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                                                           Before the
               Federal Communications Commission
                     Washington, D.C. 20554

In the Matter of

Elastic Networks Petition for Waiver of the Signal
Power Limitations Contained in Section 
68.308 (e)(1) of the Commission's Rules for the 
EtherLoop/Stormport 400 Modem
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File No. NSD-L-00-254

                  MEMORANDUM OPINION AND ORDER

   
Adopted:  July 13, 2001                 Released:  July 16, 2001 

By the Acting Chief, Network Services Division:

                      I.iNTRODUCTION
1.     On November 15, 2000, Elastic Networks (Elastic) filed a Petition with the Network Services
Division (Division) of the Common Carrier Bureau (Bureau) for waiver of the out-of-band metallic signal
power limitations contained in 47 C.F.R. section 68.308(e)(1) of the Commission's rules, so that it may
register its EtherLoop Stormport 400 Modem under Part 68 of the Commission's rules. In this order, we
grant the waiver request subject to the conditions described herein.
                       II.BACKGROUND
3.     Signal Power Limitations.  Section 68.308(e) contains limitations on metallic and longitudinal
signal power to protect the network from crosstalk.  Metallic signal power levels in the 100 Hz to 4 kHz
range are limited by section 68.308(b).  Section 68.308(e)(1) limits the power level of metallic signals in the
4 kHz to 6 MHz range.  These limits are represented by a maximum value of root mean square (rms) voltage
across the terminals of the equipment, as shown in Figure 68.308(a).  
4.     Although section 68.308(e) provides two limitations to prevent crosstalk in telephone company
transmission systems or services, Elastic seeks waiver of only the first limitation, excessive metallic signal
power in the 4 kHz to 6 MHz range, as specified in section 68.308(e)(1).  Elastic claims that the Stormport
400 complies with all other sections of Part 68.
5.     Waiver Standard.  In analyzing the waiver request, we consider established legal standards for
waiver of the Commission's rules.  The Commission will adhere strictly to its rules unless a party can
demonstrate that "in the public interest the rule should be waived." Furthermore, the Commission may only
waive a provision of its rules for "good cause shown."  The party petitioning the Commission for a waiver
bears the burden of showing good cause: "[a]n applicant [for a waiver] faces a high hurdle even at the starting
gate."  The Commission must take a "hard look" at applications for waiver and must consider all relevant
factors when determining if good cause exists. In addition, "[t]he agency must explain why deviation better
serves the public interest, and articulate the nature of the special circumstances, to prevent discriminatory
application and to put future parties on notice as to its operation."  Finally, a waiver of one or more
conditions of the Commission's rules does not excuse an applicant from compliance with the Commission's
other requirements. 
6.     The test for a waiver of section 68.308(e)(1) is well established.  We have formulated and
consistently applied a two-prong test, the Nortel Test, to determine the merits of a request for waiver of
section 68.308(e)(1) to permit registration of non-conforming terminal equipment.  The first prong of the
test is an evaluation of the terminal equipment's benefit to the public interest, with an emphasis on the
potential gain in consumer choice and value that it would bring to the market. The second prong of the test
is an evaluation of potential for prevention of harm if terminal equipment meets alternatives to waived
conditions. We have consistently concluded that when waivers require the imposition of certain alternative
performance conditions, those alternative performance conditions become mandatory requirements upon
which the grant of the waiver is conditioned.  Applicants submitting applications for registration of
equipment for which waiver of section 68.308(e)(1) has been granted subject to provision of alternative
performance conditions must provide, with their application for registration, test results showing compliance
with those alternative performance conditions, as well as compliance with other applicable part 68
requirements.
7.     Elastic's Petition.   As described by Elastic, the Stormport 400 is a "burst mode" modem.  Burst
mode modems transmit in intervals interleaved with quiet periods (moments in time when no energy is
transmitted). The Stormport 400 takes crosstalk measurements in the quiet period between bursts, and uses
these measurements both to optimize its transmission speed and to change its mode of operation if it detects
the presence of crosstalk coupling with any asymmetric service. The change in mode of operation is
accomplished by a "Spectrum Management" feature that switches from the higher power "Native Mode" to
the lower power "Safe Mode" upon detection of such crosstalk.  Elastic states that if Spectrum Manager's
detection of crosstalk is inconclusive, the Spectrum Manager takes the cautious step of switching to Safe
Mode.  In Safe Mode, Elastic states, the Stormport 400 modem will not cause interference in the PSTN
because it complies with ANSI standard T1.417 section 5.3.5.1 (Spectrum Management Class 5 PSD
criteria and total average power constraints), with section 5.3.5.2 (Spectrum Management Class 5 transverse
balance requirements), and with section 5.3.5.3 (Spectrum Management Class 5 longitudinal output voltage
requirements).  These industry standards are in the same Spectrum Management Class as the ADSL modems
for which we have previously granted waivers using a streamlined procedure.  
8.     When operating in Native Mode, the Stormport 400 modem transmits up to a maximum of 14
dBm of total power at each center frequency. In Native Mode, the modem will not interfere with symmetric
basis systems, because, according to the Method B analysis of ANSI T1.417, there is sufficient margin for
non-interference with such services.  Elastic concedes that the modem would interfere with asymmetric basis
systems when operating in Native Mode.  This interference is avoided by operation of the modem's Spectrum
Manager, which will detect signals from asymmetric basis systems and switch automatically from Native
Mode to Safe Mode, thus avoiding interference with asymmetric systems.  Accordingly, Elastic argues that
its modem will not operate in Native Mode in the presence of signals from asymmetric basis systems. 
Elastic states that its modem has been deployed safely by 28 incumbent local exchange carriers and two
competitive local exchange carriers in the United States, as well as by seven incumbent local exchange
carriers in Canada.
9.     Elastic claims that the EtherLoop/Stormport 400 modem has greater reach than ADSL modems,
and that this ability to provide high-speed data services reliably at greater distances from the telephone
company central office will lead to more ubiquitous broadband service, particularly for rural customers. 
Elastic argues that its Stormport 400, although not compliant with section 68.308(e)(1), would not cause
harm to the PSTN because it complies with the ANSI T1.417 standard.  Elastic also notes that the
Commission established a streamlined waiver process for ADSL equipment in the Alcatel Order.  In that
order, the Commission determined that, if a petitioner shows that an ADSL device meets two performance
conditions established in ANSI standard T1.413, then it is in the public interest to grant a waiver of section
308(e)(1).  Elastic contends that compliance with ANSI standard T1.417 should be an alternate basis for
the Commission to waive the same rule. 

