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$// PN, IDCMA's Petition for Declaratory Ruling DA 95-2190 //$
$/ 47 CFR 64.702 /$
"FOR RECORD ONLY"
                                                                 DA 95-2190
                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C.  20554
In the Matter of                   )
                              )
INDEPENDENT DATA              )
COMMUNICATIONS                )
MANUFACTURERS            )
ASSOCIATION, INC.             )
                              )
Petition for Declaratory Ruling That    )
AT&T's InterSpan Frame Relay Service    )
Is a Basic Service; and            )
                              )
                              )
AMERICAN TELEPHONE       )
AND TELEGRAPH COMPANY         )
                              )
Petition for Declaratory Ruling That    )
All IXCs be Subject to the Commission's )
Decision on the IDCMA Petition          )
                       MEMORANDUM OPINION AND ORDER
Adopted:  October 16, 1995         Released:  October 18, 1995
     By the Chief, Common Carrier Bureau:
                             I.  INTRODUCTION
   1.  On November 28, 1994, the Independent Data Communications Manufacturers
Association, Inc. (IDCMA) filed a petition for declaratory ruling that AT&T's InterSpan
Frame Relay Service (InterSpan) is a basic transmission service, subject to the tariffing and
other requirements of Title II of the Communications Act of 1934, as amended (Act).
Thereafter, on December 5, 1994, AT&T filed a separate petition for declaratory ruling that
the Commission's decision regarding InterSpan should apply to all other interexchange
carriers' (IXC) frame relay services.  For the reasons stated below, we conclude that frame
relay service is a basic service in accordance with the Commission's Rules and precedent.  In
addition, we conclude that AT&T provides both basic frame relay service and an enhanced
service incorporating an underlying basic frame relay service.  Accordingly, consistent with
the Commission's prior decisions:  (1) AT&T must provide the basic frame relay service
under tariff, whether or not it provides that service in conjunction with enhanced protocol
conversion, within 60 days of the effective date of this order; and (2) all other common
carriers owning transmission facilities (facilities-based) used to provide basic frame relay
service or an enhanced service in conjunction with an underlying basic frame relay service
must file tariffs for the basic frame relay service.
                              II.  BACKGROUND
   2.  The issue before us is whether AT&T and certain other carriers must offer frame
relay service as a regulated telecommunications service, in accordance with the requirements
of Title II of the Act and the Commission's Computer II and Computer III proceedings.
Although the Commission has addressed general packet-switching technology in the past,
frame relay service is a recent offering.  We discuss below the development of this
technology, and the historical treatment of data communications services under the
Commission's Computer II and Computer III proceedings.
A. Basic Data Communications and Protocol Processing
   3.  In contrast to voice communications, data communications between computers is
generally thought of as "bursty" traffic.  That is, rather than a continuous stream of data,
computers communicate in bursts of data.  Packet-switched networks were developed to take
advantage of this characteristic of data communications.  With packet switched data
transmission, many users can share a single digital transmission channel.  Each user's data are
divided into small discrete packets.  Each packet contains a header with address information
that enables the network to route the packet to the proper destination.  Packets belonging to
one user are sent through the network separately, then reassembled at their destination.
During transmission, packets belonging to one user can be interspersed among packets
belonging to other users, allowing the channel to be more fully occupied than it would be if it
were dedicated to a single user.
   4.  The synchronous X.25 interface protocol has traditionally been the most widely
recognized protocol used to communicate over packet-switched networks.  Much of the
existing terminal equipment that customers use to originate and terminate data
communications between their computers and other computers, however, historically has not
been designed to support the X.25 protocol.  This equipment often employs an asynchronous
protocol, which is used to originate and terminate traffic over ordinary voice communications
lines.  Thus, data communicated under asynchronous protocols must be converted to data
employing synchronous X.25 protocol in order to be transmitted over a packet-switched
network.  Moreover, as the number of networking and terminal protocols has increased over
time, so has the need to provide conversion among these protocols.
   5.  Prior to its divestiture AT&T offered neither packet switching services nor protocol
conversion.  Independent vendors of packet switched communications services known as
value-added-network service providers (VANs) acquired common carrier facilities from
AT&T and added "value" by providing such packet services.  The VANs resold the
underlying transport services in conjunction with the packet switching services.  Today,
AT&T, the BOCs, and many other service providers (both facilities-based carriers and VANs)
offer packet switched and protocol conversion services, such as asynchronous-to-X.25
conversion.
