[Federal Register Volume 63, Number 4 (Wednesday, January 7, 1998)]
[Rules and Regulations]
[Pages 990-1042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-173]



[[Page 989]]

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Part III





Federal Communications Commission





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47 CFR Parts 0 and 1



Procedures To Be Followed When Formal Complaints Are Filed Against 
Common Carriers; Final Rule

  Federal Register / Vol. 63, No. 4 / Wednesday, January 7, 1998 / 
Rules and Regulations  

[[Page 990]]



FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 1

[CC Docket No. 96-238; FCC 97-396]


Procedures To Be Followed When Formal Complaints Are Filed 
Against Common Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commission adopted a Report and Order that changed the 
rules for processing formal complaints filed against common carriers. 
The Report and Order adopted rules that are necessary to implement 
certain provisions contained in the 1996 Act that prescribe deadlines 
ranging from 90 days to 5 months for resolution of certain types of 
complaints against common carriers. The rules adopted in the Report and 
Order require or encourage parties to engage in pre-filing activities, 
change service requirements, modify the form and content of initial 
pleadings, shorten filing deadlines, eliminate pleading opportunities 
that were not useful or necessary, and modify the discovery process.

EFFECTIVE DATE: March 18, 1998.

FOR FURTHER INFORMATION CONTACT: Deena Shetler (202) 418-7296. For 
additional information concerning the information collections contained 
in this Report and 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 Report 
and Order in CC Docket No. 96-238, adopted and released on November 25, 
1997. The full text of the Report and Order is available for inspection 
and copying during normal business hours in the FCC Reference Center, 
Room 239, 1919 M Street, N.W., Washington D.C. The complete text of 
this decision may also be purchased from the Commission's duplicating 
contractor, International Transcription Services, 1231 20th Street NW, 
Washington D.C. 20036, (202) 857-3800.
    This Report and Order contains new or modified information 
collections subject to the Paperwork Reduction Act of 1995 (PRA). It 
has been submitted to the Office of Management and Budget (OMB) for 
review under the PRA. OMB, the general public, and other federal 
agencies are invited to comment on the proposed or modified information 
collections contained in this proceeding.

Paperwork Reduction Act

    This Report and Order contains either a new or modified information 
collection. The Commission, as part of its continuing effort to reduce 
paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collections 
contained in this Order, as required by the Paperwork Reduction Act of 
1995, Pub. L. 104-12. Written comments by the public on the information 
collections are due February 6, 1998. OMB notification of action is due 
March 9, 1998. Comments should address: (1) whether the new or modified 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall practical utility; (b) the accuracy of the Commission's burden 
estimates; (c) ways to enhance the quality, utility, and clarity of the 
information collected; and (d) ways to minimize the burden of the 
collection of information on the respondents including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: 3060-0411.
    Title: Procedures for Formal Complaints Filed Against Common 
Carriers.
    Form No.: FCC Form 485.
    Type of Review: Revision.
    Respondents: Individuals or households; businesses or other for 
profit, including small business; not-for-profit institutions; state, 
local or tribal government.

------------------------------------------------------------------------
                                                                Total   
                                   No. of        Est. time      annual  
        Section/title           respondents         per         burden  
                                                respondent     (hours)  
------------------------------------------------------------------------
a. Service..................  760............          1.0           760
b. Pleading Content           760............          3.0         2,280
 Requirements.                                                          
c. Discovery................  380                      2.25          855
                               (complainants).                          
                              380                      1.5           570
                               (defendants).                            
Estimate for recordkeeping..  760............          0.5           380
d. Scanning.................  38.............          5.0           190
e. Damages..................  380............          1.0           380
f. Briefs...................  760............          3.0         2,280
g. Directory of Service       4,965..........          0.25     1,241.25
 Agents.                                                                
h. Joint Statement of         760............          2.0         1,520
 Stipulated Facts and Status                                            
 Conferences.                                                           
i. Filing of Copies of        760............          0.5           380
 Proposed Orders on Disks.                                              
j. FCC 485-Intake Form......  380............          0.5           190
------------------------------------------------------------------------

    Total Annual Burden: 11,026.25 hours.
    Estimated Costs Per Respondents: $150.00 for each respondent that 
files a complaint against a common carrier, it is estimated that 380 
complaints will be filed in the next year.
    Needs and Uses: The information has been and is currently being 
used by the FCC to determine the sufficiency of complaints and to 
resolve the merits of disputes between the parties.
    The Report and Order requires all complainants to personally serve 
their formal complaint on the defendant, as well as serve copies of the 
complaint with the Mellon Bank, the Secretary of the Commission, and 
the responsible Bureau or Bureaus. This requirement will speed up the 
proceeding by eliminating delays in the defendant receiving a copy of 
the complaint.
    Regarding changes to the pleading requirements, the Report and 
Order concludes that complaints, answers, and any necessary replies 
must contain complete statements of relevant facts and supporting 
documentation; an inventory of all documents relevant to the complaint; 
an identification of all individuals with information relevant to the 
complaint; and a computation of any damages claimed. The Report and 
Order concludes that each complaint must contain verification of 
payment of the filing fee, a certificate of service, and certification 
that each complainant has mailed a certified letter to each defendant 
outlining the allegations that form the basis of the complaint it 
anticipated filing with the Commission to the defendant carrier that 
invited a response within a reasonable time

[[Page 991]]

period and a summary of all additional steps taken to resolve the 
dispute prior to the filing of the complaints, or an explanation of why 
no such steps were taken. The Report and Order concludes that each 
answer must contain certification that each defendant has discussed the 
possibility of settlement with each complainant prior to the filing of 
the complaint, or an explanation of why such discussion was not 
feasible. The Report and Order also concludes that Answers must be 
filed within 20 days of service of the complaint on the defendant by 
the complainant. The Report and Order requires that all pleadings be 
accompanied by copies of relevant tariffs. The Report and Order 
concludes that all dispositive motions be accompanied by proposed 
finding of facts and conclusions of law in both hard copy and on a 
computer disk, formatted to be compatible with the Commission's word 
processing software. The Report and Order concludes that no amendments 
to complaints will be allowed and no cross-complaints or counterclaims 
may be filed. The Report and Order further requires parties to submit a 
joint statement of disputed and undisputed facts and key legal issues 
at least two business days prior to the scheduled date of the initial 
status conference. These proposals will promote agreement on a 
significant number of disputed facts and legal issues, as well as 
serving to better inform the Commission of the factual and legal areas 
in dispute.
    The Report and Order concludes that complainants must file and 
serve any requests for interrogatories, up to a limit of 10, 
concurrently with their complaints, defendants must file and serve any 
requests for interrogatories, up to a limit of 10, prior to or 
concurrently with their answer, and complainants must file and serve 
any requests for interrogatories that are directed solely at facts 
underlying affirmative defenses asserted by the defendant in its 
answer, up to a limit of 5, within 3 calendar days of service of the 
defendant's answer. The Report and Order concludes further that 
individuals who are provided access to proprietary information shall 
sign a notarized statement affirmatively stating that the individual 
has personally reviewed the Commission's rules and understands the 
limitations they impose on the signing party. Parties must maintain a 
log recording the number of copies made of all proprietary materials 
and the persons to whom the copies have been provided. Upon termination 
of a formal complaint proceeding, all originals and reproduction of any 
proprietary materials disclosed in that proceeding, along with the log 
recording persons who received copies of such materials, shall be 
provided to the producing party. These requirements will lead to the 
disclosure of information relevant to the resolution of formal 
complaints earlier in the complaint proceeding, thus, allowing for 
timely resolution of these complaints.
    The Report and Order also concludes that the Commission may impose 
a scanning or other electronic formatting requirement for submission of 
large numbers of documents in certain cases. This requirement will 
assist in the efficient management of documents in those cases where 
the review of large numbers of documents is necessary to the resolution 
of a dispute.
    The Report and Order requires that, where the Commission has 
ordered parties to attempt to negotiate a damages amount according to 
an approved damages formula, the parties must submit to the Commission, 
within thirty days, the written results of such negotiations. The 
written statement shall contain one of the following: (1) the parties' 
agreement as to the amount of damages; (2) a statement that the parties 
are continuing to negotiate in good faith and a request for an 
extension of time to continue such negotiations; or (3) the bases for 
the continuing dispute and the reasons why no agreement can be reached. 
This requirement will encourage parties to negotiate the resolution of 
damages claims diligently and ensure that the failure of parties to so 
negotiate will be remedied by the Commission.
    The Report and Order resolves that briefs may be prohibited or 
limited. Where permitted, briefs must contain all claims and defenses 
that the party wants the Commission to address. Each brief must attach 
all documents on which it relies and explain how each attachment is 
relevant to the issues. Brief length has been shortened to 25 pages for 
initial briefs and 10 pages for reply briefs. This requirement will 
ensure that briefs will not be filed where they would be redundant of 
filings already made with the Commission and that briefs will be filed 
where necessary to the full resolution of a formal complaint.
    The Report and Order requires all carriers subject to the 
Communications Act of 1934, as amended, to file in writing a 
designation of agent for service of process with the Commission, to 
facilitate service of process in all Commission proceedings.
    The Report and Order concludes that parties must file a joint 
statement of stipulated facts, disputed facts and key legal issues at 
least two business days prior to the initial status conference. This 
requirement will serve to narrow the issues in dispute and serve as 
further information to be considered in determining the necessity of 
any discovery sought by the parties. The Report and Order also 
concludes that parties must submit a joint proposed order memorializing 
the rulings made at each status conference by the close of business on 
the business day following the date the status conference was held. 
Alternatively, parties may submit a transcript of the rulings made at 
each status conference by the close of business on the third business 
day following the date the status conference was held. This requirement 
will save Commission staff time and ensure that the parties fully 
understand the rulings that will impact the proceedings.
    The Report and Order concludes that all proposed orders must be 
submitted both as hard copies and on computer disk formatted to be 
compatible with the Commission's computer system and using the 
Commission's current wordprocessing software. This requirement 
increasing the efficiency of the formal complaint process by providing 
Commission staff with the ability to adopt proposed rules either in 
whole or in part where necessary.
    Finally, the Report and Order concludes that complainants are 
required to submit a completed intake form with its formal complaint to 
indicate that the complaint meets the threshold requirements for 
stating a cause of action. This requirement will help to prevent the 
filing of procedurally deficient complaints.

Summary of Report and Order

[Report and Order in CC Docket No. 96-238]

I. Introduction

    1. In February 1996, Congress passed and the President signed the 
Telecommunications Act of 1996 (``1996 Act''). One of the main goals of 
the 1996 Act is to establish a ``pro-competitive, deregulatory'' 
national policy framework for the telecommunications industry. In 
accordance with this goal, sections 208, 260, 271, and 275 of the Act 
contain deadlines ranging from ninety days to five months for the 
Commission's resolution of certain complaints filed against the Bell 
Operating Companies (``BOCs''), local exchange carriers (``LECs''), and 
other telecommunications carriers that are subject to the requirements 
of the Act. Provisions of the 1996 Act further direct the Commission to 
establish such procedures as are necessary for the review and 
resolution of such

[[Page 992]]

complaints within the statutory deadlines. Prompt and effective 
enforcement of the Act and the Commission's rules is crucial to 
attaining the 1996 Act's goals of full and fair competition in all 
telecommunications markets. Such widespread competition will ensure 
that the American public derives the full benefit of such competition 
through new and better products and services at affordable rates.
    2. We conclude that, in order to fulfill the goals and meet the 
statutory deadlines of the 1996 Act, we must revise our formal 
complaint rules to provide a forum for prompt resolution of all 
complaints of unreasonably discriminatory or otherwise unlawful conduct 
by telecommunications carriers, and thus to reduce impediments to 
robust competition in all telecommunications markets. Consistent with 
the Congressional mandate to expedite the processing of formal 
complaints, on November 26, 1996, the Commission released a Notice of 
Proposed Rulemaking, 61 FR 67978 (December 26, 1996) (``NPRM'') 
proposing changes to the rules that govern formal complaints against 
common carriers. In the NPRM we articulated our goal of expediting the 
resolution of all formal complaints, not just those enumerated in the 
1996 Act. The NPRM sought public comment on comprehensive rule changes 
and additions that would: (1) encourage parties to attempt to settle 
their disputes before filing formal complaints; (2) facilitate the 
filing and service of complaints and related pleadings; (3) improve the 
content and utility of the initial pleadings filed by both parties, 
while reducing reliance on discovery and subsequent pleading 
opportunities; and (4) eliminate unnecessary or redundant pleadings and 
other procedural devices.
    3. In this Report and Order, we adopt certain of the proposed 
rules, with some modifications. The amended rules will foster our 
ability to meet the statutory complaint resolution deadlines of the 
1996 Act and expedite the resolution of all formal complaints, while 
safeguarding the due process interests of affected parties. The rules 
we adopt today apply to all formal complaints, except complaints 
alleging violations of section 255. A uniform approach will ensure that 
the Commission places on all formal complaints the same pro-competitive 
emphasis underlying the 1996 Act's complaint resolution deadlines. The 
rules we adopt in this Report and Order shall be important tools for 
promptly assessing a common carrier's compliance with the requirements 
of the Act and our rules. In addition, these rules provide for suitable 
remedial actions where appropriate.
    4. We intend to closely monitor the effectiveness of our new 
streamlined rules in promoting the pro-competitive goals of the Act. We 
will not hesitate to re-visit the rules and policies adopted in this 
Report and Order if we later determine that further modifications are 
needed to ensure that complaint proceedings are promptly and fairly 
resolved and, more generally, to promote the Act's goal of full and 
fair competition in all telecommunications markets.
    5. In addition, Commission staff retains considerable discretion 
under the new rules to, and is indeed encouraged to, explore and use 
alternative approaches to complaint adjudication designed to ensure the 
prompt discovery of relevant information and the full and fair 
resolution of disputes in the most expeditious manner possible. We 
recently established an Enforcement Task Force, the principal mission 
of which is to promote timely and appropriate enforcement of the pro-
competitive policies of the 1996 Act. Among other duties, the 
Enforcement Task Force has been charged with identifying and 
investigating actions by common carriers that may be hindering 
competition in telecommunications markets and with initiating 
enforcement actions where necessary to remedy conduct that is 
unreasonable, anti-competitive or otherwise harmful to consumers. The 
Enforcement Task Force is considering whether to recommend alternative 
forms of complaint adjudications and enforcement actions to ensure that 
the goals underlying the pro-competitive policies of the 1996 Act and 
the Commission's implementing rules and orders are met. Any such 
recommendation may form the basis for a subsequent Report and Order to 
be considered by the Commission at a later date.
    6. Finally, we note that section 207 of the Act gives any person 
the option of pursuing claims for damages against common carriers based 
on alleged violations of the Act either at the Commission or before a 
federal district court of competent jurisdiction. Thus, parties looking 
to recover monetary damages are free to weigh the advantages of 
bringing their claims before a federal district court against the 
benefits of proceeding under the Commission's expedited complaint 
procedures.

II. Background

A. Statutory Framework for Complaints Against Common Carriers
    7. Prior to enactment of the 1996 Act, sections 206 to 209 of the 
Act provided the statutory framework for our rules for resolving formal 
complaints filed against common carriers. Section 206 of the Act 
establishes the liability of a common carrier for damages sustained by 
any person or persons as a consequence of that carrier's violation of 
any provision of the Act. Section 207 of the Act permits any person 
claiming to be damaged by the actions of any common carrier either to 
make a complaint to the Commission or bring suit in federal district 
court for the recovery of such damages. Section 208(a) authorizes 
complaints by any person ``complaining of anything done or omitted to 
be done by any common carrier'' subject to the provisions of the Act. 
Section 208(a) specifically states that ``it shall be the duty of the 
Commission to investigate the matters complained of in such manner and 
by such means as it shall deem proper.'' Section 209 of the Act 
specifies that, if ``the Commission shall determine that any party 
complainant is entitled to an award of damages under the provisions of 
this Act, the Commission shall make an order directing the carrier to 
pay to the complainant the sum to which he is entitled on or before a 
day named.''
    8. In 1988, Congress added subsection 208(b) to require that 
complaints filed with the Commission concerning the lawfulness of a 
common carrier's charges, practices, classifications or regulations, 
must be resolved by the Commission in a final, appealable order within 
twelve months from the date filed, or fifteen months from the date 
filed if ``the investigation raises questions of fact of . . . 
extraordinary complexity.'' In addition, Congress amended subsection 
5(c)(1) to require that such decisions be made by the Commission, not 
the Bureau staff pursuant to delegated authority.
B. Complaint Provisions Amended and Added by the 1996 Act
    9. As amended or added by the 1996 Act, sections 208, 260, 271, and 
275 of the Act all contain deadlines for the Commission's resolution of 
formal complaints alleging violations under the particular section by a 
common carrier.
    10. Section 208. The 1996 Act amended section 208, entitled 
``Complaints to the Commission.'' Section 208(b)(1) now mandates that 
``the Commission shall, with respect to any investigation under 
[section 208(b)] of the lawfulness of a charge,

[[Page 993]]

classification, regulation, or practice, issue an order concluding such 
investigation within 5 months after the date on which the complaint was 
filed,'' rather than the twelve to fifteen month deadline previously 
imposed. In addition, subsection 208(b)(2) provides that any such 
investigation initiated prior to enactment of subsection 208(b)(2) must 
be concluded within twelve months after the date of enactment.
    11. Section 260. The 1996 Act added section 260, entitled 
``Provision of Telemessaging Service.'' Section 260(b) provides that:

    [T]he Commission shall establish procedures for the receipt and 
review of complaints concerning violations of [section 260(a)] or 
the regulations thereunder that result in material financial harm to 
a provider of telemessaging service. Such procedures shall ensure 
that the Commission will make a final determination with respect to 
any such complaint within 120 days after receipt of the complaint. 
If the complaint contains an appropriate showing that the alleged 
violation occurred, the Commission shall, within 60 days after 
receipt of the complaint, order the local exchange carrier and any 
affiliates to cease engaging in such violation pending such final 
determination.

    12. Section 271. The 1996 Act added section 271, entitled ``Bell 
Operating Company Entry into InterLATA Services.'' Section 271(d)(6)(B) 
directs the Commission to ``establish procedures for the review of 
complaints concerning failures by [BOCs] to meet conditions required 
for approval'' under section 271(d)(3) to provide in-region interLATA 
services. Section 271(d)(6)(B) further provides that, ``[u]nless the 
parties otherwise agree, the Commission shall act on such complaint 
within 90 days.''
    13. Section 275. The 1996 Act added section 275, entitled ``Alarm 
Monitoring Services.'' Section 275(c) requires the Commission to 
``establish procedures for the receipt and review of complaints 
concerning violations of [section 275(b)] or the regulations thereunder 
that result in material financial harm to a provider of alarm 
monitoring service.'' Section 275(c) further provides that:

    [S]uch procedures shall ensure that the Commission will make a 
final determination with respect to any such complaint within 120 
days after receipt of the complaint. If the complaint contains an 
appropriate showing that the alleged violation occurred, * * * the 
Commission shall, within 60 days after receipt of the complaint, 
order the incumbent local exchange carrier * * * and its affiliates 
to cease engaging in such violation pending such final 
determination.

    14. The 1996 Act also added several provisions that reference 
complaint proceedings but do not contain resolution deadlines.
    15. Section 255. The 1996 Act added section 255, entitled ``Access 
by Persons with Disabilities.'' Section 255 requires manufacturers of 
telecommunications equipment or customer premises equipment to ensure 
that the equipment is ``designed, developed, and fabricated to be 
accessible to and usable by individuals with disabilities'' and further 
requires any providers of telecommunications services to ``ensure that 
the service is accessible to and usable by individuals with 
disabilities.'' Section 255 provides that ``[t]he Commission shall have 
exclusive jurisdiction with respect to any complaint under this 
section'' but imposes no specific resolution deadline for such 
complaints. We have initiated a separate proceeding to implement the 
provisions of section 255.
    16. Section 274. The 1996 Act added section 274, entitled 
``Electronic Publishing by Bell Operating Companies.'' Section 
274(e)(1) provides that ``any person claiming that an act or practice 
of any [BOC], affiliate, or separated affiliate constitutes a violation 
of [section 274] may file a complaint with the Commission or bring suit 
in federal district court as provided in section 207 of the Act'' and 
that a ``[BOC], affiliate, or separated affiliate'' shall be liable for 
damages as provided in section 206 of the Act. Similarly, subsection 
274(e)(2) permits an aggrieved person to apply to the Commission for a 
cease-and-desist order or to a U.S. District Court for an injunction or 
order compelling compliance with section 274. None of the complaint 
provisions in section 274 contain deadlines for Commission action.
    17. In addition, the 1996 Act imposed other requirements on the 
BOCs and other common carriers which could lead to formal complaint 
actions under section 208. For example, section 254(k), entitled 
``Subsidy of Competitive Service Prohibited,'' prohibits 
telecommunications carriers from using non-competitive services to 
subsidize services that are subject to competition. The 1996 Act also 
added section 276, entitled ``Provision of Payphone Service.'' section 
276(a) prohibits a BOC from subsidizing its payphone service through 
its telephone exchange service operations or its exchange access 
operations. Timely, responsive enforcement of provisions such as these 
will be necessary to promote the 1996 Act's goal of fostering 
competitive telecommunications markets.
    18. We tentatively concluded in the NPRM that the provisions of the 
1996 Act that specifically refer to complaint procedures do not 
diminish the Commission's broad authority to investigate formal 
complaints under section 208. AT&T, the sole commenter to address this 
issue, agrees with our tentative conclusion, explaining that section 
261(a) states that:

nothing in this part [Part II] shall be construed to prohibit the 
Commission from enforcing regulations prescribed prior to the date 
of enactment of the Telecommunications Act of 1996 in fulfilling the 
requirements of this part, to the extent that such regulations are 
not inconsistent with the provisions of this part.

According to AT&T, specific references in the Act to the Commission's 
duties to resolve formal complaints under section 271 and elsewhere in 
the Act affect only the time in which such matters must be decided, but 
do not affect the Commission's existing authority under section 208.
    19. We find that Congress' actions in specifying certain complaint 
procedures and deadlines for those procedures do not restrict the 
Commission's authority to resolve formal complaints pursuant to section 
208. Section 261 is entitled, ``Effect on Other Requirements'' and 
subsection (a) indicates Congress'' intent to leave intact the 
Commission's authority except where it would be inconsistent with the 
Act itself. We conclude that any references to complaint resolution 
deadlines in Title II of the Act are intended to affect only the time 
in which specific matters must be decided, and do not decrease the 
Commission's existing authority under section 208.

III. Amendments to Rules of Practice and Procedure

A. Overview
    20. The focus of this proceeding is on establishing rules and 
procedures to implement the expedited complaint provisions set forth by 
the 1996 Act and to speed the resolution of all formal complaints in 
accordance with the pro-competitive policies underlying the 1996 Act. 
Three objectives form the basis for the amendment of the formal 
complaint rules, which focus on settlement efforts, enhanced pleading 
content, and streamlined procedures.
    21. Our first objective is to promote settlement efforts to enable 
parties to resolve disputes on their own before resorting to 
adjudication before the Commission. We conclude that more dialogue 
between parties prior to the complaint process will reduce, and in some 
cases, eliminate, the need to file formal complaints with the 
Commission. Consequently, we require complainants and defendant 
carriers to

[[Page 994]]

certify in their respective complaints and answers that the possibility 
of settlement was discussed before the complaint was filed with the 
Commission. Certification of settlement attempts will promote pre-
filing discussions and information exchanges among the disputing 
parties. In situations in which disputes are not resolved, we expect 
that pre-filing discussions and information exchanges will enable 
parties to narrow the number and scope of the issues to be presented to 
the Commission for resolution under the expedited complaint procedures.
    22. Our second objective is to improve the utility and content of 
pleadings, so that the complaint, answer, and any necessary reply may 
serve as the principal basis upon which the Commission will make a 
decision on the merits of the complaint. Under the format and content 
rules, absent a waiver for good cause shown, complainants and 
defendants must make factual allegations in their pleadings and supply 
documentation to support such facts. To the extent that the Commission 
determines that additional information is needed in the record to 
resolve a complaint fully, the parties will be required to respond 
quickly.
    23. Our third objective is to streamline the formal complaint 
process by eliminating or limiting procedural devices and pleading 
opportunities that have contributed to undue delays in formal 
complaints. For example, we conclude that we should modify discovery to 
increase staff control over the process and limit the filing, timing, 
and scope of briefs, as well as streamline the service process by 
having complainants serve complaints directly on defendants. In 
addition, we eliminate certain pleading opportunities that have been of 
little value to the complaint resolution process, including cross-
complaints, counterclaims, motions to make a complaint definite and 
certain, and amendments to complaints.
    24. To advance these three objectives, we have designed rules to 
speed the processing of all formal complaints. By encouraging dialogue 
among the parties prior to the filing of formal complaints, many 
conflicts will be settled and those complaints that are filed will have 
been narrowed in scope. By requiring initial pleadings to contain 
complete information and documentation, the parties and the Commission 
will be better prepared to resolve disputed issues at an early stage of 
the complaint process. And finally, by streamlining and eliminating 
unnecessary pleading opportunities, the parties and the Commission will 
be able to focus early on the essential activities and information 
needed to more quickly resolve formal complaints.
B. Applicability of the Rules
    1. Uniform Application of the Rules. a. The NPRM. 25. In the NPRM, 
we tentatively concluded that the pro-competitive goals and policies 
underlying the short complaint resolution deadlines in the Act should 
apply to all formal complaints, not just to those specifically added or 
amended by the 1996 Act. The NPRM proposed to implement uniform 
procedures and pleading requirements to expedite the resolution of all 
formal complaints and sought comment on the need for specialized rules 
or procedures for handling complaints arising under particular 
provisions of the Act.
    b. Comments. 26. BellSouth supports applying the same procedures to 
all formal complaints and the National Association for the Deaf 
(``NAD'') agrees, stating that separate sets of procedures could be 
confusing for complainants. The majority of parties commenting on this 
issue, however, argue for special expedited procedures for those 
complaints that are subject to specific statutory deadlines, with other 
complaints proceeding under more relaxed or flexible timetables. 
American Public Communications Council (``APCC'') expresses concern 
that the new procedures will place significant burdens on complainants 
and defendants. Cincinnati Bell Telephone (``CBT'') states that 
sections 260(b), 271(d)(6)(B), and 275(c), which require complaints to 
be resolved under ninety or 120-day deadlines, involve very specialized 
subject matters, while section 208 complaints may involve any aspect of 
telecommunications and therefore parties to section 208 complaints may 
need more time to develop and resolve issues. GTE suggests using 
separate proceedings for ``fast-track'' cases, stating that the 
Commission should wait until it has gained more experience with 
application of the provisions of the 1996 Act before attempting to 
apply the same expedited procedures to all formal complaints.
    27. Some commenters also urge the Commission to establish expedited 
procedures for those complaints that are not specifically covered by a 
statutory deadline but which, they argue, are needed to ensure full and 
fair competition. For example, MCI proposes expedited procedures for 
interconnection-related complaints pursuant to sections 251 and 252 of 
the Act. Telecommunications Resellers Association (``TRA'') argues that 
complaints filed by resale carriers should be processed under expedited 
procedures because of the size and resource disparities between 
resellers and their underlying network service providers, and because 
of the unusual circumstances in which resellers have dual status as 
both customers and competitors of network service providers.
    28. The NAD references its comments to the Section 255 NOI, 61 FR 
50465 (September 26, 1996), in which it proposed that the Commission 
create procedures to coordinate with the Department of Justice 
(``DOJ'') to determine the appropriate governmental authority for 
reviewing complaints that arise out of a lack of access to 
telecommunications services for persons with disabilities. Such 
complaints could result either from the failure of a place of public 
accommodation or state or local governmental entity to follow the 
requirements of the Americans with Disabilities Act of 1990 (``ADA'') 
or from the failure of a telecommunications manufacturer or service 
provider to comply with section 255. The NAD states that its proposal 
will aid parties who file section 255 complaints that may raise 
jurisdictional issues.
    c. Discussion. 29. We affirm our tentative conclusion that uniform 
streamlined procedures and pleading requirements should be applied to 
all formal complaints filed against common carriers, even those that 
are not subject to specific statutory deadlines, with the exception of 
complaints alleging violations of section 255. All formal complaints 
should be resolved as expeditiously as possible. We find that uniform 
procedures and pleading requirements will promote efficiency in the 
Commission's administration of complaints and will minimize confusion 
among the parties. Uniform procedures for all formal complaints will 
promote the Commission's goal of expediting the resolution of these 
disputes by allowing the Commission and all parties to follow one set 
of rules.
    30. We disagree with the commenters who support expedited 
procedures only for complaints that have statutory deadlines or that 
involve competitive issues for the following reasons. First, we agree 
with NAD that having separate sets of procedures for certain types of 
complaints would create confusion for parties who might be unclear as 
to which rules to follow and might even lead to repeated and 
inadvertent violations of our procedural rules. Second, we conclude 
that separate complaint procedures would permit

[[Page 995]]

parties to exploit our rules by alleging certain violations in order to 
manipulate the time frame or level of evidentiary support required in a 
particular complaint. For example, a complainant alleging that a BOC 
has violated certain provisions of the Act might be tempted to add an 
allegation that the BOC has also failed to meet a condition required 
for approval for provision of interLATA services in violation of 
section 271, in order to take advantage of the ninety-day resolution 
deadline mandated by section 271(d)(6)(B). Third, to the extent that 
certain commenters contend that subjecting all complaints to expedited 
procedures will unnecessarily work hardships on complainants and 
defendants in cases without statutory deadlines, we note that the 
Commission has considerable discretion under the amended rules to 
accommodate the needs of parties in cases where no statutory deadline 
applies. Finally, separate sets of procedures would be administratively 
burdensome for the Commission. Not only would it be cumbersome to 
promulgate separate sets of procedures, but it would decrease staff 
efficiency to apply different procedural rules to different complaints.
    31. We defer consideration of NAD's proposal to establish 
coordination procedures with the DOJ regarding jurisdiction of 
accessibility complaints in this proceeding. We will address this 
proposal in our section 255 implementation rulemaking, so as to permit 
the Commission to take a comprehensive approach to implementation of 
section 255.
    2. Applicability of the Section 208(b)(1) Deadline. a. The NPRM. 
32. We stated in the NPRM that the new five-month resolution deadline 
in section 208(b)(1) applies only to those formal complaints that 
investigate the ``lawfulness of a charge, classification, regulation or 
practice.'' Section 208(b), as originally added by Congress in 1988 in 
the FCCAA, has been interpreted previously as applicable only to 
complaints about matters contained in tariffs filed with the 
Commission. In other words, under this interpretation, only those 
complaints challenging the ``lawfulness of a charge, classification, 
regulation or practice'' reflected in a tariff filed with the 
Commission pursuant to section 203 of the Act have been viewed as 
subject to the resolution deadlines contained in former section 208(b).
    b. Comments. 33. Several commenters take a much broader view of the 
scope of section 208(b). According to these commenters, the five-month 
resolution deadline in section 208(b)(1), in the absence of a specific 
statutory resolution deadline such as in sections 260, 275, and 271, 
applies to all formal complaints filed pursuant to section 208. 
Although the commenters provide little argument to support this view, 
the crux of their claim appears to be that the language in section 
208(b)(1) referring to ``investigation[s] into the lawfulness of a 
charge, classification, regulation or practice'' is broad enough to 
cover any unlawful act or omission by a common carrier which could 
subject it to a complaint filed pursuant to section 208. Under this 
broad interpretation of section 208(b)(1), the Commission would have a 
maximum of five months to resolve any formal complaint filed pursuant 
to section 208.
    c. Discussion. 34. The plain language of the Act establishes that 
the class of complaints subject to the deadline in section 208(b)(1) is 
narrower than the class of complaints that can be filed under section 
208(a). Section 208(a), inter alia, gives any person the right to 
complain about ``anything done or omitted to be done'' by a common 
carrier in contravention of the Act. The complaint resolution deadline 
in section 208(b)(1), on the other hand, refers only to those 
complaints involving investigations into the lawfulness of a ``charge, 
classification, regulation, or practice'' of a carrier.
    35. While there is little guidance in section 208 itself for 
defining the subset of complaints covered by section 208(b), we 
conclude that section 208(b)(1) covers complaints relating to the 
lawfulness of those matters required to be in tariffs. Stated another 
way, the deadline covers complaints relating to the lawfulness of 
matters with respect to which the Commission could exercise its 
prescription power under section 205. The deadlines in sections 
204(a)(2)(A) (pertaining to the nature and timing of tariff 
investigations by the Commission) and 208(b)(1) are identical in both 
the Act, as amended by the FCCAA, and the 1996 Act. In addition, the 
provision in the 1996 Act establishing the effective date for the 
changes to the tariff investigation and complaint resolution deadlines 
specifically states that the new deadlines in sections 204 and 208(b) 
shall apply only with respect to charges, practices, classifications, 
or regulations ``filed'' on or after one year after the date of 
enactment. The use of the word ``filed'' connotes a tariff filing 
pursuant to section 203 of the Act because it is generally pursuant to 
section 203 that a ``charge, classification, regulation, or practice'' 
would be ``filed'' with the Commission.
    36. We note, moreover, that the 1996 Act added specific resolution 
deadlines for complaints filed pursuant to sections 260, 271, and 275. 
It may be inferred that, because Congress added specific deadlines in 
certain sections of the 1996 Act for resolving identified types of 
complaint actions, and was silent as to deadlines for resolving 
complaints arising from other sections of the Act, Congress did not 
intend to mandate deadlines for resolving all complaints.
    37. We therefore conclude that section 208(b) applies only to 
formal complaints which involve ``investigation[s] into the lawfulness 
of a charge, classification, regulation or practice'' contained in 
tariffs filed with the Commission. In light of our complete detariffing 
policy for the domestic interstate, interexchange services of 
nondominant interexchange carriers and our permissive detariffing 
policy for competitive access providers and competitive LECs, however, 
we conclude that the interpretation should be modified to ensure that 
our forbearance decisions do not eviscerate Congress' intent in 
establishing the five-month resolution deadline for 208(b)(1) 
complaints. As noted above, the application of the 5-month 208(b)(1) 
deadline to investigations concerning a carrier's ``charge, 
classification, regulation, or practice'' is triggered by the filing of 
any such charge, classification, regulation or practice with the 
Commission. To the extent that our detariffing decisions relieve 
carriers of any obligations to make such filings, it could be argued 
that complaints about matters not filed with the Commission by carriers 
are not encompassed by section 208(b)(1). We conclude that Congress 
clearly did not intend this result. We hold, therefore, that the 
section 208(b)(1) deadline shall apply to any complaint about the 
lawfulness of matters included in tariffs filed with the Commission, 
and those matters that would have been included in tariffs but for the 
Commission's forbearance from tariff regulation. For example, 
complaints alleging that a carrier,through its non-tariffed charges, 
has failed to meet the rate integration or rate averaging requirements 
of section 254(g) of the Act would be subject to the section 208(b)(1) 
deadline. Similarly, complaints contending that a carrier has imposed 
unjust and unreasonable terms and conditions on the provision of a 
service that would have been tarrifed but for our forbearance decision 
would fall within the requirements of section 208(b)(1).
C. Pre-Filing Procedures and Activities
    38. In the NPRM we asked parties to identify specific pre-filing 
activities available to potential complainants and

[[Page 996]]

defendants that could serve to settle or narrow disputes, or facilitate 
the compilation and exchange of relevant documentation or other 
information prior to the filing of a formal complaint with the 
Commission. It has been our experience that there is generally little 
exchange of information or discussion of the dispute between parties 
prior to the filing of a formal complaint and that such exchange of 
information and discussion of a dispute will often lead to settlement. 
We stated in the NPRM that our intent was to adopt rules or procedures 
that would promote actions that could either foster the resolution of 
disputes prior to filing or narrow the scope of the issues to be 
resolved in formal complaints.
    1. Certification of Settlement Attempts. a. The NPRM. 39. We 
tentatively concluded in the NPRM that we should require that a 
complainant certify in its complaint that it discussed, or attempted to 
discuss, in good faith the possibility of settlement with the defendant 
carrier's representative(s) prior to filing the complaint, and, 
further, that failure to comply with this certification requirement 
would result in dismissal of the complaint.
    b. Comments. 40. Most commenters support the proposal to require a 
complainant to certify in its complaint that it discussed, or attempted 
to discuss, the possibility of settlement with the defendant carrier 
prior to filing its complaint. These commenters agree that settlement 
should be encouraged and that the certification requirement would 
provide an additional incentive for parties to settle or narrow 
disputed issues, thereby resulting in fewer and better-focused 
complaints. GST Telecom, Inc. (``GST''), KMC Telecom, Inc. (``KMC''), 
MFS Communications, Co. (``MFS''), and TRA additionally suggest that 
answers should be required to contain certification that the parties 
discussed, or attempted to discuss, the possibility of settlement prior 
to the filing of the formal complaint. In their Joint Reply, Jones 
Intercable, Inc., Centennial Cellular Corp., Texas Cable and 
Telecommunications Association, Cable Television Association of 
Georgia, South Carolina Cable Television Association, and Tennessee 
Cable Telecommunications Association (collectively, the ``Cable 
Entities'') recommend mirroring the Commission's pole attachment 
procedures, which require a complaint to either summarize all steps 
taken to resolve the dispute prior to filing or explain why no steps 
were taken. AT&T opposes such a pre-certification requirement, arguing 
that it would unduly restrict a party's ``unconditional statutory 
right'' to file a section 208 complaint, citing AT&T v. FCC as support 
for its proposition. BellSouth disagrees with AT&T, arguing that there 
is no section 208 right to file a complaint that is not based on facts, 
and that encouraging pre-complaint negotiations will facilitate all 
parties' understanding of the facts. Bell Atlantic, NYNEX, and Pacific 
Telesis Group (``PTG'') also disagree with AT&T's argument, stating 
that AT&T v. FCC deals only with the Commission's prohibition of tariff 
revisions for certain services and does not deal with section 208 
complaints. Competitive Telecommunications Association (``CompTel'') 
opposes the requirement of certification of settlement attempts, 
arguing that parties already have sufficient motivation to settle their 
disputes and that mandatory settlement discussions might force some 
parties to accept unfavorable settlements.
    c. Discussion. 41. We conclude that both the complainant and 
defendant, as part of the complaint and answer, respectively, must 
certify that they discussed, or attempted in good faith to discuss, the 
possibility of settlement with the opposing party prior to the filing 
of the complaint. We agree with GST, KMC, MFS, and TRA that defendant 
carriers should be given equal responsibility for exploring settlement 
options prior to the filing of a formal complaint. To help facilitate 
meaningful discussion between disputing parties, we will adopt a 
requirement that the complainant mail a certified letter outlining the 
allegations that form the basis of the complaint it anticipates filing 
with the Commission to the defendant carrier that invites a response 
within a reasonable period of time. We further conclude that the rule 
setting forth the certification requirement shall be modeled on the 
Commission's existing pole attachment procedures in Sec. 1.1404(i) of 
the rules. Therefore, each settlement certification must include a 
brief summary of all steps taken to resolve the dispute prior to 
filing. If no steps are taken, then each such certification must state 
the reason(s) for such failure to conduct settlement discussions. We 
find that mandating settlement discussions prior to filing a formal 
complaint will result in (1) more disputes being settled amicably, and 
(2) the scope of the issues in dispute in formal complaints being 
narrowed where possible.
    42. We disagree with CompTel's assertion that a rule requiring 
mandatory settlement discussions could be used to coerce parties into 
accepting unfavorable settlements. This rule requires good faith 
settlement attempts, not settlement itself. Furthermore, requiring good 
faith settlement attempts will not impose undue restrictions on the 
right of any person to file a complaint with the Commission. We 
disagree with AT&T's interpretation of the ruling in AT&T v. FCC as it 
applies to the issues under consideration here. In AT&T v. FCC, the 
court held that the Commission's requirement that a carrier obtain 
special permission, i.e., prior Commission approval, before filing a 
tariff under section 203 unlawfully interfered with the carrier's right 
to file a tariff. In addition to the fact that AT&T v. FCC considers 
the application of section 203, not section 208, the issue considered 
in AT&T v. FCC is distinguishable from the issue before us in that the 
pre-filing requirements we impose here only dictate that parties 
explore settlement possibilities and do not require any Commission 
approval prior to filing a formal complaint. If settlement attempts are 
unsuccessful, the complainant is free to file a formal complaint. The 
certification requirement will benefit the parties and the Commission 
by requiring the parties to discuss the facts and issues in dispute 
prior to the filing of the complaint. Such requirement may, therefore, 
lead to an informal resolution of the dispute or, at the very least, 
may reduce or clarify the number and scope of the issues in dispute, 
consistent with Congress' intent to expedite the resolution of 
disputes.
    2. Neutral Industry Committee. a. The NPRM. 43. We also sought 
comment on whether a committee composed of neutral industry members 
would serve a needed role or useful purpose in addressing disputes over 
technical and other business disputes, before parties bring their 
disputes to the Commission in the form of formal complaints. We asked 
commenters to address the extent to which there would be a need for 
outside experts to deal with technical issues that are likely to arise 
in formal complaints and whether, if such a need exists, the use of a 
committee of such experts in the form of a voluntary preliminary 
alternative dispute resolution (``ADR'') procedure would expedite the 
resolution of complaints
    b. Comments. 44. Most commenters oppose the creation of an industry 
committee. Several parties argue that it would be impossible to 
construct a neutral committee, PTG and TRA argue that the use of such a 
committee would delay the resolution of important marketplace issues, 
and AT&T and GTE argue that the committee would lack the expertise to 
handle a wide variety of disputes. CBT, Communications and Energy 
Dispute Resolution Associates (``CEDRA''), and NYNEX contend that

