**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | CC Docket No. 96-254         |
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| Implementation of Section 273 of | ** |                              |
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| the Communications Act of 1934,  | *  |                              |
| as amended by the                | *) |                              |
| Telecommunications Act of 1996   | ** |                              |
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|                                  | *) |                              |
|                                  | ** |                              |
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|                                  | ** |                              |
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|                                  | *  |                              |
|                                  | *) |                              |
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+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: September 8, 2003 Released: September 16, 2003**

By the Commission:

# Introduction

1.  In this Memorandum Opinion and Order, we resolve the pending Notice
    of Proposed Rulemaking[^1] to implement provisions of section 273 of
    the Telecommunications Act of 1996 (the Act), [^2] that pertain to
    manufacturing by the Bell Operating Companies (BOCs).[^3] We believe
    that the statute, as written, is sufficiently detailed as to be
    self-executing and sufficiently clear as to cover most circumstances
    at this time. Under these circumstances adopting rules to implement
    the provisions of section 273 would not serve the public interest
    and would impose unnecessary regulatory burdens inconsistent with
    the pro-competitive, deregulatory goals of the Act. Accordingly, for
    the reasons indicated below, we conclude that it is unnecessary for
    the Commission to adopt rules to implement section 273 at this
    juncture, and consequently, terminate this proceeding.

# Background

2.  Under the AT&T Consent Decree (Consent Decree),[^4] the BOCs were
    prohibited from engaging in certain lines of business, including the
    manufacture of telecommunications equipment and customer premises
    equipment (CPE).[^5] With the passage of the 1996 amendments to the
    Act, however, Congress provided the BOCs with a mechanism to remove
    the line of business restrictions once the BOCs had opened their
    local markets to competition. Specifically, with section 273 of the
    Act, Congress sought to facilitate BOC entry into the manufacturing
    business while preserving the robust competition that had developed
    in these markets.[^6]

3.  Section 273 permits a BOC to manufacture telecommunications
    equipment and CPE through a structurally separate corporate
    affiliate once the Commission authorizes the BOC to provide
    in-region, interLATA services pursuant to section 271(d) of the
    Act.[^7] Section 273 provides for two important exceptions to the
    requirement that a BOC refrain from all manufacturing activity until
    after it receives section 271 approval. First, section 273(b)(1)
    permits a BOC at any time to engage in "close collaboration" with
    manufacturers on product design and development.[^8] Second, section
    273 (b)(2) permits a BOC at any time to enter into "royalty
    agreements" with manufacturers.[^9]

4.  The *BOC Manufacturing NPRM*, invited public comment on a broad list
    of issues and concerns, and proposed numerous tentative conclusions.
    Among other things, the *BOC Manufacturing NPRM* sought information
    on the following issues: the proper scope of section 273's
    prohibitions, particularly as regarded BOC "close collaboration" and
    royalty agreements with manufacturers;[^10] the applicability of
    existing rules, particularly the network change disclosure rules, to
    section 273;[^11] definitions of key terms;[^12] and the impact of
    the proposed sale of Bell Communications Research, Inc.
    (Bellcore).[^13] In a separate, earlier proceeding, the Commission
    had adopted rules to implement section 273(d)(5), which requires the
    Commission to prescribe a default dispute resolution process when
    technical disputes arise between the non-accredited standards
    development organizations, such as Bellcore, and any party that
    funds the standards setting activities of the non-accredited
    standards development organization.[^14]

5.  The *BOC Manufacturing NPRM* generated comment from BOCs,
    competitive LECs, manufacturers, and others. Since the issuance of
    the *BOC Manufacturing NPRM*, each BOC has obtained section 271
    authority to provide in-region interLATA service in at least one of
    its states, and Verizon and BellSouth have received section 271
    authority throughout their regions. Yet to our knowledge, no BOC has
    created a manufacturing affiliate, nor has the Commission received
    complaints that BOCs have violated section 273.

