**Before the**

**[Federal Communications Commission]{.smallcaps}**

**Washington, D.C.**

In the Matter of )

)

Interconnection and Resale Obligations ) CC Docket No. 94-54

Pertaining to )

Commercial Mobile Radio Services )

**[Fourth Report and Order]{.smallcaps}**

Adopted: July 18, 2000 Released: July 24, 2000

By the Commission:

**[Table of Contents]{.smallcaps}**

Paragraph

I. INTRODUCTION
..........................................................................................1

II\. BACKGROUND
............................................................................................2

III\. DISCUSSION
.............................................................................................
6

A.  Reseller Switch Interconnection

```{=html}
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```
1.  Whether the Communications Act Requires the Commission to Mandate
    Reseller Switch
    Interconnection..............................................................................
    6

> 2\. Whether the Commission Should Require the Interconnection of
> Reseller Switches
>
> with CMRS
> Networks........................................................................
> 12
>
> 3\. State Interconnection
> Requirements...........................................................
> 20

B. CMRS-to-CMRS
Interconnection....................................................................
23

IV\. CONCLUSION
..............................................................................................26

V. PROCEDURAL MATTERS
...............................................................................27

VI\. ORDERING CLAUSES
....................................................................................29

Appendix -- List of Pleadings

**I. INTRODUCTION**

Number range level0Number range level1Number range level2Number range
level3Number range level4Number range level5Number range level6Number
range level71. This Report and Order resolves issues raised in 1995 in
the *Second NPRM* in this proceeding[^1] concerning whether
facilities-based commercial mobile radio service (CMRS) providers should
be required to interconnect with CMRS resellers' switches or with each
others' networks. Specifically, we adopt our tentative conclusion in
that *NPRM* and deny requests for mandatory interconnection between
resellers' switches and CMRS providers' networks. In the absence of any
specific State interconnection requests pending before us, we also
decline to take action preempting state requirements. Finally, we adopt
our tentative conclusion in the *NPRM* and decline to impose general
interconnection obligations between the networks of facilities-based
CMRS providers. Consistent with the interconnection provisions of the
1996 Telecommunications Act, as interpreted in the *Local Competition
First Report and Order,*[^2] we conclude generally that efficient CMRS
interconnection will be achieved between facilities-based CMRS providers
through voluntary agreements.

**II. BACKGROUND**

2\. Wireless resellers have on several occasions sought from cellular
carriers interconnection of resellers' switches with the cellular
carriers' networks. The resellers have proposed to place their switches
between the mobile telephone switching office (MTSO) of the cellular
carrier and the facilities of the local exchange carrier (LEC) or
interexchange carrier (IXC). They claim these switches would allow them
to route traffic and bill customers on a real-time basis, and thus
reduce costs and improve their services. In most cases, these requests
have not been granted by the cellular carriers.[^3]

3\. In proceedings dating back to 1994, wireless resellers Cellular
Service, Inc. (CSI) and ComTech Mobile Telephone Company (ComTech) have
sought Commission intervention to help them obtain such switch
interconnection with CMRS networks. In the *CMRS Second Report and
Order*,[^4] the Commission decided to seek further comment on the issue
of interconnection to facilities-based CMRS providers, and stated that
it would initiate a new proceeding to examine such issues. On May 19,
1994, ComTech filed a petition for reconsideration of the *CMRS Second
Report and Order* on the ground that the Commission\'s decision failed
to recognize the right of a reseller to interconnect its switch with the
MTSO of a cellular carrier. CSI and ComTech requested the Commission to
issue a policy statement that would recognize the right of a reseller to
interconnect its own switch with a cellular carrier's network and the
concomitant obligation of the cellular carrier to engage in good faith
negotiations for the establishment of such interconnection
arrangements.[^5]

4\. As it had indicated in the *CMRS Second Report and Order*, the
Commission began in this proceeding an exploration of the reseller
switch interconnection issue as part of a broad rulemaking proceeding.
The Commission initiated this proceeding with a Notice of Proposed
Rulemaking and a Notice of Inquiry that addressed a broad array of
regulatory issues relating to CMRS interconnection, including CMRS
interconnection and resale.[^6] The Commission indicated that, until
final disposition of the interconnection issues was reached, it would
entertain requests for interconnection pursuant to Section 332(c)(1)(B)
