**Federal Communications Commission**

**Biennial Regulatory Review 2000**

**Updated Staff Report**

**January 17, 2000**

TABLE OF CONTENTS

I. OVERVIEW [1](#overview)

II\. BACKGROUND [1](#background)

A. Legal Authority [1](#legal-authority)

B. Summary of 1998 Biennial Regulatory Review
[2](#summary-of-1998-biennial-regulatory-review)

III\. THE 2000 BIENNIAL Regulatory REVIEW
[3](#the-2000-biennial-regulatory-review)

A. Method and Scope of Review [4](#method-and-scope-of-review)

B. Analytical Framework [5](#analytical-framework)

C. Structure of the Staff Report [6](#structure-of-the-staff-report)

IV\. SUMMARY OF REVIEWS BY COMMON CARRIER, INTERNATIONAL, AND WIRELESS
TELECOMMUNICATIONS BUREAUS
[7](#summary-of-reviews-by-common-carrier-international-and-wireless-telecommunications-bureaus)

A. Common Carrier Bureau [7](#common-carrier-bureau)

1\. Scope of Review [8](#scope-of-review)

2\. Recent and Ongoing Activities [9](#recent-and-ongoing-activities)

3\. New Initiatives [14](#new-initiatives)

4\. Other Issues [16](#other-issues)

B. International Bureau [17](#international-bureau)

1\. Scope of Review [18](#scope-of-review-1)

2\. Recent and Ongoing Activities [18](#recent-and-ongoing-activities-1)

3\. New Initiatives [22](#new-initiatives-1)

C. Wireless Telecommunications Bureau
[27](#wireless-telecommunications-bureau)

1\. Scope of Review [28](#scope-of-review-2)

2\. Recent and Ongoing Activities [29](#recent-and-ongoing-activities-2)

3\. New Initiatives [31](#new-initiatives-2)

4\. Other Issues [33](#other-issues-1)

V. SUMMARY OF REVIEW BY MASS MEDIA BUREAU
[34](#summary-of-review-by-mass-media-bureau)

1\. Recent and Ongoing Activities [36](#recent-and-ongoing-activities-3)

2\. New Initiatives [46](#new-initiatives-3)

VI\. SUMMARY OF REVIEWS BY OTHER BUREAUS AND OFFICES
[46](#summary-of-reviews-by-other-bureaus-and-offices)

A. Cable Services Bureau [46](#cable-services-bureau)

1\. Recent and Ongoing Activities [47](#recent-and-ongoing-activities-4)

2\. New Initiatives [49](#new-initiatives-4)

B. Consumer Information Bureau [50](#consumer-information-bureau)

1\. Recent and Ongoing Activities [51](#recent-and-ongoing-activities-5)

2\. New Initiatives [51](#new-initiatives-5)

C. Enforcement Bureau [53](#enforcement-bureau)

1\. Recent and Ongoing Activities [53](#recent-and-ongoing-activities-6)

D. Office Of Communications Business Opportunities
[54](#office-of-communications-business-opportunities)

1\. Recent and Ongoing Activities [54](#recent-and-ongoing-activities-7)

E. Office of Engineering and Technology
[57](#office-of-engineering-and-technology)

1\. Recent and Ongoing Activities [57](#recent-and-ongoing-activities-8)

2\. New Initiatives [60](#new-initiatives-6)

3\. Other Issues [62](#other-issues-2)

F. Office of General Counsel [62](#office-of-general-counsel)

1\. Recent and Ongoing Activities [62](#recent-and-ongoing-activities-9)

G. Office of the Managing Director
[63](#office-of-the-managing-director)

1\. Recent and Ongoing Activities
[63](#recent-and-ongoing-activities-10)

2\. New Initiatives [65](#new-initiatives-7)

VII\. Conclusion [66](#conclusion)

Appendix I: 1998 BIENNIAL REGULATORY REVIEW Proceedings
[1](#__RefHeading___Toc503675515)

A. PROCEEDINGS INITIATED -- COMPLETED/SIGNIFICANT ORDERS ISSUED
[1](#proceedings-initiated-completedsignificant-orders-issued)

1\. Telecommunications Providers (Common Carriers)
[1](#telecommunications-providers-common-carriers)

2\. Other [3](#other)

B. PROCEEDINGS INITIATED -- PENDING [4](#proceedings-initiated-pending)

1\. Telecommunications Providers (Common Carriers)
[4](#telecommunications-providers-common-carriers-1)

2\. Other [4](#other-1)

Appendix II: List of Commenting Parties
[i](#__RefHeading___Toc503675522)

Appendix III: Staff Acknowledgements [i](#__RefHeading___Toc503675523)

appendix IV: rule part analysis [1](#__RefHeading___Toc503675524)

Part 1 -- Practice and Procedure [1](#__RefHeading___Toc503675525)

Description [1](#__RefHeading___Toc503675526)

Purpose [2](#__RefHeading___Toc503675527)

Analysis [3](#__RefHeading___Toc503675528)

Advantages [3](#__RefHeading___Toc503675529)

Disadvantages [3](#__RefHeading___Toc503675530)

Recent Efforts [3](#__RefHeading___Toc503675531)

Initial Recommendation [3](#__RefHeading___Toc503675532)

Comments [4](#__RefHeading___Toc503675533)

Recommendation [4](#__RefHeading___Toc503675534)

part 1, Subpart E -- Complaints, Applications, Tariffs, and Reports
Involving Common Carriers -- formal complaints
[5](#__RefHeading___Toc503675535)

Description [5](#__RefHeading___Toc503675536)

Purpose. [5](#__RefHeading___Toc503675537)

Analysis. [5](#__RefHeading___Toc503675538)

Status of Competition [5](#__RefHeading___Toc503675539)

Advantages [5](#__RefHeading___Toc503675540)

Disadvantages. [6](#__RefHeading___Toc503675541)

Recent Efforts. [6](#__RefHeading___Toc503675542)

Initial Recommendation. (Formal Complaints)
[6](#__RefHeading___Toc503675543)

Comments [6](#__RefHeading___Toc503675544)

Recommendation [6](#__RefHeading___Toc503675545)

Initial Recommendation. (Informal Complaints)
[6](#__RefHeading___Toc503675546)

Comments [7](#__RefHeading___Toc503675547)

Recommendation [7](#__RefHeading___Toc503675548)

part 1, Subpart F -- Wireless Telecommunications Services Applications
and Procedures [8](#__RefHeading___Toc503675549)

Description [8](#__RefHeading___Toc503675550)

Purpose [8](#__RefHeading___Toc503675551)

Analysis [8](#__RefHeading___Toc503675552)

Status of Competition [8](#__RefHeading___Toc503675553)

Advantages [8](#__RefHeading___Toc503675554)

Disadvantages [9](#__RefHeading___Toc503675555)

Recent Efforts [9](#__RefHeading___Toc503675556)

Initial Recommendation [9](#__RefHeading___Toc503675557)

Comments [9](#__RefHeading___Toc503675558)

Recommendation [9](#__RefHeading___Toc503675559)

part 1, Subpart I -- Procedures Implementing the National Environmental
Policy Act of 1969 [10](#__RefHeading___Toc503675560)

Description [10](#__RefHeading___Toc503675561)

Purpose [10](#__RefHeading___Toc503675562)

Analysis [11](#__RefHeading___Toc503675563)

Status of Competition [11](#__RefHeading___Toc503675564)

Advantages [11](#__RefHeading___Toc503675565)

Disadvantages [11](#__RefHeading___Toc503675566)

Recent Efforts [11](#__RefHeading___Toc503675567)

Initial Recommendation [12](#__RefHeading___Toc503675568)

Comments [12](#__RefHeading___Toc503675569)

Recommendation [12](#__RefHeading___Toc503675570)

part 1, Subpart J - Pole Attachment Complaint Procedures
[13](#__RefHeading___Toc503675571)

Description [13](#__RefHeading___Toc503675572)

Purpose [13](#__RefHeading___Toc503675573)

Analysis [13](#__RefHeading___Toc503675574)

Status of Competition [13](#__RefHeading___Toc503675575)

Advantages [13](#__RefHeading___Toc503675576)

Disadvantages [14](#__RefHeading___Toc503675577)

Recent Efforts [14](#__RefHeading___Toc503675578)

Initial Recommendation [14](#__RefHeading___Toc503675579)

Comments [14](#__RefHeading___Toc503675580)

Recommendation [15](#__RefHeading___Toc503675581)

part 1, Subpart Q -- Competitive Bidding Proceedings
[16](#__RefHeading___Toc503675582)

Description [16](#__RefHeading___Toc503675583)

Purpose [16](#__RefHeading___Toc503675584)

Analysis [16](#__RefHeading___Toc503675585)

Status of Competition [16](#__RefHeading___Toc503675586)

Advantages [17](#__RefHeading___Toc503675587)

Disadvantages [17](#__RefHeading___Toc503675588)

Recent Efforts [17](#__RefHeading___Toc503675589)

Initial Recommendation [18](#__RefHeading___Toc503675590)

part 1, Subpart T -- Exempt Telecommunications Companies
[19](#__RefHeading___Toc503675591)

Description [19](#__RefHeading___Toc503675592)

Purpose [19](#__RefHeading___Toc503675593)

Analysis [19](#__RefHeading___Toc503675594)

Status of Competition [19](#__RefHeading___Toc503675595)

Advantages [19](#__RefHeading___Toc503675596)

Disadvantages [19](#__RefHeading___Toc503675597)

Recommendation [19](#__RefHeading___Toc503675598)

Comments [19](#__RefHeading___Toc503675599)

Recommendation [19](#__RefHeading___Toc503675600)

Part 2, Subpart B -- Allocation, Assignment, and Use of Radio
Frequencies [20](#__RefHeading___Toc503675601)

Description [20](#__RefHeading___Toc503675602)

Purpose [20](#__RefHeading___Toc503675603)

Analysis [20](#__RefHeading___Toc503675604)

Status of Competition [20](#__RefHeading___Toc503675605)

Advantages [20](#__RefHeading___Toc503675606)

Disadvantages [20](#__RefHeading___Toc503675607)

Recent Efforts [20](#__RefHeading___Toc503675608)

Initial Recommendation [20](#__RefHeading___Toc503675609)

Comments [20](#__RefHeading___Toc503675610)

Recommendation [20](#__RefHeading___Toc503675611)

Part 2, subpart j -- equipment authorization procedures
[21](#__RefHeading___Toc503675612)

Description [21](#__RefHeading___Toc503675613)

Purpose [21](#__RefHeading___Toc503675614)

Analysis [21](#__RefHeading___Toc503675615)

Status of Competition [21](#__RefHeading___Toc503675616)

Advantages [21](#__RefHeading___Toc503675617)

Disadvantages [21](#__RefHeading___Toc503675618)

Recent Efforts [21](#__RefHeading___Toc503675619)

Initial Recommendation [21](#__RefHeading___Toc503675620)

Comments [21](#__RefHeading___Toc503675621)

Recommendation [22](#__RefHeading___Toc503675622)

Part 3 -- Authorization and Administration of Accounting Authorities in
Maritime and Maritime Mobile-Satellite Radio Services.
[23](#__RefHeading___Toc503675623)

Description [23](#__RefHeading___Toc503675624)

Purpose [23](#__RefHeading___Toc503675625)

Analysis [23](#__RefHeading___Toc503675626)

Status of Competition [23](#__RefHeading___Toc503675627)

Advantages [23](#__RefHeading___Toc503675628)

Disadvantages [23](#__RefHeading___Toc503675629)

Recent Efforts [23](#__RefHeading___Toc503675630)

Initial Recommendation [24](#__RefHeading___Toc503675631)

Comments [24](#__RefHeading___Toc503675632)

Recommendation [24](#__RefHeading___Toc503675633)

Part 15 Radio Frequency Devices [25](#__RefHeading___Toc503675634)

Description [25](#__RefHeading___Toc503675635)

Purpose [25](#__RefHeading___Toc503675636)

Analysis [25](#__RefHeading___Toc503675637)

Status of Competition [25](#__RefHeading___Toc503675638)

Advantages [25](#__RefHeading___Toc503675639)

Disadvantages [25](#__RefHeading___Toc503675640)

Recent Efforts [25](#__RefHeading___Toc503675641)

Initial Recommendation [25](#__RefHeading___Toc503675642)

Comments [25](#__RefHeading___Toc503675643)

Recommendation [26](#__RefHeading___Toc503675644)

Part 17 -- Construction, Marking, and Lighting of Antenna Structures
[27](#__RefHeading___Toc503675645)

Description [27](#__RefHeading___Toc503675646)

Purpose [27](#__RefHeading___Toc503675647)

Analysis [27](#__RefHeading___Toc503675648)

Status of Competition [27](#__RefHeading___Toc503675649)

Advantages [27](#__RefHeading___Toc503675650)

Disadvantages [27](#__RefHeading___Toc503675651)

Recent Efforts [28](#__RefHeading___Toc503675652)

Initial Recommendation [28](#__RefHeading___Toc503675653)

Comments [28](#__RefHeading___Toc503675654)

Recommendation [29](#__RefHeading___Toc503675655)

Part 18 -- industrial, scientific and medical equipmEnt
[30](#__RefHeading___Toc503675656)

Description [30](#__RefHeading___Toc503675657)

Purpose [30](#__RefHeading___Toc503675658)

Analysis [30](#__RefHeading___Toc503675659)

Status of Competition [30](#__RefHeading___Toc503675660)

Advantages [30](#__RefHeading___Toc503675661)

Disadvantages [30](#__RefHeading___Toc503675662)

Recent Efforts [30](#__RefHeading___Toc503675663)

Initial Recommendation [30](#__RefHeading___Toc503675664)

Comments [30](#__RefHeading___Toc503675665)

Recommendation [30](#__RefHeading___Toc503675666)

Part 20 -- Commercial Mobile Radio Services, Section 20.6 − CMRS
Spectrum Aggregation Limit [31](#__RefHeading___Toc503675667)

Description [31](#__RefHeading___Toc503675668)

Purpose [31](#__RefHeading___Toc503675669)

Analysis [31](#__RefHeading___Toc503675670)

Status of Competition [31](#__RefHeading___Toc503675671)

Advantages [31](#__RefHeading___Toc503675672)

Disadvantages [32](#__RefHeading___Toc503675673)

Recent Efforts [32](#__RefHeading___Toc503675674)

Initial Recommendation [32](#__RefHeading___Toc503675675)

Comments [32](#__RefHeading___Toc503675676)

Recommendation [33](#__RefHeading___Toc503675677)

part 20, section 20.11 − Interconnection to facilities of local exchange
carriers [34](#__RefHeading___Toc503675678)

Description [34](#__RefHeading___Toc503675679)

Purpose [34](#__RefHeading___Toc503675680)

Analysis [35](#__RefHeading___Toc503675681)

Status of Competition [35](#__RefHeading___Toc503675682)

Advantages [35](#__RefHeading___Toc503675683)

Disadvantages [35](#__RefHeading___Toc503675684)

Recent Efforts [35](#__RefHeading___Toc503675685)

Initial Recommendation [36](#__RefHeading___Toc503675686)

Comments [36](#__RefHeading___Toc503675687)

Recommendation [36](#__RefHeading___Toc503675688)

part 20, Section 20.12 − Resale and Roaming
[37](#__RefHeading___Toc503675689)

Resale [37](#__RefHeading___Toc503675690)

Description [37](#__RefHeading___Toc503675691)

Purpose [37](#__RefHeading___Toc503675692)

Analysis [37](#__RefHeading___Toc503675693)

Status of Competition [37](#__RefHeading___Toc503675694)

Advantages [38](#__RefHeading___Toc503675695)

Disadvantages [38](#__RefHeading___Toc503675696)

Recent Efforts [38](#__RefHeading___Toc503675697)

Initial Recommendation [38](#__RefHeading___Toc503675698)

Comments [38](#__RefHeading___Toc503675699)

Recommendation [39](#__RefHeading___Toc503675700)

Roaming [39](#__RefHeading___Toc503675701)

Description [39](#__RefHeading___Toc503675702)

Purpose [39](#__RefHeading___Toc503675703)

Analysis [39](#__RefHeading___Toc503675704)

Status of Competition [39](#__RefHeading___Toc503675705)

Advantages [40](#__RefHeading___Toc503675706)

Disadvantages [40](#__RefHeading___Toc503675707)

Recent Efforts [40](#__RefHeading___Toc503675708)

Initial Recommendation [40](#__RefHeading___Toc503675709)

Comments [40](#__RefHeading___Toc503675710)

Recommendation [40](#__RefHeading___Toc503675711)

part 20, Section 20.18 -- 911 Service [41](#__RefHeading___Toc503675712)

Description [41](#__RefHeading___Toc503675713)

Purpose [41](#__RefHeading___Toc503675714)

Analysis [41](#__RefHeading___Toc503675715)

Status of Competition [41](#__RefHeading___Toc503675716)

Advantages [41](#__RefHeading___Toc503675717)

Disadvantages [42](#__RefHeading___Toc503675718)

Recent Efforts [42](#__RefHeading___Toc503675719)

Initial Recommendation [42](#__RefHeading___Toc503675720)

Comments [42](#__RefHeading___Toc503675721)

Recommendation [42](#__RefHeading___Toc503675722)

Part 20, section 20.20 − Conditions Applicable to Provision of CMRS
Service by Local Exchange Carriers [43](#__RefHeading___Toc503675723)

Description [43](#__RefHeading___Toc503675724)

Purpose [43](#__RefHeading___Toc503675725)

Analysis [43](#__RefHeading___Toc503675726)

Advantages [43](#__RefHeading___Toc503675727)

Disadvantages [44](#__RefHeading___Toc503675728)

Recent Efforts [44](#__RefHeading___Toc503675729)

Initial Recommendation [44](#__RefHeading___Toc503675730)

Comments [44](#__RefHeading___Toc503675731)

Reply Comments [44](#__RefHeading___Toc503675732)

Recommendation [45](#__RefHeading___Toc503675733)

Part 21---Domestic Public Fixed Radio Services
[46](#__RefHeading___Toc503675734)

Description [46](#__RefHeading___Toc503675735)

Purpose [46](#__RefHeading___Toc503675736)

Analysis [46](#__RefHeading___Toc503675737)

Status of Competition [46](#__RefHeading___Toc503675738)

Advantages [47](#__RefHeading___Toc503675739)

Disadvantages [47](#__RefHeading___Toc503675740)

Recent Efforts [47](#__RefHeading___Toc503675741)

Initial Recommendation [47](#__RefHeading___Toc503675742)

Comments [47](#__RefHeading___Toc503675743)

Recommendation [48](#__RefHeading___Toc503675744)

Part 22 -- Public Mobile Services [49](#__RefHeading___Toc503675745)

Description [49](#__RefHeading___Toc503675746)

Purpose [49](#__RefHeading___Toc503675747)

Analysis [50](#__RefHeading___Toc503675748)

Status of Competition [50](#__RefHeading___Toc503675749)

Advantages [50](#__RefHeading___Toc503675750)

Disadvantages [50](#__RefHeading___Toc503675751)

Recent Efforts [50](#__RefHeading___Toc503675752)

Initial Recommendation [51](#__RefHeading___Toc503675753)

Comments [51](#__RefHeading___Toc503675754)

Recommendation [51](#__RefHeading___Toc503675755)

part 22, Subpart E -- Paging and Radiotelephone Service
[52](#__RefHeading___Toc503675756)

Description [52](#__RefHeading___Toc503675757)

Purpose [52](#__RefHeading___Toc503675758)

Analysis [52](#__RefHeading___Toc503675759)

Status of Competition [52](#__RefHeading___Toc503675760)

Advantages [53](#__RefHeading___Toc503675761)

Disadvantages [53](#__RefHeading___Toc503675762)

Recent Efforts [53](#__RefHeading___Toc503675763)

Initial Recommendation [53](#__RefHeading___Toc503675764)

Comments [53](#__RefHeading___Toc503675765)

Recommendation [53](#__RefHeading___Toc503675766)

part 22, Subpart F -- Rural Radiotelephone Service
[54](#__RefHeading___Toc503675767)

Description [54](#__RefHeading___Toc503675768)

Purpose [54](#__RefHeading___Toc503675769)

Analysis [54](#__RefHeading___Toc503675770)

Status of Competition [54](#__RefHeading___Toc503675771)

Advantages [54](#__RefHeading___Toc503675772)

Disadvantages [55](#__RefHeading___Toc503675773)

Recent Efforts [55](#__RefHeading___Toc503675774)

Initial Recommendation [55](#__RefHeading___Toc503675775)

Comments [55](#__RefHeading___Toc503675776)

Recommendation [55](#__RefHeading___Toc503675777)

part 22, Subpar t G -- Air-Ground Radiotelephone Service
[56](#__RefHeading___Toc503675778)

Description [56](#__RefHeading___Toc503675779)

Purpose [56](#__RefHeading___Toc503675780)

Analysis [56](#__RefHeading___Toc503675781)

Status of Competition [56](#__RefHeading___Toc503675782)

Advantages [57](#__RefHeading___Toc503675783)

Disadvantages [57](#__RefHeading___Toc503675784)

Initial Recommendation [57](#__RefHeading___Toc503675785)

Comments [57](#__RefHeading___Toc503675786)

Recommendation [57](#__RefHeading___Toc503675787)

part 22, Subpart H-- Cellular Radiotelephone Service
[58](#__RefHeading___Toc503675788)

Description [58](#__RefHeading___Toc503675789)

Purpose [58](#__RefHeading___Toc503675790)

Analysis [58](#__RefHeading___Toc503675791)

Status of Competition [58](#__RefHeading___Toc503675792)

Advantages [59](#__RefHeading___Toc503675793)

Disadvantages [59](#__RefHeading___Toc503675794)

Recent Efforts [59](#__RefHeading___Toc503675795)

Initial Recommendation [59](#__RefHeading___Toc503675796)

Comments [60](#__RefHeading___Toc503675797)

Recommendation [60](#__RefHeading___Toc503675798)

part 22, Subpart I -- Offshore Radiotelephone Service
[61](#__RefHeading___Toc503675799)

Description [61](#__RefHeading___Toc503675800)

Purpose [61](#__RefHeading___Toc503675801)

Analysis [61](#__RefHeading___Toc503675802)

Status of Competition [61](#__RefHeading___Toc503675803)

Advantages [61](#__RefHeading___Toc503675804)

Disadvantages [61](#__RefHeading___Toc503675805)

Recent Efforts [61](#__RefHeading___Toc503675806)

Recommendation [61](#__RefHeading___Toc503675807)

part 22, Subpart J -- Required New Capabilities Pursuant to the
Communications Assistance for Law Enforcement Act (CALEA)
[62](#__RefHeading___Toc503675808)

Description [62](#__RefHeading___Toc503675809)

Purpose [62](#__RefHeading___Toc503675810)

Analysis [62](#__RefHeading___Toc503675811)

Status of Competition [62](#__RefHeading___Toc503675812)

Advantages [62](#__RefHeading___Toc503675813)

Disadvantages [62](#__RefHeading___Toc503675814)

Recent Efforts [63](#__RefHeading___Toc503675815)

Initial Recommendation [63](#__RefHeading___Toc503675816)

Comments [63](#__RefHeading___Toc503675817)

Reply Comments [63](#__RefHeading___Toc503675818)

Recommendation [63](#__RefHeading___Toc503675819)

Part 23 -- International Fixed Public Radiocommunication Services
[64](#__RefHeading___Toc503675820)

Description [64](#__RefHeading___Toc503675821)

Purpose [64](#__RefHeading___Toc503675822)

Analysis [64](#__RefHeading___Toc503675823)

Status of Competition [64](#__RefHeading___Toc503675824)

Advantages [65](#__RefHeading___Toc503675825)

Disadvantages [65](#__RefHeading___Toc503675826)

Recent Efforts [65](#__RefHeading___Toc503675827)

Initial Recommendation [65](#__RefHeading___Toc503675828)

Comments [65](#__RefHeading___Toc503675829)

Recommendation [65](#__RefHeading___Toc503675830)

Part 24 --- Personal Communications Services
[66](#__RefHeading___Toc503675831)

Description [66](#__RefHeading___Toc503675832)

Purpose [67](#__RefHeading___Toc503675833)

Analysis [67](#__RefHeading___Toc503675834)

Status of Competition [67](#__RefHeading___Toc503675835)

Advantages [68](#__RefHeading___Toc503675836)

Disadvantages [68](#__RefHeading___Toc503675837)

Recent Efforts [68](#__RefHeading___Toc503675838)

Initial Recommendation [68](#__RefHeading___Toc503675839)

Comments [69](#__RefHeading___Toc503675840)

Recommendation [69](#__RefHeading___Toc503675841)

Part 25 -- Satellite Communications [70](#__RefHeading___Toc503675842)

Description [70](#__RefHeading___Toc503675843)

Purpose [70](#__RefHeading___Toc503675844)

Analysis [70](#__RefHeading___Toc503675845)

Status of Competition [70](#__RefHeading___Toc503675846)

Advantages [71](#__RefHeading___Toc503675847)

Disadvantages [71](#__RefHeading___Toc503675848)

Recent Efforts [72](#__RefHeading___Toc503675849)

Initial Recommendation [72](#__RefHeading___Toc503675850)

Comments [73](#__RefHeading___Toc503675851)

Recommendation [73](#__RefHeading___Toc503675852)

Part 26 -- General Wireless Communications Services
[74](#__RefHeading___Toc503675853)

Description [74](#__RefHeading___Toc503675854)

Purpose [74](#__RefHeading___Toc503675855)

Analysis [74](#__RefHeading___Toc503675856)

Status of Competition [74](#__RefHeading___Toc503675857)

Advantages [74](#__RefHeading___Toc503675858)

Disadvantages [74](#__RefHeading___Toc503675859)

Recent Efforts [74](#__RefHeading___Toc503675860)

Initial Recommendation [75](#__RefHeading___Toc503675861)

Comments [75](#__RefHeading___Toc503675862)

Recommendation [75](#__RefHeading___Toc503675863)

Part 27 -- Miscellaneous Wireless Communications Services
[76](#__RefHeading___Toc503675864)

Description [76](#__RefHeading___Toc503675865)

Purpose [76](#__RefHeading___Toc503675866)

Analysis [77](#__RefHeading___Toc503675867)

Status of Competition [77](#__RefHeading___Toc503675868)

Advantages [77](#__RefHeading___Toc503675869)

Disadvantages [77](#__RefHeading___Toc503675870)

Recent Efforts [77](#__RefHeading___Toc503675871)

Initial Recommendation [78](#__RefHeading___Toc503675872)

Comments [78](#__RefHeading___Toc503675873)

Recommendation [78](#__RefHeading___Toc503675874)

Part 32 -- Uniform System of Accounts [79](#__RefHeading___Toc503675875)

Description [79](#__RefHeading___Toc503675876)

Purpose [79](#__RefHeading___Toc503675877)

Analysis [80](#__RefHeading___Toc503675878)

Status of Competition [80](#__RefHeading___Toc503675879)

Advantages [80](#__RefHeading___Toc503675880)

Disadvantages [80](#__RefHeading___Toc503675881)

Recent Efforts [81](#__RefHeading___Toc503675882)

Initial Recommendation [81](#__RefHeading___Toc503675883)

Comments [82](#__RefHeading___Toc503675884)

Recommendation [82](#__RefHeading___Toc503675885)

Part 36 -- Jurisdictional Separations Procedures
[83](#__RefHeading___Toc503675886)

Description [83](#__RefHeading___Toc503675887)

Purpose [83](#__RefHeading___Toc503675888)

Analysis [83](#__RefHeading___Toc503675889)

Status of Competition [83](#__RefHeading___Toc503675890)

Advantages [83](#__RefHeading___Toc503675891)

Disadvantages [84](#__RefHeading___Toc503675892)

Recent Efforts [84](#__RefHeading___Toc503675893)

Initial Recommendation [84](#__RefHeading___Toc503675894)

Comments [85](#__RefHeading___Toc503675895)

Recommendation [85](#__RefHeading___Toc503675896)

Part 42 -- Preservation of Records of Common Carriers
[86](#__RefHeading___Toc503675897)

Description [86](#__RefHeading___Toc503675898)

Purpose [86](#__RefHeading___Toc503675899)

Analysis [86](#__RefHeading___Toc503675900)

Status of Competition [86](#__RefHeading___Toc503675901)

Advantages [86](#__RefHeading___Toc503675902)

Disadvantages [86](#__RefHeading___Toc503675903)

Recent Efforts [87](#__RefHeading___Toc503675904)

Initial Recommendation [87](#__RefHeading___Toc503675905)

Comments [87](#__RefHeading___Toc503675906)

Recommendation [87](#__RefHeading___Toc503675907)

Part 43 -- Reports of Communications Common Carriers and Certain
Affiliates [88](#__RefHeading___Toc503675908)

Description [88](#__RefHeading___Toc503675909)

Purpose [88](#__RefHeading___Toc503675910)

Analysis [89](#__RefHeading___Toc503675911)

Status of Competition [89](#__RefHeading___Toc503675912)

Advantages [89](#__RefHeading___Toc503675913)

Disadvantages [89](#__RefHeading___Toc503675914)

Recent Efforts [89](#__RefHeading___Toc503675915)

Initial Recommendation [90](#__RefHeading___Toc503675916)

Comments [91](#__RefHeading___Toc503675917)

Recommendation [91](#__RefHeading___Toc503675918)

Part 51 -- Interconnection [92](#__RefHeading___Toc503675919)

Description [92](#__RefHeading___Toc503675920)

Purpose [92](#__RefHeading___Toc503675921)

Analysis [93](#__RefHeading___Toc503675922)

Status of Competition [93](#__RefHeading___Toc503675923)

Advantages [93](#__RefHeading___Toc503675924)

Disadvantages [93](#__RefHeading___Toc503675925)

Recent Efforts [93](#__RefHeading___Toc503675926)

Initial Recommendation [93](#__RefHeading___Toc503675927)

Comments [93](#__RefHeading___Toc503675928)

Recommendation [94](#__RefHeading___Toc503675929)

PART 52 -- Numbering [95](#__RefHeading___Toc503675930)

Description [95](#__RefHeading___Toc503675931)

Purpose [95](#__RefHeading___Toc503675932)

Analysis [95](#__RefHeading___Toc503675933)

Status of Competition [95](#__RefHeading___Toc503675934)

Advantages [95](#__RefHeading___Toc503675935)

Disadvantages [96](#__RefHeading___Toc503675936)

Recent Efforts [96](#__RefHeading___Toc503675937)

Initial Recommendation [96](#__RefHeading___Toc503675938)

Comments [96](#__RefHeading___Toc503675939)

Recommendation [96](#__RefHeading___Toc503675940)

Part 53 -- Special Provisions Concerning Bell Operating Companies
[97](#__RefHeading___Toc503675941)

Description [97](#__RefHeading___Toc503675942)

Purpose [97](#__RefHeading___Toc503675943)

Analysis [97](#__RefHeading___Toc503675944)

Status of Competition [97](#__RefHeading___Toc503675945)

Advantages [97](#__RefHeading___Toc503675946)

Disadvantages [98](#__RefHeading___Toc503675947)

Recent Efforts [98](#__RefHeading___Toc503675948)

Initial Recommendation [98](#__RefHeading___Toc503675949)

Comments [98](#__RefHeading___Toc503675950)

Recommendation [99](#__RefHeading___Toc503675951)

Part 54 -- Universal Service [100](#__RefHeading___Toc503675952)

Description [100](#__RefHeading___Toc503675953)

Purpose [100](#__RefHeading___Toc503675954)

Analysis [101](#__RefHeading___Toc503675955)

Status of Competition [101](#__RefHeading___Toc503675956)

Advantages [101](#__RefHeading___Toc503675957)

Disadvantages [101](#__RefHeading___Toc503675958)

Recent Efforts [101](#__RefHeading___Toc503675959)

Initial Recommendation [102](#__RefHeading___Toc503675960)

Comments [102](#__RefHeading___Toc503675961)

Recommendation [102](#__RefHeading___Toc503675962)

Part 59 -- Infrastructure Sharing [103](#__RefHeading___Toc503675963)

Description [103](#__RefHeading___Toc503675964)

Purpose [103](#__RefHeading___Toc503675965)

Analysis [103](#__RefHeading___Toc503675966)

Status of Competition [103](#__RefHeading___Toc503675967)

Advantages [103](#__RefHeading___Toc503675968)

Disadvantages [103](#__RefHeading___Toc503675969)

Recent Efforts [103](#__RefHeading___Toc503675970)

Initial Recommendation [104](#__RefHeading___Toc503675971)

Comments [104](#__RefHeading___Toc503675972)

Recommendation [104](#__RefHeading___Toc503675973)

Part 61 -- Tariffs [105](#__RefHeading___Toc503675974)

Description [105](#__RefHeading___Toc503675975)

Purpose [105](#__RefHeading___Toc503675976)

Analysis [105](#__RefHeading___Toc503675977)

Status of Competition [105](#__RefHeading___Toc503675978)

Advantages [106](#__RefHeading___Toc503675979)

Disadvantages [106](#__RefHeading___Toc503675980)

Recent Efforts [106](#__RefHeading___Toc503675981)

Initial Recommendation [107](#__RefHeading___Toc503675982)

Comments [107](#__RefHeading___Toc503675983)

Recommendation [107](#__RefHeading___Toc503675984)

Part 63 -- Extension of Lines, New Lines, and Discontinuance, Reduction,
Outage and Impairment of Service by Common Carriers; and Grants of
Recognized Private Operating Agency Status
[109](#__RefHeading___Toc503675985)

Description [109](#__RefHeading___Toc503675986)

Purpose [109](#__RefHeading___Toc503675987)

Analysis [110](#__RefHeading___Toc503675988)

Status of Competition [110](#__RefHeading___Toc503675989)

Advantages [110](#__RefHeading___Toc503675990)

Disadvantages [110](#__RefHeading___Toc503675991)

Recent Efforts [110](#__RefHeading___Toc503675992)

Initial Recommendation [111](#__RefHeading___Toc503675993)

Comments [112](#__RefHeading___Toc503675994)

Recommendation [112](#__RefHeading___Toc503675995)

Part 64 -- Miscellaneous Rules relating to common carriers, Subpart A --
Traffic Damage Claims [113](#__RefHeading___Toc503675996)

Description [113](#__RefHeading___Toc503675997)

Purpose [113](#__RefHeading___Toc503675998)

Analysis [113](#__RefHeading___Toc503675999)

Status of Competition [113](#__RefHeading___Toc503676000)

Advantages [113](#__RefHeading___Toc503676001)

Disadvantages [113](#__RefHeading___Toc503676002)

Recent Efforts [113](#__RefHeading___Toc503676003)

Initial Recommendation [113](#__RefHeading___Toc503676004)

Comments [113](#__RefHeading___Toc503676005)

Recommendation [114](#__RefHeading___Toc503676006)

Part 64, Subpart B -- Restrictions on Indecent Telephone Message
Services [115](#__RefHeading___Toc503676007)

Description [115](#__RefHeading___Toc503676008)

Purpose [115](#__RefHeading___Toc503676009)

Analysis [115](#__RefHeading___Toc503676010)

Status of Competition [115](#__RefHeading___Toc503676011)

Advantages [115](#__RefHeading___Toc503676012)

Disadvantages [115](#__RefHeading___Toc503676013)

Recent Efforts [116](#__RefHeading___Toc503676014)

Recommendation [116](#__RefHeading___Toc503676015)

Part 64, Subpart C -- Furnishing of Facilities to Foreign Governments
for International Communications [117](#__RefHeading___Toc503676016)

Description [117](#__RefHeading___Toc503676017)

Purpose [117](#__RefHeading___Toc503676018)

Analysis [117](#__RefHeading___Toc503676019)

Status of Competition [117](#__RefHeading___Toc503676020)

Advantages [117](#__RefHeading___Toc503676021)

Disadvantages [117](#__RefHeading___Toc503676022)

Recent Efforts [117](#__RefHeading___Toc503676023)

Initial Recommendation [117](#__RefHeading___Toc503676024)

Comments [118](#__RefHeading___Toc503676025)

Recommendation [118](#__RefHeading___Toc503676026)

Part 64, Subpart D -- Procedures for Handling Priority Services in
Emergencies [119](#__RefHeading___Toc503676027)

Description [119](#__RefHeading___Toc503676028)

Purpose [119](#__RefHeading___Toc503676029)

Analysis [119](#__RefHeading___Toc503676030)

Status of Competition [119](#__RefHeading___Toc503676031)

Advantages [119](#__RefHeading___Toc503676032)

Disadvantages [119](#__RefHeading___Toc503676033)

Recent Effort [119](#__RefHeading___Toc503676034)

Initial Recommendation [119](#__RefHeading___Toc503676035)

Comments [119](#__RefHeading___Toc503676036)

Recommendation [119](#__RefHeading___Toc503676037)

Part 64, Subpart E -- Use of Recording Devices by Telephone Companies
[120](#__RefHeading___Toc503676038)

Description [120](#__RefHeading___Toc503676039)

Purpose [120](#__RefHeading___Toc503676040)

Analysis [120](#__RefHeading___Toc503676041)

Status of Competition [120](#__RefHeading___Toc503676042)

Advantages [120](#__RefHeading___Toc503676043)

Disadvantages [120](#__RefHeading___Toc503676044)

Recent Effort [120](#__RefHeading___Toc503676045)

Initial Recommendation [120](#__RefHeading___Toc503676046)

Comments [120](#__RefHeading___Toc503676047)

Recommendation [120](#__RefHeading___Toc503676048)

Part 64, Subpart F -- Telecommunications Relay Services and Related
Customer Premises Equipment for Persons with Disabilities
[121](#__RefHeading___Toc503676049)

Description [121](#__RefHeading___Toc503676050)

Purpose [121](#__RefHeading___Toc503676051)

Analysis [121](#__RefHeading___Toc503676052)

Status of Competition [121](#__RefHeading___Toc503676053)

Advantages [121](#__RefHeading___Toc503676054)

Disadvantages [122](#__RefHeading___Toc503676055)

Recent Efforts [122](#__RefHeading___Toc503676056)

Initial Recommendation [122](#__RefHeading___Toc503676057)

Comments [122](#__RefHeading___Toc503676058)

Recommendation [122](#__RefHeading___Toc503676059)

Part 64, Subpart G -- Furnishing of Enhanced Services and Customer
Premises Equipment by Bell Operating Companies; Telephone Operator
Services [123](#__RefHeading___Toc503676060)

Description [123](#__RefHeading___Toc503676061)

Purpose [124](#__RefHeading___Toc503676062)

Analysis [124](#__RefHeading___Toc503676063)

Status of Competition [124](#__RefHeading___Toc503676064)

Advantages [124](#__RefHeading___Toc503676065)

Disadvantages [124](#__RefHeading___Toc503676066)

Recent Efforts [124](#__RefHeading___Toc503676067)

Initial Recommendation [125](#__RefHeading___Toc503676068)

Comments [125](#__RefHeading___Toc503676069)

Recommendation [125](#__RefHeading___Toc503676070)

Part 64, Subpart H -- Extension of Unsecured Credit for Interstate and
Foreign Communications Services to Candidates for Federal Office
[126](#__RefHeading___Toc503676071)

Description [126](#__RefHeading___Toc503676072)

Purpose [126](#__RefHeading___Toc503676073)

Analysis [126](#__RefHeading___Toc503676074)

Status of Competition [126](#__RefHeading___Toc503676075)

Advantages [126](#__RefHeading___Toc503676076)

Disadvantages [126](#__RefHeading___Toc503676077)

Recent Efforts [127](#__RefHeading___Toc503676078)

Initial Recommendation [127](#__RefHeading___Toc503676079)

Comments [127](#__RefHeading___Toc503676080)

Recommendation [127](#__RefHeading___Toc503676081)

Part 64, Subpart I -- Allocation of Costs
[128](#__RefHeading___Toc503676082)

Description [128](#__RefHeading___Toc503676083)

Purpose [128](#__RefHeading___Toc503676084)

Analysis [128](#__RefHeading___Toc503676085)

Status of Competition [128](#__RefHeading___Toc503676086)

Advantages [128](#__RefHeading___Toc503676087)

Disadvantages [128](#__RefHeading___Toc503676088)

Recent Efforts [129](#__RefHeading___Toc503676089)

Initial Recommendation [129](#__RefHeading___Toc503676090)

Comments [129](#__RefHeading___Toc503676091)

Recommendation [130](#__RefHeading___Toc503676092)

Part 64, subpart J -- International Settlements Policy And Modification
Requests [131](#__RefHeading___Toc503676093)

Description [131](#__RefHeading___Toc503676094)

Purpose [131](#__RefHeading___Toc503676095)

Analysis [131](#__RefHeading___Toc503676096)

Status of Competition [131](#__RefHeading___Toc503676097)

Advantages [132](#__RefHeading___Toc503676098)

Disadvantages [132](#__RefHeading___Toc503676099)

Recent Efforts [132](#__RefHeading___Toc503676100)

Initial Recommendation [132](#__RefHeading___Toc503676101)

Comments [132](#__RefHeading___Toc503676102)

Recommendation [132](#__RefHeading___Toc503676103)

Part 64, Subpart K -- Changing Long Distance Service
[133](#__RefHeading___Toc503676104)

Description [133](#__RefHeading___Toc503676105)

Purpose [133](#__RefHeading___Toc503676106)

Analysis [133](#__RefHeading___Toc503676107)

Status of Competition [133](#__RefHeading___Toc503676108)

Advantages [133](#__RefHeading___Toc503676109)

Disadvantages [133](#__RefHeading___Toc503676110)

Recent Efforts [133](#__RefHeading___Toc503676111)

Initial Recommendation [134](#__RefHeading___Toc503676112)

Comments [134](#__RefHeading___Toc503676113)

Recommendation [134](#__RefHeading___Toc503676114)

PART 64, SUBPART L -- RESTRICTIONS ON TELEPHONE SOLICITATION
[135](#__RefHeading___Toc503676115)

Description [135](#__RefHeading___Toc503676116)

Purpose [135](#__RefHeading___Toc503676117)

Analysis [135](#__RefHeading___Toc503676118)

Status of Competition [135](#__RefHeading___Toc503676119)

Advantages [135](#__RefHeading___Toc503676120)

Disadvantages [135](#__RefHeading___Toc503676121)

Recent Efforts [135](#__RefHeading___Toc503676122)

Initial Recommendation [135](#__RefHeading___Toc503676123)

Comments [135](#__RefHeading___Toc503676124)

Recommendation [136](#__RefHeading___Toc503676125)

Part 64, Subpart M -- Provision of Payphone Service
[137](#__RefHeading___Toc503676126)

Description [137](#__RefHeading___Toc503676127)

Purpose [137](#__RefHeading___Toc503676128)

Analysis [137](#__RefHeading___Toc503676129)

Status of Competition [137](#__RefHeading___Toc503676130)

Advantages [137](#__RefHeading___Toc503676131)

Disadvantages [137](#__RefHeading___Toc503676132)

Recent Efforts [137](#__RefHeading___Toc503676133)

Initial Recommendation [138](#__RefHeading___Toc503676134)

Comments [138](#__RefHeading___Toc503676135)

Recommendation [138](#__RefHeading___Toc503676136)

Part 64, Subpart N -- Expanded Interconnection
[139](#__RefHeading___Toc503676137)

Description [139](#__RefHeading___Toc503676138)

Purpose [139](#__RefHeading___Toc503676139)

Analysis [139](#__RefHeading___Toc503676140)

Status of Competition [139](#__RefHeading___Toc503676141)

Advantages [139](#__RefHeading___Toc503676142)

Disadvantages [139](#__RefHeading___Toc503676143)

Recent Efforts [139](#__RefHeading___Toc503676144)

Initial Recommendation [140](#__RefHeading___Toc503676145)

Comments [140](#__RefHeading___Toc503676146)

Recommendation [140](#__RefHeading___Toc503676147)

Part 64, Subpart O -- Interstate Pay-Per-Call and Other Information
Services [141](#__RefHeading___Toc503676148)

Description [141](#__RefHeading___Toc503676149)

Purpose [141](#__RefHeading___Toc503676150)

Analysis [141](#__RefHeading___Toc503676151)

Status of Competition [141](#__RefHeading___Toc503676152)

Advantages [141](#__RefHeading___Toc503676153)

Disadvantages [141](#__RefHeading___Toc503676154)

Recent Efforts [141](#__RefHeading___Toc503676155)

Initial Recommendation [141](#__RefHeading___Toc503676156)

Comments [142](#__RefHeading___Toc503676157)

Recommendation [142](#__RefHeading___Toc503676158)

PART 64, SUBPART P -- CALLING PARTY TELEPHONE NUMBER; PRIVACY (also
known as "Caller ID") [143](#__RefHeading___Toc503676159)

Description [143](#__RefHeading___Toc503676160)

Purpose [143](#__RefHeading___Toc503676161)

Analysis [143](#__RefHeading___Toc503676162)

Status of Competition [143](#__RefHeading___Toc503676163)

Advantages [143](#__RefHeading___Toc503676164)

Disadvantages [143](#__RefHeading___Toc503676165)

Recent Efforts [143](#__RefHeading___Toc503676166)

Initial Recommendation [144](#__RefHeading___Toc503676167)

Comments [144](#__RefHeading___Toc503676168)

Recommendation [144](#__RefHeading___Toc503676169)

Part 64, Subpart Q -- Implementation of Section 273(d)(5) of the
Communications Act: Dispute Resolution Regarding Equipment Standards
[145](#__RefHeading___Toc503676170)

Description [145](#__RefHeading___Toc503676171)

Purpose [145](#__RefHeading___Toc503676172)

Analysis [145](#__RefHeading___Toc503676173)

Status of Competition [145](#__RefHeading___Toc503676174)

Advantages [145](#__RefHeading___Toc503676175)

Disadvantages [145](#__RefHeading___Toc503676176)

Recent Efforts [145](#__RefHeading___Toc503676177)

Initial Recommendation [145](#__RefHeading___Toc503676178)

Comments [145](#__RefHeading___Toc503676179)

Recommendation [145](#__RefHeading___Toc503676180)

Part 64, Subpart R -- Geographic Rate Averaging and Rate Integration
[146](#__RefHeading___Toc503676181)

Description [146](#__RefHeading___Toc503676182)

Purpose [146](#__RefHeading___Toc503676183)

Analysis [146](#__RefHeading___Toc503676184)

Status of Competition [146](#__RefHeading___Toc503676185)

Advantages [146](#__RefHeading___Toc503676186)

Disadvantages [146](#__RefHeading___Toc503676187)

Recent Efforts [146](#__RefHeading___Toc503676188)

Initial Recommendation [147](#__RefHeading___Toc503676189)

Comments [147](#__RefHeading___Toc503676190)

Recommendation [147](#__RefHeading___Toc503676191)

Part 64, Subpart S -- Nondominant Interexchange Carrier Certifications
Regarding Geographic Rate Averaging and Rate Integration Requirements
[148](#__RefHeading___Toc503676192)

Description [148](#__RefHeading___Toc503676193)

Purpose [148](#__RefHeading___Toc503676194)

Analysis [148](#__RefHeading___Toc503676195)

Status of Competition [148](#__RefHeading___Toc503676196)

Advantages [148](#__RefHeading___Toc503676197)

Disadvantages [148](#__RefHeading___Toc503676198)

Recent Efforts [148](#__RefHeading___Toc503676199)

Initial Recommendation [148](#__RefHeading___Toc503676200)

Comments [148](#__RefHeading___Toc503676201)

Recommendation [149](#__RefHeading___Toc503676202)

Part 64, Subpart T -- Separate Affiliate Requirements for Incumbent
Independent Local Exchange Carriers That Provide In-Region, Interstate
Domestic Interexchange Services or In-Region International Interexchange
Services [150](#__RefHeading___Toc503676203)

Description [150](#__RefHeading___Toc503676204)

Purpose [150](#__RefHeading___Toc503676205)

Analysis [150](#__RefHeading___Toc503676206)

Status of Competition [150](#__RefHeading___Toc503676207)

Advantages [150](#__RefHeading___Toc503676208)

Disadvantages [150](#__RefHeading___Toc503676209)

Recent Efforts [151](#__RefHeading___Toc503676210)

Initial Recommendation [151](#__RefHeading___Toc503676211)

Comments [151](#__RefHeading___Toc503676212)

Recommendation [151](#__RefHeading___Toc503676213)

Part 64, Subpart U -- Customer Proprietary Network Information
[152](#__RefHeading___Toc503676214)

Description [152](#__RefHeading___Toc503676215)

Purpose [152](#__RefHeading___Toc503676216)

Analysis [152](#__RefHeading___Toc503676217)

Status of Competition [152](#__RefHeading___Toc503676218)

Advantages [152](#__RefHeading___Toc503676219)

Disadvantages [152](#__RefHeading___Toc503676220)

Recent Efforts [152](#__RefHeading___Toc503676221)

Initial Recommendation [152](#__RefHeading___Toc503676222)

Comments [153](#__RefHeading___Toc503676223)

Recommendation [153](#__RefHeading___Toc503676224)

Part 64, Subpart V -- Telecommunications Carrier Systems Security and
Integrity Pursuant to the Communications Assistance for Law Enforcement
Act (CALEA) [154](#__RefHeading___Toc503676225)

Description [154](#__RefHeading___Toc503676226)

Purpose [154](#__RefHeading___Toc503676227)

Analysis [154](#__RefHeading___Toc503676228)

Status of Competition [154](#__RefHeading___Toc503676229)

Advantages [154](#__RefHeading___Toc503676230)

Disadvantages [154](#__RefHeading___Toc503676231)

Recent Efforts [154](#__RefHeading___Toc503676232)

Initial Recommendation [154](#__RefHeading___Toc503676233)

Comments [154](#__RefHeading___Toc503676234)

Recommendation [155](#__RefHeading___Toc503676235)

Part 64, Subpart W -- Required New Capabilities Pursuant to the
Communications Assistance for Law Enforcement Act (CALEA)
[156](#__RefHeading___Toc503676236)

Description [156](#__RefHeading___Toc503676237)

Purpose [156](#__RefHeading___Toc503676238)

Analysis [156](#__RefHeading___Toc503676239)

Status of Competition [156](#__RefHeading___Toc503676240)

Advantages [156](#__RefHeading___Toc503676241)

Disadvantages [156](#__RefHeading___Toc503676242)

Recent Efforts [156](#__RefHeading___Toc503676243)

Initial Recommendation [156](#__RefHeading___Toc503676244)

Comments [156](#__RefHeading___Toc503676245)

Recommendation [157](#__RefHeading___Toc503676246)

Part 64, Subpart X -- Subscriber List Information
[158](#__RefHeading___Toc503676247)

Description [158](#__RefHeading___Toc503676248)

Purpose [158](#__RefHeading___Toc503676249)

Analysis [158](#__RefHeading___Toc503676250)

Status of Competition [158](#__RefHeading___Toc503676251)

Advantages [158](#__RefHeading___Toc503676252)

Disadvantages [158](#__RefHeading___Toc503676253)

Recent Efforts [158](#__RefHeading___Toc503676254)

Initial Recommendation [158](#__RefHeading___Toc503676255)

Comments [158](#__RefHeading___Toc503676256)

Recommendation [159](#__RefHeading___Toc503676257)

Part 64, Subpart Y -- Truth-in-Billing Requirements for Common Carriers
[160](#__RefHeading___Toc503676258)

Description [160](#__RefHeading___Toc503676259)

Purpose [160](#__RefHeading___Toc503676260)

Analysis [160](#__RefHeading___Toc503676261)

Status of Competition [160](#__RefHeading___Toc503676262)

Advantages [160](#__RefHeading___Toc503676263)

Disadvantages [160](#__RefHeading___Toc503676264)

Recent Efforts [161](#__RefHeading___Toc503676265)

Initial Recommendation [161](#__RefHeading___Toc503676266)

Comments [161](#__RefHeading___Toc503676267)

Recommendation [161](#__RefHeading___Toc503676268)

Part 65 -- Interstate Rate of Return Prescription Procedures and
Methodologies [162](#__RefHeading___Toc503676269)

Description [162](#__RefHeading___Toc503676270)

Purpose [162](#__RefHeading___Toc503676271)

Analysis [162](#__RefHeading___Toc503676272)

Status of Competition [162](#__RefHeading___Toc503676273)

Advantages [162](#__RefHeading___Toc503676274)

Disadvantages [163](#__RefHeading___Toc503676275)

Recent Efforts [163](#__RefHeading___Toc503676276)

Initial Recommendation [163](#__RefHeading___Toc503676277)

Comments [163](#__RefHeading___Toc503676278)

Recommendation [164](#__RefHeading___Toc503676279)

Part 68 -- Connection of Terminal Equipment to the Telephone Network
[165](#__RefHeading___Toc503676280)

Description [165](#__RefHeading___Toc503676281)

Purpose [165](#__RefHeading___Toc503676282)

Analysis [165](#__RefHeading___Toc503676283)

Status of Competition [165](#__RefHeading___Toc503676284)

Advantages [166](#__RefHeading___Toc503676285)

Disadvantages [166](#__RefHeading___Toc503676286)

Recent Efforts [166](#__RefHeading___Toc503676287)

Initial Recommendation [166](#__RefHeading___Toc503676288)

Comments [167](#__RefHeading___Toc503676289)

Recommendation [167](#__RefHeading___Toc503676290)

Part 69 -- Access Charges [168](#__RefHeading___Toc503676291)

Description [168](#__RefHeading___Toc503676292)

Purpose [168](#__RefHeading___Toc503676293)

Analysis [168](#__RefHeading___Toc503676294)

Status of Competition [168](#__RefHeading___Toc503676295)

Advantages [169](#__RefHeading___Toc503676296)

Disadvantages [169](#__RefHeading___Toc503676297)

Recent Efforts [169](#__RefHeading___Toc503676298)

Initial Recommendation [169](#__RefHeading___Toc503676299)

Comments [170](#__RefHeading___Toc503676300)

Recommendation [171](#__RefHeading___Toc503676301)

part 73, --radio broadcast services -- The Broadcast Ownership Rules
[172](#__RefHeading___Toc503676302)

Description [172](#__RefHeading___Toc503676303)

Purpose [172](#__RefHeading___Toc503676304)

Analysis [172](#__RefHeading___Toc503676305)

Status of Competition [172](#__RefHeading___Toc503676306)

Advantages [172](#__RefHeading___Toc503676307)

Disadvantages [172](#__RefHeading___Toc503676308)

Recent Efforts [172](#__RefHeading___Toc503676309)

Initial Recommendation [173](#__RefHeading___Toc503676310)

Local Radio Ownership Rule [173](#__RefHeading___Toc503676311)

Local Television Multiple Ownership Rule
[173](#__RefHeading___Toc503676312)

Radio-Television Cross-Ownership Rule
[173](#__RefHeading___Toc503676313)

Daily Newspaper/Broadcast Cross-Ownership Rule
[173](#__RefHeading___Toc503676314)

National Television Multiple Ownership Rule
[173](#__RefHeading___Toc503676315)

Dual Network Rule [173](#__RefHeading___Toc503676316)

Experimental Broadcast Station Multiple Ownership Rule (74.132)
[174](#__RefHeading___Toc503676317)

Cable/Television Cross-Ownership Rule (76.501(a))
[174](#__RefHeading___Toc503676318)

Comments [174](#__RefHeading___Toc503676319)

Recommendation [176](#__RefHeading___Toc503676320)

Part 80 -- Stations in the Maritime Services, Subparts J (Public Coast
Stations) and Y (Competitive Bidding Procedures)
[178](#__RefHeading___Toc503676321)

Description [178](#__RefHeading___Toc503676322)

Purpose [178](#__RefHeading___Toc503676323)

Analysis [178](#__RefHeading___Toc503676324)

Status of Competition [178](#__RefHeading___Toc503676325)

Advantages [179](#__RefHeading___Toc503676326)

Disadvantages [179](#__RefHeading___Toc503676327)

Recent Efforts [179](#__RefHeading___Toc503676328)

Initial Recommendation [180](#__RefHeading___Toc503676329)

Comments [180](#__RefHeading___Toc503676330)

Recommendation [180](#__RefHeading___Toc503676331)

part 90 -- Private Land Mobile Radio Services.
[181](#__RefHeading___Toc503676332)

Description [181](#__RefHeading___Toc503676333)

Purpose [181](#__RefHeading___Toc503676334)

Analysis [182](#__RefHeading___Toc503676335)

Status of Competition [182](#__RefHeading___Toc503676336)

Advantages [182](#__RefHeading___Toc503676337)

Disadvantages [182](#__RefHeading___Toc503676338)

Recent Efforts [182](#__RefHeading___Toc503676339)

Initial Recommendation [182](#__RefHeading___Toc503676340)

Comments [183](#__RefHeading___Toc503676341)

Recommendation [183](#__RefHeading___Toc503676342)

part 90, Subpart L -- Regulations for Authorization and Use of
Frequencies in the 470-512 MHz Band [184](#__RefHeading___Toc503676343)

Description [184](#__RefHeading___Toc503676344)

Purpose [184](#__RefHeading___Toc503676345)

Analysis [185](#__RefHeading___Toc503676346)

Status of Competition [185](#__RefHeading___Toc503676347)

Advantages [185](#__RefHeading___Toc503676348)

Disadvantages [185](#__RefHeading___Toc503676349)

Recent Efforts [185](#__RefHeading___Toc503676350)

Initial Recommendation [185](#__RefHeading___Toc503676351)

Comments [185](#__RefHeading___Toc503676352)

Recommendation [185](#__RefHeading___Toc503676353)

part 90, Subparts M (Intelligent Transportation Systems Radio Service)
and X (Competitive Bidding Rules for the Location and Monitoring
Service) [186](#__RefHeading___Toc503676354)

Description [186](#__RefHeading___Toc503676355)

Location and Monitoring Systems (LMS)
[186](#__RefHeading___Toc503676356)

Dedicated Short Range Communications Service (DSRCS)
[186](#__RefHeading___Toc503676357)

Purpose [187](#__RefHeading___Toc503676358)

Analysis [187](#__RefHeading___Toc503676359)

Status of Competition [187](#__RefHeading___Toc503676360)

Advantages [187](#__RefHeading___Toc503676361)

Disadvantages [187](#__RefHeading___Toc503676362)

Recent Efforts [187](#__RefHeading___Toc503676363)

Initial Recommendation [187](#__RefHeading___Toc503676364)

Comments [187](#__RefHeading___Toc503676365)

Recommendation [187](#__RefHeading___Toc503676366)

Part 90, Subpart P − Paging Operations in the 929 MHz Band
[188](#__RefHeading___Toc503676367)

Description [188](#__RefHeading___Toc503676368)

Purpose [188](#__RefHeading___Toc503676369)

Analysis [188](#__RefHeading___Toc503676370)

Status of Competition [188](#__RefHeading___Toc503676371)

Advantages [188](#__RefHeading___Toc503676372)

Disadvantages [188](#__RefHeading___Toc503676373)

Recent Efforts [188](#__RefHeading___Toc503676374)

Initial Recommendation [189](#__RefHeading___Toc503676375)

Comments [189](#__RefHeading___Toc503676376)

Recommendation [189](#__RefHeading___Toc503676377)

part 90, Subparts S (Regulations for Licensing and Use of Frequencies in
the 800 and 900 MHz Bands), and U and V (Competitive Bidding Procedures
for the 900 and 800 MHz Service) [190](#__RefHeading___Toc503676378)

Description [190](#__RefHeading___Toc503676379)

Purpose [190](#__RefHeading___Toc503676380)

Analysis [190](#__RefHeading___Toc503676381)

Status of Competition [190](#__RefHeading___Toc503676382)

Advantages [191](#__RefHeading___Toc503676383)

Disadvantages [191](#__RefHeading___Toc503676384)

Recent Efforts [191](#__RefHeading___Toc503676385)

Initial Recommendation [192](#__RefHeading___Toc503676386)

Comments [192](#__RefHeading___Toc503676387)

Recommendation [192](#__RefHeading___Toc503676388)

part 90, Subparts T (Regulations for Licensing and Use of Frequencies in
the 220-222 MHz Band) and W (Competitive Bidding Procedures for the 220
MHz Service) [193](#__RefHeading___Toc503676389)

Description [193](#__RefHeading___Toc503676390)

Purpose [193](#__RefHeading___Toc503676391)

Analysis [193](#__RefHeading___Toc503676392)

Status of Competition [193](#__RefHeading___Toc503676393)

Advantages [193](#__RefHeading___Toc503676394)

Disadvantages [194](#__RefHeading___Toc503676395)

Recent Efforts [194](#__RefHeading___Toc503676396)

Initial Recommendation [194](#__RefHeading___Toc503676397)

Comments [195](#__RefHeading___Toc503676398)

Recommendation [195](#__RefHeading___Toc503676399)

Part 95 -- Personal Radio Services, Subpart F -- 218-219 MHz Service
[196](#__RefHeading___Toc503676400)

Description [196](#__RefHeading___Toc503676401)

Purpose [196](#__RefHeading___Toc503676402)

Analysis [196](#__RefHeading___Toc503676403)

Status of Competition [196](#__RefHeading___Toc503676404)

Advantages [197](#__RefHeading___Toc503676405)

Disadvantages [197](#__RefHeading___Toc503676406)

Recent Efforts [197](#__RefHeading___Toc503676407)

Initial Recommendation [197](#__RefHeading___Toc503676408)

Comments [197](#__RefHeading___Toc503676409)

Recommendation [197](#__RefHeading___Toc503676410)

Part 100 -- Direct Broadcast Satellite Service
[198](#__RefHeading___Toc503676411)

Description [198](#__RefHeading___Toc503676412)

Purpose [198](#__RefHeading___Toc503676413)

Analysis [198](#__RefHeading___Toc503676414)

Status of Competition [198](#__RefHeading___Toc503676415)

Advantages [198](#__RefHeading___Toc503676416)

Disadvantages [199](#__RefHeading___Toc503676417)

Recent Efforts [199](#__RefHeading___Toc503676418)

Initial Recommendation [200](#__RefHeading___Toc503676419)

Comments [200](#__RefHeading___Toc503676420)

Recommendation [200](#__RefHeading___Toc503676421)

Part 101 -- Fixed Microwave Services [201](#__RefHeading___Toc503676422)

Description [201](#__RefHeading___Toc503676423)

Purpose [201](#__RefHeading___Toc503676424)

Analysis [202](#__RefHeading___Toc503676425)

Status of Competition [202](#__RefHeading___Toc503676426)

Advantages [202](#__RefHeading___Toc503676427)

Disadvantages [202](#__RefHeading___Toc503676428)

Recent Efforts [202](#__RefHeading___Toc503676429)

Initial Recommendation [203](#__RefHeading___Toc503676430)

Comments [203](#__RefHeading___Toc503676431)

Recommendation [203](#__RefHeading___Toc503676432)

part 101, Subpart G -- 24 GHz Service and Digital Electronic Message
Service [205](#__RefHeading___Toc503676433)

Description [205](#__RefHeading___Toc503676434)

Purpose [205](#__RefHeading___Toc503676435)

Analysis [205](#__RefHeading___Toc503676436)

Status of Competition [205](#__RefHeading___Toc503676437)

Advantages [205](#__RefHeading___Toc503676438)

Disadvantages [206](#__RefHeading___Toc503676439)

Recent Efforts [206](#__RefHeading___Toc503676440)

Initial Recommendation [206](#__RefHeading___Toc503676441)

Comments [206](#__RefHeading___Toc503676442)

Recommendation [206](#__RefHeading___Toc503676443)

part 101, Subparts L (Local Multipoint Distribution Service (LMDS)) and
M (Competitive Bidding Procedures for LMDS)
[207](#__RefHeading___Toc503676444)

Description [207](#__RefHeading___Toc503676445)

Purpose [207](#__RefHeading___Toc503676446)

Analysis [207](#__RefHeading___Toc503676447)

Status of Competition [207](#__RefHeading___Toc503676448)

Advantages [208](#__RefHeading___Toc503676449)

Disadvantages [208](#__RefHeading___Toc503676450)

Recent Efforts [209](#__RefHeading___Toc503676451)

Initial Recommendation [209](#__RefHeading___Toc503676452)

Comments [209](#__RefHeading___Toc503676453)

Recommendation [209](#__RefHeading___Toc503676454)

# OVERVIEW

1.  This Staff Report summarizes the findings of an extensive review of
    the Federal Communications Commission's rules. Each Bureau and
    Office reviewed the rules pertinent to its operations to determine
    whether to recommend that the Commission modify or eliminate any
    rules. Accompanying this written report is a rule part analysis that
    identifies the Commission's rule parts, explains the purpose,
    benefits and disadvantages of the particular rule or rule part, and
    lists any staff recommendation for modifying or repealing any rules
    within each part. The report and analysis are steps in the
    Commission's process of conducting biennial regulatory reviews
    pursuant to section 11 of the Communications Act of 1934, as amended
    (Communications Act), and section 202(h) of the Telecommunications
    Act of 1996 (1996 Act).[^1]

# BACKGROUND

## Legal Authority

2.  The Telecommunications Act of 1996, was intended "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."[^2] The 1996 Act significantly
    amended the Communications Act of 1934 to permit and encourage
    competition in various communications markets. Congress anticipated
    that, as competition developed, market forces would reduce the need
    for regulation.[^3] Therefore, in addition to requiring the
    Commission to take certain actions to open markets to competition,
    Congress required the Commission to review certain regulations every
    two years and to modify or repeal those regulations that are no
    longer "necessary in the public interest."[^4]

3.  Section 11 of the Communications Act, which was added by the 1996
    Act, provides:

    \(a\) [Biennial Review of Regulations]{.underline}. -- In every
    even-numbered year (beginning with 1998), the Commission --

    \(1\) shall review all regulations issued under this Act in effect
    at the time of the review that apply to the operations or activities
    of any provider of telecommunications service; and

    \(2\) shall determine whether any such regulation is no longer
    necessary in the public interest as the result of meaningful
    economic competition between providers of such service.

    \(b\) [Effect of Determination]{.underline}. -- The Commission shall
    repeal or modify any regulation it determines to be no longer
    necessary in the public interest.

4.  Section 202 of the 1996 Act addresses matters regarding broadcast
    ownership. Section 202(h) provides:

The Commission shall review its rules adopted pursuant to this section
and all of its ownership rules biennially as part of its regulatory
reform review under section 11 of the Communications Act of 1934 and
shall determine whether any of such rules are not in the public interest
as the result of competition. The Commission shall repeal or modify any
regulation it determines to be no longer in the public interest.

5.  Section 11 and section 202(h), collectively, require the
    Commission: (1) to review biennially its regulations that pertain
    to (a) the operations or activities of telecommunications service
    providers,[^5] and (b) broadcast ownership; and (2) to determine
    whether those regulations are no longer necessary in the public
    interest as a result of meaningful economic competition. Following
    such review, the Commission is directed to modify or repeal any such
    regulations that are no longer necessary in the public interest.[^6]

6.  In addition to these statutory requirements, the Commission has
    discretion to suspend, modify, revoke or waive any of its
    regulations for good cause, pursuant to other applicable
    requirements, such as the Administrative Procedure Act.[^7] Thus,
    for example, the Commission may consider whether circumstances other
    than economic competition justify modification or repeal of
    particular rules.

## Summary of 1998 Biennial Regulatory Review 

7.  In 1998, the Commission reviewed all of its regulations. The
    Commission did not attempt to identify or limit its review to rules
    that "apply to the operations or activities" of telecommunications
    service providers.[^8] For the 1998 review: (1) each of the
    operating bureaus and the Office of Engineering and Technology
    conducted a review of the rules under their jurisdiction; and (2)
    members of the Office of Plans and Policy, the Chief Economist and
    his staff, and members of the Competition Division in the Office of
    General Counsel conducted a parallel review of Commission rules.
    These reviews were not limited to whether \"meaningful economic
    competition\" justified changes, but instead considered whether, for
    any reason, modification or elimination of a rule would serve the
    public interest.

8.  The team from the Office of Plans and Policy/Chief
    Economist/Competition Division used the following questions in its
    review:

> Is the original or present purpose of the regulation still valid?
>
> If a valid purpose for the regulation exists, how well does the
> regulation achieve the purpose?
>
> Even if a regulation achieves its purpose, do the burdens it creates
> outweigh its advantages?
>
> Is there a less burdensome alternative that will produce similar
> benefits?
>
> Does the regulation overlap, interfere, or conflict with other
> regulations such that modification is warranted?

9.  The Commission received substantial public input. For example, each
    of the Bureaus, together with the Office of General Counsel, hosted
    a series of public fora to solicit ideas regarding rules that might
    warrant repeal or modification. In addition, staff received input
    during a series of meetings held by practice groups of the Federal
    Communications Bar Association.

10. The 1998 Biennial Regulatory Review led to the initiation of a wide
    range of deregulatory and streamlining proposals.[^9] For example,
    the Commission initiated 32 proceedings and modified or eliminated
    hundreds of rules, particularly ones that affected the operations
    and activities of telecommunications service providers.

# THE 2000 BIENNIAL Regulatory REVIEW 

11. This review builds upon the work completed in the 1998 Biennial
    Regulatory Review, and establishes a foundation for future reviews.
    In particular, the 2000 Biennial Regulatory Review provides more
    detailed documentation of the staff's review. The review process is
    incremental, however, and staff expects that even more comprehensive
    documentation may be provided in future years. In addition, staff
    recommends that the Commission consider setting forth an analysis
    similar to the analysis used in this staff report whenever the
    Commission adopts new rules. Such an analysis may include the reason
    for the rule, whether the rule effectively accomplishes its intended
    purpose, and, if relevant, the status of competition at the time the
    rule is enacted. Conducting such an analysis at the time new rules
    are adopted might help ensure that new regulatory requirements are
    carefully tailored to achieve their intended regulatory goals. Such
    analysis might also significantly reduce the burdens associated with
    future biennial reviews.

12. In evaluating the rules, staff applied a consistent analysis to
    determine whether to recommend modification or elimination of
    Commission rules. Staff's review considered (1) the purpose of the
    rule; (2) the advantages of the rule;[^10] (3) the disadvantages of
    the rule;[^11] (4) what impact competitive developments have had on
    the rule; and (5) whether to recommend modification or revocation of
    the rule. This analysis allowed the staff to make reasoned
    determinations about whether a rule should be changed or eliminated
    either because of competitive developments, or for other reasons.
    For example, staff considered whether the underlying purpose of the
    rule is still relevant, and, if so, whether that purpose could be
    accomplished more effectively in another manner.

13. Although there may be other ways to determine whether a Commission
    rule continues to be necessary in the public interest, staff
    believes that the analysis it used is a reasonable way to carry out
    the requirements of section 11 and section 202(h). In addition, the
    analysis staff used is relatively easy to apply, and permits
    consideration of all relevant factors in determining whether a rule
    should be modified or revoked. Staff therefore recommends that the
    Commission adopt this analysis when it makes public interest
    determinations.

## Method and Scope of Review

14. The Commission has devoted substantial time and resources to the
    2000 Biennial Regulatory Review. In the fall of 1999, Commission
    staff began to create a computer database of Commission rules. In
    early 2000, a team consisting of representatives from each Bureau
    and Office began to develop a method for conducting the staff
    review. The team agreed to a framework and analysis that each Bureau
    and Office would use in reviewing its rules. This framework was
    intended to ensure a well-reasoned and consistent review across the
    agency. That framework included the following:

a.) Each Bureau and Office would endeavor to look at all of its rules --
not only rules that are specifically implicated by sections 11 and
202(h) -- and consider whether repeal or modification might be
appropriate.

The benefits associated with modifying or eliminating regulations are
not limited to the rules implicated in sections 11 and 202(h). The team
determined that a broad review of Commission rules, even beyond the
scope of statutory requirements, could provide significant benefits. The
team reasoned, for example, that eliminating unnecessary regulations
would likely reduce compliance costs of service providers, which in turn
could reduce charges to consumers. Similarly, the team deemed it
reasonable to consider whether any regulations could be modified so that
they achieve their intended goals more effectively or in a less
burdensome manner. In addition, the team determined that its decision to
conduct a broad rule review would reduce the potential for disagreement
about what rules are subject to the mandatory review requirements in
sections 11 and 202(h).

b.) As noted above, the team determined that each Bureau and Office
would use a consistent analysis, which would consider the advantages and
disadvantages of the existing rules and what impact, if any, competitive
developments have had on each rule. Each Bureau and Office would
consider whether revocation or modification might be appropriate for any
reason. The review would not be limited to whether changes were
warranted as a result of competition.

Although sections 11 and 202(h) require the Commission to determine
whether rules remain in the public interest as a result of developments
in competition, the team determined that there might be other relevant
bases for modifying or revoking a rule. For example, a rule might be
obsolete as a result of technological developments. Or modification
might be appropriate as a result of changes in industry practices or
judicial decisions, or because a rule is duplicative of or contradictory
to other rules. Although the Commission has worked hard to keep its
rules current with industry, judicial, and other developments, the
biennial regulatory review process provides another opportunity to
ensure that the Commission's rules are up-to-date.

15. The team also recognized that, even where competition develops, it
    will not always and immediately eliminate the need for regulation.
    For example, there may be certain segments of the market that would
    not receive service of acceptable quality or at affordable rates
    absent regulation. Thus, even if a regulation *generally* is no
    longer necessary in the public interest as a result of competition,
    there may be reasons to retain it, at least with respect to certain
    segments of the market.

c.) Staff would prepare a report that summarizes the review conducted by
each Bureau and Office. In addition, staff would provide a written
description of the analysis used in reviewing each rule part implicated
by sections 11 or 202(h).

The staff report includes highlights of the staff's review, as well as
recommendations for Commission action. The staff report is not limited
to rules that are subject to the biennial regulatory review requirements
of sections 11 and 202(h).

16. The rule part analysis provides additional documentation of the
    staff's review of each rule part that is implicated by section 11 or
    section 202(h). It is intended to enable the public to understand
    the reasoning behind the staff's review and recommendation. The
    analysis strives to encompass any rule that might affect the
    operations or activities of telecommunications service providers.

17. The team recognized that completing a comprehensive rule review, as
    it proposed, would be time-consuming and labor intensive. The team
    concluded that it should give priority to satisfying statutory
    requirements, and thus would focus its efforts on completing the
    rule analysis for rules that are implicated by sections 11 and
    202(h).

18. The analysis generally documents review by rule part, but it
    identifies many of the individual rules that the staff recommends be
    modified or repealed. Staff determined that in most instances,
    providing analysis at the rule part level was sufficient to identify
    the reasoning used and the basis for the recommendations. In some
    instances, however, staff determined that it should include its
    analysis of rule subparts. For example, where only portions of the
    rule part are implicated by section 11, or where more than one
    Bureau or Office shares responsibility for overseeing a rule part,
    the analysis may be done by subpart.

## Analytical Framework 

19. The analytical framework that staff used for this Biennial
    Regulatory Review recognizes that significant economic benefits can
    be achieved by fostering competition. Although regulation may
    sometimes be necessary to correct market failures or prevent the
    accrual of excessive market power,[^12] in most instances market
    forces will yield economically efficient results. Staff's review
    thus sought to maximize the potential for self-correcting market
    action, and to suggest deregulatory action warranted by economic and
    technological developments. Staff considered factors such as the
    effect a rule has on competitive entry into specific services,
    whether the rule encourages resource-efficient technologies, the
    effect of the rule on costs for the industry and the agency, and
    whether developments in the definition and structure of the relevant
    market would suggest that the elimination or modification of the
    rule is appropriate. Staff paid particular attention to rules that
    seek to limit the exercise of market power in markets transitioning
    to a more competitive structure.

20. The staff also recognized that some of the Commission's goals might
    require regulatory action even when developments like those
    mentioned above are taken into consideration. For example, the
    Commission has sought to ensure that all Americans have access to
    the widest variety of telecommunications services and that audiences
    have access to diverse media sources. Staff attempted to consider
    all of the Commission's stated policy concerns when it reviewed the
    agency's rules.

## Structure of the Staff Report

21. As stated above, staff endeavored to review all of the Commission's
    rules rather than limit its review to rules covered explicitly by
    section 11 of the Communications Act and section 202(h) of the 1996
    Act. Staff determined that a broad review of the Commission's rules
    could provide significant benefits, although it gave priority to the
    rules that are implicated in sections 11 and 202(h).

22. Each Bureau and Office conducted this review by seeking input from
    staff and industry groups. In conducting this review, staff
    considered (1) the purpose of the rule; (2) the advantages of the
    rule; (3) the disadvantages of the rule; and (4) the impact
    competitive developments may have had on the need for the rule.

23. This Report summarizes staff's review of the Commission's rules, the
    status of ongoing and recent initiatives, and recommendations on
    whether specific rules should be kept in place, modified, or
    repealed. The staff's recommendations are also reported in the
    attached rule part analysis. The rule part analysis summarizes
    staff's findings and comments that have been submitted in response
    to the September 19, 2000 Public Notice. The analysis of each rule
    includes two recommendation sections. The Initial Recommendation
    section is based upon staff's review of the rule at the time of the
    release of the September 19, 2000 Staff Report. The Recommendation
    section is based upon further reflection by the staff and any
    comments that were submitted to the Commission in response to the
    Public Notice.

24. This Staff Report is merely one step in the Commission's 2000
    Biennial Regulatory Review. Section 11 and section 202(h) mandate
    Commission determinations. A Commission Report is being released
    concurrently with this Staff Report. The Commission would determine
    what if any regulations are no longer necessary in the public
    interest, in accordance with section 11 and section 202(h).

25. Pursuant to the Commission's determinations, staff expects that the
    Commission would initiate proceedings to modify or eliminate
    selected rules. These proceedings would conform with Commission
    procedural rules and the Administrative Procedure Act. Some of these
    proceedings have been initiated already, while others will be
    initiated next year.[^13] The statute does not require the
    Commission to repeal or modify its rules by the end of 2000.[^14]

# SUMMARY OF REVIEWS BY COMMON CARRIER, INTERNATIONAL, AND WIRELESS TELECOMMUNICATIONS BUREAUS

## Common Carrier Bureau

26. The Common Carrier Bureau advises the Commission regarding the
    regulation of telecommunications service providers, including issues
    related to interstate telecommunications service, interstate access
    service, and local exchange competition. The Bureau administers
    rules and policies designed to foster competition in
    telecommunications markets, promote widespread availability of
    telecommunications, and protect consumers.

27. The Common Carrier Bureau has focused in recent years on adopting
    market-opening and universal service rules for the local exchange
    and long distance markets. The Bureau has also focused on review of
    applications by Bell Operating Companies to provide long distance
    service as well as review of telecommunications company mergers. In
    addition, the Bureau has devoted considerable resources to
    consideration of the regulatory reforms that should occur as
    competition in the provision of telecommunications services
    develops.

28. In evaluating the state of competition, the Bureau has found that
    the long distance services market is competitive, but competition in
    the local exchange and exchange access markets is nascent. While
    incumbent local exchange carriers (LECs) and the new local exchange
    entrants disagree about the extent to which local competition has
    developed, competition for local exchange services has taken root
    and is increasing.

29. Three recent reports concerning competitive developments in the
    local exchange market conclude that competition is growing, although
    competitive local exchange carriers still serve only a very small
    portion of local exchange lines. "Telecommunications @ the
    Millennium," a report by the FCC Office of Plans and Policy, states
    that "\[o\]n the fourth anniversary of the Act, we see competition
    in the local market beginning to take hold."[^15] The report states
    that, "in 1996, when the Act was passed, competitors had a one
    percent share of the local market,"[^16] adding that "\[t\]heir
    share of the local market has increased to 4 percent of lines served
    and over 6 percent of local service revenue."[^17] The report states
    that "\[l\]ocal competitors have been particularly successful in the
    business market, where competitors have added 65 percent of all new
    lines deployed in the third quarter of 1999."[^18] The report adds
    that "more people are beginning to see wireless telephones as
    substitutes for their wireline services"[^19] in light of dramatic
    price decreases and increases in service quality. These trends are
    further explored in "Local Telephone Competition at the New
    Millennium," a report by the FCC Common Carrier Bureau.[^20] A
    report by the United States General Accounting Office, "Development
    of Competition in Local Telephone Markets," states that, "\[t\]o
    date, little competition has emerged in local telephone
    markets,"[^21] but concludes that "further competition seems likely
    to develop in local telephone markets."[^22] The report notes that
    "competing carriers, . . . are using all entry modes envisioned by
    the act, legal and regulatory issues are . . . becoming clarified,
    and the packaging of varied telecommunications services may enable
    firms providing other telecommunications services to effectively
    compete for local telephone customers."[^23] In the past few months,
    however, new competitors have experienced increased difficulty
    obtaining capital necessary to fund expansion and several carriers
    have experienced serious financial difficulties.

30. In contrast to the market for local exchange and exchange access
    service, the markets for long distance and customer premises
    equipment (CPE) are competitive and have been increasingly
    deregulated. Long distance prices (international and domestic), as
    approximated by average revenue per minute, have fallen by 34
    percent since 1993.[^24] Similarly, a vibrantly competitive market
    has developed for CPE, and, as a result, basic voice telephones are
    now available from an array of suppliers with a myriad of options at
    extremely low prices.[^25]

31. It is against this background that we begin our second "Biennial
    Regulatory Review" of rules for common carriers.

### Scope of Review

32. As part of the review process, initiated by the Year 2000 Biennial
    Regulatory Review Working Group, the Common Carrier Bureau has
    reviewed all of the rules within each of the following parts that
    affect common carriers.

> [Part 32 -- Uniform System of Accounts]{.underline} - Establishes
> mandatory minimum accounting standards for certain common carriers.
>
> [Part 36 -- Jurisdictional Separations]{.underline} - Contains an
> outline of the separations procedures designed primarily for the
> allocation of property costs, revenues, expenses, taxes and reserves
> between the state and interstate jurisdictions.
>
> [Part 42 -- Record Retention Requirements]{.underline} - Prescribes
> the regulations governing the preservation of records of
> communications common carriers.
>
> [Part 43 -- Reporting Requirements]{.underline} - Prescribes specific
> filing requirements for communications common carriers and certain of
> their affiliates.

[Part 51 -- Interconnection]{.underline} - Establishes interconnection
obligations for LECs.

> [Part 52 -- Numbering]{.underline} - Establishes conditions for the
> administration and use of telecommunications numbers for provision of
> telecommunications services in the United States.
>
> [Part 53 -- Special Provisions Concerning Bell Operating
> Companies]{.underline} - Establishes special requirements applicable
> to the Bell Operating Companies, pursuant to 47 U.S.C. §§ 271 and 272.
>
> [Part 54 -- Universal Service]{.underline} - Establishes the
> mechanisms to ensure the provision of Universal Service.
>
> [Part 59 -- Infrastructure Sharing]{.underline} - Establishes the
> general duty of incumbent LECs to make available to certain qualifying
> carriers network infrastructure, facilities, functions, technology,
> and information.
>
> [Part 61 -- Tariffs]{.underline} - Prescribes the framework for the
> initial establishment of and subsequent revisions to tariff
> publications for certain carriers.
>
> [Part 63 - Extension of Lines]{.underline} - Prescribes a regulatory
> framework for construction of wireline common carrier infrastructure.

[Part 64 -- Miscellaneous]{.underline} - Addresses a broad range of
common carrier issues.

> [Part 65 -- Rate of Return]{.underline} - Establishes procedures and
> methodologies for Commission prescription of an authorized unitary
> interstate exchange access rate of return and individual authorized
> rates of return for the interstate exchange access rates of certain
> other carriers.
>
> [Part 68 -- Connections of Terminal Equipment]{.underline} -- Permits
> direct connection to the network of registered terminal equipment.
> Provides uniform technical standards for equipment to prevent network
> harm and ensure that telephones are compatible with hearing aids.
>
> [Part 69 -- Access Charges]{.underline} - Establishes rules for access
> charges for interstate or foreign access services for incumbent LECs.

### Recent and Ongoing Activities

33. Recently, the Commission has begun a number of proceedings designed
    to reduce or simplify wireline common carrier regulation in light of
    increasing local exchange competition and other industry
    developments. Among other things, the Commission is currently
    conducting rulemaking proceedings to review: (1) Part 32 of the
    Rules, Uniform System of Accounts for Class A and B Telephone
    Companies, and the Commission's ARMIS (Automated Reporting
    Management Information System) information reporting system for
    incumbent LECs; (2) Part 36 of the Rules, Jurisdictional
    Separations; and (3) Part 68 of the Rules, Connection of Terminal
    Equipment to the Telephone Network. In addition, the Commission
    initiated several common carrier rulemakings as part of the 1998
    Biennial Regulatory Review.[^26]

#### Accounting and ARMIS Requirements

34. The Commission is currently conducting a comprehensive review of its
    Part 32 accounting and related rules and its ARMIS reporting
    requirements. This comprehensive review will complement the Biennial
    Regulatory Review process and ensure that the goal of continued
    deregulation is vigorously pursued.[^27] This review will consider
    the need for various accounting and reporting requirements and
    whether they impose unnecessary burdens on incumbent LECs as local
    exchange competition develops. Resolution of these issues could have
    a significant effect on State commissions because most of them rely
    on the FCC accounting and reporting requirements.

35. The review is being conducted in three phases. Phase 1, which was
    completed in March 2000, was designed to focus on immediate
    streamlining measures.[^28] Phase 2 "examine\[s\] broader and more
    extensive deregulatory measures."[^29] Phase 3 will consider issues
    raised by a long-term transition to deregulation.