[[Page 997]]

such options are already available to parties. NYNEX additionally 
states that complaints before the Commission typically involve disputes 
between individual companies, rather than broad issues affecting the 
industry. Some commenters, however, support the proposal. Association 
of Telemessaging Services International (``ATSI''), BellSouth, 
Southwestern Bell Telephone (``SWBT''), and United States Telephone 
Association (``USTA'') support the use of an industry committee to 
assist in resolving technical and business disputes. BellSouth added 
that an industry committee could be used in conjunction with ADR 
mechanisms. ATSI asserts that committee proceedings would have to be 
completed within clearly established deadlines to prevent delay in 
resolving disputes involving competitive issues and to ensure 
compliance with the statutory complaint resolution deadlines. In 
addition, GST, KMC, and MFS suggest permitting the parties and the 
Commission to utilize such a committee during the complaint process, as 
well as at the pre-filing stage, to resolve certain factual issues.
    c. Discussion. 45. We decline to establish a committee of neutral 
industry members to resolve disputes over technical and other business 
issues, before parties file such disputes with the Commission as formal 
complaints. We note that the majority of commenters oppose this 
proposal. Several factors weigh against establishing such a committee. 
First, because the committee's decisions would not be binding on the 
Commission, it is possible that the committee and the Commission might 
rule differently on identical issues. The usefulness of committee 
decisions to resolve disputes would be diminished by such uncertainty, 
as a losing party would have little incentive to accept the committee's 
recommendation. Second, we agree with commenters that it would be 
difficult to establish a standing committee with sufficient expertise 
to resolve a range of technical and business issues because of the 
breadth of knowledge and expertise that would be required. Third, we 
agree with commenters that it would be administratively burdensome to 
assemble a new committee for each conflict parties sought to submit to 
such committee. Finally, we agree with the commenters who argue that 
the potential for conflicts of interest among the committee members is 
too great to be able to provide a guarantee of neutrality.
    3. Additional Commenters' Suggestions. a. The NPRM 46. In the NPRM, 
we invited commenters to suggest additional pre-filing requirements or 
procedures to help settle or narrow disputes, or facilitate the 
compilation and exchange of relevant documentation or other 
information.
    b. Comments. 47. ATSI, NYNEX, and USTA suggest that formal ADR 
efforts be made a prerequisite to filing a complaint, while MCI and 
Sprint oppose such a proposal. MCI, ICG Telecom Group (``ICG''), and 
Sprint suggest that parties be required to begin their information 
exchange before a complaint is filed, in order to prepare for the rapid 
pace of the complaint process. PTG opposes this suggestion, arguing 
that requiring such information exchanges would lead to fishing 
expeditions and raise confidentiality concerns. Bell Atlantic proposes 
that a potential complainant be required to provide the defendant 
carrier with a statement of its claim and specify documents and 
information that it believes would be material to the resolution of the 
dispute, and that the carrier be required to respond in full within a 
reasonable period of time before a complaint is filed. Similarly, CEDRA 
and BellSouth suggest that complainants be required to serve advance 
copies of their complaints on defendant carriers prior to filing such 
complaints with the Commission. Finally, CompTel, Nextlink and various 
cable entities suggest that the Commission offer binding arbitration or 
mediation as an alternative to formal complaints, arguing that 
Commission staff would be more persuasive and knowledgeable than 
outside mediators or arbitrators.
    c. Discussion. 48. We decline to adopt these proposals because, for 
the most part, they raise potential problems that would outweigh their 
potential benefits. We reject suggestions that would impose rigid 
requirements for pre-filing activities. We find that these proposals 
could either stifle the parties' ability to develop creative solutions 
to their differences or delay unnecessarily the filing of complaints, 
or both. For example, we agree with MCI and Sprint that requiring 
formal ADR efforts prior to the filing of a formal complaint could 
permit defendant carriers to delay the filing of formal complaints to 
the detriment of customers and competitors alike. For the same reason, 
we reject the suggestions by MCI, ICG, and Sprint that we should 
mandate the exchange of documents and materials by potential 
complainants and defendant carriers prior to the filing of a formal 
complaint. Although the proposals of Bell Atlantic, BellSouth, and 
CEDRA, to require the exchange of specific information identifying 
claims and key facts in advance of the filing of the formal complaint, 
would promote pre-filing discussions, we conclude that parties should 
be afforded the widest possible latitude in conducting their settlement 
efforts and not be subjected to rigid requirements. We also reject the 
proposals of CompTel, Nextlink, and the cable entities to require the 
Commission to arbitrate or mediate disputes at the request of the 
disputing parties as an alternative to formal complaints. Such a 
requirement would unnecessarily tax the Commission's resources when 
there are many qualified ADR experts outside the Commission. We note 
that Commission staff will work with industry members and formal 
complaint parties to resolve disputes informally, both before and after 
formal complaints have been filed. We see little benefit, however, in 
requiring the staff to conduct such mediation or arbitration efforts in 
all cases.
D. Service
    49. Under section 208 of the Act and the Commission's existing 
complaint rules, the staff is responsible for serving formal complaints 
on defendant carriers. Currently, all formal complaints must be 
initially filed with the Mellon Bank in Pittsburgh, Pennsylvania; 
forwarded by the Bank to the Commission's Secretary; and then 
distributed to the Common Carrier Bureau. The Common Carrier Bureau 
then forwards complaints against common carriers and complaints against 
international telecommunications providers to the Common Carrier 
Bureau's Enforcement Division; complaints against wireless carriers are 
forwarded to the Wireless Telecommunications Bureau. As a result, ten 
days or more may pass before the staff receives official copies of a 
complaint, reviews it for minimum compliance with the rules, and serves 
it on the defendant carrier(s). It has been common for a defendant 
carrier to receive a complaint twenty days after it was filed with the 
Commission. Pleadings filed subsequent to the complaint are currently 
served by regular U.S. mail, which may delay actual receipt of such 
pleadings from three days to a week. Because of the new ninety to 120-
day statutory deadlines, the NPRM proposed to eliminate delays 
associated with the current filing and service procedures by 
streamlining the service process.
    1. Personal Service of Formal Complaints on Defendants. a. The

[[Page 998]]

NPRM. 50. In the NPRM we sought comment on our proposals to modify the 
service of formal complaints. We proposed to authorize or require a 
complainant to effect service simultaneously on the following persons: 
the defendant carrier, the Commission, and the appropriate staff office 
at the Commission, i.e., the Chief, Formal Complaints and 
Investigations Branch, Enforcement Division, Common Carrier Bureau; the 
Chief, Compliance and Litigation Branch, Enforcement and Consumer 
Information Division, Wireless Telecommunications Bureau; or the Chief, 
Telecommunications Division, International Bureau. With regard to 
service on the defendant, we proposed that a complainant would 
personally serve the complaint on an agent designated by the defendant 
carrier to receive such service. We proposed that the answer period 
would begin to run once the complaint has been served by the 
complainant on the defendant.
    51. We also noted that requiring complainants to serve complaints 
directly on defendants would eliminate the staff's initial review of 
the complaint prior to the defendant's receipt of the complaint. To 
alleviate concerns about service of deficient complaints, the NPRM 
proposed to require that parties submit a completed checklist or 
``intake'' form with each copy of the formal complaint to indicate: (1) 
that the complaint satisfies minimum format and content requirements; 
(2) that the complaint meets the various threshold requirements for 
stating a cause of action under the Act and the Commission's rules; and 
(3) the statutory provisions allegedly violated and any applicable 
statutory resolution deadline. We based this proposal on our belief 
that such an intake form could be a useful tool both to speed the 
preparation and filing of complaints and to avoid or reduce the time 
and resources involved in processing procedurally defective or 
substantively insufficient complaints. We further noted that the intake 
form could serve another useful purpose, by quickly identifying for the 
staff and defendant carrier the relevant statutory provisions and any 
associated statutory time constraints.
    b. Comments. 52. The commenters generally support the proposal to 
require parties to serve complaints simultaneously on defendants, the 
Office of the Secretary, and the Bureau responsible for processing the 
complaint. BellSouth, GTE, and CBT, however, are concerned that 
defendants may be required to respond to deficient complaints if the 
Commission eliminates its practice of reviewing complaints prior to 
serving them on defendants. By contrast, MCI argues that Commission 
review of a complaint is unnecessary because a defendant would 
undoubtedly raise the issue if a complaint was deficient. CompTel 
suggests that the Commission send the defendant a notice of receipt of 
the complaint to safeguard against faulty service. BellSouth states 
that section 208(a) mandates that only the Commission may serve 
complaints on defendants, and suggests that the complainant serve the 
defendant with a copy of the complaint and notice of intent to file 
prior to the filing of the complaint with the Commission. AT&T and 
NYNEX state that, while section 208(a) does require the Commission to 
serve complaints on defendants, this requirement is fulfilled by 
allowing complainants to serve complaints on defendants as agents of 
the Commission for that limited purpose only. PTG asks the Commission 
to clarify that personal service is required for the complaint.
    53. Almost all of the commenters, including ATSI, BellSouth, CBT, 
CompTel, GST, GTE, KMC, MFS, and TRA, support the proposal to require 
complainants to submit a completed checklist or ``intake'' form with 
each copy of the formal complaint. ATSI stated that using ``check-off 
boxes'' to clearly indicate the specific complaint category utilized 
would assist all parties and the Commission in determining quickly the 
special standards and applicable deadlines. BellSouth additionally 
suggests that the form include a waiver of the section 271(d)(6)(B) 90-
day resolution deadline. MCI argues that this form would be useless 
because a party filing a defective complaint would be unlikely to 
complete this form correctly.
    c. Discussion. 54. We conclude that complainants shall be required 
to effect personal service of the complaint on the defendant carrier/
designated agent simultaneously with the filing of the complaint with 
the Commission's Secretary, the Chief of the division or branch 
responsible for handling the complaint within the Bureau responsible 
for handling the complaint, and the Mellon Bank. The complainant shall 
serve two copies of the complaint with the Chief of the division or 
branch responsible for handling the complaint within the Bureau 
responsible for handling the complaint. The Chief will then forward one 
of those copies to the defendant, in compliance with the mandate in 
section 208(a) that complaints ``shall be forwarded by the Commission'' 
to the defendant. The allowable time period for filing an answer begins 
to run on the date the complainant serves the complaint on the 
defendant. Because the Common Carrier Bureau coordinates with the 
International Bureau to handle international telecommunications 
complaints, any formal complaint that is filed with the International 
Bureau must also be filed simultaneously with the Chief, Formal 
Complaints Branch, Enforcement Division, Common Carrier Bureau. 
Requiring service of the complaint on the defendant carrier 
simultaneously with filing the complaint with the Commission will 
enable the parties and the Commission to begin prompt resolution of the 
complaint, by eliminating delays that existed under the former rules. 
This requirement satisfies the Commission's goal of expediting the 
processing of formal complaints.
    55. After consideration of commenters' concerns regarding notice to 
the defendant in the event of defective service of the complaint, we 
conclude that the Commission will send each defendant notice of receipt 
of the complaint as a precaution against defective service. Upon 
receipt of the complaint, the Commission shall promptly send notice of 
receipt of the complaint by facsimile transmission to the defendant. In 
addition to mailing a copy of the complaint to the defendant, the staff 
will send to all parties a schedule detailing the date the answer is 
due and the date of the initial status conference. The date of service 
of the formal complaint upon the defendant shall be presumed to be the 
same date as service on the Commission. Where, however, a complainant 
fails to properly serve the complaint on the defendant, the complaint 
will be dismissed without prejudice.
    56. We further conclude that the complainant must file the 
complaint, along with the appropriate fee, with the Mellon Bank on the 
same day that it serves the complaint on the Commission and the 
defendant. Although this requirement was not specifically proposed in 
the NPRM, we find that requiring the complaint to be filed with the 
Mellon Bank on the same day as service on the defendant and the 
Commission is a natural extension of the proposal in the NPRM to 
require simultaneous service of the complaint on the defendant and the 
Commission. Such requirement is further justified by the fact that the 
date on which the complaint is filed with the Mellon Bank is the 
official commencement date of the complaint with the Commission. Thus, 
the date on which the complaint is filed with the Mellon Bank is the 
date on which any statutory deadlines begin to

[[Page 999]]

run and timely prosecution of such complaints requires service on the 
defendant at the earliest date possible. Additionally, requiring 
delivery of the complaint and fee payment to the Mellon Bank by the day 
of service of the complaint on the Commission and defendant will help 
the Commission to determine quickly whether the fee has been properly 
paid. We also require the complainant to attach to each copy of the 
intake form, a photocopy of its fee payment (check, etc.) as well as a 
certificate of service. Attachment of a copy of the fee payment will 
provide some assurance to the Commission and a defendant that payment 
was made. Where a fee is not properly paid, the Commission will notify 
both parties promptly that the complaint has been dismissed without 
prejudice.
    57. BellSouth, GTE, and CBT raise some valid concerns about the 
possibility of defendants having to respond to deficient complaints 
under our new service requirements. To address these concerns, we 
require a complainant to submit a completed intake form with its formal 
complaint to indicate that the complaint satisfies the procedural and 
substantive requirements under the Act and our rules. The completed 
intake form shall identify all relevant statutory provisions, any 
relevant procedural history of the case, and, in the case of a section 
271(d)(6)(B) complaint, whether the complainant desires to waive the 
ninety-day resolution deadline. We disagree with MCI's assertion that a 
complainant who files a defective complaint will probably be unable to 
fill out the intake form properly. Rather, we find that the intake form 
will serve as a checklist to guide complainants who may be unfamiliar 
with the necessary components of a formal complaint and in that way 
reduce the number of defective complaints filed. We conclude further 
that this requirement will permit the Commission to eliminate the delay 
associated with the initial review of a complaint. To the extent that 
frivolous complaints are filed, the intake form requirement will assist 
in weeding out such complaints prior to Commission review. The form 
will identify for the Commission staff any relevant statutory 
provisions and associated deadlines. Furthermore, the staff will be 
alerted if there is relevant procedural history that will require 
review of related non-Commission records by the staff. We note that a 
defendant is not relieved of its obligation to file and serve its 
answer on time by the fact that a complainant failed to correctly 
complete the intake form.
    58. In addition, we reject NAD's proposal to permit service of 
complaints by facsimile transmission because we conclude that service 
of the complaint must be accomplished in the most reliable manner 
possible. Because we are requiring the defendant to submit its answer 
within twenty days of receipt of the complaint, any delay or 
uncertainty in the receipt of the complaint and associated documents 
through facsimile transmission could unduly infringe on the defendant's 
due process rights.
    2. Expediting Service Generally. a. The NPRM. 59. In the NPRM, we 
proposed to require service of all documents filed subsequent to the 
complaint (answer, motions, briefs, etc.) by overnight delivery. 
Alternatively, parties would be permitted to serve pleadings by 
facsimile transmission, to be followed by hard copies sent by regular 
mail delivery.
    60. We further proposed to establish and maintain an electronic 
directory, available on the Internet, of agents authorized to receive 
service of complaints on behalf of carriers that are subject to the 
provisions of the Act and of the relevant Commission personnel who must 
be served. We noted that section 413 of the Act requires all carriers 
subject to the Act to designate in writing an agent in the District of 
Columbia for service of all process. The proposed directory would list, 
in addition to the name and address of the agent, at least one of the 
following: his or her telephone or voice-mail number, facsimile number, 
or Internet e-mail address. We sought comment on this proposal and on 
what information should be included within the service directory.
    61. Finally, we recognized that the practice of routing formal 
complaints against wireless telecommunications providers was unwieldy 
and time-consuming. We noted that under the current rules, wireless 
complaints are routed from the Common Carrier Bureau lock box at the 
Mellon Bank in Pittsburgh to the Commission's Secretary, who forwards 
the complaint to the Formal Complaints and Investigations Branch of the 
Common Carrier Bureau's Enforcement Division, which then reviews and 
forwards the complaints to the Wireless Telecommunications Bureau. 
Therefore, we sought comment on our proposal to revise our rules to 
provide for a separate lock box at the Mellon Bank for the receipt of 
complaints against wireless telecommunications service providers.
    b. Comments. 62. Commenters strongly support these proposals. 
BellSouth suggests that facsimile service would be facilitated by 
requiring pleading signature blocks to include facsimile and phone 
numbers. SWBT additionally suggests that service include delivery by 
certified mail. ICG argues that service should be by hand delivery or 
overnight mail only. GST, KMC, MFS, and NAD suggest permitting service 
by Internet, with NAD particularly encouraging Internet or facsimile 
service of complaints and related documents to facilitate service by 
consumers with disabilities. CBT opposes service by Internet because of 
technical difficulties and problems with verification. CBT asks the 
Commission to clarify that it will take responsibility for updating the 
electronic directory and make allowances for improper service due to 
mistakes in the directory. America's Carriers Telecommunication 
Association (``ACTA'') suggests that carriers be able to designate 
someone other than an agent located in the District of Columbia for 
receipt of service, arguing that limiting service to what in many cases 
will be an ``artificial agent'' in the District of Columbia is 
inefficient in light of the availability of national overnight 
delivery. MCI suggests that a paper directory of service agents be kept 
in the Secretary's office for those parties lacking Internet access.
    c. Discussion. 63. We conclude that parties must serve documents or 
pleadings filed subsequent to the complaint by either hand delivery, 
overnight delivery, or facsimile transmission followed by mail 
delivery. Any facsimile transmission or hand delivery must be completed 
by 5:30 p.m., local time of the recipient, in order to be considered 
served on the date of receipt. Service by overnight delivery will be 
deemed served the business day following the date it is accepted for 
overnight delivery by a reputable overnight delivery service. Although 
we are permitting service of pleadings subsequent to the complaint to 
be by facsimile transmission, we also require that facsimile service be 
accompanied by mailed hard copies to alleviate the effects of possible 
faulty facsimile transmission. These requirements will ensure timely 
and verifiable service. To facilitate facsimile delivery, we require 
pleading signature blocks to include facsimile and telephone numbers, 
as suggested by BellSouth.
    64. We decline to authorize service by Internet at this time 
because we have received insufficient comments on the issue, given the 
significance of permitting electronic filing or service of complaint 
pleadings. We may revisit this issue at a later date, following our 
consideration of possible procedures for

[[Page 1000]]

the electronic filing of documents in rulemaking proceedings in GC 
Docket 97-113.
    65. We also reject SWBT's proposal to deliver pleadings by 
certified mail. Although SWBT presumably offered this suggestion to 
improve verification of service rather than speed of service, we did 
not seek comment on verification procedures in the NPRM because we have 
not found verification of service to be a significant problem.
    66. Although we considered establishing an electronic directory of 
agents designated by carriers to receive service of process, we decline 
to establish such a directory at this time. We have concluded that more 
review is needed to determine the most efficient means for collecting 
the data necessary to establish such a directory. This data collection 
may be combined with other collections of data from common carriers by 
the Commission in the future. The Commission intends to reconsider this 
issue in conjunction with streamlining its other data collection 
procedures.
    67. We recognize the need to provide complainants with the 
information necessary to effect personal service on defendant carriers 
as required by our rules. Accordingly, the Commission will provide 
access to a listing of agents designated by carriers to receive service 
of process in the Office of the Commission Secretary. In order to 
establish this listing, all common carriers are required to designate 
service agents within the District of Columbia, although they may 
additionally identify an alternative service agent outside the District 
of Columbia. For each designated agent for service of process, each 
carrier is required to identify its name, address, telephone or voice-
mail number, facsimile number, and Internet e-mail address if 
available. In addition, the carrier shall identify any other names by 
which it is known or under which it does business, and, if the carrier 
is an affiliated company, its parent, holding, or management company. 
This information shall be provided to the Commission by filing it with 
the Formal Complaints and Investigations Branch of the Common Carrier 
Bureau. Parties are required to notify the Commission within one week 
of any changes in their information. We note that ACTA's proposal to 
permit designation of service agents outside of the District of 
Columbia was based on the incorrect premise that overnight delivery 
would fulfill our requirement of having the complainant personally 
serve the complaint on the defendant. It will not. Only hand delivery 
constitutes personal service for the purposes of our service 
requirement. We note, however, that the complainant is not required to 
hand deliver the complaint to the Commission Secretary, the Chief of 
the division or branch responsible for handling the complaint within 
the Bureau responsible for handling the complaint, or the Mellon Bank.
    68. We establish a separate lock box at the Mellon Bank in 
Pittsburgh for the receipt of complaints against wireless 
telecommunications service providers. Currently, all formal complaints 
against common carriers, including Wireless Telecommunications Bureau 
complaints and International Bureau complaints, are filed in the 
lockbox of the Common Carrier Bureau at the Mellon Bank. Because the 
Common Carrier Bureau coordinates with the International Bureau to 
handle international telecommunications complaints, filing the 
International Bureau's complaints in the Common Carrier Bureau's 
lockbox does not delay the complaint process. Providing the Wireless 
Telecommunications Bureau with its own lockbox, however, will both 
expedite the delivery of the complaint and verification of fee payment 
to the Wireless Telecommunications Bureau, and relieve the Common 
Carrier Bureau of the responsibility of reviewing wireless complaints 
for routing to the Wireless Telecommunications Bureau.
E. Format and Content Requirements
    69. The short resolution deadlines contained in the Act place 
greater burdens on parties to provide facts and legal arguments in 
their respective complaints and answers to support or defend against 
allegations of misconduct by common carriers. Similarly, the short 
resolution deadlines place greater demands on the Commission and its 
staff to expedite the review and disposition of these complaints.
    70. The Commission's rules have always required fact-based 
pleadings. That is, all complaints, answers and related pleadings are 
required to contain complete statements of fact, supported by relevant 
documentation and affidavits. In actual practice, however, many parties 
file what amount to ``notice'' pleadings similar to filings that would 
be made in federal district court. Both complainants and defendants 
have placed substantial reliance on self-executing discovery and 
additional briefing opportunities to present their respective claims 
and defenses to the Commission.
    71. A principal goal of this rulemaking that was set forth in the 
NPRM was to improve the utility and content of the complaint and answer 
by requiring complainants and defendants to exercise diligence in 
compiling and submitting full legal and factual support in their 
initial filings with the Commission. The proposals in the NPRM were 
designed to promote fact-based pleadings and to shift the focus of 
fact-finding away from costly, time-consuming discovery and towards the 
pre-filing and initial complaint and answer periods.
    1. Support and Documentation of Pleadings. a. The NPRM. 72. In the 
NPRM, we proposed to require that any party to a formal complaint 
proceeding must, in its complaint, answer, or any other pleading 
required during the complaint process, include full statements of 
relevant facts and attach to such pleadings supporting documentation 
and affidavits of persons attesting to the accuracy of the facts stated 
in the pleadings. This would effectively prohibit defendants from 
making general denials in their answers. We proposed to require a 
complainant to append to its complaint documents and other materials to 
support the underlying allegations and requests for relief, and 
tentatively concluded that failure to append such documentation would 
result in summary dismissal of the complaint. Although our rules 
already required each complainant to provide a complete statement of 
the facts and description of the nature of the alleged violation, we 
tentatively concluded that we should require more specifically that a 
complainant include a detailed explanation of the manner in which a 
defendant has violated the Act, Commission order, or Commission rule in 
question in the formal complaint. Such a rule, for example, would 
require a complainant alleging that a BOC has ceased to meet any of the 
conditions that were required for approval to provide interLATA 
services pursuant to section 271(c)(2)(B) of the Act to include in its 
complaint a detailed explanation of the manner in which the defendant 
BOC has ceased to meet such condition or conditions, along with any 
associated documentation. The NPRM also sought comment on whether we 
should prohibit complaints that rely solely on assertions based on 
``information and belief.'' We stated that, while assertions based on 
information and belief may not be useful in deciding on the merits of a 
complaint, prohibiting such assertions might inhibit a complainant's 
ability to present claims of unlawful behavior against carriers under 
applicable provisions of the Act.
    73. We proposed to require the complaint, answer, and any 
authorized reply include two sets of additional information: (1) the 
name, address, and

[[Page 1001]]

telephone number of each individual likely to have discoverable 
information relevant to the disputed facts alleged with particularity 
in the pleadings, identifying the subjects of information; and (2) a 
copy of, or a description by category and location of, all documents, 
data compilations, and tangible things in the possession, custody, or 
control of the party that are relevant to the disputed facts alleged 
with particularity in the pleadings. We noted that this proposal, which 
would enable the Commission and parties to identify quickly sources of 
information, comported with an analogous requirement under the Federal 
Rules of Civil Procedure. We also sought comment on what benefits, if 
any, would be realized by the parties or the Commission by requiring 
the identified relevant documents to be filed with the Commission along 
with the complaint and answers.
    74. The NPRM proposed to require parties to append copies of 
relevant tariffs or tariff provisions to their complaints, answers, and 
replies, noting that the current rules only encourage parties to append 
such tariffs. The NPRM also proposed to modify the rules to include 
expressly pleadings filed solely to effect delay in the prosecution or 
disposition of a complaint as filings for improper purpose within the 
meaning of Sec. 1.734 of our rules.
    b. Comments. 75. Most commenters, including AT&T, BellSouth and 
TRA, strongly support the proposals to require all pleadings to include 
complete facts and documentation. AT&T states that supporting 
affidavits and documentation are ``critical to understanding the 
parties' positions on the matters at issue.'' NYNEX agrees with the 
observation in the NPRM that ``[t]ypically, complainants file `bare 
bones' complaints with numerous allegations, but with little or no 
documentation'' and that the proposal would allow the Commission to 
``process complaints more quickly, since it would have access to the 
relevant information from the beginning[.]'' BellSouth suggests that 
the Commission impose requirements similar to its rules for pole 
attachment complaints which require detailed, fact-based complaints, 
supported by extensive documentation and verifications detailing the 
alleged violations.
    76. Several commenters, including CBT, NYNEX, and PTG, only support 
our proposals regarding complaints, and oppose our proposals regarding 
answers. They state that the format and content proposals for 
complaints are not overly burdensome because complainants control the 
timing of the filing of the complaint and can gather information prior 
to bringing the complaint. They oppose the format and content proposals 
with regard to answers, however, because they argue that the 
requirements will be too onerous for defendants who will have little 
time to respond with such specificity in their answers, especially in 
light of our proposal to reduce the time to file answers to twenty 
days.
    77. AT&T agrees that general denials should be prohibited. MCI, 
however, contends that general denials should be permitted where a 
complainant has been uncooperative with the defendant prior to the 
filing of the complaint and the defendant lacks the necessary 
information upon which to respond to the complaint in detail. The cable 
entities state that general denials should be permitted in accordance 
with the Federal Rules of Civil Procedure (``FRCP''), subject to Rule 
11 sanctions, if the party intends in good faith to controvert all the 
averments of a pleading or specific paragraph.
    78. AT&T and PTG endorse the proposal to prohibit assertions based 
solely on information and belief, stating that it would help to reduce 
the number of frivolous complaints, including those brought to harass 
defendants or as fishing expeditions. Many commenters, however, 
including APCC, Bell Atlantic, CompTel, MCI, NYNEX, NAD, TRA, and 
Teleport Communications Group (``TCG''), argue that allowances should 
be made for situations in which a complainant will have difficulty 
obtaining access to information that may be in the sole possession of a 
defendant or third parties who might be unwilling to relinquish such 
information. APCC, GTE, ICG, and TCG propose that information and 
belief allegations should be permitted if the complainant pleads with 
particularity facts that would establish a credible case, or supplies 
affidavits stating that the necessary information is in the possession 
of the defendant or an uncooperative third party. ATSI, KMC, and MFS 
oppose the proposal because of the potential hardship on small or 
emerging businesses. APCC and ICG also seek clarification on whether 
the Commission's proposal is to prohibit complaints based solely on 
information and belief, or only those allegations based solely on 
information and belief.
    79. AT&T and PTG note that the identification of individuals with 
discoverable information should not include phone numbers because such 
individuals should be contacted only through counsel. Regarding the 
document production proposal, Bechtel & Cole and Ameritech support 
requiring all relevant documents to be produced to the opposing party 
and the Commission. Most commenters, however, such as CBT, BellSouth, 
MCI, the cable entities, and PTG, express concern that the information 
produced might be overbroad and argue that requiring the filing of 
numerous documents with only tangential relevance to the dispute is 
likely to overwhelm the Commission with materials of marginal or no use 
in resolving the complaint. CBT notes that many federal courts have 
opted out of compliance with the federal rule and that it would be more 
efficient to respond to discovery requests than to identify and gather 
the universe of available information. MCI questions whether this 
requirement will be useful, stating that a party would identify as 
relevant only those documents already attached as documents upon which 
that party intends to rely and that party would be unable to guess at 
what materials another party might find relevant. ACTA, BellSouth, and 
GTE propose requiring parties to file only the documents relied upon 
concurrently with the complaint and answer and any subsequently filed 
brief, rather than requiring the production of all potentially relevant 
documents. GST, KMC, and MFS argue that, to prevent the copying of 
millions of unnecessary documents, parties should only be required to 
identify documents and provide the opportunity to copy such documents. 
AT&T supports the identification or attachment of documents to 
complaints and answers only with respect to section 271(d)(6)(B) 
complaints; otherwise, AT&T argues, all document production should 
occur at the initial status conference. CBT, NYNEX, and SWBT express 
concern that defendants will not have time to execute document 
identification and production of this broad scope. Bell Atlantic states 
that, because the Commission seldom permits depositions or broad 
document searches, the provision of this information would rarely be 
utilized. PTG and USTA suggest that parties be allowed to amend their 
information designations without leave. Several parties, including MCI, 
express doubt that such information disclosure requirements could 
entirely substitute for discovery.
    80. All commenters who discussed the proposal to require parties to 
append copies of relevant tariffs or tariff provisions to their 
complaints, answers, and replies support the proposal. No parties 
commented on the proposal, to include expressly within the meaning of

[[Page 1002]]

Sec. 1.734 of our rules, that pleadings filed solely to effect delay in 
the prosecution or disposition of a complaint are filings for improper 
purpose.
    c. Discussion. 81. We conclude that the complaint, answer, reply, 
and any other required pleading are required to include full statements 
of relevant, material facts with supporting affidavits and 
documentation. This requirement will improve the utility and content of 
pleadings by requiring parties to plead their cases with specific, 
material facts and supply documentation early in the complaint process. 
In order to speed resolution of all formal complaints, the Commission 
must adhere to the fact-pleading process. Such quick resolution of 
certain formal complaints is necessitated by the Act. Further, such 
quick resolution of all formal complaints where possible is consistent 
with the overall goals of the Act to promote and protect competition in 
the marketplace.
    82. We conclude that complainants shall be required to provide, in 
their complaints, a detailed explanation of the manner in which a 
defendant has violated the Act, Commission order, or Commission rule in 
question. Substantive claims, or ``counts,'' based solely upon 
information and belief shall be generally prohibited. A complainant may 
be permitted, however, to file claims based on information and belief 
if such claims are made in good faith and the complainant attaches an 
affidavit to the complaint that explains why the supporting facts could 
not be reasonably ascertained. Our goal is to discourage complainants 
from filing claims based solely upon information and belief without 
firsthand knowledge of the violation alleged. Because quick resolution 
of formal complaints is essential to the Commission's goal of fostering 
and preserving competition in today's deregulated telecommunications 
markets, strict adherence to the Commission's fact pleading 
requirements is necessary. A general rule prohibiting assertions based 
solely upon information and belief will ensure that complainants 
exercise diligence in preparing and submitting allegations of 
misconduct against a carrier. We have considered, however, commenters' 
concerns that complainants may not always have in their possession the 
information that would substantiate their claims and that such 
information may be in the sole possession or control of the defendant 
carrier or of uncooperative third parties. Each complainant has the 
general duty to provide, whenever possible, full statements of fact 
supported by relevant documentation and affidavits. Complainants should 
not, however, be penalized or prevented from filing a formal complaint 
in those situations in which the necessary information could not have 
been reasonably obtained prior to the filing of the complaint. We 
conclude that this requirement strikes an equitable balance between the 
Commission's need for complete information as early as possible, and 
the complainant's potential difficulty in obtaining that information.
    83. We disagree with the comments of the cable entities that 
defendants should be permitted to make general denials if the defendant 
intends in good faith to controvert all the averments of a pleading or 
specific paragraph. Requiring the answer to include full statements of 
relevant, material facts with supporting affidavits and documentation 
will prohibit defendants from making general denials in their answers. 
Specific denials supported by facts and documentation will aid the 
Commission staff in understanding the nature of the dispute and 
facilitate its resolution. Formal complaints often raise questions 
about a rate, charge, term or condition of a particular service 
offering. In our staff's experience, defendant carriers have the 
requisite knowledge to specifically deny a complainant's allegations 
about such charges, practices or service requirements in the vast 
majority of cases. A diligent defendant should almost always have 
sufficient information with which to make specific denials. We conclude 
further that, contrary to MCI's suggestion, the benefits to speedy 
resolution of a complaint that arise from specific denials outweigh the 
potential benefit of allowing general denials as a mechanism to enforce 
compliance with the pre-filing activities requirements.
    84. We conclude that parties must include in the complaint, answer, 
and any necessary reply, an ``information designation'' that identifies 
individuals known or believed by the parties to have knowledge about 
the matters in dispute. This information designation must identify such 
individuals by name and business or other address and include a 
description of the information possessed by that source and its 
relevance to the dispute. We conclude that such mandatory information 
designation will simplify, expedite, and, in some cases, eliminate the 
need for time-consuming discovery. We agree with AT&T and PTG that 
parties should not be required to supply the phone numbers of 
individuals who should only be contacted through counsel. Therefore 
parties are required to identify in the complaint, answer, and any 
necessary reply only the name and address of each individual likely to 
have discoverable information relevant to the disputed facts alleged 
with particularity in the pleadings.
    85. We conclude further that parties shall also be required to 
identify in their information designations all documents in their 
possession or control believed to be relevant to the matters in 
dispute, including an inventory that contains for each document the 
date, the source, the intended recipient(s), and a description of the 
document's relevance to the dispute. We disagree with MCI's assertion 
that parties will be unable to guess what kinds of material the 
opposing party would regard as relevant. In most cases, parties to 
formal complaints before the Commission are sophisticated business 
entities who fully understand the issues before them and know which 
documents in their possession or control are relevant to those issues. 
We find CBT's arguments that many federal courts have opted out of 
compliance with this rule's equivalent in the FRCP unpersuasive. We 
note that, while we looked to the FRCP for some guidance during this 
proceeding, that guidance was limited by the many differences between 
federal court proceedings and Commission proceedings. Not only does the 
Commission require fact-based pleadings, but certain of the 
Commission's formal complaint proceedings are subject to statutory 
resolution deadlines shorter than any deadline applicable to the 
federal courts. Although some federal courts have opted out of 
compliance with FRCP 26(a)(1), we adopt its equivalent for Commission 
proceedings because it will aid us greatly in meeting statutory 
deadlines under our individual procedural constraints as well as in 
expediting the resolution of competitive issues that affect the 
telecommunications marketplace.
    86. We disagree with CBT's statement that it would be more 
efficient to have parties respond to discovery requests than to have 
parties identify all relevant documents in their information 
designations. We find that requiring such information designations 
early in the dispute will facilitate the Commission's ability to focus 
on the facts and issues in the case quickly. Having such information on 
hand will further expedite the Commission's consideration of the 
necessity of any discovery requests early in the proceeding. We also 
disagree with the suggestions by PTG and USTA to permit parties to 
amend their information designations without leave. We conclude that 
this would run contrary to