# Discussion

6.  We conclude that the provisions of section 273 are sufficiently
    detailed as to be self-executing and sufficiently clear as to cover
    most circumstances. Thus, section 273 requires no further
    elaboration at this time. The *BOC Manufacturing NPRM* reflected the
    Commission's legitimate concern in 1996 that competition in the
    manufacture of telecommunications equipment and CPE must be
    safeguarded, while the nascent competition for local exchange
    service should be facilitated by monitoring BOC conduct and
    precluding anticompetitive incentives. Given these unprecedented
    responsibilities, the Commission posed detailed questions and sought
    broad participation to develop a framework to carry out the goals of
    the new Act. However, more than seven years have passed since the
    passage of the Act, and the Commission has granted section 271
    authorization to provide in-region interLATA service in forty-two
    states and the District of Columbia. Our experience over this time
    frame persuades us, with the benefit of hindsight, that the concerns
    the Commission articulated in the *BOC Manufacturing NPRM* were
    unwarranted because the competitive harms the Commission envisioned
    simply have not materialized.[^15]

7.  Although each BOC has obtained section 271 authority to provide
    in-region interLATA service in at least one of its in-region states,
    no BOC to date has sought a manufacturing affiliate under section
    272 of the Act. Further, the Commission has received no complaints
    against a BOC regarding standard setting or manufacturing activity
    pursuant to section 273, nor do we know of any BOC activity that
    would otherwise implicate a section 273 violation arising from BOC
    royalty agreements or BOC "close collaboration" with manufacturers.
    In view of these facts, we see no need to formulate and impose
    Commission rules when the general concerns and issues raised by the
    *BOC Manufacturing NPRM* have not occurred.

8.  Moreover, whenever the Commission adopts rules, it must consider
    whether the benefit of such rules outweighs the burden on regulated
    entities. Although sections 273(g) and (f) specifically grant the
    Commission authority to implement any necessary rules, they do not
    require us to do so. As written, section 273 provides detailed
    requirements that should facilitate quick review and disposal of
    alleged violations on a case-by-case basis.[^16] Moreover, if a
    party believes that section 273 does not clearly indicate the proper
    course of conduct, the Commission has in place adequate mechanisms
    for addressing the party's concerns. For example, the complainant
    may seek a declaratory ruling or an enforcement action from the
    Commission. The complainant also may seek redress under the rules
    promulgated in the *Section 273 Dispute Resolution Order*.[^17]
    Thus, there is only, at most, a slight benefit in enacting specific
    regulations. By contrast, we expect carriers would incur not
    insignificant costs in complying with such regulations. Accordingly,
    we believe a case-by-case approach would serve the public interest
    more efficiently than imposing a new rules regime. Therefore, in the
    absence of a compelling need to adopt regulations, we decline to do
    so. Should circumstances change such that parties believe the
    Commission must adopt rules to implement section 273, a party may
    file a petition for rulemaking.[^18]

# Regulatory Flexibility Act

9.  We conclude that, because we do not adopt rules in this Memorandum
    Opinion & Order to implement section 273, our resolution of this
    matter raises no Regulatory Flexibility Act issues.[^19] Although
    section 273 focuses primarily on BOC manufacturing activity, in the
    *BOC Manufacturing NPRM* the Commission questioned whether
    development of rules would "have a significant economic impact on a
    substantial number of small businesses insofar as they apply to
    entities that develop standards, develop generic requirements and
    conduct certification activity."[^20] However, in this Memorandum
    Opinion & Order, we neither promulgate new rules nor revise existing
    rules, and thus the action does not require any change in the
    current practices of any standard setting entities, large or small.
    Accordingly, because we implement no rules, we take no action that
    would require entities to modify their practices. Thus, we find that
    the action will not have a "significant economic impact on a
    substantial number of small entities."[^21]

# paperwork reduction act of 1995

10. We find that this Memorandum Opinion and Order does not contain
    information collection provisions and therefore does not implicate
    the Paperwork Reduction Act of 1995.

# Conclusion

11. We conclude that there is no need to impose Commission rules at this
    juncture. With the benefit of hindsight, we have determined that
    section 273 is sufficiently clear as to be self-executing and
    sufficiently detailed as to cover most situations. Accordingly, we
    terminate this proceeding in view of our finding that further rules
    to implement section 273 are not necessary at this time.

