[Federal Register Volume 64, Number 56 (Wednesday, March 24, 1999)]
[Rules and Regulations]
[Pages 14141-14148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6726]


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

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 51 and 64

[CC Docket No. 95-20; FCC 99-36]


Computer III Further Remand Proceedings: Bell Operating Company 
Provision of Enhanced Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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

SUMMARY: The Report and Order released March 10, 1999 streamlines the 
Commission's Comparably Efficient Interconnection (CEI) and network 
information disclosure rules. The Report and Order frees the Bell 
Operating Companies (BOCs) from the requirement that they obtain pre-
approval of their CEI plans and plan amendments from the Commission 
before initiating or altering an intraLATA information service. This 
change to the CEI rules will result in new information services being 
available to the public sooner. The Report and Order clarifies the 
network information disclosure rules, and relieves the interexchange 
carriers (IXCs) and competitive local exchange carriers (Competitive 
LECs) from these reporting requirements. As a result, these carriers 
will no longer perform a task the Commission has found to be 
unnecessary.

DATES: Effective April 23, 1999, except for Secs. 51.325, 64.702, and 
Subpart G of Part 64, which contain information collection requirements 
which have not been approved by the Office of Management and Budget 
(OMB) and which will be effective June 2, 1999. Written comments by the 
public on the modified information collections are due April 23, 1999. 
Written comments must be submitted by OMB on the modified information 
collections on or before May 24, 1999.

FOR FURTHER INFORMATION CONTACT: Jonathan Reel, Attorney, Common 
Carrier Bureau, Policy and Program Planning Division, (202) 418-1580 or 
via the Internet at [email protected]. Further information may also be 
obtained by calling the Common Carrier Bureau's TTY number: 202-418-
0484. For additional information concerning the information collections 
contained in this Order contact Judy Boley at (202) 418-0214, or via 
the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order adopted February 24, 1999, and released March 3, 1999. 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 information collections contained in 
this proceeding. The full text of this Report and Order is available 
for inspection and copying during normal business hours in the FCC 
Reference Center, 445 12th Street, N.W., Washington, D.C. The complete 
text also may be obtained through the World Wide Web, at http://
www.fcc.gov/Bureaus/Common Carrier/Orders/fcc9936.wp, or may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 1231 20th St., N.W., 
Washington, D.C. 20036.
    Regulatory Flexibility Certification: As required by the Regulatory 
Flexibility Act, the Report and Order contains a Final Regulatory 
Flexibility Analysis which is set forth in the Report and Order. A 
brief description of the analysis follows. The Report and Order removes 
the network information disclosure requirements from interexchange 
carriers and competitive local exchange carriers. These carriers are 
thus relieved of the burden associated with the requirements, and for 
that reason the Commission continues to foresee no significant economic 
impact on a substantial number of small entities.
    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, Public Law No. 104-12. Written 
comments by the public on the information collections are due 30 days 
after date of publication in the Federal Register. OMB notification of 
action is due May 24, 1999. Comments should address: (a) 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: 3060-0817.
    Title: Computer III Further Remand Proceedings: Bell Operating 
Company Provision of Enhanced Services, CC Docket No. 95-20.
    Form No.: N/A.
    Type of Review: Revised collection.

[[Page 14142]]



----------------------------------------------------------------------------------------------------------------
                                                                    No. of       Estimated time
                    Information collection                       respondents      per response     Total annual
                                                                  (approx.)         (house)           burden
----------------------------------------------------------------------------------------------------------------
Section 51.325...............................................             500               72           36,000
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 36,000 hours (no change in burden).
    Respondents: Businesses or other for-profit.
    Estimated costs per respondent: $0.
    Needs and Uses: The Commission no longer requires Bell Operating 
Companies (BOCs) to file their Comparably Efficient Interconnection 
(CEI) plans with the Commission and to obtain pre-approval of CEI plans 
and amendments before initiating or altering an intraLATA information 
service. Instead, we require BOCs to post their CIE plans and plan 
amendments on their publicly accessible Internet sites linked to and 
searchable from the BOC's main Internet page, and to notify the Common 
Carrier Bureau of the posting. The Commission also extended the 
disclosure requirements in 47 CFR Section 51.325(a) to require 
incumbent LECs to provide public notice of any network changes that 
will affect the manner in which Customer Premises Equipment (CPE) is 
attached to the network. The requirements will be used to ensure that 
the affected carriers comply with Commission policies and regulations 
safeguarding against potential anticompetitive behavior in the 
provision of information services.

