[Federal Register Volume 62, Number 213 (Tuesday, November 4, 1997)]
[Rules and Regulations]
[Pages 59583-59605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29117]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 42 and 61

[CC Docket No. 96-61; FCC 97-293]


Policy and Rules Concerning the Interstate, Interexchange 
Marketplace

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Order on Reconsideration (Order) released August 20, 1997 
reconsiders the Second Report and Order in this docket (61 FR 59340 
(November 22, 1996)). The Order modifies the Second Report and Order 
by: adopting permissive detariffing for interstate, domestic, 
interexchange direct-dial services; adopting permissive detariffing for 
the first 45 days of service to new customers that contact the local 
exchange carrier to choose their primary interexchange carrier; and 
eliminating the requirement that nondominant interexchange carriers 
make publicly available information concerning current rates, terms, 
and conditions for all of their interstate, domestic, interexchange 
services, except in the case of dial-around 0+ services from aggregator 
locations.

EFFECTIVE DATE: December 4, 1997.

FOR FURTHER INFORMATION CONTACT: Lisa Choi, Attorney, Common Carrier 
Bureau, Policy and Program Planning Division, (202) 418-1580. For 
additional information concerning the information collections contained 
in this Order contact Judy Boley at (202) 418-0214, or via the Internet 
at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
adopted August 15, 1997, and released August 20, 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., NW, Room 239, 
Washington, DC The complete text also may be obtained through the World 
Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/fcc97-
293.wp, or may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., (202) 857-3800, 1231 20th 
St., NW, Washington, DC 20036.

Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act, the Order contains a 
Final Regulatory Flexibility Analysis on Reconsideration which is set 
forth in the Order on Reconsideration. A brief description of the 
analysis follows. Pursuant to section 604 of the Regulatory Flexibility 
Act, the Commission performed a comprehensive analysis of the Order on 
Reconsideration 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 Order on Reconsideration; (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 Order on Reconsideration as a result of the comments; (3) a 
description of and an estimate of the number of small entities to which 
the Order on Reconsideration will apply; (4) a description of the 
projected reporting, recordkeeping and other compliance requirements of 
the Order on Reconsideration, 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 Order on Reconsideration and why each one of the other 
significant alternatives to each of the Commission's decisions which 
affect small entities was rejected.
    The rules adopted in this Order on Reconsideration are necessary to 
implement the provisions of the Telecommunications Act of 1996.

Paperwork Reduction Act

    The Federal Communications Commission (FCC) has received Office of 
Management and Budget (OMB) approval for the following public 
information collections pursuant to the Paperwork Reduction Act of 
1995, Pub. L.104-13. 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.
    OMB Control Number: 3060-0704.
    Expiration Date: February 28, 1998.
    Title: Policy and Rules Concerning the Interstate, Interexchange 
Marketplace; Implementation of section 254(g) of the Communications Act 
of 1934, as amended, CC Docket No. 96-61.
    Respondents: Business or other for-profit.
    Public reporting burden for the collection of information is 
estimated as follows:

[[Page 59584]]



----------------------------------------------------------------------------------------------------------------
                                      No. of                                                                    
      Information collection       respondents  Annual hour burden per response        Total annual burden      
                                    (approx.)                                                                   
----------------------------------------------------------------------------------------------------------------
Detariffing*.....................            0  0..............................  0.                             
Certification requirement........          519  0.5 hour.......................  259.5.                         
Tariff cancellation requirement:           519  2 hours per page (1,252 pages)   2,504 (one-time).              
 completely cancel tariffs.                      (one-time).                                                    
Tariff cancellation requirement:           519  2 hours per page (36,047 pages)  72,094 (one-time).             
 revise mixed tariffs to remove                  (one-time).                                                    
 domestic services.                                                                                             
Information disclosure                       0  0..............................  0.                             
 requirement**.                                                                                                 
Recordkeeping requirement........          519  2 hours........................  1,038.                         
----------------------------------------------------------------------------------------------------------------
* The Commission affirmed its decision in the Second Report and Order to eliminate the requirement that         
  nondominant interexchange carriers file tariffs for interstate, domestic, interexchange services. In the      
  Order, the Commission has decided to (1) permit nondominant interexchange carriers to file tariffs for the    
  provision of dial-around 1+ services using a nondominant interexchange carrier's carrier access code; (2)     
  permit nondominant interexchange carriers to file tariffs for the initial 45 days of domestic, interstate,    
  interexchange service, or until there is a written contract between the carrier and the customer, whichever is
  earlier; and (3) eliminate the public disclosure requirement.                                                 
** The Commission has eliminated the information disclosure requirement.                                        

    Total Annual Burden: 75,895.5 hours, of which 74,598 will be one-
time.
    Frequency of Response: Annual, except for tariff cancellation 
requirement, which will be one-time, and on occasion.
    Estimated Annual Reporting and Recordkeeping Costs: $435,000.
    Needs and Uses: The attached item affirms the Commission's previous 
decision in the Second Report and Order to eliminate the requirement 
that nondominant interexchange carriers file tariffs for interstate, 
domestic, interexchange telecommunications services. In this Order, the 
Commission has eliminated this information disclosure requirement. In 
addition, the Commission has reconsidered its decision to require 
affected carriers to maintain, and to make available to the public in 
at least one location, information concerning their rates, terms and 
conditions for all of their interstate, domestic, interexchange 
services.
    Public reporting burden for the collection of information is as 
noted above. Send comments regarding the burden estimate or any other 
aspect of the collections of information, including suggestions for 
reducing the burden to Performance Evaluation and Records Management, 
Washington, DC 20554.

Synopsis of Order on Reconsideration

I. Introduction

    1. On October 29, 1996, the Commission adopted the Second Report 
and Order (61 FR 59340 (November 22, 1996)) in its proceeding reviewing 
the regulation of interstate, domestic, interexchange 
telecommunications services in light of the passage of the 
Telecommunications Act of 1996 (1996 Act) and the increasing 
competition in the interexchange market over the last decade. 
Consistent with the intent of the 1996 Act to provide a ``pro-
competitive, deregulatory'' national policy framework for 
telecommunications and information technologies and services, Congress 
directed the Commission to forbear from applying any provision of the 
Communications Act or the Commission's regulations if certain 
conditions are met.
    2. We determined in the Second Report and Order that the statutory 
forbearance criteria in section 10 of the Communications Act were met 
for complete detariffing (``Complete detariffing'' refers to a policy 
of neither requiring nor permitting nondominant interexchange carriers 
to file tariffs pursuant to section 203 of the Communications Act for 
their interstate, domestic, interexchange services. ``Permissive 
detariffing'' refers to a policy of allowing, but not requiring, 
nondominant interexchange carriers to file tariffs for such services.) 
of the interstate, domestic, interexchange services offered by 
nondominant interexchange carriers, and, therefore, that we would no 
longer allow such carriers to file tariffs pursuant to section 203 of 
the Communications Act for their interstate, domestic, interexchange 
services, with the limited exception of AT&T's provision of 800 
directory assistance and analog private line services. At the same 
time, we recognized that a transition period was necessary to allow 
nondominant interexchange carriers time to adapt to complete 
detariffing. We therefore ordered all nondominant interexchange 
carriers to cancel their tariffs for such services within nine months 
from the effective date of the Second Report and Order. We maintained 
the tariffing requirement for the international portion of bundled 
domestic and international service offerings. We further required 
nondominant interexchange carriers to: (1) File an annual certification 
stating that they are in compliance with the geographic rate averaging 
and rate integration requirements of section 254(g) of the 
Communications Act; (2) maintain supporting documentation on the rates, 
terms, and conditions of their interstate, domestic, interexchange 
services that they could submit to the Commission within ten business 
days upon request; and (3) make publicly available information 
concerning current rates, terms, and conditions for all of their 
interstate, domestic, interexchange services. The basis for the 
information disclosure requirement was to ensure that the public was 
provided with the information necessary to determine whether a 
nondominant interexchange carrier was adhering to the rate averaging 
and rate integration requirements of section 254(g) of the 
Communications Act. In addition, we determined that a public disclosure 
requirement would promote the public interest by making it easier for 
consumers, including resellers, to compare service offerings.
    3. Our actions in the Second Report and Order were intended to 
advance Congress' pro-competitive and deregulatory objectives by 
eliminating regulatory requirements that the Commission determined were 
no longer necessary to protect consumers or serve the public interest. 
We concluded that our actions would foster increased competition in the 
market for interstate, domestic, interexchange services by deterring 
tacit price coordination, eliminating the possible invocation of the 
``filed-rate'' doctrine, and establishing market conditions that more 
closely resemble an unregulated environment. We found that elimination 
of the possible invocation of the ``filed-rate'' doctrine is in the 
public interest

[[Page 59585]]

because, pursuant to the ``filed-rate'' doctrine articulated by the 
courts, where a filed tariff rate, term, or condition differs from a 
rate, term, or condition in a non-tariffed carrier-customer contract, 
the carrier is required to assess the tariff rate, term, or condition. 
See Armour Packing Co. v. United States, 209 U.S. 56 (1908); American 
Broadcasting Cos., Inc. v. FCC, 643 F.2d 818 (D.C. Cir. 1980); see also 
Aero Trucking, Inc. v. Regal Tube Co., 594 F.2d 619 (7th Cir. 1979); 
Farley Terminal Co., Inc. v. Atchison, T. & S.F. Ry., 522 F.2d 1095 
(9th Cir.), cert. denied, 423 U.S. 996 (1975). Consequently, if a 
carrier unilaterally changes a rate by filing a tariff revision, the 
newly filed rate becomes the applicable rate for all customers of that 
service unless the revised rate is found to be unjust, unreasonable, or 
unlawful under the Communications Act. See 47 U.S.C. 201(b); see also 
Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116 
(1990).
    4. Several parties appealed the Second Report and Order to the 
United States Court of Appeals for the District of Columbia Circuit and 
filed motions requesting that the court stay the Second Report and 
Order pending judicial review. On February 13, 1997, the court granted 
these motions. The Commission's rules adopted in this proceeding, 
therefore, are stayed until the court issues its determination on the 
merits of the appeal. Accordingly, nondominant interexchange carriers 
are currently required to file tariffs for their interstate, domestic, 
interexchange services.
    5. In addition, eleven parties filed petitions requesting that we 
reconsider or clarify the rules we adopted in the Second Report and 
Order. The United States Court of Appeals for the District of Columbia 
Circuit deferred the briefing schedule in the appeal of the rules 
adopted in the Second Report and Order to allow the Commission to act 
on these petitions for reconsideration. MCI Telecommunications Corp. v. 
FCC, No. 96-1459 (D.C. Cir. April 4, 1997). The court directed the 
parties to file motions to govern further proceedings 60 days after 
April 4, 1997. Id. The Commission issued a public notice to establish a 
pleading cycle for the issues raised in the petitions for 
reconsideration and clarification. The public notice sought comments on 
or oppositions to the petitions and replies. Policy and Rules 
Concerning the Interstate, Interexchange Marketplace, CC Docket No. 96-
61, Public Notice, Petitions for Reconsideration and Clarification of 
Action in Rulemaking Proceedings (released January 7, 1997). For 
convenience, we will cite the parties' filings in these three phases as 
petitions, comments, and replies, respectively. For the reasons set 
forth below, we grant requests for reconsideration on three issues. 
Specifically, we modify the Second Report and Order by: (1) Adopting 
permissive detariffing for interstate, domestic, interexchange direct-
dial services to which end-users obtain access by dialing a carrier's 
access code (CAC); (2) adopting permissive detariffing for the first 45 
days of service to new customers that contact the local exchange 
carrier (LEC) to choose their primary interexchange carrier (PIC); and 
(3) eliminating the requirement that nondominant interexchange carriers 
make publicly available information concerning current rates, terms, 
and conditions for all of their interstate, domestic, interexchange 
services, except in the case of dial-around 0+ services from aggregator 
locations, pursuant to section 226 of the Communications Act. In 
another proceeding, we are considering the issue of forbearing from 
applying section 226, which requires operator service providers to file 
informational tariffs. See Billed Party Preference for InterLATA 0+ 
Calls, CC Docket No. 92-77, Second Further Notice of Proposed 
Rulemaking, 11 FCC Rcd 7274 (1996); Public Notice, DA 96-1695 (released 
October 10, 1996) (seeking further comment). We deny all of the other 
petitions for reconsideration. We also make a number of clarifications 
in this Order on Reconsideration.

II. Detariffing Issues

A. Forbearance From Tariff Filing Requirements for the Interstate, 
Domestic, Interexchange Services of Nondominant Interexchange Carriers

i. Background
    6. In the Second Report and Order, we concluded that the statutory 
forbearance criteria in section 10 were satisfied, based on our 
findings that: (1) Tariffs are not necessary to ensure that the rates, 
practices, classifications, and regulations of nondominant 
interexchange carriers for interstate, domestic, interexchange services 
are just and reasonable and not unjustly or unreasonably 
discriminatory; (2) tariffs for interstate, domestic, interexchange 
services of nondominant interexchange carriers are not necessary to 
protect consumers; and (3) complete detariffing of interstate, 
domestic, interexchange services provided by nondominant interexchange 
carriers, and not permissive detariffing of such services, is in the 
public interest. We concluded that permissive detariffing of 
interstate, domestic, interexchange services provided by nondominant 
interexchange carriers is not in the public interest because it: (1) 
Would not necessarily eliminate possible invocation of the ``filed-
rate'' doctrine; (2) would create a risk that nondominant interexchange 
carriers would file tariffs to send price signals and to manipulate 
prices; and (3) would impose administrative costs on the Commission, 
which must maintain and organize tariff filings for public inspection. 
We further concluded that the Commission has the authority under 
section 10 to prohibit carriers from filing tariffs. Accordingly, 
pursuant to section 10, we determined that we must forbear from 
applying section 203 tariff filing requirements to the interstate, 
domestic, interexchange services offered by nondominant interexchange 
carriers and not permit nondominant interexchange carriers to file 
tariffs for their interstate, domestic, interexchange services, with 
the limited exception of AT&T's provision of 800 directory assistance 
and analog private line services.
ii. Positions of the Parties
    7. Frontier, Telecommunications Resellers Association (TRA), and 
Telco petition the Commission to reconsider its decision to adopt 
complete detariffing, and urge the Commission to adopt permissive 
detariffing for the interstate, domestic, interexchange services 
offered by nondominant interexchange carriers. TRA further argues that 
the increased costs and burdens of a complete detariffing regime will 
adversely affect small and mid-sized nondominant interexchange 
carriers, which have fewer resources. TRA proposes specifically that 
the Commission adopt permissive detariffing in conjunction with a 
carrier-administered electronic tariff filing system, thereby relieving 
the Commission of the burden of administering and maintaining tariff 
filings. AT&T, CompTel, SBC, U S WEST, and WorldCom also support 
permissive detariffing.
    8. AT&T, CompTel, and WorldCom argue that section 10 only 
authorizes the Commission to refrain from requiring tariffs, and does 
not empower the agency to prohibit carriers from voluntarily complying 
with section 203. These parties, and others, also challenge the 
Commission's determination that permissive detariffing is not in the 
public interest. Specifically, these parties argue that: (1) The 
``filed-rate'' doctrine would no longer apply if the Commission adopted 
a permissive detariffing regime because the tariffed

