[Federal Register Volume 66, Number 98 (Monday, May 21, 2001)]
[Proposed Rules]
[Pages 27927-27930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12756]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 61

[CC Docket No. 96-262; FCC 01-146]


Access Charge Reform; Reform of Access Charges Imposed by 
Competitive Local Exchange Carriers

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment on whether 
tariffed competitive LEC-provided access service for toll free, or 
``8YY,'' numbers should be benchmarked to a different figure than the 
Commission has adopted for CLEC tariffed switched access traffic 
generally.

DATES: Comments are due by June 20, 2001. Reply comments are due by 
July 20, 2001. Written comments by the public on the proposed and/or 
modified information collections discussed in this Further Notice of 
Proposed Rulemaking are due by June 20, 2001. Written comments must be 
submitted by the Office of Management and Budget (OMB) on the proposed 
and/or modified information collections by July 20, 2001.

ADDRESSES: All filings must be sent to the Commission's Secretary, 
Magalie Roman Salas, Office of the Secretary, Federal Communications 
Commission, 445 12th Street, SW., Washington, DC 20554. In addition to 
filing comments with the Secretary, a copy of any comments on the 
information collection(s) 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 C. Springer, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503, or via the Internet to [email protected]. Parties 
should also send one paper copy of their filings to Jane Jackson, 
Common Carrier Bureau, Federal Communications Commission, 445 Twelfth 
Street, SW., Room 5-A225, Washington, DC 20554. In addition, commenters 
must send diskette copies to the Commission's copy contractor, 
International Transcription Services, Inc., 1231 20th Street, NW., 
Washington, DC 20037.

FOR FURTHER INFORMATION CONTACT: Jeffrey H. Dygert, Common Carrier 
Bureau, (202) 418-1500.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) in CC Docket No. 96-262 
released on April 27, 2001. The full text of this document is available 
for public inspection during regular business hours in the FCC 
Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, 
DC, 20554.
    This FNPRM contains proposed information collection(s) subject to 
the Paperwork Reduction Act of 1995 (PRA). It has been submitted to the 
Office of Management and Budget (OMB) for review under the PRA. OMB, 
the general public, and other Federal agencies are invited to comment 
on the proposed information collections contained in this proceeding.

Paperwork Reduction Act

    The FNPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and OMB to comment on the 
information collection(s) contained in this FNPRM, as required by the 
PRA, Public Law 104-13. Public and agency comments on the proposed and/
or modified information collections discussed in this Notice of 
Proposed Rulemaking are due by June 20, 2001. Written comments must be 
submitted by the Office of Management and Budget (OMB) on the proposed 
and/or modified information collections by July 20, 2001.
    Comments should address: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.

Synopsis of FNPRM

I. Further Notice of Proposed Rulemaking

    1. Shortly before we issued the final rule that is published 
elsewhere in this issue, AT&T asserted, for the first time in this 
proceeding, that CLEC originating 8YY, toll-free traffic should be 
subject to a different benchmark scheme than other categories of 
switched access traffic. AT&T argues that the benchmark for CLEC 8YY 
traffic should immediately move to the access rate of the competing 
ILEC and that CLECs should be mandatorily detariffed above that point. 
In support of this position, AT&T asserts that certain CLECs with 
higher access charges attempt to obtain as customers end users that 
typically generate high volumes of 8YY traffic, such as hotels and 
universities. AT&T further asserts that some CLECs then ``install 
limited, high-capacity facilities designed only to handle 8YY traffic'' 
and ``share their access revenues with the customers generating the 
[8YY] traffic'' through agreements that provide for payments to the end 
user based on the level of 8YY

[[Page 27928]]

