[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]


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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.

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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.

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                                                                      No. of       Est. time per                
               Information collection requirement                  respondents       response      Total annual 
                                                                 (approximately)      (hours)         burden    
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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
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    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.
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    \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.
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    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.
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    \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.
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    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.
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    \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.
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    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.
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    \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).
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    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.
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    \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.
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    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.
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    \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.
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    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