of the Communications Act[^7] on a case-by-case basis.[^8]

5\. The Commission in the *Second NPRM,* on the issues before us now,
tentatively proposed not to require facilities-based CMRS providers to
interconnect with each other or to unbundle the elements of
interconnection in order to permit resellers to interconnect their
switches between the CMRS MTSO and the facilities of LECs. [^9]

6\. Subsequently, in the Telecommunications Act of 1996, Congress
enacted provisions on interconnection, including Section 251(a), which
imposes an obligation on each telecommunications carrier \"to
interconnect directly or indirectly with the facilities and equipment of
other telecommunications carriers.\"[^10]

**III. DISCUSSION**

A.  **Reseller Switch Interconnection**

    **1. Whether the Communications Act or Commission Precedent Requires
    the Commission to Mandate Reseller Switch Interconnection**

7\. **[Background]{.underline}**. In the *Second NPRM*, the Commission
sought comment on the question of whether the CMRS providers' refusals
to interconnect with resellers violated Sections 201 or 332 of the
Act.[^11] The cellular resellers and organizations representing
resellers oppose the Commission\'s tentative conclusion not to require
that interconnection, based on the argument that the Commission is
legally required to mandate interconnection of reseller switches under
Sections 201 and 332(c)(1)(B) of the Communications Act.[^12]
Furthermore, these commenters cite the *Hush-A-Phone* decision in
arguing that the established standard for determining whether
interconnection is in the public interest is whether it is "privately
beneficial without being publicly detrimental."[^13]

8\. By contrast, facilities-based CMRS providers argue that
*Hush-A-Phone* does not set forth the relevant standard for applying
Section 201 of the Communications Act. Rather, these commenters argue
that the *Hush-A-Phone* rule --- that interconnection is in the public
interest if it is privately beneficial without being publicly
detrimental --- applies only in the context of connecting customer
premises equipment to the facilities of a carrier with market
power.[^14] In other contexts, they assert, the Commission should
balance all the costs and benefits in order to apply the public interest
standard set out on the face of Section 201.[^15] In particular, they
argue, the Commission should be especially careful before finding that
the public interest requires carriers to unbundle the elements of their
network in order to interconnect with a reseller that has its own
switch, but otherwise lacks its own network. Such a requirement, they
state, would be unprecedented under Section 201.[^16]

9\. **[Discussion]{.underline}**. We find that neither Sections 201 and
332 nor our past precedents require us to mandate interconnection
between CMRS networks and resellers' switches. The resellers argue that
*Hush-A-Phone* established the standard for determining whether the
interconnection is in the public interest and thus permissible. We
disagree. Section 332 requires interconnection 'pursuant to the
provisions of section 201" and section 201 requires interconnection only
when "the Commission, after opportunity for hearing, finds such action
necessary or desirable in the public interest."[^17] *Hush-A-Phone* does
not modify this requirement. That case concerned whether a telephone
subscriber could be precluded from using an attachment to his telephone
for the purpose of giving him privacy against eavesdroppers. The U.S.
Court of Appeals for the D.C. Circuit ruled in that case that telephone
company tariffs precluding such an attachment were an unwarranted
interference with the telephone user's right to reasonably use his
telephone in ways that are privately beneficial without being publicly
detrimental, and remanded the case to the Commission to prescribe
changes in the tariffs to render them fair, just and reasonable.[^18] We
do not read *Hush-A-Phone* as establishing a standard for
interconnection that we must apply here.

10\. The U.S. Court of Appeals for the Sixth Circuit affirmed the
position we take here, upholding our *CMRS Resale First Report and
Order* in 1998.[^19] The Court rejected the notion that *Hush-A-Phone*
set out a "public detriment/private benefit" test for FCC action.
Instead, the *Cellnet* court found that the D.C. Circuit in *Hush
-A-Phone* determined only that a tariff \"was neither just nor
reasonable under §§ 201 and 202 because it was an unwarranted
interference with a person\'s use of their own telephone\"[^20] and that
the justness and reasonableness requirements set out in sections 201 and
202 remain the criteria for FCC action. As the court stated, "the
*Hush-A-Phone* decision neither set forth other, more restrictive
principles, nor did it recognize the existence of a customer's right to
resell services as long as such was not publicly detrimental."[^21]
Accordingly, we determine that *Hush-A-Phone* does not require reseller
switch interconnection, which does not involve a customer's use of his
telephone.

11\. We similarly reject arguments by petitioners that our decisions in
the 1960s and 1970s relying in part on the *Hush-A-Phone* standard
require us to mandate interconnection of reseller switches.[^22]