traffic it generates. AT&T contends that such arrangements do not 
promote the development of local exchange competition. Rather, it 
argues that these arrangements merely create the incentive for end 
users artificially to generate heavy 8YY traffic loads, which, in turn 
generate revenues for CLECs and their end-user customers.
    2. Given the paucity of record evidence on this issue, we seek 
comment generally on AT&T's proposal immediately to benchmark CLEC 8YY 
access services to the ILEC rate. Is the generation of 8YY traffic in 
order to collect greater access charges, as AT&T complains, something 
that the Commission should attempt to address through a rulemaking, or 
should the IXCs be left to address specific instances of abuse directly 
with the relevant CLEC, with the aid of the Commission's complaint 
process where appropriate? In this regard, we note AT&T's assertion 
that one recent case of apparent abuse, confirmed by WorldCom, arose 
from the sequential dialing of over 800,000 8YY calls by a single end 
user. It appears that, even without the rule it now requests, AT&T may, 
through discussions with the relevant CLEC, have been able to act to 
prevent payment for improperly generated 8YY access minutes.
    3. We seek comment on the magnitude of the potential problem with 
8YY traffic that AT&T identifies. AT&T estimates that approximately 30% 
of its CLEC access traffic is generated by 8YY aggregators that, it 
speculates, have revenue-sharing agreements with their end-user 
subscribers. Is this an accurate figure across the industry? How many 
minutes and what premium over the competing ILEC rate does this 
represent? More generally, what proportion of CLEC access traffic is 
composed of originating 8YY service? What proportion of CLEC end users 
have 8YY revenue-sharing agreements with their carrier?
    4. Are CLECs continuing to offer 8YY revenue-sharing agreements to 
their new end users, or are they currently available only to end users 
that negotiated them at some point in the past? Do CLECs notice a 
difference in the 8YY traffic patterns generated by end users with 
revenue-sharing agreements, compared to those end users without such 
agreements? What are the typical terms of a revenue-sharing agreement? 
Do they provide for payment of a per-minute fee for 8YY traffic, a per-
call fee or some other arrangement? What is the magnitude of the fee 
paid? How, if at all, will the Commission's imposition of the switched-
access benchmark affect CLECs' existing revenue-sharing agreements?
    5. We are concerned that AT&T's proposed solution to the problem it 
identifies may paint with too broad of a brush. Does the existence of 
some CLECs' revenue-sharing agreements justify immediately limiting 
CLEC tariffed access rates for all 8YY traffic to the rate of the 
competing ILEC? Should the Commission instead impose such a limitation 
only on those CLECs that actually offer revenue-sharing agreements to 
their end users?
    6. Additionally, we seek comment on AT&T's assertion that it 
promotes neither appropriate policy goals nor the development of local 
exchange competition when a CLEC carries an end user's 8YY traffic 
without also providing that end user with local exchange service or 
other types of access service. Would we be justified in immediately 
tying 8YY access tariffs to the ILEC rate for all CLECs, regardless of 
the services that they provide to their end users? Or would such a rule 
be appropriate, if at all, only for those CLECs that carry exclusively 
their end users' 8YY traffic? How does the presence or absence of 
revenue-sharing agreements, discussed, fit into the analysis of whether 
a CLEC's service offerings support restricting their tariffed 8YY 
access rates to the competing ILEC's rate?
    7. We question whether, at bottom, CLEC 8YY traffic is inherently 
worthy of lower access charges than are other types of access traffic. 
A CLEC provides a closely similar service and uses similar or identical 
facilities, regardless of whether it provides originating 8YY access 
service, or terminating or originating access service for conventional 
1+ calls. Accordingly, we seek comment on whether the presence of 
certain incentives to generate artificially high levels of 8YY traffic 
necessarily justifies reducing the tariffed rate for all such traffic 
immediately to the ILEC rate. Should we instead presume that there 
exists some ``legitimate'' level of CLEC 8YY traffic that should be 
treated as other categories of access traffic and subject to a lower 
benchmark only the traffic that exceeds this ``legitimate'' level? If 
this is an appropriate alternative, how should we define the level at 
or below which 8YY access traffic may be subject to the higher tariff 
benchmark that we permit for other categories of CLEC access service? 
Additionally, we seek comment on any other reasons that CLEC 8YY 
traffic should be subjected to a different tariff benchmark than are 
other categories of CLEC access traffic. We also seek comment on 
whether, if we adopt a different benchmark for 8YY access services, 
there are any different tariff filing requirements or timetables that 
we might adopt to account for the resources available to small 
entities. Commenters should indicate whether and how such provisions 
would be consistent with our goals in this proceeding, including our 
obligation to ensure just and reasonable rates for interstate access 
services.

