[Federal Register Volume 66, Number 59 (Tuesday, March 27, 2001)]
[Rules and Regulations]
[Pages 16611-16617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7496]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CC Docket No. 96-238; FCC 01-78]


Procedures To Be Followed When Formal Complaints Are Filed 
Against Common Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document resolves petitions for reconsideration and/or 
clarification concerning various aspects of the First Report and Order 
and Second Report & Order previously issued in this proceeding. As 
described, the Commission denies all of the petitions for 
reconsideration and one of the two requests for clarification because 
they present issues fully addressed in the prior orders or because we 
reject the positions taken by the petitioners. We grant one petition 
for clarification to clarify that, before a matter is accepted onto the 
Accelerated Docket, the parties must participate in staff-supervised 
settlement negotiations. Moreover, on reconsideration on our own 
motion, we modify or clarify certain procedural rules, consistent with 
our experience in implementing those rules.

DATES: These rules contain information collections that have not yet 
been approved by OMB. The Commission will release a document in the 
Federal Register announcing the effective date of the rules. Written 
comments by the public on the modified information collections are due 
on or before April 26, 2001. Written comments by OMB on

[[Page 16612]]

the modified information collections are due on or before May 29, 2001.

FOR FURTHER INFORMATION CONTACT: Gilberto de Jesus, Enforcement Bureau, 
at (202) 418-7331.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission''s Order on Reconsideration, FCC 01-78, in CC 
Docket No. 96-238, adopted on February 26, 2001, and released on March 
7, 2001. The full text of this Order on Reconsideration is available 
for inspection and copying during normal business hours in the FCC 
Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 
20554. The complete text may be purchased from the Commission''s copy 
contractor, International Transcription Service, Inc., 1231 20th 
Street, NW., Washington, DC 20037. The full text may also be downloaded 
at: http://www.fcc.gov. Alternative formats are available to persons 
with disabilities by contacting Martha Contee at (202) 418-0260 or TTY 
(202) 418-2555.

Synopsis of the Order on Reconsideration

    (1) In the Order on Reconsideration, the Federal Communications 
Commission (Commission) considered petitions for reconsideration and/or 
clarification of various parts of the First Report and Order (12 FCC 
Rcd 22497 (1997), 63 FR 990 (January 7, 1997)) and Second Report & 
Order (13 FCC Rcd 17018 (1998), 63 FR 41433 (August 4, 1998)) issued in 
this proceeding. In the First Report and Order, the Commission adopted 
rules designed, inter alia, to expedite the resolution of formal 
complaints filed against common carriers pursuant to section 208 of the 
Communications Act of 1934, as amended (``Act''). In the Second Report 
& Order, the Commission established ``Accelerated Docket'' procedures 
to help spur the development of competition by adjudicating certain 
complaints within relatively short timeframes.
    (2) Four parties filed petitions for reconsideration and/or 
clarification of various rules adopted in the First Report and Order. 
MCI Telecommunications Corp. (``MCI'') requested reconsideration of 
certain discovery rules. AirTouch Paging (``AirTouch''), America's 
Carriers Telecommunication Association (``ACTA''), and MCI requested 
that the Commission reconsider its interpretation of the scope of the 
new five-month deadline for resolving certain formal complaints set 
forth in section 208(b)(1) of the Act. ACTA proposed additional 
requirements regarding the service of complaints. AT&T Corp. (``AT&T'') 
requested that the Commission clarify that pre-filing settlement 
letters should be sent to certain representatives of the defendant. 
Bell Atlantic Telephone Companies (``Bell Atlantic''), BellSouth 
Corporation (``BellSouth''), and Telecommunications Resellers 
Association (``TRA'') filed comments in response to the petitions.
    (3) One party, BellSouth, filed a petition for reconsideration and 
clarification of the Accelerated Docket rules adopted in the Second 
Report & Order. BellSouth requested that the Commission reconsider: (1) 
