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                                             FCC 97-23
                            Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554

In the Matter                           )
                                   )
Implementation of Section 402(b)(1)(A)       )     CC Docket No. 96-187
of the Telecommunications Act of 1996        )    
                                   )

                         REPORT AND ORDER

Adopted:   January 29, 1997        Released: January 31, 1997

By the Commission:

                        TABLE OF CONTENTS
                                                            

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

II.  THE 1996 ACT. . . . . . . . . . . . . . . . . . . . . . .  1

III. STREAMLINED LEC TARIFF FILINGS UNDER SECTION 402 OF THE 1996
     ACT . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

     A.   Commission Authority Under the 1996 Act to Defer LEC Tariffs Eligible
          for Streamlined Treatment. . . . . . . . . . . . . .  2

     B.   Effect of Streamlined LEC Tariff Filings Being "Deemed Lawful"  4

     C.   LEC Tariffs Eligible for Filing on a Streamlined Basis 13

          1.   Types of Tariff Filings Eligible for Streamlined Filing  13

          2.   Optional Nature of LEC Streamlined Tariff Filings 17

          3.   Forbearance Authority under Section 10(a) of the Act 18

          4.   Applications of Section 204(a)(3) of the Act to Tariff Filings of
               Nondominant LECs. . . . . . . . . . . . . . . . 20

     D.   Streamlined Administration of LEC Tariffs. . . . . . 21

          1.   Electronic Filing . . . . . . . . . . . . . . . 21

          2.   Exclusive Reliance on Post-Effective Tariff Review 24

          3.   Pre-Effective Tariff Review of Streamlined Tariff Filings 26

               a.   Summaries and Legal Analyses . . . . . . . 26

               b.   Presumptions of Unlawfulness . . . . . . . 28

               c.   Treatment of Tariffs Containing Both Rate Increases and
                    Decreases  . . . . . . . . . . . . . . . . 29

               d.   Mechanisms to Identify Contents of Filings 32

               e.   Commission Notification to Interested Parties  33

          4.   Notice Period and Filing Procedures . . . . . . 35

               a.   Deadlines for Petitions and Replies. . . . 35

               b.   Other Issues Relating to Computation of Time 36

               c.   Hand Delivery. . . . . . . . . . . . . . . 37

               d.   Elimination of Public Comment Period . . . 38

               e.   Protective Orders. . . . . . . . . . . . . 39

          5.   Annual Access Tariff Filings. . . . . . . . . . 45

          6.   Tariff Investigations . . . . . . . . . . . . . 49

          7.   Notice Requirements . . . . . . . . . . . . . . 51

IV.  EFFECTIVE DATE. . . . . . . . . . . . . . . . . . . . . . 52

V.   FINAL REGULATORY FLEXIBILITY ANALYSIS . . . . . . . . . . 53

VI.  FINAL PAPERWORK REDUCTION ANALYSIS. . . . . . . . . . . . 64

VII. ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . . 64


                        I.  INTRODUCTION  

     1.   On February 8, 1996, the "Telecommunications Act of 1996" (1996 Act) became
law.  The intent of this legislation is "to provide for a pro-competitive, de-regulatory national
policy framework designed to accelerate rapid private sector deployment of advanced
telecommunications and information technologies and services to all Americans by opening all
telecommunications markets to competition."  This Report and Order adopts rules to implement
section 402(b)(1)(A)(iii) of the 1996 Act, which adds section 204(a)(3) to the Communications
Act.  This section provides for streamlined tariff filings by local exchange carriers (LECs).  In
the Notice of Proposed Rulemaking in this proceeding, we proposed measures to implement the
tariff streamlining requirements of section 204(a)(3).  Twenty-nine parties filed comments and
twenty-one filed replies. 

                         II. THE 1996 ACT

     2.   Section 402(b)(1)(A)(iii) of the 1996 Act adds new subsection 3 to section 204(a)
of the Communications Act of 1934 (the Act):   

     (3) A local exchange carrier may file with the Commission a new or revised
     charge, classification, regulation, or practice on a streamlined basis.  Any such
     charge, classification, regulation, or practice shall be deemed lawful and shall be
     effective 7 days (in the case of a reduction in rates) or 15 days (in the case of an
     increase in rates) after the date on which it is filed with the Commission unless the
     Commission takes action under paragraph (1) before the end of that 7-day or 15-
     day period as is appropriate.

Section 402 of the 1996 Act also amends section 204(a) of the Act to provide that the
Commission shall conclude any hearings initiated under this section within five months after the
date the charge, classification, regulation, or practice subject to the hearing becomes effective. 
Section 402(b)(4) of the 1996 Act provides that these amendments shall apply to any charge,
classification, regulation, or practice filed on or after one year after the date of enactment of the
Act, i.e., February 8, 1997. 

     3.   Under the 1996 Act, a LEC is defined as "any person that is engaged in the
provision of telephone exchange service or exchange access."  A LEC "does not include a
person insofar as such person is engaged in the provision of commercial mobile radio service
under section 332(c), except to the extent that the Commission finds that such service should be
included in the definition of such term."


III.  STREAMLINED LEC TARIFF FILINGS UNDER SECTION 402 OF THE 1996
                               ACT

     A.   Commission Authority Under the 1996 Act to Defer LEC Tariffs Eligible for
          Streamlined Treatment

          a.     Background

     4.   In the Notice, we stated that by adopting section 204(a)(3) Congress intended to
streamline LEC tariff filings by providing that they would become effective within seven or
fifteen days notice unless suspended and investigated by the Commission.  Section 203(b)(2) of
the Act, however, provides that the Commission may defer the effective date of  tariffs for up to
120 days.  In the Notice, we tentatively concluded that Congress intended to foreclose the
exercise of our general deferral authority under section 203(b)(2) of the Act with respect to the
tariffs eligible for streamlined treatment.  We solicited comment on this tentative conclusion. 

          b.   Comments

     5.   ALLTEL Telephone Services Corporation (ALLTEL), Ameritech, Bell Atlantic,
BellSouth Corp. (BellSouth), Cincinnati Bell Telephone (CBT),  GTE Services Corp. (GTE),
NYNEX Telephone Companies (NYNEX), Pacific Telesis Group (Pacific Telesis), Southwestern
Bell Telephone Company (SWBT), United States Telephone Association (USTA), and US West,
Inc. (US West) agree with the tentative conclusion set out in the Notice that the Commission
does not have discretion to defer for up to 120 days tariffs that LECs may file under the new
streamlining provisions.  GTE asserts that granting the Commission such discretion would
enable competitors to continue to use the tariff review process to delay implementation of LEC
pricing changes, a result that GTE contends would be contrary to Congressional intent to
accelerate the tariff review process.  NYNEX asserts that the Commission's deferral authority is
derived from section 203(b)(1) of the Act while section 204(a)(3) provides for streamlined tariff
filings.  NYNEX concludes that, because there is no provision in section 204(a)(3) for deferring
streamlined tariffs, Congress did not intend the deferral authority in section 203 to be applicable
to tariffs filed pursuant to section 204.  In contrast, AT&T Corp. (AT&T), America's Carrier
Telecommunications Association (ACTA), and Telecommunications Resellers Association 
(TRA) contend that the 1996 Act does not affect the Commission's authority to defer LEC tariff
filings.  According to AT&T, Congress could not have intended to preclude the Commission
from deferring tariff filings made by monopoly LECs while retaining the authority to defer tariff
filings made by carriers who face significant competition.  MCI Communications Corporation
(MCI) states that the Commission's deferral authority is foreclosed only for rate increases and
decreases and that the Commission may continue to exercise its deferral authority for all other
LEC tariffs.  The General Services Administration (GSA) contends that the Commission retains
its deferral authority because Congress did not amend section 203(b)(1).

          c.   Discussion

     6.   Neither the statute nor the legislative history to the 1996 Act directly addresses
whether Congress intended to foreclose our exercise of deferral authority with respect to LEC
streamlined tariffs.  We conclude that the more recent and specific provisions of the 1996 Act
take precedence over our general deferral authority in section 203.  We believe continued
application of the general deferral authority contained in section 203 to LEC tariffs filed on a
streamlined basis under the specific provisions set out in new section 204 (a)(3) would be
contrary to Congressional intent.  Accordingly, we adopt our tentative conclusion in the Notice
that we may not defer LEC tariffs filed under the tariff streamlining provisions of the 1996 Act.

     B.   Effect of Streamlined LEC Tariff Filings Being "Deemed Lawful"

          a.   Background

     7.   Section 204(a)(3) of the Act provides that LEC tariffs filed on a streamlined basis
"shall be deemed lawful."  The 1996 Act and the legislative history are silent regarding the
specific legal consequences of this provision.  In the Notice, we tentatively concluded that, by
specifying that LEC tariffs shall be "deemed lawful," Congress intended to change the current
regulatory treatment of LEC tariff filings.  The Commission set forth two possible interpretations
of "deemed lawful."

     8.   Under the first interpretation, a tariff that becomes effective without suspension
and investigation would be a "lawful" tariff.  It could subsequently be found unlawful in a rate
prescription proceeding under section 205, or in a complaint proceeding under section 208.  The
Commission, however, could not award refunds or damages for the time that the rate was in
effect but could only order tariff revisions or award damages on a prospective basis.  This would
differ radically from the current practice, where a rate that goes into effect without suspension
and investigation is the "legal" rate, leaving carriers liable for damages, for the time the tariff was
in effect, subject to the applicable two-year statute of limitations set out in section 415(a) of the
Act, if the tariff is subsequently found unlawful.

     9.     Under the second interpretation, the statutory language would be construed to
establish higher burdens for suspension and investigation by presuming LEC tariffs lawful.
Under this interpretation, the statutory language "unless the Commission [suspends and
investigates the tariff] before the end of that 7-day or 15-day period," would not apply to the
"deemed lawful" phrase, but only to the "shall be effective" phrase of section 204(a)(3).  We
noted in the Notice that Congress did not otherwise amend the statutory scheme for tariffs filed
by interstate communications common carriers.  Therefore, the Commission or parties to a
tariff proceeding could rebut the presumption of lawfulness in the truncated pre-effective tariff
review process established by the 1996 Act.  Tariffs would still be subject to complaint and/or
investigation, and refunds or damages could be awarded for any time that the tariff was in effect,
subject to the applicable statute of limitations.  
 
     10.  We also solicited comment on other possible interpretations of "deemed lawful." 
We stated in the Notice that we would adopt the interpretation that would best implement the
intent of the 1996 Act's tariff streamlining provisions.  We also solicited comment on the impact
of these interpretations of "deemed lawful" on small entities, both LECs and other small entities,
that might be customers of LEC tariffed services.  In particular, we solicited comment on the
relative burdens that would be imposed on small entities by possible interpretations of "deemed
lawful." 

          b.   Comments

     11.  The LECs and USTA support adoption of the first interpretation of "deemed
lawful."  They favor the position that tariffs filed on a streamlined basis are lawful unless the
Commission takes action prior to the effective date of the tariffs and that retroactive damage
awards for successful challenges to LEC tariffs are prohibited by the 1996 Act.  According to
these parties, this interpretation of "deemed lawful" is consistent with the precedent established
in Arizona Grocery.  There the U.S. Supreme Court held that a tariff rate that is allowed to
become effective is considered the "legal" rate, that is, the rate that the carrier is required to
collect and the customer to pay under the filed rate doctrine.  The lawfulness of an effective
rate, however, remains subject to challenge either pursuant to a section 204(a)(1) hearing, a
complaint proceeding initiated pursuant to section 208 of the Act, or an investigation established
under section 205 of the Act.  If, after completion of one of these proceedings, the Commission
determines that some element of the effective tariff is unlawful, the Commission may order the
filing carrier to pay damages, pursuant to section 207 of the Act, on a prospective basis only. 
The Supreme Court, these commenters point out, has held that an agency generally may not
retroactively subject a carrier to refund liability if the agency subsequently declares the tariff rate
to be unreasonable.

     12.  Furthermore, these commenters maintain that Congress intended to alter the
regulatory treatment for LEC tariff filings by adjudging streamlined LEC filings lawful by
operation of the statute without need for a regulatory hearing and determination.  BellSouth, for
example, argues that, if the Commission does not exercise its discretion to suspend and
investigate a LEC tariff filing, then the statute deems the filing to be lawful upon its effective
date.  In addition, BellSouth maintains that the statute confers upon the tariff the same status that
previously could only be acquired through a Commission determination or adjudication. Pacific
Telesis argues that, in determining Congressional intent, the starting point is the text of the
statute and that, where as here, the statute is clear, no further inquiry is needed.  According to
Pacific Telesis, the phrase "shall be deemed lawful" expressly mandates that a filed tariff be
treated, by operation of law, as lawful at the time of filing.  It further states that the next phrase,
"and shall be effective," states a separate requirement regarding the time within which the tariff
applies and therefore any consideration by the Commission of the tariff, even in the pre-effective
period, must recognize this lawful status.  SWBT argues that the "shall be deemed lawful"
language of the 1996 Act limits any subsequent Commission review of a section 208 complaint
challenging a LEC tariff filed on a streamlined basis.  According to SWBT, the complainant in a
section 208 proceeding would have the insurmountable burden of overcoming the Commission's
prior determination that the tariff is lawful.  Thus, SWBT believes that a tariff revision that
becomes effective under the streamlined procedures would be the lawful rate until the
Commission concluded in a section 205 proceeding that a different charge, classification, or
regulation would be lawful in the future.  In addressing the question of limitation on damages,
NYNEX asserts that several factors should minimize customers' concern about possible
overcharges.  NYNEX maintains that the Commission still has the authority to suspend and
investigate a tariff that appears unlawful and to impose an accounting order.  According to
NYNEX, this action should serve to protect customers' rights to obtain damages if the tariff is
later found to be unlawful at the conclusion of an investigation.  In addition, NYNEX contends
that, even if an unlawful tariff has gone into effect, a five-month time limit on investigations and
complaint proceedings imposed by the 1996 Act will limit the time during which potentially
unlawful rates would be in effect.  Finally, NYNEX points out that, with increased competition,
customers will have other choices if a LEC attempts to charge unlawful rates.  USTA supports
adoption of the first interpretation of "deemed lawful," arguing that the statutory language
provides that tariffs filed on a streamlined basis shall be deemed lawful unless the Commission
takes action pursuant to section 204(a)(1). 

     13.  The remainder of the commenting parties oppose adoption of the first
interpretation of "deemed lawful."  They are concerned that customers would be precluded from
recovering damages for overpayments where a tariff was later found to be unlawful.  MFS
states that the first interpretation would create a "perverse incentive" for LECs to overcharge
because they would be allowed to continue to collect such payments for the duration of any later
tariff investigation or complaint proceeding.  The only burden on the LECs would be defending
their position in a complaint or investigation proceeding.  Ad Hoc Telecommunications Users
Committee (Ad Hoc) states that the LECs' analysis of the first interpretation of "deemed lawful"
overlooks the Communications Act requirement that carrier rates be just and reasonable and that
consumers be protected from unjust and unreasonable rates.  Furthermore, Ad Hoc maintains
that, contrary to the LECs' position, customers are not protected from unlawful rates due to the
availability of other options because the marketplace has yet to reach a competitive state.  In
addition, MCI, AT&T, and GSA contend that this interpretation must be rejected because
Congress gave no indication that it intended to limit customers' remedies. 

     14.  GSA notes that, in the Notice, the Commission recognized that the Act and its
legislative history do not provide an explanation of the term "deemed lawful."  According to
GSA, it would be unreasonable for the Commission to adopt the first interpretation of "deemed
lawful" absent a clear indication that Congress intended to make a fundamental change to the
regulatory framework for LEC tariffs.  GSA argues as well that Congress made no corresponding
changes to other sections of the Act designed to assure that LEC rates are reasonable, and that
this interpretation of section 204(a)(3) would appear to be in conflict with these sections.  GSA
maintains that, without changes to these sections, Congress could not have intended this radical
departure from existing tariff regulatory procedures.  Capital Cities/ABC, Inc., CBS, Inc.,
National Broadcasting Company, Inc., and Turner Broadcasting System, Inc. (CapCities)
contend that the new section 204(a)(3) of the Act does not modify the long-standing statutory
scheme of  pre-effective tariff review by the Commission on its own initiative or upon complaint
of interested parties, and potential refunds if carrier tariffs which have been allowed to become
effective are found unlawful after investigation and opportunity for hearing.  Rather, CapCities
argues, section 204(a)(3) serves to extend formally to dominant LECs a variation of the
streamlined tariff filing mechanism that the Commission has applied in various forms to other
tariff filings.