B. Frame Relay Technology
   6.  Frame relay is a relatively new, high-speed packet-switching technology used to
communicate digital data between, among other things, geographically dispersed local area
networks (LANs).  In addition, frame relay technology often serves as the intermediary format
for data traveling between different computer systems employing different communications
protocols.
   7.  As the term suggests, frame relay networks communicate "frames" containing digital
data.  The format of a frame defined by a specific interface protocol consists of a
beginning "flag," a "header," a variable length data field, a "trailer," and an ending "flag."
The header contains routing and congestion control information, while the trailer holds an
error control sequence enabling detection of errors within frames.  Unlike the slower X.25
packet switching protocol, frame relay switches do not store frames until a positive
acknowledgement is received from a destination switch.  When a destination switch receives a
frame with errors, it simply discards the frame, relying on higher-layer protocols of intelligent
customer premises equipment (CPE) to note the omission and take corrective action by
rerequesting transmission of the packet.  This streamlined operation allows frame relay
networks to operate at significantly higher speeds than X.25 networks.
   8.  In a typical frame relay application, a LAN is linked to a device known as a "router"
on the customer premises.  If the router supports frame relay protocol, it is connected to an
access link which carries the frame relay traffic to a central office port.  If the router does not
support frame relay, a frame relay assembler/disassembler (FRAD) is located on a customer
premise between the router and access link to convert the data transmitted from the router to
frame relay format.  The central office frame relay switch establishes a permanent virtual
circuit (PVC) connecting the access link to a communications line linking one switch to
another.  While the access link may operate at speeds from 56 to over 1,000 kilobits per
second (kbs), the data relay rate across the network is limited by the transmission rate of the
PVC, which varies according to customer needs and budgets.  The customer contracts with the
service provider for a specified information transmission rate.  If the customer attempts to
transmit data at speeds that exceed the agreed-upon rate, the network tries to accommodate the
higher rate if capacity is available.  If the network is unable either to perform the transmission
or temporarily buffer the data, the network discards excess frames beyond the agreed-upon
rate.  As with frames containing errors, frames discarded in this fashion must be tracked by
CPE.
C. AT&T's InterSpan Frame Relay Service
   9.  According to AT&T's InterSpan Interface Specification, the "core aspects" of its
InterSpan Service are:  (1) provision of bidirectional frame transfer; (2) maintaining the
frames across the network in the same sequence in which they were delivered to the network;
(3) detection of errors; (4) transportation of user data transparently; and (5) no
acknowledgement of frames (in contrast with X.25 protocol).  In addition to these core
attributes, InterSpan provides protocol conversion for CPE that does not have a frame relay
interface.
   10.  Thus, the "core" of InterSpan service is the provision of frame transmission in the
frame relay format between the point where a customer's data enters the public switched
network and the point where it leaves the network.  For those customers whose CPE is not
equipped to provide the network with frame format data, AT&T provides a variety of protocol
conversion functions permitting communication with the frame relay network.  Some
conversion functions are performed at both ends of the network.  That is, a customer may
provide data to the network in a foreign protocol, the network converts the data into frame
relay protocol, transmits the data across the network, and then converts the data back to the
original foreign protocol before delivering the data out of the network.  Other conversions
take place only at the originating end of the transmission, or only at egress from the network.
D. Regulatory Framework
   11.  The regulatory treatment of data communications services is governed by the basic-
enhanced service framework established in the Commission's Computer II proceeding.  In
that proceeding, the Commission described basic communications services as providing "pure
transmission capability over a communications path that is virtually transparent in terms of its
interaction with customer-supplied information."  The use of packet switching and error
control techniques "that facilitate the economical, reliable movement of [such] information
[do] not alter the nature of the basic service."  Thus, for example, in subsequent decisions
the Commission has determined that packet-switched networks following X.25 protocols
provide a basic transport service under Commission Rules.
   12.  In contrast, section 64.702(a) of the Commission's Rules defines enhanced services
in pertinent part as "services . . . which employ computer processing applications that act on
the format, content, code, protocol or similar aspects of the subscriber's transmitted
information; provide the subscriber additional, different, or restructured information; or
involve subscriber interaction with stored information."  Thus, the Commission has
traditionally treated carrier provision of protocol conversion (such as asynchronous-to-X.25
conversion) as an enhanced, and thus unregulated, service.
