**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

###  {#section .unnumbered}

In the Matter of )

)

2000 Biennial Regulatory Review of Part 68 of ) CC Docket No. 99-216

the Commission\'s Rules and Regulations )

**NOTICE OF PROPOSED RULEMAKING**

Adopted: May 15, 2000 Released: May 22, 2000

**Comment date: June 23, 2000**

**Reply comment date: July 7, 2000**

By the Commission:

**TABLE OF CONTENTS**

I. INTRODUCTION [2](#introduction)

II\. BACKGROUND [4](#background)

III\. PROPOSALS FOR PART 68 [7](#proposals-for-part-68)

A. Regulatory Paradigm for Establishing Technical Criteria
[7](#regulatory-paradigm-for-establishing-technical-criteria)

1\. Need for Technical Criteria to Protect the Network
[8](#need-for-technical-criteria-to-protect-the-network)

2\. Relative Roles of Government and Industry in Establishing Technical
Criteria
[9](#relative-roles-of-government-and-industry-in-establishing-technical-criteria)

3\. Option A -- "Gatekeeper" SDO [14](#option-a-gatekeeper-sdo)

4\. Option B -- Multiple Standards Organizations
[19](#option-b-multiple-standards-organizations)

5\. Option C - Incorporate Specific Standards by Reference
[22](#option-c---incorporate-specific-standards-by-reference)

6\. Clarification of Terminology in Part 68
[23](#clarification-of-terminology-in-part-68)

B. Regulatory Paradigm for Equipment Approval
[23](#regulatory-paradigm-for-equipment-approval)

1\. Telecommunications Certification Bodies
[24](#telecommunications-certification-bodies)

2\. Supplier\'s Declaration of Conformity and Verification
[26](#suppliers-declaration-of-conformity-and-verification)

3\. Database of Approved or Certified Equipment
[28](#database-of-approved-or-certified-equipment)

4\. Anti-Drug Abuse Act [29](#anti-drug-abuse-act)

5\. Registration Numbering and Labeling
[29](#registration-numbering-and-labeling)

6\. Compliance With Consumer Protection and Part 68 HAC/VC Rules.
[30](#compliance-with-consumer-protection-and-part-68-hacvc-rules.)

C. Commission Enforcement of the Streamlined Part 68
[31](#commission-enforcement-of-the-streamlined-part-68)

D. Conclusion [33](#conclusion)

IV\. PROCEDURAL MATTERS [33](#procedural-matters)

A. Ex Parte Presentations [33](#ex-parte-presentations)

B. Initial Paperwork Reduction Act Analysis
[33](#initial-paperwork-reduction-act-analysis)

C. Comment Filing Procedures [34](#comment-filing-procedures)

D. Further Information [35](#further-information)

V. ORDERING CLAUSES [35](#ordering-clauses)

APPENDIX A List of Commenters and Fora Participants

APPENDIX B Initial Regulatory Flexibility Act Analysis

# INTRODUCTION

1.  In this Notice of Proposed Rulemaking (Notice), we propose to
    streamline most elements of the process by which technical criteria
    are established for customer premises equipment[^1] (CPE or terminal
    equipment) that, once approved, local exchange carriers must allow
    to be connected to the public switched telephone network (PSTN). We
    also propose to minimize Commission assessment of product compliance
    with technical criteria for such equipment. Our goal is to make
    these processes faster and more responsive to technical innovation,
    with a diminished role for the government, while preserving our core
    goals of preventing harm to the PSTN and ensuring access for persons
    with disabilities.

2.  CPE currently is regulated by Part 68 of our rules, which
    establishes technical criteria designed to ensure that the CPE does
    not harm the PSTN or telephone company personnel[^2] and a
    registration process to verify which CPE complies with these
    criteria. Part 68 requires local exchange carriers to allow CPE that
    is registered as Part 68 compliant to be connected to their
    networks.[^3] As part of our overall mandate to reduce regulation
    wherever possible, consistent with the public interest, [^4] we
    propose in this Notice largely to privatize two of Part 68's
    functions \-- first, the establishment of technical criteria for CPE
    to ensure it will not harm the PSTN and, second, the registration
    process used to determine whether a particular model of equipment
    meets those standards.[^5] The reduction of governmental involvement
    in the setting of technical criteria and registration of CPE will,
    we believe, have a beneficial impact upon the pace of new or
    competitive CPE deployment, and therefore increase the choices
    available to consumers.[^6]

3.  Our proposals in this Notice are based on positions that emerged
    from a series of industry fora we held in July 1999 to explore the
    extent to which regulations in Part 68, other than our hearing aid
    compatibility and volume control (HAC/VC) rules, may no longer be
    necessary. We also include proposals patterned after the
    Commission's rules establishing interconnection rules for cable
    television devices.[^7] In this Notice, we propose to retain in our
    rules proscriptions against certain harms to the PSTN that can be
    caused by offending CPE. We also propose that our rules continue to
    require that local exchange carriers (LECs) allow CPE that meets
    technical criteria for network protection to be connected freely to
    their networks. However, rather than continuing to set such
    technical criteria ourselves, we propose in this Notice to use one
    of several potential industry standards-setting processes. The only
    technical criteria that we propose to retain in our rules are those
    that ensure access to telecommunications and services by persons
    with disabilities and those that deal with network demarcation and
    inside wire.[^8] To ensure that the public interest is adequately
    protected, we propose to provide for *de novo* Commission review and
    enforcement, where necessary, of the industry-established technical
    criteria in the event of an appeal regarding the criteria. We
    expect, however, that such Commission involvement would be extremely
    limited.

4.  We also propose to assign to private industry the process of
    verifying that specific CPE meets the established technical
    criteria. We have already established a procedure whereby CPE
    manufacturers may submit their products to private
    Telecommunications Certifications Bodies (TCBs), rather than the
    Commission, for Part 68 registration.[^9] In this Notice, we propose
    to replace Commission registration entirely with either expanded use
    of the TCBs for certification, or self-certification or
    verification.

# BACKGROUND

5.  Before the Commission established its rules in Part 68, CPE was
    manufactured almost exclusively by Western Electric, which was part
    of the Bell System of companies that included the monopoly local
    exchange and long distance providers in most parts of the country.
    This ensured that no harmful CPE was connected to the PSTN, but also
    created a monopoly in the development and manufacture of CPE. The
    Part 68 rules are premised on a compromise whereby LECs are required
    to allow CPE manufactured by anyone to be connected to their
    networks, provided that the CPE has been shown to meet the technical
    criteria for preventing network harm that are established in the
    Part 68 rules. Thus, although our Part 68 rules appear to establish
    elaborate requirements for CPE manufacturers, the fundamental
    obligation that the rules impose is on the LECs \-- they must allow
    Part 68-compliant CPE to be connected freely to their networks.[^10]
    CPE manufacturers are not required to comply with Part 68, but
    equipment that is not Part 68-registered is not freely connectable
    to the PSTN and thus has limited marketability. Our rules have
    facilitated a vibrant, competitive market for CPE, reducing prices
    and resulting in a proliferation of new equipment and capabilities
    available to consumers.

6.  At the time the Commission established its Part 68 rules, the LECs
    controlled the CPE market as well as the PSTN itself. Few entities
    outside of the LECs had extensive knowledge about the interaction of
    CPE and the PSTN, and there appeared to be no private
    standard-setting bodies or testing laboratories with expertise in
    CPE. Given this market condition, the Commission took upon itself
    the obligations of both establishing technical criteria to ensure
    that CPE would not harm the network and verifying that specific CPE
    complied with the technical criteria. The rules identified four
    types of harm against which the network was to be protected:[^11]

#####  (1) electrical hazards to telephone company personnel,  {#electrical-hazards-to-telephone-company-personnel .unnumbered}

#####  (2) damage to telephone company equipment,  {#damage-to-telephone-company-equipment .unnumbered}

#####  (3) malfunction of telephone company billing equipment, and {#malfunction-of-telephone-company-billing-equipment-and .unnumbered}

\(4\) degradation of service to persons other than the user of the
subject terminal equipment, his calling or called party.

7.  Taking account of the LECs' near monopoly on technical expertise in
    the 1970s, the Commission included in its Part 68 rules detailed
    technical information, including drawings and schematics of CPE
    circuitry and interconnection devices. The initial Part 68 rules
    were based, in large measure, on the existing internal carrier
    technical standards at that time. Although they contain detailed
    technical criteria, the Part 68 rules do not generally seek to
    ensure the quality, performance, or interoperability of
    interconnected networks.[^12]

8.  In the years since the Part 68 rules were promulgated, the
    marketplaces for both CPE and local exchange service have changed
    dramatically, as has this Commission's approach to regulation. As
    noted above, vibrant competition has emerged in the CPE marketplace.
    Basic voice telephones (virtually the only consumer CPE that was
    available from the LECs at the time Part 68 rules were established)
    are now available from an array of suppliers in a myriad of styles
    with varied options for extremely low prices. New types of CPE,
    including advanced telephones, computer modems, and equipment for
    individuals with disabilities, have become available. Private
    standards-setting bodies and testing laboratories for
    telecommunications equipment have also been established, and the
    CPE-manufacturing industry has matured and plays a strong and active
    role in them. The PSTN itself is also becoming more competitive.
    Competition in the long distance market became a reality with the
    divestiture of the Bell System in 1984. With Congress's passage, and
    the Commission's implementation, of the 1996 Act, competition is now
    emerging in the local exchange market as well, with new companies
    often using their own networks, in whole or in part, to serve local
    customers.

9.  The Commission has revised Part 68 many times since it was initially
    promulgated, often to reflect technological innovation in the
    network and CPE.[^13] In addition, we have established rights to
    supply, buy, and use inside wiring.[^14] Despite frequent revisions,
    the time and resources required to change federal regulations in
    accordance with the Administrative Procedure Act (APA)[^15] have
    prevented, in some cases, the Part 68 rules from keeping pace with
    technological innovations. As a result, we have established a policy
    of granting waivers of certain of the technical criteria in Part 68
    on an *ad hoc* basis to accommodate technological innovations that,
    while not compliant with Part 68, nevertheless serve the public
    interest.[^16] We generally have granted such waivers in
    anticipation of later rulemaking proceedings that would effect a
    change in our rules to accommodate the innovations on a permanent
    basis. Nevertheless, the waiver process may hinder the pace at which
    such innovations can be deployed in the marketplace and enjoyed by
    the public.

10. The Part 68 rules also affect foreign manufacturers of CPE.
    Currently, the U.S. Customs Service prevents the importation into
    the United States of terminal equipment[^17] that is not Part
    68-registered. Because the Commission currently processes Part 68
    registrations, foreign manufacturers must apply to the Commission
    for registration prior to exporting their products to the United
    States. In part to make it easier to export terminal equipment into
    the United States, we recently have enacted rules that allow
    manufacturers to have their equipment certified as compliant not
    only by the Commission, but, as an alternative, by any of a
    multitude of TCBs as well.[^18] TCBs need not be based in the U.S.;
    TCBs may be based in any country with which the U.S. has a Mutual
    Recognition Agreement (MRA).[^19] TCBs must meet certain
    qualifications that ensure their knowledge, expertise, and
    integrity.[^20] We have also adopted uniform, or \"harmonized,\"
    technical criteria for protection of the wireline network consistent
    with the protections used in Canada.[^21] The existence of the TCB
    program will benefit not only foreign manufacturers but also
    domestic manufacturers, who may apply to TCBs for equipment
    registration in lieu of the Commission. Nevertheless, our current
    rules envision the TCBs as an alternative to the primary role of the
    Commission in registering CPE.

11. Against the backdrop of these highly developed and competitive
    market conditions and the opportunity for a new regulatory paradigm,
    we began an inquiry in 1999 into whether the Commission could begin
    to take a less active role in regulating the interconnection of CPE
    to the PSTN. In July 1999, the Common Carrier Bureau held a series
    of public fora on this question. Industry commenters in the fora
    included representatives of incumbent local exchange carriers
    (ILECs), competitive local exchange carriers (CLECs), manufacturers,
    industry associations, terminal equipment testing laboratories, and
    one state consumer counsel.[^22] The views of commenters and fora
    participants were that: (1) carriers\' networks must be
    protected; (2) one uniform set of national technical standards is
    necessary; (3) there are few, if any, unnecessary technical
    requirements in Part 68 at present; (4) the Commission should retain
    the authority to ensure that the PSTN is protected; and (5) the
    functions of technical criteria development, laboratory
    qualification, and registration of equipment, currently performed by
    the Commission, largely can be privatized.[^23] The ideas developed
    in the fora have shaped some of the proposals discussed in this
    Notice. In addition, in a 1998 Report and Order on interconnection
    devices for cable television systems[^24] we adopted a set of rules
    to accomplish set-top box interconnection functions that were far
    simpler than the Part 68 framework for CPE interconnection.[^25] Our
    proposals for Part 68 privatization also are based in part upon this
    precedent.[^26]

# PROPOSALS FOR PART 68

12. In this Notice, we propose alternative approaches to reducing the
    Commission's role in regulating the interconnection of CPE to the
    PSTN by relying to a greater extent on industry standards-setting
    bodies. We first discuss ways to allow industry standards-setting
    organizations to take over the establishment of the Commission's
    technical criteria for CPE currently set forth in Commission's
    rules. We then discuss alternatives for removing the Commission from
    the role of verifying CPE's compliance with the relevant technical
    criteria, which occurs currently through the Part 68 registration
    process.

## Regulatory Paradigm for Establishing Technical Criteria

13. As noted above, Part 68's guarantee that compliant CPE can be
    connected to the PSTN has fundamentally altered the market for CPE
    and the balance of power between the LECs and equipment
    manufacturers. Because we believe that the industry has developed a
    high degree of competitiveness, information dissemination, and
    balanced participation of entities other than incumbent LECs in
    developing policies applicable to network protection, we initiate in
    this Notice a rulemaking proceeding to rely more heavily on industry
    standards-setting bodies for establishing technical criteria for
    CPE. In this section, we consider how to implement these changes. We
    face two basic questions with respect to technical criteria for CPE.
    First, we must determine whether there is a continued need for
    technical criteria of any kind in order to protect the PSTN from
    harm. Second, if there is a continued need for technical criteria,
    we must consider whether it is necessary for the Commission to
    continue to establish and maintain such criteria as opposed to
    having industry establish the criteria.

### Need for Technical Criteria to Protect the Network

14. We must begin this inquiry with the question of whether technical
    criteria are still required at all to protect the PSTN from harm.
    Such criteria would no longer be necessary if, for example, we were
    to determine that the CPE-manufacturing industry has reached such a
    level of maturity that it is now inconceivable that harmful CPE
    would ever be brought to market, or that any LEC allegations of
    CPE's potential to cause harm had been exaggerated. These are
    questions that the Common Carrier Bureau explored in the 1999 public
    fora on Part 68 deregulation.

