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Federal Communications Commission
Biennial Regulatory Review 2000
Staff Report
September 18, 2000
TABLE OF CONTENTS
I.	OVERVIEW	1
II.	BACKGROUND	1
A.	LEGAL AUTHORITY	1
B.	SUMMARY OF 1998 BIENNIAL REGULATORY REVIEW	2
III.	THE 2000 BIENNIAL REGULATORY REVIEW	3
A.	METHOD AND SCOPE OF REVIEW	4
B.	ANALYTICAL FRAMEWORK	5
C.	STRUCTURE OF THE STAFF REPORT	6
D.	FURTHER ACTION TO COMPLETE 2000 BIENNIAL REGULATORY REVIEW	6
IV.	SUMMARY OF REVIEWS BY COMMON CARRIER, INTERNATIONAL, AND
WIRELESS TELECOMMUNICATIONS BUREAUS	8
A.	COMMON CARRIER BUREAU	8
1.	Scope of Review	9
2.	Recent and Ongoing Activities	10
3.	New Initiatives	14
4.	Other Issues	16
B.	INTERNATIONAL BUREAU	17
1.	Scope of Review	18
2.	Recent and Ongoing Activities	18
3.	New Initiatives	22
C.	WIRELESS TELECOMMUNICATIONS BUREAU	27
1.	Scope of Review	28
2.	Recent and Ongoing Activities	29
3.	New Initiatives	31
4.	Other Issues	33
V.	SUMMARY OF REVIEW BY MASS MEDIA BUREAU	34
1.	Recent and Ongoing Activities	37
2.	New Initiatives	46
VI.	SUMMARY OF REVIEWS BY OTHER BUREAUS AND OFFICES	46
A.	CABLE SERVICES BUREAU	46
1.	Recent and Ongoing Activities	46
2.	New Initiatives	49
B.	CONSUMER INFORMATION BUREAU	50
1.	Recent and Ongoing Activities	50
2.	New Initiatives	51
C.	ENFORCEMENT BUREAU	52
1.	Recent and Ongoing Activities	53
D.	OFFICE OF COMMUNICATIONS BUSINESS OPPORTUNITIES	53
1.	Recent and Ongoing Activities	54
E.	OFFICE OF ENGINEERING AND TECHNOLOGY	56
1.	Recent and Ongoing Activities	56
2.	New Initiatives	59
3.	Other Issues	60
F.	OFFICE OF GENERAL COUNSEL	60
1.	Recent and Ongoing Activities	61
G.	OFFICE OF THE MANAGING DIRECTOR	61
1.	Recent and Ongoing Activities	62
2.	New Initiatives	63
APPENDIX I: STAFF ACKNOWLEDGEMENTS	1
APPENDIX II:  1998 BIENNIAL REGULATORY REVIEW PROCEEDINGS	1
A.	PROCEEDINGS INITIATED - COMPLETED/SIGNIFICANT ORDERS ISSUED	1
1.	Telecommunications Providers (Common Carriers)	1
2.	Other	2
B.	PROCEEDINGS INITIATED - PENDING	4
1.	Telecommunications Providers (Common Carriers)	4
2.	Other	4
APPENDIX III: INDUSTRY GROUPS INTERVIEWED	1
APPENDIX IV: RULE PART ANALYSIS	1
PART 1 - PRACTICE AND PROCEDURE	1
DESCRIPTION	1
PURPOSE	2
ANALYSIS	3
Advantages	3
Disadvantages	3
Recent Efforts	3
RECOMMENDATION	3
PART 1, SUBPART E - COMPLAINTS, APPLICATIONS, TARIFFS, AND REPORTS
INVOLVING COMMON CARRIERS - FORMAL COMPLAINTS	4
DESCRIPTION	4
PURPOSE.	4
ANALYSIS.	4
Status of Competition	4
Advantages	4
Disadvantages.	5
Recent Efforts.	5
RECOMMENDATION.	5
PART 1, SUBPART F - WIRELESS TELECOMMUNICATIONS SERVICES APPLICATIONS
AND PROCEDURES	6
DESCRIPTION	6
PURPOSE	6
ANALYSIS	6
Advantages	6
Disadvantages	6
Recent Efforts	7
RECOMMENDATION	7
PART 1, SUBPART I - PROCEDURES IMPLEMENTING THE NATIONAL
ENVIRONMENTAL POLICY ACT OF 1969	8
DESCRIPTION	8
PURPOSE	8
ANALYSIS	9
Advantages	9
Disadvantages	9
Recent Efforts	9
RECOMMENDATION	10
PART 1, SUBPART J - POLE ATTACHMENT COMPLAINT PROCEDURES	11
DESCRIPTION	11
PURPOSE	11
ANALYSIS	11
Status of Competition	11
Advantages	11
Disadvantages	12
Recent Efforts	12
RECOMMENDATION	12
PART 1, SUBPART Q - COMPETITIVE BIDDING PROCEEDINGS	13
DESCRIPTION	13
PURPOSE	13
ANALYSIS	13
Advantages	13
Disadvantages	14
Recent Efforts	14
RECOMMENDATION	14
PART 1, SUBPART T - EXEMPT TELECOMMUNICATIONS COMPANIES	15
DESCRIPTION	15
PURPOSE	15
ANALYSIS	15
RECOMMENDATION	15
PART 2, SUBPART B - ALLOCATION, ASSIGNMENT, AND USE OF RADIO FREQUENCIES
	16
DESCRIPTION	16
PURPOSE	16
ANALYSIS	16
Status of Competition	16
Advantages	16
Disadvantages	16
Recent Efforts	16
RECOMMENDATION	16
PART 3 - AUTHORIZATION AND ADMINISTRATION OF ACCOUNTING AUTHORITIES IN
MARITIME AND MARITIME MOBILE-SATELLITE RADIO SERVICES.	17
DESCRIPTION	17
PURPOSE	17
ANALYSIS	17
Advantages	17
Disadvantages	17
Recent Efforts	17
RECOMMENDATION	18
PART 15 RADIO FREQUENCY DEVICES	19
DESCRIPTION	19
PURPOSE	19
ANALYSIS	19
Status of Competition	19
Advantages	19
Disadvantages	19
Recent Efforts	19
RECOMMENDATION	19
PART 17 - CONSTRUCTION, MARKING, AND LIGHTING OF ANTENNA STRUCTURES	20
DESCRIPTION	20
PURPOSE	20
ANALYSIS	20
Advantages	20
Disadvantages	20
Recent Efforts	21
RECOMMENDATION	21
PART 20 - COMMERCIAL MOBILE RADIO SERVICES, SECTION 20.6 ? CMRS SPECTRUM
AGGREGATION LIMIT	22
DESCRIPTION	22
PURPOSE	22
ANALYSIS	22
Advantages	22
Disadvantages	22
Recent Efforts	23
RECOMMENDATION	23
PART 20, SECTION 20.11 ? INTERCONNECTION TO FACILITIES OF LOCAL EXCHANGE
CARRIERS	24
DESCRIPTION	24
PURPOSE	25
ANALYSIS	25
Advantages	25
Disadvantages	25
Recent Efforts	25
RECOMMENDATION	26
PART 20, SECTION 20.12 ? RESALE AND ROAMING	27
RESALE	27
DESCRIPTION	27
PURPOSE	27
ANALYSIS	27
Status of Competition	27
Advantages	28
Disadvantages	28
Recent Efforts	28
RECOMMENDATION	28
ROAMING	28
DESCRIPTION	28
PURPOSE	29
ANALYSIS	29
Status of Competition	29
Advantages	29
Disadvantages	29
Recent Efforts	29
RECOMMENDATION	30
PART 20, SECTION 20.18 - 911 SERVICE	31
DESCRIPTION	31
PURPOSE	31
ANALYSIS	31
Advantages	31
Disadvantages	32
Recent Efforts	32
RECOMMENDATION	32
PART 20, SECTION 20.20 ? CONDITIONS APPLICABLE TO PROVISION OF CMRS
SERVICE BY LOCAL EXCHANGE CARRIERS	33
DESCRIPTION	33
PURPOSE	33
ANALYSIS	33
Advantages	33
Disadvantages	34
Recent Efforts	34
RECOMMENDATION	34
PART 21-DOMESTIC PUBLIC FIXED RADIO SERVICES	35
DESCRIPTION	35
PURPOSE	35
ANALYSIS	35
Status of Competition	35
Advantages	36
Disadvantages	36
Recent Efforts	36
RECOMMENDATION	36
PART 22 - PUBLIC MOBILE SERVICES	37
DESCRIPTION	37
PURPOSE	37
ANALYSIS	38
Status of Competition	38
Advantages	38
Disadvantages	38
Recent Efforts	38
RECOMMENDATION	39
PART 22, SUBPART E - PAGING AND RADIOTELEPHONE SERVICE	40
DESCRIPTION	40
PURPOSE	41
ANALYSIS	41
Status of Competition	41
Advantages	41
Disadvantages	41
Recent Efforts	41
RECOMMENDATION	42
PART 22, SUBPART F - RURAL RADIOTELEPHONE SERVICE	43
DESCRIPTION	43
PURPOSE	44
ANALYSIS	44
Status of Competition	44
Advantages	44
Disadvantages	44
Recent Efforts	44
RECOMMENDATION	44
PART 22, SUBPAR T G - AIR-GROUND RADIOTELEPHONE SERVICE	46
DESCRIPTION	46
PURPOSE	46
ANALYSIS	46
Status of Competition	46
Advantages	47
Disadvantages	47
RECOMMENDATION	47
PART 22, SUBPART H- CELLULAR RADIOTELEPHONE SERVICE	48
DESCRIPTION	48
PURPOSE	48
ANALYSIS	48
Status of Competition	48
Advantages	49
Disadvantages	49
Recent Efforts	49
RECOMMENDATION	50
PART 22, SUBPART I - OFFSHORE RADIOTELEPHONE SERVICE	51
DESCRIPTION	51
PURPOSE	51
ANALYSIS	51
Status of Competition	51
Advantages	51
Disadvantages	51
Recent Efforts	51
RECOMMENDATION	52
PART 22, SUBPART J - REQUIRED NEW CAPABILITIES PURSUANT TO THE
COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT (CALEA)	53
DESCRIPTION	53
PURPOSE	53
ANALYSIS	53
Advantages	53
Disadvantages	53
Recent Efforts	54
RECOMMENDATION	54
PART 23 - INTERNATIONAL FIXED PUBLIC RADIOCOMMUNICATION SERVICES	55
DESCRIPTION	55
PURPOSE	55
ANALYSIS	55
Status of Competition	55
Advantages	56
Disadvantages	56
Recent Efforts	56
RECOMMENDATION	56
PART 24 - PERSONAL COMMUNICATIONS SERVICES	57
DESCRIPTION	57
PURPOSE	58
ANALYSIS	58
Status of Competition	58
Advantages	59
Disadvantages	59
Recent Efforts	59
RECOMMENDATION	59
PART 25 - SATELLITE COMMUNICATIONS	61
DESCRIPTION	61
PURPOSE	61
ANALYSIS	61
Status of Competition	61
Advantages	62
Disadvantages	63
Recent Efforts	63
RECOMMENDATION	64
PART 26 - GENERAL WIRELESS COMMUNICATIONS SERVICES	65
DESCRIPTION	65
PURPOSE	65
ANALYSIS	65
Status of Competition	65
Advantages	65
Disadvantages	65
Recent Efforts	66
RECOMMENDATION	66
PART 27 - MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES	67
DESCRIPTION	67
PURPOSE	68
ANALYSIS	68
Advantages	68
Disadvantages	68
Recent Efforts	68
RECOMMENDATION	69
PART 32 - UNIFORM SYSTEM OF ACCOUNTS	70
DESCRIPTION	70
PURPOSE	70
ANALYSIS	71
Status of Competition	71
Advantages	71
Disadvantages	71
Recent Efforts	72
RECOMMENDATION	72
PART 36 - JURISDICTIONAL SEPARATIONS PROCEDURES	74
DESCRIPTION	74
PURPOSE	74
ANALYSIS	74
Status of Competition	74
Advantages	74
Disadvantages	75
Recent Efforts	75
RECOMMENDATION	75
PART 42 - PRESERVATION OF RECORDS OF COMMON CARRIERS	76
DESCRIPTION	76
PURPOSE	76
ANALYSIS	76
Status of Competition	76
Advantages	76
Disadvantages	76
Recent Efforts	77
RECOMMENDATION	77
PART 43 - REPORTS OF COMMUNICATIONS COMMON CARRIERS AND CERTAIN
AFFILIATES	78
DESCRIPTION	78
PURPOSE	78
ANALYSIS	79
Status of Competition	79
Advantages	79
Disadvantages	79
Recent Efforts	79
RECOMMENDATION	80
PART 51 - INTERCONNECTION	81
DESCRIPTION	81
PURPOSE	81
ANALYSIS	82
Status of Competition	82
Advantages	82
Disadvantages	82
Recent Efforts	82
RECOMMENDATION	82
PART 52 - NUMBERING	83
DESCRIPTION	83
PURPOSE	83
ANALYSIS	83
Status of Competition	83
Advantages	83
Disadvantages	84
Recent Efforts	84
RECOMMENDATION	84
PART 53 - SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES	85
DESCRIPTION	85
PURPOSE	85
ANALYSIS	85
Status of Competition	85
Advantages	85
Disadvantages	86
Recent Efforts	86
RECOMMENDATION	86
PART 54 - UNIVERSAL SERVICE	87
DESCRIPTION	87
PURPOSE	87
ANALYSIS	88
Status of Competition	88
Advantages	88
Disadvantages	88
Recent Efforts	88
RECOMMENDATION	88
PART 59 - INFRASTRUCTURE SHARING	90
DESCRIPTION	90
PURPOSE	90
ANALYSIS	90
Status of Competition	90
Advantages	90
Disadvantages	90
Recent Efforts	90
RECOMMENDATION	91
PART 61 - TARIFFS	92
DESCRIPTION	92
PURPOSE	92
ANALYSIS	92
Status of Competition	92
Advantages	93
Disadvantages	93
Recent Efforts	93
RECOMMENDATION	93
PART 63 - EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, REDUCTION,
OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF
RECOGNIZED PRIVATE OPERATING AGENCY STATUS	95
DESCRIPTION	95
PURPOSE	95
ANALYSIS	96
Status of Competition	96
Advantages	96
Disadvantages	96
Recent Efforts	96
RECOMMENDATION	97
PART 64 - MISCELLANEOUS RULES RELATING TO COMMON CARRIERS, SUBPART A -
TRAFFIC DAMAGE CLAIMS	98
DESCRIPTION	98
PURPOSE	98
ANALYSIS	98
Status of Competition	98
Advantages	98
Disadvantages	98
Recent Efforts	98
RECOMMENDATION	98
PART 64, SUBPART B - RESTRICTIONS ON INDECENT TELEPHONE MESSAGE
SERVICES	99
DESCRIPTION	99
PURPOSE	99
ANALYSIS	99
Status of Competition	99
Advantages	99
Disadvantages	99
Recent Efforts	100
RECOMMENDATION	100
PART 64, SUBPART C - FURNISHING OF FACILITIES TO FOREIGN GOVERNMENTS FOR
INTERNATIONAL COMMUNICATIONS	101
DESCRIPTION	101
PURPOSE	101
ANALYSIS	101
Status of Competition	101
Advantages	101
Disadvantages	101
Recent Efforts	101
RECOMMENDATION	101
PART 64, SUBPART D - PROCEDURES FOR HANDLING PRIORITY SERVICES IN
EMERGENCIES	102
DESCRIPTION	102
PURPOSE	102
ANALYSIS	102
Status of Competition	102
Advantages	102
Disadvantages	102
Recent Effort	102
RECOMMENDATION	102
PART 64, SUBPART E - USE OF RECORDING DEVICES BY TELEPHONE COMPANIES	103
DESCRIPTION	103
PURPOSE	103
ANALYSIS	103
Status of Competition	103
Advantages	103
Disadvantages	103
Recent Effort	103
RECOMMENDATION	103
PART 64, SUBPART F - TELECOMMUNICATIONS RELAY SERVICES AND RELATED
CUSTOMER PREMISES EQUIPMENT FOR PERSONS WITH DISABILITIES	104
DESCRIPTION	104
PURPOSE	104
ANALYSIS	104
Status of Competition	104
Advantages	104
Disadvantages	105
Recent Efforts	105
RECOMMENDATION	105
PART 64, SUBPART G - FURNISHING OF ENHANCED SERVICES AND CUSTOMER
PREMISES EQUIPMENT BY BELL OPERATING COMPANIES; TELEPHONE OPERATOR
SERVICES	106
DESCRIPTION	106
PURPOSE	107
ANALYSIS	107
Status of Competition	107
Advantages	107
Disadvantages	107
Recent Efforts	107
RECOMMENDATION	108
PART 64, SUBPART H - EXTENSION OF UNSECURED CREDIT FOR INTERSTATE AND
FOREIGN COMMUNICATIONS SERVICES TO CANDIDATES FOR FEDERAL OFFICE	109
DESCRIPTION	109
PURPOSE	109
ANALYSIS	109
Status of Competition	109
Advantages	109
Disadvantages	109
Recent Efforts	110
RECOMMENDATION	110
PART 64, SUBPART I - ALLOCATION OF COSTS	111
DESCRIPTION	111
PURPOSE	111
ANALYSIS	111
Status of Competition	111
Advantages	111
Disadvantages	111
Recent Efforts	112
RECOMMENDATION	112
PART 64, SUBPART J - INTERNATIONAL SETTLEMENTS POLICY AND MODIFICATION
REQUESTS	113
DESCRIPTION	113
PURPOSE	113
ANALYSIS	113
Status of Competition	113
Advantages	114
Disadvantages	114
Recent Efforts	114
RECOMMENDATION	114
PART 64, SUBPART K - CHANGING LONG DISTANCE SERVICE	115
DESCRIPTION	115
PURPOSE	115
ANALYSIS	115
Status of Competition	115
Advantages	115
Disadvantages	115
Recent Efforts	115
RECOMMENDATION	116
PART 64, SUBPART L - RESTRICTIONS ON TELEPHONE SOLICITATION	117
DESCRIPTION	117
PURPOSE	117
ANALYSIS	117
Status of Competition	117
Advantages	117
Disadvantages	117
Recent Efforts	117
RECOMMENDATION	117
PART 64, SUBPART M - PROVISION OF PAYPHONE SERVICE	118
DESCRIPTION	118
PURPOSE	118
ANALYSIS	118
Status of Competition	118
Advantages	118
Disadvantages	118
Recent Efforts	118
RECOMMENDATION	119
PART 64, SUBPART N - EXPANDED INTERCONNECTION	120
DESCRIPTION	120
PURPOSE	120
ANALYSIS	120
Status of Competition	120
Advantages	120
Disadvantages	120
Recent Efforts	120
RECOMMENDATION	121
PART 64, SUBPART O - INTERSTATE PAY-PER-CALL AND OTHER INFORMATION
SERVICES	122
DESCRIPTION	122
PURPOSE	122
ANALYSIS	122
Status of Competition	122
Advantages	122
Disadvantages	122
Recent Efforts	122
RECOMMENDATION	123
PART 64, SUBPART P - CALLING PARTY TELEPHONE NUMBER; PRIVACY  (ALSO
KNOWN AS "CALLER ID")	124
DESCRIPTION	124
PURPOSE	124
ANALYSIS	124
Status of Competition	124
Advantages	124
Disadvantages	124
Recent Efforts	124
RECOMMENDATION	125
PART 64, SUBPART Q - IMPLEMENTATION OF SECTION 273(D)(5) OF THE
COMMUNICATIONS ACT: DISPUTE RESOLUTION REGARDING EQUIPMENT
STANDARDS	126
DESCRIPTION	126
PURPOSE	126
ANALYSIS	126
Status of Competition	126
Advantages	126
Disadvantages	126
Recent Efforts	126
RECOMMENDATION	126
PART 64, SUBPART R - GEOGRAPHIC RATE AVERAGING AND RATE INTEGRATION	127
DESCRIPTION	127
PURPOSE	127
ANALYSIS	127
Status of Competition	127
Advantages	127
Disadvantages	127
Recent Efforts	127
RECOMMENDATION	128
PART 64, SUBPART S - NONDOMINANT INTEREXCHANGE CARRIER CERTIFICATIONS
REGARDING GEOGRAPHIC RATE AVERAGING AND RATE INTEGRATION
REQUIREMENTS	129
DESCRIPTION	129
PURPOSE	129
ANALYSIS	129
Status of Competition	129
Advantages	129
Disadvantages	129
Recent Efforts	129
RECOMMENDATION	129
PART 64, SUBPART T - SEPARATE AFFILIATE REQUIREMENTS FOR INCUMBENT
INDEPENDENT LOCAL EXCHANGE CARRIERS THAT PROVIDE IN-REGION,
INTERSTATE DOMESTIC INTEREXCHANGE SERVICES OR IN-REGION
INTERNATIONAL INTEREXCHANGE SERVICES	130
DESCRIPTION	130
PURPOSE	130
ANALYSIS	130
Status of Competition	130
Advantages	130
Disadvantages	130
Recent Efforts	131
RECOMMENDATION	131
PART 64, SUBPART U - CUSTOMER PROPRIETARY NETWORK INFORMATION	132
DESCRIPTION	132
PURPOSE	132
ANALYSIS	132
Status of Competition	132
Advantages	132
Disadvantages	132
Recent Efforts	132
RECOMMENDATION	133
PART 64, SUBPART V - TELECOMMUNICATIONS CARRIER SYSTEMS SECURITY AND
INTEGRITY PURSUANT TO THE COMMUNICATIONS ASSISTANCE FOR LAW
ENFORCEMENT ACT (CALEA)	134
DESCRIPTION	134
PURPOSE	134
ANALYSIS	134
Status of Competition	134
Advantages	134
Disadvantages	134
Recent Efforts	134
RECOMMENDATION	134
PART 64, SUBPART W - REQUIRED NEW CAPABILITIES PURSUANT TO THE
COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT (CALEA)	135
DESCRIPTION	135
PURPOSE	135
ANALYSIS	135
Status of Competition	135
Advantages	135
Disadvantages	135
Recent Efforts	135
RECOMMENDATION	135
PART 64, SUBPART X - SUBSCRIBER LIST INFORMATION	136
DESCRIPTION	136
PURPOSE	136
ANALYSIS	136
Status of Competition	136
Advantages	136
Disadvantages	136
Recent Efforts	136
RECOMMENDATION	136
PART 64, SUBPART Y - TRUTH-IN-BILLING REQUIREMENTS FOR COMMON CARRIERS
	137
DESCRIPTION	137
PURPOSE	137
ANALYSIS	137
Status of Competition	137
Advantages	137
Disadvantages	137
Recent Efforts	138
RECOMMENDATION	138
PART 65 - INTERSTATE RATE OF RETURN PRESCRIPTION PROCEDURES AND
METHODOLOGIES	139
DESCRIPTION	139
PURPOSE	139
ANALYSIS	139
Status of Competition	139
Advantages	139
Disadvantages	140
Recent Efforts	140
RECOMMENDATION	140
PART 68 - CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK
	141
DESCRIPTION	141
PURPOSE	141
ANALYSIS	142
Status of Competition	142
Advantages	142
Disadvantages	142
Recent Efforts	142
RECOMMENDATION	142
PART 69 - ACCESS CHARGES	143
DESCRIPTION	143
PURPOSE	143
ANALYSIS	143
Status of Competition	143
Advantages	144
Disadvantages	144
Recent Efforts	144
RECOMMENDATION	144
PART 73, -RADIO BROADCAST SERVICES, SECTION 73.3555 - THE BROADCAST
OWNERSHIP RULES	145
DESCRIPTION	145
PURPOSE	145
ANALYSIS	145
Status of Competition	145
Advantages	145
Disadvantages	145
Recent Efforts	145
RECOMMENDATION	145
PART 80 - STATIONS IN THE MARITIME SERVICES, SUBPARTS J (PUBLIC COAST
STATIONS) AND Y (COMPETITIVE BIDDING PROCEDURES)	146
DESCRIPTION	146
PURPOSE	146
ANALYSIS	147
Status of Competition	147
Advantages	147
Disadvantages	147
Recent Efforts	148
RECOMMENDATION	148
PART 90 - PRIVATE LAND MOBILE RADIO SERVICES.	149
DESCRIPTION	149
PURPOSE	150
ANALYSIS	150
Status of Competition	150
Advantages	150
Disadvantages	150
Recent Efforts	150
RECOMMENDATION	150
PART 90, SUBPART L - REGULATIONS FOR AUTHORIZATION AND USE OF
FREQUENCIES IN THE 470-512 MHZ BAND	152
DESCRIPTION	152
PURPOSE	153
ANALYSIS	153
Status of Competition	153
Advantages	153
Disadvantages	153
Recent Efforts	153
RECOMMENDATION	153
PART 90, SUBPARTS M (INTELLIGENT TRANSPORTATION SYSTEMS RADIO SERVICE)
AND X (COMPETITIVE BIDDING RULES FOR THE LOCATION AND MONITORING
SERVICE)	154
DESCRIPTION	154
Location and Monitoring Systems (LMS)	154
Dedicated Short Range Communications Service (DSRCS)	155
PURPOSE	155
ANALYSIS	155
Status of Competition	155
Advantages	155
Disadvantages	155
Recent Efforts	156
RECOMMENDATION	156
PART 90, SUBPART P ? PAGING OPERATIONS IN THE 929 MHZ BAND	157
DESCRIPTION	157
PURPOSE	157
ANALYSIS	157
Status of Competition	157
Advantages	157
Disadvantages	157
Recent Efforts	157
RECOMMENDATION	158
PART 90, SUBPARTS S (REGULATIONS FOR LICENSING AND USE OF FREQUENCIES IN
THE 800 AND 900 MHZ BANDS), AND U AND V (COMPETITIVE BIDDING PROCEDURES
FOR THE 900 AND 800 MHZ SERVICE)	159
DESCRIPTION	159
PURPOSE	160
ANALYSIS	160
Status of Competition	160
Advantages	160
Disadvantages	161
Recent Efforts	161
RECOMMENDATION	161
PART 90, SUBPARTS T (REGULATIONS FOR LICENSING AND USE OF FREQUENCIES IN
THE 220-222 MHZ BAND) AND W (COMPETITIVE BIDDING PROCEDURES FOR THE 220
MHZ SERVICE)	162
DESCRIPTION	162
PURPOSE	163
ANALYSIS	163
Status of Competition	163
Advantages	163
Disadvantages	163
Recent Efforts	164
RECOMMENDATION	164
PART 95 - PERSONAL RADIO SERVICES, SUBPART F - 218-219 MHZ SERVICE	166
DESCRIPTION	166
PURPOSE	166
ANALYSIS	166
Status of Competition	166
Advantages	167
Disadvantages	167
Recent Efforts	167
RECOMMENDATION	167
PART 100 - DIRECT BROADCAST SATELLITE SERVICE	169
DESCRIPTION	169
PURPOSE	169
ANALYSIS	169
Status of Competition	169
Advantages	169
Disadvantages	170
Recent Efforts	170
RECOMMENDATION	171
PART 101 - FIXED MICROWAVE SERVICES	172
DESCRIPTION	172
PURPOSE	172
ANALYSIS	173
Status of Competition	173
Advantages	173
Disadvantages	173
Recent Efforts	174
RECOMMENDATION	174
PART 101, SUBPART G - 24 GHZ SERVICE AND DIGITAL ELECTRONIC MESSAGE
SERVICE	176
DESCRIPTION	176
PURPOSE	176
ANALYSIS	176
Status of Competition	176
Advantages	177
Disadvantages	177
Recent Efforts	177
RECOMMENDATION	177
PART 101, SUBPARTS L (LOCAL MULTIPOINT DISTRIBUTION SERVICE (LMDS)) AND M
(COMPETITIVE BIDDING PROCEDURES FOR LMDS)	178
DESCRIPTION	178
PURPOSE	178
ANALYSIS	178
Status of Competition	178
Advantages	179
Disadvantages	179
Recent Efforts	179
RECOMMENDATION	180
I. OVERVIEW
1. This Staff Report summarizes the findings of an extensive review of the Federal
Communications Commission's rules.  Each Bureau and Office reviewed the rules pertinent to its
operations to determine whether to recommend that the Commission modify or eliminate any
rules.  Accompanying this written report is a rule part analysis that identifies the Commission's
rule parts, explains the purpose, benefits and disadvantages of the particular rule or rule part, and
lists any staff recommendation for modifying or repealing any rules within each part.  The report
and analysis are steps in the Commission's process of conducting biennial regulatory reviews
pursuant to section 11 of the Communications Act of 1934, as amended (Communications Act),
and section 202(h) of the Telecommunications Act of 1996 (1996 Act).   These documents are
staff recommendations, and do not reflect formal Commission opinions or binding
determinations.
II. BACKGROUND
A. Legal Authority
2. The Telecommunications Act of 1996, which was intended "to promote
competition and reduce regulation in order to secure lower prices and higher quality services for
American telecommunications consumers and encourage the rapid deployment of new
telecommunications technologies."   The 1996 Act significantly amended the Communications
Act of 1934 to permit and encourage competition in various communications markets.  Congress
anticipated that, as competition developed, market forces would reduce the need for regulation.
Therefore, in addition to requiring the Commission to take certain actions to open markets to
competition, Congress required the Commission to review certain of its regulations every two
years and to modify or repeal those regulations that are no longer "necessary in the public
interest."
3. Section 11 of the Communications Act, which was added by the 1996 Act,
provides:
(a) Biennial Review of Regulations. - In every even-numbered year (beginning with
1998), the Commission -
(1) shall review all regulations issued under this Act in effect at the time of the
review that apply to the operations or activities of any provider of
telecommunications service; and
(2) shall determine whether any such regulation is no longer necessary in the
public interest as the result of meaningful economic competition between
providers of such service.
(b) Effect of Determination. - The Commission shall repeal or modify any regulation it
determines to be no longer necessary in the public interest.
4. Section 202 of the 1996 Act addresses matters regarding broadcast ownership.
Section 202(h) provides:
The Commission shall review its rules adopted pursuant to this
section and all of its ownership rules biennially as part of its
regulatory reform review under section 11 of the
Communications Act of 1934 and shall determine whether any
of such rules are necessary in the public interest as the result of
competition.  The Commission shall repeal or modify any
regulation it determines to be no longer in the public interest.
5. Section 11 and section 202(h), collectively, require the Commission:  (1) to
review biennially its regulations that pertain to (a) the operations or activities of
telecommunications service providers,  and (b) broadcast ownership; and (2) to determine
whether those regulations are no longer necessary in the public interest as a result of meaningful
economic competition.  Following such review, the Commission is directed to modify or repeal
any such regulations that are no longer necessary in the public interest.
6. In addition to these statutory requirements, the Commission has discretion to
suspend, modify, revoke or waive any of its regulations for good cause, pursuant to other
applicable requirements, such as the Administrative Procedure Act.   Thus, for example, the
Commission may consider whether circumstances other than economic competition justify
modification or repeal of particular rules.
B. Summary of 1998 Biennial Regulatory Review
7. In 1998, the Commission reviewed all of its regulations.  The Commission did
not attempt to identify or limit its review to rules that "apply to the operations or activities" of
telecommunications service providers.   For the 1998 review:  (1) each of the operating bureaus
and the Office of Engineering and Technology conducted a review of the rules under their
jurisdiction; and (2) members of the Office of Plans and Policy, the Chief Economist and his
staff, and members of the Competition Division in the Office of General Counsel conducted a
parallel review of Commission rules.  These reviews were not limited to whether "meaningful
economic competition" justified changes, but instead considered whether, for any reason,
modification or elimination of a rule would serve the public interest.
8. The team from the Office of Plans and Policy/Chief Economist/Competition
Division used the following questions in its review:
Is the original or present purpose of the regulation still valid?
If a valid purpose for the regulation exists, how well does the regulation achieve the
purpose?
Even if a regulation achieves its purpose, do the burdens it creates outweigh its
advantages?
Is there a less burdensome alternative that will produce similar benefits?
Does the regulation overlap, interfere, or conflict with other regulations such that
modification is warranted?
9. The Commission received substantial public input.  For example, each of the
Bureaus, together with the Office of General Counsel, hosted a series of public fora to solicit
ideas regarding rules that might warrant repeal or modification.  In addition, staff received input
during a series of meetings held by practice groups of the Federal Communications Bar
Association.
10. The 1998 Biennial Regulatory Review led to the initiation of a wide range of
deregulatory and streamlining proposals.   For example, the Commission initiated 32 proceedings
and modified or eliminated hundreds of rules, particularly ones that affected the operations and
activities of telecommunications service providers.
III. THE 2000 BIENNIAL REGULATORY REVIEW
11. This review attempts to build upon the work completed in the 1998 Biennial
Regulatory Review, and to establish a foundation for future reviews.  In particular, the 2000
Biennial Regulatory Review provides greater documentation of the staff's review.  The review
process is incremental, however, and staff expects that even greater documentation will occur in
future years.  In addition, staff recommends that the Commission consider setting forth an
analysis similar to the analysis used in this staff report whenever the Commission adopts new
rules.  Such an analysis may include the reason for the rule, whether the rule effectively
accomplishes its intended purpose, and the status of competition at the time the rule is enacted.
Conducting such an analysis at the time new rules are adopted might help ensure that new
regulatory requirements are carefully tailored to achieve their intended regulatory goals.  Such
analysis might also significantly reduce the burdens associated with future biennial reviews.
12. In evaluating the rules, staff applied a consistent analysis to determine whether to
recommend modification or elimination of Commission rules.  Staff's review considered (1) the
purpose of the rule; (2) the advantages of the rule;  (3) the disadvantages of the rule;  (4) what
impact competitive developments have had on the rule; and (5) whether to recommend
modification or revocation of the rule.  This analysis allowed the staff to make reasoned
determinations about whether a rule should be changed or eliminated either because of
competitive developments, or for other reasons.  For example, staff considered whether the
underlying purpose of the rule is still relevant, and, if so, whether that purpose could be
accomplished more effectively in another manner.
13. Although there may be other ways to determine whether a Commission rule
continues to be necessary in the public interest, staff believes that the analysis it used is a
reasonable way to carry out the requirements of section 11 and section 202(h).  In addition, the
analysis staff used is relatively easy to apply, and permits consideration of all relevant factors in
determining whether a rule should be modified or revoked.  Staff therefore recommends that the
Commission adopt this analysis when it makes public interest determinations.
A. Method and Scope of Review
14. The Commission has devoted substantial time and resources to the 2000 Biennial
Regulatory Review.  In the fall of 1999, Commission staff began to create a computer database of
Commission rules.  In early 2000, a team consisting of representatives from each Bureau and
Office began to develop a method for conducting the staff review.  The team agreed to a
framework and analysis that each Bureau and Office would use in reviewing its rules.  This
framework was intended to ensure a well-reasoned and consistent review across the agency.  That
framework included the following:
a.) Each Bureau and Office would endeavor to look at all of its
rules - not only rules that are specifically implicated by sections
11 and 202(h) - and consider whether repeal or modification
might be appropriate.
The benefits associated with modifying or eliminating regulations are not limited to the rules
implicated in sections 11 and 202(h).  The team determined that a broad review of Commission
rules, even beyond the scope of statutory requirements, could provide significant benefits.  The
team reasoned, for example, that eliminating unnecessary regulations would likely reduce
compliance costs of service providers, which in turn could reduce charges to consumers.
Similarly, the team deemed it reasonable to consider whether any regulations could be modified
so that they achieve their intended goals more effectively or in a less burdensome manner.  In
addition, the team determined that its decision to conduct a broad rule review would reduce the
potential for disagreement about what rules are subject to the mandatory review requirements in
sections 11 and 202(h).
b.) As noted above, the team determined that each Bureau and
Office would use a consistent analysis, which would consider the
advantages and disadvantages of the existing rules and what
impact, if any, competitive developments have had on each rule.
Each Bureau and Office would consider whether revocation or
modification might be appropriate for any reason.  The review
would not be limited to whether changes were warranted as a
result of economic competition.
Although sections 11 and 202(h) require the Commission to determine whether rules remain
necessary in the public interest as a result of competition, the team determined that there might be
other relevant bases for modifying or revoking a rule.  For example, a rule might be obsolete as a
result of technological developments.  Or modification might be appropriate as a result of
changes in industry practices or judicial decisions, or because a rule is duplicative of or
contradictory to other rules.  Although the Commission has worked hard to keep its rules current
with industry, judicial, and other developments, the biennial regulatory review process provides
another opportunity to ensure that the Commission's rules are up-to-date.
15. The team also recognized that, even where competition develops, it will not
always and immediately eliminate the need for regulation.  For example, there may be certain
segments of the market that would not receive service of acceptable quality or at affordable rates
absent regulation.  Thus, even if a regulation generally is no longer necessary in the public
interest as a result of competition, there may be reasons to retain it, at least with respect to certain
segments of the market.
c.) Staff would prepare a report that summarizes the review
conducted by each Bureau and Office.  In addition, staff would
provide a written description of the analysis used in reviewing
each rule part implicated by sections 11 or 202(h).
The staff report includes highlights of the staff's review, as well as recommendations for
Commission action.  The staff report is not limited to rules that are subject to the biennial
regulatory review requirements of sections 11 and 202(h).
16. The rule part analysis provides additional documentation of the staff's review of
each rule part that is implicated by section 11 or section 202(h).  It is intended to enable the
public to understand the reasoning behind the staff's review and recommendation.  The analysis
strives to encompass any rule that might affect the operations or activities of telecommunications
service providers.
17. The team recognized that completing a comprehensive rule review, as it
proposed, would be time-consuming and labor intensive.  The team concluded that it should give
priority to satisfying statutory requirements, and thus would focus its efforts on completing the
rule analysis for rules that are implicated by sections 11 and 202(h).
18. The analysis generally documents review by rule part, but it identifies many of
the individual rules that the staff recommends be modified or repealed.  Staff determined that in
most instances, providing analysis at the rule part level was sufficient to identify the reasoning
used and the basis for the recommendations.  In some instances, however, staff determined that it
should include its analysis of rule subparts.  For example, where only portions of the rule part are
implicated by section 11, or where more than one Bureau or Office shares responsibility for
overseeing a rule part, the analysis may be done by subpart.
B. Analytical Framework
19. The analytical framework that staff used for this Biennial Regulatory Review
recognizes that significant economic benefits can be achieved by fostering competition.
Although regulation may sometimes be necessary to correct market failures or prevent the accrual
of excessive market power,  in most instances market forces will yield economically efficient
results.  Staff's review thus sought to maximize the potential for self-correcting market action,
and to suggest deregulatory action warranted by economic and technological developments.  Staff
considered factors such as the effect a rule has on competitive entry into specific services,
whether the rule encourages resource-efficient technologies, the effect of the rule on costs for the
industry and the agency, and whether developments in the definition and structure of the relevant
market would suggest that the elimination or modification of the rule is appropriate.  Staff paid
particular attention to rules that seek to limit the exercise of market power in markets
transitioning to a more competitive structure.
20. The staff also recognized that some of the Commission's goals might require
regulatory action even when developments like those mentioned above are taken into
consideration.  For example, the Commission has sought to ensure that all Americans have access
to the widest variety of telecommunications services and that audiences have access to diverse
media sources.  Staff attempted to consider all of the Commission's stated policy concerns when
it reviewed the agency's rules.
C. Structure of the Staff Report
21. Staff endeavored to review all of the Commission's rules rather than limit its
review to rules covered explicitly by section 11 of the Communications Act and section 202(h) of
the 1996 Act.  Staff determined that a broad review of the Commission's rules could provide
significant benefits, although it gave priority to the rules that are implicated in sections 11 and
202(h).
22. Each Bureau and Office conducted this review by seeking input from staff and
industry groups.  In conducting this review, staff considered (1) the purpose of the rule; (2) the
advantages of the rule; (3) the disadvantages of the rule; and (4) the impact competitive
developments may have had on the need for the rule.
23. This Report summarizes staff's review of the Commission's rules, the status of
ongoing and recent initiatives, and recommendations on whether specific rules should be kept in
place, modified, or repealed.  The staff's recommendations are also reported in the attached rule
part analysis.  The rule part analysis summarizes staff's findings and should be viewed as works
in progress.  The analysis does not reflect formal Commission opinions or binding
determinations.
24. Staff recommends that the Commission seek public comment on the Report and
the rule part analysis.
D. Further Action to Complete 2000 Biennial Regulatory Review
25. This Staff Report is merely one step in the Commission's 2000 Biennial
Regulatory Review.  Section 11 and section 202(h) mandate Commission determinations.  Staff
proposes that the Commission release and seek comment on the Staff Report and rule part
analysis.  After receiving public comment, staff anticipates that the Commission would issue a
report before December 31, 2000.  The Commission report would determine what if any
regulations are no longer necessary in the public interest, in accordance with section 11 and
section 202(h).
26. Pursuant to the Commission's determinations, staff expects that the Commission
would initiate proceedings to modify or eliminate selected rules.  These proceedings would
conform with Commission procedural rules and the Administrative Procedure Act.  Although
some of these proceedings will be initiated in the year 2000, many will not be.  The statute does
not require the Commission to repeal or modify its rules by the end of 2000.
IV. SUMMARY OF REVIEWS BY COMMON CARRIER, INTERNATIONAL, AND
WIRELESS TELECOMMUNICATIONS BUREAUS
A. Common Carrier Bureau
27. The Common Carrier Bureau advises the Commission regarding the regulation of
telecommunications service providers, including issues related to interstate telecommunications
service, interstate access service, and local exchange competition.  The Bureau administers rules
and policies designed to foster competition in telecommunications markets, promote widespread
availability of telecommunications, and protect consumers.
28. The Common Carrier Bureau has focused in recent years on adopting market-
opening and universal service rules for the local exchange and long distance markets.  The
Bureau has also focused on review of applications by Bell Operating Companies to provide long
distance service as well as review of telecommunications company mergers.  In addition, the
Bureau has devoted considerable resources to consideration of the regulatory reforms that should
occur as competition in the provision of telecommunications services develops.
29. In evaluating the state of competition, the Bureau has found that the long distance
services market is competitive, but competition in the local exchange and exchange access
markets is nascent.  While incumbent local exchange carriers (LECs) and the new local exchange
entrants disagree about the extent to which local competition has developed, competition for local
exchange services has taken root and is increasing.
30. Three recent reports concerning competitive developments in the local exchange
market conclude that competition is growing, although competitive local exchange carriers still
serve only a very small portion of local exchange lines.  "Telecommunications @ the
Millennium," a report by the FCC Office of Plans and Policy, states that "[o]n the fourth
anniversary of the Act, we see competition in the local market beginning to take hold."   The
report states that, "in 1996, when the Act was passed, competitors had a one percent share of the
local market,"  adding that "[t]heir share of the local market has increased to 4 percent of lines
served and over 6 percent of local service revenue."   The report states that "[l]ocal competitors
have been particularly successful in the business market, where competitors have added 65
percent of all new lines deployed in the third quarter of 1999."   The report adds that "more
people are beginning to see wireless telephones as substitutes for their wireline services"  in light
of dramatic price decreases and increases in service quality.  These trends are further explored in
"Local Telephone Competition at the New Millennium," a report by the FCC Common Carrier
Bureau.   A report by the United States General Accounting Office, "Development of
Competition in Local Telephone Markets," states that, "[t]o date, little competition has emerged
in local telephone markets,"  but concludes that "further competition seems likely to develop in
local telephone markets."   The report notes that "competing carriers, . . . are using all entry
modes envisioned by the act, legal and regulatory issues are . . . becoming clarified, and the
packaging of varied telecommunications services may enable firms providing other
telecommunications services to effectively compete for local telephone customers."
31. In contrast to the market for local exchange and exchange access service, the
markets for long distance and customer premises equipment (CPE) are competitive and have been
increasingly deregulated.  Long distance prices (international and domestic), as approximated by
average revenue per minute, have fallen by 34 percent since 1993.   Similarly, a vibrantly
competitive market has developed for CPE, and, as a result, basic voice telephones are now
available from an array of suppliers with a myriad of options at extremely low prices.
32. It is against this background that we begin our second "Biennial Regulatory
Review" of rules for common carriers.
1. Scope of Review
33. As part of the review process, initiated by the Year 2000 Biennial Regulatory
Review Working Group, the Common Carrier Bureau has reviewed all of the rules within each of
the following parts that affect common carriers.
Part 32 - Uniform System of Accounts - Establishes mandatory minimum accounting
standards for certain common carriers.
Part 36 - Jurisdictional Separations - Contains an outline of the separations procedures
designed primarily for the allocation of property costs, revenues, expenses, taxes and
reserves between the state and interstate jurisdictions.
Part 42 - Record Retention Requirements - Prescribes the regulations governing the
preservation of records of communications common carriers.
Part 43 - Reporting Requirements - Prescribes specific filing requirements for
communications common carriers and certain of their affiliates.
Part 51 - Interconnection - Establishes interconnection obligations for LECs.
Part 52 - Numbering - Establishes conditions for the administration and use of
telecommunications numbers for provision of telecommunications services in the United
States.
Part 53 - Special Provisions Concerning Bell Operating Companies - Establishes special
requirements applicable to the Bell Operating Companies, pursuant to 47 U.S.C.  271
and 272.
Part 54 - Universal Service - Establishes the mechanisms to ensure the provision of
Universal Service.
Part 59 - Infrastructure Sharing - Establishes the general duty of incumbent LECs to
make available to certain qualifying carriers network infrastructure, facilities, functions,
technology, and information.
Part 61 - Tariffs - Prescribes the framework for the initial establishment of and
subsequent revisions to tariff publications for certain carriers.
Part 63 - Extension of Lines - Prescribes a regulatory framework for construction of
wireline common carrier infrastructure.
Part 64 - Miscellaneous - Addresses a broad range of common carrier issues.
Part 65 - Rate of Return - Establishes procedures and methodologies for Commission
prescription of an authorized unitary interstate exchange access rate of return and
individual authorized rates of return for the interstate exchange access rates of certain
other carriers.
Part 68 - Connections of Terminal Equipment - Permits direct connection to the network
of registered terminal equipment.  Provides uniform technical standards for equipment to
prevent network harm and ensure that telephones are compatible with hearing aids.
Part 69 - Access Charges - Establishes rules for access charges for interstate or foreign
access services for incumbent LECs.
2. Recent and Ongoing Activities
34. Recently, the Commission has begun a number of proceedings designed to
reduce or simplify wireline common carrier regulation in light of increasing local exchange
competition and other industry developments.  Among other things, the Commission is currently
conducting rulemaking proceedings to review: (1) Part 32 of the Rules, Uniform System of
Accounts for Class A and B Telephone Companies, and the Commission's ARMIS (Automated
Reporting Management Information System) information reporting system for incumbent LECs;
(2) Part 36 of the Rules, Jurisdictional Separations; and (3) Part 68 of the Rules, Connection of
Terminal Equipment to the Telephone Network.  In addition, the Commission initiated several
common carrier rulemakings as part of the 1998 Biennial Regulatory Review.
a) Accounting and ARMIS Requirements
35. The Commission is currently conducting a comprehensive review of its Part 32
accounting and related rules and its ARMIS reporting requirements.  This comprehensive review
will complement the Biennial Regulatory Review process and ensure that the goal of continued
deregulation is vigorously pursued.   This review will consider the need for various accounting
and reporting requirements and whether they impose unnecessary burdens on incumbent LECs as
local exchange competition develops.  Resolution of these issues could have a significant effect
on State commissions because most of them rely on the FCC accounting and reporting
requirements.