*Carterphone,* like *Hush-A- Phone*, involved the right of end users to
connect their private equipment to the network, not the interconnection
of resellers to facilities--based providers. The Sixth Circuit's
decision in *Cellnet* is clear that *Hush-A-Phone* and its progeny do
not establish a right of interconnection here. The *AT&T Piece-Out
Order,* on which the petitioners rely, is similarly distinguishable. In
that order, the Commission rejected tariff provisions restricting the
interconnection of AT&T private line service to services provided by
specialized common carriers. The Commission found that interconnection
should be permitted, relying on previous decisions that had "established
that AT&T is duty bound to honor reasonable requests for the
interconnection of AT&T facilities with specialized carrier
facilities."[^23] The Commission decision was based on its previous
decisions requiring a particular kind of interconnection under Section
201 of the Act; the *AT&T Piece-Out Order* merely enforced these prior
actions. No such finding has been made with respect to an obligation of
facilities-based CMRS providers to interconnect with reseller switches,
and we find below that establishment of a rule requiring such
interconnection is not in the public interest.

12\. Moreover, we note these cases involved AT&T, the dominant provider
of telecommunications at that time. Thus, the Commission has not applied
principles established there to interconnection to carriers without
significant market power, such as CMRS providers.

13\. Finally, we find that Section 251(a) of the 1996 Act does not
require a different result. As noted above, that section requires that
each telecommunications carrier \"interconnect directly or indirectly
with the facilities and equipment of other telecommunications
carriers.\"[^24] As we have stated in the past, CMRS providers are
obligated to comply with this section, but that indirect interconnection
(e.g., two carriers other than incumbent LECs connecting with an
incumbent LEC's network) satisfies this obligation.[^25] Thus we do not
find that the Communications Act or Commission precedent requires the
Commission to mandate reseller switch interconnection.

#########  2. Whether the Commission Should Require the Interconnection of Reseller

**Switches with CMRS Networks**

14\. **[Background]{.underline}**. The Commission tentatively concluded
in the *Second NPRM* that the resellers' switch interconnection proposal
should not be generally imposed on facilities-based CMRS providers at
this time, on the grounds that competition in the market for
interconnected switched voice mobile services would likely render
mandatory switch-based resale unnecessary to control anticompetitive
behavior.[^26] The Commission also tentatively concluded that the switch
interconnection proposal may impose unwarranted costs on consumers and
the wireless industry and may subject the Commission to administrative
burdens.[^27] The Commission requested comment on its tentative
conclusion, and on the costs and benefits of a mandatory switch-based
resale rule.[^28]

15\. The reseller parties argue that interconnection of their switches
not only would serve the private interests of resellers but also would
benefit the public. First, several commenters challenge the tentative
conclusion of the Commission that the market for interconnected switched
mobile voice services is or soon will be highly competitive.[^29]
Second, commenters state that switch interconnection will allow
resellers both to increase their efficiency and to offer innovative and
bundled services to the public, thereby resulting in lower prices and
better and more diverse service offerings.[^30] In addition, some
commenters argue that switch interconnection would promote the public
interest by providing an avenue for small businesses to compete in the
wireless market.[^31]

16\. Third, proponents of the switch proposal argue that interconnection
would not impose substantial costs on carriers or consumers, or create
administrative burdens for the Commission. They argue that claims that
interconnection is technically infeasible have no merit and that
arguments that switch interconnection will degrade service or prevent
roaming are without foundation, given that resellers will have an
incentive not to harm the underlying network.[^32] Although carriers may
incur costs modifying their networks to accept calls from
resellers'switches, these costs would be borne by the resellers, and
therefore, according to proponents, the proposal should be of no concern
to the Commission.[^33] Finally, advocates of the switch interconnection
proposal argue that the attendant administrative costs will be small. On
the one hand, they contend that carriers should incur little cost in
unbundling their services because they presumably already know their
costs and this should facilitate cost recovery on an unbundled
basis.[^34] At the same time, the Commission will necessarily incur some
administrative costs in maintaining the interconnection rule but, these
commenters argue, the Commission\'s experience with LEC interconnection
suggests that these costs will be relatively small, and furthermore it
would be even more costly for the Commission to hear individual
complaints in the absence of a rule.

