Federal Register, Volume 63 Issue 80 (Monday, April 27, 1998)

[Federal Register Volume 63, Number 80 (Monday, April 27, 1998)]
[Rules and Regulations]
[Pages 20534-20539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11163]

=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 69

[CC Docket 96-128; DA 98-481]

Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification and waivers.

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

SUMMARY: The Common Carrier Bureau adopted a Memorandum Opinion and
Order, which clarifies the requirements for the provision of payphone-
specific coding digits by local exchange carriers (LECs) and payphone
service providers (PSPs) to interexchange carriers (IXCs). The order
also clarifies that automatic number identification indicators (``ANI
ii'') and flexible automatic numbering identification (``FLEX ANI''),
are the methods to provide payphone-specific coding digits that comply
with the requirements of the Payphone Orders. In addition, the order
clarifies the tariff requirements that LECs must file pursuant to the
Payphone Orders. The order also grants a waiver of part 69 of the
Commission's rules so that LECs can establish rate elements to recover
the costs of implementing FLEX ANI to provide payphone-specific coding
digits for per-call compensation. Additionally, this order provides
limited waivers to LECs, PSPs, and IXCs, when appropriate, to
facilitate the implementation of per call compensation.

DATES: Effective March 9, 1998.

FOR FURTHER INFORMATION CONTACT: Rose Crellin, Formal Complaints and
Information Branch, Enforcement Division, Common Carrier Bureau (202)
418-0960.

SUPPLEMENTARY INFORMATION: This is a summary of the Bureau's Memorandum
Opinion and Order in CC Docket No. 96-128 [DA 98-481], adopted on March
9, 1998, and released on March 9, 1998. The full text of the Memorandum
Opinion and Order (``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 also may be purchased from the Commission's duplicating
contractor, International Transcription Services, 1231 20th Street,
N.W., Washington, D.C. 20036.

Paperwork Reduction Act

The Federal Communications Commission has received Office of
Management and Budget (OMB) approval for the following public
information collections contained in the Order pursuant to the
Paperwork Reduction Act of 1995, Public Law 104-13. An agency may not
conduct or sponsor and a person is not required to respond to a
collection of information unless it displays a currently valid control
number.
OMB Control Number: 3060-0823.
Expiration Date: 09/30/98.
Title: Pay Telephone Reclassification Memorandum Opinion and Order,
CC Docket No. 96-128.
Form No.: N/A.
Respondents: Business or other for-profit entities.

----------------------------------------------------------------------------------------------------------------
No. of Est. time per
Information collection requirement respondents response Total annual
(approximately) (hours) burden
----------------------------------------------------------------------------------------------------------------
a. LEC Tariff To Provide FLEX ANI to IXCs...................... 400 35 14,000
b. LEC Tariff To Recover Costs................................. 400 35 14,000
c. LECS Must Provide IXCs on Payphones that Provide Payphone
specific Coding Digits........................................ 400 24 9,600
d. LECs must Provide IXCs and PSPs Information on where FLEX
ANI is Available Now and When it is to be Scheduled in the
Future........................................................ 400 16 6,400
e. Waiver; LECs to Provide Cost Analysis Upon Request.......... 20 35 700
----------------------------------------------------------------------------------------------------------------

Total Annual Burden: 44,700 Hours.
Estimated Annual Reporting and Recordkeeping cost Burden: $0.
Needs and Uses: In the MO&O, the Bureau clarifies and provides
waivers of requirements established in the Payphone Orders for the
provision of payphone-specific coding digits by LECs and PSPs, to IXCs,
beginning October 7, 1997. The information disclosure rules and
policies governing the payphone industry to implement Section 276 of
the Act will ensure the payment per-call

[[Page 20535]]

compensation by implementing a method for LECs to provide information
to IXCs to identify calls, for each and every call made from a
payphone. The Bureau has reviewed several methods of identifying
payphone calls and has determined that among them, FLEX ANI is the most
flexible and has the added capability of providing a number of
additional coding digits, in real-time, that can uniquely identify a
call as coming from a payphone. Obligation to respond: Required. Public
reporting burden for the collections of information is as noted above.
Send comments regarding the burden estimate or any other aspect of the
collections of information, including suggestions for reducing the
burden to Performance Evaluation and Records Management, Washington,
D.C. 20554.

