[Federal Register Volume 67, Number 74 (Wednesday, April 17, 2002)]
[Rules and Regulations]
[Pages 18827-18832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9101]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 1, and 63

[CC Docket No. 01-150; FCC 02-78]


Implementation of Further Streamlining Measures for Domestic 
Section 214 Authorizations

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document adopts rules to govern and streamline review of 
applications for section 214 of the Communications Act of 1934, as 
amended (the Act), to transfer control of domestic transmission lines. 
Specifically, this document establishes a thirty day streamlined review 
process that will presumptively apply to domestic section 214 transfer 
applications meeting specified criteria, and that will apply on a case-
by-case basis to all other domestic section 214 applications. This 
document also sets forth the information that applicants must provide 
in their domestic section 214 applications, whether filed separately or 
in combination with an international section 214 applications. 
Moreover, this document defines pro forma transactions in a manner that 
is consistent with the definition used by the Commission in other 
contexts, and harmonizes the treatment of asset acquisitions with the 
treatment of acquisitions of corporate control.

DATES: Effective May 17, 2002, except Secs. 63.01, 63.03 and 63.04 
which contain information collection requirements that have not been 
approved by the Office of Management and Budget (OMB). The Federal 
Communications Commission will publish a document in the Federal 
Register announcing the effective date of these rules.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in CC Docket No. 01-150, FCC 02-78, adopted March 14, 2002, 
and released March 21, 2002. The complete text of this Report and Order 
is available for inspection and copying during normal business hours in 
the FCC Reference Information Center, Portals II, 445 12th Street, SW, 
Room CY-A257, Washington, DC, 20554. This document may also be 
purchased from the Commission's duplicating contractor, Qualex 
International, Portals II, 445 12th Street, SW, Room CY-B402, 
Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, 
or via e-mail [email protected]. It is also available on the 
Commission's website at http://www.fcc.gov.

Synopsis of the Report and Order

    1. The Commission's goals in adopting this Report and Order are: 
(1) To add predictability, efficiency, and transparency to the 
Commission's domestic section 214 transfer of control review process; 
and (2) greatly improve the Commission's current domestic section 214 
transfer of control procedures, which carriers have sometimes found 
confusing, cumbersome, and overly burdensome to navigate.
    2. Background. Under section 214 of the Communications Act of 1934, 
as amended (Act), carriers must obtain a certificate of public 
convenience and necessity from the Commission before constructing, 
acquiring, operating or engaging in transmission over lines of 
communication, or before discontinuing, reducing or impairing service 
to a community. In considering such applications, the Commission has 
employed a public interest standard under section 214(a) that involves 
an examination of the potential public interest harms and benefits of a 
proposed transaction.
    3. In 1999, the Commission adopted the current version of 
Sec. 63.01 of the Commission's rule, granting all carriers blanket 
authority under section 214 to provide domestic interstate services and 
to construct, acquire, or operate any domestic transmission line. The 
blanket authority in Sec. 63.01, however, does not extend to the 
transfer of lines resulting from an acquisition of corporate control. 
Accordingly, with respect to acquisitions of corporate control, the 
Commission decided that carriers must file a section 214 application 
with the Commission and obtain Commission approval prior to 
consummating a proposed transaction.
    4. In the Notice of Proposed Rulemaking adopted in this proceeding 
on July 12, 2001 (66 FR 41823 (2001)), the Commission tentatively 
concluded that a substantial number of transactions do not raise public 
interest concerns and should be granted on a streamlined basis. 
Therefore, the Commission sought comment on ways to streamline its 
review process for these transactions. Following from the Notice of 
Proposed Rulemaking, this Report and Order takes several significant 
steps to lessen the burden on carriers seeking authorization to acquire 
domestic transmission lines.

