[Federal Register Volume 62, Number 129 (Monday, July 7, 1997)]
[Notices]
[Pages 36287-36288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17267]


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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 97-121; FCC 97-228]


Application for Authorization Under Section 271 of the 
Communications Act to Provide In-Region InterLATA Service in the State 
of Oklahoma

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Memorandum Opinion and Order (Order) in CC Docket No. 97-
121 concludes that SBC Communications Inc. (SBC) has not satisfied the 
requirements of section 271(c)(1) of the Communications Act of 1934, as 
amended (Act). The Commission therefore denies, pursuant to section 
271(d)(3), SBC's application to provide in-region interLATA services in 
Oklahoma. The Order declines to grant SBC authority to provide in-
region interLATA services in Oklahoma.

EFFECTIVE DATE: June 26, 1997.

FOR FURTHER INFORMATION CONTACT: Craig Brown, Attorney, Policy and 
Program Planning Division, Common Carrier Bureau, (202) 418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
adopted June 25, 1997, and released June 26, 1997. The full text of 
this Order is available for inspection and copying during normal 
business hours in the FCC Reference Center, 1919 M St., N.W., Room 239, 
Washington, D.C. The complete text also may be obtained through the 
World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/
fcc97-228.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.

Synopsis of Order

    1. On April 11, 1997, SBC Communications Inc. and its subsidiaries, 
Southwestern Bell Telephone Company and Southwestern Bell 
Communications Services, Inc., d/b/a Southwestern Bell Long Distance, 
(collectively, SBC) filed an application for authorization under 
section 271 of the Act, to provide in-region interLATA services in the 
State of Oklahoma. For the reasons set forth below, the Commission 
concludes that SBC has not satisfied the requirements of section 
271(c)(1). The Commission therefore denies, pursuant to section 
271(d)(3), SBC's application to provide in-region interLATA services in 
Oklahoma.
    2. Section 271 requires the Commission to make several findings 
before approving a BOC's application for in-region interLATA authority. 
As a preliminary matter, a BOC must show that it satisfies the 
requirements of either section 271(c)(1)(A) or 271(c)(1)(B). In order 
to satisfy section 271(c)(1)(A), a Bell Operating Company (BOC) must 
demonstrate that it ``is providing access and interconnection to its 
network facilities for the network facilities of one or more 
unaffiliated competing providers of telephone exchange service . . . to 
residential and business subscribers.'' The Commission concludes that 
the use of the term ``competing provider[]'' in section 271(c)(1)(A) 
suggests that there must be a viable commercial alternative to the

[[Page 36288]]