36. The Commission took the following specific steps to streamline its
    accounting requirements in Phase 1: (1) eliminated the expense
    matrix filing requirement; (2) allowed carriers to reduce the cost
    allocation manual (CAM) audit requirement from an annual financial
    statement audit to a biennial attestation engagement; (3) relaxed
    the affiliate transactions requirements for services; (4) eliminated
    the 15-day pre-filing requirement for certain CAM changes; (5)
    eliminated the 30-day notification requirement for establishment of
    temporary or experimental accounts; (6) allowed carriers to record
    contingent liabilities without agency review; (7) eliminated the
    reclassification requirement for certain property held for future
    use; and (8) eliminated the reclassification requirement for certain
    plant under construction. [^30] The *Phase 1 Order* also streamlined
    the ARMIS reporting requirements by, among other things, eliminating
    certain Tables, eliminating reporting items from a number of Tables,
    and establishing new threshold levels for certain reporting
    items.[^31]

37. The Commission issued a *Notice of Proposed Rulemaking* in Phase 2
    and Phase 3 of this proceeding on October 18, 2000.[^32] In Phase 2,
    the Commission sought comment on the following streamlining
    measures: (1) eliminating a quarter of the accounts used by the
    largest incumbent carriers; (2) eliminating approximately half of
    the current reporting requirements in the ARMIS 43-07 Reports; (3)
    eliminating the cost allocation manual filing and audit requirements
    for mid-sized carriers; and (4) increasing the income threshold that
    determines which carriers must file certain ARMIS reports. Phase 2
    comments are due December 21, 2000 with replies due January
    30, 2001. In Phase 3, the Commission requested comment on a number
    of issues raised by the long term transition to accounting and
    reporting deregulation. Comments are due January 30, 2001 and
    replies are due February 28, 2001.

38. The Commission issued a *Notice of Proposed Rulemaking* on November
    9, 2000, seeking comment on whether to streamline service quality
    reporting in ARMIS.[^33] Comments are due January 12, 2000, while
    reply comments are due February 16, 2001.

#### Jurisdictional Separations 

39. The Commission has instituted a review of the Part 36 jurisdictional
    separations procedures, which govern the division of the carriers'
    regulated costs between the state and federal jurisdictions.[^34]
    The costs allocated to the interstate jurisdiction by Part 36 are
    recovered through charges regulated by the FCC, and the costs
    allocated to the state jurisdiction are recovered through charges
    regulated by the states.

40. The Commission stated that the purpose of the *Separations Reform
    Notice* was to consider what changes to our separations procedures
    might be appropriate in light of legal, technological and market
    structure changes affecting telecommunications. The Commission
    specifically requested comment on: (1) what changes in the law and
    within the industry may warrant revision of the separations
    process; (2) the criteria that should be used in evaluating the
    existing separations procedures and proposals for reform; (3)
    whether separations rules are needed during the transition to a
    competitive market; (4) a number of specific industry proposals for
    replacement of the existing separations procedures; and (5) how
    various options for separations reform would affect revenue
    requirements and prices.[^35]

41. Pursuant to the requirements of section 410(c) of the 1996 Act, the
    Commission referred these issues to the Federal-State Joint Board
    established in the separations reform proceeding for the preparation
    of a recommended decision.[^36] On July 21, 2000, the Joint Board
    recommended that the Commission freeze certain elements of the
    separations process, including the jurisdictional allocation
    factors, for five years while the Joint Board and the Commission
    continue to review issues regarding comprehensive separations
    reform.[^37]

#### Part 68 Equipment Registration

42. Prior to the adoption of the Part 68 rules, in 1975, incumbent LECs
    generally prohibited direct connection of third party customer
    premises equipment (CPE) to their networks, thus maintaining an
    essential monopoly over the provision of CPE. [^38] Under Part 68,
    the incumbent LECs must permit direct connection to the public
    switched telephone network of CPE that is certified as meeting
    certain technical standards, which are designed to prevent harm to
    the public switched network.[^39] The Commission has developed these
    technical standards, and played a major role in ensuring product
    compliance with these requirements.[^40] A vibrantly competitive
    market for the provision of CPE has developed, resulting in an
    enormous increase in the variety of CPE available to consumers and
    major price reductions.[^41]

43. The Common Carrier Bureau held a series of public fora on Part 68 to
    address streamlining issues in July 1999.[^42] On May 22, 2000, the
    Commission released the *Part 68 NPRM,* which sought comment on
    options to streamline the process by which technical criteria are
    established for CPE. [^43] The Commission also proposed to
    streamline the registration process for CPE by ending its direct
    review of applications and issuance of grants for such equipment.

44. In the *Part 68 Order*[^44], the Commission eliminated regulations
    governing the development of technical standards and certification
    procedures for telecommunications equipment such as telephones, fax
    machines, or modems. Specifically, the Commission privatized the
    process for establishing technical criteria for CPE and eliminated
    the requirement that manufacturers or CPE seek Commission approval
    of the equipment. This action is expected to save manufacturers
    millions of dollars a year, and bring innovative equipment to the
    marketplace faster, thereby increasing the choices available to
    consumers, without harming the telephone network and with a minimal
    federal role. Once the *Order* becomes effective, equipment
    manufacturers and suppliers will be able to demonstrate conformity
    to the appropriate technical criteria either by seeking
    certification from a Telecommunications Certification Body (TCB), or
    Administrative Council for Terminal Attachment.

45. The Commission will continue to enforce the requirement that CPE not
    cause harm to the network. In addition, the Commission rules will
    continue to require that providers of telecommunications permit
    connection to the telephone network of any CPE that meets the
    technical criteria developed by industry. Finally, aggrieved parties
    may request that the Commission conduct a *de novo* review of the
    technical criteria.

#### Universal Service Reform for Rural Carriers

46. The Commission has also taken steps to begin consideration of rural
    carrier universal service issues (in consultation with the
    Federal-State Joint Board on Universal Service (Joint Board)). In
    1997 the Joint Board created a Rural Task Force to study possible
    universal service reforms for rural telephone companies. The Rural
    Task Force submitted a report with recommendations to the Joint
    Board on September 29, 2000. [^45] On October 4, 2000, the
    Commission released a public notice seeking comment on the rural
    task force recommendation.[^46] On November 13, 2000, the Joint
    Board held an en banc hearing on the Rural Task Force's report. The
    Joint Board will make its recommendations to the Commission, on the
    basis of the Rural Task Force's report.

47. In addition, in 1999 the Common Carrier Bureau granted the request
    of nine rural companies and removed the individual caps placed on
    the rural companies' high-cost loop support as a condition for grant
    of a study area waiver.[^47] On August 4, 2000, in response to
    requests from more than 25 additional rural telephone companies, the
    Bureau removed these caps for all affected rural telephone
    companies, effective January 1, 2000.[^48] The Commission is also
    considering a comprehensive interstate access charge and interstate
    universal service reform plan for rate-of-return carriers sponsored
    by an industry coalition known as the Multi-Association Group
    (MAG).[^49]

### New Initiatives

48. In addition to the recent and ongoing actions discussed above, the
    staff recommends that the Commission address various other issues.
    These issues include intercarrier compensation, modification of the
    separate subsidiary requirement for independent telephone company
    provision of inter-exchange service, and eliminating outdated rules.

#### Intercarrier Compensation 

49. The staff recommends that the Commission consider whether the
    sometimes conflicting rules used for calculating intercarrier
    compensation for the origination and termination of traffic can be
    streamlined and harmonized. At present, the transport and
    termination provisions in sections 251 and 252 of the Communications
    Act and the Commission's implementing regulations in 47 C.F.R. §§
    51.701-717 govern the way the incumbent LECs and competitive LECs
    (CLECs) compensate one another for call completion. The Part 69
    access charge rules generally govern the compensation that incumbent
    LECs receive for the use of their services in the origination and
    termination of interstate interexchange traffic. Access charge
    structures, generally similar to that in Part 69 of the Commission
    rules and adopted by individual states, govern compensation for the
    origination and termination of intrastate interexchange traffic.
    Moreover, Information Service Provider (ISP) traffic is exempt from
    interstate access charges. Instead, ISPs generally pay incumbent
    LECs local exchange business rates for their connections to the LEC
    local network.[^50]

50. Since passage of the Telecommunications Act of 1996, the Commission
    has been adjusting incumbent LECs' access charges to reflect costs.
    This has resulted in price reductions totaling \$6.4 billion.[^51]
    The Commission most recently reduced access charges paid by long
    distance carriers by \$3.2 billion.[^52] This action furthers the
    Commission's objective of developing a more economic approach to
    access charges while balancing various, and sometimes competing
    interests -- including the promotion of competition and
    deregulation, the maintenance of affordable prices for consumers,
    and the avoidance of rate-shock for consumers.[^53]

51. The staff recommends that the Commission seek comment on a broad
    range of economic, legal and policy issues raised by the current
    system of intercarrier compensation for the origination and
    termination of traffic, and seek to identify alternative approaches
    that are more consistent with the long term development of
    competition.[^54] One purpose of such a proceeding would be to
    explore whether a single consistent approach to intercarrier
    compensation for traffic origination and termination could be
    developed. Staff believes that an appropriate, consolidated set of
    rules could reduce opportunities for arbitrage, eliminate incentives
    for inefficient market entry strategies, and reduce transaction
    costs. The staff further recommends that the Commission evaluate
    alternative compensation mechanisms in terms of their effect on
    local exchange, exchange access, and interstate interexchange
    competition. This proceeding should also consider the need for
    transitional mechanisms to ease the implementation of a new approach
    to intercarrier compensation for traffic origination and
    termination, and how to avoid dislocations.

#### Independent Incumbent LEC Separate Subsidiary

52. The staff also recommends that the Commission seek comment on
    modifying Part 64, subpart T to exclude small rural incumbent LECs,
    as defined in section 3(37) of the Act, from the requirement that
    independent incumbent LECs provide interexchange service through a
    separate subsidiary. Staff also recommends that with respect to all
    other independent LECs, the Commission consider limited waiver
    requests of the separate subsidiary requirement if the prohibition
    on joint ownership of equipment creates hardship for an independent
    incumbent LEC.[^55]

#### Eliminating Outdated Rules 

53. The staff recommends that the Commission remove portions of the
    rules that are outdated. For example, in the Part 69 Access Charge
    rules, as well as elsewhere, rules establishing a transition period
    may remain in place even after the transition has been completed.
    The provisions listed below, are examples of rules that should be
    eliminated, in whole or in part, for this reason.

36.701 -- Lifeline connection assistance expense allocation -- general.

51.211 -- Toll Dialing Parity Implementation.

51.515(b)-(c) -- Application of access charges.

53.101 -- Joint marketing of local and long distance services by
interLATA carriers.

53.201(a)-(b) -- Services for which a separate 272 affiliate is
required.

54.701(b)-(e) -- Administrator of universal service support mechanisms.

64.1320 -- Payphone compensation verification and reports.

64.1903(c) -- Obligations of all incumbent independent local exchange
carriers.

69.116 -- Universal service fund.

69.117 -- Lifeline assistance.

69.126 -- Nonrecurring charges.

69.127 -- Transitional equal charge rule.

69.612 -- Long term and transitional support.

### Other Issues

#### Comments

54. The Commission sought public comment on the September Staff Report.
    USTA, ITTA, OPASTCO, NECA, WorldCom, Sprint and GSA filed comments
    on wireline Common Carrier issues. ITTA, WorldCom and GSA filed
    replies. The staff met with interested parties and considered the
    Petition for Rulemaking filed by USTA in August 1999 addressing 2000
    Biennial Regulatory Review issues, and the comments filed in
    response to it.[^56] USTA reiterated many of these concerns in its
    comments on the September Staff Report. GSA also commented on the
    September Staff Report, strongly urging the Commission not to reduce
    regulation before it is warranted by increased competition. The
    staff continues to believe that the ongoing proceedings and proposed
    initiatives discussed above address many but not all of the major
    common carrier concerns expressed by USTA. For example, USTA sought
    numerous additional changes to Part 36 (concerning jurisdictional
    separations), to Part 32 (governing the Uniform System of Accounts),
    and to the ARMIS reporting requirements. As discussed above, most of
    these matters are being, or will be, addressed by the Commission.
    USTA also proposed rule changes to Parts 61 and 69. These proposals
    generally would reorganize and streamline these parts by creating
    separate rule parts to govern tariff filings, rate-of-return LEC
    pricing, and price cap LEC pricing. USTA also proposed substantially
    greater pricing flexibility for incumbent LEC access charges. The
    staff does not recommend that the Commission initiate specific new
    proceedings at this time to address the Part 61 and 69 concerns
    raised by USTA in the context of this biennial regulatory review.
    First, many of these issues have been addressed. For example, issues
    related to price cap LECs were considered in the Coalition for
    Affordable Local and Long Distance Services (CALLS) proceeding and
    other proceedings addressing pricing flexibility.[^57] In addition,
    many of the rate-of-return LEC access reform and pricing flexibility
    issues raised by USTA are the subject of pending proceedings or are
    scheduled for consideration.

55. In addition, the Independent Telephone and Telecommunications
    Alliance (ITTA) commented on the September Staff Report, urging the
    Commission to undertake additional regulatory relief for mid-sized
    carriers. As indicated above, GSA urged the Commission to proceed
    cautiously with reduced regulatory and reporting requirements. Some
    of these issues are already being addressed in on-going proceedings.
    For example, the Commission has proposed reduced accounting and
    reporting requirements for mid-sized carriers. Other issues raised
    by ITTA are addressed in Appendix IV in the context of relevant
    parts of the rules.

56. OPASTCO, NTCA and NECA also raised a number of specific issues for
    consideration in the context of the 2000 Biennial Regulatory Review
    in filings prior to the September Staff Report and/or in comments on
    the September Staff Report. These issues include for example, (1)
    streamlining accounting, jurisdictional separations and other cost
    allocation requirements; (2) universal service funding caps; (3)
    compensation for local number portability services and directory
    listing information; (4) establishment of a small telecom company
    federal advisory committee; (5) requirements affecting customer data
    and billing; (6) avoidance of unnecessary data reporting
    requirements; (7) average cost schedule review and reporting
    requirements; (8) elimination of the requirement for annual NECA
    elections; and (9) implementation of government mandates such as
    CALEA. The staff recognizes the importance of these issues given the
    unique circumstances of small telephone companies and the customers
    they serve. Accordingly, we recommend that the Commission redouble
    its efforts to ensure appropriate accommodations for small telephone
    companies. As one of these efforts, the staff recommends that the
    Commission begin proceedings to lift the separate subsidiary
    requirement for the provision of interexchange services for small
    rural carriers as defined in Section 251(f)(1) of the Act. Many of
    the other specific issues raised by OPASTCO and NTCA are currently
    under consideration by the Commission or are scheduled for
    consideration. We also recommend that the Commission consider
    simplifying review of the average schedules and changing the
    schedule for NECA Board elections. In addition, we note that the
    Commission will have the opportunity to consider lifting the cap on
    universal service funding for small companies in the ongoing rural
    carrier universal service proceeding. We do not recommend that the
    Commission initiate a new broad based proceeding focused on small
    telephone company concerns as part of this Biennial Regulatory
    Review because we believe that such issues can be addressed most
    expeditiously in other contexts. Similarly, we are reluctant to
    recommend that the Commission establish a small telecom federal
    advisory committee, as we believe that this would lead to
    unnecessary complications and delays in addressing small telephone
    company concerns. These parties are free, however, to petition for
    specific rulemakings. We will consider those petitions and make
    appropriate recommendations to the Commission.

## International Bureau

57. The International Bureau administers policy for the authorization
    and regulation of international telecommunications facilities and
    services, as well as policy for licensing and regulating satellite
    facilities and services. The Bureau represents the Commission in
    international fora, as well as in bilateral and multilateral
    meetings.[^58] The Bureau directs and coordinates negotiations with
    Mexico, Canada and other countries regarding spectrum use and
    interference protection. The Bureau provides assistance in
    telecommunications trade negotiations, and provides regulatory
    assistance and training programs to foreign governments.

58. The International Bureau seeks to facilitate the introduction of new
    services, and to provide customers with more choices, more
    innovative services, and competitive prices. The 2000 Biennial
    Regulatory Review complements the Bureau's streamlining efforts. The
    Bureau has taken a proactive approach in its rulemakings to remove
    unnecessary regulatory constraints, wherever possible and
    practicable. It continually reviews its rules and policies to
    respond to changing conditions and developments in the industry.

### Scope of Review

59. The International Bureau reviewed all of the rules that it
    administers. Specifically, the Bureau reviewed:

> [Part 1 -- Practice and Procedure]{.underline} -- In addition to
> procedural rules of general applicability to all Commission licensees,
> certain rules within Part 1 explicitly address international
> telecommunications service providers.
>
> [Part 23 -- International Fixed Public Radio Communication
> Services]{.underline} -- Contains rules applicable to international
> terrestrial fixed communications systems, including general licensing
> and application filing requirements, technical standards, and
> operations.
>
> [Part 25 -- Satellite Communications]{.underline} -- Contains rules
> applicable to satellite communications, including general licensing
> and application filing requirements, technical standards, and
> operations.
>
> [Part 43 -- Reports of Communication Common Carriers and Certain
> Affiliates]{.underline} -- Contains rules requiring certain reports by
> common carriers, including reports regarding different facets of
> international telecommunications.
>
> [Part 63 -- Extension of Lines, and Discontinuance, Reduction, Outage
> and Impairment of Service by Common Carriers; and Grants of Recognized
> Private Operating Agency Status]{.underline} -- Contains rules
> applicable to common carriers, including application filing
> requirements for international section 214 authorizations.
>
> [Part 64 -- Miscellaneous Rules Relating to Common
> Carriers]{.underline} -- Subpart J contains rules regarding the
> Commission's settlements policy.
>
> [Part 73 -- Radio Broadcast Services]{.underline} -- Subpart F
> contains rules applicable to international broadcast stations.
>
> [Part 100 -- Direct Broadcast Satellite Service]{.underline} --
> Contains rules applicable to direct broadcast satellite service,
> including technical and operating requirements.

### Recent and Ongoing Activities

#### Satellite Licensing 

60. Part 25 and Part 100 of the Commission's rules form the basis for
    the Commission's "Open Skies" policy under which a wide range of
    systems have been licensed to provide satellite services.[^59]
    Through this policy, the Bureau attempts to accommodate the maximum
    number of systems possible to provide a particular service to
    maximize entry and competition in the satellite service market.

##### Space Segment Authorization

61. The Commission has already taken steps to streamline the space
    segment portion of the satellite licensing process. First, the
    Commission eliminated section 319(d) waiver procedures to permit
    companies to begin construction, at their own risk, prior to being
    licensed.[^60] Second, the Commission relaxed the rules governing
    space station licensee reports. Third, DISCO I eliminated the
    distinction between U.S.-licensed domestic satellites and
    international "separate" satellite systems, and the new rules allow
    satellites to provide both domestic and international services.[^61]
    Fourth, DISCO II adopted a framework to evaluate requests by foreign
    satellite operators to provide service in the United States.[^62]
    DISCO II also established the "Permitted Space Station" List. Once
    placed on the list, non-U.S. satellite operators can provide
    fixed-satellite service in the United States.

62. For direct broadcast satellite (DBS) service, the Commission issued
    an NPRM. The NPRM proposes to consolidate and harmonize the
    Commission's Satellite rules, to eliminate the Commission's separate
    Part 100 rules for DBS, and incorporate the rules into Part 25.[^63]

##### International Satellite Coordination

63. The International Telecommunication Union (ITU) has established a
    satellite coordination process to facilitate the harmonious use of
    satellite orbits and spectrum among Administrations.[^64] Satellite
    coordination occurs by negotiating mutually satisfactory solutions
    among the affected parties. All space segment licenses that the
    Commission issues must comply with ITU coordination requirements and
    international agreements. To eliminate delay of pending
    international coordination needed by U.S. satellite systems,
    however, the Commission moves forward with space segment
    applications and typically approves them before coordination is
    complete. All authorizations are subject to possible changes that
    may be necessary to conform to final coordination agreements. This
    approach saves satellite applicants substantial time. In addition,
    the Commission has developed processes that allow U.S. satellite
    operators to negotiate directly with satellite operators of other
    countries. The Commission reviews and finalizes any operator
    arrangements before agreeing to them. This process saves staff
    resources and permits the satellite operators to have some
    decisional role in the authorization process.

64. The staff and the industry also are working together to propose
    solutions to the backlog of coordination filings at the ITU. There
    is a need to reduce the time it takes for the ITU to process a
    coordination request because it has a direct effect on the
    international coordination process and on our licensing process.

##### Earth Station Licensing 

65. In general, earth stations are licensed for 10 years. The Commission
    also issues a single blanket license for a large number of
    technically identical earth stations (*e.g.,* very small aperture
    terminal earth stations (VSATs), and Satellite News Gathering and
    mobile earth stations). In 1999, the International Bureau
    streamlined its processing of certain earth station applications.
    Specifically, the Bureau instituted an "auto-grant" process that
    automatically grants routine satellite earth station applications
    proposing to use the Ku-band fixed-satellite service frequencies
    (14.0-14.5 GHz / 11.7-12.2 GHz) to communicate with all satellites
    authorized to provide service to the United States (the "Permitted
    List").[^65] Such routine earth station applications are considered
    granted 35 days from the date on which the application appears on
    public notice as "accepted for filing," provided that no objections
    are filed during the public comment period. These changes were
    consistent with the increased competition and consumer demand in the
    satellite marketplace.

66. The Bureau also reduced the number of emission designators required
    to be identified in applications for digital systems.[^66] This
    modification significantly reduces the time necessary to enter earth
    station information into the Commission's database, and largely
    eliminates the need for earth station operators to file modification
    applications when they wish to add a new emission.

67. The Commission also modified its Part 25 rules to provide earth
    station applicants greater flexibility in applying for and renewing
    earth station licenses.[^67] For example, the Commission simplified
    rules for license renewals for temporary fixed earth stations and
    VSATs. The Commission extended the licensing term for VSATs to 10
    years. Additionally, the Bureau created new procedures to allow
    Special Temporary Authority to be granted readily for use by
    satellite earth stations if the applicant is able to demonstrate
    extraordinary circumstances. Furthermore, the Bureau issued a Public
    Notice that committed to placing routine applications on public
    notice within 10 business days of receipt by the Bureau, if the
    applications include all required information.[^68]

#### Section 214 Applications

68. The Commission has taken great strides to streamline its
    international 214 application processes. In 1996, the Commission
    created an expedited process for global, facilities-based section
    214 applications.[^69] The Commission created global section 214
    authorizations, reduced paperwork obligations, streamlined tariff
    requirements for non-dominant international carriers, and ensured
    that essential information is readily available to all carriers and
    users. The new regulations facilitate entry into the international
    telecommunications market and the expansion of international
    services.

69. In March 1999, as part of its 1998 Biennial Regulatory Review
    process, the Commission took additional steps to reduce regulatory
    burdens on providers of international telecommunications services.
    The Commission streamlined its procedures for granting international
    section 214 authorizations to provide international services, and
    increased the categories of applications eligible for streamlined
    processing.[^70] After adoption of the rules, most new carriers are
    authorized to provide international services on most international
    routes 14 days after public notice of an application. Carriers
    already providing service can complete *pro forma* transactions and
    assignments of their authorizations without prior Commission
    approval and provide service through their wholly owned subsidiaries
    without separate Commission approval. Carriers under common
    ownership with an already-authorized carrier are able to provide the
    same authorized services after a minimal waiting period. Authorized
    carriers are able to use any authorized U.S.-licensed or
    non-U.S.-licensed undersea cable systems to provide their authorized
    services. The vast majority of international section 214
    applications now qualify for streamlined processing.

#### Foreign Participation 

70. The Commission has sought to foster an increasingly competitive
    international telecommunications market by adopting policies that
    promote the shift away from government-owned monopolies and toward
    private sector competition. For example, the Commission has
    simplified its own licensing rules in ways that have facilitated
    entry into the U.S. market by foreign private sector competitors. In
    addition, Commission broadened the class of foreign-affiliated
    applicants eligible for streamlined processing. The competitive
    conditions created by the World Trade Organization (WTO) basic
    telecommunications agreement and the rules adopted in the *Foreign
    Participation Order* significantly reduced the possibility of market
    distortion, and thereby allowed the Commission to reduce scrutiny of
    many applications and afford those applications streamlined
    processing.[^71] In the *Foreign Participation Reconsideration
    Order*, the Commission clarified and revised certain aspects of our
    foreign carrier affiliation notification rule to respond to carrier
    concerns about the purpose and application of our rule.[^72] In that
    proceeding, the Commission reduced the prior notification period
    from 60 to 45 days, and exempted certain classes of foreign carriers
    from the requirement to submit prior notification.[^73]

#### International Settlements Policy 

71. The Commission has taken action to remove regulatory impediments and
    to increase competition in the international telecommunications
    marketplace through reform of the longstanding international
    settlements policy. In 1999, in the *ISP Reform Order*, the
    Commission adopted sweeping deregulatory inter-carrier settlement
    arrangements between U.S. carriers and foreign non-dominant carriers
    on competitive routes.[^74] Specifically, the Commission: (1)
    eliminated the international settlements policy and contract filing
    requirements for arrangements with foreign carriers that lack market
    power; (2) eliminated the international settlements policy for
    arrangements with all carriers on routes where rates to terminate
    U.S. calls are at least 25 percent lower than the relevant
    settlement rate benchmark previously adopted by the Commission in
    its *Settlement Rate Benchmark Order*;[^75] (3) adopted changes to
    contract filing requirements to permit U.S. carriers to file, on a
    confidential basis, arrangements with foreign carriers with market
    power on routes where the international settlements policy is
    removed; (4) adopted procedural changes to simplify accounting rate
    filing requirements; and (5) eliminated the flexibility policy in
    recognition that the reforms to the international settlements policy
    render the flexibility policy largely superfluous. The Commission
    noted that the revisions to its rules will increase opportunities to
    smaller carriers and will allow the market, rather than government
    regulation, to govern settlement arrangements between carriers in
    competitive markets. These changes promote lower prices and greater
    innovation in international telecommunications services for U.S.
    consumers.

#### Automation

72. The International Bureau has made substantial progress in its
    ongoing efforts to automate its processes. For example, the Bureau
    implemented a computerized notification system to enable the ITU and
    other international entities to provide data to the Commission
    electronically. In January 2000, the International Bureau
    successfully completed the transition from a paper and diskette
    distribution format, the ITU Weekly Information Circular (WIC), to a
    new computer-based CD-ROM system, the Radiocommunication Bureau
    International Frequency Information Circular (BRIFIC), for
    terrestrial service notifications. The BRIFIC system saves tune and
    resources by completely replacing our reliance on paper
    notifications for these services.

### New Initiatives

#### Earth Station Licensing 

73. In December, the Commission released a Notice of Proposed Rulemaking
    to streamline earth station and space station licensing.[^76] The
    NPRM proposes technical changes that would streamline the earth
    station licensing process. In addition, the NPRM proposes the
    electronic filing of earth station applications.

#### Space Segment Authorizations 

74. Currently it takes the Commission a minimum of just over two years
    to grant a space station application. The satellite network
    licensing process takes several years longer when there is no
    spectrum allocation (International or Domestic), when no service
    rules exist for the proposed system, or when there are other
    countries ahead of the United States in the ITU coordination
    process.

75. The Bureau's current "processing round" approach requires
    substantial staff time and resources to resolve all of the issues
    associated with a particular pool of applications. [^77] On the
    other hand, a processing round approach sets parameters for
    licensing in an orderly fashion, and take into account mutual
    exclusivity considerations. Through processing rounds, the
    Commission can identify the name, type and number of applications
    for a particular service and avoid considering applications
    subsequently filed that may be mutually exclusive with previously
    filed applications.

76. The major criticism of the current process is that service
    rulemakings and international coordination take too long to
    complete. The International Bureau has made concerted efforts to
    streamline the satellite licensing process. The staff believes that
    further improvements are warranted. The Bureau is examining new
    options to improve and streamline the space segment licensing
    process as it relates to the development of new service rules and
    international coordination. The Bureau plans to develop specific
    procedural and substantive proposals for new licensing approaches
    and to establish goals for implementation.

77. The Bureau is also continuing to work with the industry to
    re-examine the entire satellite network licensing process. The
    International Bureau has convened several meetings with
    representatives of the U.S. and foreign satellite industry,
    including geostationary (GSO) companies, non-geostationary (NGSO)
    companies, direct broadcast satellite (DBS) providers, fixed
    satellite service (FSS) operators and mobile satellite service
    providers (MSS), to discuss satellite space station licensing. Input
    from these industry meetings will be useful in the Bureau's new
    initiatives.

#### Parts 23, 25 and 100 

78. The staff recommends that the Commission consider repealing section
    25.141[^78] and subpart H[^79] of its rules. The staff also
    recommends that the Commission review sections 25.140[^80] and
    25.144[^81] of its rules. Section 25.140 requires that each
    applicant for a fixed satellite service (FSS) authorization
    demonstrate that it is legally, financially, technically and
    otherwise qualified to proceed expeditiously with the construction,
    launch and/or operation of each proposed space station immediately
    after the grant of the requested authorization.[^82] If the
    Commission determines that financial qualifications are still
    necessary, we recommend that the Commission review the rules to
    determine whether a different showing of financial qualifications is
    warranted. We recommend, however, that the Commission retain its
    technical and legal qualifications in their current form.

79. Section 25.144 includes the licensing provisions for the 2.3 GHz
    satellite digital audio radio service (DARS). The staff recommends
    that the Commission eliminate the subsection in 25.144 that
    identifies the specific DARS applicants eligible for the auction.
    This subsection is no longer necessary because DARS licenses have
    already been issued. The staff recommends, however, that the
    Commission retain the actual auction procedures for DARS in Part 25.

80. The Commission has already initiated a proceeding to streamline the
    DBS rules by integrating the Part 100 DBS service rules into Part 25
    (Satellite Communications), by eliminating duplicative rule sections
    and by consolidating existing rule sections as appropriate.[^83] The
    staff recommends that Part 23 be retained in its entirety pending an
    in-depth Commission review to determine how the few remaining
    licensees are using this service and to project when submarine cable
    and satellite will fully supplant this service.

#### Section 214 Applications

81. In November, the Commission released an NPRM which proposed changes
    to several of our rules relating to international telecommunications
    services.[^84] Specifically, the Commission proposed to amend the
    rule concerning *pro forma* assignments and transfers of control of
    international Section 214 authorizations to more closely correspond
    to those used for the assignment and transfer of control of
    Commercial Mobile Radio Service (CMRS) licenses. In that proceeding,
    the Commission also proposed to amend several rules to clarify the
    intent of those rules and to eliminate certain rules that no longer
    have any application. The staff recommends adoption of those
    proposed rule changes.

#### Submarine Cable

82. In recent years, there has been an explosive growth in the number
    and capacity of submarine cables. In particular, the development of
    the Internet has dramatically increased demand for submarine cable
    capacity. To address issues relating to increased demand, the rapid
    pace of technological development, and the emergence of
    non-traditional ownership and financing structures in the submarine
    cable marketplace, the International Bureau held a public forum in
    November 1999.[^85] The Bureau also has held numerous meetings with
    individual industry participants about ways the Commission might
    reform its regulation of the submarine cable landing licensing
    process to further promote competition.

83. On the basis of the public forum and meetings with industry in June,
    the Commission adopted a Notice of Proposed Rulemaking to continue
    the Commission's efforts to streamline the submarine cable landing
    licensing process.[^86] In the NPRM, the Commission proposed
    pro-competitive streamlining that incorporates competitive
    safeguards to allow for and encourage: (1) more certainty and
    flexibility for participants in the application process; (2)
    increased investment and infrastructure development by multiple
    providers; (3) expansion of available submarine cable capacity;
    and (4) decreased application processing time. This streamlining
    effort will benefit U.S. consumers by eliminating regulatory delay
    and enhancing the competitiveness of U.S. service providers in the
    world market.

#### Reporting Requirements

84. The Bureau staff reviewed the rules in Part 43 relating to reporting
    requirements of carriers providing international telecommunications
    services. In addition, Bureau staff met with industry
    representatives to solicit suggestions on how to improve the
    reporting requirements. The Bureau recommends that the Commission
    undertake a proceeding to review the reporting requirements. The
    staff finds that these reporting requirements can be modified to
    reflect changes that have occurred in the telecommunications
    industry. While these reports aid the Commission, industry, and
    international agencies in planning and understanding international
    telecommunications markets, the staff believes that the reporting
    burdens can be reduced without eliminating these benefits.

85. The staff recommends that some of the rules relating to reports
    filed by carriers providing international telecommunications
    services be modified, and that others be eliminated. The staff has
    determined that reports regarding the division of international toll
    communications charges are no longer needed. The purpose of those
    reports is to monitor telegraph communications, which are no longer
    a major component of telecommunications. This reporting requirement
    also duplicates other rules. This reporting requirement can be
    eliminated prior to its sunset date. The Bureau also recommends that
    the instruction manual for reports of International
    Telecommunications Traffic be revised to reflect all the changes
    that have occurred over the past several years. In the *2000
    International Biennial Regulatory Review NPRM*, the Commission
    proposes to eliminate Section 43.81 which sets forth the requirement
    for reports of carriers owned by foreign telecommunications
    entities.[^87] The staff recommends elimination of that rule.

#### International Broadcasting Stations

86. International broadcasting stations are broadcast stations operating
    on certain high frequency bands whose transmissions are intended to
    be received directly by the general public in foreign
    countries.[^88] The staff reviewed the Commission's rules governing
    international broadcasting stations[^89] and determined that five of
    these rules should be revised to reflect actions taken at recent
    World Radio Conferences (WRCs).[^90] First, the staff recommends
    that the Commission modify section 73.701(g) - (j) and (l) of the
    rules,[^91] to reflect the Final Acts of WRC '97 (Geneva), which
    reduced the number of seasonal schedules per year (and thus the
    number of times per year that licensees have to file for frequency
    assignments) from four to two. In addition, the staff recommends
    that the Commission change the starting and ending dates in the rule
    to the last Sunday in March and the last Sunday in September, and
    change the reference month in section 73.701(l) to specify either
    July or December. Second, the staff recommends that the Commission
    modify section 73.702(f)(1) of the rules,[^92] to include additional
    bands approved for international broadcasting use by the World Radio
    Assembly Conference (WRAC) '92.[^93] Third, the staff recommends
    that the Commission replace the target zone map in section 73.703 of
    the rules[^94] with the current ITU target zone map. Fourth, the
    staff recommends that the Commission change the frequency control
    tolerance specified in section 73.756(c) of the rules,[^95] to the
    current ITU regulation standard of 10 Hz.[^96] Finally, the staff
    recommends that the Commission modify the last sentence of section
    73.766 of the rules[^97] to change the highest modulating frequency
    from 5 kHz to 4.5 kHz, to reflect a provision in the Final Acts of
    WARC-87. These changes would bring the Commission's international
    broadcasting rules into conformance with current international
    provisions, make the rules easier to use, and avoid the confusion
    that could result from different Commission and international
    requirements.

#### Detariffing International Services

87. The Commission is in the process of detariffing interstate domestic
    interexchange services offered by non-dominant interexchange
    carriers (IXCs).[^98] Similar to the domestic interexchange market,
    the international interexchange market has seen a substantial
    increase in the level of competition. In light of this change, the
    Commission released an NPRM proposing to extend the complete
    detariffing regime adopted for domestic, interexchange services to
    the international services of non-dominant interexchange carriers,
    including Commercial Mobile Radio Service providers and U.S.
    carriers classified as dominant solely due to foreign
    affiliations.[^99] The staff recommends that the Commission adopt
    the rule changes set out in that NPRM. Detariffing international
    interexchange services will reduce the burdens placed on carriers
    and the Commission. The Commission will still be able to (1) ensure
    that rates are just and reasonable and not unreasonably
    discriminatory; (2) protect consumers by requiring carriers to
    disclose their rates publicly and through use of the section 208
    complaint process;[^100] and (3) promote the public interest by
    furthering competition in the international interexchange
    marketplace.

88. In the *International Detariffing NPRM*, the Commission also
    proposes to amend Section 43.51 to clarify that the contracts filing
    requirements only apply to U.S. carrier contracts for common carrier
    service between U.S. and foreign points involving: (1) a U.S.
    carrier that has been classified as dominant for reasons on nay
    route included in the contract, except for carriers classified as
    dominant on that route solely due to a foreign carrier
    affiliation,[^101] and (2) a foreign carriers that posses market
    power in its market.[^102] The staff recommends that the Commission
    adopt the changes to Section 43.51 set out in that NPRM. This will
    reduce burdens on carriers and the Commission. Given the increasing
    level of competition in telecommunications markets, the staff does
    not believe that these contracts need to be filed. The Commission
    and carriers should be able to ascertain when anti-competitive
    behavior occurs even if the contracts are not filed, and the
    Commission has authority to obtain the contracts if it needs to
    review them.

## Wireless Telecommunications Bureau

89. The Wireless Telecommunications Bureau (Wireless Bureau or WTB) is
    responsible for licensing and regulating all wireless communications
    services other than broadcast and satellite services. Wireless
    communications services include commercially provided services such
    as cellular, Personal Communications Services (PCS), and paging, as
    well as public safety and other private radio services.

90. The functions of the Wireless Bureau largely derive from Title III
    of the Communications Act, which governs licensing of spectrum in
    general and wireless services in particular. The vast majority of
    the Commission's regulations affecting wireless carriers consist
    of (1) allocation and service rules, (2) procedural rules concerning
    licensing and auctions, and (3) technical and operational rules.

91. The market for wireless carriers has changed dramatically in recent
    years as a result of entry by new wireless competitors, substantial
    growth, and increased competition in the wireless market. In 1993,
    Congress granted authority to the Commission to award wireless
    licenses by auction.[^103] Since that time, the Commission has
    conducted 30 spectrum auctions for services such as broadband and
    narrowband PCS, Specialized Mobile Radio (SMR), Wireless
    Communications Service (WCS), Local Multipoint Distribution Service
    (LMDS), and numerous other fixed and mobile wireless services.[^104]
    This unprecedented wave of new licensing has resulted in a dramatic
    increase in the number of competing wireless service
    providers.[^105]

92. As a result of increased wireless licensing and new competition, the
    Commission has substantially deregulated many aspects of wireless
    services. For example, in 1994, pursuant to authority granted under
    section 332 of the Communications Act, the Commission eliminated all
    federal rate regulation of CMRS providers, and preempted all state
    rate regulation as well.[^106] In 1996, the Commission revised its
    technical and operational rules to give CMRS carriers flexibility to
    provide fixed as well as mobile services, so that carriers could
    better respond to customer demands for new and innovative
    services.[^107] The dynamic and rapidly evolving nature of the
    wireless industry continues to make it important for the Commission
    to review its wireless regulations on a regular basis.

### Scope of Review

93. As part of the review process initiated by the 2000 Biennial
    Regulatory Review Working Group, WTB has reviewed the following rule
    parts that affect wireless telecommunications carriers.

> [Part 1 -- Practice and Procedure]{.underline} -- In addition to
> procedural rules of general applicability to all Commission licensees,
> subpart F relates to licensing and application procedures for wireless
> services, and subpart Q contains auction rules for wireless services.
>
> [Part 17 -- Construction, Marking, and Lighting of Antenna
> Structures]{.underline} -- Establishes construction, marking, and
> lighting requirements for antenna structures that affect aviation
> safety, and sets forth procedures for registering such structures with
> the Commission.
>
> [Part 20 -- Commercial Mobile Radio Services]{.underline} -- Contains
> rules that are generally applicable to all CMRS providers, including
> the CMRS spectrum cap, resale and roaming rules, and E911
> requirements.
>
> [Part 22 -- Public Mobile Services]{.underline} -- Contains licensing,
> technical, and operational rules for cellular, paging, air-to-ground,
> and other mobile services.
>
> [Part 24 -- Personal Communications Services]{.underline} -- Contains
> auction, licensing, technical, and operational rules for Broadband and
> Narrowband PCS.
>
> [Part 26 -- General Wireless Communications Service]{.underline} --
> Contains auction, licensing, technical, and operational rules for the
> General Wireless Communications Service (GWCS).
>
> [Part 27 -- Wireless Communications Service]{.underline} -- Contains
> auction, licensing, technical, and operational rules for the Wireless
> Communications Service (WCS).
>
> [Part 80 -- Stations in the Maritime Services]{.underline} -- Contains
> auction, licensing, technical, and operational rules for Public Coast
> Stations in the marine radio services.
>
> [Part 90 -- Private Land Mobile Radio Services]{.underline} --
> Contains auction, licensing, technical, and operational rules for 800
> and 900 MHz SMR, private carrier paging, 220 MHz Service, Location and
> Monitoring Service (LMS), and private land mobile services.
>
> [Part 95 -- Personal Radio Services]{.underline} -- Contains
> licensing, technical, and operational rules for the 218-219 MHz
> Service.
>
> [Part 101 -- Fixed Microwave Services]{.underline} -- Contains
> auction, licensing, technical, and operational rules for private and
> common carrier fixed microwave services. Includes specific subparts
> governing LMDS, 24 GHz, and 38-39 GHz services.

### Recent and Ongoing Activities

94. Prior to and contemporaneously with the 2000 Biennial Regulatory
    Review, WTB has engaged in a number of major initiatives to
    streamline and eliminate unnecessary rules.

#### Universal Licensing Proceeding 

95. In the *Universal Licensing* proceeding, which was part of the 1998
    Biennial Regulatory Review, the Commission furthered the
    implementation of the Universal Licensing System (ULS) by
    consolidating and streamlining its licensing rules and procedures
    for all wireless services.[^108] Major accomplishments in this
    proceeding include: (1) establishing an electronic filing
    requirement for all wireless services; (2) consolidating all
    wireless licensing rules into Part 1; (3) reducing the number of
    wireless application forms from more than 40 different application
    forms to 4 standardized application forms; and (4) eliminating
    obsolete or burdensome application filing rules and procedures
    (*e.g.*, the filing of microfiche copies of applications).

#### Part 90 Biennial Regulatory Review Proceeding

96. This proceeding, also initiated as part of the 1998 Biennial
    Regulatory Review, addresses rules applicable to Part 90 private
    land mobile licensees.[^109] In the *Report and Order* recently
    adopted in this proceeding, the Commission took the following
    actions: (1) lengthened license terms for Part 90 licensees from 5
    to 10 years, which increases licensee flexibility and reduces filing
    burdens; (2) extended the construction period for private land
    mobile licensees from 8 to 12 months; and (3) streamlined,
    clarified, and eliminated other Part 90 rules.

#### Amendment of the Commission's Part 97 Amateur Radio Rules

97. This proceeding simplified licensing classifications in the Amateur
    Radio Service, streamlined and updated Amateur license examination
    procedures, and eliminated other outdated rules.[^110]

#### *Pro Forma* Assignments and Transfers 

98. In 1998, the Commission granted section 10 forbearance of section
    310(d), which required prior Commission approval for most *pro
    forma* assignments and transfers involving wireless
    telecommunications carriers.[^111] This action enables
    telecommunications carriers to carry out non-substantial transfers
    and assignments without regulatory delays, subject only to the
    requirement that they notify the Commission of the change.

#### Local Number Portability

99. In 1999, the Commission granted a petition by the Cellular
    Telecommunications Industry Association to extend the deadline for
    CMRS providers to establish a local number portability (LNP)
    capability in their networks. [^112] As a result of the Commission's
    decision to apply section 10 forbearance in this case, the LNP
    implementation deadline for CMRS providers has been extended until
    November 2002. This will give CMRS providers greater flexibility as
    they build out their systems and increase capacity to meet growing
    consumer demand for wireless services**.**

#### LMDS Eligibility

100. In June 2000, the Commission adopted the *Third Report and Order*
     in CC Docket No. 92-97, in which it allowed the Local Multipoint
     Distribution Service (LMDS) eligibility restriction to sunset on
     June 30, 2000.[^113] The LMDS eligibility restriction prohibited
     local exchange carriers and incumbent cable companies from having
     an attributable interest in any LMDS "A" block license that
     overlapped with ten percent or more of the population in their
     service areas. In the *Third Report and Order*, the Commission
     concluded that allowing this eligibility restriction to sunset
     would promote the public interest. After reviewing the restriction,
     the Commission found that the record did not support a conclusion
     that open eligibility posed a significant threat of competitive
     harm in specific markets; indeed, the Commission concluded that
     open eligibility may improve the availability of services,
     particularly in rural areas.

#### Streamlining Initiatives

101. The Wireless Bureau has engaged in a comprehensive effort to
     streamline its procedures, to resolve pending applications and
     requests expeditiously, and to operate more efficiently. Some of
     the Bureau's more significant accomplishments are:

> \(1\) [Deploying the ULS]{.underline}. This has resulted in electronic
> filing of more than 60 percent of wireless applications.
>
> \(2\) [Expediting the licensing process via auctions.]{.underline} The
> Bureau has conducted twelve auctions since January 1999, in which more
> than 7,000 licenses have been auctioned.
>
> \(3\) [Eliminating the case backlog]{.underline}. Between March 1999
> and March 2000, the Bureau reduced by 99 percent a backlog of more
> than 64,000 applications that had been pending for more than one year,
> and implemented tracking procedures to prevent future backlogs.
>
> \(4\) [Resolving pending matters quickly]{.underline}. In 2000, the
> Bureau processed more than 500,000 license applications, issued more
> than 900 decisions on delegated authority, and had 133 orders adopted
> by the Commission.
>
> \(5\) [Processing license transfers and assignments
> efficiently]{.underline}. From November 1, 1999, to October 31, 2000,
> the Bureau processed approximately 29,000 transfer and assignment
> applications, including such major transactions as AT&T/Vanguard, Bell
> Atlantic/Vodafone, Nextel/Geotek, Omnipoint/Voicestream, Arch/PageNet,
> Voicestream/Aerial, TeleCorp/Tritel, SBC Wireless/BS Mobility (to
> create Cingular), Neoworld/Geotek Creditors, Bell
> Atlantic-GTE-Vodafone-Air Touch divestitures, TLA Spectrum/Saco River
> Telephone and Telegraph. For transfer and assignment applications
> processed in the new ULS, 74 percent were processed in 90 days or
> less, and 90 percent were processed in 180 days or less.

### New Initiatives

102. In general, the Bureau has not recommended repeal or significant
     modification of allocation and service rules, procedural rules
     concerning licensing and auctions, and technical and operational
     rules. The staff has determined that these rules are integral to
     the basic licensing and spectrum management functions performed by
     the Bureau and the Commission under Title III of the Communications
     Act. The continued need for these rules is not diminished by
     increased competition in the wireless marketplace. Indeed, without
     basic "rules of the road" for spectrum use, the ability of wireless
     carriers to compete would be significantly impaired.

103. Nevertheless, the Bureau has determined that there are several
     areas where competitive conditions, technological changes, or
     administrative efficiency may warrant changing or eliminating
     regulations. In addition, the Bureau and the Biennial Regulatory
     Review Working Group have received numerous suggestions from
     outside parties, such as the Cellular Telecommunications Industry
     Association (CTIA), the Personal Communications Industry
     Association (PCIA), and the Federal Communications Bar Association
     (FCBA), of possible areas for streamlining or eliminating wireless
     rules.

#### Part 22 Cellular Rules

104. The Commission's rules regulating cellular telephone service,
     contained in Part 22, were largely adopted in the early 1980s when
     the service was initiated.[^114] At the time these rules were
     adopted, the two cellular carriers in each market (one of which in
     each market was affiliated with the incumbent LEC) were the only
     providers of mobile telephony. This created a "duopoly" for this
     service. In addition, those cellular licenses not granted to
     incumbent LECs were awarded primarily by lottery. This caused the
     Commission to adopt regulations to prevent speculation and
     trafficking in licenses. Finally, to ensure technical uniformity in
     the deployment of cellular, the rules included detailed technical
     requirements for the provision of analog cellular service. Since
     these rules were adopted, PCS and SMR providers have entered the
     mobile telephony market and have changed the competitive landscape.
     The Commission has replaced the lottery process with licensing by
     auction. There has also been significant advances in wireless
     technology, including the development of several competing digital
     interfaces. As a result of these changes, many of the Part 22
     cellular rules adopted in the duopoly era appear to be unnecessary.
     Therefore, the Bureau staff recommends initiating a rulemaking to
     review the cellular rules and to consider which of these rules are
     obsolete as a result of competitive or technological developments.
     The Bureau staff also recommends review of rules regulating other
     Part 22 services, such as paging and air-to-ground service, on the
     same basis.

#### License Renewal Procedures

105. In most instances, wireless licenses must be renewed every 10
     years. As a practical matter, granting renewal of wireless licenses
     has proved to be virtually automatic except where the licensee has
     violated Commission rules, which only occurs in a very small
     percentage of cases. However, the renewal process in some instances
     places significant burdens on licensees. In a small but significant
     number of cases, the Bureau has encountered problems with
     late-filed renewal applications, in many instances involving public
     safety licensees that provide essential emergency services to their
     communities. To address these issues, the staff recommends
     initiating a proceeding that would consider possible changes to
     renewal procedures for wireless licenses. Among the options that
     could be considered are: (1) extending license terms beyond 10
     years, which is now permitted as a result of a 1996 amendment of
     Section 307(c) of the Act; and (2) implementing automatic or
     default renewal procedures to avoid late filing problems. Reform of
     renewal procedures was an issue specifically raised by CTIA and
     other industry representatives in meetings with Bureau staff.

#### Privatization of Microwave Licensing

106. Under its Part 101 rules, the Commission licenses some private and
     common carrier microwave services on a site-by-site,
     frequency-by-frequency basis. Although this licensing procedure
     facilitates efficient use of the spectrum, the licensing process is
     administratively complex and resource-intensive for applicants and
     the Commission. In some instances (e.g., LMDS, 39 GHz), the
     Commission has converted from site-based licensing of microwave
     services to a geographic area licensing approach, which reduces the
     need for Commission approval of individual facilities within the
     licensing area. Band manager licensing also represents a possible
     approach to addressing administrative burdens in the licensing
     process: the Commission has recently initiated the use of band
     manager licensing in the 700 MHz Guard Band, and has stated in the
     Balanced Budget Act proceeding that band manager licensing could be
     used in other services as well. Nevertheless, certain services may
     continue to be licensed on a site-by-site, frequency-by-frequency
     basis. In such cases, the staff recommends initiating a proceeding
     that would consider the possibility of partially privatizing the
     licensing process in these services, to the extent consistent with
     our statutory licensing responsibility. If implemented, certain
     licensing functions within designated spectrum could be performed
     by private coordinators, including, for example, maintenance of a
     licensee database.-

#### CMRS Spectrum Cap Review

107. The CMRS spectrum cap, set forth in section 20.6 of the rules,
     limits the aggregate amount of broadband PCS, cellular, and SMR
     spectrum that an entity can hold in any market.[^115] The rule was
     adopted in the CMRS *Third Report and Order* prior to the
     initiation of broadband PCS licensing.[^116] In the September 1999
     *Spectrum Cap Report and Order*, the Commission considered whether
     to retain, modify, or eliminate the spectrum cap.[^117] The
     Commission concluded that the cap continued to serve the public
     interest by preventing undue concentration in the CMRS market. The
     Commission also concluded that the cap should be relaxed in some
     respects, including liberalizing certain of the attribution rules
     and allowing aggregation of up to 55 MHz of spectrum in rural areas
     (as opposed to the 45 MHz limit in major markets). Finally, the
     Commission stated that it would again review the spectrum cap in
     the 2000 Biennial Regulatory Review. In accordance with this
     directive, the Bureau plans to prepare a Notice of Proposed
     Rulemaking for Commission consideration later this year that will
     initiate this review, taking into consideration existing
     competitive conditions and technological developments that could
     affect the continued need for the cap. As part of the same
     proceeding, the Bureau will also recommend review of the cellular
     cross-ownership rule, which prevents entities from holding
     attributable interests in cellular licenses on both channel blocks
     in overlapping geographic areas.[^118]

### Other Issues

108. The Bureau is also considering several other possible areas for new
     Biennial Regulatory Review initiatives. For example, the Bureau is
     reviewing its procedures for environmental clearance of tower sites
     under the National Environmental Policy Act (NEPA) to determine
     whether it can implement its responsibilities under NEPA more
     effectively and efficiently. The Bureau has also received Biennial
     Regulatory Review suggestions from outside parties such as CTIA and
     PCIA, including: streamlining procedures for submission of
     confidential information; streamlining and consolidating reporting
     obligations applicable to wireless carriers (*e.g.*, TRS, Universal
     Service, broadband competition, regulatory fees); and reviewing our
     buildout requirements for different wireless services. The Bureau
     has taken these suggestions under consideration and will announce
     further initiatives as appropriate.

# SUMMARY OF REVIEW BY MASS MEDIA BUREAU 

109. The Mass Media Bureau advises the Commission in matters pertaining
     to radio stations, television stations, Multipoint Distribution
     Service (MDS), Multichannel Multipoint Distribution Service (MMDS),
     and Instructional Television Fixed Service (ITFS) facilities. The
     Bureau is responsible for licensing these services and administers
     Commission rules and policies pertaining to these services,
     including ownership rules. The Bureau has been engaged in a
     thorough review of its rules and policies to promote competition
     and diversity, to minimize unwarranted regulatory burdens, and to
     streamline our licensing processes. These rules are located in
     Parts 73, 74, and 21 of Title 47 of the Code of Federal
     Regulations.

110. A variety of video outlets currently serve over 102 million
     television households in the United States.[^119] The average
     television household in the United States can receive 13
     over-the-air television stations, while 36 percent of all homes can
     receive 15 or more stations and 9 percent can receive 20 or more
     stations.[^120] Over 10,400 cable systems pass by 96 million homes
     and serve almost 67 million television households.[^121] Sixty-four
     percent of all subscribers have at least 54 channels and over 98
     percent have a minimum of 30 channels.[^122] Other video providers
     include Direct Broadcast Satellite, MMDS, satellite master antenna
     television, home satellite dishes, and open video systems.

111. Over 12,600 radio stations are currently on the air. Listeners in
     over half of the Arbitron radio markets are served by 20 or more
     commercial radio stations, and listeners in over 90 percent of the
     markets are served by 10 or more commercial radio stations.[^123]
     The 1996 Act eliminated the Commission's national radio ownership
     limits and relaxed the local radio ownership limits. In response,
     the radio industry has consolidated ownership during the past four
     years, with the number of radio owners declining by approximately
     1,100. Thus, there are now approximately 4,000 owners of commercial
     radio stations. The average number of owners of commercial radio
     stations in Arbitron radio metro markets has declined by 3 (from 14
     to 11) since the 1996 Act. Prior to the 1996 Act, the largest radio
     group owner had fewer than 40 radio stations nationwide. By
     September 2000, the largest radio group owner had over 1000 radio
     stations, and there were several radio owners with more than 100
     radio stations. As a result of this consolidation, approximately
     two-thirds of all commercial radio stations are owned as part of
     radio groups.[^124]

112. Commercial broadcasters fund their activities by selling
     advertisers access to their audiences (they receive no revenue from
     listeners or viewers).[^125] Broadcast programming is limited to
     the geographic reach of any given station's signal. This creates an
     incentive for broadcast networks to forge arrangements with many
     stations, thereby expanding their geographic reach and attracting a
     broader range of advertisers. Once broadcast television transitions
     to a digital service, DTV could provide multiple streams of video
     programming and allow broadcasters to charge subscriber fees for
     several program services.

113. Section 202(h) of the 1996 Act requires the Commission to review
     its ownership rules biennially to "determine whether any of such
     rules are necessary in the public interest as the result of
     competition." The Commission has undertaken a number of
     deregulatory initiatives with respect to the broadcast ownership
     rules. The Bureau is committed to reevaluating regulatory standards
     on an ongoing basis to respond to changes in the broadcast
     industry.

114. One important policy goal for mass media, and one of the most
     important purposes of the Commission's multiple ownership rules, is
     to encourage diversity in the ownership of broadcast stations in
     order to ensure that a diversity of viewpoints is available over
     the airwaves.[^126] As the Supreme Court stated, "it has long been
     a basic tenet of national communications policy that 'the widest
     possible dissemination of information from diverse and antagonistic
     sources is essential to the welfare of the public.'"[^127] This
     diversity policy is consistent with the First Amendment goal of
     fostering the "marketplace of ideas"[^128] and encouraging
     "uninhibited, robust, and wide-open" debate.[^129] For these
     reasons, the Supreme Court has stated that it has "no difficulty"
     in concluding that the Commission's interest in "promoting
     widespread dissemination of information from a multiplicity of
     sources" is "an important governmental interest;" indeed, the
     Supreme Court has stated that "assuring that the public has access
     to a multiplicity of information sources is a governmental purpose
     of the highest order, for it promotes values central to the First
     Amendment."[^130]

115. Broadcast stations, particularly television stations, reach large
     audiences and are the primary source of news and entertainment
     programming for Americans.[^131] Broadcasters consequently play a
     leading role in airing democratic debate and shaping cultural
     attitudes. For example, the manner and viewpoint a station uses in
     presenting the news can have a substantial impact on local
     elections. A television drama that raises controversial or
     important societal issues can shape cultural attitudes about these
     issues in significant ways. There is consequently a vital public
     interest in ensuring that these influential outlets for
     communication are in the hands of a broad number of different
     owners.

116. The strong policy of promoting diversity is relevant to determining
     whether a regulation is necessary in the public interest. Whether
     or not a particular ownership combination has anticompetitive
     effects in the sale of advertising time or other markets in which
     broadcasters compete, that combination may reduce the diversity of
     voices in a community. Congress implicitly recognized this by
     maintaining local radio ownership limitations, albeit at relaxed
     levels.[^132] Congress has repeatedly emphasized its concern for
     promoting diversity in the mass media, notwithstanding the
     increasingly competitive nature of virtually all communications
     markets.[^133] In attempting to foster diversity through structural
     regulation, the Commission endorses a content-neutral method that
     does not evaluate the substance of any station's editorial
     decisions, but seeks to ensure a sufficient number of independent
     outlets and program sources to foster a diversity of independent
     viewpoints in a given local market.

### Recent and Ongoing Activities

117. On August 6, 1999, the Commission released its *Local Television
     Ownership Report and Order*[^134] and its *National Television
     Ownership Report and Order*.[^135] As discussed more fully below,
     the Commission, in the *Local Television Ownership Report and
     Order*, revised its local television ownership rules -- the "TV
     duopoly" rule and the radio-television cross-ownership or
     "one-to-a-market" rule -- to respond to ongoing changes in the
     broadcast television industry. The new rules reflect a recognition
     of the growth in the number and variety of media outlets in local
     markets, as well as significant efficiencies and public service
     benefits that can be obtained from joint ownership. At the same
     time, the Commission's amendments reflect its continuing goals of
     ensuring diversity and localism and guarding against undue
     concentration of economic power in the marketplace. The newly
     adopted rules balance these competing concerns and are intended to
     facilitate further development of competition in the marketplace
     and to strengthen the potential to serve the public interest. In
     the *National Television Ownership Report and Order*, the
     Commission modified its method of calculating stations' audience
     reach and made some minor changes in which stations would be
     counted for purposes of the national TV ownership rule.

118. On June 20, 2000, the Commission released its *1998 Biennial
     Regulatory Review Report*,[^136] which discusses all of the
     Commission's broadcast ownership rules not already considered in
     the *1999 Local and National Television Ownership Report and
     Orders*. The *1998 Biennial Regulatory Review Report*
     considered (1) the local radio ownership rules, including the radio
     market definition; (2) the daily newspaper/broadcast
     cross-ownership rule; (3) the national television ownership rule,
     including the "UHF discount;" (4) the dual network rule; (5) the
     experimental broadcast station ownership rule; and (6) the
     cable/television cross-ownership rule. The *Report* then stated the
     Commission's conclusions as to whether the rules remain necessary
     in the public interest in view of competition.

#### Broadcast Ownership Rules

##### Local Radio Ownership Rule

119. In 1996, the Commission revised the number of radio stations that
     an entity may own in a single radio market under section 73.3555(a)
     of its rules in accordance with section 202(b) of the 1996
     Act.[^137] The Commission also reviewed the rule in its *1998
     Biennial Regulatory Review Report*. On the basis of that recently
     concluded review under the biennial regulatory review requirements
     of the 1996 Act, the Commission concluded that local radio
     ownership rules generally continue to serve the public interest.
     Noting that there currently are far fewer licensees competing
     against each other in many communities than there were prior to the
     1996 Act, the *1998 Biennial Regulatory Review Report* concluded
     that the existing limitations remain necessary to prevent further
     diminution of competition and diversity in the radio industry.

120. The Commission, however, recognized that its methodology for
     counting the number of stations a party owned in a market may have,
     under certain circumstances, created results that were inconsistent
     with congressional intent.[^138] For example, the Commission noted
     that its current methodology may result in a station being counted
     as part of a market but not counted against a licensee's cap on the
     number of stations it may own in that market. The Commission
     therefore has issued a notice of proposed rulemaking seeking
     comment on its methodology for defining radio markets, counting the
     number of stations within those markets, and counting the number of
     stations that a party owns in a radio market.[^139]

##### Local Television Multiple Ownership Rule

121. Section 73.3555(b) of the Commission's rules limits the number of
     television stations an entity may own in a single market.[^140] The
     *1999 Local Television Ownership Report and Order* relaxed this
     rule by (1) modifying the geographic scope from the Grade B contour
     overlap approach to a Nielsen Designated Market Area (DMA) test
     that permits common ownership of two television stations in
     separate DMAs without regard to contour overlap; (2) allowing
     common ownership of two television stations within the same DMA if
     their Grade B contours do not overlap (a continuation of the
     previous rule), or if eight independently-owned, full power and
     operational TV stations (commercial and non-commercial) will remain
     post-merger, and one of the stations to be merged is not among the
     top four-ranked stations in the market, on the basis of audience
     share at the time the application is filed; and (3) allowing waiver
     of the new rules under certain circumstances. As the Commission
     stated in the *1999 Local Television Ownership Report and Order*,
     the relaxed rules provide measured relaxation of the local
     television multiple ownership rule, particularly in larger
     television markets. The rule will allow weaker television stations
     in a market to combine, either with each other or with a larger
     station, thereby preserving and strengthening these stations and
     improving their ability to compete. These station combinations will
     allow licensees to take advantage of efficiencies and cost savings
     that can benefit the public. At the same time, the station rank and
     voice criteria are designed to protect both the Commission's core
     competition and diversity concerns.[^141] Because the local
     television multiple ownership rule was so recently relaxed, the
     staff believes that no further changes are warranted at this time.
     Instead, staff will monitor the effects of deregulatory actions on
     the marketplace to determine whether further changes are warranted.

##### Radio-Television Cross-Ownership Rule

122. Section 73.3555(c) of the Commission's rules limits the number of
     radio and television stations that an entity may own in a single
     market.[^142] The *1999 Local Television Ownership Report and
     Order* relaxed the Commission's radio-television cross-ownership
     rule to allow common ownership of a television station (or two
     television stations if permitted under our local television
     ownership rules) and up to six radio stations (any combination of
     AM or FM stations, to the extent permitted under our local radio
     ownership rules) in any market where at least 20 independent voices
     would remain post-merger; a television station and up to four radio
     stations (any combination of AM or FM stations, to the extent
     permitted under our local radio ownership rules) in any market
     where at least 10 independent voices would remain post-merger; and
     a television station and one radio station (AM or FM)
     notwithstanding the number of independent voices in the market. The
     *1999 Local Television Ownership Report and Order* also eliminated
     the previous five-factor case-by-case waiver standard[^143] and
     established a simplified waiver standard.[^144] The Commission
     stated in the *1999 Local Television Ownership Report and Order*
     that it relaxed the radio-television cross-ownership rule to
     balance its traditional diversity and competition concerns with its
     desire to permit broadcasters and the public to realize the
     benefits of radio-television common ownership. The relaxed rule
     recognizes the growth in the number and types of media outlets, the
     clustering of cable systems in major population centers, the
     efficiencies inherent in joint ownership and operation of both
     television and radio stations in the same market, as well as public
     service benefits that can be obtained from joint operation. The new
     rule also ensures the application of a clear, reasonable standard.
     As a result, the rule will ease administrative burdens and will
     provide predictability to broadcasters in structuring their
     business transactions.[^145] Because the radio-television
     cross-ownership rule was so recently relaxed, the staff believes
     that no further changes are warranted at this time. Staff will
     monitor the market effects of deregulatory actions to determine
     whether further changes are warranted.

##### Daily Newspaper/Broadcast Cross-Ownership Rule

123. Section 73.3555(d) of the Commission's rules generally prohibits
     the common ownership of a broadcast station and a daily newspaper
     in the same community.[^146] The Commission reviewed this rule in
     its *1998 Biennial Regulatory Review Report*. In that review, the
     Commission recognized that even though media markets have undergone
     changes since the cross-ownership rule was adopted, many of the new
     media outlets do not yet appear to be substitutes for newspapers or
     broadcast stations on the local level, for diversity purposes. The
     *1998 Biennial Regulatory Review Report* therefore concluded that
     the rule should, as a general matter, be retained because it
     furthers the important public policy goal of viewpoint diversity
     and continues to serve the public interest.

124. While electing to retain the rule, the Commission recognized that
     situations may arise where the rule may not be necessary in the
     public interest to ensure diversity and competition. For example,
     given the size of the market and the size and type of the newspaper
     and broadcast station involved, there may be sufficient diversity
     and competition even if a newspaper/broadcast combination were
     allowed. The Commission indicated in the *1998 Biennial Regulatory
     Review Report* that it would examine these types of situations in
     greater detail. The Commission indicated that it would examine
     whether the rule needs to be tailored to address contemporary
     market conditions and would issue a notice of proposed rule making
     seeking comment on these and other potential modifications of the
     rule.[^147]

125. On October 1, 1996, the Commission released a *Notice of Inquiry*
     (NOI) seeking comment on the possible revision of its standards for
     waiver of the daily newspaper/broadcast cross-ownership rule with
     respect to newspaper/radio combinations.[^148] The *Newspaper/Radio
     Cross-Ownership Waiver Policy NOI* sought comment on whether the
     Commission should adopt objective criteria for evaluating these
     waiver requests and, if so, what those criteria should be. No
     action has been taken in this proceeding.

##### National Television Multiple Ownership Rule

126. Section 73.3555(e) of the Commission's rules prohibits an entity
     from owning television stations that would result in an aggregate
     national audience reach exceeding 35 percent.[^149] The current cap
     was established in 1996, when Congress directed the Commission to
     raise the national cap from 25 percent to 35 percent.[^150] The
     *1999 National Television Ownership Report and Order* generally
     clarifies that no market will be counted more than once when
     calculating the 35 percent cap, and uses DMAs, rather than
     Arbitron's Areas of Dominant Influence, to define a station's
     market for the purpose of calculating national audience
     reach.[^151] More recently, the Commission, in its *1998 Biennial
     Regulatory Review Report,* addressed the issue of whether to modify
     the 35 percent cap.[^152] The Commission determined that its recent
     changes to the local television ownership rule should be observed
     and assessed before making any further changes to the national
     limit. The Commission also found that many group owners have
     acquired large numbers of stations nationwide since the cap was
     increased to 35 percent in 1996, and that this trend needed further
     observation. The *1998 Biennial Regulatory Review Report* therefore
     did not alter the 35 percent cap.[^153]

127. Section 73.3555(e)(2) provides for a 50 percent "UHF discount" in
     calculating the national audience reach.[^154] Because the UHF
     discount is intended to recognize the deficiencies in over-the-air
     UHF reception in comparison to VHF reception, UHF stations are not
     "credited" with reaching their entire market. The Commission
     addressed the issue of whether to retain the 50 percent UHF
     discount in its *1998 Biennial Regulatory Review Report* and
     concluded that the signal disparity between UHF and VHF has not yet
     been eliminated. The *1998 Biennial Regulatory Review Report*
     therefore retains the 50 percent UHF discount. Because the signal
     disparity should be diminished by digital television, however, the
     *Report* stated that when the transition to digital television is
     near completion, the Commission will issue a notice of proposed
     rulemaking proposing a phased-in elimination of the discount.

##### Dual Network Rule

128. As mandated by the 1996 Act, section 73.658(g) of the Commission's
     rules permits a broadcast station to affiliate with a network
     organization that maintains more than one broadcast network, unless
     the dual or multiple networks are created by a merger between ABC,
     CBS, Fox, or NBC, or a merger between one of these four established
     networks and UPN or WB.[^155] The Commission reviewed this rule in
     its *1998 Biennial Regulatory Review Report*. The Commission
     recognized that the rule, as it applies to UPN and WB, may no
     longer be necessary in the public interest. The Commission stated
     that the opportunity for broadcast networks to create and maintain
     multiple broadcast networks may place networks on more equal
     footing with cable, satellite, and other multi-channel video
     programming distributors. The Commission further noted that because
     the emerging networks (UPN and WB) are nascent subsidiaries of
     large program producers, their merger with a major network (ABC,
     CBS, Fox or NBC) may permit realization of substantial economic
     efficiencies without undue harm to diversity and competition. The
     Commission has issued a notice of proposed rulemaking to consider
     eliminating the restriction on the ownership of UPN or WB by one of
     the four established networks and seeking comment on what, if any,
     safeguards should be imposed.[^156] The Commission, however,
     declined to eliminate the prohibition against any mergers of the
     four major networks because of significant concerns about
     competition and diversity.

##### Experimental Broadcast Station Multiple Ownership Rule

129. Section 74.134 of the Commission's rules prohibits any person from
     controlling two or more experimental broadcast stations unless it
     can show that the research program requires the licensing of two or
     more separate stations.[^157] The Commission reviewed this rule in
     its *1998 Biennial Regulatory Review Report* and concluded that
     elimination of the rule would not adversely affect diversity and
     competition. The Commission stated that other rules, which require
     experimental stations to operate for research purposes and bar them
     from imposing charges for transmitting programming and from
     offering a regular program service, provide sufficient safeguards
     against use of experimental stations for commercial purposes. The
     Commission has issued a Notice of Proposed Rulemaking proposing to
     eliminate the rule.[^158]

##### Cable/Television Cross-Ownership Rule

130. Section 76.501(a) of the Commission's rules prohibits a cable
     system from carrying the signal of a television station if the
     system owns or controls a TV station whose predicted Grade B
     contour overlaps the service area of the cable system.[^159] The
     Commission reviewed this rule in its *1998 Biennial Regulatory
     Review Report* and concluded that the cable/television
     cross-ownership rule promotes competition in the delivered video
     programming market. The Commission noted that, despite an array of
     participants in the delivered video programming market, 67 percent
     of television households subscribe to cable. The Commission also
     noted that this rule prevents other forms of discrimination that
     could degrade competition in the delivered video programming
     market. The *1998 Biennial Regulatory Review Report* therefore
     retains the rule. The staff does not find any reason to alter that
     decision.[^160]

#### Other Rules

##### Broadcast Attribution Report and Order

131. The *1999 Attribution Report and Order* amended Note 2 to section
     73.3555 of the Commission's rules, the broadcast attribution rules,
     which determines what interests should be counted in applying the
     ownership rules.[^161] The *1999 Attribution Report and Order*
     amended the attribution rules to improve their precision, avoid
     disruption in the flow of capital to broadcasting, afford clarity
     and certainty to regulatees and markets, and facilitate application
     processing. A number of measures were adopted in the *1999
     Attribution Report and Order*. In particular, the *Order*
     eliminated the cross-interest policy, which had required a
     time-consuming case-by-case review, and adopted instead a new
     equity/debt plus rule that addressed some of the same concerns. In
     addition, the Commission raised the passive investor voting stock
     benchmark from 10 to 20 percent. The *1999 Attribution Report and
     Order* also conformed the cable/Multipoint Distribution Service
     attribution rules to the newly adopted broadcast attribution
     criteria and amended the attribution rules regarding
     cable/television cross-ownership and the ITFS cross-leasing rules.

##### Main Studio and Public File Report and Order

132. The *Main Studio and Public File Rules Report and Order* provided
     broadcasters greater flexibility in choosing where to locate their
     main studios, required commercial and noncommercial educational
     stations to locate the public files at their main studio, and
     allowed licensees to maintain all or part of the files in a
     computer database, rather than in paper files.[^162] The *Main
     Studio and Public File Rules Report and Order* further clarified
     what must be contained in the public inspection files. The
     Commission's goals in amending these rules was to strike an
     appropriate balance between ensuring that the public has reasonable
     access to each station's main studio and public file, minimizing
     regulatory burdens on licensees, and establishing rules that are
     easy to administer and understand. In its *Memorandum Opinion and
     Order* on reconsideration of the *1999 Attribution Report and
     Order*, the Commission eliminated the single majority shareholder
     attribution exemption, while grandfathering existing holdings, and
     revised the filing requirements for Local Marketing Agreements
     (LMAs), among other revisions.[^163]

##### Call Sign Report and Order

133. The *Call Sign Report and Order* amended several rules to ease and
     speed call sign request processing.[^164] Specifically, the *Call
     Sign Report and Order* amended the Commission's rules to replace
     the requirement that parties file written requests for the
     registration or change of call signs with a new on-line call sign
     inquiry, reservation, and authorization system that is accessible
     through the Internet.[^165] The Commission further amended its
     low-power television station identification rules to allow
     low-power television permittees and licensees to be assigned
     four-letter call signs, *via* the Internet on-line process, in lieu
     of five-character alphanumeric call signs.[^166] These revised
     rules will streamline the Commission's call sign assignment
     procedures. Implementation of the on-line system enhances the speed
     and certainty of radio and television broadcast station call sign
     assignments, thereby providing better service to all broadcast
     station licensees and permittees.

##### Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses

134. The Commission traditionally used comparative hearings to decide
     among mutually exclusive applications to provide commercial
     broadcast service, and it has used a system of random selection to
     award certain types of broadcast licenses, such as low-power
     television and television translator licenses. As a result of the
     Balanced Budget Act of 1997, which expanded the Commission's
     competitive bidding authority under section 309(j) of the
     Communications Act, as amended,[^167] the Commission no longer has
     the option of resolving competing applications for commercial
     broadcast stations by comparative hearings, except for certain
     applications filed before July 1, 1997. In addition, the Balanced
     Budget Act removed the Commission's authority to resolve competing
     applications for commercial broadcast stations by a system of
     random selection. In response to these legislative changes, the
     *Competitive Bidding First Report and Order*[^168] adopted new
     competitive bidding rules to select among mutually exclusive
     applications for new commercial full-power radio station licenses,
     analog television station licenses, and a variety of secondary
     commercial broadcast service licenses (low-power television, FM
     translator, and television translator services).[^169] In contrast
     to the comparative hearing process, the competitive bidding rules
     provide a more streamlined method for awarding authorizations, and,
     as a result, expedite service to the public.

##### 1998 Nontechnical Streamlining Report and Order

135. The Commission recently concluded a review of its broadcast rules
     and application procedures. The *Nontechnical Streamlining Report
     and Order* made fundamental changes in the Commission's broadcast
     application and licensing procedures to reduce unwarranted
     applicant and licensee burdens, while preserving the public's
     ability to participate fully in the broadcast licensing
     process.[^170] The Commission extended the construction period for
     all broadcast stations to three years (from 18 months for radio
     stations and 24 months for television stations), but tightened
     standards for granting extensions. With respect to the procedures
     for transfer and assignment applications, the Commission eliminated
     the prohibition on for-profit sales of unbuilt stations.[^171] In
     addition, applicants now certify that their sales and
     organizational documents comply with Commission policy and
     rules.[^172] Similarly, staff no longer routinely reviews contour
     overlap maps; applicants now certify compliance with multiple
     ownership rules.[^173] In addition, broadcast licensees now file
     ownership reports every two years, rather than yearly. The
     *Nontechnical Streamlining Report* *and Order* also applied the
     two-year ownership report filing requirement to noncommercial
     educational broadcasters and eliminated the requirement that a
     noncommercial educational licensee file an ownership report within
     30 days after any change in previously reported information.[^174]
     Both commercial and noncommercial educational licensees, however,
     must file a new ownership report within 30 days of consummating
     authorized license assignments or transfers of control of licensee
     entities.

136. In addition to streamlining the application procedures, the
     Commission adopted new certification-based application procedures
     and mandatory electronic filing rules for fifteen key Mass Media
     Bureau broadcast application and reporting forms. These changes are
     designed to make filings easier, faster, and more resistant to
     error. For example, electronic filing automatically notifies
     applicants of any critical errors in their applications, and allows
     the public to view the applications on the Commission's web site.
     When fully implemented, these reforms will significantly reduce
     burdens on applicants and Commission staff, facilitate application
     processing, and result in more accurate databases and easier public
     access to information. Electronic submission furthers the
     Commission's long-standing commitment to using new information
     technologies for enhancing service to licensees and to the public.
     Electronic filing of certain of these forms became mandatory on
     November 1, 2000.

##### 1999 Technical Streamlining Report and Order

137. On June 15, 1998, the Commission released a notice of proposed
     rulemaking seeking comment on streamlining AM and FM, noncommercial
     educational (NCE) FM, and FM translator technical rules.[^175] The
     Commission addressed many of the proposals from the *Technical
     Streamlining Notice* in the *1999 Technical Streamlining First
     Report and Order.*[^176] The *1999 Technical Streamlining First
     Report and Order* in this proceeding extended first-come,
     first-served processing to applications for minor changes to AM,
     NCE FM, and FM translator facilities.[^177] The *1999 Technical
     Streamlining First Report and Order* also expanded the definition
     of "minor change" in these services to conform more closely to the
     commercial FM definition. The expanded "minor" change application
     definition permits expeditious processing of most facility
     modifications under our efficient and proven first-come,
     first-served rules. Finally, the *1999 Technical Streamlining First
     Report and Order* amended the Commission's contingent application
     rule, which had prohibited the filing of coordinated facility
     modifications. The revised rule permits the simultaneous filing of
     up to four "related" minor change FM station construction permit
     applications.[^178]

138. In October 2000 the Commission adopted the *Second Report and
     Order* in the radio technical streamlining proceeding.[^179] The
     Order amends commercial FM distance separation restrictions to
     provide all stations with minimum relief of six kilometers from
     basic spacing requirements and provides special spacing relief for
     all commercial stations in Puerto Rico and the Virgin Islands. It
     also gives additional facility siting flexibility to noncommercial
     educational FM stations by modifying the second-adjacent channel
     interference standard to more closely conform to the less
     restrictive commercial FM standard. The Order establishes, on a
     going forward basis, an NCE FM principal community coverage
     standard. Finally, the Order creates a new station class, Class
     C-zero, for stations operating at 100 kilowatts effective radiated
     power with antenna heights of between 300 and 450 meters above
     average terrain. The Commission also adopted a procedure for
     downgrading current Class C stations to the new class where there
     is a competing demand for the radio spectrum and the "blocking"
     Class C station chooses not to modify its facilities to the new
     Class C minimum antenna height.

### New Initiatives

139. The Commission has significantly reduced the burdens of its mass
     media rules and policies over the past few years. Bureau staff is
     in the process of reviewing petitions for reconsideration of the
     rules the Commission adopted in the *1999 Local and National
     Television Reports and Orders* as well as the *1999 Attribution
     Report and Order*. Moreover, the Bureau is initiating several
     rulemaking proceedings, as described above, that are based on the
     Commission's findings in its *1998 Biennial Regulatory Review
     Report* on the mass media ownership rules.

# SUMMARY OF REVIEWS BY OTHER BUREAUS AND OFFICES

## Cable Services Bureau

140. The Cable Services Bureau advises the Commission in matters
     pertaining to the regulation and development of cable television
     and other multichannel video programming services. The Bureau
     administers rules and policies regarding cable television service
     and systems, including, for example, ownership of cable systems;
     promotion of competition; pole attachment issues; the preemption of
     restrictions on devices designed for over-the-air television
     broadcast signals, and the accessibility of video programming to
     persons with disabilities.

141. Section 11 and section 202(h) of the 1996 Act do not specifically
     refer to cable operators and cable regulation. The Bureau does
     administer section 224 of the Communications Act and the
     Commission's rules for pole attachments (Part I, subpart J), which
     provide cable operators and telecommunications providers with
     nondiscriminatory access to a utility's poles, ducts, conduits, and
     right of ways (see section XV below).The Bureau's review of the
     rules it administers, however, is consistent with the general
     spirit and purpose of section 11, which directs the Commission to
     review and repeal or modify regulations applicable to providers of
     telecommunications services that are determined to be no longer
     necessary in the public interest.

### Recent and Ongoing Activities

#### Effective Competition Orders

142. Under the 1992 Cable Act and the Commission's implementing rules,
     only cable systems that are *not* subject to effective competition
     may be regulated under the cable rate rules.[^180] Cable systems
     that are subject to effective competition are not rate regulated. A
     cable operator that believes that it should not be subjected to the
     cable rate rules must file a petition with the Commission showing
     that it is subject to effective competition in its franchise
     area.[^181] Since 1992, the Cable Services Bureau has addressed
     over 200 effective competition petitions.

#### Satellite Home Viewer Improvement Act 

143. Recent amendments to the Satellite Home Viewer Improvement Act
     (SHVIA) give consumers more choices in how they receive broadcast
     stations at home.[^182] Most significantly, the amendments give
     satellite carriers the right to retransmit local stations back into
     local markets. The legislation directs the Commission to conduct
     numerous rulemakings and inquiries within one year, including
     retransmission consent and must carry requirements for satellite
     carriers; network non-duplication; sports blackout and syndicated
     exclusivity; improvement of predictive models; enforcement
     procedures; designation of signal testers and an inquiry into
     signal standards.[^183] The Commission has already issued five
     Orders, four Notices of Proposed Rulemaking and a Notice of Inquiry
     addressing SHVIA requirements. The Cable Services Bureau continues
     work on additional SHVIA requirements.

#### Horizontal Ownership

144. Section 613 (f)(1)(A) of the Communications Act requires the
     Commission to "prescribe rules and regulations establishing
     reasonable limits on the number of cable subscribers a person is
     authorized to reach through cable systems owned by such a person,
     or in which such a person has an attributable interest."[^184] The
     rules adopted by the Commission in response to 613(f)(1)(A) are
     known as the horizontal ownership rules.[^185]

145. The *Third Report and Order* adopted by the Commission in October
     1999, *inter* *alia*, permits cable operators to have no more than
     a 30 percent share of nationwide multichannel video programming
     distributor (MVPD) subscribers. The United States Court of Appeals
     for the District of Columbia Circuit recently upheld the
     constitutionality of section 613(f)(1)(A).[^186] A petition for
     reconsideration of the *Third Report and Order* was filed on
     January 3, 2000. A decision on the petition is pending. In
     addition, several cable operators filed petitions for review of the
     *Third Report and Order* with the United States Court of Appeals
     for the District of Columbia Circuit. These petitions are pending.

#### Mandatory Carriage of Digital Television Signals 

146. Local television stations receive access to a cable operator's
     cable system either through request, as with must carry, or through
     negotiation, as with retransmission consent. Sections 614 and 615
     of the Communications Act contain the must carry requirements for
     commercial and noncommercial television stations, respectively.
     Commercial television stations may invoke mandatory carriage rights
     within their local market areas. Noncommercial television stations
     are considered qualified, and may invoke such rights if they (1)
     are licensed to a community within fifty miles of the principal
     headend of the cable system; or (2) place a Grade B contour over
     the cable operator's principal headend. Low power television
     stations have rights to invoke mandatory carriage if they meet six
     qualifying statutory criteria; however, a cable operator cannot
     carry a low power station in lieu of a full power station.

147. The Communications Act of 1934, as amended by the 1992 Cable Act,
     instructs the Commission to commence a proceeding to determine
     whether changes in the mandatory carriage rules are necessary to
     accommodate advances in television broadcast signal standards, such
     as the advent of digital broadcast television signals on cable
     television systems.[^187] In 1995 and 1996, the Commission received
     comments on digital television signal carriages issues from
     broadcasters, cable operators, cable programmers, equipment
     manufacturers, public interest groups and other interested parties
     in response to questions posed in the *Fourth Further Notice of
     Proposed Rulemaking* in MM Docket 87-268. To refresh the record and
     reflect recent changes in technology, policy and law, the
     Commission released a new Notice of Proposed Rulemaking in July
     1998 asking for new and updated information and arguments.[^188]

#### Navigation Devices 

148. Navigation devices are television set-top boxes, converter boxes,
     interactive communications equipment, and other equipment that a
     consumer uses to access video programming. The devices are most
     commonly recognized as the boxes on top of many televisions that
     are used to access cable television. Section 629 of the 1996 Act
     requires the Commission to assure that navigation devices used in
     conjunction with multi channel programming distribution are
     commercially available from sources other than cable operators,
     *e.g.,* made available to consumers through retail stores. The
     Commission's rules relating to navigation devices are located at 47
     C.F.R. §§ 76.1200-1210. In May 1999, the Commission adopted an
     *Order on Reconsideration* that exempted, as of July 1, 2000,
     equipment that performs analog-only conditional access from the
     requirement that multi-channel video programming distributors
     separate the security function from non-security functions.[^189]
     The Commission did not think it worthwhile for the industry to
     construct a separate analog security module that will soon be
     obsolete because of the industry's transition from analog to
     digital programming. The rules adopted were upheld on appeal by the
     United States Court of Appeals for the District of Columbia
     Circuit.[^190]

#### Inside Wiring 

149. In October 1997, the Commission adopted a Report and Order and
     Second Further Notice of Proposed Rulemaking that amended its cable
     inside wiring rules to enhance competition in the video
     distribution marketplace.[^191]

150. The Report and Order was intended to provide opportunities for new
     entrants seeking to compete in distributing video programming,
     particularly multi-channel video programming distributors seeking
     to provide service in multi-dwelling unit buildings (MDUs).
     Specifically, the Commission's rules establish procedures for the
     disposition of cable "home run" wiring where the incumbent MVPD no
     longer has a legally enforceable right to remain in the
     building.[^192] The Second Further Notice seeks comment on the
     benefits or disadvantages of exclusive contracts in promoting a
     competitive environment, and whether there are circumstances where
     the Commission should adopt restrictions on exclusive contracts in
     order to further promote competition in the MDU marketplace.[^193]

### New Initiatives

151. The Cable Services Bureau's review of the existing rules and
     procedures suggests a number of areas that should benefit from
     further review. First, the Bureau has suggested and the Commission
     has adopted a proposal to revise the rules governing the filing of
     applications and forms to facilitate electronic filing. The Cable
     Operations and Licensing System (COALS), a new electronic filing
     system, should significantly enhance availability of cable system
     information to the cable industry and the public, and reduce the
     cost of filing applications and obtaining information.[^194]

152. The Cable Services Bureau also recommends that the Commission
     conduct a general review of the rules to eliminate specific
     sections that are no longer relevant or correct in light of
     judicial decisions or the elimination of certain statutory
     requirements. Included in this category of changes would be: (1)
     the elimination of those portions of the rate rules pertaining to
     cable programming services tier (non-basic) rates which, pursuant
     to section 623(c)(4), sunset on April 1, 1999; (2) elimination of
     the rules based on section 505 of the 1996 Act, including section
     76.227, relating to incompletely scrambled sexually-oriented
     programming that were found to be unconstitutional by the recent
     Supreme Court decision in *United States v. Playboy Entertainment
     Group, Inc*., No. 96-1682 (decided May 22, 2000);[^195] and (3)
     deletion of section 76.209, applying the fairness doctrine to
     cablecast programming.