36. The review is being conducted in two phases.  Phase 1, which was completed in
March 2000, was designed to focus on immediate streamlining measures.   Phase 2 will
"examine broader and more extensive deregulatory measures."   The Commission took the
following specific steps to streamline its accounting requirements in Phase 1: (1) eliminated the
expense matrix filing requirement; (2) allowed carriers to reduce the cost allocation manual
(CAM) audit requirement from an annual financial statement audit to a biennial attestation
engagement; (3) relaxed the affiliate transactions requirements for services; (4) eliminated the 15-
day pre-filing requirement for certain CAM changes; (5) eliminated the 30-day notification
requirement for establishment of temporary or experimental accounts; (6) allowed carriers to
record contingent liabilities without agency review; (7) eliminated the reclassification
requirement for certain property held for future use; and (8) eliminated the reclassification
requirement for certain plant under construction.    The Phase 1 Order also streamlined the
ARMIS reporting requirements by, among other things, eliminating certain Tables, eliminating
reporting items from a number of Tables, and establishing new threshold levels for certain
reporting items.
37. The Common Carrier Bureau conducted a number of public workshops this
spring, including one workshop devoted solely to issues concerning mid-sized incumbent LECs,
to solicit ideas on reform initiatives for Phase 2 of this proceeding.   These workshops have
covered the Part 32 chart of accounts, the affiliate transaction rules and certain Part 64 rules,
ARMIS financial reporting requirements, ARMIS non-financial reports, and other rules of
concern to mid-sized carriers.  Interested parties have made numerous proposals for
simplification of the Commission's accounting and reporting requirements in these workshops.
The proposals discussed at the workshops include, among other things: (1) use of the simplified
Class B accounting rules by all carriers; (2) elimination of various accounts and sub-accounts; (3)
elimination of the requirement for agency approval to implement changes in Financial
Accounting Standards Board (FASB) Generally Accepted Accounting Principles (GAAP); (4)
more flexibility in dealing with construction costs; and (5) streamlining and eventual elimination
of the ARMIS reporting requirements.  The Bureau recommends that the Commission adopt a
Phase 2 Notice of Proposed Rulemaking in this proceeding.
b) Jurisdictional Separations
38. The Commission has instituted a review of the Part 36 jurisdictional separations
procedures, which govern the division of the carriers' regulated costs between the state and
federal jurisdictions.   The costs allocated to the interstate jurisdiction by Part 36 are recovered
through charges regulated by the FCC, and the costs allocated to the state jurisdiction are
recovered through charges regulated by the states.
39. The Commission stated that the purpose of the Separations Reform Notice was to
consider what changes to our separations procedures might be appropriate in light of legal,
technological and market structure changes affecting telecommunications.  The Commission
specifically requested comment on: (1) what changes in the law and within the industry may
warrant revision of the separations process; (2) the criteria that should be used in evaluating the
existing separations procedures and proposals for reform; (3) whether separations rules are
needed during the transition to a competitive market; (4) a number of specific industry proposals
for replacement of the existing separations procedures; and (5) how various options for
separations reform would affect revenue requirements and prices.
40. Pursuant to the requirements of section 410(c) of the 1996 Act, the Commission
referred these issues to the Federal-State Joint Board established in the separations reform
proceeding for the preparation of a recommended decision.   On July 21, 2000, the Joint Board
recommended that the Commission freeze certain elements of the separations process, including
the jurisdictional allocation factors, for five years while the Joint Board and the Commission
continue to review issues regarding comprehensive separations reform.
c) Part 68 Equipment Registration
41. Prior to the adoption of the Part 68 rules, in 1975, incumbent LECs generally
prohibited direct connection of third party customer premises equipment (CPE) to their networks,
thus maintaining an essential monopoly over the provision of CPE.    Under Part 68, the
incumbent LECs must permit direct connection to the public switched telephone network of CPE
that is certified as meeting certain technical standards, which are designed to prevent harm to the
public switched network.   The Commission develops these technical standards, and plays a
major role in ensuring product compliance with these requirements.   A vibrantly competitive
market for the provision of CPE has developed, resulting in an enormous increase in the variety
of CPE available to consumers and major price reductions.
42. The Common Carrier Bureau held a series of public fora on Part 68 to address
streamlining issues in July 1999.   Representatives of the incumbent LECs, competitive LECs,
equipment manufacturers, industry associations, terminal equipment testing laboratories and a
state consumer counsel participated.  Most of these participants agreed that: (1) the public interest
requires that carrier networks be protected from harm; (2) the industry and consumers would
benefit from a single uniform set of national technical standards; (3) Part 68 contains few, if any,
unnecessary technical requirements; (4) the Commission should retain authority to ensure
protection of the public switched network; and (5) the Commission's present functions of
developing technical requirements, laboratory qualification, and equipment registration can be
privatized in most respects.
43. On May 22, 2000, the Commission released the Part 68 NPRM, which seeks
comment on three possible options to streamline most elements of the process by which technical
criteria are established for CPE.    These options include:  (1) choosing a "gatekeeper" Standards
Development Organization (SDO); (2) relying on multiple Standards Organizations; and (3)
incorporating into the Commission's rules by reference specific standards developed by national
standards organizations.
44. In the Part 68 NPRM, the Commission also proposed to streamline the
registration process for CPE.  Currently, the Commission itself reviews applications and issues
grants for such equipment.  The Commission proposed to cease this direct registration and asked
for comments on one or a combination of the following options to privatize the registration
process: (1) use Telecommunications Certification Bodies, which have just begun operations; (2)
permit manufacturers to use a self-declaration of conformity process; or (3) permit manufacturers
to use a verification process.  The last two procedures are in use in Part 15 radio equipment
licensing.
d) Universal Service Reform for Rural Carriers
45. The Commission has also taken steps to begin consideration of rural carrier
universal service issues in consultation with the Federal-State Joint Board on Universal Service
(Joint Board).  In 1997 the Joint Board created a Rural Task Force to study possible universal
service reforms for rural telephone companies.  The Rural Task Force is due to submit a report
with recommendations to the Joint Board by September 30, 2000.  The Joint Board will then
make its recommendations to the Commission, on the basis of the Rural Task Force's report.
46. In addition, in 1999 the Common Carrier Bureau granted the request of nine rural
companies and removed the individual caps placed on the rural companies' high-cost loop
support as a condition for grant of a study area waiver.   On August 4, 2000, in response to
requests from more than 25 additional rural telephone companies, the Bureau removed these caps
for all affected rural telephone companies, effective January 1, 2000.
3. New Initiatives
47. In addition to the recent and ongoing actions discussed above, the staff
recommends that the Commission address various other issues.  These issues include intercarrier
compensation, periodic review of the separate subsidiary requirement for independent telephone
company provision of inter-exchange service, and eliminating outdated rules.
a) Intercarrier Compensation
48. The staff recommends that the Commission consider whether the various,
sometimes conflicting, rules used for calculating intercarrier compensation for the origination and
termination of traffic can be streamlined and harmonized.  At present, the transport and
termination provisions in sections 251 and 252 of the Communications Act and the Commission's
implementing regulations in 47 C.F.R.  51.701-717 govern the way the incumbent LECs and
competitive LECs (CLECs) compensate one another for call completion.  The Part 69 access
charge rules generally govern the compensation that incumbent LECs receive for the use of their
services in the origination and termination of interstate interexchange traffic.  Access charge
structures, generally similar to that in Part 69 of the Commission rules and adopted by individual
states, govern compensation for the origination and termination of intrastate interexchange traffic.
Moreover, Information Service Provider (ISP) traffic is exempt from interstate access charges.
Instead, ISPs generally pay incumbent LECs local exchange business rates for their connections
to the LEC local network.
49. Since passage of the Telecommunications Act of 1996, the Commission has been
adjusting incumbent LECs' access charges to reflect costs, which has resulted in price reductions
totaling $6.4 billion.   The Commission most recently reduced access charges paid by long
distance carriers by $3.2 billion.   This action continues to further the Commission's objective of
developing a more economically rational approach to access charges while balancing various, and
sometimes competing interests - including promotion of competition, deregulation, maintaining
affordability for all and avoiding rate-shock for consumers.
50. The staff recommends that the Commission seek comment on a broad range of
economic, legal and policy issues raised by the current system of intercarrier compensation for
the origination and termination of traffic, and seek to identify alternative approaches that are
more consistent with the long term development of competition.   One purpose of such a
proceeding would be to explore whether a single consistent approach to intercarrier compensation
for traffic origination and termination could be developed.  Staff believes that an appropriate,
consolidated set of rules could reduce opportunities for arbitrage, eliminate incentives for
inefficient market entry strategies, and reduce transaction costs.  The staff further recommends
that the Commission evaluate alternative compensation mechanisms in terms of their effect on
local exchange, exchange access, and interstate interexchange competition.  This proceeding
should also consider the need for transitional mechanisms to ease the implementation of a new
approach to intercarrier compensation for traffic origination and termination, and to avoid
dislocations.
b) Independent Incumbent LEC
51. The staff also recommends that the Commission modify Part 64, subpart T to
provide for triennial review of the requirement that independent incumbent LECs provide
interexchange service through a separate subsidiary.  Staff believes that such a review is
necessary to insure that these separate affiliate requirements are eliminated when they no longer
serve the public interest.
c) Eliminating Outdated Rules
52. The staff recommends that the Commission remove portions of the rules that are
outdated.  For example, in the Part 69 Access Charge rules, as well as elsewhere, rules
establishing a transition period may remain in place even after the transition has been completed.
The provisions listed below, are examples of rules that should be eliminated, in whole or in part,
for this reason.
36.701 - Lifeline connection assistance expense allocation - general.
51.211 - Toll Dialing Parity Implementation.
51.515(b)-(c) - Application of access charges.
53.101 - Joint marketing of local and long distance services by interLATA carriers.
53.201(a)-(b) - Services for which a separate 272 affiliate is required.
54.701(b)-(e) - Administrator of universal service support mechanisms.
64.1320 - Payphone compensation verification and reports.
64.1903(c) - Obligations of all incumbent independent local exchange carriers.
69.116 - Universal service fund.
69.117 - Lifeline assistance.
69.126 - Nonrecurring charges.
69.127 - Transitional equal charge rule.
69.612 - Long term and transitional support.
4. Other Issues
a) The USTA Petition and Industry Comments
53. In preparation for this Report, the staff has met with interested parties to discuss
common carrier issues, including the United States Telephone Association (USTA), Competitive
Telecommunications Association (CompTel), the Organization for the Promotion and
Advancement of Small Telecommunications Companies (OPASTCO), National Telephone
Cooperative Association (NTCA), the National Exchange Carrier Association (NECA),
Association for Local Telecommunications Services (ALTS) and Cellular Telecommunications
Industry Association (CTIA).  We have also considered the Petition for Rulemaking filed by
USTA in August 1999 addressing 2000 Biennial Regulatory Review issues, and the comments
filed in response to it.   The ongoing proceedings and proposed initiatives discussed above
address many but not all of the major common carrier concerns expressed by USTA.  For
example, USTA sought numerous additional changes to Part 36 (concerning jurisdictional
separations), to Part 32 (governing the Uniform System of Accounts), and to the ARMIS
reporting requirements.  As discussed above, these matters are being, or will be, addressed by the
Commission.  USTA also proposed rule changes to Parts 61 and 69.  These proposals generally
would reorganize and streamline these parts by creating separate rule parts to govern tariff filings,
rate-of-return LEC pricing , and price cap LEC pricing.  USTA also proposed substantially
greater pricing flexibility for incumbent LEC access charges..  The staff does not recommend that
the Commission initiate specific new proceedings at this time to address these Part 61 and 69
concerns raised by USTA in the context of this biennial regulatory review.  First, many of these
issues have been addressed.  For example, issues related to price cap LECs were considered in the
Coalition for Affordable Local and Long Distance Services (CALLS) proceeding and other
proceedings addressing pricing flexibility.   In addition, many of the rate-of-return LEC access
reform and pricing flexibility issues raised by USTA are the subject of pending proceedings or
are scheduled for consideration.
54. OPASTCO, NTCA and NECA also raised a number of specific issues for
consideration in the context of the 2000 Biennial Regulatory Review.  These issues include (1)
streamlining accounting, jurisdictional separations and other cost allocation requirements; (2)
universal service funding caps; (3) compensation for local number portability services and
directory listing information; (4) establishment of a small telecom company federal advisory
committee; (5) requirements affecting customer data and billing; (6) avoidance of unnecessary
data reporting requirements; (7) average cost schedule review and reporting requirements; (8)
elimination of the requirement for annual NECA elections; and (9) implementation of
government mandates such as CALEA.  The staff recognizes the importance of these issues given
the unique circumstances of small telephone companies and the customers they serve.
Accordingly, we recommend that the Commission redouble its efforts to ensure appropriate
accommodations for small telephone companies.  Many of the specific issues raised by
OPASTCO and NTCA are currently under consideration by the Commission or are scheduled for
consideration.  We also recommend that the Commission consider simplifying review of the
average schedules and changing the schedule for NECA Board elections.  In addition, we note
that the Commission will have the opportunity to consider lifting the cap on universal service
funding for small companies in the context of the ongoing rural carrier universal service
proceeding.  We do not recommend that the Commission initiate a new broad based proceeding
focused on small telephone company concerns as part of this Biennial Regulatory Review since
we believe that such issues can be addressed most expeditiously in other contexts.  Similarly, we
are reluctant to recommend that the Commission establish a small telecom federal advisory
committee, as we believe that this would lead to unnecessary complications and delays in
addressing small telephone company concerns.  These parties are free, however, to petition for
specific rulemakings or to file comments in response to this report.
B. International Bureau
55. The International Bureau administers policy for the authorization and regulation
of international telecommunications facilities and services, as well as policy for licensing and
regulating satellite facilities and services.  The Bureau represents the Commission in international
fora, as well as in bilateral and multilateral meetings.   The Bureau directs and coordinates
negotiations with Mexico, Canada and other countries regarding spectrum use and interference
protection.  The Bureau provides assistance in telecommunications trade negotiations, and
provides regulatory assistance and training programs to foreign governments.
56. The International Bureau seeks to facilitate the introduction of new services, and
to provide customers with more choices, more innovative services, and competitive prices.  The
2000 Biennial Regulatory Review complements the Bureau's streamlining efforts.  The Bureau
has taken a proactive approach in its rulemakings to remove unnecessary regulatory constraints,
wherever possible and practicable.  It continually reviews its rules and policies to respond to
changing conditions and developments in the industry.
1. Scope of Review
57. The International Bureau reviewed all of the rules that it administers.
Specifically, the Bureau reviewed:
Part 1 - Practice and Procedure - In addition to procedural rules of general applicability to all
Commission licensees, certain rules within Part 1 explicitly address international
telecommunications service providers.
Part 23 - International Fixed Public Radio Communication Services - Contains rules
applicable to international terrestrial fixed communications systems, including general
licensing and application filing requirements, technical standards, and operations.
Part 25 - Satellite Communications - Contains rules applicable to satellite communications,
including general licensing and application filing requirements, technical standards, and
operations.
Part 43 - Reports of Communication Common Carriers and Certain Affiliates - Contains
rules requiring certain reports by common carriers, including reports regarding different
facets of international telecommunications.
Part 63 - Extension of Lines, and Discontinuance, Reduction, Outage and Impairment of
Service by Common Carriers; and Grants of Recognized Private Operating Agency Status -
Contains rules applicable to common carriers, including application filing requirements for
international section 214 authorizations.
Part 64 - Miscellaneous Rules Relating to Common Carriers - Subpart J contains rules
regarding the Commission's settlements policy.
Part 73 - Radio Broadcast Services - Subpart F contains rules applicable to international
broadcast stations.
Part 100 - Direct Broadcast Satellite Service - Contains rules applicable to direct broadcast
satellite service, including technical and operating requirements.
2. Recent and Ongoing Activities
a) Satellite Licensing
58. Part 25 and Part 100 of the Commission's rules form the basis for the
Commission's "Open Skies" policy under which a wide range of systems has been licensed to
provide satellite services.    Through this policy, the Bureau attempts to accommodate the
maximum number of systems possible to provide a particular service in order to maximize entry
and competition in the satellite service market.
(1) Space Segment Authorization
59. The Commission has already taken steps to streamline the space segment portion
of the satellite licensing process.  First, the Commission eliminated section 319(d) waiver
procedures to permit companies to begin construction, at their own risk, prior to being licensed.
Second, the Commission relaxed the rules governing space station licensee reports.  Third,
DISCO I eliminated the distinction between U.S.-licensed domestic satellites and international
"separate" satellite systems, and the new rules allow satellites to provide both domestic and
international services.   Fourth, DISCO II adopted a framework to evaluate requests by foreign
satellite operators to provide service in the United States.   DISCO II also established the
"Permitted" List, which provides another option to non-U.S. satellite operators under which, once
placed on the "Permitted Space Station" list, the non-U.S. satellites could provide fixed-satellite
service in the United States.
60. In the direct broadcast satellite (DBS) context, the Commission issued an NPRM,
which proposes to consolidate and harmonize the Commission's Satellite rules and eliminate the
Commission's separate Part 100 rules for DBS and incorporate the rules into Part 25.
(2) International Satellite Coordination
61. The International Telecommunication Union (ITU) has established a satellite
coordination process to facilitate the harmonious use of satellite orbits and spectrum among
Administrations.   Satellite coordination occurs by negotiating mutually satisfactory solutions
among the affected parties.  All space segment licenses that the Commission issues must comply
with ITU coordination requirements and international agreements.  To eliminate delay of pending
international coordination, however, the Commission moves forward with space segment
applications and typically approves them before coordination is complete.  All authorizations are
subject to possible changes that may be necessary to conform to final coordination agreements.
This approach saves satellite applicants substantial time.  In addition, the Commission has
developed processes that allow U.S. satellite operators to negotiate directly with satellite
operators of other countries.  The Commission reviews and finalizes any operator arrangements
before agreeing to them.  This process saves staff resources and permits the satellite operators to
have some decisional role in the authorization process.
62. The staff and the industry also are working together to propose solutions to the
backlog of coordination filings at the ITU.  There is a need to reduce the time it takes for the ITU
to process a coordination request because it has a direct effect on the international coordination
process and on our licensing process.
(3) Earth Station Licensing
63. Earth stations are licensed generally for 10 years.  The Commission also issues a
single blanket license for a large number of technically identical earth stations (e.g., very small
aperture terminal earth stations (VSATs), and Satellite News Gathering and mobile earth
stations).  Less than a year ago, the International Bureau streamlined its processing of certain
earth station applications.  Specifically, the Bureau instituted an "auto-grant" process that
automatically grants routine satellite earth station applications proposing to use the Ku-band
fixed-satellite service frequencies (14.0-14.5 GHz / 11.7-12.2 GHz) to communicate with all
satellites authorized to provide service to the United States (the "Permitted List").   Such routine
earth station applications are considered granted 35 days from the date on which the application
appears on public notice as "accepted for filing," provided that no objections are filed during the
public comment period.  These changes were consistent with the increased competition and
consumer demand in the satellite marketplace.
64. The Bureau also reduced the number of emission designators required to be
identified in applications for digital systems.   This modification significantly reduces the time
necessary to enter earth station information into the Commission's database, and largely
eliminates the need for earth station operators to file modification applications when they wish to
add a new emission.
65. The Commission also modified its Part 25 rules to provide earth station
applicants greater flexibility.   For example, the Commission simplified rules for license
renewals for temporary fixed earth stations and very small aperture terminal earth stations
(VSATs).  The Commission extended the licensing term for VSATs to 10 years.  Additionally,
the Bureau created new procedures to allow Special Temporary Authority to be granted readily
for use by satellite earth stations if the applicant is able to demonstrate extraordinary
circumstances, according to Part 25.  Furthermore, the Bureau issued a Public Notice that
committed to placing routine applications on public notice within 10 business days of receipt by
the Bureau, provided the application includes all required information.
b) Section 214 Applications
66. The Commission has taken great strides to streamline its international 214
application processes.  In 1996, the Commission created an expedited process for global,
facilities-based section 214 applications.   The Commission created global section 214
authorizations, reduced paperwork obligations, streamlined tariff requirements for non-dominant
international carriers, and ensured that essential information is readily available to all carriers and
users.  The new regulations facilitated entry into the international telecommunications market and
the expansion of international services.
67. In March 1999, as part of its 1998 Biennial Regulatory Review process, the
Commission took additional steps to reduce regulatory burdens on providers of international
telecommunications services, citing rapid changes in the global telecommunications market.  The
Commission streamlined its procedures for granting international section 214 authorizations to
provide international services, and increased the categories of applications eligible for
streamlined processing.   After adoption of the rules, most new carriers are authorized to provide
international services on most international routes 14 days after public notice of an application.
Carriers already providing service are able to complete pro forma transactions and assignments of
their authorizations without prior Commission approval and to provide service through their
wholly owned subsidiaries without separate Commission approval.  Carriers under common
ownership with an already-authorized carrier are able to provide the same authorized services
after only a minimal waiting period.  Authorized carriers are able to use any authorized U.S.-
licensed or non-U.S.-licensed undersea cable systems in the provision of their authorized
services.  Approximately 99 percent of international section 214 applications now qualify for
streamlined processing.
c) Foreign Participation
68. The Commission has sought to foster an increasingly competitive international
telecommunications market by adopting policies that promote the shift away from government-
owned monopolies and toward private sector competition.  For example, the Commission has
simplified its own licensing rules in ways that have facilitated entry into the U.S. market by
foreign private sector competitors.  In the Foreign Participation Order,  the Commission
broadened the class of foreign-affiliated applicants eligible for streamlined processing.  In
addition, the competitive conditions created by the World Trade Organization (WTO) basic
telecommunications agreement and the rules adopted in the Foreign Participation Order
significantly reduced the possibility of market distortion, thereby allowing the Commission to
reduce scrutiny of many applications and afford those applications streamlined processing.
d) International Settlements Policy
69. The Commission has taken action to remove regulatory impediments and
increase competition in the international telecommunications marketplace through reform of the
longstanding international settlements policy.  In 1999, in the ISP Reform Order, the Commission
adopted sweeping deregulatory inter-carrier settlement arrangements between U.S. carriers and
foreign non-dominant carriers on competitive routes.   Specifically, the Commission: (1)
eliminated the international settlements policy and contract filing requirements for arrangements
with foreign carriers that lack market power; (2) eliminated the international settlements policy
for arrangements with all carriers on routes where rates to terminate U.S. calls are at least 25
percent lower than the relevant settlement rate benchmark previously adopted by the Commission
in its Settlement Rate Benchmark Order;  (3) adopted changes to contract filing requirements to
permit U.S. carriers to file, on a confidential basis, arrangements with foreign carriers with
market power on routes where the international settlements policy is removed;  (4) adopted
procedural changes to simplify accounting rate filing requirements; (5) eliminated the flexibility
policy in recognition that the reforms to the international settlements policy render the flexibility
policy largely superfluous.  The Commission noted that the revisions to its rules will give greater
opportunities to smaller carriers and will allow the market, rather than government regulation, to
govern settlement arrangements between carriers in competitive markets.  These changes promote
lower prices and greater innovation in international telecommunications services for U.S.
consumers.
e) Automation
70. The International Bureau has made substantial progress in its ongoing efforts to
automate its processes.  For example, the Bureau implemented a computerized notification
system, enabling the ITU and other international entities to provide data to the Commission
electronically.  In January 2000, the International Bureau successfully completed the transition
from a paper and diskette distribution format, the ITU Weekly Information Circular (WIC), to a
new computer-based CD-ROM system, the Radiocommunication Bureau International Frequency
Information Circular (BRIFIC), for terrestrial service notifications.  The BRIFIC system
completely replaces our reliance on paper notifications for these services and will save time and
resources.
3. New Initiatives
a) Earth Station Licensing
71. The industry has provided substantial constructive comment on the Bureau's
processes regarding satellite earth station licensing.  The greatest criticism is that the process to
obtain an earth station license takes too long.  Industry members have suggested a variety of ways
to address this problem.  Staff recommends that the Commission seek comment on
comprehensive changes to the earth station licensing process in a Notice of Proposed
Rulemaking.  The NPRM would seek comment on the proposals advanced by industry members.
72. The staff also recommends that the Commission consider requiring electronic
filing.  Electronic filing eliminates the need for staff to input information into the Bureau's
database (which also reduces the chance of typographical errors generated by the staff).  The
NPRM would also seek comment on various technical changes to Part 25 that could save
substantial time in processing applications.
b) Space Segment Authorizations
73. Currently it takes the Commission a minimum of just over two years to grant a
space station application.  The satellite network licensing process takes several years longer when
there is no spectrum allocation (International or Domestic), when no service rules exist for the
proposed system, or when there are other countries ahead of the United States in the ITU
coordination process.
74. The Bureau's current "processing round" approach requires substantial staff time
and resources to resolve all of the issues associated with a particular pool of applications.    On
the other hand, a processing round approach sets parameters for licensing in an orderly fashion,
taking into account mutual exclusivity considerations.  Through processing rounds, the
Commission is able to identify the name, type and number of applications for a particular service
and can avoid considering applications subsequently filed that may be mutually exclusive with
previously filed applications.
75. The major criticism of the current process is that service rulemakings and
international coordination take too long to complete.  The International Bureau has made
concerted efforts to streamline the satellite licensing process.  The staff believes that further
improvements are warranted.  The Bureau is examining new options to improve and streamline
the space segment licensing process as it relates to the development of new service rules and
international coordination.  The Bureau plans to develop specific procedural and substantive
proposals for new licensing approaches and establish goals for implementation.
76. The Bureau also is continuing to work with the industry to re-examine the entire
satellite network licensing process.  The International Bureau has convened several meetings with
representatives of the U.S. and foreign satellite industry, including geostationary (GSO)
companies, non-geostationary (NGSO) companies, direct broadcast satellite (DBS) providers,
fixed satellite service (FSS) operators and mobile satellite service providers (MSS), to discuss
satellite space station licensing.  Input from these industry meetings will be useful in the Bureau's
new initiatives.
c) Parts 23, 25 and 100
77. The staff recommends that the Commission consider repealing section 25.141
and subpart H  of its rules.  The staff also recommends that the Commission review sections
25.140  and 25.144  of its rules.  Section 25.140 requires that each applicant for a fixed satellite
service (FSS) authorization demonstrate that it is legally, financially, technically and otherwise
qualified to proceed expeditiously with the construction, launch and/or operation of each
proposed space station immediately after the grant of the requested authorization.   If the
Commission determines that financial qualifications are still necessary, we recommend that the
Commission review the rules to determine whether a different showing of financial qualifications
may be warranted.  We recommend, however, that the Commission retain its technical and legal
qualifications in their current form.
78. Section 25.144 includes the licensing provisions for the 2.3 GHz satellite digital
audio radio service (DARS).  The staff recommends that the Commission eliminate the
subsection in 25.144 that identifies the specific DARS applicants eligible for the auction.  This
subsection is no longer necessary because DARS licenses have already been issued.  The staff
recommends, however, that the Commission retain the actual auction procedures for DARS in
Part 25.
79. The staff further recommends that Parts 23 and 100 be retained in their entirety.
Part 100 is the subject of a Notice of Proposed Rulemaking, which has already been released by
the Commission.  Part 23 should be considered by the Commission for further review.
d) Section 214 Applications
80. As part of the Telecommunications Division's ongoing efforts to improve
service, the Division staff reviewed the rules in Part 63 relating to section 214 authorizations for
international communications.  In addition, Bureau staff met with industry representatives to
solicit suggestions on how to improve the rules.  On the basis of this review, and its daily work
implementing the rules, the Bureau recommends that the Commission initiate a NPRM to expand
the availability of pro forma section 214 transfers of control and assignments, which would
reduce processing burdens and provide greater regulatory certainty.  The Bureau also has
identified several duplicative rules that the Commission should consider eliminating, and a
number of rules that are unclear, or ambiguous, or contain errors that the Commission should
consider modifying.
e) Submarine Cable
81. In recent years, there has been an explosive growth in the number and capacity of
submarine cables.  In particular, the development of the Internet has dramatically increased
demand for submarine cable capacity.  To address issues relating to increased demand, the rapid
pace of technological development, and the emergence of non-traditional ownership and
financing structures in the submarine cable marketplace, the International Bureau held a public
forum in November 1999.   The Bureau also has held numerous meetings with individual
industry participants about ways the Commission might reform its regulation of the submarine
cable landing licensing process to further promote competition.
82. On the basis of the public forum and meetings with industry, the Commission
recently adopted a Notice of Proposed Rulemaking to continue the Commission's efforts to
streamline the submarine cable landing license process.   In the Notice, the Commission
proposed pro-competitive streamlining that incorporates competitive safeguards to allow for and
encourage:  (1) more certainty and flexibility for participants in the application process; (2)
increased investment and infrastructure development by multiple providers; (3) expansion of
available submarine cable capacity; and (4) decreased application processing time.  This
streamlining effort will benefit U.S. consumers by eliminating regulatory delay and enhancing the
competitiveness of U.S. service providers in the world market.
f) Reporting Requirements
83. The Bureau staff reviewed the rules in Part 43 relating to reporting requirements
of carriers providing international telecommunications services.  In addition, Bureau staff met
with industry representatives to solicit suggestions on how to improve the reporting requirements.
The Bureau recommends that the Commission undertake a proceeding to review the reporting
requirements.  The staff finds that these reporting requirements can be modified to reflect changes
that have occurred in the telecommunications industry.  These reports aid the Commission,
industry, and international agencies in planning and understanding international
telecommunications markets.  The staff believes that the reporting burdens can be reduced
without eliminating the benefits these reports provide.
84. The staff recommends that some of the rules relating to reports filed by carriers
providing international telecommunications services be modified, and that others be eliminated.
The staff has determined that reports regarding the division of international toll communications
charges are no longer needed.  The purpose of those reports is to monitor telegraph
communications, which is no longer a major component of telecommunications.  In addition, this
reporting requirement is duplicative of other rules.  The requirement for reports of carriers owned
by foreign telecommunications entities, which is designed to monitor foreign ownership of
certain carriers, is no longer necessary in light of the development of competition in international
telecommunications markets.  Although this reporting requirement has a sunset date, it can be
eliminated prior to that sunset.  The Bureau also recommends that the instruction manual for
reports of International Telecommunications Traffic be revised to reflect all the changes that have
occurred over the past several years.
g) International Broadcasting Stations
85. International broadcasting stations are broadcast stations operating on certain
high frequency bands whose transmissions are intended to be received directly by the general
public in foreign countries.  The staff reviewed the Commission's rules governing international
broadcasting stations  and determined that five of these rules should be revised to reflect actions
taken at recent World Radio Conferences (WRCs).   First, the staff recommends that the
Commission modify section 73.701(g) - (j) and (l) of the rules,  to reflect the Final Acts of WRC
`97 (Geneva), which reduced the number of seasonal schedules per year (and thus the number of
times per year that licensees have to file for frequency assignments) from four to two.  In
addition, the staff recommends that the Commission change the starting and ending dates in the
rule to the last Sunday in March and the last Sunday in September, and change the reference
month in section 73.701(l) to specify either July or December.  Second, the staff recommends that
the Commission modify section 73.702(f)(1) of the rules,  which lists the frequencies that can be
assigned by the Commission for international broadcasting, to include additional bands approved
for international broadcasting use by the World Radio Assembly Conference (WRAC) `92.
Third, the staff recommends that the Commission replace the target zone map in section 73.703
of the rules  with the current ITU target zone map, which was used for implementation of the
WRC `97 Final Acts.  Fourth, the staff recommends that the Commission change the frequency
control tolerance of 0.0015 percent of the assigned frequency, which is specified in section
73.756(c) of the rules,  to the current ITU regulation standard of 10 Hz.  Finally, the staff
recommends that the Commission modify the last sentence of section 73.766 of the rules  to
change the highest modulating frequency from 5 kHz to 4.5 kHz, to reflect a provision in the
Final Acts of WARC-87.  These changes would bring the Commission's international
broadcasting rules into conformance with current international provisions.  This will make the
rules easier to use and will avoid the confusion that could result from different Commission and
international requirements.
h) Detariffing International Services
86. The Commission is in the process of detariffing interstate domestic interexchange
services offered by non-dominant interexchange carriers (IXCs).   Similar to the domestic
interexchange market, the international interexchange market has seen a substantial increase in
the level of competition that has benefited consumers.  In light of this change, the staff
recommends that the Commission extend the detariffing regime adopted for domestic
interexchange services to the international services of non-dominant interexchange carriers,
including Commercial Mobile Radio Service providers and U.S. carriers classified as dominant
solely because of foreign affiliations.   Detariffing international interexchange services will
reduce the burdens placed on carriers and the Commission.  The Commission will still be able to
ensure that rates are just and reasonable and not unreasonably discriminatory; will be able to
protect consumers by requiring carriers to disclose their rates publicly and through use of the
section 208 complaint process;  and will promote the public interest by furthering competition in
the international interexchange marketplace.
87. The staff also recommends that the Commission amend, as part of the detariffing
process, the rule relating to the filing of contracts between carriers.  Specifically, the staff
recommends that the Commission amend section 43.51 to simplify the language and to provide
that the only contracts that need to be filed with the Commission are (1) contracts with a foreign
carrier that has market power in a foreign market for common carrier service between the U.S.
and that foreign location and (2) contracts involving a U.S. carrier that has been classified as
dominant on any routes included in the contract, except for carriers classified as dominant on a
particular route only because of a foreign carrier affiliation.   This will reduce burdens on
carriers and the Commission.  Given the increasing level of competition in telecommunications
markets, the staff does not believe that these contracts need to be filed.  The Commission and
carriers should be able to ascertain when anti-competitive behavior occurs even if the contracts
are not filed, and the Commission has authority to obtain the contracts if it needs to review them.
C. Wireless Telecommunications Bureau
88. The Wireless Telecommunications Bureau (Wireless Bureau or WTB) is
responsible for licensing and regulating all wireless communications services other than
broadcast and satellite services.  Wireless communications services include commercially
provided services such as cellular, Personal Communications Services (PCS), and paging, as well
as public safety and other private radio services.
89. The functions of the Wireless Bureau largely derive from Title III of the
Communications Act, which governs licensing of spectrum in general and wireless services in
particular.  As a result, the vast majority of the Commission's regulations affecting wireless
carriers consist of (1) allocation and service rules, (2) procedural rules concerning licensing and
auctions, and (3) technical and operational rules.
90. The market for wireless carriers has changed dramatically in recent years as a
result of entry by new wireless competitors, substantial growth, and increased competition in the
wireless market.  In 1993, Congress granted authority to the Commission to award wireless
licenses by auction.   Since that time, the Commission has conducted 30 spectrum auctions for
services such as broadband and narrowband PCS, Specialized Mobile Radio (SMR), Wireless
Communications Service (WCS), Local Multipoint Distribution Service (LMDS), and numerous
other fixed and mobile wireless services.   This unprecedented wave of new licensing has
resulted in a dramatic increase in the number of competing wireless service providers.
91. As a result of increased wireless licensing and new competition, the Commission
has substantially deregulated many aspects of wireless services.  For example, in 1994, pursuant
to authority granted under section 332 of the Communications Act, the Commission eliminated
all federal rate regulation of commercial mobile radio service (CMRS) providers, and preempted
all state rate regulation as well.   In 1996, the Commission revised its technical and operational
rules to give CMRS carriers flexibility to provide fixed as well as mobile services, so that carriers
could better respond to customer demands for new and innovative services.   The dynamic and
rapidly evolving nature of the wireless industry continues to make it important for the
Commission to review its wireless regulations on a regular basis.
1. Scope of Review
92. As part of the review process initiated by the 2000 Biennial Regulatory Review
Working Group, WTB has reviewed the following rule parts that affect wireless
telecommunications carriers.
Part 1 - Practice and Procedure -  In addition to procedural rules of general applicability
to all Commission licensees, subpart F relates to licensing and application procedures for
wireless services, and subpart Q contains auction rules for wireless services.
Part 17 - Construction, Marking, and Lighting of Antenna Structures - Establishes
construction, marking, and lighting requirements for antenna structures that affect
aviation safety, and sets forth procedures for registering such structures with the
Commission.
Part 20 - Commercial Mobile Radio Services - Contains rules that are generally
applicable to all CMRS providers, including the CMRS spectrum cap, resale and roaming
rules, and E911 requirements.
Part 22 - Public Mobile Services - Contains licensing, technical, and operational rules
for cellular, paging, air-to-ground, and other mobile services.
Part 24 - Personal Communications Services - Contains auction, licensing, technical, and
operational rules for Broadband and Narrowband PCS.
Part 26 - General Wireless Communications Service - Contains auction, licensing,
technical, and operational rules for the General Wireless Communications Service
(GWCS).
Part 27 - Wireless Communications Service - Contains auction, licensing, technical, and
operational rules for the Wireless Communications Service (WCS).
Part 80 - Stations in the Maritime Services - Contains auction, licensing, technical, and
operational rules for Public Coast Stations in the marine radio services.
Part 90 - Private Land Mobile Radio Services - Contains auction, licensing, technical,
and operational rules for 800 and 900 MHz SMR, private carrier paging, 220 MHz
Service, Location and Monitoring Service (LMS), and private land mobile services.
Part 95 - Personal Radio Services - Contains licensing, technical, and operational rules
for the 218-219 MHz Service.
Part 101 - Fixed Microwave Services - Contains auction, licensing, technical, and
operational rules for private and common carrier fixed microwave services.  Includes
specific subparts governing LMDS, 24 GHz, and 38-39 GHz services.
2. Recent and Ongoing Activities
93. Prior to and contemporaneously with the 2000 Biennial Regulatory Review,
WTB has engaged in a number of major initiatives to streamline and eliminate unnecessary rules.
a) Universal Licensing Proceeding
94. In the Universal Licensing proceeding, which was part of the 1998 Biennial
Regulatory Review, the Commission furthered the implementation of the Universal Licensing
System (ULS) by consolidating and streamlining its licensing rules and procedures for all
wireless services.   Major accomplishments in this proceeding include: (1) establishing an
electronic filing requirement for all wireless services, which significantly reduces filing burdens
on wireless applicants and speeds the licensing process;  (2) consolidating all wireless licensing
rules into Part 1, by which the Commission eliminated more than 200 duplicative and sometimes
inconsistent licensing rules that previously governed applications and licensing in individual
wireless services;  (3) reducing the number of wireless application forms from more than 40
different application forms in use for different purposes in different wireless services to four
standardized application forms; and (4) eliminating obsolete or burdensome application filing
rules and procedures, such as the requirement that common carrier licensees file microfiche
copies of their applications.
b) Part 90 Biennial Regulatory Review Proceeding
95. This proceeding, also initiated as part of the 1998 Biennial Regulatory Review,
addresses rules applicable to Part 90 private land mobile licensees.   In the Report and Order
recently adopted in this proceeding, the Commission took the following actions:  (1) lengthened
license terms for Part 90 licensees from 5 to 10 years, which increases licensee flexibility and
reduces filing burdens;  (2) extended the construction period for private land mobile licensees
from 8 to 12 months; and (3) streamlined, clarified, and eliminated other Part 90 rules.
c) Amendment of the Commission's Part 97 Amateur Radio Rules
96. This proceeding simplified licensing classifications in the Amateur Radio
Service, streamlined and updated Amateur license examination procedures, and eliminated other
outdated rules.
d) Pro Forma Assignments and Transfers
97. In 1998, the Commission granted section 10 forbearance of section 310(d), which
required prior Commission approval for most pro forma assignments and transfers involving
wireless telecommunications carriers.   This action enables telecommunications carriers to carry
out non-substantial transfers and assignments without regulatory delays, subject only to the
requirement that they notify the Commission of the change.
e) Local Number Portability
98. In 1999, the Commission granted a petition by the Cellular Telecommunications
Industry Association to extend the deadline for CMRS providers to establish a local number
portability (LNP) capability in their networks.    As a result of the Commission's decision to
apply section 10 forbearance in this case, the LNP implementation deadline for CMRS providers
has been extended until November 2002.  This will give CMRS providers greater flexibility in the
near term to build out their systems and increase capacity to meet growing consumer demand for
wireless services.
f) LMDS Eligibility
99. In June 2000, the Commission adopted the Third Report and Order in CC Docket
No. 92-97, in which it allowed the Local Multipoint Distribution Service (LMDS) eligibility
restriction to sunset on June 30, 2000.   The LMDS eligibility restriction, adopted in 1997,
prohibited local exchange carriers and incumbent cable companies from having an attributable
interest in any LMDS "A" block license that overlapped with ten percent or more of the
population in their service areas.  In the Third Report and Order, the Commission concluded that
allowing this eligibility restriction to sunset would promote the public interest.  After reviewing
the restriction, the Commission found that the record did not support a conclusion that open
eligibility posed a significant threat of competitive harm in specific markets; indeed, the
Commission concluded that open eligibility may improve the availability of services, particularly
in rural areas.
g) Streamlining Initiatives
100. The Wireless Bureau has engaged in a comprehensive effort to streamline its
procedures, to resolve pending applications and requests expeditiously, and to operate more
efficiently.  Some of the Bureau's more significant accomplishments are:
(1) Deploying the ULS and expanding use of electronic filing.  This has resulted in
electronic filing of more than 60 percent of wireless applications.
(2) Expanding and expediting the licensing process via auctions.  The Bureau has
conducted eight auctions since January 1999, in which more than 5,000 licenses have
been awarded.  The Bureau plans to conduct an additional four auctions during the
remainder of this year.
(3) Eliminating the case backlog.  Between March 1999 and March 2000, the Bureau
reduced by 99 percent a backlog of more than 64,000 applications that had been pending
for more than one year, and implemented tracking procedures to prevent future backlogs.
(4) Resolving pending matters quickly.  In 1999, the Bureau processed more than
400,000 license applications, issued more than 500 decisions on delegated authority, and
had 112 orders adopted by the Commission.
(5) Processing license transfers and assignments efficiently.  From October 1999 to April
2000, the Bureau processed approximately 1900 transfer and assignment applications,
including such major transactions as AT&T/Vanguard, Bell Atlantic/Vodafone,
Nextel/Geotek, Omnipoint/Voicestream, and Arch/PageNet.  Seventy percent of the
transfer and assignment applications filed with the Bureau were processed in 90 days or
less, and 87 percent were processed in 180 days or less.
3. New Initiatives
101. In general, the Bureau has not recommended repeal or significant modification of
allocation and service rules, procedural rules concerning licensing and auctions, and technical and
operational rules, which, as noted above, constitute the majority of the rules subject to review that
affect wireless carriers.  The staff has determined that these types of rules are integral to the basic
licensing and spectrum management functions performed by the Bureau and the Commission
under Title III of the Communications Act.  The continued need for such rules is not diminished
by increased competition in the wireless marketplace.  Indeed, without basic "rules of the road"
for spectrum use, the ability of wireless carriers to compete would be significantly impaired.
102. Nevertheless, the Bureau has determined that there are several areas where
competitive conditions, technological changes, or administrative efficiency may warrant changing
or eliminating regulations.  In addition, the Bureau and the Biennial Regulatory Review Working
Group have received numerous suggestions from outside parties, such as the Cellular
Telecommunications Industry Association (CTIA), the Personal Communications Industry
Association (PCIA), and the Federal Communications Bar Association (FCBA), of possible areas
for streamlining or eliminating wireless rules.
a) Part 22 Cellular Rules
103. The Commission's rules regulating cellular telephone service, contained in Part
22, were largely adopted in the early 1980s when the service was initiated.   At the time these
rules were adopted, the two cellular carriers in each market (one of which in each market was
affiliated with the incumbent LEC) were the only providers of mobile telephony, thus creating a
"duopoly" market for this service.  In addition, those cellular licenses not granted to incumbent
LECs were awarded primarily by lottery, which caused the Commission to adopt regulations to
prevent speculation and trafficking in licenses.  Finally, to ensure technical uniformity in the
deployment of cellular, the rules included detailed technical requirements for the provision of
analog cellular service.  Since these rules were adopted, PCS and SMR providers have entered the
mobile telephony market, significantly changing the competitive landscape.  The Commission has
also replaced the lottery process with licensing by auction, and there have been significant
advances in wireless technology, including the development of several competing digital
interfaces.  As a result of these changes, many of the Part 22 cellular rules adopted in the duopoly
era appear to be no longer necessary.  Therefore, the Bureau staff recommends initiating a
rulemaking to review the cellular rules and consider which of these rules are obsolete as a result
of competitive or  technological developments.  The Bureau staff also recommends review of
rules regulating other Part 22 services, such as paging and air-to-ground service, on the same
basis.
b) License Renewal Procedures
104. In most instances, wireless licenses must be renewed every 10 years.  As a
practical matter, granting renewal of wireless licenses has proved to be virtually automatic except
where the licensee has violated Commission rules, which only occurs in a very small percentage
of cases.  However, the renewal process in some instances places significant burdens on
licensees.  In a small but significant number of cases, the Bureau has encountered problems with
late-filed renewal applications, in many instances involving public safety licensees that provide
essential emergency services to their communities.  To address these issues, the staff recommends
initiating a proceeding that would consider changes to renewal procedures for public safety
licenses in particular and that would review renewal procedures for other wireless licenses as
well.  Among the options that could be considered are:  (1) extending license terms beyond 10
years, and (2) implementing automatic or default renewal procedures to avoid late filing
problems.  Reform of renewal procedures was an issue specifically raised by CTIA and other
industry representatives in meetings with Bureau staff.
c) Privatization of Microwave Licensing
105. Under its Part 101 rules, the Commission licenses some private and common
carrier microwave services on a site-by-site, frequency-by-frequency basis.  Although this
licensing procedure facilitates efficient use of the spectrum, the licensing process is
administratively complex and resource-intensive for applicants and the Commission.  The staff
recommends initiating a proceeding that would consider the possibility of partially privatizing the
licensing process in these services.  If implemented, licensing functions within designated
spectrum could be performed by private coordinators, who would also be responsible for
maintaining the licensee database.
d) CMRS Spectrum Cap Review
106. The CMRS spectrum cap, set forth in section 20.6 of the rules, limits the
aggregate amount of broadband PCS, cellular, and SMR spectrum that an entity can hold in any
market.   The rule was adopted in the CMRS Third Report and Order prior to the initiation of
broadband PCS licensing.   In the September 1999 Spectrum Cap Report and Order, the
Commission considered whether to retain, modify, or eliminate the spectrum cap.  The
Commission concluded that the cap continued to serve the public interest by preventing undue
concentration in the CMRS market.  The Commission also concluded that the cap should be
relaxed in some respects, including liberalizing certain of the attribution rules and allowing
aggregation of up to 55 MHz of spectrum in rural areas (as opposed to the 45 MHz limit in major
markets).  Finally, the Commission stated that it would again review the spectrum cap in the 2000
Biennial Regulatory Review.  In accordance with this directive, the Bureau plans to prepare a
Notice of Proposed Rulemaking for Commission consideration later this year that will initiate this
review, taking into consideration existing competitive conditions and technological developments
that could affect the continued need for the cap.
