[Federal Register Volume 65, Number 10 (Friday, January 14, 2000)]
[Proposed Rules]
[Pages 2367-2369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-460]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[CC Docket No. 96-98; FCC 99-238]


Revision of the Commission's Rules Specifying the Portions of the 
Nation's Local Telephone Networks that Incumbent Local Telephone 
Companies Must Make Available to Competitors

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document seeks comment from interested parties on issues 
surrounding the ability of competitive carriers to use combinations of 
unbundled network elements as a

[[Page 2368]]

substitute for the incumbent LECs' special access services. It also 
seeks comment on the policy implications, if any, of a significant 
reduction in special access revenues for the Commission's universal 
service program. It also requests additional comment on the Third 
Reconsideration Order and Further Notice of Proposed Rulemaking 
regarding the use of shared transport to originate or terminate 
interstate toll traffic to customers to whom the requesting carrier 
does not provide local exchange service.

DATES: Comments are due on January 19, 2000 and reply comments are due 
on February 18, 2000.

FOR FURTHER INFORMATION CONTACT: Jodie Donovan, Attorney, Policy and 
Program Planning Division, Common Carrier Bureau, (202) 418-1580 or via 
the Internet at JD[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) in Docket No. 96-98, (62 
FR 45611, August 28, 1997), and FCC 99-238, adopted on September 15, 
1999, and released on November 5, 1999. Specifically, it seeks comment 
on the argument that the ``just and reasonable'' terms of section 
251(c) or section 251(g) of the 1996 Act permit the Commission to 
establish a usage restriction on combinations of unbundled loops and 
transport network elements and entrance facilities. It also seeks 
comment on whether there is any other statutory basis for limiting an 
incumbent LEC's obligation to provide combinations of loops and 
transport facilities or entrance facilities as unbundled network 
elements. The Commission acknowledges in the Fourth FNPRM that 
resolution of this issue potentially could have a large financial 
impact on incumbent local exchange carriers, and seeks comment on the 
extent to which any such impact should be considered in reaching a 
decision on this issue. The complete text of this FNRPM 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., and also may be purchased from the Commission's copy 
contractor, International Transcription Services (ITS, Inc.), CY-B400, 
445 12th Street, S.W., Washington, D.C.
    1. Synopsis of the Fourth Further Notice of Proposed Rulemaking
    2. The Commission's First Report and Order in CC Docket No. 96-98 
(61 FR 45476, August 29, 1996) found that for all unbundled network 
elements, including combinations of network elements, incumbent LECs 
may not impose any usage restriction on the use of such elements, or 
combinations thereof. In the Third Reconsideration Order and Further 
Notice of Proposed Rulemaking the Commission required incumbent LECs to 
provide access to shared transport as an unbundled network element in 
conjunction with local and tandem switching. The Commission limited the 
obligation of incumbent LECs to provision shared transport to end users 
to whom the requesting carrier was providing local exchange service. 
The Commission sought comment on whether requesting carriers may use 
unbundled dedicated or shared transport facilities, in conjunction with 
unbundled switching, to originate or terminate interstate toll traffic 
to customers to whom the requesting carrier does not provide local 
exchange service.
    3. The Fourth FNPRM, as modified in the Supplemental Order, seeks 
comment on the argument that the ``just and reasonable'' terms of 
section 251(c) or section 251(g) of the 1996 Act permit the Commission 
to establish a usage restriction on combinations of unbundled loops and 
transport network element and entrance facilities. It also seeks 
comment on whether there is any other statutory basis for limiting an 
incumbent LEC's obligation to provide combinations of loops and 
transport facilities or entrance facilities as unbundled network 
elements. The Commission acknowledges in the Fourth FNPRM that 
resolution of this issue potentially could have a large financial 
impact on incumbent local exchange carriers. It seeks comment on this 
issue, and on the extent to which any such impact should be considered 
in reaching a decision on this issue. It also seeks comment on the 
policy implications, if any, of a significant reduction in special 
access revenues for the Commission's universal service program, and 
urges parties to address what long term solutions may be necessary to 
avoid adverse effects on special access revenues that support universal 
service in light of the fact that it is not clear that the 1996 Act 
permits any restrictions to be placed on the use of unbundled network 
elements.
    4. Because the record developed in the Third Reconsideration Order 
and Further Notice of Proposed Rulemaking is two years old, the 
Commission, in the Fourth FNPRM also invites parties to refresh the 
record on whether requesting carriers may use unbundled dedicated or 
shared transport facilities in conjunction with unbundled switching to 
originate or terminate interstate toll traffic to customers to whom the 
requesting carrier does not provide local exchange service.