[[Page 18828]]

    5. Discussion. First, the Commission establishes a thirty day 
streamlined review process in which certain applications are 
automatically granted thirty days after public notice announcing the 
transaction unless a carrier is otherwise notified by the Commission. 
The Streamlining Rule lists categories of applications that would be 
presumptively accorded streamlined treatment, such as those involving 
only non-facilities-based carriers; certain types of incumbent local 
exchange carrier (LEC) transactions; combinations of interexchange 
carriers with low combined market shares; and proposed transactions 
where one party provides no domestic telecommunications services. 
Streamlined processing of applications not falling within a presumptive 
category will be determined on a case-by-case basis.
    6. Second, the Commission adopts rules to provide guidance 
concerning the information that carriers should provide in domestic 
section 214 applications. The Commission also eases filing burdens by 
adopting rules that enable carriers to file a single document with the 
Commission that combines both domestic and international section 214 
applications.
    7. Third, the Commission eliminates application filing requirements 
for all pro forma transactions, requiring simple post-transaction 
notifications to the Commission only for certain transfers in 
bankruptcy proceedings. The Commission also defines pro forma 
transactions in the domestic section 214 context in a manner that is 
consistent with how the Commission defines pro forma transactions 
involving other types of Commission authorization.
    8. Fourth, the Commission modifies its filing requirements with 
regard to asset acquisitions, by requiring that they now be treated as 
transfers of control.
    9. Finally, the Report and Order removes sections of the 
Commission's rules that the Commission has determined to be obsolete.

Final Paperwork Reduction Act Analysis

    10. The action contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1995 and found to impose new or modified 
reporting and recordkeeping requirements or burdens on the public. 
Implementation of these new or modified reporting and recordkeeping 
requirements will be subject to approval by the Office of Management 
and Budget (OMB) as prescribed by the Act. The new paperwork 
requirement contained in the Report and Order will go into effect in 
the Federal Register upon OMB approval.

Final Regulatory Flexibility Analysis

    11. As required by the Regulatory Flexibility Act, as amended, 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Declaratory Ruling and Notice of Proposed 
Rulemaking in CC Docket No. 01-150 (NPRM). The Commission sought 
written public comment on the proposals in the NPRM, including comment 
on the IRFA. The Commission received seven comments and four reply 
comments in this proceeding. No comments received addressed the IRFA. 
This present Final Regulatory Flexibility Analysis (FRFA) conforms to 
the RFA.

Need for, and Objectives of, the Report and Order

    12. The Commission initiated the NPRM to seek comment on how it 
might improve and streamline applications under section 214 to acquire 
domestic transmission lines through acquisitions of corporate control 
that require little scrutiny in order for the Commission to determine 
that they serve the public interest. In particular, the Commission 
sought comment on: (1) Whether the Commission should shorten the review 
period for a predetermined class of domestic section 214 applications; 
(2) what criteria to employ to determine eligibility for streamlined 
review; (3) how to treat a streamlined domestic section 214 application 
that is accompanied by a request for waiver of Commission rules; (4) 
whether the Commission should have discretion to remove an application 
from streamlined processing; (5) how the Common Carrier Bureau should 
treat a streamlined application when the applicants file related 
applications in other bureaus; and (6) whether the Commission should, 
as an alternative to streamlining, relieve all non-dominant carriers, 
or certain categories of non-dominant carriers, that have blanket 
domestic section 214 authority from filing transfer of control 
applications.
    13. In this Order, the Commission adopts rules to govern and 
streamline review of domestic section 214 transfer of control 
applications. By adopting these rules, the Commission intends to reduce 
the burden on carriers of complying with the Commission's review 
requirements and, at the same time, increase the predictability and 
transparency of these requirements.
    14. First, under the new streamlined procedures, for example, 
transactions involving small entities such as incumbent LECs, are 
presumed to be of the kind not likely to raise public interest concerns 
and would receive automatic approval after a 30 day review period 
unless otherwise notified by the Commission. This streamlined approach 
reduces the amount of business and legal resources an applicant may 
need to expend to manage an application through the Commission review 
process because applicants can now predict the level of scrutiny an 
application is likely to receive. The streamlined approach also offers 
small entities the benefit of business certainty by designating a date 
certain on which transactions would be permitted to close.

Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    15. No party specifically commented in response to the Regulatory 
Flexibility Act. However, commenters proposed many of the streamlined 
measures the Commission enacted. For example, in this Order, the 
Commission adopts commenters' proposals to presumptively streamline 
transfer applications involving domestic, interstate carriers that are 
non-dominant in the provision of any service where their combined post-
transaction market presence is unlikely to raise public interest 
concerns. If a transaction proposes to combine the interexchange 
services of two non-dominant carriers, the application will be 
presumptively streamlined if the transferee's market share in the 
interstate, interexchange market following the transaction would be 
less than 10 percent. Similarly, if a transaction proposes to combine 
the telephone exchange services and/or exchange access services of two 
non-dominant carriers, the application will be presumptively 
streamlined if their services are offered exclusively in geographic 
areas served by a dominant local exchange carrier. These adopted 
streamlining measures proposed by commenters, while not directly 
responsive to the RFA, will nevertheless benefit both small and large 
carriers.

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

    16. 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 rules adopted herein. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' The 
term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act,

[[Page 18829]]

unless the Commission has developed one or more definitions that are 
appropriate for its activities. 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 SBA.
    17. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide 
appears to be data the Commission publishes annually in its 
Telecommunications Provider Locator report, derived from filings made 
in connection with the Telecommunications Relay Service (TRS). 
According to data in the most recent report, there are 5,679 interstate 
service providers. These providers include, inter alia, local exchange 
carriers, wireline carriers and service providers, interexchange 
carriers, competitive access providers, operator service providers, pay 
telephone operators, providers of telephone service, providers of 
telephone exchange service, and resellers.
    18. The Commission has included small incumbent local exchange 
carriers (LECs) in this present RFA analysis. As noted above, a ``small 
business'' under the RFA is one that, inter alia, meets the pertinent 
small business size standard (e.g., a telephone communications business 
having 1,500 or fewer employees), and ``is not dominant in its field of 
operation.'' The SBA's Office of Advocacy contends that, for RFA 
purposes, small incumbent LECs are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. The 
Commission has therefore included small incumbent LECs in this RFA 
analysis, although the Commission emphasizes that this RFA action has 
no effect on FCC analyses and determinations in other, non-RFA 
contexts.
    19. Total Number of Telephone Companies Affected. The U.S. Bureau 
of Census (Census Bureau) reports that, at the end of 1992, there were 
3,497 firms engaged in providing telephone services, as defined 
therein, for at least one year. This number contains a variety of 
different categories of carriers, including LECs, interexchange 
carriers, competitive access providers, operator service providers, pay 
telephone operators, and resellers. It seems certain that some of these 
3,497 telephone service firms may not qualify as small entities or 
small incumbent LECs because they are not ``independently owned and 
operated.'' It seems reasonable to conclude that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by these rules.
    20. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that there were 2,321 such telephone companies in operation for 
at least one year at the end of 1992. According to the SBA's 
definition, a small business telephone company other than a 
radiotelephone (wireless) company is one employing no more than 1,500 
persons. All but 26 of the 2,321 non-radiotelephone (wireless) 
companies listed by the Census Bureau were reported to have fewer than 
1,000 employees. Even if all 26 of the remaining companies had more 
than 1,500 employees, there would still be 2,295 non-radiotelephone 
(wireless) companies that might qualify as small entities or small 
incumbent LECs. Although it seems certain that some of these carriers 
are not independently owned and operated, the Commission is unable at 
this time to estimate with greater precision the number of wireline 
carriers and service providers that would qualify as small business 
concerns under SBA's definition. Therefore, the Commission estimates 
that fewer than 2,295 small telephone communications companies other 
than radiotelephone (wireless) companies are small entities or small 
incumbent LECs that may be affected by these rules.
    21. Local Exchange Carriers, Competitive Access Providers, 
Interexchange Carriers, Operator Service Providers, Payphone Providers, 
and Resellers. Neither the Commission nor the SBA has developed a 
definition for small LECs, competitive access providers (CAPS), 
interexchange carriers (IXCs), operator service providers (OSPs), 
payphone providers, or resellers. 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 that the Commission knows regarding the 
number of these carriers nationwide appears to be the data that the 
Commission collects annually in connection with the TRS. According to 
our most recent data, there are 1,329 LECs, 532 CAPs, 229 IXCs, 22 
OSPs, 936 payphone providers, and 710 resellers. Although it seems 
certain that some of these carriers are not independently owned and 
operated, or have more than 1,500 employees, the Commission is unable 
at this time to estimate with greater precision the number of these 
carriers that would qualify as small business concerns under the SBA's 
definition. Therefore, the Commission estimates that there are fewer 
than 1,329 small entity LECs or small incumbent LECs, 532 CAPs, 229 
IXCs, 22 OSPs, 936 payphone providers, and 710 resellers that may be 
affected by these rules.
    22. Wireless Telephony and Paging and Messaging. Wireless telephony 
includes cellular, personal communications services (PCS) or 
specialized mobile radio (SMR) service providers. Neither the 
Commission nor the SBA has developed a definition of small entities 
applicable to cellular licensees, or to providers of paging and 
messaging services. The closest applicable SBA definition is a 
telephone communications company other than radiotelephone (wireless) 
companies. According to the most recent Provider Locator data, 858 
carriers reported that they were engaged in the provision of wireless 
telephony and 576 companies reported that they were engaged in the 
provision of paging and messaging service. The Commission does not have 
data specifying the number of these carriers that are not independently 
owned or operated, and thus are unable at this time to estimate with 
greater precision the number that would qualify as small business 
concerns under the SBA's definition. Consequently, the Commission 
estimates that there are fewer than 858 small carriers providing 
wireless telephony services and fewer than 576 small companies 
providing paging and messaging services that may be affected by these 
rules.

Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    23. The streamlining requirements discussed herein will not require 
additional reporting, recordkeeping or compliance requirements for 
service providers. In this Order, the Commission is not mandating new 
recordkeeping and compliance requirements. Rather, the Commission is 
articulating more clearly the categories of information that must be 
contained in a domestic section 214 application for transfer of control 
in order for the Commission to grant streamlined review. While there 
has been some uncertainty concerning the appropriate content of a 
section 214 application, the Commission believes that these new 
requirements will lessen the regulatory burden on small carriers.

[[Page 18830]]

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

    24. 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 (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    25. The Commission concludes that measures adopted and described in 
this Order would reduce regulatory burdens for small carriers including 
resellers and small incumbent LECs. For example, in this Order, the 
Commission eases filing burdens by adopting rules that enable carriers 
to file a single document with the Commission that combines both 
domestic and international section 214 applications. Aside from cases 
involving bankruptcy, where a simple notice will be required, the 
Commission eliminates filing requirements for pro forma transactions. 
The same categories of pro forma transactions that apply in other 
bureaus will apply to domestic carriers, thus improving consistency of 
filing requirements across bureaus for small and large entities alike. 
Carriers have sometimes found the filing rules confusing, cumbersome, 
and overly burdensome to navigate because the rules did not state what 
information the Commission required. In this Order, the Commission 
clarifies what a carrier must submit to be eligible for streamlined 
treatment. Overall, the steps the Commission takes in this item will 
add predictability, efficiency, and transparency to its review process, 
and will vastly improve our current transfer of control procedures. 
While these streamlining measures apply similarly to both small and 
large entities, the Commission expects that small entities are more 
likely to benefit to the extent such firms have fewer or reduced 
resources available, as compared to large firms.
    26. In this Order, the Commission also describes commenters' 
alternative streamlining proposals and state why those proposals would 
not improve efficiency or predictability, or would not serve the public 
interest. For example, CenturyTel proposed that ``after the fact'' 
notice for corporate transfers of control by small and medium-sized 
carriers would serve the public interest. However, the Commission must 
fulfill its statutorily imposed duty to determine whether the 
transaction serves the public interest, notwithstanding the legitimate 
desire of applicants to obtain the most expedited review possible. 
Therefore, the Commission concludes that applicants shall continue 
current practice and provide the Commission prior notice of proposed 
transfers of control to permit a short period for comment and review, 
even in the context of streamlined processing of domestic section 214 
applications. Moreover, the Commission gains assurance from knowing 
that the rule would continue to benefit small carriers and serve the 
public interest by providing applicants with a date certain for 
domestic transfers of control, after which every transaction may close, 
unless the Commission otherwise notifies the applicant.
    27. Report to Congress. The Commission will send a copy of this 
Order, including this FRFA, in a report to be sent to Congress pursuant 
to the Congressional Review Act. In addition, the Commission will send 
a copy of this Order, including this FRFA, to the Chief Counsel for 
Advocacy of the SBA. A copy of this Order and FRFA (or summaries 
thereof) will also be published in the Federal Register.