[[Page 59586]]

rate would no longer be the only permissible rate; (2) even if the 
``filed-rate'' doctrine would continue to apply, that doctrine and 
carriers' ability to limit their liability through tariff provisions, 
benefit consumers because the terms of the carrier-customer 
relationship are certain; (3) price coordination would be difficult, if 
not impossible, with permissive detariffing, because carriers would at 
best have fragmentary information about their competitors' rates, 
terms, and conditions; (4) requiring nondominant interexchange carriers 
to make price and service information publicly available allows 
carriers to coordinate prices as easily as with filed tariffs; (5) even 
under a system of permissive detariffing, a carrier could not refuse to 
accommodate a customer's request for services tailored to its specific 
needs on the ground that the request is beyond the scope of the 
carrier's tariff; (6) complete detariffing significantly increases 
transactional and administrative costs, especially for small carriers, 
by forcing nondominant interexchange carriers to conclude written 
agreements with every customer and notify them of modifications to the 
carriers' rates, terms, and conditions; and (7) permissive detariffing, 
or even mandatory tariffing, promotes vigorous competition to an even 
greater extent than complete detariffing, because carriers can react to 
market conditions quickly and without appreciable costs by filing a new 
tariff.
    9. Ad Hoc Users Committee, American Petroleum Institute (API), and 
the Television Networks oppose the petitions of TRA and Frontier, at 
least to the extent that they request reconsideration of complete 
detariffing of individually-negotiated service arrangements. Ad Hoc 
Users Committee and API contend that the petitions for reconsideration 
should be denied because they merely repeat arguments previously made 
and rejected by the Commission in the Second Report and Order. In 
addition, these parties argue that complete detariffing, and not 
permissive detariffing, of interstate, domestic, interexchange services 
offered by nondominant interexchange carriers is in the public 
interest, because: (1) The ``filed-rate'' doctrine would continue to 
apply under a system of permissive detariffing; (2) the ``filed-rate'' 
doctrine harms consumers because it allows carriers unilaterally to 
alter or abrogate agreements; (3) complete detariffing ensures that 
carriers would no longer be able to refuse to accommodate a customer's 
request for services tailored to its specific needs on the grounds that 
the request conflicts with the carriers' tariffs; and (4) tariffs delay 
rapid responses to customer demands. API further argues that the 1996 
Act gives the Commission authority to prohibit tariff filings.
iii. Discussion
    10. We deny the petitions of Frontier, Telco, and TRA urging us to 
adopt permissive detariffing for all interstate, domestic, 
interexchange services. As discussed infra, arguments presented by 
these petitioners, and others, have persuaded us that permissive 
detariffing is warranted in certain limited circumstances. 
Specifically, we find that permissive detariffing is warranted for: (1) 
Interstate, domestic, interexchange direct-dial services to which end-
users obtain access by dialing a carrier's CAC (dial-around 1+ 
services); (A CAC enables callers to reach any carrier (presubscribed 
or otherwise) from any telephone. During the current transition from 
five to seven digit CACs, both five digit CACs (10XXX) and seven digit 
CACs (101XXXX) are in use. On April 11, 1997, the Commission determined 
that the transition will end on January 1, 1998. See Administration of 
the North American Numbering Plan, Carrier Identification Codes (CICs), 
CC Docket 92-237, Second Report and Order, 62 FR 19056 (April 18, 
1997), stay and recon. pending. Thus, after January 1, 1998, only seven 
digit CACs may be used.) and (2) interstate, domestic, interexchange 
services provided by a nondominant interexchange carrier for the 
initial 45 days of service or until there is a written contract between 
the carrier and the customer, in those limited circumstances in which a 
prospective customer contacts the LEC to select an interexchange 
carrier or to initiate a PIC change (LEC-implemented new customer 
services). Aside from these two limited categories of service, the 
petitions and comments do not present any arguments that were not 
considered and addressed in the Second Report and Order. Thus, we find 
no basis upon which to reconsider our determination that the statutory 
criteria are met for completely detariffing all other interstate, 
domestic, interexchange services of nondominant interexchange carriers, 
except for dial-around 0+ services from aggregator locations, pursuant 
to section 226 of the Communications Act.
    11. In the Second Report and Order, we extensively considered and 
rejected the argument that the Commission does not have statutory 
authority under section 10 to adopt complete detariffing. No new 
arguments have been presented that persuade us to reconsider our 
decision. Therefore, we reaffirm our earlier conclusion that Congress, 
in section 10, provided the Commission with broad forbearance authority 
that enables the agency to eliminate tariff filings under section 203.
    12. In the Second Report and Order, we also considered all of the 
arguments advanced by those parties now urging us to reconsider our 
determination that permissive detariffing is in the public interest and 
complete detariffing is not. With the exception of dial-around 1+ 
services and LEC-implemented new customer services, we affirm our 
conclusion in the Second Report and Order that permissive detariffing 
of interstate, domestic, interexchange services offered by nondominant 
interexchange carriers is not in the public interest, for the reasons 
set forth in our prior order. We are not persuaded that a permissive 
detariffing regime would eliminate possible invocation of the ``filed-
rate'' doctrine. In a permissive detariffing regime, a nondominant 
interexchange carrier may choose to file a tariff for an interstate, 
domestic, interexchange service, even if the carrier has signed an 
underlying contract with the customer. If a carrier files a tariff for 
an interstate, domestic, interexchange service with the Commission, 
whether on a permissive or mandatory basis, section 203(c) requires the 
carrier to provide service at the rates, and on the terms and 
conditions, set forth in the tariff until the carrier files a 
superseding tariff cancelling, or changing the rates, terms, and 
conditions of the tariffed offering. Thus, if the tariffed rates, 
terms, and conditions differ from those in the contract, section 
203(c), in all likelihood, requires the carrier to provide service at 
the rates, and on the terms and conditions, set forth in the tariff. 
Because the ``filed-rate'' doctrine is a judicially-created doctrine, 
the determination of how to apply the doctrine in a permissive 
detariffing regime when the tariffed rates, terms, or conditions differ 
from those contained in a contract must necessarily be left to the 
courts. See supra paragraph 3. Only with a complete detariffing regime, 
under which the carrier-customer relationship would more closely 
resemble the legal relationship between service providers and customers 
in an unregulated, competitive environment, can we definitively avoid 
the negative consequences for consumers of the ``filed-rate'' doctrine. 
The Common Carrier Bureau, on numerous occasions, has issued Orders 
Designating Issues for Investigation to examine whether a carrier's 
proposed unilateral changes in a tariff meet the ``substantial cause''

[[Page 59587]]

standard applied by the Commission. See AT&T Contract Tariff No. 374, 
Transmittal Nos. CT 2952 and CT 3441, Order Designating Issues for 
Investigation, DA 95-1784 (Common Carrier Bureau released August 11, 
1995); AT&T Communications Contract Tariff No. 360, Transmittal No. CT 
3076, CC Docket No. 95-146, Order Designating Issues for Investigation 
(Common Carrier Bureau released September 8, 1995).
    13. Moreover, we reject carriers' arguments that the ``filed-rate'' 
doctrine benefits customers by creating certainty in the carrier-
customer relationship. In fact, the ``filed-rate'' doctrine creates 
uncertainty in the carrier-customer relationship. Invocation of the 
``filed-rate'' doctrine can be especially harmful to consumers who have 
signed long-term service contracts with interexchange carriers. As Ad 
Hoc Users Committee, API and the Television Networks point out, the 
doctrine permits interexchange carriers subsequently to file a tariff 
that differs from the long-term contract, and if justified by 
substantial cause, unilaterally to alter or abrogate their contractual 
obligations in a manner that is not available in most commercial 
relationships and that undermines consumers' legitimate business 
expectations. The ``filed-rate'' doctrine also harms residential and 
small business consumers who utilize mass market services and do not 
enter into long-term service arrangements. Such customers may purchase 
these mass market services in response to representations made by sales 
agents of the interexchange carrier or advertisements. In addition, 
such customers may assume the interexchange carrier will not modify its 
rates without actual notice to the customer. In the event of a dispute 
about the representations made by a sales agent, or a subsequent 
modification to an interexchange carrier's rates, terms, or conditions 
without actual notice to customers, a customer would be bound by the 
tariffed rates, terms, and conditions.
    14. Moreover, we reaffirm our finding that permissive detariffing 
would facilitate tacit price coordination, because nondominant 
interexchange carriers could file tariffs to send price signals. On 
further reflection, however, we are persuaded by the comments of AT&T, 
TRA, and Telco, which maintain that complete detariffing, in 
conjunction with a public disclosure requirement, may not effectively 
impede tacit price coordination, because a nondominant interexchange 
carrier's rates, terms, and conditions for its interstate, domestic, 
interexchange services would still be available to its competitors in 
one location. We adopted the public disclosure requirement primarily to 
aid enforcement of the geographic rate averaging and rate integration 
requirements of section 254(g). In response to petitions asking us to 
reconsider the information disclosure requirements, we determine, as 
discussed below, that we can effectively meet our obligations to 
enforce section 254(g) without the public disclosure requirement. We 
conclude that complete detariffing, without a public disclosure 
requirement, will more effectively deter tacit price coordination.
    15. We recognized in the Second Report and Order that complete 
detariffing would change in significant respects the manner in which 
nondominant interexchange carriers conduct their business. We 
considered the arguments raised by the parties in their petitions for 
reconsideration and comments regarding costs and administrative burdens 
associated with complete detariffing that would be avoided if carriers 
were allowed to file tariffs. With the exception of casual calling 
services and LEC-implemented new customer services, these arguments 
either essentially restate claims that were advanced in the initial 
phase of this proceeding in response to the NPRM and were rejected in 
the Second Report and Order, or are new, but unsupported by credible 
evidence. For example, Frontier, CompTel and SBC contend, as numerous 
parties did in earlier comments in this proceeding, that complete 
detariffing will increase the costs and administrative burdens on 
nondominant interexchange carriers because they will have to enter into 
individually negotiated contracts with every end user in order to 
establish a binding contractual relationship. Commenters assert that 
the costs associated with establishing an enforceable contractual 
relationship in the absence of tariffs will be ``enormous,'' 
``significant,'' and ``substantial;'' however, they do not provide any 
evidence in support of these claims. In short, these parties did not 
raise any new arguments or provide any credible new evidence concerning 
the costs of providing interstate, domestic, interexchange service in a 
detariffed environment, as required by section 405 of the 
Communications Act. We, therefore, affirm our conclusion, for the 
reasons set forth in the Second Report and Order, that requiring 
nondominant interexchange carriers to conduct their businesses as do 
other businesses in unregulated markets will not substantially increase 
their costs.
    16. In contrast, parties offered additional credible evidence on 
reconsideration concerning the costs and burdens to carriers of 
providing dial-around 1+ services and LEC-implemented new customer 
services in the absence of tariffs. As discussed below, we reconsider 
our decision in light of this evidence, and determine that permissive 
detariffing in these specific, limited instances is in the public 
interest. With respect to other interstate, domestic, interexchange 
services, we affirm our finding that the benefits and pro-competitive 
effects of complete detariffing outweigh any increased transactional or 
administrative costs resulting from the shift to complete detariffing.
    17. Finally, we reject the argument that permissive detariffing or 
mandatory tariffing would promote competition more effectively than 
complete detariffing. As discussed above, allowing nondominant 
interexchange carriers to file tariffs for interstate, domestic, 
interexchange services creates the risk that such carriers will use 
these tariffs to send price signals in an effort to manipulate prices. 
Moreover, for the reasons discussed above and in the Second Report and 
Order, requiring nondominant interexchange carriers to conduct their 
businesses as do other businesses in unregulated markets will not 
substantially increase their costs. We, therefore, conclude that 
complete detariffing of the interstate, domestic, interexchange 
services of nondominant interexchange carriers is in the public 
interest, with the exception of dial-around 1+ services, LEC-
implemented new customer services and section 226 tariffs associated 
with dial-around 0+ calls.

B. Casual Calling Services

i. Background
    18. In contrast to other interstate, domestic, interexchange 
services, casual calling services are those services that do not 
require the calling party to establish an account with an interexchange 
carrier or otherwise presubscribe to a service. ``Casual calling'' 
refers to services such as collect calling, the use of a third-party 
credit card, or dial-around through the use of an access code. Casual 
calling does not include services for which customers presubscribe to 
an interexchange carrier or otherwise establish an account with an 
interexchange carrier prior to using the service, such as by obtaining 
a calling card, in advance, from an interexchange carrier. References 
to

[[Page 59588]]

casual calling in this reconsideration do not pertain to section 226 
informational tariffs. We concluded in the Second Report and Order that 
the record did not support a finding that complete detariffing would 
cause nondominant interexchange carriers to cease offering such 
services. Rather, we found that nondominant interexchange carriers have 
options other than tariffs by which they can ensure the establishment 
of a contractual relationship with casual callers that would legally 
obligate such callers to pay for the telecommunications service they 
use and bind them to the carriers' terms and conditions. Second Report 
and Order at 59350, paragraph 58. We stated that a casual caller 
providing billing or payment information, such as a credit card or 
billing number, and completing use of the telecommunications service, 
may be deemed to have accepted a legal obligation to pay for any such 
services rendered. We also noted that a carrier could alternatively 
seek recovery under an implied-in-fact contract theory. An implied-in-
fact contract ``refers to that class of obligations which arises from 
mutual agreement and intent to promise, when the agreement and promise 
have simply not been expressed in words. Despite the fact that no words 
of promise or agreement have been used, such transactions are 
nevertheless true contracts, and may properly be called inferred 
contracts or contracts implied in fact.'' 1 Williston on Contracts, 
Sec. 1.5, at 20-21 (4th ed. 1990); see also 1 Arthur L. Corbin, et al., 
Corbin on Contracts, Sec. 1.19, at 55-57 (rev. ed. 1993) (stating that 
an implied-in-fact contract requires the same terms as an express 
contract and those terms are determined through a process of 
implication and inference). We further concluded on the basis of the 
record before us at that time that the competitive benefits of complete 
detariffing of nondominant interexchange carriers' interstate, 
domestic, interexchange service outweighed any potential increased 
costs resulting from detariffing such services.
ii. Positions of the Parties
    19. AT&T, Frontier, Telco, and TRA petition the Commission to 
reconsider its decision to adopt complete detariffing for casual 
calling services and argue that the Commission, instead, should allow 
nondominant interexchange carriers to file tariffs for these services. 
CompTel, Television Networks, SBC, Sprint and WorldCom support this 
request. TRA and Sprint contend that unlike most other businesses, 
common carriers are required by statute to provide service upon demand 
prior to payment for their services. AT&T argues that allowing 
nondominant interexchange carriers to file tariffs for casual calling 
services is the simplest and most efficient means of ensuring a 
contractual relationship between carriers and casual callers. These 
parties, and others, contend that, in the absence of tariffs, carriers 
would need to develop costly and burdensome mechanisms to ensure the 
establishment of a legal relationship with casual callers to obligate 
them to pay for the services they receive and to bind casual callers to 
the terms and conditions of the service, including limitations on 
liability.
    20. Several of these parties also maintain that the alternatives to 
tariffs that the Commission suggested in the Second Report and Order 
are insufficient to ensure that carriers have a contractual basis for 
enforcing their rates, terms, and conditions for casual calling 
services. Specifically, these parties assert that neither the implied-
in-fact contract theory nor requiring customers to provide credit card 
information or a billing number guarantees that a carrier will be able 
to recover its charges for calls made by casual callers, because the 
carrier will have to demonstrate that the parties agreed upon definite 
terms. AT&T, Sprint, CompTel, and SBC assert that without tariffs, 
interexchange carriers would have to resort to costly, repetitive, 
state-by-state litigation to secure payment for services rendered. They 
assert that the outcome of such litigation is uncertain, and that the 
associated costs would inevitably be passed on to consumers.
    21. AT&T argues that nondominant interexchange carriers, to ensure 
the establishment of a contractual relationship with a casual caller, 
would likely need to provide casual callers with the rates, terms, and 
conditions, or at a minimum, the option of obtaining the rates, terms, 
and conditions, prior to completion of the call. AT&T contends that 
using a recorded announcement that provides the rates, terms, and 
conditions of the call would greatly inconvenience callers by adding a 
delay in call set-up time of between 1.5 and 2 minutes. AT&T further 
maintains that even providing casual callers with the option of hearing 
such information would add between 7 and 9 seconds to the call set-up 
time. AT&T argues that this time delay is especially burdensome to the 
casual caller because in most instances, the caller is placing the call 
from a telephone away from the home in circumstances that necessitate 
simplicity, convenience and speed. Moreover, AT&T contends that these 
mechanisms would increase by approximately $0.33 to $0.77 the cost of 
each call. AT&T asserts that the costs would be higher if the 
nondominant interexchange carrier announces the rates, terms, and 
conditions and lower if the carrier provides the option of hearing the 
information. AT&T further argues that it may have underestimated this 
incremental cost per call, because it was unable to calculate the cost 
of playing an announcement to dial-around callers. AT&T also argues 
that computers and fax machines are unable to recognize the 
announcement, and, therefore, that any announcement would interfere 
with a caller's ability to use casual calling services for computer 
access or sending faxes. AT&T states, further, that an announcement of 
the rates, terms, and conditions transmitted to a computer or fax 
machine may be insufficient to create an enforceable contractual 
relationship with the caller.
    22. AT&T and Sprint also claim that a recorded announcement may not 
even be an option for callers who use dial-around 1+ services, because 
interexchange carriers may be unable to distinguish these calls from 
direct dial 1+ calls placed from telephones presubscribed to that 
carrier. Letter from Marybeth M. Banks, Director, Federal Regulatory 
Affairs, Sprint, to William F. Caton, Acting Secretary, Federal 
Communications Commission, April 30, 1997 (Sprint April 30 Ex Parte); 
Letter from Marybeth M. Banks, Director, Federal Regulatory Affairs, 
Sprint, to William F. Caton, Acting Secretary, Federal Communications 
Commission, March 21, 1997 (Sprint March 21 Ex Parte). Direct-dial 1+ 
calls are those interstate, interexchange calls that an end-user makes 
using his or her presubscribed interexchange carrier. A caller 
completes this call by simply dialing 1 before the number being called. 
In contrast, dial-around 1+ calls are generally those made by end-users 
to access the interstate, domestic, interexchange services of an 
interexchange carrier other than the carrier presubscribed to that 
line. Once an end-user dials a carrier's CAC, the caller is connected 
to that interexchange carrier, and may place a 1+ (dial-around 1+) or a 
0+ (dial-around 0+) call using the services of that interexchange 
carrier. End-users may use a dial-around service to take advantage of a 
lower rate offered by a competing interexchange carrier for that 
specific call, or during outages of its presubscribed interexchange 
carrier's network. Sprint contends that the technology to distinguish 
between these two types of

