[Federal Register Volume 64, Number 147 (Monday, August 2, 1999)]
[Proposed Rules]
[Pages 41884-41887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19634]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CC Docket No. 96-98; FCC 99-141]


Promotion of Competitive Networks in Local Telecommunications 
Markets

AGENCY: Federal Communications Commission.

ACTION: Third Further Notice of Proposed Rulemaking.

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SUMMARY: In this Third Further Notice of Proposed Rulemaking, the 
Commission seeks comment on a proposed interpretation of Section 224 of 
the Communications Act in order to facilitate the development of 
competitive telecommunications networks that will provide consumers 
with alternatives to services provided by the incumbent wireline local 
exchange carriers (LECs). In particular, the Commission seeks comment 
on the provision of reasonable and nondiscriminatory access to rights-
of-way and riser conduit on private premises that are under the 
ownership or control of LECs or other utilities. A companion Notice of 
Proposed Rulemaking and a Notice of Inquiry are summarized elsewhere in 
this issue of the Federal Register.

DATES: Comments are due August 13, 1999; Reply comments are due 
September 3, 1999.

ADDRESSES: Parties who choose to file comments by paper should send 
comments to the Commission's Secretary, Magalie Roman Salas, Office of 
the Secretary, Federal Communications Commission, 445 Twelfth Street, 
SW.; TW-A325; Washington, DC 20554. Comments filed through the 
Commission's Electronic Comment Filing System (ECFS) can be sent as an 
electronic file via the Internet to <http://www.fcc.gov/e-file/
ecfs.html>. See SUPPLEMENTARY INFORMATION for additional information 
about paper and electronic filing.

FOR FURTHER INFORMATION CONTACT: Jeff Steinberg at (202) 418-0896 or 
Joel Taubenblatt at (202) 418-1513 (Wireless Telecommunications 
Bureau).

SUPPLEMENTARY INFORMATION: This is a summary of the Third Further 
Notice of Proposed Rulemaking in CC Docket No. 96-98 (the ``Notice''), 
FCC 99-141, adopted June 10, 1999 and released July 7, 1999. The 
complete text of the document is available for inspection and copying 
during normal business hours in the FCC Reference Center, 445 12th 
Street, SW., Washington, DC and also may be purchased from the 
Commission's copy contractor, International Transcription Services, 
(202) 857-3800, 445 12th Street, SW., CY-B400, Washington, DC 20554. 
The document is also available via the Internet at <http://www.fcc.gov/
Bureaus/Wireless/Orders/1999/index.html>.

Introduction

    1. This Notice is part of a larger item that seeks comments and 
initiates an inquiry in order to further the Commission's ongoing 
efforts to promote facilities-based competition in the local telephone 
market. The larger item addresses several issues that are not squarely 
before the Commission in pending proceedings. In particular, this 
Notice addresses access by telecommunications and cable service 
providers to rights-of-way and riser conduit on private premises that 
are owned or controlled by LECs or other utilities.

Background

    2. In the Telecommunications Act of 1996, codified at 47 U.S.C. 151 
et seq., Congress included provisions intended to facilitate 
competition with the incumbent LECs through three entry strategies: 
resale of the incumbent LEC's services, leasing of unbundled network 
elements, and use of a new entrant's own facilities. To date, the 
Commission's efforts to facilitate local competition pursuant to these 
provisions of the Act have generally encompassed all three of these 
means of entry. Carriers who provide service by any of the three means 
of competitive entry have the potential to bring many of the benefits 
of competition to local exchange markets, and the Commission recognizes 
it should continue to facilitate competitive entry by all means. 
However, in the long term, the most substantial benefits to consumers 
will be achieved through facilities-based

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competition. Only facilities-based competitors can break down the 
incumbent LECs' bottleneck control over local networks and provide 
services without having to rely on their rivals for critical components 
of their offerings. Moreover, only facilities-based competition can 
fully unleash competing providers' abilities and incentives to 
innovate, both technologically and in service development, packaging, 
and pricing.

