[Federal Register Volume 62, Number 167 (Thursday, August 28, 1997)] [Proposed Rules] [Pages 45611-45613] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-22733] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 51 [CC Docket No. 96-98, FCC 97-295] Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 AGENCY: Federal Communications Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The Commission is issuing this Further Notice of Proposed Rulemaking (Further NPRM) seeking comment on whether requesting carriers may use unbundled shared transport facilities in conjunction with unbundled switching, to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service. We also seek comment on whether similar use restrictions may apply to the use of unbundled dedicated transport facilities. The Commission's goal is to increase competition in the local exchange and exchange access market. DATES: Comments are due on or before October 2, 1997 and Reply Comments are due on or before October 17, 1997. Written comments by the public on the proposed and/or modified information collections are due October 2, 1997. Written comments must be submitted by the Office of Management and Budget (OMB) on the proposed and/or modified information collections on or before October 27, 1997. ADDRESSES: Comments and reply comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M Street NW., Room 222, Washington, DC 20554, with a copy to Janice Myles of the Common Carrier Bureau, 1919 M Street NW., Room 544, Washington, DC 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th St. NW., Washington, DC 20036. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 234, 1919 M Street NW., Washington, DC 20554, or via the Internet to [email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street NW., Washington, DC 20503 or via the Internet to [email protected]. FOR FURTHER INFORMATION CONTACT: Kalpak Gude, Attorney, Common Carrier Bureau, Policy and Program Planning Division, (202) 418-1580. For additional information concerning the information collections contained in this Further NPRM contact Dorothy Conway at (202) 418-0217, or via the Internet at [email protected]. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Further Notice of Proposed Rulemaking adopted and released August 18, 1997 (FCC 97-295). The full text of this Further NPRM is available for inspection and copying during normal business hours in the FCC Reference Center, 1919 M St. NW., Room 239, Washington, DC. The complete text also may be obtained through the World Wide Web, at http://www.fcc.gov/Bureaus/Common [[Page 45612]] Carrier/Orders/fcc97295.wp, or may be purchased from the Commission's copy contractor, International Transcription Service, Inc., (202) 857- 3800, 1231 20th St., N.W., Washington, D.C. 20036. Synopsis of Further Notice of Proposed Rulemaking I. Further Notice of Proposed Rulemaking A. Discussion 1. In the Local Competition Order (61 FR 45476 (August 29, 1996)), we did not condition use of network elements on the requesting carrier's provision of local exchange service to the end-user customer. We recognized, however, that, as a practical matter, a requesting carrier using certain network elements would be unlikely to obtain customers unless it offered local exchange service as well as exchange access service over those network elements. In particular, we found that local loops are dedicated to the premises of a particular customer. Therefore, we stated that a requesting carrier would need to provide all services requested by the customer to whom the local loops are dedicated, and that, as a practical matter, requesting carriers usually would need to provide local exchange service over any unbundled local loops that it purchases under section 251(c)(3). We similarly held in our Order on Reconsideration (61 FR 52706 (October 8, 1996)) that the unbundled switch, as defined in the Local Competition Order, includes the line card, which is typically dedicated to a particular customer. We concluded that: Thus, a carrier that purchases the unbundled switching element to serve an end user effectively obtains the exclusive right to provide all features, functions, and capabilities of the switch, including switching for exchange access and local exchange service, for that end user. A practical consequence of this determination is that the carrier that purchases the local switching element is likely to provide all available services requested by the customer served by that switching element, including switching for local exchange and exchange access. 2. Neither of the petitions for reconsideration expressly asked the Commission to determine whether requesting carriers may purchase shared transport facilities under section 251(c)(3) of the Act to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service. Moreover, the oppositions and replies to the two petitions for reconsideration, as well as the ex partes, focused on the issue of whether requesting carriers may use unbundled shared transport facilities, in conjunction with unbundled switching, to compete in the local exchange market. In fact, the issue of whether requesting carriers may purchase unbundled shared transport facilities to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service was specifically addressed only in two recent ex parte submissions. In order to develop a complete record on this issue, we issue this further notice of proposed rulemaking specifically asking whether requesting carriers may use unbundled dedicated or shared transport facilities in conjunction with unbundled switching, to originate or terminate interstate toll traffic to customers to whom the requesting carrier does not provide local exchange service. Absent restrictions requiring carriers to provide local exchange service in order to purchase unbundled shared or dedicated transport facilities, an IXC, for example, could request shared or dedicated transport under section 251(c)(3) for purposes of carrying originating interstate toll traffic between an incumbent LEC's end office and the IXC's point of presence (POP). Likewise, an IXC could request such transport network elements for purposes of terminating interstate toll traffic from its POP to an incumbent LEC's end office. Parties that advocate the use of transport network elements for the transmission of such access traffic should address whether that approach is consistent with our Order on Reconsideration regarding the use of the unbundled local switching element to provide interstate access service as well as recent appellate court decisions interpreting section 251(c)(2) and (3). Parties that advocate restricting the use of transport network elements should address whether such restrictions are consistent with section 251(c)(3) of the Act, which requires an incumbent LEC to provide access to unbundled network elements ``for the provision of a telecommunications service.'' Moreover, those parties should also address the technical feasibility of requiring an IXC to identify terminating toll traffic that is destined for customers that are not local exchange customers of the incumbent LEC. B. Procedural Matters 1. Ex Parte Presentations 3. This Further NPRM is a permit-but-disclose notice-and-comment rulemaking proceeding. Ex parte presentations are permitted, in accordance with the Commission's rules, provided that they are disclosed as required. 