Synopsis of Order

I. Introduction

    1. In the Telecommunications Act of 1996 (1996 Act), Congress 
directed the Commission to examine its rules every two years and repeal 
or modify those found to be no longer in the public interest. 
Consistent with the directive of Congress, in 1998 the Commission 
undertook a comprehensive biennial review of the Commission's rules to 
promote ``meaningful deregulation and streamlining where competition or 
other considerations warrant such action.''
    2.In this Report and Order (Order) the Commission evaluates the 
utility of two of the regulatory safeguards we employ to prevent 
carriers that control local exchange and exchange access facilities 
from using their market power for anticompetitive purposes in the 
provision of intraLATA information services. The first safeguard we 
review is the requirement that Bell Operating Companies (BOCs) file 
service-specific Comparably Efficient Interconnection (CEI) plans, and 
obtain the Commission's approval of those plans, prior to initiating or 
altering their intraLATA information services. The other safeguards we 
review are the Commission's network information disclosure 
requirements, which seek to prevent anticompetitive behavior by 
ensuring that Information Service Providers (ISPs) and others have 
timely access to information affecting interconnection to the BOCs'', 
AT&T's, and other carriers' networks.
    3. Our consideration of these two issues is part of a larger 
proceeding to reexamine issues relating to the safeguards applied 
primarily to the provision of information services by the BOCs. In 
January 1998, the Commission released a Further Notice of Proposed 
Rulemaking (Further NPRM) in the Computer III proceeding to reevaluate 
structural and nonstructural safeguards in light of recent 
developments, among them a remand from the United States Court of 
Appeals for the Ninth Circuit (California III), and the enactment of 
the 1996 Act. We also intended to repeal or modify any safeguards that 
we determine to be ``no longer necessary in the public interest.'' In 
the Further NPRM, the Commission sought to strike a reasonable balance 
between the goal of reducing and eliminating those regulatory 
requirements it could, and the recognition that certain safeguards may 
still be necessary.
    4. We conclude that although the BOCs must continue to comply with 
their CEI obligations, they should no longer be required to file or 
obtain pre-approval of CEI plans and plan amendments before initiating 
or altering an intraLATA information service. Instead, we will require 
the BOCs to post their CEI plans and plan amendments on their publicly 
accessible Internet sites, and to notify the Common Carrier Bureau upon 
such posting. We also conclude that the network information disclosure 
rules set forth in the Computer II and Computer III proceedings have 
been effectively superseded by the disclosure rules that the Commission 
adopted pursuant to the 1996 Act, and we therefore eliminate those 
rules. We retain the Computer II network disclosure requirement that 
incumbent local exchange carriers (LECs) must disclose network changes 
that could affect the manner in which customer premises equipment (CPE) 
is attached to the interstate network.
    5. This modification of our CEI rules should reduce substantially 
the burden of compliance with these requirements by the BOCs. By 
eliminating the need to obtain pre-approval of the BOCs' CEI plans, we 
remove the delay that has sometimes hampered the BOCs in their 
introduction of new intraLATA information services. Requiring the BOCs 
to post CEI plans on their publicly accessible Internet sites should 
not delay the introduction of innovative information services, because 
posting and service initiation may occur simultaneously. Also, by 
limiting the notification aspect of the requirement to a single-page 
letter stating the Internet address and path to the relevant CEI plan, 
the new procedure minimizes the administrative burden associated with 
the plans. Removing the CEI plan pre-approval process allows BOCs to 
bring new services to consumers sooner. At the same time, by requiring 
BOCs to post their CEI plans on the Internet, we ensure that the 
information which the BOCs' competitors still need will continue to be 
widely and conveniently available.
    6. By removing the Computer II and Computer III network disclosure 
regimes, we reduce from three to one the sources to which an incumbent 
LEC must look to ascertain its disclosure obligations. All of the 
Commission's network disclosure obligations now reside together in 
sections 51.325-335 of our rules, which clarifies and streamlines the 
network disclosure regulation that remains. In addition, by eliminating 
the Computer II ``all carrier'' rule, we remove entirely the regulatory 
burden of network information disclosure obligations from both IXCs and 
competitive LECs. Instead, we rely on market forces to ensure network 
disclosure by those sectors of the telecommunications industry that we 
find to be subject to competitive pressures, and in which no carrier 
enjoys the degree of market power that could make anti-competitive 
nondisclosure appealing. The measures we adopt in this Order thus carry 
out the Commission's obligation to review our rules to determine 
whether they are no longer necessary in the public interest as a result 
of meaningful economic competition.

[[Page 14143]]