     15.  The other non-LEC parties likewise support the adoption of the second
interpretation of "deemed lawful."  AT&T, for example, contends that the purpose of the
"deemed lawful" provisions is to establish a presumption of lawfulness for the relevant tariffs
during pre-effectiveness review.  AT&T contends that this presumption is, as the Notice
suggests, analogous to that accorded to LEC rate filings that are within applicable price cap
limits, or to filings by non-dominant carriers under section 1.773 of the Commission rules.
Therefore, AT&T maintains that tariffs filed pursuant to Section 204(a)(3) should not be
suspended unless a petitioner makes a showing similar to the four-part test required under section
1.773.  Moreover, AT&T contends that, because incumbent LECs retain significant market
power and therefore are more likely than carriers facing competition to charge unreasonable
rates, petitioners challenging a tariff filed pursuant to section 204(a)(3) should be required to
show only that it is "more likely than not" that the disputed tariff is unlawful, rather than "a high
probability" that the tariff will be found unlawful.  Accordingly, AT&T argues that, because of
the LECs' market position, petitions challenging their tariffs should have a lower threshold
showing than petitions filed against tariffs proposed by nondominant carriers. 

     16.  MFS takes a position similar to AT&T, claiming that the Commission should
adopt rules that presume section 204(a)(3) filings are lawful and assign the burden of proof to
those wishing to challenge the lawfulness of the filing.  Sprint Corp (Sprint) maintains that the
second interpretation is "clearly the correct one."  Sprint also states that there is nothing in the
statute itself nor in the legislative history that indicates a Congressional intent to overturn well
established precedent that holds that an effective tariff establishes only the legal rate and not the
lawful rate, citing Arizona Grocery.

     17.   With respect to how the Commission should interpret "deemed lawful," KMC
Telecom Inc. (KMC), ACTA, TRA and SWBT discussed the effect the Commission's decision
would have on small entities.  KMC opposes adoption of the first interpretation of "deemed
lawful" because it states that such a finding would render the pre-effective tariff review process
meaningless for small competitors because it would be nearly impossible for them to monitor
and review all LEC tariff filings sufficiently to overcome any presumption of lawfulness within
the limited time period for filing petitions.  KMC further states that, if the deadline for opposing
tariffs is missed, then the only relief available is the filing of a formal complaint, which involves
a lengthy and costly process that is not a practical remedy for a small company.  ACTA states
that, as a practical matter, precluding damages as a remedy will endanger the viability of small
carriers because the LECs could litigate protested issues indefinitely without any threat of
liability for damages.  TRA states that LECs should not be permitted to charge and retain
unreasonable rates while being exempt from paying damages for such unlawful charges. 
SWBT states that adoption of an interpretation of "deemed lawful" that would limit participation
in review would not negatively impact small carriers because "their current participation in the
tariff review process is rare, and ... Commission policy assumes that there is no need to allow for
small entity/customer participation in the tariff filings of non-dominant carriers."


          c.   Discussion

     18.  Based on our analysis of the statute in light of the record compiled in this
proceeding and relevant judicial precedent, we adopt the first interpretation of "deemed lawful." 
In reaching this conclusion, we determine that this interpretation is compelled by the language of
the statute viewed in light of relevant appellate decisions, and that our alternative approach
outlined in the NPRM is not a permissible reading of this statutory provision.

     19.  The first step in statutory construction is to look at the language of the statute.  In
the Notice, we suggested that the statutory phrase, "deemed lawful," may be interpreted in two
different ways.  Appellate  cases, however, have consistently found that the term "deemed," in
this context, is not ambiguous.  Developed in the context of energy rate regulation, this
precedent states that the term "deemed to be reasonable" must be read to establish a conclusive
presumption of reasonableness.  In addition, we note that in this context the courts have
explained that, while a rate contained in a properly filed tariff is the legal rate, a rate is "lawful"
only if it is reasonable.   Accordingly, we conclude that, because section 204(a)(3) uses the
phrase "deemed lawful," it must be read to mean that a streamlined tariff that takes effect without
prior suspension or investigation is conclusively presumed to be reasonable and, thus, a lawful
tariff during the period that the tariff remains in effect.  For the reasons discussed below, we do
not find, however, that the Commission is precluded from finding, under section 208, that a rate
will be unlawful if a carrier continues to charge it during a future period or from prescribing a
reasonable rate as to the future under section 205.  Given the unambiguous meaning of the term
"deemed lawful," we see no reason to resort to the legislative history (although there is none on
point) in concluding that this term denotes a conclusive presumption.  In light of this statutory
language as viewed under relevant appellate case law, we find that this interpretation is required
in order to give effect to the language of the statute and therefore decline to adopt the alternative
interpretation suggested in the Notice.  We find further, however, that the "deemed lawful"
language does not govern streamlined tariff filings that become effective after suspension in
those instances where the Commission suspends and initiates an investigation of a LEC tariff
within the 7 or 15 day notice periods specified in section 204(a)(3).  In those cases, the LEC
streamlined tariffs would not be "deemed lawful" under section 204(a)(3) because they were
suspended and set for investigation.  Rather, they would be "legal" until the Commission
concluded an investigation and made a determination as to their lawfulness.  The lawfulness of
such tariffs would be determined by the orders issued by the Commission at the conclusion of
those proceedings.  

     20.  We recognize that our interpretation of section 204(a)(3) will change significantly
the legal consequences of allowing tariffs filed under this provision to become effective without
suspension.  Under current practice, a tariff filing that becomes effective without suspension or
investigation is the legal rate but is not conclusively presumed to be lawful for the period it is in
effect.  Indeed, if such a tariff filing is subsequently determined to be unlawful in a complaint
proceeding commenced under section 208 of the Act, customers who obtained service under the
tariff prior to that determination may be entitled to damages.  In contrast, tariff filings that take
effect, without suspension, under section 204(a)(3) that are subsequently determined to be
unlawful in a section 205 investigation or a section 208 complaint proceeding would not subject
the filing carrier to liability for damages for services provided prior to the determination of
unlawfulness.  We find, based on the language of the statute, that this is the balance between
consumers and carriers that Congress struck when it required eligible streamlined tariffs to be
deemed lawful.

     21.  Further, section 204(a)(3) does not mean that tariff provisions that are deemed
lawful when they take effect may not be found unlawful subsequently in section 205 or 208
proceedings.  No language in section 204(a)(3) states or requires us to infer such a limitation,
nor is there any legislative history suggesting such a limitation.  As the 1996 Act did not amend
sections 205 or 208, nor refer to them in amending section 204, it did not limit our authority
either to conduct tariff investigations under section 205 or to process complaint proceedings
commenced under section 208.  In fact, the language of section 205, which was not changed by
the 1996 Act, makes clear that the Commission may find that a rate "is or will" be in violation of
the Act and prescribe "what will be the just and reasonable charge" for the future.  The "deemed
lawful" language in section 204(a)(3) changes the current regulatory scheme only by immunizing
from challenge those rates that are not suspended or investigated before a finding of
unlawfulness.  It does nothing to change the Commission's ability to prescribe rates as to the
future under section 205 or to find under section 208 that a rate will be unlawful if charged in the
future.  Even where the agency has made an affirmative finding of lawfulness, which would not
be the case where a tariff has become effective without suspension under section 204(a)(3), the
tariff remains subject to further review under section 205.  Thus, a rate that is "deemed lawful"
can also be reevaluated as to its future effect under sections 205 and 208 and the Commission
may prescribe a rate as to the future under section 205.

     22.  In this decision, we do not adopt the view of Pacific Telesis that the phrase "shall
be deemed lawful and shall be effective 7 days . . . or 15 days . . . after the date on which it is
filed" mandates that a tariff be treated as lawful at the time of filing.  In our view, the better
reading of section 204(a)(3) is that a streamlined tariff becomes both effective and "deemed
lawful" 7 or 15 days after the date on which it is filed.  Congress did not amend the Act to
eliminate the Commission's suspension authority for LEC tariffs and therefore, Congress did not
intend that LEC tariffs be deemed lawful when filed.  Moreover, it would be illogical if, for
example, a tariff could be considered lawful before it even takes effect and while another tariff is
already in place. 

     23.  We also conclude that the Commission may find a tariff provision that is "deemed
lawful" under section 204(a)(3) to be unlawful at the conclusion of a section 205 investigation or
208 complaint proceeding based on a preponderance of the evidence presented in either
proceeding.  We currently employ this standard in section 205 and 208 proceedings and find
nothing in section 204(a)(3) requiring us to establish a higher evidentiary standard for
determining the prospective lawfulness of a streamlined tariff provision.  Further, we decline to
impose a higher burden as a matter of policy. 

     24.  In adopting the first interpretation of "deemed lawful," we have considered the
comments of KMC, ACTA, and TRA, which expressed a concern that adoption of this
interpretation would be unfair to small consumers and competitors of LECs.  With respect to
KMC's concern that the adoption of the first interpretation would make it difficult for small
competitors to challenge LEC tariff filings, we note that all parties, including small entities, will
have the same opportunity to challenge tariff filings eligible for streamlined regulation before
they become effective or to initiate a section 208 complaint proceeding after the filings become
effective. These procedures will permit small businesses to participate fully in pre-effective
review of LEC tariffs and to obtain a determination of the lawfulness of a LEC tariff after it has
gone into effect.  Small businesses will be able to protect against this possible impact on them
caused by "deemed lawful" treatment of LEC tariffs by participating in the pre-effective tariff
review process.  In addition, the program of electronic filing of tariffs that we discuss in Section
III, D, 1, infra. will facilitate participation by small entities in the tariff review process.  To the
extent that small entities will have greater difficulty than larger entities in participating in the
tariff review process, we note that the shortened time period for pre-effective review of LEC
tariffs is required by the 1996 Act and that, as explained above, we are compelled by the
language in the statute as interpreted by relevant judicial precedent to adopt the first
interpretation of "deemed lawful."

     C.   LEC Tariffs Eligible for Filing on a Streamlined Basis

          1.   Types of Tariff Filings Eligible for Streamlined Filing

               a.   Background

     25.  The first sentence of section 204(a)(3) provides that LECs may file "a new or
revised charge, classification, regulation, or practice on a streamlined basis."  The Notice
observed that this suggests that LEC tariff filings that propose any change, including rate
increases and decreases, may be eligible for streamlined filing.  The second sentence of section
204(a)(3) provides for specified effective dates only for tariffs proposing rate increases or
decreases.  In the Notice, we tentatively concluded that all LEC tariff filings that involve changes
to the rates, terms, and conditions of existing service offerings, regardless of whether  they
involve a rate increase or decrease, would be eligible for streamlined treatment, with the possible
exception of tariffs for new services. 
     
     26.  Concerning new services, the Notice asked whether the phrase "a new or revised
charge" included tariffs introducing entirely new services or whether the word "new" refers only
to new charges, classifications, regulations, or practices for existing services.  The 
Notice therefore solicited comment on whether section 204(a)(3) applies to new or revised
charges associated with existing services, but not to charges associated with new services. The
Notice stated that this approach may be preferable as a matter of policy, to the extent permissible
under the statute, because it would permit the Commission and interested parties greater
opportunity to review tariffs that propose to introduce new services since those filings are more
likely to raise sensitive pricing issues than revisions to tariffs for services that have already been
subject to review. 

               b.   Comments

     27.  The LECs, Ad Hoc, TRA, Sprint, USTA, AT&T, National Exchange Carrier
Association (NECA), and GSA support our tentative conclusion that the streamlining provisions
of the 1996 Act apply to tariffs proposing changes to a rate, term, or condition as well as to rate
increases and decreases.  Generally, these commenters contend that almost any change in the
terms and conditions of an existing service, regardless of whether the change involves a rate
increase or decrease, will affect the overall rate or cost to the consumer and therefore should be
subject to streamlining.  Ameritech contends that the plain meaning of the first sentence of
section 204(a)(3) clearly states that LECs may file a new or revised charge, classification,
regulation, or practice on a streamlined basis. Ameritech concludes from this language that
Congress intended streamlining to apply to all tariff revisions, not just those involving rate
increases or decreases. While AT&T and NECA agree with the Commission's tentative
conclusion that streamlining should apply to changes in rates, terms, and conditions of existing
services, as well as to rate increases and decreases, they note that the statute does not specify
time periods for consideration of suspension or deferral in the case of changes to a
"classification, regulation, or practice" to an existing service.  AT&T recommends that the
Commission require LECs to file such tariffs thirty days prior to the tariff's proposed effective
date.  NECA suggests that the Commission adopt a rule that permits tariff filings containing
only terms and conditions only to be filed on seven days' notice.

     28.  Time Warner Communications Holdings, Inc. (TW Comm), MCI, and the
Association for Local Telecommunications Services  (ALTS) disagree with the tentative
conclusion in the Notice, arguing that the statute is clear that streamlining applies only to rate
increases and decreases to existing services. MCI, for example, argues that changes to terms
and conditions should not be eligible for streamlined treatment because the second sentence of
section 204(a)(3) applies reduced notice periods only to rate increases or decreases.  In addition,
MCI contends that, given the LECs' continued market share, there is still a "substantial
possibility" that any proposed terms and conditions in LEC tariffs will result in unreasonable
discrimination in violation of section 202 of the Act.  MCI asserts that  proposed changes to LEC
tariffs that do not include rate increases or decreases should be subject to more thorough scrutiny
than would be possible under the streamlining provisions of the 1996 Act.

     29.  While the LECs, USTA, the Competitive Telecommunications Association
(CompTel), and GTE support the Commission's tentative conclusion that section 204(a)(3)
should be construed to include changes to existing rates, they disagree with the Commission's
stated inclination to exclude new services from streamlined treatment.   NYNEX maintains that
the terms "new or revised charge, classification or practice" in section 204(a)(1) are repeated in
section 204(a)(3) and that the Commission has consistently interpreted the former section as
giving it authority to investigate and impose an accounting order for all types of tariffs, including
those for new services and revised rates for existing services.  If the Commission interpreted the
terms "new" and "revised" for purposes of section 204(a)(3) to exclude tariffs proposing new
services, NYNEX argues that it would imply that the Commission does not have authority under
section 204(a)(1) to order investigations or conduct complaint proceedings of any tariffs
proposing new services.  US West argues that streamlining new services will facilitate
competition by allowing the LECs to respond quickly to changing market conditions, such as the
introduction of new services by their competitors, and to reward innovation.  Ameritech and
USTA further argue that it would not be in the public interest to permit LECs' competitors, but
not the LECs, to introduce new services on an expedited basis. GTE maintains that, when the
first two sentences of the statute are considered together, it is clear that tariffs proposing new
services, as described in the first sentence, are to be afforded the streamlined treatment described
in the second sentence.

     30.  A number of commenters believe that new services should be excluded from
eligibility for streamlined treatment. ALTS argues that tariffs for new services should not be
eligible for streamlined treatment because they do not involve changes in rates and they are more
likely to raise policy questions than rate changes.  MCI takes a similar position, stating that the
statute is clear that the streamlining provisions apply only to "a new or revised charge,
classification, regulation, or practice" associated with existing services.  Both ALTS and MCI
maintain that the current 45-day notice period for new services is reasonable and should be
retained.  Sprint believes that new services are not covered by the streamlining provisions
because the word "new" in the statute does not modify or relate to a new service, but rather
relates to a new charge, term, condition, or practice for an existing service.  In addition, Sprint
maintains that charges for new services are neither rate reductions nor rate increases and, thus,
are not eligible for streamlining under the language of the statute.  Ad Hoc asserts that, because
LECs have market power, the Commission should construe the statute narrowly to ensure that
LEC tariffs for new services are thoroughly reviewed.  GSA is in favor of excluding new
services from streamlining because of the complexity of new service offerings.  GSA supports a
policy of giving such tariffs a higher level of scrutiny.

          c.   Discussion

     31.   We find that all LEC tariffs involving rate increases, decreases, and/or changes to
the rates, terms, and conditions of existing services are eligible for streamlining.  We also
conclude that LEC tariffs introducing new services are eligible for streamlined filing.  Making all
LEC tariffs eligible for streamlining will provide a consistent reading of section 204(a)(3) and
section 204(a)(1) by establishing that all tariff filings are subject to the provisions of section 204. 
We agree with NYNEX that we have consistently interpreted section 204(a)(1) as giving the
Commission authority to investigate and impose an accounting order on all types of tariffs,
including those for new services.  Making all LEC tariffs eligible for streamlining will continue
this practice as well as give greatest effect to Congressional intent to streamline the LEC tariff
process.  In addition, we find that this interpretation will simplify the administration of the LEC
tariff process by making it unnecessary for the Commission, carriers, or interested persons to
determine whether a particular tariff qualifies for streamlining.  Accordingly, we determine that
all LEC tariffs are eligible for streamlined filing.  
     