# ordering clauses

12. Accordingly, IT IS ORDERED that pursuant to sections 1, 3, 4(i)-(j),
    7, 201-209, 218-220, 251, 271-273 and 403 of the Communications Act
    of 1934, as amended, 47 U.S.C. §§ 151, 153, 154(i)-(j), 157,
    201-209, 218-220, 251, 271-273, and 403 that this Memorandum Opinion
    and Order IS ADOPTED.

13. The Commission has thus completed its review of the record in the
    above-captioned rulemaking. Accordingly, IT IS ORDERED, that the
    above-captioned proceeding IS TERMINATED.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch Secretary

**Appendix A**

**47 U.S.C. § 273. Manufacturing by Bell operating companies**

\(a\) Authorization

A Bell operating company may manufacture and provide telecommunications
equipment, and manufacture customer premises equipment, if the
Commission authorizes that Bell operating company or any Bell operating
company affiliate to provide interLATA services under section 271(d) of
this title, subject to the requirements of this section and the
regulations prescribed thereunder, except that neither a Bell operating
company nor any of its affiliates may engage in such manufacturing in
conjunction with a Bell operating company not so affiliated or any of
its affiliates.

\(b\) Collaboration; research and royalty agreements

> \(1\) Collaboration
>
> Subsection (a) of this section shall not prohibit a Bell operating
> company from engaging in close collaboration with any manufacturer of
> customer premises equipment or telecommunications equipment during the
> design and development of hardware, software, or combinations thereof
> related to such equipment.
>
> \(2\) Certain research arrangements; royalty agreements
>
> Subsection (a) of this section shall not prohibit a Bell operating
> company from\--
>
> **(A)** engaging in research activities related to manufacturing, and
>
> **(B)** entering into royalty agreements with manufacturers of
> telecommunications equipment.

\(c\) Information requirements

> \(1\) Information on protocols and technical requirements
>
> Each Bell operating company shall, in accordance with regulations
> prescribed by the Commission, maintain and file with the Commission
> full and complete information with respect to the protocols and
> technical requirements for connection with and use of its telephone
> exchange service facilities. Each such company shall report promptly
> to the Commission any material changes or planned changes to such
> protocols and requirements, and the schedule for implementation of
> such changes or planned changes.
>
> \(2\) Disclosure of information
>
> A Bell operating company shall not disclose any information required
> to be filed under paragraph (1) unless that information has been filed
> promptly, as required by regulation by the Commission.
>
> \(3\) Access by competitors to information
>
> The Commission may prescribe such additional regulations under this
> subsection as may be necessary to ensure that manufacturers have
> access to the information with respect to the protocols and technical
> requirements for connection with and use of telephone exchange service
> facilities that a Bell operating company makes available to any
> manufacturing affiliate or any unaffiliated manufacturer.
>
> \(4\) Planning information
>
> Each Bell operating company shall provide, to interconnecting carriers
> providing telephone exchange service, timely information on the
> planned deployment of telecommunications equipment.