15. In general, it appears that all segments of the industry, including
    equipment manufacturers, agree that improperly designed or
    constructed CPE may still present a threat to the PSTN. The Common
    Carrier Bureau began the July 1999 fora with the premise that
    industry might welcome complete elimination or reduction of Part 68
    regulation.[^27] We learned that that is not entirely the case.
    Commenters from all facets of the CPE industry were unanimous in
    their view that the technical requirements designed to protect the
    network from harm are beneficial to owners of the network, to
    consumers, and to both domestic and foreign manufacturers.[^28] In
    fact, all parties at the fora argued that all four types of
    protections listed in section 68.3 are still needed.[^29] SBC, for
    example, discussed at length the technical faults that can cause
    injury to maintenance personnel,[^30] the network physical
    plant,[^31] and to other users of the network.[^32] Ameritech and
    Lucent argued that new technology increases, rather than diminishes,
    the need for protection of the network from harm and interference to
    third parties.[^33] Thomson pointed out that responsible
    manufacturers are eager to learn and comply with the technical
    criteria that will protect the network from harm;[^34] other
    manufacturers attending the fora generally agreed that rules are
    necessary to this end.[^35] It appears that LEC billing apparatus
    still requires protection from potential abuse by CPE.[^36]
    TIA,[^37] USTA,[^38] and ITI,[^39] trade associations representing a
    broad spectrum of the telecommunications industry, all argued that
    the network must be protected from damage that still can be caused
    by improperly designed CPE or untested new technologies. Commenters
    also pointed out that, in the *Harmonization Order*, the technical
    criteria were carefully reviewed so that the applicability of the
    current technical rules has been recently examined by industry
    standards groups.[^40]

16. We therefore tentatively conclude that it remains necessary to
    maintain technical criteria for CPE to protect the PSTN from harm.
    We also tentatively conclude that the four types of network harm
    currently embodied in the Part 68 rules continue to represent a
    valid enunciation of the types of harm against which the PSTN still
    must be protected. We seek comment on these tentative conclusions.

### Relative Roles of Government and Industry in Establishing Technical Criteria 

17. Currently, the technical criteria for freely connectable CPE are
    contained in Part 68 of our rules; they are thus promulgated by a
    government agency pursuant to the rulemaking process. Based on the
    information received in the fora, we tentatively conclude that
    consumers and the industry would be better served if the technical
    criteria were established by an industry standards-setting process
    rather than by the Commission. We reach this tentative conclusion
    for three reasons.

18. First, the record developed to date shows that all components of the
    CPE industry, *i.e.*, industry associations, terminal equipment
    manufacturers, local exchange carriers, standards organizations, and
    retailers, depend upon the safety of the telephone network for their
    economic survival. As a result, they are logically in the best
    position to know what is necessary to protect the network.

19. Second, we believe that, because the industry substantially benefits
    from protecting the PSTN, it rightly should have the responsibility,
    in the first instance, of establishing these criteria rather than
    relying on the government to do so. This places the initial
    responsibility of protecting the PSTN from harm on those who have a
    strong financial interest in ensuring this protection.

20. Third, the extensive participation in technical
    standards-development by these diverse segments of the industry is a
    testament that appropriate parity exists among these parties.
    Competing interests (*e.g.*, the LECs that own the networks, the
    manufacturers of CPE, and existing testing laboratories) will share
    responsibility for establishing the technical criteria. Thus, it
    does not appear that one segment of the industry will dominate the
    development of technical criteria to the detriment of another
    segment of the industry. We seek comment on these tentative
    conclusions.

21. We next consider whether it is necessary to extend the force of law
    to technical criteria established by private bodies, or whether the
    industry is capable of ensuring compliance with technical criteria
    for CPE without the force of law behind those requirements. In
    connection with the Common Carrier Bureau's fora, telephone company
    representatives argued that it is essential to have the authority of
    the government to uphold provisions for network protection in order
    to facilitate their efforts to seek disconnection of harmful CPE
    from the PSTN. Without the authority of the government behind
    technical criteria, they argue, their own efforts to protect their
    networks would be difficult, if not impossible.[^41] Comments
    indicate that consumers also benefit from government regulations
    protecting the network from harm. According to the Texas Office of
    Public Utility Counsel (TOPUC), there are potential market failures
    and externalities from harmful CPE interconnection.[^42] Damage to
    the network adversely affects all network users and causes them to
    incur costs, not just the party that interconnected the offending
    CPE. Thus, the manufacturer or importer does not have full economic
    incentive to avoid offering harmful CPE, and the result is a market
    failure.[^43] Commission rules would thus be required to protect
    consumers from these externalities.

22. Based on the foregoing, we tentatively conclude that it is necessary
    for the government to continue to provide the force of law to
    technical criteria designed to protect the network from harm. We
    seek comment on this tentative conclusion and the premises
    supporting it.

23. We must next determine how best to pursue our twin goals of, on the
    one hand, privatizing the establishment of technical criteria and,
    on the other hand, retaining a public (*i.e.*, Commission) mechanism
    for reviewing and enforcing those criteria. These two functions are
    interrelated in the sense that our method of reviewing and enforcing
    the technical criteria may depend in large part on the method by
    which the criteria are adopted. In the remainder of this section, we
    discuss concrete proposals to effectuate the policy goals we have
    discussed above. We propose three options for relying on private
    development of technical criteria to ensure that CPE connected to
    the PSTN does not cause harm. The three proposals include: (a)
    Commission identification of a "gatekeeper" Standards Development
    Organization (SDO) that will establish and publish binding technical
    criteria for CPE developed pursuant to American National Standards
    Institute (ANSI) procedures for consensus bodies; (b) adoption of a
    presumption that CPE that complies with technical specifications
    established by any national standards-setting organization will not
    cause harm and that local exchange carriers must permit its
    connection to the PSTN; or (c) incorporation into this Commission's
    rules by reference, through the rulemaking process, of specific
    standards developed by national standards organizations. We refer to
    these three proposals as Options A, B, and C, respectively. We do
    not, at this stage of our proceeding, express a preference for any
    of the options. We request that interested parties provide analyses
    of these options and suggest further alternatives if appropriate.
    Comments we receive in response to this Notice will provide the
    basis for our choice of any options or alternatives.

24. Next, we must consider how, from a legal perspective, we can give
    privately developed technical criteria the force of law.
    Historically, we have generally done so by referencing such
    standards by specific title, number and year in our rules.
    Accordingly one alternative is a deregulatory paradigm that involves
    referencing industry standards specifically in our Part 68 rules.
    Such specific references, however, must be updated through a
    rulemaking proceeding to reflect a newer version of any given
    standard.[^44] For example, in sections 68.3, 68.215(d)(4) and
    68.317(a) of our current rules, we reference specific industry
    standards rather than including the entire technical description in
    our rules. Commenters indicate that this procedure, while removing
    technical criteria from our rules, nevertheless creates a
    "bottleneck" as the referenced standards may become obsolete and the
    reference must be updated in a rulemaking proceeding.[^45] The delay
    caused by the need to hold a rulemaking proceeding is one of the
    elements of the current system that we seek to eliminate in this
    proceeding. Therefore, we tentatively conclude that it is preferable
    to pursue a deregulatory paradigm that allows us to give the force
    of law to private technical criteria without specifically
    referencing them in our rules. We tentatively conclude that such a
    procedure will allow vendors to market CPE more expeditiously and
    bring greater benefits to consumers. We seek comment on these
    tentative conclusions.

25. In light of these tentative conclusions, we propose certain
    deregulatory options in this Notice (specifically, those identified
    below as Options A and B) that would give presumptive validity and
    the force of law to privately established technical criteria for CPE
    without referencing those criteria specifically in our rules. We
    believe that options A and B are supported by the past regulatory
    framework for Part 68. The Part 68 *First Report and Order* stressed
    that the Commission\'s guiding objective for competitive CPE
    registration is that it would remain "simple and easy to administer
    as is reasonably possible with a minimum of government
    intervention."[^46] The Commission's goal was to minimize expense to
    both the government and private industry, to the benefit of the
    ultimate consumer, while protecting the PSTN from harms that could
    be caused by faulty CPE.[^47] Now, in view of the market changes
    discussed above, we tentatively conclude that the key objectives
    that led to the original adoption of the Part 68 program may be
    served better through a different mix of government and private
    industry involvement. Although the privately established technical
    criteria would have the force of law, the private standards-setting
    organization would not be performing a Commission policymaking
    function. The authorized standards development organizations would
    assist us in the implementation of our objectives to permit
    connection of competitive CPE to the PSTN without causing harm.
    Although we would expect any disputes over the technical criteria to
    be resolved through established industry processes, any disputes
    ultimately could be brought to the Commission for *de novo* review
    or enforcement, if necessary, giving the Commission the final say in
    the establishment of technical criteria. We request comment on this
    analysis and the foregoing tentative conclusions.

26. We tentatively conclude that the Commission possesses the statutory
    authority to adopt any of the proposals discussed in this Notice.
    For example, the proposed changes are entirely in furtherance of our
    statutory mission \"to make available . . . a rapid, efficient,
    Nation-wide, and world-wide wire and radio communications service
    with adequate facilities . . . .\"[^48] Further, the proposed
    changes are justified, at least in part, on the basis of the same
    statutory authority which was relied upon in 1975 when the Part 68
    program was originally implemented.[^49] Finally, as noted
    previously, the proposed changes, if adopted, will further the
    competitive goals of the 1996 Act.[^50] We also seek comment,
    however, on whether the proposed standards options, particularly the
    Commission's role relative to standards organizations under each of
    the proposed options, are subject to, and consistent with, Section
    256 of the Act.[^51]

27. We also believe that the notice and comment requirements of the
    APA[^52] would not be applicable to the development of technical
    criteria by a non-governmental entity as proposed in options A
    and B. This is so because when an industry body adopts and applies
    technical criteria, it will not be adopting a rule. Rather, it will
    be making a private interpretation of a Commission rule prohibiting
    harm caused by CPE to the PSTN. Any final interpretation with
    respect to compliance would remain with the Commission through a *de
    novo* review and enforcement procedure. We ask for comment on this
    analysis. We are particularly interested in constructive comments on
    the likely impact of these proposals on small entities. For example,
    will it be easier or more difficult for small businesses to
    participate in industry procedures than it is for them to
    participate in FCC rulemaking proceedings under the APA?

28. We note that there are a number of other statutory provisions that
    govern the procedural and administrative aspects of agency action,
    including the Regulatory Flexibility Act (RFA),[^53] the Paperwork
    Reduction Act (PRA),[^54] and the Congressional review procedures
    enacted in the Contract with America Advancement Act (CWAAA).[^55]
    For the same reasons that we believe the APA does not apply to
    privatized development of technical criteria, we do not believe
    these statutory provisions are applicable. We seek comment on this
    tentative conclusion.

29. Certain factors are common to all three of our options. First, these
    proposals affect technical criteria in Part 68, Subparts B, C, D,
    and F.[^56] These proposals also affect the technical definitions
    contained in Section 68.3. We propose, however, to retain in Part 68
    definitions of other terms that embody important public policies or
    have some other aspect that is important to our regulatory design
    outside of CPE interconnection. Accordingly, we propose to keep in
    Part 68 the present definitions of: (a) \"demarcation point\"[^57]
    and the related terms \"single-unit installations\" and \"multiunit
    installations,\" (b) \"essential telephones,\" (c) \"harm,\" (d)
    \"hearing aid compatible,\" (e) \"Private Radio Services,\" (f)
    \"Public Mobile Services,\" and (g) \"secure telephones.\"[^58] In
    addition, we will maintain our direct oversight of, and rules
    concerning, hearing aid compatibility (HAC),[^59] volume
    control,[^60] consumer protection,[^61] and inside wiring.[^62] We
    request comment on these proposals and tentative conclusions and
    request suggestions for any other rules which should be retained, or
    added to, Part 68.

30. We tentatively conclude that the explicit goals of Part 68 \-- in
    effect, the requirements that would remain in our rules to guide and
    govern industry development of technical criteria under either
    option A or B \-- should be the following:

-   to develop technical criteria[^63] to protect the wireline telephone
    network from harm, as defined in our rules;

-   to allow the expeditious approval of terminal equipment for
    connection to the wireline telephone network;[^64]

-   to ensure that technical criteria for CPE are responsive to the
    needs of new suppliers, new technology, and innovative terminal
    equipment and services;

-   to rely, in developing specific technical criteria to carry out
    these goals, on nationally recognized standards for the relevant
    technical aspects of CPE; and

-   to minimize the duration and expense of any related activities,
    especially concerning the introduction of new technology, *e.g.*
    testing and product approval.

31. We ask for comment on the foregoing tentative conclusions and these
    requirements. Are any of the requirements unnecessary or
    inappropriate? Further, are there other requirements that are
    important enough to be stated along with those above? We request
    parties to propose other requirements that would be appropriate for
    our rules.

32. As a corollary to the foregoing, we propose to consider, review
    and/or enforce privately-established CPE technical criteria only to
    the extent they concern network harm as defined in our rules. As
    discussed above, this is the proper province of Part 68. We
    tentatively conclude that we would not grant presumptive validity to
    any standards addressing network service quality, performance, and
    interoperability issues. We seek comment on this tentative
    conclusion.

33. Finally, with regard to all three options, we seek comment on
    whether the entities involved in technical criteria development
    should be treated as FACs under the Federal Advisory Committee Act
    (FACA).[^65]

### Option A -- "Gatekeeper" SDO

34. In this option, we propose that the Commission would choose a
    "gatekeeper" SDO that will establish and publish technical criteria
    for CPE developed pursuant to American National Standards Institute
    (ANSI) procedures for consensus bodies. Thus, we propose that LECs
    must permit connection to the PSTN of any CPE that meets the
    technical criteria endorsed by the "gatekeeper" SDO. We do not
    propose to require any specific structure for the gatekeeper SDO.
    The SDO may simply act as a central committee and endorse technical
    criteria developed by other organizations, or it may be an active
    SDO in its own right that directly establishes technical criteria.
    Moreover, it is not our intention to modify the existing industry
    standards setting process and the excellent cooperation that today
    exists among standards groups. Ideally, commenters that prefer this
    option would agree on what entity we should designate as the
    "gatekeeper" SDO. It is clear from the comments received during the
    fora that there are a number of industry standards organizations
    that could serve as the gatekeeper SDO. We request comment on which
    entity, or combination of entities, would best be able to carry out
    the functions we propose for the SDO herein. We believe that Option
    A would reduce Commission involvement, and give responsibility to
    the industry for establishment of technical criteria. This option
    would ensure that technical criteria remains uniform and mandatory.
    Thus, we believe that this option addresses all of the concerns
    raised by fora commenters while minimizing the Commission's
    involvement in establishment of technical criteria.