Discussion

    3. In particular, this Notice seeks comment and makes tentative 
conclusions regarding a Petition for Reconsideration filed by WinStar 
of the Local Competition First Report and Order concerning section 224 
of the Communications Act. See 61 FR 45476 (August 29, 1996); 11 FCC 
Rcd 15499; 47 U.S.C. 224. The Notice tentatively concludes that section 
224 encompasses access to locations on private property, including end 
user premises, where a utility has established ownership or control of 
a right-of-way. The Notice also tentatively concludes that section 224 
includes locations on a utility's own property that are used by the 
utility in the manner of a right-of-way in connection with the 
utility's distribution network. In addition, the Notice tentatively 
concludes that a utility must afford access consistent with section 224 
to riser conduit that it may own or control. At the same time, the 
Notice tentatively reaffirms the Commission's prior determination that 
section 224 does not require a utility to afford access to all of its 
real property, such as the roof of its corporate office, unless that 
property constitutes a pole, duct, conduit, or right-of-way. The Notice 
states the Commission's tentative conclusion that these interpretations 
of section 224 are consistent with the plain meaning of the statute. 
The Notice requests comment on these interpretations and on several 
issues related to the implementation of these interpretations, 
including what sets of facts would establish utility ownership or 
control.

Filing Procedures

    4. Pursuant to 47 CFR 1.415, 1.419, interested parties may file 
comments on or before August 13, 1999, and reply comments on or before 
September 3, 1999. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS) or by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24,121 
(1998).
    5. 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. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit 
electronic comments 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 .'' A sample form and directions will be sent 
in reply.
    6. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
All filings must be sent to the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, 445 
12th Street, SW., TW-A325, Washington, DC 20554.
    7. Regardless of whether parties choose to file electronically or 
by paper, parties should also file one copy of any documents filed in 
this docket with the Commission's copy contractor, International 
Transcription Services, Inc., 445 12th Street, SW., CY-B400, 
Washington, DC 20554. Comments and reply comments will be available for 
public inspection during regular business hours in the FCC Reference 
Center, 445 12th Street, SW., Washington, DC 20554.
    8. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with 47 CFR 1.49, and all other 
applicable sections of the Commission's rules. The Commission also 
directs all interested parties to include the name of the filing party 
and the date of the filing on each page of their comments and reply 
comments. All parties are encouraged to utilize a table of contents, 
regardless of the length of their submission.

Initial Regulatory Flexibility Analysis

    9. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and rules proposed in this Third Further Notice of 
Proposed Rulemaking. Written public comments are requested on this 
IRFA. These comments must be filed in accordance with the same filing 
deadlines for comments on the rest of this Third Further Notice of 
Proposed Rulemaking, as set forth in the Filing Procedures section 
above, and they must have a separate and distinct heading designating 
them as responses to the IRFA. The Commission's Office of Public 
Affairs, Reference Operations Division, will send a copy of this Third 
Further Notice of Proposed Rulemaking, including the IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration, in 
accordance with the RFA.

I. Need for and Objectives of the Proposed Rules

    10. We are issuing this Third Further Notice of Proposed Rulemaking 
to seek comment on proposals to facilitate competition with the 
incumbent local exchange carriers (LECs) by competitors who use their 
own end-to-end facilities. Extensive facilities-based competition will 
provide consumers with a choice of telecommunications providers that 
will compete to offer traditional, voice-grade telephone service, as 
well as high-speed data and other advanced services, at reasonable 
prices and with reasonable terms and conditions--a major goal of the 
Telecommunications Act of 1996. We particularly expect this proceeding 
to further the availability of competition to the many consumers and 
businesses that are located in multiple tenant environments, such as 
apartment and office buildings.
    11. Specifically, this Third Further Notice of Proposed Rulemaking 
seeks comment on the following issue: the tentative conclusion that, to 
the extent that LECs or other utilities own or control rooftop and 
other rights-of-way or riser conduit in multiple tenant environments, 
47 U.S.C. 224 requires that they permit competing providers access to 
such rights-of-way or conduit under just, reasonable and 
nondiscriminatory rates, terms, and conditions.

II. Legal Basis

    12. The potential actions on which comment is sought in this Third 
Further Notice of Proposed Rulemaking would be authorized under 
sections 1, 2(a), 4(i), 4(j), 201(b), 224, 303(r), and 332 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i), 
154(j), 201(b), 224, 303(r), and 332, and 47 CFR 1.411 and 1.412.