[[Page 1003]]

our objective of procuring as much information as early as possible. 
The allowance of amendments would reduce parties' incentives to file 
thorough information designations with their complaints, answers, and 
replies because they will rely on their right to supplement their 
designations at a later time. Accepting routinely late-obtained 
information will only delay the resolution of complaints. We do 
recognize, however, that parties may occasionally, after submitting 
their initial pleadings, discover information that should be included 
in their information designations. Accordingly, a party may submit a 
request for permission to amend its information designations, along 
with an explanation of why the information was not designated at the 
time of the filing of the complaint, answer, or reply.
    87. We do not find it necessary to require the production or 
exchange of all documents identified as relevant to a dispute as a 
matter of course in all cases. It will be helpful and often necessary, 
however, in light of the Act's complaint resolution deadlines and the 
Commission's goal of expediting the resolution of all complaints, to 
have certain documents identified by the parties readily accessible to 
the staff and opposing parties. Therefore we require parties to file 
concurrently with the complaint, answer, and any necessary reply, only 
those documents and affidavits upon which they intend to rely to 
support their respective claims and defenses. Required attachments 
include relevant tariffs or tariff provisions where applicable. Because 
it is in each party's self-interest to support its most persuasive 
arguments, we conclude that it is reasonable to rely on each party's 
judgment to identify the key documents in the dispute. We acknowledge 
that a party may be reluctant to divulge information that would weaken 
its case, and, therefore, would probably not attach such information to 
its complaint, answer, or reply. We conclude that this concern can be 
adequately addressed by requiring each party to identify all such 
information in their information designations, however, and opposing 
parties will therefore be aware of, and have subsequent opportunity to 
request, such information at the initial status conference.
    88. We conclude that each party shall be required to attach 
supporting affidavits and documents to any allowed briefs, along with a 
full explanation in the brief of the material's relevance to the issues 
and matters in dispute. Such attachments shall have been previously 
identified in the parties' information designations, but need not have 
been attached to the complaint, answer, or any necessary reply. We find 
that this strikes an appropriate balance between the needs of the 
Commission and opposing parties to have readily available information 
and the hardships of producing unnecessary materials. We agree with PTG 
and USTA that parties may, despite good faith efforts to file complete 
submissions, later acquire documents or information upon which they 
wish to rely but which they did not identify as relevant information in 
their information designations. Therefore we permit a party to attach 
such subsequently obtained documents, upon which the party intends to 
rely, to any subsequent brief filed in the matter, provided it is 
accompanied by a full explanation in the brief of the material's 
relevance to the issues and matters in dispute and why such material 
was not identified in the party's information designation.
    89. We disagree with AT&T's suggestion that all document production 
should occur at the initial status conference, except in section 
271(d)(6)(B) complaints under 90-day resolution deadlines. This 
document production requirement is intended to work in conjunction with 
the other requirements adopted in this rulemaking, including the 
requirement that parties discuss, before the initial status conference, 
issues such as settlement prospects and stipulations of facts and 
disputed facts. It is essential that parties be able to review the 
documents produced with the initial pleadings in order to meet and 
discuss these issues knowledgeably prior to the initial status 
conference. Furthermore, we conclude that requiring the identification 
of individuals and the identification, inventory, and production of 
documents will facilitate the staff's ability to require further 
disclosure of information about individuals with relevant information 
and/or further production of documents when necessary.
    90. We are not persuaded by the arguments of some commenters, such 
as CBT, NYNEX, PTG, and SWBT, that twenty days is an insufficient 
amount of time in which to prepare answers with the level of 
information contemplated under these rules. We do not view defendants 
as having only twenty days in which to prepare their answers. The 
pleading requirements are intended to work in conjunction with the pre-
filing requirements. Thus, by the time parties reach the stage of 
participating in a formal complaint before the Commission, settlement 
talks will have narrowed the number and scope of issues in dispute, and 
parties will have already commenced the collection and/or exchange of 
relevant information that will be used to substantiate the defendant's 
answer. We conclude that the imposition of these format and content 
requirements on defendants is not unduly burdensome, particularly in 
light of Congress' clear intent to expedite resolution of complaints to 
promote the competitive goals of the Act.
    91. We also disagree with Bell Atlantic that the information 
produced would only be useful for depositions or broad document 
searches, which are seldom permitted by the Commission. Early 
identification of individuals knowledgeable about the matters in 
dispute will be an important tool for the parties and the staff, 
particularly in those cases where additional affidavits or other forms 
of factfinding become necessary. Given our experience, and in light of 
the short complaint resolution deadlines, we conclude that it is 
necessary and appropriate to require parties to identify knowledgeable 
individuals and potentially relevant documents early in the complaint 
process.
    92. We also conclude that pleadings filed solely to effect delay in 
the prosecution or disposition of a complaint are filings for improper 
purpose within the meaning of Sec. 1.734 of our rules. No commenters 
opposed this proposal. Adoption of this definition will work in 
conjunction with the new rules to further deter parties from filing 
unnecessary pleadings in formal complaints before the Commission.
    2. Waivers for Good Cause Shown. a. The NPRM. 93. In the NPRM, we 
recognized that many of the proposed pleading requirements could be 
burdensome on some individuals or parties, particularly those desiring 
or compelled to proceed without the assistance of legal counsel due to 
financial and other reasons. Therefore, we proposed to waive format and 
content requirements for complaints, answers, and replies upon an 
appropriate showing of financial hardship or other public interest 
factors. We tentatively concluded that this waiver provision would help 
to ensure that full effect is given to the provision in section 208 of 
the Act that ``any person, any body politic, or municipal organization, 
or State Commission,'' may complain to the Commission about anything 
``done or omitted to be done'' by a common carrier in contravention of 
the Act. We sought comment on this proposal and tentative conclusion, 
as well as on what standards should be

[[Page 1004]]

used to determine ``good cause'' for waiving format and content 
requirements.
    b. Comments. 94. All parties commenting on this proposal support 
it. APCC and NYNEX suggest that waivers should be granted primarily for 
financial hardship or public interest reasons and suggest specific 
revenue or asset levels to define ``financial hardship.'' ATSI argues 
that complainants alleging violations of section 260, regarding the 
provision of telemessaging service, should not have to make special 
requests to receive good cause waivers. GST, KMC, MFS, and USTA suggest 
that the Commission issue form complaints and model pleadings that pro 
se complainants could either fill out or follow. GTE warns against 
routine granting of waivers. The NAD suggests establishing an ombudsman 
within the Commission to assist with accessibility complaints.
    c. Discussion. 95. We conclude that parties may petition the staff 
for waivers of the format and content requirements for complaints, 
answers, and any authorized replies. Such waiver requests shall be 
considered on a case-by-case basis and may be granted upon an 
appropriate showing of financial hardship or other public interest 
factors. We note this waiver provision will work in conjunction with 
the Commission's existing general authority to waive any provision of 
the rules on its own motion or on petition if good cause is shown. The 
discretion to grant waivers of the format and content requirements 
based on financial hardship and other public interest factors will 
ensure, pursuant to section 208, that ``any person'' has the right to 
complain to the Commission about acts or omissions by a carrier that 
contravene the Act. For this reason, we do not agree with APCC or NYNEX 
that financial hardship should be determined solely based on set 
revenue or asset levels. The range of potential complainants under 
section 208 is broad and may include individuals, state commissions, 
municipalities, associations, and other entities of all forms and 
sizes. Likewise, the size and makeup of defendant carriers will vary 
greatly. Thus we conclude that waiver determinations should be made on 
a case-by-case basis. The Commission shall make every effort to apply 
its discretion in a consistent and fair manner to strike an appropriate 
balance between strict compliance with the rules and the needs of 
certain parties for more lenient requirements and timetables. 
Furthermore, the Commission shall have discretion to waive or modify 
some or all of its rules as appropriate when a waiver is granted for 
good cause shown. For example, if the Commission grants a waiver of the 
document production requirements to a party who demonstrates financial 
hardship, the Commission may establish an appropriate alternative 
method for review and production of documents in that matter.
    96. We find that Sec. 1.721(b) of the rules contains a suggested 
format for formal complaints that is clear and explicit and that no 
further form complaints or model pleadings for pro se complainants are 
necessary. Furthermore, the Enforcement Division of the Common Carrier 
Bureau currently provides, via the Internet, direct mailings, and 
public reference room access, a fact sheet designed to instruct 
consumers on how to file a formal complaint with the Commission. 
Finally, we conclude that the range of subjects that could conceivably 
be contained within a pleading is too broad for a model pleading form 
to be of much utility to pro se parties.
    97. We decline to address in this proceeding NAD's proposal to 
establish a Commission ombudsman to assist with accessibility 
complaints in this proceeding. Such a proposal should be addressed in 
our section 255 implementation rulemaking, so as to permit the 
Commission to take a comprehensive approach to implementation of 
section 255.
F. Answers
    1. Reduction of Time to File Answers. a. The NPRM. 98. In the NPRM 
we proposed to reduce the permissible time for a defendant to file an 
answer to a complaint from thirty to twenty days after service or 
receipt of the complaint. We tentatively concluded that this reduction 
was consistent with the changes we proposed regarding the form and 
content of pleadings and would not unduly prejudice the rights of any 
defendant. We further tentatively concluded that this reduction in time 
to answer struck the appropriate balance in distributing the burdens of 
compliance with the new formal complaint resolution deadlines among the 
complainants, defendants and the Commission.
    b. Comments. 99. The majority of commenters, including AT&T, Bell 
Atlantic, CBT, CompTel, the cable entities, MCI, TRA, and USTA support 
this proposal. Ameritech, BellSouth, GTE, PTG, and SWBT contend, 
however, that because complainants will have months to prepare their 
complaints, requiring defendant carriers to submit detailed responses 
with full legal and factual support within a twenty day window would be 
unfair and unreasonably burdensome in most cases. PTG suggests that 
defendants be required to file their answers within twenty days only in 
complaints filed pursuant to section 271(d)(6)(B). ACTA and USTA 
suggest that defendants be permitted to supplement their answers at a 
later time.
    c. Discussion. 100. We conclude that a defendant shall be required 
to file its answer to a complaint within twenty days after receipt of 
service of the complaint by the complainant. We find that reducing the 
time in which to file an answer is necessary in light of the 
Congressional intent to expedite the resolution of complaints alleging 
anti-competitive behavior by defendant carriers. We disagree with 
commenters who assert that defendant carriers will be overly burdened 
by having to file answers that comply with the format and content 
requirements within twenty days from the date of service. As stated 
earlier, we view the defendants as having far more than twenty days in 
which to prepare their answers because the pre-filing and format and 
content requirements adopted in this proceeding are intended to work in 
conjunction with the reduction in time to file an answer. The pre-
filing requirements will alert the defendant as to the basis of the 
dispute. The actions taken by a defendant in participating in good 
faith settlement negotiations should require the same collection of 
information and documents that will be necessary to support its answer 
in compliance with the format and content requirements. The requirement 
of fully supported and thoroughly prepared complaints, furthermore, 
will facilitate a defendant carrier's ability to prepare a full 
response to a complaint within the twenty day period. Such pre-filing 
and format and content requirements will eliminate any need to allow 
defendants to supplement their answers. Permitting defendants to 
supplement their answers routinely would only encourage defendants to 
submit incomplete answers.
G. Discovery
    101. The NPRM sought comment on a variety of ways to modify the 
discovery process in light of the new statutory deadlines. Discovery is 
inherently time-consuming and often fails to yield information that 
aids in the resolution of a complaint. The NPRM, in conjunction with 
other proposals designed to improve the content and utility of the 
complaint, answer, and related pleadings, sought comment on discovery 
proposals that would balance the parties' legitimate need for discovery 
with the twin goals of (1)

[[Page 1005]]

meeting statutory resolution deadlines, and (2) facilitating prompt 
resolution of all formal complaints.
    1. Permissible Requests for Discovery. a. The NPRM. 102. In our 
experience, discovery has been the most contentious and protracted 
component of the formal complaint process. In the NPRM, we stated that 
one of the key elements to streamlining the enforcement process was to 
maximize staff control over the discovery process. We stated our 
intention to examine carefully what role, if any, discovery should 
continue to play in resolving formal complaints, and sought comment on 
a range of options to either eliminate or modify the current discovery 
process.
    103. For our first approach, we sought comment on the benefits and 
drawbacks of eliminating the self-executing discovery permitted under 
our current rules by prohibiting discovery as a matter of right. This 
proposal placed the emphasis of developing facts and arguments at the 
complaint and answer stages of the proceeding, rather than on discovery 
and subsequent briefing opportunities. Under this proposal, if the 
record presented through such pleadings failed to provide a basis for 
resolving disputes over material facts or was otherwise insufficient to 
permit our resolution of a complaint, the staff would have the 
discretion to authorize limited discovery at the initial status 
conference, that would be held shortly after receipt of the defendant's 
answer to the complaint. We sought comment on various aspects of 
eliminating automatic discovery, including whether discovery was 
necessary in all cases, whether such a rule would pose a hardship for 
any particular segment of complainants, and what standards should apply 
in the event that discovery was authorized by the staff.
    104. For our second alternative approach, we sought comment on the 
benefits and drawbacks of a proposed rule that would limit self-
executing discovery to something other than the thirty written 
interrogatories authorized under the current rules. We asked parties to 
comment on whether a more limited form of discovery as a matter of 
right would accommodate a party's ability, where necessary, to identify 
and present to the Commission material facts that may be in the 
possession or control of the other party; whether allowing a limited 
amount of discovery as a matter of right might decrease the staff's 
burden in deciding discovery requests on a case-by-case basis; and 
whether limiting discovery in this manner would detract from full 
compliance with our rules regarding the level of detail that should be 
offered in support of complaints and answers. Pursuant to this 
approach, the staff would permit additional discovery only in 
extraordinary cases. We sought comment on various aspects of this 
approach, including whether a reduction in the number of allowable 
written interrogatories would be appropriate, and whether 
interrogatories should be limited to questions designed to illuminate 
specific factual assertions or denials.
    105. In our third alternative approach, we sought comment on 
continuing to allow some limited discovery as a matter of right, but 
allowing Commission staff to set limits on the scope of that discovery 
and to set specific timetables for such discovery. We noted that 
authorizing the staff to limit the scope of the written interrogatories 
could be an effective deterrent to attempts by parties to use discovery 
for purposes of delay or to gain tactical leverage for settlement 
purposes. In conjunction with this approach, we proposed to require 
that objections to interrogatories be filed by the date of the initial 
status conference, thereby enabling staff to rule on such objections at 
that time. We noted that under this proposal, extensions of time to 
initiate limited discovery and file objections and motions to compel 
would be granted only in extraordinary circumstances.
    b. Comments. 106. The majority of commenting parties argue that the 
Commission should continue to allow discovery as a matter of right. 
CBT, ICG, and MCI argue that eliminating discovery as a matter of right 
will cause delay due to the fact that motions requesting discovery will 
almost always be filed and ICG argues further that such motions may 
produce inconsistent discovery rulings. PTG argues that the prohibition 
of discovery would inhibit the development of facts. Bechtel & Cole 
argue that the right to discovery is necessary because defendants have 
the power to protect information in their sole possession. APCC, 
CompTel and TRA argue that discovery is especially necessary where the 
defendant has sole possession of the information a complainant needs to 
make its case, such as in the case of allegations of cross-subsidies or 
discrimination. ACTA and CompTel argue that due process requires that a 
complainant be able to direct its case as it sees fit.
    107. Parties objecting to the elimination of discovery as a matter 
of right propose several ways to streamline the discovery process. PTG 
and TCG suggest that the Commission could limit discovery to twenty 
written interrogatories, while USTA and GTE suggest that fifteen 
interrogatories would be the appropriate number. The cable entities, 
however, suggest allowing thirty discovery requests, including 
interrogatories, requests for production of documents, and requests for 
physical inspection of materials and facilities, to be filed ten days 
after service of the complaint, an additional fifteen such discovery 
requests to be filed within five days of the filing of the answer, and 
allowing parties to request additional discovery thereafter. The cable 
entities argue that the certainty of prompt resolution of discovery 
disputes will discourage parties from making frivolous requests or 
objections.
    108. A number of the parties that oppose the elimination of 
discovery as a matter of right suggest that discovery disputes should 
be resolved at the initial status conference. Several parties argue 
that it would be useful for Commission staff to use the initial status 
conference to control the scope and/or scheduling of discovery. U S 
West and TRA, however, argue that discovery should be limited by the 
staff only with regard to timetables. TRA states that even Rule 26 of 
the FRCP provides for traditional discovery, in addition to voluntary 
disclosure, and states further that Commission staff should not control 
the prosecution of an action. MCI suggests that requiring discovery to 
be discussed at the initial status conference will help Commission 
staff maintain control over the discovery process, although MCI asserts 
that the proposed timing of the initial status conference is too early 
in formal complaint proceedings to rule on objections to discovery.
    109. To promote the resolution of discovery disputes at the initial 
status conference, several parties argue that discovery requests and 
objections thereto should be served and filed prior to the initial 
status conference. MCI argues, however, that it would be unfair to 
complainants to require discovery requests to be filed with complaints 
and answers because the defendants would be able to formulate their 
requests after seeing the complaint, while the complainants would be 
required to formulate their requests prior to seeing the answer. 
CompTel argues that the proposed timetables for objecting to 
interrogatories provides insufficient time for parties to review the 
interrogatories, and that therefore parties will always file objections 
to interrogatories rather than answer them. CompTel suggests instead 
that parties be required to respond promptly to interrogatories for 
which their objections are denied. While they support retaining 
discovery as a matter

[[Page 1006]]

of right, GST, KMC and MFS argue that interrogatories should be 
prohibited or limited because they are often useless. If allowed, 
interrogatories should not be served until after the parties file their 
joint statement of stipulated facts and key legal issues, to facilitate 
the targeting of disputed areas. APCC suggests that the Commission 
require early discovery, including expedited rulings on discovery 
disputes.
    110. GTE, MCI, Nextlink and TCG argue that discovery as a matter of 
right is necessary because all prior disclosures are ``voluntary'' and 
parties would disclose only those facts solely in their possession that 
are most favorable to their case. ICG argues that the absence of 
discovery as a matter of right would preclude parties from checking the 
accuracy of their opponent's disclosures. TRA is concerned that 
elimination of discovery as a matter of right would result in fewer 
complaints being filed with the Commission because injured parties 
would lack access to information.
    111. AT&T, BellSouth, NYNEX, and SWBT argue that there should be no 
discovery as a matter of right. AT&T argues that abuses will continue 
to occur if parties are entitled to a fixed number of interrogatories. 
BellSouth argues that full discovery is always available in federal 
court. MCI counters this argument by asserting that discovery should 
not be the exclusive province of federal courts because courts often 
make primary jurisdiction referrals to the Commission in section 207 
cases. SWBT's support of the elimination of discovery is contingent 
upon two requirements: (1) providing defendants with the right to 
remove a formal complaint proceeding to federal court, and (2) a 
complete prohibition on motions for discovery to prevent the routine 
filing of such motions. TRA opposes SWBT's suggestion that the 
Commission provide defendants with the right to remove formal 
complaints to federal court because it argues that defendants would use 
such a procedure to their tactical advantage to avoid expedited 
resolution.
    112. SWBT argues that discovery is not needed because parties do 
not have a right to file a formal complaint and then use discovery to 
determine if a claim exists. SWBT suggests that parties be required to 
certify that they engaged in good faith discovery discussions and 
exchanges prior to the filing of the complaint.
    113. AT&T and NYNEX argue that the Commission should control all 
discovery, including the scope, timing and number of interrogatories, 
and issue discovery rulings at the initial status conference. NYNEX 
proposes that parties be required to propound up to thirty 
interrogatories with the complaint and answer and file any opposition 
to such discovery five days prior to the initial status conference. 
AT&T argues that discovery requests in addition to interrogatories 
should be (1) only allowed in extraordinary circumstances, (2) 
requested at the initial status conference, and (3) discussed with the 
opposing party prior to the filing of the motion requesting such 
discovery, with any opposition to such motion due in five days.
    114. AT&T suggests that responses to interrogatories should be 
filed with the Commission. APCC suggests that a ``good cause waiver'' 
should be available to grant relief to parties from discovery 
limitations. Ameritech suggests, and BellSouth concurs in its Reply 
comments, that the Commission implement procedures such as those 
contained in section 252(b)(2) of the Act, that are applicable to 
compulsory arbitration of interconnection disputes. GST, KMC and MFS 
suggest the implementation of mandatory ``meet and confer'' conferences 
between the parties to address procedural issues and potential disputes 
prior to the initial status conference. AT&T supports the meet and 
confer concept. CBT opposes mandatory meet and confer conferences, 
arguing that the Commission should not be adding unnecessary 
requirements for the parties to fulfill. ICG suggests that the 
Commission make clear that it will not tolerate form objections and 
answers. In light of the Commission's proposals to permit 
interrogatories only when it determines such discovery is appropriate, 
AT&T suggests deleting Sec. 1.729(e) of the Commission's rules because 
it would be superfluous.
    c. Discussion. 115. For the reasons discussed below, we eliminate 
the rule authorizing the parties to initiate self-executing discovery. 
In its place, we have adopted rules and policies that carefully balance 
the rights of the parties and the need to expedite the resolution of 
complaints in a number of important aspects. These new rules: (1) 
require complainants and defendants to exercise diligence in compiling 
and submitting facts to support their complaints and answers; (2) 
discourage reliance on the often protracted discovery process as a 
means to identify or develop information needed to support a complaint 
or answer; (3) give parties an opportunity to make their cases for or 
against limited discovery early in the proceedings; (4) reduce the need 
for time-consuming motions to compel; (5) provide Commission staff with 
more control over the discovery process; and (6) limit each party's 
ability to use discovery for delay or other purposes unrelated to the 
merits of the dispute. The 1996 Act imposed both statutory deadlines on 
certain complaints and an overall pro-competitive policy on the 
handling of all formal complaints, thus signifying an intent that we 
resolve quickly disputes involving allegations of interference in the 
development of competition in telecommunications markets. The discovery 
procedures under the old rules were time consuming and were susceptible 
to abuses that often caused undue delays in our consideration of the 
merits of a complainant's claims. The discovery rules adopted in this 
proceeding expedite the discovery process, which, in turn, expedites 
the resolution of all formal complaints, in accordance with the 
requirements and policies of the 1996 Act.
    116. The new procedures and policies allow the staff to consider 
and rule on reasonable, properly focused requests for interrogatories 
and other discovery on an expedited basis as follows:
    (a) With its complaint, a complainant may file with the Commission 
and serve on the defendant requests for ten written interrogatories. A 
defendant may file with the Commission and serve on the complainant 
requests for ten written interrogatories during the period beginning 
with the service of the complaint and ending with the service of the 
answer.
    (b) Within three calendar days following service of the answer, a 
complainant may file with the Commission and serve on the defendant 
requests for five written interrogatories. Such additional 
interrogatories shall be directed only at specific factual allegations 
made by the defendant in support of its affirmative defenses.
    (c) Requests for interrogatories shall contain (1) a listing of the 
interrogatories requested; and (2) an explanation of why the 
information sought in each interrogatory is necessary to the resolution 
of the dispute and unavailable from any other source.
    (d) Oppositions and objections to the requests for interrogatories 
shall be filed with the Commission and served on the propounding party 
(1) by the defendant, within ten calendar days of service of 
interrogatories served simultaneously with the complaint and within 
five calendar days of interrogatories served following service of the 
answer, (2) by the complainant, within five calendar days of service of 
the interrogatories, and (3) in no event less than three calendar days 
prior to the initial status conference.

[[Page 1007]]

    (e) Section 1.730 of the current rules, which expressly authorizes 
parties to petition for additional ``extraordinary'' discovery in the 
form of requests for document production, depositions and additional 
interrogatories, shall be deleted.
    (f) Commission staff will be inclined to grant all reasonable 
requests for interrogatories and other forms of discovery to the extent 
permitted under any applicable statutory deadlines. It will issue 
rulings and direct the parties accordingly at the initial status 
conference.
    (g) Commission staff retains the discretion to order on its own 
motion, additional discovery including, but not limited to, document 
production, depositions, and/or interrogatories. The staff also retains 
discretion to limit the scope of permissible interrogatories and to 
modify or otherwise relax the discovery available in particular cases 
where appropriate.
    117. These rules and policies are designed to work in conjunction 
with our pre-filing and format and content requirements, which are 
designed to improve the utility and content of the initial complaint 
and answer filed in a section 208 proceeding. The rules as a whole are 
intended to change fundamentally the nature of the formal complaint 
process to enforce the Commission's long-standing requirement that 
``[a]ll matters concerning a claim [be pled] fully and with 
specificity.'' In adhering to these fact-pleading requirements, we will 
further the pro-competitive policies of the 1996 Act by expediting the 
resolution of all formal complaints. We find that these new 
requirements strike a reasonable balance between, on the one hand, 
providing for discovery where necessary to ensure the development of a 
complete record and, on the other hand, preventing the use of discovery 
as the primary means of determining if a claim exists.
    118. Some commenters express doubt that parties will disclose 
unfavorable information, and argue that discovery is needed to verify 
the accuracy of initial disclosures. The format and content rules 
address this concern by requiring that parties reveal the means by 
which they determine what documents and information to disclose. 
Disclosure of the nature of the inquiry should significantly reduce 
concerns about accuracy, since a failure to address a patently relevant 
topic will be readily apparent. The arguments of some commenters are 
based on the use of the phrase ``voluntary disclosure.'' We emphasize 
that the phrase ``voluntary disclosure'' refers to the fact that the 
parties are obligated to disclose all information that is relevant to 
the resolution of a dispute in the absence of a specific discovery 
request. Use of the term ``voluntary disclosure'' does not limit the 
obligation of the disclosing party to identify all information that is 
relevant to the facts in dispute, including information that is 
unfavorable to the disclosing party.
    119. The rules adopted address MCI's concerns that it is unfair to 
require complainants to file their discovery requests without an 
opportunity to review the answer. First, because the parties must make 
a good faith effort to resolve their dispute prior to the filing of the 
complaint, the complainant will know what to expect in the defendant's 
answer. Second, the rules provide the complainant with an opportunity 
to seek discovery on affirmative defenses first raised in the answer. 
In light of these factors and the time constraints of statutory 
deadlines, MCI's fairness argument fails.
    120. We disagree with the argument that the Commission should 
provide discovery as a matter of right because federal court rules 
provide for discovery as a matter of right, in addition to required 
initial disclosures. While the Commission has often found the federal 
rules instructive, it has consistently rejected wholesale adoption of 
them. A significant difference exists in the procedural requirements of 
actions brought before the different fora. Federal court rules require 
notice pleading while the Commission's rules require fact pleading. 
Notice pleading anticipates the use of discovery to obtain evidence of 
the facts to support a complainant's claims, while fact pleading 
requires that a complainant know the specific facts necessary to prove 
its claim at the time of filing. Neither section 208 of the Act nor the 
Commission's own rules and policies contemplate the expansive discovery 
available in federal district court, and in fact, section 207 of the 
Act gives parties the option of filing their complaints in federal 
district court rather than with the Commission. We, further, disagree 
with the argument that self-executing discovery is necessary because 
due process requires that a complainant be able to direct its case as 
it sees fit. As we have stated, our rules require that parties plead 
all matters fully and specifically, and commission staff will be 
inclined to grant reasonable requests for discovery to the extent 
permitted under any applicable statutory deadlines. In this context, a 
party's due process rights are fulfilled by being provided with the 
opportunity to request discovery and present its argument to the 
Commission as to why discovery is necessary in its particular case. The 
fact that the Commission may deny a party's discovery request, 
following consideration of the merits of such request, does not negate 
the party's right to the opportunity to make its case for discovery.
    121. We disagree with the commenters who state that ending self-
executing discovery will result in an avalanche of motions for 
discovery, which would lengthen the discovery process and could result 
in inconsistent discovery rulings. Our rules will provide for the quick 
resolution of discovery disputes by the date of the initial status 
conference, which will be held ten days after the answer is filed. We 
note that these same commenters strongly support proposals requiring 
the staff to play a more active role in the discovery process by 
defining the timing and scope of necessary discovery. These rules allow 
Commission staff to take a more active role in the discovery process to 
meet statutory deadlines and expedite the resolution of all formal 
complaints.
    122. We conclude that SWBT's suggestion that the Commission require 
the parties to engage in good faith discovery discussions prior to the 
filing of the complaint is unduly burdensome. The Commission is already 
requiring parties to engage in good faith settlement negotiations prior 
to the filing of a complaint. As part of that obligation, we anticipate 
that parties will exchange relevant documentation to the extent that it 
would help to resolve conflicts. We also conclude that SWBT's 
suggestion would be likely to raise numerous disputes after the filing 
of the complaint, e.g., concerning what constitutes ``good faith 
discovery,'' that would consume more time and resources than would be 
saved by the implementation of such a requirement.
    123. SWBT suggests that the Commission adopt a rule providing 
defendants with the right to remove disputes to federal court where 
broader discovery is available. We decline to adopt this suggestion 
because it would eliminate rights provided to complainants in the Act. 
The Act provides complainants with the choice of filing claims with the 
Commission or in federal court. The 1996 Act further provides 
complainants with the right to have the Commission resolve certain 
types of complaints within statutory deadlines. Because those deadlines 
are enforceable only at the Commission, providing a defendant with the 
right to remove any claim to federal court would provide it with the 
ability to eliminate the complainant's right to have its

[[Page 1008]]

dispute resolved within the applicable statutory deadline. SWBT, 
furthermore, made this proposal in conjunction with its support for the 
proposal to eliminate all discovery, which we have declined to adopt.
    124. Additionally, we reject Ameritech's proposal that, as a means 
to effective discovery, the Commission adopt disclosure requirements 
similar to those in section 252(b)(2), which are for compulsory 
arbitration of interconnection agreements. Such a proposal is 
unworkable in light of the fact that section 252(b)(2) procedures would 
not accommodate the variety of complaints that may be brought before 
the Commission. Section 252(b)(2) disclosure procedures are directed at 
arbitration of disputes of a particular nature before state 
commissions. Our voluntary disclosure rules will provide the benefits 
of that provision, the initial disclosure of relevant documentation, 
while the discovery rules adopted herein contain sufficient flexibility 
to be adapted to the unique circumstances of individual cases.
    125. The issue of requiring a meet and confer conference to discuss 
discovery disputes is addressed in the Status Conference section of 
this Report and Order.
    2. Reduction of the Administrative Burden of Filing Documents. a. 
The NPRM. 126. In the NPRM we sought comment on methods to reduce the 
administrative burden on the Commission of accepting filed documents, 
either identified in initial filings or obtained through discovery, 
including implementation of a computer scanning requirement for large 
document productions.
    b. Comments. 127. Those parties that commented on this proposal 
oppose the imposition of a scanning requirement. CBT argues that such a 
requirement would be a waste of resources while CompTel argues it would 
be too burdensome.
    c. Discussion. 128. We decline to adopt a scanning requirement for 
all large document productions. Instead, we shall provide Commission 
staff with the discretion, in individual cases involving the review of 
a large number of documents, to require the parties to provide the 
documents to the Commission in a scanned or other electronic format. 
Material in any electronic format shall be indexed and submitted in 
such manner as to facilitate the staff's review of the information. 
Commission staff shall have discretion to reach an agreement with the 
parties about the appropriate technology to be used in light of the 
needs of the staff and the current cost and availability of document 
management technology. Commenters opposed to the imposition of a 
scanning requirement make general statements that a scanning 
requirement would be unjustifiably costly and burdensome to implement. 
Because such a requirement will be imposed on an individualized basis, 
the staff shall decide on a case-by-case basis whether the nature of 
the production involved will justify the cost and burden of electronic 
formatting.
    129. We also recognize that a significant number of complex 
technical issues that are beyond the scope of the NPRM would have to be 
addressed prior to the implementation of a comprehensive document 
scanning requirement. Because scanning technology is varied and not 
universally compatible, the implementation of a standardized scanning 
requirement would require us to choose a single type of scanning 
technology. Several complex questions would therefore arise, including, 
but not limited to, what information should be placed in identifying 
fields and whether the documents must be searchable by text. Because of 
these complex technical questions, we decline to impose a scanning 
requirement at this time, although we may address this issue again at a 
later date, following our consideration of possible procedures for 
allowing the electronic filing of documents in GC Docket 97-113.
    3. Voluntary Agreements for the Recovery of Discovery Costs. a. The 
NPRM. 130. One of the goals in the NPRM was to identify ways to 
encourage parties to exercise diligence in identifying and satisfying 
their discovery needs. For example, although the Commission does not 
have authority to award costs in the context of a formal complaint 
proceeding, we sought comment on whether encouraging formal complaint 
parties to agree among themselves to a cost-recovery system for 
discovery would facilitate the prompt identification and exchange of 
information. As an example, we suggested that the parties could 
stipulate that the losing party in the complaint proceeding would bear 
the reasonable costs associated with discovery, including reasonable 
attorneys' fees.
    b. Comments. 131. Although GST, KMC and MFS support the Commission 
encouraging parties to enter into voluntary cost recovery agreements, 
Ameritech, CBT, CompTel, PTG, SWBT, and TCG oppose such a position. 
CompTel, GTE, PTG, and SWBT argue that parties will be unable to agree 
to a cost recovery system. Ameritech argues that parties will be 
tempted to convince the decisionmaker to award enough money to the 
``losing'' party to offset the costs of discovery. Ameritech suggests 
the alternative of giving the factfinder the discretion to decide cost 
recovery issues and award financial damages for the filing of frivolous 
complaints. TCG argues that, if the Commission encouraged such 
agreements, parties might not comply with discovery requests unless 
they are compensated. CBT argues that discovery abuse would not be 
lessened by having the loser pay the cost of discovery, since the 
winning party is as likely to have abused discovery. CBT supports, 
however, requiring parties to compensate each other for extraordinary 
efforts to comply with discovery requests. CompTel suggests that the 
Commission should set a reasonable copying fee.
    c. Discussion. 132. We decline to encourage voluntary cost recovery 
agreements among parties for several reasons. We conclude that recovery 
of discovery costs will not be a significant problem in formal 
complaints because the rules we adopt today will make extensive 
discovery the rare exception rather than the general rule, regardless 
of the willingness of parties to pay for discovery. Furthermore, most 
of the commenters oppose this proposal. Since the majority of the 
commenters are potential parties to formal complaints before the 
Commission, we find it unlikely that parties would enter into such 
voluntary cost recovery agreements.
    4. Referral of Factual Disputes to Administrative Law Judges. a. 
The NPRM. 133. In the NPRM we proposed to amend our rules to authorize 
the Common Carrier Bureau and the Wireless Telecommunications Bureau, 
on their own motion, to refer disputes over material facts in formal 
complaint proceedings to an administrative law judge (``ALJ'') for 
expedited hearing. The disputes referred would be those that cannot be 
resolved without resorting to formal evidentiary proceedings, although 
adjudication of novel questions of law or policy would remain outside 
of the delegated authority of the ALJ. We noted that, as a practical 
matter, the Bureaus would refer issues only where necessary to 
determine acts or omissions, and not to determine the legal 
consequences of such acts or omissions. We tentatively concluded that 
expanding the Bureaus' delegated authority in this limited way would 
provide the staff with an important tool for resolving disputes over 
material facts that cannot be resolved without resort to formal 
evidentiary proceedings.