[[Page 59589]]

calls exists, but that this feature is not universally offered by all 
LECs. Sprint contends that only those LECs with switches capable of 
providing signalling using Signalling System 7 (SS7) protocol are able 
to provide this feature. Moreover, Sprint asserts that several LECs 
that have switches capable of providing SS7 do not offer this feature. 
Sprint and AT&T further argue that the cost of implementing this 
technology, where available, is significant and inevitably will be 
passed on to consumers.
    23. Several parties state that the increase in costs related to 
ensuring that a legally enforceable relationship is established with 
casual callers in the absence of tariffs may make it difficult for 
carriers effectively to provide casual calling services, and may 
ultimately result in carriers ceasing to offer these services 
altogether.
    24. Telco and SBC also argue that possible invocation of the 
``filed-rate'' doctrine--a primary reason the Commission adopted 
complete detariffing in the Second Report and Order--is not an issue 
with respect to casual calling services, for which carriers do not 
negotiate individual contracts. Frontier and SBC claim, moreover, that 
contrary to the Commission's conclusions in the Second Report and 
Order, the ``filed-rate'' doctrine is actually beneficial to consumers 
because the ability to tariff a service ``promotes certainty'' in the 
carrier-customer relationship. Frontier contends that this certainty is 
particularly beneficial in situations such as casual calling, where the 
carrier provides the service prior to establishing an enforceable 
contractual relationship with the customer.
    25. Finally, Western Union urges the Commission to allow 
nondominant interexchange carriers to file tariffs for consumer 
messaging services (e.g., telegram services). Western Union advances 
essentially the same arguments in support of this claim that other 
parties make in urging the Commission to adopt permissive detariffing 
for casual calling services. Western Union asserts that customers often 
convey to Western Union by telephone the message that they want 
transmitted by telegram. As a result, Western Union contends that it 
does not have an opportunity to formalize a written contract with the 
customer that would bind the customer to its terms and conditions. 
Western Union states that although the carrier could provide such 
information orally at the time the customer telephones Western Union to 
place an order, such a method of conveying the information would 
confuse customers, and may not create a legally enforceable contract 
that effectively limits the carrier's liability. Western Union further 
contends that if carriers are unable to limit their liability 
effectively, they may be forced to increase their rates or cease 
offering consumer messaging services altogether, which would not be in 
the public interest.
iii. Discussion
    26. A number of parties urge us to reconsider our decision to adopt 
complete detariffing for casual calling services in general. Sprint has 
focused its comments on dial-around 1+ services. After examining 
additional evidence presented by the parties on reconsideration, we 
partially grant the petitions and adopt permissive detariffing, on an 
interim basis, for a subset of casual calling services, specifically, 
the provision of dial-around 1+ services. For all other types of casual 
calling services that are the subject of this proceeding, we affirm our 
determination that complete detariffing is warranted, and, therefore, 
deny the petitions for reconsideration to this extent.
    27. We note at the outset that the problems that nondominant 
interexchange carriers maintain will arise with respect to ensuring the 
establishment of a contractual relationship with casual callers in a 
detariffed environment do not arise with calling cards. Because 
customers obtain calling cards in advance of using the service, the 
carrier can formalize a contractual relationship at the time the 
customer obtains the card, rather than at the time the call is placed. 
Consumers always have the option of obtaining a carrier's calling card 
to make calls and carriers may choose to advertise calling cards as a 
preferable alternative to casual calling in a detariffed environment.
    28. With the exception of dial-around 1+ calls, discussed infra, we 
affirm our prior finding that nondominant interexchange carriers have 
reasonable options other than tariffs by which they can ensure the 
establishment of a contractual relationship with casual callers that 
would legally obligate such callers to pay for the services they use 
and bind them to the carrier's terms and conditions. We recognize that 
the implied-in-fact contract theory and the provision of credit card 
information or a billing number, alone, do not guarantee that 
nondominant interexchange carriers will have an enforceable contract 
with the casual caller, if the caller does not have knowledge of the 
carrier's rates, terms, and conditions prior to completion of the call. 
Interexchange carriers, however, do not dispute that alternatives can 
be created by which they can establish an enforceable contract with 
casual callers. One alternative, as discussed by AT&T, is that 
nondominant interexchange carriers could establish an enforceable 
contract with casual callers by providing them with the rates, terms, 
and conditions of the interstate, domestic, interexchange service by 
operator or recorded announcements prior to completion of the call. The 
parties acknowledge that an enforceable contract would exist if the 
rates, terms, and conditions were provided prior to completion of the 
call. Rather, these carriers argue only that providing such an 
announcement of rates, terms, and conditions prior to completion of the 
call would be burdensome to their casual calling customers. Many casual 
calling services, including collect calling, and calls billed to third-
party numbers, however, already require intervention by the 
interexchange carrier before the call is completed, and nondominant 
interexchange carriers could provide this announcement at that time. 
Furthermore, less burdensome alternatives may also be sufficient to 
ensure the establishment of a contractual relationship. Another 
alternative discussed by AT&T would be to provide casual callers with 
the option of obtaining the rates, terms, and conditions prior to 
completion of the call either through an operator or a recorded 
announcement. We need not address whether this alternative is 
sufficient to ensure the establishment of an enforceable contract, 
because we conclude that providing the rates, terms, and conditions 
prior to completion of the call would establish an enforceable contract 
and, as discussed below, is a feasible alternative. Moreover, at a 
minimum, we agree with Frontier and reaffirm our conclusion in the 
Second Report and Order that if the customer has used the carrier's 
service with knowledge of the rates, terms, and conditions, nondominant 
interexchange carriers could seek recovery under an implied-in-fact 
contract theory. Thus, we conclude that the fact that a casual caller 
has not signed a written contract does not preclude a finding that a 
legally enforceable obligation exists between the nondominant 
interexchange carrier and the casual caller, especially when the 
customer has knowledge of the carrier's charges.
    29. We recognize that complete detariffing of casual calling 
services may require nondominant interexchange

[[Page 59590]]

carriers to modify in significant respects the manner in which these 
carriers bill and collect charges for their affected services. We 
further recognize the concerns raised by AT&T and Sprint that the cost 
of casual calls may increase and that casual callers may experience a 
delay in call set-up time. Nevertheless, we affirm our prior conclusion 
that the benefits of complete detariffing of casual calling services 
except dial-around 1+ services are substantial. These benefits include 
elimination of the possible invocation of the ``filed-rate'' doctrine, 
decreased risk of tacit price coordination, and increased rate and 
service information provided directly to casual callers to ensure that 
a legal relationship is established between carriers and customers at 
the time the caller uses the casual calling service. In our view, these 
benefits outweigh the increased costs and delays in call set-up time 
that AT&T and Sprint claim will result from complete detariffing. In 
addition, we reiterate that casual callers always have the option of 
obtaining and using an interexchange carrier's calling card, thereby 
avoiding any increased cost or delay.
    30. We also recognize AT&T's concern that complete detariffing of 
casual calling services would impede the use of certain casual calling 
arrangements for calls originated by computers and fax machines, 
because the computer or fax machine would not recognize the 
announcement, thereby interfering with the call, and because an 
announcement transmitted to a computer or fax machine may be 
insufficient to establish an enforceable contract. AT&T, however, 
overstates the problem. Casual calling services such as collect calling 
and calls billed to third-party numbers presently require intervention 
by the interexchange carrier before the call is completed. Likewise, 
use of a third-party credit card often requires interaction with the 
carrier to provide the credit card information. Thus, the use of a 
recorded announcement in a detariffed environment will not 
significantly alter the current requirement of intervention by the 
interexchange carrier. One casual calling service that does not require 
intervention with the interexchange carrier prior to completion of the 
call is dial-around 1+ service. As discussed infra, we are permitting 
carriers to file tariffs for dial-around 1+ service through use of a 
carrier's CAC. Concededly, there may be situations where callers using 
third-party credit cards may be able to enter their credit card 
information electronically by swiping the card prior to beginning a 
call, and that in the absence of tariffs, these customers may face an 
additional announcement of rates, terms, and conditions. We 
nevertheless find that the negative consequences to the limited number 
of those casual callers who may use third-party credit cards for 
computer access and fax machines do not warrant reconsideration of our 
decision to detariff completely casual calling except dial-around 1+ 
services in light of the benefits of complete detariffing of such 
casual calling services and the fact that most casual calling services 
already require intervention by an interexchange carrier. Moreover, 
casual callers who now use third-party credit cards for computer access 
and fax machines can avoid the announcement of rates, terms, and 
conditions by obtaining in advance and using an interexchange carrier's 
calling card. As discussed above, an interexchange carrier can 
establish an enforceable contract with customers at the time they 
obtain the calling card, rather than when the call is placed.
    31. We also reject Telco's and SBC's argument that, because 
carriers do not negotiate individual contracts with casual callers, 
possible invocation of the ``filed-rate'' doctrine is not a concern for 
casual callers. Although we agree with Telco and SBC that generally the 
``filed-rate'' doctrine is an issue when a tariffed rate, term, or 
condition differs from a rate, term, or condition in a contract, 
invocation of the ``filed-rate'' doctrine may also harm casual callers. 
Customers may use a casual calling service in response to an 
advertisement or direct solicitation, which may provide rates, terms, 
and conditions for the interstate, domestic, interexchange casual 
calling service. If the interexchange carrier modifies these rates, 
terms, or conditions in the future, the consumer would be bound by the 
tariffed rates, terms, and conditions, even if the consumer did not 
receive actual notice of the modification. In the absence of tariffs, 
consumers will likely receive, or have the option of receiving, current 
information on the rates, terms, and conditions for the specific 
service they are about to use, because nondominant interexchange 
carriers will likely disclose such information to the casual caller in 
order to ensure the establishment of a contractual relationship.
    32. While we continue to require complete detariffing for casual 
calling services in general, we adopt permissive detariffing for dial-
around 1+ services using a nondominant interexchange carrier's access 
code. We are persuaded that the means of ensuring the establishment of 
an enforceable contract with customers of other casual calling services 
cannot be implemented currently for dial-around 1+ services, because, 
as explained below, the interexchange carrier does not have the ability 
reasonably to distinguish a caller using dial-around 1+ services from 
direct dial 1+ services, as required to provide the dial-around 1+ 
caller with the rates, terms, and conditions prior to completion of the 
call. We note that this issue is not a concern for dial-around 0+ calls 
from aggregator locations, because those calls require intervention 
between the carrier and customer, at which time the carrier can 
establish a contractual relationship with the customer. We further note 
that not all dial-around 1+ calls are from casual callers. Presently, 
some customers may need to dial their presubscribed interexchange 
carrier's access code to use that carrier's interstate, domestic, 
interexchange services, rather than the caller's LEC, for interstate, 
intraLATA calls. After February 8, 1999, however, customers will no 
longer need to dial their presubscribed interexchange carrier's access 
code to use that carrier's interstate, domestic, interexchange services 
because LECs are required to institute dialing parity and allow 
customers to select a PIC for intraLATA toll calling by then. See 
Implementation of the Local Competition Provisions of the 
Telecommunications Act of 1996; Interconnection Between Local Exchange 
Carriers and Commercial Mobile Radio; Area Code Relief Plan for Dallas 
and Houston, Ordered by the Public Utility Commission of Texas; 
Administration of the North American Numbering Plan; Proposed 708 
Relief Plan and 630 Numbering Plan Area Code by Ameritech-Illinois, CC 
Docket Nos. 96-98, 95-185, NSD File No. 96-8, CC Docket No. 92-237, IAD 
File No. 94-102, Second Report and Order and Memorandum Opinion and 
Order, 61 FR 47284 (September 6, 1996).
    33. Sprint and AT&T have presented evidence that the technology to 
distinguish dial-around 1+ calls from direct dial 1+ calls placed from 
telephones presubscribed to an interexchange carrier is not universally 
offered by all LECs either because some LEC switches are not capable of 
providing signalling using SS7, which is necessary to provide this 
feature, or because some LECs have chosen not to offer the technology 
needed to distinguish dial-around 1+ calls from direct dial 1+ calls. 
Sprint's and AT&T's unchallenged representations, which were not in the 
record when we considered casual calling services in the Second Report 
and Order, lead us to