4. Other Issues
107. The Bureau is also considering several other possible areas for new Biennial
Regulatory Review initiatives.  For example, the Bureau is reviewing its procedures for
environmental clearance of tower sites under the National Environmental Policy Act (NEPA) to
determine whether it can implement its responsibilities under NEPA more effectively and
efficiently.  The Bureau has also received Biennial Regulatory Review suggestions from outside
parties such as CTIA and PCIA, including: streamlining procedures for submission of
confidential information; streamlining and consolidating reporting obligations applicable to
wireless carriers (e.g., TRS, Universal Service, broadband competition, regulatory fees); and
reviewing our buildout requirements for different wireless services.  The Bureau has taken these
suggestions under consideration and will announce further initiatives as appropriate.
V. SUMMARY OF REVIEW BY MASS MEDIA BUREAU
108. The Mass Media Bureau advises the Commission in matters pertaining to radio
stations, television stations, Multipoint Distribution Service (MDS), Multichannel Multipoint
Distribution Service (MMDS), and Instructional Television Fixed Service (ITFS) facilities.  The
Bureau is responsible for licensing these services and administers Commission rules and policies
pertaining to these services, including ownership rules.  The Bureau has been engaged in a
thorough review of its rules and policies to promote competition and diversity, to minimize
unwarranted regulatory burdens, and to streamline our licensing processes.  These rules are
located in Parts 73, 74, and 21 of Title 47 of the Code of Federal Regulations.
109. A variety of video outlets currently serve over 100 million television households
in the United States.   The average television household in the United States can receive 13
over-the-air television stations, while 36 percent of all homes can receive 15 or more stations and
9 percent can receive 20 or more stations.   Over 10,400 cable systems pass by 96 million
homes and serve almost 67 million television households.   Sixty-four percent of all subscribers
have at least 54 channels and over 98 percent have a minimum of 30 channels.   Other video
providers include Direct Broadcast Satellite, MMDS, satellite master antenna television, home
satellite dishes, and open video systems.
110. Over 12,600 radio stations are currently on the air (4,783 AM, 5,766 commercial
FM and 2,066 educational FM).   Listeners in over half of the Arbitron radio markets are served
by more than 20 commercial radio stations, and listeners in over 90 percent of the markets are
served by more than 10 commercial radio stations.   The 1996 Act eliminated the Commission's
national radio ownership limits and relaxed the local radio ownership limits.  In response, the
radio industry has consolidated ownership during the past four years, with the number of radio
owners declining by approximately 1,100.  Thus, there are now approximately 4,000 owners of
commercial radio stations.  The average number of owners of commercial radio stations in
Arbitron radio metro markets has declined by 3 (from 14 to 11) since the 1996 Act.  Prior to the
1996 Act, the largest radio group owner had fewer than 40 radio stations nationwide.  In March
2000, the two largest radio group owners each had over 440 radio stations, and there were several
radio owners with more than 100 radio stations.  As a result of this consolidation, approximately
two-thirds of all commercial radio stations are owned as part of radio groups.
111. Commercial broadcasters fund their activities by selling advertisers access to
their audiences (they receive no revenue from listeners or viewers).   Broadcast programming is
limited to the geographic reach of any given station's signal.  This creates an incentive for
broadcast networks to forge arrangements with many stations, thereby expanding their geographic
reach and attracting a broader range of advertisers.  Once broadcast television transitions to a
digital service, DTV could provide multiple streams of video programming and allow
broadcasters to charge subscriber fees for several program services.
112. Section 202(h) of the 1996 Act requires the Commission to review its ownership
rules biennially to "determine whether any of such rules are necessary in the public interest as the
result of competition."  The Commission has undertaken a number of deregulatory initiatives with
respect to the broadcast ownership rules.  The Bureau is committed to reevaluating regulatory
standards on an ongoing basis to respond to changes in the broadcast industry.
113. One important policy goal for mass media, and one of the most important
purposes of the Commission's multiple ownership rules, is to encourage diversity in the
ownership of broadcast stations in order to ensure that a diversity of viewpoints is available over
the airwaves.   As the Supreme Court stated, "it has long been a basic tenet of national
communications policy that `the widest possible dissemination of information from diverse and
antagonistic sources is essential to the welfare of the public.'"   This diversity policy is
consistent with the First Amendment goal of fostering the "marketplace of ideas"  and
encouraging "uninhibited, robust, and wide-open" debate.   For these reasons, the Supreme
Court has stated that it has "no difficulty" in concluding that the Commission's interest in
"promoting widespread dissemination of information from a multiplicity of sources" is "an
important governmental interest;" indeed, the Supreme Court has stated that "assuring that the
public has access to a multiplicity of information sources is a governmental purpose of the
highest order, for it promotes values central to the First Amendment."
114. Broadcast stations, particularly television stations, reach large audiences and are
the primary source of news and entertainment programming for Americans.   Broadcasters
consequently play a leading role in airing democratic debate and shaping cultural attitudes.  For
example, the manner and viewpoint a station uses in presenting the news can have a substantial
impact on local elections.  A television drama that raises controversial or important societal issues
can shape cultural attitudes about these issues in significant ways.  There is consequently a vital
public interest in ensuring that these influential outlets for communication are in the hands of a
broad number of different owners.
115. The strong policy of promoting diversity is relevant to determining whether a
regulation is necessary in the public interest.  Whether or not a particular ownership combination
has anticompetitive effects in the sale of advertising time or other markets in which broadcasters
compete, that combination may reduce the diversity of voices in a community.  Congress
implicitly recognized this by maintaining local radio ownership limitations, albeit at relaxed
levels.   Congress has repeatedly emphasized its concern for promoting diversity in the mass
media, notwithstanding the increasingly competitive nature of virtually all communications
markets.   In attempting to foster diversity through structural regulation, the Commission
endorses a content-neutral method that does not evaluate the substance of any station's editorial
decisions, but seeks to ensure a sufficient number of independent outlets and program sources to
foster a diversity of independent viewpoints in a given local market.
1. Recent and Ongoing Activities
116. On August 6, 1999, the Commission released its Local Television Ownership
Report and Order  and its National Television Ownership Report and Order.   As discussed
more fully below, the Commission, in the Local Television Ownership Report and Order, revised
its local television ownership rules - the "TV duopoly" rule and the radio-television cross-
ownership or "one-to-a-market" rule - to respond to ongoing changes in the broadcast television
industry.  The new rules reflect a recognition of the growth in the number and variety of media
outlets in local markets, as well as significant efficiencies and public service benefits that can be
obtained from joint ownership.  At the same time, the Commission's amendments reflect its
continuing goals of ensuring diversity and localism and guarding against undue concentration of
economic power in the marketplace.  The newly adopted rules balance these competing concerns
and are intended to facilitate further development of competition in the marketplace and to
strengthen the potential to serve the public interest.  In the National Television Ownership Report
and Order, the Commission modified its method of calculating stations' audience reach and made
some minor changes in which stations would be counted for purposes of the national TV
ownership rule.
117. On June 20, 2000, the Commission released its 1998 Biennial Regulatory Review
Report,  which discusses all of the Commission's broadcast ownership rules not already
considered in the 1999 Local and National Television Ownership Report and Orders.  The 1998
Biennial Regulatory Review Report considers (1) the local radio ownership rules, including the
radio market definition; (2) the daily newspaper/broadcast cross-ownership rule; (3) the national
television ownership rule, including the "UHF discount;" (4) the dual network rule; (5) the
experimental broadcast station ownership rule; and (6) the cable/television cross-ownership rule.
The Report then states the Commission's conclusions as to whether the rules remain necessary in
the public interest in view of competition.
a) Broadcast Ownership Rules
(1) Local Radio Ownership Rule
118. In 1996, the Commission revised the number of radio stations that an entity may
own in a single radio market under section 73.3555(a) of its rules in accordance with section
202(b) of the 1996 Act.   The Commission also reviewed the rule in its 1998 Biennial
Regulatory Review Report.  On the basis of that recently concluded review under the biennial
regulatory review requirements of the 1996 Act, the Commission concluded that local radio
ownership rules generally continue to serve the pubic interest.  Noting that there currently are far
fewer licensees competing against each other in many communities than there were prior to the
1996 Act, the 1998 Biennial Regulatory Review Report concluded that the existing limitations
remain necessary to prevent further diminution of competition and diversity in the radio industry.
119. The Commission, however, recognized that its methodology for counting the
number of stations a party owned in a market may have, under certain circumstances, created
results that were inconsistent with congressional intent.   For example, the Commission noted
that its current methodology may result in a station being counted as part of a market but not
counted against a licensee's cap on the number of stations it may own in that market.  The
Commission therefore stated that it will issue a notice of proposed rulemaking seeking comment
on its methodology for defining radio markets, counting the number of stations within those
markets, and counting the number of stations that a party owns in a radio market.
(2) Local Television Multiple Ownership Rule
120. Section 73.3555(b) of the Commission's rules limits the number of television
stations an entity may own in a single market.   The 1999 Local Television Ownership Report
and Order relaxed this rule by (1) modifying the geographic scope from the Grade B contour
overlap approach to a Nielsen Designated Market Area (DMA) test that permits common
ownership of two television stations in separate DMAs without regard to contour overlap; (2)
allowing common ownership of two television stations within the same DMA if their Grade B
contours do not overlap (a continuation of the previous rule), or if eight independently-owned,
full power and operational TV stations (commercial and non-commercial) will remain post-
merger, and one of the stations to be merged is not among the top four-ranked stations in the
market, on the basis of audience share at the time the application is filed; and (3) allowing waiver
of the new rules under certain circumstances.  As the Commission stated in the 1999 Local
Television Ownership Report and Order, the relaxed rules provide measured relaxation of the
local television multiple ownership rule, particularly in larger television markets.  The rule will
allow weaker television stations in a market to combine, either with each other or with a larger
station, thereby preserving and strengthening these stations and improving their ability to
compete.  These station combinations will allow licensees to take advantage of efficiencies and
cost savings that can benefit the public.  At the same time, the station rank and voice criteria are
designed to protect both the Commission's core competition and diversity concerns.   Because
the local television multiple ownership rule was so recently relaxed, the staff believes that no
further changes are warranted at this time.  Instead, staff will monitor the effects of deregulatory
actions on the marketplace to determine whether further changes are warranted.
(3) Radio-Television Cross-Ownership Rule
121. Section 73.3555(c) of the Commission's rules limits the number of radio and
television stations that an entity may own in a single market.   The 1999 Local Television
Ownership Report and Order relaxed the Commission's radio-television cross-ownership rule to
allow common ownership of a television station (or two television stations if permitted under our
local television ownership rules) and up to six radio stations (any combination of AM or FM
stations, to the extent permitted under our local radio ownership rules) in any market where at
least 20 independent voices would remain post-merger; a television station and up to four radio
stations (any combination of AM or FM stations, to the extent permitted under our local radio
ownership rules) in any market where at least 10 independent voices would remain post-merger;
and a television station and one radio station (AM or FM) notwithstanding the number of
independent voices in the market.  The 1999 Local Television Ownership Report and Order also
eliminated the previous five-factor case-by-case waiver standard  and established a simplified
waiver standard.   The Commission stated in the 1999 Local Television Ownership Report and
Order that it relaxed the radio-television cross-ownership rule to balance its traditional diversity
and competition concerns with its desire to permit broadcasters and the public to realize the
benefits of radio-television common ownership.  The relaxed rule recognizes the growth in the
number and types of media outlets, the clustering of cable systems in major population centers,
the efficiencies inherent in joint ownership and operation of both television and radio stations in
the same market, as well as public service benefits that can be obtained from joint operation.  The
new rule also ensures the application of a clear, reasonable standard.  As a result, the rule will
ease administrative burdens and will provide predictability to broadcasters in structuring their
business transactions.  Because the radio-television cross-ownership rule was so recently
relaxed, the staff believes that no further changes are warranted at this time.  Staff will monitor
the market effects of deregulatory actions to determine whether further changes are warranted.
(4) Daily Newspaper/Broadcast Cross-Ownership Rule
122. Section 73.3555(d) of the Commission's rules generally prohibits the common
ownership of a broadcast station and a daily newspaper in the same community.   The
Commission reviewed this rule in its 1998 Biennial Regulatory Review Report.  In that review,
the Commission recognized that even though media markets have undergone changes since the
cross-ownership rule was adopted, many of the new media outlets do not yet appear to be
substitutes for newspapers or broadcast stations on the local level, for diversity purposes.  The
1998 Biennial Regulatory Review Report therefore concludes that the rule should, as a general
matter, be retained because it furthers the important public policy goal of viewpoint diversity and
continues to serve the public interest.
123. While electing to retain the rule, the Commission recognized that situations may
arise where the rule may not be necessary in the public interest to ensure diversity and
competition.  For example, given the size of the market and the size and type of the newspaper
and broadcast station involved, there may be sufficient diversity and competition even if a
newspaper/broadcast combination were allowed.  The Commission indicated in the 1998 Biennial
Regulatory Review Report that it would examine these types of situations in greater detail.  The
Commission indicated that it would examine whether the rule needs to be tailored to address
contemporary market conditions and would issue a notice of proposed rule making seeking
comment on these and other potential modifications of the rule.
124. On October 1, 1996, the Commission released a Notice of Inquiry (NOI) seeking
comment on the possible revision of its standards for waiver of the daily newspaper/broadcast
cross-ownership rule with respect to newspaper/radio combinations.   The Newspaper/Radio
Cross-Ownership Waiver Policy NOI sought comment on whether the Commission should adopt
objective criteria for evaluating these waiver requests and, if so, what those criteria should be.
No action has been taken in this proceeding.
(5) National Television Multiple Ownership Rule
125. Section 73.3555(e) of the Commission's rules prohibits an entity from owning
television stations that would result in an aggregate national audience reach exceeding 35
percent.   The current cap was established in 1996, when Congress directed the Commission to
raise the national cap from 25 percent to 35 percent.   The 1999 National Television Ownership
Report and Order generally clarifies that no market will be counted more than once when
calculating the 35 percent cap,  and uses DMAs, rather than Arbitron's Areas of Dominant
Influence, to define a station's market for the purpose of calculating national audience reach.
More recently, the Commission, in its 1998 Biennial Regulatory Review Report, addressed the
issue of whether to modify the 35 percent cap.  The Commission determined that its recent
changes to the local television ownership rule should be observed and assessed before making
any further changes to the national limit.  The Commission also found that many group owners
have acquired large numbers of stations nationwide since the cap was increased to 35 percent in
1996, and that this trend needed further observation.  The 1998 Biennial Regulatory Review
Report therefore did not alter the 35 percent cap.
126. Section 73.3555(e)(2) provides for a 50 percent "UHF discount" in calculating
the national audience reach.   Because the UHF discount is intended to recognize the
deficiencies in over-the-air UHF reception in comparison to VHF reception, UHF stations are not
"credited" with reaching their entire market.  The Commission addressed the issue of whether to
retain the 50 percent UHF discount in its 1998 Biennial Regulatory Review Report and concluded
that the signal disparity between UHF and VHF has not yet been eliminated.  The 1998 Biennial
Regulatory Review Report therefore retains the 50 percent UHF discount.  Because the signal
disparity should be diminished by digital television, however, the Report states that when the
transition to digital television is near completion, the Commission will issue a notice of proposed
rulemaking proposing a phased-in elimination of the discount.
(6) Dual Network Rule
127. As mandated by the 1996 Act, section 73.658(g) of the Commission's rules
permits a broadcast station to affiliate with a network organization that maintains more than one
broadcast network, unless the dual or multiple networks are created by a merger between ABC,
CBS, Fox, or NBC, or a merger between one of these four established networks and UPN or
WB.   The Commission reviewed this rule in its 1998 Biennial Regulatory Review Report.  The
Commission recognized that the rule, as it applies to UPN and WB, may no longer be necessary
in the public interest.  The Commission stated that the opportunity for broadcast networks to
create and maintain multiple broadcast networks may place networks on more equal footing with
cable, satellite, and other multi-channel video programming distributors.  The Commission
further noted that because the emerging networks (UPN and WB) are nascent subsidiaries of large
program producers, their merger with a major network (ABC, CBS, Fox or NBC) may permit
realization of substantial economic efficiencies without undue harm to diversity and competition.
The Commission has issued a notice of proposed rulemaking to consider eliminating the
restriction on the ownership of UPN or WB by one of the four established networks and seeking
comment on what, if any, safeguards should be imposed.   The Commission, however, declined
to eliminate the prohibition against any mergers of the four major networks because of significant
concerns about competition and diversity.
(7) Experimental Broadcast Station Multiple Ownership Rule
128. Section 74.134 of the Commission's rules prohibits any person from controlling
two or more experimental broadcast stations unless it can show that the research program requires
the licensing of two or more separate stations.   The Commission reviewed this rule in its 1998
Biennial Regulatory Review Report and concluded that elimination of the rule would not
adversely affect diversity and competition.  The Commission stated that other rules, which
require experimental stations to operate for research purposes and bar them from imposing
charges for transmitting programming and from offering a regular program service, provide
sufficient safeguards against use of experimental stations for commercial purposes.  The
Commission has issued a Notice of Proposed Rulemaking proposing to eliminate the rule.
(8) Cable/Television Cross-Ownership Rule
129. Section 76.501(a) of the Commission's rules prohibits a cable system from
carrying the signal of a television station if the system owns or controls a TV station whose
predicted Grade B contour overlaps the service area of the cable system.   The Commission
reviewed this rule in its 1998 Biennial Regulatory Review Report and concluded that the
cable/television cross-ownership rule promotes competition in the delivered video programming
market.  The Commission noted that, despite an array of participants in the delivered video
programming market, 67 percent of television households subscribe to cable.  The Commission
also noted that this rule prevents other forms of discrimination that could degrade competition in
the delivered video programming market.  The 1998 Biennial Regulatory Review Report therefore
retains the rule.  The staff does not find any reason to alter that decision.
b) Other Rules
(1) Broadcast Attribution Report and Order
130. The 1999 Attribution Report and Order amended Note 2 to section 73.3555 of
the Commission's rules, the broadcast attribution rules, which determines what interests should
be counted in applying the ownership rules.   The 1999 Attribution Report and Order amended
the attribution rules to improve their precision, avoid disruption in the flow of capital to
broadcasting, afford clarity and certainty to regulatees and markets, and facilitate application
processing.  A number of measures were adopted in the 1999 Attribution Report and Order.  In
particular, the Order eliminated the cross-interest policy, which had required a time-consuming
case-by-case review, and adopted instead a new equity/debt plus rule that addressed some of the
same concerns.  In addition, the Commission raised the passive investor voting stock benchmark
from 10 to 20 percent.  The 1999 Attribution Report and Order also conformed the
cable/Multipoint Distribution Service attribution rules to the newly adopted broadcast attribution
criteria and amended the attribution rules regarding cable/television cross-ownership and the
ITFS cross-leasing rules.
(2) Main Studio and Public File Report and Order
131. The Main Studio and Public File Rules Report and Order provided broadcasters
greater flexibility in choosing where to locate their main studios, required commercial and
noncommercial educational stations to locate the public files at their main studio, and allowed
licensees to maintain all or part of the files in a computer database, rather than in paper files.
The Main Studio and Public File Rules Report and Order further clarified what must be
contained in the public inspection files.  The Commission's goals in amending these rules was to
strike an appropriate balance between ensuring that the public has reasonable access to each
station's main studio and public file, minimizing regulatory burdens on licensees, and
establishing rules that are easy to administer and understand.
(3) Call Sign Report and Order
132. The Call Sign Report and Order amended several rules to ease and speed call
sign request processing.   Specifically, the Call Sign Report and Order amended the
Commission's rules to replace the requirement that parties file written requests for the registration
or change of call signs with a new on-line call sign inquiry, reservation, and authorization system
that is accessible through the Internet.   The Commission further amended its low-power
television station identification rules to allow low-power television permittees and licensees to be
assigned four-letter call signs, via the Internet on-line process, in lieu of five-character
alphanumeric call signs.   These revised rules will streamline the Commission's call sign
assignment procedures.  Implementation of the on-line system enhances the speed and certainty
of radio and television broadcast station call sign assignments, thereby providing better service to
all broadcast station licensees and permittees.
(4) Competitive Bidding for Commercial Broadcast and
Instructional Television Fixed Service Licenses
133. The Commission traditionally used comparative hearings to decide among
mutually exclusive applications to provide commercial broadcast service, and it has used a system
of random selection to award certain types of broadcast licenses, such as low-power television
and television translator licenses.  As a result of the Balanced Budget Act of 1997, which
expanded the Commission's competitive bidding authority under section 309(j) of the
Communications Act, as amended,  the Commission no longer has the option of resolving
competing applications for commercial broadcast stations by comparative hearings, except for
certain applications filed before July 1, 1997.  In addition, the Balanced Budget Act removed the
Commission's authority to resolve competing applications for commercial broadcast stations by a
system of random selection.  In response to these legislative changes, the Competitive Bidding
First Report and Order  adopted new competitive bidding rules to select among mutually
exclusive applications for new commercial full-power radio station licenses, analog television
station licenses, and a variety of secondary commercial broadcast service licenses (low-power
television, FM translator, and television translator services).  In contrast to the comparative
hearing process, the competitive bidding rules provide a more streamlined method for awarding
authorizations, and, as a result, expedite service to the public.
(5) 1998 Nontechnical Streamlining Report and Order
134. The Commission recently concluded a review of its broadcast rules and
application procedures.  The Nontechnical Streamlining Report and Order made fundamental
changes in the Commission's broadcast application and licensing procedures to reduce
unwarranted applicant and licensee burdens, while preserving the public's ability to participate
fully in the broadcast licensing process.   The Commission extended the construction period for
all broadcast stations to three years (from 18 months for radio stations and 24 months for
television stations), but tightened standards for granting extensions.  With respect to the
procedures for transfer and assignment applications, the Commission eliminated the prohibition
on for-profit sales of unbuilt stations.   In addition, applicants now certify that their sales and
organizational documents comply with Commission policy and rules.   Similarly, staff no longer
routinely reviews contour overlap maps; applicants now certify compliance with multiple
ownership rules.   In addition, broadcast licensees now file ownership reports every two years,
rather than yearly.  The Nontechnical Streamlining Report and Order also applied the two-year
ownership report filing requirement to noncommercial educational broadcasters and eliminated
the requirement that a noncommercial educational licensee file an ownership report within 30
days after any change in previously reported information.   Both commercial and
noncommercial educational licensees, however, must file a new ownership report within 30 days
of consummating authorized license assignments or transfers of control of licensee entities.
135. In addition to streamlining the application procedures, the Commission adopted
new certification-based application procedures and mandatory electronic filing rules for fifteen
key Mass Media Bureau broadcast application and reporting forms.  These changes are designed
to make filings easier, faster, and more resistant to error.  For example, electronic filing
automatically notifies applicants of any critical errors in their applications, and allows the public
to view the applications on the Commission's web site.  When fully implemented, these reforms
will significantly reduce burdens on applicants and Commission staff, facilitate application
processing, and result in more accurate databases and easier public access to information.
Electronic submission furthers the Commission's long-standing commitment to using new
information technologies for enhancing service to licensees and to the public.  On April 28, 2000,
the Mass Media Bureau implemented electronic filing procedures for six broadcast application
forms.  Electronic filing of these forms will become mandatory in October 2000.
(6) 1999 Technical Streamlining Report and Order
136. On June 15, 1998, the Commission released a notice of proposed rulemaking
seeking comment on streamlining AM and FM, noncommercial educational (NCE) FM, and FM
translator technical rules.   The Commission addressed many of the proposals from the
Technical Streamlining Notice in the 1999 Technical Streamlining First Report and Order.  The
1999 Technical Streamlining First Report and Order in this proceeding extended first-come,
first-served processing to applications for minor changes to AM, NCE FM, and FM translator
facilities.   The 1999 Technical Streamlining First Report and Order also expanded the
definition of "minor change" in these services to conform more closely to the commercial FM
definition.  The expanded "minor" change application definition permits expeditious processing
of most facility modifications under our efficient and proven first-come, first-served rules.
Finally, the 1999 Technical Streamlining First Report and Order amended the Commission's
contingent application rule, which had prohibited the filing of coordinated facility modifications.
The revised rule permits the simultaneous filing of up to four "related" minor change FM station
construction permit applications.
2. New Initiatives
137. The Commission has significantly reduced the burdens of its mass media rules
and policies over the past few years.  Bureau staff is in the process of reviewing petitions for
reconsideration of the rules the Commission adopted in the 1999 Local and National Television
Reports and Orders as well as the 1999 Attribution Report and Order.  Moreover, the Bureau is
initiating several rulemaking proceedings, as described above, that are based on the
Commission's findings in its 1998 Biennial Regulatory Review Report on the mass media
ownership rules.
VI. SUMMARY OF REVIEWS BY OTHER BUREAUS AND OFFICES
A. Cable Services Bureau
138. The Cable Services Bureau advises the Commission in matters pertaining to the
regulation and development of cable television and other multichannel video programming
services.  The Bureau administers rules and policies regarding cable television service and
systems, including, for example, ownership of cable systems; promotion of competition; pole
attachment issues; the preemption of restrictions on devices designed for over-the-air television
broadcast signals, and the accessibility of video programming to persons with disabilities.
139. Section 11 and section 202(h) of the 1996 Act do not specifically refer to cable
operators and cable regulation.  The Bureau does administer section 224 of the Communications
Act and the Commission's rules for pole attachments (Part I, subpart J), which provide cable
operators and telecommunications providers with nondiscriminatory access to a utility's poles,
ducts, conduits, and right of ways (see section XV below).The Bureau's review of the rules it
administers, however, is consistent with the general spirit and purpose of section 11, which
directs the Commission to review and repeal or modify regulations applicable to providers of
telecommunications services that are determined to be no longer necessary in the public interest.
1. Recent and Ongoing Activities
a) Effective Competition Orders
140. Under the 1992 Cable Act and the Commission's implementing rules, only cable
systems that are not subject to effective competition may be regulated under the cable rate
rules.   Cable systems that are subject to effective competition are not rate regulated.  A cable
operator that believes that it should not be subjected to the cable rate rules must file a petition
with the Commission showing that it is subject to effective competition in its franchise area.
Since 1992, the Cable Services Bureau has addressed over 200 effective competition petitions.
b) Satellite Home Viewer Improvement Act
141. Recent amendments to the Satellite Home Viewer Improvement Act (SHVIA)
give consumers more choices in how they receive broadcast stations at home.   Most
significantly, the amendments give satellite carriers the right to retransmit local stations back into
local markets.  The legislation directs the Commission to conduct numerous rulemakings and
inquiries within one year, including retransmission consent and must carry requirements for
satellite carriers; network non-duplication; sports blackout and syndicated exclusivity;
improvement of predictive models; enforcement procedures; designation of signal testers and an
inquiry into signal standards.   The Commission has already issued five Orders, four Notices of
Proposed Rulemaking and a Notice of Inquiry addressing SHVIA requirements.  The Cable
Services Bureau continues work on additional SHVIA requirements.
c) Horizontal Ownership
142.  Section 613 (f)(1)(A) of the Communications Act requires the Commission to
"prescribe rules and regulations establishing reasonable limits on the number of cable subscribers
a person is authorized to reach through cable systems owned by such a person, or in which such a
person has an attributable interest."   The rules adopted by the Commission in response to
613(f)(1)(A) are known as the horizontal ownership rules.
143. The Third Report and Order adopted by the Commission in October 1999, inter
alia, permits cable operators to have no more than a 30 percent share of nationwide multichannel
video programming distributor (MVPD) subscribers.  The United States Court of Appeals for the
District of Columbia Circuit recently upheld the constitutionality of section 613(f)(1)(A).  A
petition for reconsideration of the Third Report and Order was filed on January 3, 2000.  A
decision on the petition is pending.  In addition, several cable operators filed petitions for review
of the Third Report and Order with the United States Court of Appeals for the District of
Columbia Circuit.  These petitions are pending.
d) Mandatory Carriage of Digital Television Signals
144.  Local television stations receive access to a cable operator's cable system either
through request, as with must carry, or through negotiation, as with retransmission consent.
Sections 614 and 615 of the Communications Act contain the must carry requirements for
commercial and noncommercial television stations, respectively.  Commercial television stations
may invoke mandatory carriage rights within their local market areas.  Noncommercial television
stations are considered qualified, and may invoke such rights if they (1) are licensed to a
community within fifty miles of the principal headend of the cable system; or (2) place a Grade B
contour over the cable operator's principal headend.  Low power television stations have rights to
invoke mandatory carriage if they meet six qualifying statutory criteria; however, a cable operator
cannot carry a low power station in lieu of a full power station.
145. The Communications Act of 1934, as amended by the 1992 Cable Act, instructs
the Commission to commence a proceeding to determine whether changes in the mandatory
carriage rules are necessary to accommodate advances in television broadcast signal standards,
such as the advent of digital broadcast television signals on cable television systems.   In 1995
and 1996, the Commission received comments on digital television signal carriages issues from
broadcasters, cable operators, cable programmers, equipment manufacturers, public interest
groups and other interested parties in response to questions posed in the Fourth Further Notice of
Proposed Rulemaking in MM Docket 87-268.  To refresh the record and reflect recent changes in
technology, policy and law, the Commission released a new Notice of Proposed Rulemaking in
July 1998 asking for new and updated information and arguments.
e) Navigation Devices
146. Navigation devices are television set-top boxes, converter boxes, interactive
communications equipment, and other equipment that a consumer uses to access video
programming.  The devices are most commonly recognized as the boxes on top of many
televisions that are used to access cable television.  Section 629 of the 1996 Act requires the
Commission to assure that navigation devices used in conjunction with multi channel
programming distribution are commercially available from sources other than cable operators,
e.g., made available to consumers through retail stores.  The Commission's rules relating to
navigation devices are located at 47 C.F.R.  76.1200-1210.  In May 1999, the Commission
adopted an Order on Reconsideration that exempted, as of July 1, 2000, equipment that performs
analog-only conditional access from the requirement that multi-channel video programming
distributors separate the security function from non-security functions.   The Commission did
not think it worthwhile for the industry to construct a separate analog security module that will
soon be obsolete because of the industry's transition from analog to digital programming.  The
rules adopted were upheld on appeal by the United States Court of Appeals for the District of
Columbia Circuit.
f) Inside Wiring
147. In October 1997, the Commission adopted a Report and Order and Second
Further Notice of Proposed Rulemaking that amended its cable inside wiring rules to enhance
competition in the video distribution marketplace.
148. The Report and Order was intended to provide opportunities for new entrants
seeking to compete in distributing video programming, particularly multi-channel video
programming distributors seeking to provide service in multi-dwelling unit buildings (MDUs).
Specifically, the Commission's rules establish procedures for the disposition of cable "home run"
wiring where the incumbent MVPD no longer has a legally enforceable right to remain in the
building.   The Second Further Notice seeks comment on the benefits or disadvantages of
exclusive contracts in promoting a competitive environment, and whether there are circumstances
where the Commission should adopt restrictions on exclusive contracts in order to further
promote competition in the MDU marketplace.
2. New Initiatives
149. The Cable Services Bureau's review of the existing rules and procedures
suggests a number of areas that should benefit from further review.  First, the Bureau has
suggested and the Commission has adopted a proposal to revise the rules governing the filing of
applications and forms to facilitate electronic filing.  The Cable Operations and Licensing System
(COALS), a new electronic filing system, should significantly enhance availability of cable
system information to the cable industry and the public, and reduce the cost of filing applications
and obtaining information.
150. The Cable Services Bureau also recommends that the Commission conduct a
general review of the rules to eliminate specific sections that are no longer relevant or correct in
light of judicial decisions or the elimination of certain statutory requirements.  Included in this
category of changes would be: (1) the elimination of those portions of the rate rules pertaining to
cable programming services tier (non-basic) rates which, pursuant to section 623(c)(4), sunset on
April 1, 1999; (2) elimination of the rules based on section 505 of the 1996 Act, including section
76.227, relating to incompletely scrambled sexually-oriented programming that were found to be
unconstitutional by the recent Supreme Court decision in United States v. Playboy Entertainment
Group, Inc., No. 96-1682 (decided May 22, 2000);  and (3) deletion of section 76.209, applying
the fairness doctrine to cablecast programming.
151. As part of the Biennial Regulatory Review Process, the Cable Services Bureau
met with several attorneys who work with cable issues and other industry representatives.  In
these meetings, the Bureau staff sought to obtain an outside perspective as to how the cable rules
could be modified to serve the public better as competition in the industry develops.  As a result
of these discussions, the bureau will be considering other changes to the rules, including in
particular changes in the remaining rate rules on the basic service tier to make sure that the
process continues to function properly and efficiently after elimination of cable programming
service tier regulation.
B. Consumer Information Bureau
152. The Consumer Information Bureau (CIB), which was created in November 1999
along with the new Enforcement Bureau, was established to provide easy access to information
about communications services, as well as to serve as a consumer and disability rights voice at
the Commission.  CIB's creation consolidated consumer information and complaint processing
responsibilities from multiple bureaus, thus eliminating duplication of services and providing
consumers with a single point of contact with the FCC.
153. A key priority of CIB is to help ensure that information is readily available,
because competitive markets work best when consumers have the information required to make
informed choices.  CIB develops, recommends, coordinates and administers the Commission's
consumer information program to enhance the public's understanding of the Commission's
policies, goals, objectives, and regulatory requirements.  This serves to facilitate public
participation in the Commission's proceedings.
154. CIB's Reference Information Center (RIC) is the official Commission custodian
for designated records, and handles the intake processing, organization and maintenance,
reference services, retirement, and retrieval of these records.  It provides a convenient one-stop
shop for its clients, including industry, attorneys, academic researchers and consumers, to
research and obtain relevant and available information.  RIC is also responsible for managing and
maintaining the Electronic Comment Filing System.  This system, which allows comments to be
filed with the Commission remotely, facilitates public participation in Commission proceedings.
155. CIB has two consumer centers, one in Gettysburg, Pennsylvania, the other
located at the FCC's Portals headquarters.  These centers, which comprise the Consumer
Information Network Division (CIND), respond to over 100,000 consumer inquiries each year,
and process and serve informal complaints.
156. CIB's Strategic Information Office (SIO) is charged with collecting and
analyzing information received in the bureau from incoming consumer complaints and inquiries,
consumer fora, and other industry sources.  This allows SIO to serve as an early warning system
to the Commission about consumer trends.
157. Finally, CIB also contains the Disability Rights Office (DRO).  DRO advises
other Bureaus and Offices on rulemakings and other proceedings.  It also helps consumers resolve
disability complaints, and works with industry and other entities to facilitate the provision of
accessible services and equipment.
1. Recent and Ongoing Activities
158. CIB's Consumer Education Office (CEO) furthers the Bureau's mission to
educate the public about important Commission regulatory programs, through consumer and
industry fora and workshops.  CEO held a workshop to facilitate discussions between industry
groups, state agencies, and consumer groups to make billing practices more consumer friendly.
It has also published a guidebook on how consumers can participate in Commission proceedings,
and consumer education pamphlets on selecting the right telephone service plan, and how to
understand long-distance and dial-around advertising.
159. In conjunction with other Commission bureaus and offices, CEO continues to
develop consumer alerts, education campaigns and public service announcements to give
consumers information about their rights and information so that they can protect themselves
against unscrupulous practices.  CEO also held a forum on customer service,  featuring bureau
staff, staff regulators, consumer and community representatives, and customer service experts.
The forum was accompanied by a consumer education pamphlet on navigating customer service
systems.  The Bureau is also planning a forum on the consumer perspective in a detariffed long
distance market.
160. CIB staff is working on the Commission's tribal initiatives to address the
problem of limited availability of basic and advanced services in many tribal regions, and to
ensure that basic and advanced telecommunications services are made available in those
geographical areas.  CIB will continue to work on other outreach initiatives to underserved
communities.
161. These non-regulatory initiatives will educate consumers so that they can make
better, more informed choices about telecommunications services, and more fully enjoy the fruits
of competitive markets.
2. New Initiatives
162. The staff recommends that the Commission consider reviewing its informal
complaint rules, 47 C.F.R. 1.716-718.  The rules do not specify the documentation consumers
must file with the Commission to complete their complaints, leading to repetitive filings from
consumers, particularly if the primary filing lacks sufficient information to resolve the informal
complaint.  The rules also do not prescribe a specific time frame for carriers to respond to an
informal complaint.  If consumers have not received a response to an informal complaint in a
specific period of time, consumers may file duplicative formal complaints.  Such complaints are
costly to consumers and carriers, and may require unnecessary expenditure of Commission
resources.  Finally, these rules traditionally have applied to informal wireline complaints, while
other complaints have been handled in a less structured manner.  This has led to a lack of
predictability for consumers in filing complaints, and industry in receiving complaints.  Staff
recommends reviewing these rules, to determine whether their scope should be expanded to cover
all informal complaints.
163. DRO advises other bureaus and offices on compliance with section 255 of the
1996 Act, which mandates access to telecommunications services for Americans with disabilities,
as well as other substantive proceedings addressing disability issues.  For example, DRO worked
closely with the Common Carrier Bureau on drafting new rules relating to Telephone Relay
Services (TRS).  These new rules require that speech-to-speech relay service be provided, and
also encourage competition in the video relay market by making that service eligible for
reimbursement from the TRS fund.  DRO intends to initiate rulemakings in the future on
appropriate issues in order to fulfill its mandate.  Staff has also worked with the Wireless
Telecommunications Bureau on the Commission's E-911 rules to ensure that these public safety
rules are accessible to Americans with disabilities.
164. DRO also conducts public outreach and education on disability issues.  It works
closely with the public to ensure that individuals with disabilities are aware of their rights, and
with industry to ensure that service providers are complying with the law and providing
appropriate telecommunications services.
165. Our education efforts included a TRS forum in March 2000,  which presented
an opportunity for consumers and industry representatives to exchange ideas with the
Commission and state relay administrators about provision of TRS, common concerns of TRS
administrators, consumers, and providers, and variations among states' approaches to TRS.  The
forum also discussed whether other technologies, services, and features should be made available
to TRS users.
166. DRO also provides materials in accessible alternative formats, so individuals
with disabilities have access to Commission proceedings, and has created an e-mail mailing list to
keep consumers apprised of relevant happenings at the Commission.
C. Enforcement Bureau
167. The Commission established the Enforcement Bureau in November 1999.  The
new Enforcement Bureau has responsibility for ensuring that regulated entities comply with the
Communications Act and the Commission's implementing rules.  The consolidation of most
enforcement functions into one bureau is consistent with the regulatory reform goals of section
11, because it makes it easier for competitors and consumers to get prompt and clear resolution of
disputes.  Consolidating enforcement activity into a single bureau promotes consistent and
predictable enforcement policies.  It also maximizes the efficiency of the Commission's
enforcement program by allowing the agency to establish enforcement priorities and make the
best use of limited Commission resources.
168. Clear, consistent and swift enforcement action is increasingly important as
competition develops and deregulation occurs.  The statutory and rule provisions that remain will
be those that are necessary even in a competitive environment, such as those that provide a
structure for competition to flourish, help users of communications services benefit from
competitive communications services, and ensure that spectrum is used in a manner that prevents
harmful interference and promotes public safety.  In particular, the Enforcement Bureau is a
critical part of the agency's plan to preserve and promote the competitive gains that have been
made under the 1996 Act and the Commission's implementing regulations.  To ensure fair
competition, all competitors must play by the rules and follow the law.  Companies may not gain
a competitive advantage through unfair market practices.  With the enhanced focus on
enforcement, companies know that, if they violate communications law or the Commission's
rules, there will be significant consequences.  In this way, the competitive marketplace envisioned
by Congress will work, and the benefits of that competition will flow to consumers.
1. Recent and Ongoing Activities
169. Although the Enforcement Bureau generally does not engage in rulemaking
activity or have responsibility for maintaining or revising substantive Commission rules, the
agency has taken steps during the past few years in the area of enforcement to further the
deregulatory goals of the 1996 Act.  For example, the Commission revamped and streamlined its
procedural rules governing the resolution of formal complaints against common carriers filed
pursuant to section 208 of the Communications Act.  These changes were designed to resolve
disputes more quickly and efficiently than under prior rules.
170. Most significantly, under the new rules Enforcement Bureau staff has stepped up
its efforts to mediate disputes between the parties both before and after a formal complaint is filed
at the Commission.  These mediation efforts often result in quick and efficient resolution of
disputes.  Business solutions achieved by the parties through Commission-assisted mediation
avoid the expense and delay that can accompany formal litigation before the agency.
171. The revised rules also require that a complaining party provide all factual support
for its case in its initial pleadings.  This minimizes the need for time-consuming and resource-
intensive discovery.  In addition, the rules provide for the staff to convene an initial status
conference with the parties shortly after the defendant files its answer.  This presents an
opportunity to simplify or narrow the issues, obtain admissions of fact or stipulations by the
parties, settle some or all of the matters in controversy, and develop a schedule for the remainder
of the case.  This proactive case management tool helps ensure prompt and efficient case
resolution.
172. In addition, the agency created an Accelerated Docket procedure in 1998 that
results in quicker formal decisions from the agency for certain formal complaints selected by
Bureau staff.  Once a particular dispute is accepted by the staff onto the Accelerated Docket, the
procedure is designed to lead to a written staff-level decision within 60 days from the filing of the
complaint.  Because this procedure may lead to a "mini-trial" with testimony by witnesses subject
to cross-examination, it is particularly well suited for cases involving difficult factual disputes.
The Accelerated Docket rules require staff-supervised pre-filing settlement discussions between
the parties.  Many disputes are settled without the need to file a formal complaint.
173. The efficiencies generated by the new complaint procedures, combined with an
increased emphasis on mediation and aggressive case management, have resulted in a significant
reduction in the number of pending formal common carrier complaints at the Commission.  By
reducing the backlog of pending cases, the staff can respond more quickly to new disputes as they
are filed and resolve them in a timely fashion.  Quick and clear resolution of disputes is critical to
enhancing competition and enabling consumers to obtain the benefits of that competition.
D. Office Of Communications Business Opportunities
174. Section 257(c) of the Communications Act  requires the Commission to report
triennially to Congress on the steps taken to eliminate market entry barriers for entrepreneurs and
other small businesses in telecommunications.  Section 257 was enacted as part of the 1996 Act
and focuses on two areas:  (1) "the provision and ownership of telecommunications services and
information services" and (2) "the provision of parts or services to providers of
telecommunications services and information services."   Pursuant to the requirements of
section 257, the Commission, in 1996, initiated a proceeding  to identify market entry barriers.
In 1997 the Commission issued a report ("1997 Report")  referencing the policy objectives set
forth in section 257 - "favoring [1] diversity of media voices, [2] vigorous economic competition,
[3] technological advancement, and [4] promotion of the public interest, convenience, and
necessity"  - and describing a variety of measures taken by the Commission to fulfill those
policies.
1. Recent and Ongoing Activities
175. The Commission has just completed its second report under section 257 ("2000
Report").  The 2000 Report, which was delivered to Congress August 9, 2000, reflects the
Commission's continuing compliance with the four policy objectives set forth supra.  The report
sets forth the Commission's Five-Year Strategic Plan and the role of that plan in eliminating
market entry barriers.  Following the discussion of the strategic plan, the bulk of the 2000 Report
describes regulatory and other initiatives undertaken by the Commission's bureaus and offices
since 1997 to remove market entry barriers and other impediments confronting small businesses.
The report also analyzes efforts to overcome unique obstacles facing minority-owned and
women-owned small businesses, discusses this Biennial Regulatory Review, addresses
responsibilities under the Regulatory Flexibility Act (RFA) and the Small Business Act,  and
introduces the agency's new electronic filing systems.  Finally, the report sets forth some
proposed legislative initiatives.  The 2000 Report is available to the public on the Commission's
website at http://www.fcc.gov/Bureaus/OCBO/fcc00279.html.
176. RFA Analyses and Certifications Since enactment of the Small Business
Regulatory Enforcement Fairness Act of 1996 ("SBREFA") amendments  to the Regulatory
Flexibility Act,   the Commission has strived to make its RFA analyses more extensive, precise,
and helpful, and to include a focus on plain language.  For instance, because the agency typically
writes rulemakings tailored to the various and numerous communications "services" it regulates
(e.g., FM radio, paging, satellite services, etc.), the agency has undertaken numerous RFA
analyses describing each service and the extent of the small entity participation within each.  This
has required frequent revision of the service sector analyses, as new services are created and
additional licenses for traditional services are issued.  In this way, the agency attempts to ensure
full and accurate analyses and certifications in the agency's 150 or more rulemaking items per
year.
177. Special initiatives.  Special initiatives have included internal training sessions
for Commission staff on the RFA process and, a special RFA presentation conducted by the
Small Business Administration's (SBA's) Office of Advocacy to train Commission staff.  The
presentation was held on October 12, 1999, and featured the SBA's Chief Counsel for Advocacy.
Going forward, the FCC is committed to working with SBA and the small business community to
develop regulatory policies and procedures that are no more burdensome than necessary to
achieve the intended goals.  Another 1999 initiative was the resolution of the Commission's
treatment of small incumbent local exchange carriers (LECs) under the RFA.  In the 1997 Report,
the Commission stated that it did not believe that small incumbent LECs qualified as small
businesses under the RFA because such businesses appeared to be "dominant in their field or
operation due to their current control of bottleneck facilities."   Following a letter on the subject
from the Office of Advocacy and a meeting between agency staffs, the Commission decided to
revise the language of its decisions to make clear that small incumbent LECs are among the small
businesses included in its analyses under the RFA.
178. Annual "Ten-Year Review of Rules," 5 U.S.C.  610.  During 1999, the
Commission completed and published an updated, comprehensive listing of Commission rule
sections subject to review under the RFA's annual "ten-year review of rules" provision, 5 U.S.C.
 610.  Section 610 requires that agencies publish in the Federal Register a plan for the periodic
review of rules that have a significant economic impact on a substantial number of small entities.
The recent Commission plan provides a list of hundreds of rules in an effort to assist the public in
identifying rules that might be amended or rescinded in the public interest.  In addition, the
Commission has explored the creation of a computer software program that, utilizing historical
Code of Federal Regulations data, would track rules over a ten-year period and significantly
reduce the administrative work currently required to undertake a section 610 review.  If the
Commission were to accomplish this goal, it could share the computer program with other federal
agencies subject to section 610 obligations, thereby assisting those agencies as well.
179. Special Small Business Size Standards, 15 U.S.C.  632.  To ensure that the
agency's initiatives accurately target small entity participation in the telecommunications
industry, the Commission works closely with the SBA's Office of Size Standards to create new
telecommunications small business size standards.  In particular, in recent years, the agency has
coordinated extensively with both the SBA Office of Size Standards and the Office of Advocacy
to create informal guidelines to keep the SBA apprised of size standard initiatives.  The
Commission's policy is to send SBA descriptions and analyses of proposed size standards prior to
adoption of the Notice of Proposed Rulemaking in such proceedings, and thereafter to send to the
SBA additional comments and documentation at each step of the way.  At the end of the process,
the Commission sends a formal request for approval to the SBA Administrator, prior to final
Commission consideration of the new size standard.  This close coordination has particularly
helped the Commission to initiate radio spectrum auctions, where the goals are to make efficient
use of the spectrum, give all Americans access to telecommunications services, and promote
economic growth.