[[Page 1009]]

    b. Comments. 134. The majority of commenters support the adoption 
of a rule authorizing the Common Carrier Bureau and the Wireless 
Telecommunications Bureau to refer factual disputes to an ALJ for 
resolution. Bechtel & Cole's support for authorizing such referral, 
however, is contingent upon the establishment of deadlines for ALJs to 
resolve such disputes, as well as a clear definition of the role and 
responsibility of the ALJ in each case. CBT suggests that the ALJ 
hearing be located at the site of the alleged violation. GST, KMC and 
MFS argue generally that the procedures for referral of factual 
disputes to ALJs should be clarified. BellSouth, however, opposes the 
referral of factual issues to ALJs, except as a last resort, arguing 
that it would only add a layer of procedural rules while still 
requiring the Commission to make a legal determination on the case 
itself. BellSouth supports referral of disputes to ALJs for hearing 
only if the Commission adopts the pole attachment complaint rules.
    c. Discussion. 135. We amend Sec. 0.291 of the rules to authorize 
the Chief of the Common Carrier Bureau to designate factual disputes 
for evidentiary hearings before an ALJ and clarify that the change in 
the Bureau's delegated authority is intended to authorize the Bureau to 
designate factual disputes for hearing even in those cases where the 
facts to be determined may be considered ``novel.'' We retain, however, 
the existing prohibition on the Common Carrier Bureau designating for 
hearing those issues involving novel questions of law or policy which 
cannot be resolved under outstanding precedents or guidelines. No 
revision is required in the existing delegated authority of the 
Wireless Telecommunications Bureau, which now permits it to delegate 
novel factual issues for hearing.
    136. Factual disputes that are referred to an ALJ for hearing shall 
be referred to such ALJ through a hearing designation order. The 
hearing designation order may set a recommended deadline for the ALJ to 
certify the record by, and, if time permits, issue a recommended 
decision on the factual dispute. The presiding judge shall certify the 
record and if time permits, issue a recommended decision, pursuant to 
the instructions contained in the hearing designation order, before 
referring the matter back to the Commission for, inter alia, final 
resolution of all outstanding factual, legal and policy issues. We 
clarify that, where the Common Carrier Bureau or the Wireless 
Telecommunications Bureau designates a dispute for expedited hearing, 
the designating Bureau may authorize the presiding judge to schedule 
the proceedings to enable such deadline to be met. We further clarify 
that the Common Carrier and Wireless Telecommunications Bureaus will 
not refer a factual dispute to an ALJ for hearing where the time 
required by the ALJ to complete a hearing on such dispute would 
preclude the Commission from meeting an applicable statutory deadline.
    137. There is broad support among the commenters for the use of 
ALJs to resolve factual disputes. After due consideration of 
commenters' concerns about compliance with statutory deadlines, we 
conclude that the existing rules provide the Commission with the 
authority to request, in a hearing designation order, that disputes be 
resolved by an ALJ within a set period of time consistent with the 
final Commission decision complying with the statutory deadline and to 
authorize ALJs to use discretion in the application of their hearing 
rules to ensure compliance with the deadline recommended by the 
Commission. We conclude, in addition, that the concerns of some 
commenters about such referrals slowing down the complaint process are 
unwarranted. The Commission's obligation to comply with statutory 
deadlines is not eliminated by such referral. Referral of factual 
disputes to ALJs will, in fact, expedite the process because referrals 
will be used in those circumstances where the factual disputes cannot 
be resolved promptly, if at all, on a written record. In such cases, it 
would take longer for the Commission to resolve such disputes itself 
without a hearing than it would for the Commission to do so after a 
hearing before an ALJ. ALJs are, furthermore, expert triers of fact and 
are well-situated to conduct their proceedings within the time frames 
given by the Commission, such that sufficient time will remain for the 
Commission to issue its decision in compliance with the statutory 
deadline. We also conclude that ALJ hearings will be held at the 
offices of the Commission in Washington, D.C., unless otherwise ordered 
by the Commission. It would be impractical to provide for hearings at 
the location of each dispute in light of both the time limitations that 
may be imposed on the ALJs and the limited resources of the Commission.
    138. Additionally, we note that the Enforcement Task Force is 
currently evaluating whether it may be appropriate, in certain limited 
categories of disputes, to conduct mini-trials or some other form of 
live evidentiary proceeding, either before an ALJ or the Task Force. If 
adopted, this test procedure, subject to careful time constraints, 
would allow parties a substantially greater opportunity to present live 
testimony and oral argument than is contemplated by the hearings 
conducted pursuant to designation orders.
H. Status Conferences
    139. The NPRM proposed to use status conferences to speed up the 
formal complaint process in order to enable compliance with the newly 
imposed statutory deadlines and overall streamlining of the formal 
complaint procedures. The status conference proposals were intended to 
work in conjunction with the modifications of the briefing and 
discovery rules.
    1. The Initial Status Conference. a. The NPRM. 140. We proposed to 
modify our rules concerning status conferences to improve the ability 
of the Commission staff to render prompt decisions and order any 
necessary actions by the parties. We proposed to require that, unless 
otherwise ordered by the staff, an initial status conference take place 
in all formal complaint proceedings ten business days after the 
defendant files its answer to the complaint. Such an early status 
conference would be used to discuss such issues as claims and defenses, 
settlement possibilities, scheduling, rulings on outstanding motions, 
the necessity of and, if necessary, scope and/or timetable of 
discovery.
    b. Comments. 141. A number of commenters support scheduling the 
initial status conference ten days after the filing of the answer. 
Several commenters, such as CompTel, MCI, Nextlink, and PTG, however, 
assert that it may be unrealistic for parties to be required to argue 
all discovery issues in that short a time period. They suggest either a 
second status conference or that the initial status conference be held 
twenty to thirty days after the filing of the answer. AT&T, CBT, PTG, 
and U S West argue that parties should continue to be permitted to 
attend status conferences by telephone conference call.
    142. The commenters agree that the issues to be resolved at the 
initial status conference should include the scope and scheduling of 
discovery and the briefing schedule. The cable entities state that they 
envision the initial status conference as the ``focal point of the 
complaint proceeding.'' PTG suggests the scheduling of a formal 
settlement conference at that time. GST, KMC, and MFS also propose to 
have parties attend ``meet and confer'' conferences prior to the 
initial status conference so that

[[Page 1010]]

agreements reached and disputes remaining unresolved after the meet and 
confer may be reduced to writing and given to the staff at the initial 
status conference. GST, KMC, and MFS suggest that the following 
subjects be discussed at the meet and confer: (1) the necessity and/or 
scope of discovery beyond the exchange of documents and information 
designations; (2) if depositions or affidavits are necessary, and if 
so, the number and proposed dates; (3) the timetable for completion of 
discovery; (4) the need or desirability of referring technical issues 
to an neutral expert; (5) settlement possibilities; (6) if briefing is 
necessary; (7) whether parties are willing to have damages claims 
resolved separately from liability issues using the supplemental 
complaint process, where such action has not already taken place; (8) 
disagreements over designation of documents as confidential or 
proprietary; (9) in section 271(d)(6)(B) cases, whether parties can 
agree to waive the ninety-day resolution deadline; and (10) the draft 
joint statement of stipulated facts and key legal issues. AT&T and the 
cable entities support requiring the meet and confer, while CBT opposes 
the meet and confer because it argues that the Commission should not 
impose additional requirements on parties.
    c. Discussion. 143. We require that the initial status conference 
take place ten business days after the date the answer is due to be 
filed unless otherwise ordered by the staff. Setting the initial status 
conference date for ten business days after the date the answer is due 
to be filed will enable Commission staff to render decisions and/or 
order necessary actions promptly. Commission staff retain the 
discretion to permit parties to attend status conferences by telephone 
conference call on a case-by-case basis.
    144. Commenters that oppose scheduling the initial status 
conference for ten business days after the date the answer is due to be 
filed claim that it may be unrealistic to require the parties to 
address discovery issues so early in the proceeding. In response to 
these commenters, we shall use a complaint with a ninety-day resolution 
deadline as an example. In a ninety-day complaint, the date of the 
initial status conference is 34 days into the proceeding under the 
amended rules. In other words, over one third of the time allocated for 
resolution of such complaint will have passed before the status 
conference takes place. In the remaining fifty-six days, the parties 
will be required to comply with any discovery ordered and to draft 
briefs to include such discovery findings, and the staff will be 
required to consider all submissions by the parties and issue a 
decision taking appropriate action. Given these requirements, it is 
necessary for the parties and the Commission to move the proceeding 
along with great speed. Even if the complaint is not subject to such an 
abbreviated schedule, the expedited resolution of all formal complaints 
is essential to fostering and maintaining competition in accordance 
with the goals of the 1996 Act. Furthermore, the requirement of an 
early initial status conference will not be as burdensome as some 
commenters envision. Our status conference requirement must be 
considered in conjunction with the establishment of requirements for 
pre-filing activities, format and content of pleadings, and discovery 
procedures. The pre-filing activities will narrow the scope of disputed 
issues. The format and content requirements will reduce the amount of 
discovery that is necessary by requiring the disclosure of relevant 
evidence at the complaint and answer stage of a formal complaint 
proceeding. The new discovery procedures will require the filing of all 
requests for discovery, as well as objections and oppositions thereto, 
prior to the initial status conference, to enable the staff to address 
discovery issues at the initial status conference. Finally, Commission 
staff will retain the discretion to modify the scheduling of the 
initial status conference when it is warranted by the facts and 
circumstances of an individual case.
    145. We also adopt, in part, the proposal made by GST, KMC, and MFS 
to require the parties to meet and confer prior to the initial status 
conference. Parties will be required to schedule and attend a meet and 
confer conference amongst themselves prior to the initial status 
conference to discuss the following issues: (1) settlement prospects; 
(2) discovery; (3) issues in dispute; (4) schedules for pleadings; (5) 
joint statements of stipulated facts, disputed facts, and key legal 
issues; and (6) in a section 271(d)(6)(B) proceeding, whether the 
parties agree to waive the ninety-day resolution deadline. All 
proposals agreed to and disputes remaining must be reduced to writing 
and submitted to the staff two business days prior to the initial 
status conference. This submission is to be made separately from the 
joint statement of disputed and undisputed facts and key legal issues 
that is due on the same date. Our requirement that the parties meet and 
confer will prepare the parties for a productive status conference 
because it will require the parties to consult early on substantive and 
procedural issues. The requirement to meet and confer should also 
eliminate any element of surprise that might prevent parties from 
reaching agreements at the status conference, due to a party needing 
time to consider an opponent's newly disclosed position on a particular 
issue. CBT's argument against the imposition of further requirements is 
unpersuasive. The meet and confer will not require the parties to 
address any new issues, but rather imposes an earlier deadline for 
completing activities which the parties would have to perform in any 
case.
    2. Status Conference Rulings. a. The NPRM. 146. In the NPRM, we 
proposed to modify the requirement that the staff memorialize oral 
rulings made in status conferences. We proposed that, within twenty-
four hours of a status conference, the parties in attendance, unless 
otherwise directed, would submit to the Commission a joint proposed 
order memorializing the oral rulings made during the conference. 
Commission staff would review and make revisions, if necessary, prior 
to signing and filing the submission as part of the record. To 
facilitate the submission of these joint proposed orders, we further 
proposed that parties be allowed, but not required, to tape record the 
staff's summary of its oral rulings or, alternatively, to transcribe 
the status conference proceedings. We sought comment on these proposals 
and any other alternative proposals.
    b. Comments. 147. Most commenters, including ACTA, ATSI, Bell 
Atlantic, GTE, and ICG, support requiring parties to file a joint 
proposed order within twenty-four hours of a status conference. ACTA, 
AT&T and GTE suggest that the Commission provide an alternative 
procedure for parties that cannot agree on a proposed order. Bell 
Atlantic suggests that the Commission provide the parties with 
resources to draft the proposed order on-site following the conference, 
with staff remaining available for consultation. CBT, NYNEX, and PTG 
oppose requiring parties to file a joint proposed order memorializing 
the status conference rulings. They argue that parties will be unable 
to agree on the content of such an order and that the Commission staff 
member making the ruling is in the best position to know what was 
intended by the ruling. AT&T suggests that joint proposed orders would 
be unnecessary if the parties have made a stenographic record.
    148. Commenters are split regarding the allowance of audio 
recording and/or the use of stenographers at status conferences. ICG 
supports audio recording of the entire status conference. GST, KMC, and 
MFS

[[Page 1011]]

support the audio recording of a summary of the staff's oral rulings, 
but oppose the use of a stenographer as being unnecessary. SWBT opposes 
using a stenographer because of concern that a transcribed record may 
have a chilling effect on the free flow of discussions at status 
conferences.
    c. Discussion. 149. We require parties to provide the Commission 
with a joint proposed order memorializing the rulings made at each 
status conference. Because of the many important issues that will be 
resolved during the status conference, a written record of the rulings 
will be an essential reference and organizational tool for the parties 
and the Commission. Requiring the parties to provide a joint proposed 
order will allow the Commission to focus its scarce resources on other 
aspects of the complaint process. Requiring the parties to submit such 
joint proposed order by the end of the business day following the 
status conference is necessary because compliance with rulings made at 
status conference may require action within a matter of days. Such time 
sensitivity requires that any confusion or dispute among the parties 
over rulings made at the status conference be brought to the attention 
of Commission staff as early as possible. It is instructive to note 
that the Commission's ex parte rules require parties making oral ex 
parte presentations to file a written memorandum with the Commission's 
Office of the Secretary that summarizes the data and arguments 
presented on the next business day after the presentation. It has been 
our experience that parties do not have difficulties complying with 
such requirement. As explained below, we have eased the burden of 
compliance with this requirement by providing parties with the 
opportunity to submit either the joint proposed order or a transcript 
of the status conference.
    150. The joint proposed order shall summarize the rulings made by 
the staff in the status conference. If the parties cannot agree on all 
rulings in the joint proposed order they may submit instead a joint 
proposed order that contains the proposed rulings upon which they agree 
and alternative proposed rulings for those rulings upon which they 
cannot agree. The joint proposed order shall comply with the format and 
content requirements for proposed orders, and shall be filed with the 
Commission by 5:30 p.m. on the business day following the date of the 
status conference, unless otherwise directed by Commission staff.
    151. If parties choose to make an audio recording or 
stenographically transcribe parts of the status conference, they shall 
submit, in lieu of a joint proposed order, either a transcript of the 
audio recording or the stenographic transcript of such status 
conference within three business days following the conference, unless 
otherwise directed by Commission staff. Parties will be permitted to 
make an audio recording of or stenographically transcribe only those 
parts of a status conference that are deemed ``on the record'' by 
Commission staff at its discretion. We shall prohibit any recording in 
any manner of those parts of the status conference deemed ``off-the-
record'' by the staff. Any party wishing to make an audio recording of 
the staff's summary of oral rulings only must notify the staff and all 
attending parties in writing of its intent at least three business days 
prior to the scheduled conference. Any party wishing to make an audio 
recording of those portions of a status conference that are ``on-the-
record'' must secure the agreement of the attending parties and notify 
the staff of such intent at least three business days prior to the 
scheduled conference. Such audio recordings shall be transcribed and 
such transcript submitted as part of the record no later than three 
business days after the conference, unless otherwise directed by the 
staff. Parties wishing to transcribe by stenographer those portions of 
a status conference that are ``on-the-record'' must secure the 
agreement of the attending parties and notify the staff in writing of 
such intent at least three business days prior to the scheduled 
conference. Such transcript shall be submitted as part of the record no 
later than three business days after the status conference, unless 
otherwise directed by the staff. It is the sole responsibility of the 
party or parties choosing to make an audio recording of or 
stenographically transcribe any part of a status conference to make all 
arrangements for such recording or transcription, including, but not 
limited to, arrangements for payment of the costs of such recording or 
transcription.
    152. The commenters have raised legitimate concerns that the making 
of a formal record of a status conference by any means may have a 
chilling effect on the free exchange of information by the parties. We 
emphasize that the staff will retain significant discretion to 
determine in each case what is ``on-the-record'' and what is ``off-the-
record'' to prevent parties from using the record to stifle such 
exchanges.
I. Cease Orders, Cease and Desist Orders, and Other Forms of Interim 
Relief
    153. Certain provisions added by the 1996 Act authorize the 
Commission to take interim actions against LECs pending final 
resolution of complaints in some instances and to order permanent 
injunctive relief in others. Sections 260 and 275 of the Act contain 
nondiscrimination provisions governing the provision of telemessaging 
service and the provision of alarm monitoring service, respectively, by 
incumbent LECs. Sections 260(b) and 275(c) require the Commission to 
issue, upon an appropriate showing by the complainant of a violation 
that resulted in ``material financial harm,'' an order directing the 
incumbent LEC ``to cease engaging'' in such violation ``pending a final 
determination'' by the Commission. Both sections provide that such 
cease orders ``shall'' be issued within 60 days of the filing of a 
complaint that satisfies the stated criteria. In addition, section 274, 
pertaining to electronic publishing by BOCs, authorizes the Commission 
(or federal district court) to issue cease and desist orders for 
violations of the section. Unlike sections 260 and 275, however, 
section 274 contains no deadline for issuing such orders, nor does it 
predicate the issuance of such orders on a showing of material 
financial harm.
    1. Cease and Cease and Desist Orders Under Title II of the Act and 
Other Forms of Interim Relief. a. The NPRM. 154. In the NPRM, we 
invited comment on our tentative conclusion that the procedures 
prescribed in Title III (section 312) of the Act for issuing cease and 
desist orders are not mandatory in section 208 and related Title II 
complaint proceedings, and that the complaint provisions added by the 
1996 Act give the Commission additional authority to issue cease or 
cease and desist orders in certain cases.
    155. Section 312 prescribes certain ``Administrative Sanctions'' 
available to the Commission to remedy violations of the Act and the 
Commission's rules and orders. Subsection 312(a) provides that the 
Commission ``may'' revoke a station license or construction permit 
under any one of seven enumerated factual circumstances. 47 U.S.C. 
312(a). Subsection 312(b) similarly provides that the Commission 
``may'' order ``any person'' who has failed to operate substantially as 
set forth in a license or has otherwise violated a provision of the 
Act, certain provisions of Title 18 of the United States Code, or any 
rule or regulation of the Commission, to ``cease and desist'' from such 
action. 47 U.S.C. 312(b). Before taking the actions prescribed in 
Subsections 312 (a) and (b), Subsections 312 (c) and (d) require that 
the Commission conduct ``show cause'' proceedings in which the 
Commission bears both the burden of proceeding with the introduction of 
evidence and the burden of proof. 47

[[Page 1012]]

U.S.C. 312 (c) and (d). We also asked commenters to address whether an 
order to ``cease engaging in'' violations under sections 260(b) and 
275(c) would be the same as an order to ``cease and desist'' violations 
under section 274(e)(2).
    2. Comments. 156. Apart from comments regarding the evidentiary 
showing that should be required to obtain cease and cease and desist 
orders, few commenting parties draw a distinction between the cease 
orders contemplated under sections 260(b) and 275(c) and the cease and 
desist order described in section 274(e)(2). Voice-Tel asserts that 
cease and cease and desist orders are the same and that the language 
between sections 260 and 275 differs only because section 274 gives the 
complainant the option of obtaining relief in federal court.
    157. Commenters are evenly divided, however, on the issue of 
whether the Commission must follow the procedures prescribed in section 
312 of the Act before issuing cease and cease and desist orders in 
Title II complaint proceedings. Bechtel & Cole, GST, KMC, MFS, and TRA 
argue that, in light of the requirement in the 1996 Act for prompt 
issuance of cease orders in cases alleging violations of sections 260 
and 275, Congress did not intend for section 312 hearings to apply to 
cease and cease and desist orders pursuant to section 208 and related 
Title II complaint proceedings. These commenters argue that the 
application of section 312 show cause hearings would contravene 
Congressional intent. Bell Atlantic, CompTel, PTG, and SWBT, on the 
other hand, contend that section 312 hearings are a prerequisite to the 
issuance of any cease or cease and desist order pursuant to the Act. 
These commenters maintain that the D.C. Circuit Court decision in 
General Telephone Co. of California v. FCC (``General Telephone'') 
establishes that section 312 show cause hearings are required before 
the Commission can issue cease and cease and desist orders.
    c. Discussion. 158. Congress clearly distinguished between cease 
orders in sections 260 and 275 and cease and desist orders in section 
274. Both sections 260(b) and 275(c) provide that, if a complaint 
contains an appropriate showing of a violation that results in material 
financial harm, the Commission ``shall,'' within 60 days, issue an 
order directing incumbent LECs to ``cease engaging in'' the violation 
pending resolution of the complaint. Section 274(e)(2), on the other 
hand, authorizes ``any person'' claiming that a BOC or BOC affiliate 
has violated section 274 ``to make application'' to the Commission or 
the federal district courts for a cease and desist order, but does not 
specify circumstances in which a cease and desist order must be issued. 
In addition, unlike sections 260(b) and 275(c), section 274(e)(2) 
contains no deadline for Commission action on applications for cease 
and desist orders, nor does it predicate issuance of such orders on a 
showing of material financial harm by the petitioner. We therefore 
disagree with VoiceTel's argument that Congress intended section 260 
and 275 cease orders to be identical to section 274 cease and desist 
orders.
    159. Based on the express language of sections 260(b) and 275(c), 
we conclude that any order issued by the Commission pursuant to these 
sections must be in the nature of an injunction directed against a 
defendant incumbent LEC pending a final determination on the merits of 
a complainant's discrimination claims. As is customarily the case with 
permanent or preliminary injunctive actions, orders issued under 
sections 260(b) and 275(c) directing a LEC to ``cease engaging in'' a 
particular act will either be discharged or made final depending on the 
outcome of the complaint. We further conclude that, apart from the 
interim enforcement actions authorized under sections 260(b) and 
275(c), the Commission retains discretion under section 4(i) of the Act 
to entertain requests for interim relief in other Title II complaint 
proceedings involving alleged violations of the Act or our rules and 
orders. We disagree with commenters who claim that section 312 
procedures must be applied to requests for cease orders under sections 
260(b) and 275(c), particularly since these sections make it clear that 
the complainants, not the Commission, have the burden of proof. By 
contrast, section 312(c) states that ``both the burden of proceeding 
with the introduction of the evidence and the burden of proof shall be 
upon the Commission.'' The commenters' reliance on General Telephone is 
misplaced. That case stands for the proposition that the Commission may 
properly invoke section 312(b) in carrying out its functions under 
Title II, not that the Commission is compelled to use section 312 
procedures in determining if a carrier should be required to 
discontinue a particular practice on a temporary or interim basis. 
Sections 260(b) and 275(c), and section 4(i) generally, clearly empower 
the Commission to act promptly to restrain, on a temporary or interim 
basis, apparent or prima facie violations of the Act and our rules and 
orders without resorting to section 312 procedures.
    160. With regard to cease and desist orders under section 
274(e)(2), we conclude that Congress intended to assign the same 
meaning to ``cease and desist'' orders in section 274(e)(2) as used for 
``cease and desist'' orders in section 312 of the Act. Section 
274(e)(2) simply authorizes parties to petition the Commission for 
cease and desist orders based on alleged violations of the requirements 
of section 274. There is no support in section 274 or elsewhere in the 
Act for applying procedures other than those prescribed in section 312 
for acting on requests for such cease and desist orders. We conclude 
that, in contrast to the permanent or preliminary injunctive relief 
required under sections 260(b) and 275(c), Congress intended the cease 
and desist orders contemplated under section 274(e)(2) to be in the 
nature of final injunctive orders to be issued in conformance with the 
notice and opportunity for hearing requirements of section 312 of the 
Act.
    2. Legal and Evidentiary Standards. a. The NPRM. 161. We proposed 
to amend our rules to delineate the legal and evidentiary standards 
necessary for obtaining cease and cease and desist orders pursuant to 
Title II of the Act and other forms of interim relief in section 208 
formal complaint cases. We noted that creating minimum legal and 
evidentiary standards would expedite the issuance of cease and cease 
and desist orders within statutory deadlines and create more certainty 
in the industry as to the legal and factual basis for obtaining such 
injunctive or interim relief. We noted further that, when a court 
considers requests for various types of interim or injunctive relief, 
such as a temporary restraining order, it generally requires that the 
plaintiff demonstrate four factors: (1) likelihood of success on the 
merits; (2) the threat of irreparable harm absent the grant of the 
injunctive relief requested; (3) no substantial injury to any other 
party; and (4) that issuance of the order will further the public 
interest. Courts have also required the posting of bond in some cases 
prior to granting interim relief.
    162. Few parties responded in detail to our requests for comment in 
the Sections 260, 274, 275 NPRM regarding (1) the ``appropriate 
showing'' required for the Commission to issue a ``cease'' order 
pursuant to section 260(b) or 275(c); (2) whether it would be 
sufficient for the complainant to make a prima facie showing of 
discrimination to obtain a cease order; (3) the meaning of ``cease 
engaging in'' under sections 260(b) and 275(c); and (4) whether 
sections 260(b) and 275(c) give the

[[Page 1013]]

Commission the authority to issue a cease and desist order similar to 
the action contemplated in section 274(e)(2) and, if so, whether the 
showing required to obtain cease orders and cease and desist orders 
should differ in any material way. Accordingly, the NPRM sought 
additional comment on these issues and emphasized that all comments 
pertaining to enforcement issues in response to the Sections 260, 274, 
275 NPRM would be incorporated by reference into the instant 
proceeding. We also asked parties to comment on (1) the meaning of the 
terms ``material financial harm'' as used in sections 260 and 275; (2) 
whether a showing of material financial harm should also be required in 
order to obtain a cease and desist order under section 274; and (3) the 
level of proof required to establish material financial harm in the 
context of a section 208 complaint proceeding.
    b. Comments. 163. Many of the commenters, including BellSouth, 
CompTel, PTG, NYNEX, SWBT, and U S West, support the use of the 
traditional four-prong injunction test articulated in Virginia 
Petroleum Jobbers (i.e., likelihood of success, threat of irreparable 
harm, no substantial injury to other parties, and the furtherance of 
the public interest) for issuing cease orders pursuant to sections 260 
and 275 and cease and desist orders pursuant to section 274. These 
commenters claim that this test will minimize the chance of harm to a 
carrier should the allegations ultimately prove to be groundless. GST, 
CompTel, KMC, MFS, and PTG also argue that complainants should be 
required to post a bond to pay for the carrier's damages if the 
Commission later finds that the complaint was without merit.
    164. TRA, ICG and the cable entities argue for more relaxed 
standards, especially for resellers and small market entrants. They 
urge the Commission to retain only the elements of the traditional test 
relating to advancement of the ``public interest'' and ``no substantial 
injury to other parties.'' ICG contends that the ``likelihood of 
success'' and ``irreparable harm elements'' inherently favor the status 
quo, which is contrary to Congress' goal of expediting effective local 
exchange competition. According to the cable entities, the Commission 
should require a moving party to show only that it has mounted a 
``substantial challenge'' to a carrier's practice. TRA recommends that 
if the Commission decides to apply the traditional four-part test for 
injunctive or interim relief, it should define ``irreparable harm'' to 
include a showing of ``serious damage to a resale carrier's business.''
    165. The Alarm Industry Communications Committee (``AICC'') and 
Voice-Tel argue that a prima facie showing of discrimination should be 
sufficient to warrant issuance of a cease order against an incumbent 
LEC pursuant to either section 260(b) or section 275(c). ATSI contends 
that an ``appropriate showing'' for a cease order under section 260 
would be a complainant's showing it had requested service or access 
from an incumbent LEC and that such request was denied or unduly 
delayed in violation of section 260 on more than one occasion and that 
such violations would continue absent a cease order. According to ATSI, 
the Commission should apply the following two presumptions in 
considering requests for cease orders in such cases: (1) if any 
incumbent LEC is offering a basic service pursuant to section 260, then 
any other incumbent LEC should have the capability to do the same; and 
(2) if an incumbent LEC has the capability to provide telemessaging 
service, then a telemessager should be able to access the LEC's network 
for purposes of providing similar telemessaging service.
    166. Bell Atlantic argues that a cease or cease and desist order 
could be issued under sections 260, 274, or 275 only if a complainant 
produces facts that show that (1) the alleged discriminatory behavior 
has occurred or will soon occur, (2) that the behavior violates the Act 
and/or the Commission's rules, and (3) that it has or will cause 
substantial harm to the complainant. PTG contends that cease orders 
should be issued pursuant to section 260 only after the complainant has 
shown by a preponderance of the evidence that an incumbent LEC has 
violated section 260(a) and that the violation was the proximate cause 
of the complainant's material financial harm. PTG argued that an order 
to ``cease engaging'' under sections 260 and 275 should be more 
difficult to obtain than an order to ``cease and desist'' under section 
274 because sections 260 and 275 require a showing of ``material 
financial harm.'' SWBT contends that the standard under section 274(e), 
which authorizes any person to ``make application to the Commission'' 
for a cease-and-desist order, should be at least as demanding as 
Sec. 1.722 of the Commission's rules, which requires complainants 
seeking damages to demonstrate or quantify the harm suffered or damages 
incurred with reasonable certainty. SWBT maintains that cease orders 
under sections 260(b) and 275(c), on the other hand, should require 
more stringent proof because those sections direct the Commission to 
issue such orders upon an appropriate showing of material financial 
harm in the complaint. Voice-Tel asserts that the Commission's 
authority under sections 260, 274 and 275 is the same, contending that 
the language between the two provisions is different only because 
section 274 gives the complainant the option of obtaining relief in 
federal court.
    167. Several commenters contend that what constitutes material 
financial harm under sections 260 and 275 should be decided on a case-
by-case basis. AICC, ATSI, and Voice-Tel proposed that all cases 
involving denial of access or delay would always result in material 
financial harm and that material financial harm need not be quantified 
in such cases. BellSouth maintains that a showing of material financial 
harm must establish a causal relationship between the harm and the 
defendant carrier's actions and should exclude unsupported claims of 
``lost opportunity.'' According to PTG, a showing of material financial 
harm should consist of testimony, supported by affidavit, regarding (1) 
the magnitude of the alleged harm; (2) the relationship of the harm to 
the alleged violation, and (3) the impact of the harm on the 
complainant's business prospects. PTG, SWBT, and USTA all argue that a 
prima facie case of material financial harm must include some 
quantification of the alleged harm.
    168. Finally, none of the commenters, either in this proceeding or 
in the Sections 260, 274, 275 NPRM, addressed the issue of whether a 
showing of material financial harm, as the term is used in sections 260 
and 275, should also be required in order to obtain a cease-and-desist 
order under section 274, although some argued that the same standards 
and procedures should (or should not) apply to cease and cease and 
desist orders.
    c. Discussion. 169. Notwithstanding our proposals in the NPRM, we 
conclude that, apart from the specific requirements set forth in the 
Act and our implementing rules and orders, it is unnecessary at this 
time to prescribe the legal and evidentiary showings required to obtain 
cease orders in section 260(b), 275(c), and other section 208 complaint 
proceedings. We similarly conclude that we need not delineate the 
showing needed for a cease and desist order under section 274(e)(2). 
The commenters differ sharply over these issues. Many argue that the 
four-pronged test set forth in Virginia Petroleum Jobbers should be 
relaxed to promote the pro-competitive goals of the Act, while an equal 
number contend

[[Page 1014]]

that the Virginia Petroleum Jobbers standard, or its equivalent, is 
necessary to protect the due process rights of defendant carriers. 
After weighing the various comments, we conclude that it is more 
appropriate to consider requests for interim or injunctive relief on a 
case-by-case basis. It is impossible to anticipate all of the various 
factual circumstances that could form the basis of a complaint. 
Similarly, the level and types of information necessary to sustain or 
refute allegations of misconduct by carriers is likely to vary widely. 
We note that the rules we adopt today will foster our ability to 
consider requests for interim and injunctive relief and to order such 
relief promptly in appropriate cases. In particular, our pre-filing 
settlement discussion requirement should promote the ability of both 
complainants and defendants to ascertain the legal and factual bases of 
their dispute and submit detailed, fact-based complaints and answers 
accordingly. Our new format and content requirements are designed to 
ensure that both complaints and answers contain full legal and factual 
support for or against the relief requested in the complaint. Thus, as 
a practical matter, we do not anticipate that the absence of specific 
legal and evidentiary guidelines in this Report and Order will require 
complainants and defendant carriers to incur any additional or 
otherwise unreasonable burdens in presenting and defending against 
requests for interim injunctive relief.
    170. We also conclude that we need not describe the specific 
showing required of a complainant to establish ``material financial 
harm'' within the meaning of sections 260 and 275 of the Act. 
Generally, a complainant alleging material financial harm will be 
expected to demonstrate some nexus between its financial condition or 
results and the defendant carriers' allegedly unlawful behavior within 
the meaning of sections 260 or 275 during the period at issue in the 
complaint. In addition, the plain language of sections 260 and 275 
indicate that Congress sought to enjoin only those activities that 
would cause material financial harm, rather than any financial harm 
whatsoever. Beyond these guidelines, we do not believe it necessary or 
appropriate to delineate specific factual situations that would satisfy 
this burden since the evidentiary proof of material financial harm will 
likely vary widely in different cases. We agree with PTG, SWBT, and 
USTA, however, that allegations of material financial harm should be 
supported by documentation and affidavits sufficient to enable the 
Commission to quantify such harm with reasonable certainty.
J. Damages
    1. Bifurcation by the Commission and the Supplemental Complaint 
Process. a. The NPRM. 171. In the NPRM we sought comment on whether the 
Commission legally could and/or should bifurcate liability and damages 
issues on its own motion in certain circumstances. In our experience, 
the damages phase of the formal complaint process is often cumbersome 
and protracted largely due to the scope and magnitude of discovery 
typically requested to substantiate or refute damages claims. The 
Commission noted that damages discovery is a waste of the time and 
resources of both the Commission and the parties when no violation or 
liability is found. The Commission further noted that the deadlines 
mandated by the new statutory complaint provisions allow very little 
time for complainants to present evidentiary arguments sufficient to 
establish both a violation of the Act and a proper measure of damages 
incurred as a consequence of such violation within the applicable 
deadlines. We stated in the NPRM that our goal was to eliminate or 
minimize the delay that is often inherent in damages issues.
    172. In the NPRM, we proposed to encourage complainants to 
bifurcate voluntarily their liability and damages issues by reserving 
the right to voluntarily file a supplemental complaint for damages 
after liability has been determined. This procedure was available under 
the previous rule Sec. 1.722(b). Where a complainant voluntarily 
bifurcated a complaint proceeding using the supplemental complaint 
procedure, the Commission would defer adjudication of all damages 
issues until after a finding of liability. We proposed that a 
complainant's use of this provision in a formal complaint proceeding 
subject to a statutory deadline would enable the Commission to make a 
liability finding within such deadline and still preserve the 
complainant's right to establish a damage award under a less pressing 
schedule. We noted that, while bifurcation could result in a faster 
complaint proceeding if no liability were found, the overall proceeding 
could be significantly longer if liability was found and damages were 
decided in a second, separate proceeding. We emphasized, however, that 
complainants would want to avail themselves of the supplemental 
complaint bifurcation approach in most instances to avoid the 
possibility that the deadlines would not provide them with enough time 
to develop their damages claims. We noted that bifurcation through the 
voluntary supplemental complaint process would be particularly 
appropriate in those cases in which a complainant sought both 
prospective relief and damages incurred as the consequences of a 
defendant carrier's violation of the Act or a Commission rule or order. 
For example, we stated that a decision by the Commission requiring a 
defendant carrier to terminate a particular practice or to provide 
service to a complainant under more reasonable terms and conditions 
would constitute a final, appealable order, as would a decision denying 
a complainant such relief. This would be the case even if issues of 
damages remained to be resolved as a result of the complainant's 
decision to file a supplemental complaint. We sought comment on the 
relative benefits to be gained by bifurcating liability and damages 
issues in section 208 proceedings through complainants' voluntary use 
of the supplemental complaint process. We also asked parties to 
identify bifurcation standards that might help ensure that both 
liability and damages issues are fully resolved within the earliest 
practicable time frame.
    b. Comments. 173. Bell Atlantic and NYNEX comment that the 
Commission currently has the authority to bifurcate a complaint without 
the complainant's acquiescence. BellSouth argues that not all 
complaints are appropriate for bifurcation.
    174. The majority of commenters support voluntary bifurcation of 
liability and damages issues. CompTel, GST, ICG, KMC, MCI, MFS, TCG, 
and TRA support bifurcation only if it is voluntary. CompTel argues 
that forced bifurcation could impair a complainant's due process rights 
by causing undue delay. ICG argues that complainants need assurances 
that their damages claims will be resolved promptly following a finding 
of liability with expedited discovery. TRA argues that bifurcation 
should remain voluntary in light of the delay in recovering damages 
which is inherent in a bifurcated proceeding.
    175. CBT argues that bifurcation will reduce the time pressure of 
resolving claims within five months because each phase of the case will 
be simpler to deal with and, if liability is not established, the 
damages claim will no longer be at issue. CBT argues further that such 
bifurcation will result in a less compressed schedule and, therefore, 
increase discovery opportunities. CBT contends, however, that the 
damages phase would still have to be resolved

[[Page 1015]]

within the statutory deadline. GTE argues that bifurcation will prevent 
the domination of discovery with damages issues. GTE and NYNEX assert 
that once liability is found, a defendant will have more incentives to 
settle informally. NYNEX argues that the proposed bifurcation rules 
will make it easier for the Commission to resolve substantive liability 
issues within the statutory deadlines while preserving the rights of 
the parties to a full investigation into injury and damages. NYNEX 
further argues that bifurcation decreases unnecessary costs, as a 
complainant will not have to go through the expense of quantifying its 
damages until it has prevailed on liability. TRA asserts that 
bifurcation benefits the parties because it will speed the resolution 
of liability issues and preclude unnecessary expenditures of time and 
resources. SWBT contends that bifurcation will be beneficial to the 
parties because the substantial time required to resolve damages issues 
will not be wasted where no liability is found. GST, KMC and MFS argue 
that bifurcation benefits the parties because the extensive discovery 
required for damages issues will not be unnecessarily undertaken if no 
liability is established.
    176. MCI argues that the statutory deadline for a particular formal 
complaint should be applied separately to each phase because otherwise 
the parties would not have sufficient time to develop their cases 
fully. TRA asserts that bifurcation effectively waives any statutory 
deadline with regard to damages issues. TCG argues that bifurcation 
will enable the Commission to make a liability finding within the 
statutory deadlines and preserve a complainant's right to a damages 
award.
    177. PTG, GST, and Ameritech seek clarification that a complainant 
must establish ``injury'' for a finding of liability to proceed to the 
damages phase in a bifurcated proceeding. PTG argues that ``injury'' is 
a necessary element of liability, however, it is not interchangeable 
with ``damages'' which are the quantification of losses that result 
from an injury.
    c. Discussion. 178. We find that the Commission has discretion to 
bifurcate liability and damages issues on its own motion pursuant to 
section 208(a) of the Act. Section 208(a) authorizes the Commission 
``to investigate . . . matters complained of in such manner and by such 
means as it shall deem proper.'' We note, however, that the Commission 
only has such discretion to the extent that such bifurcation will not 
violate the statutory deadline applicable to the complaint as filed. 
Therefore, all claims, that are subject to a statutory complaint 
resolution deadline and include a properly supported request for 
damages, require that the Commission issue a final order within the 
deadline on both the liability and damages claims.
    179. However, we both permit and encourage complainants to use the 
supplemental complaint procedures to separate liability and damages 
issues voluntarily such that damages issues will be resolved in 
separate formal complaints. By using the term ``bifurcate'' in 
connection with the supplemental complaint procedures, we contemplate 
the filing of two separate complaints: (1) the initial complaint for 
liability and any applicable prospective relief; and (2) the 
supplemental complaint for damages. Resolution of the liability and 
prospective relief issues on the complaint that only seeks a 
determination of those issues complies with the applicable statutory 
deadline because such a determination resolves all issues properly 
brought before the Commission. The damages issues will not have been 
brought before the Commission until, and unless, the supplemental 
complaint for damages is actually filed. We modify Sec. 1.722 of the 
rules to clarify this procedure.
    180. Given the new complaint provisions, requiring final Commission 
orders resolving certain complaints within specified time frames, 
encouraging the parties to separate their liability and damages claims 
into separate complaints is the most practical means to focus scarce 
resources on the determination of liability issues and, when necessary, 
granting prospective relief quickly. In addition, in cases where no 
liability has been found, significant resources will have been saved as 
a damages complaint will not have been necessary. Promoting voluntary 
separation of liability and damages issues is consistent with the pro-
competitive goals and policies underlying the 1996 Act's complaint 
resolution deadlines and will not adversely affect the Commission's 
ability to resolve complaints raising competitive and other marketplace 
disputes on an expedited basis. On the contrary, such separation will 
enable the Commission and the parties to focus initial resources on 
addressing allegations of anti-competitive conduct and any necessity 
for prospective injunctive relief.
    181. We disagree with CBT's assertion that a complainant should be 
required to prosecute its liability and damages claims in a single 
complaint. Nothing in the Act prohibits a complainant from choosing to 
bring its liability and damages claims in separate complaints. The 
supplemental complaint process is voluntary and the decision to pursue 
damages in a separate proceeding is made solely by the complainant. 
Further, the Commission has no basis on which to make a finding 
regarding damages if such claims have not yet been presented by the 
complainant. Thus, a decision on a liability complaint that reserves 
the right to file a supplemental complaint for damages is a final 
decision on all matters the complainant has presented to the Commission 
in its complaint.
    182. As a policy matter, we note that a notice of intent to seek 
damages in a supplemental complaint contained in a complaint for 
liability has the effect of tolling the statute of limitations for 
damages claims. Moreover, a complainant may file a supplemental 
complaint for damages following a finding of liability even if it gave 
no notice of such intent at the time it filed its original complaint. 
Thus, the distinction between the treatment of a supplemental complaint 
for damages when the complainant gave notice of its intent to file such 
supplemental complaint in its complaint for liability and when the 
complainant failed to give notice of its intent to file such 
supplemental complaint in its complaint for liability is solely the 
period of time for which damages may be assessed against a defendant. 
Under the circumstances, a rule that would require complainants to 
prosecute damages within the statutory deadline, regardless of whether 
the complainant chose to reserve its right to file a supplemental 
complaint for damages, would, in fact, shorten the statute of 
limitations for bringing complaints for damages in those complaints 
that are subject to a statutory resolution deadline. We do not find 
that it was the intent of Congress to limit the rights of complainants 
in this manner.
    183. We find that complainants will elect to pursue their liability 
and damages claims in separate proceedings because it will be to their 
advantage to postpone expending time and money developing proof of 
their damages claims until after liability and issues of prospective 
relief have been established. Complainants will also benefit from being 
provided an extended period within which to support their damages 
claims factually. Most importantly, complainants will benefit from 
swifter resolution of liability issues through the filing of separate 
complaints for the resolution of liability and damages issues, and, 
therefore, swifter provision of the prospective relief needed to halt 
allegedly anti-competitive conduct. For this reason, the provision in 
the rules for complainants to file such separate