                       X.Discussion
11.    The issues raised by Elastic's Petition are similar to those raised in other petitions seeking
waiver of the Commission's rules in Part 68.   Based upon the record and its application to current law,
regulations and precedent, we grant Elastic Network's Petition, subject to the following limitations. 
12.    First prong of Nortel Test: New Products and Innovation.   We conclude that Elastic's Stormport
Modem would increase consumer access to advanced telecommunication services, particularly in rural areas
where ADSL services are not available.  Champlain Telephone Company provides evidence of its
deployment experience with the Stormport 400, indicating that use of the device would successfully benefit
consumers.  We have previously found that the similar ADSL, RADSL, and G-LITE technologies are in
the public interest. Accordingly, we find that Elastic's Petition meets the first prong of the Nortel Test. 
13.    Second prong of Nortel Test: Harm to the Network.   In our analysis of the second prong of the
Nortel Test, we consider whether certain technical alternatives to section 68.308(e)(1) provide sufficient
criteria for prevention of harm to the PSTN from terminal equipment meeting those alternative criteria. We
conclude that with the protection of conditions proposed by Verizon and approved by Elastic, Elastic's
Petition also meets the second prong of the Nortel Test.  
14.    As a threshhold matter, we find Bell South's argument that third party review is necessary for
supporting a waiver of the Part 68 technical requirements to be without merit.  In our previous Orders
waiving section 68.308(e)(1), we based our second-prong analysis on petitioner's representations that its
equipment complied with established industry standards that were developed through open, industry
consensus-building processes, and intended to protect the PSTN from harm.   We have previously
considered a similar argument by BellSouth that a party applying for a waiver of Part 68 criteria must submit
its device to a third party for testing for compliance with conditions imposed by an Order before granting a
waiver request.  We conclude here, as we did earlier, that requiring third party review for grant of a waiver
would unnecessarily duplicate the testing that already occurs as part of the Part 68 registration process, and
therefore is not in the public interest.
15.    Verizon proposed five conditions that would ensure that no harm would be caused to the PSTN. 
These conditions are based on compliance with ANSI T1.417 as well as with the "Method B" outlined in that
standard.  The waiver conditions are different depending upon whether the Safe Mode or the Native Mode
of the Stormport 400 is operating.  We discuss these conditions below in detail and, with some modifications,
include these conditions in our grant of Elastic's waiver request.   
16.    User Control of Adaptive Systems. We conclude that there must be a performance condition that
requires the modem to be equipped with circuitry, e.g., a "spectrum manager" feature, that cannot be defeated
or adjusted by the operator, and that places the modem in the Safe Mode when signals from asymmetric
services are present.  Fundamental to Elastic Network's petition is the claim that its modem switches from
Native Mode to Safe Mode upon detection of crosstalk coupling with an asymmetric service, even if the
detection is ambiguous.  We agree that a switch to Safe Mode in the presence of asymmetric services is
necessary to prevent harmful interference.  We further agree with Verizon that the mechanism that insures
appropriate switching to safe mode should be beyond control by the user.  We find it reasonable that a
critical safety mechanism must not be easily defeated, for then it would not be fail safe. 
17.    Compliance with T1.417, section 5.3.5.1.  We conclude that when operating in Safe Mode, the
modem must meet the Spectral Management Class 5 Power Spectral Density criteria and total average power
constraints contained in T1.417 clause 5.3.5.1.  These technical criteria prevent interference by restricting
the amount of electrical power transmitted over the PSTN.   Elastic describes the Stormport 400 as a device
that complies with T1.417, section 5.3.5.1, PSD and average power limitations when operating in Safe Mode. 
We agree, as do Elastic and all commenters, that such compliance is necessary to avoid harmful interference
in the PSTN. 
18.    Compliance with "T1.417 Method B" or PSD masks.   We conclude that when operating in the
Native Mode, all transmissions from the modem must have sufficient margin with respect to symmetric
systems, as shown by the Method B analysis of ANSI T1.417, to avoid interference.  Method B is a set of
mathematical models for calculation of crosstalk margins for several transmission technologies. Elastic
argues that analysis pursuant to Method B of ANSI T1.417 shows that its modem, operating in Native Mode,
is spectrally compatible, without deployment restrictions, with all symmetric basis systems.  Power Spectrum
Density (PSD) masks set out specific technical requirements for signal power allowed at a given point in the
spectrum.  Verizon obtained PSD masks from Elastic Networks for the spectra associated with each of the
carrier frequencies, or "tones," used by the Stormport 400, and presented those masks to Commission staff
as its suggested parameters for conditioning a grant of Elastic's waiver request.  The PSD masks present
criteria that are relatively easy to understand and apply in evaluation of test data for registration of the
modem.  Their use as a condition for this waiver, however, would be a departure from our practice of
considering only widely accepted industry standards in deciding waiver requests.  Accordingly, we believe
that the better practice is to require compliance with Method B, since it is part of the industry standard ANSI
T1.417.