153. As part of the Biennial Regulatory Review Process, the Cable
     Services Bureau met with several attorneys who work with cable
     issues and other industry representatives. In these meetings, the
     Bureau staff sought to obtain an outside perspective as to how the
     cable rules could be modified to serve the public better as
     competition in the industry develops. As a result of these
     discussions, the bureau will be considering other changes to the
     rules, including changes in the remaining rate rules on the basic
     service tier to ensure that the process continues to function
     properly and efficiently after elimination of cable programming
     service tier regulation.

## Consumer Information Bureau 

154. The Consumer Information Bureau (CIB), which was created in
     November 1999 along with the new Enforcement Bureau, was
     established to provide easy access to information about
     communications services, as well as to serve as a consumer and
     disability rights voice at the Commission. CIB's creation
     consolidated consumer information and complaint processing
     responsibilities from multiple bureaus, thus eliminating
     duplication of services and providing consumers with a single point
     of contact with the FCC.

155. A key priority of CIB is to help ensure that information is readily
     available, because competitive markets work best when consumers
     have the information required to make informed choices. CIB
     develops, recommends, coordinates and administers the Commission's
     consumer information program to enhance the public's understanding
     of the Commission's policies, goals, objectives, and regulatory
     requirements. This serves to facilitate public participation in the
     Commission's proceedings.

156. CIB's Reference Information Center (RIC) is the official Commission
     custodian for designated records, and handles the intake
     processing, organization and maintenance, reference services,
     retirement, and retrieval of these records. It provides a
     convenient one-stop shop for its clients, including industry,
     attorneys, academic researchers and consumers, to research and
     obtain relevant and available information. RIC is also responsible
     for managing and maintaining the Electronic Comment Filing System.
     This system, which allows comments to be filed with the Commission
     remotely, facilitates public participation in Commission
     proceedings.

157. CIB has two consumer centers, one in Gettysburg, Pennsylvania, the
     other located at the FCC's Portals headquarters. These centers,
     which comprise the Consumer Information Network Division (CIND),
     respond to over 100,000 consumer inquiries each year, and process
     and serve informal complaints. CIB also enforces the Commission's
     new telephone slamming rules.[^196]

158. CIB's Strategic Information Office (SIO) is charged with collecting
     and analyzing information received in the bureau from incoming
     consumer complaints and inquiries, consumer fora, and other
     industry sources. This allows SIO to serve as an early warning
     system to the Commission about consumer trends.

159. Finally, CIB also contains the Disability Rights Office (DRO). DRO
     conducts rulemakings on disability related issues and advises other
     bureaus and offices on rulemakings and other proceedings pertaining
     to disability access. It also helps consumers resolve disability
     complaints, and works with industry and other entities to
     facilitate the provision of accessible services and equipment.

### Recent and Ongoing Activities

160. CIB's Consumer Education Office (CEO) furthers the Bureau's mission
     to educate the public about important Commission regulatory
     programs, through consumer and industry fora and workshops. CEO has
     held three fora to facilitate discussions between industry groups,
     state agencies, and consumer groups. These were on (1) billing
     practices; (2) customer service; and (3) telecommunications issues
     affecting Hispanic people. CEO has also published a guidebook on
     how consumers can participate in Commission proceedings, and
     consumer education pamphlets on selecting the right telephone
     service plan, wireless services, and how to understand
     long-distance and dial-around advertising.[^197]

161. In conjunction with other Commission bureaus and offices, CEO
     continues to develop consumer alerts, education campaigns and
     public service announcements to give consumers information about
     their rights and information so that they can protect themselves
     against unscrupulous practices

162. CIB staff is working on the Commission's tribal initiatives to
     address the problem of limited availability of basic and advanced
     services in many tribal regions, and to ensure that basic and
     advanced telecommunications services are made available in those
     geographical areas. CIB will continue to work on other outreach
     initiatives to underserved communities.

163. These non-regulatory initiatives will educate consumers so that
     they can make better, more informed choices about
     telecommunications services, and more fully enjoy the fruits of
     competitive markets. CIB is also initiating a federal advisory
     committee on consumer and disability issues. This committee will be
     designed to solicit ongoing input on a variety of subject matters
     including lifeline services, slamming, digital television,
     captioning and relay services.

### New Initiatives

164. In the September Staff Report, the staff recommended that the
     Commission consider reviewing its informal complaint rules, 47
     C.F.R. §§ 1.716-718. The rules do not specify the documentation
     consumers must file with the Commission to complete their
     complaints. This leads to repetitive filings from consumers,
     particularly if the primary filing lacks sufficient information to
     resolve the informal complaint. Commenters agree that the rules
     should specify the type of documentation that a consumer must file
     with the complaint.[^198] The rules also do not prescribe a
     specific time frame for carriers to respond to an informal
     complaint. If consumers have not received a response to an informal
     complaint in a specific period of time, consumers may file
     duplicative formal complaints. Such complaints are costly to
     consumers and carriers, and may require unnecessary expenditure of
     Commission resources. WorldCom states that the Commission should
     retain its flexibility in determining a timeframe within which a
     carrier must respond to a complaint rather than set a specific time
     period.[^199] Staff believes that a review of the informal
     complaint rules will best address these issues. Finally, these
     rules traditionally have applied to informal wireline complaints,
     while other complaints have been handled in a less structured
     manner. This has led to a lack of predictability for consumers in
     filing complaints, and industry in receiving complaints. Staff also
     recommends reviewing these rules, to determine whether their scope
     should be expanded to cover all informal complaints.

165. DRO advises other bureaus and offices on compliance with section
     255 of the 1996 Act, which mandates access to telecommunications
     services for Americans with disabilities, as well as other
     substantive proceedings addressing disability issues. For example,
     DRO worked closely with the Common Carrier Bureau on drafting new
     rules requiring access to telecommunications relay services (TRS)
     and requiring that improvements be made to the provision of these
     services themselves. These new rules require that speech-to-speech
     relay service be provided, and also encourage competition in the
     video relay market by making that service eligible for
     reimbursement from the TRS fund.[^200] DRO also worked closely with
     the Mass Media Bureau on drafting rules requiring video description
     and with the Cable Services Bureau on rules requiring visual access
     to televised emergency programming for deaf and hard of hearing
     people. DRO intends to propose additional rulemakings in the future
     on appropriate issues in order to fulfill its mandate. Staff also
     intends to continue working with the Wireless Telecommunications
     Bureau on the Commission's E-911 rules to ensure that these public
     safety points are accessible to Americans with disabilities.

166. DRO also conducts public outreach and education on disability
     issues. It works closely with the public to ensure that individuals
     with disabilities are aware of their rights, and with industry to
     ensure that service providers are complying with the law and
     providing appropriate telecommunications services.

167. DRO's education efforts included a TRS forum in March 2000,[^201]
     which presented an opportunity for consumers and industry
     representatives to exchange ideas with the Commission and state
     relay administrators about the provision of TRS, common concerns of
     TRS administrators, consumers, and providers, and variations among
     states' approaches to TRS. The forum also discussed the extent to
     which new technologies, services, and features should be made
     available to TRS users.

168. DRO also provides materials in accessible alternative formats, so
     individuals with disabilities have access to Commission
     proceedings. DRO has created an e-mail mailing list to keep
     consumers apprised of relevant happenings concerning disability
     access at the Commission.

## Enforcement Bureau

169. The Commission established the Enforcement Bureau in November 1999.
     The new Enforcement Bureau has responsibility for ensuring that
     regulated entities comply with the Communications Act and the
     Commission's implementing rules. The consolidation of most
     enforcement functions into one bureau is consistent with the
     regulatory reform goals of section 11, because it makes it easier
     for competitors and consumers to get prompt and clear resolution of
     disputes. Consolidating enforcement activity into a single bureau
     promotes consistent and predictable enforcement policies. It also
     maximizes the efficiency of the Commission's enforcement program by
     allowing the agency to establish enforcement priorities and make
     the best use of limited Commission resources.

170. Clear, consistent and swift enforcement action is increasingly
     important as competition develops and deregulation occurs. The
     statutory and rule provisions that remain will be those that are
     necessary even in a competitive environment, such as those that
     provide a structure for competition to flourish, help users of
     communications services benefit from competitive communications
     services, and ensure that spectrum is used in a manner that
     prevents harmful interference and promotes public safety. In
     particular, the Enforcement Bureau is a critical part of the
     agency's plan to preserve and promote the competitive gains that
     have been made under the 1996 Act and the Commission's implementing
     regulations. To ensure fair competition, all competitors must play
     by the rules and follow the law. Companies may not gain a
     competitive advantage through unfair market practices. With the
     enhanced focus on enforcement, companies know that, if they violate
     communications law or the Commission's rules, there will be
     significant consequences. In this way, the competitive marketplace
     envisioned by Congress will work, and the benefits of that
     competition will flow to consumers.

### Recent and Ongoing Activities

171. Although the Enforcement Bureau generally does not engage in
     rulemaking activity or have responsibility for maintaining or
     revising substantive Commission rules, the agency has taken steps
     during the past few years in the area of enforcement to further the
     deregulatory goals of the 1996 Act. For example, the Commission
     revamped and streamlined its procedural rules governing the
     resolution of formal complaints against common carriers filed
     pursuant to section 208 of the Communications Act. These changes
     were designed to resolve disputes more quickly and efficiently than
     under prior rules**.**

172. Most significantly, under the new rules Enforcement Bureau staff
     has stepped up its efforts to mediate disputes between the parties
     both before and after a formal complaint is filed at the
     Commission. These mediation efforts often result in quick and
     efficient resolution of disputes. Business solutions achieved by
     the parties through Commission-assisted mediation avoid the expense
     and delay that can accompany formal litigation before the agency.

173. The revised rules also require that a complaining party provide all
     factual support for its case in its initial pleadings. This
     minimizes the need for time-consuming and resource-intensive
     discovery. In addition, the rules provide for the staff to convene
     an initial status conference with the parties shortly after the
     defendant files its answer. This presents an opportunity to
     simplify or narrow the issues, obtain admissions of fact or
     stipulations by the parties, settle some or all of the matters in
     controversy, and develop a schedule for the remainder of the case.
     This proactive case management tool helps ensure prompt and
     efficient case resolution.

174. In addition, the agency created an Accelerated Docket procedure in
     1998 that results in quicker formal decisions from the agency for
     certain formal complaints selected by Bureau staff. Once a
     particular dispute is accepted by the staff onto the Accelerated
     Docket, the procedure is designed to lead to a written staff-level
     decision within 60 days from the filing of the complaint. Because
     this procedure may lead to a "mini-trial" with testimony by
     witnesses subject to cross-examination, it is particularly well
     suited for cases involving difficult factual disputes. The
     Accelerated Docket rules require staff-supervised pre-filing
     settlement discussions between the parties. Many disputes are
     settled without the need to file a formal complaint.

175. The efficiencies generated by the new complaint procedures,
     combined with an increased emphasis on mediation and aggressive
     case management, have resulted in a significant reduction in the
     number of pending formal common carrier complaints at the
     Commission. By reducing the backlog of pending cases, the staff can
     respond more quickly to new disputes as they are filed and resolve
     them in a timely fashion. Quick and clear resolution of disputes is
     critical to enhancing competition and enabling consumers to obtain
     the benefits of that competition.

## Office Of Communications Business Opportunities

176. Section 257(c) of the Communications Act[^202] requires the
     Commission to report triennially to Congress on the steps taken to
     eliminate market entry barriers for entrepreneurs and other small
     businesses in telecommunications. Section 257 was enacted as part
     of the 1996 Act[^203] and focuses on two areas: (1) "the provision
     and ownership of telecommunications services and information
     services" and (2) "the provision of parts or services to providers
     of telecommunications services and information services."[^204]
     Pursuant to the requirements of section 257, the Commission, in
     1996, initiated a proceeding[^205] to identify market entry
     barriers. In 1997 the Commission issued a report ("1997
     Report")[^206] referencing the policy objectives set forth in
     section 257 -- "favoring \[1\] diversity of media voices, \[2\]
     vigorous economic competition, \[3\] technological advancement, and
     \[4\] promotion of the public interest, convenience, and
     necessity"[^207] -- and describing a variety of measures taken by
     the Commission to fulfill those policies.

### Recent and Ongoing Activities

177. The Commission has just completed its second report under section
     257 ("2000 Report"). The 2000 Report, which was delivered to
     Congress on August 9, 2000, reflects the Commission's continuing
     compliance with the four policy objectives set forth *supra*. The
     report sets forth the Commission's Five-Year Strategic Plan and the
     role of that plan in eliminating market entry barriers. Following
     the discussion of the strategic plan, the bulk of the 2000 Report
     describes regulatory and other initiatives undertaken by the
     Commission's bureaus and offices since 1997 to remove market entry
     barriers and other impediments confronting small businesses. The
     report also analyzes efforts to overcome unique obstacles facing
     minority-owned and women-owned small businesses, discusses this
     Biennial Regulatory Review, addresses responsibilities under the
     Regulatory Flexibility Act (RFA) and the Small Business Act,[^208]
     and introduces the agency's new electronic filing systems. Finally,
     the report sets forth some proposed legislative initiatives. The
     2000 Report is available to the public on the Commission's website
     at http://www.fcc.gov/Bureaus/OCBO/fcc00279.html. As a follow up,
     the Commission held a public forum on December 12, 2000, during
     which five studies on market entry barriers facing small, woman−and
     minority−owned businesses were released.[^209]

178. **RFA** **Analyses** **and** **Certifications** Since enactment of
     the Small Business Regulatory Enforcement Fairness Act of 1996
     ("SBREFA") amendments[^210] to the RFA, the Commission has strived
     to make its RFA analyses more extensive, precise, and helpful, and
     to include a focus on plain language. For instance, because the
     agency typically writes rulemakings tailored to the various and
     numerous communications "services" it regulates (*e.g.*, FM radio,
     paging, satellite services), the agency has undertaken numerous RFA
     analyses describing each service and the extent of the small entity
     participation within each. This has required frequent revision of
     the service sector analyses, as new services are created and
     additional licenses for traditional services are issued. In this
     way, the agency attempts to ensure full and accurate analyses and
     certifications in the agency's 150 or more rulemaking items per
     year.

179. **Special initiatives.** Special initiatives have included internal
     training sessions for Commission staff on the RFA process and a
     special RFA presentation conducted by the Small Business
     Administration's (SBA's) Office of Advocacy to train Commission
     staff. The presentation was held on October 12, 1999, and featured
     the SBA's Chief Counsel for Advocacy, Jere Glover. On October 30,
     2000, Mr. Glover and selected staff returned to brief high−level
     Commission decision−makers. Going forward, the FCC is committed to
     working with SBA and the small business community to develop
     regulatory policies and procedures that are no more burdensome than
     necessary to achieve the intended goals. Another initiative was the
     resolution of the Commission's treatment of small incumbent local
     exchange carriers (LECs) under the RFA. In the *1997 Report*, the
     Commission stated that it did not believe that small incumbent LECs
     qualified as small businesses under the RFA because such businesses
     appeared to be "dominant in their field or operation due to their
     current control of bottleneck facilities."[^211] Following a letter
     on the subject from the Office of Advocacy and a meeting between
     agency staffs, the Commission in 1999 decided to revise the
     language of its decisions to make clear that small incumbent LECs
     are among the small businesses included in its analyses under the
     RFA.[^212]

180. **Annual "Ten-Year Review of Rules," 5 U.S.C. § 610**. During 1999,
     the Commission completed and published an updated, comprehensive
     listing of Commission rule sections subject to review under the
     RFA's annual "ten-year review of rules" provision, 5 U.S.C. § 610.
     Section 610 requires that agencies publish in the *Federal
     Register* a plan for the periodic review of rules that have a
     significant economic impact on a substantial number of small
     entities. The recent Commission plan provides a list of hundreds of
     rules in an effort to assist the public in identifying rules that
     might be amended or rescinded in the public interest. In addition,
     the Commission has explored the creation of a computer software
     program that, utilizing historical Code of Federal Regulations
     data, would track rules over a ten-year period and significantly
     reduce the administrative work currently required to undertake a
     section 610 review. If the Commission were to accomplish this goal,
     it could share the computer program with other federal agencies
     subject to section 610 obligations, thereby assisting those
     agencies as well.

181. **Special Small Business Size Standards, 15 U.S.C. § 632**. To
     ensure that the agency's initiatives accurately target small entity
     participation in the telecommunications industry, the Commission
     works closely with the SBA's Office of Size Standards to create new
     telecommunications small business size standards. In particular, in
     recent years, the agency has coordinated extensively with both the
     SBA Office of Size Standards and the Office of Advocacy to create
     informal guidelines to keep the SBA apprised of size standard
     initiatives. The Commission's policy is to send to the SBA
     descriptions and analyses of proposed size standards prior to
     adoption of the Notice of Proposed Rulemaking in such proceedings,
     and thereafter to send SBA additional comments and documentation at
     each step of the way. At the end of the process, the Commission
     sends a formal request for approval to the SBA Administrator, prior
     to final Commission consideration of the new size standard. This
     close coordination has particularly helped the Commission to
     initiate radio spectrum auctions, where the goals are to make
     efficient use of the spectrum, give all Americans access to
     telecommunications services, and promote economic growth.

182. **Semi-annual "Unified Agenda," 5 U.S.C. § 602**. The Commission
     participates in the semi-annual publication of the "Unified Agenda
     of Federal Regulatory and Deregulatory Actions," which provides
     information, in a uniform format, about regulations that the
     government is considering or reviewing.[^213] The Unified Agenda
     has appeared in the Federal Register twice each year since 1983. It
     helps agencies comply with certain obligations under the RFA, other
     statutes, and Executive Orders. As a part of the October 2000
     Unified Agenda compilation, the Commission listed and described 137
     ongoing rulemaking proceedings. These descriptions assist the
     public in becoming involved in the regulatory process, and assist
     the regulated community in complying with existing regulation.

## Office of Engineering and Technology

183. The Office of Engineering and Technology (OET), in addition to
     providing technical and engineering support to all of the bureaus
     and offices, has primary responsibility for the management and
     allocation of non-government spectrum, the authorization of
     telecommunications equipment and RF regulated devices, and the
     administration of the Experimental Radio Service. OET has specific
     responsibility for Parts 2, 5, 15 and 18 of the Commission's Rules.
     [^214] All of the rules governing these responsibilities were
     reviewed by staff. OET sought recommendations regarding rules and
     procedures that should be modified or eliminated.

### Recent and Ongoing Activities

184. OET has responsibility for authorizing radio frequency equipment
     and devices and has endeavored in the past several years to
     privatize and standardize this work. In addition to instituting
     electronic filing and streamlining the experimental radio
     service[^215] and equipment authorization rules and
     processes,[^216] the Commission modified the equipment
     authorization rules to allow designated private parties to issue
     equipment authorizations.[^217] The Commission has also worked
     diligently to implement Mutual Recognition Agreements (MRAs), which
     permit designated parties in other countries to issue equipment
     authorizations.[^218]

185. Through various spectrum management efforts, the Commission has
     endeavored to facilitate new, innovative and competitive services.
     Specifically, the Commission has facilitated the proliferation of
     unlicensed services through the allocation of spectrum for the
     Unlicensed National Information Infrastructure (UNII) and
     authorization of UNII devices. [^219] These devices provide
     short-range, high-speed wireless digital communications that
     support wireless local area networks and facilitate wireless access
     to the national information infrastructure. The Commission has
     allocated millimeter wave spectrum for unlicensed devices that
     provide short-range communications. [^220] These unlicensed devices
     can be used for such diverse services as vehicle radar systems for
     collision avoidance, computer-to-computer wireless connections, and
     improved access to libraries and information databases. The
     Commission revised its rules for spread spectrum devices to
     facilitate the development of new and innovative technology often
     used for high data rate wireless applications.[^221] The Commission
     recently proposed the possibility of permitting operation of one of
     the newest innovative wireless technologies, ultra-wideband
     technology.[^222] This new technology can be used for a variety of
     applications such as radar imaging of objects under the ground or
     behind walls, and for wireless communications such as short-range
     high-speed data transmissions suitable for broadband access to the
     Internet.

186. In addition to unlicensed spectrum, the Commission allocated
     spectrum for Dedicated Short Range communications systems operating
     in the Intelligent Transportation System radio service.[^223] These
     services and systems can provide short range wireless information
     links between vehicles and roadside systems, and can improve
     traveler safety, decrease traffic congestion, facilitate the
     reduction of air pollution and help conserve fossil fuels. The
     Commission allocated spectrum for a new wireless medical telemetry
     service and established service rules that provide interference
     protection for the potentially life critical equipment used in
     hospitals and health care facilities that transmit patient
     measurement data such as pulse and respiration rates to nearby
     receivers.[^224] The Commission allocated spectrum transferred from
     Government to non-Government use for fixed and mobile (base
     station) terrestrial wireless service and proposed spectrum pairing
     to encourage the introduction of new services, such as wireless
     local exchange and exchange access service in rural areas.[^225]
     The Commission issued a *Spectrum Policy Statement* articulating
     the principles to guide the Commission's reallocation of
     approximately 200 MHz of spectrum over the next three to five
     years. [^226] Consistent with the *Spectrum Policy Statement*, the
     Commission recently proposed to reallocate 27 megahertz transferred
     from Government to non-Government use in small band segments for
     use to enable the development of new technologies and services and
     provide additional spectrum relief for congested private land
     mobile frequencies.[^227] In addition, Commission staff released an
     interim spectrum study report on the feasibility of accommodating
     third generation mobile systems in the 2500-2690 MHz band.[^228]

187. The Commission also adopted a *Secondary Markets Policy Statement*
     setting forth principles for promoting the efficient use of radio
     spectrum by encouraging the development of secondary markets and
     identifying key areas the Commission will focus on in its efforts
     to foster the development of secondary markets.[^229] As a first
     step in this effort, the Commission has proposed rule changes to
     enable wider use of spectrum rights leasing by licenses of wireless
     radio spectrum.[^230] The Commission also proposed rule changes to
     facilitate the development and deployment of software defined
     radios.[^231] In a software defined radio, functions formerly
     performed solely in hardware are performed by software. This
     innovation, which makes a radio programmable, could facilitate
     interoperability between radio services, improve efficient use of
     spectrum, expand opportunities for broadband communication access
     for all persons, increase competition among telecommunications
     service providers, decrease equipment costs for consumers, and
     increase worldwide market opportunities for US manufacturer of all
     sizes.

188. The Commission anticipates these new spectrum allocations, rules
     and principles, will enable a broad range of new radio
     communications services, such as expanded wireless services,
     advanced mobile services, and new spectrum-efficient private land
     mobile systems. The development of a broad range of new devices and
     communications options will stimulate economic development and the
     growth of new industries and promote the ability of manufacturers,
     including small businesses and entrepreneurs to compete both
     domestically and globally.

189. As follow-ups to proceedings initiated as part of OET's 1998
     Biennial Regulatory Review efforts, the Commission proposed changes
     to its rules regarding conducted emission limits in Parts 15 and 18
     of the rules[^232] to make them more effective in controlling
     interference to communications services and to reduce the burden of
     these regulations. Review of the rules regulating radio frequency
     lighting devices resulted in the relaxation of the line-conducted
     emission limits in Part 18 of the rules for RF lighting devices
     operating in the 2.2-2.8 MHz band.[^233] The Commission is
     continuing to examine the possible relaxation of the rules for RF
     lighting devices operating in the 2450 MHz band.[^234] As part of
     the 2000 Biennial Regulatory Review process, the Commission
     recently privatized the customer premises equipment approval
     process.[^235]

### New Initiatives

190. The Commission has rules that restrict human exposure to radio
     frequency (RF) emissions in radio devices. Currently, radio devices
     such as cellular and PCS telephones manufactured and marketed in
     the United States must meet certain requirements regarding RF
     emissions. Specific Absorption Rate (SAR) is a measure of human
     exposure to radio signals. Notwithstanding intensive efforts both
     domestically and internationally by private standards-setting
     organizations, SAR measurement techniques are not currently
     standardized. Staff recommended that the Commission take steps to
     facilitate development of standardized SAR measurement techniques.
     A standard SAR measurement procedure can make the already dynamic
     market for such equipment even more dynamic by increasing
     alternatives for approval, and improving the speed and
     predictability of the approval process. Alloy LLC urged the
     Commission to rely upon industry standard setting bodies rather
     than undertake a rulemaking proceeding. Staff continues to
     recommend that the Commission facilitate the development of
     standardized SAR measurement techniques.

191. The industry standard setting committee ANSI C63 has developed an
     equipment testing procedure for unlicensed PCS systems.[^236] The
     new procedure, C.63.17, removes ambiguities in the test procedure.
     The staff recommended incorporating the new standard into the
     Commission's rules by reference in order to update current test
     procedures. No comments were received on this staff recommendation.

192. The explosive growth in the international market for mobile
     communications devices such as cellular and PCS phones and marine
     and aviation devices has resulted in the manufacture of products
     that operate in dual modes or on frequencies not authorized for
     such operation in every country where the products are marketed.
     When such products are approved for sale in the United States, our
     rules are ambiguous as to whether the product complies with
     standards applicable for operation in international markets. The
     staff recommended resolution of the ambiguity by clarifying whether
     dual mode products approved in the United States must comply with
     other applicable international standards. Alloy LLC urged the
     Commission to examine this issue in the context of a Notice of
     Proposed Rulemaking. Staff concurs that the clarification would be
     resolved in a full notice and comment rulemaking.

193. In the past decade commercial utilization of spectrum above 2 GHz
     has increased significantly. Licensed and unlicensed devices
     operating above 2 GHz have proliferated, in part because technical
     advances have made such devices affordable. When the Commission
     first authorized services and devices in this spectrum, radiated
     emission limits were established. At that time, the Commission had
     a significant accumulation of information on emissions below 2 GHz,
     but very little information on emissions above 2 GHz. Emission
     limits affect the design and performance of devices, and prevent
     interference among devices. However, unnecessarily restrictive
     limits can impede innovation and development of new markets.
     Accordingly, the staff recommended reviewing Commission rules on
     intentional and unintentional emission limits above 2 GHz to
     determine whether the limits are appropriate. No comments were
     received on this staff recommendation.

194. Current Commission rules prohibit unlicensed "periodic"
     (intermittent) transmitters at 40 MHz and above 70 MHz from
     transmitting continuous data signals.[^237] The original rationale
     for this prohibition was that efficient utilization of the spectrum
     by multiple users was facilitated by limiting the amount of data
     transmissions within the band. Use of current technology, however,
     results in the opposite conclusion. The staff believes this rule
     can be updated to permit data transmissions and enable some new
     types of unlicensed wireless systems without changing the effect
     and intent of the original rule. No comments were received on this
     staff recommendation.

195. At present, the highest electromagnetic radio-frequency spectrum
     for which commercial service rules exist is 77 GHz. As a result of
     a program of the Defense Advanced Research Projects Agency,
     semiconductor device technology at 92-95 GHz is now available.
     Propagation in this band is relatively good, compared to other
     nearby frequencies, due to limited radio absorption by oxygen
     molecules. The short wavelengths generated in this "oxygen window"
     band can be effectively utilized by very small narrow beam antennas
     for high speed transmissions and high frequency reuse. The staff
     recommended exploring possible use of this band, including seeking
     initial inquiry on whether the band is appropriate for licensed or
     unlicensed use and for shared commercial and Government use.[^238]
     No comments were received on this recommendation.

196. TIA recommended five technical rule revisions. TIA suggested
     revision of Part 2.1055(a)(2) to include Family Radio Service
     devices within the test temperature ranges of -20° C to 50° C.
     Current rules do not specifically specify the test temperature
     range for Family Radio Service devices therefore they must be
     tested under the general temperature range established in subpart
     (a)(1) of the rules. Staff concurs with TIA's recommendation.

197. TIA proposes revision of the test procedures for Part 90
     push-to-talk devices to reduce the duty cycle from 50% to 15%.
     Staff believe the current procedure should not be relaxed. A 50%
     duty cycle is possible for moderate periods of time and testing the
     devices to ensure compliance at this level is appropriate. TIA
     further recommends several specific changes to the Part 15 rules.
     Specifically, TIA notes an error in Part 15.121(b) regarding
     scanning receivers, requests modification of the labeling
     requirements in rule 15.19, and requests clarification of the
     equipment authorizations required for composite devices. Staff
     believes there is merit in some of TIA's suggestions and recommends
     initiation of a review of the Part 15 rules.

### Other Issues

198. The staff's thorough review of the Commission's allocation and
     standards rules revealed a handful of rules adopted some time ago
     that address legacy systems or demographic locations that have
     changed significantly. Some of these rules or standards were
     instituted at the behest of the National Telecommunications and
     Information Administration at the Department of Commerce, acting
     pursuant to 47 U.S.C. § 305 on behalf of the Executive Branch, to
     protect Federal Government systems. The staff recommends revisiting
     with NTIA whether certain restrictions on non-government systems
     remain necessary. No comments were received on this recommendation.

199. In 1983, the Commission reviewed all of the technical rules to
     identify rules that might unnecessarily discourage technical
     innovation. [^239] In view of the tremendous growth and innovation
     in telecommunications and radio systems and devices over the past
     decade, technical rules that are design-based as opposed to
     performance-based could be thwarting innovation and growth.
     Accordingly, the staff recommends that technical staff for OET,
     working with technical staff from the other Bureaus and Offices,
     again review the technical rules to ensure they permit flexibility
     while preventing interference and ensuring spectrum efficiency. No
     comments were received on this recommendation.

## Office of General Counsel

200. The Office of General Counsel (OGC) advises, makes recommendations,
     and defends the Commission on legal issues that arise in a wide
     range of Commission activities. OGC does not have primary
     responsibility for drafting or overseeing compliance with
     substantive Commission rules, but it does recommend and oversee
     compliance with a variety of procedural rules. For example, OGC is
     involved in setting procedures for rulemakings, hearings, and other
     proceedings. These rules are included in Parts 0 and 1 of Title 47
     of the Code of Federal Regulations.

201. OGC is committed to establishing processes that encourage
     participation by a broad a range of interested parties, in a
     convenient manner, and without unnecessary expense. At the same
     time, OGC works to ensure that the Commission's procedures conform
     to the notice and comment requirements of the Administrative
     Procedure Act (APA), and that parties have access to comments and
     other information that the Commission may consider in making its
     decisions.

### Recent and Ongoing Activities

202. In 1997, the Commission revised its rules governing *ex parte*
     presentations in Commission proceedings.[^240] Those revisions were
     intended to make the rules simpler and clearer. In 1999, the
     Commission found that, although its experience with the revised
     rules generally was positive, further minor revisions were
     warranted.[^241] The Commission modified its rules regarding which
     persons would be treated as parties for purposes of determining *ex
     parte* status. The Commission also changed the *ex parte* status of
     certain types of proceedings from restricted to
     permit-but-disclose. The Commission determined that presentations
     to Commission representatives by administrators, such as the
     Universal Service Administrative Company (*i.e.*, the entity that
     administers universal service), would be exempt. In addition, a
     person seeking Commission preemption is required to serve its
     preemption request upon any state or local government identified in
     the request. These revisions were intended to further simplify and
     clarify the Commission's *ex parte* rules, enhance the fairness of
     the Commission's processes, and facilitate the public's ability to
     communicate with the Commission.

203. In 1998, the Commission revised its rules and clarified its
     policies concerning the treatment of competitively sensitive
     information that carriers and others provide to the Commission. The
     Commission adopted a model protective order for use in its
     proceedings.[^242]

## Office of the Managing Director

204. The Office of the Managing Director (OMD) provides management and
     administrative support to the Commission's bureaus and offices. It
     administers management and administrative policy programs and
     directives supporting the deregulatory efforts of bureaus and
     offices and their goals to increase competition. The rules
     administered by OMD do not regulate telecommunications service
     providers directly. Traditionally, however, OMD has exercised
     jurisdiction over certain portions of Parts 0, 1, and 3 of Title 47
     of the Code of Federal Regulations. OMD staff conducted a review of
     these regulations to determine whether to recommend that any of
     these rules be repealed or modified.

205. Initially, staff determined whether a section of the Communications
     Act was involved. For example, Part 0 contains the Commission's
     rules implementing the Freedom of Information Act (FOIA) and the
     Privacy Act, and Part 1 contains rules implementing the Debt
     Collection Improvement Act (DCIA) and the Ethics in Government Act.
     Other government agencies have primary responsibility for
     implementing these statutes. Therefore, the staff did not recommend
     changes to these rules. The staff reviewed rules based on the
     Communications Act to determine whether enactment of the 1996 Act
     affected the operation of these rules, and whether there had been
     any significant market changes or other developments that might
     affect the current rules and warrant modification or repeal.

206. As the Commission proceeds with its reorganization, OMD will
     continue to support bureaus and offices to ensure that its
     organization leads to increased efficiency and effectiveness. OMD
     will conduct annual reviews and will perform verifications as
     required. Oversight of accounting procedures will also continue.
     OMD will regularly evaluate its rules to determine whether they
     should be modified or eliminated in light of changing competitive
     market conditions.

### Recent and Ongoing Activities

207. Part 0 covers the organization and general description of the
     Commission's organization and operations. This section concerns
     regulations pertaining to the administrative functions of the
     different bureaus and offices, delegations of authority to the
     Commissioners, bureaus and offices, the operation of the public
     reference rooms, and the agency's printed publications. Generally,
     these rules are amended whenever there is a reorganization. The
     Commission periodically reviews its organizational structure to
     ensure that it provides for the most efficient and effective
     structure for the Commission's functions. The Commission amended
     rules implementing the FOIA to reflect the Electronic Freedom of
     Information Act,[^243] but the rules may require further updating
     to reflect the restructuring of reference room operations following
     the move to the Portals and the availability of public records on
     the agency's Internet website.

208. Part 1, subpart A involves pleadings, filing periods, and motions
     for extension of time. These rules are administered by Office of
     the Secretary. The Commission recently made minor changes to some
     of these rules, and staff does not recommend further changes at
     this time.[^244] Part 1 also covers statutory charges and
     procedures for payment of fees. These sections are reviewed
     annually and in some cases biannually, pursuant to the
     Communications Act.

209. Part 3 involves the certification and monitoring of accounting
     authorities. The Associate Managing Director for Financial
     Operations recently revised these rules to reflect the Commission's
     new location. Last year the Commission modified these rules to
     phase out the Commission's Accounting Authority \[US01\] and to
     privatize this function.[^245]

210. Each fiscal year, according to Section 9(a) of the Communications
     Act, as amended, the Office of the Managing Director revises the
     FCC's Schedule of Regulatory Fees. These fees are assessed to
     recover the costs of enforcement, policy and rulemaking, and
     international and user information activities. In FY 2000, the
     amount of fees that Congress required the Commission to collect was
     \$185,754,000. To collect this amount, the Schedule of Regulatory
     Fees was proportionally adjusted for each service subject to a fee
     based on payment unit and revenue information, and the resulting
     fee table was set forth in the proceeding, Assessment and
     Collection of Regulatory Fees for Fiscal Year 2000, Report and
     Order, adopted by the Commission on June 30, 2000 and released on
     July 10, 2000. Collection of FY 2000 Regulatory Fees commenced on
     September 11, 2000 and ended September 22, 2000.

211. OMD has been active in its efforts to ensure that its programs and
     activities are in compliance with the Privacy Act and its
     implementing policy guidance. In September 2000, OMD sent the
     Commission\'s response to the Office of Management and Budget\'s
     (OMB) "Agency Biennial Computer Matching Report," detailing the
     Commission\'s new matching programs, cost‑benefit analysis
     information, and other information related to computer matching. In
     October 2000, the Commission published a notice in the Federal
     Register[^246] containing the Commission\'s 31 systems of records
     under the Privacy Act, eliminating unnecessary or outdated systems
     and ensuring that all agency systems of records fully comply with
     OMB\'s directives implementing the Privacy Act. In another matter
     related to privacy concerns, the Commission was asked to submit
     comments on a General Accounting Office (GAO) report to House
     Majority Leader, Dick Armey, and W.J. Billy Tauzin, Chairman of the
     Subcommittee on Telecommunications, Trade and Consumer Protection,
     evaluating privacy notices of selected Federal web sites.[^247] It
     should be noted that GAO's evaluation of the FCC web site found
     that the Commission had implemented several privacy features
     recommended by the FTC's Fair Information Principles.

### New Initiatives

212. In August 1999, FCC Chairman William Kennard delivered to Congress
     the FCC's Strategic Plan for the 21^st^ Century. The Strategic Plan
     has as one of its goals to "Create a Model Agency for the Digital
     Age.[^248] One of the objectives under this goal is for the agency
     to "Lead the Way in the Information Age." The Office of the
     Managing Director seeks to meet this objective through the
     development and implementation of an intelligent, integrated,
     information management system known as the "Intelligent Gateway" or
     "Gateway." The "Gateway" will help the FCC develop its website into
     a model of accessibility and information availability.

213. Once funded, designed, and implemented, the Gateway will ensure
     swift, accurate, and complete access to information by the public,
     and will promote information sharing among the Bureaus and Offices.
     As a result, the agency will reduce duplicative staff efforts and
     will make available, in ways useful for both internal and external
     consumption, information about the number and priority of its
     pending tasks.

214. At least one industry group has expressed an interest in the public
     tracking of items on circulation before the Commission. As the
     Gateway develops, we recommend that the Commission consider whether
     to use it to permit the public to track items as they move through
     the Commission, prior to adoption.

215. The Office of Management and Budget has directed federal agencies
     under the Government Paperwork Elimination Act (GPEA) to implement
     procedures that allow individuals or entities the option to submit
     information or transact with Federal Agencies electronically, when
     practicable, and to maintain records electronically, when
     practicable. GPEA also includes an electronic signature mechanism
     to provide verification and security for documents. The Performance
     Evaluation and Records Management Office is in the process of
     implementing these procedures.

216. The Commission implemented an on line registration system, the
     Commission Registration System (CORES), for all entities filing
     applications or making payments to the Commission. Over time, the
     CORES registration will be used by all Commission systems that
     handle financial transactions, authorizations of service and
     enforcement activities. CORES will provide the means for the
     Commission to administer more effectively its financial management
     responsibility. OMD is currently working on a Notice of Proposed
     Rulemaking to make the CORES' Federal Registration Number (FRN) a
     mandatory submission requirement. The FRN will enable the
     Commission to better manage the financial systems of the agency and
     improve compliance with various statutes that govern the financial
     operations of the Federal Government.

# Conclusion

217. This Staff Report summarizes staff's findings and recommendations
     resulting from an extensive review of the Federal Communications
     Commission's rules. Staff reviewed all of the Commission's rules
     rather than limit its review to rules covered explicitly by section
     11 of the Communications Act and section 202(h) of the 1996 Act.
     Staff determined that a broad review of the Commission's rules
     could provide significant benefits, although it gave priority to
     the rules that are implicated in sections 11 and 202(h).

218. This Staff Report is an important intermediate step in the
     Commission's 2000 Biennial Regulatory Review as section 11 and
     section 202(h) mandate Commission determinations. A Commission
     Report is being released concurrently with this Staff Report. The
     Commission Report would determine whether any regulations are no
     longer necessary in the public interest, in accordance with section
     11 and section 202(h). Pursuant to the Commission's determinations,
     staff expects that the Commission would initiate proceedings to
     modify or eliminate selected rules. These proceedings would conform
     with Commission procedural rules and the Administrative Procedure
     Act. Some of these Proceedings have been initiated already, while
     others will be initiated next year.[^249]

     []{#__RefHeading___Toc503675515 .anchor}Appendix I: 1998 BIENNIAL
     REGULATORY REVIEW Proceedings

## PROCEEDINGS INITIATED -- COMPLETED/SIGNIFICANT ORDERS ISSUED

### Telecommunications Providers (Common Carriers)

Streamline and consolidate rules governing application procedures for
wireless services to facilitate introduction of electronic filing via
the Universal Licensing System. *1998 Biennial Regulatory Review* --
*Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97, and
101 of the Commission\'s Rules to Facilitate the Development and Use of
the Universal Licensing System in the Wireless Telecommunications
Services*, WT Dkt No. 98-20, *NPRM*, FCC 98-25 (rel. March 19, 1998),
*R&O*, FCC 98-234 (rel. Oct. 21, 1998).

Streamline the equipment authorization program by implementing the
recent mutual recognition agreement with Europe and providing for
private equipment certification. *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*, GEN Dkt No. 98-68, *NPRM*, FCC 98-92 (rel. May
18, 1998), *R&O*, FCC 98-338 (rel. Dec. 23, 1998).

Eliminate rules concerning the provision of telegraph and telephone
franks. *1998 Biennial Regulatory Review* -- *Elimination of Part 41
Telegraph and Telephone Franks*, CC Dkt No. 98-119, *NPRM*, FCC 98-152
(rel. July 21, 1998), *R&O*, FCC 98-344 (rel. Feb. 3, 1999).

In addition to addressing issues remanded by the Ninth Circuit,
reexamine the nonstructural safeguards regime governing the provision of
enhanced services by the Bell Operating Companies (BOCs) and consider
elimination of requirement that BOCs file Comparably Efficient
Interconnection (CEI) plans. *Computer III Further Remand Proceedings:
Bell Operating Company Provision of Enhanced Services; 1998 Biennial
Regulatory Review* -- *Review of Computer III and ONA Safeguards and
Requirements*, CC Dkt Nos. 95-20 and 98-10, *FNPRM*, FCC 98-8 (rel. Jan.
30, 1998), *R&O*, FCC 99-36 (rel. Mar. 10, 1999).

Provide for a blanket section 214 authorization for international
service to destinations where the carrier has no affiliate; eliminate
prior review of *pro forma* transfers of control and assignments of
international section 214 authorizations; streamline and simplify rules
applicable to international service authorizations and submarine cable
landing licenses. *1998 Biennial Regulatory Review* -- *Review of
International Common Carrier Regulations*, IB Dkt No. 98-118, *NPRM*,
FCC 98-149 (rel. July 14, 1998), *R&O*, FCC 99-51 (rel. Mar. 23, 1999).

Removal or reduction of, or forbearance from enforcing, regulatory
burdens on carriers filing for technology testing authorization. *1998
Biennial Regulatory Review − Testing New Technology*, CC Dkt No. 98-94,
*NOI*, FCC 98-118 (rel. June 11, 1998), *Policy Statement*, FCC 99-53
(rel. Apr. 2, 1999).

Deregulate or streamline policies governing settlement of accounts for
exchange of telephone traffic between U.S. and foreign carriers. *1998
Biennial Regulatory Review* -- *Reform of the International Settlements
Policy and Associated Filing Requirements*, IB Dkt No. 98-148, *NPRM*,
FCC 98-190 (rel. Aug. 6, 1998), *R&O*, FCC 99-73 (rel. May 6, 1999).

Deregulate radio frequency (RF) lighting requirements to foster the
development of new, more energy efficient RF lighting technologies.
*1998 Biennial Regulatory Review* -- *Amendment of Part 18 of the
Commission's Rules to Update Regulations for RF Lighting Devices*, ET
Dkt No. 98-42, *NPRM*, FCC 98-53 (rel. Apr. 9, 1998), *R&O*, FCC 98-135
(rel. June 6, 1999).

Modify accounting rules to reduce burdens on carriers. *1998 Biennial
Regulatory Review* -- *Review of Accounting and Cost Allocation
Requirements*, CC Dkt No. 98-81, *NPRM*, FCC 98-108 (rel. June 17,
1998), *R&O*, FCC 99-106 (rel. June 30, 1999).

Eliminate duplicative or unnecessary common carrier reporting
requirements. *1998 Biennial Regulatory Review* -- *Review of ARMIS
Reporting Requirements*, CC Dkt No. 98-117, *NPRM*, FCC 98-147 (rel.
July 17, 1998), *R&O*, FCC 99-107 (rel. June 30, 1999).

Privatize the administration of international accounting settlements in
the maritime mobile and maritime satellite radio services. *1998
Biennial Regulatory Review* -- *Review of Accounts Settlement in the
Maritime Mobile and Maritime Mobile-Satellite Radio Services and
Withdrawal of the Commission as an Accounting Authority in the Maritime
Mobile and the Maritime Mobile-Satellite Radio Services Except for
Distress and Safety Communications*, IB Dkt No. 98-96, *NPRM*, FCC
98-123 (rel. July 17, 1998), *R&O and FNPRM*, FCC 99-150 (rel. July 13,
1999).

Streamline and rationalize information and payment collection from
contributors to Telecommunications Relay Service, North American
Numbering Plan Administration, Universal Service, and Local Number
Portability Administration funds. *1998 Biennial Regulatory Review --
Streamlined Contributor Reporting Requirements Associated with
Administration of Telecommunications Relay Services, North American
Numbering Plan, Local Number Portability, and Universal Service Support
Mechanisms*, CC Dkt No. 98-171, *NPRM*, FCC 98-233 (rel. Sept. 25,
1998), *R&O*, FCC 99-175 (rel. July 15, 1999).

Repeal Part 62 rules regarding interlocking directorates among
carriers*. 1998 Biennial Regulatory Review* -- *Repeal of Part 62 of the
Commission's Rules*, CC Dkt No. 98-195, *NPRM*, FCC 98-294 (rel. Nov.
17, 1998), *R&O*, FCC 99-163 (rel. July 16, 1999).

Simplify Part 61 tariff and price cap rules. *1998 Biennial Regulatory
Review* -- *Part 61 of the Commission\'s Rules and Related Tariffing
Requirements*, CC Dkt No. 98-131, *NPRM*, FCC 98-164 (rel. July 24,
1998), *R&O*, FCC 99-173 (rel. Aug. 8, 1999).

Consider modifications or alternatives to the 45 MHz CMRS spectrum cap
and other CMRS aggregation limits and cross-ownership rules. *1998
Biennial Regulatory Review* -- *Review of CMRS Spectrum Cap and Other
CMRS Aggregation Limits and Cross-Ownership Rules*, WT Dkt No. 98-205,
*NPRM*, FCC 98-308 (rel. Dec. 18, 1998), *R&O*, FCC 99-244 (rel. Sept.
22, 1999).

Eliminate or streamline various rules prescribing depreciation rates for
common carriers. *1998 Biennial Regulatory Review* -- *Review of
Depreciation Requirements for Incumbent Local Exchange Carriers*, CC Dkt
No. 98-137, *NPRM*, FCC 98-170 (rel. Oct. 14, 1998), *MO&O*, FCC 99-397
(rel. Dec. 30, 1999), *FNPRM*, FCC 00-119 (rel. Apr. 3, 2000).

In *NPRM* portion, consider forbearance from additional requirements
regarding telephone operator services applicable to commercial mobile
radio service providers (CMRS) and, more generally, forbearance from
other statutory and regulatory provisions applicable to CMRS providers*.
Personal Communications Industry Association*'*s Broadband Personal
Communications Services Alliances' Petition for Forbearance For
Broadband Personal Communications Services; 1998 Biennial Regulatory
Review - Elimination or Streamlining of Unnecessary and Obsolete CMRS
Regulations; Forbearance from Applying Provisions of the Communications
Act to Wireless Telecommunications Carriers*, WT Dkt No. 98-100*, MO&O
and NPRM*, FCC 98-134 (rel. July 2, 1998), *First R&O*, FCC 00-311 (rel.
Sept. 8, 2000).

### Other

Amend cable and broadcast annual employment report due dates to
streamline and simplify filing. *1998 Biennial Regulatory Review --
Amendment of sections 73.3612 and 76.77 of the Commission*'*s Rules
Concerning Filing Dates for the Commission*'*s Equal Employment
Opportunity Annual Employment Reports, MO&O*, FCC 98-39 (rel. Mar. 16,
1998).

Streamline broadcast filing and licensing procedures. *1998 Biennial
Regulatory Review* -- *Streamlining of Mass Media Applications, Rules
and Processes*, MM Dkt No. 98-43, *NPRM*, FCC 98-57 (rel. Apr. 3, 1998),
*R&O*, FCC 98-281 (rel. Nov. 25, 1998), *on recon.*, 14 FCC Rcd 17525
(1999).

Provide for electronic filing for assignment and change of radio and TV
call signs. *1998 Biennial Regulatory Review -- Amendment of Part 73 and
Part 74 Relating to Call Sign Assignments for Broadcast Stations*, MM
Dkt No. 98-98, *NPRM*, FCC 98-130 (rel. June 30, 1998), *R&O*, FCC
98-324 (rel. Dec. 16, 1998).

Simplify and unify Part 76 cable pleading and complaint process rules.
*1998 Biennial Regulatory Review* -- *Part 76 - Cable Television Service
Pleading and Complaint Rules*, CS Dkt No. 98-54, *NPRM*, FCC 98-68 (rel.
Apr. 22, 1998), *R&O*, FCC 98-348 (rel. Jan. 8, 1999).

Streamline the Gettysburg reference facilities so that electronic filing
and electronic access can substitute for the current method of written
filings/access. *1998 Biennial Regulatory Review* -- *Amendment of Part
0 of the Commission's Rules to Close the Wireless Telecommunications
Bureau's Gettysburg Reference Facility*, WT Dkt No. 98-160, *NPRM*, FCC
98-217 (rel. Sept.18, 1998), *R&O,* FCC 99-45 (rel. Mar. 24, 1999).

Streamline and consolidate public file requirements applicable to cable
television systems. *1998 Biennial Regulatory Review* -- *Streamlining
of Cable Television Services Part 76 Public File and Notice
Requirements*, CS Dkt No. 98-132*, NPRM*, FCC 98-159 (rel. July 20,
1998*), R&O,* FCC 99-12 (rel. Mar. 26, 1999).

Streamline AM/FM radio technical rules and policies. *1998 Biennial
Regulatory Review -- Streamlining of Radio Technical Rules in Parts 73
and 74 of the Commission\'s Rules*, MM Dkt No. 98-93, *NPRM*, FCC 98-117
(rel. June 15, 1998), *First R&O*, FCC 99-55 (rel. Mar. 30, 1999),
*Second R&O*, FCC 00-368 (rel. Nov. 1, 2000).

Modify or eliminate Form 325, annual cable television system report.
*1998 Biennial Regulatory Review -- \"Annual Report of Cable Television
System,\" Form 325, Filed Pursuant to Section 76.403 of the
Commission\'s Rules*, CS Dkt No. 98-61, *NPRM*, FCC 98-79 (rel. Apr. 30,
1998), *R&O*, FCC 99-13 (rel. Mar. 31, 1999).

Streamline application of Part 97 amateur service rules. *1998 Biennial
Regulatory Review* -- *Amendment of Part 97 of the Commission\'s Amateur
Service Rules*, WT Dkt No. 98-143*, NPRM*, FCC 98-1831 (rel. Aug. 10,
1998), *R&O*, FCC 99-412 (rel. Dec. 30, 1999).

Conduct broad inquiry into broadcast ownership rules not the subject of
other pending proceedings. *1998 Biennial Regulatory Review -- Review of
the Commission*'*s Broadcast Ownership Rules and Other Rules Adopted
Pursuant to section 202 of the Telecommunications Act of 1996*, MM Dkt
No. 98-35, *NOI*, FCC 98-37 (rel. Mar. 13, 1998), *Report*, FCC 00-191
(rel. June 20, 2000).

Streamline Part 90 private land mobile services rules. *1998 Biennial
Regulatory Review* -- *47 C.F.R. Part 90 -- Private Land Mobile Radio
Services*, WT Dkt No. 98-182, *NPRM*, FCC 98-251 (rel. Oct. 20, 1998),
*R&O,* FCC 00-235 (rel. July 12, 2000).

## PROCEEDINGS INITIATED -- PENDING

### Telecommunications Providers (Common Carriers)

Modify Part 68 rules that limit the power levels at which any device
attached to the network can operate to allow use of 56 Kbps modems.
*1998 Biennial Regulatory Review -- Modifications to Signal Power
Limitations Contained in Part 68 of the Commission's Rules*, CC Dkt No.
98-163, *NPRM*, FCC 98-221 (rel. Sept. 16, 1998).

Modify or eliminate Part 64 restrictions on bundling of
telecommunications service with customer premises equipment. *1998
Biennial Regulatory Review -- Policy and Rules Concerning the
Interstate, Interexchange Marketplace/implementation of Section 254(g)
of the Communications Act of 1934, as Amended/Review of the Customer
Premises Equipment and Enhanced Services Unbundling Rules in the
Interexchange, Exchange Access and Local Exchange Markets*, CC Dkt Nos.
98-183 and 96-61, *FNPRM*, FCC 98-258 (rel. Oct. 9, 1998).

Seek comment on various deregulatory proposals of SBC Communications,
Inc. not already subject to other biennial regulatory review
proceedings. *1998 Biennial Regulatory Review -- Petition for* *Section
11 Biennial Regulatory Review filed by SBC Communications, Inc.,
Southwestern Bell Telephone Company, Pacific Bell, and Nevada Bell*, CC
Dkt No. 98-177, *NPRM*, FCC 98-238 (rel. Nov. 24, 1998). \[Proceeding
superceded by *Common Carrier Bureau Announces Agenda for Initial
Workshop for Phase I of the Comprehensive Review of Commission's
Accounting and Reporting Requirements and Treatment of Ex Parte
Presentations in Related Proceedings, Public Notice,* DA 99-758 (rel.
Apr. 19, 1999); *Common Carrier Bureau Announces Initiative to Undertake
Comprehensive Review of Part 32 and ARMIS Requirements, Public Notice,*
DA 99-695 (rel. Apr. 12, 1999); *In the Matter of Comprehensive Review
of the Accounting Requirements and ARMIS Reporting Requirements for
Incumbent Local Exchange Carriers: Phase 1*, CC Dkt No. 99-253, *NPRM*,
FCC 99-174 (rel. July 14, 1999); *Report and Order*, FCC 00-78 (rel.
Mar, 8, 2000)\].

### Other

Review current Part 15 and Part 18 power line conducted emissions limits
and consider whether the limits may be relaxed to reduce the cost of
compliance for a wide variety of electronic equipment. *1998 Biennial
Regulatory Review -- Conducted Emissions Limits Below 30 MHz for
Equipment Regulated Under Parts 15 and 18 of the Commission\'s Rules*,
ET Dkt No. 98-80, *NOI*, FCC 98-102 (rel. June 8, 1998), *NPRM*, FCC
99-296 (rel. Oct. 18, 1999).

[]{#__RefHeading___Toc503675522 .anchor}Appendix II: List of Commenting
Parties

FOR THE SEPTEMBER 2000 STAFF REPORT

**[Comments:]{.underline}**

Alloy LLC

Cellular Telecommunications Industry Association

Coalition of Independent Cellular Carriers

General Services Administration

Hughes Network Systems

Independent Telephone & Telecommunications Alliance

National Association of Broadcasters

National Exchange Carrier Association

Newspaper Association of America

Organization for the Promotion and Advancement of Small
Telecommunications Companies,

Sprint Corporation

Telecommunications Industry Association

Telecommunications Management Information Systems Coalition

United States Telecom Company

Verizon Wireless

Winstar Communications, Inc.

Wireless Communications Association International, Inc.

WorldCom, Inc.

**[Reply Comments:]{.underline}**

Cellular Telecommunication Industry Association

General Services Administration

Independent Telephone & Telecommunications Alliance

WorldCom, Inc.,

[]{#__RefHeading___Toc503675523 .anchor}Appendix III: Staff
Acknowledgements

We would like to recognize the following staff for their participation
in the 2000 Biennial Review Working Group:

  ----------------------------------- -----------------------------------
  **Cable Services Bureau**           **Consumer Information Bureau**

                                      

  Kathleen Costello                   Margaret Egler

  William Johnson                     Peter Friedman

  Cheryl King                         Sumita Mukhoty

  Cheryl Kornegay                     

  John Norton                         

  Quyen Truong                        **Enforcement Bureau**

                                      

                                      Lisa Fowlkes

  **Common Carrier Bureau**           Tonya Rutherford

                                      Joseph Scavetta

  John Adams                          Wayne Toivanen

  Tom Beers                           Richard Welch

  Scott Bergmann                      

  Stephen Burnett                     

  Anthony Butler                      **International Bureau**

  Anthony Dale                        

  Andy Firth                          Thomas N. Albers

  Neil Fried                          Rebbeca Arbogast

  Tiffany Jamison                     James G. Ballis

  Jake Jennings                       Breck Blalock

  Louise Klees-Wallace                Kathleen Campbell

  Bob Loube                           Alfred Davidson

  Susan Magnotti                      Pamela Gerr

  Andrew Mulitz                       Anna Gomez

  Mark Nadel                          Howard Griboff

  Claudia Pabo                        Selina Khan

  Susan Pies                          David Krech

  Debra Sabourin                      Kathy O\'Brien

  Katherine Schroeder                 Susan O\'Connell

  Marty Schwimmer                     Thomas E. Polzin

  Douglas Slotten                     Ronald Repasi

  Richard Smith                       Jackie Ruff

  Robin Smolen                        Marilyn Simon

  Ceci Stephens                       Ken Stanley

  Antoinette Stevens                  Sheryl Todd

  Gayle Teicher                       Mark Uretsky

  Alan Thomas                         Alifya Vasi

  Sheryl Todd                         Doug Webbink

  Michele Walters                     

  Sharon Webber                       

  Jack Zinman                         

                                      

                                      

                                      

  **Mass Media Bureau**               **Office of Legislative and
                                      Intergovernmental**

                                      **Affairs**

  Mania Baghdadi                      

  Sharon Bertelson                    Sherille Ismail

  Deborah Dupont                      Stephen Klitzman

  Charles Dziedzic                    Sheryl Wilkerson

  Judy Herman                         

  Jamila Bess Johnson                 

  Brad Lerner                         **Office of the Managing Director**

  Mary Beth Murphy                    

  Cynthia Thomas                      Judy Boley

                                      Andra Cunningham

                                      Regina Dorsey

  **Office** **of**                   Kathy Fagan
  **Communications** **Business**     

  **Opportunities**                   Patricia Rawlings

                                      Renee Licht

  Helen Hillegass                     Mark Reger

  Eric Jensen                         Mary Beth Richards

  Eric Malinen                        Magalie Salas

  Frank Montero                       Larry Schecker

                                      Les Smith

                                      Ron Stone

  **Office of Engineering and         
  Technology**                        

                                      

  Rebecca Dorch                       **Office of Plans and Policy**

  Michael Marcus                      

  Ken Nichols                         Pat DeGraba

                                      Pam Megna

                                      Lisa Sockett

  **Office of General Counsel**       

                                      

  Susan Aaron                         **Wireless Telecommunications
                                      Bureau**

  Lisa Gelb                           

  Jane Halprin                        Dennis Butler

  Daniel Harrold                      Ken Burnley

  Joel Kaufman                        David Furth

  Jeffrey Lanning                     Chris Gacek

  Phyllis Morgan                      Robert Hardy

  Marilyn Sonn                        Jay Jackson

  William Trumpbour                   Don Johnson

  Debra Weiner                        Elizabeth Lyle

                                      Jamison Prime

                                      John Spencer

                                      Frank Stillwell

                                      Greg Vadas

                                      
  ----------------------------------- -----------------------------------

[]{#__RefHeading___Toc503675524 .anchor}appendix IV: rule part analysis

[]{#__RefHeading___Toc503675525 .anchor}Part 1 -- Practice and Procedure

[]{#__RefHeading___Toc503675526 .anchor}Description

Part 1 contains rules governing general practice and procedure before
the Commission, including rules and procedures governing applications
and licensing, rulemakings, complaints, hearings, and a variety of other
Commission processes. Part 1 also contains miscellaneous rules
implementing certain statutes other than the Communications Act that
affect Commission processes, such as the National Environmental Policy
Act, the Equal Access to Justice Act, and the Anti-Drug Abuse Act. Some
of these rules apply generally to all entities that conduct business
before the Commission, others apply to specific groups of licensees or
other regulated entities, while others apply solely to the Commission
and its staff.

Part 1 contains 19 subparts:

> [Subpart A -- General Rules of Practice and Procedure]{.underline} --
> General rules for filing of pleadings with and appearances before the
> Commission; procedures for miscellaneous Commission proceedings,
> including forfeitures, license modifications, revocation or cease and
> desist proceedings, consent orders, reconsiderations (other than
> reconsiderations in rulemaking proceedings), and applications for
> review.
>
> [Subpart B -- Hearing Proceedings]{.underline} -- Procedural rules for
> hearing proceedings.
>
> [Subpart C -- Rulemaking Proceedings]{.underline} -- Procedural rules
> for rulemaking proceedings.

[Subpart D -- Broadcast Applications and Proceedings]{.underline} --
Application and licensing rules for broadcasters.

> [Subpart E -- Complaints, Applications, Tariffs, and Reports Involving
> Common Carriers]{.underline} -- Procedural rules pertaining to filings
> by and complaints against common carriers.
>
> [Subpart F -- Wireless Telecommunications Services Applications and
> Procedures]{.underline} -- Application and licensing rules for
> wireless services.
>
> [Subpart G -- Schedule of Statutory Charges and
> Procedures]{.underline} -- Fee schedule for application and regulatory
> fees charged by the Commission, pursuant to sections 8 and 9 of the
> Communications Act.[^250]
>
> [Subpart H -- Ex Parte Communications]{.underline} -- Rules governing
> *ex parte* communications and presentations in Commission proceedings.
>
> [Subpart I -- Procedures Implementing the National Environmental
> Policy Act of 1969]{.underline} (NEPA)[^251] -- Application and
> licensing rules for FCC-licensed facilities that require environmental
> clearance under NEPA due to potential impact on environmentally
> sensitive areas.
>
> [Subpart J -- Pole Attachment Complaint Procedures]{.underline} --
> Complaint procedures applicable to cable companies and
> telecommunications carriers that seek to obtain non-discriminatory
> access to utility poles, ducts, conduits, and rights-of-way on
> reasonable rates, terms, and conditions.
>
> [Subpart K -- Implementation of the Equal Access to Justice Act (EAJA)
> in Agency Proceedings]{.underline}[^252] -- Rules and procedures for
> parties to Commission administrative proceedings who seek recovery of
> attorneys fees and expenses pursuant to the EAJA.
>
> [Subpart L -- Random Selection Procedures for Mass Media
> Services]{.underline} -- Rules and procedures for use of lotteries to
> award certain categories of broadcast licenses. \[Not applicable to
> telecommunications carriers.\]
>
> [Subpart N -- Enforcement of Nondiscrimination on the Basis of
> Handicap in Programs or Activities Conducted by the Federal
> Communications Commission]{.underline} -- Rules implementing the
> Rehabilitation, Comprehensive Services, and Disabilities Amendments of
> 1978,[^253] which prohibits Executive agencies from discriminating
> against persons with disabilities in programs or activities conducted
> by the agency. \[Not applicable to telecommunications carriers.\]
>
> [Subpart O -- Collection of Claims Owed the United States]{.underline}
> -- Rules allowing the Commission to collect certain debts owed to the
> United States through administrative or salary offsets.
>
> [Subpart P -- Implementation of the Anti-Drug Abuse Act of
> 1998]{.underline}[^254] -- Rules requiring certain Commission
> applicants to certify that they are not subject to denial of Federal
> Benefits under section 5301 of the ADAA due to a conviction for
> possession or distribution of a controlled substance.
>
> [Subpart Q -- Competitive Bidding Procedures]{.underline} -- Rules
> governing the mechanisms and procedures for competitive bidding to
> award spectrum licenses.
>
> [Subpart R -- Implementation of section 4(g)(3) of the Communications
> Act: Procedures Concerning Acceptance of Unconditional Gifts,
> Donations, and Bequests]{.underline} -- Rules restricting acceptance
> of gifts by Commission employees. \[Not applicable to
> telecommunications carriers.\]
>
> [Subpart S -- Preemption of Restrictions That "Impair" a Viewer's
> Ability to Receive Television Broadcast Signals, Direct Broadcast
> Satellites, or Multi-Channel Multipoint Distribution
> Services]{.underline} -- Rules preempting state and local regulation
> of antennas for reception of video programming via broadcast,
> satellite, or multipoint distribution services. \[Not applicable to
> telecommunications carriers.\]
>
> [Subpart T -- Exempt Telecommunications Companies]{.underline} --
> Rules implementing provisions of the Telecommunications Act of 1996 by
> which a public utility holding company may obtain a determination from
> the Commission of status as an Exempt Telecommunications Company
> (ETC).

[]{#__RefHeading___Toc503675527 .anchor}Purpose

The primary purpose of the Part 1 rules, particularly subparts A through
L and subpart Q, is to establish fair and equitable rules of practice
and procedure before the Commission for applicants, licensees, and other
entities regulated by the Commission. Other subparts of Part 1 serve
other purposes, such as compliance with external statutory mandates.

[]{#__RefHeading___Toc503675528 .anchor}Analysis

[]{#__RefHeading___Toc503675529 .anchor}Advantages

The procedural rules in Part 1 provide uniform direction to applicants,
licensees, and other entities in a wide variety of Commission
proceedings. Consolidation of the Commission's procedural rules in Part
1 helps to ensure consistency in the Commission's processes across
services, Bureaus, and offices.

[]{#__RefHeading___Toc503675530 .anchor}Disadvantages

The Part 1 rules impose inherent administrative burdens on applicants,
licensees, and other parties that practice before the Commission.

[]{#__RefHeading___Toc503675531 .anchor}Recent Efforts

Certain portions of the Part 1 rules, such as the wireless licensing
rules (subpart F), the *ex parte* rules (subpart H), and the
Commission's competitive bidding rules (subpart Q) have been modified in
recent rulemaking proceedings.[^255] In addition, Part 1 was recently
amended to allow parties to file comments and other pleadings
electronically via the Internet in informal notice and comment
rulemaking proceedings under section 553 of the Administrative Procedure
Act.[^256] In that *Report and Order*, the rules were also amended to
permit electronic filing of all pleadings and comments in proceedings
involving petitions for rulemaking and Notice of Inquiry proceedings.
Since that time, other Bureaus have amended Part 1 to include the
electronic filing of applications.

[]{#__RefHeading___Toc503675532 .anchor}Initial Recommendation

The staff recommends no significant changes to the Part 1 rules at this
time. However, as the Commission proceeds to implement new electronic
filing initiatives, further amendment of the rules is envisioned. In
addition, the staff intends to closely monitor the practical application
of these rules, and will recommend appropriate rule changes in the
future if the rules no longer best achieve their underlying purposes.
\[Note: Staff recommendations with respect to certain subparts of Part 1
are discussed in the sections below.\]

[]{#__RefHeading___Toc503675533 .anchor}Comments

United States Telecom Association (USTA) recommends that the Commission
modify its procedural rules that the Commission resolve waiver requests
and petitions for reconsideration within one year.[^257] Any filing that
the Commission did not deny within a year would be deemed approved. USTA
argues that failure to resolve these requests in a timely manner creates
uncertainty for carriers and customers. ITTA supports USTA's
proposal,[^258] and urges the Commission to adopt a 90-day deadline for
acting on petitions filed by mid-sized carriers.[^259]

WorldCom, Inc. opposes USTA's proposal, and argues that an accelerated
timetable would divert the Commission from more important tasks.[^260]
WorldCom recommends the Commission adopt a cover form for petitions for
reconsideration, applications for review of actions taken pursuant to
delegated authority, and requests for waiver.[^261] The cover form would
contain information that would help the Commission determine the speed
with which the applicant's request should be considered, and whether the
request was frivolous.[^262]

[]{#__RefHeading___Toc503675534 .anchor}Recommendation

Staff does not recommend adopting USTA's and ITTA's suggestion to adopt
a time limit for resolving petitions for reconsideration and waiver.
Parties can and do request expedited consideration in particular
circumstances. In addition, confusion could be created if requests for
waiver or reconsideration were deemed approved absent agency action,
because rule changes could occur without adequately alerting parties who
might be affected by the changes.

Staff does not recommend initiating a rulemaking proceeding and
soliciting comment on WorldCom's proposal. Staff believes that requiring
parties to file a new form would increase rather than decrease
regulatory burdens. Any party may, however, include the form proposed by
WorldCom or another document intended to demonstrate to the Commission
the importance or urgency of its filing.

[]{#__RefHeading___Toc503675535 .anchor}part 1, Subpart E -- Complaints,
Applications, Tariffs, and Reports Involving Common Carriers -- formal
complaints

[]{#__RefHeading___Toc503675536 .anchor}Description

These rules implement section 208 of the Communications Act of 1934, as
amended.[^263] Section 208 permits any person to lodge a complaint with
the Commission against a common carrier alleging a violation of the
Communications Act. Congress amended the Communications Act in 1996 to
establish specific procedures and, in some cases, timeframes for
complaints concerning certain new statutory provisions. See, for
example, sections 260 (telemessaging), 271 (Bell operating company entry
into long distance market), 274 (Bell operating company provision of
electronic publishing service), 275 (Bell operating company provision of
alarm monitoring service). The Commission's formal complaint rules
implement these new statutory provisions.

[]{#__RefHeading___Toc503675537 .anchor}Purpose.

These rules establish procedures for Commission receipt and review of
formal complaints lodged against common carriers. The rules are designed
to expedite the resolution of formal complaints while safeguarding the
due process interests of the affected parties. The rules are also
intended to foster the pro-competitive, deregulatory goals of the
Telecommunications Act of 1996 by providing for prompt and efficient
enforcement of the statute and the Commission's substantive rules
implementing the statute.

[]{#__RefHeading___Toc503675538 .anchor}Analysis.

[]{#__RefHeading___Toc503675539 .anchor}Status of Competition

Because section 208 permits complaints against a wide range of common
carriers involving a host of obligations, it is not feasible to
characterize the status of competition with respect to the variety of
common carriers and markets subject to this statutory provision.

[]{#__RefHeading___Toc503675540 .anchor}Advantages

The rules provide procedures to expedite resolution of disputes
involving a common carrier. The rules permit and encourage
staff-sponsored mediation between the parties both before and after a
formal complaint is filed at the Commission. These mediation efforts
often result in quick and efficient resolution of disputes. Business
solutions achieved by the parties through Commission-assisted mediation
avoid the expense and delay that can accompany formal litigation before
the agency.

The rules also require that a complaining party provide all factual
support for its case in its initial pleadings. This, in turn, minimizes
the need for time-consuming and resource-intensive discovery. In
addition, the rules permit the staff to convene an initial status
conference with the parties shortly after the defendant files its
answer. This presents an opportunity to simplify or narrow the issues,
obtain admissions of fact or stipulations by the parties, settle some or
all of the matters in controversy, and develop a schedule for the
remainder of the case. This proactive case management tool helps ensure
prompt and efficient case resolution.

Moreover, the rules provide an Accelerated Docket procedure that results
in swift decisions from the agency for certain formal complaints
selected by the staff. Once a particular dispute is accepted onto the
Accelerated Docket, the procedure is designed to lead to a written
staff-level decision within 60 days from the filing of the complaint.
Because this procedure may lead to a "mini-trial" with testimony by
witnesses subject to cross-examination, it is particularly well suited
for cases involving difficult factual issues. The Accelerated Docket
rules require staff-supervised pre-filing settlement discussions between
the parties. Thus, enabling the settlement of many disputes without a
formal complaint.

[]{#__RefHeading___Toc503675541 .anchor}Disadvantages.

Formal litigation can be expensive and time-consuming. The rules attempt
to minimize these liabilities by enhancing mediation and limiting
discovery, while recognizing the due process interests of the affected
parties. Nevertheless, section 208 creates a statutory process for
persons to file complaints against common carriers and obligates the
Commission to investigate those complaints, often within tight
timeframes. Procedural rules are thus necessary to discharge this
statutory directive.

[]{#__RefHeading___Toc503675542 .anchor}Recent Efforts.

As noted in the Staff Report, the Commission revamped and streamlined
these rules in 1997 and 1998 in light of the pro-competitive,
deregulatory goals of the Telecommunications Act of 1996. In general,
the 1997 rule changes were designed to: (1) enable parties to resolve
disputes on their own; (2) improve the utility and content of pleadings;
and (3) streamline the formal complaint process. The 1998 rule changes
created the Accelerated Docket which provides a framework for
expeditious resolution of certain carrier-related complaints.

[]{#__RefHeading___Toc503675543 .anchor}Initial Recommendation. (Formal
Complaints)

The staff recommends no changes to the rules at this time because the
rules were recently revamped and streamlined. However, the staff intends
to closely monitor the practical application of all the rules governing
formal complaints against common carriers. The staff will recommend
appropriate rules changes in the future if the rules no longer achieve
their underlying purposes, or if rule changes will better service the
public interest in light of competitive developments in the marketplace.

[]{#__RefHeading___Toc503675544 .anchor}Comments

No comments were received on this subpart.

[]{#__RefHeading___Toc503675545 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675546 .anchor}Initial Recommendation.
(Informal Complaints)

The staff recommended that the Commission review the informal complaint
rules because these rules do not specify the documentation consumers
must file with the Commission to complete their complaints and they do
not prescribe a specific timeframe for carriers to respond to an
informal complaint.[^264] Staff also recommended that these rules be
reviewed to determine whether their scope should be expanded to cover
all informal complaints.

[]{#__RefHeading___Toc503675547 .anchor}Comments

Alloy and WorldCom agree that the rules should specify the type of
documentation that a consumer must file with the complaint.[^265]
WorldCom also states that the Commission should retain its flexibility
in determining a timeframe within which a carrier must respond to a
complaint.[^266]

[]{#__RefHeading___Toc503675548 .anchor}Recommendation

Staff continues to recommend that a review of the informal complaint
rules is necessary to address the issues raised in the staff report and
the comments.

[]{#__RefHeading___Toc503675549 .anchor}part 1, Subpart F -- Wireless
Telecommunications Services Applications and Procedures

[]{#__RefHeading___Toc503675550 .anchor}Description

Part 1, subpart F[^267] sets forth procedural rules governing the filing
of applications and the issuance of wireless licenses. The rules cover
all of the basic types of applications associated with wireless
licensing, including initial applications, amendments and modifications,
waiver requests, requests for special temporary authorization,
assignment and transfer applications, and renewals. In addition, subpart
F includes rules concerning public notices, petitions to deny, dismissal
of applications, and termination of licenses.

The subpart F rules were adopted as part of the 1998 Biennial Regulatory
Review in the *Universal Licensing* proceeding, WT Docket No.
98-20.[^268] The Commission initiated this proceeding in connection with
the implementation of the Universal Licensing System (ULS), an
integrated, automated system for electronic filing and processing of
wireless applications. In the *Universal Licensing* proceeding, the
Commission consolidated and streamlined its procedural rules into
subpart F, which replaced numerous service-specific rules that had
previously applied to different wireless services. In addition, the
Commission adopted new standardized application forms designed for use
in ULS, and adopted rules requiring all wireless telecommunications
carriers, as well as certain other classes of wireless licensees, to
file applications electronically.[^269]

[]{#__RefHeading___Toc503675551 .anchor}Purpose

The purpose of subpart F is to: (1) establish uniform procedures for the
licensing of all wireless services; (2) minimize filing requirements;
and (3) ensure the collection of reliable information from applicants
and licensees.

[]{#__RefHeading___Toc503675552 .anchor}Analysis

[]{#__RefHeading___Toc503675553 .anchor}Status of Competition

It is not feasible to characterize the status of competition because of
the variety of providers and markets subject to this rule.

[]{#__RefHeading___Toc503675554 .anchor}Advantages

Consolidating the wireless procedural rules into a single subpart
provides greater clarity, consistency, and predictability to the
licensing process than the prior array of sometimes inconsistent
service-specific rules, forms, and procedures. This lessens the filing
burden on applicants, and also facilitates more rapid and efficient
processing by the Commission.

[]{#__RefHeading___Toc503675555 .anchor}Disadvantages

The requirement of electronic filing for all wireless telecommunications
carriers imposes certain technical burdens and costs. In addition, the
general procedural rules contained in subpart F impose administrative
burdens on wireless applicants and licensees that are inherent to the
licensing process.

[]{#__RefHeading___Toc503675556 .anchor}Recent Efforts

The Commission made minor changes to those rules in the 1999
reconsideration of the *ULS Report and Order*.[^270]

[]{#__RefHeading___Toc503675557 .anchor}Initial Recommendation

The staff recommends that the Commission monitor developments as the
Wireless Telecommunications Bureau completes its implementation of ULS
for all wireless services this year.

[]{#__RefHeading___Toc503675558 .anchor}Comments

Alloy suggests that the Commission review its Quiet Zone rules to
streamline the approval process for modifications of wireless
facilities.[^271] Alloy asserts that the Commission could increase the
efficiency of the ULS system by providing a method to search licenses by
market number, and by allowing ULS users to view microwave licenses in
the exact form in which the paper license appears.

[]{#__RefHeading___Toc503675559 .anchor}Recommendation

See initial recommendation. Staff note that the ULS Taskforce is
currently reviewing these suggestions and working to find ways to
increase the usefulness of the ULS to wireless licenses and the general
public. The staff intends to review its application procedures involving
Quiet Zones to determine whether they can be made more efficient.

[]{#__RefHeading___Toc503675560 .anchor}part 1, Subpart I -- Procedures
Implementing the National Environmental Policy Act of 1969

[]{#__RefHeading___Toc503675561 .anchor}Description

Subpart I of the Commission's rules[^272] implements the requirements of
the National Environmental Policy Act (NEPA)[^273] as well as a series
of other federal environmental laws, such as the Endangered Species Act
of 1973, as amended,[^274] The National Historic Preservation Act of
1966 NHPA),[^275] the Wilderness Act of 1964, as amended,[^276] laws
relating to Indian Ceremonial Sites[^277] and the Wildlife Refuge
Laws.[^278] In addition, the Commission's environmental rules implement
Executive Orders regarding flood plains and wetlands regulation.[^279]
By statute and/or as set forth in the regulations of the Council on
Environmental Quality (CEQ),[^280] the Commission is responsible for
ensuring compliance with these laws. The rules identify certain special
issues for consideration, including the impact of high-intensity white
lights on towers in residential neighborhoods[^281] and the effect of
radiofrequency emissions on the human environment.[^282]

[]{#__RefHeading___Toc503675562 .anchor}Purpose

The purpose of the Commission's environmental rules is to identify those
sensitive environmental issues which Commission licensees must address.
The Commission complies with NEPA by requiring its licensees to assess
and, if found, report the potential environmental consequences of their
proposed projects.

If a federally-licensed facility, such as the construction of a tower,
might affect the environment in one of the ways described in the rules,
the licensee is required to consider the potential environmental effects
from its project, to describe those potential effects in an
environmental assessment (EA) and file that document with the
Commission.[^283] The Commission has concluded that actions not
identified in its rules are categorically excluded from environmental
review.[^284] The Commission's environmental rules then explain what
information is required in an EA,[^285] the methods for the public to
file objections to EAs,[^286] and those situations in which a full
environmental impact statement must be completed,[^287] as required by
NEPA.

[]{#__RefHeading___Toc503675563 .anchor}Analysis

[]{#__RefHeading___Toc503675564 .anchor}Status of Competition

The status of competition is irrelevant to the analysis of this rule.

[]{#__RefHeading___Toc503675565 .anchor}Advantages

The Commission's environmental rules meet the Commission's obligation to
consider the affect on the environment, of facilities proposed by its
licensees. These rules streamline compliance with multiple environmental
laws and focus environmental review activities on those that have a
potential to significantly affect the environment. The rules rely on
licensees to perform preliminary analyses to determine if there will be
an environmental effect by contacting expert state and federal agencies.
Licensees are required to file environmental assessments with the
Commission only where there may be an environmental effect. In those
cases where there may be an effect on the environment a detailed
evaluation of the environmental effect is performed by the licensee,
filed with the Commission, and approved prior to construction of the
proposed facilities.

[]{#__RefHeading___Toc503675566 .anchor}Disadvantages

The environmental laws as implemented by the Commission can create
administrative burdens and delays in the implementation of
federally-licensed projects. Moreover, the expert agencies contacted by
licensees to determine if proposed projects will have an environmental
effect could be burdened by the number of requests from the Commission's
licensees. The reliance on the licensees to make the initial evaluation
of environmental effect of proposed facilities can lead to the
construction of facilities that have an adverse effect on the
environment. In these cases, licensees generally construct without
contacting expert agencies or adequately assessing the effect on the
environment.

[]{#__RefHeading___Toc503675567 .anchor}Recent Efforts

The Wireless Telecommunications Bureau recently sought comment on a
Nationwide Programmatic Agreement that would adopt streamlined
procedures for review of co-locations of antennas under the NHPA.[^288]
This Nationwide Programmatic Agreement is being considered for potential
execution by the FCC, the National Conference of State Historic
Preservation Officers, and the Advisory Council on Historic Preservation
(ACHP). Members of the staff have also attended various environmental
seminars, workshops, and meetings to identify areas where the FCC has
compliance obligations, to explain the Commission's rules, and to
evaluate how the FCC's environmental obligations can be streamlined.

The Wireless Telecommunications Bureau is reviewing the NEPA process and
actively working with carriers, tower construction and management
companies, the ACHP, and the SHPOs/THPOs to develop a programmatic
agreement and other measures to facilitate the NEPA process and meet the
concerns raised by all parties involved. The ACHP has recently confirmed
the authority of licensees, applicants, and their representatives to act
on behalf of the Commission with respect to many aspects of the historic
preservation review process.[^289]

[]{#__RefHeading___Toc503675568 .anchor}Initial Recommendation

In general, the staff recommends that the subpart I rules be retained
because they are statutorily mandated and fulfill important public
interest goals. The staff also recommends, however, that the rules be
evaluated on an ongoing basis to determine whether they meet the
Commission's environmental obligations and can be streamlined in order
to minimize administrative cost and delay.

[]{#__RefHeading___Toc503675569 .anchor}Comments

Sprint asserts that the application of NHPA to tower siting is legally
unjustified, discriminatory, and administratively burdensome.[^290]
Alloy, Verizon, CTIA, and Sprint suggest that the Commission streamline
its process for reviewing the construction of facilities under the NHPA
and NEPA, particularly by exempting certain categories of construction
from the requirement to prepare an EA. [^291] For example, Alloy and
Sprint recommend that co-locations of new antennas on existing
structures should be subject to streamlined procedures.[^292]

[]{#__RefHeading___Toc503675570 .anchor}Recommendation

See initial recommendation. Although Sprint asserts that the
Commission's rules implementing NHPA should not apply to tower siting
generally, it does not provide any specific arguments in support of this
assertion. Regarding carriers' concerns about streamlining the
Commission's environmental review process as applied to tower siting, we
note that the Commission recently sought comment on a Nationwide
Programmatic Agreement that would adopt streamlined procedures for
review of co-locations of antennas under the NHPA.[^293] The Commission
will continue to work actively with carriers, tower construction and
management companies, and other federal and state agencies to streamline
the environmental review process.

[]{#__RefHeading___Toc503675571 .anchor}part 1, Subpart J - Pole
Attachment Complaint Procedures

[]{#__RefHeading___Toc503675572 .anchor}Description

Subpart J implements section 224 of the Communications Act of 1934, as
added by Pub. Law No. 95-234, as amended. The Telecommunications Act of
1996[^294] significantly amended section 224. Subpart J contains
complaint and enforcement procedures to ensure that telecommunications
carriers and cable system operators have nondiscriminatory access to a
utility's poles, ducts, conduits and rights-of-way with rates, terms and
conditions that are just and reasonable. These rules apply to states
that have not certified to the Commission that they regulate pole
attachments.

[]{#__RefHeading___Toc503675573 .anchor}Purpose

The purpose of subpart J is to provide a simple and expeditious process
for resolving complaints filed pursuant to section 224 of the
Communications Act of 1934, as amended. Subpart J sets forth uniform
definitions, procedures and requirements for an aggrieved party to seek
redress for unjust and unreasonable rates, and terms and conditions
which impede the deployment of its facilities.

[]{#__RefHeading___Toc503675574 .anchor}Analysis

[]{#__RefHeading___Toc503675575 .anchor}Status of Competition

The relevant market is the existing local pool of poles, ducts, conduits
and rights-of-way to which cable or telecommunications service
providers, out of necessity or business convenience, must attach their
distribution facilities. At the time of adoption of section 224,
utilities enjoyed a superior bargaining position over attachers in
negotiating the rates, terms and conditions for pole attachments due to
the utilities' monopoly position in the ownership or control of these
facilities.[^295] That monopoly position has not changed, hence there
remains the possibility of anti-competitive practices by utilities
against cable or competitive telecommunications providers in the absence
of section 224.

[]{#__RefHeading___Toc503675576 .anchor}Advantages

Subpart J provides a simple and expeditious complaint process and
methodology to determine a maximum just and reasonable pole attachment
rate a utility may charge an attaching telecommunications carrier or
cable system operator. Subpart J provides a means for parties to predict
an estimated rate a utility may charge by using an established set of
formulas based on rebuttable presumptions and generally publicly
available data that utilities report to their respective regulatory
agencies. It also promotes successful negotiation between parties and
reduces the burden which might otherwise be associated with rate
setting.

[]{#__RefHeading___Toc503675577 .anchor}Disadvantages

Subpart J imposes certain transaction costs on the parties in order to
successfully pursue and respond to the complaint driven rules. This
process, however, has been kept as simple and expeditious as possible to
ensure a minimal burden on the parties.

[]{#__RefHeading___Toc503675578 .anchor}Recent Efforts

In the Pole Fee Order[^296] the Commission refined and clarified the
formula used to calculate the maximum just and reasonable rate a utility
may charge a cable service or telecommunications service provider for
attachments to a pole, duct, conduit or right-of-way prior to February
8, 2001, and continuing for cable operators not providing
telecommunications services after February 8, 2001. Petitions for
reconsideration and/or clarification of this order are pending. In the
Telecommunications Carrier Report and Order,[^297] the Commission
adopted a separate methodology for attachments by telecommunications
service providers, including cable systems providing telecommunications
services, after February 8, 2001, as mandated by section 224. Petitions
for reconsideration and/or clarification of this order are pending. In
the Local Competition Order,[^298] the Commission enumerated guidelines
concerning the reasonableness of certain terms and conditions of access.
These guidelines were later modified and refined in the Local
Competition Reconsideration Order.[^299]

[]{#__RefHeading___Toc503675579 .anchor}Initial Recommendation

The Staff report concluded that Subpart J of Part I is necessary to
implement and enforce section 224 of the Communications Act. The
argument for these rules has been bolstered by the entry of utilities
into the telecommunications field. Additionally, because the Commission
has significantly revised and clarified this rule in the last two years,
modification or repeal of the Subpart J rules is not recommended.