[[Page 1016]]

complaints is consistent with the Act's goal of timely resolution of 
competitive issues to open markets for all potential entrants and 
competitors, not just the parties to the complaint.
    184. We also recognize the importance of swift resolution of 
damages complaints once the liability of a defendant carrier has been 
established. We agree with commenters who argue that many complainants 
will bifurcate liability and damages claims only if they expect that 
the Commission will conclude the damages phase rapidly. While we 
believe that parties will benefit substantially from complaint 
bifurcation in many instances, rules and polices must be in place to 
ensure resolution of damages complaints promptly and effectively. A 
paramount concern of a complainant seeking damages is to obtain 
monetary relief for harm suffered as a consequence of the defendant 
carrier's actions. Similarly, defendant carriers have an interest in 
quickly resolving any uncertainty about the amount or extent of their 
damages liability. Therefore, we will endeavor to resolve supplemental 
damages complaints in the same length of time within which the 
liability phase was resolved. As a general rule, damages proceedings 
will be resolved within the same amount of time required to rule on the 
preceding liability complaint. For example, a provider of alarm 
monitoring services that elects to file a supplemental complaint for 
damages, based on a finding by the Commission that the defendant 
carrier is liable for a violation of section 275 of the Act, can 
reasonably expect to have its damages claims resolved within a similar 
120-day period. In addition, with respect to supplemental complaints 
for damages that are filed following a finding of liability on a matter 
that was not subject to a statutory deadline, we will endeavor to 
resolve such complaints within five months of the date of filing. This 
approach furthers the intent underlying the deadlines that Congress 
established for different types of complaints. Establishing rules and 
policies that promote swift determination of damages claims provides a 
significant incentive for common carriers to comply with the Act and 
the Commission's rules and orders. It also gives all complainants 
reasonable assurances of the length of time a damages phase is likely 
to take. Such information will help parties that plan to seek damages 
weigh the benefits of bifurcating the liability and damages aspects of 
their claims prior to filing a complaint with the Commission.
    185. We also recognize that damages complaints often raise issues 
of extraordinary factual and/or legal complexity, the resolution of 
which may require substantial expenditures of time and resources by the 
parties. In the paragraphs below, we discuss rules that are designed to 
facilitate the computation of damages by complainants and defendants 
and promote the prompt resolution of damages disputes. We believe that 
these rules will help us attain our goal of resolving all damages 
complaints within five months from the date filed. Nonetheless, we 
believe that cases of extraordinary complexity could require 
substantially more time. As a general rule, we will endeavor to resolve 
such complex complaints within twelve months from the date filed.
    186. We recognize the distinction commenters make between 
``injury'' and ``damages,'' and agree that a party that has not shown 
that it suffered an injury has not met a threshold requirement for 
substantiating a claim for damages. We disagree, however, with the 
assertion by these commenters that a determination of ``injury'' in a 
liability complaint is necessary to proceed to a supplemental complaint 
for damages when a complainant chooses to use the supplemental 
complaint procedures. Contrary to the commenters' claims, proof of 
``injury'' is not necessary to establish a violation of the Act within 
the meaning of section 208. Section 208 of the Act only requires proof 
that the defendant carrier has violated the Act or a Commission rule or 
order for a complainant to prevail. Additionally, determining whether 
an individual complainant has been injured and is entitled to monetary 
damages does not further the pro-competitive goals and policies 
underlying the 1996 Act in the same way that addressing allegations of 
anti-competitive conduct and the need for injunctive relief does. That 
is, the question of injury goes to the resolution of an individual 
dispute rather than the resolution of a disputed issue that affects 
competition in an industry. For that reason, we conclude that, where 
the fact of injury does not need to be established to prevail on the 
issue of liability in a complaint proceeding, a prior determination of 
injury is not a prerequisite to the filing of a supplemental complaint 
for damages. A complainant must always, however, prove injury and 
quantify its monetary damages with reasonable certainty to prevail on 
its claim for damages.
    2. Detailed Computation of Damages. a. The NPRM. 187. In the NPRM 
we proposed to require that any complaint or supplemental complaint 
seeking an award of damages contain a detailed computation for such 
claim. That is, every complaint for damages would include a computation 
for every category of damages claimed, as well as identification of all 
documents or material on which such computation was based. For example, 
in cases in which a complainant is challenging the reasonableness of 
charges or rate levels applied by a carrier to particular services 
taken by the complainant, the complainant's computations would have to 
identify clearly the precise nature of the service taken and applicable 
charges broken down by such factors as minutes of use, traffic mileage 
and volume, as well as any applicable discounts or other adjustment 
factors.
    b. Comments. 188. ACTA, BellSouth, CBT, GST, KMC, MFS, NYNEX, and U 
S West support requiring complaints seeking an award of damages to 
contain a detailed computation of damages claimed. SWBT asserts that 
such a requirement should reduce the filing of frivolous claims for 
speculative damages that are not subject to proof. GST, KMC and MFS 
argue that such a requirement should encourage settlement by clarifying 
a party's claim. The cable entities and MCI oppose such a requirement, 
expressing concern that complainants may not have access to sufficient 
information prior to discovery to prepare and submit detailed damages 
computations or computation formulas.
    189. ICG argues that the proposed detailed computation of damages 
should only be required to be made in good faith and that complainants 
should be provided with the opportunity to amend the complaint to 
reflect an updated computation of damages following discovery. MCI 
argues that requiring the complaint to contain a detailed computation 
of damages would violate a complainant's due process rights and 
suggests, as an alternative, requiring a complainant to outline its 
damages methodology and identify what damages information it lacks. 
While they do not oppose the proposed requirement that a complaint 
contain a detailed computation of damages, U S West argues that the 
Commission must take into account the reasonable availability of 
necessary information, and TRA asserts that the Commission must be 
careful not to impose an overly rigid or binding requirement with 
regard to a detailed or definitive damages calculation prior to the 
receipt of an answer and completion of discovery.
    c. Discussion. 190. After considering the concerns raised by the 
commenters, we modify the proposed rule. We require that a complainant 
seeking damages must file in its complaint or supplemental complaint 
either a detailed computation of damages or a

[[Page 1017]]

detailed explanation of why such a computation is not possible at the 
time of filing. Commenters raise valid concerns about the ability of 
complainants to substantiate damages claims at the beginning of a 
formal complaint proceeding. In light of these considerations, we 
require all complaints or supplemental complaints seeking an award of 
damages to contain either:
    (a) A detailed computation of damages, including supporting 
documentation and materials; or
    (b) An explanation of:
    (i) What information not in the possession of the complaining party 
is necessary to develop a detailed computation of damages;
    (ii) Why such information is unavailable to the complaining party;
    (iii) The factual basis the complainant has for believing that such 
evidence of damages exists; and
    (iv) A detailed outline of the methodology that would be used to 
create a computation of damages with such evidence.
    191. This rule strikes the appropriate balance between the need for 
complainants to be diligent in establishing their claims and our 
recognition that, in certain instances, a complainant may not possess 
sufficient facts at the initial stages of a complaint proceeding to 
prepare a detailed computation of damages alleged. This rule also is 
consistent with the Commission's adoption of a policy of encouraging 
complainants to have damages claims resolved separately from liability 
issues using the supplemental complaint process, because it provides 
the complainant with the benefit of additional time to develop and 
support factually an accurate computation of damages following a 
finding of liability. It would have been unduly burdensome to require a 
complainant who has been unable to obtain access to substantiating 
information, after it has made good faith efforts to obtain such 
information, to support factually its damages claim without providing a 
means to substantiate such claims. Further, such a rule would have 
reduced the incentives on defendants to negotiate damages issues in 
good faith.
    3. Ending Adjudication With a Determination of the Sufficiency of a 
Damages Calculation Method. a. The NPRM 192. In the NPRM we proposed 
that the Commission's adjudication of damages should end with a 
determination of the sufficiency of the computation method submitted by 
the complainant, instead of making a finding as to the exact amount of 
damages incurred. We stated that the benefit of such a procedure would 
be that the Commission would be spared the detailed and time-consuming 
investigation of the facts necessary to establish an exact amount of 
damages. As an example of how such a procedure would be implemented, we 
noted that a similar procedure is used in complaints dealing with pole 
attachments. We sought comment on this proposal.
    b. Comments. 193. CBT, CompTel, GST, and SWBT oppose a rule ending 
the Commission's adjudication of damages with a determination of the 
sufficiency of the computation method. CBT and CompTel argue that 
parties will be unable to resolve issues remaining in dispute, such as 
the numbers to be plugged into an approved method. CBT argues that such 
disputes will require further Commission involvement to resolve. GST 
argues that parties are entitled to a final resolution of all 
substantive issues, a category it contends includes the actual amount 
of damages incurred. SWBT argues that because such a procedure would 
not require a complainant to meet its burden of proof, it would be a 
denial of a defendant's due process rights. AT&T supports this proposal 
if the Commission remains available to resolve further disputes among 
the parties and provide a final resolution if the parties cannot agree 
to one.
    c. Discussion. 194. In cases where liability and damages claims 
have been severed using the supplemental complaint process, the 
Commission may end adjudication of damages with a determination of the 
sufficiency of the damages computation method submitted by the 
complainant. After considering the concerns raised by the commenters, 
we modify the proposed rule to reflect that if the Commission finds the 
damages computation submitted by the complainant unsatisfactory, the 
Commission may, in its discretion, modify such computation method or 
require the complainant to resubmit such computation. In addition, the 
rule specifically prohibits the computation method from incorporating 
an offset for a claim of a defendant against a complainant. To ensure 
the parties are diligent in their negotiations to apply the approved 
calculation method, we shall require that, within thirty days of the 
date the damages computation method is approved and released, the 
parties must file with the Commission a joint statement which will do 
one of the following: (1) detail the parties' agreement as to the 
amount of damages; (2) state that the parties are continuing to 
negotiate in good faith and request that the parties be given an 
extension of time to continue such negotiations, or (3) detail the 
bases for the continuing dispute and the reasons why no agreement can 
be reached. In this way, the Commission will monitor the parties' 
compliance with its directive to negotiate a resolution of the dispute 
in good faith using the mandated computation method.
    195. This rule permits the Commission to avoid the detailed and 
time-consuming investigation of the facts necessary to establish an 
exact amount of damages where such investigation may reasonably be 
delegated to the parties. At the same time, however, it provides a 
means for parties to return to the Commission for resolution of ongoing 
disputes if parties are unable to agree to a final amount of damages. 
This rule encourages good faith negotiation among the parties by 
requiring parties to provide detailed explanations if they fail to 
resolve their dispute. We emphasize that the Commission will always 
retain the right to determine the actual amount of damages in those 
cases where the establishment of damages does not lend itself to such a 
means of resolution. We also conclude that requiring parties to reach 
an agreement within a limited time addresses the concerns raised by 
some commenters that the parties would have no recourse if they are 
unable to apply a damages computation method successfully.
    4. Settlement Period. a. The NPRM. 196. In the NPRM we proposed, in 
conjunction with the proposals to resolve liability and damages claims 
separately using the supplemental complaint process, to set aside a 
limited period, following a finding of liability and prior to the 
damages phase, during which the parties could engage in settlement 
negotiations or submit their damages claims to voluntary ADR mechanisms 
in lieu of further proceedings before the Commission.
    b. Comments. 197. GST, SWBT, TRA and U S West support setting aside 
a limited time period, following a finding of liability, in which to 
encourage settlement and/or participation in ADR. SWBT asserts that a 
finding of liability increases the defendant's incentive to settle. U S 
West argues that the Commission does not go far enough and that ADR 
procedures should be used wherever possible to resolve entire 
complaints.
    c. Discussion. 198. In cases where liability and damages claims 
have been severed using the supplemental complaint process, the 
Commission may suspend proceedings for a period of fourteen days 
following the filing of a supplemental complaint for damages, to

[[Page 1018]]

allow parties to attempt to negotiate a settlement or use ADR 
procedures. The staff has the discretion to delay this period until 
later in the damages phase, when warranted by the facts of an 
individual case.
    199. Encouraging parties to settle their disputes is in the 
interests of the Commission and the parties. Commenting parties 
recognize the benefits of settlements reached by the parties and 
support the establishment of this settlement period to further 
settlement negotiations. The timing of this settlement period is 
especially useful because it follows the determination of liability. A 
finding of liability will increase the parties' incentives to settle, 
as a major issue formerly in dispute will have been resolved. We 
recognize, however, that information disclosures may be necessary in 
some cases for parties to assess adequately the amount of damages 
incurred. In such cases, a settlement period immediately following the 
filing of the supplemental complaint for damages may be too early in 
the proceeding to be useful. Providing the staff with the discretion to 
delay the settlement period until after information disclosures have 
been made maximizes the Commission's ability to encourage settlement on 
a case-by-case basis.
    5. Referral of Damages Issues. a. The NPRM. 200. In conjunction 
with the proposals to resolve liability and damages claims separately 
using the supplemental complaint process, we sought comment on the 
benefits of referring damages issues to ALJs for either decision 
following a finding of liability or, by agreement of the parties, 
mediation. We noted that such referral would be at the discretion of 
the Commission staff pursuant to delegated authority, depending on the 
particular facts and circumstances involved. We also sought alternative 
proposals that would serve to minimize or reduce the need for costly 
and protracted proceedings on the issue of damages.
    b. Comments. 201. Commenters generally support the referral of 
damages issues to ALJs. ICG compared this procedure to the federal 
courts' use of special masters. BellSouth suggests that parties should 
have the option of mediation or referral to a special master. KMC 
asserts that parties need to have the right to appeal any decision on 
damages made by an ALJ. GTE argues that the ALJ should have the 
authority to request production of evidence. GTE seeks clarification 
that an ALJ's authority would be restricted to the resolution of 
damages issues.
    c. Discussion. 202. We adopt a rule authorizing the Chiefs of the 
Common Carrier Bureau and Wireless Telecommunications Bureau to refer 
damages disputes to ALJs for either decision following a finding of 
liability or, by agreement of the parties, mediation. This rule would 
work in conjunction with cases in which liability and damages claims 
have been severed using the supplemental complaint process. The 
commenters generally support the use of ALJs to resolve damages issues. 
We conclude, despite GTE's concerns regarding the authority of ALJs in 
damages hearings, that special rules or procedures are not needed to 
guide the ALJs in their deliberations given the narrow focus of damages 
proceedings. The hearing rules provide for the designation of specific 
issues in the hearing designation order. Once liability has been 
determined, the question of damages is largely a factual one. ALJs are 
expert triers of fact well suited to conduct fact-finding proceedings. 
Regarding appeals of ALJ decisions, we note that the ALJ hearing rules 
provide the means for parties to seek review of an ALJ decision. If the 
parties agree to mediation, however, the right to seek review of the 
ALJ's mediation resolution would be contained within the terms pursuant 
to which the parties agreed to such mediation.
    6. Deposit of Funds into an Escrow Account. a. The NPRM. 203. In 
the NPRM we proposed that the Commission be given discretion to require 
a defendant to place a deposit in an interest-bearing escrow account 
following a finding of liability in cases in which liability and 
damages claims have been severed using the supplemental complaint 
process. The purpose of such a deposit would be to cover all or part of 
the damages for which the defendant carrier may be found liable in 
order to provide a complainant with some assurance that a judgment can 
be readily collected. We proposed that, in exercising this discretion, 
the Commission would apply standards similar to those used to determine 
whether a preliminary injunction is appropriate. We emphasized that the 
Commission would not administer any such account. We sought comment on 
this proposal as well as alternative proposals that would serve to 
facilitate and expedite the resolution of damages claims.
    b. Comments. 204. Commenters are split over whether or not the 
Commission could or should require the deposit of funds into an escrow 
account following a finding of liability. AT&T, TRA, GST, KMC and MFS 
support such a procedure. AT&T, GST, KMC and MFS further support 
allowing the posting of a bond as an alternative to depositing funds 
into an escrow account as a means to ensure payment. GST, KMC, and MFS 
argue that preliminary injunction standards do not need to be met to 
require such a bond because liability will already have been 
determined. GST, KMC, and MFS argue that the Commission should require 
a showing of irreparable harm and the likelihood that the defendant 
will default on the damages award before requiring the posting of a 
bond or the deposit of funds into an escrow account.
    205. CBT, SWBT, GTE, and PTG oppose the proposal, arguing that the 
Commission lacks authority to impose such a requirement. CBT, SWBT, and 
PTG argue that a Commission order for payment of damages pursuant to 
section 209 of the Act is not an enforceable money judgment. CBT and 
SWBT argue that prospective money damages are insufficient to justify a 
preliminary injunction, and that the proper compensation for any delay 
in a damages award is the payment of interest. PTG asserts that such a 
rule creates an unnecessary administrative burden in light of the fact 
that there is no evidence of a problem in collecting damages from 
carriers.
    c. Discussion. 206. In cases in which liability and damages claims 
have been severed using the supplemental complaint process, following a 
finding of liability, the Commission shall have discretion to require a 
defendant either to post a bond for, or place in an escrow account, an 
amount the Commission determines is likely to be awarded, if such 
relief is justified following consideration of the following factors:
    (a) The likelihood of irreparable injury in the absence of such a 
deposit;
    (b) The extent to which damages can be accurately estimated;
    (c) The balance of hardships between complainant and defendant; and
    (d) Whether public interest considerations favor the posting of a 
bond or establishment of an escrow account.
    207. Requiring the posting of a bond or the deposit of funds into 
an escrow account both protects against a defendant's future inability 
to satisfy an enforceable judgment and removes the benefit a defendant 
receives from delaying payment in a case. Contrary to what several 
commenters suggest, neither the posting of a bond nor the deposit of 
funds into an escrow account is the enforcement of a money judgment. 
The rule does not provide that a complainant may execute its judgment 
on the bond or account

[[Page 1019]]

following a Commission order of damages. The rule merely requires the 
bond or account to be set up as a protective measure. Further, this 
protective measure may only be taken following a finding of liability 
and a Commission assessment of likely damages.
    208. Precedent for the Commission requiring a defendant to deposit 
funds into an escrow account following a determination of liability is 
found in Western Union Telegraph Co. v. TRT Telecommunications Corp., 
and FTC Communications, Inc.
    7. Additional Suggestions From Commenters. a. The NPRM. 209. In the 
NPRM we sought alternative proposals that would serve to facilitate and 
expedite the resolution of damages claims and/or minimize or reduce the 
need for costly and protracted proceedings on the issue of damages.
    b. Comments. 210. ACTA suggests that the Commission codify the 
procedure for a complainant to litigate damages in federal court 
following a finding of liability by the Commission.
    211. GST suggests providing for targeted discovery during a damages 
phase, arguing such discovery should be limited to initial disclosures 
of witnesses, exchange of documents and one deposition for each party.
    c. Discussion. 212. We decline to adopt ACTA's proposal to codify a 
procedure for litigating damages claims in federal court following a 
finding of liability by the Commission. The Act does not provide the 
Commission with the authority to establish federal court procedures. 
Although federal courts occasionally refer cases to the Commission for 
resolution of liability issues, while retaining authority over damages 
issues pending the Commission's liability determination, such referrals 
are initiated by the courts, not the Commission.
    213. We decline to adopt GST's proposal to establish special 
discovery rules for a supplemental complaint proceeding. A supplemental 
complaint is a formal complaint that is limited to the issue of damages 
because the issue of liability has already been determined in a 
separate, prior proceeding. Supplemental complaints are, therefore, 
subject to the formal complaint discovery rules. We conclude that the 
formal complaint discovery rules are adequate to address damage claims 
and the creation of a separate set of discovery rules is unwarranted at 
this time.
K. Cross-Complaints and Counterclaims
    214. The Act imposes new deadlines for actions on certain 
complaints ranging in length from ninety days to five months from the 
date of filing. The NPRM recognized that the filing of cross-complaints 
or counterclaims during a complaint proceeding could inhibit the 
Commission's ability to fully resolve disputes within the mandated time 
frames.
    a. The NPRM. 215. We proposed to allow compulsory counterclaims 
only if filed concurrently with the answer, such that the failure to 
file with the answer would bar the defendant from filing such 
compulsory counterclaim. We also proposed that a defendant electing to 
file permissive counterclaims and cross-claims would be required to 
file such pleadings concurrently with its answer, leaving the defendant 
with the option of filing any barred permissive counterclaims or cross-
claims in a separate proceeding, provided that the statute of 
limitations has not run. We also proposed to revise our rules to 
clarify the applicability of filing fees to complaints, cross-
complaints, and counterclaims.
    b. Comment. 216. CompTel and TRA support the Commission's 
proposals. Most commenters, however, oppose establishing a category of 
compulsory counterclaims that will be barred if not filed concurrently 
with an answer. AT&T, BellSouth, PTG, and NYNEX argue that the time to 
answer (twenty days) is insufficient to allow a defendant to answer the 
complaint, ascertain all possible counterclaims and prepare such 
counterclaims for filing and service in accordance with the proposed 
format and content requirements. GTE further argues that defendants may 
be reasonably unaware of their counterclaims prior to the date an 
answer is due. CBT, GST, KMC, and MFS suggest that compulsory 
counterclaims filed with the answer should not be subjected to the same 
high levels of evidentiary support as required of the complaint. AT&T 
and NYNEX support a rule requiring counterclaims and cross-complaints 
not filed concurrently with the answer to be brought in separate 
proceedings. CBT and U S West argue that the Commission's jurisdiction 
over counterclaims is limited to instances where both parties to a 
proceeding are carriers and the counterclaim involves an allegation of 
a violation by the complainant that could itself be the subject of a 
separate complaint before the Commission.
    c. Discussion. 217. We require all cross-complaints and 
counterclaims to be filed as separate, independent actions. While the 
NPRM originally proposed to distinguish between the treatment of 
compulsory and permissive cross-complaints and counterclaims, we have 
decided that banning all cross-complaints and counterclaims is 
necessary in light of the statutory deadlines in the 1996 Act. Cross-
complaints and counterclaims would not be filed until twenty days into 
an ongoing proceeding, thereby shortening the time within which the 
Commission may adequately consider and resolve such claims. 
Establishing a category of compulsory counterclaims, furthermore, would 
have created an inconsistency between the treatment of claims by 
complainants and counterclaims by defendants. Under such a rule, 
complainants would be permitted to file separate formal complaints 
based on claims arising out of the same transaction or occurrence as a 
pending formal complaint, but defendants would be barred from filing 
counterclaims once the answer had been filed.
    218. The rule we adopt also satisfies the concerns of some 
commenters that the Commission only has jurisdiction to consider those 
claims that the defendant could have filed against the complainant 
independent of the ongoing litigation. That is, the Commission does not 
have the authority to assert pendent jurisdiction over disputes for 
which no independent jurisdictional ground exists. In light of both the 
time constraints within which the Commission must work and the nature 
of allowable cross-complaints and counterclaims, we conclude that all 
such claims are better treated as individual complaints. To preclude 
the possibility of inconsistent rulings on identical facts, a 
complainant filing a formal complaint that shares any factual basis 
with another formal complaint to which the complainant is a party, 
whether ongoing or finally resolved, must include this fact in such 
formal complaint and its accompanying formal complaint intake form. We 
note that, under the broad powers of section 208, the Commission always 
has the authority to consolidate separate complaint cases. Where 
appropriate, the staff will have discretion to consolidate cases so 
that all claims arising out of the same transaction or occurrence may 
be adjudicated in a single proceeding.
    219. We decline to adopt our proposal to revise our rules to 
clarify the applicability of filing fees to cross-complaints and 
counterclaims. Such a rule would be moot in light of the rule adopted 
prohibiting all cross-complaints and counterclaims.
L. Replies
    a. The NPRM. 220. We proposed to prohibit replies to answers unless 
specifically authorized by the

[[Page 1020]]

Commission. We noted that our rules made filing a reply voluntary, and 
that failure to reply was not deemed to be an admission of any 
allegation contained in the answer, except for facts contained in 
affirmative defenses. We proposed to authorize replies only upon a 
complainant's motion, filed within five days of service of the answer, 
showing good cause to reply to any affirmative defenses supported by 
factual allegations that were different from any denials also contained 
in the answer. We also proposed to provide that a complainant's failure 
to file a reply to an answer would be deemed a denial of any 
affirmative defenses.
    221. We also proposed to prohibit replies to oppositions to 
motions. We stated our belief that such replies seldom aid the 
Commission in resolving factual or legal issues and were often used to 
repeat information already contained within the original motion itself. 
We sought comment on this and any other alternative proposals.
    b. Comments. 222. Many commenters, including AT&T, BellSouth, GST, 
KMC, MFS, GTE, NYNEX, and TRA support our proposals to prohibit, in 
most instances, replies to defendants' answers. They agree that replies 
are unnecessary and redundant as long as complainants are deemed to 
have denied all affirmative defenses and are permitted to respond for 
good cause, such as a showing that a defendant has misrepresented 
pertinent facts. ATSI and the cable entities, however, argue that a 
reply is necessary to give a complainant the opportunity to respond to 
matters that might be raised for the first time in the answer and to 
withdraw claims that may have been satisfactorily addressed in the 
answer. NYNEX argues that a complainant should be permitted to file a 
reply to an answer if it is replying to an affirmative defense and it 
is relying on factual allegations that are different from any denials 
contained in the answer. ICG argues that prohibiting replies would 
generate more work for the Commission, in the form of responding to 
motions for leave to file replies.
    223. Regarding our proposal to prohibit replies to oppositions to 
motions, PTG points out that Sec. 1.727(f) of the Commission's existing 
rules already prohibits replies to oppositions to motions. CompTel, 
GST, KMC, MFS, and GTE assert that replies to oppositions to motions 
may be warranted where the opposition distorts facts or where matters 
are raised for the first time in the opposition.
    c. Discussion. 224. We modify our proposed rule and permit 
complainants to file replies that respond only to affirmative defenses. 
We shall deem any failure to reply to an asserted affirmative defense 
as an admission of such affirmative defense and of any facts supporting 
such affirmative defense that are not specifically contradicted in the 
complaint. We note that the NPRM originally proposed to require parties 
to move for leave to file replies to affirmative defenses and that 
failure to reply to an affirmative defense would be deemed a denial of 
such defense. The rule we adopt departs from our proposal in the NPRM 
because we are persuaded by the commenters that requiring complainants 
to seek leave to file replies to affirmative defenses is likely to 
generate unnecessary work for the staff. Instead, we have chosen to 
limit replies to those that respond to new allegations raised in an 
answer in the form of affirmative defenses. Complainants will be 
required to support their replies to affirmative defenses in the same 
manner that they are required to support their claims in the complaint. 
This requirement will aid the staff by the presentation of specific 
evidence regarding each affirmative defense. General replies to 
answers, however, are often redundant and unnecessary because 
complainants simply repeat claims that were filed with the original 
complaint. Such general replies are prohibited. We do not modify the 
existing rule that prohibits replies to oppositions to motions.
M. Motions
    225. The NPRM proposed to modify the rules pertaining to motions in 
order to enhance the efficiency of the formal complaint process, 
expedite the filing and consideration of motions, and eliminate 
unnecessary or duplicative pleadings.
    1. The Filing of Motions. a. The NPRM. 226. In the NPRM, we 
proposed to require a party filing a motion to compel discovery to 
certify that it had made a good faith attempt to resolve the matter 
before filing the motion. We also proposed to eliminate motions to make 
the complaint ``definite and certain,'' stating that, under the 
proposed rules, complaints would have to be very definite and certain 
to avoid being dismissed at the outset.
    b. Comments. 227. All parties that commented on this issue agree 
that the Commission should require certification of good faith attempts 
to resolve discovery disputes informally as a condition to the filing 
of any motion to compel. Commenters also support the proposal to 
eliminate motions to make a complaint more definite and certain. 
BellSouth supports eliminating motions to make complaints ``definite 
and certain'' as long as the Commission will consider motions to 
dismiss for failure to state a claim or failure to comply with 
procedural requirements.
    c. Discussion. 228. We require a party that files a motion to 
compel answers to discovery requests to certify that it has made a good 
faith attempt to resolve the matter before filing the motion. We 
conclude, and commenting parties agree, that adoption of this rule will 
limit Commission involvement in conflicts that may be easily resolved 
by the parties themselves.
    229. Motions to make the complaint ``definite and certain'' are 
prohibited, as such motions should be superfluous under the new format 
and content requirements for initial pleadings. BellSouth's suggestion 
that the Commission consider motions to dismiss is inapposite to our 
decision to eliminate motions to make a complaint ``definite and 
certain.'' The rationale for eliminating motions to make complaints 
more ``definite and certain'' is that our newly-adopted stringent 
pleading requirements will ensure the filing of complaints that are 
``definite and certain.'' We do not intend to prohibit the filing of 
motions to dismiss a complaint for failure to state a claim or failure 
to comply with procedural requirements.
    2. Oppositions To Motions. a. The NPRM. 230. In the NPRM, we stated 
our intent to expedite further formal complaint proceedings by 
modifying the rules regarding oppositions to motions. We proposed to 
make failure to file an opposition to a motion possible grounds for 
granting the motion, although the filing of oppositions to motions 
would remain permissive. Additionally, we proposed to shorten the 
deadline for filing oppositions to motions from ten to five business 
days.
    b. Comments. 231. GST, KMC, MFS, NYNEX, and SWBT support the 
proposal to make failure to file an opposition to a motion possible 
grounds for granting the motion, arguing that it is reasonable to 
require a party to articulate its reasons for opposing a motion. ACTA, 
however, opposes such a proposal, arguing that if the failure to file 
an opposition can be grounds for granting a motion, the filing of an 
opposition will not be permissive in any real sense. AT&T warned that 
failure to file an opposition to a motion should not be an automatic 
basis for granting the motion.
    232. Many commenters, including AT&T, BellSouth, GTE, PTG, SWBT, 
and TRA, support the shortening of the period to file an opposition to 
a motion to five business days. GTE suggests that the rules provide a 
procedure to seek an

[[Page 1021]]

extension of time to oppose a motion when circumstances warrant it. PTG 
suggests that motions be served by facsimile to give parties more time 
to respond. CBT opposes the shortening of time, arguing that more time 
is needed to respond to complex motions, and suggests instead that the 
time for filing be reduced to ten calendar days rather than five 
business days.
    c. Discussion. 233. A party's failure to file an opposition to a 
motion is possible grounds for granting such motion. We note that the 
commenters misconstrue the meaning of the statement that it is 
``permissive'' to file an opposition to a motion. This statement merely 
means that the Commission does not require a party to take affirmative 
steps to oppose a motion against it. This rule does not, however, 
alleviate any party's burden to represent fully its own interests 
before the Commission. Any party that chooses not to file an opposition 
to a motion runs the risk that the motion will be granted without 
consideration of that party's views. Because the Commission is 
prohibited from acting in an arbitrary and capricious manner, staff 
will not grant unopposed motions that are frivolous, inconsistent with 
the Commission's rules, or that may create unnecessary delay.
    234. The deadline to file an opposition to a motion is five 
business days, with the time running from the date service is 
effective. Reduction of the number of days a party has to respond to a 
motion will speed up the motions process. We disagree with CBT's 
suggestion to use ten calendar days rather than five business days to 
determine filing due dates because we find that a reduction to ten 
calendar days will not save sufficient time in light of the statutory 
deadlines in the Act. Five business days will provide the opposing 
party with seven calendar days to prepare, file and serve an 
opposition, with exceptions for when a holiday falls in the five 
business day period. Ten business days would provide the opposing party 
with fourteen calendar days to prepare, file and serve an opposition, 
with exceptions for when a holiday falls in the ten business day 
period. In contrast to this, CBT's proposed ten calendar days would 
provide the opposing party with ten to thirteen calendar days, 
depending on the day of the week the motion is served and filed and the 
existence of holidays. In response to PTG's suggestion that motions be 
served by facsimile, we note that this proceeding adopts rules 
requiring service of motions by hand-delivery, overnight delivery, or 
facsimile transmission followed by mail delivery.
    3. Format, Content, and Specifications of Motions and Orders. a. 
The NPRM. 235. To ease the burden on Commission staff in drafting 
decisional documents within short time frames, the NPRM proposed to 
require all pleadings seeking Commission orders to contain proposed 
findings of fact and conclusions of law with supporting legal analysis. 
The NPRM also proposed that all parties submit with their procedural or 
discovery motions and oppositions to such motions, proposed orders, in 
both hard copy and disk, that incorporate the legal and factual bases 
for granting the requested relief. The NPRM proposed that the computer 
disk submissions be formatted in WordPerfect 5.1, the wordprocessing 
system currently used by the Commission. Furthermore, we proposed to 
require parties to conform the format of any proposed order to that of 
a reported FCC order. Such proposals would reduce the burden on 
Commission staff in drafting orders and letter rulings by enabling the 
staff to either incorporate relevant portions of the parties' 
submissions into the required orders or use the parties' submissions in 
their entirety.
    b. Comments. 236. ACTA and BellSouth agree with the proposal to 
require all pleadings seeking Commission orders to contain proposed 
findings of fact and conclusions of law with supporting legal analysis. 
ACTA states that the added cost to the parties of such submissions 
would be offset by the value of such filing in expediting the 
resolution of cases. On the other hand, MCI, PTG, and CBT argue that 
such inclusions would only be appropriate for certain pleadings, such 
as briefs or motions for summary judgment, because parties may be 
unprepared to make such conclusions prior to conducting discovery and 
reviewing opposing pleadings.
    237. Commenters generally did not oppose the proposals to require 
parties making or opposing procedural or discovery motions to submit 
proposed orders, in both hard copy and disk, that conform to the format 
of reported FCC orders. CBT additionally suggests that parties be 
allowed to submit proposed orders in formats other than WordPerfect 
5.1. MCI opposes requiring parties to submit proposed orders with their 
motions and oppositions proposal, arguing that such a rule will be 
largely inapplicable because most motions will be discovery motions, 
which are resolved by informal letter orders that are not in the format 
of Commission orders. NAD argues that this proposal will be too 
burdensome for consumers with disabilities.
    c. Discussion. 238. After consideration of the comments received, 
we modify the rule proposed and will require only those pleadings 
seeking dispositive orders to contain proposed findings of fact and 
conclusions of law with supporting legal analysis. We define a 
dispositive order as an order that finally resolves one or more claims 
in a complaint. We conclude that this requirement is justified in these 
limited circumstances because it will help to ensure that issues and 
arguments are better framed and presented to the Commission. We agree 
with MCI, PTG, and CBT that such a requirement would not be appropriate 
for interlocutory motions, such as those seeking discovery or 
extensions of time. Requiring complete support for dispositive motions 
will decrease substantially the number of unnecessary motions filed 
with the Commission because parties will be reluctant to file motions 
for which they have no factual or legal basis. This requirement will 
also give Commission staff the option of incorporating the proposed 
findings of fact and conclusions of law with supporting legal analysis 
into orders, thereby easing the burden of drafting orders.
    239. To further facilitate the drafting of orders and letter 
rulings, we adopt our proposals to require parties to submit with their 
procedural or discovery motions and oppositions to such motions, 
proposed orders, in both hard copy and disk, that incorporate the legal 
and factual bases for granting the requested relief. Although some 
commenters argue that such a requirement may often be inapplicable to 
discovery and too burdensome for persons with disabilities, we conclude 
that the benefits of such a rule justify it. The Commission anticipates 
addressing a large number of complaints on an expedited basis. In light 
of the Commission's limited resources, it will be of great assistance 
to Commission staff to have the relief sought or opposed by motion, and 
the basis therefore, set out clearly and concisely in a proposed order 
format. Having such a proposed order, in hard copy and on disk, will 
assist in the timely release of orders or letter rulings on motions. 
Requiring a party to articulate the relief sought in an order may also 
produce more clearly focused arguments. We also conclude that this 
requirement does not overly burden parties, who merely have to transfer 
a portion of the text of their motions or oppositions into the format 
of an order. Finally, if submission of such a draft order does place a 
large

[[Page 1022]]

burden on a particular party, the staff retains the discretion to waive 
this requirement on a case-by-case basis.
    240. We modify our proposed rule concerning the submission of 
proposed orders on disk. We require that computer disk submissions be 
formatted in the Commission's designated ``wordprocessing program,'' 
rather than specifically ``WordPerfect 5.1,'' because the Commission 
may decide to utilize different software in the future. We also decline 
to adopt CBT's proposal to permit parties to submit documents in 
alternative wordprocessing formats. Because of conversion difficulties, 
parties will not be permitted to submit documents in any wordprocessing 
format not used by the Commission. The staff has discretion to grant 
waivers of this requirement to parties upon a showing that such 
wordprocessing program is unavailable to them.
    4. Amendments To Complaints. a. The NPRM. 241. We stated in the 
NPRM that compliance with deadlines in the Act requires that a 
complaint be fully developed prior to filing. In furtherance of this 
goal, we proposed to prohibit the amendment of complaints except for 
changes necessary under 47 CFR 1.720(g), which requires that 
information and supporting authority be current and updated as 
necessary in a timely manner. This would preclude a complainant from 
introducing new issues late in the development of the case.
    b. Comments. 242. BellSouth, PTG, and SWBT support prohibiting 
amendments to complaints because such a bar will encourage compliance 
with the proposed pre-filing requirements and result in a fully 
developed complaint that conforms to format and content requirements. 
Several commenters, however, oppose the prohibition. ACTA, GTE, ICG, 
MCI, and TRA suggest allowing complaints to be amended for good cause, 
e.g. if the complainant could not have reasonably ascertained certain 
facts at the time of filing of the complaint. MCI expresses concern 
that such a prohibition might reward monopoly carriers who withhold 
information. CBT and PTG suggest that any amended complaint be treated 
as a new complaint to restart the statutory resolution deadline.
    c. Discussion. 243. The Act requires expedited resolution of 
certain complaints. An amendment to a complaint subject to a statutory 
deadline on a showing of good cause would require the resolution of 
that claim in a shorter period than provided for in the statutory 
deadline. We believe that the cost of expediting complaint resolutions 
more than Congress anticipated would outweigh any benefit to be had 
from allowing such amendments. Further, we are not persuaded by the 
arguments of ACTA, GTE, ICG, TRA, and MCI that prohibiting amendments 
to complaints will unduly prejudice complainants to the benefit of 
defendants. We also decline to adopt the suggestion of CBT and PTG 
that, instead of prohibiting amendments to complaints, we treat amended 
complaints as new complaints and restart any statutory deadline on the 
date of the ``new complaint.'' We are not persuaded that our 
``treatment'' of an amended complaint as a new complaint would comply 
with the statutory deadline requirements. We note that a complainant is 
not prohibited from filing a separate formal complaint if it discovers 
a new claim at some later point in the complaint process. In addition, 
where appropriate, the staff may consolidate two or more complaints to 
adjudicate all claims arising out of the same transaction or occurrence 
in one proceeding. Thus, we adopt a rule generally prohibiting all 
amendments to complaints. We note that this prohibition on amendments 
in no way relieves the parties of their obligation under Sec. 1.720(g) 
of the Commission's rules to maintain the accuracy and completeness of 
all information and supporting authority furnished to the Commission in 
a pending proceeding. In addition, we note that complainants always 
have the option of filing their complaints in federal court if they 
conclude that the Commission's rules will not afford them the pleading 
opportunities they need. The Commission's rules have long included a 
fact pleading requirement designed to ensure that a party has 
sufficient knowledge of its claims before filing its complaint.
    5. Additional Suggestions From Commenters. a. The NPRM. 244. In the 
NPRM, we sought alternative proposals to modify the rules regarding 
motions.
    b. Comments. 245. BellSouth suggests that any request for an 
interlocutory ruling be deemed a voluntary waiver of any applicable 
statutory deadline shorter than five months. BellSouth reasons that, 
given the Commission's limited resources, such a rule is the only way 
to discourage the filing of time-consuming motions that will preclude 
Commission staff from meeting the statutory deadlines.
    246. AT&T and ICG suggest requiring parties to give advance notice 
of motions to be filed.
    247. PTG suggests that the Commission make a commitment to decide 
all motions within thirty days of filing, rather than waiting until the 
final order is issued.
    c. Discussion. 248. We decline to adopt BellSouth's suggestion that 
a request for an interlocutory ruling be deemed a waiver of the 
applicability of any statutory deadline shorter than five months. As 
discussed in the ``Damages'' section, the parties to a formal complaint 
proceeding do not have the authority to waive statutory deadlines, with 
the exception of the section 271(d)(6)(B) ninety-day deadline. Even if 
the parties did have such authority, a rule that allowed a party to 
waive a statutory deadline by filing any type of interlocutory motion 
would provide a means for such party to manipulate the deadline and, 
thereby, eviscerate the intent of the Act to provide expedited 
resolution for certain complaints.
    249. We decline to adopt a rule requiring parties to provide notice 
of their intent to file a motion because we find that such a 
requirement would not further the timely resolution of motions. We do 
require parties to certify in any motions to compel discovery that good 
faith efforts to resolve the discovery dispute were undertaken prior to 
the filing of the motion. That rule will provide early notice of a 
party's intent to file such a motion. Other types of motions do not 
slow down formal complaint proceedings significantly because, unlike 
discovery disputes, they generally do not need to be resolved to enable 
parties to support their claims in briefs. Furthermore, the delivery of 
all motions will be expedited by our requirement that parties serve all 
motions by hand delivery, overnight delivery, or facsimile transmission 
followed by mail delivery.
    250. We decline to adopt a rule requiring the Commission to rule on 
all motions within thirty days. The intent of this rulemaking is to 
speed up resolution of formal complaints and, to the extent the early 
disposition of a pending motion would further such intent, the 
Commission will rule on motions as expeditiously as possible. We do 
not, however, see the benefit of constraining Commission staff by 
imposing a requirement that all motions be resolved within thirty days.
N. Confidential or Proprietary Information and Materials
    251. In 1993, the Commission revised its rules to require a party 
asserting the confidentiality of any materials subject to a discovery 
request to mark clearly the relevant portions as being proprietary 
information. If the proprietary designation is challenged, that party 
bears the burden of demonstrating, by a preponderance of