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III. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply

    13. The RFA requires that an initial 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). For many of the 
entities described below, the SBA has defined small business categories 
through Standard Industrial Classification (``SIC'') codes.
    14. This Third Further Notice of Proposed Rulemaking could result 
in rule changes that, if adopted, would impose requirements on local 
exchange carriers and other utilities. To assist the Commission in 
analyzing the total number of potentially affected small entities, 
commenters are requested to provide estimates of the number of small 
entities that may be affected by any rule changes resulting from this 
Third Further Notice of Proposed Rulemaking.

a. Local Exchange Carriers

    15. The proposal on which comment is sought in this Third Further 
Notice of Proposed Rulemaking, if adopted, would affect small LECs. 
Neither the Commission nor the SBA has developed a small business 
definition specifically for small LECs. The closest applicable 
definition under the SBA rules is for those telephone communications 
companies that are not radiotelephone (wireless) companies. 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. According to November 1997 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 
potential actions discussed in this Third Further Notice of Proposed 
Rulemaking, if adopted.
    16. Above, we have included smaller incumbent LECs in our analysis. 
Although some incumbent LECs 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.''

b. Other Utilities

    17. The proposal in this Third Further Notice of Proposed 
Rulemaking with respect to 47 U.S.C. 224, if adopted, would affect 
utilities other than LECs. Section 224 defines a ``utility'' as ``any 
person who is a local exchange carrier or an electric, gas, water, 
steam, or other public utility, and who owns or controls poles, ducts, 
conduits, or rights-of-way used, in whole or in part, for any wire 
communications. Such term does not include any railroad, any person who 
is cooperatively organized, or any person owned by the Federal 
Government or any State.'' The Commission anticipates that, to the 
extent its section 224 proposal affects non-LEC utilities, the effect 
would be concentrated on electric utilities.
(1) Electric Utilities (SIC 4911, 4931 and 4939)
    18. Electric Services (SIC 4911). The SBA has developed a 
definition for small electric utility firms. The Census Bureau reports 
that a total of 1,379 electric utilities were in operation for at least 
one year at the end of 1992. According to SBA, a small electric utility 
is an entity whose gross revenues do not exceed five million dollars. 
The Census Bureau reports that 447 of the 1,379 firms listed had total 
revenues below five million dollars in 1992.
    19. Electric and Other Services Combined (SIC 4931). The SBA has 
classified this entity as a utility whose business is less than 95% 
electric in combination with some other type of service. The Census 
Bureau reports that a total of 135 such firms were in operation for at 
least one year at the end of 1992. The SBA's definition of a small 
electric and other services combined utility is a firm whose gross 
revenues do not exceed five million dollars. The Census Bureau reported 
that 45 of the 135 firms listed had total revenues below five million 
dollars in 1992.
    20. Combination Utilities, Not Elsewhere Classified (SIC 4939). The 
SBA defines this type of utility as providing a combination of 
electric, gas, and other services which are not otherwise classified. 
The Census Bureau reports that a total of 79 such utilities were in 
operation for at least one year at the end of 1992. According to SBA's 
definition, a small combination utility is a firm whose gross revenues 
do not exceed five million dollars. The Census Bureau reported that 63 
of the 79 firms listed had total revenues below five million dollars in 
1992.
(2) Gas Production and Distribution (SIC 4922, 4923, 4924, 4925 and 
4932)
    21. Natural Gas Transmission (SIC 4922). The SBA's definition of a 
natural gas transmitter is an entity that is engaged in the 
transmission and storage of natural gas. The Census Bureau reports that 
a total of 144 such firms were in operation for at least one year at 
the end of 1992. According to SBA's definition, a small natural gas 
transmitter is an entity whose gross revenues do not exceed five 
million dollars. The Census Bureau reported that 70 of the 144 firms 
listed had total revenues below five million dollars in 1992.
    22. Natural Gas Transmission and Distribution (SIC 4923). The SBA 
has classified this type of entity as a utility that transmits and 
distributes natural gas for sale. The Census Bureau reports that a 
total of 126 such entities were in operation for at least one year at 
the end of 1992. The SBA's definition of a small natural gas 
transmitter and distributor is a firm whose gross revenues do not 
exceed five million dollars. The Census Bureau reported that 43 of the 
126 firms listed had total revenues below five million dollars in 1992.
    23. Natural Gas Distribution (SIC 4924). The SBA defines a natural 
gas distributor as an entity that distributes natural gas for sale. The 
Census Bureau

[[Page 41887]]

