[Federal Register Volume 62, Number 167 (Thursday, August 28, 1997)]
[Proposed Rules]
[Pages 45611-45613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22733]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[CC Docket No. 96-98, FCC 97-295]


Implementation of the Local Competition Provisions in the 
Telecommunications Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is issuing this Further Notice of Proposed 
Rulemaking (Further NPRM) seeking comment on whether requesting 
carriers may use unbundled shared transport facilities in conjunction 
with unbundled switching, to originate or terminate interexchange 
traffic to customers to whom the requesting carrier does not provide 
local exchange service. We also seek comment on whether similar use 
restrictions may apply to the use of unbundled dedicated transport 
facilities. The Commission's goal is to increase competition in the 
local exchange and exchange access market.

DATES: Comments are due on or before October 2, 1997 and Reply Comments 
are due on or before October 17, 1997. Written comments by the public 
on the proposed and/or modified information collections are due October 
2, 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 October 27, 1997.

ADDRESSES: Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 1919 M Street NW., Room 
222, Washington, DC 20554, with a copy to Janice Myles of the Common 
Carrier Bureau, 1919 M Street NW., Room 544, Washington, DC 20554. 
Parties should also file one copy of any documents filed in this docket 
with the Commission's copy contractor, International Transcription 
Services, Inc., 1231 20th St. NW., Washington, DC 20036. In addition to 
filing comments with the Secretary, a copy of any comments on the 
information collections contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room 234, 1919 M Street NW., 
Washington, DC 20554, or via the Internet to [email protected], and to 
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street NW., 
Washington, DC 20503 or via the Internet to [email protected].

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking adopted and released August 18, 
1997 (FCC 97-295). The full text of this Further NPRM is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 1919 M St. NW., Room 239, Washington, DC. The 
complete text also may be obtained through the World Wide Web, at 
http://www.fcc.gov/Bureaus/Common

[[Page 45612]]

Carrier/Orders/fcc97295.wp, or may be purchased from the Commission's 
copy contractor, International Transcription Service, Inc., (202) 857-
3800, 1231 20th St., N.W., Washington, D.C. 20036.

Synopsis of Further Notice of Proposed Rulemaking

I. Further Notice of Proposed Rulemaking

A. Discussion

    1. In the Local Competition Order (61 FR 45476 (August 29, 1996)), 
we did not condition use of network elements on the requesting 
carrier's provision of local exchange service to the end-user customer. 
We recognized, however, that, as a practical matter, a requesting 
carrier using certain network elements would be unlikely to obtain 
customers unless it offered local exchange service as well as exchange 
access service over those network elements. In particular, we found 
that local loops are dedicated to the premises of a particular 
customer. Therefore, we stated that a requesting carrier would need to 
provide all services requested by the customer to whom the local loops 
are dedicated, and that, as a practical matter, requesting carriers 
usually would need to provide local exchange service over any unbundled 
local loops that it purchases under section 251(c)(3). We similarly 
held in our Order on Reconsideration (61 FR 52706 (October 8, 1996)) 
that the unbundled switch, as defined in the Local Competition Order, 
includes the line card, which is typically dedicated to a particular 
customer. We concluded that:

    Thus, a carrier that purchases the unbundled switching element 
to serve an end user effectively obtains the exclusive right to 
provide all features, functions, and capabilities of the switch, 
including switching for exchange access and local exchange service, 
for that end user. A practical consequence of this determination is 
that the carrier that purchases the local switching element is 
likely to provide all available services requested by the customer 
served by that switching element, including switching for local 
exchange and exchange access.

    2. Neither of the petitions for reconsideration expressly asked the 
Commission to determine whether requesting carriers may purchase shared 
transport facilities under section 251(c)(3) of the Act to originate or 
terminate interexchange traffic to customers to whom the requesting 
carrier does not provide local exchange service. Moreover, the 
oppositions and replies to the two petitions for reconsideration, as 
well as the ex partes, focused on the issue of whether requesting 
carriers may use unbundled shared transport facilities, in conjunction 
with unbundled switching, to compete in the local exchange market. In 
fact, the issue of whether requesting carriers may purchase unbundled 
shared transport facilities to originate or terminate interexchange 
traffic to customers to whom the requesting carrier does not provide 
local exchange service was specifically addressed only in two recent ex 
parte submissions. In order to develop a complete record on this issue, 
we issue this further notice of proposed rulemaking specifically asking 
whether requesting carriers may use unbundled dedicated or shared 
transport facilities in conjunction with unbundled switching, to 
originate or terminate interstate toll traffic to customers to whom the 
requesting carrier does not provide local exchange service. Absent 
restrictions requiring carriers to provide local exchange service in 
order to purchase unbundled shared or dedicated transport facilities, 
an IXC, for example, could request shared or dedicated transport under 
section 251(c)(3) for purposes of carrying originating interstate toll 
traffic between an incumbent LEC's end office and the IXC's point of 
presence (POP). Likewise, an IXC could request such transport network 
elements for purposes of terminating interstate toll traffic from its 
POP to an incumbent LEC's end office. Parties that advocate the use of 
transport network elements for the transmission of such access traffic 
should address whether that approach is consistent with our Order on 
Reconsideration regarding the use of the unbundled local switching 
element to provide interstate access service as well as recent 
appellate court decisions interpreting section 251(c)(2) and (3). 
Parties that advocate restricting the use of transport network elements 
should address whether such restrictions are consistent with section 
251(c)(3) of the Act, which requires an incumbent LEC to provide access 
to unbundled network elements ``for the provision of a 
telecommunications service.'' Moreover, those parties should also 
address the technical feasibility of requiring an IXC to identify 
terminating toll traffic that is destined for customers that are not 
local exchange customers of the incumbent LEC.

