[Federal Register Volume 64, Number 83 (Friday, April 30, 1999)]
[Proposed Rules]
[Pages 23247-23252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10833]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[CC Docket No. 98-147, FCC 99-48]


Deployment of Wireline Services Offering Advanced 
Telecommunications Capability

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, we propose to establish certain spectrum 
compatibility and management rules in order to promote the timely 
deployment of advanced services without significantly degrading the 
performance of other advanced services or traditional voice band 
services. These rules rest upon currently established technical 
standards and practices. We recognize that, in the long term, more 
comprehensive standards and practices must be developed. The Commission 
is therefore issuing this Further Notice of Proposed Rulemaking (FNPRM) 
seeking comment on proposed regulations to resolve, in a timely manner, 
the host of long-term spectrum compatibility and management issues. In 
addition, the FNPRM tentatively concludes that it is technically 
feasible for two different carriers sharing a single line to provide 
traditional voice service and advanced services. The FNPRM seeks 
comment on a host of issues associated with the ramifications of 
mandating such line sharing.

DATES: Comments are due on or before June 15, 1999 and Reply Comments 
are due on or before July 15, 1999. Written comments by the public on 
the proposed information collections are due June 15, 1999.

ADDRESSES: Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 445 Twelfth Street, S.W., 
Room TW-A325, Washington, D.C. 20554, with a copy to Janice Myles of 
the Common Carrier Bureau, 445 12th Street, S.W., Room 5-C327, 
Washington, D.C. 20554. Parties should also file one copy of any 
documents filed in this docket with the Commission's copy contractor, 
International Transcription Services, Inc., 1231 20th St., N.W., 
Washington, D.C. 20036.

FOR FURTHER INFORMATION CONTACT: Staci Pies, Attorney, Common Carrier 
Bureau, Policy and Program Planning Division, (202) 418-1580. Further 
information may also be obtained by calling the Common Carrier Bureau's 
TTY number: 202-418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking adopted March 18, 1999 and 
released March 31, 1999. The full text of this FNPRM is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 445 12th St., S.W., Room CY-A257, Washington, D.C. 
The complete text also may be obtained through the World Wide Web, at 
http://www.fcc.gov/Bureaus/Common Carrier/Orders/fcc9948.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.

Synopsis of Further Notice of Proposed Rulemaking

A. Spectrum Compatibility--Long-Term Standards and Practices

1. Overview
    1. In the Advanced Services Order and NPRM 63 FR 45134, August 24, 
1998, we requested comment on loop spectrum issues. We asked commenters 
to address any degradation of service that may result from provision of 
advanced services using different signal formats on copper pairs in the 
same bundle. In the Order, we establish spectrum compatibility and 
management rules to the extent currently feasible in order to promote 
the timely deployment of advanced services without significantly 
degrading the performance of other advanced services or traditional 
voice band services. These rules rest upon currently established 
technical standards and practices. We recognize that, in the long term, 
more comprehensive technical standards and practices must be developed. 
We therefore adopt this Further NPRM, through which we hope to resolve, 
in a timely manner, the host of long-term spectrum compatibility and 
management issues.
2. Discussion
    2. In the companion Order, we find that incumbent LECs may not 
unilaterally set spectrum compatibility and spectrum management 
policies. In place of incumbent LEC-determined standards and practices, 
we found in the companion Order that there should be a competitively 
neutral spectrum standards setting process to investigate the actual 
level of interference between technologies to determine what 
technologies are deployable and under what circumstances. In this 
Further NPRM, we tentatively conclude that this process should include 
the active participation of the incumbent LECs, competitive LECs, 
equipment suppliers, and the Commission. We further tentatively 
conclude the following: the process should be competitively neutral in 
both structure and procedure; representation should be equitably spread 
over all segments of the industry; and representatives should have 
equal authority, with no party or groups of parties presuming to have 
greater weight or ``veto'' power. We seek comment on these tentative 
conclusions and how to establish such a process to develop long-term 
standards and practices. We also seek comment on our authority to 
direct industry bodies to engage in the process of developing spectrum 
compatibility and management policies, and our authority to compel 
industry bodies to adhere to any requirements we establish for the 
functioning of such bodies.
    3. In this Further NPRM we seek comment on two broad and 
interrelated issues: spectrum compatibility and spectrum management. 
With regard to spectral compatibility, we generally believe, as 
indicated in the Order, that the industry, via its standards bodies, 
can create acceptable standards for xDSL and other advanced services. 
Much of the standards development process is continuous in nature, and 
our hope is that the industry will fairly and expeditiously develop 
standards beyond completion of this proceeding. Future technologies 
will require the T1E1.4, or other standards bodies, to develop these 
compatibility standards in a timely, fair, and open manner. We believe, 
however, that the Commission can play a role in fostering timely, fair, 
and open development of standards for current and future technologies.
    4. We seek comment on the best process or forum for developing 
future power spectral density (PSD) masks. We tentatively conclude that 
T1E1.4 is the best choice for this task. Commenters have expressed 
concern, however, that T1E1.4 is not representative of the developing 
advanced services industry as a whole and may be overly represented by 
incumbent carriers and large manufacturers. We seek comments on how to 
foster broader representation and participation in this standards body. 
We also ask commenters to suggest other forums or methods of 
guaranteeing fair and timely resolution of spectrum compatibility 
problems.
    5. We seek comment on whether generic masks would be an appropriate 
means to address spectrum compatibility. We seek comment on whether 
this approach might restrict deployment of technologies that otherwise 
would not harm the network.
    6. We seek comment on whether a calculation-based approach, in 
addition