Summary of Memorandum Opinion and Order

1. In the order, the Bureau clarifies and waives certain
requirements established in the Payphone Orders ¹ regarding
payphone-specific coding digits ² to facilitate the
transition for local exchange carriers (``LECs''), payphone service
providers (``PSPs'') and interexchange carriers (``IXCs'') ³
to provide and receive payphone-specific coding digits to identify
calls from payphones to pay payphone compensation for subscriber 800
and access code calls. In doing so, the Bureau concludes that the
waivers granted therein to ensure the orderly transition for the
requirements established in the Payphone Orders to implement Section
276 of the Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (``1996 Act''), are in the public
interest. The Bureau finds that the waivers granted therein reflect the
transitional ``default per-call rate'' period established by the
Commission in the Payphone Orders and extended in the Second Report and
Order. In the Order, the Bureau notes that almost 80% of payphones are
expected to provide payphone-specific coding digits by March 9, 1998,
and the number of payphone digits for which payphone-specific coding
digits are available will continue to increase over the next few months
as technical problems are overcome by LECs.
---------------------------------------------------------------------------

\1\ Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996, CC
Docket No. 96-128, Report and Order, 61 FR 52307 (Oct. 7, 1996), 11
FCC Rcd 20,541 (1996) (``Report and Order''); Order on
Reconsideration, 61 FR 65341 (Dec. 12, 1996), 11 FCC Rcd 21,233
(1996) (``Order on Reconsideration'') (together the ``Payphone
Orders''). The Payphone Orders were affirmed in part and vacated in
part. See Illinois Public Telecomm. Ass'n v. FCC, 117 F.3d 555 (D.C.
Cir. 1997) (``Illinois Public Telecomm.''). See also Second Report
and Order, 62 FR 58659 (Oct. 30, 1997), CC Docket No. 96-128, FCC
97-371 (rel. Oct. 9, 1997) (``Second Report and Order''), pets. for
recon. pending, review pending, MCI Telecomm. Corp. v. FCC, D.C.
Circuit No. 97-1675 (filed Nov. 7, 1997); Sprint Corp. v. FCC, D.C.
Circuit No. 97-1685 (filed Nov. 13, 1997); Personal Communications
Industry Association v. FCC, D.C. Circuit No. 97-1709 (filed Dec. 1,
1997); Illinois Public Telecommunications Association v. FCC, D.C.
Circuit No. 97-1713 (filed Dec. 3, 1997). In the Payphone Orders,
the Commission adopted new rules and policies governing the payphone
industry to implement Section 276 of the Communications Act of 1934,
as amended, (``the Act'').
\2\ Payphone-specific coding digits provide a method for LECs to
transmit, with the automatic number identification (ANI),
information (coding number or digits) identifying a call as having
been placed specifically from a payphone. See Order on
Reconsideration, 61 FR 65341 (Dec. 12, 1996), 11 FCC Rcd at 21,265-
66, para. 64.
\3\ For purposes of paying compensation for compensable calls
and other associated obligations, such as tracking calls, we note
that the term ``IXC'' includes a LEC when it provides interstate,
intraLATA toll service. See Report and Order, 61 FR 52307 (Oct. 7,
1996), 11 FCC Rcd at 20,584, para. 83 n.293.
---------------------------------------------------------------------------

2. In the Order, the Bureau clarifies requirements established in
the Payphone Orders for the provision of payphone-specific coding
digits by LECs and PSPs, to IXCs beginning October 7, 1997.
Specifically, the Order explains that automatic number information
indicators (``ANI ii'') and flexible automatic numbering identification
(``FLEX ANI'') ⁴ are the methods that LECs can use to
provide payphone-specific coding digits that comply with the
requirements of the Payphone Orders. ⁵ The Order concludes
that all LECs must implement FLEX ANI to comply with the requirements
of the Payphone Orders subject to the limited waivers granted in the
Order. (i) In concluding that hardcoding ANI ii payphone-specific
coding digits and FLEX ANI, not line information database (LIDB), are
the only approaches that comply with the requirements of the Payphone
Orders for the provision of payphone-specific coding digits, the
Bureau, in the Order, rejects the claim that LIDB also complies with
those requirements because the implementation of FLEX ANI is too costly
for LECs. In the Order, the Bureau explains that the mechanisms
established by the Commission in the Payphone Orders and the Second
Report and Order, as well as the waivers granted therein respond to
those concerns.
---------------------------------------------------------------------------