B. Procedural Matters

1. Ex Parte Presentations
    3. This Further NPRM is a permit-but-disclose notice-and-comment 
rulemaking proceeding. Ex parte presentations are permitted, in 
accordance with the Commission's rules, provided that they are 
disclosed as required.
2. Initial Regulatory Flexibility Analysis
    4. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the expected significant economic impact on small 
entities by the policies and rules proposed in the Further Notice of 
Proposed Rulemaking (Further NPRM). Written public comments are 
requested on the IRFA. These comments must be filed by the deadlines 
for comment on the remainder of the Further Notice, and should have a 
separate and distinct heading designating them as responses to the 
IRFA. The Commission will send a copy of the Further NPRM, including 
the IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) in accordance with the RFA, 5 U.S.C. Sec. 603(a).
    5. Need for and Objectives of the Proposed Rules. We seek comment 
on whether requesting carriers may use unbundled shared transport 
facilities in conjunction with unbundled switching, to originate or 
terminate interexchange traffic to customers to whom the requesting 
carrier does not provide local exchange service. We also seek comment 
on whether similar use restrictions may apply to the use of unbundled 
dedicated transport facilities. We propose no new rules at this time. 
In light of comments received in response to the Further NPRM, we might 
issue new rules.
    6. Legal Basis. The legal basis for any action that may be taken 
pursuant to the Further Notice is contained in Sections 1, 2, 4, 201, 
202, 274, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. Secs. 151, 152, 154, 201, 202, 274, and 303(r).
    7. Description and Estimate of the Number of Small Entities That 
May Be Affected by the Further Notice of Proposed Rulemaking. In 
determining the small entities affected by our Further NPRM for 
purposes of this Supplemental FRFA, we adopt the analysis and 
definitions set forth in the FRFA in our First Report and Order (61 FR 
45476 (August 29, 1996)). The RFA directs the Commission to provide a 
description of and, where feasible, an estimate of the number of small 
entities that might be affected by proposed rules. The RFA defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small business concern'' 
under Section 3 of the Small Business Act. A small business concern

[[Page 45613]]

is one which: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) satisfies any additional 
criteria established by SBA. The SBA has defined a small business for 
Standard Industrial Classification (SIC) categories 4812 
(Radiotelephone Communications) and 4813 (Telephone Communications, 
Except Radiotelephone) to be an entity with no more than 1,500 
employees. Consistent with our FRFA and prior practice, we here exclude 
small incumbent local exchange carriers (LECs) from the definition of 
``small entity'' and ``small business concern.'' While such a company 
may have 1,500 or fewer employees and thus fall within the SBA's 
definition of a small telecommunications entity, such companies are 
either dominant in their field of operations or are not independently 
owned and operated. Out of an abundance of caution, however, for 
regulatory flexibility analysis purposes, we will consider small 
incumbent LECs within this present analysis and use the term ``small 
incumbent LECs'' to refer to any incumbent LEC that arguably might be 
defined by SBA as a small business concern.
    8. In addition, for purposes of this IRFA, we adopt the FRFA 
estimates of the numbers of telephone companies, incumbent LECs, and 
competitive access providers (CAPs) that might be affected by the First 
Report and Order. In the FRFA, we determined that it was reasonable to 
conclude that fewer than 3,497 telephone service firms are small entity 
telephone service firms or small incumbent LECs that might be affected. 
We further estimated that there are fewer than 1,347 small incumbent 
LECs that might be affected. Finally, we estimated that there are fewer 
than 30 small entity CAPs that might qualify as small business 
concerns.
    9. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. It is probable that any rules issued pursuant 
to the Further NPRM would not change the projected reporting, 
recordkeeping, or other compliance requirements already adopted in this 
proceeding.
    10. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Alternatives Considered. As stated in our FRFA, we 
determined that our decision to establish minimum national requirements 
for unbundled elements would likely facilitate negotiations and reduce 
regulatory burdens and uncertainty for all parties, including small 
entities and small incumbent LECs. National requirements for unbundling 
may allow new entrants, including small entities, to take advantage of 
economies of scale in network design, which may minimize the economic 
impact of our decision in the First Report and Order. This finding has 
not been challenged. We do not believe that any rules that may be 
issued pursuant to the Further NPRM will change this finding. We seek 
comment on this tentative conclusion.
    11. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rules. None.
3. Comment Filing Procedures
    12. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, 47 CFR Secs. 1.415, 1.419, interested 
parties may file comments on or before October 2, 1997, and reply 
comments on or before October 17, 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., 1231 20th Street, N.W., 
Washington, D.C., 20036. 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.
    13. 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 Sec. 1.49 and all other 
applicable sections of the Commission's Rules. 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.
    14. 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.
    15. In addition to filing comments with the Secretary, a copy of 
any comments on the information collections contained herein should be 
submitted to Judy Boley, 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

    16. It is further ordered, that the Commission shall send a copy of 
this Third Order on Reconsideration and Further Notice of Proposed 
Rulemaking, including the associated Supplemental Final Regulatory 
Flexibility Analysis and Initial Regulatory Flexibility Analysis, to 
the Chief Counsel for Advocacy of the Small Business Administration.
    17. It is further 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. Secs. 151, 152, 154, 201, 202, 274, and 303(r), the further 
notice of proposed rulemaking is adopted.

List of Subjects in 47 CFR Part 51

    Communications common carriers, Network elements, Transport and 
termination.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-22733 Filed 8-27-97; 8:45 am]
BILLING CODE 6712-01-P