\(d\) Manufacturing limitations for standard-setting organizations

> \(1\) Application to Bell Communications Research or manufacturers
>
> Bell Communications Research, Inc., or any successor entity or
> affiliate\--
>
> **(A)** shall not be considered a Bell operating company or a
> successor or assign of a Bell operating company at such time as it is
> no longer an affiliate of any Bell operating company; and
>
> **(B)** notwithstanding paragraph (3), shall not engage in
> manufacturing telecommunications equipment or customer premises
> equipment as long as it is an affiliate of more than 1 otherwise
> unaffiliated Bell operating company or successor or assign of any such
> company.
>
> Nothing in this subsection prohibits Bell Communications Research,
> Inc., or any successor entity, from engaging in any activity in which
> it is lawfully engaged on February 8, 1996. Nothing provided in this
> subsection shall render Bell Communications Research, Inc., or any
> successor entity, a common carrier under this subchapter. Nothing in
> this subsection restricts any manufacturer from engaging in any
> activity in which it is lawfully engaged on February 8, 1996.
>
> \(2\) Proprietary information
>
> Any entity which establishes standards for telecommunications
> equipment or customer premises equipment, or generic network
> requirements for such equipment, or certifies telecommunications
> equipment or customer premises equipment, shall be prohibited from
> releasing or otherwise using any proprietary information, designated
> as such by its owner, in its possession as a result of such activity,
> for any purpose other than purposes authorized in writing by the owner
> of such information, even after such entity ceases to be so engaged.
>
> \(3\) Manufacturing safeguards
>
> **(A)** Except as prohibited in paragraph (1), and subject to
> paragraph (6), any entity which certifies telecommunications equipment
> or customer premises equipment manufactured by an unaffiliated entity
> shall only manufacture a particular class of telecommunications
> equipment or customer premises equipment for which it is undertaking
> or has undertaken, during the previous 18 months, certification
> activity for such class of equipment through a separate affiliate.
>
> **(B)** Such separate affiliate shall\--
>
> **(i)** maintain books, records, and accounts separate from those of
> the entity that certifies such equipment, consistent with generally
> acceptable accounting principles;
>
> **(ii)** not engage in any joint manufacturing activities with such
> entity; and
>
> **(iii)** have segregated facilities and separate employees with such
> entity.
>
> **(C)** Such entity that certifies such equipment shall\--
>
> **(i)** not discriminate in favor of its manufacturing affiliate in
> the establishment of standards, generic requirements, or product
> certification;
>
> **(ii)** not disclose to the manufacturing affiliate any proprietary
> information that has been received at any time from an unaffiliated
> manufacturer, unless authorized in writing by the owner of the
> information; and
>
> **(iii)** not permit any employee engaged in product certification for
> telecommunications equipment or customer premises equipment to engage
> jointly in sales or marketing of any such equipment with the
> affiliated manufacturer.
>
> \(4\) Standard-setting entities
>
> Any entity that is not an accredited standards development
> organization and that establishes industry-wide standards for
> telecommunications equipment or customer premises equipment, or
> industry-wide generic network requirements for such equipment, or that
> certifies telecommunications equipment or customer premises equipment
> manufactured by an unaffiliated entity, shall\--
>
> **(A)** establish and publish any industry-wide standard for,
> industry-wide generic requirement for, or any substantial modification
> of an existing industry-wide standard or industry-wide generic
> requirement for, telecommunications equipment or customer premises
> equipment only in compliance with the following procedure\--
>
> **(i)** such entity shall issue a public notice of its consideration
> of a proposed industry-wide standard or industry-wide generic
> requirement;
>
> **(ii)** such entity shall issue a public invitation to interested
> industry parties to fund and participate in such efforts on a
> reasonable and nondiscriminatory basis, administered in such a manner
> as not to unreasonably exclude any interested industry party;
>
> **(iii)** such entity shall publish a text for comment by such parties
> as have agreed to participate in the process pursuant to clause (ii),
> provide such parties a full opportunity to submit comments, and
> respond to comments from such parties;
>
> **(iv)** such entity shall publish a final text of the industry-wide
> standard or industry-wide generic requirement, including the comments
> in their entirety, of any funding party which requests to have its
> comments so published; and
>
> **(v)** such entity shall attempt, prior to publishing a text for
> comment, to agree with the funding parties as a group on a mutually
> satisfactory dispute resolution process which such parties shall
> utilize as their sole recourse in the event of a dispute on technical
> issues as to which there is disagreement between any funding party and