\4\ FLEX ANI permits the association of additional digits with
specific calling party classes of service (e.g. coin phone, hotel/
motel, and prison service). FLEX ANI information digits provide
information along with the calling party's directory number, which
is useful for billing and paying compensation. FLEX ANI coding
digits are transmitted as part of the ANI signaling sequence and are
used by the receiving switch to identify the type of originating
line or the type of call being made. ``Open Network Architecture
User's Guide,'' June 1996 at 92.
\5\ ANI ii as currently deployed by the LECs does not provide
all the payphone-specific coding digits necessary to identify
payphones for payphone compensation. Pursuant to the waivers
provided in the Bureau Waiver Order and this order, ANI ii can be
used to provide the ``27'' payphone-specific coding digit until
either additional ANI ii codes are hardcoded or FLEX ANI is
implemented in a switch. Based on the record before us regarding the
additional costs and time it would require to hardcode additional
ANI ii digits to provide all of the payphone-specific coding digits
necessary for per-call compensation, we clarify in this order that
the transmission of payphone-specific coding digits by LECs through
FLEX ANI is required unless a LEC hardcodes into all of its switches
all the payphone-specific coding digits discussed herein as
necessary for identifying payphones calls for per-call compensation.
Accordingly, we do not require the hardcoding of these additional
ANI ii digits by LECs, although this is an approach that might be
used by some LECs, in lieu of FLEX ANI, to transmit payphone-
specific coding digits to satisfy their transmission obligations
under the Payphone Orders. See Order paras. 23-25. Where a LEC
chooses to employ hardcoding to provide payphone-specific coding
digits and to recover the incremental costs from PSPs, as provided
in this order, we assume that LEC would file an appropriate tariff
as provided in other parts of this order.
---------------------------------------------------------------------------

3. The Order also clarifies the requirement to transmit payphone-
specific coding digits applies only to payphone service provided by
LECs to dumb, smart, and inmate payphones. It does not apply to any
other LEC provided service such as business lines, PBX, or Centrex
lines to which a payphone may be connected.
4. In the Bureau Waiver Order, the Bureau stated that payphones
appearing on the LEC-provided lists of payphones (LEC ANI lists) will
be eligible for per-call compensation even if they do not transmit
payphone-specific coding digits. Although payphones on the LEC ANI
lists are eligible for per-call compensation during the waiver period
of the Bureau Waiver Order, and this Order, to ensure an orderly
transition to the provision of FLEX ANI for all payphones on LEC
payphone service lines, not just any LEC service line, PSP payphones
must be on LEC payphones lines within 30 days of the release of this
order to continue to be eligible for per-call compensation, even if the
PSP payphones are on the LEC ANI lists.
5. In response to the concerns raised by LECs, PSPs, and IXCs, the
Order further clarifies the tariffing requirements for the provision of
payphone-specific coding digits established in the Payphone Orders. The
Order on Reconsideration required that LECs ``must make available to
PSPs, on a tariffed basis, such coding digits as

[[Page 20536]]

part of the ANI for each payphone.'' ¹² In the Second Report
and Order, the Commission included the estimated cost of providing
coding digits in the per-call default compensation rate to be paid by
IXCs to PSPs for subscriber 800 and access code calls. To comply with
the requirements of the Payphone Orders, LECs must provide FLEX ANI to
IXCs through their interstate tariffs, so that IXCs can identify which
calls come from payphones. The LEC Coalition, Bell South, and Bell
Atlantic have proposed that LECs modify their interstate access tariffs
to provide that IXCs may request FLEX ANI without charge if it is for
the purpose of complying with the per-call compensation requirements of
the Payphone Orders. The LEC Coalition also proposes that LECs recover
the costs of providing FLEX ANI to IXCs for payphone compensation from
PSPs through a new federal rate element to be applied to all payphone
lines on a nondiscriminatory basis. That proposed rate is to be charged
monthly on a per-line basis until the costs for implementation of FLEX
ANI for payphone compensation are recovered. The Order concludes that
this approach is consistent with the tariff requirements of the
Payphone Orders.
---------------------------------------------------------------------------

\12\ The Bureau Waiver Order extended that period for LECs that
were unable to provide coding digits until March 9, 1998. 62 FR
58659 (October 30, 1997), 12 FCC Rcd at 16,387, para. 1.
---------------------------------------------------------------------------

