[Federal Register Volume 64, Number 136 (Friday, July 16, 1999)]
[Rules and Regulations]
[Pages 38313-38314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18231]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 20

[WT Docket No. 97-207; FCC 99-137]


Commercial Mobile Radio Services

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification.

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SUMMARY: This document finds that service offered with a Calling Party 
Pays option qualifies as Commerical Mobile Radio Service (CMRS) under 
the Communications Act, meets the criteria of the definition for a 
Commercial Mobile Radio Service under the Commission's rules, and thus 
falls under the regulatory structure set out in the Communications Act. 
The document is needed to clarify any uncertainty regarding the 
regulatory status of Calling Party Pays offerings.

DATES: Effective July 7, 1999.

FOR FURTHER INFORMATION CONTACT: David Siehl or Joseph Levin at (202) 
418-1310, TTY at (202) 418-7233, Policy Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 
Washington, D.C. 20554.

SUPPLEMENTARY INFORMATION: The following synopsis concerns only the 
Declaratory Ruling in the Commission's Declaratory Ruling and Notice of 
Proposed Rulemaking in WT Docket No. 97-207, adopted June 10, 1999, and 
released July 7, 1999. The synopsis of the document containing the 
Notice of Proposed Rulemaking is being published separately in the 
Federal Register. The complete text of the entire released item, 
including the Declaratory Ruling, is available for inspection and 
copying during normal business hours in the FCC Reference Information 
Center (Courtyard Level), 445 12th Street, S.W., Washington, D.C. 
20554, and also may be purchased from the Commission's copy contractor, 
International Transcription Services, at (202) 857-3800, 445 12th 
Street, S.W., CY-B400, Washington, D.C. 20054.

Synopsis of Declaratory Ruling

    1. In this Declaratory Ruling we clarify that Calling Party Pays 
(CPP) offerings qualify as Commercial Mobile Radio Service (CMRS) under 
the Communications Act and thus would fall under the regulatory 
structure set out in section 332(c)(3) of the Act.1 
Therefore, providers of CPP would be treated as common carriers, and 
state regulation of rates and entry for CPP would generally be 
preempted.
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    \1\ 47 U.S.C. 332(c)(3).
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    2. The record reveals disagreement regarding how CPP should be 
classified, and the significance of prior Commission statements 
regarding CPP. Some commentators in the Notice of Inquiry (NOI) (62 FR 
58700 (Oct. 30, 1997)) record argue that states have jurisdiction over 
CPP as a billing practice, while other commenters support Commission 
jurisdiction, relying on the rationale that CPP is a CMRS service.
    3. The Commission finds that CPP offerings are properly classified 
as CMRS services pursuant to section 332 of the Act.2 In 
order to determine whether a particular service could constitute CMRS, 
the Commission looks to section 332(d) of the Act. As provided by the 
statute,3 the term ``commercial mobile service'' means any 
mobile service (as defined in section 3 of the Act) that is ``provided 
for profit, and makes interconnected service available (A) to the 
public or (B) to such classes of eligible users as to be effectively 
available to a substantial portion of the public, as specified by 
regulation by the Commission * * * .'' Section 3 of the Act and 
Sec. 20.3 of the Commission's Rules, in turn, define the term ``mobile 
service'' in pertinent part as ``a radio communication service carried 
on between mobile stations or receivers and land stations, and by 
mobile

[[Page 38314]]