Ordering Clauses

    28. It is ordered, pursuant to the authority contained in sections 
2, 4(i)-(j), 201, 214, and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. 152, 154(i)-(j), 201, 214, and 303(r), that the 
Report and Order in CC Docket No. 01-150 is adopted and parts 0, 1, and 
63 of the Commission's rules, 47 CFR parts 0, 1, and 63, are amended as 
set forth.
    29. It is further ordered that the policies, rules, and 
requirements adopted herein are adopted and shall become effective upon 
approval by OMB. The Commission will publish a document in the Federal 
Register announcing the effective date.
    30. It is further ordered that the Commission's Consumer 
Information Bureau, Reference Information Center, shall send a copy of 
this Report and Order in CC Docket No. 01-150, including the Final 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects

47 CFR Part 0

    Reporting and recordkeeping requirements.

47 CFR Part 1

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications.

47 CFR Part 63

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 0, 1 and 63 as follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for part 0 continues to read:

    Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.


    2. In Sec. 0.291 remove paragraph (c) and redesignate paragraphs 
(d) through (i) as paragraphs (c) through (h).

PART 1--PRACTICE AND PROCEDURE

    3. The authority for part 1 continues to read:

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


Sec. 1.762  [Removed]

    4. Remove Sec. 1.762.


Secs. 1.765 and 1.766  [Removed]

    5. Remove Secs. 1.765 and 1.766.

PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, 
REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND 
GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS

    6. The authority citation for part 63 continues to read:

    Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 
403, and 651 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, 
unless otherwise noted.

    7. Section 63.01(a) is revised to read as follows:

[[Page 18831]]

Sec. 63.01  Authority for all domestic common carriers.

    (a) Any party that would be a domestic interstate communications 
common carrier is authorized to provide domestic, interstate services 
to any domestic point and to construct or operate any domestic 
transmission line as long as it obtains all necessary authorizations 
from the Commission for use of radio frequencies.

    8. Add Sec. 63.03 to read as follows:


Sec. 63.03  Streamlining procedures for domestic transfer of control 
applications.