reports that a total of 478 such firms were in operation for at least 
one year at the end of 1992. According to the SBA, a small natural gas 
distributor is an entity whose gross revenues do not exceed five 
million dollars. The Census Bureau reported that 267 of the 478 firms 
listed had total revenues below five million dollars in 1992.
    24. Mixed, Manufactured, or Liquefied Petroleum Gas Production and/
or Distribution (SIC 4925). The SBA has classified this type of entity 
as a utility that engages in the manufacturing and/or distribution of 
the sale of gas. These mixtures may include natural gas. The Census 
Bureau reports that a total of 43 such firms were in operation for at 
least one year at the end of 1992. The SBA's definition of a small 
mixed, manufactured or liquefied petroleum gas producer or distributor 
is a firm whose gross revenues do not exceed five million dollars. The 
Census Bureau reported that 31 of the 43 firms listed had total 
revenues below five million dollars in 1992.
    25. Gas and Other Services Combined (SIC 4932). The SBA has 
classified this entity as a gas company whose business is less than 95% 
gas, in combination with other services. The Census Bureau reports that 
a total of 43 such firms were in operation for at least one year at the 
end of 1992. According to the SBA, a small gas and other services 
combined utility is a firm whose gross revenues do not exceed five 
million dollars. The Census Bureau reported that 24 of the 43 firms 
listed had total revenues below five million dollars in 1992.
(3) Water Supply (SIC 4941)
    26. The SBA defines a water utility as a firm who distributes and 
sells water for domestic, commercial and industrial use. The Census 
Bureau reports that a total of 3,169 water utilities were in operation 
for at least one year at the end of 1992. According to SBA's 
definition, a small water utility is a firm whose gross revenues do not 
exceed five million dollars. The Census Bureau reported that 3,065 of 
the 3,169 firms listed had total revenues below five million dollars in 
1992.
(4) Sanitary Systems (SIC 4952, 4953 and 4959)
    27. Sewerage Systems (SIC 4952). The SBA defines a sewage firm as a 
utility whose business is the collection and disposal of waste using 
sewage systems. The Census Bureau reports that a total of 410 such 
firms were in operation for at least one year at the end of 1992. 
According to SBA's definition, a small sewerage system is a firm whose 
gross revenues did not exceed five million dollars. The Census Bureau 
reported that 369 of the 410 firms listed had total revenues below five 
million dollars in 1992.
    28. Refuse Systems (SIC 4953). The SBA defines a firm in the 
business of refuse as an establishment whose business is the collection 
and disposal of refuse ``by processing or destruction or in the 
operation of incinerators, waste treatment plants, landfills, or other 
sites for disposal of such materials.'' The Census Bureau reports that 
a total of 2,287 such firms were in operation for at least one year at 
the end of 1992. According to SBA's definition, a small refuse system 
is a firm whose gross revenues do not exceed six million dollars. The 
Census Bureau reported that 1,908 of the 2,287 firms listed had total 
revenues below six million dollars in 1992.
    29. Sanitary Services, Not Elsewhere Classified (SIC 4959). The SBA 
defines these firms as engaged in sanitary services. The Census Bureau 
reports that a total of 1,214 such firms were in operation for at least 
one year at the end of 1992. According to SBA's definition, a small 
sanitary service firm's gross revenues do not exceed five million 
dollars. The Census Bureau reported that 1,173 of the 1,214 firms 
listed had total revenues below five million dollars in 1992.
(5) Steam and Air Conditioning Supply (SIC 4961)
    30. The SBA defines a steam and air-conditioning supply utility as 
a firm who produces and/or sells steam and heated or cooled air. The 
Census Bureau reports that a total of 55 such firms were in operation 
for at least one year at the end of 1992. According to SBA's 
definition, a steam and air conditioning supply utility is a firm whose 
gross revenues do not exceed nine million dollars. The Census Bureau 
reported that 30 of the 55 firms listed had total revenues below nine 
million dollars in 1992.
(6) Irrigation Systems (SIC 4971)
    31. The SBA defines irrigation systems as firms who operate water 
supply systems for the purpose of irrigation. The Census Bureau reports 
that a total of 297 firms were in operation for at least one year at 
the end of 1992. According to SBA's definition, a small irrigation 
service is a firm whose gross revenues do not exceed five million 
dollars. The Census Bureau reported that 286 of the 297 firms listed 
had total revenues below five million dollars in 1992.

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

    32. This Third Further Notice of Proposed Rulemaking proposes no 
additional reporting, recordkeeping or other compliance measures.

V. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    33. This Third Further Notice of Proposed Rulemaking seeks comment 
on how the proposals set forth could impact regulated entities, 
including small entities. For example, we seek comment on whether an 
overly broad construction of utility ownership or control would impose 
unreasonable burdens on building owners, including small building 
owners, or compromise their ability to ensure the safe use of rights-
of-way or conduit, or engender other practical difficulties. Commenters 
are invited to address the economic impact of all of our proposals on 
small entities and offer any alternatives.

VI. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    34. None.

List of Subjects in 47 CFR Part 1

    Communications common carriers, Telecommunications.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 99-19634 Filed 7-30-99; 8:45 am]
BILLING CODE 6712-01-P