          2.   Optional Nature of LEC Streamlined Tariff Filings

               a.   Background

     32.  Section 204(a)(3) states that LECs "may" file under streamlined provisions.  In
the Notice, we tentatively concluded that LECs may elect to file on longer notice periods than
those provided for in section 204(a)(3), but that, if they chose to do so, such tariffs would not be
"deemed lawful."
               
               b.   Comments

     33.  SWBT, ALLTEL, USTA, NYNEX, NECA, and GTE disagree with the
Commission's tentative conclusion and contend that tariffs should be deemed lawful whether or
not they are filed on a streamlined basis.  USTA and SWBT, for example, maintain that, while
the statute may give LECs the option to file their tariffs on a streamlined basis, a determination
that the tariff is "deemed lawful" is not dependant on whether the LEC filed on a streamlined
basis.  ACTA and TRA support the Commission's tentative conclusion. 

               c.        Discussion

     34.  We determine, as set out in the Notice, that LECs may, but are not required to, 
file tariffs on a streamlined basis.  As noted above, the first sentence of section 204(a)(3) states
that LECs "may" file a tariff on a streamlined basis.  We also interpret this section to mean that,
if a LEC chooses not to avail itself of the streamlining provisions, then the tariff would be filed
pursuant to the general tariffing requirements set out in section 203 of the Act and governed by
the notice periods set out in section 61.58 of our rules.  In addition, LEC tariffs filed outside the
scope of section 204(a)(3) shall not be "deemed lawful" because, by definition, they are not filed
pursuant to that section and are not, therefore, accorded the treatment provided for in that section. 
We also conclude that we may exercise our deferral authority with respect to such tariffs.
     
          3.   Forbearance Authority under Section 10(a) of the Act

               a.    Background

     35.  In the Notice, we tentatively concluded that section 204(a)(3) does not preclude
the Commission from exercising its forbearance authority under section 10(a) of the Act to
establish permissive or complete detariffing of LEC tariffs. 
          
               b.   Comments

     36.  Most of the commenters agree with the tentative conclusion set out in the Notice
that the Commission has forbearance authority to reduce or eliminate filing requirements for
LEC tariffs.  Pacific Telesis believes that the Commission has forbearance authority to remove
tariff filing requirements when competition develops to the point where regulation is
unnecessary. GSA states that nothing in either section 204(a)(3) or section 10(a) of the 1996
Act restricts the Commission from applying its forbearance authority to LEC tariff filings. 
CompTel and ACTA, on the other hand, argue that the general provisions of section 10(a) are
overridden by the specific language of new section 204(a)(3), which requires LECs to file tariffs. 
They contend that this interpretation is consistent with general statutory construction principles
mandating that specific provisions take precedence over more general ones. They further argue
that any interpretation of the statute that gave the Commission authority to eliminate LEC tariff
filing requirements entirely would void the new streamlining provisions.

               c.   Discussion

     37.  We affirm our tentative conclusion that we may exercise forbearance authority to
reduce or eliminate tariff filing requirements for LECs, including the filing of tariffs eligible for
streamlined treatment.  Section 10(a) accords the Commission general authority to forbear from
enforcing almost any provision of the Act applicable to common carriers if specific preconditions
are met.  The only limitation on this authority is provided in subsection 10(d), which states that
the Commission may not forbear from applying certain interconnection requirements on
incumbent LECs set out in section 251(c) of the 1996 Act or from authorizing Bell Operating
Company interLATA entry pursuant to section 271 of the 1996 Act until "those requirements
have been fully implemented."  Absent any express limitation on our authority to forbear from
applying tariffing requirements of section 203 of the Act, we conclude that we have authority to
do so under section 10(a).  In addition, we find it difficult to construe section 204(a)(3), which
states that LECs "may" file streamlined tariffs, and our section 10 forbearance authority to mean
that the statute imposes a requirement that LECs "must" file tariffs.  Rather, we find that
Congress intended to reduce or eliminate regulation as competition develops and to provide for
the detariffing of LEC services under appropriate conditions.  


          4.   Applications of Section 204(a)(3) of the Act to Tariff Filings of
               Nondominant LECs

               a.   Background

     38.  As noted above, under the 1996 Act, a LEC is defined as "any person that is
engaged in the provision of telephone exchange service or exchange access."  The Notice did
not address the application of section 204 to nondominant LECs.

               b.   Comments

     39.  Several of the commenters assert that the 1996 Act's streamlined tariffing
provisions should not apply to nondominant LECs.  They argue that there is nothing in the 1996
Act or its legislative history to suggest that Congress intended to increase the current one-day's
notice period for nondominant LECs.  In any event, MCI asserts that, if the Commission
determines that Section 204(a)(3) applies to nondominant LECs, it should forbear from applying
Section 204 (a)(3) to nondominant providers of interstate access service that do not have market
power.

               c.   Discussion

     40.  The statute does not distinguish between incumbent LEC and competitive LECs
for purposes of Section 204.  Therefore, we conclude that all LECs, including nondominant
LECs, to the extent they file tariffs, are eligible to file tariffs on a streamlined basis.  At this time,
we have not addressed the extent to which nondominant LECs are required to comply with our
tariffing rules.  Two petitions before the Commission will provide an opportunity for us to do
so.  As noted above, the statute also provides that LECs "may" file under streamlined
provisions.  We have interpreted this section to mean that LECs may choose to use these
streamlined provisions, but that tariffs filed outside of the scope of these provisions are governed
by the general tariffing provisions of section 203.  Accordingly, we also conclude that Section
204(a)(3) does not limit the ability of nondominant LECs to file tariffs on one-day's notice under
section 61.23(c) of our rules.  We also conclude that such tariffs would not be eligible for
"deemed lawful" treatment, but that such tariffs would continue to enjoy the presumption of
lawfulness accorded all nondominant carrier filings under section 1.773(a)(ii) of our rules. 


     D.   Streamlined Administration of LEC Tariffs

          1.   Electronic Filing

               a.   Background
     
     41.       In the Notice, we proposed establishing a program for electronic filing of tariffs
and associated documents.  We sought comment on: (a) whether or not to establish an electronic
filing program; (b) whether such a system should be operated by the Commission or carriers; (c)
whether tariffs should be filed in a specified database format; and (d) what system security
measures should be adopted.

               b.   Comments

     42.  Nearly every commenter supports establishing an electronic filing system.    Many
commenters suggest, however, that, before we implement a mandatory system of electronic
filing, we initiate either an industry working group or issue a further Notice to ensure the security
of the program and to discuss its functional requirements.  Sprint asserts that the industry is not
ready to participate in an electronic filing system because there are no industry standards
regarding systems, format, or software.  There is also disagreement regarding whether
participation in the system should be mandatory or not.  None of the commenters includes a
precise time frame for implementing such a system, although Frontier Corp. (Frontier) states that
it should be implemented before the LEC streamlining provisions take effect.

     43.  Commenters are divided on who should design and maintain the system.  Some
commenters support having the Commission maintain and control the system.  Other
commenters support a system designed by the Commission but run by carriers subject to
Commission oversight over access and security.  MFS and McLeod Telemanagement, Inc.
(McLeod) suggest that a third-party contractor should maintain the system.

     44.  Most commenters advocate the use of an Internet-based system.  Some of these
commenters support a system of dial-up access in addition to the Internet-based system. 
USTA favors utilization of the World Wide Web over the use of bulletin boards or dial-in
databases.  It argues that bulletin boards are slower than the World Wide Web, and dial-in
databases require specific software, which are difficult to administer.  Ameritech, BellSouth,
and CITI propose specific systems, such as EDGAR, the electronic filing system of the SEC. 
NYNEX, SWBT, and ACTA propose that the Commission post notices of tariff filings on its
Web page, which would be linked to LEC Web pages where the LECs would post their tariffs. 
USTA proposes a system with company-specific sections on the FCC's Web page.  NECA
proposes that the Commission set up separate servers for providing information and posting of
tariffs for public review, which would permit anonymous log-ons to the public server.

     45.  Ameritech suggests that the system adopted by the Commission should
accommodate multiple platforms and software packages rather than specify a database that
would require re-drafting tariffs into a standardized system.  GSA and CITI, however, contend
that the Commission should prescribe a standardized format for tariff filings.  AT&T and
USTA suggest that the system be structured to allow carriers to download tariffs in spreadsheet
formats and as ASCII text files.

     46.  Many commenters suggest methods to prevent unauthorized changes to tariffs,
such as using:  password or PIN number protection; electronic signatures; and encryption
devices.     NTCA recommends that the Commission ensure that a permanent record of
historically filed tariffs is maintained.  Ad Hoc and AT&T urge that the notice period not begin
to run until the filing is posted.  GSA and AT&T propose that we establish a return receipt
confirmation to specify the date of filing and commencement of the notice period.  Several
commenters urge the Commission to require that filings be posted on the system at a specified
time early in the day of filing, i.e., 10 a.m.  Pacific Telesis and U.S. West oppose this
suggestion.

               c.   Discussion
 
     47.  We find that a program for the electronic filing of tariffs and associated
documents would facilitate administration of  tariffs.  An electronic filing program could afford
filing parties a quick and economical means to file tariffs while giving interested parties virtually
instant notification and access to the tariffs.  In addition, we conclude that participation in such a
system should be mandatory for all LECs, because, if some LECs are allowed to continue to file
on paper, we would not realize the full benefit of electronic filing.  An electronic filing system
also should not impose undue burdens on LECs, but rather reduce their overall administrative
burdens.  Accordingly, subject to the availability of adequate funding, we will establish a
program for the electronic filing of tariffs and associated documents, such as transmittal letters,
requests for special permission, and cost support documents.   We will require LECs to file this
information electronically.  Our program will also permit filing of petitions to suspend and
investigate and responsive documents electronically and we encourage parties to do so.  Because
a database system would place significant strictures on filing, including a significant alteration of
the format of current tariffs, we will not require that tariffs and associated documents be filed in a
database format.  Instead, our electronic filing program will permit entities to file electronically
consistent with their current formats.  We further determine that the Commission, at least at the
initial stage of implementation, will be responsible for administering the electronic filing
program.  We may consider other alternatives at a later time.  

     48.  We delegate authority to the Chief, Common Carrier Bureau to establish this
program including determinations concerning transition mechanisms, establishment of
procedures to assure security, when the program should be initiated, and any other issues that
may arise regarding the initiation of the electronic filing program. We direct the Bureau to
consult with industry and potential users informally and share plans for its proposed
implementation and make any necessary adjustments in light of industry and user views, as
appropriate.  We also direct the Bureau to permit filing of, and access to, LEC tariffs and
associated documents by means of the Internet.  We direct the Bureau to implement this program
in coordination with other electronic filing initiatives within the agency.


          2.   Exclusive Reliance on Post-Effective Tariff Review

               a.   Background

     49.   We currently rely on pre- and post-effective review of tariffs to ensure LEC
compliance with Title II of the Communications Act.  In the Notice, we solicited comment on
whether we can, and should, in implementing the streamlined tariff provisions of the 1996 Act,
adopt a policy of relying exclusively on post-effective tariff review, at least for certain types of
tariff filings, to oversee LEC compliance with the Act.  In the Notice, we asked whether
exclusive reliance on post-effective review could significantly streamline the tariff review
process while continuing to provide an opportunity for evaluation of the lawfulness of tariffs. 
We sought comment on whether, under such a policy, we should retain the discretion to conduct
a pre-effective tariff review in individual cases.  We also solicited comment on the extent to
which section 204(a), which provides that when a tariff is filed, the Commission may either on
its own initiative or "upon complaint" suspend and investigate the tariff, limits our ability to
rely exclusively on post-effective tariff review.  

               b.    Comments

     50.  Commenters generally oppose relying exclusively on post-effective tariff
review.  AT&T states that Congress did not intend to eliminate pre-effective review of LEC
tariffs.  To find otherwise, AT&T explains, would permit LECs to impose rates and terms on
customers that would stay in effect until such time as the Commission could conclude an
investigation.  In addition, AT&T contends that such a finding would negate section 204(a),
which authorizes the Commission to initiate an investigation when a complaint is filed or upon
its own initiative "whenever there is filed any new or revised charge, classification, regulation or
practice."  CompTel points out that reliance solely on post-effective review would be
particularly inappropriate if the Commission interprets the term "deemed lawful" as changing the
legal status of tariffs.  Under this scenario, CompTel claims that consumers would be denied any
protection from LEC tariff filings that are given the force of an affirmative finding of lawfulness
and reviewed only after taking effect.  According to CompTel, consumer remedies would be
further limited by the Commission's inability to suspend a tariff after it has become effective.

     51.  Sprint, Frontier, and NECA are the only commenters that favor our proposal to
rely solely on post-effective review of tariffs.  According to NECA, relying on post-effective
tariff review would eliminate the need for filing of petitions and allow tariffs to go into effect
within the streamlined notice periods, thereby furthering the intent of the 1996 Act to accelerate
the tariff review process.  Sprint asserts that post-effective review of LEC tariffs will suffice,
provided that the Commission adopts the position that "deemed lawful" only creates a rebuttable
presumption of lawfulness.  The remedies provided under sections 205 and 208 of the Act would
still be available, and LEC customers could recover damages for tariffs found to be unlawful as
of the effective date of the tariff filing, according to Sprint.

               c.    Discussion

     52.   We conclude that pre-effective tariff review is required by the statute which
contemplates pre-effective tariff review by identifying specific actions that we can take, i.e.,
suspension and investigation, prior to the effective date of the tariff.   In addition, eliminating
pre-effective tariff review would restrict the opportunity for interested parties to obtain review of
potentially unlawful tariffs.   We further find that pre-effective review is a useful tool to assure
carriers' compliance with sections 201 through 203 of the Act.   Therefore, we will retain our
practice of pre-effective review.  We will continue to rely additionally on post-effective tariff
review, including the section 208 complaint process and in section 205 tariff investigations.

          3.   Pre-Effective Tariff Review of Streamlined Tariff Filings

     53.  In the Notice, we solicited comment on what measures, if any, the Commission
should take to facilitate decision-making within seven or fifteen days concerning whether to
suspend and investigate tariffs filed pursuant to section 204(a)(3).  

               a.   Summaries and Legal Analyses

          1.   Background
     
     54.       In the Notice, we solicited comment on whether we should establish requirements
that LECs file summaries of proposed tariff revisions with their streamlined tariff filings in order
to provide a more complete description than under current requirements, and that LEC tariffs
filed on a streamlined basis be accompanied by an analysis showing that they are lawful under
applicable rules.    

          2.   Comments

     55.  With the exception of Ameritech, the LECs unanimously oppose the
Commission's proposal to require them to file a summary with tariff filings.  All of the LECs
also oppose a requirement that they file an analysis demonstrating that the tariff filing is lawful. 
LECs argue that these requirements would impose increased burdens, contrary to the
deregulatory goals of the 1996 Act.   They also argue that the information contained in the
proposed summaries is already provided in the Description and Justification (D&J) section of
tariff transmittals.  Ameritech further states that requiring a legal analysis is inconsistent with
the directive in section 204(a)(3) that LEC tariffs are deemed lawful and that the burden of
demonstrating otherwise should rest on parties opposing the filing.  NYNEX states that the
Commission should adopt reduced tariff support requirements for streamlined tariff filings.
Finally, CBT states that the legal analysis requirement would have a chilling effect on small and
mid-size LECs that may be sensitive to legal fees.

     56.  Non-LEC commenters support these possible requirements, stating that they
would assist the Commission and the public in reviewing tariff filings without imposing a
significant burden on the LECs.  CapCities suggests that the summaries include details, on a
service-by-service basis, of the rate or service impact of the proposed tariff and the reasons in
support of the proposed changes.  

          3.   Discussion
 
     57.  We will not impose any additional requirements for supporting information
concerning LEC tariff filings at this time.  Although a summary and legal analysis could be
useful to the Commission and the public, we find that it is not necessary to require it as part of
our initial implementation of streamlined LEC tariff filings because we are not convinced that it
would expedite the tariff review process.  Instead, we will gain experience from our initial
administration of streamlined LEC tariffs and revisit this issue if necessary.

               b.   Presumptions of Unlawfulness

          1.   Background

     58.  In the Notice, we solicited comment on whether it would be consistent with the
1996 Act to establish presumptions of unlawfulness for narrow categories of tariffs, such as
tariffs facially not in compliance with our price cap rules, that would permit suspension and
designation of issues for investigation through abbreviated orders or public notices.  We solicited
comment on what kinds of tariffs could be accorded this presumption.

          2.   Comments

     59.  All LECs oppose establishing presumptions of unlawfulness.  They argue that
these presumptions would be contrary to section 204(a)(3).  For example, Bell Atlantic argues
that, "[t]here is no way to reconcile [establishing presumptions of unlawfulness] with the
statutory mandate, that absent direct action by the Commission, tariff filings are 'deemed lawful'
within 7 to 15 days."  Pacific Telesis explained that, "[b]y deeming LEC tariffs lawful at the
time of filing, Congress created a presumption of continuing lawfulness which puts the burden
on the party challenging the tariff to overcome the presumption." 

     60.  The Interexchange Carriers (IXCs) support the proposal, suggesting further that
the Commission should reject any tariff filing that is facially inconsistent with any existing rule
or regulation.  CompTel states that the presumptions would help the Commission serve its dual
mandates of protecting consumer interests and expediting the tariff review process.