II. Comparably Efficient Interconnection Plan Requirements

A. Background
    7. Since its Computer I proceeding, the Commission has adopted a 
variety of regulatory tools to prevent improper cost allocation and 
access discrimination against ESPs in the provision of enhanced 
services, both by the BOCs, and, before divestiture, by their 
predecessor in interest, AT&T. In the Computer II proceeding, the 
Commission required the then-integrated Bell System to establish 
structurally separate affiliates for the provision of enhanced services 
in order to address the concern over AT&T's incentive and ability to 
engage in anticompetitive activity. Following the divestiture of AT&T 
in 1984, the Commission extended the structural separation requirements 
of Computer II to the BOCs. In Computer III, the Commission determined 
that the costs of structural separation outweighed the benefits, and 
that nonstructural safeguards could protect competitive ESPs from 
improper cost allocation and discrimination by the BOCs while avoiding 
the inefficiencies associated with structural separation.
    8. Under Computer III and our Open Network Architecture rules, the 
BOCs are permitted to provide enhanced services on an integrated basis 
through the regulated entity, subject to certain nonstructural 
safeguards. One of the safeguards the Commission instituted in the 
Computer III decision requires the BOCs to obtain Commission approval 
of, and to comply with, a service-specific Comparably Efficient 
Interconnection (CEI) plan in order to offer a new enhanced service. In 
these CEI plans, the BOC must explain how it would offer to competitive 
ESPs, on a non-discriminatory basis, all the underlying basic services 
that the BOC uses to provide its own enhanced service offering. The 
Commission indicated that such a CEI requirement, itself a form of 
interconnection making basic network facilities and services available 
to the public.
    9. The Commission in 1998 released a Further NPRM to reexamine the 
issues of structural and nonstructural safeguards in light of further 
developments. We observed in the Further NPRM that the BOCs remain the 
dominant providers of local exchange and exchange access services in 
their in-region states, and thus continue to have the ability to engage 
in anticompetitive behavior against competitive ISPs. The Commission 
also acknowledged that Congress recognized, in passing the 1996 Act, 
that competition will not immediately supplant monopolies. In addition, 
we noted that Congress required the Commission to conduct a biennial 
review of regulations that apply to operations or activities of any 
provider of telecommunications service, and to repeal or modify any 
regulation we determine to be ``no longer necessary in the public 
interest.''
    10. In the Further NPRM, the Commission tentatively concluded that 
we should eliminate the requirement that BOCs file CEI plans and obtain 
Commission approval for those plans prior to providing new intraLATA 
information services. Given the protection afforded by the Commission's 
ONA requirements and the 1996 Act, we tentatively concluded that the 
administrative costs associated with BOC preparation and agency review 
of CEI plans outweighed their utility as an additional safeguard 
against access discrimination, and that the preparation and review of 
CEI plans could delay the introduction of new information services by 
the BOCs, without commensurate regulatory benefits. Finding that the 
burden imposed by these requirements outweighed their benefit as 
additional safeguards against access discrimination, we tentatively 
concluded that we should eliminate the requirement that BOCs file CEI 
plans, and obtain Bureau approval for those plans, prior to providing 
new information services. We also tentatively concluded that lifting 
the CEI plan filing requirement would further our statutory obligation 
to review and eliminate regulations that are ``no longer necessary in 
the public interest.'' We sought comment on these tentative conclusions 
and our supporting analysis.
B. Discussion
1. Introduction
    11. We believe that compliance with the Commission's CEI 
requirements remains conducive to the operation of a fair and 
competitive market for information services. Based on the record before 
us in this proceeding, and as we discuss below, we conclude that the 
BOCs' CEI plans have continuing importance in that they provide non-BOC 
ISPs with helpful information regarding their interconnection rights, 
options, and methods. These plans thus ensure that non-BOC ISPs have 
access to the underlying basic services that the BOCs use for their own 
information service offerings, access which enables those non-BOC ISPs 
to provide competitive offerings. We find that neither the protection 
afforded by ONA nor the effect of the 1996 Act has yet rendered the CEI 
plans superfluous as an effective means of making this information 
available and of promoting BOC compliance with their interconnection 
obligations. For these reasons, we do not at this time eliminate the 
requirement that BOCs publicly disclose in a written document how they 
will comply with the Commission's CEI parameters.
    12. We further conclude, however, that, although the BOCs must 
continue to prepare CEI plans, we should no longer require BOCs to file 
their CEI plans with the Commission, or obtain the Commission's 
approval of these plans, before initiating a new or changing an 
existing intraLATA information service. We conclude that the chief 
burdens associated with the CEI requirements--the administrative burden 
associated with filing the plans, and the delay in the introduction of 
new services--can be eliminated without compromising the efficient 
dissemination of the information contained in the BOC CEI plans. We 
eliminate the requirement that BOCs file with the Commission and obtain 
from the Commission approval of their CEI plans. In its place, we 
require the BOCs to post on their publicly accessible Internet page, 
linked to and searchable from the BOC's main Internet page, their CEI 
plan for any new or altered intraLATA information service offering, and 
to notify the Common Carrier Bureau at the time of the posting.
2. Benefits of Public Disclosure of CEI Compliance
    13. From the nine parameters of a BOC's CEI plan, an ISP can obtain 
detailed information regarding the following: Interface Functionality; 
Unbundling of Basic Services; Resale; Technical Characteristics; 
Installation, Maintenance, and Repair; End User Access; CEI 
Availability; Minimization of Transport Costs; Availability to All 
Interested ISPs.
    14. We agree with non-BOC ISPs and other commenters that CEI plans 
provide useful information that is either not available, or not 
available in as much detail, from other sources. Moreover, we conclude 
that the BOCs' CEI plans present this information in a more usable form 
than is otherwise available to ISPs. The nine parameters of a CEI plan 
unite in a single document the disparate pieces of information that a 
BOC makes available to its competitors through other avenues. Such a 
collection of information in a single CEI plan is significantly useful 
to competitive ISPs. In addition, CEI plans describe the availability 
of comparable interconnection to services, as distinct