[]{#__RefHeading___Toc503675580 .anchor}Comments

USTA recommends that the Commission streamline the pole attachment
rules. USTA believes that Section 1.1417(d), which requires a carrier to
determine an average number of attachers per pole based on three
demographic zones within a state, creates a significant administrative
burden and makes location definitions confusing, overlapping and far
more complex than necessary.

USTA also argues that the Commission should not require that carriers
utilize Part 32 to determine the operating expenses and actual capital
costs used to set pole attachment rates. USTA submits that the
Commission should reconsider a decision to exclude certain
administrative expenses in the Part 32 accounts in the pole attachment
formula, and objects to the Commission\'s current methodology to avoid
negative pole attachment rates. It recommends that the Commission allow
LECs to use Generally Accepted Accounting Principles (GAAP) without
specifying Part 32 accounts.

Finally, USTA suggests that the Commission could reduce the number of
unnecessary complaints if it utilized general presumptions regarding the
reasonability of pole attachment rates. It proposes that the Commission
adopt a presumption that a rate is not excessive if an equal or higher
rate has been in effect for a period of over twelve months without
complaint.

[]{#__RefHeading___Toc503675581 .anchor}Recommendation

We do not believe that USTA's comments require a change from our
conclusion that Subpart J of Part I is necessary to enforce section 224
of the Communications Act. We are not persuaded that we need reconsider
our belief that the pole attachment rules should be maintained without
modification or repeal. We note, however, that the arguments raised by
USTA are pending before us in various petitions filed by USTA prior to
the release of the Biennial Review Staff Report. We conclude therefore
that the most efficient way to resolve these issues, which address
substantive changes to our rules, is through our response to the
petitions rather than through the limited focus of this Biennial Review.

[]{#__RefHeading___Toc503675582 .anchor}part 1, Subpart Q -- Competitive
Bidding Proceedings

[]{#__RefHeading___Toc503675583 .anchor}Description

Subpart Q implements section 309(j) of the Communications Act of 1934,
as added by the Omnibus Budget Reconciliation Act of 1993[^300] and the
Balanced Budget Act of 1997.[^301] Subpart Q sets forth rules governing
the mechanisms and procedures for competitive bidding to award spectrum
licenses.

[]{#__RefHeading___Toc503675584 .anchor}Purpose

The purpose of subpart Q is to establish a uniform set of competitive
bidding rules and procedures for use in licensing of all services that
are subject to licensing by auction. The rules in this subpart: (1)
specify which services are eligible for competitive bidding; (2) provide
competitive bidding mechanisms and design options; (3) establish
application, disclosure and certification procedures for short- and
long-form applications; and (4) specify down payment, withdrawal and
default mechanisms.

In addition, subpart Q contains rules that define eligibility for
"designated entity" (*i.e.*, small business) status, and includes a
schedule of bidding credits for which designated entities may qualify in
those auctions in which special provisions are made for designated
entities.[^302] The purpose of these provisions is to implement section
309(j)(3)(B) of the Act, which states that an objective of designing and
implementing the competitive bidding system is to "promot\[e\] economic
opportunity and competition and ensur\[e\] that new and innovative
technologies are readily accessible to the American people by avoiding
excessive concentration on licenses and disseminating licenses among a
wide variety of applicants, including small businesses, rural telephone
companies, and businesses owned by members of minority groups and
women."[^303]

[]{#__RefHeading___Toc503675585 .anchor}Analysis

[]{#__RefHeading___Toc503675586 .anchor}Status of Competition

For the purpose of this document, it is not feasible to characterize the
status of competition because of the variety of markets affected by this
rule. For a detailed analysis on competitive conditions with respect to
commercial mobile services, please refer to the *Fifth Annual CMRS
Competition Report*.[^304]

[]{#__RefHeading___Toc503675587 .anchor}Advantages

The subpart Q competitive bidding rules establish procedures for the
efficient licensing of spectrum. Use of auction procedures allows for
substantially faster licensing and lesser costs than alternative
licensing methods such as comparative hearings, and is more likely to
result in award of licenses to those entities that value the spectrum
the most and will use it most efficiently. Auction rules also enable the
Commission to recover a portion of the value of the spectrum for the
benefit of the public.

Subpart Q is the result of the Commission's consolidation of its auction
rules in the Part 1 rulemaking proceeding (WT Docket No. 97-82). Prior
to the Part 1 proceeding, the Commission implemented service-specific
auction rules for each new auctioned service. Consolidating the auction
rules in Part 1 has resulted in more consistency and predictability in
the auctions process from service to service.

[]{#__RefHeading___Toc503675588 .anchor}Disadvantages

The auction rules in this subpart impose certain transaction costs on
auction participants (aside from the obligation on the winning bidder to
pay the amount bid). These auction-related costs may be somewhat higher
than the cost of filing a lottery application but significantly less
than the cost of a comparative hearing.[^305] However, they also tend to
discourage frivolous or speculative applications and are critical for
ensuring the integrity of the auction process. In addition, certain
aspects of the auctions process (*e.g.*, setting of minimum opening bid
amounts, bid increments, and bidding credit levels) still require
service-specific notice and comment prior to each individual auction.
Nonetheless, the delays associated with auctions are significantly less
than those associated with other licensing mechanisms.

[]{#__RefHeading___Toc503675589 .anchor}Recent Efforts

The Commission has made significant changes to the competitive bidding
rules of subpart Q in recent years. The overall objectives of these
competitive bidding rulemakings are: (1) consolidation of competitive
bidding rules; and (2) the establishment of a uniform set of rules. In
the *Part 1 Third Report and Order*,[^306] the Commission made
substantive amendments and modifications to the competitive bidding
rules for all auctionable services. These changes to the rules are
intended to streamline regulations and eliminate unnecessary rules
wherever possible, increase the efficiency of the competitive bidding
process, and provide more specific guidance to auction participants. The
changes also advance the auction program by reducing the burden on the
Commission and the public of conducting service-by-service auction rule
makings. The Commission recently adopted the *Part 1 Fifth Report and
Order*,[^307] which amended and clarified the Part 1 subpart Q general
competitive bidding rules. In the *Part 1 Fifth Report and Order,* the
Commission delegated to the Wireless Telecommunications Bureau the
authority to make any revisions to the Code of Federal Regulations that
are necessary to conform the service-specific auction rules to the Part
1 general competitive bidding rules.

[]{#__RefHeading___Toc503675590 .anchor}Initial Recommendation

The Commission has significantly revised and streamlined the competitive
bidding rules in this subpart in several proceedings. Therefore, the
staff concludes that significant modification or repeal of the subpart Q
rules is not necessary at this time.

**Comments**

None.

**Recommendation**

See initial recommendation.

[]{#__RefHeading___Toc503675591 .anchor}part 1, Subpart T -- Exempt
Telecommunications Companies

[]{#__RefHeading___Toc503675592 .anchor}Description

Sections 1.5000 through 1.5007[^308] implement provisions of the
Telecommunications Act of 1996 by which a public utility holding company
may obtain a determination from the Commission of status as an Exempt
Telecommunications Company (ETC). By obtaining ETC status under these
procedures, these firms become exempt from the "line of business"
restrictions of the Public Utility Holding Company Act (PUHCA). Those
restrictions, which are subject to regulation of the Securities and
Exchange Commission, would otherwise preclude these firms from entering
markets that are not related to the provision of public utility service.

[]{#__RefHeading___Toc503675593 .anchor}Purpose

The purpose of these rules is to enable public utility holding companies
to enter the telecommunications industry and thereby increase the number
of possible entrants into this industry.

[]{#__RefHeading___Toc503675594 .anchor}Analysis

[]{#__RefHeading___Toc503675595 .anchor}Status of Competition

The status of competition is irrelevant to the analysis of this rule.

[]{#__RefHeading___Toc503675596 .anchor}Advantages

The rules achieve the purpose in a very effective, streamlined way and
permit swift entry into many markets by ETCs.

[]{#__RefHeading___Toc503675597 .anchor}Disadvantages

The required approval process may slow market entry slightly in some
cases.

[]{#__RefHeading___Toc503675598 .anchor}Recommendation

Staff recommends that these rules be retained.

[]{#__RefHeading___Toc503675599 .anchor}Comments

None.

[]{#__RefHeading___Toc503675600 .anchor}Recommendation

See initial recommendation

[]{#__RefHeading___Toc503675601 .anchor}Part 2, Subpart B -- Allocation,
Assignment, and Use of Radio Frequencies

[]{#__RefHeading___Toc503675602 .anchor}Description

Section 303(c) of the Communications Act of 1934, as amended, authorizes
the Commission to "assign bands of frequencies to the various classes of
stations." Part 2, subpart B implements this authority and contains the
Table of Allocations which identifies the services allowed in each
frequency band.

[]{#__RefHeading___Toc503675603 .anchor}Purpose

The Table of Allocations provides a basic framework for each radio
service's rules.

[]{#__RefHeading___Toc503675604 .anchor}Analysis

[]{#__RefHeading___Toc503675605 .anchor}Status of Competition

The status of competition cannot be characterized because of the variety
of services and markets affected by this part.

[]{#__RefHeading___Toc503675606 .anchor}Advantages

The Table of Allocations sets out what radio services are permitted in
each band and the primary or secondary status of each. Users are
informed of what other classes of stations may enter the band or
adjacent bands and what priority exists with respect to other uses.

[]{#__RefHeading___Toc503675607 .anchor}Disadvantages

For some new radio technologies, a two-step process is needed to
implement their use: first the allocation table is amended, and then the
service rules are adopted. On occasion, the Commission combines these
two steps.

[]{#__RefHeading___Toc503675608 .anchor}Recent Efforts

The allocation table is dynamic and is regularly amended to address new
services and changes to existing services.

[]{#__RefHeading___Toc503675609 .anchor}Initial Recommendation

The staff recommends retaining the table in its current form and
continuing the present procedure of incremental change as the need
arises.

[]{#__RefHeading___Toc503675610 .anchor}Comments

None received.

[]{#__RefHeading___Toc503675611 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675612 .anchor}Part 2, subpart j -- equipment
authorization procedures

[]{#__RefHeading___Toc503675613 .anchor}Description

Sections 302 and 303(e) of the Communications Act of 1934, as amended,
authorize the Commission to regulate radio devices.

[]{#__RefHeading___Toc503675614 .anchor}Purpose

Subpart J describes the general application procedure and general
technical requirements for equipment authorization.

[]{#__RefHeading___Toc503675615 .anchor}Analysis

[]{#__RefHeading___Toc503675616 .anchor}Status of Competition

The status of competition cannot be characterized because of the variety
of services and markets affected by this rule.

[]{#__RefHeading___Toc503675617 .anchor}Advantages

This subpart delineates procedures and requirements for compliance with
technical standards for radio frequency equipment, thereby promoting
efficient use of radio spectrum.

[]{#__RefHeading___Toc503675618 .anchor}Disadvantages

The requirements impose some regulatory costs on equipment manufacturers
and the required approvals may slow market entry slightly.

[]{#__RefHeading___Toc503675619 .anchor}Recent Efforts

The equipment authorization procedures have been updated to decrease the
regulatory burden on classes of equipment shown to have a low risk of
interference potential.

[]{#__RefHeading___Toc503675620 .anchor}Initial Recommendation

The staff recommended that this subpart clarify the conditions under
which equipment designed for operation outside the US could be marketed
in the US, *e.g*. cellular telephones and marine radios with both US and
foreign modes.

[]{#__RefHeading___Toc503675621 .anchor}Comments

The Wireless Communications Division of the Telecommunications Industry
Association[^309] suggested two additional changes to the Rules: (1) to
amend 2.1055(a)(2) to reflect the present practice that Family Radio
Service transmitters are examined at temperatures between --20 degrees
and +50 degrees Celsius; and (2) to change the 50% duty cycle used for
examining Part 90 devices to 15%.

We concur with the first recommendation but disagree with the second. A
50% duty cycle is possible for moderate periods of time and testing of
the device to ensure compliance at this level is appropriate.

Alloy LLC[^310] objected to a staff recommendation to clarify what
equipment approvals are required for the marketing of transmitters that
include modes for overseas use. The staff recommends proceeding with a
clarification of our rules in the context of a notice and comment rule
making proceeding.

[]{#__RefHeading___Toc503675622 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675623 .anchor}Part 3 -- Authorization and
Administration of Accounting Authorities in Maritime and Maritime
Mobile-Satellite Radio Services.

[]{#__RefHeading___Toc503675624 .anchor}Description

This rule part implements 47 U.S.C. 154(i), 154(j) and 303(r). Part 3
sets forth rules for authorizing, controlling and monitoring the
issuance of accounting authority identification codes (AAIC). The rule
places specific reporting requirements on authorized Accounting
Authorities and addresses the Commission's enforcement policy. It also
establishes rules to monitor the business conduct of authorized
Accounting Authorities.

Accounting Authorities are responsible for settling accounts for public
correspondence due to foreign administrations for messages transmitted
at sea by or between maritime mobile stations located on board ships
subject to U.S. registry and utilizing foreign coast and coast earth
station facilities.

[]{#__RefHeading___Toc503675625 .anchor}Purpose

These rules ensure that settlements of accounts for U.S. licensed ship
radio stations are conducted in accordance with the International
Telecommunications Regulations, taking into account the applicable ITU-T
recommendations.

[]{#__RefHeading___Toc503675626 .anchor}Analysis

[]{#__RefHeading___Toc503675627 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503675628 .anchor}Advantages

These rules establish and formalize procedures for controlling the
issuance of accounting authority identification codes; establish rules
and guidance for administering accounting authority activities; address
ITU-T recommendations; ensure compliance with International
Telecommunications Regulations; implement specific reporting
requirements; and provide the opportunity for the Commission to
privatize its own internal accounting authority activities.

[]{#__RefHeading___Toc503675629 .anchor}Disadvantages

Administrative burden of monitoring the activities of private accounting
authorities.

[]{#__RefHeading___Toc503675630 .anchor}Recent Efforts

The International Bureau is currently drafting a *Further Notice of
Proposed Rule Making* (*FNPRM*) which, among other things, considers
privatizing the role currently performed by USO1, the Commission's
internal accounting authority. For years USO1 has handled all
communications traffic, not otherwise contracted with one of the interim
accounting authorities. With the implementation of Part 3 and the
adoption of rules proposed in the pending *FNPRM*, the Commission plans
to get out of the business of settling maritime accounts and instead
will administer and monitor the activities of authorized accounting
authorities.

[]{#__RefHeading___Toc503675631 .anchor}Initial Recommendation

Recommend the entire rule part stand as written, pending IB completion
of its current rule making to privatize the Commission's internal
accounting authority (USO1).

[]{#__RefHeading___Toc503675632 .anchor}Comments

None received.

[]{#__RefHeading___Toc503675633 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675634 .anchor}Part 15 Radio Frequency Devices

[]{#__RefHeading___Toc503675635 .anchor}Description

Section 302 of the Communications Act of 1934, as amended, authorizes
the Commission to regulate devices which may interfere with radio
reception and requires the Commission to adopt regulations forbidding
the sale of equipment capable in intercepting domestic cellular radio
telecommunications service.

[]{#__RefHeading___Toc503675636 .anchor}Purpose

The purpose of Part 15 is to provide technical guidance regarding radio
devices, including prevention of interference, prohibitions on cellular
transmission and reception interception.

[]{#__RefHeading___Toc503675637 .anchor}Analysis

[]{#__RefHeading___Toc503675638 .anchor}Status of Competition

The markets affected by Part 15 are competitive.

[]{#__RefHeading___Toc503675639 .anchor}Advantages

The requirements of Part 15 are clear and competitively neutral.

[]{#__RefHeading___Toc503675640 .anchor}Disadvantages

The requirements impose some regulatory costs on equipment manufacturers
and the required approvals may slow market entry slightly.

[]{#__RefHeading___Toc503675641 .anchor}Recent Efforts

The Part 15 rules are continually revised to address evolving
technology.

[]{#__RefHeading___Toc503675642 .anchor}Initial Recommendation

The staff recommends that the Commission incorporate the new ANSI C63.17
test procedure for unlicensed PCS systems into the rules; review
emission standards above 2 GHz in view of changes in licensed services
at these frequencies; and amend 15.231 to permit data transmission.

[]{#__RefHeading___Toc503675643 .anchor}Comments

The Wireless Communications Division of the Telecommunications Industry
Association made several suggestions for additional changes. First, TIA
argued that the Commission should simplify the different equipment
authorizations needed for composite devices (*e.g.* wireless
organizers). Staff agrees with this suggestion. Second, TIA recommended
that the Commission remove the requirement for two FCC ID's for
composite devices connected to the PSTN. This change has been proposed
in the NPRM in CC Docket 99-216.[^311] Third, TIA proposes a rewording
of 15.121(b) which deals with the limiting the ability of scanners to
receive commercial land mobile signals such as cellular radiotelephone.
Staff agrees with TIA that the present wording of the section is not
clear and recommends proposing a revised rule. Finally, TIA argues that
the Commission should add a new 15.19(b)(1)(iii) to permit the use of
the FCC logo to indicate equipment had been approved under Declaration
of Conformity for use other than home of office. Staff agrees with this
suggestion.

[]{#__RefHeading___Toc503675644 .anchor}Recommendation

The staff recommends the incorporation of the new ANSI C63.17 test
procedure for unlicensed PCS systems; a review of the emission standards
above 2 GHz; a clarification of 15.121(b); the amendment of 15.231 to
permit data transmission; and finally, the addition of a new
15.19(b)(1)(iii) to permit the use of the FCC logo to indicate equipment
had been approved under Declaration of Conformity for use other than
home or office.

[]{#__RefHeading___Toc503675645 .anchor}Part 17 -- Construction,
Marking, and Lighting of Antenna Structures

[]{#__RefHeading___Toc503675646 .anchor}Description

Part 17 implements section 303(q) of the Communications Act of 1934, as
amended.[^312] Part 17 establishes the procedures by which the
Commission registers and assigns painting and lighting requirements to
those antenna structures that may pose a physical hazard to
aircraft.[^313] The rules require registration, evaluation and approval
by the Commission, in conjunction with the recommendations of the
Federal Aviation Administration (FAA), of any proposed construction or
modification of an antenna structure that is a potential hazard to
aircraft. The rules also require tower owners to paint and light their
antenna structures as necessary to protect air navigation.

The Antenna Structure Registration procedures set forth in Part 17 are
distinct from the FCC's licensing functions. The registration of an
antenna structure that affects air navigation is a pre-condition to FCC
licensing of radio facilities at a particular site.

[]{#__RefHeading___Toc503675647 .anchor}Purpose

Part 17 ensures that tower owners do not construct structures that may
pose a hazard to air navigation and FCC licensees do not site facilities
on such structures until the antenna structures comply with federal
aviation safety requirements.

[]{#__RefHeading___Toc503675648 .anchor}Analysis

[]{#__RefHeading___Toc503675649 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503675650 .anchor}Advantages

The rules are limited to those classes of antenna structures that may
reasonably be expected to pose an air safety hazard (generally, antenna
structures that are taller than 200 feet or that are in close proximity
to airports). Antenna structure owners are responsible for compliance
with the rules; thus there is a single point of contact for a particular
antenna structure. This eliminates the need for each party on a
multi-tenant structure to undertake the registration process.

[]{#__RefHeading___Toc503675651 .anchor}Disadvantages

The Part 17 may delay the commencement of service when proposed
facilities must be studied by the FAA and registered by the Commission
prior to construction.

[]{#__RefHeading___Toc503675652 .anchor}Recent Efforts

In a March 2000 *Memorandum Opinion and Order on Reconsideration*, the
Commission reaffirmed the antenna structure registration procedures
adopted in 1995, [^314] and clarified several rules.[^315] The
Commission has cross-referenced the Part 17 rules in rulemaking
proceedings for individual radio services.[^316]

[]{#__RefHeading___Toc503675653 .anchor}Initial Recommendation

The staff concludes that it is unnecessary to significantly restructure
or modify the Part 17 rules at this time. However, the staff has
identified some rules that could be modified or eliminated without
compromising the public safety goals. These rules are duplicative or
inconsistent with the procedures antenna structure owners must undertake
when notifying the FAA,[^317] create unnecessary administrative burdens
on antenna structure owners,[^318] or are apt to confuse owners and
licensees who attempt to comply with our Part 17 rules.[^319]

[]{#__RefHeading___Toc503675654 .anchor}Comments

Commenters agreed with staff's recommendation that certain Part 17 rules
could be modified or eliminated without jeopardizing the Commission's
statutory responsibility to prescribe painting and lighting to antenna
structures as necessary to protect air safety.[^320] Commenters
requested that the FCC work with the FAA to further streamline
procedures in this area. For example, both Alloy and CTIA claim that
although Section 17.23 of the Commission's rules makes mandatory the
provision in the FAA Advisory Circular AC 70/7460 that requires owners
to notify the FAA when they plan to voluntarily paint or light
structures, FAA regional offices have informed antenna structure owners
not to provide such notification.[^321] Alloy and CTIA also urge the FCC
to work with the FAA to insure consistent application of the
registration exemption embodied in Section 17.14 (b) of the Commission's
rules.[^322]

[]{#__RefHeading___Toc503675655 .anchor}Recommendation

Same as above. Some of the specific issues addressed by commenters are
beyond the scope of the rule review embodied in the biennial review. The
rule sections identified by commenters -- 17.23 (FAA notification of
voluntary marking and lighting by operation of incorporation of FAA
advisory circular procedures) and 17.14(b) (the "20-foot" exception to
FAA notification of antenna structure construction or modification for
purposes of mandatory FCC registration) -- implicate FAA practices and
procedures. To the extent that FAA procedures create undue burdens or
inefficiencies, such problems are best resolved through continued
inter-agency coordination and, as necessary, modifications to the FAA's
own policies and rules.

[]{#__RefHeading___Toc503675656 .anchor}Part 18 -- industrial,
scientific and medical equipmEnt

[]{#__RefHeading___Toc503675657 .anchor}Description

Section 302 of the Communications Act of 1934, as amended, authorizes
the Commission to regulate devices which may interfere with radio
reception. Part 18 deals with unlicensed systems used for industrial,
scientific, and medical applications.

[]{#__RefHeading___Toc503675658 .anchor}Purpose

Part 18 provides technical guidance regarding industrial, scientific and
medical equipment used for purposes other than communications. The rules
minimize the likelihood of interference to licensed radio services.

[]{#__RefHeading___Toc503675659 .anchor}Analysis

[]{#__RefHeading___Toc503675660 .anchor}Status of Competition

The markets affected by Part 18 are competitive.

[]{#__RefHeading___Toc503675661 .anchor}Advantages

The requirements of Part 18 are clear and competitively neutral.

[]{#__RefHeading___Toc503675662 .anchor}Disadvantages

The requirements impose some regulatory costs on equipment manufacturers
and may slow market entry slightly.

[]{#__RefHeading___Toc503675663 .anchor}Recent Efforts

The Part 18 rules are continually revised to address evolving
technology.

[]{#__RefHeading___Toc503675664 .anchor}Initial Recommendation

The staff recommends no changes other than currently pending
rulemakings.

[]{#__RefHeading___Toc503675665 .anchor}Comments

No comments were received.

[]{#__RefHeading___Toc503675666 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675667 .anchor}Part 20 -- Commercial Mobile
Radio Services, Section 20.6 − CMRS Spectrum Aggregation Limit

[]{#__RefHeading___Toc503675668 .anchor}Description

Section 20.6[^323] limits the amount of broadband PCS, cellular, and SMR
spectrum that any entity can hold in a common geographic area. The rule
further defines the types of ownership and other interests that are
attributable under the cap. The cap was adopted in 1994,[^324] and
modified in 1999.[^325]

[]{#__RefHeading___Toc503675669 .anchor}Purpose

The purposes of section 20.6 are to promote competition and reduce
barriers to entry in the broadband CMRS market by preventing any
wireless carrier from gaining undue market power and preventing
excessive concentration of CMRS spectrum.

[]{#__RefHeading___Toc503675670 .anchor}Analysis

[]{#__RefHeading___Toc503675671 .anchor}Status of Competition

As described in the *Fifth Competition Report*, the broadband PCS sector
has engaged in significant buildout in recent years.[^326] However,
broadband PCS has not yet achieved full parity with cellular as a
facilities-based competitor. The *Fifth* *Competition Report* also notes
that PCS providers have yet to achieve the same level of geographic
coverage or subscribership as cellular, particularly in smaller
markets.[^327]

[]{#__RefHeading___Toc503675672 .anchor}Advantages

The spectrum cap minimizes the potential for anti-competitive behavior
by avoiding excessive concentration of licenses, and ensures that
licenses are distributed among a wide variety of parties. By applying a
bright-line test to spectrum aggregation, the rule also reduces
transaction costs associated with case-by-case review of such
transactions.

[]{#__RefHeading___Toc503675673 .anchor}Disadvantages

By restricting aggregation of spectrum, the spectrum cap may limit
economies of scale or scope that could otherwise be achieved by carriers
subject to the cap. The rule also potentially limits carriers' ability
to provide new services to the extent such services require more PCS,
cellular and SMR spectrum resources than the cap allows.

[]{#__RefHeading___Toc503675674 .anchor}Recent Efforts

On September 15, 1999, the Commission adopted a *Report and Order* that
retained the spectrum cap, with some modifications.[^328] The Commission
maintained the original 45 MHz cap for non-rural areas, adopted a 55 MHz
cap for rural areas, adopted a separate ownership attribution standard
of 40 percent equity ownership by passive institutional investors, and
established a waiver mechanism for carriers who can demonstrate that
strict application of the cap will impair their ability to provide 3G or
other innovative services. The Commission stated in the *Report and
Order* that it would consider whether the cap should be retained,
repealed, or modified in the 2000 Biennial Regulatory Review.[^329] On
November 8, 2000, the Commission reaffirmed these decisions on
reconsideration with minor clarification.[^330]

Several carriers filed petitions for waiver or forbearance with respect
to application of the spectrum cap to the C and F Block auction that
began on December 12, 2000. On August 29, 2000, the Commission issued
the *Sixth Report and Order and Order on Reconsideration* in WT Docket
No. 97-82, which held that the spectrum cap would apply to this
auction.[^331]

[]{#__RefHeading___Toc503675675 .anchor}Initial Recommendation

The Commission has stated that the spectrum cap will be reviewed as part
of the 2000 Biennial Regulatory Review. The staff plans to prepare a
Notice of Proposed Rulemaking for Commission consideration later this
year.

[]{#__RefHeading___Toc503675676 .anchor}Comments

Alloy, CTIA, Independent Cellular Carriers, and Verizon all state that
the Commission should eliminate the 45 MHz CMRS spectrum cap.[^332] The
Coalition of Independent Cellular Carriers believes that the spectrum
cap should be raised to 55 MHz because 55 MHz represents only 34.375% of
the relevant spectrum, and that many so-called metropolitan areas,
especially those served by unserved area licensees, are rural in
nature.[^333]

CTIA and Alloy argue that the application of the Section 11 biennial
review criteria supports the elimination of the spectrum cap because the
CMRS market is now competitive.[^334] Alloy argues that there are three
or more competing broadband CMRS providers in markets covering nearly 90
percent of the nation's population as evidence of competition,[^335] and
that since the 1998 Biennial Review, prices have fallen 20 percent and
more than two-thirds of the population can choose from among five or
more CMRS providers.[^336] CTIA points out that further enforcement of
the CMRS spectrum cap is inappropriate in a wireless market in which at
least 11 million people can choose from among seven different providers.

Commenters also argue that the spectrum cap hampers market-driven
actions. Verizon asserts that the spectrum cap distorts licensees'
demand for spectrum and undercuts the Commission's efforts to promote a
secondary spectrum market.[^337] Verizon argues that the spectrum cap
affects the reauction of numerous PCS licenses,[^338] while Alloy notes
that the application of the spectrum cap in the C and F Block auction
will preclude carriers from increasing their spectrum in some of the
most congested markets.[^339] Alloy, CTIA, and the Coalition of
Independent Cellular Carriers, argue that licensees need access to
additional spectrum to offer such services as third-generation ("3G")
mobile services,[^340] and new and enhanced services (*e.g.*, wireless
data).[^341]

CTIA also notes that the Commission's decision to exclude the spectrum
auctioned in the 700 MHz band from the spectrum cap is inconsistent
given the Commission's understanding that the 700 MHz band "may be used
for mobile services and comparable to the cellular broadband PCS and SMR
spectrum for which the CMRS spectrum cap was devised."[^342]

[]{#__RefHeading___Toc503675677 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675678 .anchor}part 20, section 20.11 −
Interconnection to facilities of local exchange carriers

[]{#__RefHeading___Toc503675679 .anchor}Description

The Section 20.11 rule codifies section 332(c)(1)(B) of the Act,[^343]
which was enacted by Congress as part of the Omnibus Budget
Reconciliation Act of 1993.[^344] Section 20.11[^345] provides that
local exchange carriers (LECs) must provide reasonable interconnection
to commercial mobile radio service (CMRS) providers on request, and that
LECs and CMRS providers must each reasonably compensate the other for
terminating traffic that originates on their respective facilities.

In the Telecommunications Act of 1996, Congress added sections 251 and
252 to the Act. These statutory provisions establish interconnection
rights among all telecommunications carriers, and set forth terms and
conditions under which interconnection must be provided by one carrier
to another.[^346] While enacting sections 251 and 252, Congress also
left section 332(c)(1)(B) of the Act intact. In the 1996 *First Local
Competition Order*, the Commission codified new interconnection rules in
Part 51 as part of its implementation of sections 251 and 252. [^347]
The Commission also concluded that in light of Congress' retention of
section 332(c)(1)(B), the Commission retained separate authority over
LEC-CMRS interconnection pursuant to that section. [^348] Because the
Commission viewed sections 251, 252, and 332 of the Act as furthering a
common goal with respect to interconnection, the Commission declined at
that point to further act on or define the scope of its section 332
interconnection authority, but instead amended section 20.11 to require
that LECs and CMRS providers comply with the interconnection rules in
Part 51.[^349]

Section 20.11 is organized into three lettered sub-parts: Subsection (a)
requires LECs to provide the type of interconnection requested by mobile
radio service providers, within reason. Subsection (b) requires LECs and
CMRS providers to reasonably compensate each other for terminating
traffic that originates on each other's facilities. Subsection (c)
requires LECs and CMRS providers to comply with the Part 51
interconnection rules.

[]{#__RefHeading___Toc503675680 .anchor}Purpose

The purpose of the LEC-CMRS interconnection rule is to promote
competition in the telecommunications market by ensuring that all LECs
and CMRS providers provide reasonable interconnection to one another
subject to reasonable rates, terms, and conditions. The rule regulates
the conduct of LECs with market power in their interconnection
relationships with CMRS providers. Historically, some LECs denied or
restricted interconnection options available to CMRS providers, or
required CMRS providers to compensate the LEC for LEC-originated traffic
that terminated on the CMRS provider's network. Congress enacted section
332(c)(1)(B), and the Commission adopted section 20.11 codifying this
provision, in order to curtail such practices.

[]{#__RefHeading___Toc503675681 .anchor}Analysis

[]{#__RefHeading___Toc503675682 .anchor}Status of Competition

While competition in the local exchange and access markets is growing,
competitors still serve only a small percentage of local lines.

[]{#__RefHeading___Toc503675683 .anchor}Advantages

Section 20.11 sets forth basic requirements for reasonable and
nondiscriminatory interconnection arrangements between LECs and CMRS
providers, but does not impose detailed standards or technical
requirements. It reduces the potential for anti-competitive behavior,
while affording carriers reasonable flexibility with respect to the
terms and conditions of interconnection so long as the basic
requirements of the rule are adhered to.

[]{#__RefHeading___Toc503675684 .anchor}Disadvantages

Section 20.11 imposes certain transaction costs on carriers to ensure
that their interconnection arrangements comply with the rule, and may
lead to disputes and litigation between carriers about what constitutes
"reasonable" interconnection under the rule. In addition, the overlap
between this rule and the Part 51 interconnection rules may cause some
duplication of regulatory requirements.

[]{#__RefHeading___Toc503675685 .anchor}Recent Efforts

Since the addition of subsection (c) in 1996, section 20.11 has not been
revised. In February 2000, Sprint PCS filed an analysis of CMRS
traffic-sensitive costs of terminating local calls originating on LECs'
networks, and requested the Commission to consider rules that would
mandate recovery of such costs. [^350] The Commission has sought comment
on Sprint's filing.[^351] The issue is still pending review.

Although section 20.11 has not been judicially challenged, the related
Part 51 rules continue to be the subject of litigation. On July 18,
2000, on remand from the Supreme Court, the Eighth Circuit vacated
portions of the FCC's forward-looking pricing methodology, proxy prices,
and wholesale pricing provisions.[^352] To the extent that section 20.11
requires compliance with Part 51, this litigation affects carriers'
obligations under both sets of rules.

[]{#__RefHeading___Toc503675686 .anchor}Initial Recommendation

The staff recommends retaining section 20.11. Although there is some
overlap with the interconnection requirements of Part 51, retention of
the rule is appropriate in light of the fact that Congress has retained
the separate statutory provision in section 332 governing LEC-CMRS
interconnection.

[]{#__RefHeading___Toc503675687 .anchor}Comments

USTA states that Section 20.11[^353] presently needs no additional
clarification.[^354] USTA believes that the Commission should deny
Sprint PCS's request for the Commission to consider rules that would
mandate recovery of CMRS traffic-sensitive costs of terminating local
calls originating on LECs' networks.[^355]

[]{#__RefHeading___Toc503675688 .anchor}Recommendation

Unchanged.

[]{#__RefHeading___Toc503675689 .anchor}part 20, Section 20.12 − Resale
and Roaming

\[Note: Section 20.12 addresses two distinct issues: resale and roaming.
This analysis deals with each separately.\]

[]{#__RefHeading___Toc503675690 .anchor}Resale

[]{#__RefHeading___Toc503675691 .anchor}Description

Section 20.12(b)[^356] provides that any carrier of Broadband PCS
(except those C, D, E, and F block PCS licensees that do not own and
control and are not owned and controlled by firms also holding cellular,
A or B block licenses), Cellular Radio Telephone Service, or Specialized
Mobile Radio (SMR) Services that offers real-time, two-way
interconnected voice service with switching capability ("covered CMRS
provider") must permit resale of its services.

The resale provision will cease to be effective five years after the
date of the award of the last group of initial licenses for broadband
PCS. The Commission has determined that the last PCS award date for
purposes of this rules was November 25, 1997. Therefore, the resale rule
is set to expire on November 24, 2002.[^357] However, resale
arrangements will continue to be subject to the non-discrimination and
reasonableness requirements of sections 201 and 202 of the
Communications Act[^358] after that date.

[]{#__RefHeading___Toc503675692 .anchor}Purpose

The purpose of the resale rule is to promote competition in the wireless
telephony market by preventing facilities-based covered CMRS carriers
from restricting resale of their services. The rule promotes competition
during the period that broadband PCS providers are building out their
facilities-based networks to compete with incumbent cellular carriers.
The Commission has concluded that by November 2002, PCS buildout should
be sufficient to obviate the need for the rule.[^359]

[]{#__RefHeading___Toc503675693 .anchor}Analysis

[]{#__RefHeading___Toc503675694 .anchor}Status of Competition

As described in the *Fifth Competition Report*, the broadband PCS
licensees have achieved significant buildout in recent years.[^360]
However, broadband PCS has not yet achieved full parity with cellular as
a facilities-based competitor. The *Fifth* *Competition Report* also
notes that PCS providers have yet to achieve the same level of
geographic coverage or subscribership as cellular providers,
particularly in smaller markets.[^361]

[]{#__RefHeading___Toc503675695 .anchor}Advantages

The resale rule provides a "bright-line" test that minimizes potential
for anti-competitive behavior. By prohibiting CMRS carriers from
restricting resale unless the carrier demonstrates that the restriction
is reasonable, the rule ensures no carrier may offer like communications
services to a reseller at less favorable prices, or on less favorable
terms or conditions, than are available to similarly situated customers.

[]{#__RefHeading___Toc503675696 .anchor}Disadvantages

The resale rule imposes administrative costs on facilities-based
carriers associated with negotiating and entering into resale
agreements, resolving disputes with resellers, and litigation of
compliance issues. The rule also may impose technical costs associated
with accommodating resellers on facilities-based networks and billing of
resale service.

[]{#__RefHeading___Toc503675697 .anchor}Recent Efforts

In response to petitions for reconsideration of the *CMRS Resale Order*,
the Commission recently conducted a comprehensive review of the resale
rule. In the *CMRS Resale Reconsideration Order*, adopted on September
15, 1999, the Commission rejected arguments that the rule should be
repealed immediately, and determined that retaining the rule (with minor
modifications) until the November 2002 sunset date would best promote
competition and balance the costs and benefits of the rule.[^362]

[]{#__RefHeading___Toc503675698 .anchor}Initial Recommendation

The staff finds no need to make further recommendations at this time.
The staff recommends that the Commission continue to evaluate the resale
rule in light of competitive conditions in the CMRS market sector.

[]{#__RefHeading___Toc503675699 .anchor}Comments

Alloy notes that the CMRS marketplace is highly competitive and as such
the resale rule should be eliminated or its sunset expedited using the
criteria in the Section 11 biennial review process to eliminate rules
made obsolete by the development of competitive market forces.[^363]
Alloy believes that retention of the resale rule is not in the public
interest because it imposes administrative costs (*e.g,* negotiating
resale agreements and resolving disputes and litigation) and technical
costs (*e.g.*, billing).[^364] Alloy asserts that the Commission should
open a proceeding to examine whether the sunset for the resale rule can
be accelerated, or whether the rules should be eliminated based on
current market conditions. [^365]

[]{#__RefHeading___Toc503675700 .anchor}Recommendation

Unchanged.

[]{#__RefHeading___Toc503675701 .anchor}Roaming

[]{#__RefHeading___Toc503675702 .anchor}Description

Roaming occurs when the subscriber of one CMRS provider utilizes the
facilities of another CMRS provider with which the subscriber has no
direct pre-existing service or financial relationship to place an
outgoing call, to receive an incoming call, or to continue an
in-progress call. Roaming can be done "manually," in which a subscriber
establishes a relationship with the host carrier usually by providing a
credit card number, or "automatically," in which the subscriber does
nothing more than turning on her telephone. Automatic roaming requires a
contractual agreement between the respective carriers.

Section 20.12(c)[^366] provides that any "covered CMRS" carrier must
provide mobile radio service upon request to any subscriber in good
standing, including roamers, while the subscriber is within any portion
of the licensee's licensed service area, assuming that the subscriber is
using technically compatible mobile equipment. The rule only mandates
that carriers offer manual roaming, and does not require provision of
automatic roaming. The rule was adopted in 1996.[^367]

[]{#__RefHeading___Toc503675703 .anchor}Purpose

The purposes of the roaming provision are to ensure seamless service to
wireless customers who roam out of their home service areas, and to
prevent carriers from restricting competition and consumer choice
through refusal to provide service to roamers.

[]{#__RefHeading___Toc503675704 .anchor}Analysis

[]{#__RefHeading___Toc503675705 .anchor}Status of Competition

Most cellular carriers have reached automatic roaming agreements among
themselves, even though section 20.12 only mandates manual roaming.
Carriers such as AT&T, Nextel, and Verizon have also developed
nationwide "footprints" and wide-area calling plans that give their
customers the ability to receive service outside their local area
without paying roaming charges. However, some local and regional
carriers have alleged that they have been unable to enter into roaming
agreements with competing carriers. Consumers' ability to roam may also
be limited because they can only roam on networks that use the same
technical standard (CDMA, TDMA, GSM, Iden) as the home carrier.

[]{#__RefHeading___Toc503675706 .anchor}Advantages

The roaming rule provides a clear standard and it is minimally intrusive
because it does not require CMRS carriers to reconfigure their systems
to support technically incompatible roaming.

[]{#__RefHeading___Toc503675707 .anchor}Disadvantages

Manual roaming obligations impose some administrative and technical
burdens associated with caller verification, billing, and similar
issues.

[]{#__RefHeading___Toc503675708 .anchor}Recent Efforts

At the time that it adopted the manual roaming rule, the Commission also
issued a *Third Notice of Proposed Rulemaking* in CC Docket 94-54 on (1)
whether to sunset the manual roaming rule, and (2) whether to mandate
automatic roaming for any carriers.[^368] On August 28, 2000, the
Commission released a *Third Report and Order and Memorandum Opinion and
Order on Reconsideration*, in which it affirmed the existing manual
roaming rule, with some modification and clarification.[^369] On October
4, 2000, the Commission initiated a new rulemaking proceeding to
consider the impact of technological advances and the rapid expansion of
the CMRS market since the *1996 Roaming Order* on issues relating to
both automatic and manual roaming.[^370]

[]{#__RefHeading___Toc503675709 .anchor}Initial Recommendation

The staff recommends that issues relating to whether to retain,
eliminate, or sunset the roaming rule be addressed in the upcoming
rulemaking proceeding.

[]{#__RefHeading___Toc503675710 .anchor}Comments

Alloy states the swift expansion of the CMRS market along with growth in
competition since the rule was adopted in 1996 justify the initiation of
a new rulemaking proceeding to examine whether to eliminate or sunset
the rule. Alloy also points out that the Commission may want to consider
the roaming rule as part of its effort to evaluate whether there is an
ongoing need for cellular providers to continue to set aside spectrum
for analog service.[^371]

[]{#__RefHeading___Toc503675711 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675712 .anchor}part 20, Section 20.18 -- 911
Service

[]{#__RefHeading___Toc503675713 .anchor}Description

Section 20.18[^372] requires certain broadband CMRS providers
(delineated in subpart (a) of this rule) to comply with guidelines set
by the Commission for the implementation of Enhanced 911 services (E911)
for all of their customers, including those customers requiring TTY
devices.

The rule provides for implementation of E911 in two phases. In Phase I,
CMRS carriers must implement E911 capability in their networks to
provide 911 dispatchers with a callback number and the location of the
cell site that received the call. In Phase II, carriers must provide
Automatic Location Identification (ALI) capability for all 911 calls
placed by wireless telephone users, so that the caller's location can be
more accurately determined.

The rule provides for implementation of Phase I by April 1, 1998. In
Phase II, licensees who employ network-based solutions must provide
service to at least 50 percent of their coverage area or their
population by October 1, 2001, and licensees employing handset-based
technologies must ensure that at least 50 percent of all new handsets
activated are location-capable by October 1, 2001.[^373] Section 20.18
further describes who must comply with E911 requirements, the basic E911
service that CMRS carriers must provide, as well as the accuracy
percentage and timeframe in which these services must be deployed.
Finally, the rule provides alternative requirements for carriers who
choose to employ an intermediary dispatcher rather than routing their
customers' 911 calls directly to a Public Safety Answering Point (PSAP).

[]{#__RefHeading___Toc503675714 .anchor}Purpose

The purpose of section 20.18 is to enhance public safety and facilitate
effective and efficient law enforcement. Unlike a wireline 911 call, a
dispatcher receiving a wireless 911 call can only obtain information
regarding the caller's location and callback number if the caller can
provide it. Section 20.18 rule attempts to provide the same reliable and
ubiquitous aid to wireless 911 callers that is available to wireline
callers.

[]{#__RefHeading___Toc503675715 .anchor}Analysis

[]{#__RefHeading___Toc503675716 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503675717 .anchor}Advantages

The E911 rule sets national standards and deadlines to ensure that all
CMRS carriers throughout the U.S. will provide E911 services in a timely
manner. At the same time, the rule is technologically and competitively
neutral because it allows carriers and equipment manufacturers to
determine the best method to implement E911 capability. Allowing
manufacturers and carriers to adopt the technology of their choice
encourages the parties to arrive at a solution that is both effective
and cost-efficient. Finally, Section 20.18 allows the Commission to
easily determine which carriers have failed to comply with the mandate
and are providing insufficient E911 services.

[]{#__RefHeading___Toc503675718 .anchor}Disadvantages

The E911 rule imposes administrative, technical, and economic costs on
carriers who must reconfigure their networks to comply with the rule.

[]{#__RefHeading___Toc503675719 .anchor}Recent Efforts

The Commission has been considering waiver requests from CMRS providers
to extend the deadlines for implementation in order to reflect and
recognize new technologies whose implementations cannot be completed in
the allotted timeframe. On September 8, 2000, the Commission issued a
*Fourth Memorandum Opinion and Order* in the E911 proceeding, in which
it (1) extended from October 1, 2000 to November 9, 2000, the date for
carriers to file E911 Phase II implementation reports; (2) extended the
deadline for carriers to begin selling and activating ALI-capable
handsets from March 1, 2001 to October 1, 2001; (3) adopted a revised
phase-in schedule for deployment of ALI-capable handsets; and (4)
extended from December 31, 2004, to December 31, 2005, the date for
carriers to reach full penetration of ALI-capable handsets in their
total subscriber bases.[^374] The Commission also granted a limited
waiver of the accuracy standards to VoiceStream Wireless to permit it to
deploy a "hybrid" location solution, subject to a timetable that will
require it to deploy ALI-capable handsets faster than the timetable
originally set forth in the *Third Report and Order*, and substantially
faster than the revised timetable adopted in the current Order.

[]{#__RefHeading___Toc503675720 .anchor}Initial Recommendation

Staff recommends that this rule be retained. While E911 requirements
impose a burden on CMRS providers, the necessity of providing sufficient
E911 services for callers in need outweighs this burden. The staff
recommends that Commission continue to review the rule as implementation
of E911 progresses.

[]{#__RefHeading___Toc503675721 .anchor}Comments

None.

[]{#__RefHeading___Toc503675722 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675723 .anchor}Part 20, section 20.20 −
Conditions Applicable to Provision of CMRS Service by Local Exchange
Carriers

[]{#__RefHeading___Toc503675724 .anchor}Description

Section 20.20[^375] requires incumbent LECs (ILECs) providing in-region
broadband CMRS to provide such services through a separate affiliate.
The rule further imposes restrictions on the separate affiliate,
including: (1) maintaining separate books of account; (2) not jointly
owning transmission or switching facilities with the affiliated ILEC
that the ILEC uses for the provision of local exchange services in the
same market; and (3) acquiring any services from the affiliated ILEC on
a compensatory arm's length basis pursuant to our affiliate transaction
rules.[^376] Additionally, Title II common carrier services, or
services, facilities or network elements provided pursuant to sections
251 and 252, that are acquired from the affiliated ILEC must be
available to all other carriers, including CMRS providers, on the same
terms and conditions. Furthermore, all transactions between the ILEC and
the cellular affiliate must be written, and a copy of all such
agreements (other than interconnection agreements) must be available for
inspection upon reasonable request by the Commission.

Rural ILECs are exempt from the separate affiliate requirement. A
competing CMRS carrier interconnected with the rural telephone carrier
may petition the Commission to remove the exemption where the rural
telephone company has engaged in anti-competitive conduct. Small-and
mid-sized ILECs serving fewer than two percent of the nation's
subscriber lines are entitled to petition the Commission for suspension
or modification of the separate affiliate requirement.

The rule became effective on February 11, 1998, and will sunset on
January 1, 2002. [^377]

[]{#__RefHeading___Toc503675725 .anchor}Purpose

The purpose of the ILEC/CMRS separate affiliate requirement is to
prevent ILECs from using their market power in the local exchange market
to engage in anti-competitive practices in the CMRS market.

[]{#__RefHeading___Toc503675726 .anchor}Analysis

[]{#__RefHeading___Toc503675727 .anchor}Advantages

The separate affiliate rule promotes competition by requiring
transparency and arm's length transactions between ILECs and their CMRS
affiliates, and by ensuring that ILECs cannot offer their CMRS
affiliates more favorable terms and conditions than they offer to
unaffiliated competing CMRS providers. The rule also provides greater
flexibility for rural, small, and mid-sized ILECs, where there is less
risk of the ILEC having sufficient market power to restrain CMRS
competition.

[]{#__RefHeading___Toc503675728 .anchor}Disadvantages

By requiring use of a separate affiliate for CMRS operations, separate
ownership of certain facilities, and written, arms-length transactions
between ILECs and their CMRS affiliates, section 20.20 increases
transaction costs for carriers subject to the rule.

[]{#__RefHeading___Toc503675729 .anchor}Recent Efforts

The Commission has recently denied petitions for reconsideration of the
separate affiliate requirements in section 20.20.[^378]

[]{#__RefHeading___Toc503675730 .anchor}Initial Recommendation

In light of the Commission's recent orders on reconsideration of the
separate affiliate rule, and the fact that the rule is scheduled to
sunset on January 1, 2002, the staff does not recommend any changes to
section 20.20 at this time. The staff will continue to evaluate whether
the competitive conditions in the local exchange market merit continued
application of the rule.

[]{#__RefHeading___Toc503675731 .anchor}Comments

USTA and ITTA recommend the Commission eliminate the requirements of
Section 20.20[^379] as they are unnecessary in a competitive
marketplace.[^380] ITTA suggests the requirements were not based on any
indication of discrimination or anti-competitive behavior by midsize
LECs.[^381] ITTA asserts midsize LECs can easily become a vital new
source of competition in rural and smaller urban areas of the
country.[^382] USTA claims that the rapid growth of the CMRS marketplace
prevents incumbent LECs from affecting CMRS competition.[^383]

[]{#__RefHeading___Toc503675732 .anchor}Reply Comments

WorldCom disagrees with ITTA and USTA. WorldCom believes that structural
separations requirements for ILECs are necessary because ILECs still
retain the market power to leverage their advantage in the local
exchange market into the CMRS market.[^384]

[]{#__RefHeading___Toc503675733 .anchor}Recommendation

Unchanged.

[]{#__RefHeading___Toc503675734 .anchor}Part 21---Domestic Public Fixed
Radio Services

[]{#__RefHeading___Toc503675735 .anchor}Description

Statutory authority for Part 21 of the Commission's rules is found in
Titles I through III of the Communications Act of 1934, as amended. The
purpose of the rules and regulations in Part 21 is to prescribe the
manner in which portions of the radio spectrum may be made available for
domestic communication common carrier and multipoint distribution
service non-common carrier operations which require transmitting
facilities on land or in specified offshore coastal areas within the
continental shelf.

Part 21 is organized into seven lettered sub-parts:

A -- General

B -- Applications and Licenses

C -- Technical Standards

D -- Technical Operation

E -- Miscellaneous

F -- Developmental Authorizations

K -- Multipoint Distribution Service

[]{#__RefHeading___Toc503675736 .anchor}Purpose

Part 21 is intended to ensure that licensees are financially and
technically qualified to provide service in a manner that will not
create interference with authorized transmissions. The procedures
prescribed in Part 21 are designed to provide the Commission and the
public with adequate information regarding licensees, prospective
licensees, facilities, and proposed changes in facilities or in the
ownership or control of licensees. Finally, the rules are intended to
promote efficient use of the radio spectrum and to encourage innovation
in communication services, equipment, and techniques.

[]{#__RefHeading___Toc503675737 .anchor}Analysis

[]{#__RefHeading___Toc503675738 .anchor}Status of Competition

Part 21 licensees provide video programming in competition with cable
television systems, broadcast television stations, direct broadcast
satellite systems, and other multichannel video programming
distributors. *See Annual Assessment of the Status of Competition in
Markets for the Delivery of Video Programming*, 15 FCC Rcd 978 (2000).
In addition, as a result of the Commission's decisions in its *Two-Way
Rulemaking,*[^385] Part 21 licensees now may offer two-way broadband
transmission services in competition with numerous wireline and wireless
service providers. *See Inquiry Concerning the Deployment of Advanced
Telecommunications Capability*, FCC 00-290 (released August 21, 2000).

[]{#__RefHeading___Toc503675739 .anchor}Advantages

Part 21 licenses are awarded through a competitive bidding process,
which creates an incentive for rapid deployment of services and, thus,
promotes efficient use of the radio spectrum. The technical standards in
Part 21 ensure interference protection and promote effective use of
proposed and authorized facilities. The Part 21 rules further benefit
the public by affording access to information regarding licensees,
prospective licensees, facilities, and proposed changes in facilities or
in the ownership or control of licensees. Such access also reduces the
cost of enforcing Commission rules by facilitating analysis by
interested parties, thereby supplementing Commission review and
enforcement efforts. Finally, Part 21 promotes innovation through the
availability of developmental authorizations for technical
experimentation.

[]{#__RefHeading___Toc503675740 .anchor}Disadvantages

Part 21 contains language and requirements that have been superseded by
recent Commission rulemakings.

[]{#__RefHeading___Toc503675741 .anchor}Recent Efforts

The Commission's decisions in its *Two-Way Rulemaking*, cited *supra*,
allow Part 21 licensees to use their assigned frequencies to provide
two-way communication services and to alternate between providing
service on a common carrier and non-common carrier basis. Recent changes
in the Part 21 attribution rules encourage investment in Part 21
services by relaxing ownership restrictions. *Attribution of Broadcast
and Cable/MDS Interests*, 14 FCC Rcd 12559 (1999).

[]{#__RefHeading___Toc503675742 .anchor}Initial Recommendation

The Staff recommended that Part 21 be reviewed to ensure consistency
with recent Commission rulemakings.

[]{#__RefHeading___Toc503675743 .anchor}Comments

The Wireless Communications Association International, Inc. ("WCAI")
filed comments in response to the report of the Commission staff in the
Biennial Regulatory Review 2000. WCAI advocates modification or
elimination of numerous Part 21 rules. Several of WCAI's suggestions
relate to current filing and service requirements for applications,
licensee qualification reports, annual reports, and articles of
incorporation and partnership agreements.[^386] Other WCAI proposals
seek elimination or modification of rules that it maintains are obsolete
in light of changes in the nature of Part 21 service or
regulation.[^387] Finally, WCAI advocates additional Part 21 changes on
the grounds that specific rules are unduly burdensome.[^388]

Sprint Corporation ("Sprint") concurs with several of WCAI's
suggestions. Sprint agrees with WCAI that the Section 21.911 annual
report should be eliminated, that licensees should not be required to
report "no change" in the information contained in their licensee
qualification reports, that the Section 21.43 restriction on pre-grant
construction should be eliminated, and that applicants should not be
required to file interference consent agreements.[^389] Sprint argues
that these changes are necessary in order to allow MDS and ITFS
licensees to compete with similar services currently subject to less
oversight (*e.g.*, local multipoint distribution service and fixed
wireless services in the 24 GHz and 39 GHz bands). Sprint further
maintains that regulation of MDS and ITFS should evolve to a system
under which regulation is required only in instances of market failure
or interference complaints from other licensees. Accordingly, Sprint
encourages the Commission to minimize engineering oversight of MDS and
ITFS licensees.[^390]

[]{#__RefHeading___Toc503675744 .anchor}Recommendation

The Part 21 rules should be reviewed to consider revisions that would
reflect changes in the nature of Part 21 services, remove unnecessary
requirements, and conform Part 21 rules with recent Commission
decisions.

[]{#__RefHeading___Toc503675745 .anchor}Part 22 -- Public Mobile
Services

[]{#__RefHeading___Toc503675746 .anchor}Description

Part 22[^391] contains licensing, technical, and operational rules for
five CMRS services historically described as "Domestic Public Land
Mobile Radio Services" or "DPLMRS." These services are the Paging and
Radiotelephone Service, the Cellular Radiotelephone Service, the Rural
Radiotelephone Service, the Air-Ground Radiotelephone Service, and the
Offshore Radiotelephone Service. In general, the rules in this part: (1)
specify the frequency bands allocated to each service; (2) provide
methods for determining the protected service area of stations in each
service; (3) establish minimum construction or coverage requirements for
licensees; and (4) define technical limits on operation (*e.g*.,
transmitter power) to reduce the likelihood of interference.

Part 22 comprises 10 subparts:

Subpart A - Scope and Authority

Subpart B - Licensing Requirements and Procedures

Subpart C - Operational and Technical Requirements

Subpart D - Developmental Authorizations

Subpart E - Paging and Radiotelephone Service

Subpart F - Rural Radiotelephone Service

Subpart G - Air-Ground Radiotelephone Service

Subpart H - Cellular Radiotelephone Service

Subpart I - Offshore Radiotelephone Service

> Subpart J - Required New Capabilities Pursuant to the Communications
> Assistance for Law Enforcement Act (CALEA)

Subparts A, B, and C apply generally to all Part 22 licensees. Subpart D
provides for the licensing on a developmental basis of stations that are
to be used for testing new technologies or services. Each of the next
five subparts (subparts E through I) contains rules applicable to one of
the five specific Part 22 services. Finally, subpart J implements the
provisions of the Communications Assistance for Law Enforcement Act
(CALEA) as they apply to Part 22 services.

[]{#__RefHeading___Toc503675747 .anchor}Purpose

Part 22 of the Commission's rules comprises a minimal regulatory
framework that facilitates the rapid, efficient provision of commercial
wireless telecommunications services to the general public at reasonable
rates, by: (1) utilizing a competitive bidding process to issue
exclusive licenses to the service provider applicants who value them
most; (2) preserving and enhancing competition between these service
providers once licensed; (3) ensuring that available spectrum
allocations are used efficiently; and (4) reducing the likelihood of
harmful interference between licensed stations.

[]{#__RefHeading___Toc503675748 .anchor}Analysis

[]{#__RefHeading___Toc503675749 .anchor}Status of Competition

As detailed in the *Fifth Competition Report*, CMRS providers, including
those licensed under Part 22, operate in an environment that is marked
by significant and increasing competition in mobile telephony,
paging/messaging, and mobile data.[^392] The only Part 22 radio service
that is not experiencing an increase in competition at this time is the
Air-Ground Radiotelephone Service, where only two of the original six
licenses remain (GTE Airfone and AT&T Claircom).

[]{#__RefHeading___Toc503675750 .anchor}Advantages

Overall, the Part 22 rules provide a clear, predictable structure for
the assignment and use of spectrum. In Part 22, provision for accepting
competing mutually exclusive applications and selecting the licensee by
means of competitive bidding results in licenses being issued to the
entities that value them the most. Geographic area licensing minimizes
the amount of paperwork involved in obtaining a license and thus speeds
the authorization of new competitive services to the public. Minimal and
flexible technical standards facilitate the introduction of new
technologies.

[]{#__RefHeading___Toc503675751 .anchor}Disadvantages

The Part 22 rules impose administrative burdens inherent to the
licensing process and are necessary for compliance with technical and
operational rules. The technical standards in most Part 22 services
place the burden of coordination on the licensees themselves, which may
increase transaction costs. Finally, while certain portions of the Part
22 rules have been recently revamped, other portions, most notably the
cellular rules in subpart H, are now more than a decade old, and
therefore may not reflect significant technological and competitive
changes that have occurred in wireless services in recent years.

[]{#__RefHeading___Toc503675752 .anchor}Recent Efforts

The Commission has made significant changes to its Part 22 rules in
recent years. For example, in the Universal Licensing proceeding, the
Commission eliminated many of the service-specific licensing rules in
Part 22 as part of its consolidation of all wireless licensing rules
into Part 1.[^393] The Commission also recently completed a
comprehensive overhaul of its paging rules, in which it finalized the
rules for the transition from site-by-site to geographic licensing and
award of geographic paging licenses by auction.[^394]

[]{#__RefHeading___Toc503675753 .anchor}Initial Recommendation

Part 22 contains a number of relatively old rules that were adopted when
wireless technology and competitive conditions were very different from
the present day. For example, section 22.937,[^395] which requires
demonstration of a cellular applicant's financial qualifications, was
adopted in connection with the use of lotteries to award licenses, which
has been superseded in most instances by the use of competitive bidding.
Similarly, section 22.323[^396] allows Part 22 licensees to provide
"incidental" fixed services, but prohibits cross-subsidization of such
services by subscribers to CMRS services -- a rule that appears
anachronistic given that CMRS rates are fully deregulated. Therefore,
the staff recommends that the Commission undertake a comprehensive
review of the Part 22 cellular rules.

[]{#__RefHeading___Toc503675754 .anchor}Comments

Various commenters suggested that a number of Part 22 rules could be
revised or deleted. Alloy recommended that the Commission should
initiate a rulemaking to address technical requirements for the
provision of cellular service, including the elimination of the
requirement that cellular providers must offer analog service.[^397]
Alloy believes that elimination of this rule will enable cellular
carriers to convert quickly from analog to digital technology and
provide more advanced services to subscribers. CTIA proposes that
CIBERNET, its wholly-owned subsidiary, assume responsibility for
assignment of cellular SID (System Identification) numbers.[^398]
Verizon also comments that the Commission should revise 47 C.F.R. §
22.367(a) of the Commission's rules, which requires transmitting
antennas for cellular systems to be vertically polarized. In addition,
Verizon indicates that Parts 24 and 27 do not contain requirements that
providers must mark every transmitting facility with the station call
sign as required by the cellular service rules.[^399] Verizon indicates
that the Commission should revise 47 C.F.R. § 22.953(c), which requires
cellular carriers to submit maps with minor modification
applications.[^400] In general, the Part 22 commenters ask the
Commission to harmonize these rules with its other CMRS rule sections.

[]{#__RefHeading___Toc503675755 .anchor}Recommendation

See initial recommendation. The comments, just described, will be
included in our future deliberations to modernize and streamline these
rules.

[]{#__RefHeading___Toc503675756 .anchor}part 22, Subpart E -- Paging and
Radiotelephone Service

[]{#__RefHeading___Toc503675757 .anchor}Description

Part 22, subpart E[^401] contains licensing, technical, and operational
rules for the Paging and Radiotelephone Service ("PARS"). This service
was originally titled the "Domestic Public Land Mobile Radio Service" or
"DPLMRS." The allocations covered by Subpart E are primarily used for
tone, voice, numeric and alphanumeric paging services. In general, the
rules in this subpart: (1) specify the frequency bands allocated to
PARS; (2) provide methods for determining the reliable service area and
interfering contour of individual stations; (3) establish construction
and commencement of operation requirements for licensees; and (4) define
technical limits on operation (*e.g*., transmitter power) to reduce the
likelihood of interference.

The PARS rules have evolved over the years. The PARS rules currently
focus primarily upon paging. There are also rules pertaining to the
operation of internal point-to-point and point-to-multipoint fixed links
that are essential for local and regional paging systems.

Part 22 subpart E is organized into six groups of rules. The first group
of rules applies to all PARS stations.[^402] Each of the subsequent five
groups contains technical and operational rules pertaining only to a
particular type of operation on specified channels. The types of
operation are paging, one- and two-way mobile, point-to-point,
point-to-multipoint, and trunked mobile operation. Some of the PARS
454-459 MHz channels are shared with basic exchange telephone radio
systems (providing Rural Radiotelephone Service) and potentially with
non-geostationary low earth orbit ("Little LEO") satellite downlinks.

[]{#__RefHeading___Toc503675758 .anchor}Purpose

The purpose of subpart E is to facilitate the provision of commercial
one-way and two-way wireless telecommunications services, in particular,
one-way paging, to the general public at reasonable rates by: (1)
utilizing a competitive bidding process to issue exclusive licenses to
the service provider applicants who value them most; (2) preserving and
enhancing competition between these service providers once licensed; (3)
ensuring that available spectrum allocations are used efficiently; and
(4) reducing the likelihood of harmful interference among licensed
stations.

[]{#__RefHeading___Toc503675759 .anchor}Analysis

[]{#__RefHeading___Toc503675760 .anchor}Status of Competition

PARS stations governed by subpart E compete directly with Part 90
commercial paging services and with Part 24 narrowband PCS, and they
compete indirectly with other CMRS. The *Fifth Competition Report* notes
that one-way paging service subscribership appears to have peaked in
1999, and is now declining.[^403] Analysts believe that this trend is
the result of declining prices for alternative options, such as cellular
and broadband PCS services, which include paging, voice mail and text
messaging capabilities. Paging providers that have sufficient spectrum
are attempting to reposition themselves in the market as wireless data
providers.

[]{#__RefHeading___Toc503675761 .anchor}Advantages

The PARS rules provide a clear, predictable regulatory structure for the
assignment and use of the spectrum allocated to PARS service. Provision
for accepting competing mutually exclusive applications and selecting
the licensee by means of competitive bidding results in licenses being
issued to the entities that value them the most. Geographic area
licensing minimizes the administrative burden involved in obtaining a
license. The technical rules allow transition to narrowband technology
capable of providing wireless data services.

[]{#__RefHeading___Toc503675762 .anchor}Disadvantages

The PARS rules impose some burdens related to compliance with technical
and operational rules. Although the Commission converted the
authorization of the PARS from the original site-by-site procedure to a
geographic area licensing process, several detailed technical rules
related to the site-by-site procedure have been retained in order to
protect the investment of grandfathered incumbent licensees in areas
where the geographic licensee is a different entity.

[]{#__RefHeading___Toc503675763 .anchor}Recent Efforts

Most of the application filing rules were moved from this subpart to
Part 1 in connection with implementation of electronic filing procedures
and the Universal Licensing System.[^404]

[]{#__RefHeading___Toc503675764 .anchor}Initial Recommendation

The Commission has recently made significant revisions that restructured
and streamlined the Part 22 licensing rules. However, in view of the
trends in paging and other CMRS services, the staff recommends that the
Commission consider, *inter alia*, eliminating the rules which limit the
number of paging channels that a licensee can obtain in the same area at
one time; impose operational burdens, such as station identification
requirements, where the advance of technology may have made the cost of
the rule exceed the benefit; and the 470-512 MHz Trunked Mobile
Operation rules (sections 22.651 through 22.659); and rules related
specifically to services and technologies that were never implemented or
have gone out of use *(e.g*., sections 22.161, 22.603).. The
availability of cellular service has made limited local trunked
radiotelephone systems obsolete and the Commission has phased out this
type of operation on this frequency band; and rules covering services
and technologies that were never implemented or have gone out of use
(*e.g.*, sections 22.161, 22.603).

[]{#__RefHeading___Toc503675765 .anchor}Comments

None

[]{#__RefHeading___Toc503675766 .anchor}Recommendation

No changes.

[]{#__RefHeading___Toc503675767 .anchor}part 22, Subpart F -- Rural
Radiotelephone Service

[]{#__RefHeading___Toc503675768 .anchor}Description

Part 22 subpart F[^405] contains licensing, technical, and operational
rules for the Rural Radiotelephone (Rural Radio) Service. The rules
contain provisions governing eligibility, assignment of channels, and
management of interference.

Rural Radio service is the only service regulated under Part 22 that is
a fixed service. Rural Radio service makes basic telephone service
available to persons who live in remote rural locations where it is not
feasible, because of cost, environmental factors, or other practical
concerns, to provide such service by wire. The rules provide that Rural
Radio interoffice stations can also be used to link central offices
where wireline links are similarly infeasible.

Two types of facilities are authorized in the Rural Radio service --
conventional Rural Radio stations and basic exchange telephone radio
systems (BETRS). Conventional Rural Radio stations may be licensed to
any existing or proposed common carrier. These stations operate on
exclusively assigned paired channels and are considered for regulatory
purposes to be interconnected to, but not a part of, the local loop.
Consequently, conventional Rural Radio stations do not have to meet
state requirements affecting the local loop (*e.g.*, call blocking,
transmission quality).

BETRS facilities may only be licensed to entities that have been state
certified to provide local exchange service in the geographic area in
question (*e.g.*, LECs and CLECs). BETRS also operate on exclusively
assigned paired channels, but they are considered, for regulatory
purposes, to be a part of the local loop, and therefore must meet state
standards applicable to the local loop.

[]{#__RefHeading___Toc503675769 .anchor}Purpose

The purpose of the Rural Radio rules is to facilitate provision of
telephone service to persons who live in remote rural locations where it
is infeasible to provide service by wire.

[]{#__RefHeading___Toc503675770 .anchor}Analysis

[]{#__RefHeading___Toc503675771 .anchor}Status of Competition

The Rural Radio service is generally used only as a last resort in the
most remote rural areas where wireline telephone service is infeasible
or not cost-effective. While historically, Rural Radio customers have
had few if any competitive alternatives for provision of telephony due
to their geographic isolation, other wireless services, such as cellular
and PCS, have begun to expand into areas served by Rural Radio, and
availability of competitive alternatives is likely to increase in the
future.

[]{#__RefHeading___Toc503675772 .anchor}Advantages

The rules in Part 22, subpart F provide a clear, predictable structure
for the assignment and use of the spectrum co-allocated to the Rural
Radio service to provide basic telephone service to persons who live in
remote rural locations.

[]{#__RefHeading___Toc503675773 .anchor}Disadvantages

As discussed below, some of the rules concerning Rural Radio appear to
have become outdated as a result of technological developments since the
rules were adopted.

[]{#__RefHeading___Toc503675774 .anchor}Recent Efforts

The Commission has not recently revised the Rural Radio rules other than
to establish geographic licensing rules, as discussed above.

[]{#__RefHeading___Toc503675775 .anchor}Initial Recommendation

In general, the staff recommends retention of the Rural Radio rules.
However, some of these rules appear to have become outdated. Sections
22.417, 22.727, and 22.729[^406] have not been used for many years. The
Commission should attempt to determine whether there are any such
systems still in operation and, if not, propose to remove the meteor
burst provisions.

Section 22.757[^407] provides a limited allocation of private radio
channels for BETRS use in certain areas. These have never been applied
for or used for BETRS because of their limited geographic availability,
and because there is no equipment suitable for BETRS in this band. Also,
the private radio rules governing these channels have been substantially
changed since this allocation was made. The Commission should consider
removing this allocation from the Rural Radio service.

[]{#__RefHeading___Toc503675776 .anchor}Comments

None

[]{#__RefHeading___Toc503675777 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675778 .anchor}part 22, Subpar t G --
Air-Ground Radiotelephone Service

[]{#__RefHeading___Toc503675779 .anchor}Description

Part 22, subpart G[^408] contains licensing, technical, and operational
rules for the Air-Ground Radiotelephone Service ("AGS"). AGS provides
commercial telephone service to persons in airborne aircraft, using
telephone instruments that are permanently mounted in the aircraft.

AGS consists of two separate parts: General Aviation air-ground stations
and Commercial Aviation air-ground systems. General Aviation air-ground
stations serve only "general aviation" aircraft (aircraft owned by
individuals or businesses for their own use that do not carry passengers
for hire). These stations operate independently rather than as a system.
Consequently, when an aircraft flies out of range of a ground station,
any call in progress disconnects, and the user must then redial through
another ground station.

Commercial Aviation air-ground systems are permitted to serve any type
of aircraft, but primarily serve passengers aboard commercial airlines.
Commercial Aviation systems use seat-back and bulkhead-mounted
telephones commonly seen on commercial flights. Commercial aviation
air-ground systems are all nationwide systems and calls in progress
hand-off from one ground station to another uninterrupted as the
aircraft flies across the country.

In general, the subpart G rules: (1) specify the frequency bands
allocated to the General Aviation and Commercial Aviation air-ground
services; (2) provide separation distance criteria for determining where
new ground stations may be established; (3) establish minimum
construction or coverage requirements for licensees; and (4) set forth
certain technical limits on operation (*e.g*., transmitter power).

[]{#__RefHeading___Toc503675780 .anchor}Purpose

Subpart G facilitates the provision of commercial telephone service to
persons aboard airborne aircraft.

[]{#__RefHeading___Toc503675781 .anchor}Analysis

[]{#__RefHeading___Toc503675782 .anchor}Status of Competition

The number of carriers providing AGS is small and most wireless carriers
consider it to be a "niche" market. The principal operators of General
Aviation stations are M-Tel and the successor companies of the Bell
Operating Companies, most notably Airtouch (now Verizon), though other,
smaller operators exist also. Although more than one provider can share
each ground station control channel pair,[^409] few if any locations
appear to have competing providers.

The frequencies used by Commercial Aviation air-ground systems can
accommodate up to six competing systems, but only three of the six
initial licensees constructed systems.[^410] Only two carriers (GTE
Airfone and Claircom, operated by AT&T Wireless) remain in operation.

Another potential source of competition in the air-ground sector may be
provided by Aircell. Aircell does not operate on AGS frequencies, but
was granted a waiver in 1998 to provide air-ground service using
specialized equipment that operates on cellular frequencies.[^411]

[]{#__RefHeading___Toc503675783 .anchor}Advantages

The AGS rules provide a clear, predictable structure for the assignment
and use of the air-ground spectrum allocation.

[]{#__RefHeading___Toc503675784 .anchor}Disadvantages

The AGS rules include highly specific requirements for the technical
configuration of air-ground systems and the use of air-ground channels
that may inhibit licensee flexibility and technical innovation.

[]{#__RefHeading___Toc503675785 .anchor}Initial Recommendation

The subpart G rules have not been significantly revised since the
1980's. The staff recommends that the Commission consider initiating a
proceeding to review its air-ground rules in light of current technology
and competitive conditions. Potential goals of such a proceeding would
include: (1) adopting rules that foster competition by eliminating
unnecessary barriers to entry; (2) eliminating rules that freeze
technological advancement; and (3) providing incentives for existing
terrestrial CMRS licensees to provide air-ground service.

[]{#__RefHeading___Toc503675786 .anchor}Comments

None

[]{#__RefHeading___Toc503675787 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675788 .anchor}part 22, Subpart H-- Cellular
Radiotelephone Service

[]{#__RefHeading___Toc503675789 .anchor}Description

Part 22, subpart H[^412] contains licensing, technical, and operational
rules for the Cellular Radiotelephone Service ("cellular service").

The spectrum allocated to the cellular service is divided into two
channel blocks, A and B. This was done to provide for two competing
facilities-based providers in each licensing area. Initially, the
cellular license for the B channel block in each licensing area was
issued to the wireline telephone company in that area and the license
for the A channel block issued to a company other than that wireline
telephone company. Because there were multiple A block applicants in
most markets, the initial licensee was selected by comparative hearings
for the first (largest) 30 markets, and random selection (lotteries) for
the remaining markets. After Congress gave the Commission authority to
select among mutually exclusive applications using competitive bidding
(auctions), the Commission began using auctions instead of lotteries in
the cellular service.

In general, the rules in Part 22, subpart H: (1) specify the frequency
bands allocated to the cellular service; (2) provide methods for
determining the Cellular Geographic Service Area (protected service
area) of each system; (3) establish minimum construction and coverage
requirements for cellular licensees; and (4) set forth certain technical
limits on operation (*e.g*., transmitter power).

[]{#__RefHeading___Toc503675790 .anchor}Purpose

Subpart H facilitates the provision of commercial cellular services to
the general public at reasonable rates, by: (1) utilizing a competitive
bidding process to issue exclusive licenses to the service provider
applicants who value them most; (2) preserving and enhancing competition
between these service providers once licensed; (3) ensuring that
available spectrum allocations are used efficiently; and (4) requiring
coordination procedures to prevent harmful interference among cellular
systems.

[]{#__RefHeading___Toc503675791 .anchor}Analysis

[]{#__RefHeading___Toc503675792 .anchor}Status of Competition

As detailed in the *Fifth Competition Report*, CMRS providers operate in
an environment that is marked by significant and increasing competition
in mobile telephony, paging/messaging, and mobile data.[^413] Cellular
is by far the largest mobile radiotelephone service in terms of
subscribers, but competing broadband PCS and enhanced SMR services are
rapidly growing. Cellular systems compete with other mobile telephone
services principally on the basis of pricing plans, geographical
coverage, and operational features.

[]{#__RefHeading___Toc503675793 .anchor}Advantages

The rules provide a clear, predictable structure for the assignment and
use of cellular spectrum. The rules provide for accepting competing
mutually exclusive applications for unserved areas and selecting the
licensee by means of competitive bidding; thus, licenses are issued to
the entities that value them the most. In addition, the rules contain
minimal and flexible technical standards for alternative cellular
technologies that facilitate the introduction of digital service and new
features.

[]{#__RefHeading___Toc503675794 .anchor}Disadvantages

The cellular rules impose some administrative burdens inherent in the
licensing process and are necessary for compliance with technical and
operational rules. However, some of the subpart H rules appear to be
outdated in light of the current state of cellular technology and
wireless competition. For example, subpart H contains regulations to
prevent speculation and trafficking in cellular licenses that were
adopted when cellular licenses were awarded by lottery. In addition,
subpart H contains technical rules for the provision of analog service.

[]{#__RefHeading___Toc503675795 .anchor}Recent Efforts

The Commission has made significant changes to its Part 22 rules in
recent years, mainly in the areas of increasing spectrum use
flexibility,[^414] streamlining the licensing process to incorporate
electronic filing procedures and the Universal Licensing System,[^415]
and permitting disaggregation of cellular spectrum.[^416] Currently, the
staff is preparing for the Commission's consideration proposals to
eliminating cellular technical and administrative rules that have become
obsolete because increased competition has caused technology to evolve
at a rapid pace.

[]{#__RefHeading___Toc503675796 .anchor}Initial Recommendation

As noted above, subpart H contains a number of relatively old rules that
were adopted when wireless technology and competitive conditions were
very different from the present day. In addition, certain rules (*e.g.*,
rules requiring demonstration of an applicant's financial
qualifications) have been superseded by the use of competitive bidding.

Therefore, the staff recommends that the Commission undertake a
comprehensive review of the subpart H rules. In accordance, with this
recommendation, the staff is preparing a Notice of Proposed Rulemaking
that would consider, *inter alia*, whether to modify or eliminate the
rule requiring demonstration of financial qualifications by cellular
applicants;[^417] whether to modify or eliminate the rule requiring
cellular systems to operate in conformance with the 1981 AMPS
compatibility specification,[^418] and various other technical rules
that have become obsolete due to the rapid evolution of technology; and
whether to privatize the assignment of system identification numbers.

[]{#__RefHeading___Toc503675797 .anchor}Comments

The Coalition of Independent Cellular Carriers believes that Section
22.942,[^419] the cellular cross-ownership rule, should be eliminated.
The Coalition argues that the variety of spectrum (*i.e.*, cellular,
800/900 MHz and PCS) used to provide wireless service suggests that a
rule prohibiting any person from controlling both the cellular "A"
frequency block licensee and the "B" frequency block licensee in
overlapping geographic areas makes no sense.[^420]

The Coalition of Independent Cellular Carriers points out that the
Commission adopted Section 22.942 when there was no spectrum allocated
for broadband wireless in the 1.9 GHz band, and when the notion of using
heavily-encumbered SMR spectrum to provide broadband wireless service
was an abstract idea.[^421] At that time, only 50 MHz were allocated for
cellular service. Today there is 90 MHz of broadband wireless spectrum
allocated under the Commission's Part 24 rules, and approximately 20 MHz
more allocated under Part 90 of the Commission's rules.[^422] The
Coalition argues that Section 22.942 is duplicative of the spectrum cap
rule and unnecessarily redundant.[^423]

The Coalition also argues that Section 22.942 does not reflect any
policy judgment that the spectrum licensed under Part 22 is better than
other spectrum licensed for broadband wireless purposes under either
Part 24 or Part 90.

[]{#__RefHeading___Toc503675798 .anchor}Recommendation

Unchanged. The Commission will also consider cellular cross ownership
issues as part of the proceeding reviewing the CMRS spectrum cap (47
C.F.R. § 20.6), referenced above.

[]{#__RefHeading___Toc503675799 .anchor}part 22, Subpart I -- Offshore
Radiotelephone Service

[]{#__RefHeading___Toc503675800 .anchor}Description

Part 22, subpart I[^424] governs the licensing and operation of offshore
radiotelephone stations. The Offshore Radiotelephone Service allows CMRS
providers to use conventional duplex analog technology to provide
telephone service to subscribers located on (or in helicopters en route
to) oil exploration and production platforms in the Gulf of Mexico.

[]{#__RefHeading___Toc503675801 .anchor}Purpose

The purpose of the subpart I rules is to establish basic rules and
procedures for the licensing and operation of offshore radiotelephone
stations.

[]{#__RefHeading___Toc503675802 .anchor}Analysis

[]{#__RefHeading___Toc503675803 .anchor}Status of Competition

There are several competitive alternatives to Offshore Radiotelephone
service in the Gulf. Two cellular companies currently operate in the
Gulf of Mexico Service Area (GMSA), and some SMR service providers also
operate there on a site-by-site basis. The Commission is also
considering licensing in the Gulf in several other spectrum bands,
including PCS and the 700 MHz band.[^425]

[]{#__RefHeading___Toc503675804 .anchor}Advantages

The subpart I rules provide a clear, predictable structure for the
assignment and use of Offshore Radio spectrum.

[]{#__RefHeading___Toc503675805 .anchor}Disadvantages

The subpart I rules impose limited administrative and technical burdens
that are inherent in the licensing process and that are necessary for
compliance with technical and operational rules.

[]{#__RefHeading___Toc503675806 .anchor}Recent Efforts

The rules in this subpart have not been revised since 1995.

[]{#__RefHeading___Toc503675807 .anchor}Recommendation

The staff concludes that significant modification or repeal of the
subpart I rules is not necessary at this time.

[]{#__RefHeading___Toc503675808 .anchor}part 22, Subpart J -- Required
New Capabilities Pursuant to the Communications Assistance for Law
Enforcement Act (CALEA)

[]{#__RefHeading___Toc503675809 .anchor}Description

The Communications Assistance for Law Enforcement Act (CALEA) was
enacted by Congress to establish procedures for law enforcement to
obtain authorized access to wireless and wireline communications or
call-identifying information where such information is needed for law
enforcement purposes. [^426] Part 22, subpart J[^427] contains technical
standards and capabilities for cellular carriers to ensure that
communications and call-identifying information will be accessible to
law enforcement, as required by section 103 of CALEA.[^428] These rules
were adopted in 1999.[^429] The Commission has adopted parallel
requirements and standards for broadband PCS licensees in Part 24,
subpart J[^430] and for wireline telecommunications carriers in Part 64,
subpart W.[^431]

[]{#__RefHeading___Toc503675810 .anchor}Purpose

The purpose of the CALEA rules is to ensure that law enforcement,
pursuant to court order or other lawful authorization, will have
reasonable access to wireless and wireline communications or
call-identifying information where such information is needed for law
enforcement purposes.

[]{#__RefHeading___Toc503675811 .anchor}Analysis

[]{#__RefHeading___Toc503675812 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503675813 .anchor}Advantages

These rules arose from the Commission's specific statutory role as
arbiter of differences among industry, law enforcement, and other
interested parties regarding standards for complying with section 103 of
CALEA. In large part, they reflect the consensus reached during the
standard-setting process, as modified through application of the
Commission's expertise in areas where consensus was not reached.

[]{#__RefHeading___Toc503675814 .anchor}Disadvantages

The CALEA rules impose technical burdens on carriers to comply with the
accessibility requirements of the statute, and may limit technical
flexibility and innovation.

[]{#__RefHeading___Toc503675815 .anchor}Recent Efforts

On August 15, 2000, the D.C. Circuit vacated and remanded for further
explanation the CALEA rules insofar as they imposed certain capability
requirements in excess of industry-adopted technical standards.

[]{#__RefHeading___Toc503675816 .anchor}Initial Recommendation

The staff recommended that the Commission reassess its subpart J rules
pursuant to the D.C. Circuit's remand.

[]{#__RefHeading___Toc503675817 .anchor}Comments

USTA supports the staff recommendation that the rules in Part 22 Subpart
J be reassessed given the D.C. Circuit Court's remand of some of these
rules, and further recommends that the Commission suspend the September
30, 2001, compliance deadline for all capability requirements beyond the
core elements of J-STD-025 (interim standard) pending further action
pursuant to the remand.[^432]

[]{#__RefHeading___Toc503675818 .anchor}Reply Comments

CTIA concurs with USTA's comments.[^433]

[]{#__RefHeading___Toc503675819 .anchor}Recommendation

On October 17, 2000, staff released a public notice (DA 00-2342) seeking
comment on various issues raised by the remand. Upon receipt of these
comments, staff will recommend appropriate action.

[]{#__RefHeading___Toc503675820 .anchor}Part 23 -- International Fixed
Public Radiocommunication Services

[]{#__RefHeading___Toc503675821 .anchor}Description

Part 23 implements and interprets sections 4, 301, and 303 of the
Communications Act of 1934, as amended.[^434] Part 23 sets forth rules
applicable to high frequency ("HF") radio systems used for international
communications, including general licensing and service rules,
application filing requirements, and technical specifications. The rules
classify these systems as either "fixed public service" (a
radiocommunication service carried on between fixed stations open to
public correspondence) or "fixed public press service" (a
radiocommunication service carried on between point-to-point telegraph
stations, open to limited public correspondence of news items or other
material related to or intended for publication by press agencies,
newspapers, or for public dissemination).

Although Part 23 does not contain lettered sub-parts, the rules are
organized as follows:

> Section 23.1 Definitions
>
> Sections 23.11-23.12 Use of frequencies
>
> Sections 23.13-23.19 Technical specifications
>
> Sections 23.20-23.27 Use of frequencies
>
> Sections 23.28-23.55 Licensing and service rules

[]{#__RefHeading___Toc503675822 .anchor}Purpose

The Commission has stated that the original purpose of the Part 23 rules
is "obscure."[^435] Neither the Federal Communications Commission nor
the Federal Radio Commission has issued any opinion explaining the
rationale for the rules.[^436] The FCC has not opined on these rules
since1980.

In the *Western Union MO&O*, the Commission stated that the rules
contained in Part 23 derive from those promulgated by the Federal Radio
Commission in 1932. At that time, fixed wireless links presumably
provided an important method of communications between: (1) the
contiguous 48 States (including D.C.) and Alaska, Hawaii, any U.S.
possession, or any foreign point; (2) Alaska and any other point; (3)
Hawaii and any other point; and (4) any U.S. possession and any other
point. Part 23 provides the regulatory framework for these services. In
addition, Part 23 governs radiocommunication within the contiguous 48
States (including D.C.) in connection with relaying the above-referenced
international traffic.