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to a power spectral density mask-based approach, provides a better tool 
for defining spectral compatibility We specifically seek comment 
whether such an approach provides a more accurate predictor of spectrum 
compatibility.
    7. With regard to spectrum management, we believe that comments in 
response to this Further NPRM can provide the information necessary to 
establish long-term spectrum management rules. Our goal is that the 
rules developed as a result of the Further NPRM will encourage 
technical innovation while preserving network reliability. Although we 
believe that T1E1.4 could serve as the common ground where industry 
resolves these issues, we think the Commission can facilitate industry 
development of fair standards through this Further NPRM. We seek 
specific comment and clarification on the following items initially 
raised in the NPRM, but not sufficiently explicated in the record.
    8. We seek comment on methods to encourage the industry to develop 
fair and open practices for the deployment of advanced services 
technologies. We tentatively conclude that T1E1.4 should serve as the 
forum to establish fair and open deployment practices. This conclusion 
is premised on the assumption that a method will be developed by which 
to ensure the active participation of all segments of the industry in 
T1E1.4. What role should the Commission play in facilitating broad 
participation in this process?
    9. We ask commenters to consider how to maximize the deployment of 
new technologies within binder groups while minimizing interference. We 
seek comment on the development of xDSL binder group administration 
practices, including specifications on the types and numbers of 
technologies that can be deployed within a binder group. This should 
include procedures allowing for deployment of various xDSL-based 
services in a nonrestrictive manner. We seek comment on the procedures 
for maintaining and updating these administrative practices so as to 
minimize interference with future technologies. We seek comment on the 
practice of segregating services based on the technology. For example, 
we recognize AMI T1 as a potential disturber and understand that 
incumbent LECs currently assign AMI T1 to separate binder groups. 
Competitive LECs have expressed concern that incumbent LECs might apply 
a similar segregation practice to xDSL technology--a practice 
competitive LECs claim is not necessary or beneficial. We seek comment 
on whether to allow incumbent LECs to segregate xDSL technology in such 
a manner.
    10. We seek comment on whether we should establish a grandfathering 
process for interfering technologies. For example, should the 
Commission establish a sunset period for services such as AMI T1? As 
noted above, we recognize that carriers have a substantial base of AMI 
T1 in deployment and that in some areas AMI T1 provides the only 
feasible high-speed transmission capability. We seek comment on whether 
carriers should be required to replace AMI T1 with new and less 
interfering technologies, and, if so, what time frame would be 
reasonable. We ask commenters to propose rules for a possible 
grandfathering process which will not disrupt the network and 
simultaneously encourage investment in, and deployment of, new 
technology.
    11. We seek comment on whether to develop a dispute resolution 
process regarding the existence of disturbers in shared facilities. 
Specifically, we ask commenters to suggest how best to resolve disputes 
arising out of claims that a technology is ``significantly degrading'' 
the performance of other services. We also seek comment on whether, and 
if so, how we should define ``significantly degrade'' so as to ensure 
that consumers have the broadest selection of services from which to 
choose without harming the network. If we develop a dispute resolution 
process, should it rely on an outside party as an arbitrator, such as 
the state commission, the FCC, or a neutral third party, or should the 
procedures simply provide the rules by which players must conform?
    12. We seek comment to determine whether the Commission should 
solicit the assistance of a third party in developing loop spectrum 
management policies. What role could such a third party serve in 
facilitating communication between the industry and regulatory bodies? 
Should it serve a role similar to the role served by the administrator 
for local number portability? Should it be empowered to develop binder 
group management procedures, facilitate the development of future PSD 
masks, and resolve disputes between carriers over the existence of 
disturbers in shared facilities? We also ask parties to comment on 
whether a voluntary industry effort could effectively address loop 
management issues.
    13. We acknowledge that the industry, via the T1E1.4, is currently 
engaged in developing standards for various varieties of xDSL 
technologies. We recognize further that the industry can best address 
many of the details concerning spectral compatibility. Furthermore, we 
acknowledge that many of the spectral compatibility issues will require 
on-going analysis and oversight beyond the completion of this 
proceeding. Although we have initiated this Further NPRM in order to 
develop rules to address long-term spectrum management concerns, we 
expect that the industry, via the T1E1.4 or other bodies, will continue 
to develop standards and procedures to promote deployment of advanced 
services and resolve the problems that arise when multiple carriers 
deploy multiple technologies over the same facilities. We encourage the 
industry, through its standards bodies, to continue its independent 
efforts to develop long-term standards and practices for spectrum 
management. We expect that the industry will conduct this ongoing role 
in a expeditious, fair and open manner.
    14. We ask commenters to address any additional measures the 
Commission could take to ensure that spectrum compatibility and 
management concerns are resolved in a fair and expeditious manner. We 
also ask commenters to consider what measures the Commission could take 
to ensure that spectral compatibility requirements are forward-looking 
and able to evolve over time to encourage, rather than stifle, 
innovation and deployment of advanced services.