6. PSPs will pay the costs incurred by LECs to implement FLEX ANI
for payphone compensation through the rate applied to all payphones by
the LECs. LECs must provide FLEX ANI to IXCs and the IXCs are charged
for this service through the per-call payphone compensation rate which
IXCs pay to PSPs. Thus, IXCs will not be charged directly for this
service by the LECs. LEC FLEX ANI tariff revisions to provide FLEX ANI
to IXCs must be filed no later than March 31, 1998, with a scheduled
effective date of April 15, 1998, if a LEC is able to provide FLEX ANI
to 25% or more of the smart payphones in its service area. Thereafter,
within the waiver period granted in this order, a LEC must file its
FLEX ANI tariff to provide FLEX ANI to IXCs no later than when it is
able to provide FLEX ANI to 25% or more of the smart payphones in its
service area. After filing the FLEX ANI tariff, LECs will continue to
make FLEX ANI available as each end office becomes FLEX ANI capable.
7. Beginning March 27, 1998, until a LEC has implemented FLEX ANI
for all payphones it serves, it must provide monthly to IXCs and PSPs,
upon request, information on: (1) End offices where FLEX ANI is
available; and (2) proposed dates for the availability of FLEX ANI by
end office for all areas where it is not yet available. Beginning March
27, 1998, all LECs must provide on a monthly basis to IXCs, upon
request: (1) The number of smart and the number of dumb payphones that
are owned by the LEC PSP and independent PSPs in the LEC service area;
and (2) the ANI for smart payphones and the ANI for dumb payphones
owned by the LEC and independent PSPs that are providing payphone-
specific coding digits and those that are not providing payphone
specific coding digits in the LEC service area. Because many LECs have
reported technical problems in transmitting payphone-specific coding
digits even when FLEX ANI is available for a payphone, we require that
in these two reports required herein, that LECs indicate which end
offices and payphone ANI's are ``coding-digit-capable.'' A payphone is
``coding-digit-capable'' when it is able to transmit payphone-specific
coding digits that are capable of reaching an IXC point of presence
(POP) for subscriber 800 and access code calls from payphones using
10XXX and 101XXXX. LECs may provide these reports earlier and LECs do
not have to provide this information to an IXC that indicates that it
does not require this information to pay per-call compensation.
8. The Bureau required in the Bureau Waiver Order, and the Order
requires therein, that LECs and PSPs must transmit payphone-specific
coding digits as soon as they are technically capable, and no later
than the waivers they have been granted. The Order notes, however, that
IXCs must request, test, and coordinate with LECs to obtain this
service under carrier to carrier procedures to ensure that there are no
problems in providing and receiving the FLEX ANI digits for a
particular IXC or LEC. The Bureau notes, however, that LECs will reduce
the burden on IXCs of requesting FLEX ANI by simplifying the service
request process. While PSPs are obligated, pursuant to the Payphone
Orders, to compensate LECs for coding of the PSPs payphone lines for
the transmission from the PSPs payphones of payphone-specific coding
digits through LEC tariffed payphone services, PSPs are not required to
request the LEC payphone-specific coding digits transmission service to
IXCs.
9. LEC tariffs to recover the costs of implementing FLEX ANI from
PSPs must be filed no later than 30 days after full implementation of
FLEX ANI. The costs of implementing FLEX ANI can include, for example,
generic upgrades excluding the costs of other software features,
loading the software, paying a fee for usage of the software,
translations and conditioning the trunks for each end office. These
costs will be distributed over a reasonable period and be paid by all
PSPs. Under Sec. 69.4(g) of the Commission's Rules, 47 CFR 69.4(g), a
LEC subject to price cap regulation may establish a switched access
rate element for a new interstate service upon approval of a petition
demonstrating that establishment of the new rate element would be in
the public interest. Because Part 69 authorizes only a limited number
of rate elements, a non-price cap LEC must still obtain a waiver of
that Part to establish any rate element for a new interstate service.
The Order grants a blanket waiver of Part 69.4(b) and (c) of the
Commission's rules to enable those LECs to establish an appropriate new
rate element in their interstate tariffs that reflects the incremental
costs directly attributable to the implementation of FLEX ANI to
transmit payphone-specific coding digits for the purposes of payphone
compensation as described elsewhere in the Order and to file the
necessary revisions to their interstate tariffs. Second, the Order
grants to those price cap LECs that must secure it, blanket permission
under Part 69.4(g) of the Commission's rules to establish a new rate
element in their interstate tariffs that reflects those same
incremental costs and to file the necessary revisions to their tariffs.
10. The Bureau also affirms its grant in the Bureau Waiver
Order,¹³ on its own motion, of a limited waiver of five
months, until March 9, 1998, to those LECs and PSPs who assert that
they cannot provide payphone-specific coding digits as required by the
Payphone Orders.
---------------------------------------------------------------------------