   13.  Under the Commission's Computer II decision, those carriers that own common
carrier transmission facilities and provide enhanced services must unbundle basic from
enhanced services and offer transmission capacity to other enhanced service providers under
the same tariffed terms and conditions under which they provide such services to their own
enhanced service operations.  Section 202 of the Act also prohibits a carrier from
discriminating unreasonably in its provision of basic services.  In addition, the Commission's
Computer III decisions subject certain carriers to further unbundling requirements in offering
an enhanced service.
   14.  In the Computer III decisions, however, the Commission reaffirmed earlier
decisions concluding that three types of protocol processing are not enhanced services within
the meaning of the Commission's rules.  First, the Commission reaffirmed that the enhanced
services definition applies only to end-to-end communications between or among subscribers.
Thus, communications between a subscriber and the network itself  (e.g. for call setup, call
routing, and call cessation) are not considered enhanced services.
   15.  Second, the Commission determined that protocol conversions necessitated by the
introduction of new technology are also outside the ambit of the enhanced services definition.
This circumstance arises when innovative basic network technology is introduced into the
network in a piecemeal fashion, and conversion equipment is used in the network to maintain
compatibility with CPE.
   16.  Third, the Commission reaffirmed that internetworking protocol conversions those
conversions taking place solely within the network that result in no net conversion between
users should be treated as basic services.  This final exemption applies in situations where
a carrier uses the protocol conversions merely to facilitate provision of an overall basic
service.  Thus, in a case where a carrier converts from X.25 to X.75 formatted data at the
originating end within the network, and then converts the data back from X.75 to X.25 at the
terminating end, the protocol conversion is treated as facilitating a basic X.25 service, rather
than enhanced protocol conversion.  Accordingly, a carrier service providing one of these
three exempted forms of protocol conversion is engaged in the provision of a basic service.
   17.    In the Computer III proceedings the Commission reaffirmed its treatment of
protocol processing (except for the three exemptions) as an enhanced service.  The
Commission reasoned, in part, that deciding otherwise would remove the enhanced component
of VAN services, thus eliminating their non-carrier status under what is termed the
"contamination" theory and subjecting them to Title II regulation.
   18.  Under the contamination theory, VANs that offer enhanced protocol processing
services in conjunction with basic transmission services have historically been treated as
unregulated enhanced service providers.  Under this theory, the enhanced component of their
offerings is viewed as "contaminating" the basic component, and as a result, the entire
offering is considered enhanced.
                           III.  IDCMA PETITION
   19.  IDCMA's petition requests that we declare AT&T's InterSpan service to be a basic
data transport service that AT&T must offer under tariff.  IDCMA argues that the protocol
processing services associated with InterSpan including conversion of customer data to
frame relay protocol and asynchronous-to-X.25 conversions are separate and distinct from
the InterSpan service.   IDCMA notes that AT&T's rate structure highlights the fact that the
frame relay and protocol conversion services are distinct offerings.  AT&T's rates for frame
relay service consist of flat-rate charges, assessed monthly.  Protocol conversion services, in
contrast, are charged on a per-minute basis.  IDCMA further contends that only ten percent
of AT&T's frame relay customers also purchase protocol conversion services.
   20.  IDCMA asserts that InterSpan provides a basic transmission service for customers
providing the network with data already in frame relay protocol.  Thus, IDCMA argues that
InterSpan does not involve alteration of the format, content, code, or protocol of the
subscriber's information because data enter and exit the network in frame relay protocol.
IDCMA analogizes InterSpan service to AT&T's basic packet switching service, which,
according to IDCMA, involves even greater data manipulation than frame relay services.
IDCMA points out that several Bell Operating Companies (BOCs) have filed tariffs for basic
frame relay services.
   21.  IDCMA also argues that the "contamination" theory purportedly exempting VANs
from Title II regulation is inapplicable to AT&T because the Commission has never applied it
to AT&T.  Finally, IDCMA states that grant of the requested declaratory relief is in the
public interest because AT&T's failure to tariff frame relay services subjects individual
customers to the possibility of unjust, unreasonable, or discriminatory rates, and impairs
competition in the CPE market by allowing AT&T to bundle frame relay service and CPE.
   22.  For the reasons set forth below, we conclude that frame relay service is a basic
service.  We further find that AT&T's frame relay service in particular, underlying its
InterSpan service, is a basic service that AT&T must unbundle from its enhanced offering.
Finally, we conclude that AT&T is providing frame relay services on a common carrier basis,
rather than as private carriage.
A. Frame Relay Service is a Basic Service
   1.  Comments
   23.  US West and Southwestern Bell state that they provide a basic frame relay service
under tariff.  Motorola agrees with IDCMA that AT&T's frame relay service is provided by
equipment separate and distinct from that performing protocol processing and, consequently,
frame relay service without protocol processing should be treated as a regulated service.