> the entity conducting such activities, except that if no dispute
> resolution process is agreed to by all the parties, a funding party
> may utilize the dispute resolution procedures established pursuant to
> paragraph (5) of this subsection;
>
> **(B)** engage in product certification for telecommunications
> equipment or customer premises equipment manufactured by unaffiliated
> entities only if\--
>
> **(i)** such activity is performed pursuant to published criteria;
>
> **(ii)** such activity is performed pursuant to auditable criteria;
> and
>
> **(iii)** such activity is performed pursuant to available
> industry-accepted testing methods and standards, where applicable,
> unless otherwise agreed upon by the parties funding and performing
> such activity;
>
> **(C)** not undertake any actions to monopolize or attempt to
> monopolize the market for such services; and
>
> **(D)** not preferentially treat its own telecommunications equipment
> or customer premises equipment, or that of its affiliate, over that of
> any other entity in establishing and publishing industry-wide
> standards or industry-wide generic requirements for, and in
> certification of, telecommunications equipment and customer premises
> equipment.
>
> \(5\) Alternate dispute resolution
>
> Within 90 days after February 8, 1996, the Commission shall prescribe
> a dispute resolution process to be utilized in the event that a
> dispute resolution process is not agreed upon by all the parties when
> establishing and publishing any industry-wide standard or
> industry-wide generic requirement for telecommunications equipment or
> customer premises equipment, pursuant to paragraph (4)(A)(v). The
> Commission shall not establish itself as a party to the dispute
> resolution process. Such dispute resolution process shall permit any
> funding party to resolve a dispute with the entity conducting the
> activity that significantly affects such funding party\'s interests,
> in an open, nondiscriminatory, and unbiased fashion, within 30 days
> after the filing of such dispute. Such disputes may be filed within 15
> days after the date the funding party receives a response to its
> comments from the entity conducting the activity. The Commission shall
> establish penalties to be assessed for delays caused by referral of
> frivolous disputes to the dispute resolution process.
>
> \(6\) Sunset
>
> The requirements of paragraphs (3) and (4) shall terminate for the
> particular relevant activity when the Commission determines that there
> are alternative sources of industry-wide standards, industry-wide
> generic requirements, or product certification for a particular class
> of telecommunications equipment or customer premises equipment
> available in the United States. Alternative sources shall be deemed to
> exist when such sources provide commercially viable alternatives that
> are providing such services to customers. The Commission shall act on
> any application for such a determination within 90 days after receipt
> of such application, and shall receive public comment on such
> application.
>
> \(7\) Administration and enforcement authority
>
> For the purposes of administering this subsection and the regulations
> prescribed thereunder, the Commission shall have the same remedial
> authority as the Commission has in administering and enforcing the
> provisions of this subchapter with respect to any common carrier
> subject to this chapter.
>
> \(8\) Definitions
>
> For purposes of this subsection:
>
> **(A)** The term \"affiliate\" shall have the same meaning as in
> section 153 of this title, except that, for purposes of paragraph
> (1)(B)\--
>
> **(i)** an aggregate voting equity interest in Bell Communications
> Research, Inc., of at least 5 percent of its total voting equity,
> owned directly or indirectly by more than 1 otherwise unaffiliated
> Bell operating company, shall constitute an affiliate relationship;
> and
>
> **(ii)** a voting equity interest in Bell Communications Research,
> Inc., by any otherwise unaffiliated Bell operating company of less
> than 1 percent of Bell Communications Research\'s total voting equity
> shall not be considered to be an equity interest under this paragraph.
>
> **(B)** The term \"generic requirement\" means a description of
> acceptable product attributes for use by local exchange carriers in
> establishing product specifications for the purchase of
> telecommunications equipment, customer premises equipment, and
> software integral thereto.
>
> **(C)** The term \"industry-wide\" means activities funded by or
> performed on behalf of local exchange carriers for use in providing
> wireline telephone exchange service whose combined total of deployed
> access lines in the United States constitutes at least 30 percent of
> all access lines deployed by telecommunications carriers in the United
> States as of February 8, 1996.
>
> **(D)** The term \"certification\" means any technical process whereby
> a party determines whether a product, for use by more than one local
> exchange carrier, conforms with the specified requirements pertaining
> to such product.
>
> **(E)** The term \"accredited standards development organization\"
> means an entity composed of industry members which has been accredited
> by an institution vested with the responsibility for standards
> accreditation by the industry.