\13\ Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996, 62 FR
60034 (November 6, 1997), CC Docket No. 96-128, Order, 12 FCC Rcd
16,387 (Common Carrier Bureau 1997) (Bureau Waiver Order).
---------------------------------------------------------------------------

11. The Bureau also grants in part the requests of USTA, TDS, and
the LEC Coalition. USTA requested that LECs with digital, equal-access
switches be given an additional nine months to provide the technology
required to supply and accommodate the coding digits; that LECs with
non-equal-access switches be exempt from providing payphone
identification information until their switches are replaced or
upgraded for equal-access; and that LECs be permitted to use whatever
technology they select for digital, equal-access switches to provide
information that will permit IXCs to track payphone calls in order to
compensate PSPs. The

[[Page 20537]]

LEC Coalition requested that the Commission waive the October 7, 1997
deadline, stating that LECs would be unable to supply forty percent of
payphone lines with the requisite coding digits by that date. The LEC
Coalition requests a waiver of the payphone-specific coding digit
requirements until the Commission clarifies the coding digit
requirement. The LEC Coalition states that implementation of FLEX ANI
requires loading of the software in switches that do not have it,
provisioning, translations, and trunk conditioning. The LEC Coalition
also indicates that LECs must test FLEX ANI with IXCs that wish to
receive it and ensure proper functioning so that calls are not dropped.
TDS, an owner of local exchange carriers, petitioned the Commission to
extend the deadline for payphone-specific coding digits from October 7,
1997, until July 1, 1998 and to use LIDB. TDS states that it needs
additional time to arrange agreements with database suppliers, and to
complete transmission tests to IXCs selected by its subsidiaries.
12. All of the BOCs have indicated problems in implementing FLEX
ANI, because of problems, for example, with software upgrades, certain
switch types, and network configurations that required heavy vendor
software development and network reconfiguration, and therefore, argue
that they need additional time to implement FLEX ANI. The Order
concludes that the LEC Coalition has shown that limited waivers are
justified to allow for additional time to implement FLEX ANI. In the
Order, the Bureau grants Bell Atlantic, SBC, Ameritech, and BellSouth
no more than a 90 day waiver to resolve technical and other
implementation problems with specific switch types and some call types.
In addition, the Order grants US West a waiver to provide payphone-
specific coding digits until June 30, 1998, to be able to provide FLEX
ANI for 90 percent of the smart payphones in its service area and until
December 31, 1998, to complete FLEX ANI implementation. With regard to
all other LECs that may require additional time to implement FLEX ANI,
including GTE and SNET, the Order grants each LEC a waiver until no
later than September 30, 1998, to be able to provide FLEX ANI for 75
percent of the smart payphones in its service area and until December
31, 1998, to complete FLEX ANI implementation to be able to provide
payphone-specific coding digits, subject to any additional waivers for
which they may qualify as discussed in the Order. Those LECs and PSPs
that are able to transmit the required coding digits by March 9, 1998,
remain obligated to do so. Similarly, all LECs and PSPs are obligated
to transmit the required coding digits as soon as they are technically
capable, but in any event no later than the end of the waiver period
for which they are eligible pursuant to this order.
13. The Order requires that LECs that have been granted a waiver
for additional time beyond March 9, 1998, to implement FLEX ANI, must
implement FLEX ANI first in locations where there are larger numbers of
payphones owned by independent PSPs for which payphone-specific coding
digits are not available.
14. The Order grants small and midsize LECs an extension to
implement FLEX ANI until September 30, 1998, to be able to provide
payphone-specific coding digits through FLEX ANI to 75 percent of the
smart payphones in its service area and until no later than December
31, 1998, to complete FLEX ANI implementation. The Order grants a
limited waiver to midsize and small LECs where a LEC is unable to
recover its costs, through a monthly charge for no longer than a 10
year period, from all payphones in its serving area.¹⁴ This
waiver is specifically granted for small and midsize LECs for which the
cost of implementing FLEX ANI would be unreasonably burdensome, despite
provisions in the Order for cost recovery. The LEC is required to use
the analysis set forth in the Order to determine whether it qualifies
for the waiver. The LEC must perform the analysis on an annual basis.
The LEC may assume that the payphone rate element established to
recover the cost over a period not greater than 10 years would not be
greater than 20% of the national average payphone line cost of
$38.90,¹⁵ or $7.78 per line per month. LECs must make this
evaluation and qualify for this waiver individually and not as part of
a holding company. LECs must make this evaluation within 30 days of the
release of this order, and notify IXCs, upon request, that they will
not be implementing FLEX ANI pursuant to this waiver. The Order
required that a LEC delaying the implementation of FLEX ANI pursuant to
this waiver provision, must be prepared to submit its analysis of cost
recovery for implementing FLEX ANI, if the Bureau requests the
analysis. The Bureau may at such time determine whether there continues
to be a justification to grant a waiver to that LEC because it is
unable to recover its cost of implementing FLEX ANI.
---------------------------------------------------------------------------