[[Page 1023]]

the evidence, that the material falls under the standards for 
nondisclosure enunciated in the Freedom of Information Act (``FOIA'').
    a. The NPRM. 252. Because the format and content proposals may 
require parties to exchange information and materials with their 
initial pleadings, the Commission proposed to allow parties to 
designate as confidential or proprietary any materials generated in the 
course of a formal complaint, and not limit such designation to 
materials produced in response to discovery requests. We sought comment 
on this proposal as well as on whether additional procedures were 
needed in light of the shortened complaint resolution deadlines in the 
Act and our proposals in the NPRM to eliminate certain pleading and 
discovery opportunities.
    b. Comments. 253. All of the parties who commented agree that the 
proposal will encourage parties to exchange information without fear of 
public dissemination. While it supports the Commission's goals, ACTA 
notes that the potential for abuse exists because parties may 
excessively and unnecessarily label documents and information as 
confidential or proprietary. MCI requests that the Commission clarify 
that information considered confidential due to its proprietary, 
sensitive or competitive nature cannot be withheld from production on 
that ground.
    c. Discussion. 254. We conclude that parties shall be allowed to 
designate as confidential or proprietary any materials generated in the 
course of a formal complaint proceeding. The commenters support 
imposing this requirement. We find that, because all parties may have 
information that is both relevant to a dispute and competitively 
sensitive, parties must be assured of protection for their confidential 
or proprietary information if we want to avoid the time consuming 
process of resolving disputes over the treatment of documents and 
information sought to be exchanged, regardless of whether the 
information is produced in response to discovery requests or not. We 
disagree with ACTA's contention that this requirement might be more 
subject to abuse than the prior requirement limiting confidential or 
proprietary designations to materials produced in response to discovery 
requests. We emphasize that designating information or materials as 
confidential or proprietary will not prevent the information or 
materials from being produced, therefore, parties will have little to 
gain by falsely claiming that materials are confidential or 
proprietary. Furthermore, if a proprietary designation is challenged, 
the party claiming confidentiality will continue to bear the burden of 
demonstrating, by a preponderance of the evidence, that the material 
designated as proprietary falls under the FOIA's standards for 
nondisclosure.
    255. The modification of the rule providing for designation of 
material disclosed in the course of a formal complaint proceedings is 
merely an extension of the previous rule, which allowed for the 
designation of materials that were disclosed in response to discovery 
as confidential and proprietary. In current practice, parties that 
reference facts in or attach materials to briefs that have been 
designated as confidential or proprietary serve two copies on opposing 
parties, a public copy that has had confidential materials redacted and 
is clearly marked ``Public Copy'' and a confidential copy that contains 
the material that was redacted from the public copy and is clearly 
marked ``Confidential Copy.'' In addition, the filing party files the 
public copy with the Office of the Secretary and files the confidential 
copy directly with the Commission staff attorney that is handling the 
matter. This practice will not change. In addition, where a complainant 
references facts in or attaches materials to its complaint that have 
been designated as confidential or proprietary, the procedure is 
substantially the same. A confidential copy of the complaint must be 
filed under seal directly with the Branch Chief on which it is required 
to serve two copies of the complaint.
O. Other Required Submissions
    1. Joint Statement of Stipulated Facts. a. The NPRM. 256. The NPRM 
proposed to require parties to submit a joint statement of stipulated 
facts and key legal issues five days after the answer is filed. We 
noted that the ``rocket docket'' rules in the United States District 
Court for the Eastern District of Virginia require parties to submit 
written stipulations of all uncontested facts prior to trial. We stated 
our belief that requiring the parties to submit a joint statement of 
stipulated facts and key legal issues at this stage might promote 
agreement on a significant number of the disputed facts and legal 
issues, as well as help the Commission to determine whether or to what 
extent discovery is necessary.
    b. Comments. 257. Most parties support this proposal. Many 
commenters, however, suggest that the joint statement be submitted 
later in the process to give parties more time to meet and negotiate. U 
S West additionally suggests requiring a joint statement of facts in 
dispute. Bechtel & Cole suggest requiring a joint statement that 
includes an outline of factual claims and legal arguments, and 
BellSouth suggests permitting parties to file unilateral statements if 
the parties cannot reach agreement in time. PTG opposes requiring a 
filing of a joint statement of facts because it believes that parties 
would never stipulate to facts. CompTel also opposes the proposal, 
arguing that nothing will be gained because parties will maintain the 
same positions taken in their fact-based complaints or answers.
    c. Discussion. 258. We conclude that parties shall be required to 
submit a joint statement of stipulated facts and key legal issues. We 
find that the drafting of such a statement, including the discussions 
between the parties that are necessary to the drafting of such a 
document, will promote settlement among the parties or, at the very 
least, narrow the factual and legal issues the Commission will need to 
resolve. The joint statement will further assist the Commission in 
discerning exactly what the parties believe to be the most important 
issues. We disagree with PTG's argument that the proposal should be 
rejected because parties will be unable to stipulate to any facts. We 
find it highly improbable that parties will be unable to stipulate to 
any facts whatsoever. We further conclude, after consideration of U S 
West's proposal, that parties shall be required to file a joint 
statement of disputed facts because such a document will pinpoint the 
exact facts in dispute. Thus, even where parties are unable to agree on 
a single fact, that can be made clear to the staff through the joint 
statement because it will include disputed facts. A clear and 
unequivocal identification of the issues on which the parties cannot 
agree will be especially beneficial to Commission staff when it is 
resolving the need for requested discovery at an initial status 
conference. We also disagree with CompTel's argument that parties will 
simply maintain the same positions taken in their complaints and 
answers. We find that compelling parties to meet after submission of 
the complaint, answer, and any necessary reply will encourage parties 
to negotiate their positions, resulting in agreement on some issues 
and, at a minimum, clarification of the areas in which they disagree. 
Indeed, we have occasionally required parties to submit stipulations of 
fact in past complaints, and have found that the parties often are able 
to reduce significantly the legal and factual issues in dispute.

[[Page 1024]]

    259. Because several commenters expressed concerns about the timing 
of the joint statement of stipulated facts, disputed facts and key 
legal issues, we have extended the time for the filing of the 
statement. Such joint statement shall be submitted to the Commission by 
no later than two business days prior to the initial status conference. 
We conclude that it would provide less of a benefit to the complaint 
proceeding if we extended the filing date of the joint statement any 
further. We have timed the filing of the joint statement to coincide 
with our requirements for interrogatory requests and the ``meet and 
confer'' conference that must take place prior to the initial status 
conference. We find that it is important to require the parties to 
discuss the factual and legal issues at this particular stage. Parties 
will have just reviewed the opposing parties' initial pleadings, 
documentation, and interrogatories but will not yet have participated 
in the more formal initial status conference. Compelling parties to 
disclose their positions on all issues in an informal manner, prior to 
the initial status conference, may be more productive in terms of 
settling or narrowing the issues than if the same discussion took place 
after the initial status conference. The parties may feel obliged to 
take firm positions on the issues in dispute after the initial status 
conference has occurred. Furthermore, we emphasize that the staff has 
discretion to grant additional time to submit the joint statement where 
necessary or appropriate.
    260. We reject BellSouth's suggestion to allow the filing of 
unilateral statements. The joint statement is beneficial in large part 
because it is a single document and does not require the Commission to 
compare two documents to determine on which facts, each articulated 
slightly differently in the separate documents, the parties agree and 
disagree. The other significant benefit arises from requiring the 
parties to meet and discuss all relevant facts and fully articulate 
their disagreements. Neither of these benefits would be obtained by 
allowing the parties to file unilateral documents, which would most 
likely be highly repetitive of the facts laid out in the complaint, 
answer and any necessary reply. Although Bechtel & Cole suggests that 
the joint statement include an outline of factual claims and legal 
arguments, we conclude that the requirement we adopt here effectively 
encompasses this suggestion.
    2. Briefs. a. The NPRM. 261. The NPRM sought comment on changes to 
our current briefing process. First, we sought comment on prohibiting 
the filing of briefs in cases in which discovery is not conducted and 
requiring parties to include proposed findings of fact, conclusions of 
law and legal analysis with their complaints and answers. We sought 
comment on whether parties could reasonably prepare proposed findings 
of fact, conclusions of law and legal analysis before reviewing the 
responses to their pleadings and statements of stipulated facts. 
Second, we sought comment on continuing to allow parties to file 
briefs, but permitting the Commission staff to limit the scope of such 
briefs. This option would add some delay to the process but would 
enable the parties to review both sides of the case before briefing 
their legal arguments to the Commission.
    262. We also sought comment on whether the staff should be 
permitted to set the timetable for completion of any briefs to give the 
staff maximum flexibility and control in order to meet the various 
statutory resolution deadlines. We also asked parties to identify 
reasonable timetables for completion of such briefs. The NPRM proposed 
to limit initial briefs to twenty-five pages and reply briefs to ten 
pages in all cases.
    b. Comments. 263. Bell Atlantic and NYNEX support the proposal to 
prohibit briefs in cases in which discovery is not conducted. Bell 
Atlantic argues that under the pre-filing procedures, parties will have 
sufficient notice of the nature and basis of the complaint to argue the 
legal issues fully in the complaint and answer. NYNEX states that, if 
the Commission adopts its proposals to require the complainant to 
include all of the legal and factual support in the initial filing, 
subsequent briefs would be superfluous. Both Bell Atlantic and NYNEX 
agree that, while briefs will probably be unnecessary in most cases in 
which discovery is not conducted, parties should be able to ask, at the 
initial status conference, for permission to file briefs on certain 
narrowly-tailored issues. Most of the commenters feel that parties must 
be allowed to file briefs because parties may lack the requisite 
information to file findings of fact and conclusions of law in their 
complaints and answers. For example, GST, MCI, PTG, Sprint, and U S 
West argue that parties cannot be expected to submit findings of fact, 
conclusions of law, and legal analysis prior to reviewing their 
opponents' pleadings. AT&T argues that briefs are necessary to complete 
the record.
    264. AT&T, Bell Atlantic, GST, KMC, MFS, GTE, MCI, and SWBT support 
the proposal to allow the staff to limit the scope of briefs. GTE 
states that permitting parties to file briefs but limiting the subjects 
of those briefs will expedite the complaint process while allowing each 
party to establish a complete record. MCI argues that the initial 
status conference will enable the Commission to tailor the briefing 
process to fit the needs of each individual case. ACTA, ICG, and PTG, 
however, oppose permitting staff to limit the scope of briefs, arguing 
that parties must be permitted to argue their cases as they see fit and 
on the issues they deem relevant. CBT supports allowing the staff to 
limit the scope of briefs to disputed issues only, but argues that 
imposing any further limitations might prejudge the outcome of the 
case.
    265. The commenters support the proposal to reduce the time in 
which briefs must be filed. Several parties suggested specific 
timetables, while others were comfortable with allowing the Commission 
to set the timetable at the initial status conference.
    266. Most commenters support the proposal to reduce brief page 
limits to twenty-five pages for initial briefs and ten pages for reply 
briefs. Several commenters, such as AT&T and PTG, request that the 
staff be able to set flexible page limits or that the parties be 
permitted to file for leave to file longer briefs. ACTA, ICG, and the 
cable entities argue that a twenty-five page limit is insufficient.
    c. Discussion. 267. The format and content rules adopted in this 
proceeding require that complaints, answers, and any necessary replies 
contain complete legal analysis, full documentary support, and proposed 
findings of fact, conclusions of law at the time of filing. It has been 
our experience that parties have used the briefing opportunity to file 
documents that merely restate the arguments already contained in the 
complaint, answer, and reply in cases in which discovery is not 
conducted. In those cases where discovery is conducted and new material 
facts are introduced into the case as a result of such discovery, 
briefs are necessary to provide the parties the opportunity to revise 
or further support their existing analysis in light of the new 
information disclosed. Eliminating briefs where discovery is not 
conducted, however, will avoid wasting the Commission's resources 
reviewing documents that are of little utility, as well as provide 
parties with incentive to submit complete and fully documented 
complaints, answers, and replies initially. Thus, we conclude that 
parties shall be generally prohibited from filing briefs in cases in 
which no discovery is conducted. The

[[Page 1025]]

commenters who oppose this proposal are concerned that parties might 
lack the information necessary to file findings of fact and conclusions 
of law in their complaints and answers, or that briefs are needed to 
complete the record. As noted by Bell Atlantic and NYNEX, however, 
under the new pre-filing activities and format and content 
requirements, complainants and defendants alike should have sufficient 
information with which to prepare and file proposed findings of fact 
and conclusions of law in their complaints, answers, and necessary 
replies. We emphasize that this rule is not a complete prohibition on 
the filing briefs in cases in which discovery is not conducted. The 
Commission may request briefs where briefing would be helpful or is 
necessary. Further, where a party believes that briefing is essential 
to fully present its case, it may request such briefing and explain to 
the Commission why briefing is necessary in that particular case. We 
note that parties may still file briefs as a matter of right in cases 
in which discovery is conducted.
    268. In those cases in which briefs are permitted, each party is 
required to attach all documents upon which it intends to rely to its 
briefs. Parties are permitted to attach to their briefs documents that 
were previously identified, and affidavits of persons previously 
identified, in their information designations, along with a full 
explanation in the brief of the material's relevance to the issues and 
matters in dispute. Such materials need not have been attached to the 
complaint, answer, or necessary reply.
    269. In those cases in which briefs are permitted, such briefs are 
required to include all legal and factual claims and defenses 
previously set forth in the complaint, answer or any other prior 
pleading submitted in the proceeding that the parties wish the 
Commission to consider in rendering its decision. Claims and defenses 
previously made but not reflected in the briefs shall be deemed 
abandoned. Where, however, the staff limits the scope of the briefs in 
a manner that does not permit parties to include claims previously 
raised, the failure to include claims previously raised will not be 
deemed to be an abandonment of such claims. Although the NPRM did not 
specifically propose to require briefs to include all claims previously 
set forth in the proceeding, we find that this requirement will 
maximize the utility of briefs. Authorized briefs are a means to 
facilitate the staff's ability to identify readily all legal and 
factual claims and defenses made by the parties, along with full 
citations to the law and the evidentiary record. This requirement 
should minimize the need for the staff to sift through multiple 
pleadings submitted by the parties in an effort to identify and address 
each of their respective claims. In addition, this requirement will 
prevent staff from having to rule on claims of questionable merit that 
were identified in initial pleadings, but that the parties do not 
intend to support or rely on in their briefs.
    270. The Commission may limit the scope of any authorized briefs 
where appropriate, and set timetables for the filing of such briefs. 
Most of the commenters support these requirements, because they 
understand that the Commission needs such limitations and flexibility 
to accomplish its goal of meeting the statutory deadlines provided for 
in the Act and expediting the processing of all formal complaints. 
ACTA, CBT, ICG, and PTG argue that the staff should not limit the scope 
of briefs because parties should be permitted to brief the issues that 
the parties themselves deem relevant. These commenters ignore, however, 
that parties are given the opportunity to file proposed findings of 
fact and conclusions of law and a complete legal analysis on the issues 
they deem relevant with their complaint, answer and any necessary 
reply. To the extent that discovery discloses new material facts, 
briefs are allowed as a matter of right. The parties also have several 
opportunities to explain to the staff why particular issues should be 
briefed. The staff's decision regarding the scope and timing of briefs 
will be based on the content of the parties' initial pleadings and 
their joint statement, as well as on information garnered from 
discussions with the parties at the initial status conference and any 
other status conferences held. Through these vehicles, parties have an 
opportunity to identify issues they feel should be briefed and to 
explain any special circumstances that may warrant a shorter or longer 
filing time for briefs. Limiting the scope of briefs, when appropriate, 
will help avoid unnecessary or redundant pleadings that do not 
facilitate the decision-making process. The Commission's discretion to 
set timetables on a case-by-case basis for the completion of briefs 
will help to tailor schedules to the needs of individual complaints.
    271. The page limits for allowed briefs shall be twenty-five pages 
for initial briefs and ten pages for reply briefs. The statutory 
deadlines imposed by the Act place great burdens on the Commission to 
evaluate briefs and prepare recommended decisions within short 
timeframes. We find that reducing the page limits for initial briefs 
and reply briefs to twenty-five and ten pages, respectively, should 
yield more focused and concise legal and factual arguments, as well as 
discourage the filing of briefs containing unnecessary and redundant 
information. We adopt the suggestion of several commenters to permit 
parties to request leave to file longer briefs. This provision should 
alleviate the concern of certain commenters that the page limits may be 
insufficient in some cases. Parties shall be granted waivers of these 
page limits for good cause shown.
    3. Commenters' Additional Suggestions. a. The NPRM. 272. The NPRM 
asked commenters to identify alternative procedures that would 
facilitate the preparation and submission of clear and concise briefs 
within the time constraints imposed by the Act.
    b. Comments. 273. AT&T, ICG, MCI, SWBT, and U S West suggest that 
the briefing process should mirror that used in federal district court, 
in which the complainant files a single initial brief, followed by the 
defendant's opposition brief, followed by the complainant's reply 
brief. They argue that simultaneous briefing forces a defendant to 
reply to a position not yet articulated, and does not give a 
complainant an opportunity to reply to a defendant's reply brief, while 
sequential briefing permits parties to meet each other's arguments 
directly.
    c. Discussion. 274. We decline to adopt the suggestions of AT&T, 
ICG, MCI, SWBT, and U S West to require a sequential briefing process. 
Sequential briefing consists of three stages: the complainant's initial 
brief, the defendant's opposition brief, and the complainant's reply 
brief. Each party must be provided with sufficient time to respond to 
the brief filed in the preceding stage. We conclude that simultaneous 
briefing, which can be accomplished in two stages (initial brief and 
reply brief) is more appropriate in light of the time constraints 
imposed by the Act. While sequential briefing is appropriate in a 
notice-pleading context, in which the parties may lack information 
regarding the positions of opposing parties, the benefits to be gained 
by sequential briefing under the Commission's fact-pleading rules are 
minimal. Under the requirements imposed in this proceeding, parties 
must submit fact-pleadings and a joint statement of disputed and 
undisputed facts and key legal issues, as well as attend an early 
status conference, where the scope of the briefing will be discussed 
and may be limited. We find

[[Page 1026]]

that these requirements will ensure that parties are fully aware of 
their opponents' positions on all key factual and legal issues by the 
briefing stage. Simultaneous briefing should not result in parties 
being prejudiced in any way.
P. Sanctions
    275. The NPRM proposed rules that will place greater burdens on 
complainants and defendants to be more diligent when presenting or 
defending against allegations of misconduct in violation of the Act or 
the Commission's rules. Such diligence must be enforced in order to 
meet the complaint resolution deadlines contained in the Act and attain 
the goal of generally improving the formal complaint process.
    a. The NPRM. 276. In the NPRM, we outlined the need for sanctions 
which would provide sufficient incentives to ensure compliance with the 
new rules. We asked interested parties to provide us with their 
proposals for appropriate sanctions. We provided several examples of 
specific sanctions for certain anticipated rules violations, including: 
(1) summary dismissal of a complaint for a complainant's failure to 
satisfy format and content requirements; (2) summary ruling or other 
judgment in favor of the complainant for a defendant's failure to 
respond fully and with specificity to a complainant's allegations; and 
(3) the imposition of monetary fines under the Act's forfeiture 
provisions for failure to file pleadings in accordance with our rules. 
We asked parties to comment on these and other alternatives that might 
help to ensure full compliance with the expedited complaint procedures 
proposed in the NPRM.
    b. Comments. 277. Most of the parties who commented generally 
support the proposed sanctions. Most state that failure to satisfy the 
form and content requirements should result in summary dismissal of the 
complaint without prejudice. GST, GTE, KMC, MFS and SWBT argue that, in 
most cases, the imposition of monetary forfeitures would be preferable 
to summary grant or dismissal, which they contend should be used only 
for: (1) failure by complainants to set forth allegations with 
specificity; (2) failure by defendants to respond to the complaint; or 
(3) failure by either party to certify that they engaged in good faith 
settlement attempts. CBT, GST, KMC, and MFS suggest issuing a notice of 
deficiency or show cause order prior to imposing a sanction. MCI 
suggests that a defendant should be penalized for its failure to 
cooperate in the pre-filing stages of a complaint proceeding by 
permitting the complainant to file a complaint without sufficient facts 
or documentation. MCI also suggests that a complainant should be 
penalized for its failure to cooperate in the pre-filing stages by 
permitting general denials where the defendant lacks necessary 
information. U S West argues that, because parties seldom violate the 
Commission's rules, the Commission should make quick and decisive 
rulings in discovery conflicts rather than emphasize sanctions. 
Communications Venture Services, Inc. (``CVS'') and SWBT suggest 
imposing sanctions on attorneys as well as clients. ACTA states that 
the Commission should draw an adverse inference as to material facts to 
sanction discovery abuses or failure to comply with discovery rulings.
    c. Discussion. 278. We conclude that no rule modifications are 
necessary with regard to sanctions at this time. We have at our 
disposal a wide range of sanctions to address violations or abuses of 
our formal complaint rules, including summary grant or dismissal of a 
complaint (in whole or in part), the drawing of adverse inferences as 
to material facts, monetary forfeitures, admonishment rulings, and show 
cause proceedings. Because sanctionable behavior may entail a wide 
range of conduct by complainants and defendant carriers, the Commission 
has considerable discretion to tailor sanctions to the individual 
circumstances of a particular violation. Sanctions for a failure to 
meet pleading requirements should be directed at the nature of the 
failure. For example, a complainant that fails to properly support a 
statement of material fact may have such statement treated as an 
unproven assertion. Sanctions for discovery abuses should provide 
sufficient incentives for parties to view full and early disclosure as 
preferable to any potential benefits from dilatory tactics.
Q. Other Matters
    279. The NPRM sought comment on the meaning of the term ``act on'' 
in section 271(d)(6)(B) of the Act pertaining to complaints concerning 
failures by BOCs to meet conditions required for approval to provide 
in-region interLATA services. In addition, the Commission stated in the 
Sections 260, 274, 275 First Report and Order and the Sections 260, 
274, 275 Second Report and Order that certain issues concerning 
possible evidentiary standards for complaints alleging violations of 
sections 260, 274, and 275 would be addressed in the Formal Complaints 
rulemaking proceeding.
    a. Section 271. i. The NPRM. 280. Section 271(d)(6)(B) of the Act 
provides that the Commission shall ``act on'' complaints alleging 
certain violations of the section within ninety days of the date filed, 
unless otherwise agreed to by the parties. This is in contrast to other 
complaint provisions added by the 1996 Act which mandate ``final'' 
action by the Commission within prescribed time periods. We tentatively 
concluded in the NPRM that ``act on'' as used in section 271(d)(6)(B) 
may be satisfied, where appropriate, by a determination of the Common 
Carrier Bureau whether a BOC has ceased to meet the conditions required 
for approval to provide in-region interLATA services, and need not 
require final action by the full Commission. We sought comment on this 
tentative conclusion and on the appropriate procedure or mechanism for 
early notice to the Commission of the parties' agreement to extend or 
waive the ninety-day resolution deadline.
    ii. Comments. 281. Commenters disagree on the meaning of ``act on'' 
in section 271(d)(6)(B). BellSouth, CompTel, GST, KMC, MFS, and MCI 
state that a Common Carrier Bureau decision constitutes ``acting on'' 
within the meaning of section 271(d)(6)(B) because the abbreviated 
deadline for resolution is a statutory mandate for prompt relief, which 
would not be fulfilled by waiting for a decision by the entire 
Commission. In addition, MCI argues that a Common Carrier Bureau 
decision is sufficient because the right to decide cases under section 
271(d)(6)(B) is not specifically reserved to the Commission under 
Sec. 0.291 of the Commission's rules. CVS, NYNEX, ICG, PTG, and SWBT, 
however, argue that section 271(d)(6)(B) requires a Commission decision 
because it would be contrary to Congressional intent to deny parties 
the immediate right of judicial review. PTG argues that the Commission 
must decide section 271(d)(6)(B) cases because, under Sec. 0.291, the 
Commission has not delegated its authority to designate for hearing any 
formal complaints which present ``novel questions of fact, law or 
policy[,]'' nor to ``impose, reduce, or cancel forfeitures pursuant to 
Section 203 or Section 503(b) * * * in amounts of more than $80,000.''
    282. Regarding the notification of waiver of the section 
271(d)(6)(B) ninety-day deadline, BellSouth suggests that the 
complainant be required to indicate its willingness to waive the 
ninety-day resolution deadline in the formal complaint intake form 
proposed by the Commission to aid in the preparation and filing of 
formal complaints. GST, KMC, and MFS

[[Page 1027]]

suggest that such agreement take place during ``meet and confer'' 
conferences, which would occur prior to the initial status conferences 
pursuant to other proposals in the NPRM.
    iii. Discussion. 283. Notwithstanding our tentative conclusion in 
the NPRM that a decision by the Common Carrier Bureau on the merits of 
the complaint satisfies the ``act on'' requirement in section 
271(d)(6)(B), we conclude that we need not address this issue in this 
Report and Order. We recognize the importance that Congress assigned to 
the resolution of complaints alleging violations of the competitive 
checklist requirements as reflected in the ninety-day ``act on'' 
requirement. We fully intend to act promptly on all matters pertaining 
to those requirements to assure that full effect is given to the 
competitive goals underlying section 271 of the Act.
    284. To facilitate our handling of section 271(d)(6)(B) complaints, 
we adopt a rule requiring parties to indicate whether they are willing 
to waive the ninety-day deadline in their initial filings to the 
Commission or, at the very latest, by the date of the initial status 
conference. Parties will have the opportunity to reach an agreement 
about waiver of the section 271(d)(6)(B) ninety-day deadline during the 
pre-filing activities. A complainant should indicate whether or not it 
is willing to waive the ninety-day deadline in the formal complaint 
intake form accompanying the complaint. The defendant carrier will have 
opportunity to respond to the complainant's request for waiver either 
in its answer or at some earlier date. Parties will have an additional 
opportunity to discuss the waiver of the ninety-day deadline in their 
``meet and confer'' held prior to the initial status conference. 
Because meeting a resolution deadline of ninety days will require both 
strong commitment and meticulous preparation at the very start of the 
complaint process, from the parties and from the Commission, a request 
by the parties to waive the ninety-day deadline will be not considered 
after the initial status conference. Permitting parties to waive the 
ninety-day deadline at any point in the complaint process could result 
in the wasteful expenditure of time and resources by the staff and the 
parties. In addition, we note that even if the parties agree to waive 
the ninety-day deadline in a section 271(d)(6)(B) case, it is our 
intent to resolve such cases as expeditiously as possible. Thus, 
parties should not relax their diligence in meeting our format and 
content requirements to the fullest extent possible as a consequence of 
having agreed to waive the ninety-day deadline.
    b. Sections 260, 274 and 275 of the Act. 285. In the Sections 260, 
274, 275 First Report and Order, 62 FR 7690 (February 20, 1997), and 
the Sections 260, 274, 275 Second Report and Order, 62 FR 16093 (April 
4, 1997), we deferred to the Formal Complaints rulemaking the issue of 
what specific acts or omissions might be sufficient to state a prima 
facie claim for relief under sections 260, 274, and 275. In that same 
proceeding, we noted that the complainant has the burden of 
establishing that a carrier has violated the Act or a Commission rule 
or order and that burden generally does not shift at any time to the 
defendant carrier. We also deferred to the Formal Complaints rulemaking 
the issue of whether shifting the burden of proof from the complainant 
to the defendant in complaints alleging violations of sections 260, 
274, and 275 would advance the pro-competitive goals of the Act.
    i. Prima facie Claim. (a). The Sections 260, 274, 275 NPRM. 286. In 
the Sections 260, 274, 275 NPRM, 61 FR 39385 (July 29, 1996), we asked 
parties to comment on what prima facie showing should be required of a 
complainant who alleges that an incumbent LEC has violated sections 260 
or 275, or that a BOC has violated section 274. Commenters were asked 
to describe what specific acts or omissions would constitute a prima 
facie claim for relief under those sections of the Act.
    (b). Comments. 287. Commenters did not address in this rulemaking 
the issue of what acts or omissions might constitute a prima facie 
claim in complaints alleging violation of sections 260, 274, and 275. 
In response to the Sections 260, 274, 275 NPRM, however, many parties 
commented on this issue. Several commenters contend that the same 
standard for a prima facie case should apply to all complaints, 
including complaints alleging violations of sections 260, 274, or 275; 
that is, a complainant would establish a prima facie case by alleging 
facts that, if true, would constitute a violation of the Act. Several 
parties, however, suggest specific standards for stating a prima facie 
claim for relief under sections 260, 274, and 275. ATSI states that a 
complainant alleging a violation of section 260 should be allowed to 
establish a prima facie case by any showing of denied or delayed 
access, or any showing of cost or quality differentials between the 
incumbent's own telemessaging operations and those offered by the 
complainant. ATSI further suggests that the Commission establish 
certain safeguards to prevent anti-competitive conduct, and declare 
that facts demonstrating a violation of these safeguards should be 
sufficient to state a prima facie case of unlawfulness. According to 
ATSI, because section 260 was not intended to ``mimic a legal 
proceeding'' complainants should not have to undertake costly or time-
consuming preparatory work prior to filing a complaint.
    288. A number of commenters oppose ATSI's proposals. U S West 
argues that a section 260 complaint is a legal proceeding in which both 
the complainant's and defendant's rights should be respected. BellSouth 
maintains that a prima facie case should include specific allegations 
of fact showing that a defendant carrier has engaged in prohibited 
discrimination or cross-subsidization. A number of other commenters 
argue that ATSI's proposals, if adopted, would open the floodgates for 
unsubstantiated complaints against the incumbent LECs and their 
affiliates.
    289. NYNEX states that, in order to establish a prima facie case 
pursuant to section 274, the complaint would have to contain a 
description of the complainant and its interest; be sworn and notarized 
and state with particularity the facts on which the complaint is based, 
distinguishing between facts based on personal knowledge and facts 
based on information and belief; provide a verifiable source of 
statements based on information and belief; be accompanied by 
supporting documentation; and identify materials the complainant has 
been unable to obtain after due inquiry which it asserts are in the 
possession of the BOC or its separate affiliate.
    (c). Discussion. 290. We decline to adopt a rule prescribing 
specific acts or omissions that would be prima facie unlawful under 
sections 260, 274, and 275. Instead, we will review section 260, 274, 
or 275 complaints on a case-by-case basis to resolve compliance issues. 
We believe that, beyond the specific requirements of the Act and the 
Commission's implementing rules and orders, it would be impracticable 
to attempt to delineate specific acts or omissions that would 
constitute violations of sections 260, 274 and 275. Acts or omissions 
that might raise the specter of violations under sections 260, 274 and 
275 are likely to vary widely. Moreover, it is possible that a 
particular act or omission deemed unlawful in one context may be 
perfectly reasonable in another. Therefore we will continue our 
existing practice of requiring that, in the context of a section 208 
complaint proceeding, a prima facie showing must

[[Page 1028]]

include allegations of fact, which if true, would establish that a BOC 
has violated the Act or any implementing rule or order.
    ii. Shifting the Burden of Proof to Defendant Carriers in 
Complaints Alleging Violations of Sections 260, 274 and 275 of the Act. 
(a). The Section 260, 274, 275 NPRM. 291. In the Sections 260, 274, 275 
NPRM, we noted that in a formal complaint proceeding the complainant 
generally has the burden of establishing, by a preponderance of the 
evidence, that a common carrier has violated the Act or a Commission 
rule or order. Ordinarily, this burden of proof does not, at any time 
in the proceeding, shift to the defendant carrier. We sought comment in 
the Sections 260, 274, 275 NPRM on whether, for purposes of complaints 
arising under Sections 260, 274, 275, shifting the ultimate burden of 
proof from the complainant to the defendant would advance the pro-
competitive goals of the Act.
    (b). Comments. 292. Commenters did not address in this rulemaking 
the issue of shifting the burden of proof from the complainant to the 
defendant BOC or incumbent LEC in complaints alleging violations of 
Sections 260, 274, and 275. A number of parties, however, commented on 
this issue in response to the Sections 260, 274, 275 NPRM. The BOCs 
oppose shifting the burden of proof to the defendant carrier after a 
complainant establishes a prima facie case, arguing that such a 
practice would force defendants to prove a negative; e.g., lack of 
undue delay, unavailability of requested services, or technical 
impossibility. The BOCs assert that the Administrative Procedures Act 
(``APA'') requires that the burden of persuasion in complaint cases 
remain on the complainant throughout and that shifting the burden of 
proof in the manner proposed would encourage the filing of frivolous 
complaints. SWBT and U S West object to shifting the burden of proof in 
section 274 cases, claiming that, because section 274 has no statutory 
resolution deadline and complainants have the option of filing their 
claims in federal district court, burden shifting would promote ``forum 
shopping'' by parties wishing to litigate their claims before the 
Commission under more relaxed standards. In addition, U S West argues 
that shifting the burden in section 274 cases would be particularly 
inappropriate because section 274 involves First Amendment (private and 
commercial speech) issues. BellSouth and PTG state that a defendant 
would bear the burden of producing evidence only if it asserted an 
affirmative defense, such as the reasonableness of its actions. 
Ameritech and PTG concede that, at most, a defendant might be expected 
to bear the burden of production, but not of persuasion. NYNEX proposes 
that, rather than shifting the burden of proof to a defendant after a 
complainant has established a prima facie case, a defendant should be 
required to provide: (1) a sworn and notarized response containing an 
admission or denial of all allegations in the complaint; (2) a summary 
of the facts on which the response is based, distinguishing between 
facts based on personal knowledge and facts based on information and 
belief; (3) a verifiable source of statements based on information and 
belief; (4) its defenses; and (5) supporting documentation if available 
or if it can be reasonably acquired within the time allowed for 
response.
    293. ATSI, AT&T, AICC, MCI, and Voice-Tel all support shifting the 
burden of proof to defendants once the complainant has established a 
prima facie case. These commenters maintain that burden shifting is 
appropriate in section 260, 274 and 275 cases because of short 
resolution deadlines and the fact that the relevant information will 
generally be in the possession or control of the defendant BOC or 
incumbent LEC. AICC states that the BOCs' argument that the APA 
prohibits shifting the burden of proof to a defendant is inapplicable 
to section 275, because the applicable section of the APA, section 556, 
only pertains to certain hearings and rulemakings required by sections 
553 and 554, respectively, of the APA. AICC adds that the Commission 
should follow its tentative conclusion in the BOC In-Region NPRM, 61 FR 
39397 (July 29, 1996), and not adopt a presumption of reasonableness 
favoring an incumbent LEC or its alarm monitoring affiliate when 
reviewing complaints alleging violations of section 275.
    (c). Discussion. 294. We decline to adopt a rule that would shift 
the burden of proof to defendant BOCs or incumbent LECs in expedited 
complaint proceedings pursuant to sections 260, 274 and 275 of the Act. 
We do not agree with the arguments of many commenters that shifting the 
burden of proof in such cases is necessary to advance the pro-
competitive goals of the 1996 Act. Nor do we agree that a rule is 
required to formally shift the burden of production to a defendant 
carrier after a complainant has demonstrated a prima facie case of a 
violation of section 260, 274, or 275. The rules adopted in this 
proceeding, particularly those pertaining to pre-filing activities and 
the form and content of pleadings, are designed specifically to require 
both complainants and defendants to exercise diligence in presenting 
and defending against alleged violations of sections 260, 274 and 275, 
as well as other sections of the Act. The new rules require full 
identification of relevant documents and information in the possession, 
or within the control, of both the complainant and defendant carrier, 
along with prompt production or exchange of the information the parties 
intend to rely on in presenting and defending against claims of 
unlawfulness under provisions of the Act and the Commission's rules and 
orders.
    295. In addition, the staff retains in all cases the discretion to 
effectively shift the burden of production in particular cases by 
directing defendant carriers to produce relevant information deemed to 
be within their exclusive possession or control. We note that this 
discretion is conferred under section 208 of the Act which authorizes 
the Commission to investigate complaints ``by such means and in such 
manner as it shall deem proper.'' Moreover, even in the absence of such 
action by the staff, it will be incumbent upon a defendant carrier to 
respond fully to any prima facie showing made by a complainant, with 
full legal and evidentiary support. A defendant that fails to provide 
such a response runs the risk of an adverse ruling or an adverse 
inference on a material fact.
    296. We note that our decision not to adopt a rule to formally 
shift the burden of production to a defendant carrier after a 
complainant has demonstrated a prima facie violation of section 260, 
274, or 275 is in contrast to our decision regarding section 
271(d)(6)(B) complaints in the BOC In-Region Order, 62 FR 2927 (January 
21, 1997). There, we concluded that the burden of production with 
respect to an issue will shift to the defendant BOC after a complainant 
has made a prima facie showing that the BOC has ceased to meet the 
conditions for its approval to provide interLATA services under section 
271(d)(3). The specificity and nature of the competitive checklist 
requirements that would form the basis of a section 271(d)(6)(B) 
complaint justify a rule requiring a defendant BOC to come forward with 
evidence of continued compliance with section 271(d)(3). It would be 
difficult, however, to attempt to anticipate all of the various factual 
circumstances that could form the basis of section 260, 274, or 275 
complaints. A rule that would automatically shift the burden of 
production in all cases would be

[[Page 1029]]

prejudicial or otherwise unreasonably burdensome on defendant carriers. 
As discussed in the preceding paragraph, the new rules give Commission 
staff ample authority to effectively shift the burden of production in 
cases where it is necessary to promote the full and fair resolution of 
the matters in dispute.
    297. Finally, we conclude, as we did in our BOC In-Region Order, 
that we should not employ a presumption of reasonableness in favor of 
incumbent LECs in complaint actions under sections 260 and 275, 
regardless of whether the incumbent LEC is regulated as a dominant or 
non-dominant carrier. As we pointed out in the BOC In-Region Order, the 
``presumption of lawfulness given to non-dominant carrier rates and 
practices is employed in the context of complaints alleging violations 
of sections 201(b) and 202(a) of the Act, where the complainant must 
demonstrate that the defendant's rates and practices are `` 'unjust and 
unreasonable.' '' Sections 260 and 275 contain unqualified prohibitions 
on discrimination by incumbent LECs and do not require considerations 
of reasonableness as is the case under sections 201(b) and 202(a).