19.    Transverse balance. We conclude that when operating in either Safe or Native Mode, the modem
must comply with the transverse balance limits of ANSI T1.417 clause 5.3.5.2. Transverse balance is the
term given to a measure of symmetry of impedance.  The transverse balance limits for Part 68 are presented
in section 68.310 for frequencies up to 4 kHz. The transverse balance limits for T1.417, applicable to
frequencies above 4 kHz, are presented in T1.417 section 5.3.5.2. 
20.    Verizon argues that, although Elastic claims that its modem meets the applicable transverse
balance limits in the Commission's rules, those limits apply only to equipment operating at frequencies
below those of Elastic's modem (up to 4 kHz, as noted above), and Elastic does not show that its Stormport
400 modem meets that standard. In the Alcatel Order, we considered the matter of transverse balance and
declined to adopt additional limits beyond those in section 68.310 as a condition for granting Alcatel's
Petition.     In that case, petitioner Alcatel did not claim compliance with transverse balance limits of a
particular standard, and Verizon (then Bell Atlantic) did not propose that we use an industry standard as a
condition on the waiver.  Instead, Verizon proposed an unsupported requirement of a minimum of 35 dB of
transverse balance across the entire upstream and downstream ADSL frequency bands. 
21.    In the instant proceeding, on the other hand, Elastic claims that its Stormport 400 is compliant
with the transverse balance limits of ANSI T1.417 section 5.3.5.2, an industry standard also proposed by
Verizon.  The transverse balance limits in ANSI T1.417 section 5.3.5.2 were developed through an industry
consensus process for the purpose of protecting the PSTN from interference from devices such as the
Stormport 400.  We agree with Elastic and Verizon that in view of the existence of this industry standard,
it is appropriate to include this standard as a performance condition for grant of Elastic's waiver request. 
22.    Longitudinal output voltage.  We conclude that when operating in either Safe or Native Mode,
the modem must comply with the longitudinal voltage limits of T1.417 clause 5.3.5.3. Longitudinal voltage
is the term given to a measure of symmetry of signals produced by the terminal equipment.  Longitudinal
voltage limits for Part 68 are presented in section 68.308(e)(2) for frequencies up to 6 MHz.  Longitudinal
voltage limits for ANSI T1.417 are presented in T1.417 5.3.5.3.
23.    Elastic claims that the Stormport 400 is compliant with both section 68.308(e)(2) and the
longitudinal voltage limits of ANSI T1.417 5.3.5.3.  As with transverse balance limitations, the ANSI T1.417
5.3.5.3 criteria for longitudinal voltage are designed to protect the network from interference and are
applicable to devices such as the Stormport 400.  Based on the industry consensus represented by ANSI
T1.417, we agree with both Elastic and Verizon that compliance with this industry standard is important for
protection of the PSTN from interference, and therefore condition Elastic's waiver on this requirement. 
24.    Short Term Stationary criteria. We conclude that when operating in either Safe or Native Mode,
the modem must comply with the short-term stationary criteria of ANSI T1.417 clause 6.5.  Short-term
stationary criteria prevent interference to the network by limiting the extent to which power transmitted into
the PSTN can change in a specified interval.   ANSI T1.417 section 6.5 specifies tests and requirements for
short-term stationary devices.  Elastic claims that its Stormport 400 complies with all of the requirements
of section 6.5. of the T1.417 standard.  We agree with both Elastic and Verizon that compliance with this
industry standard is important for protection of the PSTN from interference.
25.    Frequencies below 25.875 kHz.   In its proposed waiver criteria for Elastic's Stormport 400,
Verizon suggests that if the Stormport modem meets the upstream Spectrum Management Class 5 PSD limits
in T1.417 for frequencies below 25.875 kHz while operating, then the modem could be presumed acceptable
for deployment on the same loop with switched voice services.   We conclude that it is not necessary to add
this condition because the substance of these concerns is addressed by other waiver conditions we adopt
herein.  With regard to operation in Safe Mode, our performance condition requiring that Elastic's modem
meet the Spectral Management Class 5 Power Spectral Density criteria and total average power constraints
contained in T1.417 clause 5.3.5.1 will include modem operations on frequencies below 25.875 kHz. 
Modem operation in Native Mode below 25.875 kHz is addressed by our performance condition requiring
that Elastic's modem must have sufficient margin to avoid interference with respect to symmetric systems,
as shown by the Method B analysis of ANSI T1.417.
26.     Commission Obligations to Protect the PSTN.  We conclude that BellSouth's argument that
section 256(a)(2) of the Act obligates the Commission to develop and institute technical criteria for
equipment located on carrier premises in this proceeding is unfounded.  In other proceedings, the
Commission has imposed obligations on incumbent local exchange carriers (ILECs) to allow connection of
foreign equipment to their facilities (collocation) by competitive local exchange carriers (CLECs), and placed
the burden of assuring that such equipment did not harm the network on the incumbent carrier, without
providing numerical criteria for evaluation of that equipment.  In any event, this subject area is outside the
scope of a waiver proceeding for Part 68, which is limited to the effect of terminal equipment on the PSTN. 
27.    Based on the foregoing analyses, we conclude that granting this waiver request, subject to the
conditions set forth in this Order, will serve the public interest by providing greater consumer choice and
value without increasing the likelihood of harm to the PSTN.