   24.   AT&T and BT North America (BTNA) contend that frame relay is an enhanced
service because the discard function of frame relay service alters the data sent by the
customers of frame relay service such that the received data are "different" from the
transmitted data.  Similarly, AT&T, BTNA, and Home Depot assert that by marking certain
frames "discard eligible" during transmissions that exceed agreed-upon rates, the network
changes the content of the data sent by the customer, thereby providing another basis for
concluding that frame relay service is enhanced.  BTNA further contends that modification
of a frame location code in the frame's header also constitutes an enhancement.
   25.   Motorola disputes the claim that the discard-related features of frame relay service
render the service enhanced.  IDCMA similarly challenges AT&T's assertions regarding
frame discards, arguing that higher level protocols ensure the arrival of customer data that is
discarded. BTNA responds to IDCMA's argument by suggesting that the user's CPE, which is
not part of the network, detects the discarded frames, and thus frame relay services modify
user data unlike packet switched services (where equipment within the network detects
erroneous frames and orders retransmission).
   26.  AT&T and other commenters also assert that characterizing frame relay service as
basic would hinder development of this and other new technologies, such as asynchronous
transfer mode (ATM).  A number of frame relay customers supplied comments urging the
Commission to deny IDCMA's petition, contending that granting the petition would result in
the loss of flexibility, and that the market for frame relay services was already competitive.
United Technologies expressed concern over the ramifications of granting the petition on
existing contracts for frame relay, and the impact on other IXCs.
   27.  The Ad Hoc Users Group urges the Commission to require carriers with market
power to unbundle and tariff the basic elements of frame relay service, while allowing the
carriers to purchase those basic elements for use as part of an integrated, enhanced, untariffed
frame relay offering.
   2.  Discussion
   28.  Under section 203 of the Act, common carriers are required to tariff their interstate
communications services.  Six of the seven BOCs currently maintain or have indicated they
will file tariffs for their basic frame relay services provided without protocol processing.
Those BOCs have filed Computer III Comparably Efficient Interconnection (CEI) Plans for
their enhanced protocol processing services that use underlying basic frame relay service.  In
contrast, AT&T makes a series of arguments challenging the basic nature of frame relay
service.  We conclude, however, that frame relay service is a basic service in accordance with
the Commission's Rules and precedent.
   29.  Under section 64.702(a) of the Commission's Rules, frame relay service constitutes
an enhanced service if it "employ[s] computer processing applications that act on the . . .
content . . . of the subscriber's transmitted information, [or] provide[s] the subscriber . . .
different, or restructured information."  AT&T contends that modifications to the frame
header that occur during network transmission such as changes in discard eligibility or
location code render the customer data that is delivered to the terminating customer through
its frame relay service "different" from the data transmitted by the originating customer.  We
disagree.
   30.  Regardless of changes made to the frame header, the customer's data contained
within the frame are not modified in any way as they travel through the network and arrive
intact.  Moreover, changes to the header information such as the location code, are in some
instances responsible for the carriage of the customer's data through the network to the proper
termination point and, hence, are part of a basic transmission service.   Accordingly, we
conclude that modifications to the frame header, without more, fail to alter the customer's
data in a manner that results in the delivery of "different" data to the termination point.
   31.  As discussed above, however, frame relay networks may discard entire frames of
customer data if errors are detected in the frame or if the customer's transmission rate exceeds
the maximum rate permitted under its agreement.  In contrast to X.25 transmission networks,
the customer's CPE, not the network, must detect and compensate for such discards.  Thus,
AT&T and others assert that the customer receives "different" or "restructured" information
within the meaning of section 64.702 if the network discards eligible frames in frame relay
networks.
   32.  We conclude, however, that this is a misreading of the Rule.  The functionality that
AT&T relies on to argue that the data are "different" is designed to facilitate the overall
transparency and efficiency of the frame relay service.  Ultimately the data on the receiving
end is the same as what is transmitted.  Thus, discarding data is not a "service" rendered to a
customer within the meaning of section 64.702.
   33.  It is important to note that the only frames that are normally discard eligible (other
than frames containing errors) are those transmitted in excess of the contracted-for data rate.