the rule requiring the automatic production of documents; and (2) the 
ex parte implications of the requirement for staff-supervised, pre-
filing settlement negotiations. BellSouth also requested that the 
Commission routinely grant requests for extensions of time in 
Accelerated Docket proceedings. BellSouth also sought clarification on 
whether staff-supervised pre-filing meetings are required for all 
Accelerated Docket matters. SBC Communications Inc. (``SBC'') and TRA 
filed comments in response to BellSouth's petition.
    (4) Elimination of Self-Executing Discovery. The Commission rejects 
MCI's request that we reinstate the former rules granting self-
executing discovery and permitting ``extraordinary'' discovery. The 
Commission fully addressed this issue in the First Report and Order, 
and neither the petitioners nor the commenters offer any new 
information or arguments on this issue to persuade us that our decision 
was erroneous. Moreover, the new discovery rules have worked well in 
streamlining proceedings while allowing the parties access to 
sufficient information to support their claims and defenses. Thus, the 
Commission denies MCI's petition for reconsideration of the discovery 
rules in formal complaint proceedings.
    (5) Section 208(b)(1) of the Act. AirTouch, ACTA, and MCI urge the 
Commission to interpret section 208(b)(1) of the Act so that the five-
month deadline provided therein will apply to all formal complaints 
filed pursuant to section 208, not just to formal complaints concerning 
the lawfulness of tariff provisions. The Commission fully addressed 
this issue in the First Report and Order, and neither the petitioners 
nor the commenters offer any new arguments or information to persuade 
us that our decision was erroneous. Thus, the Commission denies 
petitioners' request for reconsideration of our interpretation of 
section 208(b)(1).
    (6) Rules Regarding Service of Process. The Commission adopted 
rules requiring each carrier to designate an agent in the District of 
Columbia to accept service of Commission process on behalf of the 
carrier, and permitting each carrier to designate other service agents 
outside the District of Columbia. Moreover, the Commission adopted a 
rule requiring the complainant to serve the complaint by hand delivery 
on either the named defendant or one of the named defendant's 
registered agents. ACTA maintains that the complaint should also be 
served, by overnight mail or facsimile, on any other designated service 
agents. We decline to adopt such a requirement. Additional notification 
is not necessary to enable defendants to file answers in a timely 
manner and would impose on a complainant an unduly burdensome task of 
identifying and serving agents throughout the country. Thus, the 
Commission denies ACTA's petition for reconsideration of our rules 
regarding service of process.
    (7) Automatic Production of Documents in Accelerated Docket 
Proceedings. BellSouth, supported by SBC, requests reconsideration of 
the Accelerated Docket rules requiring automatic production of 
documents, especially by defendants. The Commission fully addressed 
this issue in the Second Report & Order, and the parties offer no new 
information or arguments to persuade us that the decision was 
erroneous. Thus, the Commission denies reconsideration of the rules 
requiring automatic production of documents in Accelerated Docket 
proceedings.
    (8) Extensions of Time in Accelerated Docket Proceedings. We reject 
BellSouth's and SBC's contention that the Commission should routinely 
grant requests for extensions of time in Accelerated Docket 
proceedings. Parties should not ordinarily need extensions of time, 
because they should have a sufficient amount of time during pre-filing 
discussions to begin preparing their cases in the event a complaint 
subsequently is filed on the Accelerated Docket. Routinely granting 
extensions of time in Accelerated Docket proceedings would eviscerate 
the expedited mechanism that the Commission crafted. In any exceptional 
case that turns out to be unexpectedly complicated, the staff has 
discretion to grant extensions of time or modify the process in other 
respects. Thus, the Commission denies reconsideration of the time 
requirements for the Accelerated Docket.
    (9) Ex Parte Rules and Accelerated Docket Pre-Filing Procedures. We 
reject BellSouth's and SBC's concerns