\14\ In making this evaluation, LECs should not include costs
for switch replacements. Below, we grant a waiver for non-equal
access switches until they are upgraded to equal access or replaced.
If a switch is replaced, however, the costs incurred in implementing
FLEX ANI can be included. This limited waiver for small and midsize
LECs that are not able to recover their costs of implementing FLEX
ANI over up to a 10 year period is not available to price cap, CLASS
A, and Tier 1 LECs. In 1996, the Class A LECs included all price cap
LECs. .
\15\ In the Second Report and Order the Commission concluded
that the average per line cost was 7 cents per call times an average
of 542 calls resulting in an average per line rate of $38.90. Id. at
para. 102. We conclude that up to a ten year recovery period to
implement FLEX ANI would not be unreasonable for this limited waiver
for small and midsize LECs to recover their costs.
---------------------------------------------------------------------------

15. The Order grants LECs a waiver of the payphone-specific coding
digit requirement through FLEX ANI for non-equal access switches until
such switches are either upgraded to equal access or
replaced.¹⁶ In the Order, the Bureau concludes that USTA has
shown special circumstances with regard to non-equal access switches
and switches with Bell I signalling, because LECs are not able to
implement FLEX ANI in those switches at reasonable costs. The Bureau
concludes that it would not be in the public interest to require the
replacement of these switches with the expenditure of substantial
investment solely for the provision of payphone-specific coding digits.
When LECs replace or upgrade these switches, however, the Order
requires that FLEX ANI be implemented within 60 days unless they
qualify for another waiver discussed herein. LECs with non-equal access
switches must provide information as required above regarding payphones
in their service areas.
---------------------------------------------------------------------------

\16\ This waiver for non-equal access switches also covers
switches that employ Bell I signaling. Bell I signaling must be used
with non-equal access switches and uses a single information digit
to identify classes of service. This type of signaling is not
compatible with ANI ii coding digits.
---------------------------------------------------------------------------

16. In the Order, the bureau denies TDS's request that it be
allowed to implement LIDB to comply with the payphone-specific coding
digits requirement. TDS is eligible, however, for one or more of the
waivers described above.
17. Some LECs indicate that it would be costly to implement FLEX
ANI now for switches that they plan to replace in the near future. The
Order concludes that it is not cost effective to require LECs to
implement FLEX ANI in switches that are going to be replaced before
October 6, 1999, the end of the default compensation period.
Accordingly, the Order grants LECs that plan to replace switches before
October 6, 1999, a waiver until that date to

[[Page 20538]]