180. Semi-annual "Unified Agenda," 5 U.S.C.  602.  The Commission participates
in the semi-annual publication of the "Unified Agenda of Federal Regulatory and Deregulatory
Actions," which provides information, in a uniform format, about regulations that the government
is considering or reviewing.   The Unified Agenda has appeared in the Federal Register twice
each year since 1983.  It helps agencies comply with certain obligations under the RFA, other
statutes, and Executive Orders.  As a part of the October 1999 Unified Agenda compilation, the
Commission listed and described 128 ongoing rulemaking proceedings.  These descriptions assist
the public in becoming involved in the regulatory process, and assist the regulated community in
complying with existing regulation.
E. Office of Engineering and Technology
181. The Office of Engineering and Technology (OET), in addition to providing
technical and engineering support to all of the bureaus and offices, has primary responsibility for
the management and allocation of non-government spectrum, the authorization of
telecommunications equipment and RF regulated devices, and the administration of the
Experimental Radio Service.  OET has specific responsibility for Parts 2, 5, 15 and 18 of the
Commission's Rules.    All of the rules governing these responsibilities were reviewed by staff.
OET sought recommendations regarding rules and procedures that should be modified or
eliminated.
1. Recent and Ongoing Activities
182. OET has responsibility for authorizing radio frequency equipment and devices
and has endeavored in the past several years to privatize and standardize this work.  In addition to
instituting electronic filing and streamlining the experimental radio service  and equipment
authorization rules and processes,  the Commission modified the equipment authorization rules
to allow designated private parties to issue equipment authorizations.   The Commission has
also worked diligently to implement Mutual Recognition Agreements (MRAs), which permit
designated parties in other countries to issue equipment authorizations.
183. Through various spectrum management efforts, the Commission has endeavored
to facilitate new, innovative and competitive services.  Specifically, the Commission has
facilitated the proliferation of unlicensed services through the allocation of spectrum for the
Unlicensed National Information Infrastructure (UNII) and authorization of UNII devices.
These devices provide short-range, high-speed wireless digital communications that support
wireless local area networks and facilitate wireless access to the national information
infrastructure.  The Commission has also allocated millimeter wave spectrum for unlicensed
devices that provide short-range communications.    These unlicensed devices can be used for
such diverse services as vehicle radar systems for collision avoidance, computer-to-computer
wireless connections, and improved access to libraries and information databases.  The
Commission has proposed to revise its rules for spread spectrum devices to facilitate the
development of new and innovative technology that is often used for high data rate wireless
applications.   The Commission recently proposed the possibility of permitting operation of one
of the newest innovative wireless technologies, ultra-wideband technology.   This new
technology can be used for a variety of applications such as radar imaging of objects under the
ground or behind walls, and for wireless communications such as short-range high-speed data
transmissions suitable for broadband access to the Internet.
184. In addition to unlicensed spectrum, the Commission allocated spectrum for
Dedicated Short Range communications systems operating in the Intelligent Transportation
System radio service.   These services and systems can provide short range wireless information
links between vehicles and roadside systems, and can improve traveler safety, decrease traffic
congestion, facilitate the reduction of air pollution and help conserve fossil fuels.  Very recently,
the Commission allocated spectrum for a new wireless medical telemetry service and established
service rules that provide interference protection for the potentially life critical equipment used in
hospitals and health care facilities that transmit patient measurement data such as pulse and
respiration rates to nearby receivers.   The Commission has proposed allocating spectrum for
fixed wireless access service which could be used to provide wireless local exchange and
exchange access service.   The Commission also issued a Policy Statement articulating the
principles that will guide the Commission's reallocation of approximately 200 MHz of spectrum
over the next three to five years.    This spectrum will enable a broad range of new radio
communications services, such as expanded wireless services, advanced mobile services, and new
spectrum-efficient private land mobile systems.
185. With these new spectrum allocations, rules and principles, the Commission
anticipates the development of a broad range of new devices and communications options that
will stimulate economic development and the growth of new industries and promote the ability of
manufacturers, including small businesses and entrepreneurs to compete both domestically and
globally.
186. The Commission very recently began an inquiry to obtain more information
about software defined radios.   In a software defined radio, functions formerly performed
solely in hardware are performed by software.  This innovation, which makes a radio
programmable, could facilitate interoperability between radio services, improve efficient use of
spectrum, expand opportunities for broadband communication access for all persons, increase
competition among telecommunications service providers, decrease equipment costs for
consumers, and increase worldwide market opportunities for US manufacturer of all sizes.
187. As follow-ups to proceedings initiated as part of OET's 1998 Biennial
Regulatory Review efforts, the Commission proposed changes to its rules regarding conducted
emission limits in Parts 15 and 18 of the rules  to make them more effective in controlling
interference to communications services and to reduce the burden of these regulations.  Review of
the rules regulating radio frequency lighting devices resulted in the relaxation of the line-
conducted emission limits in Part 18 of the rules for RF lighting devices operating in the 2.2-2.8
MHz band.   The Commission is continuing to examine the possible relaxation of the rules for
RF lighting devices operating in the 2450 MHz band.
2. New Initiatives
188. As part of the 2000 Biennial Regulatory Review process, the Commission
recently proposed to streamline the process of developing technical criteria for customer premises
equipment and to privatize the customer premises equipment approval process.   These
proposals are intended to promote competition in the provision of telecommunications products
and electronic equipment, speed delivery of products to the public and ensure market access in
other countries.
189. The Commission has rules that restrict human exposure to radio frequency (RF)
emissions in radio devices.  Currently, radio devices such as cellular and PCS telephones
manufactured and marketed in the United States must meet certain requirements regarding RF
emissions.  Specific Absorption Rate (SAR) is a measure of human exposure to radio signals.
Notwithstanding intensive efforts both domestically and internationally by private standards-
setting organizations, SAR measurement techniques are not currently standardized.  Staff
recommend that the Commission take steps to facilitate development of standardized SAR
measurement techniques.  A standard SAR measurement procedure can make the already
dynamic market for such equipment even more dynamic by increasing alternatives for approval,
and improving the speed and predictability of the approval process.
190. The industry standard setting committee ANSI C63 recently developed an
equipment testing procedure for unlicensed PCS systems.   The new procedure, C.63.4, removes
ambiguities in the test procedure.  The staff recommends incorporating the new standard into the
Commission's rules by reference in order to update current test procedures.
191. The explosive growth in the international market for mobile communications
devices such as cellular and PCS phones and marine and aviation devices has resulted in the
manufacture of products that operate in dual modes or on frequencies not authorized for such
operation in every country where the products are marketed.  When such products are approved
for sale in the United States, our rules are ambiguous as to whether the product complies with
standards applicable for operation in international markets.  The staff recommends this ambiguity
be resolved and Commission rules clarify whether dual mode products approved in the United
States must comply with other applicable international standards.
192. In the past decade commercial utilization of spectrum above 2 GHz has increased
significantly.  Licensed and unlicensed devices operating above 2 GHz have proliferated, in part
because technical advances have made such devices affordable.  When the Commission first
authorized services and devices in this spectrum, radiated emission limits were established.  At
that time, the Commission had a significant accumulation of information on emissions below 2
GHz, but very little information on emissions above 2 GHz.  Emission limits affect the design and
performance of devices, and prevent interference among devices.  However, unnecessarily
restrictive limits can impede innovation and development of new markets.  Accordingly, the staff
recommends reviewing Commission rules on intentional and unintentional emission limits above
2 GHz to determine whether the limits are appropriate.
193. Current Commission rules prohibit unlicensed "periodic" (intermittent)
transmitters at 40 MHz and above 70 MHz from transmitting continuous data signals.   The
original rationale for this prohibition was that efficient utilization of the spectrum by multiple
users was facilitated by limiting the amount of data transmissions within the band.  Use of current
technology, however, results in the opposite conclusion.  The staff believes this rule can be
updated to permit data transmissions and enable some new types of unlicensed wireless systems
without changing the effect and intent of the original rule.
194. At present, the highest electromagnetic radio-frequency spectrum for which
commercial service rules exist is 77 GHz.  As a result of a program of the Defense Advanced
Research Projects Agency, semiconductor device technology at 92-95 GHz is now available.
Propagation in this band is relatively good, compared to other nearby frequencies, due to limited
radio absorption by oxygen molecules.  The short wavelengths generated in this "oxygen
window" band can be effectively utilized by very small narrow beam antennas for high speed
transmissions and high frequency reuse.  The staff recommends exploring possible use of this
band, including seeking initial inquiry on whether the band is appropriate for licensed or
unlicensed use and for shared commercial and Government use.
3. Other Issues
195. The staff's thorough review of the Commission's allocation and standards rules
revealed a handful of rules adopted some time ago that address legacy systems or demographic
locations that have changed significantly.  Some of these rules or standards were instituted at the
behest of the National Telecommunications and Information Administration at the Department of
Commerce, acting pursuant to 47 U.S.C.  305 on behalf of the Executive Branch, to protect
Federal Government systems.  The staff recommends revisiting with NTIA whether certain
restrictions on non-government systems remain necessary.
196. In 1983, the Commission reviewed all of the technical rules to identify rules that
might unnecessarily discourage technical innovation.    In view of the tremendous growth and
innovation in telecommunications and radio systems and devices over the past decade, technical
rules that are design-based as opposed to performance-based could be thwarting innovation and
growth.  Accordingly, the staff recommends that technical staff for OET, working with technical
staff from the other Bureaus and Offices, again review the technical rules to ensure they permit
flexibility while preventing interference and ensuring spectrum efficiency.
F. Office of General Counsel
197. The Office of General Counsel (OGC) advises, makes recommendations, and
defends the Commission regarding legal issues that arise in a wide range of Commission
activities.  OGC does not have primary responsibility for drafting or overseeing compliance with
substantive Commission rules, but it does recommend and oversee compliance with a variety of
procedural rules.  For example, OGC is involved in setting procedures for rulemakings, hearings,
and other proceedings.  These rules are included in Parts 0 and 1 of Title 47 of the Code of
Federal Regulations.
198. OGC is committed to establishing processes that encourage participation by a
broad a range of interested parties, in a convenient manner, and without unnecessary expense.  At
the same time, OGC works to ensure that the Commission's procedures conform to the notice and
comment requirements of the Administrative Procedure Act (APA), and that parties have access
to comments and other information that the Commission may consider in making its decisions.
1. Recent and Ongoing Activities
199. In 1997, the Commission revised its rules governing ex parte presentations in
Commission proceedings.   Those revisions were intended to make the rules simpler and clearer.
In 1999, the Commission found that, although its experience with the revised rules generally was
positive, further minor revisions were warranted.   The Commission modified its rules regarding
which persons would be treated as parties for purposes of determining ex parte status.  The
Commission also changed the ex parte status of certain types of proceedings from restricted to
permit-but-disclose.  The Commission determined that presentations to Commission
representatives by administrators, such as the Universal Service Administrative Company (i.e.,
the entity that administers universal service), would be exempt.  In addition, a person seeking
Commission preemption is required to serve its preemption request upon any state or local
government identified in the request.  These revisions were intended to further simplify and
clarify the Commission's ex parte rules, enhance the fairness of the Commission's processes, and
facilitate the public's ability to communicate with the Commission.
200. In 1998, the Commission revised its rules and clarified its policies concerning the
treatment of competitively sensitive information that carriers and others provide to the
Commission.  The Commission adopted a model protective order for use in its proceedings.
G. Office of the Managing Director
201. The Office of the Managing Director (OMD) provides management and
administrative support to the Commission's bureaus and offices.  It administers management and
administrative policy programs and directives supporting the deregulatory efforts of bureaus and
offices and their goals to increase competition.  The rules administered by OMD do not regulate
telecommunications service providers directly.  Traditionally, however, OMD has exercised
jurisdiction over certain portions of Parts 0, 1, and 3 of Title 47 of the Code of Federal
Regulations.  OMD staff conducted a review of these regulations to determine whether to
recommend that any of these rules be repealed or modified.
202. Initially, staff determined whether a section of the Communications Act was
involved.  For example, Part 0 contains the Commission's rules implementing the Freedom of
Information Act (FOIA) and the Privacy Act, and Part 1 contains rules implementing the Debt
Collection Improvement Act (DCIA) and the Ethics in Government Act.  Other government
agencies have primary responsibility for implementing these statutes.  Therefore, the staff did not
recommend changes to these rules.  The staff reviewed rules based on the Communications Act to
determine whether enactment of the 1996 Act affected the operation of these rules, and whether
there had been any significant market changes or other developments that might affect the current
rules and warrant modification or repeal.
203. As the Commission proceeds with its organization, OMD will continue to
support bureaus and offices to ensure that its organization leads to increased efficiency and
effectiveness.  OMD will conduct annual reviews and will perform verifications as required.
Oversight of accounting procedures will also continue.  OMD will regularly evaluate its rules to
determine whether they should be modified or eliminated in light of changing competitive market
conditions.
1. Recent and Ongoing Activities
204. Part 0 covers the organization and general description of the Commission's
organization and operations.  This section concerns regulations pertaining to the administrative
functions of the different bureaus and offices, delegations of authority to the Commissioners,
bureaus and offices, the operation of the public reference rooms, and the agency's printed
publications.  Generally, these rules are amended whenever there is a reorganization.  The
Commission periodically reviews its organizational structure to ensure that it provides for the
most efficient and effective structure for the Commission's functions.  The Commission amended
rules implementing the FOIA to reflect the Electronic Freedom of Information Act,  but the
rules may require further updating to reflect the restructuring of reference room operations
following the move to the Portals and the availability of public records on the agency's Internet
website.
205. Part 1, subpart A involves pleadings, filing periods, and motions for extension of
time.  These rules are administered by Office of the Secretary.  The Commission recently made
minor changes to some of these rules, and staff does not recommend further changes at this
time.  Part 1 also covers statutory charges and procedures for payment of fees.  These sections
are reviewed annually and in some cases biannually, pursuant to the Communications Act.
206. Part 3 involves the certification and monitoring of accounting authorities.  The
Associate Managing Director for Financial Operations recently revised these rules to reflect the
Commission's new location.  Last year the Commission modified these rules to phase out the
Commission's Accounting Authority [US01] and to privatize this function.
2. New Initiatives
207. In August 1999, FCC Chairman William Kennard delivered to Congress the
FCC's Strategic Plan for the 21st Century.  The Strategic Plan has as one of its goals to "Create a
Model Agency for the Digital Age.   One of the objectives under this goal is for the agency to
"Lead the Way in the Information Age."  The Office of the Managing Director seeks to meet this
objective through the development and implementation of an intelligent, integrated, information
management system known as the "Intelligent Gateway" or "Gateway."  The "Gateway" will help
the FCC develop its website into a model of accessibility and information availability.
208. Once funded, designed, and implemented, the Gateway will ensure swift,
accurate, and complete access to information by the public, and will promote information sharing
among the Bureaus and Offices.  As a result, the agency will reduce duplicative staff efforts and
will make available, in ways useful for both internal and external consumption, information about
the number and priority of its pending tasks.
209. At least one industry group has expressed an interest in the public tracking of
items on circulation before the Commission.  As the Gateway develops, we recommend that the
Commission consider whether to use it to permit the public to track items as they move through
the Commission, prior to adoption.
210. The Office of Management and Budget has directed federal agencies under the
Government Paperwork Elimination Act (GPEA) to implement procedures that allow individuals
or entities the option to submit information or transact with Federal Agencies electronically, when
practicable, and to maintain records electronically, when practicable.  GPEA also includes an
electronic signature mechanism to provide verification and security for documents.  The
Performance Evaluation and Records Management Office is in the process of implementing these
procedures.
211. The Commission is in the process of implementing an on line registration system,
the Commission Registration System (CORES), for all entities filing applications or making
payments to the Commission.  Over time, the CORES registration number will be used by all
Commission systems that handle financial, authorization of service and enforcement activities.
CORES will provide the means for the Commission to administer more effectively its financial
management responsibilities.
APPENDIX I: STAFF ACKNOWLEDGEMENTS
We would like to recognize the following staff for their participation in the 2000 Biennial
Regulatory Review Working Group:
Cable Services Bureau
Kathleen Costello
William Johnson
Cheryl King
Cheryl Kornegay
John Norton
Common Carrier Bureau
John Adams
Scott Bergmann
Stephen Burnett
Anthony Butler
Anthony Dale
Andy Firth
Neil Fried
Tiffany Jamison
Jake Jennings
Louise Klees-Wallace
Bob Loube
Susan Magnotti
Andrew Mulitz
Mark Nadel
Claudia Pabo
Staci Pies
Debra Sabourin
Katherine Schroder
Marty Schwimmer
Douglas Slotten
Robin Smolen
CeCi Stephens
Gayle Teicher
Sheryl Todd
Michelle Walters
Sharon Webber
Jack Zinman
Consumer Information Bureau
Peter Friedman
Sumita Mukhoty
Enforcement Bureau
Lisa Fowlkes
Tonya Rutherford
Wayne Toivanen
Richard Welch
International Bureau
Thomas N. Albers
Rebbeca Arbogast
James G. Ballis
Breck Blalock
Kathleen Campbell
Alfred Davidson
Pamela Gerr
Anna Gomez
Howard Griboff
Selina Khan
David Krech
Kathy O'Brien
Susan O'Connell
Thomas E. Polzin
Ronald Repasi
Jackie Ruff
Marilyn Simon
Ken Stanley
Mark Uretsky
Alifya Vasi
Doug Webbink
Mass Media Bureau
Mania Baghdadi
Sharon Bertelsen
Linda Blair
Deborah Dupont
Charles Dziedzic
Judith Herman
Jamila Bess Johnson
Barbara A. Kreisman
Brad Lerner
Mary Beth Murphy
Roy J. Stewart
Cynthia Thomas
Office of Communication Business
Opportunities
Helen Hillegass
Eric Jensen
Eric Malinen
Frank Montero
Office of Engineering and Technology
Rebecca Dorch
Michael Marcus
Office of General Counsel
Lisa Gelb
Jeffrey Lanning
Phyllis Morgan
William Trumpbour
Office of Legislative and Intergovernmental
Affairs
Sherille Ismail
Stephen Klitzman
Sheryl Wilkerson
Office of the Managing Director
Judy Boley
Andra Cunningham
Regina Dorsey
Kathy Fagan
Patricia Rawlings
Renee Licht
Mark Reger
Mary Beth Richards
Magalie Salas
Larry Schecker
Les Smith
Ron Stone
Office of Plans and Policy
Pat DeGraba
Pamela Megna
Lisa Sockett
Wireless Telecommunications Bureau
Kenneth Burnley
Dennis Butler
David Furth
Catherine Fox
Chris Gacek
Mike Garloch
Robert Hardy
Gil Hopenstad
Jay Jackson
Donald Johnson
Jennifer Kolen
Jamison Prime
John Spencer
Frank Stilwell
Gregory Vadas
APPENDIX II:  1998 BIENNIAL REGULATORY REVIEW PROCEEDINGS
A. PROCEEDINGS INITIATED - COMPLETED/SIGNIFICANT ORDERS ISSUED
1. Telecommunications Providers (Common Carriers)
Streamline and consolidate rules governing application procedures for wireless services to
facilitate introduction of electronic filing via the Universal Licensing System.  1998 Biennial
Regulatory Review - Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97, and 101 of
the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System
in the Wireless Telecommunications Services, WT Dkt No. 98-20, NPRM, FCC 98-25 (rel. March
19, 1998), R&O, FCC 98-234 (rel. Oct. 21, 1998).
Streamline the equipment authorization program by implementing the recent mutual recognition
agreement with Europe and providing for private equipment certification.  1998 Biennial
Regulatory Review - Amendment of Parts 2, 25 and 68 of the Commission's Rules to Further
Streamline the Equipment Authorization Process for Radio Frequency Equipment, Modify the
Equipment Authorization Process for Telephone Terminal Equipment, Implement Mutual
Recognition Agreements and Begin Implementation of the Global Mobile Personal
Communications by Satellite (GMPCS) Arrangements, GEN Dkt No. 98-68, NPRM, FCC 98-92
(rel. May 18, 1998), R&O, FCC 98-338 (rel. Dec. 23, 1998).
Eliminate rules concerning the provision of telegraph and telephone franks.  1998 Biennial
Regulatory Review - Elimination of Part 41 Telegraph and Telephone Franks, CC Dkt No. 98-
119, NPRM, FCC 98-152 (rel. July 21, 1998), R&O, FCC 98-344 (rel. Feb. 3, 1999).
In addition to addressing issues remanded by the Ninth Circuit, reexamine the nonstructural
safeguards regime governing the provision of enhanced services by the Bell Operating
Companies (BOCs) and consider elimination of requirement that BOCs file Comparably Efficient
Interconnection (CEI) plans.  Computer III Further Remand Proceedings:  Bell Operating
Company Provision of Enhanced Services; 1998 Biennial Regulatory Review - Review of
Computer III and ONA Safeguards and Requirements, CC Dkt Nos. 95-20 and 98-10, FNPRM,
FCC 98-8 (rel. Jan. 30, 1998), R&O, FCC 99-36 (rel. Mar. 10, 1999).
Provide for a blanket section 214 authorization for international service to destinations where the
carrier has no affiliate; eliminate prior review of pro forma transfers of control and assignments
of international section 214 authorizations; streamline and simplify rules applicable to
international service authorizations and submarine cable landing licenses.  1998 Biennial
Regulatory Review - Review of International Common Carrier Regulations, IB Dkt No. 98-118,
NPRM, FCC 98-149 (rel. July 14, 1998), R&O, FCC 99-51 (rel. Mar. 23, 1999).
Removal or reduction of, or forbearance from enforcing, regulatory burdens on carriers filing for
technology testing authorization.  1998 Biennial Regulatory Review ? Testing New Technology,
CC Dkt No. 98-94, NOI, FCC 98-118 (rel. June 11, 1998), Policy Statement, FCC 99-53 (rel.
Apr. 2, 1999).
Deregulate or streamline policies governing settlement of accounts for exchange of telephone
traffic between U.S. and foreign carriers. 1998 Biennial Regulatory Review - Reform of the
International Settlements Policy and Associated Filing Requirements, IB Dkt No. 98-148, NPRM,
FCC 98-190 (rel. Aug. 6, 1998), R&O, FCC 99-73 (rel. May 6, 1999).
Deregulate radio frequency (RF) lighting requirements to foster the development of new, more
energy efficient RF lighting technologies.  1998 Biennial Regulatory Review - Amendment of
Part 18 of the Commission's Rules to Update Regulations for RF Lighting Devices, ET Dkt No.
98-42, NPRM, FCC 98-53 (rel. Apr. 9, 1998), R&O, FCC 98-135 (rel. June 6, 1999).
Modify accounting rules to reduce burdens on carriers.  1998 Biennial Regulatory Review -
Review of Accounting and Cost Allocation Requirements, CC Dkt No. 98-81, NPRM, FCC 98-
108 (rel. June 17, 1998), R&O, FCC 99-106 (rel. June 30, 1999).
Eliminate duplicative or unnecessary common carrier reporting requirements.  1998 Biennial
Regulatory Review - Review of ARMIS Reporting Requirements, CC Dkt No. 98-117, NPRM,
FCC 98-147 (rel. July 17, 1998), R&O, FCC 99-107 (rel. June 30, 1999).
Privatize the administration of international accounting settlements in the maritime mobile and
maritime satellite radio services.  1998 Biennial Regulatory Review - Review of Accounts
Settlement in the Maritime Mobile and Maritime Mobile-Satellite Radio Services and Withdrawal
of the Commission as an Accounting Authority in the Maritime Mobile and the Maritime Mobile-
Satellite Radio Services Except for Distress and Safety Communications, IB Dkt No. 98-96,
NPRM, FCC 98-123 (rel. July 17, 1998), R&O and FNPRM, FCC 99-150 (rel. July 13, 1999).
Streamline and rationalize information and payment collection from contributors to
Telecommunications Relay Service, North American Numbering Plan Administration, Universal
Service, and Local Number Portability Administration funds.  1998 Biennial Regulatory Review -
Streamlined Contributor Reporting Requirements Associated with Administration of
Telecommunications Relay Services, North American Numbering Plan, Local Number
Portability, and Universal Service Support Mechanisms, CC Dkt No. 98-171, NPRM, FCC 98-
233 (rel. Sept. 25, 1998), R&O, FCC 99-175 (rel. July 15, 1999).
Repeal Part 62 rules regarding interlocking directorates among carriers. 1998 Biennial Regulatory
Review - Repeal of Part 62 of the Commission's Rules, CC Dkt No. 98-195,  NPRM, FCC 98-294
(rel. Nov. 17, 1998), R&O, FCC 99-163 (rel. July 16, 1999).
Simplify Part 61 tariff and price cap rules.  1998 Biennial Regulatory Review - Part 61 of the
Commission's Rules and Related Tariffing Requirements, CC Dkt No. 98-131, NPRM, FCC 98-
164 (rel. July 24, 1998), R&O, FCC 99-173 (rel. Aug. 8, 1999).
Consider modifications or alternatives to the 45 MHz CMRS spectrum cap and other CMRS
aggregation limits and cross-ownership rules.  1998 Biennial Regulatory Review - Review of
CMRS Spectrum Cap and Other CMRS Aggregation Limits and Cross-Ownership Rules, WT Dkt
No. 98-205, NPRM, FCC 98-308 (rel. Dec. 18, 1998), R&O, FCC 99-244 (rel. Sept. 22, 1999).
Eliminate or streamline various rules prescribing depreciation rates for common carriers.  1998
Biennial Regulatory Review - Review of Depreciation Requirements for Incumbent Local
Exchange Carriers, CC Dkt No. 98-137, NPRM, FCC 98-170 (rel. Oct. 14, 1998), R&O, FCC 99-
397 (rel. Dec. 17, 1999), FNPRM, FCC 00-119 (rel. Apr. 3, 2000).
2. Other
Amend cable and broadcast annual employment report due dates to streamline and simplify filing.
1998 Biennial Regulatory Review - Amendment of sections 73.3612 and 76.77 of the
Commission's Rules Concerning Filing Dates for the Commission's Equal Employment
Opportunity Annual Employment Reports, MO&O, FCC 98-39 (rel. Mar. 16, 1998).
Streamline broadcast filing and licensing procedures.  1998 Biennial Regulatory Review -
Streamlining of Mass Media Applications, Rules and Processes, MM Dkt No. 98-43, NPRM,
FCC 98-57 (rel. Apr. 3, 1998), R&O, FCC 98-281 (rel. Nov. 25, 1998), on recon., 14 FCC Rcd
17525 (1999).
Provide for electronic filing for assignment and change of radio and TV call signs.  1998 Biennial
Regulatory Review - Amendment of Part 73 and Part 74 Relating to Call Sign Assignments for
Broadcast Stations, MM Dkt No. 98-98, NPRM, FCC 98-130 (rel. June 30, 1998), R&O, FCC 98-
324 (rel. Dec. 16, 1998).
Simplify and unify Part 76 cable pleading and complaint process rules.  1998 Biennial Regulatory
Review - Part 76 - Cable Television Service Pleading and Complaint Rules, CS Dkt No. 98-54,
NPRM, FCC 98-68 (rel. Apr. 22, 1998), R&O, FCC 98-348 (rel. Jan. 8, 1999).
Streamline the Gettysburg reference facilities so that electronic filing and electronic access can
substitute for the current method of written filings/access.  1998 Biennial Regulatory Review -
Amendment of Part 0 of the Commission's Rules to Close the Wireless Telecommunications
Bureau's Gettysburg Reference Facility, WT Dkt No. 98-160, NPRM, FCC 98-217 (rel. Sept.18,
1998), R&O, FCC 99-45 (rel. Mar. 11, 1999).
Streamline and consolidate public file requirements applicable to cable television systems.  1998
Biennial Regulatory Review - Streamlining of Cable Television Services Part 76 Public File and
Notice Requirements, CS Dkt No. 98-132, NPRM, FCC 98-159 (rel. July 20, 1998), R&O, FCC
99-12 (rel. Mar. 26, 1999).
Streamline AM/FM radio technical rules and policies.  1998 Biennial Regulatory Review -
Streamlining of Radio Technical Rules in Parts 73 and 74 of the Commission's Rules, MM Dkt
No. 98-93, NPRM, FCC 98-117 (rel. June 15, 1998), First R&O, FCC 99-55 (rel. Mar. 30, 1999).
Modify or eliminate Form 325, annual cable television system report.  1998 Biennial Regulatory
Review - "Annual Report of Cable Television System," Form 325, Filed Pursuant to Section
76.403 of the Commission's Rules, CS Dkt No. 98-61, NPRM, FCC 98-79 (rel. Apr. 30, 1998),
R&O, FCC 99-13 (rel. Mar. 31, 1999).
Streamline application of Part 97 amateur service rules.  1998 Biennial Regulatory Review -
Amendment of Part 97 of the Commission's Amateur Service Rules, WT Dkt No. 98-143, NPRM,
FCC 98-1831 (rel. Aug. 10, 1998), R&O, FCC 99-412 (rel. Dec. 30, 1999).
Conduct broad inquiry into broadcast ownership rules not the subject of other pending
proceedings.  1998 Biennial Regulatory Review - Review of the Commission's Broadcast
Ownership Rules and Other Rules Adopted Pursuant to section 202 of the Telecommunications
Act of 1996, MM Dkt No. 98-35, NOI, FCC 98-37 (rel. Mar. 13, 1998), Report, FCC 00-191 (rel.
June 20, 2000).
Streamline Part 90 private land mobile services rules.  1998 Biennial Regulatory Review - 47
C.F.R. Part 90 - Private Land Mobile Radio Services, WT Dkt No. 98-182, NPRM, FCC 98-251
(rel. Oct. 20, 1998), R&O, FCC 00-235 (rel. July 12, 2000).
B. PROCEEDINGS INITIATED - PENDING
1. Telecommunications Providers (Common Carriers)
In NPRM portion, consider forbearance from additional requirements regarding telephone
operator services applicable to commercial mobile radio service providers (CMRS) and, more
generally, forbearance from other statutory and regulatory provisions applicable to CMRS
providers.  Personal Communications Industry Association's Broadband Personal
Communications Services Alliances' Petition for Forbearance For Broadband Personal
Communications Services; 1998 Biennial Regulatory Review - Elimination or Streamlining of
Unnecessary and Obsolete CMRS Regulations; Forbearance from Applying Provisions of the
Communications Act to Wireless Telecommunications Carriers, WT Dkt No. 98-100, MO&O and
NPRM, FCC 98-134 (rel. July 2, 1998).
Modify Part 68 rules that limit the power levels at which any device attached to the network can
operate to allow use of 56 Kbps modems.  1998 Biennial Regulatory Review - Modifications to
Signal Power Limitations Contained in Part 68 of the Commission's Rules, CC Dkt No. 98-163,
NPRM, FCC 98-221 (rel. Sept. 16, 1998).
Modify or eliminate Part 64 restrictions on bundling of telecommunications service with
customer premises equipment.  1998 Biennial Regulatory Review - Policy and Rules Concerning
the Interstate, Interexchange Marketplace/implementation of Section 254(g) of the
Communications Act of 1934, as Amended/Review of the Customer Premises Equipment and
Enhanced Services Unbundling Rules in the Interexchange, Exchange Access and Local
Exchange Markets, CC Dkt Nos. 98-183 and 96-61, FNPRM, FCC 98-258 (rel. Oct. 9, 1998).
Seek comment on various deregulatory proposals of SBC Communications, Inc. not already
subject to other biennial regulatory review proceedings. 1998 Biennial Regulatory Review -
Petition for Section 11 Biennial Regulatory Review filed by SBC Communications, Inc.,
Southwestern Bell Telephone Company, Pacific Bell, and Nevada Bell, CC Dkt No. 98-177,
NPRM, FCC 98-238 (rel. Nov. 24, 1998). [Proceeding superceded by Common Carrier Bureau
Announces Agenda for Initial Workshop for Phase I of the Comprehensive Review of
Commission's  Accounting and Reporting Requirements and Treatment of Ex Parte Presentations
in Related Proceedings, Public Notice, DA 99-758 (rel. Apr. 19, 1999); Common Carrier Bureau
Announces Initiative to Undertake Comprehensive Review of Part 32 and ARMIS Requirements,
Public Notice, DA 99-695 (rel. Apr. 12, 1999); In the Matter of Comprehensive Review of the
Accounting Requirements and ARMIS Reporting Requirements for Incumbent Local Exchange
Carriers: Phase 1, CC Dkt No. 99-253, NPRM, FCC 99-174 (rel. July 14, 1999); Report and
Order, FCC 00-78 (rel. Mar, 8, 2000)].
2. Other
Review current Part 15 and Part 18 power line conducted emissions limits and consider whether
the limits may be relaxed to reduce the cost of compliance for a wide variety of electronic
equipment.  1998 Biennial Regulatory Review - Conducted Emissions Limits Below 30 MHz for
Equipment Regulated Under Parts 15 and 18 of the Commission's Rules, ET Dkt No. 98-80, NOI,
FCC 98-102 (rel. June 8, 1998), NPRM, FCC 99-296 (rel. Oct. 18, 1999).
APPENDIX III: INDUSTRY GROUPS INTERVIEWED
Association for Local Telecommunications Service (ALTS)
Competitive Telecommunications Association (CompTel)
Cellular Telecommunications Industry Association (CTIA)
Federal Communications Bar Association (FCBA)  (various committees)
National Association of Broadcasters (NAB)
National Cable Television Association (NCTA)
National Exchange Carrier Association (NECA)
National Telephone Cooperative Association (NTCA)
Organization For the Promotion and Advancement of Small Telecommunications Companies
(OPASTCO)
Personal Communication Industry Association (PCIA)
Satellite Industry Association (SIA)
United States Telecommunication Association (USTA)
APPENDIX IV: RULE PART ANALYSIS
PART 1 - PRACTICE AND PROCEDURE
Description
Part 1 contains rules governing general practice and procedure before the Commission, including
rules and procedures governing applications and licensing, rulemakings, complaints, hearings,
and a variety of other Commission processes.  Part 1 also contains miscellaneous rules
implementing certain statutes other than the Communications Act that affect Commission
processes, such as the National Environmental Policy Act, the Equal Access to Justice Act, and
the Anti-Drug Abuse Act.  Some of these rules apply generally to all entities that conduct
business before the Commission, others apply to specific groups of licensees or other regulated
entities, while others apply solely to the Commission and its staff.
Part 1 contains 19 subparts:
Subpart A - General Rules of Practice and Procedure - General rules for filing of
pleadings with and appearances before the Commission; procedures for miscellaneous
Commission proceedings, including forfeitures, license modifications, revocation or
cease and desist proceedings, consent orders, reconsiderations (other than
reconsiderations in rulemaking proceedings), and applications for review.
Subpart B - Hearing Proceedings - Procedural rules for hearing proceedings.
Subpart C - Rulemaking Proceedings - Procedural rules for rulemaking proceedings.
Subpart D - Broadcast Applications and Proceedings
Subpart E - Complaints, Applications, Tariffs, and Reports Involving Common Carriers
- Procedural rules pertaining to filings by and complaints against common carriers.
Subpart F - Wireless Telecommunications Services Applications and Procedures -
Application and licensing rules for wireless services.
Subpart G - Schedule of Statutory Charges and Procedures - Fee schedule for application
and regulatory fees charged by the Commission, pursuant to sections 8 and 9 of the
Communications Act.
Subpart H - Ex Parte Communications - Rules governing ex parte communications and
presentations in Commission proceedings.
Subpart I - Procedures Implementing the National Environmental Policy Act of 1969
(NEPA)  - Application and licensing rules for FCC-licensed facilities that require
environmental clearance under NEPA due to potential impact on environmentally
sensitive areas.
Subpart J - Pole Attachment Complaint Procedures - Complaint procedures applicable to
cable companies and telecommunications carriers that seek to obtain non-discriminatory
access to utility poles, ducts, conduits, and rights-of-way on reasonable rates, terms, and
conditions.
Subpart K - Implementation of the Equal Access to Justice Act (EAJA) in Agency
Proceedings  - Rules and procedures for parties to Commission administrative
proceedings who seek recovery of attorneys fees and expenses pursuant to the EAJA.
Subpart L - Random Selection Procedures for Mass Media Services - Rules and
procedures for use of lotteries to award certain categories of broadcast licenses.  [Not
applicable to telecommunications carriers.]
Subpart N - Enforcement of Nondiscrimination on the Basis of Handicap in Programs or
Activities Conducted by the Federal Communications Commission - Rules implementing
the Rehabilitation, Comprehensive Services, and Disabilities Amendments of 1978,
which prohibits Executive agencies from discriminating against persons with disabilities
in programs or activities conducted by the agency.  [Not applicable to
telecommunications carriers.]
Subpart O - Collection of Claims Owed the United States - Rules allowing the
Commission to collect certain debts owed to the United States through administrative or
salary offsets.
Subpart P - Implementation of the Anti-Drug Abuse Act of 1998  - Rules requiring
certain Commission applicants to certify that they are not subject to denial of Federal
Benefits under section 5301 of the ADAA due to a conviction for possession or
distribution of a controlled substance.
Subpart Q - Competitive Bidding Procedures - Rules governing the mechanisms and
procedures for competitive bidding to award spectrum licenses.
Subpart R - Implementation of section 4(g)(3) of the Communications Act: Procedures
Concerning Acceptance of Unconditional Gifts, Donations, and Bequests - Rules
restricting acceptance of gifts by Commission employees.  [Not applicable to
telecommunications carriers.]
Subpart S - Preemption of Restrictions That "Impair" a Viewer's Ability to Receive
Television Broadcast Signals, Direct Broadcast Satellites, or Multi-Channel Multipoint
Distribution Services - Rules preempting state and local regulation of antennas for
reception of video programming via broadcast, satellite, or multipoint distribution
services.  [Not applicable to telecommunications carriers.]
Subpart T - Exempt Telecommunications Companies - Rules implementing provisions
of the Telecommunications Act of 1996 by which a public utility holding company may
obtain a determination from the Commission of status as an Exempt Telecommunications
Company (ETC).
Purpose
The primary purpose of the Part 1 rules, particularly subparts A through L and subpart Q, is to
establish fair and equitable rules of practice and procedure before the Commission for applicants,
licensees, and other entities regulated by the Commission.  Other subparts of Part 1 serve other
purposes, such as compliance with external statutory mandates.
Analysis
Advantages
The procedural rules in Part 1 provide uniform direction to applicants, licensees, and other
entities in a wide variety of Commission proceedings.  Consolidation of the Commission's
procedural rules in Part 1 helps to ensure consistency in the Commission's processes across
services, Bureaus, and offices.
Disadvantages
The Part 1 rules impose inherent administrative burdens on applicants, licensees, and other parties
that practice before the Commission.
Recent Efforts
Certain portions of the Part 1 rules, such as the wireless licensing rules (subpart F), the ex parte
rules (subpart H), and the Commission's competitive bidding rules (subpart Q) have been
revamped in recent rulemaking proceedings.   In addition, Part 1 was recently amended to allow
parties to file comments and other pleadings electronically via the Internet in informal notice and
comment rulemaking proceedings under section 553 of the Administrative Procedure Act.   In
that Report and Order, the rules were also amended to permit electronic filing of all pleadings
and comments in proceedings involving petitions for rulemaking and Notice of Inquiry
proceedings.  Since that time, other Bureaus have amended Part 1 to include the electronic filing
of applications.
Recommendation
The Part 1 rules are essential to the orderly conduct of business before the Commission.  In
addition, as noted above, key portions of Part 1 have been recently revamped.  The staff therefore
recommends no significant changes to the Part 1 rules at this time.  However, as the Commission
proceeds to implement new initiatives in the area of electronic filing, further amendment of the
rules is envisioned.  In addition, the staff intends to closely monitor the practical application of
these rules, and will recommend appropriate rule changes in the future if the rules no longer best
achieve their underlying purposes.  [Note:  Staff recommendations with respect to certain
subparts of Part 1 are discussed in the sections below.]
PART 1, SUBPART E - COMPLAINTS, APPLICATIONS, TARIFFS, AND REPORTS INVOLVING
COMMON CARRIERS - FORMAL COMPLAINTS
Description
The rules governing formal complaints against common carriers implement section 208 of the
Communications Act of 1934, as amended.   Section 208 permits any person to lodge a complaint
with the Commission against a common carrier alleging a violation of the Communications Act.
In addition, Congress amended the Communications Act in 1996, among other things, to establish
specific procedures and, in some cases, timeframes for complaints concerning certain new
statutory provisions.  See, for example, sections 260 (telemessaging), 271 (Bell operating
company entry into long distance market), 274 (Bell operating company provision of electronic
publishing service), 275 (Bell operating company provision of alarm monitoring service).  The
Commission's formal complaint rules implement these new statutory provisions.
Purpose.
These rules establish procedures for Commission receipt and review of formal complaints lodged
against common carriers.  The rules are designed to expedite the resolution of formal complaints
while safeguarding the due process interests of the affected parties.  In addition, the rules are
intended to foster the pro-competitive, deregulatory goals of the Telecommunications Act of 1996
by providing for prompt and efficient enforcement of the statute and the Commission's
substantive rules implementing the statute.
Analysis.
Status of Competition
Because section 208 permits complaints against a wide range of common carriers involving a host
of obligations, it is not feasible to characterize the status of competition with respect to the variety
of common carriers and markets subject to this statutory provision.
Advantages
The rules provide procedures to expedite resolution of disputes involving a common carrier.  As
noted in the Staff Report, the rules permit and encourage staff-sponsored mediation between the
parties both before and after a formal complaint is filed at the Commission.  These mediation
efforts often result in quick and efficient resolution of disputes.  Business solutions achieved by
the parties through Commission-assisted mediation avoid the expense and delay that can
accompany formal litigation before the agency.
The rules also require that a complaining party provide all factual support for its case in its initial
pleadings.  This, in turn, minimizes the need for time-consuming and resource-intensive
discovery.  In addition, the rules provide for the staff to convene an initial status conference with
the parties shortly after the defendant files its answer.  This present an opportunity to simplify or
narrow the issues, obtain admissions of fact or stipulations by the parties, settle some or all of the
matters in controversy, and develop a schedule for the remainder of the case.  This proactive case
management tool helps ensure prompt and efficient case resolution.
Moreover, the rules provide an Accelerated Docket procedure that results in quicker formal
decisions from the agency for certain formal complaints selected by the staff.  Once a particular
dispute is accepted by the staff onto the Accelerated Docket, the procedure is designed to lead to
a written staff-level decision within 60 days from the filing of the complaint.  Because this
procedure may lead to a "mini-trial" with testimony by witnesses subject to cross-examination, it
is particularly well suited for cases involving difficult factual issues.  The Accelerated Docket
rules require staff-supervised pre-filing settlement discussions between the parties.  Thus, many
disputes are settled without the need to file a formal complaint.
Disadvantages.
Formal litigation can be expensive and time-consuming.  The rules attempt to minimize these
liabilities by enhancing mediation and limiting discovery, while recognizing the due process
interests of the affected parties.  Nevertheless, section 208 creates a statutory process for persons
to file complaints against common carriers and obligates the Commission to investigate those
complaints, often within tight timeframes.  Procedural rules are thus necessary to discharge this
statutory directive.
Recent Efforts.
As noted in the Staff Report, the Commission revamped and streamlined these rules in 1997 and
1998 in light of the pro-competitive, deregulatory goals of the Telecommunications Act of 1996.
The 1997 rule changes, in general, were designed to: (1) promote settlement efforts to enable
parties to resolve disputes on their own; (2) improve the utility and content of pleadings; and (3)
streamline the formal complaint process by eliminating or limiting procedural devices and
pleading opportunities that contributed to undue delay.  The 1998 rule changes created the
Accelerated Docket.  These specialized rules provide a framework for expeditious resolution of
certain carrier-related complaints.
Recommendation.
The staff recommends no changes to the rules at this time because the rules were recently
revamped and streamlined.  However, the staff intends to closely monitor the practical application
of all the rules governing formal complaints against common carriers.  The staff will recommend
appropriate rule changes in the future if the rules no longer achieve their underlying purposes, or
if rule changes will better serve the public interest in light of competitive developments in the
marketplace.
PART 1, SUBPART F - WIRELESS TELECOMMUNICATIONS SERVICES APPLICATIONS AND
PROCEDURES
Description
Part 1, subpart F  sets forth procedural rules governing the filing of applications and the issuance
of wireless licenses.  The rules cover all of the basic types of applications associated with
wireless licensing, including initial applications, amendments and modifications, waiver requests,
requests for special temporary authorization, assignment and transfer applications, and renewals.
In addition, subpart F includes rules concerning public notices, petitions to deny, dismissal of
applications, and termination of licenses.
The subpart F rules were adopted as part of the 1998 Biennial Regulatory Review in the
Universal Licensing proceeding, WT Docket No. 98-20.   The Commission initiated this
proceeding in connection with the implementation of the Universal Licensing System (ULS), an
integrated, automated system for electronic filing and processing of wireless applications.  In the
Universal Licensing proceeding, the Commission consolidated and streamlined its procedural
rules into subpart F, which replaced numerous service-specific rules that had previously applied
to different wireless services.  In addition, the Commission adopted new standardized application
forms designed for use in ULS, and adopted rules requiring all wireless telecommunications
carriers, as well as certain other classes of wireless licensees, to file applications electronically.
Purpose
The purpose of subpart F is to:  (1) establish uniform procedures for the licensing of all wireless
services; (2) minimize filing requirements by eliminating redundant, inconsistent, or unnecessary
submissions; and (3) ensure the collection of reliable information from applicants and licensees.
Analysis
Advantages
Consolidating the wireless procedural rules into a single subpart provides greater clarity,
consistency, and predictability to the licensing process than the prior array of sometimes
inconsistent service-specific rules, forms, and procedures.  This lessens the filing burden on
applicants, and also facilitates more rapid and efficient processing by the Commission.
Disadvantages
The requirement of electronic filing for all wireless telecommunications carriers imposes certain
technical burdens and costs.  In addition, the general procedural rules contained in subpart F
impose administrative burdens on wireless applicants and licensees that are inherent to the
licensing process.
Recent Efforts
The Commission most recently reviewed the subpart F rules in its 1999 reconsideration of the
ULS Report and Order, in which it made minor but not substantial changes to the rules.
Recommendation
In light of the Commission's recent adoption and review on reconsideration of subpart F, the staff
does not perceive the need for significant modification or revision of the rules.  The staff
recommends continuing to monitor developments as the Wireless Bureau completes its
implementation of ULS for all wireless services, which is expected to occur by the end of the
year.
PART 1, SUBPART I - PROCEDURES IMPLEMENTING THE NATIONAL ENVIRONMENTAL
POLICY ACT OF 1969
Description
Subpart I of the Commission's rules  implements the requirements of the National
Environmental Policy Act (NEPA)  as well as a series of other federal environmental laws, such
as the Endangered Species Act of 1973, as amended,  The National Historic Preservation Act of
1966,  the Wilderness Act of 1964, as amended,  laws relating to Indian Ceremonial Sites  and
the Wildlife Refuge Laws.   In addition, the Commission's environmental rules implement
Executive Orders regarding flood plains and wetlands regulation.   By statute and/or as set forth
in the regulations of the Council on Environmental Quality (CEQ),  the Commission is
responsible for ensuring compliance with these laws.  The rules, finally, identify certain special
issues for consideration, including the impact of high-intensity white lights on towers in
residential neighborhoods  and the effect of radiofrequency emissions on the human
environment.