35. The proposal for a single SDO to serve as the industry body
    responsible for the establishment of technical criteria is not
    without precedent. In the recent *Advanced Services Third Report and
    Order*,[^66] we determined that a single ANSI-accredited standards
    development group, T1E1.4,[^67] is the best forum for developing
    spectrum compatibility standards pertaining to the network side of
    the demarcation point. We determined that because T1E1.4 has
    broad-based industry representation and years of experience
    developing these standards, the Commission would rely on that
    organization to be the one body responsible for development of
    spectrum compatibility standards and for fair and open practices in
    the deployment of advanced services technology. We concluded that
    relying on a single standards setting body would ensure that all
    carriers know which technologies can be deployed and can design
    their networks and business strategies accordingly.[^68] In
    addition, in an effort to ensure that the Commission played a role
    in fostering timely, fair, and open development of standards, we
    chose the Network Reliability and Interoperability Council (NRIC),
    an existing Federal Advisory Committee (FAC), to advise the
    Commission on the standards developed by T1E1.4. We would view the
    chosen SDO's determinations regarding technical criteria for CPE to
    be presumptively valid. Moreover, as described herein, the
    Commission would retain a role in the process by providing necessary
    oversight and enforcement through continued network harm rules and a
    *de novo* review and enforcement process.

36. We propose that the gatekeeper SDO conduct its deliberations
    pursuant to the American National Standards Institute (ANSI)
    procedures for consensus bodies. We believe that this requirement
    would result in few, if any, appeals to this Commission as a result
    of disputes over technical criteria. We expect that all industry
    parties, including the manufacturers and LECs, will accept the SDO's
    published criteria, because they will have been developed pursuant
    to consensus procedures. We request comment on this proposal.

37. Under this option, we also propose to continue the present level of
    Commission monitoring of the development of technical criteria by
    attending certain deliberative meetings of the SDO. Commission staff
    attendance at the meetings of one SDO would not stretch the
    Commission's resources beyond the current level dedicated to this
    monitoring function, and may possibly reduce them. Commenters argue
    that this Commission's continued involvement in monitoring the
    development of technical criteria is essential, stating, for
    example, that the "FCC has a way of bringing in various complaints
    that may have come to the Commission from consumers around the
    country and making sure that that voice is heard,"[^69] and that
    without Commission involvement, there is a possibility for industry
    negotiators to base their desire for particular standards on their
    market share of a particular technology or even on a patent for
    which they would receive a royalty.[^70] Commission staff currently
    attends some industry standards meetings as observers, and this
    participation has been sufficient to achieve the benefits noted by
    fora commenters. We tentatively conclude that this level of
    participation in a "gatekeeper" SDO is essentially a continuation of
    current levels of monitoring, and as such is sufficient to provide
    public interest input to the SDO at the current level offered to
    Part 68 industry standards groups. We request comment on this
    analysis and tentative conclusion.

38. We propose that our rules containing Part 68 technical criteria
    would remain applicable until the designated SDO publishes its
    criteria. The SDO's initial technical criteria would be identical to
    our existing technical criteria. At the same time, our new rules
    would go into effect that would not include the detailed technical
    criteria. Our rules would, instead, identify the SDO's technical
    criteria as presumptively valid and, if complied with, would trigger
    LEC responsibility to permit CPE connection to the PSTN. Thus, there
    would be no lapse of coverage of the technical criteria. Our new
    rules would provide that the SDO would thereafter have the
    responsibility to maintain, change or even eliminate the criteria,
    subject to a few guiding principles and requirements we propose to
    establish in our rules. Clearly, we do not propose to usurp the role
    of industry in the standards-setting process. We seek comment,
    therefore, on whether this proposal allows for sufficient autonomy
    in the industry standards-setting process. We emphasize that we will
    set out a procedure that will allow parties to petition the
    Commission for *de novo* review or enforcement of the SDO's
    technical criteria determinations. Thus, the new rules will provide
    a procedure for reviewing the SDO's activities that is no more
    cumbersome than the current procedure for changing the Commission's
    technical criteria in the first instance. Absent the need for
    Commission intervention, however, the new procedure will allow the
    SDO to update the CPE interconnection technical criteria in response
    to changes in technology much more expeditiously than the current
    rulemaking processes allows. More importantly, however, the process
    will be in the hands of the industry itself, largely privatizing the
    criteria-setting process so that the Commission may assume a more
    appropriate oversight role through the rules proposed herein.

39. In summary, we propose that technical criteria established by the
    gatekeeper SDO would be considered presumptively valid, and directly
    supported with necessary Commission oversight and enforcement
    pursuant to guidelines and requirements established in our
    rules.[^71] Whatever the SDO's published technical criteria are, a
    manufacturer that complies with the criteria must be permitted by
    any LEC to be approved for connection to the PSTN. We believe that
    this approach has the advantage of maximizing the role of the
    industry in establishing its own CPE technical criteria. This
    approach would also achieve our goals of largely privatizing the
    process of establishing technical criteria while retaining our
    ultimate authority over the policies underlying the technical
    criteria. We expect that the CPE industry would normally comply with
    the SDO's technical criteria without seeking Commission review. Fora
    commenters concurred with this deregulatory solution, and we believe
    that fora participants and the CPE industry in general are motivated
    to work with a unified source for establishment of technical
    criteria.

40. We do recognize, however, that the "gatekeeper SDO" option may have
    some disadvantages. While we believe that conducting deliberations
    pursuant to ANSI procedures assures a high degree of fairness to
    participants, a gatekeeper SDO could end up with a significant
    amount of authority over the standards-setting process. We see two
    possible problems resulting from this authority. First, we seek
    comment on whether designating a gatekeeper SDO may inhibit a more
    dynamic process that multiple SDOs might better achieve if, as we
    propose in Option B, they do not have the requirement to seek
    ratification by another SDO as gatekeeper. Second, because of the
    need to facilitate the rapid growth and pace of introduction of new
    technologies, we also seek comment on whether a gatekeeper SDO
    consensus process, as opposed to other processes, such as those
    proposed in Options B and C, would be able to keep pace with the
    introduction of new and innovative CPE technologies and services.

#### Identity of the Proposed SDO

41. Under the gatekeeper SDO option, we propose to choose the gatekeeper
    SDO to serve subject to Commission oversight. We emphasize that we
    request industry input on the best structure and composition for the
    gatekeeper SDO. Ideally, commenters would offer a consensus
    suggestion for the identity and structure of this organization.

42. In this proceeding commenters have both suggested specific entities
    and proposed quality standards for the gatekeeper SDO.
    Communications Certification Laboratory (CCL) envisions that the SDO
    would provide an open forum, following due process guidelines
    outlined in ANSI procedures, to produce and maintain a \"privatized
    ANSI Part 68.\"[^72] CCL recommends that we use an SDO such as the
    Telecommunications Industry Association (TIA), ANSI C63, or the
    Alliance for Telecommunications Industry Solutions (ATIS). Sprint
    observes that two groups could serve as the SDO: the
    Telecommunications Industry Association, which sponsors the
    Committee TR-41.9,[^73] or the ATIS Committee T1. Sprint recommends
    the latter group because it includes central office switch engineers
    from equipment manufacturers and because it says the group has a
    greater participation by incumbent and new local exchange
    carriers.[^74] Lucent suggests that the Commission delegate to a
    single SDO or council of SDOs the responsibility of developing
    national technical rules, noting that any SDO chosen for this
    capacity must represent industry as a whole and permit open
    participation by all parties.[^75] ITI proposes an open industry
    forum to develop the technical requirements based on the
    international standards of the International Electrotechnical
    Commission (IEC). USTA and TIA suggest an ANSI-accredited SDO.[^76]
    TIA, the only one of the suggested SDOs to participate in this
    proceeding to date, states that its Committee TR-41, \"User Premises
    Telephone Equipment Requirements Engineering Committee,\" is
    prepared to take on the task of an SDO for this Commission and that
    it has experience in the process from both a Part 68 perspective and
    as an ANSI-accredited SDO. We welcome comment on these
    aforementioned bodies serving as the gatekeeper SDO, as well as
    other nominations. We request comment on any potential conflict of
    interest considerations that pertain to any entity proposed for the
    role of gatekeeper SDO.

43. We tentatively conclude that the designated SDO: (a) must be
    ANSI-accredited, as discussed in the next section; (b) must be
    professionally and administratively prepared to take responsibility
    for administration of technical criteria; (c) should be experienced
    with technical criteria development; and (d) must follow, and be
    capable of following, any Commission rules and guidelines for SDO
    operations. We request comment on these qualification requirements
    and seek further input from parties on these and any additional
    requirements.

44. Part 68 fora participants did not extensively discuss the concept of
    term limits. We request comment on whether a term limit for the SDO
    is necessary. On the one hand, by not establishing a term limit, we
    may be permitting the SDO to be a more stable entity, and thus it
    may better serve the industry and the public interest by bringing
    certainty to the process of administration of technical criteria and
    by attracting participants with a deep commitment. Any entity with
    standing would, of course, be able to petition this Commission for
    relief at any time if it believed that the SDO was not adhering to
    our rules or otherwise not serving the public interest. On the other
    hand, by establishing a term limit, we would be requiring a regular
    review of the SDO's performance. The SDO would have an ongoing
    incentive to remain responsive, efficient, and effective. We request
    comment on this issue and on what the length of the SDO's term
    should be, if any.

#### Guidelines for SDO Operations

45. We tentatively conclude that most aspects of the gatekeeper SDO
    operations should be governed by the terms of accreditation under
    ANSI, including consensus proceedings. We believe it is essential to
    require ANSI accreditation for the gatekeeper SDO because the ANSI
    procedures are a benchmark for consensus decisionmaking, and include
    auditing procedures.[^77] For example, under ANSI procedures, any
    person with a direct and material interest has a right to
    participate, and to do so without any undue financial burden. Each
    such person has the right to express a position, to have it
    considered, and to appeal an adverse decision. Under ANSI
    procedures, each such person who is known to the SDO receives timely
    and adequate advance notice of proposed technical criteria setting
    activities, and the notice meaningfully and clearly describes the
    proposed activities and states where more information may be
    obtained. The ANSI standards-development process maintains a balance
    of interests. Furthermore, the methods used for developing technical
    criteria are in writing and available to any interested person.[^78]
    We request comment on whether requiring the SDO to be
    ANSI-accredited is sufficient to ensure fairness in the
    establishment of technical criteria. If parties believe that this is
    insufficient, we request comment on whether we should develop any
    additional requirements for the gatekeeper SDO, and if so, what they
    should be.

46. Because we propose that the SDO meet ANSI accreditation
    requirements, we tentatively conclude that it is not necessary to
    establish any further requirements regarding the SDO's operations.
    We believe that following the ANSI requirements will ensure that the
    SDO will provide the opportunity to all entities, including small
    businesses and individuals, to remain involved and informed of the
    SDO's actions. Thus, we do not propose to establish any separate
    requirements for such matters as the number or location of meetings,
    the reporting of meetings or other information pertaining to
    agendas, the availability of meeting transcripts, the establishment
    of working groups, or any other aspect of the SDO\'s operations.

47. We are, however, aware that ANSI procedural criteria include the
    requirement that "participation shall be open to all persons who are
    directly and materially affected by the activity in question."[^79]
    We intend for the gatekeeper SDO to make its consensus processes
    open to all interested parties. We request comment on whether
    participation in the standards-setting process of a gatekeeper SDO
    would be as open to such entities as consumer groups, government
    agencies, or small businesses, as in a Commission rulemaking
    process. We seek comment on whether it is necessary for us to impose
    additional requirements on the SDO other than the normal ANSI
    requirements to ensure these goals.

48. Likewise, we tentatively conclude that it is not necessary for us to
    make any specific proposals with regard to the SDO\'s financing. We
    believe that following the ANSI requirements will ensure that the
    SDO will be capable of determining its own financing arrangements,
    and that it will successfully take responsibility for ensuring that
    small businesses and individuals are able to participate in the
    standards-setting and standards-purchasing processes. We request
    comment on this tentative conclusion.

#### Exceptions to the SDO's Criteria and Interpretation of Criteria

49. Historically, most of the Part 68 waiver requests that have been
    filed with the Commission are due to the lack of updated technical
    criteria in our rules for newer equipment, *e.g.*, stutter dialtone
    devices and xDSL modems.[^80] We expect that an SDO would operate
    relatively quickly to update the technical criteria, and that few
    exceptions to any technical criteria administered by the SDO would
    be necessary. To the extent exceptions, or interim standards, are
    requested by manufacturers or importers whose equipment does not
    meet the technical criteria administered by the SDO, however, we
    propose to require the SDO to establish an expedited interim
    standard process. This process would require resolution of the
    requested exception within 60 days. If the exception is denied, a
    party could file an appeal with the Commission. We request comment
    on this proposed procedure. We further request comment on whether
    the provisions of Section 64.1703 of our rules, which establish a
    system of alternative dispute resolution ("ADR") for the use by
    entities aggrieved by non-accredited SDOs, should be adapted for use
    by the accredited gatekeeper SDO as the guideline for the interim
    standards process within the SDO. One difference that we propose for
    adapting Section 64.1703 to Part 68 would be that participation in
    an ADR process would not be limited to entities that fund the
    gatekeeper SDO.

50. Likewise, numerous questions received by the Commission staff
    regarding applicability of the technical criteria in particular
    cases may also be a result of the need to more frequently update the
    technical criteria. With the privatization of development and
    maintenance of technical criteria, we believe that there would be
    fewer such questions. To the extent that manufacturers and the
    general public require information concerning applicability of
    technical criteria, we propose that the SDO establish procedures to
    respond to such questions directly. We request comment on these
    proposals.

### Option B -- Multiple Standards Organizations

51. As an alternative to designating a gatekeeper SDO, we propose a
    second option: relying directly on consensus positions achieved
    under standards development processes and organizations. This is
    essentially the same policy we have adopted for television "set top
    boxes" used in cable television and similar systems.[^81] We seek
    comment on all aspects of this alternative option, discussed below.
    Under this option, the Commission's rules would establish general
    requirements that networks are to be protected from harms that could
    be caused when terminal equipment is connected and that customers
    have a right to connect terminal equipment that will not harm
    networks.[^82] The Commission's rules also would provide that
    terminal equipment that complies with technical specifications that
    are designed to protect networks from harm and that are consensus
    positions recommended by any national standards-setting organization
    would be presumed to comply with the Commission's general
    requirements on networks and customers' rights. Although under this
    option the Commission's rules would not specify any particular
    industry standard or standards-setting organization, the rules would
    clearly require that only terminal equipment that complies with a
    standard to prevent network harm that is a consensus position of any
    national standards-setting organization could be connected to the
    PSTN. Under this approach, customers could be allowed to connect to
    any network any terminal equipment that complies with any applicable
    standard. Alternatively, carriers could disclose which applicable
    terminal equipment standard conforms to their network design, if
    more than one standard exists for a given service and equipment. The
    Commission would observe but not actively participate in the
    industry technical criteria establishment activity on an ongoing
    basis. The Commission would allow for *de novo* review and
    enforcement in the same manner as proposed for Option A, and it may
    undertake to communicate with industry standards groups that were
    developing standards that went beyond prevention of harm to the
    PSTN.