          3.   Discussion

     61.  We will not establish presumptions of unlawfulness for any categories of tariffs. 
Such presumptions would be inconsistent with the legislative intent of this provision.  Instead,
consistent with our current practice, we intend to utilize the tariff review process to identify
problematic tariffs that warrant suspension.  We note, however, that tariffs that facially do not
comply with our rules, such as out-of-band price cap filings, will, for that reason, continue to
have a high probability of rejection or suspension and investigation.

               c.   Treatment of Tariffs Containing Both Rate Increases and
                    Decreases 

          1.   Background

     62.       The 1996 Act provides that LEC tariffs that propose to decrease rates shall be
effective in 7 days and tariffs proposing rate increases shall be effective in 15 days.  The statute
is silent on which notice period will apply to tariffs that contain both increases and decreases.  In
the Notice, we tentatively concluded that the 15-day notice period should apply to such tariffs
and that carriers wishing to take advantage of the 7-day notice period should file rate decreases in
separate transmittals. 

          2.   Comments

     63.  Non-LEC commenters support the Commission's proposal.  They argue that it is
necessary to protect the interest of customers to challenge rate increases, and that, therefore, the
longer notice period shall apply.  All the LECs, except BellSouth, oppose this requirement
because requiring separate transmittals would purportedly increase the regulatory burden on
LECs.  As an alternative, NYNEX, SWBT, and Pacific Telesis suggest that the Commission
look at the overall effect on the Actual Price Index (API) for a service category to determine if
a tariff filing should be classified as an increase or a decrease.  They explain that most access
services contain numerous individual rate elements, so that a tariff that reduces most rate
elements for a particular service may nonetheless contain rate increases for individual
elements.  ALLTEL suggests that small and mid-sized companies be permitted to define rate
increases and decreases at the access category level.  CBT suggests that all of the increases and
decreases in a given transmittal be aggregated and the applicable notice period determined by the
net overall change.

     64.  USTA states that price cap LECs should continue to identify increases or
decreases at the rate element level pursuant to the current Part 61 rules.  It further proposes that
the Commission ensure a streamlined approach for small and mid-sized LECs by permitting rate-
of-return LECs to define rate increases or decreases at the access category level and file
accordingly.  USTA also proposes that LECs under Optional Incentive Regulation be permitted
to define rate increases at the basket level.  Finally, USTA proposes the elimination of those Part
61 rules that require non-price cap LECs to list increases or decreases in specific rate elements in
tariff transmittals.

     65.  Ad Hoc opposes the LECs' suggestion that the Commission use API calculations
to determine whether the tariff should be considered a rate increase or decrease because section
204(a)(3) of the Act specifically provides for a fifteen-day notice period whenever a LEC files a
tariff with a rate increase.  Ad Hoc argues that, with the use of the API, there may be significant
increases that are balanced out by decreases, thereby shortening the time interested members of
the public would otherwise have to review the proposed rate increase.  Ad Hoc also states that
customers typically purchase only some of the services made available in a carrier's tariff
offering so there is the risk that members of the public could be subjected to rate increases
without proper time to respond.

     66.  Several commenters also address the need for establishing new notice periods for
streamlined tariffs that propose changes in terms and conditions and for new services.  AT&T
proposes that the Commission require that LECs file tariffs proposing changes in terms and
condition 30 days prior to the tariff's proposed effective date.  GTE states that, because there is
"no functional difference" between an increase in rates and a new service, new services should be
subject to the same 15-day notice period as price increases.  Pacific Telesis suggests that the
Commission treat new services as rate reductions and apply the 7-day notice period.  Pacific
Telesis maintains that new services, like rate reductions, benefit the public and therefore should
be implemented as quickly as possible.

          3.   Discussion

     67.  We conclude that the 15-day notice period will apply whenever a tariff filing
includes both rate increases and rate decreases and limit the application of the 7-day notice
period to tariffs that only contain a rate decrease.  Therefore, whenever a tariff transmittal
includes an increase to any rate element, the longer notice period will apply even if other rates in
the same transmittal are simultaneously decreased.   Our conclusion is supported by the statute,
which specifically provides for a fifteen-day notice period whenever a LEC files a tariff with a
rate increase.  We reject arguments advanced by the LECs that this approach is contrary to the
concept of streamlining or that this will increase the regulatory burden on them.  Rather, this
result will permit LECs to propose rate increases and decreases in the same tariff filing.  All of
the carriers' rate changes will still receive streamlined treatment.  Rate decreases will be subject
to the longer notice period because of the carriers' decision to include them in the same tariff
filing as a rate increase.  Carriers are free to take full advantage of the shorter seven-day notice
period by transmitting rate decreases in a separate filing.  We also reject the LECs' various
suggestions to base the applicable notice period on the net effect of changes to rate elements
either at the access category level, basket level, or API.  This will assure that customers that
purchase only some elements of a tariff will receive the 15-days' notice that Congress intended
for rate increases, even though rates for other elements decrease and even though rates measured
at some aggregate level may decrease.  In addition, we find that review of such calculations
would unnecessarily complicate the tariff review process.

     68.  We further determine that the 15-day notice period shall also apply to tariffs that
change terms and conditions or apply to new services even where there is no rate increase or
decrease.  This will result in the most efficient implementation of section 204(a)(3) by
minimizing analysis of each filing to determine whether or not it should be considered a rate
increase, decrease, or a change in terms and conditions.  Thus, under the rules we establish, all
LEC tariff transmittals, other than those that solely reduce rates, shall be filed on 15-days' notice. 
If there are other significant changes, the tariff transmittal will be subject to a 15-day notice
period.

               d.   Mechanisms to Identify Contents of Filings

          1.   Background

     69.  In the Notice, we proposed requiring carriers to identify specifically tariffs filed
pursuant to section 204(a)(3) and whether the transmittal contains a rate increase, decrease or
both.  We solicited comment on requiring either a label or a statement in the transmittal letter to
achieve this result. 

          2.   Comments

     70.  Only SWBT opposes our proposal.  It explains that the proposal is unnecessary
because the LECs currently provide this information by making a notation on tariff pages
indicating that it contains either an increase or reduction, and through the Description and
Justification (D&J) accompanying a new or restructured tariff.  USTA also states that the D&J
accompanying LEC tariffs adequately informs interested parties of the contents of a filing. 
USTA argues, however, that, should the Commission adopt such a requirement, it should apply
to tariff filings of LEC competitors as well.  Ad Hoc, ALLTEL, BellSouth, and TRA support
the proposal to require LECs to identify such tariffs in the transmittal letter.  

          3.   Discussion

     71.  We will require that all LECs display prominently in the upper right hand corner
of the tariff transmittal letters a statement indicating that the tariff is being filed on a streamlined
basis under section 204(a)(3) of the Act and whether it is being filed on 7- or 15-days' notice. 
While review of the LEC tariff including notations on tariff pages and the D&J would inform
interested parties of the contents of the filing, this statement by the carrier will allow the
Commission and the public to identify quickly whether the tariff is eligible for streamlined
treatment and the notice period to be applied to the filing, without imposing any undue burdens
on carriers.  Without such a statement, we will treat a tariff transmittal as filed outside of section
204(a)(3), i.e., not on a streamlined basis.

               e.   Commission Notification to Interested Parties 

          1.   Background

     72.  In the Notice, we sought comment on the best mechanism for alerting
Commission staff and interested parties about the contents of LEC tariff filings.  The Notice
proposed that we provide affirmative notice of LEC tariff filings to interested parties via e-mail. 
We sought comment on whether we should adopt the proposal before, or, only when, electronic
filing of tariffs is implemented.

          2.   Comments

     73.  Most commenters support the proposal.  McLeod suggests that the Commission
require LECs to send notification to interested parties in order to preserve Commission
resources.  CapCities suggests that the LECs notify interested parties by facsimile as well as by
e-mail.  Only NECA and SWBT oppose the proposal.  They argue that e-mail notification will
be unnecessary upon implementation of an electronic filing system, and that parties already have
procedures in place to monitor filings.

     74.  Several supporters of the proposal suggest that additional notification
requirements be placed on the LECs.  MCI, KMC, and MFS urge the Commission to require that
a carrier provide advance public notice of its intention to transmit a tariff filing and identify the
service that would be affected.  The LECs express strong opposition to these suggestions,
stating that requiring advance notice would violate the Congressional mandate to streamline the
tariff review process.  TRA, the only commenter to address whether the proposal should be
implemented immediately or upon implementation of the electronic filing system, advocated the
former.

          3.   Discussion

     75.  We find that e-mail notification is a simple, informal method of assisting parties
in complying with the expedited notice periods required under the 1996 Act.  Affirmative notice
of tariff filings for the convenience of interested parties is possible without expending significant
Commission resources.  Despite the assertions from SWBT and NECA that parties have other
means of learning of tariff filings, affirmative notice by e-mail will provide a useful way for
interested parties to learn of tariff filings.  Accordingly, we will notify by e-mail interested
persons who request such notice of LEC tariff filings eligible for streamlined treatment.  We
delegate to the Chief, Common Carrier Bureau authority to establish this mechanism and to
institute a means of receiving requests from interested persons.  We envision that this e-mail
notification will be provided on the day after the filing is made with the Commission.  We
emphasize that notice by e-mail will not constitute legal notice of filings, and failure of the
Commission to provide the affirmative notice for any reason will not extend comment periods. 
In view of our decision, we see no benefit in requiring LECs to send e-mail notification of filings
to interested parties.  We also reject suggestions that we establish an additional requirement that
LECs furnish advance notice of tariff filings.  That requirement is not necessary to provide
adequate notice to interested parties of LEC tariff filings. 

          4.   Notice Period and Filing Procedures

               a.   Deadlines for Petitions and Replies

          1.   Background

     76.  As indicated in the Notice, we need to establish new filing periods for petitions to
suspend and reject LEC transmittals filed on 7- or 15-days' notice.  The current pleading cycles
listed in section 1.773 of our rules will not accommodate the filing of petitions and replies in
response to LEC tariff changes made on 7-days' notice.  In the Notice, we proposed to require
that petitions against those LEC tariff filings that are effective within 7 or 15 days of filing must
be filed within 3 days after the date of the tariff filing and replies 2 days after service of the
petition.  

          2.   Comments

     77.  Most of the commenting LECs, as well as GSA, support the Commission's
proposal to require that petitions be filed within 3 days of the tariff filing and that replies be filed
within 2 days of service of the petition.  NYNEX, MCI, AT&T, CapCities, and Ad Hoc state
there is no reason to have the same filing periods for both tariffs filed on 15-days' notice and
tariffs filed on 7-days' notice.  AT&T and SWBT suggest shorter notice periods for replies
than the Commission's proposal.  Ameritech and Pacific Telesis sharply criticize AT&T's
proposal for replies as one-sided and overly restrictive.

          3.   Discussion

     78.  We agree with commenters who recommend establishing different filing periods
for petitions and replies based on whether the tariff filing at issue was filed on 7-days' notice or
15-days' notice.  We require that petitions against LEC tariff transmittals that are effective 7 days
from filing must be filed within 3 calendar days from the date of tariff filing, and replies must be
filed within 2 calendar days of service of petition.  We reject SWBT's suggestion that petitions be
required on the business day following the filing, as well as AT&T's suggestion that replies be
required on the calendar day following service of the petition, because these proposals
unreasonably abbreviate the amount of time within which to submit filings.

     79.  With respect to LEC tariff filings that are effective on 15-days' notice, we agree
with NYNEX, CapCities, and Ad Hoc, that the current filing schedule set forth in
sections 1.773(a)(2)(ii) and 1.773(b)(1)(ii) is sufficient.  These rules require petitions to be filed
within 7 calendar days of the tariff filing.  Replies must be filed within 4 days of service of the
petition. 

               b.   Other Issues Relating to Computation of Time
               
     80.  The Act is silent on whether the new statutory notice periods refer to calendar
days or working days.  In the Notice, we tentatively concluded that the statutory notice periods
refer to calendar days, not working days.  All the LECS, except Bell Atlantic, and USTA, agree
that calendar days should be used in computing notice periods.  Bell Atlantic argues that
filings should not be calculated on a calendar day basis because this would leave inadequate time
for the Commission to review the tariff.  ACTA also disagrees with the Commission's tentative
conclusion because of concerns that LECs will strategically submit tariffs at times that limit the
ability of interested parties to review them.  We interpret the statutory notice periods set out in
section 204(a)(3) of the Act to refer to calendar days.  This interpretation is consistent with the
present computation of time set forth in section 1.773(a)(3) of the rules, which uses calendar
days when calculating dates for filing petitions to suspend or reject a tariff.  We find that using
calendar days is consistent with existing Commission practice and best fulfills the intent of
Congress to shorten the tariff review process.

     81.  The Notice proposed that, when a due date falls on a holiday or weekend, the
document shall be filed on the next business day.  The LECs, the only parties to address this
issue, support this proposal.  We adopt the proposal as stated in the Notice.  This is consistent
with sections 1.4(g) and 1.773(a)(3) of the Commission's rules.  Therefore, when a due date falls
on a holiday or weekend, the document shall be filed on the next business day.

     82.  The Notice also proposed including intermediate holidays and weekends in
computing time periods for petitions and replies.  All comments received support this
proposal.  We adopt the proposal as stated in the Notice, which is consistent with existing
Commission practice set forth in section 1.773(a)(3).  Therefore, intermediate holidays and
weekends will be included in computing time periods.
          
               c.   Hand Delivery

          1.   Background

     83.   Section 61.33(d) requires the transmittal letter of any tariff filing made on less
than 15-days' notice to include the name, address, and facsimile number of the person designated
to receive service of petitions against the filing.  Section 1.773(a)(4) of the Commission's rules
requires that petitions against a filing made on less than 15-days' notice be served personally or
by facsimile.   The Notice proposed requiring that petitions and replies be hand-delivered to all
affected parties where the filing party is a commercial entity. 

          2.   Comments

     84.  NECA, GSA, and Pacific Telesis support the Commission's proposal.  USTA
and SWBT support requiring hand delivery of petitions, but not replies.  CBT and MCI state
that facsimile service is sufficient with confirmed receipt.  In the alternative, MCI suggests that
required hand delivery be limited to parties with a representative in Washington, D.C.  TRA
states that facsimile transmissions should be added to hand delivery requirements as a
consideration for small carriers with limited budgets.  BellSouth states that only minor changes
to sections 61.33 and 1.773(a)(4) are necessary to carry out the goals of the Commission. 
BellSouth proposes changing these rules to apply to tariffs and petitions filed on 15-days' notice
or less.

          3.   Discussion

     85.  We find that in-hand service of petitions and reply pleadings will facilitate full
participation by carriers and interested persons in the Commission's review of LEC tariffs,
particularly in view of the shortened statutory notice periods in section 204(a)(3) and the
implementing rules adopted here.  In light of the comments of TRA, we also find that it is
important to provide for service by facsimile transmission as an alternative to hand delivery. 
Therefore, we will amend sections 61.33 and 1.773(a)(4) to apply to tariffs and to all associated
documents filed on 15-days' notice or less, and require that such tariff filings include, among
other things, the facsimile number of the individual designated by the filing carrier to receive
personal or facsimile service of petitions and that petitions and replies in connection with such
tariff filings be served by hand or by facsimile.
     
               d.   Elimination of Public Comment Period

     86.  In the Notice, we sought comment on whether we should eliminate the public
comment period during the 7- or 15-days' notice period.  Only CBT supports our proposal to
eliminate the public comment period.  MCI, NYNEX, Ad Hoc, and Pacific Telesis all oppose
the proposal as contrary to the right of the public to seek suspension and investigation of a tariff
under section 204(a) of the Act.  As discussed above, we will retain pre-
effective tariff review as a useful tool for ensuring that LEC tariffs are just and reasonable. 
Public participation in tariff proceedings serve the public interest.  Accordingly, we will not
eliminate the public comment period for LEC tariffs filed on 7- or 15- days' notice.

               e.   Protective Orders

          1.   Background

     87.  We regularly receive requests by carriers for confidential treatment of cost data
filed with tariff transmittals.  In many cases, we also receive requests under the Freedom of
Information Act (FOIA) for cost information for which a filing carrier has requested
confidential treatment.  As a practical matter, we frequently will be unable to respond to these
requests within the 7- and 15-days tariff review periods established by the 1996 Act.  In the
Notice, we sought comment on whether we should routinely impose a standard protective order
whenever a carrier claims in good faith that information qualifies as confidential under relevant
Commission precedent.  We also solicited comment regarding the terms that we should include
in a standard protective order and the types of data that should be eligible for confidential
treatment.