B. Line Sharing

1. Overview
    15. In the Advanced Services Order and NPRM, we sought comment on 
whether two different service providers should be allowed to offer 
services over the same line, with each provider utilizing different 
frequencies to transport voice or data over that line. We asked 
commenters whether we should mandate such line sharing, specifically 
whether the competitive LEC should have the right to run high frequency 
data signals, or other advanced services, over the same line as the 
incumbent LEC's voice signal.
    16. Shared line access makes it possible for a competing carrier to 
offer advanced services over the same line that a consumer uses for 
voice service without requiring the competing carrier to take over 
responsibility for providing the voice service. Such shared line access 
would enable new entrants to focus solely on the advanced services 
market without having to acquire the resources or the expertise to 
provide other types of telecommunications services, such as analog 
voice service. Shared line access could also remove

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any cost disadvantage that an advanced services only provider might 
face if it had to provide advanced services over a stand-alone line. A 
competitive LEC, therefore, may want to take advantage of the ability 
of advanced services technology, such as ADSL, to run on the frequency 
above the analog voice channel by providing only high-speed data 
service, without voice service, over a loop.
    17. We believe each end user customer should be able to choose from 
a broad array of services and from whom to obtain these services. In 
particular, we believe allowing consumers to keep their voice service 
provider while allowing them to obtain advanced services on the same 
line from a different provider will foster consumer choice and promote 
innovation and competitive deployment of advanced services.
    18. Line sharing assumes that a requesting carrier will have access 
to the incumbent LEC's local loop. While the Supreme Court, in Iowa 
Utilities Board, has directed the Commission to reevaluate the standard 
for defining the local loop as an unbundled network element, we see no 
reason to delay seeking comment in this proceeding on whether competing 
carriers may have access to the high frequency portion on an incumbent 
LEC's loop. To the extent that any redefinition of the local loop, or 
other network elements, affects any conclusions drawn from this 
proceeding, we will revise our analysis and conclusions accordingly.
2. Discussion
    19. The existing record indicates that incumbent LECs have denied 
competitors the option of offering advanced services over the same line 
on which the incumbent LEC provides voice service.
    20. We decline, however, to mandate line sharing at the federal 
level at this time under the accompanying Report and Order. Although we 
find no evidence that line sharing is not technically feasible, we find 
that the record does not sufficiently address the operational, pricing, 
and other practical issues that may arise if LECs are compelled to 
share lines with competitors. We acknowledge that the Commission has 
concluded that a ``determination of technical feasibility does not 
include consideration of economic, accounting, billing, space, or site, 
concerns.'' Several incumbent LECs have raised, however, billing, 
accounting, and other operational issues, that we would like to 
consider before we determine whether to mandate line sharing 
nationwide. While none of the issues raised by the incumbents challenge 
the technical feasibility of line sharing, we believe that there may be 
practical considerations that have not been adequately addressed in the 
existing record. Moreover, there may be policy considerations that 
weigh against line sharing, even if the Commission were to conclude 
that technical and operational concerns could be met. As a result, we 
seek additional comments in the Further NPRM in order to develop a more 
comprehensive record on the policy and practical ramifications of 
federally mandated line sharing, including any policy considerations 
that weigh against line sharing.
a. Authority to Require Line Sharing