2. Initial Regulatory Flexibility Analysis 4. As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the expected significant economic impact on small entities by the policies and rules proposed in the Further Notice of Proposed Rulemaking (Further NPRM). Written public comments are requested on the IRFA. These comments must be filed by the deadlines for comment on the remainder of the Further Notice, and should have a separate and distinct heading designating them as responses to the IRFA. The Commission will send a copy of the Further NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA) in accordance with the RFA, 5 U.S.C. Sec. 603(a). 5. Need for and Objectives of the Proposed Rules. We seek comment on whether requesting carriers may use unbundled shared transport facilities in conjunction with unbundled switching, to originate or terminate interexchange traffic to customers to whom the requesting carrier does not provide local exchange service. We also seek comment on whether similar use restrictions may apply to the use of unbundled dedicated transport facilities. We propose no new rules at this time. In light of comments received in response to the Further NPRM, we might issue new rules. 6. Legal Basis. The legal basis for any action that may be taken pursuant to the Further Notice is contained in Sections 1, 2, 4, 201, 202, 274, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. Secs. 151, 152, 154, 201, 202, 274, and 303(r). 7. Description and Estimate of the Number of Small Entities That May Be Affected by the Further Notice of Proposed Rulemaking. In determining the small entities affected by our Further NPRM for purposes of this Supplemental FRFA, we adopt the analysis and definitions set forth in the FRFA in our First Report and Order (61 FR 45476 (August 29, 1996)). The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that might be affected by proposed rules. The RFA defines the term ``small entity'' as having the same meaning as the terms ``small business,'' ``small organization,'' and ``small business concern'' under Section 3 of the Small Business Act. A small business concern [[Page 45613]] 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 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 an entity with no more than 1,500 employees. Consistent with our FRFA and prior practice, we here exclude small incumbent local exchange carriers (LECs) from the definition of ``small entity'' and ``small business concern.'' While such a company may have 1,500 or fewer employees and thus fall within the SBA's definition of a small telecommunications entity, such companies are either dominant in their field of operations or are not independently owned and operated. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent LECs within this present analysis and use the term ``small incumbent LECs'' to refer to any incumbent LEC that arguably might be defined by SBA as a small business concern. 8. In addition, for purposes of this IRFA, we adopt the FRFA estimates of the numbers of telephone companies, incumbent LECs, and competitive access providers (CAPs) that might be affected by the First Report and Order. In the FRFA, we determined that it was reasonable to conclude that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that might be affected. We further estimated that there are fewer than 1,347 small incumbent LECs that might be affected. Finally, we estimated that there are fewer than 30 small entity CAPs that might qualify as small business concerns. 9. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements. It is probable that any rules issued pursuant to the Further NPRM would not change the projected reporting, recordkeeping, or other compliance requirements already adopted in this proceeding. 10. Steps Taken to Minimize Significant Economic Impact on Small Entities, and Alternatives Considered. As stated in our FRFA, we determined that our decision to establish minimum national requirements for unbundled elements would likely facilitate negotiations and reduce regulatory burdens and uncertainty for all parties, including small entities and small incumbent LECs. National requirements for unbundling may allow new entrants, including small entities, to take advantage of economies of scale in network design, which may minimize the economic impact of our decision in the First Report and Order. This finding has not been challenged. We do not believe that any rules that may be issued pursuant to the Further NPRM will change this finding. We seek comment on this tentative conclusion. 11. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None. 3. Comment Filing Procedures 12. Pursuant to applicable procedures set forth in Secs. 1.415 and 1.419 of the Commission's rules, 47 CFR Secs. 1.415, 1.419, interested parties may file comments on or before October 2, 1997, and reply comments on or before October 17, 1997. To file formally in this proceeding, you must file an original and six copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original and eleven copies. Comments and reply comments should be sent to the Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C., 20036. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C., 20554. 13. Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also 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. All parties are encouraged to utilize a table of contents, regardless of the length of their submission. 14. Parties are also asked to submit comments and reply comments on diskette. Such diskette submissions would be in addition to, and not a substitute for, the formal filing requirements addressed above. Parties submitting diskettes should submit them to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The diskette should be submitted in ``read only'' mode. The diskette should be clearly labelled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter. 15. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C., 20554, or via the Internet to [email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W., Washington, D.C., 20503 or via the Internet to [email protected]. II. Ordering Clauses 16. It is further ordered, that the Commission shall send a copy of this Third Order on Reconsideration and Further Notice of Proposed Rulemaking, including the associated Supplemental Final Regulatory Flexibility Analysis and Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. 17. It is further ordered that pursuant to sections 1, 2, 4, 201, 202, 274 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. Secs. 151, 152, 154, 201, 202, 274, and 303(r), the further notice of proposed rulemaking is adopted. List of Subjects in 47 CFR Part 51 Communications common carriers, Network elements, Transport and termination. Federal Communications Commission. William F. Caton, Acting Secretary. [FR Doc. 97-22733 Filed 8-27-97; 8:45 am] BILLING CODE 6712-01-P