    Any domestic carrier that seeks to transfer control of lines or 
authorization to operate pursuant to section 214 of the Communications 
Act of 1934, as amended, shall be subject to the following procedures:
    (a) Public Notice and Review Period. Upon determination by the 
Common Carrier Bureau that the applicants have filed a complete 
application and that the application is appropriate for streamlined 
treatment, the Common Carrier Bureau will issue a public notice stating 
that the application has been accepted for filing as a streamlined 
application. Unless otherwise notified by the Commission, an applicant 
is permitted to transfer control of the domestic lines or authorization 
to operate on the 31st day after the date of public notice listing a 
domestic section 214 transfer of control application as accepted for 
filing as a streamlined application, but only in accordance with the 
operations proposed in its application. Comments on streamlined 
applications may be filed during the first 14 days following public 
notice, and reply comments may be filed during the first 21 days 
following public notice, unless the public notice specifies a different 
pleading cycle. All comments on streamlined applications shall be filed 
electronically, and shall satisfy such other filing requirements as may 
be specified in the public notice.
    (b) Presumptive Streamlined Categories. (1) The streamlined 
procedures provided in this rule shall be presumed to apply to all 
transfer of control applications in which:
    (i) Both applicants are non-facilities-based carriers;
    (ii) The transferee is not a telecommunications provider; or
    (iii) The proposed transaction involves only the transfer of the 
local exchange assets of an incumbent LEC by means other than an 
acquisition of corporate control.
    (2) Where a proposed transaction would result in a transferee 
having a market share in the interstate, interexchange market of less 
than 10 percent, and the transferee would provide competitive telephone 
exchange services or exchange access services (if at all) exclusively 
in geographic areas served by a dominant local exchange carrier that is 
not a party to the transaction, the streamlined procedures provided in 
this rule shall be presumed to apply to transfer of control 
applications in which:
    i. Neither of the applicants is dominant with respect to any 
service;
    ii. The applicants are a dominant carrier and a non-dominant 
carrier that provides services exclusively outside the geographic area 
where the dominant carrier is dominant; or
    iii. The applicants are incumbent independent local exchange 
carriers (as defined in Sec. 64.1902 of this chapter) that have, in 
combination, fewer than two (2) percent of the nation's subscriber 
lines installed in the aggregate nationwide, and no overlapping or 
adjacent service areas.
    (3) For purposes of (b)(1) and (2) of this paragraph, the terms 
``applicant,'' ``carrier,'' ``party,'' and ``transferee'' (and their 
plural forms) include any affiliates of such entities within the 
meaning of section 3(1) of the Communications Act of 1934, as amended.
    (c) Removal of Application from Streamlined Processing. (1) At any 
time after an application is filed, the Commission, acting through the 
Chief of the Wireline Competition Bureau, may notify an applicant that 
its application is being removed from streamlined processing, or will 
not be subject to streamlined processing. Examples of appropriate 
circumstances for such action are:
    (i) An application is associated with a non-routine request for 
waiver of the Commission's rules;
    (ii) An application would, on its face, violate a Commission rule 
or the Communications Act;
    (iii) An applicant fails to respond promptly to Commission 
inquiries;
    (iv) Timely-filed comments on the application raise public interest 
concerns that require further Commission review; or
    (v) The Commission, acting through the Chief of the Wireline 
Competition Bureau, otherwise determines that the application requires 
further analysis to determine whether a proposed transfer of control 
would serve the public interest.
    (2) Notification will be by public notice that states the reason 
for removal or non-streamlined treatment, and indicates the expected 
timeframe for Commission action on the application. Except in 
extraordinary circumstances, final action on the application should be 
expected no later than 180 days from public notice that the application 
has been accepted for filing.
    (d) Pro Forma Transactions. (1) Any party that would be a domestic 
common carrier under section 214 of the Communications Act of 1934, as 
amended, is authorized to undertake any corporate restructuring, 
reorganization or liquidation of internal business operations that does 
not result in a change in ultimate ownership or control of the 
carrier's lines or authorization to operate, including transfers in 
bankruptcy proceedings to a trustee or to the carrier itself as a 
debtor-in-possession.\1\ Under this rule, a transfer of control of a 
domestic line or authorization to operate is considered pro forma when, 
together with all previous internal corporate restructurings, the 
transaction does not result in a change in the carrier's ultimate 
ownership or control, or otherwise falls into one of the illustrative 
categories found in Sec. 63.24 of this part governing transfers of 
control of international carriers under section 214 of the 
Communications Act of 1934, as amended.
---------------------------------------------------------------------------