\(e\) Bell operating company equipment procurement and sales

> \(1\) Nondiscrimination standards for manufacturing
>
> In the procurement or awarding of supply contracts for
> telecommunications equipment, a Bell operating company, or any entity
> acting on its behalf, for the duration of the requirement for a
> separate subsidiary including manufacturing under this chapter\--
>
> **(A)** shall consider such equipment, produced or supplied by
> unrelated persons; and
>
> **(B)** may not discriminate in favor of equipment produced or
> supplied by an affiliate or related person.
>
> \(2\) Procurement standards
>
> Each Bell operating company or any entity acting on its behalf shall
> make procurement decisions and award all supply contracts for
> equipment, services, and software on the basis of an objective
> assessment of price, quality, delivery, and other commercial factors.
>
> \(3\) Network planning and design
>
> A Bell operating company shall, to the extent consistent with the
> antitrust laws, engage in joint network planning and design with local
> exchange carriers operating in the same area of interest. No
> participant in such planning shall be allowed to delay the
> introduction of new technology or the deployment of facilities to
> provide telecommunications services, and agreement with such other
> carriers shall not be required as a prerequisite for such introduction
> or deployment.
>
> \(4\) Sales restrictions
>
> Neither a Bell operating company engaged in manufacturing nor a
> manufacturing affiliate of such a company shall restrict sales to any
> local exchange carrier of telecommunications equipment, including
> software integral to the operation of such equipment and related
> upgrades.
>
> \(5\) Protection of proprietary information
>
> A Bell operating company and any entity it owns or otherwise controls
> shall protect the proprietary information submitted for procurement
> decisions from release not specifically authorized by the owner of
> such information.

\(f\) Administration and enforcement authority

For the purposes of administering and enforcing the provisions of this
section and the regulations prescribed thereunder, the Commission shall
have the same authority, power, and functions with respect to any Bell
operating company or any affiliate thereof as the Commission has in
administering and enforcing the provisions of this subchapter with
respect to any common carrier subject to this chapter.

\(g\) Additional rules and regulations

The Commission may prescribe such additional rules and regulations as
the Commission determines are necessary to carry out the provisions of
this section, and otherwise to prevent discrimination and
cross-subsidization in a Bell operating company\'s dealings with its
affiliate and with third parties.

\(h\) \"Manufacturing\" defined

As used in this section, the term \"manufacturing\" has the same meaning
as such term has under the AT&T Consent Decree.

[^1]: *In the Matter of Implementation of Section 273 of the
    Communications Act of 1934, as Amended in the Telecommunications Act
    of 1996*, Notice of Proposed Rulemaking, CC Docket No. 96-254, 11
    FCC Rcd 21784 (rel. Dec 11, 1996) (*BOC Manufacturing NPRM*).

[^2]: The Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
    96 (1996) (codified at 47 U.S.C. §§ 151 *et seq*.*).*

[^3]: *See* 47 U.S.C. § 273. The text of section 273 is attached as an
    Appendix to this Order.

[^4]: The "AT&T Consent Decree" is defined in the 1996 Act to mean "the
    order entered August 24, 1982, in the antitrust action styled
    *United States v. Western Electric*, Civil Action No. 82-0192, in
    the United States District Court for the District of Columbia, and
    includes any judgment or order with respect to such action entered
    on or after August 24, 1982." 47 U.S.C. § 153(3). *See also BOC
    Manufacturing NPRM*, 11 FCC Rcd at 21787, para. 3, n.8.

[^5]: "Customer premises equipment" means "equipment employed on the
    premises of a person (other than a carrier) to originate, route, or
    terminate telecommunications." 47 U.S.C. § 153(14); *see also BOC
    Manufacturing NPRM*, 11 FCC Rcd at 21790, para. 8, n.22.

[^6]: 47 U.S.C. § 273(a); *see also BOC Manufacturing NPRM*, 11 FCC Rcd
    at 21788, para. 4.

[^7]: *Id.* at §§ 272(a)(2)(A); 273(a).

[^8]: *Id.* at § 273(b)(1).