[]{#__RefHeading___Toc503675823 .anchor}Analysis

[]{#__RefHeading___Toc503675824 .anchor}Status of Competition

Use of HF radio facilities in providing carriers' international
communications services in the age of submarine cable and satellites is
virtually dormant. There are two active Part 23 licensees, with a
recently-filed Part 23 application -- the first in several years --
still pending. Competition among services under this rule Part is
therefore not relevant.

[]{#__RefHeading___Toc503675825 .anchor}Advantages

Part 23 provides the requisite framework within which licensees can
perform useful functions in the provision of international
communications services. HF radio stations can be a functionally useful
supplement to submarine cable and satellite systems in the provision of
service to overseas points not easily or economically reached by these
facilities, in the provision of a limited restoral capability during
submarine cable or satellite outages, and in the provision of certain
specialized services such as press and weather map broadcast services.

[]{#__RefHeading___Toc503675826 .anchor}Disadvantages

Because the type of international traffic addressed in these rules now
is carried primarily by undersea cable and satellite, there is
considerably less need for regulation in this area.

[]{#__RefHeading___Toc503675827 .anchor}Recent Efforts

None.

[]{#__RefHeading___Toc503675828 .anchor}Initial Recommendation

Part 23 is ripe for streamlining or elimination. However, the staff
recommended that Part 23 be retained in its entirety pending an in-depth
Commission review to determine how the few remaining licensees are using
this service and to project when submarine cable and satellite will
fully supplant this service.

[]{#__RefHeading___Toc503675829 .anchor}Comments

No comments were received concerning Part 23.

[]{#__RefHeading___Toc503675830 .anchor}Recommendation

Same as above. Staff note that if the Commission determines that this
service warrants continued regulation, the staff recommends the repeal
of Part 23, with the necessary regulatory mechanisms (most likely,
technical standards) incorporated into Part 90 or Part 101, each of
which regulates similar services.

[]{#__RefHeading___Toc503675831 .anchor}Part 24 --- Personal
Communications Services

[]{#__RefHeading___Toc503675832 .anchor}Description

Part 24[^437] contains licensing, technical, operational, and auction
rules for broadband and narrowband Personal Communications Services
(PCS).[^438] The rules in this part: (1) define PCS licensing areas; (2)
specify the frequencies available to PCS licensees; (3) establish
license terms and operational parameters; (4) set forth minimum coverage
requirements for licensees; (5) establish minimum technical standards
and limits on operation (*e.g.*, antenna height, transmitter power) to
prevent interference; and (6) set forth application procedures and
competitive bidding rules for the auction and award of PCS licenses.

In addition, subpart J contains requirements applicable to PCS under the
Communications Assistance for Law Enforcement Act (CALEA).[^439]
Specifically, these rules set forth certain capability standards
applicable to broadband PCS telecommunications carriers in order to
ensure that, when properly authorized, law enforcement has access to
communications or call-identifying information.

> Part 24 is organized into ten lettered sub-parts:

A -- General Information

> B -- Applications and Licenses
>
> C -- Technical Standards
>
> D -- Narrowband PCS
>
> E -- Broadband PCS
>
> F -- Competitive Bidding Procedures for Narrowband PCS

G -- Interim Application, Licensing and Processing Rules for Narrowband
PCS

H -- Competitive Bidding Procedures for Broadband PCS

I -- Interim Application, Licensing and Processing Rules for Broadband
PCS

> J -- Required New Capabilities Pursuant to the Communications
> Assistance for Law Enforcement Act (CALEA)

The Part 24 rules were initially adopted in 1993,[^440] and were
modified on reconsideration in 1994.[^441] The Commission has recently
issued an order further revising certain aspects of the Part 24
narrowband PCS rules.[^442] The CALEA rules were adopted in a separate
proceeding in 1999.[^443]

[]{#__RefHeading___Toc503675833 .anchor}Purpose

The purposes of the Part 24 rules are to establish basic ground rules
for assignment of PCS spectrum, to ensure efficient spectrum use by PCS
licensees, and to prevent interference. In addition, Part 24 contains
rules that define eligibility for the PCS entrepreneurs' blocks and for
"designated entity" (*i.e.*, small business) status within these blocks.
The purpose of these provisions is to implement the objectives of
section 309(j)(3) of the Communications Act[^444] to ensure that the
distribution of PCS licenses is not excessively concentrated, and that
small businesses, rural telephone companies, and businesses owned by
women and minorities have opportunities to become PCS licensees.

[]{#__RefHeading___Toc503675834 .anchor}Analysis

[]{#__RefHeading___Toc503675835 .anchor}Status of Competition

Broadband PCS providers primarily offer mobile telephony service in
competition with cellular and some SMR services. As described in the
*Fifth Competition Report*, the broadband PCS sector has contributed to
a significant increase in competition in the mobile telephony market
since the first broadband PCS providers were licensed five years
ago.[^445] However, broadband PCS has not yet achieved the same level of
geographic coverage or subscribership as cellular, particularly in
smaller markets.

Narrowband PCS includes a variety of services such as advanced paging
and messaging. They compete with a rapidly proliferating array of other
messaging and mobile data services, including paging and wireless
Internet services.

[]{#__RefHeading___Toc503675836 .anchor}Advantages

The Part 24 rules provide the basic regulatory structure necessary for
the orderly assignment and use of PCS spectrum, while otherwise
affording licensees substantial flexibility to determine what
technology, type of service, and business strategy they will use. The
Part 24 competitive bidding rules promote efficient licensing of PCS
spectrum to those entities that value it the most.

[]{#__RefHeading___Toc503675837 .anchor}Disadvantages

The Part 24 rules impose limited administrative and technical burdens
that are inherent in the licensing process and that are necessary for
compliance with technical and operational rules.

[]{#__RefHeading___Toc503675838 .anchor}Recent Efforts

In an order adopted May 5, 2000, the Commission revised its narrowband
PCS rules to eliminate certain regulatory burdens and afford narrowband
PCS licensees greater flexibility than was provided under the original
Part 24 rules.[^446] Specifically, the Commission: (1) provided for use
of larger licensing areas for the remaining narrowband PCS spectrum; (2)
eliminated the limit on aggregation of narrowband PCS licenses; (3)
eliminated technical restrictions and eligibility limitations on paging
response channels; (4) adopted a "substantial service" alternative to
existing construction and minimum coverage requirements; and (5) adopted
partitioning and disaggregation rules.

On June 7, 2000, the Commission initiated a rulemaking to consider
possible modifications to its entrepreneur eligibility rules for the C
and F blocks in anticipation of re-authorization of some of the C and F
block spectrum later this year.[^447] On August 29, 2000, the Commission
released the Sixth Report and Order and Order on Reconsideration in WT
Docket No. 97-82, in which it reconfigured the available C block
licenses into 10 MHz blocks and removed the entrepreneur eligibility
restrictions with respect to certain reconfigured C block licenses and
all F block licenses.[^448]

[]{#__RefHeading___Toc503675839 .anchor}Initial Recommendation

With certain exceptions noted below, the staff conclude that significant
modification or repeal of the licensing and technical rules in Part 24
is not necessary at this time.

Part 24 contains two subparts (subparts G and I) that set forth "interim
application, licensing, and processing rules" for narrowband and
broadband PCS, respectively. Many of these rules appear to be
duplicative of the consolidated Part 1, subpart F rules that establish
licensing procedures for all wireless services. In addition, a number of
the competitive bidding provisions in Part 24 have been superseded by
recent amendments to the general competitive bidding rules of Part 1,
subpart Q. For example, Part 24 provisions addressing (1) competitive
bidding design, (2) withdrawal, default and disqualification penalties,
and (3) upfront, down and installment payments, have been replaced by
updated provisions in Part 1, subpart Q. Therefore, the continued
presence of service-specific auction rules in Part 24 appears to be
redundant. The staff recommends that consideration be given to
eliminating or phasing out these rules.

[]{#__RefHeading___Toc503675840 .anchor}Comments

A number of comments note disparities in the rules for Part 22 and Part
24. Verizon contends that a comparison of Part 24 with the corresponding
regulations in Part 22 and Part 27 reveals a marked disparity in both
the number and severity of the regulations imposed.[^449] The
Telecommunications Industry Association (TIA) recommends that the
measurement of power units be adopted universally in all parts of the
Commission's rules as Effective Isotropic Radiated Power (EIRP), as it
is now required under in Part 24. TIA believes it is confusing to have
different measures of power units in Part 22 and Part 24.[^450] CTIA in
its comments notes that Section 24.16 which covers renewal procedures
for PCS licenses needs to be harmonized with 47 C.F.R. §§ 22.935-22-940,
governing the content of renewal and competing applications for cellular
licenses as well as a two-step process for resolving renewal
challenges.[^451]

[]{#__RefHeading___Toc503675841 .anchor}Recommendation

In addition to keeping the initial recommendation, staff, in response to
comments, recommend the initiation of a proceeding to bring cellular,
PCS, and the General Wireless Communications Service technical and
operational rules under Parts 22, 24, and 27 into conformity with each
other. Staff recommend that the Commission use the Effective Isotropic
Radiated Power (EIRP) units of measurement in Parts 22 and 24 of its
rules (now EIRP units are used in Part 24 and Effective Radiated Power
(ERP) units are used in Part 22). Staff also recommends that the
Wireless Bureau review its renewal procedures for wireless licensees to
determine whether the rules regarding renewal expectancy may need
modification.

[]{#__RefHeading___Toc503675842 .anchor}Part 25 -- Satellite
Communications

[]{#__RefHeading___Toc503675843 .anchor}Description

Part 25 was issued pursuant to the authority contained in section
201(c)(11) of the Communications Satellite Act of 1962, as amended,
section 501(c)(6) of the International Maritime Satellite
Telecommunications Act, and titles I through III of the Communications
Act of 1934, as amended. Part 25 sets out the rules applicable to
satellite communications, including general licensing and application
filing requirements, technical standards, and technical operations.

> Part 25 is organized into seven lettered sub-parts:

A -- General

> B -- Applications and Licenses
>
> C -- Technical Standards
>
> D -- Technical Operations
>
> E -- Reserved
>
> F -- Competitive Bidding Procedures for DARS
>
> G -- Reserved
>
> H -- Authorization to Own Stock in the Communications Satellite
> Corporation
>
> I -- Equal Employment Opportunities

[]{#__RefHeading___Toc503675844 .anchor}Purpose

Part 25 provides rules under which the Bureau licenses systems to
provide various satellite services. The rules are designed to
accommodate the maximum number of systems possible for each type of
service, and to enhance competition for satellite services and the
terrestrial services with which they compete. Sections of Part 25 also
have provisions: (1) to protect against impermissible levels of
interference; (2) to assure compliance with international agreements and
treaties; (3) to assure the timely construction and operation of
authorized earth stations and the timely construction, launch and
operation of authorized space stations; (4) to assure the timely
provision of sufficient information to allow for processing of
applications; and (5) to assure compliance with license specifications
and conditions as well as with Commission rules and regulations. In
addition, Part 25 provides competitive bidding procedures for the
provision of DARS services, and specifies the procedure by which the
Commission authorizes the purchase of stock in COMSAT. Part 25 also
provides for preemption of local zoning of earth stations, if the
reasonableness of the regulation cannot be demonstrated.

[]{#__RefHeading___Toc503675845 .anchor}Analysis

[]{#__RefHeading___Toc503675846 .anchor}Status of Competition

The satellite services regulated by Part 25 are fully competitive on
most routes. There are four major satellite service providers and
several smaller providers that are licensed to provide state-of-the-art
satellite telephony and data services to U.S. consumers and consumers
worldwide. On many routes, satellite telephony and data services are
offered by several satellite providers. In addition, these satellite
service providers face competition from terrestrial service providers
for some services on some routes. Part 25 rules also provide licensing
mechanisms for future entry and further competition in these services.

[]{#__RefHeading___Toc503675847 .anchor}Advantages

[General Applications Filing Requirements]{.underline}: Part 25 provides
clear procedures for filing applications, and predictable procedures for
evaluating whether applications are complete. Section 25.120 also
provides effective procedures for handling applications for special
temporary authorization when delay would seriously prejudice the public
interest.

[Earth Stations]{.underline}: Sections 25.130 through 25.137 include
procedures that allow for a frequency coordination analysis to reduce
interference and the verification of earth station antenna performance
standards. These clear procedures minimize the cost associated with
reducing interference. Part 25 also assures compliance with
international agreements and treaties, as it ensures the timely
construction and operation of earth stations.

[Space Stations]{.underline}: Sections 25.140 through 25.145 include
conditions to facilitate coordination to avoid harmful interference to
other systems and conditions for applicant qualification. Section 25.140
also limits the number of orbital locations that can be assigned to each
applicant, thereby fostering competition and reducing the likelihood of
anti-competitive behavior.

[Processing of Applications and Forfeiture, Termination, and
Reinstatement of Station Authorizations]{.underline}: Sections 25.150
through 25.163 include well-defined procedures for processing
applications to determine whether the applications are mutually
exclusive. These sections also maximize compliance with Commission rules
and minimize enforcement costs.

[Subpart C---Technical Standards and Subpart D---Technical
Operations]{.underline}: These subparts provide clear and predictable
technical standards and operating rules to minimize interference.

[Subpart F---Competitive Bidding Procedures for DARS]{.underline}: This
subpart describes a mechanism for competitive bidding for satellite DARS
service. Competitive bidding promotes competition and awards DARS
licenses to those firms that will most efficiently use those resources
to compete in providing service. Competitive bidding is more efficient
than other forms of assignment.

[Subpart H---Authorization to Own Stock in the Communications Satellite
Corporation]{.underline}: These rules provide the procedure for the
administration of section 304 of the Communications Satellite Act of
1962. With the signing of the ORBIT Act Pub. Law No. 106-180, 114 Stat.
4B (2000), earlier this year, section 304 of the Communications
Satellite Act of 1962 ceases to be effective.

[Subpart I---Equal Employment Opportunities]{.underline}: This section
promotes diversity in employment and creates opportunities.

[]{#__RefHeading___Toc503675848 .anchor}Disadvantages

[Earth Stations]{.underline}: Some limitations included in these rules
might hamper the introduction of new services. For example, it may be
possible to relax the threshold technical rules that trigger
inter-system coordination among satellite service providers and reduce
the burden on coordinating new and innovative satellite technologies.

[Space Stations]{.underline}: The application qualification requirements
laid out in Section 25.140 may limit the number of applicants. In
addition, the limits on the allocation of orbital slots to each
applicant could restrict the introduction of new services. Section
25.144 includes licensing provisions for satellite digital audio radio
service, and specifies the applicants eligible for the auction. This
rule, too, serves no purpose because the auction has already been held
and the pool of applicants is overtaken by events.

[Processing of Applications and Forfeiture, Termination, and
Reinstatement of Station Authorizations]{.underline}: The preparation of
applications and the delay associated with public comment periods and
the examination of applications can be costly to applicants.

[Subpart C---Technical Standards and Subpart D---Technical
Operations]{.underline}: These standards and operating rules, while
preserving the operating environment today, could hamper the
introduction of new services and restrict alternative uses of resources
in the future.

[Subpart F---Competitive Bidding Procedures for DARS:]{.underline}
Satellite services in unplanned frequency bands require international
coordination prior to the commencement of operations. The value of the
orbital location resource is uncertain if the international coordination
process has not yet been completed.

[Subpart H---Authorization to Own Stock in the Communications Satellite
Corporation]{.underline}: These rules ceased to be effective with the
recent signing of the ORBIT Act.

[Subpart I---Equal Employment Opportunities]{.underline}: Rules in this
section may increase operating costs.

[]{#__RefHeading___Toc503675849 .anchor}Recent Efforts

The Commission has taken and continues to take steps to streamline both
the earth station and space station portions of its satellite licensing
process and to provide earth station applicants with greater
flexibility. The staff is reviewing the technical and operational
standards contained in Part 25. In December, the Commission released a
Notice of Proposed Rulemaking to streamline earth station and space
station licensing. [^452] The NPRM proposes technical changes that would
streamline the earth station licensing process. In addition, the NPRM
proposes the electronic filing of earth station applications.

[]{#__RefHeading___Toc503675850 .anchor}Initial Recommendation

The staff recommends further streamlining of its earth station and space
station licensing processes. The staff recommended that the Commission
commence an *NPRM* seeking comment on industry proposals for
comprehensive changes in the earth station licensing process. It also
recommends that the Commission seek comment on requiring electronic
filing, which could save substantial time in processing applications. In
addition, the staff recommend that the Bureau continue working with
industry to re-examine the entire satellite network licensing process.

Furthermore, the staff recommends repealing sections 25.141 and 25.144,
and subpart H of the Commission's rules. The staff recommended review of
the financial qualification rules in section 25.140 to determine if the
financial qualification rules are necessary, and if a different showing
of financial qualification might be appropriate.

[]{#__RefHeading___Toc503675851 .anchor}Comments

Comments were filed by Hughes Network Systems and WorldCom, Inc.[^453]
Both parties supported the staff recommendations to issue an NPRM to
further streamline the earth station licensing process. Hughes asked
that the following issues be addressed: blanket licensing of small
antennas; increase in the maximum satellite EIRP density; and Aloha
access technology if the Commission needs further comment on this
issue.[^454]

[]{#__RefHeading___Toc503675852 .anchor}Recommendation

See initial recommendation. Staff recommends that the Commission adopt
the rules proposed in the*Earth Station Streamlining NPRM.*[^455]

[]{#__RefHeading___Toc503675853 .anchor}Part 26 -- General Wireless
Communications Services

[]{#__RefHeading___Toc503675854 .anchor}Description

Part 26[^456] contains licensing, technical, and operational rules for
General Wireless Communications Services (GWCS) in the 4660-4685 MHz
band. The rules in this part: (1) define permissible communications; (2)
establish license terms and parameters; (3) establish minimum technical
standards and limits on operation (*e.g.,* antenna height, emission
limits) to prevent interference; (4) define GWCS service areas; and (5)
set forth application procedures and competitive bidding rules for the
auction and award of GWCS licenses.

The rules allow GWCS licensees to provide any fixed or mobile
communications service on their assigned spectrum. Broadcasting,
radiolocation, and satellite services are prohibited. However, as
discussed below, no licenses have been awarded in the service, the
4660-4685 MHz band has since been reclaimed by the federal government,
and the Commission has proposed to delete the Part 26 rules.

[]{#__RefHeading___Toc503675855 .anchor}Purpose

The purpose of the Part 26 rules is to establish basic ground rules for
assignment of spectrum in Part 26 services, to ensure efficient spectrum
use by licensees, and to prevent interference.

[]{#__RefHeading___Toc503675856 .anchor}Analysis

[]{#__RefHeading___Toc503675857 .anchor}Status of Competition

No licenses have been awarded in the GWCS service.

[]{#__RefHeading___Toc503675858 .anchor}Advantages

Not applicable.

[]{#__RefHeading___Toc503675859 .anchor}Disadvantages

Not applicable.

[]{#__RefHeading___Toc503675860 .anchor}Recent Efforts

On March 30, 1999, the Department of Commerce notified the Commission
that the Federal Government was reclaiming the 4635-4685 MHz band and
identified the 4.9 GHz band as substitute spectrum for private sector
use.[^457] Accordingly, on February 23, 2000, the Commission adopted a
*Notice of Proposed Rulemaking* in WT Docket No. 00-32 proposing to
eliminate the GWCS rules and delete Part 26.[^458] In the *Notice*, the
Commission states that it will allocate and establish licensing and
service rules for the 4.9 GHz band as substitute spectrum. [^459] In the
*Notice,*[^460] the Commission also proposes to license the 4.9 GHz band
under Part 27 of the Commission's Rules.[^461]

[]{#__RefHeading___Toc503675861 .anchor}Initial Recommendation

In light of the Commission's pending proposal in WT Docket No. 00-32 to
delete the Part 26 rules, the staff makes no recommendations with
respect to these rules.

[]{#__RefHeading___Toc503675862 .anchor}Comments

None

[]{#__RefHeading___Toc503675863 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675864 .anchor}Part 27 -- Miscellaneous
Wireless Communications Services

[]{#__RefHeading___Toc503675865 .anchor}Description

Part 27[^462] contains licensing, technical, and operational rules for
the Wireless Communications Services (WCS) and for other new wireless
services. The rules in this part: (1) define WCS license areas; (2)
specify the frequencies available to WCS licensees; (3) establish
license terms and operational parameters; (4) establish minimum
technical standards and limits on operation (*e.g.,* antenna height,
power limits) to prevent interference; and (5) set forth application
procedures and competitive bidding rules for the auction and award of
WCS licenses.

Part 27 is divided into six sub-parts:

A -- General Information

B -- Applications and Licenses

C -- Technical Standards

D -- Competitive Bidding Procedures for WCS

E -- Application, Licensing and Processing Rules for WCS

F -- Competitive Bidding Procedures for the 747-762 MHz and 777-792 MHz

Bands

The Commission has amended Part 27 to add new rules for wireless
services that will operate in the 747-762 MHz and 777-792 MHz bands (700
MHz services). In the *700 MHz First Report and Order,* released on
January 7, 2000, the Commission adopted rules for the 700 MHz services
that provide for the broadest possible use of this spectrum, consistent
with principles of sound spectrum management. [^463] However, the
Commission also noted that the 746-806 MHz band has historically been
used exclusively by television stations (Channels 60-69). These
incumbent broadcasters are permitted by statute to continue operations
in this band until their markets are converted to digital
television.[^464]

[]{#__RefHeading___Toc503675866 .anchor}Purpose

The purposes of the Part 27 rules are to establish assignment rules for
Part 27 services, to ensure efficient spectrum use by licensees, and to
prevent interference. In addition, Part 27 contains rules that define
eligibility for small business status within these blocks. These
provisions implement the objectives of section 309(j)(3) of the Act that
the distribution of licenses not be excessively concentrated, and that
small businesses, rural telephone companies, and businesses owned by
women and minorities have opportunities to participate in the provision
of WCS and other wireless services.

[]{#__RefHeading___Toc503675867 .anchor}Analysis

[]{#__RefHeading___Toc503675868 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503675869 .anchor}Advantages

The Part 27 rules provide a clear, predictable structure for the
assignment and use of spectrum while allowing for maximum service
flexibility. The service rules follow a market-based approach that
affords maximum flexibility to licensees to decide on development and
deployment of new telecommunications services and products to consumers.
The rules also ensure that licensees are not constrained to a single use
of this spectrum and, therefore, can offer a mix of services and
technologies to their customers.[^465]

[]{#__RefHeading___Toc503675870 .anchor}Disadvantages

The Part 27 rules impose limited administrative and technical burdens
that are inherent in the licensing process and are necessary for
compliance with technical and operational rules.

[]{#__RefHeading___Toc503675871 .anchor}Recent Efforts

In the *700 MHz Further Notice of Proposed* Rulemaking, released on June
30, 2000, the Commission sought comment on specific issues relating to
possible voluntary relocation of broadcast incumbents out of the 700 MHz
band. [^466]

On March 30, 1999, the Department of Commerce notified the Commission
that the Federal Government was reclaiming the 4635-4685 MHz band and
identified the 4.9 GHz band as substitute spectrum for private sector
use.[^467] Accordingly, on February 23, 2000, the Commission adopted a
*Notice of Proposed Rulemaking* in WT Docket No. 00-32, proposing to
allocate and establish licensing and service rules for the 4.9 GHz band
as substitute spectrum. [^468] In the *Notice*, the Commission proposed
to license the 4.9 GHz band under the Part 27 rules. Additionally, the
Commission proposed to codify and conform certain rules for the 2.3 GHz
band to provide for consistent regulation of Part 27 services.[^469]

[]{#__RefHeading___Toc503675872 .anchor}Initial Recommendation

The staff recommends retaining the Part 27 rules.

[]{#__RefHeading___Toc503675873 .anchor}Comments

None

[]{#__RefHeading___Toc503675874 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675875 .anchor}Part 32 -- Uniform System of
Accounts

[]{#__RefHeading___Toc503675876 .anchor}Description

Part 32 of the Commission's rules implements section 220's mandate and
contains the Uniform System of Accounts ("USOA") for incumbent local
exchange carriers.[^470] Section 220 of the Communications Act of 1934,
as amended, requires the Commission to prescribe a uniform system of
accounts for telephone companies.[^471] The USOA is an historical
financial accounting system that discloses the results of operational
and financial events in a manner that enables both the companies'
management and policy-making agencies to assess these results. The Part
32 USOA consists of a chart of accounts that can be used to prepare
balance sheets, income statements, and other financial reports. Part 32
USOA uses standard accounts and methods for preparing such accounts or
to monitor developments in the telecommunications industry.

> Part 32 is organized into seven lettered sub-parts:

A -- Preface

> B -- General Instructions
>
> C -- Instructions for Balance Sheet Accounts
>
> D -- Instructions for Revenue Accounts
>
> E -- Instructions for Expense Accounts
>
> F -- Instructions for Other Income Accounts
>
> G -- Glossary

Part 32 USOA performs four general functions. First, the Part 32 USOA
sets forth a standardized chart of accounts and thereby directs
companies how to record certain transactions in their books of account.
Second, the Part 32 USOA establishes rules for a carrier's affiliate
transactions. Third, the Part 32 USOA specifies accounting treatment for
depreciation expenses. Finally, the Part 32 USOA requires carriers to
maintain property records of all telecommunications plant in service.

[]{#__RefHeading___Toc503675877 .anchor}Purpose

The Part 32 USOA is a nonstructural safeguard to prevent an incumbent
LEC from exercising its market power. Specifically, through standardized
accounting procedures, the Part 32 USOA helps ensure that ratepayers of
regulated services do not bear the costs and risks associated with an
incumbent LEC's competitive operations. In addition, the Part 32 USOA
restrains an incumbent LEC's ability to charge monopoly prices because
it provides ratepayers with information that can be used to pursue a
complaint against unjust and unreasonable rates.

The USOA also provides the Commission, state commissions, ratepayers,
consumer advocates, the financial community, and others with large
carriers' financial performance results that are ultimately reflected in
their rates for telecommunications services. By providing a standardized
means for analyzing an incumbent LEC's performance, the Part 32 USOA is
a tool for the Commission's comparative analysis regulatory technique.
The Commission implemented the Part 32 USOA to reduce the need for
costly and time-consuming special studies that carriers performed for
policy-making purposes, while simultaneously providing the Commission
and others with information used to make decisions regarding
telecommunications competition, universal service, separations, access
charges, and other policy issues.

[]{#__RefHeading___Toc503675878 .anchor}Analysis

[]{#__RefHeading___Toc503675879 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503675880 .anchor}Advantages

As a nonstructural safeguard, the Part 32 USOA is a lower-cost
alternative to structural separation as a means for preventing an
incumbent LEC from exercising its market power.[^472] The Part 32 USOA
deters cost misallocations by providing the initial information needed
to identify cross-subsidization, and thus protects regulated services
from bearing the costs of an incumbent LEC's competitive operations.

The Part 32 USOA clearly specifies the incumbent LEC's chart of accounts
and the manner in which the carrier prepares such accounts. The
standardized approach lowers the Commission's costs of monitoring the
industry and enforcing its rules. Because the Part 32 USOA incorporates
Generally Accepted Accounting Principles ("GAAP"), Part 32 reduces the
carriers' cost of complying with the Commission's rules.

Working in tandem with the Part 43 reporting requirements, the Part 32
USOA is a low-cost means to gather information about the financial
performance of large incumbent LECs.[^473] Policy-makers, ratepayers,
and others can then use an incumbent LEC's accounting information to
make more informed decisions. The information is also used to support a
viable and sufficient system of universal service support. Finally,
disclosure enables ratepayers to pursue complaints regarding unjust and
unreasonable rates, and therefore lowers the Commission's costs of
enforcing the Act.

[]{#__RefHeading___Toc503675881 .anchor}Disadvantages

The Part 32 USOA may increase an incumbent LEC's cost of performing
internal accounting services because it establishes record-keeping
requirements and accounting procedures (*e.g.*, depreciation studies)
that may not be necessary in a competitive environment. Because the
Commission intended for Part 32 USOA to deter cross-subsidization
largely in a rate-of-return environment, it established a level of
accounting detail that serves as a starting point in identifying
cross-subsidization. As a result of competitive developments during the
1990s, Part 32 may impose more burdensome information requirements on
incumbent LECs than needed in the changing competitive landscape.

[]{#__RefHeading___Toc503675882 .anchor}Recent Efforts

The Commission revised its Part 32 rules during the 1998 Biennial
Regulatory Review.[^474] In that proceeding, the Commission
substantially streamlined its accounting requirements for mid-sized
incumbent LECs. The Commission also reduced accounting requirements on
all incumbent LECs by eliminating certain accounts.

Through the on-going Comprehensive Review proceeding, the Commission is
streamlining its Part 32 accounting rules as the industry becomes
increasingly competitive. The Comprehensive Review involves a two-phase
approach during which the Commission is soliciting the views of the
states, the industry, and the public in a series of public workshops (as
well as through standard notice-and-comment cycles).

In Phase 1 of the Comprehensive Review, the Commission addressed
accounting and reporting reform issues that could be implemented without
delay. In the *Phase 1 Order*, which the Commission released in March
2000, the Commission substantially reduced the level of accounting
detail required in certain reports, eliminated pre-notification
requirements, relaxed the cost allocation manual audit requirements, and
streamlined a number of ARMIS reporting requirements.[^475]

In Phase 2, the Commission will look to reducing accounting and
reporting requirements for incumbent LECs as the industry becomes more
competitive. Phase 2 of the Comprehensive Review started in December
1999. During the first quarter of 2000, Commission and state
participants met numerous times to discuss the issues of most interest
to all parties. A series of five public workshops commenced on April 5,
2000. These workshops provide an opportunity for all interested parties,
state commissions, incumbent LECs, interexchange carriers, CLECs, and
consumers to voice their opinions on accounting and reporting reform.

On October 18, 2000, the Commission released a Notice of Proposed
Rulemaking seeking comment on further measures to streamline existing
accounting and reporting requirements, as part of its ongoing efforts to
reduce regulatory burdens on the industry.[^476] The NPRM sought comment
on various proposals to reduce accounting requirements, including
various proposals raised by commenters.

[]{#__RefHeading___Toc503675883 .anchor}Initial Recommendation

Pursuant to the Commission's comprehensive review of its accounting
requirements, which it initiated in 1999, the staff recommends
substantial reductions in the Commission's accounting requirements.
These regulatory changes are responsive to the competition that has
developed in recent years. For example, the staff recommends reducing
the chart of accounts,[^477] modifying expense limits,[^478] eliminating
outdated accounts,[^479] and exempting certain transactions from the
affiliate transactions rules.[^480] As the telecommunications industry
becomes increasingly competitive, the Commission should consider further
reducing accounting requirements.

[]{#__RefHeading___Toc503675884 .anchor}Comments

Commenters to the staff report generally support the staff
recommendations regarding the streamlining of our Part 32 accounting
rules.[^481] Commenters, disagree, however, about the degree and pace of
the streamlining process. GSA asserts that the Commission should
maintain sufficient accounting requirements to prevent ILECs from
exploiting their market power where competition has not
developed."[^482] USTA, on the other hand, argues that the Part 32 rules
do not reflect current market operations, and urges the Commission to
set a specific date to convert from the USOA accounting system to
Generally Accepted Accounting Principles GAAP.[^483] USTA also argues
that the Commission should forbear from regulating depreciation and
permit LECs to use Class B accounts.

[]{#__RefHeading___Toc503675885 .anchor}Recommendation

No change, pending the completion of *Comprehensive Accounting Review:
Phase 2 and 3* proceeding.

[]{#__RefHeading___Toc503675886 .anchor}Part 36 -- Jurisdictional
Separations Procedures

[]{#__RefHeading___Toc503675887 .anchor}Description

In 1930, the Supreme Court, in the case of *Smith v. Illinois*,
recognized the system of state and federal regulation of
telecommunications, concluding that because interstate calls originate
and terminate over local exchange plant, interstate charges should
reflect some portion of the cost of local plant.[^484] The Part 36
jurisdictional separations rules are part of the Commission's
present-day implementation of that decision. The Part 36 rules contain
procedures and standards for dividing telephone company investment,
expenses, taxes and reserves between the state and federal
jurisdictions. In addition to allocating costs between the federal and
state jurisdictions, Part 36 also serves a universal service function.
Specifically, Part 36 permits carriers that serve high-cost areas to
allocate additional local loop costs to the interstate jurisdiction and
to recover those costs through the high-cost universal service support
mechanism, thus making intrastate telephone service in high-cost areas
more affordable.

Part 36 is organized into 7 lettered sub-parts:

A -- General

B -- Telecommunications Property

C -- Operating Revenues and Certain Income Accounts

D -- Operating Expenses and Taxes

E -- Reserves and Deferrals

F -- Universal Service Fund

G -- Lifeline Connection Assistance Expense Allocation

[]{#__RefHeading___Toc503675888 .anchor}Purpose

Part 36 is intended to recognize the dual system of telecommunications
regulation, with interstate calling regulated at the federal level. Part
36 is intended to ensure that incumbent LECs are able to recover a
portion of local exchange costs through interstate rates, since
interstate long distance calls originate and terminate over these
facilities. It is also intended to prevent incumbent LECs from
recovering the same costs through both interstate and intrastate rates.
The additional interstate cost allocation for high-cost areas is
intended to foster universal service by ensuring that local exchange
rates in such areas remain generally affordable.

[]{#__RefHeading___Toc503675889 .anchor}Analysis

[]{#__RefHeading___Toc503675890 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503675891 .anchor}Advantages

The existing Part 36 separations rules facilitate state and federal
common carrier rate regulation by dividing incumbent LEC costs between
the two jurisdictions. The division of costs between the state and
federal jurisdictions is necessary for the calculation of state and
federal earned rates of return. Such earned rates of return are used in
rate base rate of return regulation to determine whether earnings are
excessive. In price cap regulation, an earned rate of return is also
calculated for purposes of the low-end adjustment. The subpart F rules
promote universal service by keeping local exchange rates generally
affordable in these areas.

[]{#__RefHeading___Toc503675892 .anchor}Disadvantages

The current jurisdictional separations rules may be unnecessarily
complex and may impose some unnecessary recordkeeping burdens on
incumbent LECs.

[]{#__RefHeading___Toc503675893 .anchor}Recent Efforts

The Commission is currently in the process of considering separations
reform in conjunction with a Federal-State Joint Board, made up of
federal and state commissioners. The Commission initiated this review
with an Notice of Proposed Rulemaking in 1997, requesting comment on the
impact on jurisdictional separations of legislative, technological, and
market changes, as well as several industry proposals for separations
reform.[^485] Most of the commenting parties supported continuation of
some form of separations until the local exchange market is fully
competitive, although there was a wide range of interim proposals. On
July 21, 2000, the Federal--State Joint Board on jurisdictional
separations recommended that the Commission freeze the Part 36 plant
category relationships[^486] and the jurisdictional allocation factors
on an interim basis until comprehensive reform of jurisdictional
separations can be implemented.[^487]

[]{#__RefHeading___Toc503675894 .anchor}Initial Recommendation

The staff recommends continuation of the on-going work on jurisdictional
separations reform. The staff, however, does not recommend further
review of the universal service provisions contained in Part 36 in the
context of the current biennial regulatory review. The staff recommends
elimination of the subpart G lifeline provisions in Part 36, since they
are no longer in effect and have been replaced by rules in Part 54.
There are also a number of other rules in Part 36 that can be eliminated
because they are applicable to specific time periods that have since
passed.[^488]

[]{#__RefHeading___Toc503675895 .anchor}Comments

Commenters support the recommendation to eliminate jurisdictional
separations rules that have been superseded or are now
out-of-date.[^489] In addition, commenters express support for the
Federal-State Joint Board's recommendation on jurisdictional
separations.[^490]

[]{#__RefHeading___Toc503675896 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675897 .anchor}Part 42 -- Preservation of
Records of Common Carriers

[]{#__RefHeading___Toc503675898 .anchor}Description

Part 42 implements sections 219 and 220 of the Communications Act of
1934, as amended, which authorize the Commission to require
communications common carriers to keep records and file reports. Part 42
sets forth rules governing the preservation of records of communications
common carriers, including all accounts, records, memoranda, documents,
papers and correspondence prepared by or on behalf of such carriers. It
also requires non-dominant interexchange carriers to make available
information concerning the rates, terms, and conditions for their
services.

[]{#__RefHeading___Toc503675899 .anchor}Purpose

Part 42 facilitates enforcement of the Communications Act by ensuring
the availability of carrier records needed by the Commission to meet its
regulatory obligations. Part 42 is also intended to aid enforcement of
criminal statutes by requiring the retention of telephone toll records.
Part 42 serves the public interest by giving consumers access to
information about the rates, terms, and conditions for domestic,
interstate, interexchange services.

[]{#__RefHeading___Toc503675900 .anchor}Analysis

[]{#__RefHeading___Toc503675901 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitors still serve only a small percentage of
local exchange lines. Competition for business customers in metropolitan
areas has, in general, developed more rapidly than competition for
residential customers or customers in rural areas. The domestic U.S.
long distance market is competitive, although there is greater
competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.
These markets are rapidly changing from being dominated by a small
number of national telecommunications providers to having a large number
of competitors.

[]{#__RefHeading___Toc503675902 .anchor}Advantages

By relying primarily on general instructions to guide the preservation
of records, Part 42 gives regulated common carriers significant
flexibility in choosing how to preserve records. This allows carriers to
choose the storage media, and thereby reduce their record storage and
retrieval costs. Part 42 also gives carriers flexibility in determining
the retention periods, although it specifies the retention period for
toll records in order to assist law enforcement activities. Part 42 also
benefits consumers by ensuring that they have access to information on
carrier rates, terms, and conditions.

[]{#__RefHeading___Toc503675903 .anchor}Disadvantages

Part 42 may increase carriers' recordkeeping costs to some extent and
may increase the risk of tacit price collusion.

[]{#__RefHeading___Toc503675904 .anchor}Recent Efforts

On March 31, 1999, the Commission reinstated the public disclosure
requirement for domestic, interstate, interexchange long distance
services in light of plans to implement detariffing of these
services.[^491] On October 18, 2000, the Commission proposed detariffing
and streamlining of international interexchange services with a similar
public disclosure requirement.[^492] In its Notice of Proposed
Rulemaking in IB Docket No. 00-202, the Commission proposed that these
public disclosure requirements be added to existing requirements in
Sections 42.10 and 42.11 of the rules.[^493]

[]{#__RefHeading___Toc503675905 .anchor}Initial Recommendation

The staff recommends that Part 42 be maintained without substantial
change because it provides carriers with significant flexibility while
ensuring that necessary information will be available to the Commission
and law enforcement officials. The staff also recommends that the public
disclosure rules in Part 42 be maintained because they provide valuable
information to consumers.

[]{#__RefHeading___Toc503675906 .anchor}Comments

USTA argues that Part 42 is "outdated and unnecessary" and should be
eliminated. USTA proposes that incumbent LECs should be permitted to
determine the most efficient way to conduct recordkeeping. USTA also
proposes that the public disclosure requirements currently set out in
Sections 42.10 and 42.11 be maintained, but moved to Part 61 with other
tariff requirements.

[]{#__RefHeading___Toc503675907 .anchor}Recommendation

The staff continues to recommend that Part 42 be maintained without
substantial change because it ensures that necessary information is made
available to the Commission and law enforcement officers, while granting
carriers significant flexibility per actual record retention. The staff
also continues to recommend that the public disclosures rules in Part 42
be maintained because this ensures that consumers receive valuable
information. Because staff recommends that Part 42 be maintained, staff
recommends that the Commission find that there is no compelling reason
to adopt USTA's suggestion to move Sections 42.10 and 42.11 to Part 61.

[]{#__RefHeading___Toc503675908 .anchor}Part 43 -- Reports of
Communications Common Carriers and Certain Affiliates

[]{#__RefHeading___Toc503675909 .anchor}Description

Section 211 of the Communications Act of 1934, as amended, requires
carriers to file with the Commission copies of all contracts,
agreements, or arrangements with other carriers that relate to any
traffic affected by the Act.[^494] Section 219 authorizes the Commission
to require all carriers that are subject to the Act to file annual
reports with the Commission.[^495] Section 220 allows the Commission to
prescribe the forms of any and all accounts, records, and memoranda to
be kept by carriers.[^496]

Part 43 of the Commission's rules implements these sections by
establishing rules that perform three major functions. First, Part 43
prescribes general requirements and filing procedures for several
reports which various carriers are required to file. These include the
annual Automated Reporting Management Information System (ARMIS) reports
on financial and operating data that are filed by common carriers with
operating revenues exceeding an indexed revenue threshold, reports on
proposed depreciation changes, reports on international
telecommunications traffic, and international circuit status reports.
Second, Part 43 requires that certain carriers file with the Commission
copies of specified contracts, agreements and arrangements with other
carriers. Third, Part 43 sets forth the Commission's International
Settlements Policy, which is designed to ensure that U.S.
telecommunications carriers pay nondiscriminatory rates for termination
of international traffic in foreign countries.

[]{#__RefHeading___Toc503675910 .anchor}Purpose

The reports required by Part 43 assist the Commission in monitoring the
industry to ensure that carriers comply with the Commission's rules, and
in tracking market and other industry developments, which improves the
Commission's ability to identify developing regulatory issues and
analyze the effects of alternative policy choices. The reports of
proposed changes in depreciation rates allow the Commission to monitor
the depreciation rates for dominant carriers' capital assets.[^497] The
contract-filing requirement helps the Commission to identify potential
instances of anti-competitive conduct, and to enforce its International
Settlements Policy. The International Settlements Policy is designed to
protect U.S. international carriers and the customers they serve from
the potential exercise of market power by dominant foreign carriers, to
unilaterally set the prices, terms and conditions under which U.S.
carriers are able to exchange international traffic.[^498]

[]{#__RefHeading___Toc503675911 .anchor}Analysis

[]{#__RefHeading___Toc503675912 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitors still serve only a small percentage of
local exchange lines. Competition for business customers in metropolitan
areas has, in general, developed more rapidly than competition for
residential customers or customers in rural areas. The domestic U.S.
long distance market is competitive, although there is greater
competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.
These markets are rapidly changing from being dominated by a small
number of national telecommunications providers to having a large number
of competitors.

[]{#__RefHeading___Toc503675913 .anchor}Advantages

The reports required by Part 43 increase the Commission's ability to
ensure compliance with the Commission's rules. They also provide the
Commission, other government agencies, state regulators, industry, and
the public with valuable information on market and other industry trends
and developments. This information is helpful to the Commission in
identifying developing regulatory issues and evaluating the effects of
policy choices. The contract filing requirements also assist the
Commission to identify and remedy potential instances of
anti-competitive conduct. The International Settlements Policy and
related requirements protect U.S. carriers and their customers from the
potential exercise of market power by dominant foreign carriers.

[]{#__RefHeading___Toc503675914 .anchor}Disadvantages

Some carriers allege that some of the required filings are unduly
burdensome. Part 43 may also require the filing of some information that
is unnecessarily detailed or unnecessary in light of competitive
developments.

[]{#__RefHeading___Toc503675915 .anchor}Recent Efforts

As part of the 2000 biennial review, the Commission has recently adopted
four Notices of Proposed Rule Making regarding Part 43. In October the
Commission released an NPRM proposing to extend mandatory detariffing to
the international services of non-dominant interexchange carriers,
including Commercial Mobile Radio Service providers and U.S. carriers
classified as dominant solely due to foreign affiliations.[^499] As part
of that proceeding, the Commission proposed to amend Section 43.51 to
clarify which carrier contracts must be filed with the Commission.[^500]
In November the Commission adopted a Notice of Proposed Rule Making
which, among other things, proposes to eliminate Section 43.81. Section
43.81 requires certain foreign-owned carriers to file with the
Commission annual revenue and traffic reports for all common carrier
telecommunication services they offer in the United States.[^501]

The Commission revised its ARMIS reporting requirements as part of its
1998 Biennial Regulatory Review process.[^502] The Commission reduced
reporting requirements for mid-sized carriers, and improved the
definitions, descriptions and instructions used in preparing ARMIS
reports. The Commission adopted further streamlining measures in Phase 1
of the *Comprehensive Review* proceeding.[^503] In October, the
Commission released a Notice of Proposed Rulemaking in Phase 2 of the
*Comprehensive Review* proceeding intended to produce further
streamlining of ARMIS reports.[^504] In November, the Commission
released a Notice of Proposed Rulemaking seeking comment on Streamlining
service quality reporting in ARMIS.[^505]

In 1999, the Commission adopted a sweeping reform of the longstanding
international settlements policy, deregulating inter-carrier settlement
arrangements between U.S. carriers and foreign non-dominant carriers on
competitive routes.[^506] The Commission, among other things, eliminated
the international settlements policy and contract filing requirements
for arrangements with foreign carriers that lack market power, and
eliminated the international settlements policy for arrangements with
all carriers on routes with rates for terminating U.S. calls that are at
least 25 percent lower than the relevant settlement rate benchmark.

[]{#__RefHeading___Toc503675916 .anchor}Initial Recommendation

The staff recommends continuation of the ongoing efforts to streamline
further the ARMIS reporting requirements. The staff also recommends
modifying or eliminating some of the rules governing reports to be filed
by carriers providing international telecommunications services. In
particular, the staff recommends elimination of section 43.53 of the
rules because the required reports appear to be unnecessary and
duplicative of other rules. The staff also recommends that section 43.81
of the rules be removed from Part 43 since it is no longer in effect.

The staff also recommends that the Commission amend section 43.51 of the
rules to simplify the language and to require copies of contracts for
international services only if contracts concern common carrier service
between the U.S. and foreign points and involve a foreign carrier that
has market power in that foreign market, or a U.S. carrier that has been
classified as dominant on any routes included in the contract, for
reasons other than a foreign carrier affiliation.

[]{#__RefHeading___Toc503675917 .anchor}Comments

Two parties addressed the reporting requirements in Part 43. Alloy and
Verizon support the staff recommendations to eliminate Section 43.81 and
to revise the instruction manuals.[^507] Further, they suggest that the
Commission initiate a proceeding to eliminate the Section 43.61
reporting requirements for domestic CMRS providers that offer
international calling to their customers by reselling the international
services of switched resellers.[^508]

[]{#__RefHeading___Toc503675918 .anchor}Recommendation

The staff recommends that the Commission adopt the proposals in the
*International Detariffing NPRM* to modify Section 43.51, and the
proposals in the *2000 International Biennial Review NPRM* to eliminate
Section 43.81. The staff also recommends that the Commission consider
the requests of commenters to modify Section 43.61.

[]{#__RefHeading___Toc503675919 .anchor}Part 51 -- Interconnection

[]{#__RefHeading___Toc503675920 .anchor}Description

Part 51 implements Sections 251 and 252 of the Communications Act of
1934, as amended, the 1996 Telecommunications Act. Most significantly,
these provisions require that the incumbent local exchange carriers open
their networks to competition, and thus are critical to fostering local
exchange and exchange access competition as envisioned by Congress.
Section 251 establishes distinct sets of pro-competitive requirements
for telecommunications carriers, local exchange carriers, and incumbent
local exchange carriers. Section 251 provides that all
telecommunications carriers have a duty to interconnect with other
telecommunications carriers. Under section 251, local exchange carriers
are subject to additional requirements concerning number portability,
dialing parity, right-of-way access, and reciprocal compensation. In
addition to these obligations, incumbent local exchange carriers are
subject to further requirements concerning negotiation of agreements,
interconnection, access to unbundled network elements, resale,
notification of changes, and collocation.[^509] Section 251 also
provides for pricing standards and standards for incumbent carrier
pricing of services offered for resale. Section 252 establishes
procedures for negotiating, arbitrating, and approving interconnection
agreements.[^510]

Part 51 is organized into nine lettered sub-parts:

A -- General Information

> B -- Telecommunications Carriers
>
> C -- Obligations of All Local Exchange Carriers
>
> D -- Additional Obligations of Incumbent Local Exchange Carriers
>
> E -- Exemptions, Suspensions, and Modifications of Requirements of
> Section 251 of
>
> the Act

F -- Pricing of Elements

G -- Resale

> H -- Reciprocal Compensation for Transport and Termination of Local

Telecommunications Traffic

I -- Procedures for Implementation of Section 252 of the Act

[]{#__RefHeading___Toc503675921 .anchor}Purpose

Part 51 is intended to foster competition in the local exchange and
exchange access markets by requiring that incumbent local exchange
carriers open their networks to competition, and by establishing pricing
standards applicable to the facilities and services that the incumbent
local exchange carriers provide to their competitors. Consistent with
section 251 of the Act, Part 51 also contains certain pro-competitive
requirements that apply to all telecommunications carriers and
competitive local exchange carriers.

[]{#__RefHeading___Toc503675922 .anchor}Analysis

[]{#__RefHeading___Toc503675923 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503675924 .anchor}Advantages

The Part 51 rules require incumbent local exchange carriers to open
their networks to competition, and establish pricing standards. This
fosters competition in the local exchange and exchange access markets.
Competition in these markets will increase the choices available to
consumers, as well as create incentives for increased efficiency and the
more rapid deployment of new services and technology.

[]{#__RefHeading___Toc503675925 .anchor}Disadvantages

The Part 51 rules impose some costs on incumbent local exchange
carriers.

[]{#__RefHeading___Toc503675926 .anchor}Recent Efforts

The Eighth Circuit Court of Appeals recently overturned certain of the
pricing rules in Part 51, and remanded them to the Commission for
further consideration.[^511]

[]{#__RefHeading___Toc503675927 .anchor}Initial Recommendation

The staff recommends continued monitoring of the development of local
exchange and exchange access competition. The staff also recommends that
the Commission re-evaluate the various mechanisms for intercarrier
compensation for traffic origination and termination.

[]{#__RefHeading___Toc503675928 .anchor}Comments

Several commenters concur with the staff recommendation that the
Commission review intercarrier compensation arrangements to develop a
comprehensive system that would be more efficient and pro-competitive
than the existing myriad of rules.[^512] Sprint believes that an
intercarrier compensation proceeding should consider reciprocal
compensation, not just for delivery of calls to ISPs, but for all forms
of local traffic.[^513] USTA, however, believes that resolution of
reciprocal compensation issues for ISP-bound traffic cannot await a
broad proceeding, and that the Commission must resolve these issues
promptly with a determination that such traffic is interstate traffic
for which reciprocal compensation does not apply.[^514] Some commenters
assert that a single intercarrier compensation arrangement may not
adequately address differences among local exchange carriers.[^515]

USTA urges the Commission to avoid applying the Part 51 rules to
incumbent LEC provision of advanced services, and argued that the
Commission has no authority to address the technology or network
configurations to be used by incumbent LECs.[^516] GSA urges the
Commission to expand the collocation rights of CLECs, and argues that
CLECs should be allowed to use copper loop plant that incumbent LECs
plan to retire.[^517]

[]{#__RefHeading___Toc503675929 .anchor}Recommendation

See initial recommendation. No points made by commenters persuade us to
alter our initial recommendation that the Commission continue to monitor
local competition and address Part 51 issues through a variety of
ongoing proceedings.

[]{#__RefHeading___Toc503675930 .anchor}PART 52 -- Numbering

[]{#__RefHeading___Toc503675931 .anchor}Description

Part 52 implements the requirements of section 251(e). Part 52 contains
rules governing the administration of the North American Numbering Plan,
which is the basic numbering scheme for the telecommunications networks
located in the United States, its territories, and other countries in
North America. Part 52 also contains rules designed to ensure that users
of telecommunications services can retain, at their existing locations,
their existing telephone numbers when they switch from one local
exchange telecommunications carrier to another. It also contains rules
governing the administration of toll free telephone numbers.

Section 251(e) of the Communications Act of 1934, as amended, adopted as
part of the 1996 Telecommunications Act, governs the administration of
telephone numbers. It gives the Commission exclusive jurisdiction over
those portions of the North American Numbering Plan that pertain to the
United States. Section 251(e) also requires the Commission to create or
designate one or more impartial entities to administer
telecommunications numbering and to make those numbers available on an
equitable basis. It also charges the Commission with establishing cost
recovery mechanisms for numbering administration arrangements and number
portability.

Part 52 is organized into four lettered sub-parts:

A -- Scope and Authority

> B -- Administration
>
> C -- Number Portability
>
> D -- Toll Free Numbers

[]{#__RefHeading___Toc503675932 .anchor}Purpose

Part 52 implements the requirements of section 251(e). The purpose of
the rules in Part 52 is to establish requirements to govern the
administration and efficient use of telephone numbers within the United
States for provision of telecommunications services.

[]{#__RefHeading___Toc503675933 .anchor}Analysis

[]{#__RefHeading___Toc503675934 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The domestic U.S. long distance market is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503675935 .anchor}Advantages

The Part 52 rules foster the efficient use of telephone numbers, and
minimize the potential for anti-competitive behavior. They are designed
to provide clear and predictable guidelines for the use of telephone
numbers while minimizing administrative costs. The number portability
rules remove barriers to local exchange competition and reduce the
consumers' costs of switching to an alternative carrier by ensuring that
customers can retain their local telephone number when they switch from
one local carrier to another.

[]{#__RefHeading___Toc503675936 .anchor}Disadvantages

Carriers are required to fund the costs of administering the North
American Numbering Plan.

[]{#__RefHeading___Toc503675937 .anchor}Recent Efforts

The Commission released a Report and Order and Further Notice of
Proposed Rulemaking in March 2000 addressing how to meet the increased
demand for telephone numbers in light of the declining quantity of
available numbers. The Report and Order adopted measures that will
promote more efficient allocation and use of telephone numbers, and
established policies to ensure that carriers have access to the
numbering resources they need to participate in the competitive
telecommunications marketplace.

The Commission also released a Report and Order in July 2000 addressing
whether the current method of administering toll free numbers should be
replaced by a management system more suitable to a competitive
environment. The North American Numbering Council will prepare a report
to the Commission on this issue within the next six months.

On July 15, 2000, the Common Carrier Bureau (Bureau) released a Public
Notice in response to several questions the Bureau had received relating
to the First Report and Order. On July 20, 2000, the Bureau also
released an order delegating to 15 states the authority to implement
number conservation measures.

[]{#__RefHeading___Toc503675938 .anchor}Initial Recommendation

The staff recommends the retention of Part 52 and the continuation of
current efforts to optimize the use of numbering resources in an
impartial, economically efficient manner.

[]{#__RefHeading___Toc503675939 .anchor}Comments

No comments.

[]{#__RefHeading___Toc503675940 .anchor}Recommendation

No changes.

[]{#__RefHeading___Toc503675941 .anchor}Part 53 -- Special Provisions
Concerning Bell Operating Companies

[]{#__RefHeading___Toc503675942 .anchor}Description

Part 53 generally implements the structural safeguards mandated in
section 272 and certain section 271 requirements. Section 272 of the
Communications Act of 1934, as amended, establishes safeguards
applicable to Bell Operating Company (BOC) equipment manufacturing,
provision of in-region interLATA telecommunications service, and
provision of interLATA information services (other than electronic
publishing and alarm monitoring).[^518] The Commission's Part 53 rules
implement these requirements. In particular, the Part 53 rules provide
that the BOCs must use a separate affiliate for certain activities, and
set out structural separation, transactional, non-discrimination and
auditing requirements. The Part 53 rules also contain provisions adopted
pursuant to section 271 of the Act concerning joint marketing of local
exchange and long distance services.

Part 53 is organized into six lettered subparts (three of which are
reserved for future use):

A -- General Information

B -- Bell Operating Company Entry into InterLATA Services

C -- Separate Affiliate; Safeguards

D -- Manufacturing by Bell Operating Companies \[reserved\]

E -- Electronic Publishing by Bell Operating Companies \[reserved\]

F -- Alarm Monitoring Services \[reserved\]

[]{#__RefHeading___Toc503675943 .anchor}Purpose

These separate subsidiary and auditing requirements are designed to
prevent the BOCs from using their dominance in the market for local
exchange and exchange access services to compete unfairly in the related
markets.

[]{#__RefHeading___Toc503675944 .anchor}Analysis

[]{#__RefHeading___Toc503675945 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume business and residential customers
than for low volume customers.

[]{#__RefHeading___Toc503675946 .anchor}Advantages

Part 53 reduces the potential for the BOCs to engage in anticompetitive
behavior by leveraging their dominance in the market for local exchange
and exchange access services to compete unfairly in the markets for
other goods and services.

[]{#__RefHeading___Toc503675947 .anchor}Disadvantages

Use of a structurally separate subsidiary, for certain activities and
compliance with the auditing requirements in Part 53 can increase the
carrier costs.

[]{#__RefHeading___Toc503675948 .anchor}Recent Efforts

In February 2000, the Commission declined to extend most of the
information services safeguards, which sunset pursuant to section
272(f)(2).[^519] Pursuant to a remand from the D.C. Circuit Court of
Appeals, the Commission is re-examining whether interLATA services as
used in section 271 of the Act includes information services.[^520]

[]{#__RefHeading___Toc503675949 .anchor}Initial Recommendation

The staff recommends only minor changes to Part 53 at this time. In this
regard, we note that much of Part 53 is statutorily mandated, including
the basic requirement for the use of separate subsidiaries for certain
activities and most of the structural separation and auditing
requirements. Section 53.101 of the rules concerning joint marketing has
sunset and should be deleted from Part 53. The section 272 provisions
requiring a separate subsidiary for the provision of interLATA
information services have also sunset, and the rules related to this
requirement should be deleted from Part 53.

[]{#__RefHeading___Toc503675950 .anchor}Comments

Several commenters concur with the staff recommendation that the
Commission review intercarrier compensation arrangements to develop a
comprehensive system that would be more efficient and pro-competitive
than the existing myriad of rules.[^521] One commenter believes that an
intercarrier compensation proceeding should consider reciprocal
compensation, not just for delivery of calls to ISPs, but for all forms
of local traffic.[^522] Another party, however, believes that resolution
of reciprocal compensation issues for ISP-bound traffic cannot await a
broad proceeding, and that the Commission must resolve these issues
promptly with a determination that such traffic is interstate traffic
for which reciprocal compensation does not apply.[^523] Some commenters
assert that a single intercarrier compensation arrangement may not
adequately address differences among local exchange carriers.[^524]

[]{#__RefHeading___Toc503675951 .anchor}Recommendation

See initial recommendation. The recommended intercarrier compensation
proceeding will consider the various dimensions of the issues raised,
including differences among the various participating carriers.

[]{#__RefHeading___Toc503675952 .anchor}Part 54 -- Universal Service

[]{#__RefHeading___Toc503675953 .anchor}Description

Part 54 implements Sections 214(e) and 254 of the Communications Act of
1934 direct the Commission to establish specific, predictable, and
sufficient mechanisms to preserve and advance universal service.[^525]
Part 54 contains rules governing the operation of the Commission's four
basic universal service programs: (1) the high-cost support mechanism,
which provides support to keep rates affordable in high-cost areas; (2)
the low-income support mechanism, which provides support to keep rates
affordable for low-income consumers; (3) the schools and libraries
support mechanism, which provides support for telecommunications and
Internet access and internal connections for eligible schools and
libraries; and (4) the rural health care support mechanism, which
provides support for telecommunications services for eligible rural
health care providers. In addition, Part 54 contains administrative
rules governing the collection of universal service contributions and
the distribution of support, as well as provisions for the creation of
the Universal Service Administrative Company (USAC) to administer the
universal service support mechanisms.

Part 54 is organized into ten lettered sub-parts:

A -- General Information

B -- Services Designated for Support

C -- Carriers Eligible for Universal Service Support

D -- Universal Service Support for High Cost Areas

E -- Universal Service Support for Low-Income Consumers

F -- Universal Service Support for Schools and Libraries

G -- Universal Service Support for Health Care Providers

H -- Administration

I -- Review of Decisions Issued by the Administrator

J -- Interstate Access Universal Service Support Mechanism

[]{#__RefHeading___Toc503675954 .anchor}Purpose

Part 54 is designed to promote universal service by ensuring that all
consumers, including consumers in high-cost and rural areas, have access
to affordable telecommunications services. It is also designed to ensure
that schools, libraries, rural health care providers, and the members of
the public that they serve, have access to affordable telecommunications
and information services. Part 54 is designed to accomplish these goals
in a competitively neutral manner by collecting support from every
telecommunications carrier that provides interstate telecommunications
service, and by making support available on a technologically neutral
basis to any eligible service provider. It is intended to encourage the
provision of service by wireless and other emerging technologies that
have been ineligible to receive universal service support in the past,
but may prove to be efficient alternatives to traditional wireline
service in high-cost and rural areas.

[]{#__RefHeading___Toc503675955 .anchor}Analysis

[]{#__RefHeading___Toc503675956 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503675957 .anchor}Advantages

Part 54 establishes explicit universal service mechanisms to ensure that
all consumers have access to affordable telecommunications services. It
also promotes competition by making explicit universal service support
available to any eligible telecommunications carrier in a competitively
and technologically neutral manner and thus encourages efficient entry
in high-cost areas. Finally, Part 54 benefits the public by making
telecommunications and information services available to qualifying
schools, libraries, and rural health care providers at reduced rates.

[]{#__RefHeading___Toc503675958 .anchor}Disadvantages

The reporting requirements necessary for the collection, calculation,
and disbursement of universal service support may place administrative
burdens on certain carriers. The current procedures for review of USAC's
funding decisions concerning schools, libraries, and rural health care
providers may also place unnecessary administrative burdens on the
Commission.

[]{#__RefHeading___Toc503675959 .anchor}Recent Efforts

The Part 54 rules have been revised a number of times since 1997.[^526]
On June 30, 2000, the Commission released an order to promote
telecommunications subscribership to those living on tribal lands.[^527]
The Federal-State Joint Board on Universal Service submitted to the
Commission a Recommended Decision regarding the Rural Task Force plan
for reforming the distribution of universal service support to rural
carriers on December 22, 2000.[^528] In addition, the Commission
recently issued a Notice of Proposed Rulemaking seeking comment on a
Petition for Rulemaking submitted by the Multi-Association Group (MAG),
a coalition of incumbent local exchange carrier associations.[^529] The
Petition sets forth an interstate access reform and universal service
support proposal for incumbent local exchange carriers subject to
rate-of-return regulation (typically small, rural carriers).

[]{#__RefHeading___Toc503675960 .anchor}Initial Recommendation

The staff does not recommend any major new initiatives concerning the
Commission's universal service rules as part of the 2000 Biennial
Regulatory Review. The staff, however, recommends that the Commission
consider modifying Part 54 to streamline the process for appeals of USAC
funding decisions by requiring applicants to file appeals with USAC in
the first instance unless the appeals raise new or novel questions of
fact, law, or policy.[^530] The staff also recommends certain minor
revisions to the Part 54 rules to remove transitional provisions that
are no longer applicable. For example, section 54.701(b)-(e), concerning
the now-completed merger of the Schools & Libraries Corporation and the
Rural Health Care Corporation into the Universal Service Administrative
Company, should be deleted.

[]{#__RefHeading___Toc503675961 .anchor}Comments

Commenters encourage the Commission to act expeditiously on the
recommendations of the Rural Task Force.[^531] In addition, commenters
suggest that the Commission clarify the services eligible for support
under the schools and libraries program to reduce the number of
appeals.[^532] Modifications are also suggested to the universal service
rules relating to the high-cost and schools and libraries
programs.[^533]

[]{#__RefHeading___Toc503675962 .anchor}Recommendation

The staff agrees with commenters that the Commission should
expeditiously review the Rural Task Force's recommendations relating to
universal service funding for areas served by rural telephone companies.
In addition, staff continues to recommend that the Commission streamline
the process for schools appeals by requiring applicants to file appeals
with USAC in the first instance unless the appeals raise new or novel
questions or fact, law, or policy.

[]{#__RefHeading___Toc503675963 .anchor}Part 59 -- Infrastructure
Sharing

[]{#__RefHeading___Toc503675964 .anchor}Description

Part 59 implements Section 259 of the Communications Act of 1934, as
amended, requires the Commission to prescribe regulations that require
incumbent LECs to make available to qualifying carriers certain public
switched network infrastructure, technology, information, and
telecommunications facilities and functions used to provide
telecommunications services, or access to information services. Part 59
specifies the general duty of incumbent LECs to share such
infrastructure with qualifying carriers (*i.e.*, carriers that fulfill
universal service obligations) and setting out general terms and
conditions for such sharing. Part 59 applies only when the qualifying
carrier does not seek to use the shared infrastructure to offer certain
services within the incumbent LEC's telephone exchange area.

[]{#__RefHeading___Toc503675965 .anchor}Purpose

Part 59 is intended to foster the provision of advanced
telecommunications and information services by small carriers. It is
intended to accomplish this by allowing qualifying carriers to take
advantage of the economies of scale and scope possessed by larger
incumbent LECs.

[]{#__RefHeading___Toc503675966 .anchor}Analysis

[]{#__RefHeading___Toc503675967 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503675968 .anchor}Advantages

Part 59 fosters the availability of advanced telecommunications and
information services by articulating general rules and guidelines to
define the obligations imposed by section 259 and by relying in large
part on negotiations between interested parties. This negotiation-driven
approach allows the parties to craft section 259 agreements that best
meet their needs with minimal regulatory supervision.

[]{#__RefHeading___Toc503675969 .anchor}Disadvantages

The rules implementing section 259 may impose costs on incumbent LECs
that must share infrastructure with qualifying carriers. Part 59
minimizes these costs by relying on private negotiations to establish
the precise terms for infrastructure sharing.

[]{#__RefHeading___Toc503675970 .anchor}Recent Efforts

The Commission recently reaffirmed its negotiation-based approach to
implementing section 259.[^534]

[]{#__RefHeading___Toc503675971 .anchor}Initial Recommendation

The staff recommends that the negotiation-driven, minimally-regulatory
approach adopted in Part 59 be maintained and that no substantial
changes be made to this Part. During the three years since Part 59 was
adopted, no evidence has been presented to the Commission indicating
that parties have been unable to negotiate section 259 infrastructure
sharing agreements.

[]{#__RefHeading___Toc503675972 .anchor}Comments

The Commission received no comment on this issue.

[]{#__RefHeading___Toc503675973 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503675974 .anchor}Part 61 -- Tariffs

[]{#__RefHeading___Toc503675975 .anchor}Description

Part 61 implements sections 201 - 204. Sections 201 and 202 require
rates, terms and conditions to be "just and reasonable,"[^535] and
prohibit "unjust or unreasonable discrimination."[^536] Sections 203 and
204 of the Communications Act of 1934, as amended, establish tariff
filing requirements applicable to common carriers.[^537] Part 61
implements these sections of the Act by establishing rules that perform
two major functions. First, the Part 61 rules establish requirements
governing the filing, form, content, public notice periods, and
accompanying support materials for tariffs. Second, Part 61 sets forth
the pricing rules and related requirements that apply to incumbent local
exchange carriers (LECs) that are subject to price cap regulation.

> Part 61 is organized into ten lettered sub-parts:

A -- General

> B -- Rules for Electronic Filing
>
> C -- General Rules for Nondominant Carriers

D -- General Tariff Rules for International Dominant Carriers

> E -- General Rules for Dominant Carriers

F -- Specific Rules for Tariff Publications of Dominant and Nondominant
Carriers

> G -- Concurrences
>
> H -- Applications for Special Permission

I -- Adoption of Tariffs and Other Documents of Predecessor Carriers

> J -- Suspensions

[]{#__RefHeading___Toc503675976 .anchor}Purpose

The Part 61 tariffing rules provide consumers with information on the
rates, terms and conditions for telecommunications services. The rules
are intended ensure that the carriers provide the Commission and the
public with information necessary to evaluate the lawfulness of tariff
rates, terms and conditions. The price cap rules in Part 61 are designed
to ensure that the rates of price cap carriers are "just and reasonable"
and "not unjustly or unreasonably discriminatory." At the same time, the
price cap rules, in conjunction with the Part 69 access charge rules,
are designed to create incentives for increased carrier efficiency, to
streamline the tariff review process, and to allow the carriers some
degree of pricing flexibility.

[]{#__RefHeading___Toc503675977 .anchor}Analysis

[]{#__RefHeading___Toc503675978 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitors still serve only a small percentage of
local exchange lines. Competition for business customers in metropolitan
areas has, in general, developed more rapidly than competition for
residential customers or customers in rural areas. The domestic U.S.
long distance market is competitive, although there is greater
competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.
These markets are rapidly changing from being dominated by a small
number of national telecommunications providers to having a large number
of competitors.

[]{#__RefHeading___Toc503675979 .anchor}Advantages

The Part 61 tariffing rules benefit the public by providing information
on the rates, terms, and conditions for telecommunications services. The
requirements for support materials facilitate review of the lawfulness
of the tariffs, reduce the cost of enforcing Commission pricing rules,
and permit interested parties to more easily challenge tariff
provisions.

The price cap rules contained in Part 61 protect customers by capping
the rates charged by the LECs and by limiting the LECs ability to
exercise market power. They also streamline the tariff process, and
foster carrier efficiency by permitting them some degree of pricing
flexibility.

[]{#__RefHeading___Toc503675980 .anchor}Disadvantages

The tariff filing requirements may impede competition by reducing
carrier's ability to react to competitive developments in the market and
potentially foster in oligopoly pricing by requiring the public
disclosure of rates, terms, and conditions. Furthermore, the requirement
for tariff support materials imposes some preparation costs on the
carriers. Over time, the price cap rules may also reduce economic
efficiency by limiting carrier pricing flexibility.

[]{#__RefHeading___Toc503675981 .anchor}Recent Efforts

As part of the 1998 Biennial Regulatory Review process, the Commission
conducted a comprehensive review of Part 61, and eliminated a number of
rules that were no longer necessary.[^538] More recently, the Commission
addressed the price cap rules in a comprehensive manner in the CALLS
proceeding.[^539] In addition, the Commission is in the process of
implementing mandatory detariffing for domestic interexchange toll
service,[^540] and is considering doing the same for competitive local
exchange carrier services.[^541]

In October, as part of the 2000 Biennial regulatory review, the
Commission released an NPRM proposing to extend the complete detariffing
regime adopted for domestic, interexchange services to the international
services of non-dominant interexchange carriers, including Commercial
Mobile Radio Service providers and U.S. carriers classified as dominant
solely due to foreign affiliations.[^542]

[]{#__RefHeading___Toc503675982 .anchor}Initial Recommendation

At this time, the staff generally recommends retaining the existing Part
61 requirements, with continued monitoring of competitive developments
to permit changes as warranted by increased competition. The staff
recommends, however, that the Commission extend mandatory detariffing to
the international services of non-dominant interexchange carriers,
including CMRS providers and U.S. carriers classified as dominant solely
due to foreign affiliations. We also note that the inter-carrier
compensation proceeding recommended elsewhere in this report could
result in some revisions to Part 61.

[]{#__RefHeading___Toc503675983 .anchor}Comments

Several earlier proposals were reiterated in the comments on the staff
report: (1) reorganize Parts 61 and 69 so that carrier tariff
requirements would be in Part 61, rules governing rate-of-return LEC
access charges would be in Part 69, and rules for price cap LECs would
be in a new part; (2) all incumbent LECs should be permitted to file
contract tariffs; and (3) tariff filing procedures should be amended to
shorten the notice for corrections to tariffs from three days to one
day, to eliminate the requirement that tariffs be in effect for thirty
days before any changes can be made, and to extend the special
permission period from sixty to ninety days.[^543] The comments also
urge the Commission to allow carriers greater pricing flexibility in the
face of increased competitive pressures, to reduce burdens in filing
tariffs by permitting small LECs to file tariffs for new services on one
day's notice, and to include one or more study areas in the NECA common
line tariff.[^544] Several commenters concur with the staff
recommendation that the Commission review intercarrier compensation
arrangements to develop a comprehensive system that would be more
efficient and pro-competitive than the existing myriad of rules.[^545]
One commenter opposes permitting incumbent LECs to file contract
tariffs.[^546]

Six parties filed comments on the staff recommendation regarding the
detariffing of international services,[^547] and one party filed reply
comments.[^548] All of the parties support the Staff recommendation to
extend mandatory detariffing to the international services of
non-dominant interexchange carriers, including CMRS providers and U.S.
carriers classified as dominant solely due to foreign affiliations.

[]{#__RefHeading___Toc503675984 .anchor}Recommendation

The staff recommends that the Commission extend detariffing to the
international services of non-dominant interexchange carriers, including
CMRS providers and U.S. carriers classified as dominant solely due to
foreign affiliations in the International Detariffing proceeding.
Otherwise, the staff continues to recommend retaining the existing Part
61 requirements, with continued monitoring of competitive developments
to permit changes as warranted by increased competition. The ongoing
proceedings on access charge reform for price cap and rate-of-return
LECs that affect parts 61 and 69 provide an appropriate means to address
competitive developments in the exchange access market and other
concerns raised by commenters.

[]{#__RefHeading___Toc503675985 .anchor}Part 63 -- Extension of Lines,
New Lines, and Discontinuance, Reduction, Outage and Impairment of
Service by Common Carriers; and Grants of Recognized Private Operating
Agency Status

[]{#__RefHeading___Toc503675986 .anchor}Description

Section 214 of the Communications Act of 1934, as amended, provides that
no carrier shall undertake the construction of a new line or extension
of any line, or shall acquire or operate any line, or extension thereof,
without first having obtained a certificate from the Commission that the
present or future public convenience and necessity require the
construction and/or operation of such extended line. Section 214 also
provides that no carrier shall discontinue, reduce or impair service to
a community without first having obtained a certificate from the
Commission that neither the present nor future public convenience and
necessity will be adversely affected by such action.[^549] Part 63 of
our rules sets forth specific information that must be included in a
section 214 application for market entry or exit by a common
carrier.[^550]

Part 63 is organized into five sub-designations:

> A -- Extensions and Supplements (§§ 63.01-63.25)
>
> B -- General Provisions Relating to All Applications Under Section 214
> (§§ 63.50-63.53)
>
> C -- Discontinuance, Reduction, Outage and Impairment (§§
> 63.60-63.100)
>
> D -- Contents of Applications; Examples (§§ 63.500-63.601)
>
> E -- Request for Designation as a Recognized Private Operating Agency
> (§§ 63.701-
>
> 63.702)

[]{#__RefHeading___Toc503675987 .anchor}Purpose

Part 63 sets out the requirements for a section 214 authorization to
provide or discontinue service. A section 214 application is a request
for authority to provide or to discontinue services pursuant to section
214 of the Communications Act. A carrier must receive a section 214
authorization prior to initiating or discontinuing service.

The primary purpose in adopting entry criteria under section 214 is to
promote effective competition in the U.S. telecommunications services
market. With regard to the construction of facilities, Commission
authorization is needed to protect consumers from being charged by
carriers for unneeded facilities. Commission authorization for
discontinuance of service protects consumers from loss of service. The
Commission has substantially deregulated the procedures for obtaining
section 214 authorizations.

As competition has increased in domestic markets for international
telecommunications services, the section 214 authorization requirement
serves several purposes. It enables the Commission to screen
applications for anticompetitive efforts and to deny or condition
authorizations as appropriate. The review process also includes
consultation with Executive Branch agencies on national security, law
enforcement, foreign policy, and trade concerns that may be unique to
the provision of international services. The section 214 authorization
requirement also helps us monitor competitive conditions along U.S.
international routes as well as each carrier's compliance with our rules
and policies governing the provision of international services. Finally,
it also serves to inform small carriers of their special obligations as
providers of international service.

Part 63 also contains rules to protect U.S. consumers and carriers from
the exertion of market power by foreign telecommunications carriers in
the U.S. telecommunications market. For example, the No Special
Concessions rule prohibits U.S. international carriers from agreeing to
accept special concessions directly or indirectly from any foreign
carrier with respect to any U.S. international route where the foreign
carrier possesses sufficient market power on the foreign end of the
route to affect competition in the U.S. market.[^551] Part 63 also
contains procedures for a party to be designated as a Recognized Private
Operating Agency.[^552]

[]{#__RefHeading___Toc503675988 .anchor}Analysis

[]{#__RefHeading___Toc503675989 .anchor}Status of Competition

There is a significant amount of competition in the provision of
domestic long distance services. Competition for local exchange services
is increasing. Competition in international services is also increasing,
and the market is rapidly changing from a system that used to be
dominated by a small number of national telecommunications providers
(generally the incumbent national monopoly telephone companies) to a
system with large numbers of new entrants and competitors.

[]{#__RefHeading___Toc503675990 .anchor}Advantages

Part 63 provides carriers and the public with procedures to be followed
to obtain authorization to construct facilities, provide service, and
discontinue service. The rules clarify what information must be filed
with the Commission, how long action on the application will take, the
types of services that can be provided over the facilities, and in what
circumstances a carrier may discontinue service.

[]{#__RefHeading___Toc503675991 .anchor}Disadvantages

The rules can be administratively burdensome on the carriers and the
Commission. Some of the rules are duplicative, or unclear. The rules may
also delay the introduction of new services to the public.

[]{#__RefHeading___Toc503675992 .anchor}Recent Efforts

In November, the Commission released an NPRM which proposes changes to
several rules in Part 63.[^553] Among other things, the Commission
proposed to amend Sections 63.18 and 63.24 concerning *pro forma*
assignments and transfers of control of international Section 214
authorizations to more closely match those used for the assignment and
transfer of control of CMRS licenses. The Commission also proposed to
modify Section 63.19 to relieve dominant international carriers of the
requirement to seek prior approval to discontinue service, except where
such carriers possess market power in the provision of international
service on the U.S. end of the route. In addition, the Commission
proposed to amend several rules to clarify the intent of those rules and
to eliminate certain rules that no longer have any application.[^554]

The increase in competition has led to a reduction in the administrative
burdens on carriers regarding market entry and exit. In 1999, the
Commission amended the Part 63 rules to de-regulate market entry and to
streamline market exit filing requirements, under section 214, for
domestic carriers.[^555] An application is not needed for entry into
domestic services. The new rules confer \"blanket\" section 214
certification for new lines of all domestic carriers, exempt line
extensions and video programming services from section 214 requirements,
and permit the automatic grant of all section 214 applications to
discontinue domestic service unless the Commission notifies the
applicant otherwise. The only section 214 applications the Commission
receives for domestic service are for market exit. A carrier must get
discontinuance authority and notify customers when it stops providing
service to a community.

In 1999, the Commission further streamlined its procedures for granting
international section 214 authorizations so that the vast majority of
international section 214 applications filed qualify for streamlined
processing. Thus, most new carriers can provide international services
on most international routes 14 days after public notice of an
application. Carriers already providing service can complete *pro forma*
transactions and assignments of their authorizations without prior
Commission approval and provide service through their wholly owned
subsidiaries without separate Commission approval. Carriers under common
ownership with an already-authorized carrier can provide the same
authorized services after a minimal waiting period.[^556]

[]{#__RefHeading___Toc503675993 .anchor}Initial Recommendation

The staff recommends that the sections which were amended in 1999 to
lower entry barriers for domestic carriers be retained because they
minimize transaction costs, streamline the applications process, promote
competition, and increase consumer choice. The rules relate to the form
of applications to be filed (*i.e.*, amendments, additional information,
copies, fees, filing periods, and form (such as paper size)) should be
retained because the rules are clear and predictable. The staff
recommends that the rules describing and defining the types of
discontinuance of services for which section 214 authorization must be
obtained should be modified and consolidated because they are largely
obsolete, and duplicative. The staff has identified several duplicative
rules that should be eliminated, and a number of rules that should be
clarified or corrected.

[]{#__RefHeading___Toc503675994 .anchor}Comments

Verizon suggests that the Commission should amend Section 63.21(d) to
require that only facilities-based operators file the reports required
by Section 43.61.[^557]

[]{#__RefHeading___Toc503675995 .anchor}Recommendation

In addition to the staff's initial recommendations, the staff recommends
that the Commission adopt the proposals in *2000 International Biennial
Review NPRM* to eliminate Section 43.81. The staff does not recommend
that that the Commission review Section 63.21(d) as requested by
Verizon, but believes it is more appropriate to address Verizon's
concerns by reviewing Section 43.61.

[]{#__RefHeading___Toc503675996 .anchor}Part 64 -- Miscellaneous Rules
relating to common carriers, Subpart A -- Traffic Damage Claims

[]{#__RefHeading___Toc503675997 .anchor}Description

Subpart A requires carriers engaged in radio-telegraph, wire-telegraph,
or ocean-cable service to maintain separate files for each damage claim
of a traffic nature filed with the carrier. Subpart A also prohibits
such carriers from making payments as a result of any traffic damage
claim in excess of the total amount collected for the message or
messages from which the claim arose unless the claim is presented in
writing and sets forth the reason for the claim. These rules are based
on the Commission's authority pursuant to sections 1, 4, 201-205, and
220 of the Communications Act, as amended.[^558]

[]{#__RefHeading___Toc503675998 .anchor}Purpose

Subpart A requires that certain types of carriers maintain records
concerning damage claims, and limits damage payments absent a written
claim.

[]{#__RefHeading___Toc503675999 .anchor}Analysis

[]{#__RefHeading___Toc503676000 .anchor}Status of Competition

Telegraph service, which appears to be the primary focus of this
subpart, is no longer a major service offering.

[]{#__RefHeading___Toc503676001 .anchor}Advantages

Ensures that certain carriers maintain records concerning damage claims.

[]{#__RefHeading___Toc503676002 .anchor}Disadvantages

Subpart A appears to focus on the provision of telegraph service, which
is no longer a major service offering.

[]{#__RefHeading___Toc503676003 .anchor}Recent Efforts

No recent action.

[]{#__RefHeading___Toc503676004 .anchor}Initial Recommendation

The staff recommends the Commission consider removing subpart A since it
appears to be outdated.

[]{#__RefHeading___Toc503676005 .anchor}Comments

The only party addressing this subpart supports the staff
recommendation.[^559]

[]{#__RefHeading___Toc503676006 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676007 .anchor}Part 64, Subpart B --
Restrictions on Indecent Telephone Message Services

[]{#__RefHeading___Toc503676008 .anchor}Description

Subpart B implements the provisions of section 223(b) relating to
defenses to prosecution for indecent commercial communications. Section
223(b) of the Communications Act of 1934, as amended, prohibits use of
the telephone for the purpose of obscene commercial communications. It
also prohibits use of the telephone for indecent commercial
communications without the consent of the other party and prohibits use
of the telephone for indecent commercial communications which are
available to anyone under 18 years of age.[^560] Section 223(b) also
provides for certain defenses to prosecution for making indecent
commercial communications.

Under section 64.201, a provider of indecent commercial telephone
communications has a defense to prosecution if the provider has notified
the common carrier that the provider is engaged in providing indecent
commercial communications, and does one of the following: (1) requires
credit card payment before transmitting the message; (2) requires an
authorized access or identification code, which has been established by
mail, before transmitting the message; or (3) scrambles the message so
that the audio is unintelligible and incomprehensible without a
descrambler. Subpart B also provides a defense to prosecution for
message sponsor subscribers to mass announcement services if they ask
the carrier to take certain precautions. In addition, subpart B bars
common carriers, to the extent technically feasible, from providing
access to obscene or indecent communications from the telephone of
anyone who has not previously requested access to such services in
writing if the carrier provides billing and collection for the provider
of the obscene or indecent communications.

[]{#__RefHeading___Toc503676009 .anchor}Purpose

Subpart B is intended to implement the statutory restrictions on the
commercial provision by telephone of indecent communications, consistent
with the First Amendment. In particular, subpart B is intended to
protect minors and non-consenting adults from indecent communications.

[]{#__RefHeading___Toc503676010 .anchor}Analysis

[]{#__RefHeading___Toc503676011 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503676012 .anchor}Advantages

Subpart B protects minors and non-consenting adults from indecent
commercial telephone communications within a framework designed to be
consistent with the First Amendment.

[]{#__RefHeading___Toc503676013 .anchor}Disadvantages

Restrictions affecting speech are subject to potential challenge as
inconsistent with the First Amendment.

[]{#__RefHeading___Toc503676014 .anchor}Recent Efforts

No recent developments.

[]{#__RefHeading___Toc503676015 .anchor}Recommendation

The staff does not recommend changes to subpart B.

[]{#__RefHeading___Toc503676016 .anchor}Part 64, Subpart C -- Furnishing
of Facilities to Foreign Governments for International Communications

[]{#__RefHeading___Toc503676017 .anchor}Description

Subpart C, consisting of section 64.301 of the Commission's rules,
requires U.S. common carriers to provide services and facilities for
communications to any foreign government, upon reasonable request. If a
foreign government refuses to provide services or facilities for
communications to the U.S. Government, U.S. carriers, to the extent
specifically ordered by the Commission, shall deny equivalent services
or facilities to the foreign government.[^561] This rule was adopted
pursuant to the Commission's authority under sections 201, 214, 303, and
308 of the Communications Act, as amended.[^562]

[]{#__RefHeading___Toc503676018 .anchor}Purpose

Section 64.301 is intended to ensure that the U.S. Government has access
to communications services overseas. It permits the Commission to order
U.S. carriers to deny foreign governments access to communications
services in the United States if the foreign government has denied the
U.S. government access to communications services or facilities
overseas.

[]{#__RefHeading___Toc503676019 .anchor}Analysis

[]{#__RefHeading___Toc503676020 .anchor}Status of Competition

Competition in the international services markets is increasing. These
markets are rapidly changing from being dominated by a small number of
national telecommunications providers to having a large number of
competitors.

[]{#__RefHeading___Toc503676021 .anchor}Advantages

The rule helps to ensure that the U.S. Government has access to
communications services and facilities overseas.

[]{#__RefHeading___Toc503676022 .anchor}Disadvantages

None.

[]{#__RefHeading___Toc503676023 .anchor}Recent Efforts

The Commission last revised this rule in 1963, and would need to consult
with the State Department before doing so again.

[]{#__RefHeading___Toc503676024 .anchor}Initial Recommendation

The staff recommended retaining the rule at this time.