Supplemental Initial Regulatory Flexibility Analysis; Supplemental 
Order Regarding Use of Unbundled Network Elements; To Provide 
Exchange Access Services; Initial Regulatory Flexibility Analysis 
(IRFA)

    5. As required by the Regulatory Flexibility Act, the Commission 
has prepared this present Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules proposed in the Supplemental Order. This IRFA 
supplements the IRFA in the Fourth Further Notice of Proposed 
Rulemaking, Implementation of the Local Competition Provisions of the 
Telecommunications Act of 1996, CC Docket No. 96-98, Third Report and 
Order and Fourth Further Notice of Proposed Rulemaking, FCC 99-238, 
paras. 510 through 519 (rel. Nov. 5, 1999) (Local Competition Third R&O 
and Fourth FNPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the Fourth Further Notice of Proposed 
Rulemaking. The Commission will send a copy of the Supplemental Order, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration. See 5 U.S.C. 603(a). In addition, the 
Supplemental Order and IRFA, or summaries thereof, will be published in 
the Federal Register. Id.

(1) Need for, and Objectives of, the Proposed Rules

    6. In the Third R&O, commenters have argued that allowing 
requesting carriers to obtain combinations of loop and transport 
unbundled network elements based on forward-looking cost would provide 
opportunities for arbitrage of special access services. We recognize 
that special access has historically been provided by incumbent local 
exchange carriers at prices that are higher than the unbundled network 
element pricing scheme of section 252(d)(1) in the Telecommunications 
Act of 1996. Accordingly, in the Fourth Further Notice of Proposed 
Rulemaking, as modified by the Supplemental Order, the Commission seeks 
comment on the legal and policy bases for precluding requesting 
carriers from substituting combinations of unbundled network elements 
for special access services. We ask whether there is any basis in the 
statute or our rules under which incumbent LECs could decline to 
provide combinations of loops and

[[Page 2369]]

transport network elements at unbundled network element prices.

(2) Legal Basis

    7. Sections 1 through 4, 10, 201, 202, 251 through 254, 271, and 
303(r) of the Communications Act, as amended, 47 U.S.C. 151 through 
154, 160, 201, 202, 251 through 254, 271, and 303(r).

(3) Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    8. In the FRFA in the Third R&O and in the IRFA in the Fourth 
Further Notice of Proposed Rulemaking, we described in detail the 
entities possibly affected by those items. These entities consist of 
incumbent local exchange carriers and small incumbent local exchange 
carriers, competitive local exchange carriers and competitive access 
providers. We anticipate that the same entities, as well as those 
described below, could be affected by any action taken in response to 
the Fourth Further Notice of Proposed Rulemaking, as modified by the 
Supplemental Order. We therefore incorporate the description and 
estimates used in the FRFA and IRFA in the Third R&O and Fourth FNPRM, 
and add the following descriptions.
    9. Interexchange carriers (IXCs). Neither the Commission nor SBA 
has developed a definition of small entities specifically applicable to 
providers of interexchange services. The closest applicable definition 
under SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of IXCs nationwide of which we are 
aware appears to be the data that we collect annually in connection 
with the TRS Worksheet. According to our most recent data, 130 
companies reported that they were engaged in the provision of 
interexchange services. See Federal Communications Commission, Carrier 
Locator: Interstate Service Providers, Fig. 1 (Jan. 1999). Although it 
seems certain that some of these carriers are not independently owned 
and operated, or have more than 1,500 employees, we are unable at this 
time to estimate with greater precision the number of IXCs that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 130 small entity 
IXCs that may be affected by the decisions and rules adopted in 
response to the Fourth Further Notice of Proposed Rulemaking.

(4) Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    10. If the Commission does not establish any restrictions on the 
use of unbundled network elements or combinations of network elements, 
no additional compliance requirements are anticipated from further 
consideration of this issue. If, however, restrictions on access to 
network elements are imposed, and depending on how the restrictions are 
imposed, interexchange carriers, competitive LECs, CAPs and other 
purchasers of unbundled network elements, including small entities, may 
be subject to additional reporting, recordkeeping and other compliance 
requirements. Incumbent LECs, including small incumbent LECs, would 
also be impacted because they would have to keep track of competitive 
LEC filings and whether the use of the unbundled network element 
changed in such a way that a restriction would attach. If restrictions 
are placed on the use of unbundled network elements or combinations of 
such elements, compliance with these requests may require the use of 
engineering, technical, operational, accounting, billing, and legal 
skills.

(5) Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    11. If requesting carriers can substitute combinations of unbundled 
network elements for special access service, incumbent LECs, including 
small entities, may be significantly economically impacted. On the 
other hand, substituting combinations of unbundled network elements for 
special access services could benefit competitive LECs, CAPs, and other 
purchasers of unbundled network elements. The Commission will evaluate 
in this proceeding whether there are legal grounds for restricting such 
access. If no such grounds exist, and instead if the statute requires 
unrestricted access to these unbundled network elements or 
combinations, then the Commission will have no alternative other than 
implementation of the statutory requirements for unrestricted access.

(6) Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    12. None.

Ordering Clauses

    13. The Commission will send a copy of this Fourth Further Notice 
of Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.
    14. It is ordered that the Commission's Consumer Information 
Bureau, Reference Information Center, shall send a copy of the 
Supplemental Order, including the Final Regulatory Flexibility 
Certification and the Supplemental Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-460 Filed 1-13-00; 8:45 am]
BILLING CODE 6712-01-P