[[Page 59591]]

find that adoption of complete detariffing at this time for dial-around 
1+ services would not be in the public interest. Such a regime would 
impose substantial costs and burdens on nondominant interexchange 
carriers that offer dial-around 1+ services and their customers. The 
rates, terms, and conditions of services provided to presubscribed 
direct dial callers often differ from those provided to casual callers 
using a dial-around 1+ service. Because nondominant interexchange 
carriers would not always be able to distinguish between these two 
types of calls, they would not always be able to determine the rates, 
terms, and conditions for a particular call at the time the call is 
placed. Moreover, the inability of nondominant interexchange carriers 
to distinguish between these two types of calls would require these 
carriers to implement for dial-around 1+ callers and direct dial 1+ 
callers the recorded announcement of the rates, terms, and conditions 
or other means adopted by such carriers to ensure a contractual 
relationship with dial-around 1+ callers. Such a recorded announcement 
may confuse direct dial 1+ customers. Further, the increased costs and 
the delay in call set-up time that AT&T and Sprint contend are 
attendant with ensuring the establishment of a contractual relationship 
would likely be imposed on both dial-around 1+ calls and direct dial 1+ 
calls from a presubscribed telephone line. We find that imposing these 
increased costs and delays in call set-up time on both dial-around 1+ 
callers and customers using a direct dial 1+ service from a telephone 
line presubscribed to that carrier--in all likelihood, the majority of 
calls over that line--would impose an unreasonable burden on consumers 
using direct dial 1+ services from their PIC. We note that these 
concerns do not arise with respect to dial-around 0+ calls from 
aggregator locations, because such calls always require intervention by 
the interexchange carrier and, therefore, implementation of a recorded 
announcement or some other means of providing customers with the rates, 
terms, and conditions of the call would not affect consumers making 
calls other than dial-around 0+ calls. We reach this conclusion because 
the volume of direct dial 1+ calls from a PIC is vastly larger than the 
volume of dial-around 1+ calls, and therefore, the costs and burdens 
associated with providing an announcement of rates, terms, and 
conditions for dial-around 1+ callers would be imposed on this much 
larger group. In contrast, the increased costs and delays in call set-
up time for other casual calling services would be imposed only on 
those customers using that particular casual calling service, and the 
benefits of completely detariffing those casual calling services 
outweigh the costs, as discussed above.
    34. We recognize that nondominant interexchange carriers, to avoid 
burdening their presubscribed customers, could decide not to provide an 
announcement of rates, terms, and conditions prior to completion of 
dial-around 1+ calls. In this circumstance, as in any circumstance 
where there is no contract, the carrier, at a minimum, could seek to 
recover under a theory of quantum meruit (Quantum meruit is an 
``equitable doctrine, based on the concept that no one who benefits by 
the labor and materials of another should be unjustly enriched thereby; 
under those circumstances, the law implies a promise to pay a 
reasonable amount for the labor and materials furnished, even absent a 
specific contract therefor.'' Black's Law Dictionary 1243 (6th ed. 
1990).) for the value of its services. Because we appreciate the 
somewhat greater burden of pursuing a collection action when only a 
quantum meruit theory of recovery is available, however, we find that 
allowing nondominant interexchange carriers to file tariffs for dial-
around 1+ services at this time is in the public interest. We are also 
concerned that nondominant interexchange carriers, to avoid imposing 
these costs and delays on their presubscribed customers, may decide not 
to offer a dial-around 1+ service option. Such a result would limit 
consumers' choices, and, therefore, would also not be in the public 
interest.
    35. We realize that the unique problems created by dial-around 1+ 
services as they are presently handled could be eliminated if we were 
to require LECs to deploy universally switches capable of providing 
SS7. We are not requiring LECs to take such measures in this Order on 
Reconsideration. A significant number of LEC switches do not presently 
have SS7 capability, and we do not have an adequate record in this 
proceeding to evaluate the costs that such a decision would impose on 
LECs. We note, however, that LECs have been rapidly deploying switches 
capable of providing SS7, and therefore, the unique technological 
concerns about the ability to distinguish between dial-around 1+ calls 
and direct dial 1+ calls from presubscribed customers will not be an 
issue in the near future. Once LECs universally deploy switches that 
are capable of providing SS7, we will reexamine this issue to determine 
whether we will completely detariff dial-around 1+ services for the 
same reasons that we determine that complete detariffing of other 
casual calling services is in the public interest. In the meantime, we 
conclude that permissive detariffing of dial-around 1+ services offered 
by nondominant interexchange carriers is in the public interest as an 
interim measure. In addition, we strongly encourage nondominant 
interexchange carriers to provide dial-around 1+ services on a 
detariffed basis as soon as they have the capability to do so. Because 
we are adopting permissive detariffing for dial-around 1+ services, we 
need not address concerns raised by Sprint that the ``bad debt ratio'' 
is higher for dial-around 1+ calls than for calls from presubscribed 
customers.
    36. We recognize that adopting permissive detariffing for dial-
around 1+ services may raise concerns about invocation of the ``filed-
rate'' doctrine for customers of these services. Due to the unique 
technological concerns with dial-around 1+ services that prevent the 
interexchange carrier from reasonably being able to provide the dial-
around 1+ caller with the rates, terms, and conditions prior to 
completion of the call, discussed above, we conclude, on balance, that 
the costs to consumers of adopting complete detariffing for dial-around 
1+ services outweigh the benefits of complete detariffing with respect 
to this particular type of service.

C. Initial Period of Service to Presubscribed Customers

i. Background
    37. The Second Report and Order did not specifically address 
whether complete detariffing is in the public interest with respect to 
the provision of interstate, domestic, interexchange service to new 
customers that select and use an interexchange service before receiving 
information about the rates, terms, and conditions of that service. 
None of the comments filed in response to the NPRM raised this issue.
ii. Positions of the Parties
    38. AT&T contends that we should permit carriers to file tariffs 
that are effective for the initial 45 days of service to residential 
and small business customers, or until a contract with the new customer 
is consummated, whichever is earlier. AT&T claims that many of the 
concerns carriers raise with respect to casual calling services in a 
detariffed environment are also relevant with respect to presubscribed 
customers during the initial period of service. AT&T states that, 
absent tariffs, nondominant interexchange carriers

[[Page 59592]]

will be required to provide service to new customers prior to the 
formalization of a contractual relationship during the period: (1) 
After the customer contacts the LEC to designate an interexchange 
carrier or initiate a PIC change, but before the nondominant 
interexchange carrier is able to ensure the establishment of an 
enforceable contractual relationship; and (2) when the customer 
contacts the interexchange carrier or its marketing agents directly, 
but before the contract can be prepared and mailed to the customer. 
AT&T contends that in both situations, tariffs are the only means by 
which the interexchange carrier can enforce its rates, terms, and 
conditions and limit its liability before a contract is finalized, 
without resort to costly, repetitive litigation. AT&T concludes that 
permitting nondominant interexchange carriers to file tariffs before 
they have an opportunity to finalize a written contract with a new 
customer will not adversely affect consumers because market forces will 
ensure that the filed rates, terms, and conditions will be just, 
reasonable, and nondiscriminatory, and the Commission's complaint 
process is available as an additional safeguard. Several commenters 
support AT&T's request.
iii. Discussion
    39. We grant, in part, AT&T's petition for reconsideration urging 
us to adopt permissive detariffing for the initial 45 days of 
nondominant interexchange carriers' provision of interstate, domestic, 
interexchange mass market services to new residential and business 
customers, or until a written contract is consummated, whichever is 
earlier. We find, based on the evidence presented by the parties, that 
permitting interexchange carriers to file tariffs to cover the 
provision of service during this period is in the public interest in 
the limited circumstance when a new customer contacts the LEC to select 
an interexchange carrier or to initiate a PIC change. We expect each 
LEC to process service requests promptly. Interexchange carriers are 
reminded that during the effective period of their tariffs, they must 
make their services generally available to all similarly-situated 
customers, pursuant to section 202(a). During the effective period of a 
tariff, interexchange carriers are required, pursuant to section 
201(a), to make all efforts to provide service quickly, even under 
protest. See In the Matter of Hawaiian Telephone Company, 78 F.C.C. 2d 
1062, 1065 (1980). Carriers are also bound by section 201 when 
providing service pursuant to individually-negotiated contracts. We 
conclude, however, that the interexchange carriers have not 
demonstrated that this exception to our detariffing policy should be 
extended to the initial period of service to a new customer when the 
customer directly contacts the interexchange carrier or its marketing 
agents.
    40. We find persuasive AT&T's argument that when a residential or 
small business customer contacts the LEC in order to presubscribe to an 
interexchange carrier or initiate a PIC change, (We note that 
residential and small business customers that contact the LEC to 
presubscribe to an interexchange carrier or initiate a PIC change are 
generally those customers that utilize mass market services.) the 
selected interexchange carrier, because it does not have direct contact 
with the customer, may be unable immediately to ensure that a legal 
relationship is established with that customer. AT&T presented evidence 
establishing that: (1) It takes some LECs up to 60 days to notify AT&T 
of the PIC designation; (The 45-day period during which we are allowing 
permissive detariffing was requested by the parties. Although AT&T 
asserts that it takes LECs up to 60 days to notify it of a PIC change, 
AT&T's petition for reconsideration requests only that we adopt 
permissive detariffing for at most 45 days to enable it to formalize a 
contract. See AT&T Petition at 9, 11-12 & n.12. Other parties supported 
AT&T's request. See supra note . AT&T subsequently clarified that 
allowing interexchange carriers to file tariffs that are applicable for 
a maximum of 45 days after the customer begins taking service would 
provide the interexchange carrier a sufficient amount of time to 
establish a contractual relationship with the customer in almost all 
cases. Letter from E. E. Estey, Government Affairs Vice President, 
AT&T, to William F. Caton, Acting Secretary, Federal Communications 
Commission, July 16, 1997.) (2) AT&T, because of the enormous churn 
rate in the industry, processes in excess of 30 million PIC changes or 
requests annually (an average of more than 600,000 requests per week); 
and (3) an additional two weeks may elapse after AT&T receives notice 
that it has been designated as a customer's PIC before contract 
information is mailed to that customer. Thus, during some initial 
period after interexchange service is established, carriers may be 
providing interstate, domestic, interexchange service to new customers 
without adequate assurance that the carriers' rates, terms, and 
conditions will be legally enforceable, and as a result, may be 
required to seek recovery of unremitted charges under alternative 
equitable theories, as discussed above.
    41. We have considered various means by which LECs could convey to 
new customers of a nondominant interexchange carrier the information 
necessary to ensure the establishment of an enforceable contract during 
the initial period after the customer contacts the LEC and before the 
nondominant interexchange carrier can formalize the contractual 
relationship. We conclude, however, that none of these means adequately 
ensures an enforceable contractual relationship between the nondominant 
interexchange carrier and the customer during this initial period. 
Nondominant interexchange carriers conceivably could contract with LECs 
to act as agents of the interexchange carrier to establish a 
contractual relationship with the prospective customer by orally 
providing the rates, terms, and conditions of the interexchange 
service. We are reluctant, however, to adopt a policy that may have the 
effect of mandating such agency arrangements, especially since the LEC 
may have an affiliate that offers competing interstate interexchange 
services. Alternatively, if prospective customers are required to 
contact nondominant interexchange carriers directly prior to the 
commencement of service in order to establish the necessary contractual 
relationship, such a requirement would preclude residential and 
business customers from changing or selecting a PIC by contacting the 
LECs as they do today. That, in turn, could diminish competition among 
interexchange carriers by making it more difficult for customers to 
switch interexchange carriers. Finally, the nondominant interexchange 
carrier may decide to delay provisioning of the service until a 
contractual relationship is formalized, which also may discourage 
residential and business customers from making PIC changes, thereby 
deterring competition in the interexchange market. We, therefore, 
conclude that the benefits of allowing nondominant interexchange 
carriers to file tariffs, at their discretion, for the limited period 
before the customer executes a written contract outweigh any potential 
benefits resulting from complete detariffing in this particular 
situation. Consistent with the deregulatory framework of the 1996 Act, 
we are allowing nondominant interexchange carriers to file tariffs 
under the circumstances described herein, as opposed to requiring 
tariffs, to allow nondominant interexchange

[[Page 59593]]

carriers and LECs to agree upon alternatives to tariffs for the purpose 
of adequately ensuring a contractual relationship between the 
nondominant interexchange carrier and the customer before the customer 
formally executes the written contract.
    42. We reject AT&T's arguments that we should also allow 
nondominant interexchange carriers to provide an initial period of 
service under tariff when a customer contacts the interexchange carrier 
or its marketing agent directly. AT&T claims that even when the 
customer contacts the carrier or its marketing agents directly to begin 
interexchange service or initiate a PIC change, it is unable to 
consummate a written contract prior to the commencement of service, 
given the large number of requests it receives and the period of time 
it takes to process customers' requests. When a customer contacts the 
interexchange carrier or its marketing agent directly, however, there 
is an opportunity for the interexchange carrier to establish, at a 
minimum, an oral contract by relating to the customer the rates, terms, 
and conditions that will be in effect from the commencement of service 
until such time as the customer formalizes a written contract with the 
interexchange carrier. This situation is distinguishable from both the 
situation in which the prospective customer contacts the LEC to select 
an interexchange carrier or to initiate a PIC change, and when a 
customer places a casual call using a carrier's CAC. The interexchange 
carrier does not have an opportunity in either of those cases to 
interact with the customer. In contrast, a customer who contacts the 
nondominant interexchange carrier directly is in essentially the same 
position as customers of other businesses in unregulated, competitive 
markets, i.e., they have an opportunity to interact with the service 
provider before the service is initiated. We are not persuaded, 
therefore, that we should reconsider our decision to require complete 
detariffing when a customer contacts the interexchange carrier or its 
marketing agent directly to begin interexchange service or to initiate 
a PIC change. We reaffirm our finding that complete detariffing when a 
customer contacts the interexchange carrier or its marketing agent 
directly to begin interexchange service or to initiate a PIC change is 
in the public interest.
    43. Moreover, we find that permitting nondominant interexchange 
carriers to file tariffs effective for the initial 45 days of service 
or until there is a written contract between the carrier and the 
customer, whichever is earlier, in those limited instances where 
prospective customers contact the LEC to select an interexchange 
carrier or to initiate a PIC change, is not inconsistent with a primary 
reason we adopted complete detariffing in the Second Report and Order, 
i.e., eliminating the ability of carriers to invoke the ``filed-rate'' 
doctrine. We believe that the ability of carriers to invoke the 
``filed-rate'' doctrine does not create significant problems when a 
customer contacts the LEC to select an interexchange carrier or to 
initiate a PIC change because the proposed tariff is in place only for 
a limited time, i.e., the initial 45 days of service or until a written 
contract between the carrier and the customer is consummated, whichever 
is earlier. The limited term of the tariff would prevent carriers from 
unilaterally changing the terms of negotiated agreements or 
unilaterally limiting their liability for damages after the initial 
period of service. Upon expiration of the tariff, the legal 
relationship between carriers and customers will much more closely 
resemble the legal relationship between service providers and customers 
in an unregulated environment, a goal of detariffing delineated in the 
Second Report and Order.
    44. We recognize that permitting nondominant interexchange carriers 
to file tariffs for service to new customers that contact the LEC 
raises the risk that carriers could use these tariffs to send price 
signals for their mass market services. We believe, however, that we 
cannot address the unique problems raised by the commenters about 
establishing a contractual relationship with these new customers in a 
detariffed environment without allowing nondominant interexchange 
carriers to file tariffs for a short period needed to formalize the 
contract. We note that should we become aware of evidence indicating 
that nondominant interexchange carriers are using these tariffs to send 
price signals for their mass market services, we can reexamine our 
decision to adopt permissive detariffing for LEC-implemented new 
customer services.