Thus, the network normally delivers frames at the agreed-upon data rate without omission.  It
is only when the customer exceeds the agreed-upon rate that frames may be discarded, and
only then if excess capacity is unavailable.  Thus, the discard feature of frame relay networks
allows the network to deliver unaltered customer data at rates exceeding minimum,
contracted-for transmission rates.  The use of such a feature to facilitate the economical,
reliable movement of information in this manner does not alter the nature of the basic
service.  Nor do we view this difference between existing basic packet-switched services
(such as AT&T's ACCUNET Packet Service) and frame relay technology as sufficient to
justify disparate treatment under Commission Rules.  As a result, we conclude that the discard
feature does not render the frame relay service an enhanced service under the Commission's
rules.
   34.  We, therefore, find that frame relay service offers a transmission capability that is
virtually transparent in terms of its interaction with customer-supplied data.  The service is
designed to transport customer data transparently through the network, and the service is
already provided pursuant to tariff in this manner by all but one of the BOCs.  Accordingly,
we decline to conclude that frame relay is an enhanced service.
   35.  The provision of frame relay as a basic service, and the availability of basic digital
services in general, are consistent with policies established in Computer II and Computer III,
and is in the public interest.  Treating frame relay as a basic service provides competitive
access to the underlying basic service of facilities-based carriers who are often better able to
implement new communications technologies.  This access allows competing enhanced service
providers to more easily enter and compete in the market for such technologies.  Thus, under
the Computer II and Computer III decisions, competitive access has promoted the public
interest by accelerating the development of emerging technologies such as frame relay.
B. AT&T Provides a Basic Frame Relay Service
   1.  Comments
   36.  AT&T and BTNA argue that because protocol conversion is an integral part of
AT&T's frame relay service offering, InterSpan service should be classified as an enhanced
service.  AT&T states that its separate protocol conversion service Information Access
Service (IAS) converts data from asynchronous or SLIP protocols to X.25 protocol, and not
to frame relay protocol as IDCMA contends.  AT&T claims that the conversion from X.25 to
frame relay protocol is a part of its frame relay service, and that this capability makes its
frame relay service an enhanced service.
   37.  Moreover, AT&T contends that the contamination theory applies to its frame relay
services, rendering the entire service enhanced and outside the bounds of Title II of the Act.
AT&T claims that the theory applies to AT&T in the same way that it applies to other
enhanced service providers.
   38.  IDCMA asserts that AT&T possesses sufficient market power in the provision of
frame relay service (IDCMA estimates a 35% market share) to warrant regulation.  IDCMA
also claims that requiring AT&T to tariff its frame relay service will benefit consumers by
increasing competition in the CPE market.  Likewise, Motorola contends that requiring
AT&T to tariff frame relay will prevent AT&T from leveraging its unique position as the
dominant domestic interexchange carrier and a major manufacturer of data networking
equipment to distort the markets for CPE, frame relay and associated services, and
reseller/system integrator services.
   39.  US West argues that the contamination theory is a flawed vehicle for dealing with
the issues raised in the IDCMA petition.  US West characterizes the theory as a
contradiction, allowing certain entities to avoid regulation by combining basic and enhanced
services, which is precisely what the Computer II decision forbids.  US West states that any
attempt to revive the theory must treat the division between basic and enhanced services
uniformly for all carriers, and that the current theory would not survive judicial review.
Thus, US West states that all carriers offering enhanced services must do so with the
underlying transmission service offered pursuant to tariff.
   2.  Discussion
   40.  We conclude that AT&T provides a basic frame relay service (alone or bundled
with enhanced protocol processing) that must be offered under tariff.  According to the
InterSpan Interface Standard, AT&T provides transport of customer data "transparently"
across the AT&T frame relay network.  IDCMA argues (and AT&T does not refute) that the
vast majority of AT&T's frame relay customers terminate to, and receive from, the network
frame relay data that do not require conversion to frame relay protocol.  Since in these cases
AT&T's frame relay service "provides a pure transmission capability in a communication's
path," without any protocol conversion, we find that this is a basic service.  We again note
that six Bell Operating Companies (BOCs) treat frame relay as a basic transport service.
   41.  The assertion by AT&T and other commenters that the enhanced protocol
conversion capabilities associated with AT&T's InterSpan service bring it within the
definition of an enhanced service is beside the point.  Under the Commission's Computer II
and Computer III decisions, AT&T must unbundle the basic frame relay service, regardless of
whether the InterSpan offering also provides a combined, enhanced protocol conversion and
transport service for those customers who require it.
   42.   We also reject AT&T's contention that the contamination theory applies to its
frame relay service and renders its entire InterSpan service offering an enhanced service.  To
date, the Commission has not applied the contamination theory to the services of AT&T or
any other facilities-based carrier.  Indeed, the Commission rejected that alternative in
Computer III and other proceedings.