[]{#__RefHeading___Toc503676025 .anchor}Comments

The only party addressing this subpart advocates eliminating it,
asserting that these issues can be dealt with through contracts.[^563]

[]{#__RefHeading___Toc503676026 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676027 .anchor}Part 64, Subpart D -- Procedures
for Handling Priority Services in Emergencies

[]{#__RefHeading___Toc503676028 .anchor}Description

Subpart D requires that common carriers maintain, provision, and, if
disrupted, restore facilities and services in accordance with the
policies and procedures in Appendix A to Part 64. Appendix A establishes
policies and procedures and assigns responsibilities for the National
Security Emergency Preparedness (NSEP) Telecommunications Service
Priority (TSP) System. These requirements are based on the Commission's
authority under sections 1, 201-05 of the Communications Act as
amended.[^564]

[]{#__RefHeading___Toc503676029 .anchor}Purpose

Subpart D is designed to ensure that critical communications services
are available during times of national emergency.

[]{#__RefHeading___Toc503676030 .anchor}Analysis

[]{#__RefHeading___Toc503676031 .anchor}Status of Competition

Not Relevant.

[]{#__RefHeading___Toc503676032 .anchor}Advantages

Subpart D promotes public safety and national security by establishing
clear procedures and criteria for ensuring that critical communications
services are available in times of national emergency.

[]{#__RefHeading___Toc503676033 .anchor}Disadvantages

Complying with these requirements may impose administrative costs on
carriers.

[]{#__RefHeading___Toc503676034 .anchor}Recent Effort

There have not been any recent actions.

[]{#__RefHeading___Toc503676035 .anchor}Initial Recommendation

The staff does not recommend changes in subpart D.

[]{#__RefHeading___Toc503676036 .anchor}Comments

None.

[]{#__RefHeading___Toc503676037 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676038 .anchor}Part 64, Subpart E -- Use of
Recording Devices by Telephone Companies

[]{#__RefHeading___Toc503676039 .anchor}Description

Subpart E governs the use of recording devices by telephone common
carriers to record interstate or foreign telephone conversations between
members of the public and telephone company agents or employees. Subpart
E requires that telephone companies wishing to record such conversations
must: (1) obtain the prior consent of all parties; (2) give a verbal
notification prior to recording; and (3) accompany the use of the
recording device with an automatic tone warning device that produces a
distinct signal at regular intervals. These requirements are based on
the Commission's authority under sections 1, 2, 4, 201, and 205 of the
Communications Act as amended.[^565]

[]{#__RefHeading___Toc503676040 .anchor}Purpose

Subpart E is intended to protect privacy interests.

[]{#__RefHeading___Toc503676041 .anchor}Analysis

[]{#__RefHeading___Toc503676042 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503676043 .anchor}Advantages

Subpart E is designed to protect privacy.

[]{#__RefHeading___Toc503676044 .anchor}Disadvantages

Subpart E appears to duplicate federal and state electronic privacy
statutes, including 18 U.S.C. § 2510 *et seq.*, and 47 U.S.C. §1004*.*
It also references outdated technology.

[]{#__RefHeading___Toc503676045 .anchor}Recent Effort

There have not been any recent changes.

[]{#__RefHeading___Toc503676046 .anchor}Initial Recommendation

The staff recommends the removal of Part 64, subpart E.

[]{#__RefHeading___Toc503676047 .anchor}Comments

The only party addressing this issue supports elimination of this
subpart.[^566]

[]{#__RefHeading___Toc503676048 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676049 .anchor}Part 64, Subpart F --
Telecommunications Relay Services and Related Customer Premises
Equipment for Persons with Disabilities

[]{#__RefHeading___Toc503676050 .anchor}Description

Title IV of the Americans with Disabilities Act of 1990 (ADA), codified
as section 225 of the Communications Act of 1934, as amended, requires
the Commission to ensure that telecommunications relay service (TRS) is
available, "to the extent possible and in the most efficient manner," to
individuals with hearing or speech disabilities in the United
States.[^567] Section 225 defines TRS as telephone transmission service
that enables an individual with a hearing or speech disability to engage
in communication by wire or radio with a hearing individual in a manner
functionally equivalent to someone without such a disability.

Part 64, subpart F was adopted to implement section 225 of the Act. The
rules provide minimum functional, operational, and technical standards
for TRS programs. The rules also establish a cost recovery and a carrier
contribution mechanism for the provision of interstate TRS and require
states to establish cost recovery mechanisms for the provision of
intrastate TRS.

The rules give states a strong role in ensuring the availability of TRS
by treating carriers as in compliance with their statutory obligations
if they operate in a state that has a relay program certified as
compliant by this Commission pursuant to rules in subpart F.

[]{#__RefHeading___Toc503676051 .anchor}Purpose

Subpart F implements section 225. Subpart F is intended to facilitate
communication by persons with a hearing or speech disability by ensuring
that interstate and intrastate TRS is available throughout the country,
and by ensuring uniform minimum quality standards for such relay
services.

[]{#__RefHeading___Toc503676052 .anchor}Analysis

[]{#__RefHeading___Toc503676053 .anchor}Status of Competition

There is competition in the interstate TRS market, but very little
competition in the intrastate TRS market.

[]{#__RefHeading___Toc503676054 .anchor}Advantages

The Commission's TRS rules ensure that individuals with hearing or
speech disabilities receive the same quality of service when they make
relay calls, regardless of where their call originates or terminates.
The rules also ensure that the telecommunications service they receive
is "functionally equivalent" to that available to persons who do not
have such disabilities. The rules are particularly important to ensure
service quality because there is so little intrastate competition among
intrastate TRS providers.

[]{#__RefHeading___Toc503676055 .anchor}Disadvantages

The regulations require relatively frequent modification to ensure
functional equivalence to voice telephone service because of rapid
technological change.

[]{#__RefHeading___Toc503676056 .anchor}Recent Efforts

In March 2000, the Commission revised subpart F to, among other things:
(1) modify the definition of telecommunications relay services to
include speech-to-speech (STS) relay services (which provide a
telecommunications link for persons with speech disabilities), video
relay interpreting (VRI), (which facilitates telecommunications for
individuals who use sign language), and non-English language relay
services; (2) require that all relay services, whether mandatory or
voluntary, funded by intrastate and interstate TRS funds, comply with
minimum service quality standards; (3) require provision of STS relay
services and permit reimbursement for the voluntary provision of VRI
service; (4) modify the minimum service quality standards to better
ensure functional equivalency; (5) clarify that the existing rules
require outreach to all callers and for all forms of TRS; and (6)
improve the Commission's process for handling TRS complaints.[^568]

In August 2000, the Commission revised subpart F to require all carriers
providing telephone voice transmission service to provide access via the
711 dialing code to all relay services as a toll free call.[^569]

[]{#__RefHeading___Toc503676057 .anchor}Initial Recommendation

The staff did not recommend modification of subpart F as part of the
2000 Biennial Review**.**

[]{#__RefHeading___Toc503676058 .anchor}Comments

None.

[]{#__RefHeading___Toc503676059 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676060 .anchor}Part 64, Subpart G -- Furnishing
of Enhanced Services and Customer Premises Equipment by Bell Operating
Companies; Telephone Operator Services

[]{#__RefHeading___Toc503676061 .anchor}Description

Subpart G addresses two issues: (1) the provision of enhanced services
and customer premises equipment (CPE) by Bell Operating Companies
(BOCs); and (2) the provision of operator services. These rules were
adopted pursuant to the Commission's authority under sections 4,
201-205, 403, and 404 of the Act, as amended.[^570]

The BOCs may provide enhanced services and CPE pursuant to nonstructural
safeguards established in the *Computer III*[^571] (enhanced services)
and *Furnishing of CPE* [^572] proceedings, or through a separate
subsidiary as provided in section 64.702 of the Commission's rules. If a
BOC provides enhanced services or CPE through a separate subsidiary, the
separate subsidiary must: (1) obtain all transmission facilities
necessary for the provision of enhanced services pursuant to tariff; (2)
operate independently, with its own books of accounts, separate
officers, personnel, and computer facilities; (3) deal with any
affiliated manufacturing entity on an arm's length basis; and (4)
compensate the BOC for any research or development performed for the
subsidiary. Section 64.702 requires that transactions between the
subsidiary and the parent or any other affiliate be put in writing, and
bars BOCs from engaging in marketing or sales on behalf of a CPE or
enhanced services subsidiary. The BOC must also obtain Commission
approval of the capitalization plans for any such separate subsidiary.
In addition, section 64.702 bars all common carriers from providing CPE
in conjunction with common carrier communications services. In addition
to the nonstructural and structural separations requirements applicable
to the BOCs, section 64.702(e) requires all common carriers to sell or
lease CPE separate and apart from such carrier's regulated
communications services, and to offer CPE solely on a deregulated
non-tariffed basis.

The remainder of subpart G addresses the provision of telephone operator
services, and certain activities by call aggregators.[^573] These rules
require that operator service providers identify themselves at the
beginning of each call and provide consumers with information concerning
their rates. The rules also prohibit call blocking and require that
customers be able to obtain access to the operator services provider of
their choice. In addition, subpart G contains restrictions on charges
related to the provision of operator services, minimum standards for
routing and handling of emergency telephone calls, and rules governing
the filing of informational tariffs and the provision of operator
services for prison inmates. The Commission has forborne from applying
some of these to CMRS carriers and aggregators.[^574]

[]{#__RefHeading___Toc503676062 .anchor}Purpose

Subpart G establishes safeguards for the provision of enhanced services
and CPE by BOCs. These measures prevent the BOCs from exercising market
power in markets adjacent to the local exchange market.

The subpart G rules for operator services protect consumers by ensuring
that they have information about the rates charged by operator service
providers, and that they can reach the operator service provider of
their choice. The rules also promote public safety by prescribing
minimum standards for operator service provider and call aggregator
handling of emergency telephone calls.

[]{#__RefHeading___Toc503676063 .anchor}Analysis

[]{#__RefHeading___Toc503676064 .anchor}Status of Competition

The markets for both enhanced services and CPE are competitive. The
operator services market is becoming increasingly competitive, although
consumers may not benefit fully from this competition due to a lack of
consumer awareness about the choices available to them, especially when
using payphones.

[]{#__RefHeading___Toc503676065 .anchor}Advantages

Subpart G prevents the BOCs from using their market power in the local
exchange market to affect competition in the provision of enhanced
services and CPE. The provisions of subpart G concerning operator
services protect consumers from excessive charges for these services and
ensures that consumers can reach the interexchange carrier of their
choice.

[]{#__RefHeading___Toc503676066 .anchor}Disadvantages

The separate subsidiary requirements impose additional costs on the
BOCs. The rules concerning operator services impose some administrative
costs on aggregators and operator service providers.

[]{#__RefHeading___Toc503676067 .anchor}Recent Efforts

As part of its 1998 Biennial Review, the Commission is considering
eliminating section 64.702, which prohibits common carriers from
bundling CPE with regulated communications services. The Commission
tentatively concluded that the CPE market is sufficiently competitive to
justify eliminating this restriction.[^575]

The Commission adopted amendments to the subpart G rules governing
operator service providers on July 12, 1999. These rule changes require
that aggregators update the consumer information they must post on or
near public telephones as soon as possible, and no later than 30 days
after the aggregator changes the pre-subscribed operator service
provider.[^576] The Commission is considering in a pending rulemaking
proceeding whether to forbear from applying additional requirements
relating to the provision of telephone operator services in the context
of CMRS.[^577]

[]{#__RefHeading___Toc503676068 .anchor}Initial Recommendation

The staff does not recommend further changes in subpart G as part of the
2000 Biennial Review.

[]{#__RefHeading___Toc503676069 .anchor}Comments

Two parties urge the Commission to eliminate the prohibition on the
bundling of CPE and telecommunications services in whole or in
part.[^578]

[]{#__RefHeading___Toc503676070 .anchor}Recommendation

The Commission is addressing this issue in the aforementioned
proceeding.

[]{#__RefHeading___Toc503676071 .anchor}Part 64, Subpart H -- Extension
of Unsecured Credit for Interstate and Foreign Communications Services
to Candidates for Federal Office

[]{#__RefHeading___Toc503676072 .anchor}Description

Part 64 subpart H, implements section 401 of the Federal Election
Campaign Act of 1971 which requires the Commission to promulgate rules
governing the extension of unsecured credit for foreign or interstate
communications services to candidates for Federal office.[^579] These
rules require certain carriers[^580] to file periodic reports with the
Commission detailing the terms of any unsecured credit extended by the
carrier to, or on behalf of, a candidate for federal office. In
addition, subpart H requires carriers to extend unsecured credit on
substantially equal terms to all candidates and other persons on behalf
of any candidate for the same office.[^581]

[]{#__RefHeading___Toc503676073 .anchor}Purpose

The purpose of subpart H is to assist the Commission in monitoring
unsecured credit arrangements between carriers and candidates for
federal office, pursuant to the Federal Election Campaign Act. It is
also ensures that such agreements are extended on substantially equal
terms to all candidates for the same office.[^582]

[]{#__RefHeading___Toc503676074 .anchor}Analysis

[]{#__RefHeading___Toc503676075 .anchor}Status of Competition

Competition in the local exchange access market is growing, although
competitors still serve only a small percentage of local exchange lines.
Competition for business customers in metropolitan areas has, in
general, developed much more rapidly than competition for residential
customers or customers in rural areas. The U.S. market for domestic long
distance service is competitive, although there is greater competition
for higher volume business and residential customers than for low volume
customers.

[]{#__RefHeading___Toc503676076 .anchor}Advantages

The subpart H reporting requirements and limited disclosure rules
provide an efficient means of monitoring unsecured credit arrangements
between carriers and candidates for federal office. The rules also are
designed to ensure that carriers do not favor any one candidate with
regard to unsecured credit arrangements.

[]{#__RefHeading___Toc503676077 .anchor}Disadvantages

These rules involve some additional administrative burdens for carriers.

[]{#__RefHeading___Toc503676078 .anchor}Recent Efforts

There have been no significant changes in recent years.

[]{#__RefHeading___Toc503676079 .anchor}Initial Recommendation

The staff recommends that the Commission retain subpart H.

[]{#__RefHeading___Toc503676080 .anchor}Comments

USTA maintains that current contracts and current state and Federal law
should provide sufficient oversight and recommends that the Commission
eliminate Subpart H.[^583] No other party commented on this provision.

[]{#__RefHeading___Toc503676081 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676082 .anchor}Part 64, Subpart I -- Allocation
of Costs

[]{#__RefHeading___Toc503676083 .anchor}Description

Section 254(k) of the Communications Act, as amended, requires the
Commission, with respect to interstate services, to establish any
necessary cost allocation rules, accounting safeguards, and guidelines
to ensure that services included within the definition of universal
service bear no more than a reasonable allocation of joint and common
costs of facilities used to provide these services. The requirements in
subpart I are based on the Commission's authority under sections 201 and
220 of the Communications Act, as amended.[^584] Subpart I of the
Commission's rules prescribes procedures for the allocation of carriers'
costs between regulated and non-regulated services. It provides that all
incumbent LECs required to separate regulated and non-regulated
costs[^585] shall use the attributable cost method of cost allocation
and lists a number of cost allocation principles that such carriers must
follow. Subpart I provides that these carriers are also subject to the
affiliate transactions rules, and requires that all incumbent LECs with
annual operating revenues at or above a specified indexed level
(currently \$114 million) file cost allocation manuals (CAMs) with the
Commission. Finally, subpart I provides that all carriers required to
file CAMs must also have an independent auditor audit their compliance
with the Commission's cost allocation requirements.

[]{#__RefHeading___Toc503676084 .anchor}Purpose

The subpart I rules protect consumers by preventing cross-subsidization
between regulated and non-regulated services provided by carriers
subject to the cost allocation requirement.

[]{#__RefHeading___Toc503676085 .anchor}Analysis

[]{#__RefHeading___Toc503676086 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503676087 .anchor}Advantages

The subpart I rules ensure that carriers' prevent carriers from
competing unfairly in other markets.

[]{#__RefHeading___Toc503676088 .anchor}Disadvantages

The cost allocation and affiliate transaction rules impose
administrative costs on carriers subject to these requirements.

[]{#__RefHeading___Toc503676089 .anchor}Recent Efforts

Subpart I has been amended within the past few years to eliminate
pre-filing requirements for CAM cost apportionment and time reporting
changes, and to reduce the auditing requirements for mid-sized incumbent
local exchange carriers.[^586] The Common Carrier Bureau has held
workshops to discuss, among other things, proposals for additional
changes to CAM requirements for mid-size carriers.[^587]

In our ongoing Comprehensive Accounting Review: Phase 2 and 3
proceeding, the Commission seeks comment on proposals related to the
Subpart I, Allocation of Costs, rules. In that proceeding, the
Commission seeks comment on whether to eliminate the CAM filing
requirement for midsize carriers and whether to allow Class A carriers
to allocate Part 64 costs based on Class B accounts. The Commission also
seeks comment on a proposal to eliminate Section 64.901 (b) (4) of our
rules.[^588]

[]{#__RefHeading___Toc503676090 .anchor}Initial Recommendation

The staff recommends that the Commission consider additional changes to
CAM requirements in Phase II of the *Comprehensive Accounting Review*
proceeding.

[]{#__RefHeading___Toc503676091 .anchor}Comments

Commenters to the staff report support staff recommendations relating to
continued streamlining of its cost allocation manual (CAM) filing
requirements.[^589] GSA maintains that the cost allocation rules are
necessary to prevent cross-subsidization of competitive ventures by
regulated services.[^590] ITTA maintains that the CAM filing requirement
is burdensome for midsize carriers, and recommends that the Commission
substantially raise the index revenue threshold to exclude midsize
ILECs.[^591] USTA recommends that the Commission move toward eliminating
Subpart H.[^592] USTA also recommends that the Commission revise the
"Purpose" section of the staff report to reflect the original purpose of
the rule. Finally, USTA maintains that the Commission revise the "recent
efforts" section of the staff report.

[]{#__RefHeading___Toc503676092 .anchor}Recommendation

No change, pending completion of the ongoing *Comprehensive Accounting
Review: Phase 2 and 3* proceeding.

[]{#__RefHeading___Toc503676093 .anchor}Part 64, subpart J --
International Settlements Policy And Modification Requests

[]{#__RefHeading___Toc503676094 .anchor}Description

Subpart J requires carriers to request Commission approval for changes
in the accounting rates for international telecommunications services
unless the route involved is exempt from the Commission's International
Settlements Policy (ISP). [^593] The ISP requires that U.S.
telecommunications carriers pay nondiscriminatory rates for termination
of international traffic in foreign countries.[^594] Subpart J also sets
forth the information which must be contained in a modification request
and the procedures that govern Commission consideration of such
requests.[^595] These requirements are based on the Commission's
authority pursuant to sections 1, 201, 202, 203, and 309 of the
Communications Act, as amended.[^596]

[]{#__RefHeading___Toc503676095 .anchor}Purpose

The requirement for filing accounting rate modification requests set out
in Subpart J is intended to prevent the exercise of market power by
foreign carriers. In particular, it assists the Commission in ensuring
compliance with the ISP and the Commission's Benchmarks Policy.[^597]
The ISP was adopted as a result of the Commission's concern that a
foreign carrier with market power would have the ability to "whipsaw"
competing U.S. international carriers by discriminating among them, and
/or by unilaterally setting the prices, terms, and conditions under
which U.S. carriers are able to exchange traffic.[^598] Such actions by
foreign carriers would prevent U.S. carriers from obtaining lower
accounting rates that would benefit U.S. consumers.

[]{#__RefHeading___Toc503676096 .anchor}Analysis

[]{#__RefHeading___Toc503676097 .anchor}Status of Competition

Competition in the international services markets is increasing. These
markets are rapidly changing from being dominated by a small number of
national telecommunications providers to having a large number of
competitors.

[]{#__RefHeading___Toc503676098 .anchor}Advantages

Subpart J is designed to prevent the exercise of market power by foreign
carriers, and to facilitate the negotiation of lower accounting rates by
U.S. international carriers to the benefit of American consumers.

[]{#__RefHeading___Toc503676099 .anchor}Disadvantages

The subpart J requirements may be too restrictive or over-broad.

[]{#__RefHeading___Toc503676100 .anchor}Recent Efforts

The Commission reviewed the ISP as part of its 1998 biennial
review.[^599] In that proceeding, the Commission made several changes to
the ISP, deregulating inter-carrier settlement arrangements between U.S.
carriers and foreign non-dominant carriers on competitive routes. The
Commission, among other things, eliminated the ISP and contract filing
requirements for arrangements with foreign carriers that lack market
power, and eliminated the ISP for arrangements with all carriers on
routes where rates to terminate U.S. calls are at least 25 percent lower
than the relevant settlement rate benchmark. The Commission also adopted
procedural changes to simplify the accounting rate filing requirements,
including the elimination of the requirement that carriers making
accounting rate filings with the Commission serve every carrier that
provides service on the international route with a copy of the filing.
Instead, the Commission encouraged carriers to make their accounting
rate filings electronically over the International Bureau Electronic
Filing System.[^600]

[]{#__RefHeading___Toc503676101 .anchor}Initial Recommendation

The staff recommends retaining the rule.

[]{#__RefHeading___Toc503676102 .anchor}Comments

There were no comments filed on subpart J.

[]{#__RefHeading___Toc503676103 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676104 .anchor}Part 64, Subpart K -- Changing
Long Distance Service

[]{#__RefHeading___Toc503676105 .anchor}Description

Subpart K implements section 258 of the Act. Section 258 of the
Communications Act of 1934, as amended,[^601] requires the Commission to
prescribe verification procedures for telecommunications carriers to use
in confirming subscribers' decisions to change local exchange or long
distance telephone carriers. A carrier that fails to comply with the
Commission's verification procedures is liable to the subscriber's
authorized carrier for all amounts paid by the subscriber after the
violation. The rules also absolve subscribers of liability for charges
billed by unauthorized carriers in certain cases, impose liability on
unauthorized carriers for all charges collected from subscribers, and
establish procedures to govern preferred carrier freezes.

[]{#__RefHeading___Toc503676106 .anchor}Purpose

Subpart K attempts to: eliminate the fraudulent practice of
\"slamming,\" or changing a subscriber's authorized carrier without the
subscriber's knowledge or explicit authorization; foster consumer
choice; and facilitate competition in the telecommunications services
market.

[]{#__RefHeading___Toc503676107 .anchor}Analysis

[]{#__RefHeading___Toc503676108 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676109 .anchor}Advantages

Subpart K reduces fraud, fosters consumer choice, and facilitates
competition.

[]{#__RefHeading___Toc503676110 .anchor}Disadvantages

Compliance with the safeguards in subpart K may increase carriers' costs
to some degree.

[]{#__RefHeading___Toc503676111 .anchor}Recent Efforts

In May 2000, the Commission modified the slamming liability rules and
the procedures in subpart K.[^602] The Commission responded to industry
concerns and also permitted state regulatory commissions to become the
primary forums for resolving slamming complaints. In June 2000, the D.C.
Circuit lifted its May 1999 stay of the previous liability rules. The
new rules became effective on November 28, 2000.

In July 2000, the Commission improved the carrier change process for
subscribers and carriers while making it more difficult for carriers to
perpetrate slams.[^603] The Commission allowed the authorization and
verification of carrier changes using the Internet, consistent with the
provisions of the Electronic Signatures in Global and National Commerce
Act.[^604] The revised rules will become effective later this year.

[]{#__RefHeading___Toc503676112 .anchor}Initial Recommendation

The staff does not recommend further changes to subpart K as part of the
2000 Biennial Review.

[]{#__RefHeading___Toc503676113 .anchor}Comments

One commenter suggests that the Commission modify the application of the
slamming rules in connection with the sale or purchase of local exchange
and interexchange carriers.[^605]

[]{#__RefHeading___Toc503676114 .anchor}Recommendation

The staff recommends that the Commission propose and seek comment on
expedited procedures for handling the sale or transfer of subscriber
bases under the carrier change authorization and verification rules.

[]{#__RefHeading___Toc503676115 .anchor}PART 64, SUBPART L --
RESTRICTIONS ON TELEPHONE SOLICITATION

[]{#__RefHeading___Toc503676116 .anchor}Description

Subpart L is designed to implement Section 227. Section 227 of the
Communications Act, as amended restricts the use of automatic telephone
dialing systems (\"autodialers\"), artificial or prerecorded messages,
and telephone facsimile machines, and requires the Commission to adopt
rules to implement these protections.[^606] Section 227 also directs the
Commission to conduct proceedings to consider the need to protect
residential telephone subscribers from unsolicited telephone calls.
Subpart L requires telephone solicitors to maintain company-specific
lists of residential subscribers who do not wish to receive further
solicitations. In addition, the rules contain restrictions on the
disclosure of subscriber billing name and address information.

[]{#__RefHeading___Toc503676117 .anchor}Purpose

Subpart L rules implement section 227 of the Act, and protect subscriber
privacy and public safety without unnecessarily restricting legitimate
telephone marketing and sales.

[]{#__RefHeading___Toc503676118 .anchor}Analysis

[]{#__RefHeading___Toc503676119 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676120 .anchor}Advantages

Subpart L protects subscriber privacy and public safety without
unnecessarily interfering with legitimate telephone marketing.

[]{#__RefHeading___Toc503676121 .anchor}Disadvantages

Subpart L restricts the ability of telemarketers to place unsolicited
calls at will.

[]{#__RefHeading___Toc503676122 .anchor}Recent Efforts

There have not been any significant recent actions.

[]{#__RefHeading___Toc503676123 .anchor}Initial Recommendation

The staff does not recommend changes in subpart L at this time.

[]{#__RefHeading___Toc503676124 .anchor}Comments

None.

[]{#__RefHeading___Toc503676125 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676126 .anchor}Part 64, Subpart M -- Provision
of Payphone Service

[]{#__RefHeading___Toc503676127 .anchor}Description

Subpart M implements section 276 of the Communications Act of 1934, as
amended, concerning the provision of payphone service.[^607] These rules
govern compensation to payphone providers by carriers that receive calls
from payphones, requires states to review and remove any state
regulations that limit the entry and exit of payphone providers, and
establishes regulations to ensure individuals with disabilities can use
payphones. The subpart provides for contracts between providers, and
sets a default compensation rate if the parties cannot reach an
agreement. These rules also require carriers to establish arrangements
and track the data necessary for the calculation, verification, billing,
and collection of payphone compensation.

[]{#__RefHeading___Toc503676128 .anchor}Purpose

Subpart M helps to ensure that payphone providers receive fair
compensation for completed intrastate and interstate calls that use
their payphones, encourages competition among payphone service
providers, and promotes the deployment of payphone services.

[]{#__RefHeading___Toc503676129 .anchor}Analysis

[]{#__RefHeading___Toc503676130 .anchor}Status of Competition

Incumbent local exchange carriers have significant market power in the
provision of payphone service. Independent payphone providers have
approximately fifteen percent of the payphone market.

[]{#__RefHeading___Toc503676131 .anchor}Advantages

These rules restrain the market power of incumbent LECs and ensure that
payphone providers are fairly compensated.

[]{#__RefHeading___Toc503676132 .anchor}Disadvantages

The rules may discourage negotiated, market-based compensation
arrangements between payphone providers and carriers.

[]{#__RefHeading___Toc503676133 .anchor}Recent Efforts

The U.S. Court of Appeals for the D.C. Circuit issued a decision on June
16, 2000 upholding the Commission's decision to establish a default
compensation rate of \$.24 per call for payphone calls.[^608]

[]{#__RefHeading___Toc503676134 .anchor}Initial Recommendation

The staff recommends continued monitoring to assess future competitive
developments in the payphone market. The staff recommends deletion of
section 64.1320, which applies only to activities prior to January 1,
1999.

[]{#__RefHeading___Toc503676135 .anchor}Comments

No comments were received on this subpart of the Commission's rules.

[]{#__RefHeading___Toc503676136 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676137 .anchor}Part 64, Subpart N -- Expanded
Interconnection

[]{#__RefHeading___Toc503676138 .anchor}Description

Subpart N was adopted pursuant to the Commission's authority under
Sections 1, 4, and 201 through 205 of the Communications Act, as
amended.[^609] Subpart N provides that Class A local exchange carriers,
which do not participate in the National Exchange Carrier Association
tariff, must provide expanded interconnection.[^610] Subpart N requires
incumbent LECs to allow interconnection with their networks through
physical or virtual collocation for the provision of interstate special
access and switched transport services. Any interested party may take
expanded interconnection.

[]{#__RefHeading___Toc503676139 .anchor}Purpose

Subpart N is designed to increase competition in the provision of
interstate services by removing barriers to the competitive provision of
special access and switched transport services.

[]{#__RefHeading___Toc503676140 .anchor}Analysis

[]{#__RefHeading___Toc503676141 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676142 .anchor}Advantages

Subpart N fosters competition in the provision of special access and
switched transport services. In particular, subpart N makes collocation
and interconnection available to any interested party (*e.g.* large
businesses and universities), while interconnection and collocation
under section 251 of the Communications Act and Part 51 of the
Commission's rules are limited to telecommunications carriers.

[]{#__RefHeading___Toc503676143 .anchor}Disadvantages

Subpart N imposes some costs on incumbent LECs, which are passed on to
requesting parties.

[]{#__RefHeading___Toc503676144 .anchor}Recent Efforts

No recent action.

[]{#__RefHeading___Toc503676145 .anchor}Initial Recommendation

The staff recommends no change to Subpart N as part of the Biennial
Review.

[]{#__RefHeading___Toc503676146 .anchor}Comments

None

[]{#__RefHeading___Toc503676147 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676148 .anchor}Part 64, Subpart O -- Interstate
Pay-Per-Call and Other Information Services

[]{#__RefHeading___Toc503676149 .anchor}Description

The requirements in subpart O are based on the Commission's authority
under Sections 1, 4, and 201through 205 of the Communications Act, as
amended.[^611] Subpart O concerns pay-per-call and certain other
information services. Subpart O requires common carriers that assign
telephone numbers to providers of interstate pay-per-call services
require the provider to comply with these rules as well as certain other
laws and regulations. Subpart O restricts the provision of pay-per-call
services over 800 and other "toll free" numbers, and bars the provision
of interstate pay-per-call services on a collect basis. Subpart O
provides for 900 service access code assignment to pay-per-call
services. It requires local exchange carriers to offer subscribers the
option of blocking access to 900 numbers from their telephones. Subpart
O establishes conditions for common carrier provision of billing and
collection for pay-per-call services, and bars the disconnection or
interruption of local exchange or long distance service for the
non-payment of charges for interstate pay-per-call and certain
information services..

[]{#__RefHeading___Toc503676150 .anchor}Purpose

Subpart O is designed to protect consumers from the fraudulent or
unscrupulous provision of pay-per-call services.

[]{#__RefHeading___Toc503676151 .anchor}Analysis

[]{#__RefHeading___Toc503676152 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers

[]{#__RefHeading___Toc503676153 .anchor}Advantages

Protects consumers from the fraudulent or unscrupulous provision of
pay-per-call services.

[]{#__RefHeading___Toc503676154 .anchor}Disadvantages

The rules increase the cost of providing pay-per-call services.

[]{#__RefHeading___Toc503676155 .anchor}Recent Efforts

There have not been any recent actions.

[]{#__RefHeading___Toc503676156 .anchor}Initial Recommendation

The staff does not recommend changes to subpart O as part of the current
biennial review.

[]{#__RefHeading___Toc503676157 .anchor}Comments

None

[]{#__RefHeading___Toc503676158 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676159 .anchor}PART 64, SUBPART P -- CALLING
PARTY TELEPHONE NUMBER; PRIVACY (also known as "Caller ID")

[]{#__RefHeading___Toc503676160 .anchor}Description

The requirements in subpart P are based on the Commission's authority
under sections 1, 4, and 201 through 205 of the Communications Act, as
amended.[^612] Subpart P covers Calling Party Number (CPN) services,
including "Caller ID," which depend on capabilities that use out-of-band
signaling techniques, such as Signaling System Seven (SS7). Subpart P
provides that common carriers using SS7 must, subject to certain
exceptions, transmit the CPN associated with interstate calls to
interconnecting carriers without an additional charge. Originating
carriers using SS7 must recognize \*67 as a caller's request for privacy
when dialed as the first three digits of an interstate call. Carriers
providing line blocking services are required to recognize \*82 as a
caller's request that privacy not be provided and that the CPN be passed
on an interstate call. Subpart P requires carriers to notify customers
of their \*67 and \*82 capabilities and restricts the use of telephone
subscriber information.

[]{#__RefHeading___Toc503676161 .anchor}Purpose

The protection of subscriber privacy while fostering the development of
new and innovative services.

[]{#__RefHeading___Toc503676162 .anchor}Analysis

[]{#__RefHeading___Toc503676163 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers serve only a small
percentage of local exchange lines. Competition for business customers
in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas. The
market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676164 .anchor}Advantages

Subpart P provides a clear and consistent regulatory framework for
deployment of CPN-based services which protect the privacy interests of
telephone users, and provides for consumer education concerning
CPN-based interstate services.

[]{#__RefHeading___Toc503676165 .anchor}Disadvantages

Compliance with subpart P imposes some costs on carriers.

[]{#__RefHeading___Toc503676166 .anchor}Recent Efforts

No recent actions.

[]{#__RefHeading___Toc503676167 .anchor}Initial Recommendation

The staff does not recommend that the Commission modify subpart P as
part of this biennial review.

[]{#__RefHeading___Toc503676168 .anchor}Comments

None

[]{#__RefHeading___Toc503676169 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676170 .anchor}Part 64, Subpart Q --
Implementation of Section 273(d)(5) of the Communications Act: Dispute
Resolution Regarding Equipment Standards

[]{#__RefHeading___Toc503676171 .anchor}Description

Subpart Q implements Section 273(d) of the Act, as amended, by
establishing procedures to be followed by non-accredited standards
organizations when setting industry-wide standards or generic
requirements for telecommunications equipment or CPE. Section 273(d)(5)
of the Act directs the Commission to prescribe a dispute resolution
process when all parties involved in such standards setting cannot agree
on a dispute resolution process. It provides for resolution of technical
disputes by a three-member panel, whose recommendation can be overturned
if three-fourths of the funding parties vote to do so.

[]{#__RefHeading___Toc503676172 .anchor}Purpose

Subpart Q ensures the fair, prompt and economical resolution of disputes
that arise in the context of private sector development of technical
standards for telecommunications equipment and CPE.

[]{#__RefHeading___Toc503676173 .anchor}Analysis

[]{#__RefHeading___Toc503676174 .anchor}Status of Competition

The market for CPE is competitive.

[]{#__RefHeading___Toc503676175 .anchor}Advantages

The default dispute resolution process provides for the fair, prompt and
economical resolution of disputes when the parties cannot agree on a
mutually satisfactory process.

[]{#__RefHeading___Toc503676176 .anchor}Disadvantages

Since this dispute resolution process is only used when the parties
cannot agree on another approach, it does not appear to have any
significant disadvantages.

[]{#__RefHeading___Toc503676177 .anchor}Recent Efforts

No recent action.

[]{#__RefHeading___Toc503676178 .anchor}Initial Recommendation

The staff recommends that the Commission retain subpart Q.

[]{#__RefHeading___Toc503676179 .anchor}Comments

None

[]{#__RefHeading___Toc503676180 .anchor}Recommendation

See initial recommendation

[]{#__RefHeading___Toc503676181 .anchor}Part 64, Subpart R -- Geographic
Rate Averaging and Rate Integration

[]{#__RefHeading___Toc503676182 .anchor}Description

Subpart R implements Section 254(g) of the Communications Act, as
amended,[^613] which requires interexchange rate averaging and rate
integration. The rate averaging provisions require interexchange
carriers to charge customers in rural and high cost areas no more than
they charge urban customers. The rate integration provisions require
carriers to charge customers in one state the same rates for
interexchange service charged to customers in any other state.

[]{#__RefHeading___Toc503676183 .anchor}Purpose

Subpart R ensures that all customers, regardless of where they live,
have access to interexchange services at comparable rates.

[]{#__RefHeading___Toc503676184 .anchor}Analysis

[]{#__RefHeading___Toc503676185 .anchor}Status of Competition

The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676186 .anchor}Advantages

These rules ensure that all domestic interexchange toll service
customers, regardless of where they live, share in the benefits of rate
reductions and new technologies that result from competition in the
interexchange market.

[]{#__RefHeading___Toc503676187 .anchor}Disadvantages

The rate averaging and rate integration provisions in the statute create
implicit subsidies running from low-cost areas to high-cost areas. This
can distort the market by discouraging carriers from serving high cost
areas, and make it difficult for national interexchange carriers serving
both high and low cost areas to compete effectively with carriers that
provide targeted interexchange services in low-cost areas.

[]{#__RefHeading___Toc503676188 .anchor}Recent Efforts

The U.S. Court of Appeals for the D.C. Circuit recently affirmed the
Commission's ruling that an interexchange carrier and all of its
affiliates must charge the same integrated long distance rates. The
court, however, vacated the Commission's decision that Section 254(g)
unambiguously applies rate integration to CMRS carriers and remanded to
the Commission the question of whether rate integration should apply to
these carriers.[^614]

[]{#__RefHeading___Toc503676189 .anchor}Initial Recommendation

The staff recommends review of the applicability of rate integration to
CMRS carriers pursuant to the court remand, but does not recommend that
this be treated as a part of the 2000 Biennial Review. The staff
recommends retention of the other rate integration and rate averaging
rules that implement the statutory mandate of the 1996 Act. The staff
recommends that the Commission monitor the potential effect of these
provisions on the development of competition in the interexchange
market.

[]{#__RefHeading___Toc503676190 .anchor}Comments

Alloy asserts that there is no need to initiate a proceeding to look at
whether rate integration should be applied to CMRS providers in response
to the Court's remand. Alloy submits that the wireless market is highly
competitive and the application of rate integration to CMRS providers
would create implicit subsidies from low-cost to high-cost areas and
could lead to anticompetitive results if CMRS providers were required to
integrate rates across affiliates.[^615]

[]{#__RefHeading___Toc503676191 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676192 .anchor}Part 64, Subpart S --
Nondominant Interexchange Carrier Certifications Regarding Geographic
Rate Averaging and Rate Integration Requirements

[]{#__RefHeading___Toc503676193 .anchor}Description

Subpart S implements Section 254(g) of the Communications Act, as
amended, which requires interexchange carrier rate averaging and rate
integration.[^616] Subpart S requires nondominant carriers that provide
detariffed interstate domestic interexchange service to file an annual
certification with the Commission (signed by an officer under oath),
stating that they comply with the rate averaging and rate integration
requirements in section 254(g).

[]{#__RefHeading___Toc503676194 .anchor}Purpose

Subpart S insures compliance with the statutory requirement that all
customers, regardless of where they live, have access to interexchange
services at comparable rates.

[]{#__RefHeading___Toc503676195 .anchor}Analysis

[]{#__RefHeading___Toc503676196 .anchor}Status of Competition

The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676197 .anchor}Advantages

The certification requirements facilitate enforcement of the statutory
requirement in section 254(g) of the Act that all domestic interexchange
toll service customers, regardless of where they live, share in the
benefits of rate reductions and new technologies that result from the
competitive nature of the interexchange market.

[]{#__RefHeading___Toc503676198 .anchor}Disadvantages

Requiring interexchange carriers to file annual certifications may
impose some administrative costs on the carriers.

[]{#__RefHeading___Toc503676199 .anchor}Recent Efforts

There have been no recent actions.

[]{#__RefHeading___Toc503676200 .anchor}Initial Recommendation

The staff recommends retention of subpart S.

[]{#__RefHeading___Toc503676201 .anchor}Comments

None.

[]{#__RefHeading___Toc503676202 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676203 .anchor}Part 64, Subpart T -- Separate
Affiliate Requirements for Incumbent Independent Local Exchange Carriers
That Provide In-Region, Interstate Domestic Interexchange Services or
In-Region International Interexchange Services

[]{#__RefHeading___Toc503676204 .anchor}Description

Subpart T was adopted pursuant to sections 1, 2, 4, 201, 202, 220, 251,
271, 272 and 303(r) of the Communications Act, as amended.[^617] Subpart
T establishes separate subsidiary requirements for the provision of
in-region, interstate domestic, interexchange services and in-region
international interexchange services by incumbent independent LECs.
Subpart T generally requires that the separate affiliate: (1) maintain
separate books of account; (2) not own transmission or switching
facilities jointly with its affiliated exchange company; (3) take,
pursuant to tariff, any services for which its affiliated exchange
carrier is required to file a tariff; and (4) be a separate legal entity
from the affiliated exchange company.

[]{#__RefHeading___Toc503676205 .anchor}Purpose

Subpart T should prevent incumbent independent LECs from exercising
market power in the provision of in-region long distance services.

[]{#__RefHeading___Toc503676206 .anchor}Analysis

[]{#__RefHeading___Toc503676207 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676208 .anchor}Advantages

Subpart T helps to prevent incumbent LECs from leveraging their market
power in the local exchange service market to the long distance market.

[]{#__RefHeading___Toc503676209 .anchor}Disadvantages

Subpart T may increase independent incumbent local exchange carriers'
costs of providing in-region, interstate, interexchange services.

[]{#__RefHeading___Toc503676210 .anchor}Recent Efforts

In August 1999, the Commission revised subpart T to allow independent
LECs providing in-region long distance services solely on a resale basis
to do so through a separate corporate division rather than through a
separate legal entity.[^618]

[]{#__RefHeading___Toc503676211 .anchor}Initial Recommendation

The staff recommends that the Commission modify subpart T to provide for
triennial review of the requirement that independent incumbent LECs
provide interexchange service through a separate affiliate. The staff
also recommends that the Commission delete section 64.1903(c), since it
pertains exclusively to the time period prior to August 31, 1999.

[]{#__RefHeading___Toc503676212 .anchor}Comments

Almost all of the parties commenting on this subpart criticized the
staff recommendation for regular substantive review of the separate
subsidiary requirement, although for different reasons. A number of
parties argued that the separate subsidiary requirement should be
eliminated immediately for small and mid-size carriers.[^619] Another
party opposed the staff proposal on the ground that the separate
subsidiary requirement is necessary to prevent independent incumbent
LECs from leveraging their local exchange market power into the long
distance market.[^620]

[]{#__RefHeading___Toc503676213 .anchor}Recommendation

The staff recommends the Commission institute proceedings to consider
exempting small rural incumbent LECs as defined in section 3(37) of the
Act, from this separate subsidiary requirement. The staff also
encourages small and mid-sized carriers that wish to purchase
combination local exchange/long distance switching equipment to request
waivers if the current prohibition on the joint ownership of facilities
results in hardship.

[]{#__RefHeading___Toc503676214 .anchor}Part 64, Subpart U -- Customer
Proprietary Network Information

[]{#__RefHeading___Toc503676215 .anchor}Description

Subpart U implements Section 222 of the Communications Act, as amended,
[^621] which restricts a carrier's use of customer proprietary network
information (CPNI). Among other things, CPNI identifies to whom, where,
and when a customer places a call, and identifies the types of service
offerings to which the customer subscribes and the extent to which the
service is used.

[]{#__RefHeading___Toc503676216 .anchor}Purpose

These rules are designed to protect consumer privacy and foster
competition.

[]{#__RefHeading___Toc503676217 .anchor}Analysis

[]{#__RefHeading___Toc503676218 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is fully competitive, although
there is greater competition for high volume customers than for low
volume customers.

[]{#__RefHeading___Toc503676219 .anchor}Advantages

The CPNI rules protect consumer privacy and foster competition.

[]{#__RefHeading___Toc503676220 .anchor}Disadvantages

The CPNI rules impose some costs on carriers.

[]{#__RefHeading___Toc503676221 .anchor}Recent Efforts

On August 18, 1999, the 10^th^ Circuit Court of Appeals found that the
Commission's interpretation of the customer approval requirement for the
use of CPNI in certain circumstances violated the First Amendment.[^622]
Section 222 of the Act remains in effect and the Commission is in the
process of addressing the courts ruling.

[]{#__RefHeading___Toc503676222 .anchor}Initial Recommendation

The staff does not recommend that the Commission take action concerning
subpart U.

[]{#__RefHeading___Toc503676223 .anchor}Comments

The only party addressing this subpart urges the Commission to ensure
that new CPNI rules do not adversely affect small carriers.[^623]

[]{#__RefHeading___Toc503676224 .anchor}Recommendation

See initial recommendation. The Commission will be sensitive to the
circumstances of small carriers in addressing the court's ruling.

[]{#__RefHeading___Toc503676225 .anchor}Part 64, Subpart V --
Telecommunications Carrier Systems Security and Integrity Pursuant to
the Communications Assistance for Law Enforcement Act (CALEA)

[]{#__RefHeading___Toc503676226 .anchor}Description

Subpart V implements Section 105 of CALEA,[^624] which requires that
telecommunications carriers establish safeguards to ensure that
interception of communications or access to call-identifying information
can be activated only in accordance with a court order or other lawful
authorization, and with the affirmative intervention of an officer or
employee. Subpart V requires carriers to maintain secure records of each
interception of communications or access to call-identifying
information, and to adopt policies and procedures for supervision and
control of their employees in this regard. All telecommunication
carriers must submit their policies and procedures to the Commission for
review.

[]{#__RefHeading___Toc503676227 .anchor}Purpose

Subpart V is intended to help protect subscribers' privacy rights by
ensuring that any interception is in accordance with legal
authorization.

[]{#__RefHeading___Toc503676228 .anchor}Analysis

[]{#__RefHeading___Toc503676229 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503676230 .anchor}Advantages

Subpart V helps protect subscriber privacy.

[]{#__RefHeading___Toc503676231 .anchor}Disadvantages

Compliance with these requirements increases carrier costs.

[]{#__RefHeading___Toc503676232 .anchor}Recent Efforts

Subpart V was adopted in September 1999.[^625]

[]{#__RefHeading___Toc503676233 .anchor}Initial Recommendation

The staff does not recommend any modifications to Subpart V.

[]{#__RefHeading___Toc503676234 .anchor}Comments

None.

[]{#__RefHeading___Toc503676235 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676236 .anchor}Part 64, Subpart W -- Required
New Capabilities Pursuant to the Communications Assistance for Law
Enforcement Act (CALEA)

[]{#__RefHeading___Toc503676237 .anchor}Description

Subpart W implements Section 103 of CALEA. [^626] It establishes the
technical requirements and standards that telecommunications carriers
must satisfy to ensure that, when properly authorized, law enforcement
officials have access to communications and call-identifying
information. Subpart W parallels requirements and standards for wireless
telecommunications carriers set out in Part 22, subpart J and Part 24,
subpart J.

[]{#__RefHeading___Toc503676238 .anchor}Purpose

Subpart W assists the enforcement of criminal laws, and clarifies
telecommunications carriers' requirements under section 103(a) of
CALEA.[^627]

[]{#__RefHeading___Toc503676239 .anchor}Analysis

[]{#__RefHeading___Toc503676240 .anchor}Status of Competition

Not relevant.

[]{#__RefHeading___Toc503676241 .anchor}Advantages

Subpart W facilitates enforcement of criminal law and clarifies
carriers' requirements under CALEA.

[]{#__RefHeading___Toc503676242 .anchor}Disadvantages

Compliance with these requirements increases carriers' costs.

[]{#__RefHeading___Toc503676243 .anchor}Recent Efforts

On August 15, 2000, the D.C. Circuit affirmed in part and vacated and
remanded in part the requirements contained in subpart W.[^628]

[]{#__RefHeading___Toc503676244 .anchor}Initial Recommendation

The staff recommends that the Commission reassess its subpart W rules
pursuant to the D.C. Circuit's remand.

[]{#__RefHeading___Toc503676245 .anchor}Comments

None

[]{#__RefHeading___Toc503676246 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676247 .anchor}Part 64, Subpart X -- Subscriber
List Information

[]{#__RefHeading___Toc503676248 .anchor}Description

Subpart X implements Section 222(e) of the Communications Act[^629]
which requires carriers providing telephone exchange service to provide
subscriber list information to requesting directory publishers "on a
timely and unbundled basis, under nondiscriminatory and reasonable
rates, terms, and conditions." Subpart X implements this statutory
provision, addressing third party rights to subscriber list information,
which includes listed subscribers' names, addresses and telephone
numbers, as well as headings under which businesses are listed in the
yellow pages.

[]{#__RefHeading___Toc503676249 .anchor}Purpose

Subpart X is intended to increase competition in directory publishing by
ensuring that competing directory publishers can obtain subscriber list
information from LECs.

[]{#__RefHeading___Toc503676250 .anchor}Analysis

[]{#__RefHeading___Toc503676251 .anchor}Status of Competition

The market for directory publishing has been dominated by incumbent LEC
publishing operations, but is becoming increasingly competitive. Much of
this increased competition is due to section 222 and the Commission's
implementing rules in subpart X.

[]{#__RefHeading___Toc503676252 .anchor}Advantages

Subpart X fosters competition in directory publishing, and prevents
incumbent LECs from using control of their subscriber information lists
to undermine competition in the directory publishing business.

[]{#__RefHeading___Toc503676253 .anchor}Disadvantages

These requirements may place some administrative burdens on local
exchange carriers.

[]{#__RefHeading___Toc503676254 .anchor}Recent Efforts

The Commission adopted the subpart X rules on August 23, 1999.[^630]

[]{#__RefHeading___Toc503676255 .anchor}Initial Recommendation

The staff does not recommend that the Commission modify subpart X at
this time.

[]{#__RefHeading___Toc503676256 .anchor}Comments

None

[]{#__RefHeading___Toc503676257 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676258 .anchor}Part 64, Subpart Y --
Truth-in-Billing Requirements for Common Carriers

[]{#__RefHeading___Toc503676259 .anchor}Description

The Commission adopted the rules in subpart Y pursuant to its authority
under sections 201(b) and 258 of the Communications Act of 1934, as
amended.[^631] Subpart Y contains binding truth-in-billing guidelines
that apply to carriers selling telecommunications services. Subpart Y
requires carriers to provide customers with necessary information about
the services and charges. Specifically, subpart Y requires carriers to
separate charges on the bill by provider, to describe clearly the
services involved, to display clearly the name of the service provider
in association with its charges, to display a toll-free number (or, in
certain cases, a website) for consumer inquiries, to identify those
charges for which failure to pay will not result in disconnection of the
customer's basic local service, and to highlight new service providers.

[]{#__RefHeading___Toc503676260 .anchor}Purpose

Subpart Y is designed to make telephone bills easier for consumers to
understand, so that customers can make informed choices among carriers
and services. Subpart Y is also intended to make it easier for consumers
to identify and report fraud, such as slamming (unauthorized change of
consumer's telecommunications carrier) and cramming (placement of
unauthorized, misleading, or deceptive charges on a consumer's telephone
bill).

[]{#__RefHeading___Toc503676261 .anchor}Analysis

[]{#__RefHeading___Toc503676262 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.
The market for long distance service is competitive, although there is
greater competition for high volume customers than for low volume
customers.

[]{#__RefHeading___Toc503676263 .anchor}Advantages

Subpart Y makes customer's telephone bills easier understand and ensures
that consumers have the information necessary to make informed choices
among carriers and services. These rules also make it easier for
consumers to detect and report fraud in the provision of
telecommunications services.

[]{#__RefHeading___Toc503676264 .anchor}Disadvantages

These requirements may increase carrier costs somewhat.

[]{#__RefHeading___Toc503676265 .anchor}Recent Efforts

Some of the truth-in-billing rules contained in subpart Y took effect in
November 1999, and several more took effect in April 2000.

In March 2000, the Commission modified the truth in billing rules
slightly, specifying that the requirement that telephone bills highlight
new service providers does not apply to services billed solely on a
per-transaction basis, and making other minor modifications.[^632] These
changes became effective on August 28, 2000.

[]{#__RefHeading___Toc503676266 .anchor}Initial Recommendation

The staff does not recommend further changes to subpart Y.

[]{#__RefHeading___Toc503676267 .anchor}Comments

While one commenter indicates that the Commission did not adequately
address the needs of small telecommunications companies in adopting
truth-in-billing rules,[^633] this commenter recommends no further
changes to the rules.

[]{#__RefHeading___Toc503676268 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676269 .anchor}Part 65 -- Interstate Rate of
Return Prescription Procedures and Methodologies

[]{#__RefHeading___Toc503676270 .anchor}Description

Section 201 of the Communications Act, as amended, requires that rates
for common carrier communications services be just and reasonable.[^634]
Part 65 sets forth procedures and methodologies used by the Commission
to prescribe an authorized interstate rate-of-return for the exchange
access services of incumbent LECs subject to rate-of-return regulation.
Price cap incumbent LECs also use the Commission prescribed
rate-of-return for certain limited purposes. The Part 65 rules describe
the methodologies to be used in calculating the cost of equity, the cost
of debt, the weighted average cost of capital (both equity and debt),
the interstate ratebase, and the carriers' interstate rate-of-return.
These rules also require the filing of certain rate-of-return reports.

Part 65 is organized into seven lettered subparts.

A -- General

B -- Procedures

C -- Exchange Carriers

D -- Interexchange Carriers

E -- Rate-of-Return Reports

F -- Maximum Allowable Rates of Return

G -- Rate Base

[]{#__RefHeading___Toc503676271 .anchor}Purpose

The Part 65 rules are designed to protect consumers from excessive rates
by prescribing an authorized interstate rate of return used to set local
exchange access rates for incumbent local exchange carriers subject to
rate-of-return regulation.

[]{#__RefHeading___Toc503676272 .anchor}Analysis

[]{#__RefHeading___Toc503676273 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers in rural areas.

[]{#__RefHeading___Toc503676274 .anchor}Advantages

The Part 65 rules protect consumers from excessive interstate access
charges by incumbent LECs subject to rate-of-return regulation. The
authorized interstate rate of return is also used by incumbent local
exchange carriers for certain purposes, for example, calculating
payments to and disbursements from the universal service fund and in the
low end adjustment formula.

[]{#__RefHeading___Toc503676275 .anchor}Disadvantages

The Part 65 rules impose some paperwork burdens on carriers.

[]{#__RefHeading___Toc503676276 .anchor}Recent Efforts

In 1995, the Commission substantially reformed the Part 65 rules. The
major changes made by the 1995 order were the elimination of the
biennial represcription schedule, and simplification of the
represcription process. The Commission replaced the existing rule, which
called for the initiation of rate return represcription proceedings
every two years, with a semiautomatic trigger activated by changes in
capital costs.[^635]

In October 1998, the Common Carrier Bureau initiated a proceeding to
represcribe the rate of return.[^636] This proceeding has not yet been
completed.

[]{#__RefHeading___Toc503676277 .anchor}Initial Recommendation

The staff does not recommend changes in the Part 65 rules at this time.

[]{#__RefHeading___Toc503676278 .anchor}Comments

USTA maintains that Part 65 reporting requirements should be eliminated,
except when a lower formula adjustment is filed.[^637] USTA also states
that the Commission should modify Section 65.702 to measure earnings on
an overall interstate basis.[^638] USTA further proposes that the
Commission modify section 65.700 to calculate the maximum allowable rate
of return on all access elements in the aggregate instead of for each
access category.[^639] GSA notes that the Common Carrier Bureau
initiated a proceeding to represcribe the interstate rate of return in
October 1998. GSA recommends that the Commission conclude that
proceeding on an expedited basis.[^640] In its reply comments, GSA
disputes USTA's assertion that Part 65 reporting requirements should be
eliminated.[^641] GSA states that ILECs, under price cap regulation,
realize "supra-competitive returns," which is a reflection of their
market power. GSA urges the Commission not to eliminate the annual
reporting requirement of the ILECs' rate of return.[^642]

[]{#__RefHeading___Toc503676279 .anchor}Recommendation

The arguments raised by commenters do not persuade us to alter the
initial staff recommendation.

[]{#__RefHeading___Toc503676280 .anchor}Part 68 -- Connection of
Terminal Equipment to the Telephone Network

[]{#__RefHeading___Toc503676281 .anchor}Description

Part 68 was established in 1974 as the result of a court decision ruling
that the Bell Operating Companies could not bar direct connection of
customer premises equipment (CPE) to the public switched telephone
network (PSTN), so long as the CPE would not cause harm to the
PSTN.[^643] Part 68 requires that CPE be tested to show that it will not
harm the PSTN or carrier personnel, and then registered with the
Commission. Carriers must permit the free connection of registered CPE
to the PSTN, but they can require disconnection of unregistered CPE or
of CPE that causes harm to the PSTN without recourse to litigation. Part
68 also establishes customer's right to use competitively provided
inside wiring.

In addition, Part 68 implements a statutory requirement for telephone
equipment compatibility with hearing aids,[^644] and contains two
consumer protection provisions mandated by statute: a requirement that
all fax transmissions include source labeling,[^645] and a requirement
that CPE support equal access to providers of operator services.[^646]

Part 68 is organized into six lettered subparts:

A -- General

B -- Conditions on Use of Terminal Equipment

C -- Registration Procedures

D -- Conditions for Registration

E -- Complaint Procedures

F -- Connectors

[]{#__RefHeading___Toc503676282 .anchor}Purpose

The Part 68 rules are designed to foster competition in the provision of
CPE and inside wiring, by permitting the connection of competitively
provided CPE and inside wiring to the PSTN. Part 68 also ensures that
the connection of CPE and inside wiring does not harm the PSTN or injure
personnel, and ensures the compatibility of hearing aids and telephone
receivers so that persons with hearing aids can use virtually all
telephones.

[]{#__RefHeading___Toc503676283 .anchor}Analysis

[]{#__RefHeading___Toc503676284 .anchor}Status of Competition

The market for CPE and the market for the installation of inside wiring
in single family residences are fully competitive.

[]{#__RefHeading___Toc503676285 .anchor}Advantages

Part 68 fosters competition in the provision of CPE and inside wiring,
increased innovation in CPE, and reduced CPE prices. Part 68 prevents
harm to the PSTN and carrier personnel, and requires telephone receivers
to be compatible with hearing aids.

[]{#__RefHeading___Toc503676286 .anchor}Disadvantages

Part 68 requirements impose additional costs on manufacturers and may
delay customer access to new CPE. The Part 68 registration program also
uses Commission resources that might otherwise be available for other
priorities.

[]{#__RefHeading___Toc503676287 .anchor}Recent Efforts

The Commission is taking steps to streamline the Part 68 CPE
registration process. On June 2, 2000, the Commission implemented
measures to permit private entities to register CPE.[^647] A Notice of
Proposed Rulemaking, released May 22, 2000 in CC Docket No. 99-216,
proposed entirely privatize CPE registration; to consider only appeals;
and to privatize the development of technical criteria that CPE must
meet in order to be registered.[^648] On November 9, 2000, the
Commission adopted a Report and Order that will privatize the
development and maintenance of the specific engineering criteria that
ensure customer premise equipment does not cause harms to the public
switched telephone network.[^649] In addition, the Commission will
transfer all responsibility for the approval of terminal equipment to
industry. Approval shall be accomplished either by certification bodies
of by declaration of the suppliers themselves.

[]{#__RefHeading___Toc503676288 .anchor}Initial Recommendation

The staff recommends continuation of the basic Part 68 requirement that
LECs must allow the connection of Part 68-compliant CPE and inside
wiring to the PSTN. The staff recommends that, in accordance with the
*Part 68 Streamlining Order*, the Commission should shift its focus
towards enforcing its general requirement that terminal equipment shall
not cause harms to the network.

[]{#__RefHeading___Toc503676289 .anchor}Comments

USTA supports staff recommendations and agrees that the private sector
can be responsible for the development of new technical requirements,
and the maintenance of existing technical requirements.

[]{#__RefHeading___Toc503676290 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676291 .anchor}Part 69 -- Access Charges

[]{#__RefHeading___Toc503676292 .anchor}Description

Part 69 implements Sections 201 and 202 of the Communications Act of
1934, as amended, which require that rates, terms and conditions for
telecommunications services be just and reasonable,[^650] and prohibit
unjust or unreasonable discrimination.[^651] The Part 69 rules establish
the rate structure for access charges to be paid by interexchange
carriers for the origination and termination of long distance calls, as
well as the access charges to be paid directly by end users.[^652] These
rate structure rules establish the access charge rate elements as well
as the nature of the charges, such as whether they are assessed on a per
minute or a flat-rate basis. The Part 69 rules govern how rate-of-return
LECs calculate their access charge rates. The Part 69 rules, in
conjunction with the Part 61 price cap rules, establish the degree of
pricing flexibility available to price-cap LECs. Finally, Part 69
provides for the establishment of the National Exchange Carrier
Association (NECA), which files tariffs on behalf of many of the
smaller, rate-of-return LECs.

Part 69 is organized into eight lettered subparts:

> A -- General
>
> B -- Computation of Charges
>
> C -- Computation of Charges for Price Cap Local Exchange Carriers
>
> D -- Apportionment of Net Investment
>
> E -- Apportionment of Expenses
>
> F -- Segregation of Common Line Element Revenue Requirement
>
> G -- Exchange Carrier Association
>
> H -- Pricing Flexibility

[]{#__RefHeading___Toc503676293 .anchor}Purpose

The Part 69 rules are designed to protect consumers by preventing the
exercise of market power by incumbent LECs and to ensure that rates are
just, reasonable, and not unjustly or unreasonably discriminatory. The
requirement for a certain minimum set of access charge rate elements and
the rate calculation rules for rate-of-return carriers also greatly
reduce the resources required in the tariff review process.

[]{#__RefHeading___Toc503676294 .anchor}Analysis

[]{#__RefHeading___Toc503676295 .anchor}Status of Competition

Competition in the local exchange and exchange access markets is
growing, although competitive local exchange carriers still serve only a
small percentage of local exchange lines. Competition for business
customers in metropolitan areas has, in general, developed more rapidly
than competition for residential customers or customers in rural areas.

[]{#__RefHeading___Toc503676296 .anchor}Advantages

The Part 69 rules protect customers from the exercise of market power by
incumbent LECs. The rules reduce the Commission resources required to
ensure carrier compliance with sections 201 and 202 of the Act, and
facilitate analysis of access charges by other interested parties. The
creation of NECA facilitates the filing of access charge tariffs by
smaller rate-of-return LECs and reduces the administrative costs.

[]{#__RefHeading___Toc503676297 .anchor}Disadvantages

The requirement that the LECs offer a minimum set of access charge rate
elements limits their flexibility and could over time reduce their
ability to respond to competition. The pricing rules for both price-cap
and rate-of-return LECs could undermine their ability to respond to
competition if not adjusted over time. The pooling of revenues and costs
under the NECA tariffs reduces the incentives of individual carriers to
improve efficiency.

[]{#__RefHeading___Toc503676298 .anchor}Recent Efforts

The Commission recently addressed the access charge rules applicable to
price cap LECs in the CALLS proceeding.[^653] The Commission has also
established rules to permit price cap LECs greater pricing flexibility
as specified competitive milestones are met.[^654] In addition, the
Commission is seeking comment on issues relating to further pricing
flexibility. The Commission has also initiated a rulemaking proceeding
addressing issues relating to access charge reform for rate-of-return
LECs.[^655] The Commission is considering an access charge and universal
service reform plan for rate-of-return LECs proposed by the
Multi-Association Group that is modeled after the CALLS plan adopted for
price cap LECs.[^656] The MAG plan, among other things, would raise
subscriber line caps for rate-of-return LECs to the price cap LECs caps,
reduce traffic sensitive rates, establish an additional explicit
universal service mechanism for rate-of-return LECs and make such
support portable, provide some pricing flexibility, and add an incentive
component to the regulatory process for rate-of-return LECs.

[]{#__RefHeading___Toc503676299 .anchor}Initial Recommendation

In the text of the September Staff Report, the Staff recommended that
the Commission consider simplifying review of the average schedules and
changing the schedule for NECA Board elections. The staff does not
recommend any other new initiatives relating to Part 69. The ongoing
proceedings addressing issues of access charge reform provide an
appropriate means to address competitive developments in the exchange
access market. We also note that the inter-carrier compensation
proceeding that the staff recommends in the text of this report could
result in revisions to Part 69 that would address anticipated
competitive developments. The staff recommends deleting a number of
provisions that apply only to past time periods, or are otherwise no
longer in effect, including sections 69.116, 69.117, 69.126, 69.127, and
69.612.

[]{#__RefHeading___Toc503676300 .anchor}Comments

As noted in the Part 61 appendix, one commenter proposes reorganizing
Parts 61 and 69 so that, among other things, Part 69 would only apply to
access charges for rate-of-return LECs.[^657] WorldCom opposes this
recommendation.[^658] Small telephone associations support the staff
recommendation that the Commission redouble its efforts to ensure
appropriate accommodations for small telephone companies, but assert
that more must be done given the growing competition in areas served by
these carriers.[^659] Some commenters support the access reform plan for
rate-of-return LECs developed by the multiassociation group. Commenters
suggest a variety of other modifications to Part 69: (1) reexamine the
price cap and pooling all or nothing rules;[^660] (2) create
transitional rules that facilitate the move from rate of return to price
cap regulation;[^661] (3) delete section 69.4, thereby eliminating
detailed rate element codification and the need for a public interest
showing to establish new rate elements;[^662] and (4) streamline the
access structure into four categories . One commenter opposes
consolidating the access structure into four elements.[^663]

Several commenters concur with the staff recommendation that the
Commission review intercarrier compensation arrangements to develop a
comprehensive system that would be more efficient and pro-competitive
than the existing myriad of rules.[^664] OPASTCO urges the Commission to
bifurcate any proceeding on intercarrier compensation to ensure the
revenue base of small telephone companies and the availability of
affordable service in rural areas.[^665] NECA urges the Commission to:
(1) eliminate the requirement for annual elections for NECA board
members and (2) simplify review of NECA's average schedule formula
modifications by eliminating the requirement that the Commission
"approve" NECA's average schedule filings and review NECA's average
schedule formulas in conjunction with NECA's annual access tariff
filings.[^666]

[]{#__RefHeading___Toc503676301 .anchor}Recommendation

See initial recommendation. In addition, the staff recommends that the
Commission initiate proceedings to examine rule changes relating to
NECA.

[]{#__RefHeading___Toc503676302 .anchor}part 73, --radio broadcast
services -- The Broadcast Ownership Rules

[]{#__RefHeading___Toc503676303 .anchor}Description

Statutory authority for section 73.3555 of the Commission's rules is
found in sections 308, 309 and 310 of the Communications Act of 1934, as
amended. Section 308 requires the filing of a written application for
licenses and construction permits (except in certain narrow enumerated
cases) and states that such applications shall set forth such facts as
the Commission may prescribe, including the ownership and location of
the proposed station. Section 309 requires the Commission, except in the
case of certain designated applications, to determine whether the grant
of an application would serve the public interest, and to grant the
application upon such a finding. Section 310(d) specifies that no
construction permit or license shall be transferred without first filing
an application with the Commission and without the Commission's finding
that the public interest would be served thereby. Section 73.3555
contains the rules limiting the degree of common ownership of radio and
television stations. It also contains attribution rules that specify
when interests in mass media facilities will be considered cognizable
for purposes of applying the mass media ownership rules. Section
73.658(g) sets forth the dual network rule. It directly reflects the
provisions of the Telecommunications Act of 1996.

[]{#__RefHeading___Toc503676304 .anchor}Purpose

The broadcast ownership rules are intended to foster diversity and
competition in broadcasting.

[]{#__RefHeading___Toc503676305 .anchor}Analysis

[]{#__RefHeading___Toc503676306 .anchor}Status of Competition

For an assessment of competition in broadcasting, see section V of the
Report.

[]{#__RefHeading___Toc503676307 .anchor}Advantages

The Commission is precluded from regulating the content of programming
by section 326 of the Communications Act of 1934, as amended, and by the
First Amendment. The ownership rules are a structural method of ensuring
diversity of viewpoints in broadcasting. The rules are also intended to
foster competition in broadcasting.

[]{#__RefHeading___Toc503676308 .anchor}Disadvantages

Broadcasters allege that the rules restrict mass media entities in
competing with other content providers that are not subject to ownership
rules and restrict scale efficiencies.

[]{#__RefHeading___Toc503676309 .anchor}Recent Efforts

Section V of the Report details the Commission's recent reviews of the
ownership rules, including that contained in the recently released 1998
Biennial Regulatory Review Report.

[]{#__RefHeading___Toc503676310 .anchor}Initial Recommendation

[]{#__RefHeading___Toc503676311 .anchor}Local Radio Ownership Rule

As indicated in the 1998 Biennial Regulatory Review Report, the existing
limitations remain necessary to prevent further diminution of
competition and diversity in the radio industry. However, the Commission
has issued a notice of proposed rulemaking seeking comment on its
methodology for defining radio markets, counting the number of stations
within those markets, and counting the number of stations that a party
owns in a radio market.

[]{#__RefHeading___Toc503676312 .anchor}Local Television Multiple
Ownership Rule

Because the local television multiple ownership rule was recently
relaxed in *the 1999 Local Television Ownership Report and Order*, the
staff believes that no further changes are warranted at this time.
Instead, staff will monitor the effects of deregulatory actions on the
marketplace to determine whether further changes are warranted.

[]{#__RefHeading___Toc503676313 .anchor}Radio-Television Cross-Ownership
Rule

Because the radio-television cross-ownership rule was recently relaxed
in *the 1999 Local Television Ownership Report and Order*, the staff
believes that no further changes are warranted at this time. Staff will
monitor the market effects of deregulatory actions to determine whether
further changes are warranted.

[]{#__RefHeading___Toc503676314 .anchor}Daily Newspaper/Broadcast
Cross-Ownership Rule

In the *1998 Biennial Regulatory Review Report*, the Commission stated
that the rule should, as a general matter, be retained because it
furthers the important public policy goal of viewpoint diversity and
continues to serve the public interest. Nonetheless, situations may
arise where the rule may not be necessary in the public interest to
ensure diversity and competition. For example, given the size of the
market and the size and type of the newspaper and broadcast station
involved, there may be sufficient diversity and competition even if a
newspaper/broadcast combination were allowed. The Commission will
therefore examine whether the rule needs to be tailored to address
contemporary market conditions and will issue a notice of proposed rule
making seeking comment on these and other potential modifications of the
rule.

[]{#__RefHeading___Toc503676315 .anchor}National Television Multiple
Ownership Rule

As indicated in the *1998 Biennial Regulatory Review Report*, recent
changes to the local television ownership rule should be observed and
assessed before making any further changes to the national limit. As the
Commission also stated in the 1998 Biennial Regulatory Review Report,
the signal disparity between UHF and VHF has not yet been eliminated, so
the UHF discount should be retained. The signal disparity should be
diminished by digital television. Accordingly, the Commission will issue
a notice of proposed rulemaking proposing a phased-in elimination of the
discount when the transition to digital television is near completion.

[]{#__RefHeading___Toc503676316 .anchor}Dual Network Rule

As indicated in the *1998 Biennial Regulatory Review Report*, the rule,
as it applies to UPN and WB, may no longer be necessary in the public
interest. The Commission has issued a notice of proposed rulemaking to
consider eliminating the restriction on the ownership of UPN or WB by
one of the four established networks and seeking comment on what, if
any, safeguards should be imposed. However, significant concerns about
competition and diversity remain, so that the prohibition against any
mergers of the four major networks should be retained. The Comments of
WB concerning the dual network rule will be placed in the record of that
proceeding.

[]{#__RefHeading___Toc503676317 .anchor}Experimental Broadcast Station
Multiple Ownership Rule (74.132)

The Commission has issued a *Notice of Proposed Rulemaking* proposing to
eliminate the rule.

[]{#__RefHeading___Toc503676318 .anchor}Cable/Television Cross-Ownership
Rule (76.501(a))

This rule is not contained in Part 73, but is included in the broadcast
ownership rules and is intended to foster competition and diversity. As
indicated in the *1998 Biennial Regulatory Review Report*, the rule
should be retained.

[]{#__RefHeading___Toc503676319 .anchor}Comments

*Section 73.3555(d)-Daily Newspaper/Broadcast Cross-Ownership Rule*

Newspaper Association of America (NAA) maintains that the
newspaper/broadcast cross-ownership rule should be repealed. According
to NAA, the Commission's 1999 decision to relax broadcast ownership
restrictions eliminated any basis for continuing to maintain an absolute
ban on newspaper/broadcast cross-ownership, and the policy threatens the
ability of newspapers to continue to compete effectively against other,
more diversified information providers. NAA also argues that the rule
does not serve the public interest and, as a result, the Commission is
obligated under the 1996 Act and the principles of administrative and
First Amendment law to eliminate the rule.[^667]

*Section 73.3555(e)-National Television Multiple Ownership Rule*

Fox Television Stations (Fox) and Viacom Inc (Viacom), in comments filed
in MM Docket 98-35, the 1998 biennial review proceeding and incorporated
into the record of this proceeding, argue for elimination of the
national television multiple ownership rule.[^668] Fox argues, citing a
study by Michael L. Katz,[^669] that there is no need for regulations to
protect viewers and advertisers from the exercise of station or network
market power because broadcasters face much greater competition than
ever before, that the national cap distorts investment decisions and
drives broadcasters to direct more of their resources away from free TV
and toward subscription services, and that there is no need for
regulations to protect stations from the exercise of market power
because local stations have increased alternatives to affiliating with a
given network.[^670] Further, according to Fox, the rule is not
necessary to foster diversity, since diversity is implicated only at the
local level.[^671] Fox also argues that the recent relaxation of the
cable horizontal ownership rules reinforces the need for relaxation of
the national ownership cap.[^672] Viacom agrees with Fox and argues that
the rule raises First Amendment concerns by prohibiting broadcasters
from speaking to more than a certain number of listeners.[^673] Further,
Viacom argues that the support of a company like Viacom/CBS is necessary
to help the financially struggling UPN network to survive and that the
economic health of numerous stations depends on affiliation with the UPN
network and would be hurt if UPN is forced to close or reduce
scale.[^674] According to Viacom, the 35 percent cap threatens UPN's
access to its most critical assets, its owned and operated stations,
which make the network operation viable as part of an integrated
business.[^675]

Congressional representatives have forwarded a number of letters to the
Commission from local officers of the Muscular Dystrophy Association
(MDA) that oppose any increase in the 35 percent national cap.[^676] The
MDA officials argue that raising the cap "would be catastrophic to
\[their\] Telethon, the single most important fund-raising vehicle of
the Association." Specifically, the officials argue more network owned
and operated local stations in more major markets will result in "more
of the top stations in these markets dropping the Telethon so as not to
pre-empt their owners' network programming Labor Day weekend."

*Section 76.501(a)-Cable/Television Cross-Ownership Rule*

The WB Television Network (WB) asks the Commission to eliminate the
cable/television cross-ownership rule.[^677] WB argues that if the
Commission affords Viacom relief from the dual network rule and/or the
national ownership cap to facilitate the proposed CBS/UPN combination,
it must simultaneously afford WB relief the cable/television
cross-ownership rule to allow it flexibility to explore a combination or
strategic alliance with an established broadcast network.[^678] WB
argues that the rule is no longer necessary given competition in markets
locally and nationwide and that elimination of the rule would create new
opportunities for localism, especially in smaller markets, as co-owned
television stations and cable systems combine resources to produce more
local programming. According to WB, while the Commission considers
eliminating the ban, parties should be able to enter into cable/TV
combinations in lieu of taking advantage of the relaxed duopoly or
one-to-a-market rules in a particular DMA. [^679] WB also argues that
the cable/TV cross-ownership rule violates the First Amendment.[^680]

[]{#__RefHeading___Toc503676320 .anchor}Recommendation

The staff reaffirms the initial recommendations. With respect to the
newspaper/broadcast cross-ownership rule, the comments of NAA will be
placed into the rule making proceeding that will be initiated to
consider what modifications to the rule are warranted to address
contemporary market conditions. With respect to the national television
ownership cap, the comments of Fox and Viacom do not alter the staff's
initial recommendations. As noted by the Commission in the *1998
Biennial Regulatory Review Report*, the effects of recent changes to the
local television ownership rule should be observed and assessed before
altering the national limits, as should the trend towards increased
group ownership of television stations nationwide since the cap was
raised from 25 percent to 35 percent in 1996.

The staff does not believe that First Amendment concerns necessitate
immediate review of the national television ownership cap.
Constitutional arguments similar to those raised by commenters were
recently rejected by the D.C. Circuit in *Time Warner Entertainment Co.
v. United States,*[^681] which upheld an analogous statutory restriction
on the number of subscribers that a cable operator could serve
nationwide. As the Commission stated in its 1998 Biennial Review Report,
consolidation of ownership of television stations in a few national
networks would limit the diversity of voices by reducing the number of
outlets for non-network broadcast programming.[^682] Further, the
Commission stated that such increased consolidation could diminish the
valuable role played by independently owned affiliates in
counter-balancing network power; those affiliates, it observed, decide
whether to clear network programming or to air instead programming from
other sources that they believe better serves the needs and interests of
the local communities to which they are licensed.[^683] The staff
believes that the national cap continues to serve the important
governmental interests identified by the Commission of promoting
diversity of programming and fostering programming responsive to local
interests and needs. The court in *Time Warner* held these same
interests to be important, and upheld similar limits in the cable
context as a prophylactic measure that "avoids the burden of individual
proceedings....".[^684] The Commission has even broader discretion to
impose limits to foster diversity and local programming in the broadcast
industry than in the cable industry.[^685]

With respect to the dual network rule, the comments of Viacom will be
placed into the record of our rule making to relax the rule. With
respect to the cable/television cross-ownership rule, the comments of WB
do not alter the staff recommendations. As the Commission noted in the
*1998 Biennial Regulatory Review Report*, the television industry has
just begun adapting to the recent relaxation of the local television
ownership rule. Further consolidation of local television broadcast
stations will reduce the number of independent voices providing local
news and public affairs programming. As the Commission further noted,
prudence dictates that the Commission monitor and ascertain the impact
of these changes on diversity and competition before relaxing the
cable/TV cross-ownership rule.

The staff does not believe that First Amendment concerns necessitate
immediate review of the rule. The rule is a content-neutral restriction
that furthers important governmental interests. As noted above, the D.C.
Circuit in *Time Warner* recently rejected First Amendment challenges to
restrictions on cable operators that were designed to promote diversity
and competition. The cable/TV cross-ownership rule is similarly designed
to limit concentration of control over local media and foster diverse
sources of programming.

[]{#__RefHeading___Toc503676321 .anchor}Part 80 -- Stations in the
Maritime Services, Subparts J (Public Coast Stations) and Y (Competitive
Bidding Procedures)

[]{#__RefHeading___Toc503676322 .anchor}Description

Part 80[^686] contains licensing, technical, and operational rules for
radio stations in the maritime services, which provide for the distress,
operational, and personal communications needs of vessels at sea and on
inland waterways.[^687] Maritime frequencies are allocated
internationally by geographic region and type of communication in order
to facilitate interoperable radio communications among vessels of all
nations and stations on land worldwide. Land stations in the maritime
services are the links between vessels at sea and activities on shore.
They are spread throughout the coastal and inland areas of the United
States to carry radio signals and messages to and from ships.

Staff's review of Part 80 in this report focuses on the rules affecting
public coast stations (subparts J and Y), which are unique in the
Maritime Services in that they are used for commercial applications, are
licensed on a geographic exclusive-use basis, and are subject to
licensing by the Commission's competitive bidding procedures. Public
coast stations are CMRS providers that allow ships to send and receive
messages and to interconnect with the public switched telephone
network.[^688]

[]{#__RefHeading___Toc503676323 .anchor}Purpose

The purpose of the Part 80 rules is to establish the mechanism for
allocating licenses, to ensure spectrum use that provides public coast
licensees with maximum flexibility while concurrently respecting the
unique nature of maritime spectrum, and to prevent interference.

[]{#__RefHeading___Toc503676324 .anchor}Analysis

[]{#__RefHeading___Toc503676325 .anchor}Status of Competition

While competition in the CMRS industry as a whole has increased,
competition is generally less robust in the public coast services. This
is due in part to the unique nature of maritime communications and to
the predominant safety-of-life communications responsibilities required
of licensees. Other CMRS services (*e.g.* cellular and PCS) can serve as
substitutes for commercial ship-to-shore communications, particularly
for vessels operating near the coast and on inland waterways.
Large-scale public coast operators (MariTel) are becoming predominant in
VHF Band Public Coast Stations (VPC) as many small and independent
licensees leave the business. Competition is stronger in Automated
Maritime Telecommunications System Stations (AMTS) than on the high seas
band.

[]{#__RefHeading___Toc503676326 .anchor}Advantages

The Subpart J rules promote the safety of life and property at sea,
while concurrently allowing licensees compete as CMRS providers. The
rules allow partitioning and disaggregation, and permit VPC licensees to
utilize capacity not needed for maritime service to provide other types
of services.[^689]

The subpart Y competitive bidding rules allow the efficient licensing of
spectrum. Use of auction procedures allows for swift licensing, and is
likely to result in award of licenses to those entities that value the
spectrum the most and will use it most efficiently. Auction rules also
enable the Commission to recover a portion of the value of the spectrum
for the benefit of the public.

[]{#__RefHeading___Toc503676327 .anchor}Disadvantages

Because of the unique characteristics of the maritime services, public
coast station licensees are subject to responsibilities that other CMRS
providers do not face. The international allocation of maritime
frequencies and the associated statutes, treaties, and agreements limit
the flexibility of use of maritime frequencies. Competition in AMTS is
limited to two competitors at any location and disaggregation is not
currently available for these licensees. There are additional
administrative burdens associated with the competitive bidding of public
coast station licenses, including filing and reporting requirements, as
well as the cost of maintaining staff and electronic resources to
participate in auctions. Nevertheless, the delays associated with this
process are significantly fewer than those historically associated with
licensing by lottery or hearing.

[]{#__RefHeading___Toc503676328 .anchor}Recent Efforts

In the 1998 *Maritime Third Report and Order*, the Commission converted
the licensing of VHF public coast (VPC) stations to a geographic basis,
in order to provide opportunities for the development of competitive new
services, streamline licensing procedures, promote technological
innovation, and enhance regulatory symmetry between maritime CMRS
providers and other CMRS providers.[^690] An auction of VPC spectrum was
conducted in December 1998 and 26 VPC licenses were granted in May 1999.
In the 2000 *Maritime Fourth report and Order and Third Further Notice*,
the Commission revised its service rules for AMTS and high seas public
coast stations to provide licensees greater construction and technical
flexibility, and proposed to convert AMTS to geographic licensing.[^691]
In a separate proceeding, the Commission granted a request to forbear
from enforcing station identification requirement with respect to AMTS
stations, because the requirement is unnecessary and impeded AMTS
providers from competing with non-maritime CMRS providers.[^692] Finally
the Commission has proposed to consolidate, revise, and streamline the
Part 80 rules to address new international maritime requirements,
improve the operational ability of all users of marine radios, and
remove unnecessary or duplicative requirements.[^693]

[]{#__RefHeading___Toc503676329 .anchor}Initial Recommendation

The staff recommend that only nonsubstantive revisions be made to the
structure of the Part 80 rules, to simplify and provide clarity to
licensees and applicants.

[]{#__RefHeading___Toc503676330 .anchor}Comments

None

[]{#__RefHeading___Toc503676331 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676332 .anchor}part 90 -- Private Land Mobile
Radio Services.

[]{#__RefHeading___Toc503676333 .anchor}Description

Part 90 contains 22 subparts. Some of these subparts apply generally to
all Part 90 licensees, while others establish licensing, technical, and
operational rules for specific services.[^694] Part 90[^695] contains
licensing, technical, and operational rules for the group of mobile
services historically described as "private land mobile radio services"
(PLMRS). Services regulated under this rule part include commercial
services such as Specialized Mobile Radio (SMR) and private carrier
paging (PCP), non-commercial services such as public safety, and
services that are used by utilities, transportation companies, and other
businesses for both commercial and private internal purposes.

With the passage of the Omnibus Budget Reconciliation Act of 1993
(OBRA),[^696] Congress reclassified some PLMRS (*e.g.*, 800 MHz and 900
MHz SMR, PCP, and some 220 MHz and Business Radio services) as CMRS and
required providers in these services to be regulated as common
carriers.[^697] The regulatory status of non-CMRS Part 90 services were
unaffected by OBRA, and these services continue to be classified as
private services.

In general, the rules in this part: (1) specify the frequency bands in
which each service operates; (2) define the service area of licenses in
each frequency band; (3) establish minimum construction or coverage
requirements for licensees; and (4) define technical limits on operation
(*e.g.*, antenna height, transmitter power) to prevent interference. For
certain CMRS services, Part 90 also contains subparts dealing with the
auction and award of licenses,[^698] although many of these rules have
since been consolidated in Part 1.

The analysis of Part 90 in this report focuses on those subparts that
affect CMRS providers:

Subpart I - General Technical Standards

Subpart L - Authorizations in 470-512 MHz Band

Subparts M, X - Intelligent Transportation Systems Radio Service/Auction
Rules

Subpart P - Paging Operations

Subparts S, U, V - 800/900 MHz SMR Service/Auction Rules

> Subparts T, W - 220 MHz Service/Auction Rules

[]{#__RefHeading___Toc503676334 .anchor}Purpose

The purposes of the Part 90 rules are to establish basic ground rules
for assignment of spectrum in Part 90 services, to ensure efficient
spectrum use by licensees, and to prevent interference.

[]{#__RefHeading___Toc503676335 .anchor}Analysis

[]{#__RefHeading___Toc503676336 .anchor}Status of Competition

As detailed in the *Fifth Comp*e*tition Report*, Part 90 CMRS providers
operate in an environment that is marked by significant and increasing
competition in mobile telephony, paging/messaging, and mobile
data.[^699]

[]{#__RefHeading___Toc503676337 .anchor}Advantages

The Part 90 rules provide a clear, predictable structure for the
assignment and use of spectrum. In the Part 90 frequency bands that are
licensed exclusively to CMRS providers (*e.g.*, SMR), auction rules
promote efficient licensing of spectrum to those entities that value it
the most. In other bands, site-specific licensing and frequency
coordination are used to promote efficient spectrum use.

[]{#__RefHeading___Toc503676338 .anchor}Disadvantages

The Part 90 rules impose limited administrative and technical burdens
that are inherent to the licensing process and that are necessary for
compliance with technical and operational rules.