17\. Applying a cost-benefit analysis, commenters opposing
interconnection argue that the public will realize few if any benefits
from mandatory switch interconnection and that there may be detrimental
effects on competition. This argument is based largely on the premise
that the market for switched voice mobile services is competitive
because of the presence of resellers and, more importantly, the entry of
facilities-based competitors such as PCS providers.[^35] Commenters also
contend that the switch proposal would permit resellers to obtain a
"free ride" on the investments of licensed carriers, thereby penalizing
entrepreneurs who have bid on spectrum and invested in innovative
technology. [^36] The Rural Cellular Coalition (RCC) further argues that
resellers would have an unfair advantage over licensed carriers because
they would not be subject to regulatory requirements such as spectrum
caps, user fees, and reporting requirements.[^37]

18\. In addition to arguing that such a requirement would have
detrimental effects on the market, opposing commenters also contend that
other significant costs would result from the reseller switch proposal.
AT&T, in particular, describes a series of technical obstacles that it
contends will obstruct the interconnection of the switches.[^38]
Similarly, facilities-based carriers allege that introducing a switch
into the network will interfere with their planning, introduce
inefficiencies and duplication of functions, and cause degradation of
service, including interfering with roaming.[^39] To the extent these
problems can be overcome, doing so would assertedly require substantial
investment in developing new equipment, the cost of which would be
passed on to consumers.[^40] In response to resellers' statements that
they would pay the direct costs of interconnection, opponents argue that
as a practical matter it would be difficult to set prices accurately to
recover all relevant costs, including a pro rata portion of network
costs and a premium for risk.[^41] Finally, in addition to any technical
obstacles, these commenters argue that an unbundling requirement would
impose substantial administrative costs both on carriers and on the
Commission. [^42]

19\. **[Discussion]{.underline}**. Based upon our review and analysis of
the record, we adopt our tentative conclusion that the public interest
does not support the establishment of a rule requiring that
facilities-based CMRS carriers interconnect with reseller switches. As a
preliminary matter, we note that no decision by facilities-based CMRS
providers not to interconnect with reseller switches will raise issues
regarding unreasonable restrictions on resale. Under our CMRS resale
policies, facilities-based CMRS providers need not take affirmative
actions to facilitate resale.[^43] Unlike switch-based long-distance
resale, switch-based CMRS resale would require the facilities-based
carrier to take significant affirmative action. In long-distance resale,
a reseller can purchase a facilities-based carrier's service, substitute
its switch as the CPE, and have its customers call into the switch to
originate traffic. By contrast, a CMRS reseller\'s switch, as described
in this proposal, would not replace the wireless CPE at the end of a
call, but would either replace or supplement the facilities-based CMRS
provider\'s Mobile Telephone Switching Office switch in the "middle" of
a CMRS call.

20\. We decline to adopt the requested interconnection rule for a number
of reasons. First, we note that petitioners would have us impose this
specific form of interconnection on CMRS carriers, which we have never
regulated as dominant carriers. Second, since the adoption of the
*Second NPRM*, we have decided to sunset our general CMRS resale
requirement in November 2002 based on the steady growth of competition
in CMRS markets.[^44] There are now three or more mobile telephone
operators providing service in Basic Trading Areas serving over 241
million people, or 95.8 percent of the U.S. population. This has
resulted in declines of over 40% in three years in the average price per
minute of mobile telephone service and high usage.[^45] We find that, in
these circumstances, imposing a new interconnection obligation on
facilities-based CMRS providers is not required to overcome competitive
barriers. Moreover, to the extent that resale switch interconnection is
an economically attractive way of providing CMRS service, we anticipate
that the increasing degree of CMRS competition should provide incentives
for facilities-based CMRS providers to agree to switch interconnection
to increase their revenues.[^46]

21\. Third, we find that a resale switch interconnection requirement
would raise a number of technical issues relating to possible potential
for degraded service to CMRS consumers, controversies about the type and
quality of interconnection that would have to be provided, or both.
[^47] For example, the resellers claim that issues such as the
responsibility for 911, call waiting, three-way calling, and call
transfer would have to be resolved between the facilities-based
providers and the resellers.[^48] We do not think there is an adequate
record to support regulations addressing such issues, nor do we think
the benefits of this form of interconnection outweigh the costs of