52. We believe that there are numerous benefits to adopting this option
    for terminal equipment. Foremost, the Commission would increase its
    reliance on existing private sector standards-setting processes and
    organizations, consistent with existing federal government
    policies[^83] and Commission precedents.[^84] Since the inception of
    Part 68, standards-setting in this area has continued to develop and
    is now an integral part of existing standards organizations. Indeed,
    many of the more recent technical rules adopted in Part 68 were
    initiated by petitions from standards organizations or others
    involved in private sector consensus processes.[^85] Organizations
    such as TIA and ATIS[^86] have cooperated well over the years in
    developing standards for new technologies and services on both the
    customer-side and network-side of the point of demarcation. Although
    we were reluctant in the past to adopt requests to rely directly on
    the private sector standards-setting processes for terminal
    equipment,[^87] we believe that the success of these groups over
    time in addressing network harm issues for terminal equipment allows
    us to consider recognizing their work as proposed herein without
    increasing the risk of network harm.

53. We also believe that this option would not impose any additional
    burdens on standards-setting organizations, carriers or
    manufacturers. Rather, these groups would continue to work
    cooperatively on issues of mutual concern. Today, the pace of
    technological change is ever increasing. It is not uncommon for *ad
    hoc* groups to organize to address specific issues and then disband
    or fold their work into more traditional organizations. Traditional
    standards-setting organizations may respond to technological changes
    by developing interim standards, clarifying the application of
    existing standards, or modifying existing standards. Often,
    different organizations work together to share their expertise and
    reach consensus positions.[^88] We request comment on any benefits
    this option may have in that it would not interfere with multiple
    approaches used for achieving consensus positions, and whether it
    may thus be less of an impediment to the introduction of new
    technologies and services.[^89] Under this option, the Commission
    would not set up any procedure for centralized establishment of
    interim technical criteria, but, rather, would rely on industry
    groups to clarify or interpret their own existing technical
    criteria, modify their technical criteria, or develop new interim
    technical criteria. Under the Commission's general rules on
    preventing harm, described above, equipment complying with these *ad
    hoc* solutions would be presumed to not cause harm to networks.

54. We recognize that this option may have possible disadvantages. For
    example, membership in traditional standards-setting organizations
    may not be open to everyone, and not all eligible members may
    participate. Participation may not be possible for consumer groups,
    government agencies, or small manufacturers, carriers, or testing
    laboratories. Would such constraints result in consensus positions
    that are not truly representative of carriers' and customers' needs?
    If not, how would the Commission overcome any shortcomings in those
    consensus positions in order to protect carriers and customers
    rights? Should we recognize only consensus positions endorsed by
    ANSI-accredited standards organizations, since ANSI procedures
    provide some assurance of open participation and dialogue in the
    consensus process?

55. This option would allow consensus positions from any national
    standards organizations to be recognized, and thus uniform
    nationwide standards may not always result under this option. It may
    be possible for entities who disagree with the position of an
    existing standards body to set up their own standards organization.
    The risk also exists that interested parties may not reach consensus
    positions on all issues. In the past, we have justified our
    decisions to adopt specific technical requirements in Part 68 as the
    sole means for the Commission to use its authority to resolve
    impasses on technical criteria and thus ensure that customers could
    continue to enjoy the benefits of interconnection.[^90] We also have
    expressed concerns that multiple standards might increase costs to
    manufacturers and consumers if manufacturers had to provide
    alternative devices in the market.[^91] We seek comment on whether
    these concerns are still valid in this competitive market. If so,
    how could these concerns be ameliorated under this proposal? We
    believe that the standards-setting processes for terminal equipment
    have developed significantly over time and interested parties should
    be able to resolve their differences in a consensus process. We seek
    comment on whether the Commission should consider some oversight
    procedures to address these concerns.

56. Finally, we recognize that many of the specific technical
    requirements now in Part 68 did not arise through a
    standards-setting process. If we were to adopt this option, we seek
    comment on whether we should provide a transition period (e.g.,
    twelve months) before sunsetting the technical rules in Part 68 so
    that standards-setting organizations would have time to determine
    which requirements they would continue to support and implement
    procedures to do so. We recognize that the Commission may have to
    continue to grant waivers during this transition period so that new
    technologies could be registered and thus connected to the PSTN.
    Therefore, we seek comment on a reasonable effective date for
    implementing this option.

57. We seek comment on all aspects of this option, discussed above, as
    well as comment on other issues relevant to implementing this
    approach.

### Option C - Incorporate Specific Standards by Reference

58. In this option we propose that interconnection standards be
    developed by national standards organizations and that specific
    standards be incorporated by reference into our rules. Incorporating
    specific standards by reference is a long practice at the Commission
    and other regulatory agencies[^92] and doing so in accordance with
    the above procedures is one way of giving the referenced standards
    the full force of law.[^93]

59. This option would avoid any necessity to designate a gatekeeper SDO
    for interconnection standards, but would rely on input from
    traditional standards development organizations. At present both
    TIA's and ATIS's T1 committees are active in this area and
    coordinate their activities. Under this option, these groups and
    others, as appropriate, would develop specific standards and
    petition the Commission to incorporate by reference these standards
    in our rules. We recognize that there was discussion in the comments
    and fora regarding the burden of the rulemaking process. We seek
    comment on the extent to which this option would either expedite or
    delay the development of technical criteria for Part 68.

60. While this option would continue to require an APA rulemaking
    procedure, and thus may require more time to establish technical
    requirements than options A and B, we believe that requirements may
    be more clear, uniform and consistent. Although two groups could
    petition for conflicting standards which would have to be resolved
    in a rulemaking, in the past this type of conflict has been rare
    because interested parties have usually resolved conflicts in the
    standards development process and we anticipate they would continue
    to do so. We seek comment on this alternative and its implications.

### Clarification of Terminology in Part 68

61. Part 68 currently uses the term "telephone company" rather than the
    term "local exchange carrier." We tentatively conclude that Part 68
    should be amended throughout to change this terminology, including
    the rule sections that we propose to be turned over for any private
    industry technical criteria establishment. The use of the
    discontinued term "telephone company" has resulted in some confusion
    as to whether Part 68 applies to competitive LECs as well as
    incumbent LECs. In practice, we have required all LECs to permit
    connection of compliant CPE. This proposed change would reflect our
    current practice. We request comment on this proposal.

## Regulatory Paradigm for Equipment Approval

62. From the inception of Part 68, the Commission has been responsible
    for registering specific models of CPE that comply with the
    technical standards for interconnection set out in Part 68.[^94] The
    current procedure is that terminal equipment manufacturers are
    required to submit information to the Commission showing that the
    equipment meets the requirements of Part 68. An application for
    registration must be submitted on FCC Form 730. Once the Commission
    grants an application for registration, the Commission assigns an
    FCC registration number which denotes compliance with Part 68.

63. We tentatively conclude that some type of equipment approval process
    continues to be necessary for terminal equipment in order to assure
    carriers and customers that terminal equipment can be connected to
    the PSTN while avoiding risks of network harms and to meet our
    objectives of access to the PSTN by persons with disabilities.
    Moreover, consistent with our efforts to privatize much of the Part
    68 process, we tentatively conclude that the Commission no longer
    needs to perform the function of direct registration of CPE. This
    tentative conclusion is supported by fora commenters who argued
    unanimously that the primary shortcoming in the operation of Part 68
    today is the time it takes to get equipment registered.[^95] For
    example, Thomson estimates that in this era of intense CPE
    competition, the cost to consumers and manufacturers of the
    weeks-long registration process can amount to millions of dollars a
    year industry-wide.[^96] We agree with Thomson and other commenters
    that relieving the industry and consumers of this delay will further
    enhance the competitive robustness of the CPE market.[^97]

64. Accordingly, we discuss three methods of requiring proof of
    equipment compliance with technical criteria, each of which would
    reduce or eliminate the Commission's role in the equipment approval
    and registration process.[^98] These proposals include relying on
    TCBs for equipment approval, allowing manufacturers to use the
    declaration of conformity process, and allowing manufacturers to use
    the verification process. We request comment on which of these
    approval processes we should implement. If parties believe we should
    implement more than one process, we request comment on whether we
    should leave the choice of approval processes up to the equipment
    manufacturer or importer, or whether we should implement regulatory
    requirements specifying the specific types of equipment that shall
    be subject to a specific approval process. Commenters should address
    how these different approaches for implementing more than one
    approval process may affect the integrity of an equipment approval
    program and compliance with other obligations, such as mutual
    recognition agreements and the Anti-Drug Abuse Act, discussed
    *infra* in sections B1 and B4, respectively.

65. We also propose to combine the registration marks and equipment
    numbering systems for Part 15 and Part 68 equipment. Manufacturers
    have requested that we reduce the amount of space taken up on their
    equipment by the registration marks, noting that as equipment
    becomes smaller, it becomes more difficult to find room to place the
    marks.[^99]

### Telecommunications Certification Bodies

66. Although under the current regulatory regime, the Commission
    registers terminal equipment pursuant to the rules in Part 68, in
    1998 we approved rules for new procedures whereby TCBs could also
    perform Part 68 equipment authorization functions.[^100] The TCB
    program was designed in connection with an agreement with the
    European Union (\"EU\") to facilitate the international sale of
    devices and equipment requiring testing and/or certification. There
    is a mutual recognition agreement (MRA) between the U.S. and the EU
    that allows the U.S. to designate entities that can approve
    equipment to satisfy both domestic and EU requirements, and allows
    EU entities to approve equipment to both U.S. and EU requirements.
    In the U.S., these entities are known as TCBs. The TCBs in this
    country were originally intended to provide an alternative to direct
    Commission registration, and to further international trade. Indeed,
    the Commission contemplated that TCBs would eventually take on all
    of the necessary registration processes.[^101] The TCB program
    requires the Commission to designate private domestic entities as
    TCBs to certify or register equipment as complying with the
    Commission requirements in lieu of the Commission continuing its
    current Part 68 registration process.[^102]

67. We propose the TCB program as one option to replace Commission
    registration of CPE, thus furthering our goal of privatizing or
    streamlining Commission processes that are no longer necessary. In
    the *MRA Order*, we contemplated that TCBs would eventually take
    over our registration processes, but that initially, manufacturers
    could choose either Commission or TCB registration. Our proposal
    herein would accelerate the use of TCB registration to replace
    Commission registration of Part 68 CPE.[^103] We agree with several
    commenters who argued that the TCBs would be in a position to
    perform the Commission's CPE registration functions for both
    domestic and international purposes within a short time after they
    are designated by the Commission.[^104] As we noted when we adopted
    the TCB program, we expect that the TCB program will provide an
    alternative to the current registration process and perhaps quicker
    means to introduce new products in the market.[^105] We believe this
    proposal has several advantages. First, domestic TCBs are close to
    starting equipment approval under the Commission's oversight.
    Several entities have applied to be certified as TCBs for the Part
    68 equipment approval programs, and manufacturers and importers will
    be able to apply to TCBs for approvals under Part 68, so that TCBs
    could promptly replace the Commission's registration process.
    Second, TCBs must be accredited by the National Institute of
    Standards and Technology (NIST); this will ensure their competence
    to perform these equipment approval functions. Third, the carrier
    community appears comfortable with the TCBs\' ability to register
    equipment in a manner that will provide their networks with
    necessary protection from harm.[^106] Indeed, carriers have been
    significant participants in the industry consensus process leading
    up to development of TCBs. Fourth, the manufacturing community has
    also been involved in the industry consensus proceedings and appears
    very eager to have this option for more rapid equipment
    registration.[^107] We request comment on this proposal.

### Supplier\'s Declaration of Conformity and Verification

68. *Declaration of Conformity*. A second alternative to direct
    Commission registration is the declaration of conformity process
    (DoC) that is currently available for certain types of equipment
    subject to Part 15 regulation, and is defined in Part 2 of our
    Rules.[^108] DoC is a procedure under which the party responsible
    for the equipment\'s compliance with specific technical parameters,
    the manufacturer, importer, or assembler, causes measurements to be
    made of equipment performance with regard to those parameters. The
    party performing such measurements must be accredited for doing so
    by an authorized accreditation body based on the International
    Organization for Standardization and International Electrotechnical
    Commission (\"ISO/IEC\") Guide 25. This DoC procedure is covered by
    the MRAs that the U.S. has with the EU and Asian Pacific Economic
    Community (APEC).

69. Under this option, CPE manufacturers would seek the services of a
    testing laboratory that is accredited to test Part 68 equipment by
    an accreditation body pursuant to ISO/IEC Guide 25. The manufacturer
    itself may be so accredited, and may perform in-house testing. TIA
    believes that a DoC process would benefit consumers and relieve
    competing manufacturers of the delay caused by governmental
    registration. It points out that authorization procedures for
    safety, electromagnetic compatibility, and terminal attachment
    requirements, similar to the DoC and verification processes, have
    been successfully adopted in many different countries. Some MRA
    signatories such as the EU, or potential signatories such as
    Australia, and Singapore, have moved to a \"supplier\'s declaration
    of conformity\" process for equipment authorization. TIA argues that
    the U.S. should follow suit because manufacturers have earned
    confidence in their conformity assessment capabilities.[^109]
    Moreover, it argues, the surveillance that our rules require TCBs to
    perform, and penalties for non-compliance, will support
    compliance.[^110]

70. We seek comment on the extent to which this procedure would reduce
    the burden on the manufacturer or importer, allow new products to
    enter the market more quickly than would the TCB approval option,
    and the extent to which it may increase the risk of harm to the
    PSTN. Commenters that support adoption of the DoC procedure rather
    than the verification procedure discussed in the following
    paragraphs should explain why the DoC procedure, to the exclusion of
    the verification procedure, better serves the public interest.

71. *Verification*. Currently, manufacturers and importers may also use
    the "verification\" procedure for certain types of equipment subject
    to Part 15 regulation; verification is defined in Part 2 of our
    Rules.[^111] Verification is a procedure whereby a responsible party
    makes measurements of equipment performance with regard to specific
    technical parameters. Unlike DoC, accreditation of the testing
    facility is not required for verification.

72. ITI argues that verification should replace the current registration
    process. ITI believes that mandatory laboratory accreditation is
    unnecessary and indeed undesirable because (1) manufacturers have
    every incentive to choose competent entities to perform testing, in
    view of the demands of the marketplace and the Commission's
    statutory penalties for non-compliance with our rules; (2) many
    competent laboratories with years of experience in Part 68 testing
    would be subject to the expense and delay of obtaining
    accreditation; and (3) companies with global manufacturing
    operations would have to perform redundant testing. ITI adds that
    although this redundancy can be overcome by MRAs, doing so takes a
    significant amount of time.[^112] ITI argues that its proposal would
    bring the Commission\'s procedures in line with international norms
    for the supplier\'s declaration of conformity, as defined by the
    ISO/IEC Guide 2. ITI provided detailed rules in support of its
    proposal. We invite comments on those rules.