[[Page 16613]]

regarding the propriety of ``ex parte'' discussions in the pre-filing 
stage of cases being considered for the Accelerated Docket. As the 
Commission explained in the Second Report & Order, our ex parte rules 
restrict the actions of parties only after a complaint has been filed. 
Staff-supervised settlement discussions that take place prior to the 
filing of a complaint do not implicate the ex parte rules. Moreover, 
staff involvement during pre-filing meetings will not taint the 
complaint process or have a chilling effect on settlement discussions. 
It is the Commission's role to act as an impartial entity during all 
formal complaint proceedings, including Accelerated Docket proceedings. 
We also are not persuaded by BellSouth's argument that staff members 
who have contact with parties during the pre-filing phase of a 
proceeding could later become witnesses subject to deposition. Staff 
would not permit any party to abuse the Commission's rules by 
attempting to introduce into complaint proceedings individual 
representations made in settlement discussions. Thus, the Commission 
denies reconsideration of the pre-filing requirements for the 
Accelerated Docket.
    (10) AT&T's Petition for Clarification of the Formal Complaint 
Rules Regarding Pre-Filing Letters. In the First Report and Order, the 
Commission required complainants to engage in good faith settlement 
discussions with the defendant prior to filing a formal complaint, 
including mailing to the defendant a certified letter outlining the 
allegations that form the basis of the complaint it anticipates filing 
with the Commission. AT&T argues that the Commission should clarify 
that the pre-filing letter must be sent to: (1) The defendant's 
registered agent in the District of Columbia, and (2) the defendant's 
representative that, to the best of the complainant's knowledge, has 
decision making authority over the disputed matters or has been 
designated as the defendant's attorney regarding those matters. We 
decline to clarify the rules in such a manner. The Commission 
deliberately left the determination of the appropriate recipient of the 
letter to the discretion of the complainant, who must exercise such 
discretion reasonably and in good faith. If the complainant does know 
who the defendant has designated as the decision maker or the attorney 
regarding the disputed matter, we would generally expect the 
complainant to serve that person. We also share TRA's concerns that 
AT&T's proposal could make a complainant's choice of correspondent a 
matter of routine contention. We do believe, however, that our service 
rule regarding pre-filing settlement letters should mirror our rule 
regarding service of complaints. The latter rule permits a complainant 
to serve a complaint on either ``the named defendant or one of the 
named defendant's registered agents for service of process * * *.'' (47 
CFR 1.735(d)). Therefore, to promote consistency and thereby minimize 
confusion, we amend Sec. 1.721(a)(8) of our rules to permit a 
complainant to serve the pre-filing settlement letter on the defendant 
carrier or one of the defendant's registered agents for service of 
process. (See Sec. 1.721(a)(8)).
    (11) BellSouth's Petition for Clarification Regarding Accelerated 
Docket Pre-Filing Settlement Conferences. We grant BellSouth's request 
for clarification of whether every Accelerated Docket proceeding must 
involve staff-supervised, pre-filing settlement conferences. We clarify 
that, before a matter is accepted onto the Accelerated Docket, the 
parties must participate in staff-supervised settlement negotiations. 
This does not mean, however, that all requests for inclusion on the 
Accelerated Docket will result in a staff-supervised settlement 
conference. Instead, only those matters actually under active 
consideration for inclusion on the Accelerated Docket must ultimately 
have such a conference. We also strongly encourage disputing parties to 
contact Commission staff to assist in the resolution of matters prior 
to filing any formal complaint, regardless of whether the parties wish 
to have such complaint placed on the Accelerated Docket. Thus, the 
Commission grants BellSouth's Petition for Clarification regarding 
Accelerated Docket pre-filing settlement conferences.
    (12) The Commission has closely monitored the effectiveness of the 
amended formal complaint rules. We believe, on reconsideration on our 
own motion, that a few additional modifications to the rules are 
appropriate to promote further the expedited resolution of formal 
complaints.
    (13) The Rule Governing Answers Is Modified. We amend Sec. 1.724(d) 
of our rules, which currently states that ``averments in a pleading to 
which a responsive pleading is required, other than those as to the 
amount of damages, are deemed to be admitted when not denied in this 
responsive pleading.'' (47 CFR 1.724 (d)(emphasis added).) We find that 
requiring a defendant to respond specifically to all averments in a 
complaint, including those regarding damage amounts, will enhance the 
ability of Commission staff to resolve complaints more efficiently. 
Accordingly, we amend Sec. 1.724(d) to specify that defendants are 
required to respond to any and all averments raised in both initial and 
supplemental complaints, including averments relating to damage 
amounts. Failure by the defendant to respond to any averment in the 
complaint or supplemental complaint will result in the averment being 
admitted as true. In addition, we amend Sec. 1.724(b) to require that 
denials based on information and belief are expressly prohibited unless 
made in good faith and accompanied by an affidavit explaining the basis 
for the defendant's belief and why the defendant could not reasonably 
ascertain the facts from the complainant or any other source. (See 
Sec. 1.724(b).) This new requirement regarding denials in answers 
mirrors an existing requirement regarding averments in complaints. (47 
CFR 1.721(a)(5).) This will promote diligence on defendants' part in 
gathering all of the relevant facts and documentation, and thereby 
expedite the development of a complete and substantial record on which 
the Commission can resolve the dispute.
    (14) The Rule Governing Replies Is Modified. We amend Sec. 1.726(a) 
of our rules, which currently permits a complainant to include in a 
reply only ``statements of relevant, material facts that shall be 
responsive to only those specific factual allegations made by the 
defendant in support of its affirmative defenses.'' (47 CFR 1.726(a)) 
(emphasis added).) We find that permitting a complainant to include in 
the reply both factual statements and legal arguments that respond to 
both the factual allegations and the legal arguments made by a 
defendant in support of affirmative defenses will enhance the ability 
of Commission staff to resolve complaints more efficiently. Therefore, 
we amend Sec. 1.726(a) to permit complainants to include in replies 
both factual statements and legal arguments that respond to both the 
factual allegations and the legal arguments made by defendants in 
support of their affirmative defenses. (See Sec. 1.726(a).)
    (15) The Payment Verification Requirement is Modified. In the First 
Report and Order, the Commission adopted a rule requiring the 
complainant to include with the complaint a ``verification of the 
filing payment * * *.'' (12 FCC Rcd at 22524, para. 56). To implement 
this rule, the Commission explained that a complainant should attach to 
its complaint a photocopy of its fee payment. We have found, however, 
that this photocopy requirement does not