D. Tariff Filing Requirements for Bundled Domestic and International 
Service Offerings

i. Background
    45. In the NPRM in this rulemaking docket, the Commission sought 
comment on whether it should forbear from requiring nondominant 
interexchange carriers to file tariffs for the international portions 
of service offerings that include both interstate, domestic, 
interexchange services and international services. The Commission noted 
that it was reserving for a separate proceeding the issue of whether it 
should consider generally forbearing from requiring tariffs for 
international services provided by nondominant carriers.
    46. We determined in the Second Report and Order that there was 
insufficient record evidence to find that each of the statutory 
criteria necessary to forbear from requiring nondominant interexchange 
carriers to file tariffs for the international portions of bundled 
domestic and international service offerings had been satisfied. We 
concluded that we should address detariffing of the international 
portions of bundled domestic and international service offerings in a 
separate proceeding in which we could examine the state of competition 
in the international market. We therefore required nondominant 
interexchange carriers with bundled domestic and international services 
to bifurcate their bundled domestic and international service offerings 
and file a tariff that includes only the international portions of 
their service offerings.
    47. We also adopted a nine-month transition period in the Second 
Report and Order to allow nondominant interexchange carriers time to 
adjust to detariffing. We determined that the Commission would not 
accept new tariffs for interstate, domestic, interexchange services, or 
revisions to existing tariffs, for long-term service arrangements 
during the nine-month transition.
ii. Positions of the Parties
    48. API and SDN Users request that the Commission detariff the 
international portions of bundled domestic and international services 
offered by nondominant interexchange carriers. Ad Hoc Users Committee 
and the Television Networks support API's and SDN Users' petitions for 
reconsideration. AT&T and CompTel argue that the international services 
portion of bundled service offerings should be treated on the same 
basis as the interstate, domestic, interexchange services portion, 
without specifying whether both portions should be tariffed or 
detariffed. SDN Users, AT&T, Ad Hoc Users Committee, and CompTel 
contend that requiring tariffs only for the international portions of 
bundled domestic and international service offerings confuses customers 
and complicates negotiations. API further argues that the statutory 
forbearance criteria are satisfied with respect to the international 
portion of bundled international and domestic services, because the 
policy considerations that

[[Page 59594]]

support the Commission's decision to detariff the interstate, domestic, 
interexchange market are equally relevant to the international portion 
of bundled international and domestic offerings. In particular, API 
states that the public interest objectives of eliminating the possible 
invocation of the ``filed-rate'' doctrine and establishing market 
conditions that more closely resemble an unregulated environment are 
also served by detariffing the international portions of bundled 
international and domestic offerings. API further argues that there is 
no evidence in the record that would support a need to retain tariffs 
for the international portions of bundled offerings.
    49. Sprint opposes the request to allow domestic nondominant 
carriers to detariff the international portions of bundled domestic and 
international services offered by nondominant interexchange carriers. 
Sprint argues that requiring carriers to detariff such international 
services will confuse customers, because some carriers are dominant in 
certain international markets and nondominant in others. Sprint 
therefore urges the Commission to maintain tariff filing requirements 
for all international services until the Commission is able to examine 
the unique issues involved in applying its detariffing policies to 
international services.
    50. AT&T and CompTel further request that the Commission allow 
permissive detariffing for mixed international and domestic services 
offered by nondominant interexchange carriers during the nine-month 
transition to allow carriers and customers to adjust to the new policy. 
Ad Hoc Users Committee and API oppose this request on the ground that 
such a policy would allow carriers to alter or abrogate long-term 
arrangements by invoking the ``filed-rate'' doctrine. API disputes 
AT&T's contention that customers are ``significantly confused'' by the 
requirement that nondominant interexchange carriers bifurcate mixed 
international and domestic service offerings and states that customers 
have worked through issues with carriers that are far more daunting and 
potentially confusing.
iii. Discussion
    51. In order to determine whether the statutory criteria are 
satisfied for us to forbear from requiring tariffs for the 
international portion of bundled domestic and international service 
offerings, we need to examine the state of competition for these 
international services. We find nothing in the record on 
reconsideration that enables us to make findings on the state of 
competition for such services. API claims only that detariffing the 
international portion of bundled domestic and international service 
offerings would lead to the same public interest benefits as 
detariffing interstate, domestic, interexchange services. Other parties 
argue that requiring tariffs only for the international portions of 
bundled domestic and international service offerings confuses customers 
and complicates negotiations. The parties, however, have not provided 
new evidence in the record that would enable us to determine that the 
statutory forbearance criteria are met for detariffing the 
international portion of bundled domestic and international service 
offerings. The state of competition in the international market may not 
be the same as in the domestic market, and, we do not have sufficient 
evidence in this proceeding to make such a determination. We therefore 
affirm our conclusion that the determination of whether to detariff the 
international portions of bundled domestic and international service 
offerings should be addressed as part of a separate proceeding in which 
the Commission can further examine the state of competition in the 
international market.
    52. We need not address at this time AT&T's request that we adopt 
permissive detariffing for bundled international and domestic service 
offerings during the nine-month transition. The United States Court of 
Appeals for the D.C. Circuit has stayed the Second Report and Order, 
pending judicial review. Nondominant interexchange carriers, therefore, 
are currently required to file tariffs for all of their interstate, 
domestic, interexchange services, including those that are bundled with 
international services. We delegate authority to the Common Carrier 
Bureau to determine the appropriate transition period and address other 
transition issues when the detariffing rules become effective.

E. Local Access Portion of Interstate, Domestic, Interexchange Services

i. Positions of the Parties
    53. Ad Hoc Users Committee requests that the Commission clarify 
that the Second Report and Order detariffed the exchange access 
components of the interstate, domestic, interexchange services offered 
by nondominant interexchange carriers, and not only the interoffice 
component of such services. It argues that a requirement that 
nondominant interexchange carriers separate their integrated end-to-end 
service offerings into interexchange and exchange access services would 
radically depart from the Commission's historical approach to 
regulation of the interstate, domestic, interexchange marketplace and 
would create a ``practical nightmare'' for nondominant interexchange 
carriers to implement. API and Sprint support Ad Hoc Users Committee's 
request for clarification.
    54. Bell Atlantic contends that Ad Hoc's request, which deals with 
the regulation of exchange access services and not the regulation of 
interexchange services, is beyond the scope of this proceeding. 
Moreover, Bell Atlantic argues that the Commission should not detariff 
the exchange access services of nondominant providers without 
detariffing such services for all providers.
ii. Discussion
    55. We agree with Ad Hoc Users Committee that we detariffed 
integrated end-to-end interstate, domestic, interexchange services in 
the Second Report and Order, including both the interexchange portion 
and the interstate exchange access components of such services when 
offered on an integrated basis. We note that our conclusion that the 
forbearance criteria are satisfied applies only to interstate exchange 
access that is offered to customers as part of an integrated, end-to-
end interstate, domestic, interexchange service that the customer is 
purchasing. We are not detariffing in this proceeding the sale of 
interstate exchange access that is offered on a stand-alone basis. The 
Commission, in another proceeding, recently granted, in part, two 
petitions seeking forbearance from tariff filing requirements for 
competitive access providers (CAPs) and non-dominant providers of 
interestate exchange access services. In that proceeding, the 
Commission adopted permissive detariffing for non-ILEC providers of 
interstate exchange access services, and proposed the adoption of 
complete detariffing for all non-ILEC providers of these services. See 
In the Matters of Hyperion Telecommunications, Inc. Petition Requesting 
Forbearance, Time Warner Communications Petition for Forbearance, 
Complete Detariffing for Competitive Access Providers and Competitive 
Local Exchange Carriers, Memorandum Opinion and Order and Notice of 
Proposed Rulemaking, CC Docket No. 97-146, 62 FR 38244 (July 17, 1997); 
see also Access Charge Reform; Price Cap Performance Review for Local 
Exchange Carriers; Transport Rate Structure and Pricing; End User

[[Page 59595]]

Common Line Charges, CC Docket Nos. 96-262, 94-1, 91-213, 95-72, First 
Report and Order, 62 FR 31868 (June 11, 1997) (Access Charge Reform 
Order).
    56. Nondominant interexchange carriers purchase or self provide 
interstate exchange access as an input to providing integrated, end-to-
end interstate, domestic, interexchange service. Thus, access is merely 
a component of a service offered to end users. We have found that 
market forces generally will ensure that nondominant interexchange 
carriers do not charge rates, or impose terms and conditions, for their 
interstate, domestic, interexchange services that violate sections 201 
and 202 of the Communications Act. Because market forces will generally 
constrain nondominant interexchange carriers' charges for interstate, 
domestic, interexchange services, there is no need to require the 
nondominant interexchange carrier to break out and tariff a separate 
charge for interstate exchange access.

F. Effect of Detariffing on AT&T/Alascom's Common Carrier Services

i. Background
    57. AT&T/Alascom offers certain ``common carrier'' services that 
the Commission has defined as ``all interstate interexchange transport 
and switching services that are necessary for other interexchange 
carriers to provide services in Alaska up to the point of 
interconnection with each Alaska local exchange carrier.'' In the AT&T 
Reclassification proceeding, AT&T made certain commitments, including, 
inter alia, that it ``will comply with all of the obligations and 
conditions contained in the Commission orders associated with AT&T's 
purchase of Alascom, Inc., including the Alascom Authorization Order, 
the Market Structure Order (59 FR 27496 (May 27, 1994)), and the Final 
Recommended Decision (58 FR 63345 (December 1, 1993)).'' In the Second 
Report and Order, we stated that our decision to forbear from requiring 
nondominant interexchange carriers to file tariffs for interstate, 
domestic, interexchange services would not affect AT&T's commitment to 
comply with the Commission's orders associated with AT&T's purchase of 
Alascom, and that AT&T would continue to be bound by this commitment.
ii. Discussion
    58. We have been asked to clarify in this proceeding that the 
Second Report and Order did not detariff AT&T/Alascom's common carrier 
services. A similar issue has been raised in the AT&T Reclassification 
Order. We believe this issue is better addressed in that proceeding in 
light of AT&T's commitment in that proceeding to comply with the 
Commission's orders associated with AT&T's purchase of Alascom. We 
therefore incorporate the record filed in this proceeding on the issue 
of detariffing AT&T/Alascom's common carriers services to the AT&T 
Reclassification proceeding.

III. Information Disclosure Issues

A. Background

    59. The Commission tentatively concluded in the NPRM that it would 
require nondominant providers of interstate, domestic, interexchange 
telecommunications services to file certifications that they are in 
compliance with the geographic rate averaging and rate integration 
requirements of section 254(g) of the Communications Act to ensure 
compliance with those requirements. The Commission also tentatively 
concluded in the NPRM that, if it were to adopt a complete detariffing 
policy, nondominant interexchange carriers would be required to 
maintain at their premises price and service information regarding all 
of their interstate, domestic, interexchange service offerings, which 
they could submit to the Commission upon request.
    60. In the Second Report and Order, we adopted the tentative 
conclusion in the NPRM and required nondominant interexchange carriers 
to file an annual certification stating that they are in compliance 
with the statutory rate averaging and rate integration requirements. We 
further adopted the tentative conclusion in the NPRM and ordered 
nondominant interexchange carriers to maintain supporting documentation 
on the rates, terms, and conditions of their interstate, domestic, 
interexchange services that they could submit to the Commission within 
ten business days upon request. In addition, in the Second Report and 
Order, we required nondominant interexchange carriers to make 
information concerning current rates, terms, and conditions for all of 
their interstate, domestic, interexchange services available to the 
public in at least one location during regular business hours, although 
we expressly stated that we did not intend to require nondominant 
interexchange carriers to disclose more information than is currently 
provided in tariffs.

B. Positions of the Parties

    61. Several parties filed petitions asking the Commission to 
reconsider or clarify various aspects of the public disclosure 
requirement in the Second Report and Order. Ad Hoc Users Committee 
requests that the Commission eliminate the public disclosure 
requirement with respect to information on individually-negotiated 
service arrangements. It argues that a public disclosure requirement 
makes it easier for interexchange carriers to ascertain their 
competitors' price and service information, and, therefore, the 
requirement is inconsistent with the Commission's interest in deterring 
price coordination. Ad Hoc Users Committee further argues that, because 
the Commission decided to forbear from applying section 254(g) to 
contract tariffs and similar customer-specific agreements, disclosure 
of the rates and terms of individually-negotiated service arrangements 
cannot be justified on the basis of enforcing section 254(g). Rather 
than requiring public disclosure, Ad Hoc Users Committee contends that 
the Commission could meet the objectives supporting a public disclosure 
requirement in the Second Report and Order through: (1) The workings of 
the competitive market; (2) the Commission's complaint process; and (3) 
disclosure of rate and term information to Commission and state 
regulatory staff, to Congress in connection with agency oversight, and 
to complainants in discovery proceedings before the Commission or 
courts.
    62. API, Bell Atlantic, and Sprint support Ad Hoc Users Committee's 
petition, arguing that a public disclosure requirement for customer-
specific arrangements will inhibit competition and that businesses in 
other competitive markets are not required to disclose the terms of 
customer-specific deals. Bell Atlantic further argues that, if the 
Commission eliminates the public disclosure requirement, it should also 
not require dominant interexchange carriers to disclose their prices to 
the public through tariffs. Bell Atlantic maintains that requiring 
dominant interexchange carriers to file tariffs or otherwise disclose 
their prices would be anticompetitive, because nondominant 
interexchange carriers would set their prices based on the dominant 
carrier's disclosed prices.
    63. TRA argues that the public disclosure requirement is necessary 
to address, at least in part, its concerns that carriers will 
discriminate against resellers in the absence of tariffs. Several other 
parties request that the Commission strengthen the information 
disclosure requirements in the Second Report and Order, which they deem 
insufficient. Specifically, Rural

[[Page 59596]]

Telephone Coalition (RTC) asks the Commission to require carriers to 
make information more widely available to consumers to ensure that they 
have easy access to the information necessary to determine whether 
nondominant interexchange carriers are complying with the rate 
integration and rate averaging requirements of section 254(g). RTC 
argues that the Second Report and Order's requirement that nondominant 
interexchange carriers make information available in only one location 
will prevent customers, especially those in rural areas, from obtaining 
the information. Instead, RTC urges the Commission to require carriers 
to make the information available on-line and at one public place in 
each state in which the carrier operates. RTC contends that these 
requirements would not be unduly burdensome on carriers. Alaska and 
Hawaii support RTC's petition.
    64. Telecommunications Management Information Systems Coalition 
(TMISC) requests that we clarify the disclosure rules by specifying the 
type and amount of information that must be made publicly available, as 
well as the time limit within which nondominant interexchange carriers 
must make the information publicly available. TMISC argues that, 
without more specific information requirements, the Commission and 
other interested parties may not be able effectively to enforce the 
geographic rate averaging and rate integration requirements of section 
254(g). TMISC further points out that a significant number of consumer 
organizations, public interest organizations, and state governments 
filed comments in this proceeding, arguing that effective public 
disclosure requirements are not only necessary to enforce section 
254(g), but also to enable consumers to make fully informed service 
decisions. Hawaii argues that the Commission should require nondominant 
interexchange carriers to disclose the same amount of information that 
is currently provided in tariffs and also agrees with TMISC that the 
current information disclosure provisions are inadequate.
    65. AT&T responds to RTC and TMISC by arguing that complete 
detariffing will impose substantial burdens on nondominant 
interexchange carriers, particularly the costs associated with 
establishing and maintaining a legal relationship with their customers. 
AT&T contends that there is no reason to add to these costs by imposing 
more burdensome information disclosure requirements.

