, assuming the LEC has 
complied with all of the other compliance list requirements, if a LEC 
has effective intrastate tariffs in State X and has filed tariffs in 
State Y that are not yet in effect, then the LEC PSP will be able to 
receive payphone compensation for its payphones in State X but not in 
State Y. The intrastate tariffs for payphone services, including 
unbundled features, and the state tariffs removing payphone equipment 
costs and subsidies must be in effect for a LEC to receive compensation 
in a particular state.

Ordering Clauses

    12. Accordingly, it is ordered, pursuant to Sections 4(i,), 5(c), 
201-205, 276 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 155(c), 201-205, 276, and Sections 0.91 and 0.291 of the 
Commission's rules, 47 CFR 0.91 and 0.291, that limited waiver of the 
Commission's requirements to be eligible to receive the compensation 
provided by the Payphone Reclassification Proceeding, CC Docket No. 96-
128, is granted to the extent stated herein.
    13. It is further ordered that each individual BOC must file an ex 
parte document with the Secretary, by April 10, 1997, advising on the 
status of intrastate tariffs for the unbundled features and functions 
that it has not yet federally tariffed, and stating that it commits to 
filing federal tariffs for such unbundled features and functions within 
45 days of the release date of this Order.
    14. It is further ordered that this limited waiver shall be 
effective upon release.
    15. It is further ordered that the Motion of APCC requesting that 
the Commission conclude that the BOCs are disqualified from receiving 
interim compensation under the Payphone Reclassification Proceeding is 
denied.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-11682 Filed 5-5-97; 8:45 am]
BILLING CODE 6712-01-P