provide FLEX ANI through those switches.
18. SBC, BellSouth, Ameritech, SNET, and Bell Atlantic have
requested additional time to implement FLEX ANI to resolve specific
problems with certain switches and call types, and request waivers
because there are technical limitations in passing FLEX ANI payphone-
specific coding digits on certain types of calls and switches, and the
modifications cannot be completed by March 9, 1998.
19. The Order grants BOCs 90 days to resolve technical problems in
implementing FLEX ANI. BOCs must provide payphone-specific coding
digits earlier than the end of the waiver period for each technical
problem, if these problems are resolved earlier than the end of the
waiver period granted. BOCs must notify IXCs regarding the call and
switch problems the BOCs are having on a monthly basis. With regard to
these technical problems, BOCs and other LECs must notify IXCs
regarding these problems in implementing FLEX ANI. With regard to
problem (2), cited by SBC, FGB service, the Order notes that there is
currently no standard to provide payphone-specific coding digits and
carriers wishing to receive FLEX ANI must take FGD service. Thus,
pending the development of standards, the Order grants all LECs a
waiver and require that carriers taking FGB service pay PSPs per-call
compensation using ANI lists or other means they may identify.
20. All LECs and PSPs are obligated to transmit the required coding
digits as soon as they are technically capable, but in any event, no
later than the end of the waiver period for which they are eligible,
pursuant to the Order. During the period of the Bureau Waiver Order and
the waivers granted in the Orders, the IXC obligation to pay per-call
compensation established in the Payphone Orders remains in effect.
Neither the Bureau Waiver Order, nor the Order, waives the per-call
compensation requirements of the Payphone Orders and the Second Report
and Order. As required in the Bureau Waiver Order, payphones appearing
on the LEC-provided lists of payphones are eligible for per-call
compensation even if they do not transmit payphone-specific coding
digits. As required in the Payphone Orders and the Second Report and
Order, absent a negotiated agreement, IXCs must pay per-call
compensation of $0.284, for all calls they receive from payphones not
otherwise compensated. Payments must be remitted at least on a
quarterly basis. The payment for the October 1997 through December 31,
1997 period must be paid no later than April 1, 1998. LECs that have
certified to the IXC that they comply with the requirements of the
Payphone Orders must receive per-call compensation. The Order further
states that there likely will be some disputes between IXCs and PSPs
about the true number of compensable calls, but that these disputes
should not be a basis for delay of payphone compensation payments. The
Order states that whether a retroactive adjustment (true-up) of
payphone compensation may be necessary for the waiver periods granted
in the Bureau Waiver Order and this order will be addressed in a
subsequent order in this proceeding if necessary. The Order also does
not address AT&T's request, in response to the Bureau Waiver Order,
that it and similarly situated IXCs receive a waiver to pay per-phone
rather than per-call compensation for payphones that do not provide
payphone-specific coding digits. Nonetheless, IXCs must still pay
compensation on April 1, 1998.
21. The waivers granted in the Order are effective immediately in
order to ensure that all PSPs continue to receive per-call
compensation, as required by the Payphone Orders. Without these
waivers, many PSPs would not receive per-call compensation, because the
LECs servicing them are not yet able to provide the required payphone-
specific coding digits.
22. In the Order, the Bureau rejects the argument that IXCs should
not be required to compensate PSPs for the costs they incur in paying
LECs to implement FLEX ANI for payphone compensation. The Commission
concluded in the Payphone Orders that IXCs are the primary
beneficiaries of dial-around calls and they should perform per-call
tracking and pay per-call compensation. In addition, the Commission
concluded in the Second Report and Order that the costs of providing
coding digits to IXCs is a cost of doing business of PSPs for which
IXCs must provide compensation as part of the per-call rate. In the
Order, the Bureau also denies USTA's request that the Commission must
authorize full cost recovery and additional time for LECs that
implemented LIDB for CC Docket No. 91-35 stating that it is unclear
what additional costs would have been incurred to implement LIDB to
comply with the payphone-specific coding digit requirement of the
Payphone Orders, separate from those incurred for CC Docket No. 91-35
and that there is insufficient information on the record to grant the
request.
23. The Order concludes as did the Bureau Waiver Order, that it is
in the public interest for IXCs to pay payphone compensation beginning
October 7, 1997, despite the limited waivers of the requirement to
provide payphone-specific coding digits provided in the Bureau Waiver
Order and this order, because of the clear mandate of Section 276 that
PSPs be paid compensation for each and every call. The Second Report
and Order established a default per-call compensation rate and extended
the period of its applicability to address the problem presented by the
LECs, IXCs, and PSPs in these waiver requests. Pursuant to the waivers
granted in the Order, if a payphone does not provide payphone-specific
coding digits, the default per-call rate established in the Second
Report and Order for the first two years of per-call compensation,
$0.284 per-call, will continue to be the per-call default rate for that
payphone until that payphone provides payphone-specific coding digits.
24. The Order also concludes that a continuing waiver of the rule
requiring the provision of payphone-specific digits as a prerequisite
to payphone compensation in the circumstances identified in the
payphone proceeding will serve the public interest, because it will
allow us to move forward in implementing the statutory requirement that
PSPs receive fair compensation for calls placed from their phones while
continuing to progress to a market-based structure for payphone
compensation. The Bureau stated in the Bureau Waiver Order that the
unavailability of the payphone-specific coding digits will not preclude
IXCs from identifying payphone calls for the purpose of determining the
number of calls for which compensation is owed. Nor will the waiver
interfere with the payphones that currently are able to transmit
payphone-specific coding digits.
25. The waivers the Bureau grants in the Order to LECs and PSPs are
effective March 9, 1998, to ensure that all PSPs continue to receive
per-call compensation after the expiration of the waiver granted in the
Bureau Waiver Order. The immediate implementation of these waivers is
crucial to the Commission's efforts to ensure fair compensation for all
PSPs, encourage the deployment of payphones, and enhance competition
among PSPs, as mandated by Section 276 of the Act. In the Order the
Bureau grants these waivers to all similarly situated LECs and PSPs to
avoid a significant administrative impact and further delay of the
payment of payphone compensation as required by Section 276.
26. In the Order, the Bureau declines to waive the obligation of
IXCs to pay per-call compensation during the waiver