C. Discussion

    66. The basis for our decision in the Second Report and Order to 
adopt a public disclosure requirement for all interstate, domestic, 
interexchange services offered by nondominant interexchange carriers 
was to provide the public with the information necessary to determine 
whether a carrier was adhering to the rate integration and rate 
averaging requirements of section 254(g). We recognized that, in 
competitive markets, carriers would not necessarily maintain 
geographically averaged and integrated rates for interstate, domestic, 
interexchange services as required by section 254(g). We also 
determined that a public disclosure requirement would promote the 
public interest by making it easier for consumers, including resellers, 
to compare service offerings and to bring complaints. We noted, 
however, that nondominant interexchange carriers will generally provide 
such information to consumers to improve or maintain their competitive 
position in the market.
    67. We sought to tailor this public disclosure requirement to meet 
our objective of ensuring that nondominant interexchange carriers 
comply with section 254(g) in their provision of interstate, domestic, 
interexchange services, while minimizing any potential adverse effects 
on our general policy of allowing market forces, rather than 
regulation, to discipline the practices of these carriers. Although a 
public disclosure requirement does not affect certain benefits of 
complete detariffing, such as elimination of possible invocation of the 
``filed-rate'' doctrine, it may detract from our objective of reducing 
regulatory burdens and deterring tacit price coordination. Thus, we 
minimized the burdens on nondominant interexchange carriers of 
complying with this requirement by, for example, only requiring 
nondominant interexchange carriers to make information available in one 
location and not specifying a format for the disclosure.
    68. Upon further examination, we agree with Ad Hoc Users Committee 
that we can more narrowly tailor our information disclosure 
requirement. We therefore grant Ad Hoc Users Committee's petition and 
eliminate the public disclosure requirement for individually-negotiated 
service arrangements. Individually-negotiated service arrangements, as 
opposed to mass market services, are customer-specific arrangements, 
such as contract tariffs, AT&T's Tariff 12 options, MCI's special 
customer arrangements, and Sprint's custom network service 
arrangements. We find that the disclosure of the rates, terms, and 
conditions of individually-negotiated service arrangements cannot be 
justified on the basis of the need to enforce the rate averaging 
requirements of section 254(g). This is because the Commission decided 
to ``forbear from applying section 254(g) to such arrangements, 
consistent with the intent of Congress, to the extent necessary.'' The 
Commission continues to require carriers to ensure that individually-
negotiated service offerings are available to all similarly-situated 
customers, regardless of their geographic location. The Commission did 
not forbear from applying the rate integration requirements to 
individually-negotiated service arrangements. There are several means 
to ensure that nondominant interexchange carriers make individually-
negotiated service arrangements available to all similarly-situated 
customers without a public disclosure requirement. Market forces 
generally will ensure that nondominant interexchange carriers that lack 
market power do not charge rates, or impose terms and conditions, for 
interstate, domestic, interexchange services that are unjustly or 
unreasonably discriminatory. Specifically, if a nondominant 
interexchange carrier could profit from selling an interstate, 
domestic, interexchange service at one price to one customer and 
attempted to sell the same service at an unjustly or unreasonably 
discriminatory price to a similarly-situated customer, that customer 
would purchase services from other facilities-based nondominant 
interexchange carriers that could profit from selling the same services 
to that customer at the lower market price. Moreover, we can remedy any 
carrier conduct that violates the requirement that carriers make 
individually-negotiated service arrangements available to all 
similarly-situated customers through the section 208 complaint process. 
A customer can file a section 208 complaint and allege that a carrier 
has unreasonably discriminated against it in the provision of either 
contract or mass market services. The customer complainant, as always, 
under section 208, bears the initial burden of establishing that: (1) 
The complainant sought substantially the same service arrangement under 
the same terms and conditions that were made available to another 
customer; and (2) the carrier refused to make that service available to 
the complainant on terms similar to those of another customer's service 
arrangement. If a complainant establishes this, the burden

[[Page 59597]]

shifts to the carrier which must demonstrate why the discrimination is 
reasonable. In addition, we will be able to investigate carriers' 
compliance with our rules through the requirement adopted in the Second 
Report and Order that interexchange carriers maintain price and service 
information on all of their interstate, domestic, interexchange 
services and make this information available to the Commission upon 
request. Thus, eliminating public disclosure for individually-
negotiated service arrangements will not hinder enforcement of the 
requirement that carriers make such services available to all 
similarly-situated customers, and will also decrease the regulatory 
burden on nondominant interexchange carriers and deter tacit price 
coordination.
    69. Although Ad Hoc Users Committee requests that the Commission 
eliminate the public disclosure requirement only for individually-
negotiated service arrangements, the arguments it raises about the 
effect of public disclosure on tacit price coordination and the need to 
tailor more narrowly the information requirements apply to mass market 
services as well. Although no party specifically requested that the 
Commission eliminate the public disclosure requirement for mass market 
services, the Commission, in light of pending petitions for 
reconsideration, retains jurisdiction to reconsider its rules on its 
own motion. See Central Florida Enters., Inc. v. FCC, 598 F.2d 37, 48 
n.51 (D.C. Cir. 1978), cert. dismissed, 441 U.S. 957 (1979). We 
therefore conclude on reconsideration that we should also eliminate the 
public disclosure requirement for mass market interstate, domestic, 
interexchange services offered by nondominant interexchange carriers. 
Mass market interstate, domestic, interexchange services are those 
services that are not individually-negotiated service arrangements, 
and, therefore, we are eliminating the public disclosure requirement 
for all interstate, domestic, interexchange services offered by 
nondominant interexchange carriers. Bell Atlantic's argument that we 
should also not require dominant interexchange carriers to disclose 
their rates, terms, and conditions is now largely moot in light of our 
determination that LECs providing interstate, domestic, interexchange 
services will generally be classified as nondominant in their provision 
of such services, pursuant to Regulatory Treatment of LEC Provision of 
Interexchange Services Originating in the LEC's Local Exchange Area; 
and Policy and Rules Concerning the Interstate, Interexchange 
Marketplace, CC Docket Nos. 96-149, 96-61, Second Report and Order and 
Third Report and Order, (62 FR 35974 (July 3, 1997)). Because this 
proceeding concerns detariffing only nondominant interexchange 
carriers' interstate, domestic, interexchange services and the record 
on dominant interexchange carrier regulation is extremely limited, we 
will address the issue of the regulatory treatment of dominant 
interexchange carriers if and when we determine that an interexchange 
carrier should be classified as dominant in its provision of 
interstate, domestic, interexchange services. We emphasize, however, 
that this decision does not suggest any diminution in our commitment to 
enforce the geographic rate averaging and rate integration 
requirements. To that end, we require nondominant interexchange 
carriers to file annually certifications stating that they are in 
compliance with their obligations under section 254(g) and to maintain 
price and service information on all of their interstate, domestic, 
interexchange services that they must make available to the Commission 
and to state regulatory commissions upon request. In addition, we will 
further our goal of deterring tacit price coordination, because a 
nondominant interexchange carrier's rate, terms, and conditions for 
interstate, domestic, interexchange services will not be collected and 
available in one location, although we recognize that nondominant 
interexchange carriers may still be able to obtain information about 
their competitors' rates and service offerings in the absence of a 
public disclosure requirement.
    70. We believe that our decision to eliminate the public disclosure 
requirement for mass market services will not deprive residential and 
other low volume customers of information about nondominant 
interexchange carriers' interstate, domestic, interexchange service 
offerings that they need to ensure that they have been correctly billed 
and to bring to the Commission's attention possible violations of the 
Communications Act, particularly section 254(g). To the contrary, we 
find nothing in the record of this reconsideration proceeding that 
would cause us to modify our conclusion in the Second Report and Order 
that consumers will have access to information concerning the rates, 
terms, and conditions for interstate, domestic, interexchange services 
offered by nondominant interexchange carriers to consumers through, 
inter alia, the billing process, information provided by nondominant 
interexchange carriers to establish a contractual relationship with 
their customers, notifications required by service contracts or state 
consumer protection laws, and advertisements and marketing materials. 
We note that the majority of consumer complaints about the lawfulness 
of carriers' rates, terms, or conditions for interstate, domestic, 
interexchange services are based on information obtained through the 
billing process. Moreover, as set forth in the Second Report and Order, 
we find that it is highly unlikely that interexchange carriers that 
lack market power could successfully charge rates, or impose terms and 
conditions that violate sections 201 and 202 of the Communications Act. 
Consumers will also have the information they need to select the 
service best suited to their calling patterns through the mechanisms 
discussed above and the workings of the competitive market. Because 
consumers will have access to rate and service information about 
nondominant interexchange carriers' interstate, domestic, interexchange 
services in a detariffed environment without a public disclosure 
requirement, we conclude that the public disclosure requirement in the 
Second Report and Order, let alone an expanded public disclosure 
requirement as RTC and TMISC request, is unnecessary to protect 
consumers.
    71. We recognize that elimination of the public disclosure 
requirement will make the collection of information more difficult for 
businesses, including consumer groups, that analyze and compare the 
rates and services of interexchange carriers and offer their analysis 
to the public for a fee. These businesses, however, will have access to 
the information that nondominant interexchange carriers provide to the 
public in order to market their services and improve their competitive 
position in the market. On balance, we conclude that the benefits of 
eliminating the public disclosure requirement for consumers, e.g., 
decreased risk of tacit price coordination and increased competition in 
the interstate, domestic, interexchange market, outweigh any potential 
adverse effects on these businesses. Moreover, as stated above, 
consumers will not be deprived of the information they need and will 
receive additional information directly from nondominant interexchange 
carriers that will provide rate and service information to consumers in 
order to ensure the establishment of a contractual relationship with 
them in a detariffed environment. Although we find on the basis of the 
record in this

[[Page 59598]]

proceeding that a public disclosure requirement is not necessary to 
ensure that interexchange carriers comply with their obligation under 
section 254(g), we are prepared to revisit this issue in the event that 
evidence shows that the safeguards we have implemented are inadequate. 
One tool at our disposal is to conduct audits of interexchange carrier 
compliance with the rate averaging obligations of section 254(g).
    72. We also recognize the concerns of resellers, as expressed by 
TRA, that, without rate and service information through either tariffs 
or a public disclosure requirement, resellers will not have adequate 
information to prevent nondominant interexchange carriers from 
discriminating against resellers, which are not only customers, but 
also competitors of the carriers. We conclude, however, that the 
resellers' concern that the resale market will not survive in a 
detariffed environment without a public disclosure requirement is 
overstated. As noted in the Second Report and Order, our decision to 
forbear from requiring nondominant interexchange carriers to file 
tariffs for interstate, domestic, interexchange services does not 
affect such carriers' obligations under sections 201 and 202. Thus, as 
discussed below, our long-standing policies barring prohibitions on 
resale and restrictive eligibility requirements will continue in full 
force to the same extent as prior to detariffing. Moreover, we agree 
with Ad Hoc Users Committee that it is unreasonable to assume that in a 
substantially competitive market, facilities-based carriers will not 
provide resellers with service options at reasonable rates. As TRA 
noted, in another proceeding, AT&T has just begun to ``reform its 
conduct with respect to resellers'' when its market share declined to 
fifty percent. If a carrier does not provide resellers with service 
options at reasonable rates, resellers are not only likely to find 
another facilities-based carrier that will do so, but resellers also 
have the right to file a section 208 complaint with the Commission. We 
therefore find that the increased benefits to interexchange carriers 
and consumers of complete detariffing without a public disclosure 
requirement, e.g., decreased risk of tacit price coordination and 
increased competition in the interstate, domestic, interexchange 
market, and a reduced regulatory burden justify any negative effect 
upon resellers of eliminating the public disclosure requirement.
    73. Finally, we make clear that the annual certification 
requirement and the requirement that nondominant interexchange carriers 
maintain price and service information on all of their interstate, 
domestic, interexchange services that they must submit to the 
Commission upon request, discussed herein, are the same as those 
contained in the Second Report and Order.

IV. Miscellaneous Issues

A. Nondiscriminatory Access to Interstate, Domestic, Interexchange 
Services

i. Positions of the Parties
    74. TRA asks the Commission to clarify that nondominant 
interexchange carriers are required to make available, upon request, 
all interstate, domestic, interexchange services, including contract-
based services, on a nondiscriminatory basis, to all qualified 
entities, including resellers. TRA argues that the Commission has 
required nondominant interexchange carriers to make such service 
offerings generally available, and has declared unlawful restrictive 
eligibility requirements that unreasonably discriminate against 
similarly-situated customers. TRA notes that the Commission addressed 
its concerns in the Second Report and Order, in part, by requiring 
nondominant interexchange carriers to make publicly available price and 
service information on all of their interstate, domestic, interexchange 
services. TRA contends, however, that the Second Report and Order does 
not expressly declare that the ``general availability'' requirement 
will continue to apply.
ii. Discussion
    75. The Commission has long-standing policies of prohibiting 
restrictions on resale and barring restrictive eligibility requirements 
for interstate, domestic, interexchange services that have the effect 
of unreasonably discriminating against similarly-situated customers. 
The Commission has further concluded that individually-negotiated 
service arrangements do not violate section 202(a)'s prohibition 
against ``unjust or unreasonable discrimination,'' if the terms of the 
service arrangement are made available to similarly-situated customers. 
In the Second Report and Order, we made clear that our decision to 
forbear from requiring nondominant interexchange carriers to file 
tariffs for interstate, domestic, interexchange services does not 
affect carriers' obligations under sections 201 and 202. Thus, 
nondominant interexchange carriers are prohibited from imposing 
restrictions on resale and restrictive eligibility requirements that 
unreasonably discriminate against similarly-situated customers to the 
same extent that they were prohibited from doing so prior to adoption 
of the Second Report and Order. TRA also stated in its petition that 
the Commission partially addressed its concerns by requiring 
nondominant interexchange carriers to disclose publicly certain 
information regarding their interstate, domestic, interexchange 
services. As stated above, we have eliminated the public disclosure 
requirement in this Order on Reconsideration. For a discussion of this 
issue and TRA's concerns, see supra paras. 59-73.

B. Law Governing the Lawfulness of Rates, Terms, and Conditions for 
Interstate Services

i. Positions of the Parties
    76. AT&T requests that the Commission clarify that federal, and not 
state, law governs the determination as to whether a nondominant 
interexchange carrier's rates, terms, and conditions for interstate, 
domestic, interexchange services are lawful. AT&T contends that parties 
may interpret the statement in the Second Report and Order that, with 
complete detariffing, ``consumers will also be able to pursue remedies 
under state consumer protection and contract laws'' as allowing 
challenges under state law to the lawfulness of rates, terms, and 
conditions for these interstate services. AT&T argues that any 
interpretation that authorizes such challenges under state law is 
foreclosed by numerous judicial decisions recognizing that sections 201 
and 202 of the Communications Act preempt state law with respect to the 
reasonableness of rates, terms, and conditions for interstate 
telecommunications services. Sprint, and WorldCom support AT&T's 
petition, arguing that the Communications Act, and not state law, 
governs rates, terms, and conditions for interstate telecommunications 
services. U S WEST argues that the Commission should adopt permissive 
detariffing until it conducts a new proceeding to determine the law 
that governs the relationship between carriers and customers in a 
detariffed environment. API opposes U S WEST's request that the 
Commission conduct a new proceeding to determine the applicability of 
state and federal law in a detariffed environment.
ii. Discussion
    77. In the Second Report and Order, we stated that our decision to 
forbear from requiring nondominant interexchange carriers to file 
tariffs for interstate, domestic, interexchange

[[Page 59599]]

services will not affect our enforcement of carriers' obligations under 
sections 201 and 202 to charge rates, and impose practices, 
classifications, and regulations that are just and reasonable, and not 
unjustly or unreasonably discriminatory. We therefore agree with AT&T, 
Sprint, and WorldCom that the Communications Act continues to govern 
determinations as to whether rates, terms, and conditions for 
interstate, domestic, interexchange services are just and reasonable, 
and are not unjustly or unreasonably discriminatory. While the parties 
only sought clarification that the Communications Act governs the 
determination as to the lawfulness of rates, terms, and conditions, we 
note that the Communications Act does not govern other issues, such as 
contract formation and breach of contract, that arise in a detariffed 
environment. As stated in the Second Report and Order, consumers may 
have remedies under state consumer protection and contract laws as to 
issues regarding the legal relationship between the carrier and 
customer in a detariffed regime.
    78. We reject U S WEST's argument that we should adopt permissive 
detariffing until there is greater certainty about the law that would 
govern the relationship between carriers and customers in the absence 
of tariffs. We adopted a nine-month transition in the Second Report and 
Order, during which nondominant interexchange carriers are permitted to 
file new tariffs and revise existing tariffs for mass market services. 
This transition provides for a period of permissive detariffing to 
allow nondominant interexchange carriers time to adjust to detariffing. 
We believe that a lengthier period of time is unnecessary to address U 
S WEST's concern.