stations communicating among themselves.'' 4 The Act further 
specifies the definition of radio communication as follows: ``The term 
`radio communication' or `communication by radio' means the 
transmission by radio of writing, signs, pictures, and sounds of all 
kinds, including all instrumentalities, facilities, apparatus, and 
services (among other things, the receipt, forwarding, and delivery of 
communications) incidental to such transmission.'' 5
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    \2\ 47 U.S.C. 332.
    \3\ 47 U.S.C. 332(d)(1).
    \4\ 47 U.S.C. 3(27); 47 CFR 20.3.
    \5\ 47 U.S.C. 3(33).
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    4. The Commission finds, first, that CPP offerings would meet the 
``mobile service'' part of the definition. In CPP, the calling party, 
whether from a land or mobile station, would be seeking to use radio 
spectrum and related wireless network facilities to transmit writing, 
signs, pictures and sounds to a mobile station. CPP would also be 
provided ``for profit,'' as required by the statute.6 
Whether the payment for a call to a mobile subscriber comes from the 
calling party or from the mobile subscriber under CPP, the payment 
accrues directly to and compensates the CMRS provider of the mobile 
``communications service'' for providing service to the mobile 
subscriber. The Commission further finds that CPP would meet the 
``interconnected service'' criterion of the definition for commercial 
mobile radio service. 7 Under CPP, a calling party would be 
sending a message over the ``public switched network,'' as those terms 
are defined by the regulation, to reach the mobile phone of the CMRS 
subscriber. Finally, the Commission finds that CPP would satisfy the 
statutory requirement of being ``available * * * to the public.'' 
8 Based on the record, CMRS providers who will offer CPP 
service would be making it available on nondiscriminatory terms and 
conditions to all potential subscribers and to calling parties who want 
to reach the mobile subscribers who have the CPP service 
option.9 Thus, CPP offerings would satisfy the relevant 
statutory definition for CMRS.
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    \6\ Section 20.3(a)(1) adds to the phrase, ``provided for 
profit,'' the following language: ``i.e., with the intent of 
receiving compensation or monetary gain.'' Section 20.3(a)(1) of the 
Commission's Rules, 47 CFR 20.3(a)(1).
    \7\ 47 U.S.C. 332(d); 47 CFR 20.3. The Commission is authorized 
to define ``public switched network,'' pursuant to section 332(d) 
(defining the term ``interconnected service'' as ``service that is 
interconnected with the public switched network (as such terms are 
defined by regulation by the Commission) * * *.'' 47 U.S.C. 
332(d)(2).
    \8\ 47 U.S.C. 332(d)(1).
    \9\ See 47 CFR 20.3(b).
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    5. Moreover, the Commission finds that there is no reference in the 
statutory language definition to who pays for the call, and no 
suggestion that CPP, which would satisfy all requirements of the 
definition, should be excluded because the calling party pays the 
airtime charges.'' Whether the payment obligation to the CMRS provider 
for using that airtime falls on the party initiating the call (CPP) or 
on the party receiving the call, the underlying transmission and 
wireless network facilities remain the same as those currently used to 
provide CMRS and, as described, would be subject to section 332 of the 
Act.10 In agreeing to pay for the call to the CMRS 
subscriber, the calling party becomes, for the purpose of completing 
the call, a customer of the CMRS provider. Placement of a CPP call by 
the calling party thus operates similarly to casual calling services 
whereby the call to a mobile user does not require the calling party to 
establish an account, or presubscribe, with the CMRS provider. Thus, a 
CPP offering, while transferring some payment aspects of the call to a 
customer other than the owner of the mobile phone, does not in any 
fashion alter the regulatory classification of the call.
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    \10\ 47 U.S.C. 332.
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    6. The Commission also rejects the view that classifying CPP as 
CMRS is inconsistent with the Arizona Decision.11 In that 
decision, the Commission gave only limited attention to the regulatory 
classification of CPP, but instead focused on addressing Arizona 
Corporation Commission's case for continued rate regulation of CMRS 
generally. That decision did not address explicitly the statutory 
criteria of section 332(d) as to whether CPP is CMRS, or describe CPP 
in any detail. Even so, the Commission agrees with BAM that the 
underlying premise of that order is that the Commission considered CPP 
as CMRS, as evidenced by the fact that the Arizona Decision addressed 
the issues there in the context of section 332. Indeed, the discussion 
of CPP-related billing practices in the Arizona Decision simply 
concerned whether such practices fall within the scope of `` `other 
terms and conditions' of CMRS offerings.'' Thus, the Arizona Decision 
implicitly characterized CPP as a CMRS offering.
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    \11\ Petition of Arizona Corporation Commission to Extend State 
Authority over Rate and Entry Regulation of All Commercial Mobile 
Radio Services and Implementation of Sections 3(n) and 332 of the 
Communications Act, PR Docket No. 94-104 and GN Docket No. 93-252, 
Report and Order and Order on Reconsideration, 10 FCC Rcd 7824, 7837 
(1995).
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    7. The Commission also regards the discussion of CPP in the Arizona 
Decision as dicta. In the Arizona Decision, the Commission rejected 
ACC's argument that it needed continued rate regulation authority on 
the basis of two examples, including CPP. In discussing this decision, 
the Commission found that it could not conclude that ``these isolated 
incidents constitute a pattern of anticompetitive practice that might 
warrant continued state rate regulation.'' The conclusion regarding 
``these isolated incidents'' holds true whether or not Arizona's 
intervention into a CPP matter involved a CMRS service or a billing 
practice. Accordingly, we find that the possible characterization of 
CPP as a ``billing practice'' was not essential to the decision and 
therefore dicta. Finally, to the extent that the Arizona Decision is 
found as holding that CPP does not constitute a CMRS service, the 
Commission hereby overturns any such holding.

Ordering Clauses

    Accordingly, it is ordered That the action reflected in the 
Declaratory Ruling is taken pursuant to sections 1, 4(i), and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 403, 
and 47 CFR 1.2.
    It is further ordered that the Declaratory Ruling is effective 
immediately upon release of this Declaratory Ruling and Notice of 
Proposed Rulemaking.
    It is further ordered that parties have until August 16, 1999 to 
seek review of the Declaratory Ruling.

List of Subjects in 47 CFR Part 20

    Communications common carrier; Commercial mobile radio services.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-18231 Filed 7-15-99; 8:45 am]
BILLING CODE 6712-01-P