[[Page 16614]]

serve its verification purpose in all cases. This is largely because, 
where the complainant pays by wire transfer or with a credit card, 
there exists no paper record of the transaction that can be 
contemporaneously photocopied. Thus, in order to create a uniform 
method of payment verification that will work in all cases, we amend 
the payment verification requirement set forth in the First Report and 
Order and Sec. 1.721(a)(13) as follows: The complaint shall include a 
declaration, under penalty of perjury, by complainant or complainant's 
counsel describing the amount, method, and date of the complainant's 
payment of the filing fee, and the complainant's 10-digit FCC 
Registration Number (FRN), if any. (See Sec. 1.721(a)(13).)
    (16) The Rules Governing Supplemental Complaints for Damages Are 
Modified. Our rules enable complainants, and Commission staff under 
certain circumstances, to bifurcate formal complaints into two separate 
complaints: (1) An initial complaint for liability and any prospective 
relief, and (2) a supplemental complaint for damages. Our experience in 
implementing the rules regarding supplemental complaints for damages 
indicates that certain revisions are appropriate to clarify and modify 
how the supplemental complaint process operates.
    (17) First, we amend Sec. 1.722 of our rules (47 CFR 1.722), to 
state expressly what the Commission concluded in the First Report and 
Order: In a proceeding to which no statutory deadline applies, the 
Commission may, on its own motion, bifurcate the proceeding so that 
only liability and prospective relief issues are before the Commission 
initially, and damage issues come before the Commission only if the 
complainant prevails and later chooses to initiate a separate 
proceeding seeking damages. (See Sec. 1.722(c).) Consistent with that 
amendment, we further amend Sec. 1.722 of our rules to clarify that the 
procedures set forth therein apply to all supplemental complaints for 
damages, regardless of whether bifurcation was made upon the 
Commission's own motion or the complainant's request. (See 
Sec. 1.722(d) through 1.722(i).)
    (18) Second, Sec. 1.722(b)(1) presently permits a prevailing 
complainant to file a subsequent complaint for damages arising from the 
same facts alleged in the first complaint, even if the first complaint 
made no mention whatsoever of any intent to seek damages. Upon further 
consideration of this provision, we believe that it should be stricken, 
because it conflicts with the principles of efficiency, notice, and 
fairness to defendants that underlie the doctrine of res judicata. To 
promote those principles, defendants and the Commission should know as 
soon as possible whether a dispute may ultimately involve a resolution 
of damages. Therefore, we amend Sec. 1.722 of our rules to state that, 
in order to preserve the option of filing a supplemental complaint for 
damages, a complainant must include in its initial complaint a notice 
of intent to file such a supplemental complaint, in accordance with the 
requirements of our rules. (See Sec. 1.722(d).)
    (19) Third, we amend Sec. 1.722 to clarify that, except where 
otherwise stated, the rules governing initial formal complaint 
proceedings govern supplemental complaint proceedings, as well. (See 
Sec. 1.722(j)). Fourth, our experience in applying Sec. 1.722 of our 
rules reveals that its wording can be improved. Accordingly, we modify 
much of the language of Sec. 1.722, intending to clarify rather than 
change its meaning (except the intended changes described previously). 
(See Sec. 1.722(a)-(i).)
    (20) Other rules require revisions, as well, because our experience 
with supplemental complaints indicates that some confusion exists as to 
whether, and to what extent, the format and content requirements for 
initial complaints apply to supplemental complaints for damages. We now 
recognize that our current rules seek more and different information 
than is needed to evaluate a supplemental complaint for damages. 
Accordingly, we amend, in relevant part, Secs. 1.721 and 1.735 of our 
rules to specify what is required in supplemental damage complaints. As 
described further, these changes will streamline the supplemental 
complaint process by eliminating unnecessary or redundant information, 
reducing paperwork, and clarifying that additional filing fees are not 
required.
    (21) We amend Sec. 1.735 of our rules to make clear that (1) a 
filing fee need not be paid in conjunction with filing a supplemental 
complaint for damages pursuant to Sec. 1.722 of our rules, and (2) a 
complainant may serve a supplemental complaint for damages in 
accordance with Sec. 1.735(f) rather than Sec. 1.735(d) of our rules. 
(See Sec. 1.735(g).) Moreover, we amend the rules so that 
Secs. 1.720(b) and 1.721(a)(4), (5), (8), (9), (12), and (13) do not 
apply to supplemental complaints for damages filed pursuant to 
Sec. 1.722 of our rules. (See Sec. 1.721(e)(i).) Thus, supplemental 
complaints for damages are not required to include the following: (1) A 
full description of the statutory violation described previously in the 
initial complaint; (2) a statement regarding whether a separate action 
has been filed with the Commission, any court, or another government 
agency based on the same claim; (3) a formal complaint intake form; or 
(4) verification of the payment of a filing fee.
    (22) We further amend our rules to make clear, however, that a 
supplemental complaint for damages filed pursuant to Sec. 1.722 must 
provide a complete statement of facts which, if proven true, would 
support the complainant's calculations of damages in each category of 
damages for which recovery is sought. This statement of facts must 
include a detailed explanation of all matters relevant to the 
calculation of damages and the nature of any injury alleged to have 
been sustained by the complainant. Moreover, relevant affidavits and 
documentation must support this statement of facts. (See 
Sec. 1.721(e)(ii).)
    (23) In addition, although we change the rules so that the 
requirement of pre-filing settlement efforts set forth in 
Sec. 1.721(a)(8) does not apply to supplemental complaints, we add a 
new rule imposing essentially the same requirement on supplemental 
complainants tailored to the particular deadlines applicable to 
supplemental complaints. Specifically, the complainant must mail to 
each defendant, within 30 days of the release of the order on 
liability, a certified letter describing, inter alia, the basis for the 
damages to be sought in a supplemental complaint. (See 
Sec. 1.721(e)(iii).) We believe that the order on liability usually 
will give the parties a strong incentive to resolve on their own any 
outstanding damages issues, and a 30-day deadline for formally 
initiating settlement efforts should ensure that the parties have 
sufficient time to reach a resolution before the 60-day deadline for 
filing a supplemental complaint. Finally, we note that supplemental 
complaints must continue to meet the requirements of Sec. 1.722 of our 
rules.
    (24) The Parties' Initial Pleadings Must Contain All of the 
Parties' Supporting Facts, Legal Arguments, and Documentation. In the 
First Report and Order, the Commission explained at length that, under 
the amended formal complaint rules, the parties' initial pleadings 
should not merely provide bare notice of their claims and defenses, but 
rather should set forth in detail all of the parties' supporting facts, 
legal arguments, affidavits, and documentation. We reiterate that point 
here. Complaints and answers filed at the Commission pursuant to 
section 208