C. Private Contract Clauses Preserving the ``Filed-Rate'' Doctrine

i. Positions of the Parties
    79. Ad Hoc requests that the Commission clarify that the intent of 
the Second Report and Order is not to permit carriers to preserve the 
``unfair advantages'' they would enjoy under ``filed-rate'' doctrine, 
but to eliminate the ability of nondominant interexchange carriers to 
invoke the ``filed-rate'' doctrine. Ad Hoc contends that some 
interexchange carriers are attempting to preserve their right to make 
unilateral changes to contracts by including a contract clause pursuant 
to which the carrier is permitted to alter the terms of the contract at 
any time, and for any reason.
ii. Discussion
    80. In the Second Report and Order, we stated that not permitting 
nondominant interexchange carriers to file tariffs for the provision of 
interstate, domestic, interexchange services will achieve the public 
interest objective of eliminating the ability of nondominant 
interexchange carriers to invoke the ``filed-rate'' doctrine. We also 
observed that eliminating the ability of carriers to invoke the 
``filed-rate'' doctrine benefits consumers by creating a legal 
relationship that more closely resembles the legal relationship between 
service providers and customers in an unregulated environment, and is 
in the public interest. While we do not support attempts by carriers to 
preserve their ability to alter unilaterally the terms of a contract, 
pursuant to a contract clause, we will rely on private negotiations 
between the parties in the first instance to resolve such issues. The 
issue of whether a particular contract clause is ``just and 
reasonable,'' as required by section 201(b) of the Communications Act, 
is not before us in this proceeding, however, such an issue would be an 
appropriate matter for a section 208 complaint.

D. Relationship of Detariffing to Access Charge Reform and Universal 
Service

i. Positions of the Parties
    81. RTC urges the Commission in this proceeding to ensure adequate 
universal support for access charges in high-cost areas to minimize the 
incentive of interexchange carriers to deaverage their rates. RTC 
contends that, notwithstanding the statutory requirement that 
interexchange carriers charge ``reasonably comparable'' rural and urban 
interexchange rates, interexchange carriers have an incentive to 
deaverage their rates, especially as they face increased competition 
from BOCs and others. RTC further argues that eliminating tariffs and 
curtailing public information availability will decrease interexchange 
carriers' incentive to average interexchange rates. Although RTC 
recognizes that the Commission is considering universal service support 
and access charge reform in other dockets, it nevertheless contends 
that there is an overlap between this proceeding and those other 
dockets. Thus, RTC urges the Commission in this proceeding to reduce 
the incentive to deaverage rates by ensuring adequate support 
mechanisms for high-cost areas.
    82. AT&T counters that the Second Report and Order does not compel 
a particular result in the Commission's universal service and access 
charge reform proceedings. AT&T further argues that any relationship 
between detariffing and access charge reform or universal service 
should be considered in those particular dockets.
ii. Discussion
    83. We have recently addressed universal service support and access 
charge reform in separate proceedings. We agree with AT&T that these 
issues are beyond the scope of this proceeding and better addressed in 
those particular proceedings in which numerous parties commented 
specifically on universal service and access charge reform issues. 
Therefore, we decline to address these issues in this proceeding.

E. Fees for the Withdrawal of Tariffs

i. Positions of the Parties
    84. TRA requests that the Commission refrain from collecting filing 
fees from nondominant interexchange carriers that are required to 
withdraw tariffs pursuant to the Second Report and Order. TRA argues 
that Sec. 1.1113(a)(4) of the Commission's rules supports its argument 
that it is inequitable to retain filing fees when carriers are 
compelled to withdraw tariffs as a result of Commission action.
ii. Discussion
    85. Pursuant to Sec. 1.1105 of the Commission's rules, tariff 
filings must be accompanied by a filing fee, which is currently six 
hundred dollars per tariff filing. After we adopted the Second Report 
and Order, the Common Carrier Bureau received inquiries concerning 
whether nondominant interexchange carriers must pay the tariff filing 
fee to withdraw or revise tariffs pursuant to the Second Report and 
Order, and whether nondominant interexchange carriers that pay such 
fees would be entitled to a refund or return of the fee. On December 
19, 1996, the Common Carrier Bureau issued the Public Notice Concerning 
Implementation, in which it responded to these inquiries and addressed 
the precise issue TRA raises here. The Common Carrier Bureau, 
consistent with Commission precedent and practice, concluded in the 
Public Notice Concerning Implementation that nondominant interexchange 
carriers would need to pay tariff filing fees to withdraw or revise 
existing tariffs pursuant to the Second Report and Order, and that such 
carriers would not be entitled to a return or refund of the fee. We now 
affirm this conclusion.
    86. The purpose of the fee program is to assess and collect fees 
for regulatory services provided to the public, and the

[[Page 59600]]

fees charged are based primarily on the costs to the Commission of 
providing those services. In the Fee Program Order (52 FR 5285 
(February 20, 1987)), the Commission concluded that Sec. 1.1113(a)(4) 
was ``intended to apply in those rare instances where the Commission 
creates a new regulation or policy, or the Congress and the President 
approve a new law or treaty, that would make the grant of a pending 
application a legal nullity.'' The Commission specifically concluded 
that Congress, when it established the regulatory fee program, did not 
envision an exemption from the payment of fees for additional tariff 
filings required by changes to the Commission's rules. Based on its 
analysis in the Fee Program Order, the Commission required Commercial 
Mobile Radio Service providers to pay the tariff filing fee for 
cancelling tariffs for domestic interstate services pursuant to a 
Commission order. We are not aware of any distinction that justifies a 
different determination in this case. We therefore conclude that 
nondominant interexchange carriers cancelling their tariffs for 
interstate, domestic, interexchange services, or revising their tariffs 
for bundled international and domestic service offerings to exclude 
interstate, domestic, interexchange services, will be required to pay 
the tariff filing fee and will not be eligible for a return or refund 
of that fee.
    87. To minimize the cost to nondominant interexchange carriers of 
cancelling or revising tariffs pursuant to the Second Report and Order, 
we reiterate that such carriers may cancel or revise several tariffs 
under one cover letter with the payment of one filing fee, as stated in 
the Public Notice Concerning Implementation. In addition, organizations 
that file tariffs on behalf of several carriers may request a waiver of 
applicable filing rules so that they may cancel the tariffs of several 
carriers or file revisions to tariffs of several carriers under one 
cover letter with the payment of one filing fee.

V. Procedural Issues

A. Final Regulatory Flexibility Analysis on Reconsideration

    88. As required by section 603 of the Regulatory Flexibility Act 
(RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA) 
was incorporated in the NPRM. The Commission sought written public 
comments on the proposals in the NPRM. In addition, pursuant to section 
603, a Final Regulatory Flexibility Analysis (FRFA) was incorporated in 
the Second Report and Order. That FRFA conformed to the RFA, as amended 
by the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA). The Supplemental Final Regulatory Flexibility Analysis in 
this initial Order on Reconsideration (Supplemental FRFA) also conforms 
to the RFA.
i. Need for and Objectives of This Order on Reconsideration and the 
Rules Adopted Herein
    89. With the exception of dial-around 1+ services and LEC-
implemented new customer services, our decisions and rules in this 
Order on Reconsideration detariff completely the interstate, domestic, 
interexchange services of nondominant interexchange carriers. In this 
Order on Reconsideration, we grant in part and deny in part several of 
the petitions filed for reconsideration and/or clarification of the 
Second Report and Order, in order to further the same needs and 
objectives as those discussed in the FRFA in the Second Report and 
Order, including reducing the costs and burdens of providing 
interstate, domestic, interexchange services, in the absence of 
tariffs, on nondominant interexchange carriers and customers, some of 
which are small entities. First, we adopt permissive detariffing for 
dial-around 1+ services using a nondominant interexchange carrier's 
access code. Second, we adopt permissive detariffing for the initial 45 
days of LEC-implemented interstate, domestic interexchange service to 
new residential or small business customers, or until a written 
contract is consummated, whichever is earlier. Third, we eliminate the 
public disclosure requirement for all interstate, domestic, 
interexchange service offered by nondominant interexchange carriers. In 
addition, we require nondominant interexchange carriers to file annual 
certifications stating that they are in compliance with their 
obligations under section 254(g) and to maintain price and service 
information on all of their interstate, domestic, interexchange 
services that they must make available to the Commission upon request. 
Finally, with the exception of dial-around 1+ services and LEC-
implemented new customer services, we affirm our conclusion that 
permissive detariffing of all other interstate, domestic, interexchange 
service of nondominant interexchange carriers is not in the public 
interest.
ii. Analysis of Significant Issues Raised in Response to the FRFA
    90. Summary of the FRFA. In the FRFA, we recognized that many of 
the decisions and rules adopted in the Second Report and Order may have 
a significant effect on a substantial number of the small telephone 
companies identified by the Small Business Administration (SBA). Based 
upon data contained in the most recent census and a report by the 
Commission's Common Carrier Bureau, we estimated that fewer than 3,497 
telephone service firms are small entity telephone service firms that 
could be affected. We also discussed the reporting requirements imposed 
by the Second Report and Order. 
    91. In addition, we discussed the steps we had taken to minimize 
the impact on small entities, consistent with our stated objectives. We 
concluded that our actions in the Second Report and Order would benefit 
small entities by facilitating the development of increased competition 
in the interstate, domestic, interexchange market, thereby benefitting 
all consumers, some of which are small business entities. We found that 
the record in that proceeding indicated that detariffing on a 
permissive basis would not definitively eliminate the possible 
invocation of the ``filed-rate'' doctrine and would create the risk of 
price signalling. We concluded that only with complete detariffing 
could we definitively eliminate these possible anticompetitive 
practices and protect consumers, some of which are small business 
entities. We noted that we attempted to keep burdens on nondominant 
interexchange carriers to a minimum. For example, we did not require 
nondominant interexchange carriers to make rate and service information 
available to the public in any particular format, or at any particular 
location.

a. Impact of Complete Detariffing on Small, Nondominant Interexchange 
Carriers

    92. Comments. Although not in response to the FRFA, TRA claims that 
the Second Report and Order does not adequately address the impact of 
complete detariffing on small, nondominant interexchange carriers. TRA 
requests that the Commission permit nondominant interexchange carriers 
to tariff their domestic, interstate, interexchange service offerings.
    93. Discussion. As discussed in the Order on Reconsideration, we 
permit carriers to file tariffs for dial-around 1+ services and LEC-
implemented new customer services. We base this decision on the 
credible evidence offered by parties on reconsideration concerning the 
costs and burdens to carriers and customers of providing these services 
in the absence of tariffs. Permitting carriers

[[Page 59601]]

to file tariffs in these limited circumstances will ease the burdens on 
nondominant interexchange carriers and customers, some of which are 
small entities. We discuss these issues above in the Order on 
Reconsideration.
iii. Description and Estimates of the Number of Small Entities Affected 
by This Order on Reconsideration
    94. For the purposes of this Order on Reconsideration, the RFA 
defines a ``small business'' to be the same as a ``small business 
concern'' under the Small Business Act, 15 U.S.C. 632, unless the 
Commission has developed one or more definitions that are appropriate 
to its activities. Under the Small Business Act, 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. The SBA has defined a small business 
for Standard Industrial Classification (SIC) categories 4812 
(Radiotelephone Communications) and 4813 (Telephone Communications, 
Except Radiotelephone) to be small entities with fewer than 1,500 
employees. We first discuss generally the total number of small 
telephone companies falling within both of those SIC categories. Then, 
we discuss the number of small businesses within the two subcategories 
that may be affected by our rules, and attempt to refine further those 
estimates to correspond with the categories of telephone companies that 
are commonly used under our rules.
    95. Total Number of Telephone Companies Affected. Many of the 
decisions and rules adopted herein may have a significant effect on a 
substantial number of the small telephone companies identified by the 
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 services, as defined therein, for at least one year. This 
number contains a variety of different categories 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.'' For example, a PCS provider that is affiliated with an 
interexchange carrier having more than 1,500 employees would not meet 
the definition of a small business. It seems reasonable to conclude, 
therefore, that fewer than 3,497 telephone service firms are small 
entity telephone service firms that may be affected by this Order on 
Reconsideration.
    96. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that there were 2,321 such telephone companies in operation for 
at least one year at the end of 1992. According to the SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing fewer than 1,500 persons. All 
but 26 of the 2,321 non-radiotelephone companies listed by the Census 
Bureau were reported to have fewer than 1,000 employees. Thus, even if 
all 26 of those companies had more than 1,500 employees, there would 
still be 2,295 non-radiotelephone companies that might qualify as small 
entities or small incumbent LECs. 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 
wireline carriers and service providers that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 2,295 small entity telephone communications 
companies other than radiotelephone companies that may be affected by 
the decisions and rules adopted in this Order on Reconsideration.
    97. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services. The closest applicable definition 
under the SBA rules is for telephone communications companies other 
than radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of interexchange carriers nationwide 
of which we are aware appears to be the data that the Commission 
collects annually in connection with Telecommunications Relay Services 
(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 
interexchange carriers that would qualify as small business concerns 
under the SBA's definition. Consequently, we estimate that there are 
fewer than 97 small entity interexchange carriers that may be affected 
by the decisions and rules adopted in this Order on Reconsideration.
    98. Resellers. Neither the Commission nor the SBA has developed a 
definition of small entities specifically applicable to resellers. The 
closest applicable definition under the SBA's rules is for all 
telephone communications companies. 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 that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 206 small entity 
resellers that may be affected by the decisions and rules adopted in 
this Order on Reconsideration.
    99. In addition, the rules adopted in this Order on Reconsideration 
may affect companies that analyze information contained in tariffs. The 
SBA has not developed a definition of small entities specifically 
applicable to companies that analyze tariff information. The closest 
applicable definition under the SBA rules is for Information Retrieval 
Services (SIC Category 7375). The Census Bureau reports that, at the 
end of 1992, there were approximately 618 such firms classified as 
small entities. This number contains a variety of different types of 
companies, only some of which analyze tariff information. We are unable 
at this time to estimate with greater precision the number of such 
companies and those that would qualify as small business concerns under 
the SBA's definition. Consequently, we estimate that there are fewer 
than 618 such small entity companies that may be affected by the 
decisions and rules adopted in this Order on Reconsideration.
    100. We assume that most, if not all, small businesses purchase 
interstate, domestic, interexchange telecommunications services. As a 
result, our rules in this Order on Reconsideration would affect 
virtually all small business entities. The SBA guidelines to the SBREFA 
state that about 99.7 percent of all firms are small and have fewer 
than 500 employees and

[[Page 59602]]

less than $25 million in sales or assets. There are approximately 6.3 
million establishments in the SBA's database. The SBA database does 
include nonprofit establishments, but it does not include governmental 
entities. SBREFA requires us to estimate the number of such entities 
with populations of less than 50,000 that would be affected by our new 
rules. There are 85,006 governmental entities in the nation. This 
number includes such entities 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. This 
number, however, 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 
entities, we estimate that 96 percent, or 81,600, are small entities 
that would be affected by the decisions and rules adopted in this Order 
on Reconsideration.
iv. Summary Analysis of the Projected Reporting, Recordkeeping, and 
Other Compliance Requirements and Steps Taken to Minimize the 
Significant Economic Impact of This Order on Reconsideration on Small 
Entities, Including the Significant Alternatives Considered and 
Rejected
    101. Structure of the Analysis. In this section of the Supplemental 
FRFA, we analyze the projected reporting, recordkeeping, and other 
compliance requirements that may apply to small entities as a result of 
this Order on Reconsideration. As a part of this discussion, we mention 
some of the types of skills that will be needed to meet the new 
requirements. We also describe the steps taken to minimize the economic 
impact of our decisions on small entities, including the significant 
alternatives considered and rejected.
    102. We provide this summary analysis to provide context for our 
analysis in this Supplemental FRFA. To the extent that any statement 
contained in this Supplemental FRFA is perceived as creating ambiguity 
with respect to our rules or statements made in the Second Report and 
Order or preceding sections of this Order on Reconsideration, the rules 
and statements set forth in the Second Report and Order and in the 
preceding sections of this Order on Reconsideration shall be 
controlling.