Purpose
The purpose of the Commission's environmental rules is to identify those sensitive environmental
issues which Commission licensees must address.  As the primary Federal agency managing and
licensing radio spectrum to broadcasters, wireless telephone carriers and other public and
private radio users, the Commission complies with NEPA by requiring its licensees to assess
and, if found, report the potential environmental consequences of their proposed projects.
If a federally-licensed facility, such as the construction of a tower by a licensee, might affect the
environment in one of the ways described in the rules, the licensee, on behalf of the Commission,
is required to consider the potential environmental effects from its project, to describe those
potential effects in an environmental assessment (EA) and file that document with the
Commission.   The Commission has concluded that actions not identified in its rules are
categorically excluded from environmental review.   The Commission's environmental rules
then explain what information is required in an EA,  the methods for the public to file objections
to EAs,  and those situations in which a full environmental impact statement must be
completed,  as required by NEPA.
Analysis
Advantages
The Commission's environmental rules meet the Commission's obligation as a federal agency to
consider the affect on the environment, as required by a number of statutes, of proposed facilities
constructed by its licensees.  The principal advantage of the Commission's environmental rules is
that they streamline compliance with multiple environmental laws and focus environmental
review activities to those that have a potential to significantly affect the environment.  The rules
rely on licensees to perform preliminary analyses to determine if there will be an environmental
effect by contacting expert state and federal agencies.  Only where there may be an environmental
effect are licensees required to file environmental assessments with the Commission.  Thus, a
substantial number of facilities are categorically excluded from processing by the Commission
because licensees have determined the proposed facilities will not affect the environment.  In
those cases where there may be an effect on the environment a detailed evaluation of the
environmental effect is performed by the licensee, filed with the Commission, and approved prior
to construction of the proposed facilities.
Disadvantages
The environmental laws as implemented by the Commission can create administrative burdens
and delays in the implementation of federally-licensed projects.  Moreover, the expert agencies
contacted by licensees to determine if proposed projects will have an environmental effect are
potentially overburdened with the number of requests from the Commission's licensees because
of substantial facility construction.  Because the Commission's rules are streamlined and rely on
licensees to make the initial evaluation of environmental effect of proposed facilities, licensees
sometimes construct facilities that have an adverse effect on the environment without obtaining
approval from the Commission.  In these cases, licensees generally construct without contacting
expert agencies or adequately assessing the effect on the environment.
Recent Efforts
The Commission staff is currently conducting negotiations with the Advisory Council on Historic
Preservation designed to develop a programmatic agreement to streamline compliance with
historic preservation laws.  Members of the staff have also attended various environmental
seminars, workshops, and meetings to identify areas where the FCC has compliance obligations,
to explain the Commission's rules, and to evaluate how the FCC's environmental obligations can
be streamlined.
Recommendation
In general, the staff recommends that the subpart I rules be retained because they are statutorily
mandated and fulfill important public interest goals.  The staff also recommends, however, that
the rules be evaluated on an ongoing basis to determine whether they meet the Commission's
environmental obligations and can be streamlined in order to minimize administrative cost and
delay.
PART 1, SUBPART J - POLE ATTACHMENT COMPLAINT PROCEDURES
Description
Subpart J implements section 224 of the Communications Act of 1934, as added by Pub. Law No.
95-234, as amended.  The Telecommunications Act of 1996  significantly amended section 224.
Subpart J contains complaint and enforcement procedures to ensure that telecommunications
carriers and cable system operators have nondiscriminatory access to a utility's poles, ducts,
conduits and rights-of-way with rates, terms and conditions that are just and reasonable.  It is
applicable in States that have not certified to the Commission that they regulate pole attachments.
Purpose
The purpose of subpart J is to provide a simple and expeditious process for resolving complaints
filed pursuant to section 224 of the Communications Act of 1934, as amended.  Subpart J sets
forth uniform definitions, procedures and requirements for an aggrieved party to seek redress for
unjust and unreasonable rates, terms and conditions which act to impede deployment of facilities
and equipment necessary to foster diverse communication capability throughout the nation.
Analysis
Status of Competition
The relevant market for purposes of pole attachment regulation is the existing local pool of poles,
ducts, conduits and rights-of-way to which cable or telecommunications service providers, out of
necessity or business convenience, must attach their distribution facilities.  At the time of
adoption of section 224, utilities enjoyed a superior bargaining position over attachers in
negotiating the rates, terms and conditions for pole attachments due to the utilities' monopoly
position in the ownership or control of these facilities.   That monopoly position has not changed
since the passage of section 224, leaving open the possibility of anti-competitive practices by
utilities against cable or competitive telecommunications providers in the absence of section 224.
Advantages
Subpart J provides a simple and expeditious complaint process and methodology to determine a
maximum just and reasonable pole attachment rate a utility may charge an attaching
telecommunications carrier or cable system operator.  When a dispute arises, subpart J provides a
mechanism for preventing unfair pole attachment practices, thereby minimizing the effect of
unjust and unreasonable pole attachment practices on the deployment of cable television and
telecommunications services to the public.  Because subpart J provides a means for parties to
predict an estimated rate a utility may charge by using an established set of formulas based on
rebuttable presumptions and generally publicly available data that utilities report to their
respective regulatory agencies, it promotes successful negotiation between parties and reduces the
burden which might otherwise be associated with rate setting.
Disadvantages
Although cable system operators and telecommunications carriers must first attempt to negotiate
rates, terms and conditions of attaching to a utility's poles, ducts, conduits and rights-of-way, in
the event that negotiations are not successful, subpart J imposes certain transaction costs on the
parties in order to successfully pursue and respond to the complaint driven rules.  However, the
process has been kept as simple and expeditious as possible to ensure that the burden on the
parties is kept to a minimum.
Recent Efforts
In the Pole Fee Order  the Commission refined and clarified the formula used to calculate the
maximum just and reasonable rate a utility may charge a cable service or telecommunications
service provider for attachments to a pole, duct, conduit or right-of-way prior to February 8,
2001, and continuing for cable operators not providing telecommunications services after
February 8, 2001.  Petitions for reconsideration and/or clarification of this order are pending.  In
the Telecommunications Carrier Report and Order,  the Commission adopted a separate
methodology for attachments by telecommunications service providers, including cable systems
providing telecommunications services, after February 8, 2001, as mandated by section 224.
Petitions for reconsideration and/or clarification of this order are pending.  In the Local
Competition Order,  the Commission enumerated guidelines concerning the reasonableness of
certain terms and conditions of access.  These guidelines were later modified and refined in the
Local Competition Reconsideration Order.
Recommendation
Subpart J is necessary to implement and enforce section 224 of the Communications Act.  The
complaint driven process encourages parties to negotiate and when applied, acts to prevent
utilities from setting monopoly rates for infrastructure necessary to the competitive deployment of
cable and telecommunications services.  The necessity for these rules is increased by the influx of
utilities entering the telecommunications field.  In the last two years, the Commission has
significantly revised and clarified subpart J in response to Congress' expansion and modification
of section 224.  The staff concludes that significant modification or repeal of the subpart J rules is
not necessary at this time.
PART 1, SUBPART Q - COMPETITIVE BIDDING PROCEEDINGS
Description
Subpart Q implements section 309(j) of the Communications Act of 1934, as added by the
Omnibus Budget Reconciliation Act of 1993  and the Balanced Budget Act of 1997.   Subpart Q
sets forth rules governing the mechanisms and procedures for competitive bidding to award
spectrum licenses.
Purpose
The purpose of subpart Q is to establish a uniform set of competitive bidding rules and procedures
for use in licensing of all services that are subject to licensing by auction.  The rules in this
subpart: (1) specify which services are eligible for competitive bidding; (2) provide competitive
bidding mechanisms and design options; (3) establish application, disclosure and certification
procedures for short- and long-form applications; (4) specify down payment, withdrawal and
default mechanisms.
In addition, subpart Q contains rules that define eligibility for "designated entity" (i.e., small
business) status, and includes a schedule of bidding credits for which designated entities may
qualify in those auctions in which special provisions are made for designated entities.   The
purpose of these provisions is to implement section 309(j)(3)(B) of the Act, which states that an
objective of designing and implementing the competitive bidding system is to "promot[e]
economic opportunity and competition and ensur[e] that new and innovative technologies are
readily accessible to the American people by avoiding excessive concentration on licenses and
disseminating licenses among a wide variety of applicants, including small businesses, rural
telephone companies, and businesses owned by members of minority groups and women."
Analysis
Advantages
The subpart Q competitive bidding rules establish procedures for the efficient licensing of
spectrum.  Use of auction procedures allows for substantially faster licensing than alternative
licensing methods such as comparative hearings, and is more likely to result in award of licenses
to those entities that value the spectrum the most and will use it most efficiently.  Auction rules
also enable the Commission to recover a portion of the value of the spectrum for the benefit of the
public.
Subpart Q is the result of the Commission's consolidation of its auction rules in the Part 1
rulemaking proceeding (WT Docket No. 97-82).  Prior to the Part 1 proceeding, the Commission
implemented service-specific auction rules for each new auctioned service.  Consolidating the
auction rules in Part 1 has resulted in more consistency and predictability in the auctions process
from service to service.
Disadvantages
The auction rules in this subpart impose certain transaction costs on auction participants (aside
from the obligation on the winning bidder to pay the amount bid).  These include filing and
reporting requirements, as well as the cost of maintaining staff and electronic resources to
participate in auctions that may last several weeks or months.  These auction-related costs may be
somewhat higher than the cost of filing a lottery application.  However, they also tend to
discourage frivolous or speculative applications and are critical for ensuring the integrity of the
auction process.  In addition, certain aspects of the auctions process (e.g., setting of minimum
opening bid amounts, bid increments, and bidding credit levels) still require service-specific
notice and comment prior to each individual auction.  Nonetheless, the delays associated with this
process are significantly less than those historically associated with licensing by lottery or
hearing.
Recent Efforts
The Commission has made significant changes to the competitive bidding rules of subpart Q in
recent years.  The overall objectives of these competitive bidding rulemakings are: (1)
consolidation of competitive bidding rules; and (2) the establishment of a uniform set of rules
instead of a customized set of rules for each service.  In the Part 1 Third Report and Order,  the
Commission made substantive amendments and modifications to the competitive bidding rules
for all auctionable services.  These changes to the competitive bidding rules are intended to
streamline regulations and eliminate unnecessary rules wherever possible, increase the
efficiency of the competitive bidding process, and provide more specific guidance to auction
participants.  The changes also advance the auction program by reducing the burden on the
Commission and the public of conducting service-by-service auction rule makings.
Recommendation
In general, the competitive bidding rules in this subpart are integral to the basic licensing and
spectrum management functions performed by the Commission.  The necessity for these rules is
also not significantly affected by changes in the level of competition in the auctionable services.
In addition, the Commission has significantly revised and streamlined the competitive bidding
rules in this subpart in several proceedings.  Therefore, the staff concludes that significant
modification or repeal of the subpart Q rules is not necessary at this time.
PART 1, SUBPART T - EXEMPT TELECOMMUNICATIONS COMPANIES
Description
Sections 1.5000 through 1.5007  implement provisions of the Telecommunications Act of 1996
by which a public utility holding company may obtain a determination from the Commission of
status as an Exempt Telecommunications Company (ETC).  By obtaining ETC status under these
procedures, these firms become exempt from the "line of business" restrictions of the Public
Utility Holding Company Act (PUHCA).  Those restrictions, which are subject to regulation of
the Securities and Exchange Commission, would otherwise preclude these firms from entering
markets that are not related to the provision of public utility service.
Purpose
The purpose of these rules is thus to enable public utility holding companies to enter the
telecommunications industry and thereby increase the number of possible entrants into this
industry.
Analysis
The rules achieve the purpose in a very effective, streamlined way.  Notably, under section
1.5004, if the Commission does not issue an order denying an ETC application within 60 days of
receipt of the application, the application is deemed granted as a matter of law.  Under section
1.5003, a person applying in good faith for a Commission determination of ETC status is deemed
to be an ETC from the date of receipt of the application until the date of Commission action
pursuant to section 1.5004.  To implement these provisions, the Commission invites comments on
each application under section 1.5007 and at the same time notifies the Securities and Exchange
Commission under section 1.5005 that the Applicant is deemed to be an exempt
telecommunications company.  If the Commission receives comments warranting denial, it issues
an order within 60 days of receipt of the application denying the application and notifies the SEC,
but otherwise the Commission takes no further action to grant these applications.
Recommendation
Staff recommends that these rules be retained.
PART 2, SUBPART B - ALLOCATION, ASSIGNMENT, AND USE OF RADIO FREQUENCIES
Description
Section 303(c) of the Communications Act of 1934, as amended, gives the Commission authority
to "assign bands of frequencies to the various classes of stations." Part 2, subpart B implements
this authority and contains the Table of Allocations which identifies the services allowed for
various frequency bands.  The Table of Allocations is strongly influenced by the International
Telecommunications Union's (ITU) Radio Regulations which contain an international allocation
table and have the legal status of a treaty.  The international allocations are noted for information
purposes in the Table of Allocations.
Purpose
The Table of Allocations acts as a basic framework for the various service rules for each radio
service.  It also is the basic mechanism for coordinating with the National Telecommunications
and Information Administration under section 305 of the Act to regulate stations operated by the
federal government.
Analysis
Status of Competition
Not applicable: Part 2 subpart B does not regulate market entry or pricing.
Advantages
The Table of Allocations clearly sets out what radio services are permitted in each band and the
primary or secondary status of each.  As such users clearly can see what other classes of stations
may enter their band or adjacent bands and what priority they have with respect to those uses.
Disadvantages
For some new radio technologies, a two-step process is needed to implement their use:  first
implementation of an allocation table change, and then adoption of service rules.  We have
addressed this problem at times in the past by combining the two steps in cases where speed was
important and the issues were clear.  Some types of new services also require changes in the
ITU's Radio Regulations, but this step is a treaty requirement beyond FCC's control.
Recent Efforts
The allocation table is dynamic and is amended several times yearly to address new services and
changes to existing services.
Recommendation
 The staff recommends retaining the table in its current form and continuing the present procedure
of incremental change as the need arises.
PART 3 - AUTHORIZATION AND ADMINISTRATION OF ACCOUNTING AUTHORITIES IN
MARITIME AND MARITIME MOBILE-SATELLITE RADIO SERVICES.
Description
This rule part implements 47 U.S.C. 154(i), 154(j) and 303(r).  Part 3 sets forth rules for
authorizing, controlling and monitoring the issuance of accounting authority identification codes
(AAIC).  The rule places specific reporting requirements on authorized Accounting Authorities
and addresses the Commission's enforcement policy.  It also establishes rules, which monitor the
business conduct of authorized Accounting Authorities.
At any given time, there are no more than 25 authorized accounting authorities with a minimum
of 15 "US" AAICs reserved for use by the accounting authorities conducting settlement
operations with the United States.
Accounting Authorities are responsible for settling accounts for pubic correspondence due to
foreign administrations for messages transmitted at sea by or between maritime mobile stations
located on board ships subject to U.S. registry and utilizing foreign coast and coast earth station
facilities.
Purpose
These rules are intended to ensure that settlements of accounts for U.S. licensed ship radio
stations are conducted in accordance with the International Telecommunications Regulations,
taking into account the applicable ITU-T recommendations.
Analysis
Advantages
? Establishes and formalizes procedures for controlling the issuance of accounting
authority identification codes.
? Establishes rules and guidance for administering accounting authority activities.
? Addresses ITU-T Recommendations
? Compliance with International Telecommunications Regulations.
? Implements specific reporting requirements
? Provides the opportunity for the Commission to privatize its own internal accounting
authority activities.
Disadvantages
Administrative burden of monitoring the activities of private accounting authorities.
Recent Efforts
The International Bureau (IB) is currently drafting a Further Notice of Proposed Rule Making
(FNPRM) which, among other things, considers privatizing the role currently performed by
USO1.  USO1 is the Commission's internal accounting authority.  OMD's International
Telecommunications Settlements Group administers the settlement activities for USO1.  The
group is located in Gettysburg, Pennsylvania.  For years USO1 has handled all communications
traffic, not otherwise contracted with one of the interim accounting authorities.  With the
implementation of Part 3 and the adoption of rules proposed in the pending FNPRM, the
Commission plans to get out of the business of settling maritime accounts.  Focus would then be
placed on administering and monitoring the activities of authorized accounting authorities.
Recommendation
Recommend the entire rule part stand as written, pending IB completion of its current rule
making to privatize the Commission's internal accounting authority (USO1).
PART 15 RADIO FREQUENCY DEVICES
Description
Section 302 of the Communications Act of 1934, as amended, gives the Commission authority to
regulate devices which may interfere with radio reception and requires the Commission to adopt
regulations forbidding the sale of equipment capable in intercepting domestic cellular radio
telecommunications service.
Purpose
The purpose of Part 15 is to provide technical guidance regarding radio devices, including
prevention of interference, prohitions on cellular transmission and reception interception, and
requirements for television receivers and V chips.
Analysis
Status of Competition
The markets affected by Part 15 are competitive.
Advantages
The requirements of Part 15 are clear and competitively neutral.
Disadvantages
The requirements impose some regulatory costs on equipment in both having to be designed to
comply and having to show compliance.  The required approvals slow market entry slightly.
Recent Efforts
The Part 15 rules are continually revised to address evolving technology.
Recommendation
The staff recommends several specific changes to Part 15:
? Incorporate the new ANSI C63.4 test procedure for unlicensed PCS systems to
remove certain present ambiguities
? Amend rules to establish conditions under which intentional transmitter modules can
be authorized and then incorporated into larger units without addition equipment
authorization.
? Review emission standards above 2 GHz to adjust in view of changes in licensed
services at these frequencies.
? Amend 15.231 to permit data transmission by intermittent unlicensed transmitters
permitted by this rule.
PART 17 - CONSTRUCTION, MARKING, AND LIGHTING OF ANTENNA STRUCTURES
Description
Part 17  sets forth the procedures by which the Commission registers and assigns painting and
lighting requirements to those antenna structures that may pose a physical hazard to aircraft.
These procedures implement section 303(q) of the Communications Act of 1934, as amended.
The rules require registration, evaluation and approval by the Commission, in conjunction with
the recommendations of the Federal Aviation Administration (FAA), of any proposed
construction or modification of an antenna structure that is a potential hazard to aircraft.  The
rules also require tower owners to paint and light their antenna structures as necessary to protect
air navigation.
The Antenna Structure Registration procedures set forth in Part 17 are distinct from the FCC's
licensing functions.  The registration of an antenna structure that affects air navigation is a pre-
condition to FCC licensing of radio facilities at a particular site.
Purpose
The purpose of Part 17 is to insure that tower owners do not construct structures that may pose a
hazard to air navigation (and FCC licensees do not site facilities on such structures) unless and
until the antenna structures comply with federal aviation safety requirements.
Analysis
Advantages
The Part 17 rules implement section 303(q) of the Communications Act of 1934, as amended, and
provide critical safety-of-life functions by insuring that antenna structures hosting FCC licensees
are sufficiently conspicuous to aircraft.  The rules are limited to those classes of antenna
structures that may reasonably be expected to pose an air safety hazard (generally, antenna
structures that are taller than 200 feet or that are in close proximity to airports) and, therefore, that
must be individually examined in conjunction with the FAA.  Antenna structure owners are
responsible for compliance with the rules, which allows for a single point of contact for a
particular antenna structure and which eliminate the need for each party on a multi-tenant
structure to undertake the registration process.
Disadvantages
The Part 17 rules impose an additional regulatory cost on antenna structure owners.  Because
proposed facilities that meet the registration criteria must be studied by the FAA and registered
by the Commission prior to construction, an owner who is unable to allocate sufficient time for
this process risks delaying a licensee's ability to obtain an authorization for, and to begin service
from, individual antenna structures.
Recent Efforts
The Commission's antenna structure registration program was substantially revised in 1995.   In
a March 2000 Memorandum Opinion and Order on Reconsideration, the Commission reaffirmed
the antenna structure registration procedures adopted in 1995, but clarified several rules.   In
addition, the Commission has updated individual radio service rules during the course of
rulemaking proceedings in order to cross-reference the Part 17 Rules.
Recommendation
In general, the rules in this part are critical to the safety-of-life duties required by the section
303(q) of the Communications Act of 1934, as amended.  In addition, the Commission recently
reaffirmed the antenna structure clearance process.  Accordingly, the staff concludes that it is
unnecessary to significantly restructure or repeal the Part 17 rules at this time.  However, the staff
has identified some rules that it believes could be modified or eliminated without compromising
the public safety goals embodied in this rule part.  These rules are either duplicative or
inconsistent with the procedures antenna structure owners must undertake when notifying the
FAA,  create unnecessary administrative burdens on antenna structure owners,  or are apt to
confuse owners and licensees who attempt to comply with our Part 17 rules.
PART 20 - COMMERCIAL MOBILE RADIO SERVICES, SECTION 20.6 ? CMRS SPECTRUM
AGGREGATION LIMIT
Description
Section 20.6  limits the amount of broadband PCS, cellular, and SMR spectrum that any entity
can hold in a common geographic area.  The rule further defines the types of ownership and other
interests that are attributable under the cap.  The cap was adopted in 1994,  and modified in 1999
(see discussion below).
Purpose
The purpose of section 20.6 is to promote competition in the broadband CMRS market by
preventing any wireless carrier from gaining undue market power or restricting entry through the
accumulation of CMRS spectrum.
Analysis
Advantages
The spectrum cap minimizes potential for anti-competitive behavior by avoiding excessive
concentration of licenses, and ensures that licenses are distributed among a wide variety of
applicants.  By applying a bright-line test to spectrum aggregation, the rule also reduces
transaction costs associated with case-by-case review of such transactions.
Disadvantages
By restricting aggregation of spectrum, the spectrum cap may limit economies of scale or scope
that could otherwise be achieved by carriers subject to the cap.  The rule also potentially limits
carriers' ability to provide new services to the extent such services require more spectrum
resources than the cap allows.
Recent Efforts
On September 15, 1999, the Commission adopted a Report and Order that retained the spectrum
cap, with some modifications.   The Commission maintained the original 45 MHz cap for most
areas, but increased the cap to 55 MHz for rural areas.  In addition, the Commission adopted a
separate benchmark for the spectrum cap of 40 percent equity ownership by passive institutional
investors.  The Commission also established a waiver mechanism for carriers who can
demonstrate that strict application of the cap will impair their ability to provide 3G or other
innovative services.  The Commission stated in the Report and Order that while it was retaining
the cap, it would further consider in the 2000 Biennial Regulatory Review whether the cap should
be retained, repealed, or modified.
Several carriers filed petitions for waiver or forbearance with respect to application of the
spectrum cap to the upcoming C and F Block auction scheduled for November 2000.  On August
29, 2000, the Commission issued the Sixth Report and Order and Order on Reconsideration in
WT Docket No. 97-82, which held that the spectrum cap would apply to the C and F Block
auction.
Recommendation
As noted above, the Commission has stated that the spectrum cap will be reviewed as part of the
2000 Biennial Regulatory Review.  The staff plans to prepare a Notice of Proposed Rulemaking
for Commission consideration later this year.
PART 20, SECTION 20.11 ? INTERCONNECTION TO FACILITIES OF LOCAL EXCHANGE
CARRIERS
Description
Section 20.11  provides that local exchange carriers (LECs) must provide reasonable
interconnection to commercial mobile radio service (CMRS) providers on request, and that LECs
and CMRS providers must each reasonably compensate the other for terminating traffic that
originates on their respective facilities.  This rule codifies section 332(c)(1)(B) of the Act,  which
was enacted by Congress as part of the Omnibus Budget Reconciliation Act of 1993.   Section
20.11 was adopted in 1994 in the CMRS Second Report and Order in GN Docket No. 93-252.
In the Telecommunications Act of 1996, Congress added sections 251 and 252 to the
Communications Act.  These statutory provisions establish interconnection rights among all
telecommunications carriers, and set forth terms and conditions under which interconnection must
be provided by one carrier to another.   While enacting sections 251 and 252, Congress also left
section 332(c)(1)(B) of the Act intact.  In the 1996 First Local Competition Order, the
Commission codified new interconnection rules in Part 51 as part of its implementation of
sections 251 and 252.    The Commission also concluded that in light of Congress' retention of
section 332(c)(1)(B), the Commission retained separate authority over LEC-CMRS
interconnection pursuant to that section.    Because the Commission viewed sections 251, 252,
and 332 of the Act as furthering a common goal with respect to interconnection, the Commission
declined at that point to further act on or define the scope of its section 332 interconnection
authority, but instead amended section 20.11 to require that LECs and CMRS providers comply
with the interconnection rules in Part 51.
Section 20.11 is organized into three lettered sub-parts:  Subsection (a) requires LECs to provide
the type of interconnection requested by mobile radio service providers, within reason.
Subsection (b) requires LECs and CMRS providers to reasonably compensate each other for
terminating traffic that originates on each other's facilities.  Subsection (c) requires LECs and
CMRS providers to comply with the Part 51 interconnection rules.
Purpose
The purpose of the LEC-CMRS interconnection rule is to promote competition in the
telecommunications market by ensuring that all LECs and CMRS providers provide reasonable
interconnection to one another subject to reasonable rates, terms, and conditions.  The rule is
particularly directed to regulating the conduct of LECs with market power in their
interconnection relationships with CMRS providers.  Historically, some LECs denied or restricted
interconnection options available to CMRS providers, or required CMRS providers to
compensate the LEC for LEC-originated traffic that terminated on the CMRS provider's network.
Congress enacted section 332(c)(1)(B), and the Commission adopted section 20.11 codifying this
provision, in order to curtail such practices.
Analysis
Advantages
Section 20.11 sets forth basic requirements for reasonable and nondiscriminatory interconnection
arrangements between LECs and CMRS providers, but does not impose detailed standards or
technical requirements.  Thus, it reduces the potential for anti-competitive behavior, while
affording carriers reasonable flexibility with respect to the terms and conditions of
interconnection so long as the basic requirements of the rule are adhered to.
Disadvantages
Section 20.11 imposes certain transaction costs on carriers to ensure that their interconnection
arrangements comply with the rule, and may lead to disputes and litigation between carriers about
what constitutes "reasonable" interconnection under the rule.  In addition, the overlap between
this rule and the Part 51 interconnection rules may cause some duplication of regulatory
requirements.
Recent Efforts
Since the addition of subsection (c) in 1996, section 20.11 has not been revised.  In February
2000, Sprint PCS filed an analysis of CMRS traffic-sensitive costs of terminating local calls
originating on LECs' networks, and requested the Commission to consider rules that would
mandate recovery of such costs.    The Commission has sought comment on Sprint's filing.
The issue is still pending review.
Although section 20.11 has not been judicially challenged, the related Part 51 rules continue to be
the subject of litigation.  On July 18, 2000, on remand form the Supreme Court, the Eighth
Circuit vacated portions of the FCC's forward-looking pricing methodology, proxy prices, and
wholesale pricing provisions.   To the extent that section 20.11 requires compliance with Part 51,
this litigation affects carriers' obligations under both sets of rules.
Recommendation
The staff recommends retaining section 20.11.  Although there is some overlap with the
interconnection requirements of Part 51, retention of the rule is appropriate in light of the fact that
Congress has retained the separate statutory provision in section 332 governing LEC-CMRS
interconnection.
PART 20, SECTION 20.12 ? RESALE AND ROAMING
[Note: Section 20.12 addresses two distinct issues: resale and roaming.  This analysis deals with
each separately.]
RESALE
Description
Section 20.12(b)  provides that any carrier of Broadband PCS, Cellular Radio Telephone
Service, or Specialized Mobile Radio (SMR) Services that offers real-time, two-way
interconnected voice service with switching capability ("covered CMRS provider") must permit
unrestricted resale of its services.  The resale rule was adopted in 1996 in the First Report and
Order in CC Docket No. 94-54.
Section 20.12(b) further provides that the resale provision will cease to be effective five years
after the date of the award of the last group of initial licenses for broadband PCS.  The
Commission has since determined the last PCS award date for purposes of this rules was
November 25, 1997.  Therefore, the resale rule is set to expire on November 24, 2002.
However, resale arrangements will continue to be subject to the non-discrimination and
reasonableness requirements of sections 201 and 202 of the Communications Act  after that date.
Purpose
The purpose of the resale rule is to promote competition in the wireless telephony market by
preventing facilities-based covered CMRS carriers from restricting resale of their services.  The
rule is particularly directed to promoting competition during the period that broadband PCS
providers are building out their facilities-based networks to compete with incumbent cellular
carriers.  The Commission has concluded that by November 2002, PCS buildout should be
sufficient to obviate the need for the rule.
Analysis
Status of Competition
As described in the Fifth Competition Report, the broadband PCS sector has engaged in
significant buildout in recent years.   However, broadband PCS has not yet achieved full parity
with cellular as a facilities-based competitor.  The Fifth Competition Report also notes that PCS
providers have yet to achieve the same level of geographic coverage or subscribership as cellular,
particularly in smaller markets.
Advantages
The resale rule provides a "bright-line" test that minimizes potential for anti-competitive
behavior.  By prohibiting CMRS carriers from any restrictions on resale, the rule ensures no
carrier may offer like communications services to a reseller at less favorable prices, or on less
favorable terms or conditions, than are available to similarly situated customers.
Disadvantages
The resale rule imposes administrative costs on facilities-based carriers associated with
negotiating and entering into resale agreements, resolving disputes with resellers, and litigation of
compliance issues.  The rule also may impose technical costs associated with accommodating
resellers on facilities-based networks and billing of resale service.
Recent Efforts
In response to petitions for reconsideration of the CMRS Resale Order, the Commission recently
conducted a comprehensive review of the resale rule.  In the CMRS Resale Reconsideration
Order, adopted on September 15, 1999, the Commission rejected arguments that the rule should
be repealed immediately, and determined that retaining the rule (with minor modifications) until
the November 2002 sunset date would best promote competition and balance the costs and
benefits of the rule.
Recommendation
In light of the Commission's recent comprehensive review of the resale rule, discussed above, the
staff finds no need to make further recommendations at this time.  The staff recommends that the
Commission continue to evaluate the resale rule in light of competitive conditions in the CMRS
market sector.
ROAMING
Description
Roaming occurs when the subscriber of one CMRS provider utilizes the facilities of another
CMRS provider with which the subscriber has no direct pre-existing service or financial
relationship to place an outgoing call, to receive an incoming call, or to continue an in-progress
call.  Roaming can be done "manually," in which a subscriber establishes a relationship with the
host carrier usually by providing a credit card number, or "automatically," in which the subscriber
does nothing more than turning on her telephone.  Automatic roaming requires a contractual
agreement between the respective carriers.
Section 20.12(c)  provides that any "covered CMRS" carrier must provide mobile radio service
upon request to any subscriber in good standing, including roamers, while the subscriber is within
any portion of the licensee's licensed service area, and assuming that the subscriber is using
technically compatible mobile equipment.  The rule only mandates that carriers offer manual
roaming, and does not require provision of automatic roaming.  The rule was adopted in 1996.
Purpose
The purpose of the roaming provision is to ensure seamless service to wireless customers who
roam out of their home service areas, and to prevent carriers from restricting competition and
consumer choice through refusal to provide service to roamers.
Analysis
Status of Competition
Most cellular carriers have reached automatic roaming agreements among themselves, even
though section 20.12 only mandates manual roaming.  Carriers such as AT&T, Nextel, and
Verizon have also developed nationwide "footprints" and wide-area calling plans that give their
customers the ability to receive service outside their local area without paying roaming charges.
However, some local and regional carriers have alleged that they have been unable to enter into
roaming agreements with competing carriers.  Consumers' ability to roam may also be limited
because they can only roam on networks that use the same technical standard (CDMA, TDMA,
GSM, Iden) as the home carrier.
Advantages
The roaming rule provides a clear baseline standard for carriers to follow with respect to the
provision of roaming.  It is also minimally intrusive because it does not require CMRS carriers to
reconfigure their systems to support technically incompatible roaming.
Disadvantages
Manual roaming obligations impose some administrative and technical burdens associated with
caller verification, billing, and similar issues.
Recent Efforts
At the time that it adopted the manual roaming rule, the Commission also issued a Third Notice of
Proposed Rulemaking in CC Docket 94-54 on (1) whether to sunset the manual roaming rule, and
(2) whether to mandate automatic roaming for any carriers.   On August 28, 2000, the
Commission released a Third Report and Order and Memorandum Opinion and Order on
Reconsideration, in which it affirmed the existing manual roaming rule, with some modification
and clarification.   The Commission also concluded that in light of technological advances and
the rapid expansion of the CMRS market since the 1996 Roaming order, a new rulemaking
proceeding should be initiated to address the impact of these developments on issues relating to
both automatic and manual roaming.  The Commission stated that it would initiate such a
proceeding in the near future.
Recommendation
The staff recommends that issues relating to whether to retain, eliminate, or sunset the roaming
rule be addressed in the upcoming rulemaking proceeding.
PART 20, SECTION 20.18 - 911 SERVICE
Description
Section 20.18  requires certain broadband CMRS providers (delineated in subpart (a) of this rule)
to comply with guidelines set by the Commission for the implementation of Enhanced 911
services (E911) for all of their customers, including those customers requiring TTY devices.
Section 20.18 was adopted in 1996 in CC Docket No. 94-102.  The rule provides for
implementation of E911 in two phases.  In Phase I, CMRS carriers must implement E911
capability in their networks that will provide 911 dispatchers with a callback number as well as
the location of the cell site that received the call, which will enable the dispatcher to estimate the
caller's whereabouts.  In Phase II, carriers must provide Automatic Location Identification (ALI)
capability for all 911 calls placed by wireless telephone users, so that the caller's location can be
determined with greater accuracy.
The rule provides for implementation of Phase I by April 1, 1998.  In Phase II, licensees who
employ network-based solutions must provide service to at least 50 percent of their coverage area
or their population by October 1, 2001, and licensees employing handset-based technologies must
ensure that at least 50 percent of all new handsets activated are location-capable by October 1,
2001.   Section 20.18 further describes who must comply with E911 requirements, the basic
E911 service that CMRS carriers must provide, as well as the accuracy percentage and timeframe
in which these services must be deployed.  Finally, the rule provides alternative requirements for
carriers who choose to employ an intermediary dispatcher rather than routing their customers'
911 calls directly to a Public Safety Answering Point (PSAP).
Purpose
The purpose of section 20.18 is to enhance public safety and facilitate effective and efficient law
enforcement.  Without E911 services, a dispatcher receiving a wireless 911 call can only obtain
information regarding the caller's location and callback number if the caller is able to provide it.
This contrasts to certain advanced features that are available to wireline 911 customers.  By
mandating that public safety service providers have the ability to locate wireless callers instantly
and accurately, section 20.18 rule attempts to provide the same reliable and ubiquitous aid to
wireless 911 callers that is available to wireline callers.
Analysis
Advantages
The E911 rule sets national standards and deadlines to ensure that all CMRS carriers throughout
the U.S. will provide E911 services in a timely manner.  This encourages equipment
manufacturers and CMRS carriers to take public safety into consideration in the design and
production of equipment and the provision of service.  At the same time, the rule is
technologically and competitively neutral, which allows carriers and equipment manufacturers to
make their own decisions as to the best method for implementing E911 capability.  Allowing
manufacturers and carriers to adopt the technology of their choice also lowers costs and fosters
technological innovation, because it encourages the parties to arrive at a solution that is both
effective and cost-efficient.  Finally, because section 20.18 clearly delineates CMRS provider's
obligations as to E911 services and ALI compatibility, the FCC can easily determine which
carriers have failed to comply with the mandate and are not providing sufficient E911 services.
Disadvantages
The E911 rule imposes administrative, technical, and economic costs on carriers who must
reconfigure their networks to comply with the rule.
Recent Efforts
The Commission has been considering waiver requests from CMRS providers to extend the
deadlines for implementation in order to reflect and recognize new technologies whose
implementations cannot be completed in the allotted timeframe.  On September 8, 2000, the
Commission issued a Fourth Memorandum Opinion and Order in the E911 proceeding, in which
it  (1) extended from October 1, 2000 to November 9, 2000, the date for carriers to file E911
Phase II implementation reports; (2) extended the deadline for carriers to begin selling and
activating ALI-capable handsets from March 1, 2001 to October 1, 2001;  (3) adopted a revised
phase-in schedule for deployment of ALI-capable handsets;  and (4) extended from December 31,
2004, to December 31, 2005, the date for carriers to reach full penetration of ALI-capable
handsets in their total subscriber bases.   The Commission also granted a limited waiver of the
accuracy standards toVoiceStream Wireless to permit it to deploy a "hybrid" location solution,
subject to a timetable that will require it to deploy ALI-capable handsets faster than the timetable
originally set forth in the Third Report and Order, and substantially faster than the revised
timetable adopted in the current Order.
Recommendation
Due to the crucial role that the E911 rule plays in upholding and enhancing public safety, the staff
recommends that this rule be retained.  While E911 requirements impose a burden on CMRS
providers, the necessity of providing sufficient E911 services for callers in need outweighs this
burden.  The staff recommends that Commission continue to review the rule as implementation of
E911 progresses.
PART 20, SECTION 20.20 ? CONDITIONS APPLICABLE TO PROVISION OF CMRS SERVICE
BY LOCAL EXCHANGE CARRIERS
Description
Section 20.20  requires incumbent LECs (ILECs) providing in-region broadband CMRS to
provide such services through a separate affiliate.  The rule further imposes restrictions on the
separate affiliate, including: (1) maintaining separate books of account; (2) not jointly owning
transmission or switching facilities with the affiliated ILEC that the ILEC uses for the provision
of local exchange services in the same market; and (3) acquiring any services from the affiliated
ILEC on a compensatory arm's length basis pursuant to our affiliate transaction rules.
Additionally, Title II common carrier services, or services, facilities or network elements
provided pursuant to sections 251 and 252, that are acquired from the affiliated ILEC must be
available to all other carriers, including CMRS providers, on the same terms and conditions.
Furthermore, all transactions between the ILEC and the cellular affiliate must be reduced to
writing, and a copy of all such agreements (other than interconnection agreements) must be
available for inspection upon reasonable request by the Commission.
Rural ILECs are exempt from the separate affiliate requirement.  A competing CMRS carrier
interconnected with the rural telephone carrier may petition the Commission to remove the
exemption where the rural telephone company has engaged in anti-competitive conduct.  Small-
and mid-sized ILECs serving fewer than two percent of the nation's subscriber lines are entitled
to petition the Commission for suspension or modification of the separate affiliate requirement.
Section 20.20 was adopted in 1997 in WT Docket No. 96-162.   The rule became effective on
February 11, 1998.  Section 20.20(f)  provides that the rule will sunset on January 1, 2002.
Purpose
The purpose of the ILEC/CMRS separate affiliate requirement is to prevent ILECs from using
their market power in the local exchange market to engage in anti-competitive practices in the
CMRS market.
Analysis
Advantages
The separate affiliate rule promotes competition by requiring transparency and arm's length
transactions between ILECs and their CMRS affiliates, and by ensuring that ILECs cannot offer
their CMRS affiliates more favorable terms and conditions than they offer to unaffiliated
competing CMRS providers.  The rule also provides greater flexibility for rural, small, and mid-
sized ILECs, where there is less risk of the ILEC having sufficient market power to restrain
CMRS competition.
Disadvantages
By requiring use of a separate affiliate for CMRS operations, separate ownership of certain
facilities, and written, arms-length transactions between ILECs and their CMRS affiliates, section
20.20 increases transaction costs for carriers subject to the rule.
Recent Efforts
The Commission has recently denied petitions for reconsideration of the separate affiliate
requirements in section 20.20.
Recommendation
In light of the Commission's recent orders on reconsideration of the separate affiliate rule, and the
fact that the rule is scheduled to sunset on January 1, 2002, the staff does not recommend any
changes to section 20.20 at this time.  The staff will continue to evaluate whether the competitive
conditions in the local exchange market merit continued application of the rule.
PART 21-DOMESTIC PUBLIC FIXED RADIO SERVICES
Description
Statutory authority for Part 21 of the Commission's rules is found in Titles I through III of the
Communications Act of 1934, as amended.  The purpose of the rules and regulations in Part 21 is
to prescribe the manner in which portions of the radio spectrum may be made available for
domestic communication common carrier and multipoint distribution service non-common carrier
operations which require transmitting facilities on land or in specified offshore coastal areas
within the continental shelf.
Part 21 is organized into seven lettered sub-parts (excluding reserved subparts):
A - General
B - Applications and Licenses
C - Technical Standards
D - Technical Operation
E - Miscellaneous
F - Developmental Authorizations
G-J - [Reserved]
K - Multipoint Distribution Service
Purpose
Part 21 is intended to ensure that licensees are financially and technically qualified to provide
service in a manner that will not create interference with authorized transmissions.  The
procedures prescribed in Part 21 are designed to provide the Commission and the public with
adequate information regarding licensees, prospective licensees, facilities, and proposed changes
in facilities or in the ownership or control of licensees.  Finally, the rules are intended to promote
efficient use of the radio spectrum and to encourage innovation in communication services,
equipment, and techniques.
Analysis
Status of Competition
Part 21 licensees provide video programming in competition with cable television systems,
broadcast television stations, direct broadcast satellite systems, and other multichannel video
programming distributors.  See Annual Assessment of the Status of Competition in Markets for the
Delivery of Video Programming, 15 FCC Rcd 978 (2000).  In addition, as a result of the
Commission's decisions in its Two-Way Rulemaking,  Part 21 licensees now may offer two-way
broadband transmission services in competition with numerous wireline and wireless service
providers.  See Inquiry Concerning the Deployment of Advanced Telecommunications Capability,
14 FCC Rcd 2398, 2422-31 (1999).
Advantages
Part 21 licenses are awarded through a competitive bidding process, which creates an incentive
for rapid deployment of services and, thus, promotes efficient use of the radio spectrum.  The
technical standards in Part 21 ensure interference protection and promote effective use of
proposed and authorized facilities.  The Part 21 rules further benefit the public by affording
access to information regarding licensees, prospective licensees, facilities, and proposed changes
in facilities or in the ownership or control of licensees.  Such access also reduces the cost of
enforcing Commission rules by facilitating analysis by interested parties, thereby supplementing
Commission review and enforcement efforts.  Finally, Part 21 promotes innovation through the
availability of developmental authorizations for technical experimentation.
Disadvantages
Part 21 contains language and requirements that have been superseded by recent Commission
rulemakings.
Recent Efforts
The Commission's decisions in its Two-Way Rulemaking, cited supra, allow Part 21 licensees to
use their assigned frequencies to provide two-way communication services and to alternate
between providing service on a common carrier or non-common carrier basis.  Recent changes in
the Part 21 attribution rules encourage investment in Part 21 services by relaxing ownership
restrictions.  Attribution of Broadcast and Cable/MDS Interests, 14 FCC Rcd 12559 (1999).
Recommendation
The Staff recommends that Part 21 be reviewed to ensure consistency with recent Commission
rulemakings.
PART 22 - PUBLIC MOBILE SERVICES
Description
Part 22  contains licensing, technical, and operational rules for five commercial mobile radio
(CMRS) services historically described as "Domestic Public Land Mobile Radio Services" or
"DPLMRS." These services are the Paging and Radiotelephone Service, the Cellular
Radiotelephone Service, the Rural Radiotelephone Service, the Air-Ground Radiotelephone
Service, and the Offshore Radiotelephone Service.  Although these services differ in matters such
as the allocated frequency bands, historical licensing methods, and technologies used, the
common purpose of all of them is to make it possible for competing carriers to offer wireless
mobile and/or fixed telecommunications services (especially paging and telephone service) to the
public on a commercial basis.  In general, the rules in this part:  (1) specify the frequency bands
allocated to each service; (2) provide methods for determining the protected service area of
stations in each service; (3) establish minimum construction or coverage requirements for
licensees; and (4) define technical limits on operation (e.g., transmitter power) to reduce the
likelihood of interference.
Part 22 comprises 10 subparts:
Subpart A  - Scope and Authority
Subpart B  - Licensing Requirements and Procedures
Subpart C  - Operational and Technical Requirements
Subpart D  - Developmental Authorizations
Subpart E  - Paging and Radiotelephone Service
Subpart F  - Rural Radiotelephone Service
Subpart G  - Air-Ground Radiotelephone Service
Subpart H  - Cellular Radiotelephone Service
Subpart I  - Offshore Radiotelephone Service
Subpart J  - Required New Capabilities Pursuant to the Communications Assistance for
Law Enforcement Act (CALEA)
Subparts A, B, and C apply generally to all Part 22 licensees.  Subpart D provides for the
licensing on a developmental basis of stations that are to be used for testing new technologies or
services.  Each of the next five subparts (subparts E through I) contains rules applicable to one of
the five specific Part 22 services.  Finally, subpart J implements the provisions of the
Communications Assistance for Law Enforcement Act (CALEA) as they apply to Part 22
services.
Purpose
Part 22 of the Commission's rules comprises a minimal regulatory framework that facilitates the
rapid, efficient provision of commercial wireless telecommunications services to the general
public at reasonable rates, by:  (1) utilizing a competitive bidding process to issue exclusive
licenses to the service provider applicants who value them most; (2) preserving and enhancing
competition between these service providers once licensed; (3) ensuring that available spectrum
allocations are used efficiently; and (4) reducing the likelihood of harmful interference between
licensed stations.
Analysis
Status of Competition
As detailed in the Fifth Competition Report, CMRS providers, including those licensed under Part
22, operate in an environment that is marked by significant and increasing competition in mobile
telephony, paging/messaging, and mobile data.   The only Part 22 radio service that is not
experiencing an increase in competition at this time is the Air-Ground Radiotelephone Service,
where there are currently only two remaining licensees, GTE Airphone and ATT Claircom, of the
six that were originally licensed.
Advantages
Overall, the Part 22 rules provide a clear, predictable structure for the assignment and use of
spectrum.  In Part 22, provision for accepting competing mutually exclusive applications and
selecting the licensee by means of competitive bidding results in licenses being issued to the
entities that value them the most.  Geographic area licensing minimizes the amount of paperwork
involved in obtaining a license and thus speeds the authorization of new competitive services to
the public.  Minimal and flexible technical standards facilitate the introduction of new
technologies.
Disadvantages
The Part 22 rules impose administrative burdens inherent to the licensing process and to
compliance with technical and operational rules.  In addition, the flexible technical standards in
most Part 22 services place the burden of coordination to avoid and resolve harmful interference
between systems largely on the licensees themselves, which may increase transaction costs.
Finally, while certain portions of the Part 22 rules have been recently revamped, other portions,
most notably the cellular rules in subpart H, are now more than a decade old, and therefore may
not appropriately reflect significant technological and competitive changes that have occurred in
wireless services in recent years.
Recent Efforts
The Commission has made significant changes to its Part 22 rules in recent years.  For example,
in the Universal Licensing proceeding, the Commission eliminated many of the service-specific
licensing rules in Part 22 as part of its consolidation of all wireless licensing rules into Part 1.
The Commission also recently completed a comprehensive overhaul of its paging rules, in which
it finalized the rules for the transition from site-by-site to geographic licensing and award of
geographic paging licenses by auction.