[[Page 16615]]

of the Act should not resemble their counterparts filed in federal 
courts under Fed. R. Civ. P. 8. Instead, if anything, complaints and 
answers filed here should resemble a combination of complaints/answers 
filed under Fed. R. Civ. P. 8, motions to dismiss (and oppositions 
thereto) filed under Fed. R. Civ. P. 12(b), and motions for summary 
judgment (and oppositions thereto) filed under Fed. R. Civ. P. 56. In 
other words, the parties' initial pleadings should contain every 
allegation, fact, argument, affidavit, and supporting paper that the 
parties can muster at that time. Moreover, the parties should support 
each and every factual statement in their initial pleadings (and in 
their replies and briefs) with a specific citation to an affidavit(s) 
and to all other relevant portions of the record. When parties submit 
such comprehensive initial pleadings, the Commission can resolve the 
parties' disputes more expeditiously.
    (25) Certain Parties' Practices in Submitting Answers Merit a Few 
Additional Observations. First, our rules require the answer to ``admit 
or deny the averments on which the complainant relies and state in 
detail the basis for admitting or denying such averment.'' (47 CFR 
1.724(b) (emphasis added).) Bald denials and/or refraining from 
responding to a complaint's averment on the grounds that the averment 
asserts a legal conclusion are improper. Denials in answers must be 
accompanied by a thorough explanation of their basis; and if a 
complaint asserts a legal conclusion, then the answer's corresponding 
denial should fully explain why the legal conclusion is erroneous. 
Moreover, in its answer, a defendant must provide affidavits (as well 
as all supporting documents, data compilations, and tangible things) to 
support all of the facts on which the answer relies.
    (26) Motions To Dismiss Are Rarely Necessary. Some defendants file 
motions to dismiss as separate pleadings. We find this practice of 
filing a separate motion to dismiss to be unnecessary in virtually all 
cases. The grounds for a motion to dismiss ordinarily should be raised 
in the answer alone rather than in a separate pleading.
    (27) The Joint Statement Filed Before the Initial Status Conference 
Must Be Detailed and Comprehensive. Parties to a formal complaint must 
submit a joint statement of stipulated facts, disputed facts, key legal 
issues, discovery matters, and proposed pleading schedules two days 
prior to a staff-supervised, initial status conference. The purpose of 
this procedure is to promote settlement, narrow and sharpen the 
relevant factual and legal issues, and otherwise expedite the 
Commission's resolution of the dispute. In some cases, however, parties 
have frustrated the accomplishment of this goal by submitting separate 
statements or joint statements that are vague, cursory, and/or 
incomplete. We reiterate here that the parties must together file a 
single, joint statement that is comprehensive, detailed, and specific, 
providing a thorough description of all stipulated and disputed facts, 
as well as a productive summary of key legal issues. Finally, in our 
view, if the parties work together with sufficient diligence, they 
should be able to stipulate to the bulk of relevant facts and key legal 
issues in most cases. Therefore, we urge parties to devote substantial 
and cooperative effort in arriving at stipulated facts and key legal 
issues.
    (28) We Encourage Disputing Parties To Seek Mediation From 
Commission Staff Before Filing A Formal Complaint. Parties seeking 
placement of their dispute on the Accelerated Docket must participate 
in a staff-supervised, pre-filing settlement negotiation meeting. These 
pre-filing discussions have resulted in a substantial number of 
disputes being resolved without the parties having to resort to 
litigation. In light of the staff's success in helping parties achieve 
settlements, we highly recommend that parties avail themselves of the 
opportunity to use staff-supervised mediation and settlement 
negotiations prior to filing any formal complaint.
    (29) The Commission Generally Will Rule on Interlocutory Appeals of 
Staff Rulings Only in Conjunction with Ruling on the Merits. We 
emphasize that the Commission generally will not consider applications 
for review of interlocutory staff rulings pursuant to Sec. 1.115 of the 
Commission's rules (47 CFR 1.115) in the context of section 208 
complaint proceedings except in conjunction with ruling on the merits 
of the complaint. In the event, however, that the ruling on the merits 
of the complaint is made pursuant to delegated authority, the 
application for review will not be considered until after the 
Enforcement Bureau, acting on delegated authority, has issued its final 
ruling on the merits of the complaint. This will maximize the efficient 
use of limited administrative resources.