[]{#__RefHeading___Toc503676339 .anchor}Recent Efforts

The Commission has recently made changes to Part 90 in several
rulemaking proceedings, as described in greater detail within this Staff
Report. In the *Universal Licensing* proceeding, the Commission
eliminated many of the service-specific licensing rules in Part 90 as
part of its consolidation of all wireless licensing rules into Part
1.[^700] The Commission also made numerous changes to Part 90 rules in
the recently adopted Report and Order in the Part 90 Biennial Regulatory
Review proceeding.[^701]

[]{#__RefHeading___Toc503676340 .anchor}Initial Recommendation

The staff concludes that significant modification or repeal of the Part
90 rules is not necessary at this time. However, where modifications
could be made to streamline the rules in specific subparts, the staff
has so noted in the detailed analysis of those Part 90 subparts.

[]{#__RefHeading___Toc503676341 .anchor}Comments

TIA states that the Commission should amend Sections 90.207 ("Types of
Emissions") and 90.210 ("Emission Masks") for the purpose of harmonizing
them with the International Telecommunications Union (ITU) Radio
Regulations.[^702]

[]{#__RefHeading___Toc503676342 .anchor}Recommendation

No changes. The staff agrees that an internal review should be
undertaken to consider how the Commission's rules should be amended to
harmonize them with those of the ITU and to set out a schedule for
making the necessary changes.

[]{#__RefHeading___Toc503676343 .anchor}part 90, Subpart L --
Regulations for Authorization and Use of Frequencies in the 470-512 MHz
Band

[]{#__RefHeading___Toc503676344 .anchor}Description

Part 90, subpart L[^703] governs the authorization and use of the
470-512 MHz band by both commercial and private land mobile stations. In
1997, the Commission created a General Access Pool to permit greater
flexibility and foster more effective and efficient use of the 470-512
MHz band. Under current rules, all unassigned channels, including those
that subsequently become unassigned, are considered to be in the General
Access Pool and are available to all eligible licensees on a first-come,
first-served basis. If a channel is assigned in an urbanized area,
however, subsequent authorizations on that channel will only be granted
to users from the same category.[^704]

In general, the rules in subpart L: (1) specify the frequencies
available for assignment in the 470-512 MHz band; (2) define the
location of stations and service area of licenses in each frequency
block; (3) establish minimum loading requirements for licensees; and (4)
define technical limits on operation (*e.g.*, antenna height,
transmitter power) to prevent interference. In accordance with these
rules, new applicants may apply for only one channel at a time.[^705]
Licensees are required to show that any assigned channels in this band
in a particular urbanized area are at full capacity before they can be
assigned additional 470-512 MHz channels in that area.[^706] The rules
in this subpart also specify the minimum allowable distance between
co-channel stations.[^707] For purposes of loading requirements,
licensees in the 470-512 MHz band are divided into two groups: the
Public Safety Pool and the Industrial/Business Pool.[^708] After loading
a channel to full capacity, a licensee may apply for another
channel.[^709] Current licensees may use existing loading to satisfy
this requirement and apply for more than one channel at one time.
Licensees that are operating above full capacity may use those units to
qualify for additional channels.

[]{#__RefHeading___Toc503676345 .anchor}Purpose

The purposes of the subpart L rules are to establish basic ground rules
for assignment of spectrum in the 470-512 MHz service, to ensure
efficient spectrum use by licensees, and to prevent interference with
UHF television stations operating on the shared frequencies.

[]{#__RefHeading___Toc503676346 .anchor}Analysis

[]{#__RefHeading___Toc503676347 .anchor}Status of Competition

Because land mobile use of the 470-512 MHz band is limited by the
sharing of the band with broadcast channels 14-20, service in the band
has been narrowly geared to industrial and public safety use in a
limited number of urban locations. Demand for these channels to provide
commercial services to consumers has been largely absent.

[]{#__RefHeading___Toc503676348 .anchor}Advantages

The subpart L rules provide a clear, predictable structure for the
assignment and use of spectrum. Site-specific licensing and frequency
coordination are used to promote efficient spectrum use.

[]{#__RefHeading___Toc503676349 .anchor}Disadvantages

The subpart L rules impose limited administrative and technical burdens
that are inherent to the licensing process and are necessary for
compliance with technical and operational rules. Because the band is
shared with television broadcast stations, the technical burden imposed
on licensees to prevent interference with co-channel operations is
somewhat greater than in other bands allocated exclusively to wireless
services.

[]{#__RefHeading___Toc503676350 .anchor}Recent Efforts

In the *Second Report and Order* in the Refarming proceeding, the
Commission authorized centralized trunking in the 470-512 MHz band if a
licensee has an exclusive service area or obtains consent from all
co-channel and adjacent channel licensees and frequency coordination is
obtained. [^710]

[]{#__RefHeading___Toc503676351 .anchor}Initial Recommendation

The staff concludes that significant modification or repeal of the
subpart L rules is unnecessary at this time.

[]{#__RefHeading___Toc503676352 .anchor}Comments

None

[]{#__RefHeading___Toc503676353 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676354 .anchor}part 90, Subparts M (Intelligent
Transportation Systems Radio Service) and X (Competitive Bidding Rules
for the Location and Monitoring Service)

[]{#__RefHeading___Toc503676355 .anchor}Description

Part 90, subpart M[^711] contains licensing, technical, and operational
rules for the Intelligent Transportation Systems (ITS) radio service.
ITS radio service consists of two sub-categories: the Location and
Monitoring Service (LMS) and the Dedicated Short Range Communications
Service (DSRCS).

[]{#__RefHeading___Toc503676356 .anchor}Location and Monitoring Systems
(LMS)

LMS systems are used for such functions as vehicle tracking and
location, automated toll collection, and other communications functions
related to vehicles. In general, the subpart M rules: (1) specify the
frequency bands in which LMS licensees operate; (2) define the service
area of LMS licenses in each frequency band; (3) establish minimum
construction or coverage requirements for LMS licensees; and (4) define
technical limits on operation (*e.g.*, antenna height, transmitter
power) to prevent interference.[^712] The rules also establish
limitations on LMS systems' interconnection with the public switched
network and set forth a number of technical requirements intended to
ensure successful coexistence of all the services authorized to operate
in the band.

The LMS competitive bidding rules, set forth in Part 90, subpart
X,[^713] states that the auction of LMS licenses is generally subject to
the competitive bidding procedures set forth in Part 1, subpart Q. There
are service-specific rules defining designated entities in LMS. LMS
licenses were auctioned by the Commission in 1999.

[]{#__RefHeading___Toc503676357 .anchor}Dedicated Short Range
Communications Service (DSRCS)

In October 1999, the Commission allocated 75 MHz of spectrum for use by
DSRCS systems operating in the Intelligent Transportation System radio
service.[^714] The Commission amended subpart M by adding technical
rules establishing power, emission, and frequency stability limits for
DSRCS operations. The Commission has deferred consideration of DSRCS
licensing and service rules and spectrum channelization plans to a later
proceeding, pending promulgation of standards by the Department of
Transportation.

[]{#__RefHeading___Toc503676358 .anchor}Purpose

The purpose of Part 90, subpart M is to provide a regulatory framework
that allows entities to effectively deploy radio-based devices and
systems to enhance safety of life and protection of property on the
nation's highways, railways and other transportation corridors, without
causing harmful interference to other radio services.

[]{#__RefHeading___Toc503676359 .anchor}Analysis

[]{#__RefHeading___Toc503676360 .anchor}Status of Competition

The services provided by LMS operators, such as vehicular tracking, tend
to be niche services, and competition in these sectors appears to be
more limited than in other types of wireless services. In addition, many
LMS licensees are state and local government entities rather than
commercial enterprises. The number of LMS licensees has increased,
however, since the Commission completed its auction of multilateration
LMS licenses in March 1999. As these licensees begin to deploy services,
the level of competition in LMS could increase.

[]{#__RefHeading___Toc503676361 .anchor}Advantages

The Part 90, subpart M rules provide a clear, predictable structure for
the assignment and use of spectrum. Geographic area licensing of
multilateration systems minimizes the administrative burden involved in
obtaining a license and thus avoids undue delay in the authorization of
new services to the public. Minimal technical standards facilitate the
introduction of new technologies.

[]{#__RefHeading___Toc503676362 .anchor}Disadvantages

The Part 90, subpart M rules impose some administrative burdens inherent
to the licensing process and that are necessary for compliance with
technical and operational rules. The provisions relating to secondary
use of the LMS band by Part 15 users and amateur licensees impose some
additional technical burdens on LMS licensees to avoid and resolve
interference between their systems and these other uses.

[]{#__RefHeading___Toc503676363 .anchor}Recent Efforts

Aside from the DSRCS proceeding discussed above, the Commission has not
significantly revised the Part 90, subpart M rules since the LMS
auction.

[]{#__RefHeading___Toc503676364 .anchor}Initial Recommendation

The staff does not recommend any modification or repeal of the rules at
this time. The staff recommends continuing to monitor developments in
order to determine whether any additional rule modifications are
necessary to foster competition.

[]{#__RefHeading___Toc503676365 .anchor}Comments

None

[]{#__RefHeading___Toc503676366 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676367 .anchor}Part 90, Subpart P − Paging
Operations in the 929 MHz Band

[]{#__RefHeading___Toc503676368 .anchor}Description

Part 90, subpart P contains licensing, technical, and operational rules
for paging operations in the 929 MHz Band. This rule part includes
services such as commercial paging and private carrier paging (PCP).
Licensees may operate on exclusive channels or designated shared
channels on a CMRS or PMRS basis.

In general, the rules in this subpart (1) specify the exclusive channels
and shared channels; and (2) define technical limits on operation
(*e.g.*, antenna height, transmitter power) to prevent interference. For
paging operations on exclusive channels, the licensees are subject to
Part 22 of the Commission's rules regarding the Paging and
Radiotelephone Service.

[]{#__RefHeading___Toc503676369 .anchor}Purpose

The purposes of the Part 90, subpart P rules are to establish basic
ground rules for assignment and use of exclusive or shared channels in
the 929 MHz Band and to prevent interference.

[]{#__RefHeading___Toc503676370 .anchor}Analysis

[]{#__RefHeading___Toc503676371 .anchor}Status of Competition

As detailed in the *Fifth Competition Report*, Part 90 paging providers
operate in an environment that is marked by significant and increasing
competition in mobile telephony, paging/messaging, and mobile
data.[^715]

[]{#__RefHeading___Toc503676372 .anchor}Advantages

The Part 90, subpart P rules provide a clear, predictable structure for
the assignment and use of spectrum. In Part 90, Subpart P, frequency
bands that are licensed on an exclusive basis are subject to competitive
bidding. The shared channels are available to all eligible entities.

[]{#__RefHeading___Toc503676373 .anchor}Disadvantages

The Part 90, subpart P rules impose limited administrative and technical
burdens that are inherent to the licensing process and that are
necessary for compliance with technical and operational rules.

[]{#__RefHeading___Toc503676374 .anchor}Recent Efforts

The Commission has made significant changes to its Part 90, subpart P
rules in recent years. In the mid-1990s, the Commission converted the
authorization of stations in the 929 MHz Band from the original
site-by-site procedure to a geographic area licensing process. The
*Second Report and Order* established geographic area licensing for 929
MHz paging and adopted competitive bidding procedures.[^716] The *Third
Report and Order* changed the geographic area licensing of 929 MHz
paging from MTAs to MEAs, clarified that spectrum will automatically
revert to the geographic area licensee in all instances where a
non-geographic area incumbent licensee permanently discontinues service,
and allowed geographic area licensees to partition their licenses and
disaggregate the spectrum.[^717] The Commission auctioned geographic
licenses for the exclusive channels in the 929 MHz band.[^718]
Furthermore, the Part 22 Rules regarding paging now apply to all 929 MHz
licensees on exclusive channels. More recently, most of the application
filing rules were moved from this subpart to Part 1 in connection with
implementation of electronic filing procedures and the Universal
Licensing System.

[]{#__RefHeading___Toc503676375 .anchor}Initial Recommendation

The staff does not recommend significant modification or repeal of the
Part 90, subpart P at this time.

[]{#__RefHeading___Toc503676376 .anchor}Comments

None

[]{#__RefHeading___Toc503676377 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676378 .anchor}part 90, Subparts S (Regulations
for Licensing and Use of Frequencies in the 800 and 900 MHz Bands), and
U and V (Competitive Bidding Procedures for the 900 and 800 MHz Service)

[]{#__RefHeading___Toc503676379 .anchor}Description

Subpart S[^719] contains licensing, technical, and operational rules for
the 800 MHz and 900 MHz Specialized Mobile Radio (SMR) services, as well
as non-commercial services above 800 MHz, *i.e.*, public safety services
and services that are used by utilities, transportation companies, and
other businesses for internal purposes. With the passage of OBRA,
Congress reclassified 800 MHz and 900 MHz SMR services as CMRS, and
required all CMRS providers to be regulated as common carriers.[^720]

In general, the rules in Subpart S: (1) specify the frequency bands in
which each service operates; (2) define the service area of licenses in
each frequency band; (3) establish minimum construction or coverage
requirements for licensees; and (4) define technical limits on operation
(*e.g.*, antenna height, transmitter power) to prevent interference.
This subpart provides for geographic licensing of these bands.

Subparts U and V[^721] contain competitive bidding rules and procedures
for 900 MHz SMR and 800 MHz SMR services, respectively. The rules in
these subparts: (1) identify the licenses to be sold by competitive
bidding; (2) establish the competitive bidding mechanisms to be used in
900 and 800 MHz SMR auctions; (3) establish application, disclosure and
certification procedures for short- and long-form applications; (4)
specify down payment, withdrawal, and default mechanisms; (5) provide
definitions of gross revenues for designated entities and specify the
bidding credits for which designated entities qualify; and (6) provide
eligibility and technical requirements for partitioning and
disaggregation.

[]{#__RefHeading___Toc503676380 .anchor}Purpose

The purposes of the Subpart S rules are to establish basic ground rules
for the assignment of spectrum to the affected SMR licensees, to ensure
efficient spectrum use by licensees, and to prevent interference. The
competitive bidding rules of Subparts U and V ensure access to new
telecommunications offerings by ensuring that market forces guide the
allocation of licenses so that all customer segments are served with the
greatest economic efficiency. Additionally, the designated entity
provisions of the competitive bidding rules are intended to provide
opportunities for small businesses to participate in the provision of
telecommunications services.

[]{#__RefHeading___Toc503676381 .anchor}Analysis

[]{#__RefHeading___Toc503676382 .anchor}Status of Competition

As detailed in the *Fifth* *Competition Report*, Part 90 SMR providers
operate in an environment that is marked by significant and increasing
competition in mobile telephony, paging/messaging, and mobile data. Some
of the larger SMR carriers, particularly Nextel and Southern, provide
digital wide-area voice services that compete with cellular and
broadband PCS. Other SMR carriers provide more traditional dispatch
service on a local or regional basis. Although SMR channels have been
used primarily for voice communications, systems are also being
developed to carry data and facsimile services. Additionally, new
digital SMR technology is leading to the development of new features and
services, such as two-way acknowledgment paging, teleconferencing, and
voicemail.

[]{#__RefHeading___Toc503676383 .anchor}Advantages

The Subpart S rules provide a clear and predictable structure for the
assignment and use of SMR spectrum, and afford substantial flexibility
to licensees to choose the type of service they will provide based on
market demand. The Subparts U and V auction rules promote efficient
licensing of SMR spectrum to those entities that value it the most.

[]{#__RefHeading___Toc503676384 .anchor}Disadvantages

There continue to be differences between the licensing, technical, and
operational rules that apply to grandfathered site-based SMR licenses
and those that apply to geographic area licenses. This multiplicity of
rules is potentially burdensome to SMR licensees who have both
geographic and site-based systems, which may result in inconsistent
regulatory obligations (*e.g*., buildout requirements) for different
portions of their systems.

[]{#__RefHeading___Toc503676385 .anchor}Recent Efforts

In the past year, the Commission has reconsidered and revised some of
its 800 MHz SMR rules in anticipation of the SMR lower band and General
Category auctions.[^722] The Commission has also given incumbent SMR
licensees with wide-area systems the option of applying the same
buildout and coverage requirements as geographic licensees, thus giving
these incumbents greater flexibility and parity with geographic
licensees.[^723] It should also be noted that two 800 MHz SMR auctions,
just mentioned, were concluded this year: Auction No. 34 concluded on
September 1, 2000, after 14 winning bidders purchased 1030 800 MHz
General Category licenses;[^724] Auction No. 36 ended December 5, 2000,
with 22 winning bidders obtaining 2800 licenses (Lower 80
Channels).[^725]

[]{#__RefHeading___Toc503676386 .anchor}Initial Recommendation

There are several rule sections that contain outdated or burdensome
requirements. For example, the staff recommends that the Commission
consider eliminating section 90.655,[^726] which requires individual end
user licensing of SMR facilities that require Federal Aviation
Administration clearance, have a significant environmental effect, or
are located in a radio frequency "quiet zone." The staff recommends that
similar consideration be given to removing the requirement that
site-based SMR licensees provide loading data in order to renew their
licenses.[^727] We also recommend removal of section 90.607(a),[^728]
which requires SMR applicants to provide a statement describing the
applicant's "planned mode of operation." Such a requirement appears to
serve no regulatory purpose, and is inconsistent with the Commission's
policies regarding flexible use of spectrum.

[]{#__RefHeading___Toc503676387 .anchor}Comments

None

[]{#__RefHeading___Toc503676388 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676389 .anchor}part 90, Subparts T (Regulations
for Licensing and Use of Frequencies in the 220-222 MHz Band) and W
(Competitive Bidding Procedures for the 220 MHz Service)

[]{#__RefHeading___Toc503676390 .anchor}Description

Part 90, subpart T[^729] contains licensing, technical, and operational
rules for the 220-222 MHz (220 MHz) service. In general, the rules in
this part: (1) define the service area of 220 MHz licenses; (2) specify
the permissible operations for authorized systems; (3) specify the
frequencies available to 220 MHz licensees; (4) establish license terms;
(5) establish the minimum construction or coverage requirements for 220
MHz licensees; and (6) define technical limits on operation (*e.g.*,
antenna height, field strength) to prevent interference.

Part 90, subpart W[^730] contains competitive bidding rules and
procedures for commercial licenses in the 220 MHz service. The rules in
this subpart: (1) specify which 220 MHz licenses are eligible for
competitive bidding; (2) establish the competitive bidding mechanisms to
be used in 220 MHz auctions; (3) establish application, disclosure and
certification procedures for short- and long-form applications; and (4)
specify down payment, withdrawal, and default mechanisms.

[]{#__RefHeading___Toc503676391 .anchor}Purpose

The purposes of the Subparts T and W rules are to facilitate the
assignment of spectrum in the 220-222 MHz service, to ensure efficient
spectrum use by licensees, and to prevent interference through
establishment of technical limits on operation (*e.g.*, siting
requirements and limits on transmitter power).

[]{#__RefHeading___Toc503676392 .anchor}Analysis

[]{#__RefHeading___Toc503676393 .anchor}Status of Competition

Licensees in the 220 MHz service are permitted to provide voice, data,
paging, and fixed communications. Many 220 MHz licensees have begun to
deploy their networks, and dispatch subscribership in this band grew 35
percent in 1999.[^731] Suppliers of 220 MHz equipment anticipate that
there will be increased buildout and demand for service in the next
several years.[^732] Thus, there is potential for the 220 MHz service to
be increasingly competitive and to contribute to inter-service CMRS
competition.

[]{#__RefHeading___Toc503676394 .anchor}Advantages

The Subpart T rules provide a clear and predictable structure for the
assignment and use of 220-222 MHz band spectrum, and afford substantial
flexibility to licensees to choose the type of service they will provide
based on market demand. The Subpart W auction rules promote efficient
licensing of 220 MHz spectrum to those entities that value it the most.

[]{#__RefHeading___Toc503676395 .anchor}Disadvantages

Although the Commission has recently simplified and streamlined the 220
MHz rules in many respects (see below), there continue to be differences
among the licensing, technical, and operational rules that apply to
grandfathered site-based licenses and those that apply to geographic
area licenses. This multiplicity of rules is potentially burdensome to
220 MHz licensees who have systems comprised of both types of licenses,
which may result in inconsistent regulatory obligations (*e.g.*,
buildout requirements) for different portions of their systems.

[]{#__RefHeading___Toc503676396 .anchor}Recent Efforts

In several recent orders, the Commission has taken steps to reduce
regulatory burdens and afford greater flexibility to 220 MHz licensees.
For example, the original 220 MHz rules required licensees to provide
two-way land mobile service on a primary basis, and allowed use of the
band for fixed services or for paging only on an "ancillary" basis. In
the *220 MHz Third Report and Order*, the Commission eliminated the
ancillary use limitation, thus allowing licensees to provide any or all
of these services on a co-primary basis. [^733] The Commission has also
adopted rules permitting partitioning and disaggregation of 220 MHz
licenses, and has eliminated the "40-mile rule" that previously limited
the number of site-based licenses that an individual licensee could hold
in a given geographic area.[^734] Finally, the Commission recently
eliminated mandatory spectrum efficiency standards that had previously
been adopted for provision of voice and data over 220 MHz systems that
combined contiguous 5 kHz channels.[^735] The Commission concluded that
mandating technical standards was unnecessary because market forces
would spur efficient spectrum use, and that retaining mandatory
standards could impair rather than encourage technical innovation.[^736]

[]{#__RefHeading___Toc503676397 .anchor}Initial Recommendation

The staff does not recommend substantial modification or repeal of the
220 MHz rules at this time. However, the staff recommends that
consideration be given to whether certain rules applicable to site-based
licensees continue to be necessary. For example, section 90.737 imposes
certain reporting requirements and restrictions on assignments of
unconstructed site-based licenses that were intended to prevent
speculation and trafficking in licenses awarded by lottery.[^737] Now
that licensing by lottery has been discontinued, however, these rules
may actually impede the transferability of 220 MHz spectrum. The staff
therefore recommends that consideration be given to eliminating these
rules.

Similarly, as noted elsewhere in this Staff Report, the Commission has
consolidated its competitive bidding rules in Part 1, with the goal of
having future auctions be conducted in accordance with Part 1 rules.
Therefore, to the extent that future auctions are necessary in the 220
MHz service, they will be governed by Part 1, and the continued presence
of separate 220 MHz auction rules in Subpart W appears to be redundant.
The staff recommends that consideration be given to eliminating these
rules.

[]{#__RefHeading___Toc503676398 .anchor}Comments

None

[]{#__RefHeading___Toc503676399 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676400 .anchor}Part 95 -- Personal Radio
Services, Subpart F -- 218-219 MHz Service

[]{#__RefHeading___Toc503676401 .anchor}Description

For purposes of the Biennial Regulatory Review, the analysis of Part 95
in this report focuses on the 218-219 MHz Service (Subpart F), which is
unique among the Personal Radio Services in that it may be used for
commercial applications, it is licensed on a geographic exclusive-use
basis, and its licensure is subject to the Commission's competitive
bidding procedures. Part 95[^738] contains licensing, technical, and
operational rules for the Personal Radio Services, a collection of
wireless services that are generally used by individuals for personal
communications and to support the radio needs of their activities and
interests.

Subpart F was originally created to support the Interactive Video and
Data Service (IVDS), a short-distance communications service by which
licensees could provide information, products, or services to, and allow
interactive responses from, subscribers within the licensee's service
area. In 1998, the Commission renamed IVDS the 218-219 MHz Service and
revised Subpart F to allow 218-219 MHz licensees greater flexibility to
identify and structure services in response to market demand.[^739]
Under the current service rules, both common carrier and private
operations are permitted, and both one- and two-way communications are
allowed.

The licensing and technical rules for the 218-219 MHz Service are
contained in Subpart F, although certain rules that are broadly
applicable to all wireless telecommunications services (including the
218-219 MHz Service) have been consolidated in Part 1.[^740]

[]{#__RefHeading___Toc503676402 .anchor}Purpose

The rules are intended to provide licensees with the maximum flexibility
to structure their services while protecting over-the-air television
reception of TV Channel 13.

[]{#__RefHeading___Toc503676403 .anchor}Analysis

[]{#__RefHeading___Toc503676404 .anchor}Status of Competition

The original IVDS service was generally not commercially successful, and
little or no competition emerged to use the 218-219 MHz band to provide
interactive television applications. Under the revised service rules,
218-219 MHz Service licensees have proposed wireless data applications
such as meter reading and vehicle tracking services. Accordingly, the
expectation is that the 218-219 MHz Service could soon provide sources
of competition for other wireless services. However, competition is
developing slowly, due in part to (1) the limited permissible use of the
service before its recent restructuring; (2) the fact that many 218-219
MHz Service markets are not currently licensed due to payment defaults;
and (3) the on-going implementation of the service restructuring.

[]{#__RefHeading___Toc503676405 .anchor}Advantages

The Part 95, subpart F rules provide licensees with the flexibility to
identify and implement services in response to market demand. For
example, the technical rules have general interference protection
requirements and there is a substantial service requirement.

[]{#__RefHeading___Toc503676406 .anchor}Disadvantages

There are no significant disadvantages to the Subpart F rules at this
time, although the rules do impose limited administrative and technical
burdens that are inherent to the licensing process and that are
necessary for compliance with technical and operational rules. As more
licensees begin providing service and we gain more experience in the
administration of the 218-219 MHz Service, we will continue to examine
whether any of these rules impose unnecessary burdens and costs and
could therefore be candidates for additional streamlining.

[]{#__RefHeading___Toc503676407 .anchor}Recent Efforts

The Commission has made significant changes to its Part 95, subpart F
rules in recent years. As noted above, the Commission renamed the
service and revised the rules in 1998 to afford more flexibility to
licensees over use of the spectrum. The Commission adopted additional
sweeping changes to the 218-219 MHz service in September 1999.[^741] The
Wireless Telecommunications Bureau is still implementing these changes,
and several petitions for reconsideration remain pending in the docket.
In addition, the 218-219 MHz Service has been affected by a number of
broadly applicable rulemaking actions, such as the Universal Licensing
System (ULS) proceeding that was initiated in conjunction with the 1998
Biennial Regulatory Review.

[]{#__RefHeading___Toc503676408 .anchor}Initial Recommendation

Due to the recent comprehensive evaluation and restructuring of the
218-219 MHz Service, no changes are recommended to this subpart at this
time. The rules that were retained in the 1999 restructuring are an
integral part of the basic licensing and spectrum management functions
performed by the Commission and should be retained. Although there is
presently only limited competition within the 218-219 MHz Service, this
fact is primarily attributable to the narrow focus of the former rules
that supported interactive television applications and the uncertainty
surrounding the restructuring of the service. The staff anticipates the
provision of competitive services within the 218-219 MHz Service, and
will continue to monitor developments in order to determine whether any
additional rule modifications are necessary to foster competition.

[]{#__RefHeading___Toc503676409 .anchor}Comments

None

[]{#__RefHeading___Toc503676410 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676411 .anchor}Part 100 -- Direct Broadcast
Satellite Service

[]{#__RefHeading___Toc503676412 .anchor}Description

Part 100 was issued pursuant to the provisions of Title III of the
Communications Act of 1934, as amended, which gives the Federal
Communications Commission authority to regulate radio transmissions and
to issue licenses for radio stations. Part 100 sets forth rules
applicable to the Direct Broadcast Satellite Service (DBS), including
public interest obligations, general licensing and application filing
requirements, technical and operating requirements, and competitive
bidding procedures.

Part 100 is organized into five sub-parts:

> A- General Information
>
> B- Administrative Procedures
>
> C- Technical Requirements
>
> D-Operating Requirements
>
> E- Competitive Bidding Procedures for DBS

[]{#__RefHeading___Toc503676413 .anchor}Purpose

The rules are designed to promote fair competition in the multi-channel
video programming distribution market. Sections of Part 100 also have
provisions: (1) to assure protection from impermissible levels of
interference; (2) to assure compliance with international regulations;
(3) to assure the timely construction and operation of authorized space
stations; (4) to assure the timely provision of sufficient information
to allow for processing of applications; (5) to assure compliance with
license specifications and conditions, as well as with Commission rules
and regulations; and (6) to provide competitive bidding procedures for
the provision of DBS services.

[]{#__RefHeading___Toc503676414 .anchor}Analysis

[]{#__RefHeading___Toc503676415 .anchor}Status of Competition

The DBS service competes with other multi-channel video program
distribution services (*e.g.,* cable). Today there are two major
providers of DBS. The service as a whole, and the individual companies
are growing rapidly in subscribership and have the capital to offer new
digital technologies to consumers. Additionally, the Commission has
permitted mergers in the DBS industry that have placed the two DBS
licensees in a stronger position to compete with other suppliers of
multi-channel video program distribution services (*e.g.,* cable TV
systems, which are still today the dominant suppliers of multi-channel
video program distribution services). Furthermore, the U.S. has entered
into agreements with Mexico and Argentina, which allow those countries
to provide Direct-to-Home services (similar to DBS) into the U.S.
Finally, we anticipate auctioning additional DBS orbital slots that are
allotted to the U.S. which will provide existing or new DBS providers
the opportunity to further expand the service to U.S. consumers.

[]{#__RefHeading___Toc503676416 .anchor}Advantages

[Subpart A- General Information]{.underline}**:** This subpart includes
the basis and purpose of this rule subpart. Specifically, it sets forth
the Commission's statutory authority to regulate DBS, which fosters
efficient spectrum use. This subpart increases consumer choice and
diversity in programming, as well as imposes political advertising rules
on DBS providers.

[Subpart B- Administrative Procedures]{.underline}: This subpart
describes the eligibility criterion for DBS authorizations, including
foreign ownership restrictions. It provides clear procedures for filing
applications and procedures for evaluating whether applications are
complete. This allows for efficient use of resources and ensures
compliance with the Commission's rules.

[Subpart C---Technical Requirements]{.underline}: This subpart provides
technical standards and operating rules to minimize interference among
DBS licensees.

[Subpart D- Operating Requirements]{.underline}: Section 100.51
describes the Equal Employment Opportunities policy for DBS. This
section promotes diversity in employment and creates expanded
opportunities to provide service. Section 100.53 sets out geographic
service rules for DBS providers. This ensures delivery of service to the
public.

[Subpart E- Competitive Bidding Procedures for DBS]{.underline}: This
subpart describes the mechanism for competitive bidding for satellite
DBS service. Competitive bidding awards DBS licenses to those firms that
will most efficiently use orbital resources to compete in providing
service. Further, it fosters efficient use of spectrum and the
development of a competitive DBS market.

[]{#__RefHeading___Toc503676417 .anchor}Disadvantages

[Subpart A- General Information:]{.underline} Section 100.5 (DBS public
interest obligations) may increase a licensees operating administrative
and compliance costs. Further, this section may restrict the alternative
uses of the resources that must now be set aside for public interest
programming.

[Subpart B- Administrative Procedures:]{.underline} This subpart could
increase a licensee's administrative costs and hamper the introduction
of new services. For example, if the milestone for construction and
operation of DBS systems is too long, it may result in the deployment of
insufficient technologies or a delay in the reassignment of the license
to another provider who will construct and operate a DBS system. In the
alternative, if the schedule is too short, it may result in a loss of a
license if build out is delayed because of unforeseen technical
problems.

[Subpart C- Technical Requirements]{.underline}: These standards and
operating rules, while preserving the operating environment today, could
hamper the introduction of new services and restrict alternative uses of
resources in the future.

[Subpart D-Operating Requirements]{.underline}: Rules in this section
might increase operating costs and limit potential use of resources.

[Subpart E- Competitive Bidding Procedures for DBS]{.underline}:
Satellite services in the planned frequency bands require international
coordination prior to the commencement of operations (*e.g.*, when the
plans are modified to accommodate new services). The value of the
orbital location resource is uncertain if the international coordination
process has not yet been completed.

[]{#__RefHeading___Toc503676418 .anchor}Recent Efforts

As described in the staff report, the Commission has taken steps to
streamline the regulation of DBS. The Commission issued an Notice of
Proposed Rulemaking, which seeks comment on its proposals to streamline
the DBS rules by integrating the Part 100 DBS service rules into Part 25
(Satellite Communications), by eliminating duplicative rule sections,
and by consolidating existing rule sections as appropriate.[^742]

[]{#__RefHeading___Toc503676419 .anchor}Initial Recommendation

Consistent with the outstanding Notice of Proposed Rulemaking, the staff
recommended that all of the DBS rules contained in Part 100 be retained,
but that Part 100 be eliminated and the rules incorporated into Part 25.

[]{#__RefHeading___Toc503676420 .anchor}Comments

None.

[]{#__RefHeading___Toc503676421 .anchor}Recommendation

See initial recommendation.

[]{#__RefHeading___Toc503676422 .anchor}Part 101 -- Fixed Microwave
Services

[]{#__RefHeading___Toc503676423 .anchor}Description

Part 101[^743] contains licensing, technical, and operational rules for
the microwave services. Fixed microwave spectrum is primarily used to
deliver video, audio, data, and control functions for other specific
communications services from one point and/or hub to other points and/or
subscribers for distribution. Most Part 101 application processing
rules, technical standards, and operational requirements apply to all
Part 101 services, but others apply only to specific services,[^744] or
to common carrier services but not private services (or vice
versa).[^745]

Part 101 was created in 1996 through consolidation of the rules for the
common carrier and private operational fixed (POFS) microwave services
contained in Parts 21 and 94.[^746]

Part 101 contains 14 lettered subparts:

A -- General

> B -- Applications and Licenses
>
> C -- Technical Standards
>
> D -- Operational Requirements
>
> E -- Miscellaneous Common Carrier Provisions
>
> F -- Developmental Authorizations
>
> G -- 24 GHz Services and Digital Electronic Message Service

H -- Private Operational Fixed Point-to-Point Microwave Service

I -- Common Carrier Fixed Point-to-Point Microwave Service

> J -- Local Television Transmission Service
>
> K -- \[Reserved\]
>
> L -- Local Multipoint Distribution Service
>
> M -- Competitive Bidding Procedures for LMDS
>
> N -- Competitive Bidding Procedures for the 38.6-40.0 GHz Band

[]{#__RefHeading___Toc503676424 .anchor}Purpose

Part 101 rules are intended to reduce or eliminate the differences in
processing applications between common carriers and private operational
fixed microwave service licensees, and to further the regulatory parity
among these microwave services.[^747]

[]{#__RefHeading___Toc503676425 .anchor}Analysis

[]{#__RefHeading___Toc503676426 .anchor}Status of Competition

Because the Part 101 microwave services encompass a variety of private
and common carrier applications, and because some services are licensed
on a point-to-point basis while others are licensed geographically, the
level of competition varies greatly among individual microwave services.

The largest commercial deployment of Part101 microwave services has
occurred in the 24 GHz (DEMS), 28 GHz (LMDS), and 39 GHz bands. The
licensees in these bands have the potential to create facilities-based
competition in numerous industries, including high-speed broadband
services. In other Part 101 services, licensees continue to rely on
traditional point-to-point microwave systems to meet their operational
support and critical infrastructure needs as opposed to using microwave
technologies to directly access customers.

[]{#__RefHeading___Toc503676427 .anchor}Advantages

The Part 101 rules provide for a unified regulatory approach for the
microwave services, and eliminate the differences in processing
applications between common carriers and POFS licensees that existed in
the former rules. Because each of the microwave services share at least
some frequencies with other microwave services, and because some
frequencies are shared with government users, the rules minimize
repetition, reduce the potential for interference, and aid different
microwave users in efficient use of the microwave spectrum.

Part 101 also contains competitive bidding rules (Subparts M and N)
that, in conjunction with our spectrum allocation rules, promote
economic growth and enhance access to telecommunications service
offerings for consumers, producers, and new entrants. The competitive
bidding rules are structured to promote opportunity and competition. In
contrast to lotteries and comparative hearings, auctions are faster,
more efficient, and more likely to get spectrum to entities that value
it the most. Through these rules, the Commission has recovered a portion
of the value of the public spectrum.

[]{#__RefHeading___Toc503676428 .anchor}Disadvantages

Licensees and applicants have identified certain rules that are
ambiguous or confusing, and certain technical characteristics --
including those relating to frequency tolerance, spectrum efficiency,
and antenna standards -- that could be modified.[^748] In addition, some
rules could be candidates for further consolidation or
streamlining.[^749] For example, the current rules do not allow shared
use among providers and between POFS and common carrier licensees.

[]{#__RefHeading___Toc503676429 .anchor}Recent Efforts

The Commission is in the midst of a comprehensive re-evaluation of the
Part 101 rules.[^750] The *Part 101 NPRM*, which was released on
February 14, 2000, proposes to eliminate rules that are duplicative,
outmoded, or otherwise unnecessary; it also seeks comment on specific
proposals to "examine the\[\] rules and procedures and offer their view
and explanations of ways to streamline them and to make sure that the
regulations conform with the Communications Act of 1934, as
amended."[^751] The pleading cycle for the *Part 101 NPRM* closed August
4, 2000.[^752]

The Commission has made significant changes to the competitive bidding
rules of Part 1, subpart Q. In the *Part 1 Third Report and
Order*,[^753] the Commission made substantive amendments and
modifications to the competitive bidding rules for all auctionable
services. These changes to the competitive bidding rules are intended to
streamline regulations and eliminate unnecessary rules wherever
possible, increase the efficiency of the competitive bidding process,
and provide more specific guidance to auction participants. The changes
also advance our auction program by reducing the burden on the
Commission and the public of conducting service-by-service auction rule
makings, such as those rule makings that created the competitive bidding
rules of Subparts M and N.

[]{#__RefHeading___Toc503676430 .anchor}Initial Recommendation

Because of the ongoing rulemaking embodied in the *Part 101 NPRM*, staff
does not recommend that any additional changes be made to the rules
within the context of the biennial regulatory review. The staff conclude
that significant modification or repeal of the Part 101 competitive
bidding rules is not necessary at this time. However, to the extent that
service-specific auction rules are duplicative of the consolidated
auction rules in Part 1, the staff recommends that they be modified or
eliminated.

[]{#__RefHeading___Toc503676431 .anchor}Comments

TIA proposes a channel plan for the 23 GHz band, technical modifications
to the 23 GHz band, and modifications to antenna standards for the 10
GHz and 23 GHz bands.[^754] Winstar asks that the Commission review the
renewal requirements -- in particular the concept of "substantial
service" -- as they apply to certain Part 101 licenses.[^755]

[]{#__RefHeading___Toc503676432 .anchor}Recommendation

See initial recommendation. TIA's proposals mirror those it raised in a
petition for rulemaking that has been incorporated into the Part 101
NPRM,[^756] and staff believes that these concerns are best addressed
within that pending rulemaking proceeding. Although Winstar focused its
comments on renewal rules contained in Part 101, the staff continues to
believe that Winstar's comments are best addressed within the larger
issue of renewal procedures,[^757] and does not recommend any changes to
our Part 101 rules that fall outside such a comprehensive review.

[]{#__RefHeading___Toc503676433 .anchor}part 101, Subpart G -- 24 GHz
Service and Digital Electronic Message Service

[]{#__RefHeading___Toc503676434 .anchor}Description

Part 101 contains licensing, technical, and operational rules for fixed
operational microwave services that require operating facilities on land
or in certain offshore coastal areas. This report focuses on subpart G,
which contains rules for the 24 GHz Service and the Digital Electronic
Message Service (DEMS). DEMS systems are common carrier
point-to-multipoint microwave networks designed to communicate
information between a fixed (nodal) station and a multiple fixed user
terminals,[^758] and this subpart was originally intended to accommodate
operation of high-speed, two-way, point-to-multipoint terrestrial
microwave transmission systems.[^759]

DEMS is licensed for use in the 24.25-24.45 GHz and 25/05-25.25 GHz
bands.[^760]

[]{#__RefHeading___Toc503676435 .anchor}Purpose

The purpose of the Part 101 subpart G rules is to establish the rules
for allocation and use of wireless services at 24 GHz, to ensure
efficient spectrum use, and to prevent interference.

[]{#__RefHeading___Toc503676436 .anchor}Analysis

[]{#__RefHeading___Toc503676437 .anchor}Status of Competition

The majority of licenses are currently held by Teligent. The 24 GHz
spectrum used by DEMS has been identified as a potential competitor in
the local exchange telephone market.[^761] Teligent, which recently
completed its initial plan to roll out service in 40 U.S. markets,
provides a bundle of broadband fixed wireless telecommunication services
to small- and medium-sized businesses.

[]{#__RefHeading___Toc503676438 .anchor}Advantages

The current rules provide a clear regulatory framework for the
development of competitive fixed wireless services. The existing
technical and operational rules are necessary for administration of a
radio service at 24 GHz.

[]{#__RefHeading___Toc503676439 .anchor}Disadvantages

The current subpart G rules were written when the primary use of DEMS
was expected to be by businesses requiring internal networks to
distribute documents, share data, and hold teleconferences. Accordingly,
some of the terminology reflects this initial service concept. Mobile
service is not permitted in the 24 GHz band.

[]{#__RefHeading___Toc503676440 .anchor}Recent Efforts

In 1999, the Commission initiated a rulemaking proceeding (WT Docket No.
99-327) to undertake a comprehensive review of use of the 24 GHz band.
In a Report and Order adopted July 25, 2000, the Commission revised Part
101 subpart G to comprehensively regulate operations within the 24 GHz
band. Under the newly adopted changes, the Commission will license the
24 GHz band in 40 MHz channel pairs, provide 24 GHz band licensees more
flexibility in system design, implement a ten-year license term and a
\"substantial service\" requirement at renewal, allow 24 GHz band
licensees to partition and/or disaggregate their licenses, and introduce
flexible technical standards. Existing DEMS licensees are treated as
incumbent licensees subject to the new 24 GHz rules.

[]{#__RefHeading___Toc503676441 .anchor}Initial Recommendation

In light of the Commission's comprehensive review of its 24 GHz rules in
WT Docket No. 99-327, the staff does not recommend modifications to
Subpart G.

[]{#__RefHeading___Toc503676442 .anchor}Comments

TIA proposes a modification of Section 101.139 of the Commission's
Rules, 47 C.F.R. §101.139, to allow equipment self-verification in the
DEMS bands.[^762]

[]{#__RefHeading___Toc503676443 .anchor}Recommendation

See initial recommendation. TIA's proposal is embodied in the Part 101
NPRM,[^763] and staff believes that its proposal is best addressed
within that pending rulemaking proceeding.

[]{#__RefHeading___Toc503676444 .anchor}part 101, Subparts L (Local
Multipoint Distribution Service (LMDS)) and M (Competitive Bidding
Procedures for LMDS)

[]{#__RefHeading___Toc503676445 .anchor}Description

Part 101[^764] contains licensing, technical, and operational rules for
the fixed microwave radio services. Local Multipoint Distribution
Service (LMDS) systems are fixed point-to-point or point-to-multipoint
radio systems that consist of hub and subscriber stations. LMDS
licensees may provide a variety of services, including high-speed data
and Internet services and multi-channel video programming
distribution.[^765]

Subpart L contains licensing, technical, and operational rules for LMDS.
In general, the rules in this part: (1) provide eligibility restrictions
in this service; (2) define the service area of LMDS licenses; (3)
specify the permissible operations for authorized systems; (3) specify
the frequencies available to LMDS licensees; (4) establish license
terms; (5) establish the minimum construction or coverage requirements
for LMDS licensees; and (6) define system operations and permissible
communication services.

Subpart M contains competitive bidding rules and procedures for
commercial licenses in LMDS. In particular, the rules, on a
service-specific basis: (1) provide competitive bidding mechanisms and
design options; (2) establish application, disclosure and certification
procedures for short- and long-form applications; (3) specify down
payment, unjust enrichment, withdrawal and default mechanisms; (4)
provide definitions of gross revenues for designated entities and
specify the bidding credits for which designated entities qualify; and
(5) provide eligibility and technical requirements for partitioning and
disaggregation.

[]{#__RefHeading___Toc503676446 .anchor}Purpose

The purpose of the Part 101 rules is to establish rules for assignment
of spectrum for private operational, common carrier, and LMDS fixed
microwave operations that require operating facilities on land or in
specified offshore coastal areas. Subpart L contains the basic licensing
and operational rules for LMDS. Subpart M helps to ensure access to new
telecommunications offerings by ensuring that all customer segments are
served, that there is not an excessive concentration of licenses, and
that small businesses, rural telephone companies, and businesses owned
by women and minorities will have genuine opportunities to participate
in the provision of service.

[]{#__RefHeading___Toc503676447 .anchor}Analysis

[]{#__RefHeading___Toc503676448 .anchor}Status of Competition

LMDS is a "nascent market."[^766] The initial LMDS operator,
Cellularvision, no longer provides multi-channel video programming
distribution services, and has announced plans to offer high-speed data
access on a portion of its original spectrum. The remaining licenses
were issued by auctions held in March 1998 and April and May 1999.
Accordingly, LMDS equipment is still subject to limited availability and
the majority of licensees are still developing their systems.[^767] LMDS
will most likely compete with wireless and wireline broadband service
providers targeting small and medium businesses.[^768]

[]{#__RefHeading___Toc503676449 .anchor}Advantages

The Subpart L rules provide licensees with broad flexibility to identify
and implement services in response to market demand. The Commission
recently allowed LMDS eligibility restrictions for incumbent local
exchange carrier and cable companies to sunset;[^769] this development
should provide access to additional capital to develop LMDS fully, make
administration of LMDS consistent with other competitive services, and
aid the development of LMDS in rural markets.[^770]

The Subpart M competitive bidding rules, in conjunction with our
spectrum allocation rules, promote economic growth and enhance access to
telecommunications service offerings for consumers, producers, and new
entrants. The competitive bidding rules of Subpart M were structured to
promote opportunity and competition. This has resulted in the rapid
implementation of new and innovative services and the efficient use of
spectrum use, thereby fostering economic growth. In contrast to
lotteries and comparative hearings, auctions are faster, more efficient,
and more likely to get spectrum to entities that value it the most.
Through these rules, the Commission has recovered a portion of the value
of the public spectrum.

[]{#__RefHeading___Toc503676450 .anchor}Disadvantages

There are no discernable disadvantages to the LMDS rules. The existing
rules consist of technical and operational rules that are necessary for
administration of the service.

The Subpart M competitive bidding rules have no significant
disadvantages. The auction rules in this subpart impose certain
transaction costs on auction participants (aside from the obligation on
the winning bidder to pay the amount bid). These auction-related costs
may be somewhat higher than the cost of filing a lottery application.
However, they also tend to discourage frivolous or speculative
applications and are critical for ensuring the integrity of the auction
process. In addition, certain aspects of the auctions process (*e.g.*,
setting of minimum opening bid amounts, bid increments, and bidding
credit levels) still require service-specific notice and comment prior
to each individual auction. Nonetheless, the delays associated with
auctions are significantly less than those associated with other
licensing mechanisms.

[]{#__RefHeading___Toc503676451 .anchor}Recent Efforts

The June 23, 2000, *LMDS Third R&O* allowed the cross-ownership
restriction to expire on June 30. The decision to allow the
cross-ownership rule to sunset was based on a thorough analysis of
competitive issues and the LMDS market.

The Commission has made significant changes to the competitive bidding
rules of Part 1 Subpart Q. In the *Part 1 Third Report and Order*,[^771]
the Commission made substantive amendments and modifications to the
competitive bidding rules for all auctionable services. These changes to
the competitive bidding rules are intended to streamline regulations and
eliminate unnecessary rules wherever possible, increase the efficiency
of the competitive bidding process, and provide more specific guidance
to auction participants. The changes also advance our auction program by
reducing the burden on the Commission and the public of conducting
service-by-service auction rule makings, such as those rule makings that
created the competitive bidding rules of Subpart M.

[]{#__RefHeading___Toc503676452 .anchor}Initial Recommendation

The staff recommends that no substantive changes be made to this subpart
at this time. Certain nonsubstantive revisions could be made to the LMDS
rules for the purposes of simplification and to provide clarity to
licensees and applicants.[^772] The staff also concludes that
substantive modification of the Subpart M competitive bidding rules is
not necessary at this time. To the extent that future auctions are
necessary in LMDS, the staff recommends that they be governed by Part 1,
and that consideration be given to eliminating or phasing out the
separate rules in this subpart to the extent they are redundant.

[]{#__RefHeading___Toc503676453 .anchor}Comments

TIA proposes a modification of Section 101.139 of the Commission's
Rules, 47 C.F.R. §101.139, to allow equipment self-verification in the
LMDS bands.[^773] TIA also proposes technical modifications to the LMDS
rules.[^774]

[]{#__RefHeading___Toc503676454 .anchor}Recommendation

Unchanged. The issues TIA raises are being considered as part of the
Part 101 NPRM,[^775] and staff believes that TIA's proposals are best
addressed within that pending rulemaking proceeding.

[^1]: 47 U.S.C. § 161; Telecommunications Act of 1996, Pub. Law No.
    104-104, § 202, 110 Stat. 56 (1996).

[^2]: 1996 Act, introductory statement.

[^3]: *See* Joint Managers' Statement, S. Conf. Rep. No. 104-230, 104th
    Cong., 2d Sess. 113 (1996) at 1 (stating that the 1996 Act would
    establish a "pro-competitive, deregulatory national policy
    framework").

[^4]: 47 U.S.C. § 161; 1996 Act, § 202(h).

[^5]: "Telecommunications service" is "the offering of
    telecommunications for a fee directly to the public or to such
    classes of users as to be effectively available to the public...."
    47 U.S.C. § 153(46).

[^6]: Congress also directed the Commission to forbear from applying its
    regulations or provisions of the Communications Act to a
    telecommunications carrier or telecommunications service, or class
    of telecommunications carriers or telecommunications services, if,
    *inter alia*, the enforcement of such regulation or provision is not
    necessary for the protection of consumers and if forbearance is
    consistent with the public interest. 47 U.S.C. § 160(a). In
    determining whether forbearance is consistent with the public
    interest, the Commission must consider whether forbearance would
    enhance competition among telecommunications service providers. 47
    U.S.C. § 160(b).

[^7]: 47 C.F.R. § 1.3.

[^8]: 47 U.S.C. § 161.

[^9]: *See* Appendix I for a listing of the completed and ongoing
    proceedings that were initiated as a result of the 1998 Biennial
    Regulatory Review.

[^10]: This includes consideration of how adroitly, precisely, and
    cost-effectively the rule addresses the problem at issue.

[^11]: This includes consideration of whether the rule is over- or
    under-inclusive in its scope, and whether compliance imposes
    unnecessary costs.

[^12]: For a broad discussion of the causes of market failure *see* A.
    Mas-Colell, M.D. Whinston, and J. R. Green,
    [Microeconomic]{.smallcaps} T[heory, (1995),]{.smallcaps} Chapters
    11-14.

[^13]: *See* Appendix I.

[^14]: *See generally* 47 U.S.C. § 161.

[^15]: Telecommunications @ the Millennium, at 17 (rel. Feb. 8, 2000).

[^16]: *Id*. at 18.

[^17]: *Id*. These data include independent competitive LECs and the
    local exchange operations of large long distance carriers. *Id*. at
    17-18.

[^18]: *Id*. at 18.

[^19]: *Id*. at 22.

[^20]: Local Telephone Competition at the New Millennium, CCB (rel. Aug.
    2000) (summarizing Dec. 31, 1999 data from FCC Forms 477 and 499-A).

[^21]: Development of Competition in Local Telephone Markets, at 4 (rel.
    Jan. 2000).

[^22]: *Id*. at 6.

[^23]: *Id*.

[^24]: Telecommunications @ the Millennium, at 3.

[^25]: *2000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations, Notice of Proposed Rulemaking,* 15 FCC Rcd
    10525, 10529 (2000) (*Part 68 NPRM*).

[^26]: The 1998 Biennial Regulatory Review common carrier proceedings
    include: (1) *1998 Biennial Regulatory Review -- Review of
    Accounting and Cost Allocation Requirements, USTA Petition for
    Rulemaking*, CC Docket No 98-81; (2) *1998 Biennial Regulatory
    Review - Review of ARMIS Reporting Requirements*, CC Docket No.
    98-117; (3) *1998 Biennial Regulatory Review -- Testing New
    Technology,* CC Docket No. 98-94; (4) *1998 Biennial Regulatory
    Review -- Repeal of Part 62 of the Commission's Rules*, CC Docket
    No. 98-195; (5) *Policy and Rules Concerning the Interstate,
    Interexchange Marketplace/Implementation of Section 254(g) of the
    Communications Act of 1934*, CC Docket No. 98-183; (6) *1998
    Biennial Regulatory Review - Petition for Section 11 Biennial
    Regulatory Review filed by SBC Communications*, CC Docket No.
    98-177; (7) *1998 Biennial Regulatory Review -- Streamlined
    Contributor Reporting Requirements Associated with Administration of
    Telecommunications Services, North American Numbering Plan, Local
    Number Portability, and Universal Service Support Mechanisms*, CC
    Docket No. 98-171; (8) *1998 Biennial Regulatory Review --
    Modifications to Signal Power Limitations Contained in Part 68 of
    the Commission's Rules*, CC Docket No. 98-163; (9) *1998 Biennial
    Regulatory Review -- Review of Depreciation Requirements for
    Incumbent Local Exchange Carriers*, CC Docket No. 98-137; (10) *1998
    Biennial Regulatory Review - Part 61 of the Commission's Rules and
    Related Tariffing Requirements*, CC Docket No. 98-131; (11) *1998
    Biennial Regulatory Review -- Elimination of Part 41 Telegraph and
    Telephone Franks*, CC Docket No. 98-119; and (12) *1998 Biennial
    Regulatory Review - Review of Computer III and ONA Safeguards*, CC
    Docket No. 98-10. Most of these proceedings have already been
    completed. The procedural status of each of these proceedings is
    provided in Appendix II.

[^27]: Common Carrier Bureau Announces Initiative to Undertake
    Comprehensive Review of Part 32 and ARMIS Requirements, *Public
    Notice,* 14 FCC Rcd 6345 (1999).

[^28]: *Id*. at 6346.

[^29]: *Id.*

[^30]: *Comprehensive Review of the Accounting Requirements and ARMIS
    Reporting Requirements for Incumbent Local Exchange Carriers: Phase
    1* (*Phase 1 Order*), *Report and Order*, CC Docket No. 99-253, FCC
    00-78, Mar. 8, 2000.

[^31]: *Phase 1 Order*, FCC 00-78 at 4.

[^32]: *2000 Biennial Regulatory Review \-- Comprehensive Review of the
    Accounting Requirements and ARMIS Reporting Requirements for
    Incumbent Local Exchange Carriers: Phase 2 and Phase 3*, CC Docket
    No. 00-199, FCC 00-364 (rel. Oct. 18, 2000).

[^33]: *2000 Biennial Regulatory Review -- Telecommunications Service
    Quality Reporting Requirements, Notice of Proposed Rulemaking*, CC
    Docket No. 00-229, FCC 00-399 (rel. Nov. 9, 2000).

[^34]: *Jurisdictional Separations Reform and Referral to the
    Federal-State Joint Board*, *Notice of Proposed Rulemaking,* 12 FCC
    Rcd 22120 (1997) (*Separations Reform Notice*).

[^35]: *Separations Reform Notice*, 12 FCC Rcd at 22139.

[^36]: *Id*. at 22124.

[^37]: *Jurisdictional Separations Reform and Referral to the
    Federal-State Joint Board*, CC Docket No. 80-286, *Recommended
    Decision*, FCC 00-2 (rel. July 21, 2000). The Commission sought
    comment on the Joint Board Recommendation. *Comment Sought on
    Recommended Decision Issued by Federal-State Joint Board on
    Jurisdictional Separations*, CC Docket No. 80-286, DA 00-1865 (Aug.
    15, 2000).

[^38]: The Commission's rules define CPE as equipment employed on the
    premises of a person other than a carrier to originate, route or
    terminate telecommunications. 47 C.F.R. §153(14).

[^39]: The Commission's Part 68 rules are designed to ensure that
    equipment directly connected to the public switched network will
    not: (1) result in electrical hazards to telephone company
    personnel; (2) damage telephone company equipment; (3) cause the
    malfunction of telephone company billing equipment; or (4) degrade
    service to persons other than the user of the equipment involved,
    persons the equipment user calls, or those who call the user. 47
    C.F.R. § 68.3. Equipment manufacturers are not required to comply
    with the technical standards in Part 68, but CPE that is not
    certified as meeting these standards cannot be directly connected to
    the public switched network and have limited marketability. The U.S.
    Customs Service also prohibits the importation of terminal equipment
    that is not registered pursuant to Part 68. *See* 19 U.S.C. § 3109.

[^40]: CPE can now be certified as complying with the Part 68
    requirements by private Telecommunications Certification Bodies as
    well as the Commission. 47 C.F.R. § 160.

[^41]: *2000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations, Notice of Proposed Rulemaking*, 15 FCC Rcd
    10525, 10528 (2000) (*Part 68 NPRM*).

[^42]: 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,
    *Public Notice,* DA 99-1108, June 10, 1999.

[^43]: *Part 68 NPRM,* 15 FCC Rcd at 10532-34.

[^44]: *2000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations, Order*, FCC 00-400 (rel. Dec. 21, 2000).

[^45]: *Federal-State Joint Board on Universal Service*, Rural Task
    Force Recommendation to the Federal-State Joint Board on Universal
    Service, CC Docket No. 96-45 (rel. Sept. 29, 2000).

[^46]: *Federal-State Joint Board on Universal Service Seeks Comment on
    Rural Task Force Recommendation*, *Public Notice,* CC Docket No.
    96-45, FCC 00J-3 (rel. Oct. 4, 2000).

[^47]: *Petitions for Waiver and Reconsideration Concerning Sections
    36.611, 36.612, 61.41(c)(2), 69.605( c), 69.3(e)(11) and the
    Definition of "Study Area" Contained in Part 36 Appendix -- Glossary
    of the Commission's Rules Filed by Copper Valley Telephone, Inc., et
    al,* *Memorandum Opinion and Order on Reconsideration,* AAD Docket
    No. 93-93, DA 1845 (rel. Sept. 9, 1999).

[^48]: *Petitions for Waiver Concerning the Definition of "Study Area"
    Contained in Part 36 Appendix-Glossary of the Commission's Rules,
    Accent Communications, Inc., et al., Order*, CC Docket No. 96-45, DA
    00-176 (rel. Aug. 4, 2000).

[^49]: *Improved Regulation of Interstate Services of Non-Price Cap
    Incumbent Local Exchange Carriers and Interexchange Carriers*,
    *Notice of Proposed Rulemaking*, CC Docket No. 00-256, FCC 00-448
    (rel. Jan. 5, 2001).

[^50]: This exemption was originally adopted by the Commission in 1983.
    *MTS and WATS Market Structure*, 97 FCC 2d 682, 711 (1983), *aff'd
    sub nom. National Ass'n of Reg. Util. Commissioners v. FCC,* 737
    F.2d 1095, 1136-37 (D.C. Cir. 1984), *cert. denied*, 469 U.S. 1227
    (1985). The Commission reaffirmed this exemption in 1988 and 1997.
    *Amendments of Part 69 of the Commission's Rules Relating to
    Enhanced Service Providers*, 3 FCC Rcd 2631, 2633 (1988); *Access
    Charge Reform*, 12 FCC Rcd 15982, 16133-34, *aff'd sub nom.
    Southwestern Bell v. FCC*, 153 F.3d 523, 542 (8^th^ Cir. 1998).

[^51]: FCC Reduces Access Charges by \$3.2 Billion; Reductions Total
    \$6.4 Billion Since 1996 Telecommunications Act (CC Docket Nos.
    96-262, 94-1, 99-249, and 96-45), *FCC News*, May 31, 2000, at 1.

[^52]: *Id.*

[^53]: *Access Charge Reform, Price Cap Performance Review for Local
    Exchange Carriers, Low-Volume Long Distance Users, Federal-State
    Joint Board on Universal Service,* *Sixth Report and Order* in CC
    Dockets Nos. 96-262 and 94-1, *Report and Order* in CC Docket No.
    99-249, *Eleventh Report and Order* in CC Docket No. 96-45, 15 FCC
    Rcd 12962 (2000)(*CALLS Order*).

[^54]: Such a proceeding would potentially affect provisions of Parts
    51, 61, and 69.

[^55]: *See* ITTA Comments at 8-9.

[^56]: Petition for Rulemaking of the United States Telephone
    Association, filed Aug. 11, 1999. The Cincinnati Bell Telephone
    Company, Roseville Telephone Company and SBC Communications filed
    comments in response to the USTA petition. The Bell Atlantic
    Telephone Company, MCI WorldCom, and USTA filed replies.

[^57]: *CALLS Order*, 15 FCC Rcd 12962.

[^58]: Major fora include the World Radio Conference and the
    International Telecommunication Union (ITU), at which the Bureau
    represents the Commission in matters such as spectrum planning,
    terrestrial and satellite issues, standards, and broadcasting.

[^59]: 47 C.F.R. Parts 25 and 100.

[^60]: *See* *Streamlining the Commission's Rules and Regulations for
    Satellite Application and Licensing Procedures*, *Report and Order,*
    11 FCC Rcd 21581 (1996) (*1996 Satellite Streamlining Order*).

[^61]: *Amendment to the Commission's Regulatory Policies Governing
    Domestic Fixed Satellites and Separate International Satellite
    Systems, and DBS Petition for Declaratory Rulemaking Regarding the
    Use of Transponders to provide International DBS Service*, *Report
    and Order*, 11 FCC Rcd 2429, 2430 (1996) (*DISCO I*).

[^62]: *Amendment of the Commission's Regulatory Policies to Allow
    Non-U.S.-Licensed Space Stations to Provide Domestic and
    International Satellite Service in the United States*, *Report and
    Order*, 12 FCC Rcd 24094 (1997) (*DISCO II*), *recon.*, 15 FCC Rcd
    7202 (1999) (*DISCO II First Reconsideration Order*).

[^63]: *Policies and Rules for the Direct Broadcast Satellite Service*,
    IB Docket No. 98021, *Notice of Proposed Rulemaking*, 13 FCC Rcd
    6907 (1998).

[^64]: Within the ITU, Member States (Administrations/Governments) and
    Sector Members (private entities) cooperate to maintain and extend
    telecommunications globally.

[^65]: *See* *Commission Launches Earth Station Streamlining
    Initiative*, *Public Notice,* DA 99-1259 (June 25, 1999).

[^66]: Emission designators are a shorthand method used to define the
    frequency bandwidth and the modulation technique and type of service
    or combination of services.

[^67]: *See* *1996 Satellite Streamlining Order*, 11 FCC Rcd at
    21594-96.

[^68]: *See* International Bureau to Streamline Satellite and Earth
    Station Processing, *Public Notice*, Report No. SPB-140 (rel. Oct.
    28, 1998). Furthermore, the Commission recently proposed rules to
    streamline the coordination process between satellite and
    terrestrial services in shared frequency bands. *See* FWLL *Request
    for Declaratory Ruling*, IB Docket No. 00-263, *OnSat* *Petition for
    Declaratory Order*, SAT-PDR-19990910-0091, *Notice of Proposed Rule
    Making*, FCC 00-369 (rel. Oct. 24, 2000).

[^69]: *See Streamlining the International Section 214 Authorization
    Process and Tariff Requirements*, *Report and Order*, 11 FCC Rcd
    12884 (1996). The Commission had begun the international Section 214
    streamlining process in 1985. *See International Competitive Carrier
    Policies*, *Report and Order*, 102 FCC 2d 812 (1985); *recon.*
    *denied*, 60 RR2d 1435 (1986); *modified*, *Regulation of
    International Common Carrier Services*, *Report and Order*, 7 FCC
    Rcd 7331 (1992).

[^70]: *See 1998 Biennial Regulatory Review-Review of International
    Common Carrier Regulations*, *Report and Order*, 14 FCC Rcd 4909
    (1999) (*1998 International Common Carrier Biennial Regulatory
    Review Order*), *recon. pending*.

[^71]: *See Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market, Report and Order and Order on
    Reconsideration*, 12 FCC Rcd 23 891 (1997) (*Foreign Participation
    Order*), *recon.* 15 FCC Rcd 18158 (2000).

[^72]: *Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market*, IB Docket 97-142, *Order on
    Reconsideration*, 15 FCC Rcd 18158 (2000) (*Foreign Participation
    Reconsideration Order*).

[^73]: *Id.*

[^74]: *See 1998 Biennial Regulatory Review: Reform of the International
    Settlements Policy and Associated Filing Requirements* (Phase II),
    *Report and Order and Order on Reconsideration*, 14 FCC Rcd 7963
    (1999) (*ISP Reform Order*).

[^75]: *See International Settlement Rates, Report and Order,* 12 FCC
    Rcd 19806 (1997) (*Benchmarks Order*), *aff'd sub nom. Cable and
    Wireless P.L.C. v. FCC*, 166 F.3d 1224 (D.C. Cir. 1999), *Report and
    Order on Reconsideration and Order Lifting Stay,* 14 FCC Rcd 9256
    (1999) (*Benchmarks Reconsideration Order*).

[^76]: 2000 Biennial Regulatory Review -- Streamlining and Other
    Revisions of the Part 25 of the Commission's Rules Governing the
    Licensing of, and Spectrum Usage by, Satellite Network Earth
    Stations and Space Stations, IB Docket No 00-248, Notice of Proposed
    Rulemaking, FCC 00-435 (rel. Dec. 14, 2000).

[^77]: Where two or more applicants seek licenses for more spectrum than
    is available, the applications are considered to be mutually
    exclusive. *See Ashbacker v. FCC*, 326 U.S. 327 (1945). Under
    *Ashbacker,* where such mutual exclusivity exists, the Commission
    must conduct a hearing to resolve the conflicting requests.

[^78]: 47 C.F.R. § 25.141. The Commission reallocated
    radio-determination satellite service (RDSS) spectrum to the Mobile
    Satellite Service (MSS). Therefore, it appears that the RDSS rules
    in section 25.141 no longer serve any purpose.

[^79]: 47 C.F.R. Subpart H. Subpart H is intended to govern the
    administration of Section 304 of the Communications Satellite Act of
    1962. The ORBIT Act recently signed into law states that Section 304
    of the Communications Satellite Act will cease to be effective. Any
    rule established to administer Section 304 therefore also should be
    eliminated.

[^80]: 47 C.F.R. § 25.140.

[^81]: 47 C.F.R. § 25.144.

[^82]: 47 C.F.R. § 25.140.

[^83]: *Policies and Rules for the Direct Broadcast Satellite Service* ,
    IB Docket No. 98-21, *Notice of Proposed Rule Making*, 13 FCC Rcd
    6907 (1998).

[^84]: *2000 Biennial Regulatory Review, Amendment of Parts 43 and 63 of
    the Commission's Rules,* IB Docket 00-231, *Notice Of Proposed Rule
    Making*, FCC 00-407 (rel. Nov. 30, 2000).

[^85]: *See* International Bureau to Hold Public Forum on Submarine
    Cable Landing Licenses, *Public Notice*, DA 99-2148, Oct. 8, 1999.

[^86]: *See Review of Commission Consideration of Applications under the
    Cable Landing License Act*, *Notice of Proposed Rulemaking*, 15 FCC
    Rcd 20789 (2000).

[^87]: *2000 Biennial Regulatory Review, Amendment of Parts 43 and 63 of
    the Commission's Rules*, IB Docket 00-231, *Notice Of Proposed Rule
    Making*, FCC 00-407 (rel. Nov. 30, 2000).

[^88]: International broadcast stations operate on frequencies between
    5950 and 26100 kHz. 47 C.F.R. § 73.701(a). There are both government
    and non-government international broadcasting stations, and only the
    latter are licensed by the Commission. *Id*.

[^89]: *See* 47 C.F.R. §§ 73.701-73.788.

[^90]: *See* 47 C.F.R. §§ 73.701-73.788.

[^91]: 47 C.F.R. § 73.701(g) - (j) and (l).

[^92]: 47 C.F.R. § 73.702(f)(1).

[^93]: The Final Acts of WRAC '92 set January 1, 1996 as the effective
    implementation date for exclusive use by international broadcasting
    of the following additional frequency bands: 9775-9900 kHz,
    11650-11700 kHz, 11975-12050 kHz, 13600-13800 kHz, 15450-15600 kHz,
    17550-17700 kHz and 21750-21850 kHz.

[^94]: 47 C.F.R. § 73.703.

[^95]: 47 C.F.R. § 73.756(c).

[^96]: Appendix 2 of the ITU Radio Regulations requires international
    broadcasting station transmitters to meet a frequency control
    tolerance of 10 Hz for transmitters using double sideband operation.

[^97]: 47 C.F.R. § 73.766.

[^98]: *See* *In the Matter of Policy and Rules Concerning the
    Interstate Interexchange Marketplace; Implementation of Section
    254(g) of the Communications Act of 1934, as amended,* *Report and
    Order*, 11 FCC Rcd 9564 (1996); *Second Report and Order*, 11 FCC
    Rcd 20730 (1996), *stay granted*, *MCI Telecommunications Corp. v.
    FCC*, No. 96-1459 (D.C. Cir. Feb. 13, 1997); *Order on
    Reconsideration*, 12 FCC Rcd 15014 (1997); *Second Order on
    Reconsideration and Erratum*, 14 FCC Rcd 6004 (1999); *stay lifted
    and aff\'d, MCI WorldCom, Inc., et al. v. FCC*, 209 F3d 760 (D.C.
    Cir. 2000).

[^99]: *2000 Biennial Regulatory Review; Policy and Rules Concerning the
    International Interexchange Marketplace*, IB Docket No. 00-202,
    *Notice of Propose Rule Making*, 15 FCC Rcd 20008
    (2000)(International Detariffing NPRM).

[^100]: 47 U.S.C. § 208.

[^101]: *See* 47 C.F.R. § 63.10.

[^102]: *International Detariffing NPRM* at 32-40.

[^103]: Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66,
    107 Stat. 312. *See* 47 U.S.C. § 309(j).

[^104]: *See* http://www.fcc.gov/wtb/auctions.

[^105]: *See Fourth Annual Report and Analysis of Competitive Market
    Conditions With Respect to Commercial Mobile Services*, 14 FCC Rcd
    10145 (1999). *See also Implementation of Section 6002(b) of the
    Omnibus Budget Reconciliation Act of 1993, Annual Report and
    Analysis of Competitive Market Conditions With Respect to Commercial
    Mobile Services*, FCC 00-289 (adopted Aug. 3, 2000) (*Fifth
    Competition Report*).

[^106]: *Implementation of Sections 3(n) and 332 of the Communications
    Act*, *Second Report and Order*, 9 FCC Rcd 1411 (1994).

[^107]: *Amendment of the Commission's Rules to Permit Flexible Service
    Offerings in the Commercial Mobile Radio Services*, *First Report
    and Order*, 11 FCC Rcd 8965 (1996).

[^108]: *Biennial Regulatory Review -- Amendment of Parts 0, 1, 13, 22,
    24, 26, 27, 80, 87, 90, 95, 97 and 101 of the Commission's Rules to
    Facilitate the Development and Use of the Universal Licensing System
    in the Wireless Telecommunications Services*, *Notice of Proposed
    Rulemaking*, 13 FCC Rcd 9672 (1998); *Report and Order*, 13 FCC Rcd
    21027 (1998); *Memorandum Opinion and Order on Reconsideration*, 14
    FCC Rcd 11145 (1998).

[^109]: *1998 Biennial Regulatory Review -- 47 C.F.R. Part 90 -- Private
    Land Mobile Radio Services*, *Notice of Proposed Rulemaking*, 13 FCC
    Rcd 21133 (1998); *Report and Order*, FCC 00-235 (rel. July 12,
    2000).

[^110]: *1998 Biennial Regulatory Review -- Amendment of Part 97 of the
    Commission's Amateur Service Rules*, *Notice of Proposed
    Rulemaking,* 13 FCC Rcd 15798 (1998); *Report and Order*, 15 FCC Rcd
    315 (1999).

[^111]: *Federal Communications Bar Association's Petition for
    Forbearance from Section 310(d) of the Communications Act Regarding
    Non-Substantial Assignments of Wireless Licenses and Transfers of
    Control Involving Telecommunications Carriers*, *Memorandum Opinion
    and Order*, 13 FCC Rcd 6293 (1998).

[^112]: *Cellular Telecommunications Industry Association's Petition for
    Forbearance from Commercial Mobile Radio Services Number Portability
    Obligations*, *Memorandum Opinion and Order*, 14 FCC Rcd 3092
    (1999), *recon.,* 15 FCC Rcd 4727 (2000).

[^113]: *In the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of
    the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency
    Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish
    Rules and Policies for Local Multipoint Distribution Service and for
    Fixed Satellite Services*, CC Docket No. 92-237, *Third Report and
    Order and Memorandum Opinion and Order*, FCC 00-223 (rel. June 27,
    2000).

[^114]: *See* 47 C.F.R. § 22.900 *et seq.*

[^115]: 47 C.F.R. § 20.6.

[^116]: *Implementation of Sections 3(n) and 332 of the Communications
    Act*, *Third Report and Order*, 9 FCC Rcd 7988 (1994).

[^117]: *1998 Biennial Regulatory Review -- Spectrum Aggregation Limits
    for Wireless Telecommunications Carriers, Cellular
    Telecommunications Industry Association's Petition for Forbearance
    From the 45 MHz CMRS Spectrum Cap*, *Report and Order*, 15 FCC Rcd
    9219 (1999) (*Spectrum Cap Report and Order*). *See also* WT Docket
    No. 98-205, *Memorandum Opinion and Order on Reconsideration* (rel.
    Nov. 8, 2000).

[^118]: 47 C.F.R. §22.942.

[^119]: *U.S. Television Household Estimates*, Nielsen Media Research,
    Sept. 2000.

[^120]: Nielsen Media Research, *Television Audience 1996*, 1997.

[^121]: *Annual Assessment of the Status of Competition in Markets for
    the Delivery of Video Programming*, 15 FCC Rcd 978 (2000), at
    Appendix B.

[^122]: *Id*. at Table B-4.

[^123]: These station counts include all in-market stations and selected
    out-of-market stations listed in BIA's "Investing in Radio," 2000
    Market Report, 1^st^ Edition, Table 2.

[^124]: A radio station is generally considered part of a group if the
    owner has more than 2 stations.

[^125]: *See Review of the Commission's Regulations Governing Television
    Broadcasting, Television Satellite Stations Review of Policy and
    Rules*, *Further Notice of Proposed Rulemaking*, 10 FCC Rcd 3535
    (1995).

[^126]: We have previously observed that our ownership rules seek to
    foster "outlet" and "source" diversity as a means of promoting a
    diversity of viewpoints. *In the Matter of Review of the
    Commission's Regulations Governing Television Broadcasting,*
    *Further Notice of Proposed Rulemaking*, 10 FCC Rcd 3524, 3549-50,
    ¶¶ 60-61 (1995). "Outlet" diversity "refers to a variety of delivery
    services (*e.g*.*,* broadcast stations) that select and present
    programming directly to the public." "Source" diversity refers to "a
    variety of program producers and owners." 10 FCC Rcd at 3549-50, ¶
    61. Both outlet and source diversity are "integral to the ultimate
    goal of providing the public with a variety of viewpoints....The
    Commission has felt that without a diversity of outlets, there would
    be no real viewpoint diversity -- if all programming passed through
    the same filter, the material and views presented to the public
    would not be diverse. Similarly, the Commission has felt that
    without diversity of sources, the variety of views would necessarily
    be circumscribed." *Id*.

[^127]: *Turner Broadcasting System, Inc. v. FCC*, 512 U.S. 622, 663
    (1994) (*Turner I*) (quoting *United States v*. *Midwest Video
    Corp*., 406 U.S. 649, 668 n.27 (1972) (plurality opinion) (quoting
    *Associated Press v. United States*, 326 U.S. 1, 20 (1945)).

[^128]: This "marketplace of ideas" metaphor was first articulated by
    Justice Holmes. *See* *Abrams v. United States*, 250 U.S. 616, 630
    (1919) (Holmes, J., dissenting).

[^129]: *New York Times v. Sullivan*, 376 U.S. 254, 270 (1964).

[^130]: *Turner I*, 512 U.S. at 663.

[^131]: According to a recent survey, almost 70 percent of adults said
    they get most of their news from television -- almost twice the
    number that list newspapers as their main news source. *See*
    "America's Watching," March/April, 1997, Roper Starch Worldwide,
    Inc.

[^132]: Congress promotes diversity separate and apart from competition.
    For example, Section 202(b) of the 1996 Act, which set forth new
    ownership limitations, is titled "Local Radio *Diversity*." Pub. Law
    No. 104-104, 110 Stat. 56, 110 (1996) (emphasis added). Moreover, in
    discussing the radio-television cross-ownership rule, the Conference
    Report to the 1996 Act noted "the potential for public interest
    benefits of \[radio-television station combinations\] *when bedrock
    diversity interest\[s\] are not threatened*," and further stated
    that in reviewing this rule the FCC should take into account not
    only the increased competition facing broadcasters but also "the
    need for diversity in today's radio marketplace." S. Conf. Rep.
    104-230, 104^th^ Cong. 2d Sess. 163 (1996) (emphasis added).

[^133]: For example, the 1996 Act directs the Commission, in Section
    257, in identifying and eliminating market entry barriers for
    entrepreneurs and other small businesses in certain services, "to
    promote the policies and purposes of this Act favoring diversity of
    media voices." 47 U.S.C. § 257(b). Likewise, the Cable Competition
    and Consumer Protection Act of 1992 sought to "ensure that cable
    television operators do not have undue market power," and "promote
    the availability to the public of a diversity of views and
    information." Cable Television Consumer Protection and Competition
    Act of 1992, Pub. Law No. 102-385, § 2(b) (1992), 106 Stat. 1460.

[^134]: *In the Matter of Review of the Commission's Regulations
    Governing Television Broadcasting; and Television Satellite Stations
    Review of Policy and Rules*, *Report and Order*, 14 FCC Rcd 12903
    (1999) (*1999 Local Television Ownership Report and Order*).

[^135]: *In the Matter of Broadcast Television National Ownership Rules;
    Review of the Commission's Regulations Governing Television
    Broadcasting; and Television Satellite Stations Review of Policy and
    Rules*, MM Docket Nos. 96-222, 91-221, and 87-8, *Report and Order*,
    15 FCC Rcd 20743 (1999) (*1999 National Television Ownership Report
    and Order*).

[^136]: *In the Matter of 1998 Biennial Regulatory Review -- Review of
    the Commission's Broadcast Ownership Rules and Other Rules Adopted
    Pursuant to Section 202 of the Telecommunications Act of 1996*, MM
    Docket No. 98-35, *Biennial Regulatory Review Report*, 15 FCC Rcd
    11508 (2000)(*1998 Biennial Regulatory Review Report*).

[^137]: 47 C.F.R. § 73.3555(a).

[^138]: *See, e.g., Pine Bluff Radio, Inc.,* *Memorandum Opinion and
    Order*, 14 FCC Rcd 6594 (1999).

[^139]: *In the Matter of Definition of Radio Markets*, MM Docket No.
    00-244, FCC 00-427 (adopted Dec. 6, 2000).

[^140]: 47 C.F.R. § 73.3555(b).

[^141]: *1999 Local Television Ownership Report and Order*, 14 FCC Rcd
    at 12933, para. 65.

[^142]: 47 C.F.R. § 73.3555(c).

[^143]: *1999 Local Television Ownership Report and Order*, 14 FCC Rcd
    at 12955-57, ¶¶ 119-22. The five factors were: (1) the potential
    public service benefits of common ownership of the facilities, such
    as economies of scale, cost savings, and programming benefits; (2)
    the types of facilities involved; (3) the number of media outlets
    already owned by the applicant in the relevant market; (4) any
    financial difficulties involving the station(s); and (5) issues
    pertaining to the level of diversity and competition within the
    affected market.

[^144]: Waivers of the new rule will be granted only in situations
    involving a failed station, as defined in the Commission's local
    television multiple ownership rules. The waiver applicant must also
    show that the in-market buyer is the only entity willing and able to
    operate the failed station and that the sale to an out-of-market
    buyer would result in an artificially depressed price for the
    station. *1999 Local Television Ownership Report and Order*, 14 FCC
    Rcd at 12948-49, at para. 101, 12954, at para. 115.

[^145]: *1999 Local Television Ownership Report and Order*, 14 FCC Rcd
    at 12948, at paras. 102-03.

[^146]: 47 C.F.R. § 73.3555(d).

[^147]: On August 23, 1999, the Newspaper Association of America
    (\"NAA\") filed an Emergency Petition for Relief, which argues in
    favor of repeal of the newspaper/broadcast cross-ownership rule. The
    NAA petition was treated as a late-filed comment and accordingly not
    considered in the 1998 Biennial Regulatory Review proceeding.
    However, the petition is included in the record of the proceeding
    that was initiated to seek comment on this staff Report.

[^148]: *In the Matter of Newspaper/Radio Cross-Ownership Waiver
    Policy*, *Notice of Inquiry*, 11 FCC Rcd 13003 (1996)
    (*Newspaper/Radio Cross-Ownership Waiver Policy NOI*).

[^149]: 47 C.F.R. § 73.3555(e)(1).

[^150]: 1996 Act, § 202(c)(1).

[^151]: *National Television Ownership Report and Order*, at ¶ 35.

[^152]: On November 18, 1999, Fox Television Stations, Inc. filed an
    "Emergency Petition for Relief and Supplemental Comments" in the
    1998 Biennial Regulatory Review proceeding seeking, among other
    things, repeal of the national broadcast ownership rule. In
    addition, on November 19, 1999, Viacom, Inc. filed comments in that
    proceeding seeking repeal of the same rule and the dual network
    rule. The Fox and Viacom filings were not considered in the 1998
    Biennial Regulatory Review proceeding because they were untimely
    filed. *1998 Biennial Regulatory Review Report,* n.76. They are
    included, however, in the record of the proceeding that was
    initiated to seek comment on this Staff Report.

[^153]: *1998 Biennial Regulatory Review Report*, at paras. 25-30.

[^154]: 47 C.F.R. § 73.3555(e)(2). Section 73.3555(e)(2) explains that
    "national audience reach" is based on the number of television
    households in DMAs, and that UHF television stations are credited
    with reaching only 50 percent of the television households in the
    DMA.

[^155]: 47 C.F.R. § 73.658(g).

[^156]: *In the Matter of Amendment of Section 73.658(g) of the
    Commission's Rules -- The Dual Network Rule,* MM Docket No. 00-108,
    *Notice of Proposed Rule Making*, 15 FCC Rcd 11253(2000).

[^157]: 47 C.F.R. § 74.134.

[^158]: *In the Matter of Elimination of Experimental Broadcast
    Ownership Restrictions,* MM Docket No. 00-105, *Notice of Proposed
    Rule Making*, 15 FCC Rcd 11196(2000).

[^159]: 47 C.F.R. § 76.501(a).

[^160]: On January 27, 2000, the WB Television Network filed
    Supplemental Comments in the 1998 Biennial Regulatory Review
    proceeding. These comments, untimely filed in the former proceeding,
    are included in the record of this instant proceeding.

[^161]: *In the Matter of Review of the Commission's Regulations
    Governing Attribution of Broadcast and Cable/MDS Interests; Review
    of the Commission's Regulations and Policies Affecting Investment in
    the Broadcast Industry; and Reexamination of the Commission's
    Cross-Interest Policy*, *Report and Order,* 14 FCC Rcd 12559 (1999)
    (*1999 Attribution Report and Order)*.

[^162]: *In the Matter of Review of the Commission's Rules Regarding the
    Main Studio and Local Public Inspection Files of Broadcast
    Television and Radio Stations*, *Report and Order*, 13 FCC Rcd 15691
    (1998), *revised in part on reconsideration*, 14 FCC Rcd 11113
    (1999) (*Main Studio and Public File Rules Report and Order*). *See
    also* 47 C.F.R. §§ 73.1125; 73.3526 and 73.3527.

[^163]: *Memorandum Opinion and Order,* MM Docket Nos. 94-150, 92-51,
    and 87-154, FCC 00-xxx (adopted Dec. 14, 2000).

[^164]: *In the Matter of 1998 Biennial Regulatory Review -- Amendment
    of Parts 73 and 74 Relating to Call Sign Assignments for Broadcast
    Stations*, *Report and Order*, 14 FCC Rcd 1235 (1998) (*Call Sign
    Report and Order*).

[^165]: 47 C.F.R. § 73.3550.

[^166]: 47 C.F.R. § 74.783.

[^167]: Pub. Law No. 105-33, 111 Stat. 251 (1997).

[^168]: *In the Matter of Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding for Commercial Broadcast
    and Instructional Television Fixed Service Licenses; Reexamination
    of the Policy Statement on Comparative Broadcast Hearings; and
    Proposals to Reform the Commission's Comparative Hearing Process to
    Expedite the Resolution of Cases*, *First Report and Order*, 13 FCC
    Rcd 15920 (1998), *on reconsideration*, 14 FCC Rcd 8724, *on further
    reconsideration*, 14 FCC Rcd 12541 (1999).

[^169]: While concluding in the Report and Order that the channels
    reserved for ITFS were not exempt from competitive bidding, the
    Commission announced that, given the instructional nature of the
    ITFS service and the long-standing reservation of the ITFS spectrum
    for noncommercial educational use, it would request Congress to
    clarify whether it intended the Commission's expanded auction
    authority to include ITFS. *First Report and Order,* 13 FCC Rcd at
    15999-16002.

[^170]: *In the Matter of 1998 Biennial Regulatory Review --
    Streamlining of Mass Media Applications, Rules, and Processes;
    Policies and Rules Regarding Minority and Female Ownership of Mass
    Media Facilities,* *Report and Order*, 13 FCC Rcd 23056 (1998), *on
    reconsideration*, 14 FCC Rcd 17525 (1999) (*1998 Nontechnical
    Streamlining Report and Order*).

[^171]: 47 C.F.R. § 73.3597.

[^172]: While copies of sales agreements are no longer required as part
    of the application for assignment or transfer, the documents must
    still be filed for the purpose of making the contracts and
    agreements available to the public in the Commission's public
    reference room.

[^173]: While copies of contour overlap maps are no longer required as
    an exhibit to the application, the maps must still be filed for the
    purpose of making the maps available to the public in the
    Commission's public reference room.

[^174]: 47 C.F.R. § 73.3615.

[^175]: *In the Matter of 1998 Biennial Regulatory Review --
    Streamlining of Radio Technical Rules in Parts 73 and 74 of the
    Commission's Rules, Notice of Proposed Rulemaking and Order*, 13 FCC
    Rcd 14849 (1998) (*Technical Streamlining Notice*).