   43.  The two orders cited by AT&T in support of applying the contamination doctrine to
its services are inapposite.  They do not require or even allude to application of the
contamination doctrine to AT&T.  The footnote cited by AT&T in the Async/X.25 Waiver
Order contains a general definition of VANs.  Nothing in the footnote indicates that AT&T
is included within the definition of a VAN.  The footnote specifically defines VANs as
service providers that acquire common carrier facilities from other carriers, and thus do not
own facilities like AT&T.  The second order cited by AT&T is a Commission order
approving AT&T's amendment to its CEI plan, which provides customers with basic dial-out
capabilities from AT&T's enhanced voice messaging service.   This order, however, refutes,
rather than supports AT&T's interpretation of the contamination theory.  The order approves
the amendment because AT&T satisfies all of the CEI requirements, ensuring interconnection
to the underlying basic service.  If the contamination theory applied to AT&T, as it argues,
AT&T would not have had to satisfy any CEI requirements for the basic service.
   44.  Moreover, application of the contamination theory to a facilities-based carrier such
as AT&T would allow circumvention of the Computer II and Computer III basic-enhanced
framework.  AT&T would be able to avoid Computer II and Computer III unbundling and
tariffing requirements for any basic service that it could combine with an enhanced service.
This is obviously an undesirable and unintended result.
   45.  Thus, in accordance with the Commission's previous decisions, we conclude that
the contamination theory does not apply to AT&T, and we do not apply it to AT&T in this
order.  AT&T cannot avoid its Computer II and Computer III obligations under the auspices
of the contamination doctrine, which applies only to nonfacilities-based service providers.
   46.  AT&T is free to continue its practice of packaging CPE and enhanced protocol
processing with the basic frame relay service (purchased under tariff), so long as the
underlying basic service is separately offered under tariff.  Thus, AT&T may maintain its
flexible approach to offering frame relay services.  AT&T must file a tariff, however, for
basic frame relay service within 60 days of the effective date of this order.  We leave the
issues of existing AT&T frame relay contracts and the specifics of the required tariff to the
tariff-review process.
C. AT&T Acts as a Common Carrier in Offering Frame Relay Service
   1.  Comments
   47.  AT&T and EMI argue that because frame relay service providers do not hold
themselves out indiscriminately to provide service, their provision of this service is a contract
under private carriage, not a common carrier offering subject to the requirements of Title II.
AT&T contends that frame relay customers have unique needs, and that a long negotiation
process is required to craft a custom solution for each customer.
   48.  Home Depot, echoing AT&T's claims, asserts that frame relay service providers
devote substantial time to addressing the specific requirements of each customer.
Compuserve argues that it deliberately offers its frame relay service on a private carrier basis,
consistent with judicial and Commission precedent.  Compuserve further states that it tailors
its specialized offering to individual customer needs.  The Ad Hoc Users Committee
suggests that frame relay services can be provided on either a common or private carriage
basis by different carriers.
   49.  IDCMA and Motorola assert that AT&T is under a legal obligation to provide a
basic, wireline transport service like frame relay on a common carrier basis.  Motorola
contends that the Commission has already rejected separation of AT&T's service offerings
into common and private carriage, opting for contract carriage instead.
   2.  Discussion
   50.  Generally, common carrier status attaches to carriers undertaking to provide a
service indifferently to all potential customers.  In contrast, private carriage is characterized
by a carrier choosing its clients on an individual basis and determining in each particular case
whether and on what terms to serve.
   51.  In arguing that its frame relay services are provided on a private carriage basis,
AT&T emphasizes the custom nature of each user's frame relay "solution."  As discussed in
the Background section above, customers contract for frame relay services on the basis of
complex technical requirements, including various measures of switching and transmission
speed.  In addition, carriers currently providing the service on a nontariffed basis often bundle
customer premises equipment and optional protocol conversion services with the underlying
basic service.
   52.  Complex communications technologies such as frame relay blur the line between
common and private carriage.  If the analysis of where to draw that line centered solely on
the complexities of the technology itself, carriers could argue that virtually any technically
complicated communications service requiring customer-specific solutions is provided
through private carriage.  A carrier cannot vitiate its common carrier status merely by entering
into private contractual relationships with customers.  If, however, the analysis centers on
the carrier's indifference to the identity and requirements of a customer where the carrier
merely tailors the technology to those requirements a different result is obtained.  Our
analysis centers not on one or the other of these considerations, but addresses both factors in
determining the "quasi-public character" of the service offering.  That is, the extent of
customization required for a particular user may indicate that a carrier is not indifferent in
providing the service.