intruding into the detailed technical operations of facilities-based
carriers' networks.

22\. Fourth, while resellers have agreed to pay for the direct costs of
interconnection, we find that determining interconnection costs in the
wireless context for the first time involves a substantial
administrative burden. To the extent that the use of resellers' switches
make use of CMRS provider switches largely redundant or lead to direct
interconnection between that switch and the LEC over non-CMRS providers'
facilities, we would foresee arguments that resellers should not have to
pay for, or should pay reduced rates for, unused components of the
resold CMRS service. Thus, interconnection to a facilities-based
provider to allow real-time processing in the middle of a call will
inevitably lead to unbundling of the facilities-based provider's
network. This would require even more difficult cost and rate issues to
be determined by the Commission. The 1996 Telecommunications Act ordered
unbundling for wireline carriers, but promulgated no such requirement
for wireless carriers. Based on all of these reasons, we conclude that a
rule mandating CMRS reseller switch interconnection is not in the public
interest.

**3. State Interconnection Requirements**

23\. **[Background]{.underline}**. In August, 1994, the California
Public Utilities Commission ordered resale switch interconnection,
including mandatory unbundling.[^49] In addition to opposing the
reseller switch proposal as federal policy, some commenters therefore
argue that the Commission should preempt the states from requiring CMRS
carriers to interconnect with switch-based resellers, that mandatory
unbundled interconnection necessarily involves rate regulation, and
therefore that it is forbidden to the states under Section 332(c)(3) of
the Communications Act.[^50]

24\. Furthermore, these commenters continue, preemption is justified
even aside from Section 332(c)(3) because it is impossible to separate
the regulation of interstate and intrastate reseller-switched calls, and
therefore state-mandated interconnection of intrastate communications
would necessarily govern interstate communications as well, contrary to
federal policy.[^51] Proponents of the interconnection proposal,
however, oppose preemption. They argue that California\'s
interconnection mandate does not involve rate regulation, and that
state-mandated interconnection of switches is not inconsistent with
sound federal policy.[^52]

25\. **[Discussion.]{.underline}** We conclude that the Commission has
jurisdiction over CMRS reseller switch interconnection. First, in *Iowa
Utilities Board*, the Eighth Circuit upheld the authority of the
Commission to establish nationwide interconnection rules for wireless
interconnection under Sections 201 and 332(c)(1)(B) of the Act.[^53]
Second, as several parties have argued, it appears impossible to
segregate interstate from intrastate calls that would traverse the
switch.[^54] There appears no need, however, to take any action at this
time. We note that the California action requiring unbundled resale
interconnection has been indefinitely stayed by the California Public
Utilities Commission, in view of our denial of the California
Commission\'s petition for rate regulation authority.[^55] Because no
specific state actions, other than the California PUC decision, have
been brought before us, we need not take any further action at this
time.

B.  CMRS-to-CMRS Interconnection

26\. [Background]{.underline}. With respect to direct CMRS-to-CMRS
interconnection, the *Second NPRM* tentatively concluded that it was
premature to impose a general interconnection obligation on all CMRS
providers.[^56] It further tentatively concluded that private
discussions were a more appropriate vehicle than Commission requirements
to spur interconnection, that market power is an important determinant
of whether interconnection should be required, and it sought comment on
the degree of market power in the CMRS industry as part of a
determination of policy guidelines to be used in future rulemaking or
complaint proceedings concerning interconnection. [^57]

27\. In a record filed before the passage of the 1996 Telecommunications
Act, the majority of commenters contend that there is no need for a
CMRS-to CMRS interconnection requirement because of the CMRS providers'
lack of market power, and because interconnection through the LECs will
remain the most efficient way of routing calls through mobile
networks.[^58] Some small CMRS providers contend that interconnection
through the LECs will be inadequate because of the disparity of their
market power compared with the LECs' market power.[^59] GSA also
supports a requirement for mandatory interconnection on the grounds that
CMRS providers should be held to the same standards as landline
carriers.[^60]

28\. [Discussion]{.underline}. We have not been persuaded by the
commenters that we should revise our rules or require mandatory
interconnection at this time. As noted above, in the *Local Competition
First Report and Order*, we determined that indirect interconnection
(*e.g.,*two carriers other than incumbent LECs connecting with an
incumbent LECs network) is all that is required by the 1996 Act*.*
Moreover, the Commission made clear that such indirect interconnection