    \1\ ``Control'' includes actual working control in whatever 
manner exercised and is not limited to majority stock ownership. 
``Control'' also includes direct or indirect ownership or control, 
such as through intervening subsidiaries. See 47 CFR 63.09.
---------------------------------------------------------------------------

    (2) Any party that would be a domestic common carrier under section 
214 of the Communications Act of 1934, as amended, must notify the 
Commission no later than 30 days after control of the carrier is 
transferred to a trustee under Chapter 7 of the Bankruptcy Code, a 
debtor-in-possession under Chapter 11 of the Bankruptcy Code, or any 
other party pursuant to any applicable chapter of the Bankruptcy Code 
when that transfer does not result in a change in ultimate ownership or 
control of the carrier's lines or authorization to operate. The 
notification can be in the form of a letter (in duplicate to the 
Secretary). The letter or other form of notification must also contain 
the information listed in paragraphs (a)(1) through (a)(4) in 
Sec. 63.04. A single letter may be filed for more than one such 
transfer of control. If a carrier files a discontinuance request within 
30 days of the transfer in bankruptcy, the Commission will treat the 
discontinuance request as sufficient to fulfill the pro forma post-
transaction notice requirement.
    (3) Notwithstanding any other provision in this part, any party 
that would be a domestic common carrier under section 214 of the 
Communications Act of 1934, as amended, including a carrier that begins

[[Page 18832]]

providing service through a differently named subsidiary after an 
internal corporate restructuring, remains subject to all applicable 
conditions of service after an internal restructuring, such as rules 
governing slamming and tariffing.

    9. Add Sec. 63.04 to read as follows:


Sec. 63.04  Filing procedures for domestic transfer of control 
applications

    (a) Domestic Services Only. A carrier seeking domestic section 214 
authorization for transfer of control should file an application 
containing:
    (1) The name, address and telephone number of each applicant;
    (2) The government, state, or territory under the laws of which 
each corporate or partnership applicant is organized;
    (3) The name, title, post office address, and telephone number of 
the officer or contact point, such as legal counsel, to whom 
correspondence concerning the application is to be addressed;
    (4) The name, address, citizenship and principal business of any 
person or entity that directly or indirectly owns at least ten (10) 
percent of the equity of the applicant, and the percentage of equity 
owned by each of those entities (to the nearest one (1) percent);
    (5) Certification pursuant to Secs. 1.2001 through 1.2003 of this 
chapter that no party to the application is subject to a denial of 
Federal benefits pursuant to section 5301 of the Anti-Drug Abuse Act of 
1988. See 21 U.S.C. 853.
    (6) A description of the transaction;
    (7) A description of the geographic areas in which the transferor 
and transferee (and their affiliates) offer domestic telecommunications 
services, and what services are provided in each area;
    (8) A statement as to how the application fits into one or more of 
the presumptive streamlined categories in this section or why it is 
otherwise appropriate for streamlined treatment;
    (9) Identification of all other Commission applications related to 
the same transaction;
    (10) A statement of whether the applicants are requesting special 
consideration because either party to the transaction is facing 
imminent business failure;
    (11) Identification of any separately filed waiver requests being 
sought in conjunction with the transaction; and
    (12) A statement showing how grant of the application will serve 
the public interest, convenience and necessity, including any 
additional information that may be necessary to show the effect of the 
proposed transaction on competition in domestic markets.
    (b) Domestic/International Applications for Transfers of Control. 
Where an applicant wishes to file a joint international section 214 
transfer of control application and domestic section 214 transfer of 
control application, the applicant should submit information that 
satisfies the requirements of Sec. 63.18, which specifies the contents 
of applications for international authorizations, together with filing 
fees that satisfy (and are in accordance with filing procedures 
applicable to) both Secs. 1.1105 and 1.1107 of this chapter. In an 
attachment to the international application, the applicant should 
submit the information described in paragraphs (a)(6) through (a)(12) 
of this section.

[FR Doc. 02-9101 Filed 4-16-02; 8:45 am]
BILLING CODE 6712-01-P