IV. Conclusion

    298. In this Report and Order, we amend our rules governing the 
filing of formal complaints to implement certain complaint provisions 
added or amended by the 1996 Act, as well as to facilitate the full and 
fair resolution of all complaints filed against common carriers before 
the Commission. These rules of practice and procedure will promote 
competition in all telecommunications markets by providing a forum for 
the prompt resolution of complaints of unreasonable, discriminatory, or 
otherwise unlawful conduct by telecommunications carriers.

V. Procedural Matters

A. Petitions for Reconsideration and Ex Parte Presentations
    299. Parties must file any petitions for reconsideration of this 
Report and Order within thirty days from publication in the Federal 
Register. Parties may file oppositions to the petitions for 
reconsideration pursuant to Sec. 1.106(g) of the rules.
    300. To file a petition for reconsideration in this proceeding, 
parties must file an original and ten copies of all petitions and 
oppositions. Petitions and oppositions should be sent to the Office of 
the Secretary, Federal Communications Commission, Washington, D.C. 
20554. If parties want each Commissioner to have a personal copy of 
their documents, an original plus fourteen copies must be filed. In 
addition, participants should submit two additional copies directly to 
the Common Carrier Bureau, Enforcement Division, Room 6008, 2025 M 
Street, N.W., Washington, D.C. 20554. The petitions and oppositions 
will be available for public inspection during regular business hours 
in the Dockets Reference Room (Room 230) of the Federal Communications 
Commission, 1919 M Street, N.W., Washington, D.C. 20554. Copies of the 
petition and any subsequently filed documents in this matter may be 
obtained from ITS, Inc., 2100 M Street, N.W., Suite 140, Washington, 
D.C. 20037, (202) 857-3800.
    301. Petitions for reconsideration must comply with Sec. 1.429 and 
all other applicable sections of the Commission's rules. Petitions also 
must clearly identify the specific portion of this Report and Order for 
which relief is sought. If a portion of a party's arguments does not 
fall under a particular topic listed in the outline of this Report and 
Order, such arguments should be included in a clearly labelled section 
at the beginning or end of the filing.
B. Final Regulatory Flexibility Analysis
    302. As required by the Regulatory Flexibility Act (``RFA''), an 
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in 
the Implementation of the Telecommunications Act of 1996, Amendment of 
Rules Governing Procedures to be Followed When Formal Complaints Are 
Filed Against Common Carriers, Notice of Proposed Rulemaking. The 
Commission sought written public comment on the NPRM, including comment 
on the IRFA. The comments received were not specific to the IRFA, but 
are discussed below to the extent they raise concerns or make 
suggestions relevant to this analysis. This present Final Regulatory 
Flexibility Analysis (``FRFA'') conforms to the RFA.
    a. Need for and Objectives of the Implementation of the 
Telecommunications Act of 1996, Amendment of Rules Governing Procedures 
to be Followed When Formal Complaints Are Filed Against Common 
Carriers, Report and Order, and the Rules Adopted Herein. 303. The 
Commission is issuing this Report and Order to implement certain 
complaint provisions added or amended by the 1996 Act and to improve 
generally the speed and effectiveness of our formal complaint process. 
The 1996 Act added and, in some cases, amended, key complaint 
provisions that, because of their resolution deadlines, necessitate 
substantial modification of our current rules and policies for 
processing formal complaints filed against common carriers pursuant to 
section 208 of the Act. Some of the requirements adopted in this Report 
and Order may have a significant impact on a substantial number of 
small businesses as defined by section 601(3) of the RFA. Generally, 
amended rules will require or encourage complainants and defendants to 
engage in certain pre-filing activities, change service requirements, 
modify the form of initial pleadings, shorten filing deadlines, 
eliminate certain pleading opportunities that do not appear useful or 
necessary, and modify the discovery process.
    b. Summary of Significant Issues raised by the Public Comments in 
Response to the IRFA. 304. In the IRFA, the Commission found that the 
rules we proposed to adopt in this proceeding may have a significant 
impact on a substantial number of small businesses as defined by 
section 601(3) of the RFA. The IRFA solicited comment on alternatives 
to our proposed rules that would minimize the impact on small entities 
consistent with the objectives of this proceeding. No comments were 
submitted directly in response to the IRFA. However, as described below 
in Section 5, we have taken into account the comments submitted 
generally by small entities.
    c. Description and Estimate of the Number of Small Entities to 
Which the Rules Adopted in the Report and Order in CC Docket No. 96-238 
Will Apply. 305. The RFA generally defines small entity as having the 
same meaning as the terms ``small business,'' ``small organization,'' 
and ``small governmental jurisdictions.'' In addition, the term ``small 
business'' has the same meaning as the term ``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 Small Business Administration (``SBA''). 
Moreover, 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 when they have no more than 
1,500 employees. We first discuss the

[[Page 1030]]

estimated number of potential complainants, which may include entities 
that are not telephone companies. Next we discuss generally the 
estimated number of potential defendants, which would be included in 
the total number of small telephone companies falling within the SBA's 
definitions of small business concerns and small businesses. Then, we 
discuss the number of small businesses within the SIC subcategories, 
and attempt to refine further those estimates to correspond with the 
categories of telephone companies that are commonly used under our 
rules.
    306. Consistent with our prior practice, we shall continue to 
exclude small incumbent LECs from the definition of ``small entity'' 
and ``small business concerns'' for the purpose of this FRFA. We do 
this because the small incumbent LECs subject to these rules are either 
dominant in their field of operations or are not independently owned 
and operated, they are excluded from the definition of ``small entity'' 
and ``small business concerns.'' Out of an abundance of caution, 
however, for regulatory flexibility analysis purposes, we will consider 
small incumbent LECs within this analysis and use the term ``small 
incumbent LECs'' to refer to any incumbent LECs that arguably might be 
defined by SBA as ``small business concerns.''
    i. Potential Complainants. 307. Section 208(a) provides that formal 
complaints against a common carrier may be filed by ``[a]ny person, any 
body politic or municipal organization.'' Beyond this definition, the 
FCC has no control or information regarding the filing frequency of 
complaints, nor identities of parties that will file complaints. The 
filing of complaints depends entirely upon the complainant's perception 
that it possesses a cause of action against a common carrier subject to 
the Act, as amended, and it is the complainant's decision to file its 
complaint with the FCC. Therefore we are unable at this time to 
estimate the number of future complainants that would qualify as small 
business concerns under SBA's definition.
    308. As noted, the RFA includes ``small businesses,'' ``small 
organizations'' (non-profits), and ``small governmental 
jurisdictions.'' Nationwide, there are 4.44 million small business 
firms, according to SBA reporting data. A small organization is 
generally ``any not-for-profit enterprise which is independently owned 
and operated and is not dominant in its field.'' Nationwide, there are 
275,801 small organizations. Last, ``small governmental jurisdiction'' 
generally means ``governments of cities, counties, towns, townships, 
villages, school districts, or special districts, with a population of 
less than 50,000.'' As of 1992, there were 85,006 such jurisdictions in 
the United States.
    ii. Potential Defendants. 309. Estimate of Potential Defendants 
that may be Classified as Small Businesses. Section 208(a) provides for 
the filing of formal complaints for ``anything done or omitted to be 
done by any common carrier subject to this Act[.]'' The FCC has no 
control as to the filing frequency of complaints because such filing 
depends entirely upon the complainant's perception that it possesses a 
cause of action against a common carrier subject to the Communications 
Act of 1934, as amended, and it is the complainant's decision to file 
its complaint with the FCC. This inability to predict the number of 
future defendants necessitates conducting this FRFA based on the number 
of potential small business defendants, which is the number of common 
carriers that qualify as small business concerns under SBA's 
definition.
    310. Total Number of Telephone Companies Affected. The decisions 
and rules adopted herein may have a significant effect on a substantial 
number of small telephone companies identified by the SBA. The United 
States Bureau of the Census (``Census Bureau'') reports that, at the 
end of 1992, there were 3,497 firms engaged in providing telephone 
service, 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 no more than 3,497 telephone service firms are small 
entity telephone service firms or small incumbent LECs that may be 
affected by this Order. We estimate below the potential defendants 
affected by this order by service category.
    311. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telecommunications companies other 
than radiotelephone (wireless) companies (Telephone Communications, 
Except Radiotelephone). 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 no more 
than 1,500 persons. Of the 2,321 non-radiotelephone companies listed by 
the Census Bureau, 2,295 companies (or, all but twenty-six) were 
reported to have no more than 1,000 employees. Thus, at least 2,295 
non-radiotelephone companies might qualify as small incumbent LECs or 
small entities based on these employment statistics. However, because 
it seems certain that some of these carriers are not independently 
owned and operated, this figure necessarily overstates the actual 
number of non-radiotelephone companies that would qualify as ``small 
business concerns'' under the SBA's definition. Consequently, we 
estimate using this methodology that there are no more than 2,295 small 
entity telephone communications companies (other than radiotelephone 
companies) that may be affected by the actions taken in this Report and 
Order.
    312. Non-LEC wireline carriers. We next estimate more precisely the 
number of non-LEC wireline carriers, including interexchange carriers 
(``IXCs''), competitive access providers (``CAPs''), Operator Service 
Providers (``OSPs''), Pay Telephone Operators, and resellers that may 
be affected by these rules. Because neither the Commission nor the SBA 
has developed definitions for small entities specifically applicable to 
these wireline service types, the closest applicable definition under 
the SBA rules for all these service types is for telephone 
communications companies other than radiotelephone (wireless) 
companies. However, the TRS data provides an alternative source of 
information regarding the number of IXCs, CAPs, OSPs, Pay Telephone 
Operators, and resellers nationwide. According to our most recent data: 
130 companies reported that they are engaged in the provision of 
interexchange services; fifty-seven companies reported that they are 
engaged in the provision of competitive access services; twenty-five 
companies reported that they are engaged in the provision of operator 
services; 271 companies reported that they are engaged in the provision 
of pay

[[Page 1031]]

telephone services; and 260 companies reported that they are engaged in 
the resale of telephone services and thirty reported being ``other'' 
toll carriers. 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 IXCs, CAPs, OSPs, Pay Telephone Operators, and 
resellers that would qualify as small business concerns under SBA's 
definition. Firms filing TRS Worksheets are asked to select a single 
category that best describes their operation. As a result, some long 
distance carriers describe themselves as resellers, some as OSPs, some 
as ``other,'' and some simply as IXCs. Consequently, we estimate that 
there are no more than 130 small entity IXCs; fifty-seven small entity 
CAPs; twenty-five small entity OSPs; 271 small entity pay telephone 
service providers; and 260 small entity providers of resale telephone 
service; and thirty ``other'' toll carriers that might be affected by 
the actions and rules adopted in this Report and Order.
    313. Local Exchange Carriers. Although neither the Commission nor 
the SBA has developed a definition of small providers of local exchange 
services, we have two methodologies available to us for making these 
estimates. The closest applicable definition under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies (SIC 4813) (Telephone Communications, Except Radiotelephone) 
as previously detailed. Our alternative method for estimation utilizes 
the data that we collect annually in connection with the 
Telecommunications Relay Service (``TRS''). This data provides us with 
the most reliable source of information of which we are aware regarding 
the number of LECs nationwide. According to our most recent data, 1,347 
companies reported that they were engaged in the provision of local 
exchange 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 incumbent LECs that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are no more than 1,347 small LECs (including small incumbent 
LECs) that may be affected by the actions taken in this Report and 
Order.
    314. Radiotelephone (Wireless) Carriers: The SBA has developed a 
definition of small entities for Wireless (Radiotelephone) Carriers. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to the 
SBA's definition, a small business radiotelephone company is one 
employing no more than 1,500 persons. The Census Bureau also reported 
that 1,164 of those radiotelephone companies had no more than 1,000 
employees. Thus, even if all of the remaining twelve companies had more 
than 1,500 employees, there would still be 1,164 radiotelephone 
companies that might qualify as small entities if they are 
independently owned and operated. Although it seems certain that some 
of these carriers are not independently owned and operated, and, we are 
unable to estimate with greater precision the number of radiotelephone 
carriers and service providers that would both qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are no more than 1,164 small entity radiotelephone companies 
that might be affected by the actions and rules adopted in this Report 
and Order.
    315. Cellular and Mobile Service Carriers: In an effort to further 
refine our calculation of the number of radiotelephone companies 
affected by the rules adopted herein, we consider the categories of 
radiotelephone carriers, Cellular Service Carriers and Mobile Service 
Carriers. Neither the Commission nor the SBA has developed a definition 
of small entities specifically applicable to Cellular Service Carriers 
and to Mobile Service Carriers. The closest applicable definition under 
SBA rules for both services is for telephone companies other than 
radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of Cellular Service Carriers and 
Mobile Service Carriers 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, 792 companies reported that they are engaged 
in the provision of cellular services and 138 companies reported that 
they are engaged in the provision of mobile 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 Cellular Service 
Carriers and Mobile Service Carriers that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are no more than 792 small entity Cellular Service Carriers 
and no more than 138 small entity Mobile Service Carriers that might be 
affected by the actions and rules adopted in this Report and Order.
    316. Broadband PCS Licensees: In an effort to further refine our 
calculation of the number of radiotelephone companies affected by the 
rules adopted herein, we consider the category of radiotelephone 
carriers, Broadband PCS Licensees. The broadband PCS spectrum is 
divided into six frequency blocks designated A through F. As set forth 
in 47 CFR 24.720(b), the Commission has defined ``small entity'' in the 
auctions for Blocks C and F as a firm that had average gross revenues 
of less than $40 million in the three previous calendar years. Our 
definition of a ``small entity'' in the context of broadband PCS 
auctions has been approved by SBA. The Commission has auctioned 
broadband PCS licenses in Blocks A through F. We do not have sufficient 
data to determine how many small businesses bid successfully for 
licenses in Blocks A and B. There were 183 winning bidders that 
qualified as small entities in the Blocks C, D, E, and F auctions. 
Based on this information, we conclude that the number of broadband PCS 
licensees that might be affected by the decisions in this Report and 
Order includes, at a minimum, the 183 winning bidders that qualified as 
small entities in the Blocks C through F broadband PCS auctions.
    d. Description of Projected Reporting, Recordkeeping and other 
Compliance Requirements. 317. Below, we analyze the projected 
reporting, recordkeeping, and other compliance requirements that may 
apply to small entities and small incumbent LECs, and we mention some 
of the skills needed to meet these new requirements. Overall, we 
anticipate that the impact of these rules will be beneficial to small 
businesses and other filers. By requiring better and more complete 
submissions earlier in the process, these rules will reduce the need 
for discovery and other information filings, thereby significantly 
reducing the burden on small entities.
    318. Formal Complaint Intake Form. Section 1.721 will require all 
complainants to complete and submit a Formal Complaint Intake Form with 
their complaints. The intake form requirement is designed to help 
complainants avoid procedural and substantive defects that might affect 
the staff's ability to quickly process complaints and delay full 
responses by defendant carriers to otherwise legitimate complaints. In 
addition, the completed form will enable the staff and the defendant 
carriers to quickly identify the specific statutory provisions

[[Page 1032]]

under which relief is being sought in the complaint. Because the 
proposed form would solicit information that would be already contained 
in the body of the formal complaint, no additional professional skills 
would be necessary to complete the form. No commenters propose 
alternatives to the Formal Complaint Intake Form that would both ease 
the burden of small businesses and accomplish the Commission's 
objectives.
    319. Pre-Filing Activities. The amended rules will require a 
complainant to certify that it discussed the possibility of settlement 
with the defendant carrier's representative(s) prior to filing the 
complaint. Although this may delay slightly a complainant's filing of a 
formal complaint, we conclude that this requirement will serve to 
settle or narrow disputes, or facilitate the compilation and exchange 
of relevant documentation or other information prior to the filing of a 
formal complaint with the Commission. No commenters propose 
alternatives to the pre-filing activities proposals in the NPRM that 
would both ease the burden of small businesses and accomplish the 
Commission's objectives.
    320. Service. The amended rules will require complainants to 
personally serve complaints directly on defendants or their registered 
agents for service of process, such that the defendant's time to answer 
will begin to run upon receipt of the complaint from the complainant. 
Parties will be required to serve all pleadings subsequent to the 
complaint by hand delivery, overnight delivery, or by facsimile 
transmission followed by regular U.S. mail delivery.
    321. Pleadings and Discovery. The complaint, answer, and any 
authorized reply must include: (1) full statements of relevant, 
material facts with all such documents and affidavits that the party 
intends to rely on to support its claims or defenses; (2) the name and 
address of each individual likely to have discoverable information 
relevant to the disputed facts alleged in the pleadings, identifying 
the subjects of information; (3) a description by category and location 
of all documents in the possession, custody, or control of the party 
that are relevant to the matters in dispute; (4) an inventory of all 
documents and affidavits produced or identified and of all individuals 
identified; (5) proposed findings of fact, conclusions of law, and 
legal analysis. Claims based on information and belief will only be 
accepted if they are made in good faith and the complainant states in 
an affidavit why the supporting facts could not be reasonably 
ascertained. Amendments to complaints will be generally prohibited. The 
defendant must file its answer within twenty days after service of the 
complaint. General denials are prohibited. Replies will only be 
permitted to respond to affirmative defenses and failure to reply to an 
affirmative defense will be considered an admission of the affirmative 
defense. All motions to compel discovery must contain a certification 
that a good faith attempt to resolve the dispute was made prior to 
filing the motion. A party's failure to file an opposition to a motion 
may constitute grounds for granting the motion. Oppositions to motions 
must be filed within five business days of the filing of the motion. 
All pleadings that seek Commission orders, as well as the orders 
themselves, must contain proposed findings of fact and conclusions of 
law, with supporting legal analysis, and these submissions must be 
submitted in both hard copy and on computer disks in ``read only'' mode 
and formatted in the Commission's wordprocessing program. The parties 
will be required to submit a joint statement of stipulated facts, 
disputed facts, and key legal issues two days prior to the initial 
status conference. Briefs will be generally prohibited in cases in 
which no discovery is conducted and staff will have discretion to limit 
the scope and timing of any authorized briefs.
    322. Self-executing discovery is eliminated and all discovery 
requests shall be subject to staff authorization. The complainant must 
file and serve ten written interrogatory requests concurrently with its 
complaint and the defendant must file and serve ten written 
interrogatory requests by the time it serves its answer. The 
complainant will be permitted to file and serve an additional five 
written interrogatory requests within three calendar days following 
service of the answer, provided that such interrogatory requests shall 
only be directed at specific factual allegations made by a defendant in 
support of its affirmative defenses. Additional ``extraordinary'' 
discovery in the form of requests for document production, depositions 
and additional interrogatories will be generally prohibited. The staff 
will consider the interrogatory requests propounded, issue rulings and 
direct the parties accordingly at the initial status conference and 
retain discretion to limit the scope of permissible interrogatories and 
modify or otherwise relax the discovery procedures in particular cases 
(including possible document production, depositions, and additional 
interrogatories). Staff will have discretion to require the use of 
scanning or other technology on an individual case basis where review 
of large numbers of documents is necessary.
    323. Status Conferences. An initial status conference will take 
place ten business days after the filing of the answer unless otherwise 
ordered by the staff. Prior to the initial status conference, the 
parties must meet and confer regarding: (1) settlement prospects; (2) 
discovery; (3) issues in dispute; (4) schedules for pleadings; (5) 
joint statements of stipulated facts, disputed facts, and key legal 
issues; and (6) in a section 271(d)(6)(B) proceeding, whether the 
parties agree to waive the section 271(d)(6)(B) ninety-day resolution 
deadline. All proposals agreed to and disputes remaining after the 
``meet and confer'' must be reduced to writing and submitted to the 
staff two business days prior to the initial status conference. Parties 
must submit a joint proposed order of the rulings made in a status 
conference within twenty-four hours of the conference, unless otherwise 
directed by the staff. Alternatively, if an audio recording or a 
stenographer's transcription of a status conference is made, the 
parties must submit, within three business days, unless otherwise 
directed by the staff, and in lieu of a joint proposed order, either a 
transcript of such recording and a copy of the audio recording or a 
copy of the stenographer's transcript.
    324. These amended rules may place a greater burden on parties, 
including small business entities, to decide issues such as discovery 
within a short time frame. These rules, however, will enable the 
Commission to resolve many preliminary issues efficiently at the 
initial status conference and thereby prevent the parties from wasting 
resources through delay. The Commission retains the discretion to 
reschedule the status conference to provide more time to parties who 
are not under statutory deadlines.
    325. Cease, Cease and Desist Orders and Other Forms of Interim 
Relief. We will not delineate specific legal and evidentiary standards 
for issuance of cease and cease and desist orders, but will consider 
such requests on a case-by-case basis.
    326. In the NPRM, in conjunction with our proposal to establish 
legal and evidentiary standards for issuance of cease and cease and 
desist orders, we had noted that some courts consider the following 
factors prior to issuing interim relief: (1) likelihood of success on 
the merits; (2) the threat of irreparable harm absent the injunction; 
(3) no substantial injury to other parties; and (4) the furtherance of 
the public interest.

[[Page 1033]]

Several commenters stated that a more relaxed standard should apply, 
especially for resellers and small market entrants. We conclude that it 
is more appropriate to consider requests for interim or injunctive 
relief on a case-by-case basis. It is impossible to anticipate all of 
the various factual circumstances that could form the basis of a 
complaint. Similarly, the level and types of information necessary to 
sustain or defend against allegations of misconduct by carriers is 
likely to vary widely.
    327. Damages. The Commission may exercise discretion to process a 
complaint in separate liability and damages complaints on its own 
motion in cases that do not involve one or more of the statutory 
resolution deadlines and may also encourage complainants to voluntarily 
separate their complaints into liability and damages complaints. All 
complaints or supplemental complaints seeking an award of damages must 
contain either a detailed computation of damages, including supporting 
documentation and materials, or an explanation why such computation is 
not included. The Commission may end its adjudication of damages with 
the determination of the sufficiency of the damages computation method 
submitted by the complainant, but retain jurisdiction over the 
proceeding to the extent that the parties are unable to agree on an 
exact amount of damages by applying the mandated computation method. 
Parties may request a fourteen day suspension of the damages 
proceedings, during which parties may attempt to negotiate a settlement 
or use ADR procedures. Staff will have discretion to require a 
defendant to either post a bond for or place in an escrow account the 
amount the Commission determines is likely to be awarded.
    328. Cross-Complaints and Counterclaims. All counterclaims and 
cross-complaints will be required to be filed in separate actions. No 
commenters propose alternatives to the proposals for cross-complaints 
and counterclaims in the NPRM that would both ease the burden of small 
businesses and accomplish the Commission's objectives. Although this 
rule may require small businesses to litigate certain related claims as 
independent actions, the existence of statutory deadlines makes this 
necessary. Prohibiting the introduction of counterclaims and cross-
complaints late in the complaint proceeding will prevent parties from 
losing such claims because they did not have sufficient time during 
which to substantiate their claims.
    329. Upon an appropriate showing of financial hardship or other 
public interest factors, format and content requirements shall be 
waived. In addition, the staff will retain discretion to take into 
account the burden of most of these new requirements on a party that is 
a small business entity. Finally, these rules apply only to section 208 
complaints that are filed with the Commission. Complainants wishing to 
assure themselves of the ability to utilize full discovery, for 
example, are not precluded from filing their complaints in federal 
district court.
    e. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. 330. NAD proposes 
that consumers, especially pro se consumers with disabilities, be 
permitted to serve complaints by facsimile transmission or Internet. We 
have rejected NAD's proposal. We decline to authorize service by 
Internet at this time because we have received insufficient comments on 
the issue, given the significance of permitting electronic filing or 
service of complaint pleadings. This issue may be addressed at a later 
date, following implementation of procedures pursuant to our rulemaking 
regarding the electronic filing of documents in rulemaking proceedings. 
We reject NAD's proposal to permit service of complaints by facsimile 
transmission because we conclude that service of the complaint must be 
accomplished in the most reliable manner possible. Although we are 
permitting service of pleadings subsequent to the complaint to be by 
facsimile transmission, such service must be accompanied by mailed hard 
copies in the event of faulty transmission. Because we are requiring 
the defendant to submit its answer within twenty days of receipt of the 
complaint by the complainant, any delay or uncertainty in the receipt 
of the complaint would unduly infringe on the defendant's due process 
rights.
    331. Some commenters suggest alternatives to the rules adopted 
regarding format and content and discovery. The NPRM had proposed that 
information and belief allegations be prohibited. ACTA, ATSI, Bechtel & 
Cole, KMC, MFS, and NAD propose that complainants be permitted to 
submit allegations based on information and belief because some small 
complainants and small businesses would be unable to obtain information 
in the possession of large defendants. We agreed with these commenters 
and the rule we adopt will permit information and belief allegations if 
they are made in good faith and the complainant states in an affidavit 
why the supporting facts could not be reasonably ascertained.
    332. ATSI proposes that different, less rigorous complaint 
procedures be implemented for complainants alleging violations of 
section 260, pertaining to the provision of telemessaging service, 
because many of those complainants would be fledgling small businesses. 
TRA proposes special expedited procedures for resale carrier 
complainants, who may be dwarfed in size and resources by their 
underlying network service providers. For the following reasons, we 
decline to adopt the proposals of ATSI and TRA to establish separate 
complaint procedures for small business complainants. First, we 
conclude that having separate sets of procedures for certain types of 
complaints would create confusion for parties who might be unclear as 
to which rules to follow and might even lead to continuous and 
inadvertent violations of our procedural rules. Second, we conclude 
that separate complaint procedures would permit parties to exploit our 
rules by alleging certain violations in order to manipulate the time 
frame or level of evidentiary support required in a particular 
complaint. For example, a complainant alleging that a BOC has violated 
certain provisions of the Act might be tempted to add an allegation 
that the BOC has also failed to meet a condition required for approval 
for provision of interLATA services in violation of section 271, in 
order to take advantage of the ninety-day resolution deadline mandated 
by section 271(d)(6)(B). Third, to the extent that certain commenters 
contend that subjecting all complaints to expedited procedures will 
unnecessarily work hardships on complainants and defendants in cases 
without statutory deadlines, we note that the Commission will retain 
considerable discretion to accommodate the needs of parties in cases 
where no statutory deadline applies. Finally, separate sets of 
procedures would be administratively burdensome for the Commission. Not 
only would it be cumbersome to promulgate separate sets of procedures, 
but it would decrease staff efficiency to apply different procedural 
rules to different complaints.
    333. Several commenters object to the complete prohibition on 
discovery that was mentioned in the NPRM, on the grounds that small 
complainants might be unable to obtain information in the sole 
possession of large defendant carriers. We have taken these concerns 
into account in our rule which permits parties to submit discovery 
requests to be ruled upon by the initial status conference. This rule 
gives parties,

[[Page 1034]]

including small businesses, an opportunity to make their cases for or 
against limited discovery early in the proceedings and also limits each 
party's ability to use discovery for delay or other purposes unrelated 
to the merits of the dispute. This abbreviation of the discovery 
process and subsequent expedited complaint resolution is necessary to 
enable the Commission to foster the pro-competitive policies of the 
1996 Act by resolving promptly marketplace issues that could impede the 
development of competition in the telecommunications field.
    334. Although these amended rules may place a greater burden on a 
small business entity to provide better legal and factual support early 
in the process, we conclude that it does not significantly alter the 
level of evidentiary and legal support that would be ultimately 
required of parties in formal complaint actions pursuant to the past 
rules. It may, however, make it more difficult for complainants, 
including small businesses, to gather the information needed to prevail 
on their complaints. Potentially higher initial costs may be somewhat 
offset by the prompt resolution of complaints and the avoidance of 
protracted and costly discovery proceedings and briefing requirements. 
It has been noted, for example, that the overall litigation costs of 
``rocket docket'' cases in the U.S. District Court for the Eastern 
District of Virginia are lower than the costs of cases that take longer 
to resolve. Indeed, by requiring better and more complete submissions 
earlier in the process, these amended rules reduce the need for 
discovery and other information filings, thereby significantly reducing 
the burden on small business entities. Although the requirement for 
certification of attempted settlement of discovery disputes may delay 
slightly the filing of a motion to compel, we conclude that this 
requirement will serve to settle or narrow many discovery disputes.
    335. CBT suggests that parties be permitted to attend status 
conferences by telephone conference call to decrease burdens and 
expenses for parties located outside of Washington, D.C. We agree and 
will permit parties to attend by telephone conference call.
    336. No commenters propose alternatives to the damages proposals in 
the NPRM that would both ease the burden of small businesses and 
accomplish the Commission's objectives. Although these damages rules 
may require small business entities to postpone litigation of damages 
issues, any increased costs will be somewhat offset by the prompt 
resolution of the liability issues in complaints and the avoidance of 
protracted and costly discovery proceedings and briefing requirements 
in the initial proceeding. Permitting parties with a settlement period 
during a damages phase can contribute to parties reaching a mutually 
satisfactory solution. The bond and escrow account requirements would 
only be implemented in certain situations, based upon staff 
consideration of several factors, including the balance of hardships 
between the complainant and defendant.
    337. As noted, upon an appropriate showing of financial hardship or 
other public interest factors, format and content requirements shall be 
waived. APCC and NYNEX propose specific revenue levels that would 
qualify a party to be eligible for a good cause waiver. GST, KMC, and 
MFS suggest having parties complete a ``waiver'' form which would 
contain a statement of financial hardship. We conclude that waiver 
requests shall be considered on a case-by-case-basis and should not be 
limited to financial hardship reasons. Such discretion to grant waivers 
of the format and content requirements based on financial hardship and 
other public interest factors will ensure, pursuant to section 208, 
that ``any person'' has the right to complain to the Commission about 
acts or omissions by a carrier that contravene the Act. For this 
reason, we do not agree with APCC or NYNEX that financial hardship 
should be determined solely based on set revenue or asset levels. The 
range of potential complainants under section 208 is broad and may 
include individuals, state commissions, municipalities, associations, 
and other entities of all forms and sizes. Likewise, the size and 
makeup of defendant carriers will vary greatly. Thus we conclude that 
waiver determinations should be made on a case-by-case basis. The 
Commission shall make every effort to apply its discretion in a 
consistent and fair manner to strike an appropriate balance between 
strict compliance with the rules and the needs of certain parties for 
more lenient requirements and timetables. APCC also suggests that a 
party that receives a good cause waiver should also be granted relief 
from discovery limitations. We conclude that the Commission shall have 
discretion to waive or modify some or all of its rules as appropriate 
when a waiver is granted for good cause shown.
    338. MFS, GST, and USTA additionally suggest that the Commission 
promulgate model or form complaints or pleadings for pro se parties. We 
find that Sec. 1.721(b) of the rules contains a suggested format for 
formal complaints that is clear and explicit and that no further form 
complaints or model pleadings for pro se complainants are necessary. 
Furthermore, the Enforcement Division of the Common Carrier Bureau 
currently provides, via the Internet, direct mailings, and public 
reference room access, a fact sheet designed to instruct consumers on 
how to file a formal complaint with the Commission. Finally, we 
conclude that the range of subjects that could conceivably be contained 
within a pleading is too broad for a model pleading form to be of much 
utility to pro se parties.
    339. Overall, we conclude that there will be a significant positive 
economic impact on small entity carriers that, as a result of this 
rulemaking, will find their complaints resolved expeditiously. The 
establishment of these rules of practice and procedure shall, by 
providing a forum for prompt resolution of complaints of unreasonable, 
discriminatory, or otherwise unlawful conduct by BOCs and other 
telecommunications carriers, will foster robust competition in all 
telecommunications markets.
    f. Report to Congress. 340. The Commission will send a copy of the 
Amendment of Rules Governing Procedures To Be Followed When Formal 
Complaints Are Filed Against Common Carriers, Report and Order, 
including this FRFA, in a report to be sent to Congress pursuant to the 
Small Business Regulatory Enforcement Fairness Act of 1996, see 5 
U.S.C. 801 (a)(1)(A). A summary of this Report and Order and this FRFA 
will also be published in the Federal Register, see 5 U.S.C. 604(b), 
and will be sent to the Chief Counsel for Advocacy of the Small 
Business Administration.

V. Ordering Clauses

    341. Accordingly, It is ordered that pursuant to sections 1, 4, 
201-205, 208, 260, 271, 274, and 275 of the Communications Act of 1934, 
as amended, 47 U.S.C. 151, 154, 201-205, 208, 260, 271, 274, and 275, 
the policies, rules, and requirements set forth herein are adopted.
    342. It is further ordered that 47 CFR Parts 0 and 1, Are amended 
as set forth below effective March 18, 1998.
    343. It is further ordered that the Commission's Office of Public 
Affairs Shall send a copy of this Report and Order, including the FRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration 
in accordance with paragraph 603(a) of the Regulatory Flexibility Act 
Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601, et seq. (1981).

[[Page 1035]]

    344. The Report and Order Is adopted, and the requirements 
contained herein will become effective March 18, 1998.

List of Subjects

47 CFR Part 0

    Organization and functions (Government agencies).

47 CFR Part 1

    Communications common carriers.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Parts 0 and 1 of title 47 of the Code of Federal Regulations are 
amended as follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for Part 0 continues to read as follows:

    Authority: Sec. 5, 48 Stat. 1068, as amended, 47 U.S.C. 155, 
225, unless otherwise noted.

    2. Section 0.291 is amended by revising paragraph (d) to read as 
follows:


Sec. 0.291  Authority delegated.

* * * * *
    (d) Authority to designate for hearing. The Chief, Common Carrier 
Bureau shall not have authority to designate for hearing any formal 
complaints which present novel questions of law or policy which cannot 
be resolved under outstanding precedents or guidelines. The Chief, 
Common Carrier Bureau shall not have authority to designate for hearing 
any applications except applications for facilities where the issues 
presented relate solely to whether the applicant has complied with 
outstanding precedents and guidelines.
* * * * *

PART 1--PRACTICE AND PROCEDURE

    3. The authority citation for Part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise 
noted.

    4. Section 1.47 is amended by revising paragraphs (b) and (d), and 
adding new paragraph (h) to read as follows:


Sec. 1.47  Service of documents and proof of service.

* * * * *
    (b) Where any person is required to serve any document filed with 
the Commission, service shall be made by that person or by his 
representative on or before the day on which the document is filed.
* * * * *
    (d) Except in formal complaint proceedings against common carriers 
under Secs. 1.720 through 1.736, documents may be served upon a party, 
his attorney, or other duly constituted agent by delivering a copy or 
by mailing a copy to the last known address. See Sec. 1.736.
* * * * *
    (h) Every common carrier subject to the Communications Act of 1934, 
as amended, shall designate an agent in the District of Columbia, and 
may designate additional agents if it so chooses, upon whom service of 
all notices, process, orders, decisions, and requirements of the 
Commission may be made for and on behalf of said carrier in any 
proceeding before the Commission. Such designation shall include, for 
both the carrier and its designated agents, a name, business address, 
telephone or voicemail number, facsimile number, and, if available, 
Internet e-mail address. The carrier shall additionally list any other 
names by which it is known or under which it does business, and, if the 
carrier is an affiliated company, the parent, holding, or management 
company. Such information shall be filed with the Formal Complaints and 
Investigations Branch of the Common Carrier Bureau. Carriers must 
notify the Commission within one week of any changes in their 
information. A paper copy of this designation list shall be maintained 
in the Office of the Secretary of the Commission. Service of any 
notice, process, orders, decisions or requirements of the Commission 
may be made upon such carrier by leaving a copy thereof with such 
designated agent at his office or usual place of residence. If a 
carrier fails to designate such an agent, service of any notice or 
other process in any proceeding before the Commission, or of any order, 
decision, or requirement of the Commission, may be made by posting such 
notice, process, order, requirement, or decision in the Office of the 
Secretary of the Commission.
    5. Section 1.720 is amended by revising the introductory paragraph 
and paragraph (h) and adding paragraph (j) to read as follows:


Sec. 1.720  General pleading requirements.

    Formal complaint proceedings are generally resolved on a written 
record consisting of a complaint, answer, and joint statement of 
stipulated facts, disputed facts and key legal issues, along with all 
associated affidavits, exhibits and other attachments. Commission 
proceedings may also require or permit other written submissions such 
as briefs, written interrogatories, and other supplementary documents 
or pleadings. All written submissions, both substantively and 
procedurally, must conform to the following standards:
* * * * *
    (h) Specific reference shall be made to any tariff provision relied 
on in support of a claim or defense. Copies of relevant tariffs or 
relevant portions of tariffs that are referred to or relied upon in a 
complaint, answer, or other pleading shall be appended to such 
complaint, answer, or other pleading.
* * * * *
    (j) Pleadings shall identify the name, address, telephone number, 
and facsimile transmission number for either the filing party's 
attorney or, where a party is not represented by an attorney, the 
filing party.
    6. Section 1.721 is amended by revising paragraphs (a)(5), (a)(6), 
(a)(7), (a)(8) and adding paragraphs (a)(9), (a)(10), (a)(11), (a)(12), 
(a)(13), (a)(14), (c) and (d) to read as follows:


Sec. 1.721  Format and content.