[[Page 20539]]

period of the Bureau Waiver Order and the additional waivers granted
within the Order. The Payphone Orders concluded that the primary
economic beneficiaries of a subscriber 800 and access code call are the
carriers that carry the call. The Bureau Waiver Order required that
IXCs pay per-call compensation during the coding digit waiver period as
required by the Payphone Orders. During that period, IXCs and their
customers continued to use payphones to make calls that must be
compensated pursuant to the Payphone Orders and the Second Report and
Order. Moreover, IXCs already have implemented surcharges for per-call
compensation and they would be benefiting unreasonably if the Bureau
were to grant them a waiver of the payphone compensation obligations so
that they do not have to pay per-call compensation when payphone-
specific coding digits are not available.
27. In the Order, the Bureau denies ITA's petition for
reconsideration of the obligation to pay compensation during the waiver
period, and AirTouch's petition for waiver seeking similar relief, both
of which were filed in response to the Bureau Waiver Order. The Bureau
also denies the requests of ITA and AirTouch that they be granted
relief from the payment obligations of the Payphone Order and the
Second Report and Order until they can block calls. In denying
AirTouch's petition, the Bureau notes that AirTouch has not shown
special circumstances or that a waiver is in the public interest. The
Bureau also declined to reconsider, in response to ITA's Petition, its
decision in the Bureau Waiver Order to waive payphone-specific coding
digit requirements while maintaining, and not waiving, the per-call
compensation requirements during the waiver period.
28. Accordingly, pursuant to authority contained in Sections 1, 4,
201-205, 218, 226, and 276 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154, 201-205, 218, 226, and 276, that the
policies and requirements set forth herein are adopted.
29. It is further ordered that this Order is effective immediately
upon release thereof, and that the waivers included in this order are
effective March 9, 1998.
30. It is further ordered that pursuant to Section 203 of the
Communications Act, 47 U.S.C. 203, each of the LECs, absent a waiver,
shall FILE tariff revisions to their interstate access tariffs to
reflect the availability of FLEX ANI for IXCs for the purpose of
payphone compensation no later than March 31, 1998, with a scheduled
effective date of April 15, 1998, if FLEX ANI is available for 25% or
more of the smart payphones in its service area. Thereafter, within the
waiver period it is granted in this order, a LEC must file its tariff
revision to provide FLEX ANI to IXCs no later than when it provides
FLEX ANI to 25% or more of the smart payphones in its service area.
31. It is further ordered that pursuant to Section 203 of the
Communications Act, 47 U.S.C. 203, each of the LECs providing FLEX ANI
shall FILE tariffs to recover the cost of implementing FLEX ANI as
required herein no later than 30 days after full implementation of FLEX
ANI.
32. It is further ordered that LECs are granted a waiver of Part 69
of the Commission's rules to develop a rate element for recovery of
costs incurred to implement FLEX ANI from PSPs for the requirements of
this order to provide FLEX ANI to IXCs.
33. It is further ordered that the ITA Petition for Reconsideration
and the AirTouch Petition for Waiver of the Bureau Waiver Order are
denied.
34. It is further ordered that the waiver requests of USTA, the LEC
Coalition, and TDS are granted to the extent described herein, and
otherwise are denied.

Federal Communications Commission.
A. Richard Metzger, Jr.,
Chief, Common Carrier Bureau.
[FR Doc. 98-11163 Filed 4-24-98; 8:45 am]
BILLING CODE 6712-01-U