    21. In Iowa Utilities Board, the Supreme Court held that we have 
jurisdiction to implement the local competition provisions of the Act 
and that our rulemaking authority extends to sections 251 and 252. We 
therefore tentatively conclude that we have authority to require line 
sharing. We seek comment on this tentative conclusion. Finally, we 
tentatively conclude that nothing in the Act, our rules, or caselaw 
precludes states from mandating line sharing, regardless of whether the 
incumbent LEC offers line sharing to itself or others, and regardless 
of whether it offers advanced services. We seek comment on these 
tentative conclusions.
b. Access to ``High-Frequency Portion'' of the Loop
    22. We tentatively conclude that incumbent LECs must provide 
requesting carriers with access to the transmission frequencies above 
that used for analog voice service on any lines that LECs use to 
provide exchange service when the LEC itself provides both exchange and 
advanced services over a single line. We tentatively conclude that, 
without such a ruling, competitive LECs will be hampered in their 
ability to compete in providing advanced services to end users because 
the competitive LEC would have to obtain a new line from the incumbent 
LEC in order to provide advanced services whereas the incumbent LEC 
could provide advanced services far less expensively by using the 
existing line. We seek comment on these tentative conclusions. 
Moreover, in the absence of line sharing, the competing carrier 
effectively may be forced to provide both voice and data over the local 
loop it leases from the incumbent. This means that the competing 
carrier potentially must invest in two technologies--circuit switched 
technology for voice transmissions and packet switched technologies for 
data. The competing carrier may need to make this investment in circuit 
technology even though that technology may become obsolete over time. 
We seek comment on the extent to which the absence of line sharing 
requires such dual investment and the competitive effect of such dual 
investment.
    23. We also seek comment in this proceeding on whether we should 
more precisely define what constitutes the frequency above that used 
for analog voice service, so that it is clear to all parties what the 
incumbent must unbundle, in the event we require line sharing. We ask 
commenters to address whether setting a specific dividing line between 
a low frequency channel and a high frequency channel on the loop would 
arbitrarily freeze technological development and deny carriers 
opportunities to use the loop to provision services that rely on 
different frequencies bands within the loop.
    24. We also tentatively conclude that any rules we adopt on line 
sharing should not mandate a particular technological approach to the 
use of a line for multiple services. We believe that shared line access 
is a rapidly evolving technology and any rules we adopt must be 
forward-looking and flexible enough to stimulate, rather than stifle, 
technological innovation. We ask commenters to address how we can 
construct regulations that promote local competition and technological 
innovation so that American consumers can take full advantage of the 
line's features, functionalities, and capabilities.
c. Technical, Operational, Economic, Pricing, and Cost Allocation 
Issues Associated with Line Sharing
    25. The current record in this proceeding reveals that incumbent 
LECs have opposed line-sharing with xDSL-based providers on the grounds 
that simultaneous provision of advanced service and voice service over 
a single line by separate providers is not technically feasible. These 
parties broadly argue that allowing new entrants to acquire rights to 
the high frequency channel of the line, while declining to purchase the 
voice channel of the line, would harm the network. We find that 
incumbent LECs have placed nothing on the record in this proceeding 
demonstrating that a competitor's advanced services equipment is likely 
to cause any network problems.
    26. Technical Issues. We find nothing in the existing record to 
persuade us that line sharing is not technically feasible. In fact, 
incumbent LECs are