II. Procedural Matters

A. Initial Regulatory Flexibility Analysis

    8. As required by the Regulatory Flexibility Act (RFA), 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 this Further Notice. 
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 this Notice, which are set out. The Commission will 
send a copy of this Further Notice, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). In 
addition, this Further Notice and IRFA (or summaries thereof) will be 
published in the Federal Register.
1. Need for, and Objectives of, the Proposed Action
    9. In this Further Notice, the Commission sets a benchmark for CLEC 
interstate switched access services that declines over time to the 
competing ILEC rate. In the Further Notice, the Commission seeks 
comment on a proposal offered by AT&T to move immediately the benchmark 
for CLEC 8YY access services to the competing ILEC rate and to 
mandatorily detariff CLEC interstate access rates for such 8YY traffic 
above that point. The Commission seeks comment on the nature and extent 
of the problem alleged by AT&T and on various means of addressing CLEC 
8YY access service rates. Through the Further Notice, the Commission 
seeks to ensure that CLEC rates for 8YY access services are just and 
reasonable.
2. Legal Basis
    10. The legal basis for the action as proposed for this rulemaking 
is contained in sections 1-5, 201-205, 208, 251-271, 403, 502, and 503 
of the Communications Act of 1934, as amended, 47 U.S.C. 151-155, 201-
205, 208, 251-271, 403, 502, and 503.

[[Page 27929]]

3. Description and Estimate of the Number of Small Entities To Which 
the Proposed Action May Apply
    11. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. To estimate the number of 
small entities that may be affected by the proposed rules, we first 
consider the statutory definition of ``small entity'' under the RFA. 
The RFA generally defines ``small entity'' as having the same meaning 
as the term ``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, unless the Commission has developed one or more 
definitions that are appropriate to its activities. Under the Small 
Business Act, a ``small business concern'' is one that is independently 
owned and operated; is not dominant in its field of operation; and 
meets any additional criteria established by the SBA. The SBA has 
defined a small business for Standard Industrial Classification (SIC) 
categories 4812 (Radiotelephone Communications) and 4813 (Telephone 
Communications, Except Radiotelephone) to be small entities when they 
have no more than 1,500 employees.
    12. The rules adopted in this order apply to CLECs and IXCs. 
Neither the Commission nor the SBA has developed a definition of small 
CLECs or small IXCs. The closest applicable definition for these 
carrier-types under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of these carriers nationwide 
of which we are aware appears to be the data that telecommunications 
carriers file annually in connection with the Commission's universal 
services requirements. According to our most recent data, 349 companies 
reported that they were engaged in the provision of either competitive 
access services or competitive local exchange services (referred to 
collectively as CLECs) and 204 companies reported that they were 
engaged in the provision of interexchange services. Among these 
companies, we estimate that approximately 297 of the CLECs have 1500 or 
fewer employees and that approximately 163 of the IXCs have 1500 or 
fewer employees. Although it seems certain that some of these carriers 
are not independently owned and operated, we are unable at this time to 
estimate with greater precision the number of these carriers that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are 297 or fewer small CLECs, and 
163 or fewer small IXCs that may be affected by the decisions and rules 
adopted in this order.
4. Description of Proposed Reporting, Recordkeeping, and Other 
Compliance Requirements
    13. In the CLEC Access Order, the Commission sets a benchmark for 
CLEC interstate switched access services that declines over time to the 
competing ILEC rate. Through the Further Notice, the Commission seeks 
comment on whether it should move immediately the benchmark for CLEC 
8YY access services to the competing ILEC rate and mandatorily detariff 
CLEC interstate access rates for such 8YY access services above that 
point. Adopting this proposal may require CLECs to refile tariffs with 
the Commission or to negotiate contracts with IXCs, rather than filing 
tariffs.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    14. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives the establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; the use of 
performance, rather than design, standards; and an exemption from 
coverage of the rule, or any part thereof, for small entities.
    15. As mentioned, through the Further Notice, the Commission seeks 
to ensure that CLEC rates for 8YY access services are just and 
reasonable. Our proposals may affect CLECs, by altering the rates that 
they may tariff for 8YY access services. At the same time, our 
proposals might affect indirectly IXCs that must pay access charges for 
8YY traffic. Because there are both small entity IXCs and small entity 
CLECs--with conflicting interests in this proceeding--we expect that 
small entities may be affected by any approach that we adopt. We seek 
an approach that both reduces opportunities for regulatory arbitrage 
and minimizes the burdens placed on carriers.
    16. Among the alternatives proposed, the Commission seeks comment 
whether it should move immediately the benchmark for CLEC 8YY access 
services to the competing ILEC rate and mandatorily detariff CLEC 
interstate access rates for such 8YY access services above that point. 
The Commission seeks comment, to the extent that it finds that a 
separate benchmark is appropriate for 8YY access rates, on whether it 
should instead impose such a limitation only on those CLECs that offer 
revenue-sharing agreements to their end users or only on those CLECs 
that do not offer local exchange services in addition to their 8YY 
access services. Alternatively, the Commission seeks comment on whether 
the Commission should take no additional action and whether IXCs should 
be left to address specific instances of abuse directly with the 
relevant CLEC, with the aid of the Commission's complaint process where 
appropriate.
    17. We also seek comment on whether, if we adopt a different 
benchmark for 8YY access services, there are any different tariff 
filing requirements or timetables that we might adopt to account for 
the resources available to small entities. We ask commenters to 
indicate whether and how such provisions would be consistent with our 
goals in this proceeding, including our obligation to ensure just and 
reasonable rates for interstate access services.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    18. None.

