[Federal Register Volume 67, Number 189 (Monday, September 30, 2002)]
[Rules and Regulations]
[Pages 61285-61287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24721]


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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 finds that federally mandated limits on the time 
period for which incumbent local exchange carriers (LECs) and 
competitive LECs may reserve potential collocation space for future use 
are not warranted. It further concludes that disputes regarding the 
conversion of virtual collocation arrangements to physical collocation 
arrangements should be addressed on a case-by-case basis. Finally, it 
determines that, although point-of-termination bays (POT bays) 
constitute a technically feasible point of interconnection, an 
incumbent LEC may not compel collocators to interconnect through them.

DATES: Effective October 30, 2002.

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 Fifth 
Report and Order in CC Docket No. 98-147, FCC 02-234, adopted August 
14, 2002, and released September 4, 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 Web site at http://www.fcc.gov.

Synopsis of the Fifth Report and Order

    1. Background. In the Second Further Notice (65 FR 54527, September 
8, 2000), the Commission sought comment on several collocation-related 
issues that the Commission has not yet addressed. These issues included 
whether the Commission should adopt a national policy limiting the 
period for which potential collocation space can be reserved for future 
use. Parties to this proceeding asked that the Commission clarify its 
policies regarding the conversion of virtual collocation arrangements 
to physical arrangements and regarding the use of POT bays with 
physical collocation arrangements.
    2. Space Reservation Policies. In the Second Further Notice, the 
Commission stated that the primary responsibility for resolving space 
reservation disputes lay with the states and therefore declined to 
adopt specific space reservation period at that time. The Commission, 
however, requested comment as to whether it should adopt a national 
space reservation policy that would apply where a state does not set 
its own standard. Based on the record, the Commission is not convinced 
that national space reservation policy is needed at this time to ensure 
that requesting carriers obtain reasonable and nondiscriminatory access 
to potential collocation space. The Commission states that, because a 
variety of factors can impact the availability of central office space, 
the states continue to be in the best position to monitor this 
situation and adopt policies that best address the particular space 
reservation issues in that state. The Commission also states that to 
the extent the state commissions have not adopted specific periods for 
space reservations, space reservation disputes should be resolved on a 
case-by-case basis.
    3. Conversion of Virtual Arrangements to Physical Arrangements. The 
Commission states that it would not require, as a general matter, that 
incumbent local exchange carriers (incumbent LECs) permit in-place 
conversions of virtual collocation arrangements to physical collocation 
arrangements. The Commission concludes that a blanket rule might result 
in some physical arrangements occupying space that would otherwise be 
unsuited for physical collocation. At the same time, the Commission 
recognizes that, under section 251(c)(6) of the Communications Act, an 
incumbent LEC must provide for physical collocation on terms and 
conditions that are just, reasonable, and nondiscriminatory. The 
Commission determines that any disputes regarding whether an incumbent 
LEC complies with this standard in evaluating requests to move a 
virtual arrangement to part of the incumbent LEC's premises where 
physical collocation is allowed should be addressed on a case-by-case 
basis.
    4. POT Bays. In the Advanced Services First Report and Order (63 FR 
4420, August 18, 1998), the Commission adopted Sec. 51.323(k)(2) of the 
Commission's rules, which provides that ``[a]n incumbent LEC may not 
require competitors to use an intermediate interconnection arrangement 
in lieu of direct connection to the incumbent's network if technically 
feasible.'' In the Fifth Report and Order, the Commission states that, 
by definition, a POT bay is not an ``intermediate interconnection 
arrangement,'' but rather simply a convenient demarcation point between 
the incumbent LEC's facilities and those of the collocator. The 
Commission therefore concludes that the prohibition against 
intermediate interconnection arrangements in Sec.  51.323(k)(2) does 
not apply to POT bays. The Commission notes, however, that the 
Communications Act mandates that incumbent LECs allow competitive LECs 
to interconnect at ``any technically feasible point.'' The Commission 
therefore concludes that while incumbent LECs may offer interconnection 
through POT bays as one technically feasible method of interconnection 
with a collocated competitive LEC, they may not unilaterally require 
competitive LECs to

[[Page 61286]]

interconnect through such an arrangement where other technically 
feasible points of interconnection are available. The Commission notes, 
however, that although an incumbent LEC cannot unilaterally dictate the 
point of interconnection, this does not mean that a competitive LEC can 
dictate how the interconnection is implemented. The Commission states 
that these matters are typically subject to negotiations between the 
parties.

Supplemental Final Regulatory Flexibility Act Analysis

    5. 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 (66 FR 43516, August 20, 2001), 
and are addressed only briefly in The Supplemental Final Regulatory 
Flexibility Analysis (Supplemental FRFA) conforms to the RFA.

I. Need for, and Objectives of, the Fifth Report and Order

    6. This Fifth Report and Order 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 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 Fifth Report and Order, the 
Commission addressed a collocation issues raised as part of the Second 
Further Notice. The Commission's actions will help incumbent LECs and 
collocated carriers better understand its collocation requirements and 
how they will be enforced.

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

    7. 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 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

[[Page 61287]]

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. None.

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

    16. 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.
    17. In the Fifth Report and Order, the Commission addresses the 
need for a national space reservation policy, the conversion of virtual 
collocation arrangements to physical collocation arrangements, and 
whether incumbent LECs may require the use of point of termination 
(POT) bays. It rejects the alternative of adopting more stringent 
regulations as suggested by some commenters. The Commission concludes 
that disputes regarding an incumbent LEC's policies on space 
reservations and the conversion of virtual collocation arrangements 
should be addressed on a case-by-case basis. It also concludes that 
while the use of POT bay is permissible, incumbent LECs may not 
unilaterally compel their use.

Paperwork Reduction Act Analysis

    18. The actions contained in the Fifth Report and Order have been 
analyzed with respect to the Paperwork Reduction Act of 1995 (PRA) and 
found to impose no new or modified reporting and recordkeeping 
requirements or burdens on the public.

Ordering Clauses

    19. 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), the Fifth Report and Order is adopted.
    24. 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. 151-154, 201, 
202, 251-54, 256, and 303(r), the actions taken in the Fifth Report and 
Order Shall become effective October 30, 2002.
    25. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, Shall send a copy of this Fifth Report 
and Order, 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. 02-24721 Filed 9-27-02; 8:45 am]
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