Recommendation
Many of the rules in Part 22 are integral to the basic spectrum management functions of the
Commission.  The necessity for these rules is not significantly affected by changes in the level of
competition in wireless services.  Moreover, as noted above, the Commission has significantly
revised and streamlined portions of the Part 22 rules in recent proceedings.  However, Part 22
also contains a number of relatively old rules, particularly rules applicable to cellular service, that
were adopted when wireless technology and competitive conditions were very different from the
present day.  For example, section 22.937,  which requires demonstration of a cellular
applicant's financial qualifications, was adopted in connection with the use of lotteries to award
licenses, which has been superseded by the use of competitive bidding.  Similarly, section
22.323  allows Part 22 licensees to provide "incidental" fixed services, but prohibits cross-
subsidization of such services by subscribers to CMRS services - a rule that appears
anachronistic given that CMRS rates are fully deregulated.  Therefore, the staff recommends that
as part of the 2000 Biennial Regulatory Review, the Commission should undertake a
comprehensive review of the Part 22 cellular rules as well as other portions of Part 22 that have
not received recent scrutiny.
PART 22, SUBPART E - PAGING AND RADIOTELEPHONE SERVICE
Description
Part 22, subpart E  contains licensing, technical, and operational rules for the Paging and
Radiotelephone Service ("PARS"), which is the original public mobile telephone service that was
established in the 1960s.  This service was originally titled the "Domestic Public Land Mobile
Radio Service" or "DPLMRS."  Frequency bands in the low VHF (35-43 MHz), high VHF (72-
76 MHz, 152-157 MHz), and UHF (454-459 MHz, 470-512 MHz and 931 MHz) ranges of the
spectrum are allocated to this service.  Although originally used by local telephone companies
and other carriers to provide the original analog mobile telephone service ("Improved Mobile
Telephone Service" or "IMTS"), these allocations today are primarily used for tone, voice,
numeric and alphanumeric paging services.  In general, the rules in this subpart:  (1) specify the
frequency bands allocated to PARS; (2) provide methods for determining the reliable service area
and interfering contour of individual stations; (3) establish construction and commencement of
operation requirements for licensees; and (4) define technical limits on operation (e.g., transmitter
power) to reduce the likelihood of interference.
The PARS rules have evolved considerably over the years as demand for paging service has
increased while demand for the older type of non-cellular analog mobile telephone service has
declined with the advent of cellular service.  The PARS rules originally provided for two-way
mobile radiotelephone service with paging allowed on a secondary basis, but they have evolved
to focus primarily upon paging.  There are also rules pertaining to the operation of internal point-
to-point and point-to-multipoint fixed links that are essential for local and regional paging
systems.
Currently, Part 22, subpart E is organized into six groups of rules.  The first (sections 22.501-
22.529) is a group of rules applying to all PARS stations.   Each of the subsequent five groups
contains technical and operational rules pertaining only to a particular type of operation on
specified channels.  The types of operation are paging (sections 22.531-22.559),  one- and two-
way mobile (sections 22.561-22.589),  point-to-point (sections 22.591-22.603),  point-to-
multipoint (sections 22.621-22.627),  and trunked mobile operation (sections 22.651-22.659).
Some of the PARS 454-459 MHz channels are shared with basic exchange telephone radio
systems (providing Rural Radiotelephone Service) and potentially with non-geostationary low
earth orbit ("Little LEO") satellite downlinks.
Purpose
The purpose of subpart E is to facilitate the provision of commercial one-way and two-way
wireless telecommunications services, in particular, one-way paging, to the general public at
reasonable rates by:  (1) utilizing a competitive bidding process to issue exclusive licenses to the
service provider applicants who value them most; (2) preserving and enhancing competition
between these service providers once licensed; (3) ensuring that available spectrum allocations
are used efficiently; and (4) reducing the likelihood of harmful interference among licensed
stations.
Analysis
Status of Competition
PARS stations governed by subpart E compete directly with Part 90 commercial paging services
and with Part 24 narrowband PCS, and they compete indirectly with other CMRS.  The Fifth
Competition Report notes that one-way paging service subscribership appears to have peaked in
1999, and is now declining.   Analysts believe that this trend is the result of declining prices for
alternative options, such as cellular and broadband PCS services, which include paging, voice
mail and text messaging capabilities.  Paging providers that have sufficient spectrum are
attempting to reposition themselves in the market as wireless data providers.
Advantages
The PARS rules provide a clear, predictable regulatory structure for the assignment and use of the
spectrum allocated to PARS service.  Provision for accepting competing mutually exclusive
applications and selecting the licensee by means of competitive bidding results in licenses being
issued to the entities that value them the most.  Geographic area licensing minimizes the
administrative burden involved in obtaining a license.  The technical rules are flexible enough to
allow transition to narrowband technology capable of providing wireless data services.
Disadvantages
The PARS rules impose some burdens related to compliance with technical and operational rules.
Although the Commission converted the authorization of the PARS from the original site-by-site
procedure to a geographic area licensing process, several detailed technical rules related to the
site-by-site procedure have been retained in order to protect the investment of grandfathered
incumbent licensees in areas where the geographic licensee is a different entity.
Recent Efforts
The Commission made significant changes to its Part 22 subpart E rules during the last decade.
In WT Docket No. 96-18, the Commission converted the authorization of stations in the PARS
from the original site-by-site procedure to a geographic area licensing process.   More recently,
most of the application filing rules were moved from this subpart to Part 1 in connection with
implementation of electronic filing procedures and the Universal Licensing System.
Recommendation
Most of the remaining rules in Part 22, subpart E are technical rules that are integral to the basic
spectrum management function of the Commission, e.g., reducing the likelihood of harmful
interference between PARS licenses.  The necessity for these technical rules is not significantly
affected by changes in the level of competition in these services or CMRS generally.  Moreover,
as noted above, the Commission has recently made significant revisions that restructured and
streamlined the Part 22 licensing rules.  However, in view of the trends in paging and other
CMRS services, the staff recommends that the Commission consider, inter alia, eliminating the
following rules:
? Limits on the number of paging channels that a licensee can obtain in the same area
at one time.
? Rules that impose operational burdens, such as station identification requirements,
where the advance of technology may have made the cost of the rule exceed the
benefit.
? 470-512 MHz Trunked Mobile Operation rules (sections 22.651 through 22.659).
The availability of cellular service has made limited local trunked radiotelephone
systems obsolete and the Commission has phased out this type of operation on this
frequency band.
? Rules related specifically to services and technologies that were never implemented
or have gone out of use (e.g., sections 22.161, 22.603).
PART 22, SUBPART F - RURAL RADIOTELEPHONE SERVICE
Description
Part 22 subpart F  contains licensing, technical, and operational rules for the Rural
Radiotelephone (Rural Radio) Service.  The rules contain provisions governing eligibility,
assignment of channels, and management of interference.
Rural Radio service is the only service regulated under Part 22 that is a fixed, rather than mobile,
service.  Rural Radio service makes basic telephone service available to persons who live in
remote rural locations where it is not feasible, because of cost, environmental factors, or other
practical concerns, to provide such service by wire.  The rules provide that Rural Radio
interoffice stations can also be used to link central offices where wireline links are similarly
infeasible.
Two types of facilities are authorized in the Rural Radio service - conventional Rural Radio
stations and basic exchange telephone radio systems (BETRS).  Both types may be licensed on
channel pairs in the high VHF (152-158 MHz) and low UHF (454-459 MHz) bands that are also
allocated on a co-primary basis to the Paging and Radiotelephone service.   This co-primary
allocation has worked over the years because there is little demand for paging service in the
remote areas where Rural Radio service is needed, and likewise there is no need for Rural Radio
service in suburban and urban areas where paging services are in demand.  In WT Docket 96-18,
the Commission provided for geographic area licensing of these bands for both paging and Rural
Radio purposes.   However, because Rural Radio operators may seek to serve only a small
portion of a geographic licensing area, the Commission also adopted a rule provision allowing
Rural Radio licensees to operate individual sites on a secondary basis.
Conventional Rural Radio stations may be licensed to any existing or proposed common carrier.
These stations operate on exclusively assigned paired channels and are considered for regulatory
purposes to be interconnected to, but not a part of, the local loop.  Consequently, conventional
Rural Radio stations do not have to meet state requirements affecting the local loop (e.g., call
blocking, transmission quality).  Conventional stations use traditional analog FM technology and
provide one telephone line per assigned channel pair.  Often, two or more subscribers share
service from a single Rural Radio station, party-line fashion.
Unlike conventional Rural Radio, BETRS facilities may only be licensed to entities that have
been state certified to provide local exchange service in the geographic area in question (e.g.,
LECs and CLECs).  BETRS also operate on exclusively assigned paired channels, but they are
considered, for regulatory purposes, to be a part of the local loop, and therefore must meet state
standards applicable to the local loop.  BETRS systems typically use digital TDMA technology
that allows 2 or 4 independent (i.e., private) telephone lines per assigned channel pair.
Purpose
The purpose of the Rural Radio rules is to facilitate provision of basic telephone service to
persons who live in remote rural locations where it is not feasible to provide such service by wire.
Analysis
Status of Competition
The Rural Radio service was established in the 1970s to provide an extension of, rather than
competition for, regular wireline local loop service.  It is generally used only as a last resort in the
most remote rural areas where wireline telephone service is not feasible or cost-effective.  Rural
Radio frequencies offer very limited traffic capacity, which would not be sufficient to provide
viable telephony competition in suburban and urban areas, where these channels are primarily
used by paging carriers.  Historically, Rural Radio customers have had few if any competitive
alternatives for provision of telephony due to their geographic isolation.  More recently, however,
other wireless services, such as cellular and PCS, have begun to expand into areas served by
Rural Radio, and availability of competitive alternatives is likely to increase in the future.
Advantages
The rules in Part 22, subpart F provide a clear, predictable structure for the assignment and use of
the spectrum co-allocated to the Rural Radio service to provide basic telephone service to persons
who live in remote rural locations.
Disadvantages
As discussed below, some of the rules concerning Rural Radio appear to have become outdated as
a result of technological developments since the rules were adopted.
Recent Efforts
The Commission has not recently revised the Rural Radio rules other than to establish geographic
licensing rules, as discussed above.
Recommendation
In general, the staff recommends retention of the Rural Radio rules.  However, some of these
rules appear to have become outdated.  Sections 22.417, 22.727, and 22.729  provide for the use
of certain low VHF (44 MHz) channels for meteor-burst Rural Radio stations.  It appears that
these sections have not been used for many years, probably because of the availability of better
alternatives in Alaska.  The Commission should attempt to determine whether there are any such
systems still in operation and, if not, propose to remove the meteor burst provisions.
Section 22.757  provides a limited allocation of private radio channels in the high UHF band
(816-865 MHz) for BETRS use in certain areas.  These have never been applied for or used for
BETRS because of their limited geographic availability, and because there is no equipment
suitable for BETRS in this band.  Also, the private radio rules governing these channels have
been substantially changed since this allocation was made.  The Commission should consider
removing this allocation from the Rural Radio service.
PART 22, SUBPAR T G - AIR-GROUND RADIOTELEPHONE SERVICE
Description
Part 22, subpart G  contains licensing, technical, and operational rules for the Air-Ground
Radiotelephone Service ("AGS").  AGS provides commercial telephone service to persons in
airborne aircraft, using telephone instruments that are permanently mounted in the aircraft.
AGS consists of two separate parts:  General Aviation air-ground stations and Commercial
Aviation air-ground systems.  General Aviation air-ground stations are permitted to serve only
"general aviation" aircraft, which are aircraft owned by individuals or businesses for their own
use that do not carry passengers for hire.  General Aviation air-ground stations were first
established in the late 1960s and operate in the 454-459 MHz range.  General Aviation ground
stations operate independently rather than as a system.  Consequently, when an aircraft flies out
of range of a ground station, any call in progress disconnects, and the user  must then redial
through another ground station.  There are about 86 operational ground stations in the U.S.
Commercial Aviation air-ground systems are permitted to serve any type of aircraft, but primarily
serve passengers aboard commercial airlines.  Commercial Aviation systems use seat-back and
bulkhead-mounted telephones commonly seen on commercial flights.  These systems were
established in the 1980s and operate in the 850-895 MHz range.  Commercial aviation air-ground
systems are all nationwide systems and calls in progress hand-off from one ground station to
another uninterrupted as the aircraft flies across the country.
In general, the subpart G rules:  (1) specify the frequency bands allocated to the General Aviation
and Commercial Aviation air-ground services; (2) provide separation distance criteria for
determining where new ground stations may be established; (3) establish minimum construction
or coverage requirements for licensees; and (4) set forth certain technical limits on operation
(e.g., transmitter power).
Purpose
The purpose of subpart G is to facilitate the provision of commercial telephone service to persons
aboard airborne aircraft.
Analysis
Status of Competition
The number of carriers providing AGS is small and most wireless carriers consider it to be a
"niche" market.  The principal operators of General Aviation stations are M-Tel and the successor
companies of the Bell Operating companies, most notably Airtouch (now Verizon), though other,
smaller operators exist also.  Although more than one provider can share each ground station
control channel pair,  few if any locations appear to have competing providers.
The 850-895 MHz frequencies used by Commercial Aviation air-ground systems can
accommodate up to six competing systems, but only three of the six initial licensees ever
constructed their systems.   Of these three, one (In-Flight Corporation) has gone out of business,
so that only two carriers (GTE Airfone and Claircom, operated by AT&T Wireless) remain in
operation.
Another potential source of competition in the air-ground sector may be provided by Aircell,
which does not operate on AGS frequencies, but was granted a waiver in 1998 to provide air-
ground service using specialized equipment that operates on cellular frequencies.
Advantages
The AGS rules provide a clear, predictable structure for the assignment and use of the air-ground
spectrum allocation.
Disadvantages
The AGS rules include highly specific requirements for the technical configuration of air-ground
systems and the use of air-ground channels that may inhibit licensee flexibility and technical
innovation.
Recommendation
The subpart G rules were largely adopted in the 1980s, and have not been significantly revised
since.  Air-ground service is also affected by technical and competitive considerations that are
distinct from terrestrial CMRS.  The staff therefore recommends that the Commission consider
initiating a proceeding that would comprehensively review our air-ground rules in light of current
technology and competitive conditions.  Potential goals of such a proceeding would include:  (1)
adopting rules that foster competition by eliminating unnecessary barriers to entry; (2)
eliminating rules that freeze technological advancement; and (3) providing incentives for existing
terrestrial CMRS licensees to provide air-ground service.
PART 22, SUBPART H- CELLULAR RADIOTELEPHONE SERVICE
Description
Part 22, subpart H  contains licensing, technical, and operational rules for the Cellular
Radiotelephone Service ("cellular service").  This service was created in 1981 as an automated,
high-capacity, nationwide-compatible mobile telephone service.
The spectrum allocated to the cellular service is divided into two channel blocks, A and B.  This
was done to provide for two competing facilities-based providers in each licensing area.  Initially,
the cellular license for the B channel block in each licensing area was issued to the wireline
telephone company in that area and the license for the A channel block issued to a company other
than that wireline telephone company.  Because there were multiple A block applicants in most
markets, the initial licensee was selected by comparative hearings for the first (largest) 30
markets, and random selection (lotteries) for the remaining markets.  After Congress gave the
Commission authority to select among mutually exclusive applications using competitive bidding
(auctions), the Commission began using auctions instead of lotteries in the cellular service.
Throughout the 1980s and 1990s, many of the initial cellular licensees consolidated to form
systems covering much larger geographical areas.
In general, the rules in Part 22, subpart H:  (1) specify the frequency bands allocated to the
cellular service; (2) provide methods for determining the Cellular Geographic Service Area
(protected service area) of each system; (3) establish minimum construction and coverage
requirements for cellular licensees; and (4) set forth certain technical limits on operation (e.g.,
transmitter power).
Purpose
The purpose of subpart H is to facilitate the provision of commercial cellular services to the
general public at reasonable rates, by:  (1) utilizing a competitive bidding process to issue
exclusive licenses to the service provider applicants who value them most; (2) preserving and
enhancing competition between these service providers once licensed; (3) ensuring that available
spectrum allocations are used efficiently; and (4) requiring coordination procedures to prevent
harmful interference among cellular systems.
Analysis
Status of Competition
As detailed in the Fifth Competition Report, CMRS providers operate in an environment that is
marked by significant and increasing competition in mobile telephony, paging/messaging, and
mobile data.   Cellular is by far the largest mobile radiotelephone service in terms of
subscribers, but competing broadband PCS and enhanced SMR services are rapidly growing.
Cellular systems compete with other mobile telephone services principally on the basis of pricing
plans, geographical coverage, and operational features.
Advantages
The cellular rules provide a clear, predictable structure for the assignment and use of cellular
spectrum.  Although initial cellular licenses have been issued in every market, an on-going
process allows for the licensing of any areas remaining unserved in those markets after the initial
licensee's build out period has expired.  The provision for accepting competing mutually
exclusive applications for unserved areas and selecting the eventual licensee by means of
competitive bidding results in licenses being issued to the entities that value them the most.  In
addition, the rules contain minimal and flexible technical standards for alternative cellular
technologies that facilitate the introduction of digital service and new features.
Disadvantages
The cellular rules impose some administrative burdens inherent in the licensing process and
compliance with technical and operational rules.  However, some of the subpart H rules appear to
be outdated in light of the current state of cellular technology and wireless competition.  For
example, subpart H contains regulations to prevent speculation and trafficking in cellular licenses,
which were adopted at the time that cellular licenses were awarded by lottery.  These rules appear
to be anachronistic now that cellular licenses are awarded by auction.
In addition, although there are only minimal technical rules governing alternative cellular
technologies, such as the digital modes and data services, subpart H continues to contain technical
rules for the provision of analog service ("Advanced Mobile Phone Service" or "AMPS").  These
rules are based on a 1981 technical compatibility specification, with numerous technical rules
governing everything from call processing algorithms to modulation filter performance.  As a
result, these AMPS technical requirements are at least 15 years out of date.
Recent Efforts
The Commission has made significant changes to its Part 22 rules in recent years, mainly in the
areas of increasing spectrum use flexibility  and streamlining the licensing process to
incorporate electronic filing procedures and the Universal Licensing System.   Currently, the
staff is preparing for the Commission's consideration proposals to eliminating cellular technical
and administrative rules that have become obsolete because increased competition has caused
technology to evolve at a rapid pace.
Recommendation
Many of the rules in Part 22, subpart H are integral to basic spectrum management functions of
the Commission, such as requiring that spectrum assignments be put to full and efficient use.  The
necessity for some of these rules is not significantly affected by changes in the level of
competition in wireless services.
However, as noted above, subpart H also contains a number of relatively old rules, particularly
technical rules applicable to cellular service, that were adopted when wireless technology and
competitive conditions were very different from the present day.  In addition, certain rules (e.g.,
rules requiring demonstration of an applicant's financial qualifications) were adopted in
connection with the use of lotteries to award licenses, which has been superseded by the use of
competitive bidding.
Therefore, the staff recommends that as part of the 2000 Biennial Regulatory Review, the
Commission should undertake a comprehensive review of the subpart H rules.  In accordance,
with this recommendation, the staff is preparing a Notice of Proposed Rulemaking that would
consider, inter alia:
Whether to modify or eliminate, the rule requiring demonstration
of financial qualifications by cellular applicants,  which was
more appropriate under prior applicant selection systems such as
random selection lotteries.
Whether to modify or eliminate the rule requiring cellular
systems to operate in conformance with the 1981 AMPS
compatibility specification,  and various other technical rules
that have become obsolete due to the rapid evolution of
technology.
Whether to privatize the assignment of system identification
numbers.  The manufacturing industry has recently formed an
organization to manage and administer handset manufacturer
codes, which was formerly done by the Wireless
Telecommunications Bureau.
PART 22, SUBPART I - OFFSHORE RADIOTELEPHONE SERVICE
Description
Part 22, subpart I  governs the licensing and operation of offshore radiotelephone stations.  The
Offshore Radiotelephone Service allows Commercial Mobile Radio Service (CMRS) providers to
use conventional duplex analog technology to provide telephone service to subscribers located on
(or in helicopters en route to) oil exploration and production platforms in the Gulf of Mexico.
Those using this service are licensed to operate in the paired 476/479 and 489/493 MHz bands in
three zones comprising Louisiana and Texas, depending on the longitude.  The channels were
taken from UHF-TV Channels 15 and 17.
Purpose
The purpose of the subpart I rules is to establish basic rules and procedures for the licensing and
operation of offshore radiotelephone stations.
Analysis
Status of Competition
There are several competitive alternatives to Offshore Radiotelephone service in the Gulf.  Two
cellular companies currently operate in the Gulf of Mexico Service Area (GMSA), and some
SMR service providers also operate there on a site-by-site basis.  The Commission is also
considering licensing in the Gulf in several other spectrum bands, including PCS and the 700
MHz band.
Advantages
The subpart I rules provide a clear, predictable structure for the assignment and use of Offshore
Radio spectrum.
Disadvantages
The subpart I rules impose limited administrative and technical burdens that are inherent in the
licensing process and compliance with technical and operational rules.
Recent Efforts
The rules in this subpart have not been revised since 1995.
Recommendation
In general, the rules in this part are integral to the basic licensing and spectrum management
functions performed by the Commission.  Therefore, the staff concludes that significant
modification or repeal of the subpart I rules is not necessary at this time.
PART 22, SUBPART J - REQUIRED NEW CAPABILITIES PURSUANT TO THE
COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT (CALEA)
Description
The Communications Assistance for Law Enforcement Act (CALEA) was enacted by Congress
to establish procedures for law enforcement to obtain authorized access to wireless and wireline
communications or call-identifying information where such information is needed for law
enforcement purposes.    Part 22, subpart J  contains technical standards and capabilities for
cellular carriers to ensure that communications and call-identifying information will be accessible
to law enforcement, as required by section 103 of CALEA.   These rules were adopted in
1999.   The Commission has adopted parallel requirements and standards for broadband PCS
licensees in Part 24, subpart J  and for wireline telecommunications carriers in Part 64, subpart
W.
Purpose
The purpose of the CALEA rules is to ensure that law enforcement, pursuant to court order or
other lawful authorization, will have reasonable access to wireless and wireline communications
or call-identifying information where such information is needed for law enforcement purposes.
Analysis
Advantages
These rules arose from the Commission's specific statutory role as arbiter of differences among
industry, law enforcement, and other interested parties regarding standards for complying with
section 103 of CALEA.  In large part, they reflect the consensus reached during the standard-
setting process, as modified through application of the Commission's expertise in areas where
consensus was not reached.
Disadvantages
The CALEA rules impose technical burdens on carriers to comply with the accessibility
requirements of the statute, and may limit technical flexibility and innovation.
Recent Efforts
On August 15, 2000, the D.C. Circuit vacated and remanded for further explanation the CALEA
rules insofar as they imposed certain capability requirements in excess of industry-adopted
technical standards.
Recommendation
The staff recommends that the Commission reconsider its capability standards in light of the D.C.
Circuit's remand.
PART 23 - INTERNATIONAL FIXED PUBLIC RADIOCOMMUNICATION SERVICES
Description
Part 23 implements and interprets sections 4, 301, and 303 of the Communications Act of 1934,
as amended.   Part 23 sets forth rules applicable to high frequency ("HF") radio systems used
for international communications, including general licensing and service rules, application filing
requirements, and technical specifications.  The rules classify these systems as either "fixed
public service" (a radiocommunication service carried on between fixed stations open to public
correspondence) or "fixed public press service" (a radiocommunication service carried on
between point-to-point telegraph stations, open to limited public correspondence of news items or
other material related to or intended for publication by press agencies, newspapers, or for public
dissemination).
Although Part 23 does not contain lettered sub-parts, the rules are organized as follows:
		Section 23.1			Definitions
Sections 23.11-23.12		Use of frequencies
Sections 23.13-23.19		Technical specifications
Sections 23.20-23.27		Use of frequencies
Sections 23.28-23.55		Licensing and service rules
Purpose
The Commission has stated that the original purpose of the Part 23 rules is "obscure."  Western
Union Telegraph Co., Memorandum Opinion and Order, 75 F.C.C.2d 461, 472  39 (1980)
(Western Union MO&O).  Neither the Federal Communications Commission nor the Federal
Radio Commission has issued any opinion explaining the rationale for the rules.  See id. (research
updated as of December 12, 1979).  The FCC has not opined on these rules since the Western
Union MO&O.
In the Western Union MO&O, the Commission stated that the rules contained in Part 23 derive
from those promulgated by the Federal Radio Commission in 1932.  At that time, fixed wireless
links presumably provided an important method of communications between: (1) the contiguous
48 States (including D.C.) and Alaska, Hawaii, any U.S. possession, or any foreign point; (2)
Alaska and any other point; (3) Hawaii and any other point; and (4) any U.S. possession and any
other point.  Part 23 provides the regulatory framework for these services.  In addition, Part 23
governs radiocommunication within the contiguous 48 States (including D.C.) in connection with
relaying the above-referenced international traffic.
Analysis
Status of Competition
Use of HF radio facilities in providing carriers' international communications services in the age
of submarine cable and satellites is virtually dormant.  There are two active Part 23 licensees,
with a recently-filed Part 23 application - the first in several years - still pending.  Competition
among services under this rule Part is therefore not relevant.
Advantages
Part 23 provides the requisite framework within which licensees can perform useful functions in
the provision of international communications services.  HF radio stations can be a functionally
useful supplement to submarine cable and satellite systems in the provision of service to overseas
points not easily or economically reached by these facilities, in the provision of a limited restoral
capability during submarine cable or satellite outages, and in the provision of certain specialized
services such as press and weather map broadcast services.
Disadvantages
Because the type of international traffic addressed in these rules now is carried primarily by
undersea cable and satellite, there is considerably less need for regulation in this area.
Recent Efforts
None.
Recommendation
Part 23 is ripe for streamlining or elimination.  However, the staff recommends that Part 23 be
retained in its entirety pending an in-depth Commission review to determine how the few
remaining licensees are using this service and to project when submarine cable and satellite will
fully supplant this service.  Should the Commission determine that this service warrants
continued regulation, the staff recommends the repeal of Part 23, with the necessary regulatory
mechanisms (most likely, technical standards) incorporated into Part 90 or Part 101, each of
which regulates similar services.
PART 24 - PERSONAL COMMUNICATIONS SERVICES
Description
Part 24  contains licensing, technical, operational, and auction rules for broadband and
narrowband Personal Communications Services (PCS).   The rules in this part: (1) define PCS
licensing areas; (2) specify the frequencies available to PCS licensees; (3) establish license terms
and operational parameters; (4) set forth minimum coverage requirements for licensees; (5)
establish minimum technical standards and limits on operation (e.g., antenna height, transmitter
power) to prevent interference; and (6) set forth application procedures and  competitive bidding
rules for the auction and award of PCS licenses.
In addition, subpart J contains requirements applicable to PCS under the Communications
Assistance for Law Enforcement Act (CALEA).   Specifically, these rules set forth certain
capability standards applicable to broadband PCS telecommunications carriers in order to ensure
that, when properly authorized, law enforcement has access to communications or call-identifying
information.
Part 24 is organized into ten lettered sub-parts:
A - General Information
B - Applications and Licenses
C - Technical Standards
D - Narrowband PCS
E - Broadband PCS
F - Competitive Bidding Procedures for Narrowband PCS
G - Interim Application, Licensing and Processing Rules for Narrowband PCS
H - Competitive Bidding Procedures for Broadband PCS
I - Interim Application, Licensing and Processing Rules for Broadband PCS
J - Required New Capabilities Pursuant to the Communications Assistance for Law
Enforcement Act (CALEA)
The Part 24 rules were initially adopted in 1993,  and were modified on reconsideration in
1994.   The Commission has recently issued an order further revising certain aspects of the Part
24 narrowband PCS rules.   The CALEA rules were adopted in a separate proceeding in 1999.
Purpose
The purpose of the Part 24 rules is to establish basic ground rules for assignment of PCS
spectrum, to ensure efficient spectrum use by PCS licensees, and to prevent interference.  In
addition, Part 24 contains rules that define eligibility for the PCS entrepreneurs' blocks and for
"designated entity" (i.e., small business) status within these blocks.  The purpose of these
provisions is to implement the objectives of section 309(j)(3) of the Communications Act  that
the distribution of PCS licenses is not excessively concentrated, and that small businesses, rural
telephone companies, and businesses owned by women and minorities will have opportunities to
participate in the provision of PCS.
Analysis
Status of Competition
Broadband PCS providers primarily offer mobile telephony service in competition with cellular
and some SMR services.  As described in the Fifth Competition Report, the broadband PCS
sector has contributed to a significant increase in competition in the mobile telephony market
since the first broadband PCS providers were licensed five years ago.   However, broadband
PCS has not yet achieved the same level of geographic coverage or subscribership as cellular,
particularly in smaller markets.
Narrowband PCS providers primarily offer two-way messaging and services.  They compete with
a rapidly proliferating array of other messaging and mobile data services, including paging and
wireless Internet services.
Advantages
The Part 24 rules provide the basic regulatory structure necessary for the orderly assignment and
use of PCS spectrum, while otherwise affording licensees substantial flexibility to determine what
technology, type of service, and business strategy they will use.  The Part 24 competitive bidding
rules promote efficient licensing of PCS spectrum to those entities that value it the most.
Disadvantages
The Part 24 rules impose limited administrative and technical burdens that are inherent in the
licensing process and compliance with technical and operational rules.
Recent Efforts
In an order adopted May 5, 2000, the Commission revised its narrowband PCS rules to eliminate
certain regulatory burdens and afford narrowband PCS licensees greater flexibility than was
provided under the original Part 24 rules.   Specifically, the Commission:  (1) provided for use
of larger licensing areas for the remaining narrowband PCS spectrum;  (2) eliminated the limit on
aggregation of narrowband PCS licenses; (3) eliminated technical restrictions and eligibility
limitations on paging response channels; (4) adopted a "substantial service" alternative to existing
construction and minimum coverage requirements; and (5) adopted partitioning and
disaggregation rules.
On June 7, 2000, the Commission initiated a rulemaking to consider possible modifications to its
entrepreneur eligibility rules for the C and F blocks in anticipation of the auction later this year of
C and F block spectrum that has reverted to the Commission.   On August 29, 2000, the
Commission released the Sixth Report and Order and Order on Reconsideration in WT Docket
No. 97-82, in which it reconfigured the available C block licenses into 10 MHz blocks and
removed the entrepreneur eligibility restrictions with respect to certain reconfigured C block
licenses and all F block licenses.
Recommendation
In general, the Part 24 rules are integral to the basic licensing and spectrum management
functions performed by the Commission.  The necessity for such rules is also not significantly
affected by changes in the level of competition in PCS or in wireless services generally.
Therefore, with certain exceptions noted below, the staff concludes that significant modification
or repeal of the licensing and technical rules in Part 24 is not necessary at this time.
Part 24 contains two subparts (subparts G and I) that set forth "interim application, licensing, and
processing rules" for narrowband and broadband PCS, respectively.  Many of these rules appear
to be duplicative of the consolidated Part 1, subpart F rules that establish licensing procedures for
all wireless services.  In addition, a number of the competitive bidding provisions in Part 24 have
been superseded by recent amendments to the general competitive bidding rules of Part 1, subpart
Q.  For example, Part 24 provisions addressing (1) competitive bidding design, (2) withdrawal,
default and disqualification penalties, and (3) upfront, down and installment payments, have been
replaced by updated provisions in Part 1, subpart Q.  Therefore, the continued presence of
service-specific auction rules in Part 24 appears to be redundant.  The staff recommends that
consideration be given to eliminating or phasing out these rules.
PART 25 - SATELLITE COMMUNICATIONS
Description
Part 25 was issued pursuant to the authority contained in section 201(c)(11) of the
Communications Satellite Act of 1962, as amended, section 501(c)(6) of the International
Maritime Satellite Telecommunications Act, and titles I through III of the Communications Act
of 1934, as amended.  Part 25 sets out the rules applicable to satellite communications, including
general licensing and application filing requirements, technical standards, and technical
operations.
Part 25 is organized into seven lettered sub-parts:
A - General
B - Applications and Licenses
C - Technical Standards
D - Technical Operations
E - Reserved
F - Competitive Bidding Procedures for DARS
G - Reserved
H - Authorization to Own Stock in the Communications Satellite Corporation
I - Equal Employment Opportunities
Purpose
Part 25 provides rules under which the Bureau licenses systems to provide various satellite
services.  The rules are designed to accommodate efficiently the maximum number of systems
possible for each type of service, to enhance competition for satellite services and the terrestrial
services with which they compete.  Sections of Part 25 also have provisions:  (1) to protect
against impermissible levels of interference; (2) to assure compliance with international
agreements and treaties; (3) to assure the timely construction and operation of authorized earth
stations and the timely construction, launch and operation of authorized space stations; (4) to
assure the timely provision of sufficient information to allow for processing of applications; and
(5) to assure compliance with license specifications and conditions as well as with Commission
rules and regulations.  In addition, Part 25 provides competitive bidding procedures for the
provision of DARS services, and specifies the procedure by which the Commission authorizes the
purchase of stock in COMSAT.  Part 25 also provides for preemption of local zoning of earth
stations, unless the reasonableness of the regulation can be demonstrated.
Analysis
Status of Competition
The satellite services regulated by Part 25 are fully competitive on most routes.  There are four
major satellite service providers and several smaller providers that are licensed to provide state-
of-the-art satellite telephony and data services to U.S. consumers and consumers worldwide.  On
many routes, satellite telephony and data services are offered by several satellite providers.  In
addition, these satellite service providers face competition from terrestrial service providers for
some services on some routes.  The Commission's rules and policies have led to the competitive
industry that we see today by encouraging satellite companies to "pack" the satellite orbits and
maximize the use of frequencies available at those orbital locations.  Part 25 rules also provide
licensing mechanisms for future entry and further competition in these services.  The rules also
contain criteria to permit foreign entry into the U.S. markets to further compete for U.S.
consumers.
Advantages
General Applications Filing Requirements:  Part 25 provides clear procedures for filing
applications, and predictable procedures for evaluating whether applications are complete.  Part
25 also provides clear and predictable procedures for amendments, modifications, assignments
and transfers.  In addition, section 25.120 provides effective procedures for handling applications
for special temporary authorization when delay would seriously prejudice the public interest.
This allows for a more efficient use of resources.
Earth Stations:  Sections 25.130 through 25.137 include procedures that allow for a frequency
coordination analysis to reduce interference and the verification of earth station antenna
performance standards.  These clear procedures minimize the cost associated with reducing
interference.  Provisions in Part 25 also assure compliance with international agreements and
treaties.  Section 25.133 includes requirements for the timely construction and operation of earth
stations.  By reducing the likelihood that resources will be allocated to "phantom" ventures,
section 25.133 assures that unnecessary costs were not imposed on other services that would have
been limited by the need for coordination to reduce interference with systems that are, in fact, not
implemented.
Space Stations:  Sections 25.140 through 25.145 include conditions to facilitate coordination to
avoid harmful interference to other systems.  These sections also outline conditions for
qualification as an applicant, which enhances the likelihood that the proposed systems will be
constructed, launched and operated if licensed.  These conditions reduce the likelihood that
unnecessary costs will be imposed on other services through coordination to reduce interference.
Section 25.140 also includes limitations on the number of orbital locations that can be assigned to
each applicant, thereby fostering competition and reducing the likelihood of anti-competitive
behavior.
Processing of Applications and Forfeiture, Termination, and Reinstatement of Station
Authorizations:  Sections 25.150 through 25.163 include well-defined procedures for processing
applications to determine whether the applications are mutually exclusive.  These sections also
maximize compliance with Commission rules and minimize enforcement costs.
Subpart C-Technical Standards and Subpart D-Technical Operations:  These subparts provide
clear and predictable technical standards and operating rules to minimize interference.
Subpart F-Competitive Bidding Procedures for DARS:  This subpart describes a mechanism for
competitive bidding for satellite DARS service.  Competitive bidding promotes competition and
awards DARS licenses to those firms that will most efficiently use those resources to compete in
providing service.  Competitive bidding is more efficient than other forms of assignment.
Subpart H-Authorization to Own Stock in the Communications Satellite Corporation:  These
rules provide the procedure for the administration of section 304 of the Communications Satellite
Act of 1962.  With the signing of the ORBIT Act Pub. Law No. 106-180, 114 Stat. 4B (2000),
earlier this year, section 304 of the Communications Satellite Act of 1962 ceases to be effective.
Subpart I-Equal Employment Opportunities:  This section promotes diversity in employment
and creates opportunities.
Disadvantages
Earth Stations:  Some limitations included in these rules might hamper the introduction of new
services.  For example, it may be possible to relax the threshold technical rules that trigger inter-
system coordination among satellite service providers and reduce the burden on coordinating new
and innovative satellite technologies.
Space Stations:  Section 25.140 requires a demonstration that an applicant is legally, financially,
technically and otherwise qualified to proceed expeditiously to operate the proposed space
station, and outlines the information required to make this demonstration.  If the qualifications are
too restrictive, some applicants that would be able to offer service expeditiously would be
eliminated from the pool of potential satellite service providers, which may result in reduced
competition.  In addition, section 25.140 limits the allocation of orbital slots to each applicant,
which can restrict the introduction of new services.  The radio-determination satellite service
spectrum described in section 25.141 has been reallocated to MSS, and the rules in this section no
longer serve any purpose.  Section 25.144 includes licensing provisions for satellite digital audio
radio service, and specifies the applicants eligible for the auction.  This rule, too, serves no
purpose because the auction has already been held and the pool of applicants is overtaken by
events.
Processing of Applications and Forfeiture, Termination, and Reinstatement of Station
Authorizations:  The preparation of applications and the delay associated with public comment
periods and the examination of applications can be costly to applicants.
Subpart C-Technical Standards and Subpart D-Technical Operations:  These standards and
operating rules, while preserving the operating environment today, could hamper the introduction
of new services and restrict alternative uses of resources in the future.
Subpart F-Competitive Bidding Procedures for DARS:  Satellite services in unplanned
frequency bands require international coordination prior to the commencement of operations.
The value of the orbital location resource is uncertain if the international coordination process has
not yet been completed.
Subpart H-Authorization to Own Stock in the Communications Satellite Corporation: These
rules ceased to be effective with the recent signing of the ORBIT Act.
Subpart I-Equal Employment Opportunities:  Rules in this section might increase operating
costs.
Recent Efforts
As described in the staff report, the Commission has taken and continues to take steps to
streamline both the earth station and space station portions of its satellite licensing process and to
provide earth station applicants with greater flexibility.  The staff is reviewing the technical and
operational standards contained in Part 25.
Recommendation
The staff recommends further streamlining of its earth station and space station licensing
processes.  The staff recommends that the Commission commence a Notice of Proposed
Rulemaking (NPRM) seeking comment on industry proposals for comprehensive changes in the
earth station licensing process.  It also recommends that the Commission seek comment on
requiring electronic filing, which could save substantial time in processing applications.  In
addition, the staff recommends that the Bureau continue working with industry to re-examine the
entire satellite network licensing process.
Furthermore, the staff recommends repealing section 25.141 and subpart H of the Commission's
rules.  The staff recommends review of the financial qualification rules in section 25.140 to
determine if the financial qualification rules are necessary, and if a different showing of financial
qualification might be appropriate.
PART 26 - GENERAL WIRELESS COMMUNICATIONS SERVICES
Description
Part 26  contains licensing, technical, and operational rules for General Wireless
Communications Services (GWCS) in the 4660-4685 MHz band.  The rules in this part: (1)
define permissible communications; (2) establish license terms and parameters; (3) establish
minimum technical standards and limits on operation (e.g.,antenna height, emission limits) to
prevent interference; (4) define GWCS service areas; and (5) set forth application procedures and
competitive bidding rules for the auction and award of GWCS licenses.
The Commission adopted the Part 26 rules in the 1995 GWCS Second Report and Order.  The
rules allow GWCS licensees to provide any fixed or mobile communications service on their
assigned spectrum.  Broadcasting, radiolocation, and satellite services are prohibited.  However,
as discussed below, no licenses have been awarded in the service, the 4660-4685 MHz band has
since been reclaimed by the federal government, and the Commission has proposed to delete the
Part 26 rules.
Purpose
The purpose of the Part 26 rules is to establish basic ground rules for assignment of spectrum in
Part 26 services, to ensure efficient spectrum use by licensees, and to prevent interference.
Analysis
Status of Competition
No licenses have been awarded in the GWCS service.  The Commission contemplated that
GWCS would accommodate a variety of fixed and mobile service uses, such as voice, video and
data transmission, private microwave, broadcast auxiliary, and ground-to-air voice and video.
In April 1998, however, the Wireless Telecommunications Bureau postponed the GWCS auction
scheduled for May 27, 1998 due to a lack of demand for licenses in the 4660-4685 MHz band.
The lack of demand appeared to result from the relatively small size of the spectrum block and
from potential interference problems due to U.S. Navy use of adjacent spectrum.
Advantages
Not Applicable.
Disadvantages
Not applicable.
Recent Efforts
On March 30, 1999, the Department of Commerce notified the Commission that the Federal
Government was reclaiming the 4635-4685 MHz band and identified the 4.9 GHz band as
substitute spectrum for private sector use.   Accordingly, on February 23, 2000, the Commission
adopted a Notice of Proposed Rulemaking in WT Docket No. 00-32 proposing to eliminate the
GWCS rules and delete Part 26.   In the Notice, the Commission states that it will allocate and
establish licensing and service rules for the 4.9 GHz band as substitute spectrum.    In the
Notice,  the Commission also proposes to license the 4.9 GHz band under Part 27 of the
Commission's Rules.
Recommendation
In light of the Commission's pending proposal in WT Docket No. 00-32 to delete the Part 26
rules, the staff makes no recommendations with respect to these rules.
PART 27 - MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES
Description
Part 27  contains licensing, technical, and operational rules for the Wireless Communications
Services (WCS) and for other new wireless services.  The rules in this part: (1) define WCS
license areas; (2) specify the frequencies available to WCS licensees; (3) establish license terms
and operational parameters; (4) establish minimum technical standards and limits on operation
(e.g., antenna height, power limits) to prevent interference; and set forth application procedures
and competitive bidding rules for the auction and award of WCS licenses.
Part 27 is divided into six sub-parts:
	A - General Information
	B - Applications and Licenses
	C - Technical Standards
	D - Competitive Bidding Procedures for WCS
	E - Application, Licensing and Processing Rules for WCS
	F - Competitive Bidding Procedures for the 747-762 MHz and 777-792 MHz
	      Bands
The Omnibus Consolidated Appropriations Act (1997) directed the Commission to reallocate the
2305-2320 and 2345-2360 MHz bands to wireless services and, among other things, to promote
the most efficient use of the spectrum.   On February 19, 1997, the Commission adopted a
Report and Order establishing the Wireless Communications Service (WCS) in these bands and
establishing the Part 27 rules.   Pursuant to these rules, WCS licenses were auctioned in 1998.
More recently, the Commission has amended Part 27 to add new rules for wireless services that
will operate in the 747-762 MHz and 777-792 MHz bands (700 MHz services).  In the 700 MHz
First Report and Order, released on January 7, 2000, the Commission adopted rules for the 700
MHz services that provide for the broadest possible use of this spectrum, consistent with
principles of sound spectrum management.    However, the Commission also noted that the 746-
806 MHz band has historically been used exclusively by television stations (Channels 60-69).
These incumbent broadcasters are permitted by statute to continue operations in this band until
their markets are converted to digital television.
Purpose
The purpose of the Part 27 rules is to establish basic ground rules for assignment of spectrum
with respect to Part 27 services, to ensure efficient spectrum use by licensees, and to prevent
interference.  In addition, Part 27 contains rules that define eligibility for small business status
within these blocks.  These provisions implement the objectives of section 309(j)(3) of the Act
that the distribution of licenses not be excessively concentrated, and that small businesses, rural
telephone companies, and businesses owned by women and minorities have opportunities to
participate in the provision of WCS and other wireless services.
Analysis
Advantages
The Part 27 rules provide a clear, predictable structure for the assignment and use of spectrum
while allowing for maximum service flexibility.  The service rules follow a flexible, market-
based approach that affords maximum flexibility to licensees to decide on development and
deployment of new telecommunications services and products to consumers.  The rules also
ensure that licensees are not constrained to a single use of this spectrum and, therefore, can offer
a mix of services and technologies to their customers.
Disadvantages
The Part 27 rules impose limited administrative and technical burdens that are inherent in the
licensing process and compliance with technical and operational rules.
Recent Efforts
In the 700 MHz Further Notice of Proposed Rulemaking, released on June 30, 2000, the
Commission has sought comment on specific issues relating to possible voluntary relocation of
broadcast incumbents out of the 700 MHz band.
On March 30, 1999, the Department of Commerce notified the Commission that the Federal
Government was reclaiming the 4635-4685 MHz band and identified the 4.9 GHz band as
substitute spectrum for private sector use.   Accordingly, on February 23, 2000, the Commission
adopted a Notice of Proposed Rulemaking in WT Docket No. 00-32, proposing to allocate and
establish licensing and service rules for the 4.9 GHz band as substitute spectrum.    In the
Notice, the Commission proposed to license the 4.9 GHz band under the Part 27 rules.
Additionally, the Commission proposed to codify and conform certain rules for the 2.3 GHz band
to provide for consistent regulation of Part 27 services.
Recommendation
The staff recommends retaining the Part 27 rules.
PART 32 - UNIFORM SYSTEM OF ACCOUNTS
Description
Section 220 of the Communications Act of 1934, as amended, requires the Commission to
prescribe a uniform system of accounts for telephone companies.   Part 32 of the Commission's
rules implements section 220's mandate and contains the Uniform System of Accounts
("USOA") for incumbent local exchange carriers.  The USOA is an historical financial
accounting system that discloses the results of operational and financial events in a manner that
enables both the companies' management and policy-making agencies to assess these results.
The financial accounts of a company are used to record, in monetary terms, the company's basic
transactions.  Like any accounting system, the Part 32 USOA consists of a chart of accounts that
can be used to prepare balance sheets, income statements, and other financial reports.  To reflect
what happens within the telecommunications industry on a consistent and continuing basis, the
Part 32 USOA uses standard accounts and methods for preparing such accounts.
Part 32 is organized into seven lettered sub-parts:
	A - Preface
	B - General Instructions
	C - Instructions for Balance Sheet Accounts
	D - Instructions for Revenue Accounts
	E - Instructions for Expense Accounts
	F - Instructions for Other Income Accounts
	G - Glossary
On a substantive level, the Part 32 USOA performs four general functions.  First, the Part 32
USOA sets forth a standardized chart of accounts and thereby directs companies how to record
certain transactions in their books of account.  Second, the Part 32 USOA establishes rules for a
carrier's affiliate transactions.  Third, the Part 32 USOA specifies accounting treatment for
depreciation expenses.  Finally, the Part 32 USOA requires carriers to maintain property records
of all telecommunications plant in service.
Purpose
The Part 32 USOA acts as a nonstructural safeguard to prevent an incumbent LEC from
exercising its market power.  Specifically, through standardized accounting procedures, the Part
32 USOA helps ensure that ratepayers of regulated services do not bear the costs and risks
associated with an incumbent LEC's competitive operations.  In addition, the Part 32 USOA
restrains an incumbent LEC's ability to charge monopoly prices because it provides ratepayers
with information that can be used to pursue a complaint against unjust and unreasonable rates.