a. Permissive Detariffing for Dial-around 1+ Services

    103. Summary of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. In the Second Report and Order, we concluded 
that the record did not support a finding that complete detariffing 
would cause nondominant interexchange carriers to cease offering casual 
calling services. Rather, we found that nondominant interexchange 
carriers have options other than tariffs by which they can ensure the 
establishment of a contractual relationship with casual callers that 
would legally obligate such callers to pay for the telecommunications 
service they use and bind them to the carriers' terms and conditions. 
In this Order on Reconsideration, we adopt permissive detariffing, on 
an interim basis, for a subset of casual calling services, 
specifically, the provision of dial-around 1+ services. This change in 
the manner of conducting their business may require nondominant 
interexchange carriers to use technical, operation, accounting, 
billing, and legal skills.
    104. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Small Incumbent LECs, and Alternatives Considered. By 
permitting nondominant interexchange carriers to file tariffs for dial-
around 1+ services, we enable these carriers and their customers, some 
of which are small business entities, to avoid the substantial costs 
and burdens associated with ensuring the establishment of an 
enforceable contract in the absence of tariffs. The means of ensuring 
the establishment of an enforceable contract with customers of other 
casual calling services cannot be reasonably implemented currently for 
dial-around 1+ services because the interexchange carriers do not have 
the ability reasonably to distinguish dial-around 1+ calls from direct 
dial 1+ calls placed from telephones presubscribed to an interexchange 
carrier, as required to provide the dial-around 1+ caller with the 
rates, terms, and conditions prior to completion of the call. The 
inability of nondominant interexchange carriers to distinguish between 
dial-around 1+ and direct dial 1+ calls would require these carriers to 
implement the recorded announcement of the rates, terms, and conditions 
or other means adopted by such carriers to ensure a contractual 
relationship with dial-around 1+ callers for both dial-around 1+ 
callers and direct dial 1+ callers. The increased costs and the delay 
in call set-up time that are attendant with ensuring the establishment 
of a contractual relationship with dial-around 1+ callers would impose 
an unreasonable burden on consumers using direct dial 1+ service from 
their PIC. We find in this Order on Reconsideration that the technology 
to distinguish dial-around 1+ calls from direct dial 1+ calls placed 
from telephones presubscribed to an interexchange carrier is not 
universally offered by all LECs, either because some LEC switches are 
not capable of providing signalling using SS7, which is necessary to 
provide this feature, or because a LEC has chosen not to offer this 
feature.
    105. In this Order on Reconsideration, we reject the option of 
requiring LECs to deploy universally switches capable of providing SS7. 
We reject this option, which might impose greater burdens on small 
LECs, because a significant number of LEC switches do not presently 
have SS7 capability and we do not have an adequate record in this 
proceeding to evaluate the costs that such a decision would impose on 
LECs.

b. Permissive Detariffing for LEC-Implemented New Customer Services

    106. Summary of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. In the Second Report and Order, we did not 
specifically address whether complete detariffing is in the public 
interest with respect to the provision of interstate, domestic, 
interexchange service to new customers that select and use an 
interexchange service before receiving information about the rates, 
terms, and conditions of that service. In this Order on 
Reconsideration, we permit interexchange carriers to file tariffs to 
cover the provision of service during the initial 45 days of 
nondominant interexchange carriers' provision of interstate, domestic, 
interexchange services to new residential and small business customers, 
or until a written contract is consummated, whichever is earlier, in 
the limited circumstance when a new customer contacts the LEC to select 
an interexchange carrier or to initiate a PIC change. This change in 
the manner of conducting their business may require nondominant 
interexchange carriers to use technical, operation, accounting, 
billing, and legal skills.
    107. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Alternatives Considered. Adoption of permissive 
detariffing for the initial period of LEC-implemented interstate, 
domestic, interexchange service to new residential and small business 
customer enables the nondominant interexchange carriers and their 
customers, some of which are

[[Page 59603]]

small business entities, to avoid the substantial costs and burdens 
associated with ensuring the establishment of an enforceable contract 
in the absence of tariffs.
    108. In this Order on Reconsideration, we considered several means 
by which LECs could convey to customers of nondominant interexchange 
carriers the information necessary to ensure the establishment of an 
enforceable contract during the initial period after the customer 
contacts the LEC and before the nondominant interexchange carrier can 
formalize the contractual relationship. We conclude, however, that none 
of these means adequately ensures an enforceable contractual 
relationship between the nondominant interexchange carrier and the 
customer during this initial period of service. We reject the 
alternative of requiring nondominant interexchange carriers to contract 
with LECs to act as agents of the interexchange carrier to establish a 
contractual relationship with the prospective customer by orally 
providing the rates, terms, and conditions of the interexchange 
service. We are reluctant to adopt a policy that may have the effect of 
mandating such agency arrangements, especially since the LEC may have 
an affiliate that offers competing interstate interexchange services. 
In addition, requiring prospective customers to contact nondominant 
interexchange carriers directly prior to the commencement of service in 
order to establish the necessary contractual relationship would 
preclude residential and small business customers from changing or 
selecting a PIC by contacting the LECs as they do today. Finally, 
nondominant interexchange carrier could decide to delay provisioning of 
the service until a contractual relationship is formalized, but such a 
delay may also discourage residential and small business customers from 
making PIC changes, thereby deterring competition in the interexchange 
market.

c. Information Disclosure Requirements

    109. Summary of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. In the Second Report and Order, we required 
nondominant interexchange carriers to make information on current 
rates, terms, and conditions for all of their interstate, domestic, 
interexchange services available to the public in at least one location 
during regular business hours. We also required carriers to inform the 
public that this information is available when responding to consumer 
inquiries or complaints and to specify the manner in which the consumer 
may obtain the information. We further required nondominant 
interexchange carriers to maintain, for a period of two years and six 
months, the information provided to the public, as well as documents 
supporting the rates, terms, and conditions for all of their 
interstate, domestic, interexchange offerings, that they can submit to 
the Commission upon request. In addition, we required nondominant 
interexchange carriers to file with the Commission, and update as 
necessary, the name, address, and telephone number of the individual, 
or individuals, designated by the carrier to respond to Commission 
inquiries and requests for documents. We further required nondominant 
providers of interstate, domestic, interexchange telecommunications 
services to file annual certifications signed by an officer of the 
company under oath that the company is in compliance with its statutory 
geographic rate averaging and rate integration obligations.
    110. In this Order on Reconsideration, we eliminate the requirement 
that nondominant interexchange carriers make publicly available 
information concerning rates, terms, and conditions for all of their 
interstate, domestic, interexchange services. To enforce the geographic 
rate averaging and rate integration requirements applicable to mass 
market services, we require nondominant interexchange carriers to file 
annual certifications stating that they are in compliance with their 
obligations under section 254(g) and to maintain price and service 
information on all of their interstate, domestic, interexchange 
services that they must make available to the Commission upon request. 
Compliance with this obligation may require the use of accounting, 
billing, and legal skills.
    111. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Small Incumbent LECs, and Alternatives Considered. We 
recognize that elimination of the public disclosure requirement will 
make the collection of information more difficult for businesses, 
including consumer groups, that analyze and compare the rates and 
services of interexchange carriers and offer their analysis to the 
public for a fee. These businesses, however, will have access to the 
information that nondominant interexchange carriers provide to the 
public in order to market their services and improve their competitive 
position in the market. Moreover, we conclude that consumers will not 
be deprived of the information they need and will receive additional 
information directly from nondominant interexchange carriers that will 
provide rate and service information to consumers in order to ensure 
the establishment of a contractual relationship with them in a 
detariffed environment.
    112. We also recognize the concerns of resellers that, without rate 
and service information made available through either tariffs or a 
public disclosure requirement, resellers will not have adequate 
information to prevent nondominant interexchange carriers from 
discriminating against resellers, which are not only customers, but 
also competitors of the carriers. We find, however, that the increased 
benefits to interexchange carriers and consumers of complete 
detariffing without a public disclosure requirement, e.g., decreased 
risk of tacit price coordination and increased competition in the 
interstate, domestic, interexchange market, and a reduced regulatory 
burden justify any negative effect upon resellers of eliminating the 
public disclosure requirement.

v. Report to Congress

    113. The Commission shall send a copy of this Supplemental FRFA, 
along with this Order on Reconsideration, in a report to Congress 
pursuant to the Small Business Regulatory Enforcement Fairness Act of 
1996, 5 U.S.C. 801(a)(1)(A). A copy of this Supplemental FRFA will also 
be published in the Federal Register.

B. Supplemental Final Paperwork Reduction Analysis

    114. As required by the Paperwork Reduction Act of 1995, Pub. L. 
104-13, the NPRM invited the general public and the Office of 
Management and Budget (OMB) to comment on proposed changes to the 
Commission's information collection requirements contained in the NPRM. 
The changes to our information collection requirements proposed in the 
NPRM included: (1) The elimination of tariff filings by nondominant 
interexchange carriers for interstate, domestic, interexchange 
telecommunications services; (2) the requirement that nondominant 
interexchange carriers maintain at their premises price and service 
information regarding their interstate, interexchange offerings that 
they can submit to the Commission upon request; (3) the requirement 
that providers of interexchange services file certifications with the 
Commission stating that they are in compliance with their statutory 
rate integration and geographic rate averaging obligations under 
section 254(g) of the Communications Act; and (4) the requirement that 
interexchange carriers advertise the availability of

[[Page 59604]]

discount rate plans throughout the entirety of their service areas.
    115. On June 12, 1996, OMB approved all of the proposed changes to 
our information collection requirements in accordance with the 
Paperwork Reduction Act. In approving the proposed changes, OMB 
``strongly recommend(ed) that the (Commission) investigate potential 
mechanisms to provide consumers, State regulators, and other interested 
parties with some standardized pricing information,'' which ``could be 
provided as part of the certification process or could be made 
available to the public in other ways.''
    116. In this Order on Reconsideration, we adopt several changes to 
our information collection requirements proposed in the NPRM. 
Specifically, we have decided to: (1) Permit nondominant interexchange 
carriers to file tariffs for the provision of dial-around 1+services 
using a nondominant interexchange carrier's carrier access code; (2) 
permit nondominant interexchange carriers to file tariffs for the 
initial 45 days of domestic, interstate, interexchange service, or 
until there is a written contract between the carrier and the customer, 
whichever is earlier; (3) eliminate the public disclosure requirement. 
We reaffirm our decision in the Second Report and Order to require 
nondominant interexchange carriers to: (1) File annual certifications 
with the Commission stating that they are in compliance with their 
statutory rate integration and geographic rate averaging obligations 
under section 254(g) of the Communications Act, and (2) maintain price 
and service information on all their interstate, domestic, 
interexchange services that they can make available to the Commission 
upon request. Implementation of these requirements will be subject to 
approval by OMB as prescribed by the Paperwork Reduction Act.

VI. Ordering Clauses

    117. Accordingly, it is ordered that, pursuant to sections 1-4, 10, 
201, 202, 203, 204, 205, 215, 218, 220, 226, and 254 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 160, 201, 
202, 203, 204, 205, 215, 218, 220, 226, and 254, the Order on 
Reconsideration is hereby adopted. The requirements adopted in this 
Order on Reconsideration shall be effective December 4, 1997, or on the 
date when the requirements adopted in the Second Report and Order in 
this proceeding become effective, whichever is later. The collections 
of information contained within are contingent upon approval by the 
Office of Management and Budget.
    118. It is further ordered that parts 42 and 61 of the Commission's 
rules, 47 CFR parts 42 and 61 are amended as set forth herein.
    119. It is further ordered that the Petitions for Reconsideration 
filed by Ad Hoc Users Committee, AT&T, Frontier, Telco, and TRA are 
granted in part and denied in part, as described herein. All other 
Petitions for Reconsideration filed in this proceeding are denied.
    120. It is further ordered that the Petitions for Clarification 
filed in this proceeding are granted in part, and denied in part, as 
described herein.
    121. It is further ordered that whereas the Second Report and Order 
in this proceeding was stayed by the United States Court of Appeals for 
the District of Columbia Circuit, we direct the General Counsel 
expeditiously to file the necessary papers with the court to request 
clarification of that stay on the decision herein.
    Accordingly, this Order on Reconsideration is stayed pending the 
court's ruling.

List of Subjects in 47 CFR Parts 42 and 61

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Parts 42 and 61 of title 47 of the Code of Federal Regulations are 
amended as follows:

PART 42--PRESERVATION OF RECORDS OF COMMUNICATIONS COMMON CARRIERS

    1. The authority citation for part 42 continues to read as follows:

    Authority: Sec. 4(i), 48 Stat. 1066, as amended, 47 U.S.C. 
154(i). Interprets or applies secs. 219 and 220, 48 Stat. 1077-78, 
47 U.S.C. 219, 220.


Sec. 42.10  [Removed]

    2. Section 42.10 is removed.
    3. Section 42.11 is amended by revising paragraph (a) and removing 
paragraph (c).


Sec. 42.11  Retention of information concerning detariffed 
interexchange services.

    (a) A nondominant interexchange carrier shall maintain, for 
submission to the Commission upon request, price and service 
information regarding all of the carrier's detariffed interstate, 
domestic, interexchange service offerings. The price and service 
information maintained for purposes of this subparagraph shall include 
documents supporting the rates, terms, and conditions of the carrier's 
detariffed interstate, domestic, interexchange offerings. The 
information maintained pursuant to this subsection shall be maintained 
in a manner that allows the carrier to produce such records within ten 
business days.
* * * * *

PART 61-- TARIFFS

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

    Authority: Secs. 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 4-3, unless otherwise noted.

    5. Section 61.20 is revised to read as follows:


Sec. 61.20  Detariffing of interstate, domestic, interexchange 
services.

    (a) Except as otherwise provided in paragraphs (b) and (c), or by 
Commission order, carriers that are nondominant in the provision of 
interstate, domestic, interexchange services shall not file tariffs for 
such services.
    (b) Carriers that are nondominant in the provision of interstate, 
domestic, interexchange services shall be allowed to file tariffs for 
dial-around 1+services. For the purposes of this paragraph, dial-around 
1+calls are those calls made by accessing the interexchange carrier 
through the use of that carrier's carrier access code. A carrier access 
code is a five or seven digit access code that enables callers to reach 
any carrier, presubscribed or otherwise, from any telephone.
    (c) Carriers that are nondominant in the provision of interstate, 
domestic, interexchange services shall be allowed to file tariffs for 
such service to those customers who contact the local exchange carrier 
to designate an interexchange carrier or to initiate a change with 
respect to their primary interexchange carrier. These tariffs shall 
remain in effect until the interexchange carrier and the customer 
consummate a written contract, but in no event for more than 45 days.
    6. Section 61.72 is amended by revising the introductory text of 
paragraph (a) to read:


Sec. 61.72  Posting.

    (a) Offering carriers must post (i.e., keep accessible to the 
public) during the carrier's regular business hours, a schedule of 
rates and regulations for those services for which tariff filings are

[[Page 59605]]

required and those services for which carriers exercise the option to 
file tariffs. This schedule must include all effective and proposed 
rates and regulations pertaining to the services offered to and from 
the community or communities served, and must be the same as that on 
file with the Commission. This posting requirement must be satisfied by 
the following methods:
* * * * *
[FR Doc. 97-29117 Filed 11-3-97; 8:45 am]
BILLING CODE 6712-01-P