[Federal Register Volume 67, Number 189 (Monday, September 30, 2002)]
[Rules and Regulations]
[Pages 61282-61285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24720]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[CC Docket No. 98-147; FCC 02-234]


Deployment of Wireline Services Offering Advanced 
Telecommunications Capability

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document addresses a petition for clarification or 
partial reconsideration of the Collocation Remand Order (66 FR 43516, 
August 20, 2001). The document makes clear that nothing in the 
Collocation Remand Order disavows any federal jurisdiction the 
Commission otherwise has to resolve cross-connect disputes. It also 
concludes that, under section 201(a) of the Communications Act of 1934, 
as amended (Communications Act or Act), incumbent LECs must include 
cross-connect offerings made under section 201 in federal tariffs. This 
document further concludes that in certain limited circumstances 
incumbent local exchange carriers (LECs) may rely on individual case 
basis pricing when establishing rates for cross-connects.

DATES: Effective October 30, 2002, except that the Commission's actions 
with regard to federal tariffing of the cross-connect requirement and 
regarding pricing of cross connects in paragraph three of this document 
are not effective until approved by the Office of Management and 
Budget. The Commission will publish a document announcing the effective 
date of this requirement.

FOR FURTHER INFORMATION CONTACT: John Adams, Attorney-Advisor, 
Competition Policy Division, Wireline Competition Bureau, at (202) 418-
1580, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration of Fourth Report and Order (Order on 
Reconsideration) in CC Docket No. 98-147, FCC 02-234, adopted August 
14, 2002, and released September 4, 2002. The complete text of this 
Order on Reconsideration 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 Web site at http://www.fcc.gov.

Synopsis of the Order on Reconsideration

    1. Background. In the Collocation Remand Order (66 FR 43516, August 
20, 2001) the Commission reevaluated provisions of its collocation 
rules on remand from the United States Court of Appeals for the 
District of Columbia Circuit. The Commission addressed, among other 
matters, whether incumbent LECs are required to provision cross-
connects between collocators. The Commission concluded that while an 
incumbent LEC is not required to allow collocators to install and 
maintain cross-connects between their collocated equipment themselves, 
an incumbent LEC must nevertheless provide these cross-connects between 
two collocators upon reasonable request.
    2. Federal Enforcement of Cross-Connect Requirement. In the 
Collocation Remand Order, the Commission stated that it anticipated 
``that cross-connect disputes, like other interconnection related 
disputes, can be addressed in the first instance at the state level.'' 
In the Order on Reconsideration, to avoid any uncertainty, the 
Commission clarifies that nothing in that statement disavows any 
federal jurisdiction it otherwise might have under the Act to resolve 
cross-connect disputes. The Commission states that specific questions 
would be addressed on a case-by-case basis in the event of a complaint.
    3. Federal Tariffing of Cross-Connect Requirement. The Commission 
concludes that incumbent LECs must file tariffs for cross-connect 
offerings made pursuant to section 201 of the

[[Page 61283]]

Communications Act at the federal level. The Commission states that 
this is a necessary result of Section 203(a)'s mandate that all 
services subject to the Commission's jurisdiction under section 201 be 
federally tariffed. In order to minimize any unnecessary regulatory 
burdens, however, the Commission clarifies that incumbents shall have 
the flexibility to include the rates, terms, and conditions under which 
they provide cross-connects in their expanded interconnection tariffs, 
stand-alone tariffs, or other appropriate federal tariffs.
    4. Pricing of Cross-Connects. A carrier provides facilities or 
services on an individual case basis when it provides them to a 
specific customer under rates, terms, and conditions that must be 
negotiated upon request of the service. Based on the record before it, 
the Commission declines to adopt a blanket rule against the use of 
individual case basis pricing for cross-connects because it was unable 
to determine the extent to which generally available offerings at 
standardized rates will be possible.

Paperwork Reduction Act Analysis

    5. The actions contained the have been analyzed with respect to the 
Paperwork Reduction Act of 1995 (PRA) 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 PRA, and will go into 
effect upon announcement in the Federal Register of OMB approval.