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already sharing the line for the provision of both voice and advanced 
services. Because incumbent LECs are already using single lines to 
provide both voice and advanced services and are even sharing lines 
with other providers for the provision of both voice and advanced 
services, it appears that there exists no bona fide issue of technical 
infeasibility. As such, we tentatively conclude that line sharing is 
technically feasible. We seek comment on this tentative conclusion.
    27. Although not set forth in the record, we can conceive of some 
circumstances in which advanced services cannot share a line with 
analog voice service. We tentatively conclude that such isolated 
situations can be remedied and should not interfere with the 
incumbent's general obligation to share the line. We tentatively 
conclude that, to the extent that an incumbent LEC can demonstrate to 
the state commission that digital loop conditioning would interfere 
with the analog voice service of the line, line sharing is not 
technically feasible on that particular line, and the incumbent is not 
obligated to share that line. We tentatively conclude that incumbent 
LECs would be required to perform other sorts of conditioning, such as 
removing bridge taps or cleaning up splices along the loop, that would 
not interfere with the analog voice signal. We seek comment on these 
tentative conclusions. We ask commenters to address any other technical 
problems that may arise in line sharing arrangements and to suggest 
remedies for such problems.
    28. Operational Issues. In addition to technical feasibility 
concerns, commenters raise concerns about operational barriers to line 
sharing. We ask commenters to discuss the operational issues that may 
arise with line sharing. For example, what effect will line sharing 
have on existing analog voice service? Should carriers be allowed to 
request just the voice channel of a line? Should carriers be allowed to 
request any unused portion of a line? How will line sharing affect 
existing and evolving operations support systems? To what extent will 
LEC operations support systems needed to be modified in order to allow 
two carriers to share a line? Which entity should manage the 
multiplexing equipment if two carriers are offering services over the 
same loop? Should different customers be allowed on the same physical 
loop? How and by whom should problems on the line be handled? What 
happens if conditioning a loop for advanced services requires removal 
of repeaters or load coils, which are needed to preserve the quality of 
the analog voice signal? These examples are merely illustrative of 
issues that may arise from two carriers providing services over the 
same line. We ask commenters to address these issues and any other 
operational, administrative, and pricing concerns with specificity.
    29. Economic, Pricing, and Cost Allocation Issues. We also seek 
comment on the economic, pricing, and cost allocation issues that may 
arise from line sharing. For example, how might line sharing affect 
federal and state access charge regimes and universal service 
mechanisms? What are the pricing consequences of requiring line sharing 
(e.g., what consequences will line sharing have on the price of the 
unbundled local loop)? Should the entire cost of the loop be imputed to 
the voice channel or divided equally or otherwise between the two 
services sharing the facility? What cost allocation issues, if any, are 
raised by line sharing? What effect will line sharing have on new 
entrants' ability to compete with incumbents? How will line sharing 
stimulate or retard innovation? How will line sharing affect investment 
in local exchange facilities?
    30. Finally, we ask commenters to address the continued viability 
of line sharing arrangements as telecommunications network 
architectures migrate from a circuit to a packet environment. As 
carriers deploy ATM and other packet technologies, and as voice traffic 
moves from the circuit-switched network to Internet Protocol (IP) or 
ATM networks, is a line sharing requirement commercially or technically 
feasible? Commenters should address whether a competitive LEC's ability 
to deliver voice service over a packet-switched network obviates the 
need to share a loop with the incumbent LEC.

C. Procedural Matters

1. Ex Parte Presentations
    31. The matter in Docket No. 98-147, initiated by the Further NPRM 
portion of this item, shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written presentations are set forth in section 1.1206(b) as 
well.
2. Initial Paperwork Reduction Act Analysis
    32. The Further NPRM contains either a proposed or modified 
information collection. As part of its continuing effort to reduce 
paperwork burdens, we invite the general public and the Office of 
Management and Budget (OMB) to take this opportunity to comment on the 
information collections contained in this Notice, as required by the 
Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency 
comments are due at the same time as other comments on this Notice; OMB 
comments are due June 29, 1999. Comments should address: (a) whether 
the proposed collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have 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.
3. Initial Regulatory Flexibility Analysis
    33. As required by the Regulatory Flexibility Act, see 5 U.S.C. 
603, the Commission has prepared an Initial Regulatory Flexibility 
Analysis (IRFA) of the possible impact on small entities of the 
proposals suggested in this document. The IRFA is set forth in the 
Appendix. Written public comments are requested with respect to the 
IRFA. These comments must be filed in accordance with the same filing 
deadlines for comments on the rest of the NPRM, but they must have a 
separate and distinct heading, designating the comments as responses to 
the IRFA. The Office of Public Affairs, Reference Operations Division, 
will send a copy of this NPRM , including the IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration, in 
accordance with the Regulatory Flexibility Act.
4. Comment Filing Procedures
    34. The proceeding, Deployment of Wireline Services Offering 
Advanced Telecommunications Capability, CC Docket No. 98-147, is 
initiated by the Further NPRM portion of this item. Pursuant to 
Sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 
1.419, interested parties may file comments on or before June 15, 1999 
and reply comments on or before July