[[Page 14144]]

from the building-block elements of services described in ONA filings, 
and so provide competitive ISPs with a different and frequently more 
appropriate level of access to the public switched network.
    15. Also, based on these circumstances, we do not believe that our 
progress in implementing the 1996 Act has reduced the threat of 
discrimination sufficiently to warrant removal of these additional 
safeguards at this time.
    16. Posting CEI plans on their publicly accessible Internet sites 
should not hamper the BOCs in their introduction of innovative 
information services, because posting and service initiation may occur 
simultaneously. The substance of notification to the Bureau may be 
limited to the Internet address and path to the relevant CEI plan or 
amended plan; the form may consist of a letter to the Secretary with a 
copy to the Bureau.
3. Elimination of Filing and Pre-approval of CEI Plans
    17. Based on the record before us, we conclude that the CEI plan 
filing and pre-approval process has significant disadvantages without 
commensurate advancement of our regulatory goal of ensuring fair and 
equal interconnection.
4. CEI Plans for Telemessaging, Alarm Monitoring, and Payphone Services
a. Section 260 Telemessaging and Section 275 Alarm Monitoring Services
    18. In the Telemessaging and Electronic Publishing Order, 62 FR 
7690, February 20, 1997, and the Alarm Monitoring Order, 62 FR 16093, 
April 4, 1997, respectively, the Commission concluded that the Computer 
II, Computer III, and ONA requirements continue to govern the BOCs' 
provision of intraLATA telemessaging services and alarm monitoring 
services.
    19. For the same reasons we lift the CEI filing and pre-approval 
requirement for other intraLATA information services provided by the 
BOCs on an integrated basis, we also lift the requirement for section 
260 telemessaging and section 275 alarm monitoring services. We also 
require the BOCs to post on their Internet sites CEI plans for new or 
modified telemessaging or alarm monitoring services, and to notify the 
Bureau of the posting. As with other BOC intraLATA information 
services, we believe this approach minimizes a BOC's administrative 
burden, and eliminates regulatory delay; provides competitive ISPs with 
essential information; promotes the Commission's ability to monitor and 
enforce BOC access and interconnection obligations; and appropriately 
acknowledges the degree that competitive providers of telemessaging and 
alarm monitoring services must still depend on the basic services of 
the incumbent LEC--usually a BOC--for access to their customers.
b. Section 276 Payphone Services
    20. In the Further NPRM, we noted that section 276 directs the 
Commission to prescribe a set of nonstructural safeguards for BOC 
provision of payphone services that must include, at a minimum, 
``nonstructural safeguards equal to those adopted in the Computer 
Inquiry-III (CC Docket No. 90-623) proceeding.'' In implementing 
section 276, the Commission required the BOCs, among other things, to 
file CEI plans describing how they would comply with various 
nonstructural safeguards. The Bureau approved the BOCs' CEI plans to 
provide payphone service on April 15, 1997. In the Further NPRM, we 
sought comment regarding whether to relieve the BOCs from the 
requirement of filing amendments to their CEI plans for payphone 
services, and how such a step would comport with the statutory 
requirement in section 276.
    21. We now conclude that the BOCs should not be required to file or 
obtain approval of CEI plans for new payphone services or for 
amendments to their existing payphone plans. As with other applications 
of CEI, we find that the benefits of CEI plans may be largely preserved 
by instead requiring the BOCs to post on their Internet pages CEI plans 
for new or amended payphone services. Consistent with our application 
of CEI to intraLATA information services that BOCs provide on an 
integrated basis, we believe that, under current market conditions, 
such posting disseminates valuable interconnection information, and 
facilitates our enforcement of BOC interconnection responsibilities, at 
minimum cost to the BOCs.
5. IntraLATA Information Services Provided Through 272 and 274 
Affiliates
a. Background
    22. In the Further NPRM, we observed that, under our current rules, 
a BOC may provide an intraLATA information service either on an 
integrated basis pursuant to an approved CEI plan, or on a structurally 
separate basis pursuant to the Commission's Computer II rules. We noted 
that, in addition to the factors cited by the Commission in the 
Computer III Phase I Order, 51 FR 24350, July 3, 1986, the advent of 
the 1996 Act may affect our analysis of the relative costs and benefits 
of structural and nonstructural safeguards. In this context, we noted 
that the Act's local competition provisions should in time provide for 
alternate sources of access to basic services, thereby diminishing the 
BOCs' ability to engage in anticompetitive behavior against competitive 
ISPs.
    23. Section 272 Separate Affiliates. In the Non-Accounting 
Safeguards Order, 62 FR 2927, January 21, 1997, the Commission noted 
that section 272 of the Act imposes specific separate affiliate and 
nondiscrimination requirements on BOC provision of interLATA 
information services, but that section 272 does not address BOC 
provision of intraLATA information services. We concluded that, pending 
the conclusion of the Computer III Further Remand proceeding, BOCs may 
continue to provide intraLATA information services on an integrated 
basis, in compliance with the Commission's nonstructural safeguards--
including CEI--established in the Computer III and ONA proceedings. In 
the Further NPRM, however, we tentatively concluded that the BOCs 
should not have to file CEI plans for any information services they 
offer through section 272 separate affiliates, notwithstanding that 
section 272's requirements are not identical to the Commission's 
Computer II requirements. We also reasoned that our concern regarding 
access discrimination would be sufficiently addressed by requirements 
set forth in section 272 and the Commission's orders implementing that 
section.
    24. Section 274 Electronic Publishing. In the Telemessaging and 
Electronic Publishing Order, the Commission concluded that our Computer 
II, Computer III, and ONA requirements continue to govern the BOCs' 
provision of intraLATA electronic publishing services.
    25. In the Further NPRM, we tentatively concluded that, just as 
BOCs should not be required to file CEI plans for intraLATA information 
services they provide through a section 272 affiliate, so too the 
requirement should be lifted for electronic publishing services or 
other information services that BOCs provide through a section 274 
affiliate.
b. Discussion
    26. In this Order, we adopt our tentative conclusion that BOCs 
should not be required either to file or to obtain pre-approval of CEI 
plans for information services that are offered through section 272 or 
section 274 separate affiliates. The reasons that persuade us to 
eliminate the CEI filing