The USOA also provides the Commission, state commissions, ratepayers, consumer advocates,
the financial community, and others with large carriers' financial performance results that are
ultimately reflected in their rates for telecommunications services.  By providing a standardized
means for analyzing an incumbent LEC's performance, the Part 32 USOA is a tool for the
Commission's comparative analysis regulatory technique.  The Commission implemented the
Part 32 USOA in large part to reduce the need for costly and time-consuming special studies that
carriers performed for policy-making purposes, while at the same time to provide the
Commission and others with information used to make decisions regarding telecommunications
competition, universal service, separations, access charges, and other policy issues.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
As a nonstructural safeguard, the Part 32 USOA is a lower-cost alternative to structural separation
as a means for preventing an incumbent LEC from exercising its market power.   With its level
of accounting detail, the Part 32 USOA deters cost misallocations by providing the initial
information needed to identify cross-subsidization.  In this way, regulated services are protected
from bearing the costs of an incumbent LEC's competitive operations.
The Part 32 USOA clearly specifies the incumbent LEC's chart of accounts and the manner in
which the carrier prepares such accounts.  The standardized approach lowers the Commission's
costs of monitoring the industry and enforcing its rules.  Because the Part 32 USOA incorporates
Generally Accepted Accounting Principles ("GAAP"), Part 32 reduces the carriers' cost of
complying with the Commission's rules.
Working in tandem with the Part 43 reporting requirements, the Part 32 USOA is a low-cost
means to gather information in the market about financial performance of large incumbent
LECs.   Policy-makers, ratepayers, and others can then use an incumbent LEC's accounting
information to make more informed decisions.  The information is also used to support a viable
and sufficient system of universal service support.  Finally, disclosure enables ratepayers to
pursue complaints regarding unjust and unreasonable rates, and therefore lowers the
Commission's costs of enforcing the Act.
Disadvantages
The Part 32 USOA may increase an incumbent LEC's cost of performing internal accounting
services because it establishes record-keeping requirements and accounting procedures (e.g.,
depreciation studies) that may not be necessary in a competitive environment.  Because the
Commission intended for Part 32 USOA to deter cross-subsidization largely in a rate-of-return
environment, it established a level of accounting detail that serves as a starting point in
identifying cross-subsidization.  As a result of competitive developments during the 1990s, Part
32 may impose more burdensome information requirements on incumbent LECs than needed in
light of the changing competitive landscape.
Recent Efforts
The Commission revised its Part 32 rules during the 1998 Biennial Regulatory Review.   In that
proceeding, the Commission substantially streamlined its accounting requirements for mid-sized
incumbent LECs.  The Commission also reduced accounting requirements on all incumbent LECs
by eliminating certain accounts.
Through the on-going Comprehensive Review proceeding, the Commission is streamlining its
Part 32 accounting rules as the industry becomes increasingly competitive.  The Comprehensive
Review involves a two-phase approach during which the Commission is soliciting the views of
the states, the industry, and the public in a series of public workshops (as well as through standard
notice-and-comment cycles).
In Phase 1 of the Comprehensive Review, the Commission addressed accounting and reporting
reform issues that could be implemented without delay.  In the Phase 1 Order, which the
Commission released in March 2000, the Commission substantially reduced the level of
accounting detail required in certain reports, eliminated pre-notification requirements, relaxed the
cost allocation manual audit requirements, and streamlined a number of ARMIS reporting
requirements.
In Phase 2, the Commission will look to reducing accounting and reporting requirements for
incumbent LECs as the industry becomes more competitive.  Phase 2 of the Comprehensive
Review started in December 1999.  During the first quarter of 2000, Commission and state
participants met numerous times to discuss the issues of most interest to all parties.  A series of
five public workshops commenced on April 5, 2000.  These workshops provide an opportunity
for all interested parties, state commissions, incumbent LECs, interexchange carriers, CLECs, and
consumers to voice their opinions on accounting and reporting reform.
Recommendation
Pursuant to the Commission's comprehensive review of its accounting requirements, which it
initiated in 1999, the staff recommends substantial reductions in the Commission's accounting
requirements.  These regulatory changes are responsive to the competition that has developed in
recent years.  For example, the staff recommends reducing the chart of accounts,  modifying
expense limits,  eliminating outdated accounts,  and exempting certain transactions from the
affiliate transactions rules.   As the telecommunications industry becomes increasingly
competitive, the Commission should consider further reducing accounting requirements.
PART 36 - JURISDICTIONAL SEPARATIONS PROCEDURES
Description
In 1930, the Supreme Court, in the case of Smith v. Illinois, recognized the system of state and
federal regulation of telecommunications, concluding that because interstate calls originate and
terminate over local exchange plant, interstate charges should reflect some portion of the cost of
local plant.   The Part 36 jurisdictional separations rules are part of the Commission's present-
day implementation of that decision.  The Part 36 rules contain procedures and standards for
dividing telephone company investment, expenses, taxes and reserves between the state and
federal jurisdictions.  In addition to allocating costs between the federal and state jurisdictions,
Part 36 also serves a universal service function.  Specifically, Part 36 permits carriers that serve
high-cost areas to allocate additional local loop costs to the interstate jurisdiction and to recover
those costs through the high-cost universal service support mechanism, thus making intrastate
telephone service in high-cost areas more affordable.
Part 36 is organized into 7 lettered sub-parts:
	A - General
	B - Telecommunications Property
	C - Operating Revenues and Certain Income Accounts
	D - Operating Expenses and Taxes
	E - Reserves and Deferrals
	F - Universal Service Fund
	G - Lifeline Connection Assistance Expense Allocation
Purpose
Part 36 is intended to recognize the dual system of telecommunications regulation, with interstate
calling regulated at the federal level.  Part 36 is intended to ensure that incumbent LECs are able
to recover a portion of local exchange costs through interstate rates, since interstate long distance
calls originate and terminate over these facilities.  It is also intended to prevent incumbent LECs
from recovering the same costs through both interstate and intrastate rates.  The additional
interstate cost allocation for high-cost areas is intended to foster universal service by ensuring that
local exchange rates in such areas remain generally affordable.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
The existing Part 36 separations rules facilitate state and federal common carrier rate regulation
by dividing incumbent LEC costs between the two jurisdictions.  The division of costs between
the state and federal jurisdictions is necessary for the calculation of state and federal earned rates
of return.  Such earned rates of return are used in rate base rate of return regulation to determine
whether earnings are excessive.  In price cap regulation, an earned rate of return is also calculated
for purposes of the low-end adjustment.  The subpart F rules providing for an additional interstate
cost allocation for high-cost areas promote universal service by keeping local exchange rates
generally affordable in these areas.
Disadvantages
The current jurisdictional separations rules may be unnecessarily complex and may impose some
unnecessary recordkeeping burdens on incumbent LECs.
Recent Efforts
The Commission is currently in the process of considering separations reform in conjunction with
a Federal-State Joint Board, made up of federal and state commissioners.  The Commission
initiated this review with an Notice of Proposed Rulemaking in 1997, requesting comment on the
impact on jurisdictional separations of legislative, technological, and market changes, as well as
several industry proposals for separations reform.   Most of the commenting parties supported
continuation of some form of separations until the local exchange market is fully competitive,
although there was a wide range of interim proposals.  On July 21, 2000, the Federal-State Joint
Board on jurisdictional separations recommended that the Commission freeze the Part 36 plant
category relationships  and the jurisdictional allocation factors on an interim basis until
comprehensive reform of jurisdictional separations can be implemented.
Recommendation
The staff recommends continuation of the on-going work on jurisdictional separations reform.
The staff, however, does not recommend further review of the universal service provisions
contained in Part 36 in the context of the current biennial regulatory review.  The staff
recommends elimination of the subpart G lifeline provisions in Part 36, since they are no longer
in effect and have been replaced by rules in Part 54.  There are also a number of other rules in
Part 36 that can be eliminated because they are applicable to specific time periods that have since
passed.
PART 42 - PRESERVATION OF RECORDS OF COMMON CARRIERS
Description
Part 42 implements sections 219 and 220 of the Communications Act of 1934, as amended, which
authorize the Commission to require communications common carriers to keep records and file
reports.  Part 42 sets forth rules governing the preservation of records of communications
common carriers, including all accounts, records, memoranda, documents, papers and
correspondence prepared by or on behalf of such carriers.  It also requires non-dominant
interexchange carriers to make available information concerning the rates, terms, and conditions
for their services.
Purpose
Part 42 was designed to implement sections 219 and 220.  Part 42 was established to facilitate
enforcement of the Communications Act by ensuring the availability of carrier records needed by
the Commission to meet its regulatory obligations.  Part 42 is also intended to aid enforcement of
criminal statutes by requiring the retention of telephone toll records.  In addition, Part 42 serves
the public interest by giving consumers access to information about the rates, terms, and
conditions for domestic, interstate, interexchange services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitors
still serve only a small percentage of local exchange lines.  Competition for business customers in
metropolitan areas has, in general, developed more rapidly than competition for residential
customers or customers in rural areas.  The domestic U.S. long distance market is competitive,
although there is greater competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.  These markets are rapidly
changing from being dominated by a small number of national telecommunications providers to
having a large number of competitors.
Advantages
By relying primarily on general instructions to guide the preservation of records, Part 42 gives
regulated common carriers significant flexibility in choosing how to preserve records.  This
allows carriers to choose the storage media, reducing their record storage and retrieval costs.  Part
42 also gives carriers flexibility in determining proper retention periods, although it specifies the
retention period for toll records in order to assist law enforcement activities.  Part 42 also benefits
consumers by ensuring that they have access to information on carrier rates, terms, and
conditions.
Disadvantages
Part 42 may increase carriers' recordkeeping costs to some extent.  Requiring carriers to post
information concerning their rates for domestic, interstate, interexchange services may increase
the risk of tacit price collusion.
Recent Efforts
On March 31, 1999, the Commission reinstated the public disclosure requirement for domestic,
interstate, interexchange long distance services in light of plans to implement de-tariffing of  these
services.  The U.S. Court of Appeals for the D.C. Circuit recently upheld the Commission's
decision to mandate de-tariffing for domestic interstate long distance service.
Recommendation
The staff recommends that Part 42 be maintained without substantial change because it provides
carriers with significant flexibility while ensuring that necessary information will be available to
the Commission and law enforcement officials.  The staff also recommends that the public
disclosure rules in Part 42 be maintained because they provide valuable information to
consumers.
PART 43 - REPORTS OF COMMUNICATIONS COMMON CARRIERS AND CERTAIN
AFFILIATES
Description
Section 211 of the Communications Act of 1934, as amended, requires carriers to file with the
Commission copies of all contracts, agreements, or arrangements with other carriers that relate to
any traffic affected by the Act.   Section 219 authorizes the Commission to require all carriers
that are subject to the Act to file annual reports with the Commission.   Section 220 allows the
Commission to prescribe the forms of any and all accounts, records, and memoranda to be kept
by carriers.
Part 43 of the Commission's rules implements these sections by establishing rules that perform
three major functions.  First, Part 43 prescribes general requirements and filing procedures for
several reports which various carriers are required to file.  These include the annual Automated
Reporting Management Information System (ARMIS) reports on financial and operating data that
are filed by common carriers with operating revenues exceeding an indexed revenue threshold,
reports on proposed depreciation changes, reports on international telecommunications traffic,
and international circuit status reports.  Second, Part 43 requires that certain carriers file with the
Commission copies of specified contracts, agreements and arrangements with other carriers.
Third, Part 43 sets forth the Commission's International Settlements Policy, which is designed to
ensure that U.S. telecommunications carriers pay nondiscriminatory rates for termination of
international traffic in foreign countries.
Purpose
Part 43 is intended to implement section 211.  The reports required by Part 43 assist the
Commission in monitoring the industry to ensure that carriers comply with the Commission's
rules, and in tracking market and other industry developments, which improves the Commission's
ability to identify developing regulatory issues and analyze the effects of alternative policy
choices.  The reports of proposed changes in depreciation rates allow the Commission to monitor
the depreciation rates for dominant carriers' capital assets.   The contract-filing requirement
helps the Commission to identify potential instances of anti-competitive conduct, and to enforce
its International Settlements Policy.  The International Settlements Policy is designed to protect
U.S. international carriers and the customers they serve from the potential exercise of market
power by dominant foreign carriers, which could unilaterally set the prices, terms and conditions
under which U.S. carriers are able to exchange international traffic.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitors
still serve only a small percentage of local exchange lines.  Competition for business customers in
metropolitan areas has, in general, developed more rapidly than competition for residential
customers or customers in rural areas.  The domestic U.S. long distance market is competitive,
although there is greater competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.  These markets are rapidly
changing from being dominated by a small number of national telecommunications providers to
having a large number of competitors.
Advantages
The reports required by Part 43 increase the Commission's ability to ensure compliance with the
Commission's rules.  They also provide the Commission, other government agencies, state
regulators, industry, and the public with valuable information on market and other industry trends
and developments.  This information is helpful to the Commission in identifying developing
regulatory issues and evaluating the effects of policy choices.  The contract filing requirements
also assist the Commission in identifying and remedying potential instances of anti-competitive
conduct.  The International Settlements Policy and related requirements protect U.S. carriers and
their customers from the potential exercise of market power by dominant foreign carriers.
Disadvantages
Some carriers allege that certain of the required filings are unduly burdensome.  Part 43 may also
require the filing of some information that is unnecessarily detailed or no longer necessary in
light of competitive developments.
Recent Efforts
The Commission recently revised its ARMIS reporting requirements as part of its 1998 Biennial
Regulatory Review process.   The Commission reduced reporting requirements for mid-sized
carriers, and improved the definitions, descriptions and instructions used in preparing ARMIS
reports.  The Commission adopted further streamlining measures in Phase 1 of the
Comprehensive Review proceeding.   Currently, the staff is undertaking additional review of the
ARMIS reports in Phase 2 of the Comprehensive Review proceeding intended to produce further
streamlining.
In 1999, the Commission adopted a sweeping reform of the longstanding international settlements
policy, deregulating inter-carrier settlement arrangements between U.S. carriers and foreign non-
dominant carriers on competitive routes.   The Commission, among other things, eliminated the
international settlements policy and contract filing requirements for arrangements with foreign
carriers that lack market power, and eliminated the international settlements policy for
arrangements with all carriers on routes with rates for terminating U.S. calls that are at least 25
percent lower than the relevant settlement rate benchmark.
Recommendation
The staff recommends continuation of the ongoing efforts to streamline further the ARMIS
reporting requirements.  The staff also recommends modifying or eliminating some of the rules
governing reports to be filed by carriers providing international telecommunications services.  In
particular, the staff recommends elimination of section 43.53 of the rules because the required
reports regarding the division of international telegraph charges appear to be unnecessary now
that telegraph service is no longer a major component of telecommunications traffic.  In addition,
this reporting requirement duplicates requirements in other rules.  The staff also recommends that
section 43.81 of the rules be removed from Part 43 since it is no longer in effect.
The staff also recommends that the Commission amend section 43.51 of the rules to simplify the
language and to provide that copies of contracts for international services do not need to be filed
with the Commission unless the contracts concern common carrier service between the U.S. and
foreign points and involve a foreign carrier that has market power in that foreign market, or a
U.S. carrier that has been classified as dominant on any routes included in the contract, for
reasons other than a foreign carrier affiliation.
PART 51 - INTERCONNECTION
Description
Sections 251 and 252 of the Communications Act of 1934, as amended, were adopted as part of
the 1996 Telecommunications Act.  Most significantly, these provisions require that the
incumbent local exchange carriers open their networks to competition, and are critical to fostering
local exchange and exchange access competition as envisioned by Congress.  Section 251
establishes distinct sets of pro-competitive requirements for telecommunications carriers, local
exchange carriers, and incumbent local exchange carriers.  Section 251 specifically provides that
all telecommunications carriers have a duty to interconnect with other telecommunications
carriers, among other things.  Under section 251, local exchange carriers are subject to additional
requirements concerning number portability, dialing parity, right-of-way access, and reciprocal
compensation.  In addition to these obligations, incumbent local exchange carriers are subject to
further requirements concerning negotiation of agreements, interconnection, access to unbundled
network elements, resale, notification of changes, and collocation.   Section 251 also provides
for pricing standards and standards for incumbent carrier pricing of services offered for resale.
Section 252 establishes procedures for negotiating, arbitrating, and approving interconnection
agreements.  The Part 51 rules implement these statutory requirements.
Part 51 is organized into nine lettered sub-parts:
A - General Information
B - Telecommunications Carriers
C - Obligations of All Local Exchange Carriers
D - Additional Obligations of Incumbent Local Exchange Carriers
E - Exemptions, Suspensions, and Modifications of Requirements of Section 251 of
       the Act
F - Pricing of Elements
G - Resale
H - Reciprocal Compensation for Transport and Termination of Local
       Telecommunications Traffic
I - Procedures for Implementation of Section 252 of the Act
Purpose
Part 51 implements the requirements found in sections 251 and 252.  Part 51 is intended to foster
competition in the local exchange and exchange access markets by requiring that incumbent local
exchange carriers open their networks to competition, and by establishing pricing standards
applicable to the facilities and services that the incumbent local exchange carriers provide to their
competitors.  Consistent with section 251 of the Act, Part 51 also contains certain pro-competitive
requirements that apply to all telecommunications carriers and competitive local exchange
carriers.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
The Part 51 rules require incumbent local exchange carriers to open their networks to
competition, and establish pricing standards.  This fosters competition in the local exchange and
exchange access markets.  Competition in these markets will increase the choices available to
consumers, as well as create incentives for increased efficiency and the more rapid deployment of
new services and technology.
Disadvantages
The Part 51 rules impose some costs on incumbent local exchange carriers.
Recent Efforts
The Eighth Circuit Court of Appeals recently overturned certain of the pricing rules in Part 51,
and remanded them to the Commission for further consideration.
Recommendation
The staff recommends continued monitoring of the development of local exchange and exchange
access competition.  The staff also recommends that the Commission re-evaluate the various
mechanisms for intercarrier compensation for traffic origination and termination.
PART 52 - NUMBERING
Description
Section 251(e) of the Communications Act of 1934, as amended, adopted as part of the 1996
Telecommunications Act, governs the administration of telephone numbers.  It gives the
Commission exclusive jurisdiction over those portions of the North American Numbering Plan
that pertain to the United States.  Section 251(e) also requires the Commission to create or
designate one or more impartial entities to administer telecommunications numbering and to
make those numbers available on an equitable basis.  It also charges the Commission with
establishing cost recovery mechanisms for numbering administration arrangements and number
portability.
Part 52 implements the requirements of section 251(e).  It contains rules governing the
administration of the North American Numbering Plan, which is the basic numbering scheme for
the telecommunications networks located in the United States, its territories, and other countries
in North America.  Part 52 also contains rules designed to ensure that users of
telecommunications services can retain, at their existing locations, their existing telephone
numbers when they switch from one local exchange telecommunications carrier to another.  It
also contains rules governing the administration of toll free telephone numbers.
Part 52 is organized into four lettered sub-parts:
A - Scope and Authority
B - Administration
C - Number Portability
D - Toll Free Numbers
Purpose
Part 52 implements the requirements of section 251(e).  The purpose of the rules in Part 52 is to
establish requirements to govern the administration and efficient use of telephone numbers within
the United States for provision of telecommunications services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The domestic U.S. long
distance market is competitive, although there is greater competition for high volume customers
than for low volume customers.
Advantages
The Part 52 rules benefit the public by fostering the efficient use of telephone numbers, which are
a scarce national resource, and minimizing the potential for anti-competitive behavior.  They are
designed to provide clear and predictable guidelines for the use of telephone numbers while
minimizing administrative costs.  The number portability rules are also designed to remove
barriers to local exchange competition and reduce the consumers' costs of switching to an
alternative carrier by ensuring that customers can retain their local telephone number when they
switch from one local carrier to another.
Disadvantages
Carriers are required to fund the costs of administering the North American Numbering Plan.
Recent Efforts
The Commission released a Report and Order and Further Notice of Proposed Rulemaking in
March 2000 addressing how to meet the increased demand for telephone numbers in light of the
declining quantity of available numbers.  The Report and Order adopted measures that will
promote more efficient allocation and use of telephone numbers, and established policies to
ensure that carriers have access to the numbering resources they need to participate in the
competitive telecommunications marketplace.
The Commission also released a Report and Order in July 2000 addressing whether the current
method of administering toll free numbers should be replaced by a management system more
suitable to a competitive environment.  The North American Numbering Council will prepare a
report to the Commission on this issue within the next six months.
Recommendation
The staff recommends the retention of Part 52 and the continuation of current efforts to optimize
the use of numbering resources in an impartial, economically efficient manner.
PART 53 - SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
Description
Section 272 of the Communications Act of 1934, as amended, establishes safeguards applicable
to Bell Operating Company (BOC) equipment manufacturing, provision of in-region interLATA
toll service, and provision of interLATA information services (other than electronic publishing
and alarm monitoring).   The Commission's Part 53 rules implement these requirements.  In
particular, the Part 53 rules provide that the BOCs must use a separate affiliate for certain
activities, and set out structural separation, transactional, and auditing requirements.  The Part 53
rules also contain provisions adopted pursuant to section 271 of the Act concerning joint
marketing of local exchange and long distance services.
Part 53 is organized into six lettered subparts (three of which are reserved for future use):
	A - General Information
	B - Bell Operating Company Entry into InterLATA Services
	C - Separate Affiliate; Safeguards
	D - Manufacturing by Bell Operating Companies [reserved]
	E - Electronic Publishing by Bell Operating Companies [reserved]
	F - Alarm Monitoring Services [reserved]
Purpose
Part 53 generally implements the structural safeguards mandated in section 272.  These separate
subsidiary and auditing requirements are designed to prevent the BOCs from using their
dominance in the market for local exchange and exchange access services to compete unfairly in
the related markets.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume business and
residential customers than for low volume customers.
Advantages
Part 53 reduces the potential for the BOCs to engage in anticompetitive behavior by leveraging
their dominance in the market for local exchange and exchange access services to compete
unfairly in the markets for other goods and services.
Disadvantages
Use of a structurally separate subsidiary for certain activities and compliance with the auditing
requirements in Part 53 increase carrier costs.
Recent Efforts
Not applicable.
Recommendation
The staff recommends only minor changes to Part 53 at this time.  In this regard, we note that
much of Part 53 is statutorily mandated, including the basic requirement for the use of separate
subsidiaries for certain activities and most of the structural separation and auditing requirements.
Section 53.101 of the rules concerning joint marketing has sunset and should be deleted from Part
53.  The section 272 provisions requiring a separate subsidiary for the provision of interLATA
information services have also sunset, and the rules related to this requirement should be deleted
from Part 53.
PART 54 - UNIVERSAL SERVICE
Description
Sections 214(e) and 254 of the Communications Act of 1934 direct the Commission to establish
specific, predictable, and sufficient mechanisms to preserve and advance universal service.
Part 54 implements these provisions of the Act.  Part 54 contains rules governing the operation of
the Commission's four basic universal service programs: (1) the high-cost support mechanism,
which provides support to keep rates affordable in high-cost areas; (2) the low-income support
mechanism, which provides support to keep rates affordable for low-income consumers; (3) the
schools and libraries support mechanism, which provides support for telecommunications and
Internet access and internal connections for eligible schools and libraries; and (4) the rural health
care support mechanism, which provides support for telecommunications services for eligible
rural health care providers.  In addition, Part 54 contains administrative rules governing the
collection of universal service contributions and the distribution of support, as well as provisions
for the creation of the Universal Service Administrative Company (USAC) to administer the
universal service support mechanisms.
Part 54 is organized into ten lettered sub-parts:
	A - General Information
	B - Services Designated for Support
	C - Carriers Eligible for Universal Service Support
	D - Universal Service Support for High Cost Areas
	E - Universal Service Support for Low-Income Consumers
	F - Universal Service Support for Schools and Libraries
	G - Universal Service Support for Health Care Providers
	H - Administration
	I - Review of Decisions Issued by the Administrator
	J - Interstate Access Universal Service Support Mechanism
Purpose
Part 54 implements the requirements found in section 214(e) and 254.  Part 54 is designed to
promote universal service by ensuring that all consumers, including consumers living in rural,
insular, and high-cost areas as well as low-income consumers, have access to affordable
telecommunications services.  It is also designed to ensure that schools, libraries, rural health care
providers, and the members of the public that they serve, have access to affordable
telecommunications and information services.  Part 54 is designed to accomplish these goals in a
competitively neutral manner by collecting support from every telecommunications carrier that
provides interstate telecommunications service, and by making support available on a
technologically neutral basis to any eligible service provider.  This is intended to encourage the
provision of service by wireless and other emerging technologies that have not been eligible to
receive universal service support in the past, but may prove to be efficient alternatives to
traditional wireline service in high-cost and rural areas.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
Part 54 serves the public interest by establishing explicit universal service mechanisms to ensure
that all consumers have access to affordable telecommunications services.  It also promotes
competition by making explicit universal service support available to any eligible
telecommunications carrier in a competitively and technologically neutral manner.  This also
encourages efficient entry in high-cost areas.  Finally, Part 54 benefits the public by making
telecommunications and information services available to qualifying schools, libraries, and rural
health care providers at reduced rates.
Disadvantages
The reporting requirements necessary for the collection, calculation, and disbursement of
universal service support may place administrative burdens on certain carriers.  The current
procedures for review of USAC's funding decisions concerning schools, libraries, and rural
health care providers may also place unnecessary administrative burdens on the Commission.
Recent Efforts
Many of the Part 54 rules were adopted in 1997, and they have been revised a number of times
since.   On June 30, 2000, the Commission released an order to promote telecommunications
subscribership by those living on tribal lands.
Recommendation
The staff does not recommend any major new initiatives concerning the Commission's universal
service rules as part of the 2000 Biennial Regulatory Review.  The staff, however, recommends
that the Commission consider modifying Part 54 to streamline the process for appeals of USAC
funding decisions by requiring applicants to file appeals with USAC in the first instance unless
the appeals raise new or novel questions of fact, law, or policy.   The staff also recommends
certain minor revisions to the Part 54 rules to remove transitional provisions that are no longer
applicable.  For example, section 54.701(b)-(e), concerning the now-completed merger of the
Schools & Libraries Corporation and the Rural Health Care Corporation into the Universal
Service Administrative Company, should be deleted.
PART 59 - INFRASTRUCTURE SHARING
Description
Section 259 of the Communications Act of 1934, as amended, requires the Commission to
prescribe regulations that require incumbent LECs to make available to qualifying carriers certain
public switched network infrastructure, technology, information, and telecommunications
facilities and functions used to provide telecommunications services, or access to information
services.  Part 59 implements section 259 of the Act, by specifying the general duty of incumbent
LECs to share such infrastructure with qualifying carriers (i.e., carriers that fulfill universal
service obligations) and setting out general terms and conditions for such sharing.  Part 59 applies
only when the qualifying carrier does not seek to use the shared infrastructure to offer certain
services within the incumbent LEC's telephone exchange area.
Purpose
Part 59 is designed to implement the requirements of section 259.  Part 59 is intended to foster the
provision of advanced telecommunications and information services by small carriers.  It is
intended to accomplish this by allowing qualifying carriers to take advantage of the economies of
scale and scope possessed by larger incumbent LECs.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
Part 59 fosters the availability of advanced telecommunications and information services by
articulating general rules and guidelines to define the obligations imposed by section 259 and by
relying in large part on negotiations between interested parties.  This negotiation-driven approach
allows the parties to craft section 259 agreements that best meet their needs with minimal
regulatory supervision.
Disadvantages
The rules implementing section 259 may impose costs on incumbent LECs that must share
infrastructure with qualifying carriers.  Part 59 minimizes these costs by relying on private
negotiations to establish the precise terms for infrastructure sharing.
Recent Efforts
The Commission recently reaffirmed its negotiation-based approach to implementing section
259.
Recommendation
The staff recommends that the negotiation-driven, minimally-regulatory approach adopted in Part
59 be maintained and that no substantial changes be made to this Part.  During the three years
since Part 59 was adopted, no evidence has been presented to the Commission indicating that
parties have been unable to negotiate section 259 infrastructure sharing agreements.
PART 61 - TARIFFS
Description
Sections 203 and 204 of the Communications Act of 1934, as amended, establish tariff filing
requirements applicable to common carriers.   Sections 201 and 202 require rates, terms and
conditions to be "just and reasonable,"  and prohibit "unjust or unreasonable discrimination."
Part 61 implements these sections of the Act by establishing rules that perform two major
functions.  First, the Part 61 rules establish requirements governing the filing, form, content,
public notice periods, and accompanying support materials for tariffs.  Second, Part 61 sets forth
the pricing rules and related requirements that apply to incumbent local exchange carriers (LECs)
that are subject to price cap regulation.
Part 61 is organized into ten lettered sub-parts:
	A - General
	B - Rules for Electronic Filing
C - General Rules for Nondominant Carriers
D - General Tariff Rules for International Dominant Carriers
E - General Rules for Dominant Carriers
F - Specific Rules for Tariff Publications of Dominant and Nondominant Carriers
G - Concurrences
H - Applications for Special Permission
I - Adoption of Tariffs and Other Documents of Predecessor Carriers
J - Suspensions
Purpose
Part 61 is intended to implement sections 203 and 204.  The Part 61 tariffing rules are designed to
provide consumers with information on the rates, terms and conditions for telecommunications
services.  They are also intended to ensure that the carriers provide the Commission and the
public with information necessary for evaluating the lawfulness of tariff rates, terms and
conditions.  The price cap rules in Part 61 are designed to ensure that the rates of price cap
carriers are "just and reasonable" and "not unjustly or unreasonably discriminatory."  At the same
time, the price cap rules, in conjunction with the Part 69 access charge rules, are designed to
create incentives for increased carrier efficiency, to streamline the tariff review process, and to
allow the carriers some degree of pricing flexibility.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitors
still serve only a small percentage of local exchange lines.  Competition for business customers in
metropolitan areas has, in general, developed more rapidly than competition for residential
customers or customers in rural areas.  The domestic U.S. long distance market is competitive,
although there is greater competition for high volume customers than for low volume customers.
Competition in the international services markets is also increasing.  These markets are rapidly
changing from being dominated by a small number of national telecommunications providers to
having a large number of competitors.
Advantages
The Part 61 tariffing rules benefit the public by providing information on the rates, terms, and
conditions for telecommunications services.  In addition, the requirements for support materials
facilitate review of the lawfulness of the tariffs.  The requirements for support materials thus
reduce the cost of enforcing Commission pricing rules, and permit interested parties to challenge
tariff provisions.
The price cap rules contained in Part 61 protect customers by capping the rates charged by the
LECs and limiting the potential for LECs to exercise market power in an anticompetitive manner.
They also foster carrier efficiency, streamline the tariff process, and allow the carriers some
degree of pricing flexibility.
Disadvantages
The tariff filing requirements may impede competition by reducing carrier flexibility and
potentially foster oligopoly pricing by requiring the public disclosure of rates, terms, and
conditions.  Furthermore, the requirement for tariff support materials imposes some preparation
costs on the carriers.  Over time, the price cap rules may reduce economic efficiency by limiting
carrier pricing flexibility.
Recent Efforts
As part of the 1998 Biennial Regulatory Review process, the Commission conducted a
comprehensive review of Part 61, and eliminated a number of rules that were no longer
necessary.   More recently, the Commission also addressed the price cap rules in a
comprehensive manner in the CALLS proceeding.   In addition, the Commission is in the
process of implementing mandatory de-tariffing for domestic interexchange toll service,  and is
considering doing the same for competitive local exchange carrier services.
Recommendation
At this time, the staff generally recommends retaining the existing Part 61 requirements, with
continued monitoring of competitive developments to permit changes as warranted by increased
competition.  The staff recommends, however, that the Commission extend mandatory de-
tariffing to the international services of non-dominant interexchange carriers, including
Commercial Mobile Radio Service providers and U.S. carriers classified as dominant solely due
to foreign affiliations.  We also note that the inter-carrier compensation proceeding recommended
elsewhere in this report could result in some revisions to Part 61.
PART 63 - EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, REDUCTION,
OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF
RECOGNIZED PRIVATE OPERATING AGENCY STATUS
Description
Section 214 of the Communications Act of 1934, as amended, provides that no carrier shall
undertake the construction of a new line or extension of any line, or shall acquire or operate any
line, or extension thereof, without first having obtained a certificate from the Commission that the
present or future public convenience and necessity require the construction and/or operation of
such extended line.  Section 214 also provides that no carrier shall discontinue, reduce or impair
service to a community without first having obtained a certificate from the Commission that
neither the present nor future public convenience and necessity will be adversely affected by such
action.   Part 63 of our rules sets forth specific information that must be included in a section
214 application for market entry or exit by a common carrier.
Part 63 is organized into five sub-designations:
	Extensions and Supplements ( 63.01-63.25)
	General Provisions Relating to All Applications Under Section 214 ( 63.50-63.53)
	Discontinuance, Reduction, Outage and Impairment ( 63.60-63.100)
	Contents of Applications; Examples ( 63.500-63.601)
	Request for Designation as a Recognized Private Operating Agency ( 63.701-63.702)
Purpose
Part 63 sets out the requirements for obtaining a section 214 authorization to provide or
discontinue service.  A section 214 application is a request for authority to provide or to
discontinue services pursuant to section 214 of the Communications Act.  A carrier must receive
a section 214 authorization prior to initiating or discontinuing service.
The primary purpose in adopting entry criteria under section 214 is to promote effective
competition in the U.S. telecommunications services market.  With regard to the construction of
facilities, Commission authorization is needed to protect consumers from being charged by
carriers for unneeded facilities.  Commission authorization for discontinuance of service protects
consumers from loss of service.  Domestic markets have become sufficiently competitive that the
Commission has substantially deregulated the procedures for obtaining section 214
authorizations.  For international telecommunications services, the section 214 authorization
requirement serves several purposes.  It enables the Commission to screen applications for risks
to competition and to deny or condition authorizations as appropriate.  The review process also
includes consultation with Executive Branch agencies on national security, law enforcement,
foreign policy, and trade concerns that may be unique to the provision of international services.
The section 214 authorization requirement also helps us monitor competitive conditions along
U.S. international routes as well as each carrier's compliance with our rules and policies
governing the provision of international services, and it also serves to inform small carriers of
their special obligations as providers of international service.
Part 63 also contains rules to protect U.S. consumers and carriers from foreign
telecommunications carriers exerting market power in the U.S. telecommunications market.  For
example, the No Special Concessions rule prohibits U.S. international carriers from agreeing to
accept special concessions directly or indirectly from any foreign carrier with respect to any U.S.
international route where the foreign carrier possesses sufficient market power on the foreign end
of the route to affect competition adversely in the U.S. market.   Part 63 also contains
procedures for a party to be designated as a Recognized Private Operating Agency.
Analysis
Status of Competition
There is a significant amount of competition in the provision of domestic long distance services.
Competition for local exchange services is increasing.  Competition in international services is
also increasing, and the market is rapidly changing from a system that used to be dominated by a
small number of national telecommunications providers (generally the incumbent national
monopoly telephone companies)  to a system with large numbers of new entrants and
competitors.
Advantages
Part 63 provides carriers and the public with procedures to be followed to obtain authorization to
construct facilities, provide service, and discontinue service.  The rules provide certainty
regarding what information must be filed with the Commission, how long action on the
application will take, the types of services that can be provided over the facilities, and in what
circumstances a carrier may discontinue service.
Disadvantages
The rules can be administratively burdensome on the carriers and the Commission.  Some of the
rules are duplicative, and some are unclear.  The requirement for Commission authorization may
also delay the introduction of new services to the public.
Recent Efforts
The increasing number of common carriers providing service and the resulting growth of
competition have allowed the Commission to reduce the administrative burdens placed on carriers
regarding market entry and exit.  In 1999, the Commission amended the rules in Part 63 to de-
regulate market entry and streamline market exit filing requirements, under section 214, for
domestic carriers.   The new rules confer "blanket" section 214 certification for new lines of all
domestic carriers, exempt line extensions and video programming services from section 214
requirements, and provide that all section 214 applications to discontinue domestic service will be
automatically granted unless the Commission notifies the applicant otherwise.  As a result of this
deregulation, the only section 214 applications the Commission receives for domestic service are
for market exit, under which a carrier must get discontinuance authority and notify customers
when it stops providing service to a community.  Market entry for domestic services is self-
executing, and no applications are needed.
Regarding section 214 authorizations for international telecommunications services, in 1996 the
Commission created global section 214 authorizations, reduced paperwork obligations,
streamlined tariff requirements for non-dominant international carriers, and ensured that essential
information is readily available to all carriers and users.    In 1999, the Commission further
streamlined its procedures for granting international section 214 authorizations so that now
approximately 99 percent of international section 214 applications filed qualify for streamlined
processing.  As a result, most new carriers are authorized to provide international services on
most international routes 14 days after public notice of an application.  Carriers already providing
service are able to complete pro forma transactions and assignments of their authorizations
without prior Commission approval and to provide service through their wholly owned
subsidiaries without separate Commission approval.  Carriers under common ownership with an
already-authorized carrier are able to provide the same authorized services after only a minimal
waiting period.
Recommendation
The staff recommends that certain sections of Part 63 be amended or deleted, but that most of the
existing sections be retained at this time.  We recommend that the sections which were amended
in 1999 to lower entry barriers for domestic carriers be retained because they minimize
transaction costs, streamline the applications process, promote competition, and increase
consumer choice.  The sections related to the form of applications to be filed (i.e., amendments,
additional information, copies, fees, filing periods, and form (such as paper size)) should be
retained because administratively they provide clear and predictable rules.  We find, on the other
hand, that the rules describing and defining the types of discontinuance of services for which
section 214 authorization must be obtained are largely obsolete, and are duplicative, and thus
recommend that they be considered for modification and consolidation.  The staff has also
identified several duplicative rules that should be considered for elimination, and a number of
rules that are unclear, ambiguous or contain errors that the staff recommends be clarified or
corrected.
PART 64 - MISCELLANEOUS RULES RELATING TO COMMON CARRIERS, SUBPART A -
TRAFFIC DAMAGE CLAIMS
Description
Subpart A requires carriers engaged in radio-telegraph, wire-telegraph, or ocean-cable service to
maintain separate files for each damage claim of a traffic nature filed with the carrier.  Subpart A
also prohibits such carriers from making payments as a result of any traffic damage claim in
excess of the total amount collected for the message or messages from which the claim arose
unless the claim is presented in writing and sets forth the reason for the claim.  These rules are
based on the Commission's authority pursuant to sections 1, 4, 201-205, and 220 of the
Communications Act, as amended.
Purpose
Subpart A requires that certain types of carriers maintain records concerning damage claims, and
limits damage payments absent a written claim.
Analysis
Status of Competition
Telegraph service, which appears to be the primary focus of this subpart, is no longer a major
service offering.
Advantages
Ensures that certain carriers maintain records concerning damage claims.
Disadvantages
Subpart A appears to focus on the provision of telegraph service, which is no longer a major
service offering.
Recent Efforts
No recent action.
Recommendation
The staff recommends the Commission consider removing subpart A since it appears to be
outdated.
PART 64, SUBPART B - RESTRICTIONS ON INDECENT TELEPHONE MESSAGE SERVICES
Description
Section 223(b) of the Communications Act of 1934, as amended, prohibits use of the telephone
for the purpose of obscene commercial communications.  It also prohibits use of the telephone for
indecent commercial communications without the consent of the other party and prohibits use of
the telephone for indecent commercial communications which are available to anyone under 18
years of age.   Section 223(b) also provides for certain defenses to prosecution for making
indecent commercial communications.
Subpart B implements the provisions of section 223(b) relating to defenses to prosecution for
indecent commercial communications.  Under section 64.201, a provider of indecent commercial
telephone communications has a defense to prosecution if the provider has notified the common
carrier that the provider is engaged in providing indecent commercial communications, and does
one of the following: (1) requires credit card payment before transmitting the message; (2)
requires an authorized access or identification code, which has been established by mail, before
transmitting the message; or (3) scrambles the message so that the audio is unintelligible and
incomprehensible without a descrambler.  Subpart B also provides a defense to prosecution for
message sponsor subscribers to mass announcement services if they ask the carrier to take certain
precautions.  In addition, subpart B bars common carriers, to the extent technically feasible, from
providing access to obscene or indecent communications from the telephone of anyone who has
not previously requested access to such services in writing if the carrier provides billing and
collection for the provider of the obscene or indecent communications.
Purpose
Subpart B is intended to implement the statutory restrictions on the commercial provision by
telephone of indecent communications, consistent with the First Amendment.  In particular,
subpart B is intended to protect minors and non-consenting adults from indecent communications.
Analysis
Status of Competition
Not relevant.
Advantages
Subpart B protects minors and non-consenting adults from indecent commercial telephone
communications within a framework designed to be consistent with the First Amendment.
Disadvantages
Restrictions affecting speech are subject to potential challenge as inconsistent with the First
Amendment.
Recent Efforts
No recent developments.
Recommendation
The staff does not recommend changes to subpart B as part of the 2000 Biennial Review.
PART 64, SUBPART C - FURNISHING OF FACILITIES TO FOREIGN GOVERNMENTS FOR
INTERNATIONAL COMMUNICATIONS
Description
Subpart C, consisting of section 64.301 of the Commission's rules, requires U.S. common carriers
to provide services and facilities for communications to any foreign government, upon reasonable
request.  If a foreign government refuses to provide services or facilities for communications to
the U.S. Government, U.S. carriers, to the extent specifically ordered by the Commission, shall
deny equivalent services or facilities to the foreign government.   This rule was adopted
pursuant to the Commission's authority under sections 201, 214, 303, and 308 of the
Communications Act, as amended.
Purpose
Section 64.301 is intended to ensure that the U.S. Government has access to communications
services overseas.  It permits the Commission to order U.S. carriers to deny foreign governments
access to communications services in the United States if the foreign government has denied the
U.S. government access to communications services or facilities overseas.
Analysis
Status of Competition
Competition in the international services markets is increasing.  These markets are rapidly
changing from being dominated by a small number of national telecommunications providers to
having a large number of competitors.
Advantages
The rule helps to ensure that the U.S. Government has access to communications services and
facilities overseas.
Disadvantages
The Commission rarely exercises this authority.
Recent Efforts
The Commission last revised this rule in 1963, and would need to consult with the State
Department before doing so again.
Recommendation
The staff recommends retaining the rule at this time.
PART 64, SUBPART D - PROCEDURES FOR HANDLING PRIORITY SERVICES IN
EMERGENCIES
Description
Subpart D requires that common carriers maintain, provision, and, if disrupted, restore facilities
and services in accordance with the policies and procedures in Appendix A to Part 64.  Appendix
A establishes policies and procedures and assigns responsibilities for the National Security
Emergency Preparedness (NSEP) Telecommunications Service Priority (TSP) System.  These
requirements are based on the Commission's authority under sections 1, 201-05 of the
Communications Act as amended.
Purpose
Subpart D is designed to ensure that critical communications services are available during times
of national emergency.
Analysis
Status of Competition
Not Relevant.
Advantages
Subpart D promotes public safety and national security by establishing clear procedures and
criteria for ensuring that critical communications services are available in times of national
emergency.
Disadvantages
Complying with these requirements may impose administrative costs on carriers.
Recent Effort
There have not been any recent actions.
Recommendation
The staff does not recommend changes in subpart D.
PART 64, SUBPART E - USE OF RECORDING DEVICES BY TELEPHONE COMPANIES
Description
Subpart E governs the use of recording devices by telephone common carriers to record interstate
or foreign telephone conversations between members of the public and telephone company agents
or employees.  Subpart E requires that telephone companies wishing to record such conversations
must: (1) obtain the prior consent of all parties; (2) give a verbal notification prior to recording;
and (3) accompany the use of the recording device with an automatic tone warning device that
produces a distinct signal at regular intervals.  These requirements are based on the Commission's
authority under sections 1, 2, 4, 201, and 205 of the Communications Act as amended.
Purpose
Subpart E is intended to protect privacy interests.
Analysis
Status of Competition
Not relevant.
Advantages
Subpart E is designed to protect privacy.
Disadvantages
Subpart E appears to duplicate federal and state electronic privacy statutes, including 18 U.S.C. 
2510 et seq., and 47 U.S.C. 1004.  It also references outdated technology.
Recent Effort
There have not been any recent changes.
Recommendation
The staff recommends that the Commission consider removal of subpart E.
PART 64, SUBPART F - TELECOMMUNICATIONS RELAY SERVICES AND RELATED
CUSTOMER PREMISES EQUIPMENT FOR PERSONS WITH DISABILITIES
Description
Title IV of the Americans with Disabilities Act of 1990 (ADA), codified as section 225 of the
Communications Act of 1934, as amended, requires the Commission to ensure that
telecommunications relay service (TRS) is available, "to the extent possible and in the most
efficient manner," to individuals with hearing or speech disabilities in the United States.
Section 225 defines TRS as telephone transmission services that make it possible for an
individual with a hearing or speech disability to engage in communication by wire or radio with a
hearing individual in a manner functionally equivalent to someone without such a disability.
Part 64, subpart F was adopted to implement section 225 of the Act.  The rules provide minimum
functional, operational, and technical standards for TRS programs. The rules also establish a cost
recovery and a carrier contribution mechanism for the provision of interstate TRS and require
states to establish cost recovery mechanisms for the provision of intrastate TRS.
The rules give states a strong role in ensuring the availability of TRS by treating carriers as in
compliance with their statutory obligations if they operate in a state that has a relay program
certified as compliant by this Commission pursuant to rules in subpart F.
Purpose
Subpart F is designed to implement section 225.  Subpart F is intended to facilitate
communication by persons with a hearing or speech disability by ensuring that interstate and
intrastate TRS is available throughout the country, and by ensuring uniform minimum quality
standards for such relay services.
Analysis
Status of Competition
There is competition in the interstate TRS market, but very little competition in the intrastate TRS
market.
Advantages
The Commission's TRS rules ensure that individuals with hearing or speech disabilities receive
the same quality of service when they make relay calls, regardless of where their call originates or
terminates.  The rules also ensure that the telecommunications service they receive is
"functionally equivalent" to that available to persons who do not have such disabilities.  The rules
are particularly important to ensure service quality because there is so little intrastate competition
among intrastate TRS providers.
Disadvantages
Technology is changing rapidly, and the regulations require relatively frequent modification to
ensure functional equivalence to voice telephone service.  For instance, in March 2000, the
Commission adopted rules modifying Part 64, subpart F to address the provision of new types of
relay services.
Recent Efforts
In March 2000, the Commission revised subpart F to, among other things: (1) modify the
definition of telecommunications relay services to include speech-to-speech (STS) relay services
(which provide a telecommunications link for persons with speech disabilities), video relay
interpreting (VRI), (which facilitates telecommunications for individuals who use sign language),
and non-English language relay services; (2) require that all relay services, whether mandatory or
voluntary, funded by intrastate and interstate TRS funds, comply with minimum service quality
standards; (3) require provision of STS relay services and permit reimbursement for the voluntary
provision of VRI service; (4) modify the minimum service quality standards to better ensure
functional equivalency; (5) clarify that the existing rules require outreach to all callers and for all
forms of TRS; and (6) improve the Commission's process for handling TRS complaints.
In August 2000, the Commission revised subpart F to require all carriers providing telephone
voice transmission service to provide access via the 711 dialing code to all relay services as a toll
free call.
Recommendation
The staff does not recommend modification of subpart F as part of the 2000 Biennial Review.