Procedural Matters

Paperwork Reduction Act of 1995

    (30) This Order on Reconsideration has been analyzed with respect 
to the Paperwork Reduction Act of 1995 (the ``1995 Act'') and found to 
impose slightly modified information collection requirements on the 
public.\1\ These rules contain information collections that have not 
yet been approved by OMB. The Commission will release a document in the 
Federal Register announcing the effective date of the rules.
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    \1\ See Paras. 18, 19, 20, 21, 24, 28, 29, supra.
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    (31) Written comments by the public on the modified information 
collections are due on or before April 26, 2001. Written comments by 
OMB on the modified information collections are due on or before May 
29, 2001. In addition to filing comments with the Secretary, a copy of 
any comments on the modified information collections contained herein 
should be submitted to Judy Boley, Federal Communications Commission, 
Room 1-C804, 445 12th Street, SW., Washington, DC 20554, or via the 
Internet to [email protected] and to Edward Springer, OMB Desk Officer, 
Room 10236 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the 
Internet to [email protected].

Regulatory Flexibility Act

    (32) The Regulatory Flexibility Act (``RFA'') \2\ requires that an 
agency prepare a regulatory flexibility analysis for notice-and-comment 
rulemaking proceedings. In the First Report and Order and Second Report 
& Order, the Commission included a Final Regulatory Flexibility 
Analysis \3\ and a supplemental Final Regulatory Flexibility 
Analysis,\4\ respectively. In this Order, however, neither the 
clarifications to the rules nor the rule changes adopted on our own 
motion require a regulatory flexibility analysis.
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    \2\ The RFA, see 5 U.S.C. Sec. 601 et seq., has been amended by 
the Contract with America Advancement Act of 1996, Pub. L. No. 104-
121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the CWAAA is the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(``SBREFA'').
    \3\ See First Report and Order, 12 FCC Rcd at 22619-33, 
Paras. 333-340.
    \4\ See Second Report & Order, 13 FCC Rcd at 17073-17085, 
Paras. 108-134.
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Ordering Clauses

    (33) Pursuant to sections 1, 4(i), 4(j), 201-205, 208, 260, 271, 
274, and 275 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 154(i), 154(j), 201-205, 208, 260, 271, 274, and 275, and 
Sec. 1.429 of the Commission's rules, 47 CFR 1.429, that the petitions 
for reconsideration filed by AirTouch Paging, America's Carriers 
Telecommunication Association, and MCI Telecommunications Corporation 
are Denied, the Petition for Clarification filed by AT&T Corporation is 
Denied,

[[Page 16616]]

and the Petition for Reconsideration and Clarification filed by 
BellSouth Corporation is Granted in Part and Denied in Part.
    (34) Sections 1.721, 1.722, 1.724, 1.726, and 1.735 of the 
Commission's rules, 47 CFR 1.721, 1.722, 1.724, 1.726, and 1.735, Are 
Amended as set forth in the rules changes. These rules contain 
information collections that have not yet been approved by OMB. The 
Commission will release a document in the Federal Register announcing 
the effective date of the rules.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Part 1 of Title 47 of the Code of Federal Regulations is amended as 
follows:
    1. The authority citation for part 1 continues to read:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 
and 325(e).

    2. In Sec. 1.721, paragraphs (a) introductory text, (a)(8), and 
(a)(13) are revised, paragraph (e) is redesignated as paragraph (f) and 
a new (e) is added to read as follows:


Sec. 1.721  Format and content of complaints.