73. We seek comment on the extent to which this procedure would reduce
    the burden on the manufacturer or importer, allow new products to
    enter the market more quickly than would the TCB or DoC approval
    option, and the extent to which it may increase the risk of harm to
    the PSTN. Commenters that support adoption of the verification
    procedure rather than the DoC procedure discussed *supra* should
    explain why the verification procedure, to the exclusion of the DoC
    procedure, better serves the public interest. As parties have
    pointed out, numerous other countries are moving towards use of
    these procedures. Even the EU, with which we have a mutual
    recognition agreement, has developed procedures that would obviate
    the need for TCBs in many situations.

74. *Creation of a Hierarchy-Based Approval Process*. There was some
    suggestion in the fora that different equipment might be subject to
    different approval procedures depending upon technological
    complexity and other factors. Because of our deregulatory goals in
    this proceeding, we prefer to avoid adding a new regulatory layer
    with additional rules that do not exist in Part 68 now. Accordingly,
    we prefer to choose just one of the equipment approval options
    discussed above. There may be public interest factors, however, that
    would lead us to conclude that some aspects of the equipment
    registration process require closer scrutiny than others. For
    example, should we require TCB registration or DoC for all terminal
    equipment subject to the HAC/VC provisions of sections 68.316 and
    68.317, while permitting DoC or verification for other equipment
    such as modems? Alternatively, should we require the TCB
    registration or DoC procedure only insofar as it ascertains
    compliance with certain technical requirements (*e.g*., the HAC/VC
    provisions) and allow a manufacturer to rely on DoC or verification
    for demonstrating compliance with other technical requirements?

75. Accordingly, we request comment on whether it is necessary for us to
    establish a hierarchy for the approval method for CPE, *i.e.*,
    should we establish rules specifying which approval procedure may be
    used for particular types of equipment?[^113] If so, on what factors
    should the Commission base such a hierarchy? Commenters arguing that
    the Commission should establish a hierarchy should explain why this
    additional regulatory procedure is in the public interest. In
    addition, commenters should address how we should determine with
    which approval process manufacturers and importers must comply for
    equipment that combines technologies that are subject to different
    equipment approval procedures.

### Database of Approved or Certified Equipment

76. Currently, the Commission maintains a data base of terminal
    equipment registered pursuant to Part 68. Consistent with our
    proposal in this Notice to privatize many of the Commission's
    current Part 68 functions, we propose that a private entity be
    responsible for sponsoring and maintaining a similar database.[^114]
    We propose that entities obtaining equipment approval from TCBs and
    entities using either DoC or verification be required to submit
    pertinent information regarding their identity and approved
    equipment to a database administrator.[^115] The only standards we
    propose for the database of approved CPE are that it be accurate and
    that it be readily available at a reasonable cost to users. We
    believe that these requirements would ensure that information is
    available in a timely manner to the public and to governmental
    enforcement agencies without imposing unnecessary burdens on TCBs or
    entities using either DoC or verification. We recognize that
    information on certain radio equipment approved under DoC or
    verification is not required to be maintained in a database. We
    tentatively conclude, however, that a data base of all CPE should be
    maintained, regardless of whether the equipment is approved by a
    TCB, or by the DoC or verification procedures. A nationwide data
    base ameliorates concerns regarding the potentially adverse impact
    of non-compliant CPE on the PSTN. We seek comment on this tentative
    conclusion. We also seek comment on whether the costs of maintaining
    a national database outweigh the benefits of continuing this
    information collection requirement for CPE. We further seek comment
    on what information we should require to be submitted into a
    national data base by parties using DoC or verification procedures,
    and how that information would be submitted. Finally, would the
    entity or entities maintaining the database be an acceptable source
    for a number signifying equipment approval, and if so, what
    requirements should be imposed for assignment of an equipment
    approval number to CPE?

77. In the *MRA Report and Order* and under our current rules, TCBs are
    required to use Form 730 to submit information to the Commission on
    approved equipment. We now propose with regard to Part 68, however,
    that once this Commission is no longer engaged directly in
    registering CPE, that we cease our direct involvement in this area
    and no longer require TCBs to use Form 730 or to submit any
    information directly to this Commission. We believe that TCBs and
    industry consensus groups should be able to develop their own
    requirements for providing CPE information to a national database.
    We seek comment on whether the Commission needs to have any
    continuing role in data submission requirements to this data base.
    Finally, we request comment on whether we should require the entity
    or entities maintaining the database to develop a format for
    submitting information, *i.e.*, should manufacturers and vendors
    submit information electronically, via the Internet, or on paper?

### Anti-Drug Abuse Act

78. The Anti-Drug Abuse Act (ADAA)[^116] requires an entity receiving a
    "federal benefit" to certify compliance with ADAA requirements. In
    our decision implementing the ADAA, we applied the definition of
    \"license\" found in the APA to determine the scope of the term
    \"license\" as used in 47 U.S.C. section 5301 and thus to define the
    scope of federal benefits.[^117] The APA defines \"license\" as
    including \"the whole or part of an agency permit, certificate,
    approval, registration, charter, membership, statutory exemption or
    other form of permission.\"[^118] Pursuant to this definition, we
    found that Commission Part 68 registration of equipment to be
    connected to the telephone network is included within the scope of
    the ADAA.[^119]

79. We seek comment on whether the proposed DoC or verification
    procedures require ADAA certification. In addition, we request
    comment on whether any conflict would exist between use of the TCB
    procedure on the one hand, which currently requires certification
    under the ADAA, and the use of DoC and/or verification procedures on
    the other hand, which potentially might not be subject to ADAA
    requirements. We request comment on whether any ADAA certification
    continues to be required if we adopt the privatization/streamlining
    proposals discussed herein.

80. In addition, we seek comment and recommendations on the most
    efficient and accurate way to collect any information required by
    the Anti-Drug Abuse Act, and on whether the information must be
    retained by this Commission or whether it may be held in a
    privately-maintained registration database.

### Registration Numbering and Labeling

81. As stated previously, when the Commission determines that a piece of
    terminal equipment meets the technical requirements for that
    equipment, the Commission assigns a unique registration number to
    that piece of equipment. We tentatively conclude that although the
    Commission will no longer be responsible for CPE registration, some
    form of unique identifying label must be applied to all terminal
    equipment. This identifying label is necessary to adequately
    identify CPE as an approved piece of terminal equipment that
    customers are entitled to connect to the PSTN, whether the
    manufacturer uses the TCB process, a DoC process, or a verification
    process. We note, however, that we are prepared to be persuaded
    otherwise if a substantial record can be developed showing that
    registration numbers are no longer necessary.

82. We seek comment on the best method, under our streamlined Part 68,
    to assign registration numbers to equipment. Currently, we assign
    registration numbers when we approve Part 68 equipment applications.
    In the event this Commission is no longer involved in reviewing
    applications for CPE approval, registration numbers must be assigned
    by a private entity or entities. We are now working with TCBs to
    establish a method for them to assign registration numbers to CPE
    they approve. We seek comment on how these numbers should be
    assigned to CPE approved through a DoC or verification procedure.

83. At present, Part 68 registration numbers, including three character
    applicant codes, are assigned by the Commission. For Part 15, three
    character grantee codes are also assigned by the Commission.
    Applicants combine their three character Part 15 applicant code with
    three to eleven characters of their choice to create a six to
    fourteen character Part 15 equipment authorization number. We agree
    with TIA that the Part 15 numbering system may work for Part 68 as
    well. We propose to combine the requirement for an FCC Registration
    Number under Part 68 with the FCC Identifier requirement of section
    2.926 of our rules that is used for radio equipment approved by the
    Commission. We propose to use the Part 15 coding scheme for terminal
    equipment under Part 68 and seek comment on how that scheme can be
    applied reasonably to Part 68 equipment. Under this proposal, a
    given equipment model will have only one FCC number associated with
    it that is used to document its status. We believe that this
    approach would avoid unnecessary duplication of identifying marks
    for equipment that must comply with both Part 68 and Part 15
    requirements, and also will clearly establish one type of identifier
    to signify that the CPE satisfies all Part 15 and Part 68 technical
    requirements for connection to the PSTN. We request comment on this
    proposal.

84. As an alternative approach, TIA suggests that a three-character
    grantee code, which is already assigned to existing manufacturers
    under the CCB certification process, would eliminate the requirement
    for individual product registration numbers.[^120] How would the
    lack of equipment-specific registration numbers affect those who
    rely on those numbers to identify registered equipment? In
    particular, would this impact our responsibility to give the Customs
    Service sufficient information to conduct their interdiction
    functions?

85. We also propose a harmonized label for equipment subject to either
    or both Part 15 and Part 68. The single label would show compliance
    with all relevant Commission rules and identify which rules are
    relevant for the model. For example, the label may state that "This
    unit complies with all relevant FCC Part 15 and 68 requirements" in
    the case of models subject to those parts. We believe that the label
    should be as small as possible, consistent with clarity. We note
    that the Department of Energy and Environmental Protection Agency's
    Energy Star program[^121] has a simple labeling scheme to show
    compliance with voluntary standards. This program uses a simple,
    attractive logo that has been very effective in identifying
    compliant products. We seek comment on the exact format of labeling
    that would be used under the amended rules for both Part 15 and Part
    68-compliant equipment, and we welcome specific design suggestions.

### Compliance With Consumer Protection and Part 68 HAC/VC Rules.

86. We are committed to ensuring that persons with disabilities and
    other consumers continue to receive the full level of enforcement
    that they currently receive from us. As noted above, we intend to
    maintain the Part 68 HAC/VC rules that we have promulgated in
    response to statutory directives, rather than using a privatized
    industry process to establish or maintain the technical criteria
    ensuring hearing aid compatibility and volume control. There was
    some discussion in the fora regarding the effect of changing the
    registration process to DoC or verification on compliance with rules
    intended to protect access by persons with disabilities.[^122] We
    request comment on whether changes in the registration process
    proposed in this Notice may unintentionally affect compliance with
    consumer protection and HAC/VC provisions of Part 68. We seek
    comment on whether any of the changes to Part 68 proposed in this
    Notice will have an adverse impact on consumer protection or Part 68
    HAC/VC rules. If so, what can be done to prevent or mitigate that
    impact?

87. In addition, any complaints regarding compliance with the technical
    criteria relating to Part 68 HAC/VC and consumer protection in Part
    68 would come directly to the Commission, as they do now. We seek
    comment, however, as discussed in the next section, on whether the
    present Part 68 complaint procedures regarding our HAC/VC rules
    should be replaced or augmented with the procedures we developed
    pursuant to Section 255 of the Communications Act, Parts 6 and 7 of
    our Rules. We seek comment and proposals on these issues.

##  Commission Enforcement of the Streamlined Part 68

88. Although we propose in this Notice to privatize much of the
    Commission's current functions under Part 68, there are numerous
    aspects of Part 68 regulations that we now enforce and intend to
    continue enforcing. First, as discussed above, Part 68 would
    continue to require that local exchange carriers permit connection
    of compliant CPE to their networks. Second, we propose no change in
    Section 68.108, which permits carriers to discontinue service to
    subscribers that connect harmful equipment. Third, we shall continue
    to enforce the rules that will remain in Part 68, such as the
    technical rules for HAC/VC. Fourth, we do not intend any of the
    proposals we consider herein to interfere with ongoing U.S. Customs
    Service enforcement of imported CPE. We tentatively conclude that
    the proposals will not affect the ability of the U.S. Customs
    Service to enforce the provisions of 19 U.S.C. section 3109 dealing
    with the importation of equipment not compliant with Part 68.[^123]
    We seek comment on this tentative conclusion.

89. If we choose the option of TCB registration, the TCBs are required
    by our rules to conduct an ongoing surveillance program.[^124] In
    addition, oour rules allow parties to report to the Commission any
    deficiencies discovered in connection with the surveillance program.
    We propose no change in this basic procedure, and indeed we believe
    it to be an advantage in using the TCB program for Part 68
    registration. Finally, we provided in the *MRA Order* that a TCB may
    revoke its own certification for a period of 30 days after the date
    of action for an administrative error only, but that any other
    certification revocation must be addressed by the Commission.[^125]
    We do not propose to change these rules at this time, although we
    may revisit them at a later date with an eye to reducing our
    involvement in this program.

90. Parties generally agree, and we so propose, that the Commission
    should retain ultimate responsibility to enforce compliance with our
    rules, which would include industry-developed technical criteria
    that we may, upon appeal, review and enforce through a *de novo*
    review process. Moreover, we propose these enforcement policies
    notwithstanding which option for establishment of technical criteria
    we choose, and which equipment approval option we choose. There are
    two general categories of complaints that parties could bring before
    the Commission requesting enforcement. First, there may be
    complaints by end-users or manufacturers that a telephone company
    would not permit connection of compliant equipment. Second, there is
    the possibility of complaints from consumers or others who believe
    that certain CPE is not compliant, not approved, or that it has
    caused harm as defined in Part 68.[^126]

91. Part 68 has existing complaint procedures. We request comment on how
    these provisions have operated to date to uphold the technical
    criteria in Part 68. In addition, we request comment on whether it
    would be appropriate for the Commission to revise our Part 68
    complaint rules, solely for complaints arising from our HAC/VC
    rules, to incorporate procedures recently adopted pursuant to
    Section 255 and 225 of the Act.[^127] In these proceedings, we made
    it easier for consumers to file complaints and for subject entities
    to move quickly to resolve them. Accordingly, we request comment on
    whether a similar approach would be beneficial for enforcement of
    Part 68 HAC/VC rules.

92. In addition, we propose, solely for complaints arising from
    compliance with the technical criteria intended to prevent harm to
    the PSTN, that prior to filing a complaint with this Commission a
    party must follow an alternative dispute resolution process designed
    to minimize the number of complaints needing Commission *de novo*
    review. We propose requiring this alternative dispute resolution
    process only for disputes arising from the technical criteria we
    propose to be administered by an industry standards body or bodies.
    This provision requires the complainant to certify that it has made
    a good faith effort to discuss the possibility of settlement with
    each entity against which it is filing a complaint, and/or with the
    local exchange carrier. We believe that such a requirement in this
    instance would narrow the need for the Commission to review
    complaints of parties who are acting in good faith to comply with
    the technical criteria. We request comment on an alternative step:
    for equipment registered by a TCB, would it be appropriate to refer
    the complaint to the TCB that issued the registration? Finally, if
    these alternative dispute resolution procedures do not resolve the
    complaint, the complainant may then petition the Commission under
    the applicable complaint procedures. We request comments on these
    proposals.