applied to CMRS providers.[^61] In view of the growth of competition in
the CMRS market, as referred to above, we continue to believe that the
best way of achieving interconnection is through voluntary private
agreements. Nothing in the record here supports imposing more stringent
obligations on CMRS providers.

**IV. CONCLUSION**

29\. For the reasons expressed above, we adopt our tentative conclusion
in the Second NPRM that neither the switch interconnection proposal or
CMRS-to-CMRS interconnection should be generally imposed on CMRS
providers.

**V. PROCEDURAL MATTERS**

30\. This action is taken pursuant to Sections 4(i), 5(c), 201(a), and
332(c)(1)(B) of the Communications Act of 1934, 47 U.S.C. §§ 154(i),
155(c), 201(a), 332(c)(1)(B).

31\. For further information regarding this Order, contact Peter G.
Wolfe at the Wireless Telecommunications Bureau, Policy Division, at
418-1310.

**VI. ORDERING CLAUSES**

32\. Accordingly, IT IS ORDERED that the CSI/ComTech request for a
policy statement recognizing the right of resellers to interconnection
IS DENIED.

33\. IT IS FURTHER ORDERED that this proceeding IS TERMINATED..

34\. IT IS FURTHER ORDERED that this Report and Order SHALL BECOME
EFFECTIVE 30 days after publi­ca­tion in the Federal Register.

FEDERAL COMMUNICATIONS COMMIS­SION

Magalie Roman Salas

Secretary

APPENDIX

List of Parties Filing Comments and Reply Comments

[Comments]{.underline}

1.  AirTouch Communications Inc. (AirTouch)

2.  Allnet Mobile Communications, Inc. (ALLTEL Mobile)

3.  American Mobile Telecommunications Associations, Inc. (AMTA)

4.  American Personal Communication (APC)

5.  Ameritech

6.  AT&T Corporation (AT&T)

7.  Bell Atlantic Mobile Systems, Inc. (Bell Atlantic Mobile)

8.  BellSouth

9.  Cellnet Communications, Inc.

10. Cellnet of Ohio, Inc.

11. Cellular Service, Inc. & ComTech. Mobile Telephone Company
    (CSI/ComTech)

12. Cellular Telecommunications Industry Association (CTIA)

13. Comcast Cellular Communications, Inc. (Comcast)

14. Connecticut Telephone and Communications Systems, Inc. (Connecticut
    Telephone)

15. E.F. Johnson Company (E.F. Johnson)

16. Frontier Cellular Holding, Inc. (Frontier)

17. General Communications, Inc. (GCI)

18. General Services Administration (GSA)

19. Geotek Communications, Inc. (Geotek)

20. GTE

21. Horizon Cellular Telephone Company (Horizon)

22. In-Flight Phone Corporation (In-Flight)

23. Information Technology Association of America (ITAA)

24. MCI Telecommunications Corporation (MCI)

25. MobileMedia Communications, Inc. (MobileMedia)

26. National Telephone Cooperative Association (NTCA)

27. National Wireless Resellers Associations (NWRA)

28. NewPar

29. Nextel Communications, Inc. (Nextel)

30. NYNEX

31. Pacific Telesis Mobile Services and Pacific Bell Mobile Services
    (Pacific Bell)

32. Paging Network, Inc. (PageNet)

33. PCS Prime Co., L.P. (PCS Prime Co.)

34. Personal Communications Industry Associations (PCIA)

35. Rural Cellular Coalition (RCC)

36. SNET Cellular, Inc. (SNET Cellular)

37. The Southern Company (Southern)

38. Southwestern Bell Mobile Systems, Inc. (SBMS)

39. Sprint Telecommunications Venture (Sprint)

40. Telecommunications Resellers Associations (TRA)

41. Time Warner Telecommunications (TWT)

42. Vanguard Cellular Systems, Inc. (Vanguard)

43. Western Wireless Corporation (WWC)

44. WJG MariTEL Corporation (MariTel)

45. World Com, Inc d/b/a LDDS WorldCom (LDDS WorldCom)

# [Reply Comments]{.underline} {#reply-comments .unnumbered}

1.  AirTouch Communications, Inc. (AirTouch)

2.  Allnet Communications Services (Allnet)

3.  American Mobile Telecommunications Associations, Inc. (AMTA)

4.  Ameritech

5.  AT&T Corporation (AT&T)

6.  Bell Atlantic NYNEX Mobile, Inc. (Bell Atlantic/NYNEX)

7.  BellSouth

8.  Cable & Wireless, Inc. (CWI)

9.  Cellular Service Inc. & ComTech Mobile Telephone Company
    (CSI/ComTech)

10. Cellular Telecommunications Industry Association (CTIA)

11. Connecticut Telephone and Communications Systems, Inc. (Connecticut
    Telephone)

12. E.F. Johnson Company (E.F. Johnson)

13. General Services Administration (GSA)

14. Geotek Communications, Inc. (Geotek)

15. GTE

16. In-Flight Phone Corporation (In-Flight)

17. MCI Telecommunications Corporation (MCI)

18. National Association of Regulatory Utility Commissioners (NARUC)

19. National Wireless Resellers Association (NWRA)

20. New Par

21. Nextel Communications, Inc. (Nextel)

22. Pacific Bell Mobile Services (PTMS)

23. Paging Network, Inc. (PageNet)

24. PCS PRIMECO L.P. (PCS PRIMECO)

25. People of the State of California and Public Utilities Commission of
    California (California)

26. Personal Communications Industry Association (PCIA)

27. SNET Cellular, Inc. (SNET Cellular)

28. The Southern Company (Southern)

29. Southwestern Bell Mobile Systems, Inc. (SBMS)

30. Sprint Telecommunications Venture (Sprint)

31. Telecommunications Resellers Association (IRA)

32. U.S. Airwaves, Inc. (AirWaves)

33. Vanguard Cellular Systems, Inc. (Vanguard)

[^1]: ^?^ Interconnection and Resale Obligations Pertaining to
    Commercial Mobile Radio Services, CC Docket No. 94-54, *Second
    Notice of Proposed Rul*emaking, 10 FCC Rcd 10666 (1995) (*Second
    NPRM*).

[^2]: ^?^ Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996 and Interconnection between Local