    (a) Subject to paragraph (e) of this section governing supplemental 
complaints filed pursuant to Sec. 1.722, and paragraph (f) of this 
section governing Accelerated Docket proceedings, a formal complaint 
shall contain:
* * * * *
    (8) Certification that the complainant has, in good faith, 
discussed or attempted to discuss the possibility of settlement with 
each defendant prior to the filing of the formal complaint. Such 
certification shall include a statement that, prior to the filing of 
the complaint, the complainant mailed a certified letter outlining the 
allegations that form the basis of the complaint it anticipated filing 
with the Commission to the defendant carrier or one of the defendant's 
registered agents for service of process that invited a response within 
a reasonable period of time and a brief summary of all additional steps 
taken to resolve the dispute prior to the filing of the formal 
complaint. If no additional steps were taken, such certificate shall 
state the reason(s) why the complainant believed such steps would be 
fruitless;
* * * * *
    (13) A declaration, under penalty of perjury, by the complainant or 
complainant's counsel describing the amount, method, and date of the 
complainant's payment of the filing fee required under 
Sec. 1.1105(1)(c) or (d), and the complainant's 10-digit FCC 
Registration Number, if any; and
* * * * *
    (e) Supplemental complaints. (1) Supplemental complaints filed 
pursuant to Sec. 1.722 shall conform to the requirements set out in 
this section and Sec. 1.720, except that the requirements in 
Secs. 1.720(b), 1.721(a)(4), (a) (5), (a)(8), (9), (a)(12), and (a)(13) 
shall not apply to such supplemental complaints;
    (2) In addition, supplemental complaints filed pursuant to 
Sec. 1.722 shall contain a complete statement of facts which, if proven 
true, would support complainant's calculation of damages for each 
category of damages for which recovery is sought. All material facts 
must be supported, pursuant to the requirements of Sec. 1.720(c) and 
paragraph (a)(11) of this section, by relevant affidavits and other 
documentation. The statement of facts shall include a detailed 
explanation of the matters relied upon, including a full identification 
or description of the communications, transmissions, services, or other 
matters relevant to the calculation of damages and the nature of any 
injury allegedly sustained by the complainant. Assertions based on 
information and belief are expressly prohibited unless made in good 
faith and accompanied by an affidavit explaining the basis for the 
complainant's belief and why the complainant could not reasonably 
ascertain the facts from the defendant or any other source;
    (3) Supplemental complaints filed pursuant to Sec. 1.722 shall 
contain a certification that the complainant has, in good faith, 
discussed or attempted to discuss the possibility of settlement with 
respect to damages for which recovery is sought with each defendant 
prior to the filing of the supplemental complaint. Such certification 
shall include a statement that, no later than 30 days after the release 
of the liability order, the complainant mailed a certified letter to 
the primary individual who represented the defendant carrier during the 
initial complaint proceeding outlining the allegations that form the 
basis of the supplemental complaint it anticipates filing with the 
Commission and inviting a response from the carrier within a reasonable 
period of time. The certification shall also contain a brief summary of 
all additional steps taken to resolve the dispute prior to the filing 
of the supplemental complaint. If no additional steps were taken, such 
certification shall state the reason(s) why the complainant believed 
such steps would be fruitless.
* * * * *
    3. Section 1.722 is revised to read as follows:


Sec. 1.722  Damages.

    (a) If a complainant wishes to recover damages, the complaint must 
contain a clear and unequivocal request for damages.
    (b) If a complainant wishes a determination of damages to be made 
in the same proceeding as the determinations of liability and 
prospective relief, the complaint must contain the allegations and 
information required by paragraph (h) of this section.
    (c) Notwithstanding paragraph (b) of this section, in any 
proceeding to which no statutory deadline applies, if the Commission 
decides that a determination of damages would best be made in a 
proceeding that is separate from and subsequent to the proceeding in 
which the determinations of liability and prospective relief are made, 
the Commission may at any time order that the initial proceeding will 
determine only liability and prospective relief, and that a separate, 
subsequent proceeding initiated in accordance with paragraph (e) of 
this section will determine damages.
    (d) If a complainant wishes a determination of damages to be made 
in a proceeding that is separate from and subsequent to the proceeding 
in which the determinations of liability and prospective relief are 
made, the complainant must:
    (1) Comply with paragraph (a) of this section, and
    (2) State clearly and unequivocally that the complainant wishes a 
determination of damages to be made in a proceeding that is separate 
from and subsequent to the proceeding in which the determinations of 
liability and prospective relief will be made.
    (e) If a complainant proceeds pursuant to paragraph (d) of this 
section, or if the Commission invokes its authority under paragraph (c) 
of this section, the complainant may initiate a separate proceeding to 
obtain a determination of damages by filing a supplemental complaint 
that complies with Sec. 1.721(e) and paragraph (h) of this section 
within sixty days after public notice (as defined in Sec. 1.4(b) of 
this chapter) of a decision that contains a finding of liability on the 
merits of the original complaint.
    (f) If a complainant files a supplemental complaint for damages in 
accordance with paragraph (e) of this section, the supplemental 
complaint

[[Page 16617]]