[[Page 14145]]

and approval process in the context of intraLATA information services 
that a BOC offers on an integrated basis --reduction of administrative 
burden and elimination of delay--apply with at least equal force to the 
intraLATA services that a BOC chooses to offer through a section 272 or 
section 274 separate affiliate. The requirements Congress set forth in 
sections 272 and 274 substantially reduce our concern regarding access 
discrimination, so there is even less reason to delay the introduction 
of an intraLATA information service pending our review of a CEI plan. 
That the pre-approval process might also delay the introduction of 
combined intra-and interLATA integrated information services is a 
further reason to eliminate the requirement.
    27. Moreover, Congress has instructed us to repeal or modify any 
regulation we determine to be ``no longer necessary in the public 
interest.'' That Congress itself has addressed in sections 272 and 274 
concerns over discriminatory interconnection and misallocation of funds 
makes pre-Act regulation by the Commission targeted to the same 
concerns the object of our special scrutiny. Because we believe that 
structural separation protects against discriminatory interconnection 
better than do nonstructural safeguards such as CEI, we see no reason 
at this time to impose on the BOCs even the relatively light burden of 
posting CEI plans on the Internet for intraLATA information services 
they provide through a separate subsidiary. Accordingly, we will no 
longer require the BOCs to formulate CEI plans before initiating or 
altering any intraLATA information service offered through a section 
272 or 274 affiliate.
6. Pending CEI Matters
a. Background
    28. In the Further NPRM, we sought comment on whether, if we 
adopted our tentative conclusion to eliminate the CEI plan filing 
requirement for the BOCs, we should also dismiss as moot all pending 
CEI matters, including approval of pending CEI plans, pending CEI plan 
amendments, and requests for CEI plan waivers, on the condition that 
the BOCs must comply with any new or modified rules that we might 
establish.
b. Discussion
    29. We now believe that the Commission's section 208 enforcement 
process is far better suited than the CEI plan pre-approval process to 
addressing the complex and highly fact-specific issues that arise in 
certain CEI plans. In certain instances these issues fall outside the 
scope of the nine CEI parameters. The section 208, formal complaint 
process is set up to conduct the fact-finding, arbitration, and 
adjudication necessary to resolve CEI-related disputes. Moreover, 
through use of the Commission's Accelerated Docket or revised complaint 
procedures, parties would have swifter resolution and closure of their 
CEI-related disputes. For these reasons, we are confident that all 
parties, BOCs and non-BOCs, will be better served by the information-
and enforcement-based system we adopt today, and we dismiss all pending 
requests for approval of CEI plans and CEI plan amendments.
    30. We also dismiss without prejudice any pending petitions for 
reconsideration or applications for review of orders approving CEI 
plans. We believe that these complicated, fact-specific issues may be 
more appropriately and more quickly resolved in the enforcement setting 
than in the context of a CEI plan. Accordingly, parties affected by 
such ancillary issues may file section 208 formal complaints with the 
Commission. Should they file such a complaint, those parties with 
previously pending challenges to CEI plans may, as appropriate, rely on 
their already existing record, rather than developing a factual record 
through the procedures normally applicable to formal complaints.

III. Network Information Disclosure Requirements

A. Background
    31. In the Further NPRM, we addressed the Commission's network 
information disclosure rules. These rules seek to prevent 
anticompetitive behavior by ensuring that ISPs and others have timely 
access to information affecting interconnection to the BOCs', AT&T's, 
and other carriers' networks. Prior to the 1996 Act, the rules 
established in the Commission's Computer II and Computer III 
proceedings governed the disclosure of network information. Section 
251(c)(5) of the Act requires incumbent LECs to ``provide reasonable 
public notice of changes in the information necessary for the 
transmission and routing of services using that local exchange 
carrier's facilities or networks, as well as of any other changes that 
would affect the interoperability of those facilities or networks.'' In 
the Local Competition Second Report and Order, 61 FR 47284, September 
6, 1996, the Commission adopted network information disclosure 
requirements to implement section 251(c)(5). Although we discussed our 
existing network information disclosure requirements in conjunction 
with the requirements of section 251(c)(5) in the Local Competition 
Second Report and Order, we did not address in that proceeding whether 
our Computer II and Computer III network information disclosure 
requirements should continue to apply independent of our section 
251(c)(5) network information disclosure requirements. In the Further 
NPRM, we sought comment on the extent to which the Commission should 
retain the network information disclosure rules established in the 
Computer II and Computer III proceedings in light of the disclosure 
requirements stemming from section 251(c)(5) of the 1996 Act.
1. Computer II Network Disclosure Rules
    32. The Computer II network information disclosure rules consist of 
two requirements: one, termed ``the separate subsidiary rule,'' that 
depends on the existence of a Computer II separate subsidiary; and 
another, termed ``the all carrier rule,'' that applies to all carriers 
owning basic transmission facilities, independent of whether the 
carrier has a separate subsidiary. The separate subsidiary network 
disclosure requirement obligates the BOCs to disclose ``at a minimum, * 
* * any network information which is necessary to enable all 
[information] service * * * vendors to gain access to and utilize and 
to interact effectively with [the BOCs'] network services or 
capabilities, to the same extent that [the BOCs' Computer II separate 
affiliate] is able to use and interact with those network services or 
capabilities.'' In addition to technical information, the information 
required includes marketing information, such as ``commitments of the 
carrier with respect to the timing of introduction, pricing, and 
geographic availability of new network services or capabilities.'' The 
other component of the Computer II network disclosure rules, the all 
carrier rule, encompasses ``all information relating to network design 
* * * which would affect either intercarrier interconnection or the 
manner in which customer premises equipment is attached to the 
interstate network. * * *''
    33. In the Further NPRM, we tentatively concluded that both 
Computer II network disclosure requirements should continue to apply--
specifically, that the separate affiliate disclosure rule should 
continue to apply to BOCs that operate a Computer II subsidiary, and 
that the all carrier rule should continue to apply to