    Exchange Carriers and Commercial Mobile Radio Service Providers,
    *First Report and Order*, CC Docket Nos. 96-98 and 95-185, 11 FCC
    Rcd 15499, 15987-89 (1996) (*Local Competition First Report and
    Order).*

[^3]: ^?^ In a case involving somewhat different issues, Bell Atlantic
    NYNEX Mobile granted interconnection for one year as part of a
    settlement agreement. *See* Cellexis v. Bell Atlantic, File No.
    WB/ENF-F-97-001.

[^4]: ^?^ Implementation of Sections 3(n) and 332 of the Communications
    Act and Regulatory Treatment of Mobile Services, GN Docket No.
    93-252, *Second Report and Order*, 9 FCC Rcd 1411, 1499-1500 (paras.
    237-238) (1994) (*CMRS Second Report and Order*), *partial recon*.,
    11 FCC Rcd 19729 (1996) (*CMRS Partial Reconsideration Order*),
    *affirmed*, Telecommunications Resellers Association v. FCC, 141
    F.3d 1193 (D.C.Cir. 1998) (*TRA Decision*), *further recon.
    pending*.

[^5]: ^?^ *See* CSI/ComTech Comments at 9. 6. The Comtech/CSI petition
    for reconsideration of the *CMRS Second Report and Order* was denied
    by the Commission in the *CMRS Partial Reconsideration Orde*r, 11
    FCC Rcd 19729, on the ground that the resellers\' interconnection
    rights would be determined in this proceeding. The Court of Appeals
    affirmed our Order, recognizing that we have the discretion to
    determine in which proceeding to consider the issue raised by
    Comtech/CSI. See *TRA Decision.*

[^6]: ^?^ *See* Equal Access and Interconnection Obligations Pertaining
    to Commercial Mobile Radio Service, CC Docket No. 94-54, *Notice of
    Proposed Rulemaking and Notice of Inquiry*, 9 FCC Rcd 5408 (1994)
    (*Interconnection NOI*).

[^7]: ^?^ 47 U.S.C. § 332(c)(1)(B).

[^8]: ^?^ *Interconnection NOI* at 5458 n. 213. Two resellers filed
    complaints with the Commission in February 1995, alleging that
    cellular carriers had refused to discuss interconnection proposals
    made by the resellers. The merits of these requests will be
    addressed promptly in those complaint proceedings.

[^9]: ^?^ Forty-five parties filed comments and thirty-three parties
    filed replies. These parties included LECs and their affiliated
    cellular companies, non-wireline facilities-based CMRS providers,
    resellers of CMRS service, IXCs, industry trade associations, and
    State and Federal agencies. A list of parties (together with short
    title references) filing comments and reply comments in the *Second
    NPRM* is contained in the Appendix.

[^10]: ^?^ 47 U.S.C. § 251(a)(1).

[^11]: ^?^ *Second NPRM*, 10 FCC Rcd at 10713.

[^12]: ^?^ 47 U.S.C. §§ 201, 332(c)(1)(B).

[^13]: ^?^ Hush-A-Phone Corp. v. United States, 238 F.2d 266, 269
    (D.C.Cir. 1956) (*Hush-A-Phone*); *see also* Regulatory Policies
    Concerning Resale and Shared Use of Common Carrier Domestic Public
    Switched Network Services, 83 FCC 2d 167, 171 (1980); Use of the
    Carterphone Device in Message Toll Telephone Service, Docket Nos.
    16942, 17073, Memorandum Opinion and Order, 13 FCC 2d 420
    (*Carterphone Order*), *recon. denied*, 14 FCC 2d 571 (1968);
    American Telephone and Telegraph Company Restrictions on Private
    Line Service, Transmittal Nos. 12171 and 12306, Memorandum Opinion
    and Order, 60 FCC 2d 939, 943 (1976) (*AT&T Piece Out Order*).

[^14]: ^?^ *See* CTIA Reply Comments at 14-15; New Par Reply Comments at
    4-5.

[^15]: ^?^ *See* AT&T Reply Comments at 18-19; GTE Reply Comments at 25;
    New Par Reply Comments at 5-6.

[^16]: ^?^ *See* New Par Comments at 24-26; CTIA Reply Comments at 15;
    Sprint Reply Comments at 2.

[^17]: ^?^ 47 U.S.C. §§ 201(a), 332 (c)(1)(B).

[^18]: ^?^ 238 F. 2d at 269.

[^19]: ^?^ Cellnet Communications, Inc. v. FCC, 149 F.3d 429, 437 ( 6th
    Cir. 1998) (*Cellnet*).

[^20]: ^?^ *Id* (italics in original).

[^21]: ^?^ *Id.*

[^22]: ^?^ *See, e.g., Carterphone*; *AT&T Piece-Out Order.*

[^23]: ^?^ *AT&T Piece-Out Order,* 60 FCC 2d at 943 (para. 11).

[^24]: ^?^ 47 U.S.C. § 251(a)(1).

[^25]: ^?^ Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996 and Interconnection between Local
    Exchange Carriers and Commercial Mobile Radio Service Providers,
    *First Report and Order*, CC Docket Nos. 96-98 and 95-185, 11 FCC
    Rcd 15499, 15989-91 (1996).

[^26]: ^?^ *Second NPRM*, 10 FCC Rcd at 10712-13 (paras. 95-96).

[^27]: ^?^ *Id.*

[^28]: ^?^ *Id*. at 10713-14 (para. 97). The Commission further noted
    that its tentative conclusions would not prejudge the outcome of
    specific complaints that resellers have filed against cellular
    licensees based on the refusal of the licensees to interconnect with
    switches operated by the resellers. *Id*.

[^29]: ^?^ Other commenters argue that even if cellular carriers may not
    currently have market power, it is nonetheless valuable for the
    Commission to promote increased competition. *See* Connecticut
    Telephone Comments at 4; NWRA Comments at 12-14 (rule is useful in
    case Commission has erred in evaluating market); NWRA Reply Comments
    at 6 n.7 (cellular carriers may obtain market power in absence of
    reseller switch rule).

[^30]: ^?^ *See*, *e.g*., Connecticut Telephone Comments at 5-6; GSA
    Comments at 7; NWRA Comments at 5-7.