[^9]: *Id.* at §§ 273(b)(2); 47 U.S.C. 271(d). Section 273's remaining
    provisions set out, among other things, certain additional
    safeguards and nondiscrimination requirements applicable to BOC
    entry into manufacturing activities. Section 273(c) imposes certain
    information disclosure obligations on BOCs and authorizes the
    Commission to adopt implementing regulations. Section 273(d)
    concerns "Manufacturing Limitations for Standard-Setting
    Organizations," and requires open procedures when an unaccredited
    standard setting body attempts to influence the market by
    establishing a standard; section 273(e) governs BOC practices in
    procuring and selling telecommunications equipment; in section 273
    (f), Congress granted the Commission "the same authority, power, and
    functions with respect to any \[BOC\] or any affiliate . . . as the
    Commission has in administering and enforcing" any other provision
    of the Act; and section 273(g) permits the Commission to prescribe
    such additional rules and regulations as the Commission determines
    are necessary." *BOC Manufacturing NPRM*, 11 FCC Rcd at 21822-824,
    paras. 75-78; 47 U.S.C. § 273(f)-(g).

[^10]: *See, e.g., BOC Manufacturing NPRM*, 11 FCC Rcd at 21791-92,
    para. 11-12.

[^11]: *See, e.g*., *Id.* at 21800-801, para. 30; *see also
    Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996*, Second Report and Order and
    Memorandum Opinion and Order, FCC 96-333, at paras. 165-260.

[^12]: *See, e.g. ,Id.* at 21802-803, 814, 819, paras. 34, 55, 68.

[^13]: Bellcore was a provider of applied research, engineering,
    software development and related services to the Regional Holding
    Companies (RHCs). Originally, the RHCs had jointly owned and
    controlled Bellcore. Bell Communications Research, Inc. Comments, at
    2. In section 273(d) of the Act, Congress anticipated the sale of
    Bellcore to Science Applications International Corporation (SAIC)
    and set forth restrictions on the manufacturing activity of Bellcore
    as long as it is an affiliate of more than one otherwise
    unaffiliated BOC. 47 U.S.C. 273(d). The RHCs sold Bellcore to SAIC,
    after which the name of the company was changed to Telcordia
    Technologies, Inc. *See* Letter from Louise L.M. Tucker, Bellcore,
    to Chmn. William Kennard, Commr. Michael Powell, Commr. Gloria
    Tristani, Commr. Harold Furchtgott-Roth, Commr. Susan Ness, A.
    Richard Metzger, Jr., and Geraldine Matise, Federal Communications
    Commission (Nov. 17, 1997).

[^14]: See *In the Matter of Implementation of Section 273(d)(5) of the
    Communications Act of 1934, as Amended in the Telecommunications Act
    of 1996---Dispute Resolution Regarding Equipment Standards*,
    Memorandum Opinion & Order, CC Docket No. 96-254, 11 FCC Rcd 12955
    (rel. May 7, 1996) (*Section 273 Dispute Resolution Order*).

[^15]: *See, e.g., BOC Manufacturing NPRM* 11 FCC Rcd at 21786, para. 2
    ("\[B\]y favoring its own manufacturing affiliate with preferential
    network information and inequitable procurement processes, the
    monopolist could place unaffiliated manufacturers at a competitive
    disadvantage so as to further increase its manufacturing affiliates'
    profits."); *see also In The Matter Of Application By Bell Atlantic
    New York For Authorization Under Section 271 Of The Communications
    Act To Provide In-Region, Interlata Service In The State Of New
    York*, Memorandum Opinion and Order, CC Docket No. 99-295, 15 FCC
    Rcd 3953 (rel. Dec. 22, 1999).

[^16]: We also note that in addition to our rules, BOCs must obey the
    antitrust laws' prohibitions against discriminatory treatment
    through standard-setting. *See, e.g*., *Allied Tube & Conduct Corp.
    v. Indian Head, Inc.*, 486 U.S. 492 (1988) (Supreme Court upheld the
    Sherman Act section 1 liability of a member of a fire safety
    association for influencing the association to adopt a biased safety
    code to benefit its product and disfavor competing products).

[^17]: *See Section 273 Dispute Resolution Order*, 11 FCC Rcd 12955.

[^18]: 47 C.F.R. §§ 0.91(b); 1.401; 1.429.

[^19]: *See* 47 U.S.C. § 601, 604. The Regulatory Flexibility Act has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^20]: *BOC Manufacturing NPRM*, Appendix A, 11 FCC Rcd at 21828, para.
    5.

[^21]: *See* 5 U.S.C. § 601, 603 (as amended by SBREFA ).