[Federal Register Volume 68, Number 140 (Tuesday, July 22, 2003)]
[Rules and Regulations]
[Pages 43327-43329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18542]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 69

[CC Docket Nos. 96-262, 94-1, 99-249, 96-45 FCC 03-139]


Access Charge Reform; Price Cap Performance Review for Local 
Exchange Carriers; Assessment of Presubscribed Interexchange Carrier 
Charges of Public Payphones

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Commission modified its rules so that 
payphone lines are no longer subject to the PICC (Presubscribed 
Interexchange Carrier Charge). This action is necessary because the 
Commission determined that eliminating the PICC for payphone lines is 
more consistent with section 276 of the Act. To ensure compliance with 
the anti-subsidization and anti-discrimination provisions of section 
276 of the Act, the Commission determined that payphone line rates 
should be set according to the cost-based new services test. Because 
the multi-line business PICC is a subsidy from multi-line business 
lines to residential and single-line business lines whose subscriber 
line charge (SLC) rates are capped by the Commission's rules, the PICC 
is not cost-based and so it does not comply with the new services test. 
The intended effect of this action is to exempt payphones lines from 
the PICC.

DATES: Effective October 1, 2003.

FOR FURTHER INFORMATION CONTACT: Aaron Goldschmidt, Wireline 
Competition Bureau, 202-418-1520.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration, FCC 03-139 in CC

[[Page 43328]]

Docket No. 96-262, adopted on June 19, 2003 and released on June 25, 
2003. The full text of this document is available for inspection and 
copying during normal business hours in the FCC Reference Information 
Center, 445 12th Street, SW., Washington, DC 20554. The complete text 
may be purchased from the FCC's copy contractor, Qualex International, 
445 12th Street, SW., Room CY-B402 Washington, DC 20554. The full text 
also may be downloaded at http://www.fcc.gov. Introduction. On July 21, 
2000, One Call Communications, Inc. d/b/a Opticom (``One Call'') filed 
a petition for reconsideration and clarification of the Commission's 
CALLS Order. See Access Charge Reform, CC Docket No. 96-262, Sixth 
Report and Order in CC Docket Nos. 96-262 and 94-1, Report and Order in 
CC Docket No. 99-249, Eleventh Report and Order in CC Docket No. 96-45, 
65 FR 38684, June 21, 2000. In its petition, One Call sought to apply 
to payphone lines the common line cost recovery mechanism for single-
line business and residential subscriber lines established in the CALLS 
Order, rather than the cost recovery mechanism applicable to multi-line 
business lines. In this document, the Commission grants One Call's 
request to reconsider the treatment of payphone lines under the 
Commission's access charge rules. Specifically, the Commission adopts a 
rule exempting payphone lines from the PICC, and the Commission denies 
One Call's request that payphone lines be treated as single-line 
business lines for purposes of assessment of the SLC.
    The PICC for Payphone Lines. The Commission finds that payphone 
lines should be exempt from the PICC. In furtherance of section 276(a), 
the Commission has determined that payphone line rates should be set 
according to the cost-based new services test. See 47 U.S.C. 276(a) (1) 
and the Pay Telephone Reclassification and Compensation Provisions of 
the Telecommunications Act of 1996, CC Docket 96-128, Report and Order, 
61 FR 52307, October 7, 1996. The multi-line business PICC, however, 
does not recover the costs of the lines on which it is assessed. 
Rather, it recovers revenues that would be recovered through charges on 
residential and single-line business lines, if those charges were not 
capped. Thus, because the PICC is not cost-based, it does not comply 
with the new services test.
    The Commission notes that, in adopting section 276(b), Congress 
desired to ``promote the widespread deployment of payphone services to 
the general public.'' See 47 U.S.C. 276(b)(1). The Commission believes 
that this is consistent with a universal service function that 
payphones provide to those who cannot otherwise afford telephone 
service. The Commission concludes that it is bad policy to impose a 
non-cost-based charge, such as the PICC, on payphone lines because 
doing so may limit the deployment of payphone services that serve these 
important functions. Given Congress's stated intent to preserve the 
availability of payphones, the universal service functions payphones 
provide, and that the PICC does not reflect costs incurred for the 
provision of payphone service, the Commission finds it desirable to 
exempt payphone lines from the PICC. Although the Commission's Order 
establishes that payphone lines are exempted from the PICC on a going-
forward basis, the Commission makes no finding with respect to the 
application of PICCs to payphone lines prior to the effective date of 
the Order.
    Therefore, price cap LECs that still assess the PICC on multi-line 
business lines must adjust their rates in their next annual access 
tariff filings to reflect that the PICC no longer applies to payphone 
lines. Price cap LECs may recover the revenue previously recovered 
through assessing the PICC on payphone lines by adjusting their multi-
line business PICCs. To the extent the PICC cap prevents such recovery, 
price cap LECs may recover the revenue shortfall through Carrier Common 
Line Charges (CCLCs).
    The Appropriate SLC for Payphone Lines. The Commission rejects One 
Call's proposal that payphone lines be treated as single-line business 
lines for the purpose of assessing the SLC. Although the multi-line 
business PICC represents a subsidy flowing from multi-line business 
lines to residential and single-line business lines, the multi-line 
business SLC is a cost-based charge. The SLCs are the primary method by 
which incumbent LECs recover their interstate common line costs, and 
the SLC caps ensure that the SLCs never recover more than the carrier's 
per-line permitted revenues. See 47 CFR 69.152(d), (e) and (k). 
Moreover, the Commission's rules prevent a LEC from subsidizing one 
class of customers through the SLCs assessed on another class of 
customers. See id. Thus, the assessment of multi-line business line 
SLCs on payphone lines does not result in any subsidy to other lines. 
In addition, to prevent a BOC from overrecovering its costs for a 
payphone line, the BOC must reduce the monthly per-line charge for 
payphone lines determined in a state proceeding under the new services 
test by the amount of the SLC. If the Commission were to treat payphone 
lines as single-line business lines, however, the amount by which a 
LEC's per-line revenue requirement exceeds the single-line business 
line SLC cap, which is lower than the multi-line business SLC cap, 
would then need to be recovered through increased PICCs on multi-line 
businesses. This would result in multi-line business lines subsidizing 
LEC-owned payphone lines in contravention of the mandate of section 
276(a) against such subsidization. See 47 U.S.C. 276(a)(1).
    Final Regulatory Certification. The Regulatory Flexibility Act of 
1980, as amended (RFA), requires that a regulatory flexibility analysis 
be prepared for notice-and-comment rulemaking proceedings, unless the 
agency certifies that ``the rule will not, if promulgated, have a 
significant economic impact on a substantial number of small 
entities.'' 5 U.S.C. 605(b). The RFA generally defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' 5 
U.S.C. 601(6). In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. 5 U.S.C. 601(3). 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 
Small Business Administration (SBA). See 15 U.S.C. 632.
    The CALLS Order revised the Commission's system of common line 
access charges by increasing the residential and single-line business 
line SLC, while simultaneously eliminating the PICC for these lines. 
The CALLS Order also required annual reductions in traffic sensitive 
switching and trunking access rates until they reached a specified 
level. In addition, the CALLS Order also established an interstate 
access universal support mechanism that provides explicit support to 
replace support that was implicit in interstate access charges.
    This document responds to a petition for reconsideration that 
sought, for payphone lines, the application of the common line cost 
recovery mechanism for residential and single-line business lines 
established in the CALLS Order, rather than the cost recovery mechanism 
applicable to multi-line business lines. This document grants the 
petition insofar as it sought the elimination of the PICC for payphone 
lines, and denies the request that payphone lines be subject to the SLC 
applicable to single-line business and residential lines. The rule 
revision will result in a positive net