                  XXVIII.ORDERiNG CLAUSES
29.    Accordingly, pursuant to authority delegated in sections 0.91 and 0.291 of the Commission's
rules, 47 C.F.R. 0.91, 0.291, and section 1.3 of the Commission's rules, 47 C.F.R. 1.3, IT IS HEREBY
ORDERED that the request for waiver of section 68.308(e)(1) of the Commission's rules, 47 C.F.R.
68.308(e)(1), by Elastic Networks for its Etherloop/Stormport 400 Modem is GRANTED to the extent
discussed herein.
30.    IT IS FURTHER ORDERED that the waiver is GRANTED SUBJECT TO THE FOLLOWING
CONDITIONS: 
     (1) When operating in the "Native Mode," all transmissions from the modem must have sufficient
     margin with respect to symmetric systems, as shown by the Method B analysis of T1.417, to avoid
     interference;
     (2) The modem must be equipped with circuitry, e.g., a "spectrum manager" feature, that cannot be
     defeated or adjusted by the operator, and that places the modem in the Safe Mode when signals from
     asymmetric services are present;  
     (3) When operating in Safe Mode, the modem must meet the Spectral Management Class 5 Power
     Spectral Density criteria and total average power constraints contained in T1.417 clause 5.3.5.1;
     (4) When operating in either Safe or Native Mode, the modem must comply with the short term
     stationary criteria of T1.417 clause 6.5; 
     (5) When operating in either Safe or Native Mode, the modem must comply with the transverse
     balance limits of T1.417 clause 5.3.5.2; and 
     (6) When operating in either Safe or Native Mode, the modem must comply with the longitudinal
     voltage limits of T1.417 clause 5.3.5.3.
     
     
                         FEDERAL COMMUNICATIONS COMMISSION
                         
                         
                         Diane Griffin Harmon
                         Acting Chief, Network Services Division
                         Common Carrier Bureau