    (a) * * *
    (5) A complete statement of facts which, if proven true, would 
constitute such a violation. All material facts must be supported, 
pursuant to the requirements of Sec. 1.720(c) and paragraph (a)(11) of 
this section, by relevant affidavits and documentation, including 
copies of relevant written agreements, offers, counter-offers, denials, 
or other related correspondence. The statement of facts shall include a 
detailed explanation of the manner and time period in which a defendant 
has allegedly violated the Act, Commission order, or Commission rule in 
question, including a full identification or description of the 
communications, transmissions, services, or other carrier conduct 
complained of and the nature of any injury allegedly sustained by the 
complainant. Assertions based on information and belief are expressly 
prohibited unless made in good faith and accompanied by an affidavit 
explaining the basis for the plaintiff's belief and why the complainant 
could not reasonably ascertain the facts from the defendant or any 
other source;
    (6) Proposed findings of fact, conclusions of law, and legal 
analysis relevant to the claims and arguments set forth in the 
complaint;
    (7) The relief sought, including recovery of damages and the amount 
of damages claimed, if known;

[[Page 1036]]

    (8) Certification that the complainant has, in good faith, 
discussed or attempted to discuss, the possibility of settlement with 
each defendant prior to the filing of the formal complaint. Such 
certification shall include a statement that, prior to the filing of 
the complaint, the complainant mailed a certified letter outlining the 
allegations that form the basis of the complaint it anticipated filing 
with the Commission to the defendant carrier that invited a response 
within a reasonable period of time and a brief summary of all 
additional steps taken to resolve the dispute prior to the filing of 
the formal complaint. If no additional steps were taken, such 
certificate shall state the reason(s) why the complainant believed such 
steps would be fruitless;
    (9) Whether a separate action has been filed with the Commission, 
any court, or other government agency that is based on the same claim 
or same set of facts, in whole or in part, or whether the complaint 
seeks prospective relief identical to the relief proposed or at issue 
in a notice-and-comment proceeding that is concurrently before the 
Commission;
    (10) An information designation containing:
    (i) The name, address, and position of each individual believed to 
have firsthand knowledge of the facts alleged with particularity in the 
complaint, along with a description of the facts within any such 
individual's knowledge;
    (ii) A description of all documents, data compilations and tangible 
things in the complainant's possession, custody, or control, that are 
relevant to the facts alleged with particularity in the complaint. Such 
description shall include for each document:
    (A) The date it was prepared, mailed, transmitted, or otherwise 
disseminated;
    (B) The author, preparer, or other source;
    (C) The recipient(s) or intended recipient(s);
    (D) Its physical location; and
    (E) A description of its relevance to the matters contained in the 
complaint; and
    (iii) A complete description of the manner in which the complainant 
identified all persons with information and designated all documents, 
data compilations and tangible things as being relevant to the dispute, 
including, but not limited to, identifying the individual(s) that 
conducted the information search and the criteria used to identify such 
persons, documents, data compilations, tangible things, and 
information;
    (11) Copies of all affidavits, documents, data compilations and 
tangible things in the complainant's possession, custody, or control, 
upon which the complainant relies or intends to rely to support the 
facts alleged and legal arguments made in the complaint;
    (12) A completed Formal Complaint Intake Form;
    (13) Verification of the filing payment required under 
Sec. 1.1105(1)(c) or (d); and
    (14) A certificate of service.
* * * * *
    (c) Where the complaint is filed pursuant to Sec. 47 U.S.C. 
Sec. 271(d)(6)(B), the complainant shall clearly indicate whether or 
not it is willing to waive the ninety-day resolution deadline contained 
within 47 U.S.C. 271(d)(6)(B), in accordance with the requirements of 
Sec. 1.736.
    (d) The complainant may petition the staff, pursuant to Sec. 1.3, 
for a waiver of any of the requirements of this section. Such waiver 
may be granted for good cause shown.
    Section 1.722 is revised to read as follows:


Sec. 1.722  Damages.

    (a) In a case where recovery of damages is sought, the complaint 
shall contain a clear and unequivocal request for damages and 
appropriate allegations in support of such claim in accordance with the 
requirements of paragraph (c) of this section.
    (b) Damages will not be awarded upon a complaint unless 
specifically requested. Damages may be awarded, however, upon a 
supplemental complaint that complies fully with the requirement of 
paragraph (c) of this section, based upon a finding of liability by the 
Commission in the original proceeding. Provided that:
    (1) If recovery of damages is first sought by supplemental 
complaint, such supplemental compalint must be filed within, and 
recovery is limited to, the statutory limitations contained in section 
415 of the Communications Act;
    (2) If recovery of damages is clearly and unequivocally requested 
in the original complaint, by identification of the claim giving rise 
to the damages and a general statement of the nature of the injury 
suffered, such claim for damages shall relate back to the filing date 
of the original formal complaint if:
    (i) The complainant clearly states in the original complaint that 
it chooses to have liability and prospective relief issues resolved 
prior to the consideration of damages issues; and
    (ii) The complainant files its supplemental complaint for damages 
within sixty days after public notice (as defined in Sec. 1.4(b)) of a 
decision on the merits of the original complaint.
    (3) Where a complainant voluntarily elects to seek the recovery of 
damages upon a supplemental complaint in accordance with the 
requirements of paragraph (b)(2) of this section, the Commission will 
resolve the liability complaint within any applicable complaint 
resolution deadlines contained in the Act and defer adjudication of the 
damages complaint until after the liability complaint has been 
resolved.
    (c) In all cases in which recovery of damages is sought, it shall 
be the responsibility of the complainant to include, within either the 
complaint or the supplemental complaint for damages filed in accordance 
with paragraph (b) of this section, either:
    (1) A computation of each and every category of damages for which 
recovery is sought, along with an identification of all relevant 
documents and materials or such other evidence to be used by the 
complainant to determine the amount of such damages; or
    (2) An explanation of:
    (i) The information not in the possession of the complaining party 
that is necessary to develop a detailed computation of damages;
    (ii) Why such information is unavailable to the complaining party;
    (iii) The factual basis the complainant has for believing that such 
evidence of damages exists; and
    (iv) A detailed outline of the methodology that would be used to 
create a computation of damages with such evidence.
    (d) Where a complainant voluntarily elects to seek the recovery of 
damages upon a supplemental complaint in accordance with the 
requirements of paragraph (b)(2) of this section, the following 
procedures may apply in the event that the Commission determines that 
the defendant is liable based upon its review of the original 
complaint:
    (1) Issues concerning the amount, if any, of damages may be either 
designated by the Bureau for hearing before, or, if the parties agree, 
submitted for mediation to, a Commission Administrative Law Judge. Such 
Administrative Law Judge shall be chosen in the following manner:
    (i) By agreement of the parties and the Chief Administrative Law 
Judge; or
    (ii) In the absence of such agreement, the Chief Administrative Law 
Judge shall designate the Administrative Law Judge.
    (2) The Commission may, in its discretion, order the defendant 
either to post a bond for, or deposit into an interest bearing escrow 
account, a sum

[[Page 1037]]

equal to the amount of damages which the Commission finds, upon 
preliminary investigation, is likely to be ordered after the issue of 
damages is fully litigated, or some lesser sum which may be 
appropriate, provided the Commission finds that the grant of this 
relief is favored on balance upon consideration of the following 
factors:
    (i) The complainant's potential irreparable injury in the absence 
of such deposit;
    (ii) The extent to which damages can be accurately calculated;
    (iii) The balance of the hardships between the complainant and the 
defendant; and
    (iv) Whether public interest considerations favor the posting of 
the bond or ordering of the deposit.
    (3) The Commission may, in its discretion, suspend ongoing damages 
proceedings for fourteen days, to provide the parties with a time 
within which to pursue settlement negotiations and/or alternative 
dispute resolution procedures.
    (4) The Commission may, in its discretion, end adjudication of 
damages with a determination of the sufficiency of a damages 
computation method or formula. No such method or formula shall contain 
a provision to offset any claim of the defendant against the 
complainant. The parties shall negotiate in good faith to reach an 
agreement on the exact amount of damages pursuant to the Commission-
mandated method or formula. Within thirty days of the release date of 
the damages order, parties shall submit jointly to the Commission 
either:
    (i) A statement detailing the parties' agreement as to the amount 
of damages;
    (ii) A statement that the parties are continuing to negotiate in 
good faith and a request that the parties be given an extension of time 
to continue negotiations; or
    (iii) A statement detailing the bases for the continuing dispute 
and the reasons why no agreement can be reached.
    8. Section 1.724 is amended by revising paragraphs (a), (b), and 
(c) and adding new paragraphs (f), (g), (h), (i), and (j) to read as 
follows:


Sec. 1.724  Answers.

    (a) Any carrier upon which a copy of a formal complaint is served 
shall answer such complaint in the manner prescribed under this section 
within twenty days of service of the formal complaint by the 
complainant, unless otherwise directed by the Commission.
    (b) The answer shall advise the complainant and the Commission 
fully and completely of the nature of any defense, and shall respond 
specifically to all material allegations of the complaint. Every effort 
shall be made to narrow the issues in the answer. The defendant shall 
state concisely its defenses to each claim asserted and shall admit or 
deny the averments on which the complainant relies and state in detail 
the basis for admitting or denying such averment. General denials are 
prohibited. If the defendant is without knowledge or information 
sufficient to form a belief as to the truth of an averment, the 
defendant shall so state and this has the effect of a denial. When a 
defendant intends in good faith to deny only part of an averment, the 
defendant shall specify so much of it as is true and shall deny only 
the remainder. The defendant may deny the allegations of the complaint 
as specific denials of either designated averments or paragraphs.
    (c) The answer shall contain proposed findings of fact, conclusions 
of law, and legal analysis relevant to the claims and arguments set 
forth in the answer.
* * * * *
    (f) The answer shall include an information designation containing:
    (1) The name, address, and position of each individual believed to 
have firsthand knowledge of the facts alleged with particularity in the 
answer, along with a description of the facts within any such 
individual's knowledge;
    (2) A description of all documents, data compilations and tangible 
things in the defendant's possession, custody, or control, that are 
relevant to the facts alleged with particularity in the answer. Such 
description shall include for each document:
    (i) The date it was prepared, mailed, transmitted, or otherwise 
disseminated;
    (ii) The author, preparer, or other source;
    (iii) The recipient(s) or intended recipient(s);
    (iv) Its physical location; and
    (v) A description of its relevance to the matters in dispute.
    (3) A complete description of the manner in which the defendant 
identified all persons with information and designated all documents, 
data compilations and tangible things as being relevant to the dispute, 
including, but not limited to, identifying the individual(s) that 
conducted the information search and the criteria used to identify such 
persons, documents, data compilations, tangible things, and 
information;
    (g) The answer shall attach copies of all affidavits, documents, 
data compilations and tangible things in the defendant's possession, 
custody, or control, upon which the defendant relies or intends to rely 
to support the facts alleged and legal arguments made in the answer.
    (h) The answer shall contain certification that the defendant has, 
in good faith, discussed or attempted to discuss, the possibility of 
settlement with the complainant prior to the filing of the formal 
complaint. Such certification shall include a brief summary of all 
steps taken to resolve the dispute prior to the filing of the formal 
complaint. If no such steps were taken, such certificate shall state 
the reason(s) why the defendant believed such steps would be fruitless;
    (i) Where the complaint is filed pursuant to 47 U.S.C. 
271(d)(6)(B), the defendant shall clearly indicate its willingness to 
waive the 90-day resolution deadline contained within 47 U.S.C. 
271(d)(6)(B), in accordance with the requirements of Sec. 1.736.
    (j) The defendant may petition the staff, pursuant to Sec. 1.3, for 
a waiver of any of the requirements of this section. Such waiver may be 
granted for good cause shown.
    9. Section 1.725 is revised to read as follows:


Sec. 1.725  Cross-complaints and counterclaims.

    Cross-complaints seeking any relief within the jurisdiction of the 
Commission against any carrier that is a party (complainant or 
defendant) to that proceeding are expressly prohibited. Any claim that 
might otherwise meet the requirements of a cross-complaint may be filed 
as a separate complaint in accordance with Secs. 1.720 through 1.736. 
For purposes of this subpart, the term ``cross-complaint'' shall 
include counterclaims.
    10. Section 1.726 is revised to read as follows:


Sec. 1.726  Replies.

    (a) Within three days after service of an answer containing 
affirmative defenses presented in accordance with the requirements of 
Sec. 1.724(e), a complainant may file and serve a reply containing 
statements of relevant, material facts that shall be responsive to only 
those specific factual allegations made by the defendant in support of 
its affirmative defenses. Replies which contain other allegations or 
arguments will not be accepted or considered by the Commission.
    (b) Failure to reply to an affirmative defense shall be deemed an 
admission of such affirmative defense and of any facts supporting such 
affirmative defense that are not specifically contradicted in the 
complaint.

[[Page 1038]]

    (c) The reply shall contain proposed findings of fact, conclusions 
of law, and legal analysis relevant to the claims and arguments set 
forth in the reply.
    (d) The reply shall include an information designation containing:
    (1) The name, address and position of each individual believed to 
have firsthand knowledge about the facts alleged with particularity in 
the reply, along with a description of the facts within any such 
individual's knowledge.
    (2) A description of all documents, data compilations and tangible 
things in the complainant's possession, custody, or control that are 
relevant to the facts alleged with particularity in the reply. Such 
description shall include for each document:
    (i) The date prepared, mailed, transmitted, or otherwise 
disseminated;
    (ii) The author, preparer, or other source;
    (iii) The recipient(s) or intended recipient(s);
    (iv) Its physical location; and
    (v) A description of its relevance to the matters in dispute.
    (3) A complete description of the manner in which the complainant 
identified all persons with information and designated all documents, 
data compilations and tangible things as being relevant to the dispute, 
including, but not limited to, identifying the individual(s) that 
conducted the information search and the criteria used to identify such 
persons, documents, data compilations, tangible things, and 
information;
    (e) The reply shall attach copies of all affidavits, documents, 
data compilations and tangible things in the complainant's possession, 
custody, or control upon which the complainant relies or intends to 
rely to support the facts alleged and legal arguments made in the 
reply.
    (f) The complainant may petition the staff, pursuant to Sec. 1.3, 
for a waiver of any of the requirements of this section. Such waiver 
may be granted for good cause shown.
    Section 1.727 is amended by revising paragraphs (b), (c), (d), and 
(e) and adding new paragraphs (g) and (h) to read as follows:


Sec. 1. 727  Motions.

* * * * *
    (b) All dispositive motions shall contain proposed findings of fact 
and conclusions of law, with supporting legal analysis, relevant to the 
contents of the pleading. Motions to compel discovery must contain a 
certification by the moving party that a good faith attempt to resolve 
the dispute was made prior to filing the motion. All facts relied upon 
in motions must be supported by documentation or affidavits pursuant to 
the requirements of Sec. 1.720(c), except for those facts of which 
official notice may be taken.
    (c) The moving party shall provide a proposed order for adoption, 
which appropriately incorporates the basis therefor, including proposed 
findings of fact and conclusions of law relevant to the pleading. The 
proposed order shall be clearly marked as a ``Proposed Order.'' The 
proposed order shall be submitted both as a hard copy and on computer 
disk in accordance with the requirements of Sec. 1.734(d). Where 
appropriate, the proposed order format should conform to that of a 
reported FCC order.
    (d) Oppositions to any motion shall be accompanied by a proposed 
order for adoption, which appropriately incorporates the basis 
therefor, including proposed findings of fact and conclusions of law 
relevant to the pleading. The proposed order shall be clearly captioned 
as a ``Proposed Order.'' The proposed order shall be submitted both as 
a hard copy and on computer disk in accordance with the requirements of 
Sec. 1.734(d). Where appropriate, the proposed order format should 
conform to that of a reported FCC order.
    (e) Oppositions to motions may be filed and served within five 
business days after the motion is filed and served and not after. 
Oppositions shall be limited to the specific issues and allegations 
contained in such motion; when a motion is incorporated in an answer to 
a complaint, the opposition to such motion shall not address any issues 
presented in the answer that are not also specifically raised in the 
motion. Failure to oppose any motion may constitute grounds for 
granting of the motion.
* * * * *
    (g) Motions seeking an order that the allegations in the complaint 
be made more definite and certain are prohibited.
    (h) Amendments or supplements to complaints to add new claims or 
requests for relief are prohibited. Parties are responsible, however, 
for the continuing accuracy and completeness of all information and 
supporting authority furnished in a pending complaint proceeding as 
required under Sec. 1.720(g).
    2. Section 1.729 is revised to read as follows:


Sec. 1.729  Discovery.

    (a) A complainant may file with the Commission and serve on a 
defendant, concurrently with its complaint, a request for up to ten 
written interrogatories. A defendant may file with the Commission and 
serve on a complainant, during the period starting with the service of 
the complaint and ending with the service of its answer, a request for 
up to ten written interrogatories. A complainant may file with the 
Commission and serve on a defendant, within three calendar days of 
service of the defendant's answer, a request for up to five written 
interrogatories. Subparts of any interrogatory will be counted as 
separate interrogatories for purposes of compliance with this limit. 
Requests for interrogatories filed and served pursuant to this 
procedure may be used to seek discovery of any non-privileged matter 
that is relevant to the material facts in dispute in the pending 
proceeding, provided, however, that requests for interrogatories filed 
and served by a complainant after service of the defendant's answer 
shall be limited in scope to specific factual allegations made by the 
defendant in support of its affirmative defenses. This procedure may 
not be employed for the purpose of delay, harassment or obtaining 
information that is beyond the scope of permissible inquiry related to 
the material facts in dispute in the pending proceeding.
    (b) Requests for interrogatories filed and served pursuant to 
paragraph (a) of this section shall contain a listing of the 
interrogatories requested and an explanation of why the information 
sought in each interrogatory is both necessary to the resolution of the 
dispute and not available from any other source.
    (c) A responding party shall file with the Commission and serve on 
the propounding party any opposition and objections to the requests for 
interrogatories as follows:
    (1) By the defendant, within ten calendar days of service of the 
requests for interrogatories served simultaneously with the complaint 
and within five calendar days of the requests for interrogatories 
served following service of the answer;
    (2) By the complainant, within five calendar days of service of the 
requests for interrogatories; and
    (3) In no event less than three calendar days prior to the initial 
status conference as provided for in Sec. 1.733(a).
    (d) Commission staff will consider the requests for 
interrogatories, properly filed and served pursuant to paragraph (a) of 
this section, along with any objections or oppositions thereto, 
properly filed and served pursuant to paragraph (b) of this section, at 
the initial status conference, as provided for in Sec. 1.733(a)(5), and 
at that time

[[Page 1039]]

determine the interrogatories, if any, to which parties shall respond, 
and set the schedule of such response.
    (e) The interrogatories ordered to be answered pursuant to 
paragraph (d) of this section are to be answered separately and fully 
in writing under oath or affirmation by the party served, or if such 
party is a public or private corporation or partnership or association, 
by any officer or agent who shall furnish such information as is 
available to the party. The answers shall be signed by the person 
making them. The answers shall be filed with the Commission and served 
on the propounding party.
    (f) A propounding party asserting that a responding party has 
provided an inadequate or insufficient response to Commission-ordered 
discovery request may file a motion to compel within ten days of the 
service of such response, or as otherwise directed by Commission staff, 
pursuant to the requirements of Sec. 1.727.
    (g) The Commission may, in its discretion, require parties to 
provide documents to the Commission in a scanned or other electronic 
format that provides:
    (1) Indexing by useful identifying information about the documents; 
and
    (2) Technology that allows staff to annotate the index so as to 
make the format an efficient means of reviewing the documents.
    (h) The Commission may allow additional discovery, including, but 
not limited to, document production, depositions and/or additional 
interrogatories. In its discretion, the Commission may modify the 
scope, means and scheduling of discovery in light of the needs of a 
particular case and the requirements of applicable statutory deadlines.
    13. Section 1.730 is removed.
    14. Section 1.731 is amended by revising the section heading and 
paragraph (a) to read as follows:


Sec. 1.731  Confidentiality of information produced or exchanged by the 
parties.

    (a) Any materials generated in the course of a formal complaint 
proceeding may be designated as proprietary by that party if the party 
believes in good faith that the materials fall within an exemption to 
disclosure contained in the Freedom of Information Act (FOIA), 5 U.S.C. 
552(b)(1) through (9). Any party asserting confidentiality for such 
materials shall so indicate by clearly marking each page, or portion 
thereof, for which a proprietary designation is claimed. If a 
proprietary designation is challenged, the party claiming 
confidentiality shall have the burden of demonstrating, by a 
preponderance of the evidence, that the material designated as 
proprietary falls under the standards for nondisclosure enunciated in 
the FOIA.
* * * * *
    15. Section 1.732 is amended by revising paragraphs (a), (b), (c), 
(d), (f), and adding new paragraph (h) to read as follows:


Sec. 1.732  Other required written submissions.

    (a) The Commission may, in its discretion, or upon a party's motion 
showing good cause, require the parties to file briefs summarizing the 
facts and issues presented in the pleadings and other record evidence.
    (b) Unless otherwise directed by the Commission, all briefs shall 
include all legal and factual claims and defenses previously set forth 
in the complaint, answer, or any other pleading submitted in the 
proceeding. Claims and defenses previously made but not reflected in 
the briefs will be deemed abandoned. The Commission may, in its 
discretion, limit the scope of any briefs to certain subjects or 
issues. A party shall attach to its brief copies of all documents, data 
compilations, tangible things, and affidavits upon which such party 
relies or intends to rely to support the facts alleged and legal 
arguments made in its brief and such brief shall contain a full 
explanation of how each attachment is relevant to the issues and 
matters in dispute. All such attachments to a brief shall be documents, 
data compilations or tangible things, or affidavits made by persons, 
that were identified by any party in its information designations filed 
pursuant to Secs. 1.721(a)(10)(i), (a)(10)(ii), 1.724(f)(1), (f)(2), 
and 1.726(d)(1), (d)(2). Any other supporting documentation or 
affidavits that is attached to a brief must be accompanied by a full 
explanation of the relevance of such materials and why such materials 
were not identified in the information designations. These briefs shall 
contain the proposed findings of fact and conclusions of law which the 
filing party is urging the Commission to adopt, with specific citation 
to the record, and supporting relevant authority and analysis.
    (c) In cases in which discovery is not conducted, absent an order 
by the Commission that briefs be filed, parties may not submit briefs. 
If the Commission does authorize the filing of briefs in cases in which 
discovery is not conducted, briefs shall be filed concurrently by both 
the complainant and defendant at such time as designated by the 
Commission staff and in accordance with the provisions of this section.
    (d) In cases in which discovery is conducted, briefs shall be filed 
concurrently by both the complainant and defendant at such time 
designated by the Commission staff.
* * * * *
    (f) Initial briefs shall be no longer than twenty-five pages. Reply 
briefs shall be no longer than ten pages. Either on its own motion or 
upon proper motion by a party, the Commission staff may establish other 
page limits for briefs.
* * * * *
    (h) The parties shall submit a joint statement of stipulated facts, 
disputed facts, and key legal issues no later than two business days 
prior to the initial status conference, scheduled in accordance with 
the provisions of Sec. 1.733(a).
    16. Section 1.733 is amended by revising paragraphs (a) 
introductory text, (a)(2), (a)(4), (a)(5), (a)(6), (b), (c), (d), and 
(e) and adding new paragraphs (f), (g), and (h) to read as follows:


Sec. 1.733  Status conference.

    (a) In any complaint proceeding, the Commission may, in its 
discretion, direct the attorneys and/or the parties to appear before it 
for a status conference. Unless otherwise ordered by the Commission, an 
initial status conference shall take place, at the time and place 
designated by the Commission staff, ten business days after the date 
the answer is due to be filed. A status conference may include 
discussion of:
* * * * *
    (2) The necessity for or desirability of additional pleadings or 
evidentiary submissions;
* * * * *
    (4) Settlement of all or some of the matters in controversy by 
agreement of the parties;
    (5) Whether discovery is necessary and, if so, the scope, type and 
schedule for such discovery;
    (6) The schedule for the remainder of the case and the dates for 
any further status conferences; and
* * * * *
    (b)(1) Parties shall meet and confer prior to the initial status 
conference to discuss:
    (i) Settlement prospects;
    (ii) Discovery;
    (iii) Issues in dispute;
    (iv) Schedules for pleadings;
    (v) Joint statement of stipulated facts, disputed facts, and key 
legal issues; and
    (vi) In a 47 U.S.C. 271(d)(6)(B) proceeding, whether or not the 
parties agree to waive the 47 U.S.C. 271(d)(6)(B) 90-day resolution 
deadline.

[[Page 1040]]

    (2) Parties shall submit a joint statement of all proposals agreed 
to and disputes remaining as a result of such meeting to Commission 
staff at least two business days prior to the scheduled initial status 
conference.
    (c) In addition to the initial status conference referenced in 
paragraph (a) of this section, any party may also request that a 
conference be held at any time after the complaint has been filed.
    (d) During a status conference, the Commission staff may issue oral 
rulings pertaining to a variety of interlocutory matters relevant to 
the conduct of a formal complaint proceeding including, inter alia, 
procedural matters, discovery, and the submission of briefs or other 
evidentiary materials.
    (e) Parties may make, upon written notice to the Commission and all 
attending parties at least three business days prior to the status 
conference, an audio recording of the Commission staff's summary of its 
oral rulings. Alternatively, upon agreement among all attending parties 
and written notice to the Commission at least three business days prior 
to the status conference, the parties may make an audio recording of, 
or use a stenographer to transcribe, the oral presentations and 
exchanges between and among the participating parties, insofar as such 
communications are ``on-the-record'' as determined by the Commission 
staff, as well as the Commission staff's summary of its oral rulings. A 
complete transcript of any audio recording or stenographic 
transcription shall be filed with the Commission as part of the record, 
pursuant to the provisions of paragraph (f)(2) of this section. The 
parties shall make all necessary arrangements for the use of a 
stenographer and the cost of transcription, absent agreement to the 
contrary, will be shared equally by all parties that agree to make the 
record of the status conference.
    (f) The parties in attendance, unless otherwise directed, shall 
either:
    (1) Submit a joint proposed order memorializing the oral rulings 
made during the conference to the Commission by 5:30 pm, Eastern Time, 
on the business day following the date of the status conference, or as 
otherwise directed by Commission staff. In the event the parties in 
attendance cannot reach agreement as to the rulings that were made, the 
joint proposed order shall include the rulings on which the parties 
agree, and each party's alternative proposed rulings for those rulings 
on which they cannot agree. Commission staff will review and make 
revisions, if necessary, prior to signing and filing the submission as 
part of the record. The proposed order shall be submitted both as hard 
copy and on computer disk in accordance with the requirements of 
Sec. 1.734(d); or
    (2) Pursuant to the requirements of paragraph (e) of this section, 
submit to the Commission by 5:30 pm., Eastern Time, on the third 
business day following the status conference or as otherwise directed 
by Commission staff either:
    (i) A transcript of the audio recording of the Commission staff's 
summary of its oral rulings;
    (ii) A transcript of the audio recording of the oral presentations 
and exchanges between and among the participating parties, insofar as 
such communications are ``on-the-record'' as determined by the 
Commission staff, and the Commission staff's summary of its oral 
rulings; or
    (iii) A stenographic transcript of the oral presentations and 
exchanges between and among the participating parties, insofar as such 
communications are ``on-the-record'' as determined by the Commission 
staff, and the Commission staff's summary of its oral rulings.
    (g) Status conferences will be scheduled by the Commission staff at 
such time and place as it may designate to be conducted in person or by 
telephone conference call.
    (h) The failure of any attorney or party, following reasonable 
notice, to appear at a scheduled conference will be deemed a waiver by 
that party and will not preclude the Commission staff from conferring 
with those parties and/or counsel present.
    17. Section 1.734 is amended by revising paragraph (c) and adding 
new paragraph (d) to read as follows:


Sec. 1.734  Specifications as to pleadings, briefs, and other 
documents; subscription.

* * * * *
    (c) The original of all pleadings and other submissions filed by 
any party shall be signed by the party, or by the party's attorney. The 
signing party shall include in the document his or her address, 
telephone number, facsimile number and the date on which the document 
was signed. Copies should be conformed to the original. Unless 
specifically required by rule or statute, pleadings need not be 
verified. The signature of an attorney or party shall be a certificate 
that the attorney or party has read the pleading, motion, or other 
paper; that to the best of his or her knowledge, information, and 
belief formed after reasonable inquiry, it is well grounded in fact and 
is warranted by existing law or a good faith argument for the 
extension, modification, or reversal of existing law; and that it is 
not interposed solely for purposes of delay or for any other improper 
purpose.
    (d) All proposed orders shall be submitted both as hard copies and 
on computer disk formatted to be compatible with the Commission's 
computer system and using the Commission's current wordprocessing 
software. Each disk should be submitted in ``read only'' mode. Each 
disk should be clearly labelled with the party's name, proceeding, type 
of pleading, and date of submission. Each disk should be accompanied by 
a cover letter. Parties who have submitted copies of tariffs or reports 
with their hard copies need not include such tariffs or reports on the 
disk. Upon showing of good cause, the Commission may waive the 
requirements of this paragraph.
    18. Section 1.735 is amended by revising paragraphs (b), (d), (e), 
and (f) to read as follows:


Sec. 1.735  Copies; service; separate filings against multiple 
defendants.

* * * * *
    (b) The complainant shall file an original copy of the complaint, 
accompanied by the correct fee, in accordance with part I, subpart G 
(see Sec. 1.1105(1)(c) and (d)) and, on the same day:
    (1) File three copies of the complaint with the Office of the 
Commission Secretary;
    (2) If the complaint is filed against a carrier concerning matters 
within the responsibility of the Common Carrier Bureau (see Sec. 0.291 
of this chapter), serve two copies on the Chief, Formal Complaints and 
Investigations Branch, Enforcement Division, Common Carrier Bureau;
    (3) If the complaint is filed against a wireless telecommunications 
carrier concerning matters within the responsibility of the Wireless 
Telecommunications Bureau (see Sec. 0.331 of this chapter), serve two 
copies on the Chief, Compliance and Litigation Branch, Enforcement and 
Consumer Information Division, Wireless Telecommunications Bureau;
    (4) If the complaint is filed against a carrier concerning matters 
within the responsibility of the International Bureau (see Sec. 0.261 
of this chapter), serve a copy on the Chief, Telecommunications 
Division, International Bureau, and serve two copies on the Chief, 
Formal Complaints and Investigations Branch, Enforcement Division, 
Common Carrier Bureau; and
    (5) If a complaint is addressed against multiple defendants, pay a 
separate fee, in accordance with part I, subpart G (see

[[Page 1041]]

Sec. 1.1105(1)(c) and (d)), and file three copies of the complaint with 
the Office of the Commission Secretary for each additional defendant.
* * * * *
    (d) The complainant shall serve the complaint by hand delivery on 
either the named defendant or one of the named defendant's registered 
agents for service of process on the same date that the complaint is 
filed with the Commission in accordance with the requirements of 
paragraph (b) of this section.
    (e) Upon receipt of the complaint by the Commission, the Commission 
shall promptly send, by facsimile transmission to each defendant named 
in the complaint, notice of the filing of the complaint. The Commission 
shall send, by regular U.S. mail delivery, to each defendant named in 
the complaint, a copy of the complaint. The Commission shall 
additionally send, by regular U.S. mail to all parties, a schedule 
detailing the date the answer will be due and the date, time and 
location of the initial status conference.
    (f) All subsequent pleadings and briefs filed in any formal 
complaint proceeding, as well as all letters, documents or other 
written submissions, shall be served by the filing party on the 
attorney of record for each party to the proceeding, or, where a party 
is not represented by an attorney, each party to the proceeding either 
by hand delivery, overnight delivery, or by facsimile transmission 
followed by regular U.S. mail delivery, together with a proof of such 
service in accordance with the requirements of Sec. 1.47(g). Service is 
deemed effective as follows:
    (1) Service by hand delivery that is delivered to the office of the 
recipient by 5:30 pm, local time of the recipient, on a business day 
will be deemed served that day. Service by hand delivery that is 
delivered to the office of the recipient after 5:30 pm, local time of 
the recipient, on a business day will be deemed served on the following 
business day;
    (2) Service by overnight delivery will be deemed served the 
business day following the day it is accepted for overnight delivery by 
a reputable overnight delivery service such as, or comparable to, the 
US Postal Service Express Mail, United Parcel Service or Federal 
Express; or
    (3) Service by facsimile transmission that is fully transmitted to 
the office of the recipient by 5:30 pm, local time of the recipient, on 
a business day will be deemed served that day. Service by facsimile 
transmission that is fully transmitted to the office of the recipient 
after 5:30 pm, local time of the recipient, on a business day will be 
deemed served on the following business day.
    19. Section 1.736 is added under the undesignated center heading 
``Formal Complaints'' to read as follows:


Sec. 1.736  Complaints filed pursuant to 47 U.S.C. 271(d)(6)(B).

    (a) Where a complaint is filed pursuant to 47 U.S.C. 271(d)(6)(B), 
parties shall indicate whether they are willing to waive the ninety-day 
resolution deadline contained in 47 U.S.C. 271(d)(6)(B) in the 
following manner:
    (1) The complainant shall so indicate in both the complaint itself 
and in the Formal Complaint Intake Form, and the defendant shall so 
indicate in its answer; or
    (2) The parties shall indicate their agreement to waive the ninety-
day resolution deadline to the Commission staff at the initial status 
conference, to be held in accordance with Sec. 1.733 of the rules.
    (b) Requests for waiver of the ninety-day resolution deadline for 
complaints filed pursuant to 47 U.S.C. 271(d)(6)(B) will not be 
entertained by the Commission staff subsequent to the initial status 
conference, absent a showing by the complainant and defendant that such 
waiver is in the public interest.
    20. Section 1.1105 is amended by revising (1)(c) and adding (1)(d) 
to read as follows:


Sec. 1.1105  Schedule of charges for applications and other filings in 
the common carrier services.

----------------------------------------------------------------------------------------------------------------
                                                                          Payment type                          
             Action                     FCC form No.        Fee amount        code               Address        
----------------------------------------------------------------------------------------------------------------
1. * * *                                                                                                        
    c. Formal Complaints and      Corr. & 159............          150  CIZ              Federal Communications 
     Pole Attachment Complaints,                                                          Commission, Common    
     except those relating to                                                             Carrier Enforcement,  
     wireless telecommunications                                                          P.O. Box 358120,      
     services, Filing Fee.                                                                Pittsburgh, PA 15251- 
                                                                                          5120.                 
    d. Formal Complaints          Corr. & 159............          150  CIZ              Federal Communications 
     relating to wireless                                                                 Commission, Wireless  
     telecommunications                                                                   Telecommunications    
     services, including                                                                  Bureau, P.O. Box      
     cellular telephone, paging,                                                          358128, Pittsburgh, PA
     personal communications                                                              15251-5120.           
     services, and other                                                                                        
     commercial mobile radio                                                                                    
     services, Filing Fee.                                                                                      
----------------------------------------------------------------------------------------------------------------

* * * * *
    Note: This attachment will not be published in the Code of 
Federal Regulations

Attachment

[Approved by OMB; 3060-XXXX; Expires XX/XX/XX; Est. Avg. Burden: 30 
min.]

Formal Complaint Intake Form--FCC Form 485

    1. Case Name __________
    2. Complainant's Name, Address, Phone and Facsimile Number, e-mail 
address (if applicable):

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

    3. Complaint alleges violation of the following provisions of the 
Communications Act of 1934, as amended:

----------------------------------------------------------------------
    4. Complaint is subject to the following statutory resolution 
deadlines:

----------------------------------------------------------------------

----------------------------------------------------------------------

    Answer (Y)es, (N)o or N/A to the following:
    ______ 5. Complaint conforms to the specifications prescribed by 47 
CFR Secs. 1.49, 1.734.
    ______ 6. Complaint complies with the pleading requirements of 47 
CFR Sec. 1.720.
    ______ 7. Complaint conforms to the format and content requirements 
of 47 CFR Sec. 1.721:
    ______ a. Complaint contains a complete statement of facts, 
including a detailed explanation of the manner in which the defendant 
is alleged to have violated the provisions of the Communications Act of 
1934, as

[[Page 1042]]

amended, or Commission rules or Commission orders.
    ______ b. Relevant documentation and/or affidavits are attached, 
including agreements, offers, counter-offers, denials, or other 
relevant documentation.
    ______ c. If damages are sought, contains specified amount and 
nature of damages claimed.
    ______ d. Contains certification that complainant mailed a 
certified letter outlining the allegations that form the basis of the 
complaint it anticipated filing with the Commission to the defendant 
carrier that invited a response within a reasonable period of time and 
has, in good faith, discussed or attempted to discuss, the possibility 
of settlement with each defendant prior to the filing of the formal 
complaint.
    ______ e. Suit has been filed with the Commission, in another 
court, or government agency on the basis of the same cause of action or 
the same set of facts, in whole or in part. If yes, please explain:

----------------------------------------------------------------------

----------------------------------------------------------------------

    ______ f. Seeks prospective relief identical to the relief proposed 
or at issue in a notice-and-comment proceeding that is concurrently 
before the Commission. If yes, please explain:

----------------------------------------------------------------------

----------------------------------------------------------------------

    ______ g. Includes an information designation that contains:
    ______ (1) A description by category and location, of all 
documents, data compilations and tangible things in the complainant's 
possession, custody, or control that are relevant to the facts alleged 
with particularity in the complaint; and
    ______ (2) The name, address, and position of each individual 
believed to have firsthand knowledge of the facts alleged with 
particularity in the complaint, along with a description of the facts 
within any such individual's knowledge.
    ______ h. Attached are copies of all documents, data compilations 
and tangible things in the complainant's possession, custody, or 
control, upon which the complainant relies or intends to rely to 
support the facts alleged and legal arguments made in the complaint.
    ______ i. Certificate of service is attached.
    ______ j. Copy of payment of $150.00 filing fee, in accordance with 
47 CFR Sec. 1.1105(1)(c), is attached.
    ______ 8. If complaint is filed pursuant to 47 U.S.C. 271(d)(6)(B), 
complainant requests waiver of the ninety day complaint resolution 
deadline.
    ______ 9. All reported FCC orders relied upon have been properly 
cited in accordance with 47 CFR Sec. 1.14.
    ______ 10. Copy of complaint has been served on defendant's 
registered agent for service in accordance with 47 CFR Sec. l.47 (b), 
(d), (h) and 47 CFR Sec. 1.735(d).
    ______ 11. If more than ten pages, the complaint contains a table 
of contents as specified in 47 CFR Sec. 1.49(b).
    ______ 12. The correct number of copies, required by 47 CFR 
Sec. 1.51(c), if applicable, and 47 CFR Sec. 1.735(b) have been filed.
    ______ 13. Complaint has been properly signed and verified in 
accordance with 47 CFR Sec. 1.52.
    ______ 14. If complaint is by multiple complainants, it conforms 
with the requirements of 47 CFR Sec. 1.723(a).
    ______ 15. If complaint involves multiple grounds, it complies with 
the requirements of 47 CFR Sec. 1.723(b).
    ______ 16. If complaint is directed against multiple defendants, it 
complies with the requirements of 47 CFR Sec. 1.735 (a)-(b).

    Notice: Sections 206 to 209 of the Communications Act of 1934, 
as amended, provide the statutory framework for rules for resolving 
formal complaints filed against common carriers. Section 208(a) 
authorizes complaints by any person ``complaining of anything done 
or omitted to be done by any common carrier'' subject to the 
provisions of the Act. Complainant must submit a completed FCC form 
485 with any formal complaint to indicate that the complaint 
satisfies the procedural and substantive requirements under the Act 
and our rules. The information will be used to determine the 
sufficiency of the complaint and to resolve the merits of the 
dispute between the parties. We have estimated that each response to 
this collection of information will take, on average, 30 minutes. 
Our estimate includes the time to read the instructions, look 
through existing records, gather and maintain required data, and 
actually complete and review the form or response. If you have any 
comments on this estimate, or how we can improve the collection and 
reduce the burden it causes you, please write the Federal 
Communications Commission, AMD-PERM, Paperwork Reduction Project 
(3060-0411), Washington, D.C. 20554. We will also accept your 
comments via the Internet if you send them to [email protected]. PLEASE 
DO NOT SEND COMPLETED FORMS TO THIS ADDRESS.
    Remember--You are not required to respond to a collection of 
information sponsored by the Federal government, and the government 
may not conduct or sponsor this collection, unless it displays a 
currently valid OMB control number or if we fail to provide you with 
this notice. This collection has been assigned an OMB control number 
of 3060-XXXX).
    The Foregoing Notice is Required by the Privacy Act of 1974, 
Pub. L. 93-579, December 31, 1994, 5 U.S.C. 552a(E)(3), and the 
Paperwork Reduction Act of 1995, Pub. L. 104-13, October 1, 1995, 44 
U.S.C. 3507.

[FR Doc. 98-173 Filed 1-6-98; 8:45 am]
BILLING CODE 6712-01-P