## Conclusion

93. In this Notice we propose several options to privatize and
    streamline two of Part 68's functions \-- first, the establishment
    of technical criteria for CPE that will not harm the PSTN and,
    second, the process used to determine whether a particular model of
    equipment meets those standards (presently called "registration").
    These proposals are consistent with our overall mandate to reduce
    regulation wherever possible, consistent with the public interest.
    We seek a new regulatory regime that reduces direct governmental
    involvement while still protecting the PSTN from harm, maintaining a
    competitive CPE marketplace, and facilitating expeditious deployment
    of new technology. We believe that this new regulatory regime will
    have a beneficial impact upon the pace of new or competitive CPE
    deployment, and therefore increase the choices available to
    consumers.

94. We ask commenters who favor proposals other than those we make above
    to discuss and compare their regulatory paradigm in detail with our
    proposals.

# PROCEDURAL MATTERS

## Ex Parte Presentations

95. The matter in CC Docket No. 99‑216, initiated by this NPRM, shall be
    treated as a "permit‑but‑disclose" proceeding in accordance with the
    Commission\'s ex parte rules.[^128] Persons making oral ex parte
    presentations are reminded that memoranda summarizing the
    presentations must contain summaries of the substance of the
    presentations and not merely a listing of the subjects discussed.
    More than a one or two sentence description of the views and
    arguments presented is generally required.[^129] Other rules
    pertaining to oral and written presentations are set forth in our
    rules as well.[^130]

## Initial Paperwork Reduction Act Analysis

96. This NPRM contains a proposal to reduce and/or change existing
    information collections. As part of our continuing effort to reduce
    paperwork burdens, we invite the general public and the Office of
    Management and Budget (OMB) to take this opportunity to comment on
    the information collections obtained in this Notice, as required by
    the Paperwork Reduction Act of 1995, Public Law No. 104‑13. Public
    and agency comments are due at the same time as other comments on
    this Notice; OMB comments are due 60 days from date of publication
    of this Notice in the Federal Register. Comments should address: (a)
    whether the proposed collection of information is necessary for the
    proper performance of the functions of the Commission, including
    whether the information shall have practical utility; (b) the
    accuracy of the Commission\'s burden estimates; (c) ways to enhance
    the quality, utility, and clarity of the information collected;
    and (d) ways to minimize the burden of the collection of information
    on the respondents, including the use of automated collection
    techniques or other forms of information technology.

## Comment Filing Procedures

97. This proceeding is titled "In the Matter of Biennial Review of Part
    68 of the Commission's Rules and Regulations, CC Docket No. 99-216."
    Pursuant to Sections 1.415 and 1.419 of the Commission\'s rules, 47
    C.F.R. §§ 1.415, 1.419, interested parties may file comments on or
    before **June 23,** **2000** and reply comments on or before **July
    7, 2000**. All filings should refer only to "In the Matter of
    Biennial Review of Part 68 of the Commission's Rules and
    Regulations, CC Docket No. 99‑216." Comments may be filed using the
    Commission\'s Electronic Comment Filing System (ECFS) or by filing
    paper copies. See Electronic Filing of Documents in Rulemaking
    Proceedings, 63 Fed. Reg. 24,121 (1998). Comments filed through the
    ECFS can be sent as an electronic file via the Internet to
    \<http://www.fcc.gov/e‑file/ecfs.html\>. Generally, only one copy of
    an electronic submission must be filed. In completing the
    transmittal screen, commenters should include their full name,
    Postal Service mailing address, and the applicable docket or
    rulemaking number, which in this instance is CC Docket No. 99-216.
    Parties may also submit an electronic comment by Internet e‑mail. To
    get filing instructions for e‑mail comments, commenters should send
    an e‑mail to ecfs@fcc.gov, and should include the following words in
    the body of the message, \"get form \<your e‑mail address\>.\" A
    sample form and directions will be sent in reply.

98. Parties who choose to file by paper must file an original and four
    copies of each filing. All filings must be sent to the Commission\'s
    Secretary, Magalie Roman Salas, Office of the Secretary, Federal
    Communications Commission, 445 12th Street, SW, Room TW‑B204F,
    Washington, D.C. 20554.

99. Parties who choose to file by paper should also submit their
    comments on diskette. These diskettes should be submitted to Al
    McCloud, Common Carrier Bureau, Network Services Division, 445 12th
    Street, SW, Room 6 A-270, Washington, D.C. 20554. Such a submission
    should be on a 3.5-inch diskette formatted in an IBM compatible
    format using Microsoft Word97 or compatible software. The diskette
    should be accompanied by a cover letter and should be submitted in
    \"read only\" mode. The diskette should be clearly labeled with the
    commenter\'s name, proceeding (including the docket number, in this
    case, CC Docket No. 99-216), type of pleading (comment or reply
    comment), date of submission, and the name of the electronic file on
    the diskette. The label should also include the following phrase
    \"Disk Copy ‑ Not an Original.\" Each diskette should contain only
    one party\'s pleadings, preferably in a single electronic file. In
    addition, commenters must send diskette copies to the Commission\'s
    copy contractor, International Transcription Service, Inc., 1231
    20^th^ Street, N.W., Washington, D.C. 20036.

100. Regardless of whether parties choose to file electronically or by
     paper, parties should also file one copy of any documents filed in
     this docket with the Commission\'s copy contractor, International
     Transcription Services, Inc., 1231 20^th^ 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, Room CY A-257, 445 12th Street, SW, Washington,
     D.C. 20554; and with Al McCloud, Network Services Division, Common
     Carrier Bureau, Room 6 A-207, 445 12th Street, SW, Washington, D.C.
     20554.

101. 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 section 1.49 and
     all other applicable sections of the Commission\'s Rules.[^131] 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 provide
     a table of contents, regardless of the length of their submission.
     We also strongly encourage that parties track the organization set
     forth in this NPRM in order to facilitate our internal review
     process.

102. Written comments by the public on the proposed and/or modified
     information collections are due on or before **60 days from
     publication in the Federal Register** and reply comments are due on
     or before **15 days from the comment date**. Written comments must
     be submitted by the OMB on the proposed and/or modified information
     collections on or before 60 days after date of publication in the
     Federal Register. 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 1-C804, 445 12th Street, SW,
     Washington, DC 20554, or via the Internet to jboley@fcc.gov, and to
     Edward C. Springer, OMB Desk Officer, Room 10236 NEOB, 725 17th
     Street, N.W., Washington, DC 20503 or via the Internet to
     edward.springer@omb.eop.gov.

## Further Information

103. For further information regarding this proceeding, contact Susan E.
     Magnotti, Senior Attorney, Network Services Division, at 418-0871
     or smagnott@fcc.gov. Further information may also be obtained by
     calling the Common Carrier Bureau\'s TTY number: 202‑418‑0484.

# ORDERING CLAUSES

104. Accordingly, IT IS ORDERED that, pursuant to sections 1‑4, 201-205
     and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
     §§ 151‑154, 201-205 and 303(r), the NOTICE OF PROPOSED RULEMAKING
     is hereby ADOPTED.

105. IT IS FURTHER ORDERED that the Commission\'s Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     NOTICE OF PROPOSED RULEMAKING, including the Initial Regulatory
     Flexibility Certification, to the Chief Counsel for Advocacy of the
     Small Business Administration, in accordance with the Regulatory
     Flexibility Act, see 5 U.S.C. § 605(b).

#####  FEDERAL COMMUNICATIONS COMMISSION {#federal-communications-commission .unnumbered}

Magalie Roman Salas

Secretary

**Appendix A**

**List of Commenters and Fora Participants**

ACIL (formerly the American Council of Independent Laboratories)

Ameritech

Cisco Systems, Inc.

Communications Certification Laboratory

Information Technology Industry Council

Intertek Testing Services, NA Inc.

Lucent Technologies, Inc.

Mobile Engineering

Nortel Networks

SBC Communications, Inc.

Sprint Corporation

Tandy Corporation

Telecommunications Industry Association (User Premises Equipment
Division)

Texas Office of Public Utility Counsel

Thomson Consumer Electronics

United States Telephone Association

van der Heim, Peter

Appendix B

Initial Regulatory Flexibility Analysis

106. As required by the Regulatory Flexibility Act (RFA),[^132] the
     Commission has prepared this present Initial Regulatory Flexibility
     Analysis (IRFA) of the possible significant economic impact on
     small entities by the policies and rules proposed in this Notice of
     Proposed Rulemaking. Written public comments are requested on this
     IRFA. Comments must be identified as responses to the IRFA and must
     be filed by the deadlines for comments on the Notice of Proposed
     Rulemaking provided above in Section IV, Subpart C. The Commission
     will send a copy of the Notice of Proposed Rulemaking, including
     this IRFA, to the Chief Counsel for Advocacy of the Small Business
     Administration. *See* 5 U.S.C. § 603(a). In addition, the Notice of
     Proposed Rulemaking and IRFA (or summaries thereof) will be
     published in the Federal Register. *See* *id*.

# Need for, and Objectives of, the Proposed Rules

107. In this Notice of Proposed Rulemaking, we take a significant step
     forward in our initiative to largely privatize the process by which
     technical criteria are established for customer premises
     equipment[^133] (CPE or terminal equipment) that may be sold for
     connection to the public switched telephone network (PSTN), and for
     the registration of such equipment. Our proposals in this Notice
     largely are based on the consensus positions of the participants in
     a series of industry forums we held in July 1999 to explore the
     extent to which regulations in Part 68, other than our HAC/VC
     rules, may no longer be necessary. The majority of commenters and
     forum participants generally argued that: (a) carriers\' networks
     must be protected; (b) one uniform set of national technical
     standards is necessary; (c) there are few, if any, unnecessary
     technical requirements in Part 68 at present; (d) the Commission
     should retain the authority to ensure that the telephone network is
     protected; and (e) the functions of technical criteria development,
     laboratory qualification, and registration of equipment, currently
     performed by the Commission, largely can be privatized.

108. In this Notice, we propose that the new Part 68 would contain no
     detailed technical criteria for protection of the network, no
     descriptions and schematics of connectors, and none of the existing
     rules that pertain to application by manufacturers and importers
     directly to the Commission for equipment registration. We propose,
     in place of these rules, that local exchange carriers must permit
     connection to the PSTN of any CPE that meets the technical criteria
     set by an industry standards body or bodies. This Notice proposes
     alternative ways that the determination might be made whether a
     piece of CPE meets the industry's criteria, including certification
     by a telecommunications certification body (TCB) and
     self-certification by the manufacturer. Both the industry's
     technical criteria and the certification of individual CPE would be
     subject to a Commission *de novo* review or enforcement process.
     While the industry would make its determinations regarding
     technical criteria under the guidance of our policies and
     regulations, its technical criteria would not be binding on the
     Commission in the event of *de novo* review or enforcement. The
     industry's administration activity would assist us in the
     implementation of our objectives to permit connection of CPE to the
     PSTN without causing harm, but the industry standards body or
     bodies would not determine the final outcome of technical criteria
     matters. Therefore, as administrator of its technical criteria
     program governing the prevention of harm to the PSTN, the industry
     standards body or bodies would not be performing a Commission
     policy function. Although our proposals, to transfer the
     responsibility for the development and maintenance of CPE technical
     criteria from this Commission to an industry body subject to *de
     novo* review or enforcement, represent a new paradigm for Part 68
     regulation, this procedure is in fact a logical progression of our
     historic regulation of CPE and is similar to other deregulatory
     initiatives we have used.

109. In addition, we propose to largely privatize equipment registration
     by devolving this function, currently performed solely by this
     Commission, to Telecommunications Certification Bodies (TCBs),
     which we have previously established to streamline and privatize
     some of our regulatory processes.[^134] TCBs would use the
     technical criteria developed by industry to determine whether
     equipment meets the requirements for registration. We also propose
     to establish new procedures for manufacturer self-declaration of
     conformity or verification pursuant to the technical criteria, and
     we request comment on the details pertaining to these options.
     Thus, under the proposed new rules for Part 68, if CPE meets the
     technical criteria, and if it is registered pursuant to our new
     privatized registration rules, then wireline telephone companies
     must permit the equipment to be connected to the PSTN.

# Legal Basis

110. In this Notice of Proposed Rulemaking, we tentatively conclude that
     the Commission has the necessary statutory authority to adjust the
     Part 68 program as proposed herein. For example, the proposed
     changes are entirely in furtherance of our statutory mission \"to
     make available . . . a rapid, efficient, Nation-wide, and
     world-wide wire and radio communications service with adequate
     facilities . . . .\"[^135] Further, the proposed changes are
     justified, at least in part, on the basis of the same statutory
     authority which was relied upon in 1975 when the Part 68 program
     was originally implemented, *e.g.*, Sections 4(i), 4(j), and
     201-205.[^136] Finally, as noted previously, the proposed changes,
     if adopted, will further the competitive goals of the 1996 Act.

111. Our proposal herein is further supported by the past regulatory
     framework for Part 68. The Part 68 *First Report and Order*
     stressed that the Commission\'s guiding objective for competitive
     CPE registration is that it would remain "simple and easy to
     administer as is reasonably possible with a minimum of government
     intervention."[^137] The Commission's goals were to produce an
     absolute minimum of expense to both the government and private
     industry, to the benefit of the ultimate consumer, while at the
     same time protecting the PSTN from harms that could be caused by
     the connection of faulty terminal equipment.[^138] Accordingly, we
     tentatively conclude in this Notice of Proposed Rulemaking that, in
     view of the changes in the industry and the market for CPE over the
     past twenty-five years, the key objectives that led to the original
     adoption of the Part 68 program can better be served through a
     different mix of government and private industry involvement.

# Description and Estimate of the Number of Small Entities To Which the Proposed Rules Will Apply

112. 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 proposed rules, if adopted.[^139] The Regulatory
     Flexibility Act 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.[^140] 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.[^141]

113. RFA analyses and certifications need only address the impact of
     rules on small entities directly regulated by those rules, *Mid-Tex
     Electric Cooperative, Inc. v. FERC*, 773 F.2d 327, 342-43 (D.C.
     Cir. 1985). The Commission's equipment authorization rules directly
     regulate only manufacturers of equipment, which must satisfy the
     Commission's product approval requirements. Small test laboratories
     are not directly regulated by the proposed Commission rules. Thus,
     to the extent that any testing laboratories would be affected by
     these proposed rules, such entities are not addressed in this IRFA.

114. The Commission has not developed a definition of small
     manufacturers of telephone terminal equipment. The closest
     applicable definitions under SBA rules is for manufacturers of
     telephone and telegraph apparatus (SIC 3661), which defines a small
     manufacturer as one having 1,000 or fewer employees.[^142]
     According to 1992 Census Bureau data, there were 479 such
     manufacturers, and of those, 436 had 999 or fewer employees, and
     seven had between 1,000 and 1,499 employees.[^143] We estimate that
     there are fewer than 443 small manufacturers of terminal equipment
     that may be affected by the proposed rules.

# Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

115. We are proposing to remove the requirement that applicants for
     equipment authorization apply to the Commission, and instead
     propose that they apply to designated Telecommunications
     Certification Bodies. We are proposing that instead of submitting
     Part 68 application information to the Commission, the TCBs would
     be required to submit the data to a nationwide database instead,
     which shall be administered by a private entity. We are also
     proposing to offer responsible parties the option to use either a
     Self-Declaration of Conformity or a verification process for
     equipment authorization. Such parties would have to submit data
     concerning their equipment to a nationwide database.

116. Further, we are proposing to privatize development and maintenance
     of technical criteria for terminal equipment, other than those
     technical criteria required for compliance with our HAC/VC and
     consumer protection rules, which the Commission proposes to retain.
     Small entities with an interest in the development, interpretation,
     and waiver of such technical criteria would be required to seek the
     ruling of the standard development organization responsible for the
     standard at issue in the first instance. The Commission, however,
     proposes to retain full *de novo* review procedures for any
     industry decision.

117. The Commission also proposes to require that certain information
     regarding the equipment authorized under Part 68 would be placed
     into a publicly available database. This information would be
     available for review of technical parameters of specific equipment,
     including parameters required for compliance with hearing aid
     compatibility, volume control, and other HAC/VC requirements. This
     requirement would not be a new information requirement since
     application data is currently required and kept in a Commission
     database.

118. Finally, the Commission proposes to unify the numbering system and
     the logo that must be imprinted on customer premises equipment.
     Currently, Part 15 and Part 68 have different labeling and
     different registration numbering systems.

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

119. 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: (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.

120. The proposals in this Notice are designed to reduce the length of
     time for new technology to reach the market. This may benefit small
     entities especially because the proposals would cut any
     manufacturer's cost to bring an equipment design to market.
     Alternatives for making these reductions are included in the form
     of options for different methods of 1) industry development and
     maintenance of technical standards and 2) equipment registration.
     We request comment on these options.

121. We request comment on whether small entities would be adversely
     affected by the proposals herein, particularly whether the proposed
     enforcement procedures or any of the proposed options for
     establishing technical criteria would have a significant economic
     impact. We believe that our proposals would have either no impact,
     or would reduce, any economic burdens on small entities.

# Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rules

None.

[^1]: \"Customer premises equipment\" is defined as equipment employed
    on the premises of a person (other than a carrier) to originate,
    route, or terminate telecommunications. 47 U.S.C. § 153(14).

[^2]: Part 68 does not regulate the quality or performance of CPE except
    as these factors relate to preventing network harm. Quality and
    performance factors are served by consumer protection laws and by
    the operation of the free market.

[^3]: Prior to the adoption of Part 68, telephone companies generally
    only permitted their customers to connect to their networks the CPE
    the companies supplied themselves, giving the telephone companies
    monopoly control of the CPE market.

[^4]: *See* preamble of Telecommunications Act of 1996 ("...to promote
    competition and reduce regulation in order to secure lower prices
    and higher quality services for American telecommunications
    consumers and encourage the rapid deployment of new
    telecommunications technologies.") Telecommunications Act of 1996,
    Pub. L. No. 104-104, 110 Stat. 56, codified at 47 U.S.C. §§ 151 *et
    seq*. (*1996 Act*).

[^5]: *See* para. 28 and note 56, *infra*, for a list of specific rule
    sections affected by this NPRM.

[^6]: ^?^ Indeed, commenters have identified shortcomings in the current
    Part 68 regime, including the need to conduct notice-and-comment
    rulemaking proceedings to keep Part 68 current with new technology,
    and the time it presently takes to get equipment registered.

[^7]: 47 C.F.R. §76.1200-1210

[^8]: Demarcation issues pertain to the location of the dividing point
    between LEC-controlled telephone line and customer-controlled
    telephone line. *See* note 56, *infra*. Inside wire issues pertain
    to requirements concerning customer-owned line. Both of these
    matters affect a number of consumer and competitive issues including
    competitive access.

[^9]: ^?^ 1998 Biennial Regulatory Review -- Amendment of Parts 2, 25
    and 68 of the Commission's Rules to Further Streamline the Equipment
    Authorization Process for Radio Frequency Equipment, Modify the
    Equipment Authorization Process for Telephone Terminal Equipment,
    Implement Mutual Recognition Agreements and Begin Implementation of
    the Global Mobile Personal Communications By Satellite (GMPCS)
    Arrangements, *Report and Order*, GEN Docket No. 98-68, 13 FCC Rcd.
    24687 (1998) (*MRA Order*).

[^10]: Part 68's regulation of CPE is narrowly drawn and does not apply
    to any equipment on the network side of the demarcation point, to
    networks other than twisted copper pair, or to matters regarding the
    internal functioning of the PSTN.

[^11]: 47 C.F.R. § 68.3.

[^12]: To the limited extent that Part 68 addresses these latter
    functions (*e.g.*, inside wire), we do not propose at this time to
    privatize them because we have developed these rules for consumer
    protection or competitive market development.

[^13]: *See, e.g.*, Petition to Amend Part 68 of the Commission\'s
    Rules, *Order on Reconsideration*, 12 FCC Rcd 4615 (1997) and cases
    cited therein (including in Part 68 technical criteria for
    Integrated Services Digital Network and Public Switched Digital
    Service terminal equipment), Amendment of Part 68 of the
    Commission's Rules, *Report and Order*, 12 FCC Rcd 19218, 19225
    (1997) (*Harmonization Order*).

[^14]: *See, e.g.*, Detariffing the Installation & Maintenance of Inside
    Wiring, *Third Report & Order*, 7 FCC Rcd 1334 (1992) (*Inside
    Wiring Third Report & Order*); Amendment of Part 68 of the
    Commission\'s Rules Concerning Connection of Telephone Equipment,
    Systems & Protective Apparatus to the Telephone Network, *First
    Report & Order*, 97 FCC 2d 527 (1984).

[^15]: Title 5 U.S.C. §§ 551-559.

[^16]: In particular, equipment manufactured with stutter dial tone and
    xDSL technologies has proceeded under waiver pending a rulemaking
    proceeding. *See, e.g.*, Paradyne Corporation, *Order*, 14 FCC Rcd.
    4496 (Network Services Div., Com. Carr. Bur. 1999).

[^17]: Terminal equipment is 1) communications equipment at either end
    of a communications link, used to permit the stations involved to
    accomplish the mission for which the link was established; 2)
    telephone and telegraph switchboards and other centrally located
    equipment at which communications circuits are terminated.

[^18]: *See MRA Order* at 24687.

[^19]: Our TCB program was designed in connection with an agreement with
    the European Union and an arrangement with APEC in order to
    facilitate the international sale of devices and equipment requiring
    testing and/or certification. Creating TCBs in both the U.S. and EU
    countries will allow manufacturers to meet one certification process
    rather than dozens. The TCBs in this country originally were
    intended to provide an alternative to FCC registration, in order to
    facilitate international trade. The TCBs certify equipment pursuant
    to standards now outlined in Part 68 for terminal equipment.

[^20]: These rules were effective May 3, 1999; TCBs are expected to
    become operational this year.

[^21]: Amendment of Part 68 of the Commission\'s Rules, *Report &
    Order*, 12 FCC Rcd 19218 (1997).

[^22]: Public Notice, "Common Carrier Bureau Will Hold Fora on
    Deregulation/Privatization of Equipment Registration and Telephone
    Network Connection Rules (47 C.F.R. Part 68)," CC Docket No. 99-216,
    DA 99-1108, June 10, 1999 (*Part 68* *Fora Public Notice*); *See*
    Appendix A, List of Commenters and List of Fora Participants.

[^23]: Summary provided in Sprint Comments, filed July 20, 1999, at 1.

[^24]: Implementation of Section 304 of the Telecommunications Act of
    1996 - Commercial Availability of Navigation Devices, *Order on
    Reconsideration*, CS Docket No. 97-80, FCC 99-95, 14 FCC Rcd 7596
    (1999) (*Section 304 Reconsideration Order);* *Report & Order*, CS
    Docket No. 97-80, FCC 98-116, 13 FCC Rcd 14775 (1998) (*Section 304
    Report & Order*).

[^25]: 47 C.F.R. §76.1200-1210

[^26]: *But see* *Section 304 Report & Order*, 13 FCC Rcd at 14780,
    para. 12 (noting that the approach taken in the cable order was
    necessarily different from the Part 68 precedent because "when
    customer ownership of telephone CPE became available, the telephone
    network was effectively a national monopoly. Well developed
    technical standards existed throughout an almost ubiquitous network.
    In contrast, cable networks do not reflect universal attributes, and
    have substantially different designs." Accordingly, we sought with
    the cable order's regulatory scheme "to accommodate these
    differences from the telephone model.") *Id.*

[^27]: *Part 68* *Fora Public Notice*, *supra*, p. 1; Federal
    Communications Commission Public Fora on Deregulation/Privatization
    of Equipment Registration and Telephone Network Connection Rules,
    July 12-13, 1999 (\"Record\") at 8, 9.

[^28]: Record at 11-12, 20, 22, 26, 28-29, 38, 45-47, 73, 78, 85-86,
    112, 278.

[^29]: *See, e.g.*, Ameritech Comments, filed July 2, 1999, at 1; SBC
    Comments, filed July 2, 1999, at 4.

[^30]: Record at 29, 45.

[^31]: Record at 29, 47.

[^32]: Record at 50, 59, 87.

[^33]: Ameritech Comments, filed July 2, 1999, at 1; Lucent Comments,
    filed July 2, 1999, at 1, 2.

[^34]: Record at 73.

[^35]: *See, e.g*., Record at 20; Nortel Comments, filed July 2, 1999,
    at 1-2 (relying upon the marketplace for network integrity
    requirements in lieu of Part 68 is not a viable alternative).

[^36]: Record at 48-53.

[^37]: Record at 78.

[^38]: Record at 26, 46-47.

[^39]: Record at 85-86.

[^40]: Record at 16, 52.

[^41]: Record at 11-12, 22, and 78.

[^42]: Texas Office of Public Utility Counsel Comments, filed July 2,
    1999, at 2.

[^43]: *Id.* at 3.

[^44]: Administrative Procedure Act, 5 U.S.C. § 553.

[^45]: Letter from Trone Bishop, Bell Atlantic, to Magalie Roman Salas,
    Secretary, Federal Communications Commission, CC Docket No. 99-216,
    at 2 (filed July 7, 1999).

[^46]: Proposals for New or Revised Classes of Interstate and Foreign
    Message Toll Telephone Service (MTS) and Wide Area Telephone Service
    (WATS), Docket No. 19528, *First Report and Order*, 56 FCC 2d 593,
    at 599 (1975) (*Part 68 First Report and Order*).

[^47]: *Id.*

[^48]: 47 U.S.C. § 151; *see also North Carolina Utilities Commission v.
    FCC*, 537 F.2d 787, 793-94 (4th Cir. 1976).

[^49]: The provisions of the Communications Act of 1934 upon which the
    Commission relied to initiate the Part 68 program included Sections
    4(i), 4(j), 201-205, 215, 218, 313, 314, 403, 404 and 602. *See Part
    68* *First Report and Orde*r, 56 FCC 2d at 613.

[^50]: We also cite precedent supporting each of our specific proposals,
    as we discuss *infra* in the following sections.

[^51]: 47 U.S.C. §§ 256(b)-(c). This statutory provision limits the
    Commission's authority to participate in the development of industry
    standards on interconnectivity and states in subsection (b)(2) that
    the Commission "may participate, in a manner consistent with its
    authority and practice prior to the date of enactment of this
    section, in the development by appropriate industry
    standards-setting organizations...".

[^52]: 5 U.S.C. § 553 (b).

[^53]: 5 U.S.C. §§ 601 *et seq.* For example, the RFA requires an agency
    to prepare and make available an initial regulatory flexibility
    analysis whenever it proposes a rule of general applicability that
    must be published in a notice of proposed rulemaking under § 553 of
    the APA. 5 U.S.C. § 603.

[^54]: 44 U.S.C. §§ 3501 *et seq.* For example, the PRA states that an
    agency shall not conduct or sponsor certain collections of
    information unless it provides sixty days notice in the Federal
    Register and obtains approval from the Office of Management and
    Budget. 44 U.S.C. §§ 3506 (c)(2)(A), 3507.

[^55]: 5 U.S.C. §§ 801 *et seq.* These provisions of the CWAAA require,
    for example, that before an agency rule can go into effect, the
    agency must submit a report to each house of Congress and the
    General Accounting Office.

[^56]: The rules proposed to be affected by this NPRM are: §§ 68.2
    except for 68.2(i) and the last paragraph of 68.2(l)(2); 68.3 to the
    extent indicated above; 68.200, 68.202, 68.204, 68.210, 68.212,
    68.216, 68.226, 68.302, 68.304, 68.306, 68.308, 68.310, 68.312,
    68.314, 68.500, 68.502, 68.504, and 68.506.

[^57]: *See, e.g.*, *Inside Wiring Third Report & Order*, 7 FCC Rcd 1334
    at note 6; *see supra* notes 8 and 10; *see also* Promotion of
    Competitive Networks in Local Telecommunications Markets, WT Docket
    No. 99-217, Wireless Communications Association International, Inc.
    Petition for Rulemaking to Amend Section 1.4000 of the Commission\'s
    Rules to Preempt Restrictions on Subscriber Premises Reception or
    Transmission Antennas Designed To Provide Fixed Wireless Services,
    Cellular Telecommunications Industry Association Petition for Rule
    Making and Amendment of the Commission\'s Rules to Preempt State and
    Local Imposition of Discriminatory And/Or Excessive Taxes and
    Assessments, Implementation of the Local Competition Provisions in
    the Telecommunications Act of 1996, CC Docket No. 96-98, *Notice of
    Proposed Rulemaking* and *Notice of Inquiry, WT Docket No. 99-217,
    Third Further Notice of Proposed Rulemaking, CC Docket No. 96-98*,
    14 FCC Rcd. 12673 (1999) (*Competitive Networks NPRM*). In the
    *Competitive Networks NPRM*, we sought comment on how the
    demarcation point under Part 68 affects access to multiple tenant
    environments by competitive telecommunications service providers,
    and whether any Commission action is appropriate. *Id*. at 12709. We
    do not address these issues here, and will consider them in the
    context of the *Competitive Networks* rulemaking proceeding.

[^58]: These definitions are now found in 47 C.F.R. § 68.3.

[^59]: 47 C.F.R. § 68.4.

[^60]: 47 C.F.R. § 68.318 (c), *adopted pursuant to* 47 U.S.C. § 227.

[^61]: 47 C.F.R. § 68.318 (d), *adopted pursuant to* 47 U.S.C. § 227, 47
    C.F.R. § 68.318 (e), *adopted pursuant to* 47 USC § 226.

[^62]: 47 C.F.R. §§ 68.213, 68.215, 68.2(c)(3); *see also* § 68.3
    (defining \"demarcation point\").

[^63]: The technical criteria should focus on preventing harm to the
    network by CPE, rather than on its construction, operation, or
    performance, to ensure that it does not harm the PSTN.