          2.   Comments

     88.  The majority of the parties commenting on this proposal oppose the use of a
standard protective order, albeit for conflicting reasons.  AT&T contends that we do not have
the authority to issue a standard protective order because nothing in the FOIA or in the 1996 Act
relieves us of our obligation to determine whether information in our possession may properly be
withheld from the public despite the shortened tariff review process.  AT&T states that,
although Exemption 4 of the FOIA protects certain trade secrets and financial data from
disclosure, it is well-settled that an agency invoking a FOIA exemption bears the burden of
establishing its right to withhold information from the public.  Therefore, AT&T concludes, we
cannot simply accept a submitting party's assertion that tariff support materials are confidential. 
Moreover, AT&T asserts, data that are subject to a protective order are not automatically covered
by Exemption 4.  An agency still must demonstrate that the information in question is exempt
from FOIA disclosure.  Bell Atlantic takes the position that there is no legal requirement that
cost support data must be available to the public.  Moreover, even if there were such a
requirement, Bell Atlantic contends, there would be no reason to continue following such a rule
given the current level of competition.  USTA also favors elimination of cost support data for
streamlined tariff filings and states that, if this proposal were adopted, there would be no need for
protective orders.  In the alternative, USTA favors the use of standard protective agreements on a
case-by-case basis.  Ad Hoc maintains that the openness of the tariff review process would be
compromised if data are routinely withheld from disclosure.

     89.  Ameritech, NYNEX, and TW Comm support, to some extent, the routine use of
standard protective orders.  Ameritech first argues that it supports elimination of the requirement
to file cost support data.  To the extent, however, that this requirement is retained, Ameritech
favors the use of standard protective orders.  Ameritech contends that the use of protective orders
provides protection to data that in its view are intrinsically proprietary while enabling the tariff
review process to go forward.  Ameritech supports using the model protective order it
submitted with a number of other parties in GC Docket No. 96-55.  While NYNEX supports
the use of a standard protective order, it also wants carriers to have the option of seeking
nondisclosure of highly sensitive data under certain circumstances.  TW Comm states that the
use of protective orders should be limited to those circumstances where a LEC demonstrates that
confidential treatment of its data is necessary to prevent competitive harm.  If the LEC makes
such a showing, TW Comm suggests, the data should be made available to interested persons
under a narrowly-drawn protective order.  TW Comm states that the terms of the protective order
should be limited only to protecting the legitimate competitive interests of the LEC.  TW Comm
maintains that this goal could be accomplished by narrowly limiting access to the material to
those persons who are preparing petitions in opposition to the tariff or participating in a tariff
investigation.

     90.  TRA contends that, if a carrier chooses to use streamlined tariff procedures, it
forfeits its right to request confidential treatment of its cost support data.  SWBT opposes this
position.  CBT argues that, while it generally supports the use of protective orders, it
recognizes that they do not afford absolute protection against disclosure of data.  CBT maintains
that it would be preferable for us to determine that the new competitive environment has caused a
fundamental change in the nature of tariff proceedings and that the public interest in open tariff
proceedings is now outweighed by the submitting party's need to protect competitively sensitive
information.  CBT suggests, therefore, that competitors' requests to review competitively
sensitive information be rejected.  GSA maintains that standard protective orders should be
imposed on a routine basis.  It contends that LECs should be able to prevent disclosure of their
data and that interested parties should be able to petition the Commission for access.  Further,
GSA proposes that the Commission establish standards for a LEC to prevent disclosure of its
cost support data, but GSA does not suggest what these standards should be. 

          3.   Discussion

     91.   It is evident that existing procedures for responding to requests for confidential
treatment or for disclosing supporting cost data under the FOIA cannot be completed in the
limited time available for streamlined tariff review.  We find that use of standard protective
orders for purposes of streamlined LEC tariff review will properly serve the dual purpose of
permitting limited access to important information by interested persons while protecting
proprietary information from public disclosure.  We have used protective orders in a variety of
proceedings to protect competitively sensitive material from public disclosure while allowing
interested parties to have access to potentially decisional documents.  In so doing, the
Common Carrier Bureau stated that 

     . . . the competitive threat posed by widespread disclosure under
     FOIA may outweigh the public benefit in disclosure. In such instances, disclosure under a
     protective order or agreement may serve the dual purpose of protecting competitively
     valuable information while still permitting limited disclosure for a specific public
     purpose.

Accordingly, we are issuing, in this Report and Order, a standard protective order for use in
review of LEC tariff filings submitted pursuant to section 204(a)(3).  The Bureau will use the
protective order where the submitting party includes with the tariff filing a showing by a
preponderance of the evidence to support its case that the data should be accorded confidential
treatment consistent with the provisions of the FOIA or makes a sufficient showing that the
information should be subject to a protective order.  This is the standard applicable in section
0.459 of our rules to requests that materials or information submitted to us be withheld from
public disclosure.  Therefore, at a minimum, the submitting party must comply with Section
0.459 (b) and (c) of the rules regarding the supporting information that must be included in its
request for confidentiality.  Because of the shortened LEC tariff notice periods in the 1996 Act,
the Bureau will not have time to issue written determinations concerning whether the data are
entitled to confidential treatment and still complete the tariff review process.  Instead, it will
routinely employ the standard protective order in the pre-effective tariff review process to permit
meaningful participation by interested parties, so long as the carrier has made a good faith
showing in support of confidential treatment.  During the course of any follow-on investigation
of tariffs filed under section 204(a)(3), the Bureau can make any further determination as
necessary concerning a carrier's entitlement to confidentiality.  We can and will employ
appropriate sanctions against any carriers that abuse opportunities to obtain confidential
treatment.  

     92.  This will fully comport with our obligations under the FOIA.  We are not, as
AT&T suggests, ignoring our obligation to determine whether information qualifies for
nondisclosure under either the FOIA or our confidentiality rules as submitting parties will
continue to be required to make a persuasive showing that the data in question meet these
standards.  Moreover, the use of protective orders will prevent the unlimited disclosure of
sensitive financial data, and will thereby protect the competitive interests of the filing party. 
Thus, this approach appropriately balances the competing interests at stake.  We, therefore,
decline to adopt the approaches proposed by CBT and TRA that propose either that all tariff
support material be made public or that, alternatively all such material should be held in absolute
confidence.  We also believe that protective orders will afford adequate protection to even the
highly sensitive data referenced by NYNEX.  In addition, we find that ruling on individual
requests, as NYNEX proposes, will cause unacceptable delays during a very short tariff review
process and our goal in using standard protective orders is to eliminate the opportunity for such
delays.  Accordingly, we find that the routine use of a standard protective order in LEC
streamlined tariff proceedings will eliminate delay during this shortened tariff review process as
well as address the concerns of various parties concerning the protection of competitively
sensitive financial data.  Routine use of a standard protective order will also serve the public
interest by enabling interested parties to comment, as provided for in the rules, in LEC
streamlined tariff review proceedings.  The Notice in this proceeding only proposed use of a
standard protective order in the pre-effective review of streamlined tariffs filed pursuant to
section 204(a)(3).  Thus, the standard protective order adopted here is not required to be used in
tariff investigations, although its use is not precluded in those investigations where we find it
appropriate.

     93.  As noted above, the Notice sought comment on whether the Commission should
routinely impose a protective order and what terms should be included in such a standard
protective order.  The Notice also cited to GC Docket No. 96-55 in which a model protective
order has been released for public comment.  While, as described below, the standard
protective order adopted herein is similar to the standard protective order released for public
comment in that proceeding, our decision here is not binding upon any final Commission
decision in GC Docket No. 96-55, which is intended to create a standard protective order for use
in Commission proceedings generally.  We note, however, that a number of the commenters in
this proceeding incorporated by reference their comments submitted in GC Docket No. 96-55.

     94.  The standard protective order we adopt is similar to the model protective order in
GC Docket No. 96-55, but includes several changes that were suggested by comments in this
proceeding, as well as additional clarifying changes that we are adopting sua sponte. 
Significant modifications to the draft model protective order in GC Docket No. 96-55 include: (i)
clarifying that consultants under contract to the Commission must execute a Declaration that they
will abide by the protective order, unless they have signed a general non-disclosure agreement as
part of their agreement with the Commission; (ii) clarifying that unauthorized use of Confidential
Information, as well as unauthorized disclosure, is prohibited and subject to sanctions; (iii)
clarifying that the prohibition on the unauthorized disclosure or use of the Confidential
Information remains binding indefinitely unless the Submitting Party otherwise agrees; (iv)
specifying that possible sanctions for violation of a protective order include disbarment from
Commission proceedings, forfeitures, cease and desist orders, and a denial of access to
Confidential Information in that and other Commission proceedings; (v) clarifying that the
Protective Order is also an agreement between the Reviewing Parties and the Submitting Party;
and (vi) clarifying that the Submitting Party retains all rights and remedies available at law or
equity against any party using confidential information in a manner not authorized by the
protective order.  We note that the model protective order, as originally proposed, already
contains the requirement proposed by the Joint Parties to require each person examining
Confidential Information to execute a declaration agreeing to be bound by the terms of the
protective order.  Finally, because of the requirement for expedited tariff review, we have
modified the provision in paragraph 7(b), which would have permitted parties to give certain
entities access to confidential material if the Commission gave its approval.  Because of the
shortened time periods for tariff review, we do not have time to entertain and rule on such
requests.

     95.  The Commission has, however, declined to adopt certain modifications proposed
by commenters.  The Joint Parties' proposed to limit the number of authorized representatives
able to examine Confidential Information to a maximum of seven with various sub-limits, such
as one inside counsel and one outside counsel per party.  We believe such a limitation would
unduly limit the ability of, for example, a partner in a law firm to obtain the counsel of associates
and that the serious consequences of violating a Commission protective order make this
limitation unnecessary.  We also decline to adopt the Joint Party's suggestion to bar the copying
of Confidential Information, because we believe that the proposal imposes an unnecessary
burden on the review of such information.  We will, however, modify the Protective Order to
require a Reviewing Party to keep a written record of all copies made and to provide this record
to the Submitting Party on reasonable request.

          5.   Annual Access Tariff Filings

               a.   Background

     96.       Section 69.3(a) of the Commission's rules requires LECs and the National
Exchange Carrier Association (NECA) to submit revisions to their annual access tariffs on 90-
days' notice to be effective on July 1 of each year.  We indicated in the Notice that these filings
are limited to changes in rate levels, and therefore, are eligible for filing on a streamlined basis. 
As part of the annual access tariff filings, LECs are required to file summary material, known as
tariff review plans (TRPs), to support the revisions to rates in the annual access tariffs.  The
TRPs partially fulfill the requirements of sections 61.38, 61.39, and 61.41 through 61.50 of the
Commission's rules regarding the supporting information that LECs must provide with their tariff
filings.  We use the TRPs to monitor the LECs' compliance with Part 61 of the rules.

     97.       In the Notice, we proposed to modify the annual access filing process in light of
requirements of the 1996 Act.  With respect to carriers subject to price cap regulation, we
proposed to require carriers that elect to file under streamlined procedures to file a TRP prior to
the filing of the annual tariff revisions that excluded information regarding the carriers' proposed
rates but included information regarding the carriers' pricing indices, and to make it available to
the public.  Under this approach, this agency and interested parties could examine the carriers'
current and proposed price cap indices, exogenous cost adjustments, and supporting information
in advance of the LECs' submissions of their prospective rates and required supporting
documents.  We sought comment on this approach and on whether we may, under the 1996 Act,
require price cap LECs to submit their TRPs prior to the date that they file their annual access
tariffs.  Because the price cap TRP would not include information regarding a LEC's tariffed
rates, charges, classifications, or practices, we tentatively concluded that the TRP would not
trigger application of the notice periods of section 204(a)(3) and that we could require its
submission prior to the filing of the annual access tariffs.  We also solicited comment on the
filing date we should establish for the related TRP if we adopt this approach.  With respect to
carriers subject to rate-of-return regulation, we proposed to require them to file their TRPs and
annual access filings that propose rate increases fifteen days prior to the scheduled effective date
of July 1.  With respect to each of these proposals, we proposed in the Notice that LECs may
nevertheless elect to file under existing rules, and therefore, file their TRPs with the annual
access tariffs.  

               b.   Comments

     98.  Frontier, CompTel, GSA, MCI, AT&T, ACTA, and, to some extent, Ameritech
support the Commission's proposal to require the LECs to file their TRPs in advance of their
annual access charge filing.  They contend that it is within our jurisdiction as part of our
regulatory oversight of access tariffs to require the advance filing of TRPs, and that this
requirement will enable both this agency and consumers to review the support information fully
before reviewing the access tariffs.  While AT&T concurs with the Notice's finding that revisions
to annual access tariffs involve changes in rate levels and therefore qualify for streamlined
treatment, it claims there is nothing in the 1996 Act that prevents us from requiring that TRPs
and cost support data be filed in advance of the access tariff filings.  AT&T therefore
recommends that we retain our current timetable, under which LECs are to file their TRPs 90
days prior to the effective date of their annual access tariffs.  CompTel urges that we treat
annual access tariffs filed without proper prior notice of the TRP as presumed unlawful.  

     99.  USTA and the LECs generally oppose requiring advance submission of the TRPs. 
They argue that the adoption of this proposal would impose an unnecessary burden on LECs, and
would be inconsistent with the LEC tariff streamlining requirements of section 402 of the 1996
Act.  Furthermore, they contend that the TRPs have no significance without the inclusion of
the proposed rates.  For example, Sprint states that, without the rates, the TRP is pointless
because the rates drive the indices.  USTA contends that the EXG-1 chart and the PCI-1
chart are the only pages that do not reference rates and, therefore, could be submitted early. 
These pages, however, cannot be completed until NECA calculates Long Term Support, which is
contained in the Common Line Basket.  USTA further argues that none of the TRP
information can even be filed until the LECs' and NECA's tariffs are completed.  These parties
argue, therefore, that the annual access filing and the TRP should be filed on the shortened
statutory notice periods.  CBT recommends that the TRP should be eliminated for all LEC
carriers in order to establish symmetrical regulation for all types of carriers.

     100. Sprint and Ameritech acknowledge that at least some part of the TRP could be
completed before the annual access tariff would actually be filed and that the information would
be valuable to potential customers.  Sprint argues that the LECs could be required to file their
exogenous cost changes and PCI development 15 days prior to the filing of the annual access
tariffs.  Ameritech favors the submission of a modified TRP 15 days before the annual filing. 
Specifically, Ameritech suggests that price cap LECs file the following information for each
price cap basket other than the common line basket: the PCI form showing the existing and
proposed PCI; a description and explanation of any exogenous cost adjustments being made; and
the proposed upper and lower bounds for the Service Band Indices.  Ameritech states that,
pending access reform, price cap LECs cannot file this information for the common line basket
prior to their annual filings because of the interrelationship of NECA's calculation of long-term
support and exogenous cost adjustments.  Ameritech proposes that the price cap and rate-of-
return LECs file a full TRP at the time of their annual filing.  NYNEX suggests that the
Commission use this proceeding to further streamline annual access tariff filings by eliminating
the requirement for a detailed list of demand by rate elements, a discussion of how the indices
were developed, and other required information.  

               c.   Discussion

     101. The chief purposes of TRPs are to: (i) justify LECs' exogenous cost adjustments
to their PCIs; (ii) verify revisions to the price cap indices; and (iii) verify that the proposed rates
are within the established price caps.  We find that the first two purposes can be accomplished
through early filing of TRPs that do not contain proposed rates.  Early filing of information
concerning exogenous costs and recalculation of PCIs would facilitate review of price cap LECs'
annual access filings.  We disagree with the LECs' arguments that this information cannot be
filed until the tariff is submitted and that the information will have no significance without the
proposed rates.  Price cap indices are a function of inflation, productivity, and exogenous cost
changes.  None of these factors is dependent on a LEC's specific rates.  Early filing of changes in
these areas would facilitate review of the annual access filings within the streamlined notice
periods by resolving most of the major issues currently raised in the annual access
proceedings.  

     102. We also disagree with the arguments that the early submission of this TRP
information is inconsistent with the streamlined notice provisions; to the contrary, as the statute
contemplates, the actual tariff with rates will be filed on 7 - or 15-days' notice.  In addition, this
submission of TRP information does not impose an unnecessary burden on price cap LECs.  
LEC are currently required to file TRPs at the time they file their annual access tariffs in order to
comply with the cost support requirements of our rules.  Early filing of the TRPs, absent rate
information, will result in the filing of supporting information at the same time as under current
rules, while allowing actual rates to be filed later on 7 or 15 days' notice.  Accordingly, we will
continue to require price cap LECs to file the TRP for their annual access filing, 90 days prior to
July 1 of each year, but rate information need not be included.  In view of the volume and
complexity of the information submitted in the price cap carriers' TRPs, we conclude that any
notice period less than 90 days would be inadequate to allow interested parties to review these
filings carefully.  Therefore, we reject Sprint's and Ameritech's proposals to file the TRP in 15
days.  Finally, we conclude that NYNEX's suggestion to further streamline the annual access
filing process is outside the scope of this proceeding.  Non-price-cap LECs will be required to
file their TRPs at the same time that they file their annual access tariffs.  The notice period for
non-price-cap annual access filings will be governed by the rules we adopt generally governing
LEC streamlined filings.  Thus, only annual access filings that solely decrease rates may be filed
on 7-days' notice.  As stated above, LECs may elect to file under existing rules and, therefore,
file their TRPs with annual access tariffs that are filed subject to the applicable notice periods of
our rules.  