[[Page 43329]]

impact on small entities, in that operator service providers will no 
longer be assessed the PICC on payphone lines. In addition, because 
small and rural incumbent price cap LECs will be able to increase their 
PICCs or common line carrier charges to offset the reduction in the 
number of lines being assessed the PICC revenue, their overall common 
line revenues will not be affected. Thus, the Commission expects that 
the rule revision will have a de minimis impact on these affected small 
entities. Therefore, the Commission certifies that the requirements of 
the document will not have a significant economic impact on a 
substantial number of small entities.
    The Commission will send a copy of the document, including a copy 
of this Final Regulatory Flexibility Certification, in a report to 
Congress pursuant to the Congressional Review Act. See 5 U.S.C. 
801(a)(1)(A). In addition, the document (or summary thereof) and this 
final certification will be published in the Federal Register, and will 
be sent to the Chief Counsel for Advocacy of the U.S. Small Business 
Administration. See 5 U.S.C. 605(b).
    Paperwork Reduction Analysis. The action contained herein has been 
analyzed with respect to the Paperwork Reduction Act of 1995, and it 
contains no new or modified information collections subject to Office 
of Management and Budget review.
    Ordering Clauses. Accordingly, pursuant to sections 1, 4(i) and 
(j), 201-209, and 276 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i) and (j), 201-209, and 276, this Order and Order on 
Reconsideration is adopted. One Call's Petition for Reconsideration and 
Clarification is granted to the extent indicated herein and otherwise 
is denied. The Commission's Consumer & Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Order, 
including the Final Regulatory Flexibility Certification, to the Chief 
Counsel for Advocacy of the Small Business Administration. The 
provisions of this Order shall be effective on October 1, 2003.

List of Subjects in 47 CFR Part 69

    Communications common carriers, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rules Changes

0
For the reasons set forth in the preamble, amend part 69 of title 47 of 
the Code of Federal Regulations as follows:
0
1. The authority citation continues to read as follows:

    Authority: 47 U.S.C. 154, 201, 202, 203, 205, 218, 220, 254, 
403.


0
2. Amend Sec.  69.153 by adding paragraph (f) to read as follows:


Sec.  69.153  Presubscribed interexchange carrier charge (PICC).

* * * * *
    (f) The PICC shall not be applicable to any payphone lines.

[FR Doc. 03-18542 Filed 7-21-03; 8:45 am]
BILLING CODE 6712-01-P