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15, 1999. All filings should refer only to Deployment of Wireline 
Services Offering Advanced Telecommunications Capability, CC Docket No. 
98-147. Comments may be filed using the Commission's Electronic Comment 
Filing System (ECFS) or by filing paper copies. Comments filed through 
the ECFS can be sent as an electronic file via the Internet to <http://
www.fcc.gov/e-file/ecfs.html>. Generally, only one copy of an 
electronic submission must be filed. In completing the transmittal 
screen, commenters should include their full name, Postal Service 
mailing address, and the applicable docket or rulemaking number, which 
in this instance is CC Docket No. 98-147. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should include the following words in the body of the message, ``get 
form [email protected] and to Timothy Fain, OMB 
Desk Officer, 10236 NEOB, 725-17th Street, N.W., Washington, DC 20503 
or via the Internet to [email protected].
5. Further Information
    39. For further information regarding this proceeding, contact 
Michael Pryor, Deputy Division Chief, Policy and Program Planning 
Division, Common Carrier Bureau, at 202-418-1580 or [email protected]. 
Further information may also be obtained by calling the Common Carrier 
Bureau's TTY number: 202-418-0484.

VI. Ordering Clauses

    40. It is ordered that, pursuant to sections 1-4, 10, 201, 202, 
251-254, 256, 271, and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. 151-154, 160, 201, 202, 251-254, 256, 271, and 
303(r), the Further Notice of Proposed Rulemaking is hereby adopted.
    41. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of the 
Further Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Certification, to the Chief Counsel for Advocacy of the 
Small Business Administration.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Initial Regulatory Flexibility Analysis

    1. As required by Section 603 of the Regulatory Flexibility Act 
(RFA), 5 U.S.C. 603, the Commission has prepared this Initial 
Regulatory Flexibility Analysis (IRFA) of the expected significant 
economic impact on small entities by the policies and rules proposed in 
the Further Notice of Proposed Rulemaking (Further NPRM). Written 
public comments are requested on the IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for 
comments on the Further Notice. The Commission will send a copy of the 
Further NPRM, including the IRFA, to the Chief Counsel for Advocacy of 
the Small Business Admininistration in accordance with section 603(a) 
of the Flexibility Act.

I. Need for and Objectives of the Proposed Rule

    2. The Commission is issuing the Further NPRM to seek comment on 
issues related to spectral compatibility and spectral management. We 
ask commenters to consider whether the Commission should establish 
rules for deployment of central office equipment similar to those set 
forth in part 68 of our rules. We also ask commenters to address the 
technical, operational, pricing, legal or policy ramifications of line 
sharing. We tentatively conclude that there are no technical, legal, 
regulatory or policy obstacles to line sharing among competing 
carriers. Further, we seek comment on our tentative conclusions that 
incumbent LECS must provide requesting carriers with unbundled access 
to the transmission frequencies above that used for analog voice 
service on any loops that LECs use to provide exchange service when the 
LEC itself provides both exchange and advanced services over a single 
loop. We ask commenters to address any other technical problems that 
may arise in line sharing arrangements and to suggest remedies for such 
problems.

II. Legal Basis

    3. The legal basis for any action that may be taken pursuant to the 
Further NPRM is contained in sections 1-4, 10, 201, 202, 251-254, 271, 
and 303(r) of the Communications Act as amended, 47 U.S.C. 151-154, 
160, 201, 202, 251-254, 271, and 303(r).