   53.  For some time now, however, AT&T has provided, pursuant to tariff, other
complex packet-switched services on a common carrier basis.  These packet services can be
provided through contract carriage pursuant to the Commission's Competitive Interexchange
Order, providing AT&T with the flexibility to negotiate custom service arrangements that
meet users' particular needs.  Neither AT&T nor other commenters have shown that the
differences between these other existing packet services and frame relay services justify the
treatment of AT&T's frame relay offering as a private carriage offering.
   54.  In addition, the Frame Relay Interconnection Workshop recently released guidelines
for negotiating test and acceptance procedures for frame relay interconnection.  The same
organization is due to release uniform procedures for ordering frame relay interconnection in
March 1996.  Such standardization indicates that frame relay services are being offered to
customers on an increasingly indifferent basis.  Moreover, according to IDCMA, AT&T
supplies frame relay services to roughly 35% of the market, indicating that AT&T's frame
relay service fits the needs of a large segment of customers.  Therefore, we conclude that
AT&T's basic frame relay service is a communications service offered on a common carrier
basis.  Accordingly, AT&T must unbundle that service and offer it pursuant to tariff.
                           IV.  AT&T'S PETITION
   55.  AT&T requests in its petition that if the Commission finds that AT&T's frame relay
service is a basic service subject to tariff, we declare that this ruling is equally applicable to
the frame relay services offered by all other IXCs, including MCI, Sprint, and Wiltel.  AT&T
argues that because other IXCs offer frame relay services based on the same protocol
standards as AT&T uses, these other IXC services should be governed by our decision
regarding InterSpan.  Further, AT&T contends that, in accordance with the Supreme Court's
decision in MCI v. AT&T, the tariff filing requirements of section 203 of the Act apply to
such other IXCs when they offer basic services.
A. Comments
   56.  NYNEX concurs with AT&T's request and urges the Commission to apply its
determination regarding frame relay services to all carriers, not just IXCs.  Similarly,
Southwestern Bell contends that a Commission decision requiring only certain carriers to
provide frame relay under tariff would give other carriers a competitive advantage, and would
be arbitrary and capricious under the Administrative Procedures Act.
   57.  Compuserve argues that even if the Commission finds that AT&T's frame relay
service is a basic service, Compuserve's services (and those of other similarly situated VANs)
are enhanced under the contamination theory.  Compuserve and EMI contend that the theory
applies to their frame relay services because protocol processing is typically performed as an
integral part of those services.  Compuserve estimates that 90% of its customers are provided
protocol conversions to frame relay format.  Finally, Compuserve urges the Commission not
to refine the contamination theory in this proceeding because many VANs are not
participating.
   58.  As noted above, US West contends that the contamination theory is a flawed
vehicle for dealing with the issues raised in the IDCMA petition.   Thus, US West states
that all carriers offering enhanced services must do so with the underlying transmission
service offered pursuant to tariff.
B. Discussion
   59.  The requirements established in the Computer II proceeding are clear:
   [T]hose carriers that own common carrier transmission facilities and provide
   enhanced services, but are not subject to the separate subsidiary requirement, must
   acquire transmission capacity pursuant to the same prices, terms, and conditions
   reflected in their tariffs when their own facilities are utilized.  Other offerors of
   enhanced services would likewise be able to use such a carrier's facilities under the
   same terms and conditions.
Thus, having applied Commission Rules and found that frame relay service is a basic service,
we conclude that, pursuant to the Computer II decision, all facilities-based common carriers
providing enhanced services in conjunction with basic frame relay service must file tariffs for
the underlying frame relay service and acquire that tariffed service in the same manner as
resale carriers.  This requirement applies independently of any additional requirements (such
as CEI) under the Computer III proceedings.
   60.  Some commenters argue that VANs must also file tariffs for basic frame relay
services they take from facilities-based carriers in order to provide value added enhanced
services.  In the Computer III decision the Commission concluded that VANs were not
required to file tariffs.  Those parties commenting on the regulatory treatment of VANs in
essence seek a reconsideration of the Commission's earlier decision.  This issue is beyond the
scope of this proceeding, and we decline to revisit that decision in this proceeding.