Supplemental Final Regulatory Flexibility Act Analysis

    6. As required by the Regulatory Flexibility Act (RFA), a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Order on Reconsideration and Second 
Further Notice of Proposed Rulemaking (Order on Reconsideration and 
Second Further Notice) in CC Docket 98-147. The Commission sought 
written public comment on the proposals in the Second Further Notice, 
including comment on the Supplemental IRFA. The Commission received 
comments from The Organization for the Promotion and Advancement of 
Small Telecommunications Companies (OPASTCO) specifically directed 
toward the Supplemental IRFA. These comments were previously addressed 
fully in the Final Regulatory Flexibility Analysis (FRFA) included as 
part of the Collocation Remand Order, and are addressed only briefly. 
The Supplemental Final Regulatory Flexibility Analysis (Supplemental 
FRFA) conforms to the RFA.

I. Need for, and Objectives of, the Order on Reconsideration

    7. This Order on Reconsideration continues the Commission's efforts 
to facilitate the development of competition in telecommunications 
services. In the Advanced Services First Report and Order, the 
Commission strengthened its collocation rules to reduce the costs and 
delays faced by carriers that seek to collocate equipment at the 
premises of incumbent local exchange carriers (incumbent LECs). In GTE 
v. FCC, the D.C. Circuit vacated several of those rules and remanded 
the case to the Commission. In the Collocation Remand Order, the 
Commission addressed the remanded issues. Among other actions, the 
Commission required incumbent local exchange carriers (incumbent LECs) 
to provide cross-connects between collocated carriers upon reasonable 
request. In the Order on Reconsideration, the Commission addressed a 
petition for clarification or partial reconsideration of that decision.

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

    8. In the Supplemental IRFA, the Commission stated that any rule 
changes would impose minimum burdens on small entities, including both 
telecommunications carriers that request collocation and the incumbent 
LECs that, under section 251(c)(6) of the Communications Act, must 
provide collocation to requesting carriers. The Commission also 
solicited comments on alternatives to the proposed rules that would 
minimize the impact that any changes to its rules might have on small 
entities. In their comments, OPASTCO stated that the Supplemental IRFA 
did not provide ``the flexibility necessary to accommodate the needs of 
small (incumbent LECs) and their customers.'' OPASTCO also stated that 
the Supplemental IRFA does not specify the specific requirements that 
might be imposed on small incumbent LECs or the extent to which those 
requirements might burden small incumbent LECs. Finally, OPASTCO stated 
that the Supplemental IRFA failed ``to describe the ``significant 
alternatives'' for small (incumbent LECs) that [were] presumptively 
under consideration'' in this rulemaking. As noted, the Commission 
responded to OPASTCO's comments in the previous Collocation Remand 
Order.

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

    8. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of entities that will be affected 
by the rules. The RFA 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: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) meets any additional criteria established by the 
Small Business Administration (SBA).
    9. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the number of commercial wireless entities, appears to be data 
the Commission publishes annually in its Carrier Locator report, which 
encompasses data compiled from FCC Form 499-A Telecommunications 
Reporting Worksheets. According to data in the most recent report, 
there are 5679 service providers. These carriers include, inter alia, 
providers of telephone exchange service, wireline carriers and service 
providers, LECs, interexchange carriers, competitive access providers, 
and resellers.
    10. The Commission included small incumbent LECs in this present 
RFA analysis. 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 therefore included small 
incumbent LECs in this RFA analysis, although the Commission emphasized 
that this RFA action has no effect on Commission analyses and 
determinations in other, non-RFA contexts.
    11. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (Census Bureau) reports that, at the end of 1992, 
there

[[Page 61284]]

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 local exchange carriers, 
interexchange carriers, competitive access providers, cellular 
carriers, mobile service carriers, operator service providers, pay 
telephone operators, covered specialized mobile radio providers, 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.'' For example, a 
personal communications service (PCS) provider that is affiliated with 
an interexchange carrier having more than 1,500 employees would not 
meet the definition of a small business. It is 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 
the rules adopted herein.
    12. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange service 
(LECs). The closest applicable definition under the SBA rules is Wired 
Telecommunications Carriers. According to the most recent data, there 
are 2,050 incumbent and other LECs. The Commission does not have data 
specifying the number of these carriers that are either dominant in 
their field of operations, are not independently owned and operated, or 
have more than 1,500 employees, and thus are unable at this time to 
estimate with greater precision the number of LECs that would qualify 
as small business concerns under the SBA's definition. Consequently, 
The Commission estimates that fewer than 2,050 providers of local 
exchange service are small entities or small incumbent LECs that may be 
affected by the rules adopted herein.
    13. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for Wired Telecommunications 
Carriers. According to the most recent data, there are 229 carriers 
engaged in the provision of interexchange services. Of these 229 
carriers, 181 reported that they have 1,500 or fewer employees and 48 
reported that alone, or in combination with affiliates, they have more 
than 1,500 employees. The Commission does not have data specifying the 
number of these carriers that are not independently owned and operated, 
and thus are unable at this time to estimate with greater precision the 
number of IXCs that would qualify as small business concerns under the 
SBA's definition. Consequently, the Commission estimates that there are 
less than 229 small entity IXCs that may be affected by the rules 
adopted herein.
    14. Wireless Service Providers. The SBA has developed a definition 
for small businesses within the two separate categories of Cellular and 
Other Wireless Telecommunications or Paging. Under that SBA definition, 
such a business is small if it has 1,500 or fewer employees. According 
to the Commission's most recent Telephone Trends Report data, 1,495 
companies reported that they were engaged in the provision of wireless 
service. Of these 1,495 companies, 989 reported that they have 1,500 or 
fewer employees and 506 reported that, alone or in combination with 
affiliates, they have more than 1,500 employees. The Commission does 
not have data specifying the number of these carriers that are not 
independently owned and operated, and thus are unable at this time to 
estimate with greater precision the number of wireless service 
providers that would qualify as small business concerns under the SBA's 
definition. Consequently, the Commission estimates that there are 989 
or fewer small wireless service providers that may be affected by the 
rules.