III. Description and Estimates of the Number of Small Entities Affected 
by the Further Notice of Proposed Rulemaking

    4. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposals in this Further NPRM, if adopted. The RFA 
generally defines the term ``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

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additional criteria established by the Small Business Administration 
(SBA).
    5. Below, we further describe and estimate the number of small 
entities that may be affected by the proposals in this Further NPRM, if 
adopted.
    6. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the numbers of commercial wireless entities, appears to be data 
the Commission publishes annually in its Telecommunications Industry 
Revenue report, regarding the Telecommunications Relay Service (TRS). 
According to data in the most recent report, there are 3,459 interstate 
carriers. These carriers include, inter alia, local exchange carriers 
(LECs), wireline carriers and service providers, interexchange 
carriers, competitive access providers, operator service providers, pay 
telephone operators, providers of telephone toll service, providers of 
telephone exchange service, and resellers.
    7. The SBA has defined establishments engaged in providing 
``Telephone Communications, Except Radiotelephone'' to be small 
businesses when they have no more than 1,500 employees. Below, we 
discuss the total estimated number of telephone companies and small 
businesses in this category, and we then attempt to refine further 
those estimates.
    8. Although some affected incumbent LEC may have 1,500 or fewer 
employees, we do not believe that such entities should be considered 
small entities within the meaning of the RFA because they are either 
dominant in their field of operations or are not independently owned 
and operated, and therefore by definition not ``small entities'' or 
``small business concerns'' under the RFA. Accordingly, our use of the 
terms ``small entities'' and ``small businesses'' does not encompass 
small incumbent LECs. Out of an abundance of caution, however, for 
regulatory flexibility analysis purposes, we will separately consider 
small incumbent LECs within this analysis and use the term ``small 
incumbent LECs'' to refer to any incumbent LECs that arguably might be 
defined by the SBA as ``small business concerns.''
    9. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small LECs. The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. According to 
the most recent Telecommunications Industry Revenue data, 1,371 
carriers reported that they were engaged in the provision of local 
exchange services. We do not have data specifying the number of these 
carriers that are either dominant in their field of operations, are not 
independently owned and operated, or have more than 1,500 employees, 
and thus are unable at this time to estimate with greater precision the 
number of LECs that would qualify as small business concerns under the 
SBA's definition. Consequently, we estimate that fewer than 1,371 
providers of local exchange service are small entities or small 
incumbent LECs that may be affected by the proposed rules, if adopted.
    10. Competitive LECs. Neither the Commission nor SBA has developed 
a definition of small entities specifically applicable to providers of 
competitive LECs. The closest applicable definition under the SBA rules 
is for telephone communications companies except radiotelephone 
(wireless) companies. The most reliable source of information regarding 
the number of competitive LECs nationwide is the data that we collect 
annually in connection with the TRS Worksheet. According the most 
recent Telecommunications Industry Revenue data, 109 companies reported 
that they were engaged in the provision of either competitive local 
exchange service or competitive access service, which are placed 
together in the data. We do not have information on the number of 
carriers that are not independently owned and operated, nor have more 
than 1,500 employees, and thus are unable at this time to estimate with 
greater precision the number of competitive LECs that would qualify as 
small business concerns under the SBA definition. Consequently, we 
estimate that there are fewer than 109 small competitive LECs or 
competitive access providers.

IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    11. We were unable to gather a sufficient record on the development 
of rules relating to procedures for equipment testing and compliance, 
so we seek additional comments on this issue. We are seeking comments 
on whether the Commission should establish rules for deployment of 
central office equipment similar to those set forth in Part 68 of our 
rules. We also ask commenters to address whether the Commisison should 
be involved with the actual testing and compliance procedures or 
whether the industry is better suited to serve this function through 
the use of independent and accredited labs. We ask commenters to 
address any additional measures the Commission could take to ensure 
that spectrum compatibility and management concerns are resolved in a 
fair and expeditious manner. We seek comment on the level of demand for 
line sharing, and on technical and operational obstacles to sharing a 
single loop between two service providers.

V. Significant Alternatives to Proposed Rule Which Minimize Significant 
Economic Impact on Small Entities and Small Incumbent LECs, and 
Accomplish Stated Objectives

    12. In this Further NPRM, we seek to develop a record sufficient 
enough to adequately address issues related to developing long-term 
standards and practices for spectral compatibility and management. In 
addressing these issues, we seek to ensure that competing carriers, 
including small entity carriers, obtain access to inputs necessary to 
the provision of advanced services. We tentatively conclude that our 
proposals in the Further NPRM would impose minimum burdens on small 
entities. We seek comment on these proposals and the impact they may 
have on small entities.

VI. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rule

    13. None.

[FR Doc. 99-10833 Filed 4-29-99; 8:45 am]
BILLING CODE 6712-01-P