[[Page 14146]]

all carriers owning basic transmission facilities. We reasoned that the 
Computer II separate subsidiary disclosure rule should continue to 
apply to the BOCs because the rule encompasses some information, such 
as marketing information, which falls outside the scope of section 
251(c)(5), and because the rule requires disclosure under a more 
stringent timetable than that required under section 251(c)(5). We 
based our tentative conclusion that the all carrier rule should be 
retained on two factors: first, that the rule requires carriers to 
disclose network changes that affect CPE, whereas our section 251(c)(5) 
rules require carriers to disclose only information that affects 
competitive service providers; and second, that the rule applies to all 
carriers, whereas section 251(c)(5) applies only to incumbent LECs.
2. Computer III Network Disclosure
    34. The Computer III network information disclosure rules initially 
were imposed on AT&T and the BOCs in the Phase I Order and Phase II 
Order, 52 FR 20714, June 3, 1987. The Commission later extended the 
Computer III network information disclosure rules and other 
nondiscrimination safeguards to GTE in the GTE ONA Order. Under 
Computer III, the scope of network information that carriers must 
disclose is adopted from, and identical to, the Computer II 
requirements.
    35. In the Further NPRM, we tentatively concluded that the network 
information disclosure rules for incumbent LECs that the Commission 
established pursuant to section 251(c)(5) should supersede the 
disclosure rules established in Computer III. We explained that, in our 
view, the 1996 Act disclosure rules for incumbent LECs are as 
comprehensive, if not more so, than the Computer III disclosure rules. 
We invited parties who disagreed to explain why, in light of the 
section 251(c)(5) rules, all or some aspects of the Computer III 
disclosure rules might still be needed.
3. Section 251(c)(5) Network Disclosure Rules
    36. The Commission promulgated the rules implementing the section 
251(c)(5) network disclosure requirements in the Local Competition 
Second Report and Order. The section 251(c)(5) network disclosure 
requirements apply to all incumbent LECs, as the term is defined in 
section 251(h) of the Act.
B. Discussion
    37. We adopt our tentative conclusion that the network disclosure 
rules adopted pursuant to section 251(c)(5) supersede the Computer III 
disclosure rules. In addition, we remove the Computer II network 
disclosure rules that affect BOCs providing information services 
through a Computer II separate subsidiary. Finally, we eliminate the 
Computer II all carrier rule, but we preserve in our section 51 rules 
the requirement that incumbent LECs must disclose network changes that 
could affect the manner in which CPE is attached to the interstate 
network.
1. Computer III Network Disclosure Rules
    38. We conclude that we should eliminate the Computer III network 
disclosure rules. We agree with comments that the section 251(c)(5) 
rules have rendered the Computer III network disclosure rules 
redundant.
2. Computer II Network Disclosure Rules
    39. In the Further NPRM we identified two Computer II requirements 
that exceed the rules adopted pursuant to section 251(c)(5), the 
separate subsidiary rule and the all carrier rule. We address the 
separate subsidiary rule first.
a. The Separate Subsidiary Rule
    40. In the Further NPRM, we recognized that some BOCs may be 
providing certain intraLATA information services through a Computer II 
subsidiary, rather than on an integrated basis under the Commission's 
Computer III rules. We tentatively concluded that the Computer II 
separate subsidiary disclosure rule should continue to apply in such 
cases. We conclude that maintaining the Computer II separate subsidiary 
network information disclosure rules is no longer necessary. We believe 
that the protection from discriminatory interconnection afforded by 
structural separation generally exceeds that provided by non-structural 
safeguards alone. It follows that a BOC that uses a Computer II 
separate affiliate should not be subject to more stringent network 
disclosure obligations than a BOC that offers such services on an 
integrated basis under the Commission's Computer III rules. Moreover, 
Congress has instructed us to repeal or modify any regulation we 
determine to be ``no longer necessary in the public interest.'' Because 
we find that it is no longer necessary to retain the separate 
subsidiary disclosure rule, we remove it.
b. The All Carrier Rule
    41. We conclude that disclosure of network information by carriers 
other than incumbent LECs is ``no longer necessary in the public 
interest as a result of meaningful competition between providers. * * 
*'' Because no single carrier now dominates the interexchange market, 
no interexchange carrier (IXC) has the incentive or the ability to gain 
an unfair advantage by withholding network information from ISPs. We 
also find that no new entrants into the local exchange market possess 
individual market power. Because IXCs and competitive LECs currently 
lack individual market power, they also lack the incentive to create 
incompatible network interfaces for existing services in order to 
leverage that power into upstream or downstream markets.
    42. We conclude that, in contrast to the incumbent LECs, the IXCs 
and competitive LECs are not likely to gain the individual market power 
that would allow them profitably to withhold information necessary for 
interconnection to their networks in order to increase market power in 
upstream or downstream markets. Thus, we find that regulatory 
intervention to ensure network information disclosure is no longer 
needed for all carriers, but only for incumbent LECs, whose duty to 
disclose network changes that will affect other service providers is 
already defined by the section 251(c)(5) network disclosure rules. This 
conclusion comports with our statutory obligation to eliminate 
regulations that are no longer necessary due to meaningful economic 
competition among providers.
    43. Although we relieve IXCs and competitive LECs from the 
specific, routine network information disclosure obligations previously 
required under the all carrier rule, we emphasize that the 
Communications Act imposes certain nondiscrimination requirements on 
all common carriers providing interstate communication services. Among 
them, section 201 provides that all common carriers have a duty ``to 
establish physical connections with other carriers,'' and to furnish 
telecommunications services ``upon reasonable request therefor.'' We 
conclude in this proceeding that, if a carrier fails to disclose 
network information that enables other entities to interconnect to the 
carrier's basic telecommunications facilities and services in a just 
and reasonable manner, such action would violate section 201 of the 
Act. Moreover, all common carriers remain subject to the 
nondiscrimination requirements in section 202 of the Act. The 
Commission will not hesitate to use its enforcement authority to 
determine whether any carrier's network information disclosure 
practices are unjust or unreasonable.