IV. Description of Projected Reporting, Record Keeping, and Other 
Compliance Requirements

    15. The Order on Reconsideration imposes nominal changes in 
projected reporting, record keeping, and other compliance requirements. 
These changes affect small and large companies equally.
    16. In the Order on Reconsideration, in order to comply with a 
statutory mandate, the Commission requires that an incumbent LEC must 
include the rates, terms, and conditions under which they provide 
cross-connects in their federal tariffs. In order to minimize any 
unnecessary regulatory burdens, however, the Commission makes clear 
that incumbents shall have the flexibility to include their cross-
connect offerings in any appropriate federal tariffs.
    17. In the Order on Reconsideration, consistent with its existing 
policy, the Commission allows incumbent LECs the flexibility to use 
individual case basis (ICB) pricing for cross-connects under specific 
limited circumstances. The Commission also retains its requirement that 
incumbent LECs must amend their tariffs to provide for firm rates when 
those circumstances change. These tariffing requirements give greater 
certainty to collocators, many of which are small entities, without 
imposing undue burdens on any incumbent LEC.

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

    18. 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.
    19. In this Order on Reconsideration, the Commission clarifies that 
nothing in its prior order disavows any federal jurisdiction we 
otherwise have under the Act to resolve cross-connect disputes. The 
Commission also requires incumbent LECs, including those classified as 
small entities, to include their cross-connect offerings in their 
federal tariffs. In order to minimize any unnecessary regulatory 
burdens, however, the Commission clarifies that incumbents shall have 
the flexibility to include the rates, terms, and conditions under which 
they provide cross-connects in any appropriate federal tariffs. In so 
doing, the Commission implicitly rejects, as unnecessarily burdensome, 
alternatives such as requiring incumbent LECs to file new, stand-alone 
tariffs for their cross-connect offerings. The Commission also permits 
incumbent LECs to use ICB pricing in these tariffs in appropriate 
circumstances. The Commission rejects as inconsistent its prior policy 
the alternative of precluding all use of ICB pricing for cross-
connects. Rejection of this alternative ensures that incumbent LECs 
have an additional measure of flexibility in developing their federal 
cross-connect tariffs.

Ordering Clauses

    20. Pursuant to sections 1-4, 201-03, 251-54, 256, and 303(r) of 
the Communications Act of 1934, as amended, 47 U.S.C. 151-54, 201-03, 
251-54, 256, and 303(r), that the Petition for Reconsideration or 
Clarification jointly filed by Association

[[Page 61285]]

for Local Telecommunications Services, e.spire Communications, Inc., 
KMC Telecom, Inc., McLeodUSA Telecommunications Services, Inc., and 
NuVox, Inc. September 19, 2001, Is granted to the extent set forth in 
the document.
    21. The Order on Reconsideration Shall become effective October 30, 
2002. The collections of information contained in this Order on 
Reconsideration Are contingent upon approval of the Office of 
Management and Budget. The Commission will publish a document in the 
Federal Register announcing the effective date of this requirement.
    22. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Order on Reconsideration, 
including the Supplemental Final Regulatory Flexibility Analysis, to 
the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 51

    Interconnection, Telecommunications Carriers.

    Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-24720 Filed 9-27-02; 8:45 am]
BILLING CODE 6712-01-P