[^176]: *In the Matter of 1998 Biennial Regulatory Review --
    Streamlining of Radio Technical Rules in Parts 73 and 74 of the
    Commission's Rules*, *First Report and Order*, 14 FCC Rcd 5272
    (1999) (*1999 Technical Streamlining First Report and Order*). The
    proposals upon which the Commission has not yet acted pertain to
    whether the Commission should allow negotiated interference
    agreements between or among FM broadcast stations to accept new or
    increased interference in connection with substantial facilities
    improvements. *Technical Streamlining Notice*, 13 FCC Rcd at
    14857-63, paras. 17-27.

[^177]: 47 C.F.R. §§ 73.3571, 73.3573, and 74.1233.

[^178]: 47 C.F.R. § 73.3517. Two applications are "related" if the grant
    of one is necessary to permit the grant of the second application.
    Thus, the "lead" application in a group typically will not be
    "contingent" on any other application, but nevertheless will be
    counted as a "related" application. *1999 Technical Streamlining
    Report and Order*, 14 FCC Rcd at 5282 n.43.

[^179]: *Second Report and Order on Technical Streamlining*, FCC 00-368,
    (rel. Nov. 1, 2000).

[^180]: 47 U.S.C. § 623(a)(2); 47 C.F.R. § 76.905 (a).

[^181]: 47 C.F.R. § 76.907.

[^182]: *The Satellite Home Improvement Act of 1999* (SHVIA), Title I of
    the Intellectual Property and Communications Omnibus Reform Act of
    1999 (IPACORA), Pub. Law No. 106-113, 113 Stat. 1501.

[^183]: *Id*.

[^184]: 47 U.S.C.§ 533.

[^185]: 47 C.F.R § 76.503.

[^186]: *Time Warner Entertainment Co., L.P. v. United States of
    America*, 211 F.3d 1313 (D.C. Cir. 2000).

[^187]: 47 U.S.C. § 534 (b)(4)(B).

[^188]: *Carriage of the Transmissions of Digital Television Broadcast
    Stations*, *Memorandum Opinion and Order and Notice of Proposed
    Rulemaking,* 13 FCC Rcd 15092 (1998).

[^189]: *Commercial Availability of Competitive Navigation Devices,
    Order on Reconsideration*, 14 FCC Rcd 7596 (1999).

[^190]: *General Instrument Corp. v. FCC*, 213 F.3d 724 (D.C. Cir., June
    6, 2000).

[^191]: *Telecommunications Services Inside Wiring: Customer Premises
    Equipment, and Implementation and Competition Act of 1992: Cable
    Home Wiring*, *Report and Order and Second Notice of Proposed
    Rulemaking,* 13 FCC Rcd 3659 (1997). The Commission is currently
    reviewing the petitions for reconsideration and comments filed in
    this proceeding.

[^192]: 13 FCC Rcd 3680.

[^193]: 13 FCC Rcd at 3778.

[^194]: *Amendment of the Commission's Rules for Implementation of its
    Cable Operations and Licensing System*, CSB Docket 00-78, *Notice of
    Proposed Rule Making*, FCC 00-165, May 23, 2000.

[^195]: The Supreme Court concluded that section 505 of the 1996 Act,
    which provides statutory authority for 47 C.F.R. § 76.227, violates
    the First Amendment.

[^196]: *See* <http://www.fcc.gov/slamming>.

[^197]: *See* <http://www.fcc.gov/marketsense>. This pamphlet is also
    available by contacting the FCC.

[^198]: WorldCom Comments at 2; Alloy Comments at 10.

[^199]: WorldCom Comments at 2 - 3. WorldCom also asks that the
    Commission work to increase the speed at which it notifies carriers
    that an informal complaint has been filed. *Id.*

[^200]: *Telecommunications Relay Services and Speech-to-Speech Services
    for Individuals with Hearing and Speech Disabilities*, *Report and
    Order*, 15 FCC Rcd 5140 (2000).

[^201]: *See* FCC to Convene a Public Forum on Telecommunications Relay
    Services, *Public Notice*, Feb. 18, 2000, at
    http://www.fcc.gov/Bureaus/Consumer_Information/Public_Notices/2000/pnci0018.html.

[^202]: 47 U.S.C. § 257(c).

[^203]: Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat.
    56 (1996).

[^204]: 47 U.S.C. § 257(a).

[^205]: *See In the Matter of Section 257 Proceeding to Identify and
    Eliminate Market Entry Barriers for Small Businesses,* *Notice of
    Inquiry*, 11 FCC Rcd 6280 (1996).

[^206]: *See In the Matter of Section 257 Proceeding to Identify and
    Eliminate Market Entry Barriers for Small Businesses*, *Report*, 12
    FCC Rcd 16802 (1997).

[^207]: 47 U.S.C. § 257(b).

[^208]: Regulatory Flexibility Act of 1980, *as amended*, 5 U.S.C. § 601
    *et seq*.; Small Business Act, 15 U.S.C. § 632.

[^209]: *See FCC News Release*, Office of the Chairman, "Studies
    Indicate Need to Promote Wireless and Broadcast License Ownership by
    Small, Women− and Minority−Owned Businesses" (Dec. 12, 2000).

[^210]: The "Small Business Regulatory Enforcement Fairness Act of 1996"
    (SBREFA) was signed into law as Title II of the Contract With
    America Advancement Act of 1996, Pub. Law No. 104-121, 110 Stat. 847
    (1996) (CWAAA).

[^211]: *1997 Report*, 12 FCC Rcd at 16853 at para 94.

[^212]: Since 1996, the Commission had consistently included small
    incumbent LECs in its analyses, but had stated that it was doing so
    out of an abundance of caution concerning the status of incumbent
    LECs.

[^213]: *See, e.g.*, 65 Fed. Reg. 73305, 74850 (Nov. 30, 2000). The
    Unified Agenda is typically published in April and October of each
    year. The Unified Agenda project is overseen by the General Services
    Administration's Regulatory Information Service Center.

[^214]: 47 C.F.R. Parts 2, 5, 15 and 18.

[^215]: *Amendment of Part 5 of the Commission's Rules to Revise the
    Experimental Radio Service Regulations, Report and Order*, FCC
    98-283, 13 FCC Rcd 21391 (1998).

[^216]: *Amendment of Parts 2, 15, 18, and Other Parts of the
    Commission's Rules to Simplify and Streamline the Equipment
    Authorization Process for Radio Frequency Equipment*, *Report and
    Order*, FCC 98-58, 13 FCC Rcd 11415 (1998).

[^217]: *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 Global Mobile Personal
    Communications by Satellite Arrangements*, *Report and Order*, FCC
    98-338, 13 FCC Rcd 24687 (1998).

[^218]: *See* FCC Provides Further Information on the Accreditation
    Requirements for Telecommunication Certification Bodies, *Public
    Notice*, DA 99-1640, Aug. 17, 1999; Office of Engineering and
    Technology and Common Carrier Bureau Announce the Designation of
    Telecommunication Certification Bodies (TCBs) to Approve Radio
    Frequency and Telephone Terminal Equipment, *Public Notice*, DA
    00-1123, June 2, 2000.

[^219]: *Amendment of Part 15 of the Commission's Rules to Provide for
    Unlicensed National Information Infrastructure Devices at 5 GHz*,
    *Report and Order*, FCC 97-5, 12 FCC Rcd 1576, *Memorandum Opinion
    and Order*, 13 FCC Rcd 14355 (1998).

[^220]: *Amendment of Parts 2 and 15 of the Commission's Rules to Permit
    Use of Radio Frequencies Above 40 GHz for New Radio Applications,*
    *Third Report and Order*, 13 FCC Rcd 15074 (1998), *on* *recon,
    Third Memorandum Opinion and Order,* 15 FCC Rcd 10515 (2000).

[^221]: *Amendment of Part 15 of the Commission's Rules Regarding Spread
    Spectrum Devices,* *Notice of Proposed Rulemaking*, 14 FCC Rcd 13046
    (1999), *First Report and Order,* FCC 00-312 (rel. Aug. 31, 2000).

[^222]: *Revision of Part 15 of the Commission's Rules Regarding
    Ultra-Wideband Transmission Systems,* *Notice of Inquiry*, 13 FCC
    Rcd 16376 (1998); *Notice of Proposed Rulemaking*, FCC 00-163 (rel.
    May 15, 2000).

[^223]: *Amendment of Parts 2 and 90 of the Commission's Rules to
    Allocate the 5.850-5.925 GHz Band to the Mobile Service for
    Dedicated Short Range Communications of Intelligent Transportation
    Services*, *Report and Order*, 14 FCC Rcd 18221 (1999).

[^224]: *Amendment of Parts 2 and 95 of the Commission's Rules to Create
    a Wireless Medical Telemetry Service*, *Notice of Proposed Rule
    Making*, 14 FCC Rcd 16719 (1999), *Report and Order,* 15 FCC Rcd
    11206 (2000).

[^225]: *Amendment of the Commission's Rules with Regard to the
    3650-3700 MHz Government Transfer Band*, (ET Docket No. 98-237) *and
    the 4.9 GHz Band Transferred from Federal Government Use* (WT Docket
    No. 00-32), *First Report and Order and Second Notice of Proposed
    Rulemaking*, FCC 00-363 (rel. Oct. 24, 2000).

[^226]: *Principles for Reallocation of Spectrum to Encourage the
    Development of Telecommunications Technologies for the New
    Millennium, Spectrum Policy Statement*, 14 FCC Rcd 19868 (1999).

[^227]: *Reallocation of the 216-220 MHz, 1390-1395 MHz, 1427-1429 MHz,
    1427-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 MHz
    Government Transfer Bands, Notice of Proposed Rulemaking*, FCC
    00-395 (rel. Nov. 20, 2000).

[^228]: Spectrum Study of the 2500-2690 MHz Band: The Potential for
    Accommodating Third Generation Mobile Systems, Staff Interim Report,
    ET Docket No. 00-232 (rel. Nov. 15, 2000).

[^229]: *Principles for Promoting the Efficient Use of Spectrum by
    Encouraging the Development of Secondary Markets for Spectrum,
    (Secondary Markets Policy Statement)*, FCC 00-401 (rel. Dec. 1,
    2000).

[^230]: *Promoting Efficient Use of Spectrum through Elimination of
    Barriers to the Development of Secondary Markets, Notice of Proposed
    Rulemaking*, WT Docket No. 00-230, FCC 00-402 (rel. Nov. 27, 2000).

[^231]: *Inquiry Regarding Software Defined Radios,* *Notice of
    Inquiry*, ET Docket 00-47, 15 FCC Rcd 5930 (2000), *Notice of
    Proposed Rulemaking*, FCC 00-430, (rel. Dec 8, 2000).

[^232]: 47 C.F.R. Part 15 and Part 18.

[^233]: *See In the Matter of 1998 Biennial Regulatory Review --
    Amendment of Part 18 of the Commission's Rules to Update Regulations
    for RF Lighting Devices,* *First Report and Order,* 14 FCC Rcd 9840
    (1999).

[^234]: *See In the matter of 1998 Biennial Regulatory Review --
    Amendment of Part 18 of the Commission's Rules to Update Regulations
    for RF Lighting Devices,* *Notice of Proposed Rulemaking,* 13 FCC
    Rcd 11307 (1998).

[^235]: *2000 Biennial Regulatory Review Regulatory Review of Part 68 of
    the Commission's Rules and Regulations*, CC Docket No. 99-216,
    *Notice of Proposed Rulemaking*, 15 FCC Rcd 10525, *Report and
    Order*, FCC 00-400 (rel Dec. 28, 2000).

[^236]: *See* American National Standard for Method of Measurement of
    the Electromagnetic Operational Compatibility of Unlicensed Personal
    Communications Services (UPCS) Devices, ANSI C63.17 (Mar. 24, 1998).

[^237]: 47 C.F.R. §15.231.

[^238]: *See* FCC's Office of Engineering and Technology to Host Forum
    on 90 GHz Technologies*, Public Notice*, DA 00-1191, May 31, 2000,
    and *Public Notice*, DA 00-1504, July 6, 2000.

[^239]: *A Re-examination of Technical Regulations*, *Report and Order,*
    FCC 84-521, 99 FCC 2d 903 (1984).

[^240]: *See* 47 C.F.R. §§ 1.1200 *et seq.*

[^241]: *Amendment of 47 C.F.R. § 1.1200 et seq. Concerning Ex Parte
    Presentations in Commission Proceedings*, *Memorandum Opinion and
    Order,* 14 FCC Rcd 18831 (1999).

[^242]: *Examination of Current Policy Concerning the Treatment of
    Confidential Information Submitted to the Commission, Report and
    Order*, FCC 98-184, 13 FCC Rcd 24816 (1998).

[^243]: *Amendment of Part O of the Commission's Rules to Implement The
    Electronic Freedom of Information Act Amendments of 1996, Report and
    Order,* 13 FCC Rcd 3419 (1997).

[^244]: *Amendment of the Commission's Rules of Practice and Procedure,
    Order,* 14 FCC Rcd 7593 (1999).

[^245]: *1998 Biennial Regulatory Review - Review of Accounts Settlement
    in the Maritime Mobile and Maritime Mobile-Satellite Radio Services,
    Order,* 14 FCC Rcd 13504 (1999). The Commission concluded that it
    would cease operating as an accounting authority for settling
    accounts for maritime mobile, maritime satellite, aircraft and
    handheld terminal radio services. The Commission will transition to
    full privatization of the account-settlement function.

[^246]: 65 FR 63468.

[^247]: *Internet Privacy: Comparison of Federal Agency Practices with
    FTC\'s Fair Information Principles,* GAO/AIMD-00-296R, Federal
    Agencies' Fair Information Practices, September 11, 2000.

[^248]: Draft Strategic Plan: A New FCC for the 21^st^ Century, p. 9.

[^249]: For a list of the proceedings that have already been initiated,
    *see* Appendix I (B).

[^250]: 47 U.S.C. §§ 158, 159.

[^251]: 42 USC §§ 4321-4347.

[^252]: 5 U.S.C. § 504.

[^253]: Pub. Law No. 95-602, 92 Stat 2955 (1978) (codified at 29 U.S.C.
    § 794).

[^254]: 21 U.S.C. § 862.

[^255]: *See Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95,
    97, and 101 of the Commission\'s Rules to Facilitate the Development
    and Use of the Universal Licensing System in the Wireless
    Telecommunications Service*, *Report and Order*, 13 FCC Rcd 21027
    (1998) (*ULS Report and Order*); *Amendment of 47 C.F.R. § 1.1200 et
    seq. Concerning Ex Parte Presentations in Commission Proceedings,*
    *Report and Order*, 12 FCC Rcd 7348 (1997); *Amendment of Part 1 of
    the Commission\'s Rules -- Competitive Bidding Procedures*,
    *Allocation of Spectrum Below 5 GHz Transferred from Federal
    Government Use*, *Third Report and Order and Second Further Notice
    of Proposed Rule Making*, 13 FCC Rcd 374 (1997) (modified by
    *Erratum*, DA 98-419) (rel. Mar. 2, 1998).

[^256]: *In The Matter of Electronic Filing of Documents in Rulemaking
    Proceeding*s, *Report and Order*, 13 FCC Rcd 11322 (1998).

[^257]: USTA at p. 6.

[^258]: ITTA reply comments at p. 2.

[^259]: *Id.* at p. 3.

[^260]: WorldCom reply comments at p. 2.

[^261]: *Id.*

[^262]: *Id*. At 2-3.

[^263]: 47 U.S.C. § 208.

[^264]: September Staff Report at para. 162.

[^265]: WorldCom Comments at 2; Alloy Comments at 10.

[^266]: WorldCom Comments at 2-3. WorldCom also asks that the Commission
    work to increased the speed at which it notifies carriers that an
    informal complaint has been filed. *Id.*

[^267]: 47 C.F.R. Part 1, subpart F.

[^268]: *Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97,
    and 101 of the Commission\'s Rules to Facilitate the Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Service*, 98-20, *Report and Order*, 13 FCC Rcd
    21027 (1998) (*ULS Report and Order*).

[^269]: 47 C.F.R. §1.913.

[^270]: *Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97,
    and 101 of the Commission\'s Rules to Facilitate the Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Service*, *Memorandum Opinion and Order on
    Reconsideration*, 14 FCC Rcd 11476 (1999).

[^271]: Alloy Comments at 8.

[^272]: The Commission's environmental rules are codified at 47 C.F.R.
    §§ 1.1301-1.1319.

[^273]: 42 USC § 4321-4347.

[^274]: 16 USC § 1531-1543.

[^275]: *Id*. § 470.

[^276]: *Id*. § 1131-1136.

[^277]: *Id*. § 470aa.

[^278]: *Id*. § 668dd.

[^279]: *See* Executive Orders 11988 (floodplains) and 11990 (wetlands).

[^280]: 40 C.F.R. § 1501-1508.

[^281]: 47 C.F.R. § 1.1307(a)(8).

[^282]: *Id*. § 1.1307(b).

[^283]: *Id.* § 1.1307(a).

[^284]: *Id.* § 1.1306.

[^285]: *Id.* §§ 1.1308, 1.1311.

[^286]: *Id.* § 1.1313.

[^287]: *Id.* § 1.1314-1.1319.

[^288]: Wireless Telecommunications Bureau Seeks Comment on a Draft
    Programmatic Agreement with Respect to Co-locating Wireless Antennas
    on Existing Structures, DA 00-2907 (rel. Dec. 26, 2000 (*Co-location
    PN*).

[^289]: Memorandum from John M. Fowler, Executive Director, ACHP, to
    FCC, SHPOs, and THPOs, dated Sept. 21, 2000.

[^290]: Sprint Comments at 9.

[^291]: Alloy Comments at 9; Verizon Comments at 10-14; CTIA Comments at
    12-14; Sprint Comments at 9.

[^292]: Alloy Comments at 9; Sprint Comments at 9*.*

[^293]: *Co-location PN*, DA00-2907.

[^294]: Pub. Law No. 104-104, 104 Stat. 56, 149-151 (amending 47 U.S.C.
    § 224).

[^295]: *See* 1977 Senate Report, S. Rep. No. 580, 95th Cong., 1st Sess.
    19, 20 (1977).

[^296]: *In the Matter of Amendment of the Commission's Rules and
    Policies Governing Pole Attachments*, *Report and Order*, 15 FCC Rcd
    6453 (2000).

[^297]: *In the Matter of Implementation of Section 703(e) of the
    Telecommunications Act of 1996*, *Report and Order*, 13 FCC Rcd 6777
    (1998); *rev. in part*, *Gulf Power, et al., v. FCC*, 208 F.3d 1263
    (11^th^ Cir., rel. Apr. 11, 2000). Petitions for rehearing *en banc*
    have been filed by the Commission and intervenors*.*

[^298]: *Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996*, *First Report and Order*, 11 FCC
    Rcd 15499 (1996).

[^299]: *In the Matter of the Local Competition Provisions in the
    Telecommunications Act of 1996*, *Order on Reconsideration*, FCC
    99-266 (rel. Oct. 26, 1999).

[^300]: *See* Omnibus Budget Reconciliation Act of 1993, Pub. Law No.
    103-66 (1993).

[^301]: *See* Balanced Budget Act of 1997, Pub. Law No. 105-33, § 3002,
    111 Stat. 251 (1997) (amending 47 U.S.C. § 309(j)).

[^302]: In service-specific rule making proceedings, the Commission
    continues to establish the appropriate size standards for each
    auctionable service.

[^303]: 47 U.S.C. § 309(j)(3)(B).

[^304]: *Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993; Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, Fifth Report*, FCC 00-289 (rel. August 18, 2000) ("*Fifth
    Annual CMRS Competition Report*").

[^305]: *See FCC Report to Congress on Spectrum Auctions*, WT Docket No.
    97-150, *Report*, FCC 97-353, Section III, pg. 8 (rel. October 9,
    1997) (citing studies estimating costs of \$800 per application
    under the lottery system and \$130,000 per application under the
    comparative hearing process).

[^306]: *Amendment of Part 1 of the Commission\'s Rules -- Competitive
    Bidding Procedures*, *Allocation of Spectrum Below 5 GHz Transferred
    from Federal Government Use*, *Third Report and Order and Second
    Further Notice of Proposed Rule Making*, 13 FCC Rcd 374 (1997)
    (modified by *Erratum*, DA 98-419 (rel. Mar. 2, 1998).

[^307]: *Amendment of Part 1 of the Commission\'s Rules -- Competitive
    Bidding Procedures*, *Fifth Report and Order*, FCC 00-274 (rel.
    August 14, 2000) ("*Part 1 Fifth Report and Order*").

[^308]: 47 C.F.R. §§ 1.5000-1.5007.

[^309]: *See* Wireless Communications Division of the Telecommunications
    Industry Association comments at 4.

[^310]: *See* Alloy LLC comments at 11.

[^311]: *2000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations*, CC Docket No. 99-216, *Notice of Proposed
    Rulemaking*, 15 FCC Rcd 10525, *Report and Order*, FCC 00-400 (rel.
    Dec. 28, 2000).

[^312]: 47 U.S.C. § 303(q).

[^313]: 47 C.F.R. Part 17.

[^314]: *Streamlining the Commission's Antenna Structure Clearance
    Procedure*, *Report and Order*, 11 FCC Rcd 4272 (1995).

[^315]: *Streamlining the Commission's Antenna Structure Clearance
    Procedure*, *Memorandum Opinion and Order on Reconsideration,* FCC
    00-76 (rel. Mar. 8, 2000).

[^316]: *See, e.g.*, 47 C.F.R. § 1.923(d) (adopted in *Amendment of
    Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97, and 101 of the
    Commission's Rules to Facilitate the Development and Use of the
    Universal Licensing System in the Wireless Telecommunications
    Service*, *Report and Order*, 13 FCC Rcd 21027 (1998)).

[^317]: 47 C.F.R. §§ 17.6(c) (duplicates procedures described in
    17.4(e)); 17.23 (should reflect version 1K of the FAA advisory
    circular); 17.45 (because the applicable FAA advisory circular will
    specify the appropriate temporary warning lights, these provisions
    may be in conflict); 17.48 (telegraph notification is no longer
    acceptable); 17.53 and 17.54 (technical specifications duplicates
    those specifications incorporated by reference to the FAA advisory
    circulars).

[^318]: 47 C.F.R. §§ 17.4(b), (d) (submission of paper copy of FAA study
    no longer necessary); 17.57 (notification is now made via FCC Form
    854); 17.58 (Commission previously determined that there is no
    longer a basis for this reporting requirement).

[^319]: 47 C.F.R. §§ 17.24-43, associated section headings and notes
    (there is no need to retain these reserved sections and headings);
    17.4(g) and 17.49 (posting and logging requirements have caused
    confusion); 17.22 (should say that specified painting and lighting
    will be printed on the registration document); 17.56 ("as soon as
    practical" time frame is too indefinite); and 17.57 (specify which
    "owner" should file in a change of ownership situation).

[^320]: *See, e.g.,* Comments of USTA at p. 9 (stating that "USTA
    supports the Commission's efforts to eliminate duplication and
    confusion regarding the Part 17 requirements").

[^321]: Comments of Alloy at p. 7; Reply Comments of CTIA at pp. 5-6.

[^322]: Comments of Alloy at p. 7; Reply Comments of CTIA at p. 6.

[^323]: 47 C.F.R. § 20.6.

[^324]: *Implementation of Sections 3(n) and 332 of the Communications
    Act, Regulatory Treatment of Mobile Services*, *Amendment of Part 90
    of the Commission's Rules to Facilitate Future Development of SMR
    Systems in the 800 MHz Frequency Band*, *Amendment of Parts 2 and 90
    of the Commission's Rules to Provide for the Use of 200 Channels
    Outside the Designated Filing Areas in the 896-901 MHz and 935-940
    MHz Band Allotted to the Specialized Mobile Radio Pool*, *Third
    Report and Order,* 9 FCC Rcd 7988, 7992 (1994).

[^325]: *1998 Biennial Regulatory Review, Spectrum Aggregation Limits
    for Wireless Telecommunications Carriers, Cellular
    Telecommunications Industry Association's Petition for Forbearance
    From the 45 MHz CMRS Spectrum Cap*, *Amendment of Parts 20 and 24 of
    the Commission's Rules -- Broadband PCS Competitive Bidding and
    Commercial Mobile Radio Service Spectrum Cap*, *Implementation of
    Sections 3(n) and 332 of the Communications Act, Regulatory
    Treatment of Mobile Services*, *Report and Order*, 15 FCC Rcd 9219
    (1999).

[^326]: *Fifth Competition Report*, *supra,* at 28-29.

[^327]: *Id* at 29*.*

[^328]: *Id.*

[^329]: *Id.* at 25-26.

[^330]: *1998 Biennial Regulatory Review Spectrum Aggregation Limits for
    Wireless Telecommunications Carriers, Memorandum Opinion and Order
    on Reconsideration*, FCC 00-376 (rel. Nov. 8, 2000).

[^331]: *Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees*, *Sixth Report and Order and Order on Reconsideration*,
    FCC 00-313 (rel. Aug. 29, 2000).

[^332]: Comments of CTIA; Comments of Independent Cellular Carriers;
    Comments of Verizon.

[^333]: Comments of Independent Cellular Carriers pp. 4-5.

[^334]: Comments of Alloy at p. 5; Comments of CTIA at p. 3.

[^335]: Comments of Alloy at p. 5 citing *Fifth CMRS Competition Report
    at 6.*

[^336]: Comments of Alloy at p. 5 and Comments of CTIA at p. 3 both
    citing *Fifth Annual Report and Analysis of Market Conditions with
    Respect to competitive Mobile Services*, FCC 00-289, at 4-6 (rel.
    Aug. 18, 2000) (*Fifth CMRS Competition Report*).

[^337]: Comments of Verizon at p. 9.

[^338]: *Id*. at p. 10.

[^339]: Comments of Alloy at p. 5.

[^340]: *Id*. at pp. 5-6; Comments of CTIA at p. 5.

[^341]: Comments of Coalition of Independent Cellular Carriers at p. 4.

[^342]: *Id*. at p. 6 citing *Service rules for the 746-764 and 776-794
    MHz Bands and Revisions to Part 27 of the Commission's rules, First
    report and Order*, 15 FCC Rcd 476 at para. 52 (2000).

[^343]: 47 U.S.C. § 332(c)(1)(B).

[^344]: *See* 47 U.S.C. § 332.

[^345]: 47 C.F.R. § 20.11.

[^346]: *See* 47 U.S.C. §§ 251, 252.

[^347]: *Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996, CC Docket No. 96-68, Interconnection
    between Local Exchange Carriers and Commercial Mobile Radio Service
    Providers*, 11 FCC Rcd 15499, 16195 (1996) (*Local Competition First
    Report and Order*).

[^348]: *Local Competition First Report and Order* at ¶ 1023.

[^349]: 47 C.F.R. § 20.11(c). *See* *also* *Local Competition First
    Report and Order* at 16195.

[^350]: Letter from Sprint Spectrum L.P., d/b/a Sprint PCS, to Thomas J.
    Sugrue, (filed Feb. 2, 2000).

[^351]: *See Comment Sought on Reciprocal Compensation for CMRS
    Providers*, *Public Notice*, CC Docket Nos. 96-98, 95-185, and WT
    Docket No. 97-207 (rel. May 11, 2000).

[^352]: *See Iowa Utilities Board v. F.C.C*, (8th Cir. July 18, 2000).

[^353]: 47 C.F.R. § 20.11.

[^354]: USTA Comments at 10.

[^355]: USTA Comments at 10; *see also* *Comments Sought on Reciprocal
    Compensation for CMRS Providers, Public Notice,* CC Docket Nos.
    96-98, 95-185, and WT Docket No. 97-207 (rel. May 11, 2000).

[^356]: 47 C.F.R. § 20.12(b).

[^357]: *Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, Memorandum Opinion and Order on
    Reconsideration*, 14 FCC Rcd 16340 (1999) (*CMRS Resale
    Reconsideration Order*).

[^358]: 47 U.S.C. §§ 201, 202.

[^359]: *Id.*

[^360]: *Fifth Competition Report*, *supra,* at 28-29.

[^361]: *Id* at 29*.*

[^362]: *CMRS Resale Reconsideration Order at 69*.

[^363]: Comments of Alloy at p. 12.

[^364]: *Id.*

[^365]: *Id.*

[^366]: 47 C.F.R. § 20.12(c).

[^367]: *Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services*, *Second Report and Order and Third Notice of
    Proposed Rulemaking*, 11 FCC Rcd 9462 (1996) (*CMRS Roaming
    Order*)*.*

[^368]: *Id.*

[^369]: *Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, Third Report and Order and Memorandum Opinion
    and Order on Reconsideration*, FCC 00-251 (adopted July 13, 2000;
    released August 28, 2000).

[^370]: *Automatic and Manual Roaming Obligations Pertaining to
    Commercial Mobile Radio Service, Notice of Proposed Rulemaking*, WT
    Docket No. 00-193, FCC 00-361 (rel. Oct. 31, 2000).

[^371]: *Id.*

[^372]: 47 C.F.R. § 20.18.

[^373]: *Revision of the Commission's Rules to Ensure Compatibility with
    Enhanced 911 Emergency Calling Systems*, *Third Report and Order*,
    14 FCC Rcd 17388, 17436 (1999) (*Third Report and Order*).

[^374]: *Revision of the Commission's Rules To Ensure Compatibility with
    Enhanced 911 Emergency Calling Systems, Fourth Memorandum Opinion
    and Order*, FCC 00-326 (adopted August 24, 2000; released September
    8, 2000).

[^375]: 47 C.F.R. §20.20.

[^376]: 47 C.F.R. §20.20(a).

[^377]: 47 C.F.R. §20.20(f).

[^378]: *Amendment of the Commission's Rules to Establish Competitive
    Service Safeguards for Local Exchange Carrier Provision of
    Commercial Mobile Radio Services*, *First Order on Reconsideration*,
    14 FCC Rcd 11343 (1999) (denying petition Independent Telephone and
    Telecommunications Alliance (ITTA); *Amendment of the Commission's
    Rules to Establish Competitive Service Safeguards for Local Exchange
    Carrier Provision of Commercial Mobile Radio Services*, *Second
    Order on Reconsideration*, 15 FCC Rcd 414 (1999) (denying petitions
    of Aliant Communications Co. and Guam Cellular and Paging, Inc.).

[^379]: 47 CFR §20.20.

[^380]: Comments of ITTA at p. 8; USTA at 11.

[^381]: Comments of ITTA at p. 7.

[^382]: Comments of ITTA at p. 8.

[^383]: Comments of USTA at p. 11.

[^384]: WorldCom Reply Comments at 5.

[^385]: *Amendment of Parts 21 and 74 to Enable Multipoint Distribution
    Service and Instructional Television Fixed Service Licensees to
    Engage in Fixed Two-Way Transmissions*, 13 FCC Rcd 19112 (1998),
    *recon.*, 14 FCC Rcd 12764 (1999), *further recon.*, FCC No. 00-244
    (released July 21, 2000).

[^386]: *See* WCAI Comments at 5-7, 10, 11, 14-15, and 18-19, advocating
    the elimination or modification of various requirements for filing
    and/or serving applications or annual reports.

[^387]: *Id.* at 9, 13-14, and 19-20.

[^388]: *Id.* at 7-9 (lengthen deadline for consummating transfers of
    control and assignments following grant of application, eliminate
    prior approval requirement for *pro forma* transfers and
    assignments), 10-11 (eliminate §21.43 restriction on pre-grant
    construction), and 11-14 (abolish requirement of demonstration that
    proposed booster station can be served without receiving
    interference). In its discussion of the current Part 21 rule
    requiring applicants to demonstrate that proposed booster stations
    can be served without receiving interference, 47 C.F.R.
    §21.913(b)(6), WCAI also advocates elimination of the corresponding
    Part 74 rule for ITFS licensees, 47 C.F.R. §74.985(b)(3). WCAI
    argues that decisions in the *Two-Way Rulemaking* render the
    requirement in those rule sections unnecessary, noting that the
    requirement was waived during the initial MDS/ITFS two-way filing
    window.

[^389]: *See* Sprint Corporation Comments at 6-7.

[^390]: *Id.* at 7-8.

[^391]: 47 C.F.R. Part 22.

[^392]: *Fifth Competition Report*, *supra* at 9-27, 36-63.

[^393]: *Biennial Regulatory Review -- Amendment of Parts 0, 1, 13, 22,
    24, 26, 27, 80, 87, 90, 95, 97 and 101 of the Commission's Rules to
    Facilitate the Development and Use of the Universal Licensing System
    in the Wireless Telecommunications Services, Report and Order*, 13
    FCC Rcd 21027 (1998); *Memorandum Opinion and Order on
    Reconsideration*, 14 FCC Rcd 11145 (1998).

[^394]: *In the Matter of Revision of Part 22 and Part 90 of the
    Commission\'s Rules to Facilitate Future Development of Paging
    Systems and Implementation of Section 309(j) of the Communications
    Act - Competitive Bidding,* *Memorandum Opinion and Order on
    Reconsideration and Third Report and Order*, 14 FCC Rcd 10030 (1999)
    (*Paging Systems Reconsideration Order*).

[^395]: 47 C.F.R. § 22.937.

[^396]: 47 C.F.R. § 22.323.

[^397]: Alloy Comments at 4.

[^398]: CTIA Comments at 5.

[^399]: Verizon Comments at 8.

[^400]: Verizon Comments at 8.

[^401]: 47 C.F.R Part 22, subpart E.

[^402]: 47 C.F.R. §§ 22.501-22.529.

[^403]: *Fifth Competition Report*, *supra*, at 57-58.

[^404]: *See Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95,
    97, and 101 of the Commission\'s Rules to Facilitate the Development
    and Use of the Universal Licensing System in the Wireless
    Telecommunications Service*, *Report and Order*, 13 FCC Rcd 21027
    (1998).

[^405]: 47 C.F.R. Part 22, subpart F.

[^406]: 47 C.F.R. §§ 22.417, 22.727, 22.729.

[^407]: 47 C.F.R. § 22.757.

[^408]: 47 C.F.R. Part 22, subpart G.

[^409]: The original General Aviation technology allowed only one
    operator in each station location. In 1994, however, the Commission
    mandated use of a new technology, Air-Ground Radiotelephone
    Automated Service ("AGRAS"), that, among other improvements, allowed
    two or more competing ground stations in a location to share control
    channels.

[^410]: Two of the three licensees who failed to construct surrendered
    their licenses voluntarily, and the third license was ultimately
    canceled by the Commission.

[^411]: *In the Matter of AirCell, Inc., Petition Pursuant to Section 7
    of the Act, for a Waiver of the Airborne Cellular Rule, or, in the
    Alternative for a Declaratory Ruling,* *Order*, 14 FCC Rcd 806 (WTB
    1998) (*AirCell Order*), a*ffirmed, Memorandum Opinion and Order,*
    15 FCC Rcd 9622 (2000).

[^412]: 47 C.F.R. Part 22, subpart H.

[^413]: *Fifth Competition Report*, *supra*, at 9-27, 36-63.

[^414]: *Amendment of the Commission\'s Rules to Permit Flexible Service
    Offerings in the Commercial Mobile Radio Services, First Report and
    Order and Further Notice of Proposed Rulemaking*, 11 FCC Rcd 8965
    (1996) (*CMRS Flex Order/FNPRM*).

[^415]: *Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97,
    and 101 of the Commission\'s Rules to Facilitate the Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Service*, *Report and Order*, 13 FCC Rcd 21027
    (1998) (*ULS Report and Order*), *affirmed and modified in part*,
    *ULS Memorandum Opinion and Order on Reconsideration*, 14 FCC Rcd
    11476 (1999).

[^416]: *Geographic Partitioning and Spectrum Disaggregation by
    Commercial Mobile Radio Services Licensees, Second Report and
    Order*, FCC 00-141 (rel. May 19, 2000).

[^417]: 47 C.F.R. § 22.937.

[^418]: 47 C.F.R. § 22.933.

[^419]: 47 C.F.R. § 22.942.

[^420]: Comments of Coalition of Independent Cellular Carriers at pp.
    1-2.

[^421]: Comments of Coalition of Independent Cellular Carriers at pp.
    2-3 *citing Amendment of Part 22 of the Commission's Rules to
    Provide for Filing and Processing of Applications for Unserved Areas
    In the Cellular Service and to Modify Other Cellular Rules;
    Amendment of the Commission's Rules for Rural Cellular Service; In
    Re Cellular Applications for Unserved Areas in MSAa/NECMAs*, 6 FCC
    Rcd 6185, 6227-28 (1991) (*Unserved Area Order*).

[^422]: Comments of Coalition of Independent Cellular Carriers at p. 3.

[^423]: Comments of Coalition of Independent Cellular Carriers at p. 3.

[^424]: 47 C.F.R. Part 22, subpart I.

[^425]: We also note that service is provided by other services as well:
    *e.g.*, PCS, WCS, satellite, VHF maritime, private radio (formerly
    petroleum radio service), private (offshore), and microwave.

[^426]: 47 U.S.C. § 1002.

[^427]: 47 C.F.R. Part 22, subpart J.

[^428]: *Id.*

[^429]: *See Communications Assistance for Law Enforcement Act,* *Third
    Report and Order*, 14 FCC Rcd 16794 (1999).

[^430]: 47 C.F.R. Part 24, subpart J.

[^431]: 64 C.F.R. Part 64, subpart W.

[^432]: USTA Comments at 12.

[^433]: CTIA Reply Comments at 8.

[^434]: 47 U.S.C. §§ 154, 301, 303.

[^435]: *Western Union Telegraph Co., Memorandum Opinion and Order,* 75
    F.C.C.2d 461, 472 ¶ 39 (1980) (*Western Union MO&O*).

[^436]: *See id.*

[^437]: 47 C.F.R. Part 24.

[^438]: Narrowband PCS operates on the 901-902, 930-931, and 940-941 MHz
    bands. Broadband PCS operates in the 1850-1910 and 1930-1990 MHz
    bands.

[^439]: *See* Communications Assistance for Law Enforcement Act (CALEA),
    Pub. Law No. 103-414, 108 Stat. 4279 (1994).

[^440]: *See Amendment of the Commission's Rules to Establish New
    Personal Communications Services, Second Report and Order*, 8 FCC
    Rcd 7700 (1993); *Amendment of the Commission's Rules to Establish
    New Personal Communications Services*, *Third Report and Order*, 9
    FCC Rcd 1337 (1994).

[^441]: *See Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding,* *Fifth Report and Order*, 9 FCC Rcd 5532
    (1994); *See Implementation of Section 309(j) of the Communications
    Act -- Competitive Bidding, Fourth Memorandum Opinion and Order*, 9
    FCC Rcd 6858 (1994); *See Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding, Fifth Memorandum Opinion
    and Order*, 10 FCC Rcd 403 (1994).

[^442]: *See Amendment of the Commission's Rules to Establish New
    Personal Communications Services, Narrowband PCS, Second Report and
    Order,* 15 FCC Rcd 10456 (2000).

[^443]: *See* *Communications Assistance for Law Enforcement Act,* CC
    Docket No. 97-213, *Third Report and Order*, FCC 99-230 (rel. Aug.
    31, 1999), *aff'd in part, rev'd in part, United States Telecom
    Ass'n v. FCC,* D.C. Circuit No. 99-1442 (Aug. 15, 2000).

[^444]: 47 U.S.C. § 309(j)(3).

[^445]: *Fifth Competition Report*, *supra*, at 28-29.

[^446]: *See Narrowband Second Report and Order*, 10 FCC Rcd at 403.

[^447]: *See Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees,* WT Docket No. 97-82, *Further Notice of Proposed Rule
    Making*, FCC 00-197 (rel. June 7, 2000).

[^448]: *Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees, Sixth Report and Order and Order on Reconsideration*, FCC
    00-313 (adopted August 23, 2000; released August 28, 2000).

[^449]: *Id*. at 7.

[^450]: TIA Comments at Section 2.

[^451]: CTIA Comments at 9-10, and Attachment.

[^452]: *2000 Biennial Regulatory Review -- Streamlining and Other
    Revisions of the Part 25 of the Commission's Rules Governing the
    Licensing of, and Spectrum Usage by, Satellite Network Earth
    Stations and Space Stations*, IB Docket No 00-248, *Notice of
    Proposed Rulemaking*, FCC 00-435 (rel. Dec. 14, 2000)(*Earth Station
    Streamlining NPRM*).

[^453]: Hughes Network Systems comments, WorldCom, Inc. comments at 3.

[^454]: Hughes Network Systems comments at 2-6.

[^455]: *See* note 192.

[^456]: 47 C.F.R. Part 26.

[^457]: Letter to the Honorable William E. Kennard, Chairman, Federal
    Communications Commission, from Larry Irving, Assistant Secretary
    for Communications, U.S. Department of Commerce (Mar. 30, 1999)*.*

[^458]: *The 4.9 GHz Band Transferred From Federal Government Use,
    Notice of Proposed Rulemaking*, 15 FCC Rcd 4778 (2000).

[^459]: *Id.*, Appendix A.

[^460]: *Id.* At para. 2.

[^461]: 47 C.F.R. Part 27. Because Part 26 applies only to the 4660-4685
    MHz band, we propose to delete Part 26 of the Commission's Rules
    containing General Wireless Communications Services (GWCS) rules. 47
    C.F.R. Part 26.

[^462]: 47 C.F.R. Part 27.

[^463]: *Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, First Report and
    Order*, 15 FCC Rcd 476 (2000)*.*

[^464]: *See* 47 U.S.C. § 337(e). *See Advanced Television Systems and
    Their Impact Upon Existing Television Broadcast Service,
    Reconsideration of Fifth Report and Order,* 13 FCC Rcd 6860, 6887
    (1998).

[^465]: *WCS Report and Order*, 12 FCC Rcd 10785 at para. 26 (1997).

[^466]: *Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, Carriage of the
    Transmissions of Digital Television Broadcast Stations, Review of
    the Commission's Rules and Policies Affecting the Conversion to
    Digital Television,* WT Docket No. 99-168, CS Docket No. 98-120, MM
    Docket No. 00-83, *Memorandum Opinion and Order and Further Notice
    of Proposed Rulemaking*, FCC 00-224, (June 30, 2000).

[^467]: Letter to the Honorable William E. Kennard, Chairman, Federal
    Communications Commission, from Larry Irving, Assistant Secretary
    for Communications, U.S. Department of Commerce (Mar. 30, 1999)*.*

[^468]: *The 4.9 GHz Band Transferred From Federal Government Use,
    Notice of Proposed Rulemaking*, 15 FCC Rcd 4778 (2000).

[^469]: *Id.*

[^470]: 47 C.F.R. Part 32.

[^471]: 47 U.S.C. § 220.

[^472]: *See Implementation of the Telecommunications Act of 1996:
    Accounting Safeguards Under the Telecommunications Act of 1996,
    Report and Order*, 11 FCC Rcd 17539 (1996).

[^473]: The reporting threshold is modified annually to adjust for
    inflation. The current reporting threshold is \$114 million, so that
    only carriers with \$114 million or more in annual operating
    revenues report their Part 32 USOA results in the Automated
    Reporting Management Information System ("ARMIS") program.

[^474]: *See 1998 Biennial Regulatory Review -- Review of Accounting and
    Cost Allocation Requirements, Report and Order in CC Docket No.
    98-81, Order on Reconsideration in CC Docket No. 96-150, Fourth
    Memorandum Opinion and Order in AAD File No. 98-43*, 14 FCC Rcd
    11396 (1999).

[^475]: *Phase I Order.*

[^476]: *See* 2000 Biennial Regulatory Review -- Comprehensive Review of
    the Accounting Requirements and ARMIS Reporting Requirements for
    Incumbent Local Exchange Carriers: Phase 2 and Phase 3, *Notice of
    Proposed Rulemaking*, CC Docket 00-199, FCC 00-364 (rel. October 18,
    2000) (*Comprehensive Review of Accounting Requirements: Phase 2 and
    3*).

[^477]: *See, e.g*., 47 C.F.R. §§ 32.5110, 5111, 5112, 5120, 5122, 5123,
    5124, 5125, 5126, 5129, 5160, 5169, 5301, 5302, 7600, 7610, 7620,
    7630, 7640.

[^478]: *See* 47 C.F.R. § 32.2000.

[^479]: *See e.g.*, 47 C.F.R. §§ 32.2211 (analog switching account),
    2215 (electro-magnetic switching account).

[^480]: *See* 47 C.F.R. § 32.27.

[^481]: *See e.g.* GSA comments at 3-5, Reply comments at 3; ITTA
    comments at 5-6, USTA comments at 13.

[^482]: GSA comments at 4.

[^483]: USTA comments at 13.

[^484]: *Smith v. Illinois Bell Tel. Co.*, 282 U.S. 133, 148 (1930).

[^485]: *Jurisdictional Separations Reform,* 12 FCC Rcd 22120 (1997).

[^486]: This would freeze the relative proportions of plant allocated to
    the various separations plant categories. Changes in the relative
    proportion of plant allocated to the various plant categories can
    change separations results if the plant categories involved are
    apportioned between the federal and state jurisdictions on the basis
    of different factors.

[^487]: *Recommended Decision, Jurisdictional Separations Reform and
    Referral to the Federal-State Joint Board* CC Docket No. 80-286 FCC
    00J-2 (rel. July 21, 2000).

[^488]: These provisions include 47 C.F.R. §§ 36.631(a), 36.631(b), and
    36.641(b).

[^489]: GSA Comments at 7.

[^490]: GSA Comments at 6; USTA Comments at 15.

[^491]: *Policy and Rules Concerning the Interstate, Interexchange
    Marketplace, Second Order on Reconsideration*, 14 FCC Rcd 6004
    (1999). The U.S. Court of Appeals for the D.C. Circuit has upheld
    the Commission's decision to mandate detariffing for domestic
    interstate long distance service. *See MCI WorldCom, Inc. v FCC,*
    209 F.3d 132 (D.C. Cir. 2000).

[^492]: *2000 Biennial Regulatory Review; Policy and Rules Concerning
    the International Interexchange Marketplace*, IB Docket No. 00-202,
    15 FCC Rcd 18158 (2000).

[^493]: *See id*.

[^494]: 47 U.S.C. § 211. Section 211 also permits the Commission to
    require the filing of any other contracts.

[^495]: 47 U.S.C. § 219.

[^496]: 47 U.S.C. § 220.

[^497]: Only those carriers with annual operating expenses that equal or
    exceed the indexed revenue threshold defined in § 32.9000 and have
    been found by the Commission to be a dominant carrier with respect
    to communications services are required to file depreciation change
    reports.

[^498]: *See 1998 Biennial Regulatory Review: Reform of the
    International Settlements Policy and Associated Filing Requirements,
    Report and Order and Order on Reconsideration,* 14 FCC Rcd 7963,
    7974, para. 31 (1999).

[^499]: *2000 Biennial Regulatory Review; Policy and Rules Concerning
    the International Interexchange Marketplace*, IB Docket No. 00-202,
    *Notice of Propose Rule Making*, 15 FCC Rcd 20008 (2000).

[^500]: *Id.* at paras. 32-40.

[^501]: *2000 Biennial Regulatory Review \-- Amendment of Parts 43 and
    63 of the Commission\'s Rules, Notice of Proposed Rule Making*, IB
    Docket No. 00-231, FCC 00-407 (rel. Nov. 30, 2000)(*2000
    International Biennial Review NPRM* ).

[^502]: *See 1998 Biennial Regulatory Review -- Review of ARMIS
    Reporting Requirement*, *Report and Order,* 14 FCC Rcd 11443 (1999).

[^503]: *Comprehensive Review of the Accounting Requirements and ARMIS
    Reporting Requirements for Incumbent LECs: Phase 1,* CC Docket No.
    99-253, *Report and Order*, FCC 00-78 (rel. Mar.8, 2000).

[^504]: *2000 Biennial Regulatory Review -- Comprehensive Review of the
    Accounting Requirements and ARMIS Reporting Requirements for
    Incumbent Local Exchange Carriers: Phase 2 and Phase 3, Notice of
    Proposed Rulemaking*, CC Docket No. 00-199, FCC 00-364 (rel. Oct.
    18, 2000).

[^505]: *2000 Biennial Regulatory Review -- Telecommunications Service
    Quality Reporting, Notice of Proposed Rulemaking*, CC Docket No.
    00-229, FCC 00-399 (rel. Nov. 9, 2000).

[^506]: *See 1998 Biennial Regulatory Review: Reform of the
    International Settlements Policy and Associated Filing Requirements,
    Report and Order and Order on Reconsideration,* 14 FCC Rcd 7963
    (1999).

[^507]: Alloy comments at 3; Verizon comments at 3.

[^508]: Alloy comments at 3; Verizon comments at 3-6

[^509]: 47 U.S.C. § 251.

[^510]: 47 U.S.C. § 252.

[^511]: *Iowa Utilities Board v. FCC*, No. 96-3321 (8^th^ Cir. rel. July
    18, 2000).

[^512]: Comments of Sprint at 1; comments of USTA at 2; comments of GSA
    at 1.

[^513]: Comments of Sprint at 2.

[^514]: Comments of USTA at 5.

[^515]: Comments of USTA at 5; comments of OPASTCO at 19.

[^516]: USTA comments at 18-19.

[^517]: GSA comments at 10-12; GSA Reply at 9.

[^518]: 47 U.S.C. § 272. Most of the information services safeguards
    have now sunset. CITE

[^519]: *Request for Extension of the Sunset Date of the Structural
    Nondiscrimination and Other Behavior Safeguards Governing BOC
    Provision of In-Region InterLATA Information Services,* *Order*, CC
    Docket No. 96-0149, FCC 00-40 (Feb. 8, 2000).

[^520]: *Comments Requested in Connection with Court Remand of
    Non-Accounting Safeguards Order, Public Notice*, CC Docket No.
    96-149, DA 00-2530 (Nov. 8, 2000).

[^521]: Comments of Sprint at 1; comments of USTA at 2; comments of GSA
    at 1.

[^522]: Comments of Sprint at 2.

[^523]: Comments of USTA at 5.

[^524]: Comments of USTA at 5; comments of OPASTCO at 19.

[^525]: *See* 47 U.S.C. §§ 214(e), 254.

[^526]: *See, e.g., Federal-State Joint Board on Universal Service*,
    *Fifth Order on Reconsideration and Fourth Report and Order*, 13 FCC
    Rcd 14915 (1998); *Federal-State Joint Board on Universal Service*,
    *Ninth Report and Order and Eighteenth Order on Reconsideration*, 14
    FCC Rcd 20432 (1999).

[^527]: *Federal-State Joint Board on Universal Service; Promoting
    Deployment and Subscribership in Unserved Areas, Including Tribal
    and Insular Areas, Twelfth Report and Order, Memorandum Opinion and
    Order, and Further* *Notice of Proposed Rulemaking*, FCC 00-208
    (rel. June 30, 2000).

[^528]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Recommended Decision, FCC 00J-4 (rel. December 22, 2000). The
    Joint Board concluded that the Rural Task Force plan is a "good
    foundation for implementing a rural universal service plan that
    benefits consumers and provides a stable environment for rural
    carriers to invest in rural America." *Id.* at para. 1.

[^529]: *MAG Plan for Regulation of Interstate Services of Non-Price Cap
    Incumbent Local Exchange Carriers and Interexchange Carriers*, CC
    Docket No. 00-256, *Federal-State Joint Board on Universal Service*,
    CC Docket No. 96-45, *Access Charge Reform for Incumbent Local
    Exchange Carriers Subject to Rate-of-Return Regulation*, CC Docket
    No. 98-77, *Prescribing the Authorized Rate of Return For Interstate
    Services of Local Exchange Carriers*, CC Docket No. 98-166, Notice
    of Proposed Rulemaking, FCC 00-448 (released January 5, 2001).

[^530]: *See* 47 C.F.R. § 54.719.

[^531]: GSA Comments at 14; Independent Telephone and Telecommunications
    Alliance Comments at 14.

[^532]: WorldCom Comments at 3-4.

[^533]: Independent Telephone and Telecommunications Alliance Comments
    at 15; USTA Comments at 21.

[^534]: *Order on Reconsideration,* *Implementation of Infrastructure
    Sharing Provisions of the Telecommunications Act of 1996*, 62 FR
    9704 (rel. Apr. 27, 2000). This Order also addressed a number of
    issues concerning the use of section 259 to facilitate resale,
    access to intellectual property rights, and pricing of section 259
    arrangements. *Id*.

[^535]: 47 U.S.C. § 201.

[^536]: 47 U.S.C. § 202.

[^537]: 47 U.S.C. §§ 203-04.

[^538]: *1998 Biennial Regulatory Review -- Part 61 of the Commission's
    Rules and Related Tariff Requirements, Report and Order and Further
    Order on Reconsideration*, 14 FCC Rcd 12293 (1999).

[^539]: *CALLS Order*, 15 FCC Rcd 12962.

[^540]: *Access Charge Reform*, DA 00-1268 (rel. June 16, 2000).

[^541]: *Access Charge Reform, Fifth Report and Order and Further Notice
    of Proposed Rulemaking*, 14 FCC Rcd 14221, 14234 (1999).

[^542]: *2000 Biennial Regulatory Review; Policy and Rules Concerning
    the International Interexchange Marketplace, Notice of Proposed Rule
    Making,* IB Docket No. 00-202, 15 FCC Rcd 20008 (2000).

[^543]: USTA comments at 22.

[^544]: OPASTCO comments at 11.

[^545]: Sprint comments at 1; USTA comments at 2; GSA comments at 1.

[^546]: WorldCom Reply Comments at 7.

[^547]: *See* Alloy comments at 3; GSA comments at 15-16; Sprint
    comments at 5; comments of the Coalition; comments of Verizon at 2;
    comments of WorldCom at 4.

[^548]: Reply comments of GSA at 12-13.

[^549]: 47 U.S.C. § 214(a).

[^550]: 47 C.F.R. Part 63.

[^551]: 47 C.F.R. § 63.14.

[^552]: 47 C.F.R. §§ 63.701, 63.702.

[^553]: *2000 Biennial Regulatory Review, Amendment of Parts 43 and 63
    of the Commission's Rules, Notice Of Proposed Rule Making*, IB
    Docket 00-231, FCC 00-407 (rel. Nov. 30, 2000) (*2000 International
    Biennial Review NPRM*).

[^554]: 47 C.F.R. § 43.81.

[^555]: *Implementation of Section 402(b)(2)(A) of the
    Telecommunications Act of 1996,* 14 FCC Rcd 11364 (1999).

[^556]: *See 1998 Biennial Regulatory Review-Review of International
    Common Carrier Regulations*, *Report and Order*, 14 FCC Rcd 4909
    (1999) (*1998 International Common Carrier Biennial Regulatory
    Review Order*), *recon. pending*.

[^557]: Verizon comments at 5-6.

[^558]: 47 U.S.C. §§ 151, 154, 201-205 and 220.

[^559]: USTA Comments at 23.

[^560]: 47 U.S.C. **§** 223(b).

[^561]: 47 C.F.R. § 64.301.

[^562]: 47 U.S.C. §§ 201, 214, 303 and 308.

[^563]: USTA Comments at 24.

[^564]: 47 U.S.C. §§ 151, 201-05.

[^565]: 47 U.S.C. §§ 151, 152, 154, 201 and 205.

[^566]: USTA Comments at 25.

[^567]: Pub. Law No. 101‑336, § 401, 104 Stat. 327, 366‑69 (1990)
    (adding section 225 to the Communications Act of 1934, as amended,
    47 U.S.C. § 225).

[^568]: *Telecommunications Relay Services and Speech-to-Speech Services
    for Individuals with Hearing and Speech Disabilities*, *Report and
    Order and Further Notice of Proposed Rulemaking*, FCC 00-56 (rel.
    Mar. 6, 2000) (*Improved TRS Order*).

[^569]: *The Use of N11 Codes and Other Abbreviated Dialing
    Arrangements*, *Second Report and Order*, FCC 00-257 (rel. Aug. 9,
    2000) (*N11 Second Report and Order*).

[^570]: 47 U.S.C. §§ 154, 201-205, 403 and 404.

[^571]: *Amendment of Section 64.702 of the Commission's Rules and
    Regulations* (*Computer III*), *Report and Order*, *Phase I*, 104
    FCC 2d 958 (1986) (subsequent citations omitted).

[^572]: *Furnishing of Customer Premises Equipment by the Bell Operating
    Companies and the Independent Telephone Companies*, 2 FCC Rcd 143
    (1987), *aff'd sub nom*., *Illinois Bell Telephone Co. v. FCC*, 883
    F.2d 104 (D.C. Cir.1989).

[^573]: Operator services refer to "any interstate telecommunications
    service initiated from an aggregator location that includes, as a
    component, any automatic or live assistance to a consumer to arrange
    for billing or completion, or both, of an interstate telephone
    call," subject to certain exceptions. 47 C.F.R. § 64.708(i). An
    "aggregator" is "any person that, in the ordinary course of its
    operations, makes telephones available to the public or to transient
    users of its premises, for interstate telephone calls, using a
    provider of operator services." 47 C.F.R. § 64.708(b).

[^574]: *Personal Communications Industry Association's Broadband
    Personal Communications Services Alliance's Petition for Forbearance
    for Broadband Personal Communications Services, Memorandum Opinion
    and Order and Notice of Proposed Rulemaking* (*PCIA's Forbearance
    MO&O)* 13 FCC Rcd 16857 (1988).

[^575]: *Policy and Rules Concerning the Interstate, Interexchange
    Marketplace; 1998 Biennial Review -- Review of Customer Premises
    Equipment and Enhanced Services Unbundling Rules in the
    Interexchange, Exchange Access and Local Exchange Markets, Further*
    *Notice of Proposed Rulemaking*, FCC Rcd 21531 (1998).

[^576]: *Amendment of Policies and Rules Concerning Operator Service
    Providers and Call Aggregators, CC Docket No. 94-58, Second Report
    and Order*, 14 FCC Rcd 16569 (1999).

[^577]: *PCIA's Forbearance MO&O*, *Supra* n. Error: Reference source
    not found.

[^578]: USTA Comments at 26 (entirely eliminate prohibition on
    bundling); WorldCom Comments at 4 (eliminate prohibition for
    non-dominant carriers).

[^579]: 47 C.F.R. § 64.801.

[^580]: The report filing requirement is limited to carriers with
    operating revenues exceeding \$1 million for the preceding year. 47
    C.F.R. § 64.804 (g).

[^581]: 47 C.F.R. § 64.804 (b).

[^582]: Section 401, Federal Election Campaign Act of 1971, Pub. Law No.
    92-225.

[^583]: *See* USTA comments at 28.

[^584]: 47 U.S.C. §§ 201 and 220.

[^585]: Average Schedule companies do not do cost studies and do not
    perform cost allocations pursuant to Part 64, subpart I.

[^586]: *See* *Comprehensive Review of the Accounting Requirements and
    ARMIS Reporting Requirements for Incumbent Local Exchange Carriers:
    Phase 1, Report and Order*, FCC 00-78 (rel. Mar. 8, 2000)
    (*Comprehensive Accounting Review* proceeding).

[^587]: Common Carrier Bureau Announces A Series of Workshops for Phase
    2 of the Comprehensive Review of Accounting and Reporting
    Requirements*, Public Notice*, DA 00-754, Apr. 5, 2000, at 1. *See
    also* Common Carrier Bureau Announces Mid-Sized Carrier Workshop for
    Phase 2 of the Comprehensive Review of Accounting and Reporting
    Requirements, *Public Notice*, DA 00-926, Apr. 26, 2000.

[^588]: *See 2000 Biennial Regulatory Review, Comprehensive Accounting
    Review: Phase 2 and 3, Notice of Proposed Rulemaking*, CC Docket
    00-199, FCC 00-364 (rel. October 18, 2000.

[^589]: ITTA comments at 5. GSA comments at 18.

[^590]: GSA Comments at 18.

[^591]: ITTA Comments at 6.

[^592]: USTA Comments at 28.

[^593]: An accounting rate is the price a U.S. facilities-based carrier
    negotiates with a foreign carrier for handling one minute of
    international traffic. Each carrier's portion of the accounting rate
    is referred to as the settlement rate.

[^594]: 47 C.F.R. § 43.51(e).

[^595]: 47 C.F.R. § 64.1001.

[^596]: 47 U.S.C. §§ 151, 201, 202, 203 and 309.

[^597]: The Commission has established benchmarks that govern the
    international settlement rates that U.S. carriers may pay foreign
    carriers to terminate international traffic originating in the
    United States. *See* *International Settlement Rates*, *Report and
    Order*, 12 FCC Rcd 19806 (1997), *aff'd sub nom*. *Cable and
    Wireless P.L.C. v. FCC*, 166 F.3d 1224 (D.C. Cir. 1999), *Report and
    Order on Reconsideration and Order Lifting Stay*, 14 FCC Rcd 9256
    (1999).

[^598]: *See 1998 Biennial Regulatory Review: Reform of the
    International Settlements Policy and Associated Filing*
    *Requirements,* *Report and Order and Order on Reconsideration*, 14
    FCC Rcd 7963, 7974 para. 31 (1999).

[^599]: *1998 Biennial Regulatory Review: Reform of the International
    Settlements Policy and Associated Filing* *Requirements, Report and
    Order and Order on Reconsideration,,* 14 FCC Rcd 7963 (1999); *see
    also,* FCC Announces Elimination of Existing Service Requirement in
    64.1001(k), Public Notice, DA 99-1558 (rel. Aug. 6, 1999).

[^600]: *See* FCC Announces Elimination of Existing Service Requirement
    in 64.1001(k), Public Notice, DA 99-1558 (rel. Aug. 6, 1999).

[^601]: 47 U.S.C. § 258.

[^602]: *Implementation of the Subscriber Carrier Selection Changes
    Provisions of the Telecommunications Act of 1996 and Policies and
    Rules Concerning Unauthorized Changes of Consumers' Long Distance
    Carriers*, *First Order on Reconsideration*, FCC 00-135 (rel. May 3,
    2000).

[^603]: *Implementation of the Subscriber Carrier Selection Changes
    Provisions of the Telecommunications Act of 1996 and Policies and
    Rules Concerning Unauthorized Changes of Consumers' Long Distance
    Carriers*, *Third Report and Order and Second Order on
    Reconsideration*, FCC 00-255 (rel. Aug. 15, 2000).

[^604]: S. 761, 106^th^ Cong., 2^nd^ Sess. (signed into law June 30,
    2000).

[^605]: Independent Telephone and Telecommunications Alliance Comments
    at 12.

[^606]: 47 U.S.C. § 227. *See also* 47 U.S.C. § 152(b).

[^607]: *See* 47 U.S.C. § 276.

[^608]: *American Public Communications Council v. FCC*, 215 F.3d 51
    (D.C. Cir. 2000).

[^609]: 47 U.S.C. §§ 151, 154, and 201-05.

[^610]: Bell South, SBC, USWest and Verizon are subject to this
    requirement.

[^611]: 47 U.S.C. §§ 151, 154, and 201-05.

[^612]: 47 U.S.C. §§ 151, 154, and 201-05.

[^613]: *See* 47 U.S.C. § 254(g).

[^614]: *GTE Service Corp. v. FCC*, No. 97-1538 (D.C. Cir., July 14,
    2000).

[^615]: Comments of Alloy at 13.

[^616]: 47 U.S.C. § 254(g).

[^617]: 47 U.S.C. §§ 151, 152, 154, 201, 202, 220, 251, 271, 272, and
    303(r).

[^618]: *Regulatory Treatment of LEC Provision of Interexchange
    Services, Originating in the LEC's Local Exchange Area and Policy
    and Rules Concerning the Interstate, Interexchange Market Place*,
    *Second Order on Reconsideration*, 14 FCC Rcd 10771 (1999).

[^619]: ITTA Comments at 8-10; USTA Comments at 26; ITTA Reply at 6.
    *See also* Sprint Comments at 4 (supporting elimination of separate
    subsidiary requirement pursuant to staff recommendation.)

[^620]: WorldCom Comments at 4-5.

[^621]: 47 U.S.C. § 222.

[^622]: *US West v. FCC*, 182 F.3d 1224 (10^th^ Cir. 1999), *cert.
    denied*, 120 S Ct. 2215 (June 5, 2000) (No. 99-1427).

[^623]: OPASTCO Comments at 9.

[^624]: 47 U.S.C. § 1004.

[^625]: *Communications Assistance for Law Enforcement Act*, *Report and
    Order*, 14 FCC Rcd 4151 (1999).

[^626]: 47 U.S.C. § 1002.

[^627]: *See Communications Assistance for Law Enforcement Act*, CC
    Docket No. 97-213, *Third Report and Order*, 14 FCC Rcd 16794
    (1999).

[^628]: *Aff'd in part and rev'd in part, United States Telecom Ass'n v.
    FCC*, Nos. 99-1442 *et al*. (D.C. Cir. Aug. 15, 2000).

[^629]: 47 U.S.C. § 222(e).

[^630]: *Telecommunications Carriers' Use of Customer Proprietary
    Network Information and Other Customer Information,* CC Docket No.
    96-115, *Third Report and Order*, FCC Rcd (1999), *pets. for recon.
    pending.*

[^631]: 47 U.S.C. §§ 201(b) and 258. These rules were inadvertently
    placed in subpart U in the 1999 Code of Federal Regulations. This
    error was subsequently corrected and the rules were placed in
    subpart Y. 65 Fed. Reg. 36637 (June 9, 2000).

[^632]: *Truth-in-Billing and Billing Format, Order on Reconsideration*,
    CC Docket No. 98-170, FCC 00-111 (rel. Mar. 29, 2000); *Errata*, DA
    00-745 (rel. Mar. 31, 2000).

[^633]: Organization for the Promotion and Advancement of Small
    Telecommunications Companies Comments at 8.

[^634]: 47 U.S.C. § 201 (b).

[^635]: *Amendment of Parts 65 and 69 of the Commission's Rules to
    Reform the Interstate Rate of Return Prescription and Enforcement
    Process, Report and Order,* 10 FCC Rcd 6788 (1995).

[^636]: *Prescribing the Authorized Unitary Rate of Return for
    Interstate Services of Local Exchange Carriers, Notice Initiating a
    Prescription Proceeding and Notice of Proposed Rulemaking,* 13 FCC
    Rcd 20561 (1998).

[^637]: USTA comments at 31.

[^638]: *Id.*

[^639]: *Id.*

[^640]: GSA comments at 28.

[^641]: GSA Reply Comments at 16-17.

[^642]: GSA Reply Comments at 17.

[^643]: *Hush-A-Phone v. United States*, 238 F.2d 266 (D.C. Cir. 1956).

[^644]: Hearing Aid Compatibility Act of 1988, 47 U.S.C. § 610.

[^645]: 47 U.S.C. § 227(d)(2).

[^646]: 47 U.S.C. § 227(d)(1).

[^647]: *Office of Engineering and Technology and Common Carrier Bureau
    Announce the Designation of Telecommunications Certification Bodies
    (TCBs) to Approve Radiofrequency and Telephone Terminal Equipment,*
    *Public Notice*, DA 00-1223 (rel. June 2, 2000); *see also, 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*, 13 FCC Rcd 24687 (1998).

[^648]: 2*000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations*, CC Docket No. 99-216, *Notice of Proposed
    Rulemaking*, FCC 00-171 (rel. May 22, 2000).

[^649]: *2000 Biennial Regulatory Review of Part 68 of the Commission's
    Rules and Regulations*, CC Docket No. 99-216, *Report and Order*,
    (adopted Nov. 9, 2000)(*Part 68 Streamlining Order*).

[^650]: 47 U.S.C. § 201.

[^651]: 47 U.S.C. § 202.

[^652]: Local exchange carriers subject to price cap regulation must
    offer a basic set of access rate elements, but are free to offer
    additional access services.

[^653]: *Access Charge Reform*, CC Docket No. 96-262, FCC 00-193, (rel.
    May 31, 2000).

[^654]: *Access Charge Reform*, 14 FCC Rcd 14221 (1999).

[^655]: *Access Charge Reform for Incumbent LECs Subject to
    Rate-of-Return Regulation*, 13 FCC Rcd 14236 (1998).

[^656]: *Improved Regulation of Interstate Services of Non-Price Cap
    Incumbent Local Exchange Carriers and Interexchange Carriers*,
    *Notice of Proposed Rulemaking*, CC Docket No. 00-256, FCC 00-448
    (rel. Jan. 5, 2001).

[^657]: Comments of USTA at 22.

[^658]: Reply Comments of WorldCom at 8.

[^659]: Comments of ITTA at 2; comments of OPASTCO at 4.

[^660]: Comments of ITTA at 14.

[^661]: *Id.*

[^662]: Comments of USTA at 33.

[^663]: Reply Comments of WorldCom at 9.

[^664]: Comments of Sprint at 1; comments of USTA at 2; comments of GSA
    at 1.

[^665]: Comments of OPASTCO at 19.

[^666]: Comments of NECA at 5.

[^667]: Comments of NAA at pp. 6-10 (incorporating by reference its
    Comments and its Emergency Petition for Relief filed in the 1998
    biennial review proceeding).

[^668]: Emergency Petition for Relief and Supplemental Comments of Fox
    Television Stations, Inc., MM Docket No. 98-35 (1999) (Petition of
    Fox); Comments of Viacom Inc, filed November 19, 1999, in MM Docket
    No. 98-35. Viacom also comments on the dual network rule in its
    filing. These comments on the dual network rule will be included in
    the record of the pending rule making proceeding to consider
    relaxing the dual network rule, *Notice of Proposed Rule Making* in
    MM Docket No.00-108, FCC 00-213, released June 20, 2000.

[^669]: Petition of Fox at Exhibit A, *A Comparative Analysis of the
    Broadcast Television National Multiple Ownership Rule And Cable
    Horizontal Ownership Rules,* Michael L. Katz (Nov. 18, 1999).

[^670]: Petition of Fox at pp. 10-11.

[^671]: Petition of Fox at pp. 23-29.

[^672]: Petition of Fox at pp. 29-34.

[^673]: Comments of Viacom at pp. 11-25. According to Viacom: the rule
    distorts the flow of capital and programming resources by penalizing
    over-the-air broadcasters and artificially redirecting capital to
    subscription services; the fragmentation of the audience due to
    competition among a wide variety of media sources has negatively
    impacted ad revenues, highlighting the importance of economies of
    scale; and the rule does not promote competition or diversity since
    ownership of a station in a local market does not affect viewpoint
    diversity in any other local market.

[^674]: Comments of Viacom at pp. 33-38.

[^675]: Comments of Viacom at p. 42. The Commission has approved the
    transfer of control of CBS Corporation to Viacom and given Viacom
    twelve months from consummation of the transaction to come into
    compliance with the national TV ownership cap. *Memorandum Opinion
    and Order*, File Nos. BTCCT-19991116ABA, *et al*., FCC 00-155,
    released May 3, 2000.

[^676]: *See e.g.,* Letter to Senator John Warner from Jane Hunnicutt,
    Regional Director, Muscular Dystrophy Association (Aug. 1, 2000);
    Letter to Senator Bob Graham from Susan E. Reitman, District
    Director, Muscular Dystrophy Association (July 17, 2000); Letter to
    Senator John Breaux from Jeff Huggins, District Director, Muscular
    Dystrophy Association (Aug. 8, 2000).

[^677]: Supplemental Comments of the WB Television Network in MM Docket
    No. 98-35, *In the Matter of 1998 Biennial Regulatory Review --
    Review of the Commission's Broadcast Ownership Rules and Other Rules
    Adopted Pursuant to Section 202 of the Telecommunications Act of
    1996* (Jan. 27, 2000) (Supplemental Comments of WB). These were
    incorporated into the record of this proceeding in the Staff Report.
    They will also be incorporated into the record of the proceeding
    established to examine relaxation of the dual network rule.

[^678]: Comments of WB at pp. 4-6.

[^679]: Comments of WB at pp. 19-23.

[^680]: Comments of WB at pp. 23-26.

[^681]: *Time Warner Entertainment Co. v. United States*, 211 F.3d 1313
    (D.C. Cir. 2000), *petition for cert. Pending.*

[^682]: 15 FCC Rcd 11058, 11074-75.

[^683]: *Id.*

[^684]: 211 F.3d at 1320.

[^685]: *See Federal Communications Comm'n v. National Citizens
    Committee for Broadcasting*, 436 U.S. 775, 799 (1978) (noting that
    the physical limitations of broadcast frequencies make government
    allocation and regulation "essential").

[^686]: 47 C.F.R. Part 80.

[^687]: *See Amendment of the Commission's Rules Concerning Maritime
    Communications,* *Second Report and Order and Second Further Notice
    of Proposed Rulemaking*, 12 FCC Rcd 16949 (1997) (*Second Further
    Notice*).

[^688]: *Amendment of the Commission's Rules Concerning Maritime
    Communications,* *Third Report and Order and Memorandum Opinion and
    Order*, 13 FCC Rcd 19853 (1998) (*Maritime Third Report and Order*).

[^689]: *See* *Second Further Notice*, 12 FCC Rcd at 16965.

[^690]: *Maritime Third Report and Order*, 13 FCC Rcd at 19855-56.

[^691]: *Amendment of the Commission's Rules Concerning Maritime
    Communications, Fourth Report and Order and Third Further Notice of
    Proposed Rule Making*, PR Docket No. 920257, FCC 00-370, paras. 1-2
    (rel. Nov. 16, 2000).

[^692]: RegioNet Wireless License, LLC, *Order*, 15 FCC Rcd 16119,
    16121-22 (2000).

[^693]: Amendment of Parts 13 and 80 of the Commission's Rules
    Concerning Maritime Communications, *Notice of Proposed Rulemaking
    and Memorandum Opinion and Order*, WT Docket No. 00-48, 15 FCC Rcd
    5942, 5943 (2000).

[^694]: *See*, *e.g.*, Part 90, subpart L ("Authorization and Use of
    Frequencies in the 470-512 MHz Band").

[^695]: 47 C.F.R. Part 90.

[^696]: Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66.
    107 Stat. 312 (largely codified at 47 U.S.C. § 332 *et seq.*) (1993
    Budget Act or OBRA).

[^697]: *Implementation of Sections 3(n) and 332 of the Communications
    Act Regulatory Treatment of Mobile Services,* *Second Report and
    Order*, 9 FCC Rcd 1411 (1994) (*CMRS Second Report and Order*).

[^698]: *See*, *e.g.*, Part 90, subpart U ("Competitive Bidding
    Procedures for the 900 MHz Specialized Mobile Radio Service").

[^699]: *Fifth Competition Report*, *supra*, at 9-27, 36-63.

[^700]: *Biennial Regulatory Review -- Amendment of Parts 0, 1, 13, 22,
    24, 26, 27, 80, 87, 90, 95, 97 and 101 of the Commission's Rules to
    Facilitate the Development and Use of the Universal Licensing System
    in the Wireless Telecommunications Services, Report and Order*, 13
    FCC Rcd 21027 (1998); *Memorandum Opinion and Order on
    Reconsideration*, 14 FCC Rcd 11145 (1998).

[^701]: *In the Matter of 1998 Biennial Regulatory Review -- 47 C.F.R.
    Part 90 - Private Land Mobile Radio Services*, WT Docket No. 98-182,
    RM-9222, *Report and Order and Further Notice of Proposed Rule
    Making*, FCC 00-235 (rel. July 12, 2000).

[^702]: *See* 47 C.F.R. 90.210.

[^703]: 47 C.F.R. Part 90, subpart L.

[^704]: The seven categories of eligible users are: (1) Public safety;
    (2) Power and telephone maintenance licensees; (3) Special
    industrial licensees; (4) Business licensees; (5) Petroleum, forest
    products, and manufacturers licensees; (6) Railroad, motor carrier,
    and automobile emergency licensees; and (7) Taxicab licensees. 47
    C.F.R. § 90.311.

[^705]: 47 C.F.R. § 90.311.

[^706]: *Id*.

[^707]: 47 C.F.R. § 90.307.

[^708]: 47 C.F.R. § 90.313(a).

[^709]: 47 C.F.R. § 90.313(c).

[^710]: *See* *Replacement of Part 90 by Part 88 to Revise the Private
    Land Mobile Radio Services and Modify the Policies Governing Them,*
    *Report and Order,* 10 FCC Rcd 10076 (1995); *Memorandum Opinion and
    Order*, 11 FCC Rcd 17676 (1996); *Second Report and Order*, FCC
    97-61 (rel. Mar. 12, 1997). *See* 47 C.F.R. § 90.187(b). The FCC has
    recognized two types of trunking: centralized and decentralized. A
    centralized trunked system uses one or more control channels to
    transmit channel assignment information to the mobile radios. In a
    decentralized trunked system, the mobile radios scan the available
    channels and find one that is clear.

[^711]: 47 C.F.R. Part 90, subpart M.

[^712]: The definition of LMS also includes existing Automatic Vehicle
    Monitoring operations below 512 MHz. Unlike other LMS operations,
    LMS systems below 512 MHz may neither offer service to the public
    nor provide service on a commercial basis. *See LMS Report and
    Order*, 10 FCC Rcd at 4738, ¶ 86.

[^713]: 47 C.F.R. Part 90, subpart X.

[^714]: *Amendment of Parts 2 and 90 of the Commission's Rules to
    Allocate the 5.850-5.925 GHz Band to the Mobile Service for
    Dedicated Short Range Communications of Intelligent Transportation
    Services,* *Report and Order*, 13 FCC Rcd 14321 (1999).

[^715]: *Fifth Competition Report*, *supra*, at 9-27, 36-63.

[^716]: *See Revision of Part 22 and Part 90 of the Commission's Rules
    to Facilitate Future Development of Paging Systems, Second Report
    and Order and Further Notice of Proposed Rulemaking*, 12 FCC Rcd
    2732 (1997) (*Second Report and Order*).

[^717]: *See Revision of Part 22 and Part 90 of the Commission's Rules
    to Facilitate Future Development of Paging Systems, Memorandum
    Opinion and Order on Reconsideration and* *Third Report and Order*,
    14 FCC Rcd 10030 (1999) (*Third Report and Order*).

[^718]: *See* 929 and 931 MHz Paging Auction Closes, *Public Notice*, DA
    00-508 (rel. Mar. 6, 2000).

[^719]: 47 C.F.R. Part 90, subpart S.

[^720]: *Implementation of Sections 3(n) and 332 of the Communications
    Act Regulatory Treatment of Mobile Services,* *Second Report and
    Order*, 9 FCC Rcd 1411 (1994).

[^721]: 47 C.F.R. Part 90, subparts U and V.

[^722]: *Amendment of Part 90 of the Commission's Rules to Facilitate
    Future Development of SMR Systems in the 800 MHz Frequency Band,
    Second Report and Order*, 12 FCC Rcd 19079 (1997) (*Second Report
    and Order*).

[^723]: *Amendment of Part 90 of the Commission's Rules to Facilitate
    Future Development of SMR Systems in the 800 MHz Frequency Band,
    Memorandum Opinion and Order on Remand*, 14 FCC Rcd 21679 (*Fresno*
    *Remand* *Order*).

[^724]: 800 MHz Specialized Mobile Radio (SMR) Service General Category
    (851-854 MHz) and Upper Band (861-865 MHz) Auction Closes; Winning
    Bidders Announced, *Public Notice*, DA 00-2037 (rel. Sept. 6, 2000).

[^725]: 800 MHz SMR Service Lower 80 Channels Auction Closes; Winning
    Bidders Announced, *Public Notice*, DA 00-2752 (rel. Dec. 7, 2000).

[^726]: 47 C.F.R. § 90.655.

[^727]: 47 C.F.R. § 90.658.

[^728]: 47 C.F.R. § 90.607(a).

[^729]: 47 C.F.R. Part 90, subpart T.

[^730]: 47 C.F.R. Part 90, subpart W.

[^731]: *Fifth Competition Report*.

[^732]: *Id.*

[^733]: *See* *220 MHz Third Report and Order*, 12 FCC Rcd 10943 (1997).

[^734]: *See Amendment of Part 90 of the Commission's Rules to Provide
    for the Use of the 220-222 MHz Band by the Private Land Mobile Radio
    Services, Fourth Report and Order*, 12 FCC Rcd 13453 (1997).

[^735]: *See Amendment of Part 90 of the Commission's Rules to Provide
    for the Use of the 220-222 MHz Band by the Private Land Mobile Radio
    Services, Memorandum Opinion Order on Reconsideration*, 13 FCC Rcd
    14569 (1998).

[^736]: *Id.*

[^737]: 47 C.F.R. § 90.737.

[^738]: 47 C.F.R. Part 95.

[^739]: *Amendment of Part 95 of the Commission's Rules to Provide
    Regulatory Flexibility in the 218-219 MHz Service, Memorandum
    Opinion and Order and Notice of Proposed Rulemaking*, 13 FCC Rcd
    19064 (1988).

[^740]: 47 C.F.R. Part 1.

[^741]: *Amendment of Part 95 of the Commission's Rules to Provide
    Regulatory Flexibility in the 218-219 MHz Service,* *Report and
    Order and Memorandum Opinion and Order*, 15 FCC Rcd 1497 (1999).

[^742]: *Policies and Rules for the Direct Broadcast Satellite Service*,
    IB Docket No. 98-21, *Notice of Proposed Rulemaking,* 13 FCC Rcd
    6907 (1998).

[^743]: 47 C.F.R. Part 101.

[^744]: *See, e.g.,* 47 C.F.R. §§ 101.21(e), 101.61(c).

[^745]: *See, e.g.*, 47 C.F.R. §§ 101.13, 101.15.

[^746]: *Reorganization and Revision of Parts 1, 2, 21, and 94 of the
    Rules to Establish a New Part 101 Governing Terrestrial Microwave
    Fixed Radio Services, Report and Order*, 11 FCC Rcd 13449 (1996)
    (*Part 101 Order*).

[^747]: *Id.*, 11 FCC Rcd at 13452-53.

[^748]: *Id.* at para. 1.

[^749]: *Id*.

[^750]: *See id.*

[^751]: *Id.* at para. 2.

[^752]: *See* 65 Fed Reg 38333-01 (June 20, 2000).

[^753]: *See* Amendment of Part 1 of the Commission's Rules --
    Competitive Bidding Procedures, WT Docket No. 97-82, Allocation of
    Spectrum Below 5 GHz Transferred from Federal Government Use, ET
    Docket No. 94-32, *Third Report and Order and Second Further Notice
    of Proposed Rule Making*, 13 FCC Rcd 374 (1997) (modified by
    *Erratum*, DA 98-419 (rel. Mar. 2, 1998) (*Part 1 Third Report and
    Order*).

[^754]: Comments of TIA at pp. 10-14.

[^755]: Comments of Winstar at p. 3.

[^756]: WT Docket No. 00-19, RM-9418.

[^757]: *See* Biennial Review Staff Report, 104.

[^758]: *See Amendment of Parts 2, 21, 74 and 94 of the Commission's
    Rules to Allocate Spectrum at 18 GHz for, and to Establish other
    Rules and Policies Pertaining to, the Use of Radio in Digital
    Termination Systems and in Point-to-Point Microwave Radio Systems
    for the Provision of Digital Electronic Message Services, and for
    other Common Carrier, Private Radio, and Broadcast Auxiliary
    Services; and to Establish Rules and Policies for the Private Radio
    Use of Digital Termination Systems at 10.6 GHz,* 54 Rad. Reg. 2d
    1091 (1983).

[^759]: *See id*.

[^760]: *See Amendment to Parts 1, 2, and 101 of the Commission's Rules
    to License Fixed Services at 24 GHz,* *Notice of Proposed
    Rulemaking*, 14 FCC Rcd 19263, 19267 ¶ 5 (1999) (*24 GHz NPRM*).

[^761]: *See 24 GHz NPRM*, 14 FCC Rcd at 19275 ¶ 20.

[^762]: Comments of TIA at p. 13.

[^763]: Reorganization and Revision of Parts 1, 2, 21, and 94 of the
    Rules to Establish a New Part 101 Governing Terrestrial Microwave
    Fixed Radio Services, WT Docket No. 94-148, *Memorandum Opinion and
    Order and Notice of Proposed Rulemaking*, 15 FCC Rcd 3129, 57.

[^764]: 47 C.F.R. Part 101.

[^765]: *Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's
    Rules to Redesignate the 27.5-29.5 GHz Frequency Band, to Reallocate
    the 29.5-30.0 GHz Frequency Band, to Establish Rules and Policies
    for Local Multipoint Distribution Service and for Fixed Satellite
    Services, Sixth Notice of Proposed Rulemaking*, 14 FCC Rcd 21520 ¶
    32 (1999) (*LMDS 6th NPRM*).

[^766]: *Id.*

[^767]: See *Rulemaking to Amend Parts 1, 2, 21, and 25 of the
    Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
    to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules
    and Policies for Local Multipoint Distribution Service and for Fixed
    Satellite Services, Third Report and Order and Memorandum Opinion
    and Order*, FCC 00-223 (June 27, 2000) at App. B (*LMDS 3rd R&O*)
    for a comprehensive list of LMDS launches and the types of service
    each carrier is providing.

[^768]: *LMDS 3rd R&O*.

[^769]: *LMDS 3rd R&O*.

[^770]: *Id.* at para. 33.

[^771]: *See Amendment of Part 1 of the Commission's Rules − Competitive
    Bidding Procedures, Allocation of Spectrum Below 5 GHz Transferred
    from Federal Government Use, Third Report and Order and Second
    Further Notice of Proposed Rule Making*, 13 FCC Rcd 374 (1997)
    (modified by *Erratum*, DA 98-419 (rel. Mar. 2, 1998)) (*Part 1
    Third Report and Order*).

[^772]: For example, Section 101.1001, 47 C.F.R. § 101.1001, should be
    amended to remove the cross-reference to now-deleted Section
    100.1003.

[^773]: Comments of TIA at p. 13.

[^774]: *Id.* at p. 12.

[^775]: Reorganization and Revision of Parts 1, 2, 21, and 94 of the
    Rules to Establish a New Part 101 Governing Terrestrial Microwave
    Fixed Radio Services, WT Docket No. 94-148, *Memorandum Opinion and
    Order and Notice of Proposed Rulemaking,* 15 FCC Rcd 3129, 54, 57.