                              V.  Conclusion
   61.  We conclude that frame relay service is a basic service, and that AT&T must tariff
this basic frame relay service whether or not it is provided in conjunction with enhanced
protocol conversion.  Thus, we grant IDCMA's petition to the extent discussed herein and
require AT&T to unbundle and file with the Commission a tariff for basic frame relay service
within 60 days of the effective date of this order.  We also grant AT&T's petition to the
extent that we require all other facilities-based common carriers to tariff their basic frame
relay service.
                           VI.  Ordering Clauses
   62.  Accordingly, IT IS ORDERED, pursuant to Section 5(d) of the Administrative
Procedures Act, 5 U.S.C.  554, and Section 1.2 of the Commission's Rules, 47 C.F.R.  1.4,
that the petition for declaratory ruling filed by the Independent Data Communications
Manufacturers Association, Inc. IS GRANTED to the extent discussed herein.
   63.  IT IS FURTHER ORDERED, pursuant to Section 5(d) of the Administrative
Procedures Act, 5 U.S.C.  554, and Section 1.2 of the Commission's Rules, 47 C.F.R.  1.4,
that the petition for declaratory ruling by American Telephone and Telegraph Company IS
GRANTED to the extent discussed herein.
   64.  IT IS FURTHER ORDERED that AT&T and all other facilities-based common
carriers providing basic frame relay service file a tariff, in accordance with Commission
Rules, for frame relay service within 60 days of the effective date of this order.
   FEDERAL COMMUNICATIONS COMMISSION
   Kathleen M.H. Wallman
   Chief, Common Carrier Bureau
APPENDIX:  RECORD OF DA 94-1411
Petitions
IDCMA Petition for Declaratory Ruling DA 94-1411 (Nov. 28, 1994).
AT&T Petition for Declaratory Ruling (Dec. 5, 1994).
Comments/Oppositions
AT&T Opposition to IDCMA Petition for Declaratory Ruling (Jan. 23, 1995) .
EMI Opposition to IDCMA Petition for Declaratory Ruling (Jan. 23, 1995).
US West Comments on IDCMA Petition for Declaratory Ruling (Jan. 23, 1995).
NYNEX Comments on IDCMA Petition for Declaratory Ruling (Jan. 23, 1995).
Southwestern Bell Comments on IDCMA Petition for Declaratory Ruling (Jan. 23, 1995).
Compuserve Comments on IDCMA Petition for Declaratory Ruling (Jan. 23, 1995).
Comdisco Comments on IDCMA Petition for Declaratory Ruling (Feb. 16, 1995).
PPG Comments on IDCMA Petition for Declaratory Ruling (Feb. 9, 1995).
National Semiconductor Comments on IDCMA Petition for Declaratory Ruling (Feb. 10,
1995).
Welch Allyn Comments on IDCMA Petition for Declaratory Ruling (Feb. 10, 1995).
AMP Comments on IDCMA Petition for Declaratory Ruling (Feb. 9, 1995).
Bemis Comments on IDCMA Petition for Declaratory Ruling (Feb. 8, 1995).
Textron Comments on IDCMA Petition for Declaratory Ruling (Feb. 9, 1995).
Home Depot Comments on IDCMA Petition for Declaratory Ruling (Feb. 15, 1995).
United Technologies Comments on IDCMA Petition for Declaratory Ruling (Feb. 15, 1995).
Reply Comments
BT North America Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13,
1995).
IDCMA Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
US West Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
Motorola Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
EMI Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
Compuserve Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
AT&T Reply Comments on IDCMA Petition for Declaratory Ruling (Feb. 13, 1995).
Ad Hoc Telecommunications Users Committee Reply Comments on IDCMA Petition for
Declaratory Ruling (Feb. 13, 1995).
Motions/Supplemental Comments
IDCMA Motion for Leave to File Supplemental Comments/Supplemental Comments (June 13,
1995).
Ad Hoc Telecommunications Users Committee Supplemental Comments (June 28, 1995).
AT&T Opposition to IDCMA's Motion for Leave to File Supplemental Comments (June 28,
1995).
EMI Opposition to IDCMA's Motion for Leave to File Supplemental Comments (June 28,
1995).
IDCMA Reply to AT&T Opposition to IDCMA's Motion for Leave to File Supplemental
Comments (July 10, 1995).
BT North America Motion for Leave to File Supplemental Comments/Supplemental
Comments (July 12, 1995).
Ex Parte
BT North America Ex Parte (Aug. 28, 1995).
IDCMA Ex Parte (Sept. 6, 1995).
BT North America Ex Parte (Sept. 22, 1995).
BT North America Ex Parte (October 10, 1995).