          6.   Tariff Investigations

               a.   Background

     103. Section 402 of the 1996 Act amends section 204(a) of the Act, effective February
8, 1997, to provide that the Commission shall conclude all hearings initiated under this section
within five months after the date the charge, classification, regulation, or practice subject to the
hearing becomes effective.  Currently, we do not have procedural rules governing tariff
investigations; instead, the procedures are established in the orders designating issues for
investigation.  We solicited comment on whether we should establish procedural rules to
expedite the hearing process in light of the shortened period in which the Commission must
complete tariff investigations.  Specifically, we sought comment on whether we should establish
time periods for pleading cycles, and page limits for pleadings and exhibits, and whether we
should require the filing of proposed orders.  We also noted that, while section 204 investigations
may be initiated by the Bureau, they must be terminated by the full Commission under section
5(c) of the Communications Act.  We solicited suggestions for reforms that will permit more
expeditious termination of tariff investigations, such as the use of abbreviated orders without
extensive findings, especially where we find that the tariff under investigation is lawful.  We also
solicited comment on whether we can, consistent with section 5(c) of the 1934 Act, as amended,
terminate investigations by a pro forma order that adopts a decisional memorandum or order of
the Common Carrier Bureau.  Finally, we solicited comment on whether we should establish
procedures for informal mediation of tariff investigation issues.

               b.   Comments

     104. Ad Hoc, USTA, NECA, Bell Atlantic, US West, and NYNEX support the
adoption of procedural rules that would expedite the completion of tariff investigations within
the five-month statutory deadline.  NECA and Bell Atlantic support the use of abbreviated
orders where we make a finding that a tariff is lawful.  NYNEX proposed that we adopt the
following filing schedule for investigations, calculated from the tariff's effective date:  21 days
for the LECs to file the direct case; 35 days for comments/oppositions to the direct case; and 49
days for replies.  Under this schedule, we would have over three months to conclude the
investigation.  MCI favors the establishment of time periods for pleading cycles and page
limits in the designation order.  In addition, MCI suggests that the designation order could
specify that the parties should file proposed orders.  CBT, US West, and Ameritech support the
use of pro forma orders to terminate investigations.  US West supports the use of pro forma
orders, provided that they are in fact full Commission determinations of the lawfulness of tariffs
and thus final appealable orders.  Ameritech opposes the imposition of mandatory informal
mediation.     
     
     105. GSA, AT&T, Bell Atlantic, and SWBT do not support the establishment of
expedited procedures for investigations.  GSA points out that section 204(a)(1) places the
burden of proof for any rate changes or revisions on the carriers.  In addition, GSA contends that
we have the authority to reject a tariff if we find by our investigation that the proposed tariff is
unjust and unreasonable.  AT&T and Bell Atlantic suggest that we maintain our flexibility in
conducting investigations so we may tailor procedures according to the requirements of a
particular proceeding, rather than commit ourselves to any particular procedural rules.

               c.   Discussion

     106. We agree with the commenters that oppose the establishment of specific rules for
expediting tariff investigations at this time.  Rather, we will continue to set out procedures in
designation orders that best meet the needs of a particular proceeding.  We have the discretion,
for example, to set page limits, establish pleading cycles, or use pro forma  designation orders. 
We find that retaining the flexibility to tailor each investigation individually is the best means of
ensuring that tariff investigations are completed within the five month time limit.  We also
intend, to the extent we may do so while giving full consideration to all issues, to use abbreviated
orders for terminating tariff investigations, subject to the new requirements of the 1996 Act.  We
also favor encouraging parties to use informal mediation to resolve tariff disputes, but will not
impose such a requirement at this time.  Moreover, in order to expedite the tariff review process
and ensure that we conclude all tariff investigations within the five month statutory period, we
delegate authority to the Chief, Common Carrier Bureau to work within the cost support rules to
establish format requirements for cost data that must be submitted by carriers with certain tariffs.
We note that we recently proposed rules to improve the speed and effectiveness of the formal
complaint process.  In constrast to formal complaints, we can better provide for expedited tariff
investigations by establishing procedural requirements on a case-by-case basis because those
requirements can be closely tailored to the issues that have been revealed in the tariff review
process.  

          7.   Notice Requirements

     107.  Existing rules specifying notice periods for LEC tariffs must be amended to
conform to the streamlined notice periods for LEC tariffs established in section 204(a)(3).  For
example, section 61.58 of our rules specifies the notice requirements for dominant carriers before
new tariff proposals can go into effect.  In particular, section 61.58 states that carriers subject
to rate-of-return regulation must file a tariff on either 15-, 35-, or 45-days' notice, depending on
the type of tariff at issue.  Section 61.58(e) states that carriers subject to optional incentive
regulation pursuant to section 61.50 of our rules must file a tariff on either 15- or 90-days' notice,
depending on the type of tariff at issue.  Finally, section 61.58(c) states that carriers subject
to price cap regulation must file a tariff on either 14-, 45- or 120-days' notice, depending on the
type of tariff change.  Therefore, in the Notice we proposed to change section 61.58 of the
Commission's existing rules governing notice periods for LEC tariff filings to make this section
consistent with the streamlined notice periods of 7 and 15 days required by the 1996 Act.  The
few comments filed regarding this section of the rules support our proposal.  Accordingly, we
are amending section 61.58 of the rules to establish notice periods consistent with the 1996 Act.

                       IV.  EFFECTIVE DATE

     108. Section 402(b)(4) of the 1996 Act provides that the LEC tariff streamlining
provisions shall apply to any charge, classification, regulation, or practice filed on or after one
year after the effective date of the 1996 Act, i.e., February 8, 1997.  Section 553(d) of the
Administrative Procedure Act (APA) provides that the required publication in the Federal
Register of changes to the Code of Federal Regulations shall not be made less than thirty days
before the effective date except, inter alia, as otherwise provided by the agency for good cause
found and published with the rule.   We find that it is necessary for our rules implementing the
LEC streamlined tariff provisions of the 1996 Act to be effective at the time those statutory
provisions become effective.  Section 402(b)(4) of the 1996 Act is self-effectuating and will
become effective on February 8, 1997, regardless of whether the rules adopted in this proceeding
have become effective.  Making these rules effective by February 8, 1997 will assist parties in
complying with the LEC tariff streamlining provisions of the 1996 Act and will avoid possible
confusion to LECs and their customers that could result if the Commission's existing LEC
tariffing rules remain in effect after February 8, 1997.  This constitutes good cause for making
these rules effective earlier than thirty days prior to their publication in the Federal Register.  We
note as well, that much of this order is devoted to interpretation of the statute and promulgation
of procedural rules, subject matters that are not subject to the thirty day period mandated by
section 553(d) of the APA.  Accordingly, we are making the rules adopted in this proceeding
effective February 8, 1997.   

            V.  FINAL REGULATORY FLEXIBILITY ANALYSIS

     109. As required by section 603 of the Regulatory Flexibility Act, 5 U.S.C. 603
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of
Proposed Rulemaking (Notice) to implement section 402(b)(1)(a) of the Telecommunications
Act of 1996, which provides for streamlined tariff filings by local exchange carriers.  We sought
written public comment on the IRFA proposals in the Notice.  Our Final Regulatory Flexibility
Analysis (FRFA) in this Report and Order conforms to the RFA, as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).  None of the comments
specifically addressed IRFA.
 
     110. Need for and Objectives of the Proposed Rule:  We promulgate the rules in this
Report and Order to implement section 204(a) of the Communications Act of 1934, as amended
by section 402 of the Telecommunications Act of 1996.  Section 402 provides for streamlined
tariff filings by local exchange carriers.  In accordance with section 204(a), our  implementing
rules will implement streamlined tariff filing requirements by LECs with the minimum
regulatory and administrative burden on telecommunications carriers.  The objective of these
rules is to "streamline the procedures for revision by local exchange carriers of charges,
classifications and practices."

     111. Summary of Significant Issues Raised by the Public Comments In Response
to the IRFA:  While none of the commenters specifically addressed the Commission's IRFA, we
received several comments regarding the impact that the various alternatives facing the
Commission would have on small companies.  For instance, with respect to how the Commission
should interpret "deemed lawful," commenters including KMC, ACTA, TRA, and SWBT
discussed the effect the Commission's decision would have on small entities.

     112. With respect to treatment of tariff filings that include both increases and
decreases, ALLTEL suggests that small and mid-sized companies be permitted to define rate
increases and decreases at the access category level, and CBT suggests that all of the increases
and decreases in a given transmittal be aggregated with the applicable notice period based on the
net change.  USTA proposes that the Commission ensure a streamlined approach for small and
mid-sized LECs by permitting rate-of-return LECs to define rate increases or decreases at the
access category level and file accordingly.  USTA also proposes that LECs under Optional
Incentive Regulation be permitted to define rate increases at the basket level.

     113. We have also received comments from various parties regarding several discrete
issues.  For example, with respect to electronic filing, USTA states that the Commission must
consider the impact on small LECs who may wish to file their own tariffs but do not have the
resources to implement electronic filing at this time.  Hence, USTA maintains that electronic
filing should not be mandatory.  Regarding our proposal in the Notice that each LEC submit an
analysis accompanying its tariff filing demonstrating that the transmittal is lawful, CBT states
that this requirement would have a chilling effect on small and mid-size LECs that are sensitive
to increased legal fees.  TRA states that facsimile transmissions should be added to hand
delivery requirements as a consideration for small carriers with limited budgets.

     114. Description and Estimate of the Number of  Small Entities To Which the
Proposed Rules Will Apply:  The RFA defines a "small business" to be the same as a "small
business concern" under the Small Business Act (SBA), 15 U.S.C.  632, unless the Commission
has developed one or more definitions that are appropriate to its activities.  Under the SBA, a
"small business concern" is one that: (1) is independently owned and operated; (2) is not
dominant in its field of operation; and (3) meets any additional criteria established by the SBA. 
SBA has defined a small business for Standard Industrial Classification (SIC) category 4813
(Telephone Communications, Except Radiotelephone) to be small entities when they have fewer
than 1500 employees. 

     115. Total Number of Telephone Companies Affected.  Many of the decisions and rules
adopted herein may have a significant economic impact on a substantial number of small
telephone companies identified by SBA.  The United States Bureau of the Census ("the Census
Bureau") reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone
service, as defined therein, for at least one year.  This number contains a variety of different
category of carriers, including local exchange carriers, interexchange carriers, competitive access
providers, cellular carriers, mobile service carriers, operator service providers, pay telephone
operators, PCS providers, covered SMR providers, and resellers.  It seems certain that some of
those 3,497 telephone service firms may not qualify as small entities or small incumbent LECs
because they are not "independently owned and operated.

     116. Our rules governing the streamlining of the LEC tariff process apply to all LECs. 
These companies may have fewer than 1,500 employees and thus fall within the SBA's definition
of small telecommunications entity, we do not believe that such entities should be considered
small entities within the meaning of the RFA.  Because the small incumbent LECs subject to
these rules are either dominant  in their field of operations or are not independently owned and
operated, consistent with our prior practices, they are excluded from the definition of "small
entity" and "small business concerns."  Accordingly, our use of the terms "small entities" and
"small businesses" does not encompass small incumbent LECs.  Out of an abundance of
caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent
LECs that arguably might be defined by SBA as "small business concerns."

     117. Local Exchange Carriers.  Neither this agency nor SBA has developed a
definition of small providers of local exchange service (LECs).  The closest applicable definition
under SBA rules is for telephone communications companies other than radiotelephone
(wireless) companies.  The most reliable source of information regarding the number of LECs
nationwide of which we are aware appears to be the data that we collect annually in connection
with Telecommunications Relay Service (TRS).  According to our most recent data, 1,347
companies reported that they were engaged in the provision of local exchange service. 
Although it seems certain that some of these carriers are not independently owned and operated,
or have fewer than 1500 employees, we are unable at this time to estimate with greater precision
the number of LECs that would qualify as small business concerns under SBA's definition.  We
conclude that there are fewer than 1,347 small incumbent LECs that may be affected by the
proposals in this Report and Order.

     118. Potential Petitioners Subject to 47 C.F.R. 1.773: Section 1.773 of the
Commission's rules apply to any entity who files a petition to suspend or reject a new tariff
filing.  Petitioners may be other telecommunications businesses, competitors of LECs or end
users (i.e., consumers).  It is not possible to determine with any specificity the primary field of
business of an end user, nor is it possible to determine whether they may be a small entity. 
Therefore, for purposes of this FRFA, we have included general information about small
businesses, small governmental jurisdictions, and small not-for- profit establishments, as well as
telecommunications entities as potential petitioners that may be impacted by this R & O.  An
individual petitioner is not considered a small business under the RFA.

     119. Small Businesses (Workplaces).  Workplaces encompass establishments for profit
and nonprofit, plus local, state and federal governmental entities. SBA guidelines to the
SBREFA state that about 99.7 percent of all firms are small and have fewer than 500 employees
and less than $25 million in sales or assets.  There are approximately 6.3 million
establishments in the SBA database.  

     120. Governmental Jurisdictions. The definition of a small governmental jurisdiction is
one with a population of less than 50,000.  There are 85,006 governmental jurisdictions in the
nation.  This number includes such jurisdictions as states, counties, cities, utility districts and
school districts.  There are no figures available on what portion of this number has populations of
fewer than 50,000.  However, this number includes 38,978 counties, cities and towns, and of
those, 37,566, or 96 percent, have populations of fewer than 50,000.  The Census Bureau
estimates that this ratio is approximately accurate for all governmental entities.  Thus, of the
85,006 governmental jurisdictions, we estimate that 96 percent, or 81,600, are small
jurisdictions.   

     121. Small Organizations. The Commission has not established a definition of small
organization therefore, we will use the definition under the RFA. The RFA defines a small
organization as any not-for-profit enterprise which is independently owned and operated and is
not dominant in its field. There are approximately 257,038 total non-profit organizations in the
United States.

     122. Total Number of Telephone Companies Affected.  See supra para. 115. 

     123. Local Exchange Carriers.  See supra para. 117. 

     124. Interexchange Carriers.  Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to providers of interexchange services (IXCs). 
The closest applicable definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.  The most reliable source of information
regarding the number of IXCs nationwide of which we are aware appears to be the data that we
collect annually in connection with TRS.  According to our most recent data, 97 companies
reported that they were engaged in the provision of interexchange services.  Although it seems
certain that some of these carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater precision the number of
IXCs that would qualify as small business concerns under SBA's definition.  Consequently, we
estimate that there are fewer than 97 small entity IXCs that may be affected by the decisions and
rules adopted in this Order.

     125. Competitive Access Providers.  Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to providers of competitive access services
(CAPs).  The closest applicable definition under SBA rules is for telephone communications
companies other than radiotelephone (wireless) companies.  The most reliable source of
information regarding the number of CAPs nationwide of which we are aware appears to be the
data that we collect annually in connection with the TRS.  According to our most recent data, 30
companies reported that they were engaged in the provision of competitive access services. 
Although it seems certain that some of these carriers are not independently owned and operated,
or have more than 1,500 employees, we are unable at this time to estimate with greater precision
the number of CAPs that would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 30 small entity CAPs.

     126. Wireless (Radiotelephone) Carriers.  SBA has developed a definition of small
entities for radiotelephone (wireless) companies (SIC 4812) as an entity with 1,500 or less
employees.  The Census Bureau reports that there were 1,176 such companies in operation for
at least one year at the end of 1992.  According to SBA's definition, a small business
radiotelephone company is one employing fewer than 1,500 persons.  The Census Bureau also
reported that 1,164 of those radiotelephone companies had fewer than 1,000 employees.  Thus,
even if all of the remaining 12 companies had more than 1,500 employees, there would still be
1,164 radiotelephone companies that might qualify as small entities if they are independently
owned are operated.  Although it seems certain that some of these carriers are not independently
owned and operated, we are unable at this time to estimate with greater precision the number of
radiotelephone carriers and service providers that would qualify as small business concerns under
SBA's definition.  Consequently, we estimate that there are fewer than 1,164 small entity
radiotelephone companies.   