shall be deemed, for statutory limitations purposes, to relate back to 
the date of the original complaint.
    (g) Where a complainant chooses to seek the recovery of damages 
upon a supplemental complaint in accordance with the requirements of 
paragraph (e) of this section, the Commission will resolve the 
separate, preceding liability complaint within any applicable complaint 
resolution deadlines contained in the Act.
    (h) In all cases in which recovery of damages is sought, it shall 
be the responsibility of the complainant to include, within either the 
complaint or supplemental complaint for damages filed in accordance 
with paragraph (e) of this section, either:
    (1) A computation of each and every category of damages for which 
recovery is sought, along with an identification of all relevant 
documents and materials or such other evidence to be used by the 
complainant to determine the amount of such damages; or
    (2) An explanation of:
    (i) The information not in the possession of the complaining party 
that is necessary to develop a detailed computation of damages;
    (ii) Why such information is unavailable to the complaining party;
    (iii) The factual basis the complainant has for believing that such 
evidence of; damages exists;
    (iv) A detailed outline of the methodology that would be used to 
create a computation of damages with such evidence.
    (i) Where a complainant files a supplemental complaint for damages 
in accordance with paragraph (e) of this section, the following 
procedures may apply:
    (1) Issues concerning the amount, if any, of damages may be either 
designated by the Enforcement Bureau for hearing before, or, if the 
parties agree, submitted for mediation to, a Commission Administrative 
Law Judge. Such Administrative Law Judge shall be chosen in the 
following manner:
    (i) By agreement of the parties and the Chief Administrative Law 
Judge; or
    (ii) In the absence of such agreement, the Chief Administrative Law 
Judge shall designate the Administrative Law Judge.
    (2) The Commission may, in its discretion, order the defendant 
either to post a bond for, or deposit into an interest bearing escrow 
account, a sum equal to the amount of damages which the Commission 
finds, upon preliminary investigation, is likely to be ordered after 
the issue of damages is fully litigated, or some lesser sum which may 
be appropriate, provided the Commission finds that the grant of this 
relief is favored on balance upon consideration of the following 
factors:
    (i) The complainant's potential irreparable injury in the absence 
of such deposit;
    (ii) The extent to which damages can be accurately calculated;
    (iii) The balance of the hardships between the complainant and the 
defendant; and
    (iv) Whether public interest considerations favor the posting of 
the bond or ordering of the deposit.
    (3) The Commission may, in its discretion, suspend ongoing damages 
proceedings for fourteen days, to provide the parties with a time 
within which to pursue settlement negotiations and/or alternative 
dispute resolution procedures.
    (4) The Commission may, in its discretion, end adjudication of 
damages with a determination of the sufficiency of a damages 
computation method or formula. No such method or formula shall contain 
a provision to offset any claim of the defendant against the 
complainant. The parties shall negotiate in good faith to reach an 
agreement on the exact amount of damages pursuant to the Commission-
mandated method or formula. Within thirty days of the release date of 
the damages order, parties shall submit jointly to the Commission 
either:
    (i) A statement detailing the parties' agreement as to the amount 
of damages;
    (ii) A statement that the parties are continuing to negotiate in 
good faith and a request that the parties be given an extension of time 
to continue negotiations; or
    (iii) A statement detailing the bases for the continuing dispute 
and the reasons why no agreement can be reached.
    (j) Except where otherwise indicated, the rules governing initial 
formal complaint proceedings govern supplemental formal complaint 
proceedings, as well.
    4. In Sec. 1.724, paragraphs (b) and (d) are revised to read as 
follows:


Sec. 1.724  Answer.

* * * * *
    (b) The answer shall advise the complainant and the Commission 
fully and completely of the nature of any defense, and shall respond 
specifically to all material allegations of the complaint. Every effort 
shall be made to narrow the issues in the answer. The defendant shall 
state concisely its defense to each claim asserted, admit or deny the 
averments on which the complainant relies, and state in detail the 
basis for admitting or denying such averment. General denials are 
prohibited. Denials based on information and belief are expressly 
prohibited unless made in good faith and accompanied by an affidavit 
explaining the basis for the defendant's belief and why the defendant 
could not reasonably ascertain the facts from the complainant or any 
other source. If the defendant is without knowledge or information 
sufficient to form a belief as to the truth of an averment, the 
defendant shall so state and this has the effect of a denial. When a 
defendant intends in good faith to deny only part of an averment, the 
defendant shall specify so much of it as is true and shall deny only 
the remainder. The defendant may deny the allegations of the complaint 
as specific denials of either designated averments or paragraphs.
* * * * *
    (d) Averments in a complaint or supplemental complaint filed 
pursuant to Sec. 1.722 are deemed to be admitted when not denied in the 
answer.
* * * * *
    5. In Sec. 1.726, paragraph (a) is revised to read as follows:


Sec. 1.726  Replies.

    (a) Subject to paragraph (g) of this section governing Accelerated 
Docket proceedings, within three days after service of an answer 
containing affirmative defenses presented in accordance with the 
requirements of Sec. 1.724(e), a complainant may file and serve a reply 
containing statements of relevant, material facts and legal arguments 
that shall be responsive to only those specific factual allegations and 
legal arguments made by the defendant in support of its affirmative 
defenses. Replies which contain other allegations or arguments will not 
be accepted or considered by the Commission.
* * * * *
    6. In Sec. 1.735, paragraph (g) is added to read as follows:


Sec. 1.735  Copies; service; separate filings against multiple 
defendants.

* * * * *
    (g) Supplemental complaint proceedings. Supplemental complaints 
filed pursuant to section 1.722 shall conform to the requirements set 
out in this section, except that the complainant need not submit a 
filing fee, and the complainant may effect service pursuant to 
paragraph (f) of this section rather than paragraph (d) of this section 
numerals.

[FR Doc. 01-7496 Filed 3-26-01; 8:45 am]
BILLING CODE 6712-01-P