[[Page 14147]]

    44. We further conclude that the Computer II network information 
disclosure rules that extend disclosure requirements to CPE should be 
retained, but that their application should be limited to incumbent 
LECs only. The primary purpose of network information disclosure in 
this context is not to protect intercarrier interconnection, but rather 
to give competitive manufacturers of CPE adequate advance notice when a 
carrier intends to alter its network in a way that may affect the 
manner in which CPE is attached to the network. Our concern has been 
that to the extent that a company with control over underlying 
transmission facilities also manufactures CPE, that company may have 
the incentive and ability to leverage its control of those facilities 
to favor its affiliate's CPE over that of competitive manufacturers. We 
note that section 201 interconnection and section 202 nondiscrimination 
obligations also apply in the context of CPE. We conclude that failure 
to disclose network changes that affect CPE could give incumbent LECs a 
significant head start in providing fully compatible equipment, and 
could thereby adversely affect competition in the CPE market.
    45. Although we find it necessary to retain a network information 
disclosure requirement that extends incumbent LECs' disclosure 
obligations to CPE, we see no point in subjecting incumbent LECs to two 
separate sets of network information disclosure rules, each with its 
own timing, triggering, and notice requirements. Instead, we simplify 
our disclosure requirements to the extent feasible. We therefore remove 
from our rules the Computer II all carrier requirement, and instead 
extend the disclosure requirements in section 51.325(a) of our rules to 
require incumbent LECs to provide public notice of any network changes 
that will affect the manner in which CPE is attached to the network. By 
amending section 51.325(a) of our rules to include a CPE disclosure 
requirement to, we continue to require incumbent LECs to disclose that 
information.

IV. Procedural Matters

A. Final Regulatory Flexibility Certification
    46. This regulatory flexibility certification supplements our prior 
certifications and analyses in this proceeding. The Regulatory 
Flexibility Act (RFA) requires that a regulatory flexibility analysis 
be prepared for notice-and-comment rulemaking proceedings, unless the 
agency certifies that ``the rule will not, if promulgated, have a 
significant economic impact on a substantial number of small 
entities.'' The RFA generally defines ``small entity'' as having the 
same meaning as the terms ``small business,'' ``small organization,'' 
and ``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act. A small business concern is one which: 
(1) is independently owned and operated; (2) is not dominant in its 
field of operation; and (3) satisfies any additional criteria 
established by the Small Business Administration (SBA). The SBA defines 
small businesses under the category ``Telephone Communications, Except 
Radiotelephone,'' to be those employing no more than 1,500 persons.
    47. The Commission, in the previous Further Notice of Proposed 
Rulemaking (Further NPRM) in this proceeding, stated in the Initial 
Regulatory Flexibility Certification that the Further NPRM pertained to 
Bell Operating Companies (BOCs), each of which is an affiliate of a 
Regional Holding Company (RHC), as well as to GTE and AT&T. Because 
each BOC is dominant in its field of operations and all of the BOCs as 
well as GTE and AT&T have more than 1,500 employees, we previously 
certified that the proposed action would not have a significant 
economic impact on a substantial number of small entities. No commenter 
addressed this previous certification. Subsequently, however, it has 
became clear that the changes to the Commission's network information 
disclosure requirements will also affect IXCs and competitive LECs, 
because the present Report and Order removes the network information 
disclosure requirements from interexchange carriers (IXCs) and 
competitive local exchange carriers (LECs). At present, because these 
additional carriers are relieved of any burden associated with the 
requirements, we continue to foresee no significant economic impact on 
a substantial number of small entities, and therefore so certify 
regarding the rules adopted. In addition, this removal of regulation 
produces no reporting, recordkeeping, or other compliance requirement.
    48. The Commission will send a copy of the Report and Order, 
including a copy of this final certification, in a report to Congress 
pursuant to the Small Business Regulatory Enforcement Fairness Act of 
1996. In addition, the Report and Order and this certification will be 
sent to the Chief Counsel for Advocacy of the Small Business 
Administration. Finally, the Report and Order (or summary thereof) and 
certification will be published in the Federal Register.