     127. Cellular Service Carriers.  Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to providers of cellular services.  The closest
applicable definition under SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies (SIC 4812).  The most reliable source of information
regarding the number of cellular service carriers nationwide of which we are aware appears to be
the data that we collect annually in connection with the TRS.  According to our most recent data,
789 companies reported that they were engaged in the provision of cellular services.  Although
it seems certain that some of these carriers are not independently owned and operated, or have
more than 1,500 employees, we are unable at this time to estimate with greater precision the
number of cellular service carriers that would qualify as small business concerns under SBA's
definition.  Consequently, we estimate that there are fewer than 789 small entity cellular service
carriers. 

     128. Mobile Service Carriers.  Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to mobile service carriers, such as paging
companies.  The closest applicable definition under SBA rules is for radiotelephone (wireless)
companies (SIC 4812).  The most reliable source of information regarding the number of mobile
service carriers nationwide of which we are aware appears to be the data that we collect annually
in connection with the TRS.  According to our most recent data, 117 companies reported that
they were engaged in the provision of mobile services.  Although it seems certain that some of
these carriers are not independently owned and operated, or have more than 1,500 employees, we
are unable at this time to estimate with greater precision the number of mobile service carriers
that would qualify under SBA's definition.  Consequently, we estimate that there are fewer than
117 small entity mobile service carriers.   

     129. Broadband PCS Licensees.  The broadband PCS spectrum is divided into six
frequency blocks designated A through F.  As set forth in 47 C.F.R.  24.720(b), the
Commission has defined "small entity" in the auctions for Blocks C and F as a firm that had
average gross revenues of less than $40 million in the three previous calendar years.  Our
definition of a "small entity" in the context of broadband PCS auctions has been approved by
SBA.  The Commission has auctioned broadband PCS licenses in Blocks A, B, and C.  We do
not have sufficient data to determine how many small businesses bid successfully for licenses in
Blocks A and B.  There were 90 winning bidders that qualified as small entities in the Block C
auctions.  Based on this information, we conclude that the number of broadband PCS licensees
affected by the decisions in this Order includes, at a minimum, the 90 winning bidders that
qualified as small entities in the Block C broadband PCS auctions.

     130. At present, no licenses have been awarded for Blocks D, E, and F of broadband
PCS spectrum.  Therefore, there are no small businesses currently providing these services. 
However, a total of 1,479 licenses will be awarded in the D, E, and F Block broadband PCS
auctions, which commenced on August 26, 1996.  Eligibility for the 493 F Block licenses is
limited to entrepreneurs with average gross revenues of less than $125 million.  We cannot
estimate, however, the number of these licenses that will be won by small entities under our
definition, nor how many small entities will win D or E Block licenses.  Given that nearly all
radiotelephone companies have fewer than 1,000 employees and that no reliable estimate of
the number of prospective D, E, and F Block licensees can be made, we assume for purposes of
this FRFA, that a majority of the licenses in the D, E, and F Block Broadband PCS auctions.

     131. SMR Licensees.  Pursuant to 47 C.F.R.  90.814(b)(1), the Commission has
defined "small entity" in auctions for geographic area 800 MHz and 900 MHz SMR licenses as a
firm that had average annual gross revenues of less than $15 million in the three previous
calendar years.  This definition of a  "small entity" in the context of 800 MHz and 900 MHz
SMR has been approved by the SBA.  The rules adopted in this Order may apply to SMR
providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have
obtained extended implementation authorizations.  We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of less than $15 million. 
We assume, for purposes of this FRFA, that all of the extended implementation authorizations
may be held by small entities.

     132. The Commission recently held auctions for geographic area licenses in the 900
MHz SMR band.  There were 60 winning bidders who qualified as small entities in the 900 MHz
auction.  Based on this information, we conclude that the number of geographic area SMR
licensees affected by the rule adopted in this Order includes these 60 small entities.  No auctions
have been held for 800 MHz geographic area SMR licenses.  Therefore, no small entities
currently hold these licenses.  A total of 525 licenses will be awarded for the upper 200 channels
in the 800 MHz geographic area SMR auction.  However, the Commission has not yet
determined how many licenses will be awarded for the lower 230 channels in the 800 MHz
geographic area SMR auction.  It is not possible to  ascertain how many small entities will win
these licenses.  Given that nearly all radiotelephone companies have fewer than 1,000 employees
and that no reliable estimate of the number of prospective 800 MHz licensees can be made, we
assume, for purposes of this FRFA, that a majority of the licenses may be awarded to small
entities.

     133. Resellers.  Neither the Commission nor SBA has developed a definition of small
entities specifically applicable to resellers.  The closest applicable definition under SBA rules is
for all telephone communications companies (SIC 4812 and 4813 combined). The most reliable
source of information regarding the number of resellers nationwide of which we are aware
appears to be the data that we collect annually in connection with the TRS.  According to our
most recent data, 206 companies reported that they were engaged in the resale of telephone
services.  Although it seems certain that some of these carriers are not independently owned
and operated, or have more than 1,500 employees, we are unable at this time to estimate with
greater precision the number of resellers that would qualify as small business concerns under
SBA's definition.  Consequently, we estimate that there are fewer than 206 small resellers.  

     134. Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements:  LECs subject to price cap regulation and LECs that elect to file tariffs subject to
price cap regulation will be required to file their tariff review plans (TRP) prior to the filing of
their annual tariff revisions.  This requirement will not impose a significant burden on the LECs
because they currently file TRPs at the time they file their annual access tariffs.  Adoption of this
proposal will require that the carriers allocate the resources needed to complete the TRPs prior to
their filing of the annual access tariffs.  In order to comply with this filing requirement, LECs
will need to utilize tariff analysts and legal and accounting personnel.  LECs have the personnel
necessary to meet these requirements since they are already required to utilize staff with skills
necessary to establish tariffs that comply with sections 201-205 of the Communications Act.
Although this requirement that price cap LECs file their TRP prior to the filing of their annual
tariff revisions will establish a new TRP filing deadline, we believe it is justified under the new
streamlined tariff filing procedures.  To date, we are not aware of any small entities that have
elected to be subject to price cap regulation. Therefore, at the time these rules become effective,
no small carriers will be required to file their TRPs prior to the filing of their annual tariff
revisions.  In the future, however, small entities that elect to be subject to price cap regulation
pursuant to section 61.41(a)(3) of our rules will be required to comply with this reporting
requirement. 

     135. In addition, our requirement that all petitions and reply pleadings be hand served
or served by facsimile transmission will not impose a significant burden on small entities. 
Facsimile and hand delivery service are readily available throughout the country for any entities
that may not have their own capabilities in these areas.

     136. Significant Alternatives and Steps Taken By Agency to Minimize Significant
Economic Impact on a Substantial Number of Small Entities and Small Incumbent LECs
Consistent with Stated Objectives:  We believe that our proposed actions to implement the
specific streamlining requirements of section 204(a)(3) of the  Communications Act, as well as
additional steps for streamlining the tariff process, minimize the economic impact on small
carriers that are eligible to file tariffs on a streamlined basis.  For example, our proposal to
establish a program for the electronic filing of tariffs will reduce the existing economic burden
on carriers who are now required to file paper tariffs with the Commission.  To the extent that
specific concerns have been expressed regarding the ability of smaller companies to comply with
electronic filing requirements, we conclude that this issue can be addressed by the Bureau in
consultation with the industry when establishing the system.  

     137. Under the new competitive provisions of the 1996 Act, there could be a number of
new LECs entering the local exchange market that would be considered small businesses.  To the
extent that such carriers file tariffs and would be considered non-dominant, we conclude that our
rules would not create any additional burdens because under section 63.23(c), 47 C.F.R. 
63.23(c), non-dominant carriers are permitted to file tariffs on one day's notice.  Further, our
determinations in this proceeding that will apply to such carriers will reduce administrative
burdens for these carriers, to the extent they file tariffs pursuant to section 204(a)(3) of the Act.

     138. In adopting the first interpretation of "deemed lawful," we have considered the
comments of KMC, ACTA, and TRA which expressed a concern that adoption of this
interpretation would be unfair to small consumers and competitors of LECs.  With respect to
KMC's concern that the adoption of the first interpretation would make it difficult for small
competitors to challenge LEC tariff filings, as discussed above in Section III., B, all parties,
including small entities, will have the same opportunity to challenge tariff filings eligible for
streamlined regulation before they become effective or to initiate a section 208 complaint
proceeding after the filings become effective. These procedures will permit small businesses to
fully participate in pre-effective review of LEC tariffs and to obtain a determination of the
lawfulness of a LEC tariff after it has gone into effect.  To the extent that small entities will have
greater difficulty than larger entities in participating in the tariff review process, we note that the
shortened time period for pre-effective review of LEC tariffs is required by the 1996 Act and
that, as explained above, we are compelled by the language in the statute as interpreted by
relevant judicial precedent to adopt the first interpretation of "deemed lawful."  Similarly, as to
ACTA's and TRA's concern that the adoption of the first interpretation will adversely affect
small carriers and consumers by precluding damages as a remedy for the period that tariffs are
effective but have been found unlawful subsequently in a section 205 or 208 proceeding, we are
compelled by the language in the statute as interpreted by relevant judicial precedent to adopt the
first interpretation of "deemed lawful."  Small businesses will be able to protect against this
possible impact on them caused by "deemed lawful" treatment of LEC tariffs by participating in
the pre-effective tariff review process.  Our program of electronic filing of tariffs will facilitate
participation of small entities in the tariff review process.

     139. In choosing not to impose a requirement that carriers submit an analysis
accompanying their tariff filings demonstrating that the filing is lawful, we have addressed the
concerns of CBT that this requirement might have a chilling effect on small and mid-size LECs
that are sensitive to increased legal fees.

     140. Finally, we have addressed the concern expressed by TRA that requiring hand
delivery of petitions and replies could be prejudicial to small companies which may not be able
to afford such service by adopting TRA's suggestion that facsimile transmission be added as an
alternative to required hand delivery.

     141. With respect to treatment of tariff filings that include both increases and
decreases, we have considered the various alternative suggestions provided by ALLTEL, CBT,
and USTA to permit small LECs to aggregate the rate increases and decreases in their filings,
and file those with a net rate decrease on 7 days' notice.   As stated above, we have rejected these
suggestions because we believe that this approach would be contrary to the plain language of the
statute which clearly states that the longer, 15 days' notice period will apply "in the case of an
increase in rates."    Moreover, we have concluded that by requiring tabulation of net increases
and decreases, this approach would create confusion and add another step to an already brief
review process.

     142. Report to Congress:  The Commission shall send a copy of this Final Regulatory
Flexibility Analysis, along with this Report and Order, in a report to Congress pursuant to the
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A).  A copy
of this FRFA will also be published in the Federal Register.

              VI. FINAL PAPERWORK REDUCTION ANALYSIS

     143. On November 27, 1996, the Office of Management and Budget (OMB) approved
all of the proposed changes to our information collection requirements in accordance with the
Paperwork Reduction Act.  We have, however, decided not to adopt several of the information
collection requirements proposed in the Notice and we have modified others.  For example, we
declined to adopt the proposal to require the LECs to include a summary and legal analysis with
their tariff filings, but we will require that LEC tariff filings include a statement in tariff
transmittal letters clearly indicating that the tariff is being filed on a streamlined basis under
section 204(a)(3) of the Act and whether the tariff filing contains a proposed rate increase,
decrease or both for purposes of section 204(a)(3).  We conclude that these  requirements and
modifications constitute a new "collection of information," within the meaning of the Paperwork
Reduction Act of 1995, 44 U.S.C.  3501-3520.  These requirements and modifications are
subject to OMB review and the Commission has requested emergency approval of these
modifications to ensure that the requirements may be effective on February 8, 1997.  In addition,
we will seek final OMB approval for these modifications.

     144.   The Commission concurs with OMB's recommendation that we consider input
from the industry before implementing a system for the electronic filing of tariffs and related
pleadings.

                      VII.  ORDERING CLAUSES      

     145. Accordingly, IT IS ORDERED that pursuant to authority contained in sections
1,4(i), and 204(a)(3) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i)
and 204(a)(3), Parts 1 and 61 of the Commission's rules are Amended as set forth in Appendix B
hereto.

     146. IT IS FURTHER ORDERED that the policies, rules, and requirements set forth
herein ARE ADOPTED.

     147. IT IS FURTHER ORDERED that the policies, rules and requirements adopted
herein SHALL BE EFFECTIVE February 8, 1997.

     148. IT IS FURTHER ORDERED that authority is delegated to the Chief, Common
Bureau, as set forth supra. in paras. 48, 75, and 106.

                              Federal Communications Commission


                              William F. Caton
                              Acting Secretary
                   Appendix A - List of Parties
                      (CC Docket No. 96-187)

Comments filed on or before October 9, 1996
in response to Notice of Proposed Rulemaking

Ad Hoc Telecommunications Users Committee
ALLTEL Telephone Services Corporation
America's Carrier Telecommunications Association
Ameritech
AT&T Corp.
Association for Local Telecommunications Services
Bell Atlantic
BellSouth Corp.
Capital Cities/ABC, Inc., CBS, National Broadcasting Company, and Turner Broadcasting 
          System, Inc. 
Cincinnati Bell Telephone
Competitive Telecommunications Association 
Communications Image Technologies, Inc.
Frontier Corp.
General Services Administration 
GTE Services Corp.
KC Telecom, Inc.
MCI Communications Corporation
McLeod Telemanagement, Inc.
MFS Communications Co.
National Exchange Carrier Association 
NYNEX Telephone Companies
Pacific Telesis Group
Southwestern Bell Telephone Company
Sprint Corp.
Telecommunications Resellers Association 
Time Warner Communications Holdings, Inc.
United States Telephone Association
US West, Inc.

Reply Comments filed
on or before October 24, 1996

Ad Hoc Telecommunications Users Committee
America's Carrier Telecommunication Association
Ameritech
Association of Local Telecommunications Services 
AT&T Corp.
Bell Atlantic
BellSouth Corp.
General Services Administration
GTE Services Corp.
KMC Telecom, Inc.
MCI Communications Corporation
McLeod TeleManagement, Inc.
MFS Communications Co.
National Telephone Cooperative Association
NYNEX Telephone Companies
Pacific Telesis Group
Southwestern Bell Telephone Company
Sprint Corp.
Time Warner Communications Holding, Inc.
United States  Telephone Association
US West, Inc.




















                           APPENDIX B: 

  STANDARD PROTECTIVE ORDER AND DECLARATION  FOR USE IN SECTION 
               402(b) STREAMLINED LEC TARIFF PROCEEDINGS

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


In the Matter of

 [Name of Proceeding]    )                      Docket No.    
                     
                                 
                         PROTECTIVE ORDER

     This Protective Order is intended to facilitate and expedite the review of documents
containing trade secrets and commercial or financial information obtained from a person and
privileged or confidential.  It reflects the manner in which "Confidential Information," as that
term is defined herein, is to be treated.  The Order is not intended to constitute a resolution of the
merits concerning whether any Confidential Information would be released publicly by the
Commission upon a proper request under the Freedom of Information Act or other applicable law
or regulation, including 47 C.F.R.  0.442.
 
     1.   Definitions.

          a.   Authorized Representative.  "Authorized Representative" shall have the
meaning set forth in Paragraph seven.   

          b.   Commission.  "Commission" means the Federal Communications
Commission or any arm of the Commission acting pursuant to delegated authority.

          c.   Confidential Information.  "Confidential Information" means (i)
information submitted to the Commission by the Submitting Party that has been so designated by
the Submitting Party and which the Submitting Party has determined in good faith constitutes
trade secrets and commercial or financial information which is privileged or confidential within
the meaning of Exemption 4 of the Freedom of Information Act, 5 U.S.C.  552(b)(4) and (ii)
information submitted to the Commission by the Submitting Party that has been so designated by
the Submitting Party and which the Submitting Party has determined in good faith falls within
the terms of Commission orders designating the items for treatment as Confidential Information. 
Confidential Information  includes additional copies of, notes, and information derived from
Confidential Information.  

          d.   Declaration.  "Declaration" means Attachment A to this Protective Order.

          e.   Reviewing Party.  "Reviewing Party" means a person or entity
participating in this proceeding or considering in good faith filing a document in this proceeding.

          f.   Submitting Party.   "Submitting Party" means a person or entity that seeks
confidential treatment of Confidential Information pursuant to this Protective Order. 

     2.      Claim of Confidentiality.  The Submitting Party may designate information as
"Confidential Information" consistent with the definition of that term in Paragraph 1 of this
Protective Order. The Commission may, sua sponte or upon petition, pursuant to 47 C.F.R 
0.459 & 0.461, determine that all or part of the information claimed as "Confidential
Information" is not entitled to such treatment.

     3.   Procedures for Claiming Information is Confidential.  Confidential Information
submitted to the Commission shall be filed under seal and shall bear on the front page in bold
print, "CONTAINS PRIVILEGED AND CONFIDENTIAL INFORMATION - DO NOT
RELEASE."  Confidential Information shall be segregated by the Submitting Party from all non-
confidential information submitted to the Commission.  To the extent a document contains both
Confidential Information and non-confidential information, the Submitting Party shall designate
the specific portions of the document claimed to contain Confidential Information and shall,
where feasible, also submit a redacted version not containing Confidential Information.