[^64]: Of course, 47 U.S.C. §273(d)(2) applies to standards development
    organizations' responsibility to protect proprietary information
    filed with them.

[^65]: 5 U.S.C. App. 2; 41 C.F.R. §§ 101-6.1001 to 101.6-1035 (GSA
    Federal Advisory Committee Management Regulations).

[^66]: Deployment of Wireline Services Offering Advanced
    Telecommunications Capability, CC Docket No. 98-147, *Third Report
    and Order*, CC Docket No. 96-98, *Fourth Report and Order*, FCC
    99-355 (rel. Dec. 9, 1999) (*Advanced Services Third Report and
    Order*).

[^67]: T1E1.4 is a working group of Alliance for Telecommunications
    Industry Solutions (ATIS)-sponsored Committee T1.

[^68]: *Advanced Services Third Report and Order*, para. 180.

[^69]: John Bipes, Mobile Engineering, Record at 81-82.

[^70]: Jimmy Salinas, SBC, Record at 83.

[^71]: *See, e.g.*, TIA Comments, filed July 2, 1999, at 4; USTA
    Comments, filed July 2, 1999, at 2, 3.

[^72]: CCL Comments, filed July 2, 1999, at 3.

[^73]: TIA Committee TR-41.9 is a CPE technical regulations working
    group.

[^74]: Sprint Comments, filed July 2, 1999, at 8.

[^75]: Lucent Comments, filed July 2, 1999, at 3.

[^76]: TIA Comments, filed July 2, 1999, at 4; USTA Comments, filed July
    2, 1999, at 2.

[^77]: Record at 108, 114; USTA Comments, filed July 2, 1999, at 2, 3.

[^78]: American National Standards Institute, *Procedures for the
    Development and Coordination of American National Standards* §§
    1.2.1-1.2.7 (visited April 2000),
    \<http://web.ansi.org/public/library/std_proc/\>.

[^79]: *Id*. at § 1.2.1.

[^80]: Record at 64. Because technical criteria are part of the
    Commission's rules, a party that wants to register equipment that
    doesn't meet the existing technical criteria must request a waiver
    of the rules. This is an adjudicatory proceeding required by the
    APA.

[^81]: 47 C.F.R. 76.1204(b).

[^82]: Under this option, however, the Commission would continue to
    prescribe certain technical criteria, such as in the areas of HAC/VC
    or inside wire, as discussed above.

[^83]: *See, e.g.,* National Technology Transfer and Advancement Act of
    1995, Pub.L.No.104-113, §12, 110 Stat. 775, 782-83 (1996). *See
    also* OMB Circular A-119, Federal Participation in the Development
    and Use of Voluntary Consensus Standards and in Conformity
    Assessment Activities.

[^84]: This option is very similar to the one the Commission adopted for
    cable television (CATV). The Commission has decided to rely on
    voluntary industry consensus processes for the development of
    technical standards for navigation devices (e.g., cable set-top
    boxes, cable modems), which may involve more than one organization.
    *See* *Section 304* *Order on Reconsideration*, 13 FCC Rcd at
    14792-14809.

[^85]: *See, e.g.,* Amendment of Part 68 of the Commission's Rules,
    *Notice of Proposed Rulemaking*, CC Docket No. 96-28, 11 FCC Rcd
    13282 (1996) (*Harmonization Notice*); Petition to Amend Part 68 of
    the Commission's Rules to Include Terminal Equipment Connected to
    Basic Rate Access Service Provided via Integrated Services Digital
    Network Access Technology and Petition to Amend Part 68 of the
    Commission's Rules to Include Terminal Equipment Connected to Public
    Switched Digital Service, *Notice of Proposed Rulemaking*, CC Docket
    No. 93-268, 9 FCC Rcd 1068 (1993) (*ISDN Notice*).

[^86]: For example, TIA's Committee TR-41.9 (User Premises Telephone
    Equipment Requirements) and ATIS\'s Committee T1 (working group
    T1E1.4) address standards for terminal equipment.

[^87]: *See Harmonization Order*; Petition to Amend Part 68 of the
    Commission's Rules to Include Terminal Equipment Connected to Basic
    Rate Access Service Provided via Integrated Services Digital Network
    Access Technology and Petition to Amend Part 68 of the Commission's
    Rules to Include Terminal Equipment Connected to Public Switched
    Digital Service, *Report and Order*, 11 FCC Rcd 5091, 5102-5103
    (1996) (*ISDN Order*).

[^88]: ^?^ TIA, ATIS and other standards groups have a long history of
    working cooperatively on technical standards issues for
    telecommunications services and terminal equipment. For example,
    ATIS\' T1A1 has prepared standards for voice over ADSL service and
    TIA\'s TR41 will prepare CPE standards for the service; ATIS\'s
    T1E1.4 and TIA\'s 30.3 (two technical sub‑committees) have formed a
    joint ad hoc group to develop xDSL test procedures for performance
    benchmarking of different vendors\' equipment, and the group\'s
    output will be the basis for a standard for evaluating xDSL model
    performance; ATIS\'s T1E1 is preparing a spectrum management plan
    for cable plant, while TIA\'s TR 41 will adapt the plan for CPE
    applications; and TIA\'s TR41.3 has worked cooperatively over the
    years with IEEE\'s subcommittee on telephone instrumentation and
    testing on telephone set requirements.

[^89]: For example, the opportunity on the network side of the
    demarcation point to introduce technology prior to development of a
    nationwide standard sped both the initial introduction of xDSL
    technology into the local loop and the availability of broadband
    services to consumers.

[^90]: *See* *Harmonization Order*, 12 FCC Rcd at 19225; *ISDN Order*,
    11 FCC Rcd at 5102-5103.

[^91]: *See* *ISDN Order*, 11 FCC Rcd at 5098.

[^92]: *See* 47 C.F.R. §15.107(e).

[^93]: We note that there is precedent, both within Part 68 and within
    other regulatory designs implemented by this Commission, for
    referencing industry standards in our rules. For example, Bell
    Atlantic points out that Section 68.3 specifies that the zero level
    decoder, used in equipment testing under Part 68, must comply with
    the μ=255 pulse code modulation encoding standards specified in
    International Telecommunications Union/ Telecommunications Standards
    Section (formerly the Consultative Committee for International
    Telegraphy and Telephony, (CCITT)) Rec. G.711 for voiceband encoding
    and decoding. Bell Atlantic Comments at 2. In addition, Section
    68.500 specifies that hard gold, and contact performance equivalence
    to gold, shall be determined in accordance with the standard
    detailed in Appendix H of TIA Telecommunications Systems Bulletin
    No. 31, *id;* see *also* Procedure for Measuring Electromagnetic
    Emissions from Intentional and Unintentional Radiators, Gen. Docket
    Nos. 89-116, 89-117, 89-118, *Report and Order*, 8 FCC Rcd 4236
    (1993).

[^94]: See 47 C.F.R. §68.200 *et seq.*

[^95]: *See, e.g*., CCL Comments, filed July 13, 1999, at 4; Nortel
    Comments, filed July 2, 1999, at 2; Thomson Comments, July, 2, 1999,
    at 1-3.

[^96]: Thomson Comments, filed July 2, 1999, at 2, 3. The estimate made
    as follows: Each of the 3,000 products registered every year under
    Part 68 experiences, on average, a four-week delay in market
    introduction. The aggregate costs of these delays, multiplied by the
    number of registered products, results in total costs approximating
    \$100 million per year.

[^97]: Although it is desirable to reduce or eliminate, if possible, the
    registration delay in getting new products to market, we also
    commend the Network Services Division of the Common Carrier Bureau
    for administering the registration process so that registrations are
    issued in a short time (approximately 4 weeks on average). This is
    perhaps the most expeditious non-automated application process in
    the Commission.

[^98]: We note, however, that this Commission will continue to enforce
    compliance of the obligation not to connect harmful CPE to the PSTN.
    We will also enforce the requirements that LECs permit connection of
    compliant equipment to the PSTN. In addition, we emphasize that we
    are committed to enforcing the rules protecting access for persons
    with disabilities and other consumer rules.

[^99]: *See, e.g.,* Comments of Tandy Corporation, filed July 20, 1999,
    at 7.

[^100]: ^?^ *MRA Order* at 24699, 24701.

[^101]: *MRA Order* at 24708 -- 24709.

[^102]: Our reliance on TCBs for testing and registration is scheduled
    to become effective this year.

[^103]: Under the existing rules, the TCBs are required to test CPE
    pursuant to technical criteria now outlined in Part 68. TCBs also
    will provide certification for equipment subject to 47 C.F.R. Parts
    2, 11, 15, 18, 21, 22, 24, 25, 26, 27, 74, 80, 87, 90, 95, 97, and
    101.

[^104]: *See, e.g.*, Statement by Intertek Testing Services, NA Inc.,
    filed July 20, 1999. We are mindful, however, of commenters\'
    concerns that governmental presence is necessary to supply the force
    of law behind the technical criteria governing CPE manufacture and
    connection to the wireline telephone network without harm. Record at
    20, 24, 26, and 113.

[^105]: *MRA Order* at 24687 - 24688.

[^106]: Record at 283, 284.

[^107]: Record at 203, 204, 221, 206-211, 251.

[^108]: 47 C.F.R. §§ 2.906, 2.948. As TIA has pointed out, the similarly
    named \"Supplier\'s Declaration of Conformity\" process established
    in ISO/IEC Guide 2:1996 does not require accreditation. TIA Ex
    Parte, Supplemental Comments, filed July 29, 1999, at 18, 19.

[^109]: TIA Comments, filed July 29, 1999, at 3, 7, 8.

[^110]: *Id*. at 8.

[^111]: 47 C.F.R. § 2.902.

[^112]: ITI Comments, filed August 6, 1999, at 3, 4.

[^113]: We note that the Commission has relied upon certain factors to
    develop the hierarchy of equipment approvals in Part 15 of our
    rules, including complexity of equipment, the relative novelty of
    the technology, history of compliance with technical requirements,
    and consensus on testing procedures.

[^114]: If the Commission ultimately chooses Option A, a gatekeeper SDO,
    this entity could also supervise the database. *See* *supra* paras.
    33-49.

[^115]: *See*, *e.g.*, Replacement of Part 90 by Part 88 to Revise the
    Private Land Mobile Radio Services and Modify the Policies Governing
    Them, and Examination of Exclusivity and Frequency Assignment
    Policies of the Private Land Mobile Services, PR Docket No. 92-235,
    *Second Report and Order*, 12 FCC Rcd. 14307, 14333-14334 (1997)
    (establishing a one-day period for frequency coordinators to notify
    each other of frequency recommendations).

[^116]: 21 U.S.C. § 862; 47 C.F.R. §§ 1.2001 - 1.2003.

[^117]: Amendment of Part 1 of the Commission\'s Rules to Implement
    Section 5301 of the Anti-Drug Abuse Act of 1988, Gen. Docket No.
    90-312, *Report and Order*, 6 FCC Rcd 7551 (1991) (*ADAA Report and
    Order*).

[^118]: 5 U.S.C. § 551(8).

[^119]: The Commission found that the ADAA rules apply to "all forms of
    Commission instruments of authority, including . . . equipment
    certification . . . ". *ADAA Report and Order* at para. 4.

[^120]: TIA Comments, filed July 29, 1999, at 13.

[^121]: *See* <http://www.epa.gov/energystar/>

[^122]: Record at 275 - 277. *See also* Letter from Peter van der Heim
    to Chairman Kennard and Commissioners Ness, Furchtgott-Roth, Powell,
    and Tristani, CC Docket No. 99-216 (dated Mar. 3, 2000) (transmitted
    via e-mail).

[^123]: 19 U.S.C. § 3109.

[^124]: 47 C.F.R. § 68.162. "Under clause 13 of Guide 65, a TCB is
    obligated to ensure that the products it certifies continue to
    comply with Commission requirements. . . . The Commission relies on
    the TCBs to use their judgement in complying with this guideline."
    *MRA Order* at 24707.

[^125]: 47 C.F.R. § 68.162.

[^126]: We do not propose, with our suggestions regarding our
    enforcement rules, to increase or decrease the standards by which a
    complainant has standing to file a complaint. For example, issues of
    harm as defined in our rules that is caused by faulty equipment are
    and would continue to be addressed to the local telephone company in
    the first instance. Any entity may continue to file a complaint
    about an unregistered product pursuant to our Part 68 complaint
    procedures.

[^127]: *See* Implementation of Sections 255 and 251(a)(2) of the
    Communications Act of 1934, as Enacted by the Telecommunications Act
    of 1996 \-- Access to Telecommunications Service, Telecommunications
    Equipment and Customer Premises Equipment by Persons with
    Disabilities, WT Docket No. 96-198, FCC 99-181, *Report and Order
    and Further Notice of Inquiry*, \-- FCC Rcd. \-\-\-- (rel. Sept. 29,
    1999); see also Telecommunications Relay Services and
    Speech-to-Speech Services for Individuals with Hearing and Speech
    Disabilities, CC Docket No. 98-67, FCC 00-56, *Report and Order and
    Further Notice of Proposed Rulemaking*, \-- FCC Rcd. \-\-- (rel.
    Mar. 6, 2000).

[^128]: *See* Amendment of 47 C.F.R. § 1.1200 *et seq*. Concerning Ex
    Parte Presentations in Commission Proceedings, *Report & Order*, 12
    FCC Rcd 7348, 7356‑57, para. 27, citing 47 C.F.R. § 1.1204(b)(1)
    (1997).

[^129]: *See* 47 C.F.R. § 1.1206(b)(2), as revised.

[^130]: 47 C.F.R. § 1.1206(b).

[^131]: 47 C.F.R. § 1.49.

[^132]: ^?^ *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et
    seq*[.]{.underline}, has been amended by the Contract With America
    Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996)
    (CWAAA). Title II of the CWAAA is the Small Business Regulatory
    Enforcement Fairness Act of 1996 (SBREFA).

[^133]: ^?^ \"Customer premises equipment\" is defined as equipment
    employed on the premises of a person (other than a carrier) to
    originate, route, or terminate telecommunications. 47 U.S.C. §
    153(14).

[^134]: *MRA Order, supra*, note 9.

[^135]: 47 U.S.C. § 151; *see also North Carolina Utilities Commission
    v. FCC*, 537 F.2d 787, 793-94 (4th Cir. 1976).

[^136]: *See* *Part 68 First Report and Order*, 56 FCC 2d at 613.

[^137]: ^?^ *Id.* at 599.

[^138]: *Id.*

[^139]: 5 U.S.C. § 603(b)(3).

[^140]: *Id*. § 601(3).

[^141]: *Id*. § 632.

[^142]: 13 C.F.R. § 121.201, Standard Industrial Classification (SIC)
    Code 3661.

[^143]: 1992 Economic Census, Industry and Employment Size of Firm,
    Table 1D (prepared by U.S. Census Bureau under contract to the U.S.
    Small Business Administration).