V. Ordering Clauses

    49. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 2, 4, 11, 201-205, 208, 251, 260, and 271-276, 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154, 
161, 201-205, 208, 251, 260, and 271-276, that the policies, rules, and 
requirements set forth herein are adopted, and that parts 51 and 64 of 
the Commission's rules, 47 CFR Parts 51 and 64, are amended as set 
forth in Rule Changes.
    50. It is further ordered that, pursuant to 5 U.S.C. 553(d), the 
rules, requirements, and amendments set forth herein shall take effect 
30 days after the publication of this Report and Order in the Federal 
Register, except for the amendments to parts 51 and 64 of the 
Commission's rules, 47 CFR parts 51 and 64, as set forth in Rule 
Changes, which, pursuant to 44 U.S.C. 3507(c), shall take effect 70 
days after the publication of this Report and Order in the Federal 
Register.
    51. It is further ordered that, pursuant to the authority contained 
in sections 1, 2, 4, and 201-204, of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 152, 154, and 201-204, the pending requests for 
approval of CEI plans and CEI plan amendments listed in Attachment A 
are dismissed.
    52. It is further ordered that, pursuant to the authority contained 
in sections 1, 2, 4, and 201-204, of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 152, 154, and 201-204, the pending petitions 
for reconsideration or applications for review of orders approving CEI 
plans listed in Attachment B are dismissed without prejudice.
    53. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Report and Order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration, in accordance with the Regulatory Flexibility Act, see 
5 U.S.C. 605(b).

List of Subjects

47 CFR Part 51

    Communications common carriers, Telecommunications.

47 CFR Part 64

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.


[[Page 14148]]


Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Attachment A--Pending Requests for Approval of CEI Plans or Amendments

    1. Ameritech CEI Plan for Enhanced Services. DA 95-553. Plan 
filed March 13, 1995.
    2. Bell Atlantic Amendment to CEI Plan for Internet Access 
Service. CCBPol 96-09. Amendment filed May 5, 1997.
    3. Southwestern Bell Telephone Company CEI Plan for Internet 
Support Services. CCBPol 97-05. Plan filed May 22, 1997.
    4. US West CEI Plan for Alarm Monitoring. CCBPol 98-02. Plan 
filed April 24, 1998.
    5. BellSouth CEI Plan for Alarm Monitoring. CCBPol 98-03. Plan 
filed June 12, 1998.

Attachment B--Pending Petitions for Reconsideration or Applications for 
Review of Orders Approving CEI Plans

    1. Reconsideration of Bell Atlantic Internet Access CEI Plan. 
CCBPol 96-9. Petition for Reconsideration filed July 3, 1996.
    2. Applications for Review of Payphone CEI Orders. CC Docket No. 
96-28. Applications for Review filed May 5, 1997.

Rule Changes

    For the reasons discussed in the Preamble, the Federal 
Communications Commission amends 47 CFR parts 51 and 64 as follows:

PART 51--INTERCONNECTION

    1. The authority citation for part 51 continues to read as follows:

    Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54, 
271, 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 151-55, 157, 
201-05, 207-09, 218, 225-27, 251-54, 271, 332, unless otherwise 
noted.

    2. Section 51.325(a) is amended by revising paragraphs (a)(1) and 
(a)(2) and adding a new paragraph (a)(3):


Sec. 51.325  Notice of network changes; Public notice requirement.

    (a) * * *
    (1) Will affect a competing service provider's performance or 
ability to provide service;
    (2) Will affect the incumbent LEC's interoperability with other 
service providers; or
    (3) Will affect the manner in which customer premises equipment is 
attached to the interstate network.
* * * * *

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    3. The authority for part 64 continues to read as follows:

    Authority: 47 U.S.C. 154, 254(k); secs. 403(b)(2)(B), (c), Pub. 
L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. secs 201, 
218, 226, 228, and 254(k) unless otherwise noted.

Subpart G of Part 64--[Amended]


Sec. 64.702  [Amended]

    4. In the title of Subpart G of Part 64 and in paragraph (b) of 
Sec. 64.702 remove the words ``Communications Common Carriers'' and 
add, in their place, the words ``Bell Operating Companies.''
    5. In Sec. 64.702, in paragraph (c), remove the words 
``Communications Common Carrier'' and add, in their place, the words 
``Bell Operating Company,'' and revise the last sentence of paragraph 
(d)(2) to read as follows:


Sec. 64.702  Furnishing of enhanced services and customer-premises 
equipment.

* * * * *
    (d) * * *
    (2) * * * Such information shall be disclosed in compliance with 
the procedures set forth in 47 CFR 51.325 through 51.335.
* * * * *
[FR Doc. 99-6726 Filed 3-23-99; 8:45 am]
BILLING CODE 6712-01-P