     4.   Storage of Confidential Information at the Commission.  The Secretary of the
Commission or other Commission staff to whom Confidential Information is submitted shall
place the Confidential Information in a non-public file.  Confidential Information shall be
segregated in the files of the Commission, and shall be withheld from inspection by any person
not bound by the terms of this Protective Order, unless such Confidential Information is released
from the restrictions of this Order either through agreement of the parties, or pursuant to the
order of the Commission or a court having jurisdiction.

     5.   Access to Confidential Information.  Confidential Information shall only be made
available to Commission staff, Commission consultants and to counsel to the Reviewing Parties,
or if a Reviewing Party has no counsel, to a person designated by the Reviewing Party.  Before
counsel to a Reviewing Party or such other designated person designated by the Reviewing Party
may obtain access to Confidential Information, counsel or such other designated person must
execute the attached Declaration.  Consultants under contract to the Commission may obtain
access to Confidential Information only if they have signed, as part of their employment contract,
a non-disclosure agreement or if they execute the attached Declaration.

     6.   Counsel to a Reviewing Party or such other person designated pursuant to
Paragraph 5 may disclose Confidential Information to other Authorized Representatives to whom
disclosure is permitted under the terms of paragraph 7 of this Protective Order only after advising
such Authorized Representatives of the terms and obligations of the Order.  In addition, before
Authorized Representatives may obtain access to Confidential Information, each Authorized
Representative must execute the attached Declaration.
     
     7.   Authorized Representatives shall be limited to:

               a.   Counsel for the Reviewing Parties to this proceeding including in-house
                    counsel actively engaged in the conduct of this proceeding and their
                    associated attorneys, paralegals, clerical staff and other employees, to the
                    extent reasonably necessary to render professional services in this
                    proceeding;

          b.   Specified persons, including employees of the Reviewing Parties,
               requested by counsel to furnish technical or other expert advice or service,
               or otherwise engaged to prepare material for the express purpose of
               formulating filings in this proceeding, except that disclosure to persons in
               a position to use this information for competitive commercial or business
               purposes shall be prohibited; 
               
          c.   Any person designated by the Commission in the public interest, upon
               such terms as the Commission may deem proper.

     8.   Inspection of Confidential Information.  Confidential Information shall be
maintained by a Submitting Party for inspection at two or more locations, at least one of which
shall be in Washington, D.C.  Inspection shall be carried out by Authorized Representatives upon
reasonable notice not to exceed one business day during normal business hours.        

     9.   Copies of Confidential Information.  The Submitting Party shall provide a copy of
the Confidential Material to Authorized Representatives upon request and may charge a
reasonable copying fee not to exceed twenty five cents per page.  Authorized Representatives
may make additional copies of Confidential Information but only to the extent required and
solely for the preparation and use in this proceeding,   Authorized Representatives must maintain
a written record of any additional copies made and provide this record to the Submitting Party
upon reasonable request.  The original copy and all other copies of the Confidential Information
shall remain in the care and control of Authorized Representatives at all times.  Authorized
Representatives having custody of any Confidential Information shall keep the documents
properly secured at all times.

     10.  Filing of Declaration.  Counsel for Reviewing Parties shall provide to the
Submitting Party and the Commission a copy of the attached Declaration for each Authorized
Representative within five (5)  business days after the attached Declaration is executed, or by any
other deadline that may be prescribed by the Commission.  

     11.  Use of Confidential Information.  Confidential Information shall not be used by
any person granted access under this Protective Order for any purpose other than for use in this
proceeding (including any subsequent administrative or judicial review), shall not be used for
competitive business purposes, and shall not be used or disclosed except in accordance with this
Order.  This shall not preclude the use of any material or information that is in the public domain
or has been developed independently by any other person who has not had access to the
Confidential Information nor otherwise learned of its contents.  

     12.  Pleadings Using Confidential Information.  Submitting Parties and Reviewing
Parties may, in any pleadings that they file in this proceeding, reference the Confidential
Information, but only if they comply with the following procedures:

          a.   Any portions of the pleadings that contain or disclose Confidential
               Information must be physically segregated from the remainder of the
               pleadings and filed under seal;

          b.   The portions containing or disclosing Confidential Information must be
               covered by a separate letter referencing this Protective Order;  

          c.   Each page of any Party's filing that contains or discloses Confidential
               Information subject to this Order must be clearly marked:  "Confidential
               Information included pursuant to Protective Order, [cite proceeding];" and

          d.   The confidential portion(s) of the pleading, to the extent they are required
               to be served,  shall be served upon the Secretary of the Commission, the
               Submitting Party, and those Reviewing Parties that have signed the
               attached Declaration.  Such confidential portions shall be served under
               seal, and shall not be placed in the Commission's Public File unless the
               Commission directs otherwise (with notice to the Submitting Party and an
               opportunity to comment on such proposed disclosure).  A Submitting
               Party or a Reviewing Party filing a pleading containing Confidential
               Information shall also file a redacted copy of the pleading containing no
               Confidential Information, which copy shall be placed in the Commission's
               public files.  A Submitting Party or a Reviewing Party may provide
               courtesy copies of pleadings containing Confidential Information to
               Commission staff so long as the notation required by subsection c. of this
               paragraph is not removed.

     13.  Violations of Protective Order.  Should a Reviewing Party that has properly
obtained access to Confidential Information under this Protective Order violate any of its terms,
it shall immediately convey that fact to the Commission and to the Submitting Party.  Further,
should such violation consist of improper disclosure or use of Confidential Information, the
violating party shall take all necessary steps to remedy the improper disclosure or use.  The
Violating Party shall also immediately notify the Commission and the Submitting Party, in
writing, of the identity of each party known or reasonably suspected to have obtained the
Confidential Information through any such disclosure.  The Commission retains its full authority
to fashion appropriate sanctions for violations of this Protective Order, including but not limited
to suspension or disbarment of attorneys from practice before the Commission, forfeitures, cease
and desist orders, and denial of further access to Confidential Information in this or any other
Commission proceeding.  Nothing in this Protective Order shall limit any other rights and
remedies available to the Submitting Party at law or equity against any party using Confidential
Information in a manner not authorized by this Protective Order.

     14.  Termination of Proceeding.  Within two weeks after final resolution of this
proceeding (which includes any administrative or judicial appeals), Authorized Representatives
of Reviewing Parties shall destroy or return to the Submitting Party all Confidential Information
as well as all copies and derivative materials made, and shall certify in a writing served on the
Commission and the Submitting Party that no material whatsoever derived from such
Confidential Information has been retained by any person having access thereto, except that
counsel to a Reviewing Party may retain two copies of pleadings submitted on behalf of the
Reviewing Party.  Any confidential information contained in any copies of pleadings retained by
counsel to a Reviewing Party or in materials that have been destroyed pursuant to this paragraph
shall be protected from disclosure or use indefinitely in accordance with paragraphs 9 and 11 of
this Protective Order unless such Confidential Information is released from the restrictions of this
Order either through agreement of the parties, or pursuant to the order of the Commission or a
court having jurisdiction.

     15.  No Waiver of Confidentiality.  Disclosure of Confidential Information as
provided herein shall not be deemed a waiver by the Submitting Party of any privilege or
entitlement to confidential treatment of such Confidential Information.  Reviewing Parties, by
viewing these materials: (a) agree not to assert any such waiver; (b) agree not to use information
derived from any confidential materials to seek disclosure in any other proceeding;  and (c) agree
that accidental disclosure of Confidential Information shall not be deemed a waiver of the
privilege.

     16.  Additional Rights Preserved.  The entry of this Protective Order is without
prejudice to the rights of the Submitting Party to apply for additional or different protection
where it is deemed necessary or to the rights of Reviewing Parties to request further or renewed
disclosure of Confidential Information.  

     17.  Effect of Protective Order.  This Protective Order constitutes an Order of the
Commission and an agreement between the Reviewing Party, executing the attached Declaration,
and the Submitting Party.

     18.  Authority.  This Protective Order is issued pursuant to Sections 4(i) and 4(j) of the
Communications Act as amended, 47 U.S.C.  154(i), (j) and 47 C.F.R.  0.457(d).    
Attachment A to Standard Protective Order

                          DECLARATION
                                
In the Matter of

 [Name of Proceeding]    )   Docket No.    
                     

   I, ______________________________, hereby declare under penalty of perjury that I have
read the Protective Order that has been entered by the Commission in this proceeding, and that I
agree to be bound by its terms pertaining to the treatment of Confidential Information submitted
by parties to this proceeding.  I understand that the Confidential Information shall not be
disclosed to anyone except in accordance with the terms of the Protective Order and shall be used
only for purposes of the proceedings in this matter.  I acknowledge that a violation of the
Protective Order is a violation of an order of the Federal Communications Commission.  I
acknowledge that this Protective Order is also a binding agreement with the Submitting Party.

                         (signed) _______________________________

                         (printed name) __________________________

                         (representing) ___________________________

                         (title) __________________________________

                         (employer) _____________________________

                         (address) _______________________________

                                      _______________________________

                         (phone) ________________________________     

                         (date) __________________________________                     APPENDIX C - Final Rules

     AMENDMENTS TO THE CODE OF FEDERAL REGULATIONS


Parts 1 and 61 of Title 47 of the Code of Federal Regulations (C.F.R) are amended as follows:

                 PART 1 -- PRACTICE AND PROCEDURE

1.   The authority citation for part 1 continues to read as follows:

     AUTHORITY:   47 U.S.C. 151, 154, 204(a)(3), 303, and 309(j), unless otherwise noted.

2.   In section 1.773, paragraphs (a)(2)(i) through (a)(2)(iv) are redesignated as paragraphs
(a)(2)(ii) through (a)(2)(v), paragraphs (b)(1)(i) through (b)(1)(v) are redesignated as paragraphs
(b)(1)(ii) through (b)(1)(vi), new paragraphs (a)(2)(i) and (b)(1)(i) are added,  paragraphs (a)(4)
and (b)(3) are revised to read as follows:

 1.773   Petitions for suspension or rejection of new tariff filings

* * * * *
     (a)(2) * * *

     (i)  Petitions seeking investigation, suspension, or rejection of a new or revised tariff filed
pursuant to section 204(a)(3) of the Communications Act made on 7 days notice shall be filed
and served within 3 calendar days after the date of the tariff filing.


* * * * *

     (4)  Copies, service.  An original and four copies of each petition shall be filed with the
Commission as follows: the original and three copies of each petition shall be filed with  the
Secretary, FCC room 222, 1991 M Street, NW., Washington, DC 20554; one copy must be
delivered directly to the Commission's copy contractor, International Transcription Service, Inc.,
2100 M St., NW., Suite 140, Washington, DC.  Additional, separate copies shall be served
simultaneously upon the Chief, Common Carrier Bureau; the Chief, Competitive Pricing
Division; and the Chief, Tariff and Price Analysis Branch of the Competitive Pricing Division. 
Petitions seeking investigation, suspension, or rejection of a new or revised tariff made on 15
days or less notice shall be served either personally or via facsimile on the filing carrier.  If a
petition is served via facsimile, a copy of the petition must also be sent to the filing carrier via
first class mail on the same day of the facsimile transmission.  Petitions seeking investigation,
suspension, or rejection of a new or revised tariff filing made on more than 15 days notice may
be served on the filing carrier by mail.


     (b)(1) * * *

     (i)  Replies to petitions seeking investigation, suspension, or rejection of a new or revised
tariff filed pursuant to section 204(a)(3) of the Act made on 7 days notice shall be filed and
served within 2 days after the date the petition is filed with the Commission.

* * * * *

     (3)  Copies, service.  An original and four copies of each reply shall be filed with the
Commission, as follows:  the original and three copies must be filed with the Secretary, FCC
room 222, 1919 M Street, NW., Washington, DC 20554; one copy must be delivered directly to
the Commission's Copy contractor, International Transcription Service, Inc., 2100 M St., NW/.
Suite 140, Washington, DC.  Additional separate copies shall be served simultaneously upon the
Chief, Common Carrier Bureau; the Chief, Competitive Division; and the Chief, Tariff and Price
Analysis Branch of the Competitive Pricing Division and the petitioner.  Replies to petitions
seeking investigation, suspension, or rejection of a new or revised tariff made on 15 days or less
notice shall be served on petitioners personally or via facsimile.  Replies to petitions seeking
investigation, suspension, or rejection of a new or revised tariff made on more than 15 days
notice may be served upon petitioner personally, by mail or via facsimile.
  

                        PART 61 -- TARIFFS

3.   The authority citation for part 61 continues to read as follows:

     AUTHORITY: Sections 1, 4(i), 4(j), 201-205, and 403 of the Communications Act of
1934, as amended; 47 U.S.C. 151, 154(i), 154(j), 201-205, and 403, unless otherwise noted.

4.   Section 61.3(s) is revised to read as follows:

 61.3    Definitions

* * * * *

     (s)  Local Exchange Carrier.  Any person that is engaged in the provision of telephone
exchange service or exchange access as defined in section 3(26) of the Act.


5.   In section 61.33, paragraph (d) is revised and redesignated, new paragraph (e) is added,
and paragraphs (e), (f), and (g) are redesignated as (f), (g), and (h) as follows:

    61.33 Letters of transmittal

* * * * *

     (d)  Tariffs filed pursuant to section 204(a)(3) of the Communications Act shall  display
prominently in the upper right hand corner of the letter of transmittal a statement that the filing is
made pursuant to that section and whether it is being filed on 7- or 15-days' notice. 

     (e)  In addition to the requirements set forth in paragraph (a) of this section, any carrier
filing a new or revised tariff made on 15 days' notice or less shall include in the letter of
transmittal, the name, room number, street address, telephone number, and facsimile number of
the individual designated by the filing carrier to receive personal or facsimile service of petitions
against the filing as required under  1.773(a)(4).

6.   Section 61.49 is amended by adding new paragraph (l) to read as follows:

 61.49  Supporting information to be submitted with letters of transmittal for tariffs of
carriers subject to price cap regulation

* * * * *

     (l)  In accordance with  61.41-61.49, local exchange carriers subject to price cap
regulation that elect to file their annual access tariff pursuant to section 204(a)(3) of the
Communications Act shall submit supporting material for their interstate annual access tariffs,
absent rate information, 90 days prior to July 1 of each year.   
 
7.   New section 61.51 is added to part 61 to read as follows:

  61.51 LEC tariff filings requirements pursuant to section 204(a)(3) of the
Communications Act. 

     (a) Local exchange carriers may file tariffs pursuant to section 204(a)(3) of the
Communications Act.  Such tariffs shall be filed in accordance with the notice periods set forth
in  61.58(d). 

     (b)  Local exchange carriers may elect not to file any tariffs pursuant to section 204(a)(3)
of the Communications Act that may be eligible for filing under that section.  Any such tariffs
not filed pursuant to section 204(a)(3) of the Communications Act shall be filed in accordance
with the notice requirements of  61.23 and 61.58.  

     (c)  Local exchange carrier tariff filings pursuant to section 204(a)(3) must comply with
the requirements of  61.38, 61.39, and 61.41-61.50.

     (1)  Local exchange carriers subject to price cap regulation that elect to file their annual
access tariff pursuant to section 204(a)(3) of the Communications Act shall submit support
material for their interstate annual access tariffs, in accordance with  61.49(l).   

8.   Section 61.52 is amended by adding new paragraph (c) to read as follows:

  61.52  Form, size, type, legibility, etc.

* * * * *
     (c)  Local exchange carriers shall file all tariff publications and associated documents,
such as transmittal letters, requests for special permission, and cost support documents,
electronically in accordance with the requirements established by the Chief, Common Carrier
Bureau.

9.   Section 61.58 is amended by revising paragraph (a)(2), redesignating paragraphs (d) and
(e) as paragraphs (e) and (f), and adding new paragraph (d) to read as follows:

 61.58   Notice requirements.

     (a) * * *

     (1) * * *

     (2)  Except for tariffs filed pursuant to section 204(a)(3) of the Communications Act, the
Chief, Common Carrier Bureau, may require the deferral of the effective date of any tariff filing
made on less than 120-days' notice, so as to provide for a maximum of 120-days' notice, or of
such other maximum period of notice permitted by section 203(b) of the Communications Act,
regardless of whether petitions under  1.773 of the Commission's Rules have been filed.

* * * * *

     (d) Tariffs filed pursuant to section 204(a)(3) of the Communications Act.  Local
exchange carriers filing tariffs pursuant to section 204(a)(3) of the Communications Act may file
the tariff on 7-days' notice if it proposes only rate decreases.  Any other tariff filed pursuant to
section 204(a)(3) of the Communications Act, including those that propose a rate increase or any
change in terms and conditions of service other than a rate change, shall be filed on 15-days'
notice.