B. Comment Filing Procedures

    19. Pursuant to Secs. 1.415, 1.419, and 1.430 of the Commission's 
rules, interested parties may file comments by June 20, 2001, and reply 
comments by July 20, 2001. All filings should refer to CC Docket No. 
96-262. Comments may be filed using the Commission's Electronic Comment 
Filing System (ECFS) or by filing paper copies. Comments filed through 
the ECFS can be sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html>. Generally, only one copy of an 
electronic submission must be filed. In completing the transmittal 
screen, commenters should include their full name, Postal Service 
mailing address, and the applicable docket number, CC Docket No. 96-
262. Parties may also submit an electronic comment by Internet e-mail. 
To get filing instructions for e-mail comments, commenters should send 
an e-mail to

[[Page 27930]]

[email protected]>, and should include the following words in the body of 
the message: ``get form your e-mail address>.'' A sample form and 
directions will be sent in reply.
    20. Parties that choose to file by paper must file an original and 
four copies of each filing. All filings must be sent to the 
Commission's Secretary, Magalie Roman Salas, Office of the Secretary, 
Federal Communications Commission, Room TW-B204, 445 12th Street, SW., 
Washington, DC 20554. Regardless of whether parties choose to file 
electronically or by paper, parties should also serve: (1) Jane 
Jackson, Common Carrier Bureau, 445 12th Street, SW., Room 5-A225, 
Washington, DC 20554; and (2) the Commission's copy contractor, 
International Transcription Service, Inc. (ITS), 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, (202) 857-3800, with copies of any 
documents filed in this proceeding. Comments and reply comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, 
DC 20554.
    21. Parties that choose to file by paper should also submit their 
comments on diskette to the Commission's copy contractor, International 
Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 
20036. These submissions should be on a 3.5-inch diskette formatted in 
a Windows-compatible format using Microsoft Word or compatible 
software. The diskette should be accompanied by a cover letter and 
should be submitted in ``read only'' mode. The diskette should be 
clearly labeled with the commenter's name, proceeding (including the 
docket number, CC Docket No. 96-262), type of pleading (comment or 
reply comment), date of submission, and the name of the electronic file 
on the diskette. The label should also include the following phrase: 
``Disk Copy--Not an Original.'' Each diskette should contain only one 
party's pleadings, preferably in a single electronic file.
    22. Comments and reply comments must comply with Sec. 1.49 and all 
other applicable sections of the Commission's rules. We also direct 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.
    23. That this proceeding will continue to be governed by ``permit-
but-disclose'' ex parte procedures that are applicable to non-
restricted proceedings under 47 CFR 1.1206. This will provide an 
opportunity for all interested parties to receive notice of the various 
issues raised in ex parte presentations made to the Commission in this 
proceeding; it will also allow interested parties to file responses or 
rebuttals to proposals made on the record in this proceeding. We find 
that it is in the public interest to continue this proceeding's 
designation as ``permit-but-disclose.''
    24. Alternative formats (computer diskette, large print, audio 
recording, and Braille) are available to persons with disabilities by 
contacting Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY, or 
[email protected]>. This further notice of proposed rulemaking can also 
be downloaded in Microsoft Word and ASCII formats at http://www.fcc.gov/ccb/cpd>.

III. Ordering Clauses

    25. Pursuant to sections 1-5, 201-205, 303(r), 403, 502, and 503 of 
the Communications Act of 1934, as amended, this Further Notice of 
Proposed Rulemaking is hereby adopted.
    26. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Further Notice of 
Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analyses, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 01-12756 Filed 5-18-01; 8:45 am]
BILLING CODE 6712-01-P