BOC in order to satisfy section 271(c)(1)(A).
    3. According to SBC, its ``implemented agreement with Brooks Fiber 
(Brooks) satisfies all the requirements of [section 271(c)(1)(A)].'' 
The Commission concludes, however, that Brooks' provision of local 
exchange service on a test basis to the homes of four of its employees 
does not qualify Brooks as a ``competing provider[ ] of telephone 
exchange service . . . to residential . . . subscribers,'' as required 
by section 271(c)(1)(A). Nor is the Commission persuaded that Brooks is 
a competing provider of telephone exchange service to residential and 
business subscribers merely because it has an effective tariff in place 
for the provision of both business and residential service in Oklahoma, 
or because it may have engaged in certain types of limited media 
advertising. Brooks represents, and SBC has not disputed, that Brooks 
``is not now offering residential service in Oklahoma, nor has it ever 
offered residential service in Oklahoma,'' and that it ``is not 
accepting any request in Oklahoma for residential service.'' As a 
result, the Commission concludes that SBC has not demonstrated on this 
record that it is providing access and interconnection to an 
unaffiliated, facilities-based competing provider of telephone exchange 
service to residential and business subscribers, as required by section 
271(c)(1)(A) of the Act.
    4. The Commission further concludes that, under the circumstances 
presented in this application, SBC may not obtain authorization to 
provide in-region interLATA services in Oklahoma pursuant to section 
271(c)(1)(B) at this time. Section 271(c)(1)(B) of the Act allows a BOC 
to seek entry without satisfying section 271(c)(1)(A) if ``no such 
provider has requested the access and interconnection described in 
[section 271(c)(1)(A)]'' and the BOC's statement of generally available 
terms and conditions has been approved or permitted to take effect by 
the applicable state regulatory commission. All parties appear to agree 
that, if SBC has received a ``request'' that is referred to in section 
271(c)(1)(B), which is hereinafter referred to as a ``qualifying 
request,'' the statute bars SBC from proceeding under Track B. The 
Commission agrees with this analysis and concludes that, in order to 
decide whether SBC's application may proceed under Track B, the 
Commission must determine whether SBC has received a ``qualifying 
request''. The Commission concludes that a qualifying request under 
section 271(c)(1)(B) is a request for negotiation to obtain access and 
interconnection that, if implemented, would satisfy the requirements of 
section 271(c)(1)(A). The Commission further concludes that the request 
for access and interconnection must be from an unaffiliated competing 
provider that seeks to provide the type of telephone exchange service 
described in section 271(c)(1)(A). Such a request need not be made by 
an operational competing provider, as some BOCs suggest. Rather, the 
qualifying request may be submitted by a potential provider of 
telephone exchange service to residential and business subscribers.
    5. The Commission reaches this conclusion for several reasons. As a 
matter of statutory interpretation, the Commission finds that this 
reading, by giving full effect to the meaning of the term ``request'' 
in section 271(c)(1)(B), is the one most consistent with the statutory 
design. In addition, as a matter of policy, the Commission finds that 
this interpretation will best further Congress' goal of introducing 
competition in the local exchange market by giving BOCs an incentive to 
cooperate with potential competitors in providing them the facilities 
they need to fulfill their requests for access and interconnection. 
Moreover, the Commission finds this interpretation to be particularly 
sound in contrast to the extreme positions set forth by SBC and its 
potential competitors.
    6. Under SBC's interpretation of section 271(c)(1)(B), only 
operational facilities-based competing providers may submit qualifying 
requests that preclude a BOC from proceeding under Track B. Adoption of 
this interpretation of a qualifying request would create an incentive 
for a BOC to delay the provision of facilities in order to prevent any 
new entrants from becoming operational and, thereby, preserve the BOC's 
ability to seek in-region interLATA entry under Track B. As the 
Department of Justice observes, this reading of section 271(c)(1)(B) 
would effectively ``reward the BOC that failed to cooperate in 
implementing an agreement for access and interconnection and thereby 
prevented its competitor from becoming operational.'' Opponents of 
SBC's application offer a radically different--and, in the Commission's 
view, equally unreasonable--interpretation of when a qualifying request 
has been made. These parties claim that any request for access and 
interconnection submitted by a potential new entrant to a BOC is a 
qualifying request and precludes the BOC from proceeding under Track B. 
The Commission concludes, however, that this statutory reading could 
create an incentive for potential competitors to ``game'' the 
negotiation process by submitting an interconnection request that would 
foreclose Track B but, if implemented, would not satisfy the 
requirements of section 271(c)(1)(A). Such a result would effectively 
give a BOC's potential competitors in local telecommunications markets 
the power to deny the BOC entry into the in-region interLATA market.
    7. On the basis of the record in this proceeding, the Commission 
finds that SBC has received at least several qualifying requests for 
access and interconnection that, if implemented, will satisfy the 
requirements of section 271(c)(1)(A). The Commission therefore 
concludes that SBC, at this time, may not pursue in-region interLATA 
entry in Oklahoma under section 271(c)(1)(B).
    8. Because SBC has failed to meet the requirements of either 
section 271(c)(1)(A) or section 271(c)(1)(B), the Commission finds it 
unnecessary to address SBC's compliance with the competitive checklist 
requirements set forth in section 271(c)(2)(B). Nonetheless, the 
Commission recognizes that even if SBC had satisfied the requirements 
of section 271(c)(1)(A) or 271(c)(1)(B), it would still be required to 
demonstrate compliance with each and every item of the competitive 
checklist, including access to physical collocation, cost-based 
unbundled loops, and reliable OSS functions before it may gain in-
region interLATA entry. The Commission leaves it to future applications 
to define the scope of these and other checklist requirements.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-17267 Filed 7-3-97; 8:45 am]
BILLING CODE 6712-01-P