[^31]: ^?^ *See* Connecticut Telephone Comments at 9-10; Connecticut
    Telephone Reply Comments at 9-10; NWRA Reply Comments at 10-11.

[^32]: ^?^ *See* NWRA Comments at 11-12; Connecticut Telephone Reply
    Comments at 5-6.

[^33]: ^?^ *See*, *e.g*., NWRA Comments at 10; TRA Comments at 31
    (noting that recovery from party seeking interconnection has worked
    in other contexts); Time Warner Comments at 20.

[^34]: ^?^ *See* Connecticut Telephone Comments at 4-5; CSI/ComTech
    Reply Comments at 11-12; Connecticut Telephone Reply Comments at 7-8
    (noting that commenters do not request unbundling of all elements,
    only airtime).

[^35]: ^?^ *See, e.g*., Alltel Comments at 4; AT&T Comments at 31; GTE
    Comments at 24; CTIA Reply Comments at 9-14 (even if market is not
    currently competitive, it makes no sense to impose costly regulatory
    requirements for only short-term benefit); *see also* PCS Primeco
    Reply Comments at 9 (Commission can impose requirement later if
    market failure subsequently occurs).

[^36]: ^?^ *See* Comcast Comments at 27-29; AirTouch Comments at 20; APC
    Comments at 12; Alltel Comments at 5; CTIA Comments at 37; CTIA
    Reply Comments at 15-16

[^37]: ^?^ RCC Comments at 9-10.

[^38]: ^?^ AT&T Comments at 29-30 and Exhibit 3 (Declaration of R.
    Nelson); *see also* AirTouch Comments at 21; BellSouth Comments at
    10-11; PCS Primeco Comments at 12-13; SNET Reply Comments at 9-10
    (citing alleged inability of Connecticut Telephone to overcome
    technical problems with its own proposal); Vanguard Reply Comments
    at 4.

[^39]: ^?^ *See, e.g*., AT&T Comments at 30; CTIA Comments at 38-39;
    Nextel Comments at 16.

[^40]: ^?^ *See* CTIA Comments at 38; RCC Comments at 8-9; Sprint
    Comments at 12; AirTouch Reply Comments at 6; AT&T Reply comments at
    17-18.

[^41]: ^?^ *See* CTIA Comments at 32; *see also* CTIA Reply Comments at
    9 n.17 (noting that carrier would run risk of non-recovery of costs
    in case of reseller\'s bankruptcy).

[^42]: ^?^ *See, e.g.*, CTIA Comments at 32; PCS Primeco Comments at 12;
    PCIA Comments at 22; *see also* New Par Reply Comments at 13-15
    (noting Commission\'s recognition in prior proceedings that
    excessive unbundling is inefficient).

[^43]: ^?^ Interconnection and Resale Obligations Pertaining to
    Commercial Mobile Radio Services, CC Docket No. 94-54, *First Report
    and Order,*11 FCC Rcd 18455, 18462 (para. 12) (*CMRS Resale Order).*

[^44]: ^?^ *Id.*

[^45]: ^?^ Implementation of Section 6002(b) of the Omnibus Budget
    Reconcilation Act of 1993 and Annual Report and Analysis of
    Competitive Market Conditions With Respect to Commercial Mobile
    Services, *Fourth Report*, FCC 99-136 (rel. June 24, 1999).

[^46]: ^?^ *See* AirTouch Comments at 20; Horizon Comments at 4; Bell
    Atlantic NYNEX Reply Comments at 8; SNET Reply Comments at 9-13
    (citing reported progress of MCI in negotiating reseller switch
    connections); *see also* Vanguard Comments at 13-14; Vanguard Reply
    Comments at 4 (success of resellers to date shows that switch-based
    interconnection is not needed).

[^47]: ^?^ *See* Comments of AT& T at 230 and Declaration of Roderick
    Nelson, which describes such problems as the lack of call waiting,
    three-way calling and call transfer; the lack of standards for
    intercept messages; the lack of provision for handling 911 calls,
    repeated attempts to access the reseller switch which result in
    congestion on the cellular carrier's switch; the lack of roaming
    agreements; increased call set-up times; and increased cost of
    transmission.

[^48]: ^?^ NWRA Reply Comments at 12.

[^49]: ^?^ CPUC Decision 94-08-002.

[^50]: ^?^ *See* AirTouch Comments at 23-24; GTE Comments at 25-26.

[^51]: ^?^ *See* AirTouch Comments at 24-26; CTIA Comments at 39-40; GTE
    Comments at 25.

[^52]: ^?^ *See* California Reply Comments at 3; CSI/ComTech Reply
    Comments at 14-16; NWRA Reply Comments at 19-20.

[^53]: ^?^ Iowa Utilities Board v. F.C.C., 120 F. 3d 753, 800 n.21 (8th
    Cir. 1997), *vacated on other grounds*, AT&T Corp. v. Iowa Utilities
    Board, 522 U.S. 1089 (1999) (*Iowa Utilities Board).*

[^54]: ^?^ *See* Louisiana PSC v. FCC, 476 U.S. 355 (1986).

[^55]: ^?^ Investigation on the Commission\'s Own Motion into Mobile
    Telephone Service and Wireless Communications, I-93-12-007, Decision
    96-12-071 (Dec. 1996); *see* Petition of the People of the State of
    California and the Public Utilities Commission of the State of
    California to Retain Regulatory Authority Over Interstate Cellular
    Service Rates, PR Docket No. 94-105, Report and Order (May 19,
    1995).

[^56]: ^?^ *Second NPRM* at 10681-87 (paras. 29-42).

[^57]: ^?^ *Id.*

[^58]: ^?^ *See, e.g.,* BellSouth Comments at 2-3; AT&T Comments at 5-9;
    Ameritech Comments at 2-3; AMTA Comments at 3-4; Alltel Comments at
    2.

[^59]: ^?^ *See, e.g.,* APC Comments at 2-4; U.S. Airwaves Reply
    Comments at 4.

[^60]: ^?^ GSA Comments at 4.

    ,

[^61]: ^?^ Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996 and Interconnection between Local
    Exchange Carriers and Commercial Mobile Radio Service Providers,
    *First Report and Order*, CC Docket Nos. 96-98 and 95-185, 11 FCC
    Rcd 15499, 15987-89 (1996)