PART 64, SUBPART G - FURNISHING OF ENHANCED SERVICES AND CUSTOMER
PREMISES EQUIPMENT BY BELL OPERATING COMPANIES; TELEPHONE OPERATOR
SERVICES
Description
Subpart G addresses two distinct sets of issues.  First, it contains rules concerning the provision of
enhanced services and customer premises equipment (CPE) by Bell Operating Companies.
Second, it contains rules governing the provision of operator services.  These rules were adopted
pursuant to the Commission's authority under sections 4, 201-205, 403, and 404 of the Act, as
amended.
The Bell Operating Companies may provide enhanced services and CPE pursuant to nonstructural
safeguards established in the Computer III  (enhanced services) and Furnishing of CPE
proceedings, or through a separate subsidiary as provided in section 64.702 of the Commission's
rules.  If a Bell Operating Company provides enhanced services or CPE through a separate
subsidiary, the separate subsidiary must: (1) obtain all transmission facilities necessary for the
provision of enhanced services pursuant to tariff; (2) operate independently, with its own books
of accounts, separate officers, personnel, and computer facilities; (3) deal with any affiliated
manufacturing entity on an arm's length basis; and (4) compensate the Bell Operating Company
for any research or development performed for the subsidiary.  Section 64.702 requires that
transactions between the subsidiary and the parent or any other affiliate be put in writing, and
bars Bell Operating Companies from engaging in marketing or sales on behalf of a CPE or
enhanced services subsidiary.  The Bell Operating Company must also obtain Commission
approval of the capitalization plans for any such separate subsidiary.  In addition, section 64.702
bars all common carriers from providing CPE in conjunction with common carrier
communications services.
The remainder of subpart G addresses the provision of telephone operator services, and certain
activities by call aggregators.   These rules require that operator service providers identify
themselves at the beginning of each call and provide consumers with information concerning
their rates.  The rules also prohibit call blocking and require that customers be able to obtain
access to the operator services provider of their choice.  In addition, subpart G contains
restrictions on charges related to the provision of operator services, minimum standards for
routing and handling of emergency telephone calls, and rules governing the filing of
informational tariffs and the provision of operator services for prison inmates
Purpose
Subpart G establishes safeguards for the provision of enhanced services and CPE by Bell
Operating Companies.  These measures are intended to prevent the Bell Operating Companies
from using their power in the local exchange market to adversely affect competition in other
adjacent markets.
The subpart G rules governing the provision of operator services protect consumers by ensuring
that they have access to useful information about the rates charged by operator service providers,
and that they are able to reach the operator service provider of their choice.  The rules also
promote public safety by prescribing minimum standards for operator service provider and call
aggregator handling of emergency telephone calls.
Analysis
Status of Competition
The markets for both enhanced services and CPE are competitive.  The operator services market
is becoming increasingly competitive, although consumers may not benefit fully from this
competition due to a lack of consumer awareness about the choices available to them, especially
when using payphones.
Advantages
Subpart G is designed to foster competition by preventing the Bell Operating Companies from
using their power in the local exchange market to adversely affect competition in the provision of
enhanced services and CPE.  The provisions of subpart G concerning operator services are
designed to protect consumers from excessive charges for such services and ensure that
consumers are able to reach the interexchange carrier of their choice.
Disadvantages
The separate subsidiary requirements impose additional costs on the Bell Operating Companies.
The rules concerning operator services impose some administrative costs on aggregators and
operator service providers.
Recent Efforts
As part of its 1998 Biennial Review, the Commission is considering eliminating section
64.702(c), which prohibits common carriers from bundling CPE with regulated communications
services.  The Commission tentatively concluded that the CPE market is sufficiently competitive
to justify eliminating this restriction.
The Commission adopted amendments to the subpart G rules governing operator service
providers on July 12, 1999.  These rule changes require that aggregators update the consumer
information they must post on or near public telephones as soon as possible, but no later than 30
days after the aggregator changes the pre-subscribed operator service provider.
Recommendation
The staff does not recommend further changes in subpart G as part of the 2000 Biennial Review.
PART 64, SUBPART H - EXTENSION OF UNSECURED CREDIT FOR INTERSTATE AND
FOREIGN COMMUNICATIONS SERVICES TO CANDIDATES FOR FEDERAL OFFICE
Description
Part 64 subpart H, implements section 401 of the Federal Election Campaign Act of 1971 which
requires the Commission to promulgate rules governing the extension of unsecured credit for
foreign or interstate communications services to candidates for Federal office.   Part 64, subpart
H requires certain carriers  to file periodic reports with the Commission detailing the terms of
any unsecured credit extended by the carrier to, or on behalf of, a candidate for federal office.  In
addition, subpart H requires carriers to extend unsecured credit on substantially equal terms to all
candidates and other persons on behalf of any candidate for the same office.
Purpose
The purpose of subpart H is to assist the Commission in monitoring unsecured credit
arrangements between carriers and candidates for federal office, pursuant to the Federal Election
Campaign Act.  It is also intended to ensure that such agreements are extended on substantially
equal terms to all candidates for the same office.
Analysis
Status of Competition
Competition in the local exchange access market is growing, although competitors still serve only
a small percentage of local exchange lines.  Competition for business customers in metropolitan
areas has, in general, developed much more rapidly than competition for residential customers or
customers in rural areas.  The U.S. market for domestic long distance service is competitive,
although there is greater competition for higher volume business and residential customers than
for low volume customers.
Advantages
The subpart H reporting requirements and limited disclosure rules provide an efficient means of
monitoring unsecured credit arrangements between carriers and candidates for federal office.  The
rules also are designed to ensure that carriers do not favor any one candidate with regard to
unsecured credit arrangements.
Disadvantages
These rules involve some additional administrative burdens for carriers.
Recent Efforts
There have been no significant changes in recent years.
Recommendation
The staff recommends the Commission retain subpart H.
PART 64, SUBPART I - ALLOCATION OF COSTS
Description
Section 254(k) of the Communications Act, as amended, requires the Commission, with respect
to interstate services, to establish any necessary cost allocation rules, accounting safeguards, and
guidelines to ensure that services included within the definition of universal service bear no more
than a reasonable allocation of joint and common costs of facilities used to provide these services.
The requirements in subpart I are also based on the Commission's authority under sections 201
and 220 of the Communications Act, as amended.   Subpart I of the Commission's rules
prescribes procedures for the allocation of carriers' costs between regulated and non-regulated
services.  It provides that all incumbent LECs required to separate regulated and non-regulated
costs  shall use the attributable cost method of cost allocation and lists a number of cost
allocation principles that such carriers must follow.  Subpart I provides that all carriers required to
allocate costs between regulated and non-regulated activities are also subject to the affiliate
transactions rules.  Subpart I also requires that all incumbent LECs with annual operating
revenues at or above a specified indexed level (currently $114 million) file cost allocation
manuals (CAMs) with the Commission.  Finally, subpart I provides that all carriers required to
file CAMs must also engage independent auditors to audit their compliance with the
Commission's cost allocation requirements.
Purpose
The subpart I rules are designed to implement section 254(k) and are intended to foster
competition and protect consumers by preventing cross-subsidization between regulated and non-
regulated services provided by carriers subject to the cost allocation requirement.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
Advantages
The subpart I rules protect consumers by helping to ensure that carriers' less competitive
regulated services do not subsidize competitive ventures.  This also helps to prevent carriers from
competing unfairly in other markets.
Disadvantages
The cost allocation and affiliate transaction rules impose administrative costs on carriers subject
to these requirements.
Recent Efforts
Subpart I has been amended within the past few years to eliminate pre-filing requirements for
CAM cost apportionment and time reporting changes, and to reduce the auditing requirements for
mid-sized incumbent local exchange carriers..   The Common Carrier Bureau has held
workshops to discuss, among other things, proposals for additional changes to CAM requirements
for mid-size carriers.
Recommendation
The staff recommends that the Commission consider additional changes to CAM requirements in
Phase II of the Comprehensive Accounting Review proceeding.
PART 64, SUBPART J - INTERNATIONAL SETTLEMENTS POLICY AND MODIFICATION
REQUESTS
Description
subpart J requires that carriers request Commission approval for changes in the accounting rates
for international telecommunications services unless the route involved is exempt from the
Commission's International Settlements Policy (ISP).   The ISP requires that U.S.
telecommunications carriers pay nondiscriminatory rates for termination of international traffic in
foreign countries.   subpart J also sets forth the information which must be contained in a
modification request and the procedures that govern Commission consideration of such
requests.   These requirements are based on the Commission's authority pursuant to sections 1,
201, 202, 203, and 309 of the Communications Act, as amended.
Purpose
The requirement for filing accounting rate modification requests set out in Subpart J is intended
to prevent the exercise of market power by foreign carriers.  In particular, it assists the
Commission in ensuring compliance with the ISP and the Commission's Benchmarks Policy.
The ISP was adopted as a result of the Commission's concern that a foreign carrier with market
power would have the ability to "whipsaw" competing U.S. international carriers by
discriminating among them, and /or by unilaterally setting the prices, terms, and conditions under
which U.S. carriers are able to exchange traffic.   Such actions by foreign carriers would prevent
U.S. carriers from obtaining lower accounting rates that would benefit U.S. consumers.
Analysis
Status of Competition
Competition in the international services markets is increasing.  These markets are rapidly
changing from being dominated by a small number of national telecommunications providers to
having a large number of competitors.
Advantages
Subpart J is designed to prevent the exercise of market power by foreign carriers, and facilitate
the negotiation of lower accounting rates by U.S. international carriers to the benefit of American
consumers.
Disadvantages
The subpart J requirements may be too restrictive or over-broad.
Recent Efforts
The Commission reviewed its International Settlements Policy as part of its 1998 biennial
review.   In that proceeding, the Commission made several changes to the ISP, deregulating
inter-carrier settlement arrangements between U.S. carriers and foreign non-dominant carriers on
competitive routes.  The Commission, among other things, eliminated the international
settlements policy and contract filing requirements for arrangements with foreign carriers that
lack market power, and eliminated the international settlements policy for arrangements with all
carriers on routes where rates to terminate U.S. calls are at least 25 percent lower than the
relevant settlement rate benchmark.  The Commission also adopted procedural changes to
simplify the accounting rate filing requirements, including the elimination of the requirement that
carriers making accounting rate filings with the Commission serve every carrier that provides
service on the international route with a copy of the filing.  Instead, the Commission encouraged
carriers to make their accounting rate filings electronically over the International Bureau
Electronic Filing System.
Recommendation
The staff does not believe that further amendments to subpart J are necessary at this time, and
recommends retaining the rule.
PART 64, SUBPART K - CHANGING LONG DISTANCE SERVICE
Description
Section 258 of the Communications Act of 1934, as amended,  requires the Commission to
prescribe verification procedures for telecommunications carriers to use in confirming
subscribers' decisions to change local exchange or long distance telephone carriers.  Section 258
provides that a carrier that fails to comply with the Commission's verification procedures will be
liable to the subscriber's authorized carrier for all amounts paid by the subscriber after the
violation.  Subpart K implements section 258 of the Act by requiring telecommunications carriers
to follow specific procedures with respect to changes in subscribers' preferred carriers.  The rules
also absolve subscribers of liability for charges billed by unauthorized carriers in certain cases,
impose liability on unauthorized carriers for all charges collected from subscribers, and establish
procedures to govern preferred carrier freezes.
Purpose
Subpart K is intended to implement section 258 of the Act by attempting to eliminate the
fraudulent practice of "slamming," or changing a subscriber's authorized carrier without the
subscriber's knowledge or explicit authorization.  Subpart K is also designed to foster consumer
choice and facilitate fair competition in the market for telecommunications services
Analysis
 Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
Subpart K reduces fraud by deterring slamming, fosters consumer choice, and facilitates fair
competition.
Disadvantages
Compliance with the safeguards in subpart K may increase carriers' costs to some degree.
Recent Efforts
In May 2000, the Commission modified the slamming liability rules and the procedures contained
in subpart K.   Among other things, the Commission modified the liability rules in response to
industry concerns about complexity and expense of implementation and permitted state
regulatory commissions to become the primary forums for resolving slamming complaints.  In
June 2000, the D.C. Circuit lifted its May 1999 stay of the previous liability rules.  The new rules
will become effective later this year.
In July 2000, the Commission revised other aspects of its slamming rules to improve the carrier
change process for both subscribers and carriers while making it more difficult for unscrupulous
carriers to perpetrate slams.   Among other things, the Commission allowed the authorization
and verification of carrier changes using the Internet, consistent with the provisions of the
Electronic Signatures in Global and National Commerce Act.   The revised rules will become
effective later this year.
Recommendation
The staff does not recommend further changes to subpart K as part of the 2000 Biennial Review.
PART 64, SUBPART L - RESTRICTIONS ON TELEPHONE SOLICITATION
Description
Section 227 of the Communications Act, as amended, imposes restrictions on the use of
automatic telephone dialing systems ("autodialers"), artificial or prerecorded messages, and
telephone facsimile machines, and it specifically requires that the Commission adopt rules to
implement these protections.   Section 227 also directs the Commission to conduct proceedings
to consider the need to protect residential telephone subscribers from unsolicited telephone calls.
The subpart L rules contain measures designed to implement these provisions of the statute.
Among other things, the subpart L rules require that telephone solicitors maintain company-
specific lists of residential subscribers who do not wish to receive further solicitations.  In
addition, the subpart L rules contain restrictions on the disclosure of subscriber billing name and
address information.
Purpose
The subpart L rules are intended to implement section 227 of the Act, and protect subscriber
privacy and public safety without unnecessarily restricting legitimate telephone marketing and
sales.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
Subpart L protects subscriber privacy and public safety without unnecessarily interfering with
legitimate telephone marketing.
Disadvantages
Subpart L restricts the ability of telemarketers to place unsolicited calls at will.
Recent Efforts
There have not been any significant recent actions.
Recommendation
The staff does not recommend changes in subpart L at this time.
PART 64, SUBPART M - PROVISION OF PAYPHONE SERVICE
Description
Subpart M implements section 276 of the Communications Act of 1934, as amended, concerning
the provision of payphone service.   The subpart governs the compensation of payphone
providers by carriers that receive calls from payphones, requires states to review and remove any
of their regulations that limit the ability of payphone service providers to enter or exit the market,
and establishes regulations designed to ensure the accessibility of payphone service to individuals
with disabilities.  With respect to payphone compensation, the subpart provides for contracts
between providers, but sets a default compensation rate should the parties not reach an agreement.
The subpart also requires carriers to establish arrangements and track the data necessary for the
calculation, verification, billing, and collection of payphone compensation.
Purpose
Subpart M is designed to implement section 276 of the Act and help ensure that payphone
providers receive fair compensation for completed intrastate and interstate calls that use their
payphones, to encourage competition among payphone service providers, and to promote the
widespread deployment of payphone services.
Analysis
Status of Competition
Incumbent local exchange carriers have significant market power in the provision of payphone
service.  Independent payphone providers have captured approximately fifteen percent of the
payphone market.
Advantages
The payphone regulations act to restrain the market power of incumbent LECs and ensure that
payphone providers are fairly compensated through a default rate.
Disadvantages
By establishing a default payphone compensation rate, the payphone rules may discourage
negotiated, market-based compensation arrangements because neither side has the incentive to
disadvantage itself in relation to the default rate.
Recent Efforts
The U.S. Court of Appeals for the D.C. Circuit issued a decision on June 16, 2000 upholding the
Commission's decision to establish a default compensation rate of $.24 per call for payphone
calls.
Recommendation
The staff recommends retention of the payphone rules, but recommends continued monitoring to
assess future competitive developments in the payphone market.  The staff recommends deletion
of section 64.1320, which applies only to activities prior to January 1, 1999.
PART 64, SUBPART N - EXPANDED INTERCONNECTION
Description
Subpart N provides that Class A local exchange carriers, which do not participate in the National
Exchange Carrier Association tariff, must provide expanded interconnection.   Subpart N
requires that these incumbent LECs allow interconnection with their networks through physical or
virtual collocation for the provision of interstate special access and switched transport services.
Any interested party may take expanded interconnection.  Subpart N was adopted pursuant to the
Commission's authority under Sections 1, 4, and 201 through 205 of the Communications Act, as
amended.
Purpose
Subpart N is designed to increase competition in the provision of interstate services by removing
barriers to the competitive provision of special access and switched transport services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
Subpart N fosters competition in the provision of special access and switched transport services.
In particular, subpart N makes collocation and interconnection available to a broader group of
interested parties than section 251 of the Communications Act and Part 51 of the Commission's
rules.  Any interested party, including end users such as large businesses and universities, for
example, can take advantage of expanded interconnection under subpart N, while interconnection
and collocation under section 251 of the Communications Act and Part 51 of the Commission's
rules are limited to telecommunications carriers.
Disadvantages
Subpart N imposes some costs on incumbent LECs, which are passed on to requesting parties.
Recent Efforts
No recent action.
Recommendation
The staff recommends that the Commission retain subpart N because it covers more interested
parties than section 251 of the Act and Part 51 of the rules, and serves to promote competition.
PART 64, SUBPART O - INTERSTATE PAY-PER-CALL AND OTHER INFORMATION
SERVICES
Description
Subpart O contains provisions concerning pay-per-call and certain other information services.
Subpart O requires that common carriers assigning telephone numbers to providers of interstate
pay-per-call services require that the provider comply with this subpart as well as certain other
laws and regulations.  Subpart O restricts the provision of pay-per-call services over 800 and
other "toll free" numbers, and effectively bars the provision of interstate pay-per-call services on
a collect basis.  Subpart O provides for the assignment of the 900 service access code to pay-per-
call services.  It requires that local exchange carriers offer subscribers the option of blocking
access to 900 numbers from their telephones.  Subpart O also bars the disconnection or
interruption of local exchange or long distance service for the non-payment of charges for
interstate pay-per-call and certain information services.  In addition, subpart O establishes
conditions for common carrier provision of billing and collection for pay-per-call services.  The
requirements in subpart O are based on the Commission's authority under Sections 1, 4, and
201through 205 of the Communications Act, as amended.
Purpose
Subpart O is designed to protect consumers from the fraudulent or unscrupulous provision of pay-
per-call services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers
Advantages
Subpart O protects consumers from the fraudulent or unscrupulous provision of pay-per-call
services.
Disadvantages
Compliance with the requirements of subpart O increases the cost of providing pay-per-call
services.
Recent Efforts
There have not been any recent actions.
Recommendation
The staff does not recommend changes to subpart O as part of the current biennial review.
 PART 64, SUBPART P - CALLING PARTY TELEPHONE NUMBER; PRIVACY  (ALSO KNOWN
AS "CALLER ID")
Description
Subpart P contains the Commission's rules concerning Calling Party Number (CPN) services,
including "Caller ID," which depend on capabilities that use out-of-band signaling techniques,
such as Signaling System Seven (SS7).  Subpart P provides that common carriers using SS7 must,
subject to certain exceptions, transmit the CPN associated with interstate calls to interconnecting
carriers without additional charge.  Originating carriers using SS7 must recognize *67 as a
caller's request for privacy when dialed as the first three digits of an interstate call.  Carriers
providing line blocking services are required to recognize *82 as a caller's request that privacy
not be provided and that the CPN be passed on an interstate call.  Subpart P restricts the use of
telephone subscriber information provided as part of Automatic Number Identification or Charge
Number services.  Carriers are also required to notify customers of their *67 and *82 capabilities.
The requirements in subpart P are based on the Commission's authority under sections 1, 4, and
201 through 205 of the Communications Act, as amended.
Purpose
Subpart P provides a clear and consistent regulatory framework for deployment of CPN-based
services which protects subscriber privacy while fostering the development of new and innovative
services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers serve only a small percentage of local exchange lines.  Competition for
business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
Subpart P protects the privacy interests of telephone users, and provides for consumer education
concerning CPN-based interstate services.
Disadvantages
Compliance with subpart P imposes some costs on carriers.
Recent Efforts
No recent actions.
Recommendation
The staff does not recommend that the Commission modify subpart P as part of this biennial
review.
PART 64, SUBPART Q - IMPLEMENTATION OF SECTION 273(D)(5) OF THE
COMMUNICATIONS ACT: DISPUTE RESOLUTION REGARDING EQUIPMENT STANDARDS
Description
Section 273(d) of the Communications Act, as amended, establishes procedures to be followed by
non-accredited standards organizations when setting industry-wide standards or generic
requirements for telecommunications equipment or customer premises equipment (CPE).  Section
273(d)(5) of the Act directs the Commission to prescribe a dispute resolution process to be used
when all parties involved in such standards setting cannot agree on a dispute resolution process.
Subpart Q establishes a default dispute resolution process in response to section 273(d)(5).  It
provides for resolution of technical disputes by a three-member panel, whose recommendation
can be overturned if three-fourths of the funding parties vote to do so.
Purpose
Subpart Q is designed to implement section 273(d) and ensure the fair, prompt and economical
resolution of disputes that arise in the context of private sector development of technical
standards for telecommunications equipment and CPE.
Analysis
Status of Competition
The market for CPE is competitive, with vibrant competition among a wide variety of CPE
manufacturers.
Advantages
The default dispute resolution process prescribed in subpart Q provides for the fair, prompt and
economical resolution of disputes when the parties are unable to agree on a mutually satisfactory
process.
Disadvantages
Since this dispute resolution process is only used when the parties cannot agree on another
approach, it does not appear to have any significant disadvantages.
Recent Efforts
No recent action.
Recommendation
The staff recommends that the Commission retain subpart Q.
PART 64, SUBPART R - GEOGRAPHIC RATE AVERAGING AND RATE INTEGRATION
Description
Section 254(g) of the Communications Act, as amended,  requires interexchange rate averaging
and rate integration.  The rate averaging provisions require interexchange carriers to charge
customers in rural and high cost areas no more than they charge urban customers.  The rate
integration provisions require carriers to charge customers in one state the same rates for
interexchange service charged to customers in any other state.  Subpart R implements this
requirement.
Purpose
Subpart R is designed to implement section 254(g) of the Act and ensure that all customers,
regardless of where they live, have access to interexchange services at comparable rates.
Analysis
Status of Competition
The market for long distance service is competitive, although there is greater competition for high
volume customers than for low volume customers.
Advantages
The rate averaging and rate integration requirements help ensure that all domestic interexchange
toll service customers, regardless of where they live, share in the benefits of rate reductions and
new technologies that result from the competitive nature of the interexchange market.
Disadvantages
By requiring carriers to average their rates across all of their service areas, the rate averaging and
rate integration provisions in the statute create implicit subsidies running from low-cost areas to
high-cost areas.  This has the potential to distort the market by discouraging carriers from serving
high cost areas.  It can also make it difficult for national interexchange carriers serving both high
and low cost areas to compete effectively with carriers that provide targeted interexchange
services in low-cost areas.
Recent Efforts
The U.S. Court of Appeals for the D.C. Circuit recently affirmed the Commission's ruling that an
interexchange carrier and all of its affiliates must charge the same integrated long distance rates.
The court, however, vacated the Commission's decision that Section 254(g) unambiguously
applies rate integration to CMRS carriers and remanded to the Commission the question of
whether rate integration should apply to these carriers.
Recommendation
The staff recommends review of the applicability of rate integration to CMRS carriers pursuant to
the court remand, but does not recommend that this be treated as a part of the 2000 Biennial
Review.  The staff recommends retention of the other rate integration and rate averaging rules
that implement the statutory mandate of the 1996 Act.  The staff recommends that the
Commission monitor the potential effect of these provisions on the development of competition
in the interexchange market.
PART 64, SUBPART S - NONDOMINANT INTEREXCHANGE CARRIER CERTIFICATIONS
REGARDING GEOGRAPHIC RATE AVERAGING AND RATE INTEGRATION
REQUIREMENTS
Description
Section 254(g) of the Communications Act, as amended, requires interexchange carrier rate
averaging and rate integration.  Subpart S implements this requirement by requiring that
nondominant carriers that provide detariffed interstate domestic interexchange service file an
annual certification with the Commission (signed by an officer under oath), stating that they
comply with the rate averaging and rate integration requirements in section 254(g).
Purpose
Subpart S is intended to implement section 254(g) and insure compliance with the statutory
requirement that all customers, regardless of where they live, have access to interexchange
services at comparable rates.
Analysis
Status of Competition
The market for long distance service is competitive, although there is greater competition for high
volume customers than for low volume customers.
Advantages
The rate averaging and rate integration certification requirements facilitate enforcement of the
statutory requirement in section 254(g) of the Act that all domestic interexchange toll service
customers, regardless of where they live, share in the benefits of rate reductions and new
technologies that result from the competitive nature of the interexchange market.
Disadvantages
Requiring that nondominant interexchange carriers file annual certifications may impose some
administrative costs on these carriers.
Recent Efforts
There have been no recent actions.
Recommendation
The staff recommends retention of subpart S.
 PART 64, SUBPART T - SEPARATE AFFILIATE REQUIREMENTS FOR INCUMBENT
INDEPENDENT LOCAL EXCHANGE CARRIERS THAT PROVIDE IN-REGION, INTERSTATE
DOMESTIC INTEREXCHANGE SERVICES OR IN-REGION INTERNATIONAL
INTEREXCHANGE SERVICES
Description
Subpart T establishes separate subsidiary requirements applicable to the provision of in-region,
interstate domestic, interexchange services and in-region international interexchange services by
incumbent independent local exchange carriers.  Subpart T generally requires that the separate
affiliate: (1) maintain separate books of account, although these books of account need not
comply with Part 32 requirements; (2) not own transmission or switching facilities jointly with its
affiliated exchange company, although the separate affiliate may share personnel or other assets
or resources with an affiliated exchange company; (3) take, pursuant to tariff, any services for
which its affiliated exchange carrier is required to file a tariff, although the separate affiliate may
also take unbundled network elements and services for resale pursuant to the terms of pre-existing
negotiated agreements approved under section 252 of the Act; and (4) be a separate legal entity
from the affiliated exchange company, although the separate affiliate may share personnel, office
space and marketing with the affiliated exchange companies.  Subpart T was adopted pursuant to
sections 1, 2, 4, 201, 202, 220, 251, 271, 272 and 303(r) of the Communications Act, as
amended.
Purpose
Subpart T is designed to prevent incumbent independent local exchange carriers from exercising
market power in the provision of in-region long distance services.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
By requiring a separate affiliate for the provision of in-region long distance service by
independent incumbent local exchange carriers, subpart T helps to prevent these carriers from
exercising market power in the provision of in-region long distance services.
Disadvantages
Subpart T may increase independent incumbent local exchange carriers' costs of providing in-
region, interstate, interexchange services.  Additionally, section 64.1903(c) is no longer
applicable since it addresses exclusively the time period prior to August 30, 1999.
Recent Efforts
In August 1999, the Commission revised subpart T to allow independent LECs providing in-
region long distance services solely on a resale basis to do so through a separate corporate
division rather than through a separate legal entity.
Recommendation
The staff recommends that the Commission modify subpart T to provide for triennial review of
the requirement that independent incumbent LECs provide interexchange service through a
separate affiliate.  The staff also recommends that the Commission delete section 64.1903(c),
since it pertains exclusively to the time period prior to August 31, 1999.
PART 64, SUBPART U - CUSTOMER PROPRIETARY NETWORK INFORMATION
Description
Section 222 of the Communications Act, as amended,   restricts carrier use of customer
proprietary network information (CPNI), which, among other things, identifies to whom, where,
and when a customer places a call, and identifies the types of service offerings to which the
customer subscribes and the extent to which the service is used.  The Commission adopted CPNI
rules pursuant to section 222, but the order adopting those rules was overturned on appeal, as
discussed in more detail below.   Section 222 remains in effect, however, and the Commission
has authority to enforce the CPNI protections in that section.
Purpose
The Commission adopted the CPNI rules in order to implement the provisions of section 222 and
protect consumer privacy and foster competition.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is fully competitive, although there is greater competition for high volume customers than
for low volume customers.
Advantages
The CPNI rules protect consumer privacy and foster competition.
Disadvantages
The CPNI rules adopted by the Commission impose some costs on carriers.  The 10th Circuit
Court of Appeals decision concerning the Commission's CPNI rules is discussed below.
Recent Efforts
The 10th Circuit Court of Appeals found that the Commission's interpretation of the customer
approval requirement for the use of CPNI in certain circumstances violated the First Amendment.
Although the court did not discuss other aspects of the Commission's rules, its opinion concluded
by vacating the Commission order adopting the CPNI rules.  The court did not address the
constitutionality of section 222, which remains in effect and continues to protect customer CPNI.
The Commission is in the process of addressing the court's ruling.
Recommendation
The staff does not recommend that the Commission take action concerning subpart U as part of
the 2000 Biennial Review.
PART 64, SUBPART V - TELECOMMUNICATIONS CARRIER SYSTEMS SECURITY AND
INTEGRITY PURSUANT TO THE COMMUNICATIONS ASSISTANCE FOR LAW
ENFORCEMENT ACT (CALEA)
Description
Section 105 of CALEA,  requires that telecommunications carriers establish safeguards to
ensure that interception of communications or access to call-identifying information can be
activated only in accordance with a court order or other lawful authorization, and with the
affirmative intervention of an officer or employee.  Subpart V implements this CALEA
requirement by mandating that carriers adopt policies and procedures for supervision and control
of their employees and officers in this regard, and by requiring that carriers maintain secure
records of each interception of communications or access to call-identifying information.  Each
telecommunication carrier is required to submit its policies and procedures to the Commission for
review.
Purpose
Subpart V is intended to implement section 105 of CALEA and help protect subscribers' privacy
rights by ensuring that any interception is in accordance with legal authorization.
Analysis
Status of Competition
Not relevant.
Advantages
Subpart V helps protect subscriber privacy.
Disadvantages
Compliance with these requirements increases carrier costs.
Recent Efforts
Subpart V was adopted in September 1999.
Recommendation
The staff does not recommend that the Commission modify subpart V as part of its 2000 Biennial
Review.
PART 64, SUBPART W - REQUIRED NEW CAPABILITIES PURSUANT TO THE
COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT (CALEA)
Description
Subpart W establishes the technical requirements and standards that telecommunications carriers
must satisfy to ensure that, when properly authorized, law enforcement officials have access to
communications and call-identifying information, as required by section 103 of CALEA.
Subpart W parallels requirements and standards for wireless telecommunications carriers set out
in Part 22, subpart J and Part 24, subpart J.
Purpose
Subpart W is intended to implement section 103 of CALEA and assist in enforcement of criminal
laws, and to clarify what telecommunications carriers must do in order to satisfy the requirements
of section 103(a) of CALEA.
Analysis
Status of Competition
Not relevant.
Advantages
Subpart W facilitates enforcement of criminal law and clarifies what carriers must do in order to
comply with CALEA.
Disadvantages
Compliance with these requirements increases carriers' costs.
Recent Efforts
On August 15, 2000, the D.C. Circuit affirmed in part and vacated and remanded in part the
requirements contained in subpart W.
Recommendation
The staff recommends that the Commission reassess its subpart W rules pursuant to the D.C.
Circuit's remand.
PART 64, SUBPART X - SUBSCRIBER LIST INFORMATION
Description
Section 222(e) of the Communications Act  requires carriers providing telephone exchange
service to provide subscriber list information to requesting directory publishers "on a timely and
unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions." Subpart
X implements this statutory provision, addressing third party rights to subscriber list information,
which includes listed subscribers' names, addresses and telephone numbers, as well as headings
under which businesses are listed in the yellow pages.
Purpose
Subpart X is intended to implement section 222(e) of the Act and encourage the development of
competition in directory publishing by ensuring that competing directory publishers can obtain
subscriber list information from local exchange carriers.
Analysis
Status of Competition
The market for directory publishing has been dominated by incumbent LEC publishing
operations, but is becoming increasingly competitive.  Much of this increased competition is due
to section 222 and the Commission's implementing rules in subpart X.
Advantages
Subpart X fosters competition in directory publishing, and prevents incumbent local exchange
carriers from using control of their subscriber information lists to undermine competition in the
directory publishing business.
Disadvantages
These requirements may place some administrative burdens on local exchange carriers.
Recent Efforts
The Commission adopted the subpart X rules on August 23, 1999.
Recommendation
The staff does not recommend that the Commission modify subpart X at this time.
PART 64, SUBPART Y - TRUTH-IN-BILLING REQUIREMENTS FOR COMMON CARRIERS
Description
The Commission adopted the rules in subpart Y pursuant to its authority under sections 201(b)
and 258 of the Communications Act of 1934, as amended.   Subpart Y contains binding truth-in-
billing guidelines that apply to carriers selling telecommunications services.  Subpart Y requires
carriers to provide customers with necessary information about the services and charges that are
shown on the customer's bill in a user-friendly format.  Specifically, subpart Y requires carriers
to separate charges on the bill by provider, to describe clearly the services involved, to display
clearly the name of the service provider in association with its charges, to display a toll-free
number (or, in certain cases, a website) for consumer inquiries, to identify those charges for
which failure to pay will not result in disconnection of the customer's basic local service, and to
highlight new service providers.
Purpose
Subpart Y is designed to implement sections 201(b) and 258 of the Act and make telephone bills
easier for consumers to understand, so that customers can make informed choices among carriers
and services in the increasingly competitive telecommunications market.  Subpart Y is also
intended to make it easier for consumers to identify and report fraud, such as slamming
(unauthorized change of consumer's telecommunications carrier) and cramming (placement of
unauthorized, misleading, or deceptive charges on a consumer's telephone bill).
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.  The market for long distance
service is competitive, although there is greater competition for high volume customers than for
low volume customers.
Advantages
Subpart Y makes telephone bills easier for customers to understand and ensures that consumers
have the information necessary to make informed choices among carriers and services.  These
rules also make it easier for consumers to detect and report fraud in the provision of
telecommunications services such as slamming and cramming.
Disadvantages
These requirements may increase carrier costs somewhat.
Recent Efforts
Some of the truth-in-billing rules contained in subpart Y took effect in November 1999, and
several more took effect in April 2000.
In March 2000, the Commission modified the truth in billing rules slightly, specifying that the
requirement that telephone bills highlight new service providers does not apply to services billed
solely on a per-transaction basis, and making other minor modifications.   These changes
became effective on August 28, 2000.
Recommendation
The staff does not recommend further changes to subpart Y as part of the 2000 Biennial Review.
PART 65 - INTERSTATE RATE OF RETURN PRESCRIPTION PROCEDURES AND
METHODOLOGIES
Description
Section 201 of the Communications Act, as amended, requires that rates for common carrier
communications services be just and reasonable.   Part 65 sets forth procedures and
methodologies used by the Commission to prescribe an authorized interstate rate-of-return for the
exchange access services of incumbent local exchange carriers subject to rate-of-return
regulation.  Price cap incumbent local exchange carriers also use the Commission prescribed rate-
of-return for certain limited purposes.  The Part 65 rules describe the methodologies to be used in
calculating the cost of equity, the cost of debt, the weighted average cost of capital (both equity
and debt), the interstate ratebase, and the carriers' interstate rate-of-return.  These rules also
require the filing of certain rate-of-return reports.
Part 65 is organized into seven lettered subparts.
	A - General
	B - Procedures
	C - Exchange Carriers
	D - Interexchange Carriers
	E - Rate-of-Return Reports
	F - Maximum Allowable Rates of Return
	G - Rate Base
Purpose
The Part 65 rules are designed to protect consumers from excessive rates by prescribing an
authorized interstate rate of return used to set local exchange access rates for incumbent local
exchange carriers subject to rate-of-return regulation.  (End users pay the subscriber line charge
element of interstate access charges directly.  Other interstate access charges are paid by the
interexchange carriers and reflected in their interstate long distance rates.)
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers in rural areas.
Advantages
The Part 65 rules protect consumers from excessive interstate access charges by incumbent local
exchange carriers subject to rate-of-return regulation.  The authorized interstate rate of return is
also used by incumbent local exchange carriers for certain purposes, for example, calculating
payments to and disbursements from the universal service fund and in the low end adjustment
formula.
Disadvantages
The Part 65 rules impose some paperwork burdens on carriers.
Recent Efforts
In 1995, the Commission substantially reformed the Part 65 rules.  The major changes made by
the 1995 order were the elimination of the biennial represcription schedule, and simplification of
the represcription process.  The Commission replaced the existing rule, which called for the
initiation of rate return represcription proceedings every two years, with a semiautomatic trigger
activated by changes in capital costs.
In October 1998, the Common Carrier Bureau initiated a proceeding to represcribe the rate of
return.   This proceeding has not yet been completed.
Recommendation
The staff does not recommend changes in the Part 65 rules at this time.
PART 68 - CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK
Description
Part 68 was established in 1974 as the result of a court decision ruling that the Bell Operating
Companies could not bar direct connection of customer premises equipment (CPE) (such as
telephones, fax machines, modems, etc.) to the public switched telephone network (PSTN), so
long as the CPE would not cause harm to the PSTN.   Part 68 requires that CPE be tested to
show that it will not harm the PSTN or carrier personnel, and then registered with the
Commission.  Carriers are obligated to permit the free connection of registered CPE to the PSTN,
but they can require disconnection of unregistered CPE or of CPE that causes harm to the PSTN
without recourse to litigation.  Part 68 also establishes the right of customers to use competitively
provided inside wiring.
In addition, Part 68 implements a statutory requirement for telephone equipment compatibility
with hearing aids,  and contains two consumer protection provisions mandated by statute: a
requirement that all fax transmissions include source labeling,  and a requirement that CPE
support equal access to providers of operator services.
Part 68 is organized into six lettered subparts:
	A - General
	B - Conditions on Use of Terminal Equipment
	C - Registration Procedures
	D - Conditions for Registration
	E - Complaint Procedures
	F - Connectors
Purpose
The Part 68 rules are designed to foster competition in the provision of CPE and inside wiring by
permitting the connection of competitively provided CPE and inside wiring to the PSTN.  Part 68
is also intended to ensure that the connection of CPE and inside wiring does not harm the PSTN
or injure personnel.  In addition, Part 68 is designed to ensure the compatibility of hearing aids
and telephone receivers so that persons with hearing aids will be able to use virtually all
telephones.
Analysis
Status of Competition
The market for CPE and the market for the installation of inside wiring in single family
residences are fully competitive.
Advantages
Part 68 benefits consumers by fostering competition in the provision of CPE and inside wiring.
The competition engendered by Part 68 has greatly increased innovation in CPE and reduced
prices.  Part 68 also benefits consumers and the industry by preventing harm to the PSTN and
carrier personnel.  In addition, Part 68 benefits people with hearing disabilities and those who
communicate with these people by requiring that telephone receivers be compatible with hearing
aids.
Disadvantages
The present Part 68 requirements for CPE registration impose additional costs on manufacturers
and may delay customer access to new CPE.  The present Part 68 registration program also uses
Commission resources that might otherwise be available for other priorities.
Recent Efforts
The Commission is taking steps to streamline the Part 68 CPE registration process.  On June 2,
2000, the Commission implemented measures allowing private entities to register CPE, ending
the policy of having the Commission perform this function on an exclusive basis.   A Notice of
Proposed Rulemaking, released May 22, 2000 in CC Docket No. 99-216, proposes that the
Commission cease performing all registration functions other than consideration of appeals, thus
entirely privatizing CPE registration.   In the May 22 Notice, the Commission also proposes to
privatize the development of technical criteria that CPE must meet in order to be registered.
Recommendation
The staff recommends continuation of the basic Part 68 requirement that LECs must allow the
connection of Part 68-compliant CPE and inside wiring to the PSTN.  The staff also recommends
continuing the requirements for hearing aid compatibility and the other consumer protection
requirements in Part 68.  In addition, the staff recommends continuation of the Commission's
ongoing efforts in CC Docket No. 99-216 to streamline and privatize the development of
technical standards and the CPE registration process.
PART 69 - ACCESS CHARGES
Description
Sections 201 and 202 of the Communications Act of 1934, as amended, require that rates, terms
and conditions for telecommunications services be just and reasonable,  and prohibit unjust or
unreasonable discrimination.   Part 69 implements these sections of the Act by establishing rules
that perform the following major functions.  First, the Part 69 rules establish the rate structure for
access charges to be paid by interexchange carriers for the origination and termination of long
distance calls, as well as the access charges to be paid directly by end users.   These rate
structure rules establish the access charge rate elements as well as the nature of the charges, such
as whether they are assessed on a per minute or a flat-rate basis.  Second, the Part 69 rules govern
how rate-of-return LECs calculate their access charge rates.  Third, the Part 69 rules, in
conjunction with the Part 61 price cap rules, establish the degree of pricing flexibility available to
price-cap LECs.  Finally, Part 69 provides for the establishment of the National Exchange Carrier
Association (NECA), which files tariffs on behalf of many of the smaller, rate-of-return LECs.
Part 69 is organized into eight lettered subparts:
A - General
B - Computation of Charges
C - Computation of Charges for Price Cap Local Exchange Carriers
D - Apportionment of Net Investment
E - Apportionment of Expenses
F - Segregation of Common Line Element Revenue Requirement
G - Exchange Carrier Association
H - Pricing Flexibility
Purpose
The Part 69 rules are designed to implement the provisions of sections 201 and 202 of the Act and
protect consumers by preventing the exercise of market power by incumbent LECs and ensuring
that rates are just, reasonable, and not unjustly or unreasonably discriminatory.  The requirement
for a certain minimum set of access charge rate elements and the rate calculation rules for rate-of-
return carriers also greatly reduce the resources required in the tariff review process.
Analysis
Status of Competition
Competition in the local exchange and exchange access markets is growing, although competitive
local exchange carriers still serve only a small percentage of local exchange lines.  Competition
for business customers in metropolitan areas has, in general, developed more rapidly than
competition for residential customers or customers in rural areas.
 Advantages
The Part 69 rules protect customers from the exercise of market power by incumbent LECs.  The
requirement for a minimum set of access charge rate elements and the pricing rules for both rate-
of return and price-cap LECs greatly reduce the Commission resources required to ensure carrier
compliance with sections 201 and 202 of the Act.  These requirements also greatly facilitate
analysis of access charges by other interested parties.  The creation of NECA facilitates the filing
of access charge tariffs by smaller rate-of-return LECs and reduces the administrative costs
involved
Disadvantages
The requirement that the LECs offer a minimum set of access charge rate elements limits their
flexibility and could over time reduce their ability to respond appropriately to competition.  The
pricing rules for both price-cap and rate-of-return LECs could also undermine their ability to
respond to competition if not adjusted over time.  The pooling of revenues and costs under the
NECA tariffs reduces the incentives of individual carriers to improve efficiency.
Recent Efforts
The Commission recently addressed the access charge rules applicable to price cap LECs in the
CALLS proceeding.   The Commission has also established rules permitting price cap LECs
greater pricing flexibility as they achieve specified competitive milestones.   In addition, the
Commission is seeking comment on issues relating to further pricing flexibility.  The
Commission has also initiated a rulemaking proceeding addressing issues relating to access
charge reform for rate-of-return LECs.
Recommendation
In light of recent Commission decisions concerning Part 69 discussed above, the staff does not
recommend any new initiatives relating to Part 69 in the context of this biennial regulatory
review.  The ongoing proceedings addressing issues of access charge reform provide an
appropriate means of addressing competitive developments in the exchange access market.  We
also note that the inter-carrier compensation proceeding that the staff recommends in the text of
this report could result in revisions to Part 69 that would address anticipated competitive
developments.
The staff recommends deleting a number of provisions that apply only to past time periods, or are
otherwise no longer in effect, including sections 69.116, 69.117, 69.126, 69.127, and 69.612.
PART 73, -RADIO BROADCAST SERVICES, SECTION 73.3555 - THE BROADCAST
OWNERSHIP RULES
Description
Statutory authority for section 73.3555 of the Commission's rules is found in sections 308, 309
and 310 of the Communications Act of 1934, as amended.  Section 308 requires the filing of a
written application for licenses and construction permits (except in certain narrow enumerated
cases) and states that such applications shall set forth such facts as the Commission may
prescribe, including the ownership and location of the proposed station.  Section 309 requires the
Commission, except in the case of certain designated applications, to determine whether the grant
of an application would serve the public interest, and to grant the application upon such a finding.
Section 310(d) specifies that no construction permit or license shall be transferred without first
filing an application with the Commission and without the Commission's finding that the public
interest would be served thereby.  Section 73.3555 contains the rules limiting the degree of
common ownership of radio and television stations.  It also contains attribution rules that specify
when interests in mass media facilities will be considered cognizable for purposes of applying the
mass media ownership rules.
Purpose
The broadcast ownership rules are intended to foster diversity and competition in broadcasting.
Analysis
Status of Competition
For an assessment of competition in broadcasting, see section V of the Report.
Advantages
The Commission is precluded from regulating the content of programming by section 326 of the
Communications Act of 1934, as amended, and by the First Amendment.  The ownership rules
are a structural method of ensuring diversity of viewpoints in broadcasting.  The rules are also
intended to foster competition in broadcasting.
Disadvantages
Broadcasters allege that the rules restrict mass media entities in competing with other content
providers that are not subject to ownership rules and restrict scale efficiencies.
Recent Efforts
Section V of the Report details the Commission's recent reviews of the ownership rules,
including that contained in the recently released 1998 Biennial Regulatory Review Report.
Recommendation
Section V of the Report details a recommendation with respect to each of the ownership rules
contained in section 73.3555.
PART 80 - STATIONS IN THE MARITIME SERVICES, SUBPARTS J (PUBLIC COAST
STATIONS) AND Y (COMPETITIVE BIDDING PROCEDURES)
Description
Part 80  contains licensing, technical, and operational rules for radio stations in the maritime
services, which provide for the distress, operational, and personal communications needs of
vessels at sea and on inland waterways.   Maritime frequencies are allocated internationally by
geographic region and type of communication in order to facilitate interoperable radio
communications among vessels of all nations and stations on land worldwide.  Land stations in
the maritime services are the links between vessels at sea and activities on shore.  They are spread
throughout the coastal and inland areas of the United States to carry radio signals and messages to
and from ships.
For purposes of the Biennial Regulatory Review, the analysis of Part 80 in this report focuses on
the rules affecting public coast stations (subparts J and Y), which are unique in the Maritime
Services in that they are used for commercial applications, are licensed on a geographic
exclusive-use basis, and are subject to licensing by the Commission's competitive bidding
procedures.
Public coast stations are commercial mobile radio service (CMRS) providers that allow ships to
send and receive messages and to interconnect with the public switched telephone network.
VHF band (156-162 MHz) public coast stations (VPC) provide short-range communications for
vessels not more than 30 nautical miles from shore.  High seas band (2-27.5 MHz) public coast
stations serve vessels far from shore.  Automated Maritime Telecommunications System (AMTS)
stations are a special type of public coast station operating in the 216-220 MHz band.  AMTS
stations are licensed to provide coverage over an entire inland waterway or a substantial portion
of an ocean coastline.
Public coast stations are common carriers, and thus charge a fee for providing voice, telex, fax, or
data transmission services.  Public coast stations also provide a vital public service because they
can reach well beyond the limits of terrestrial radio systems and are required by statute to relay
distress messages free of charge.
Purpose
The primary purpose of the Maritime Services is to provide for the safety of life and property at
sea.   The specific purpose of the Part 80 public coast station rules is to establish the mechanism
for allocating licenses, to ensure spectrum use that provides public coast licensees with maximum
flexibility while concurrently respecting the unique nature of maritime spectrum, and to prevent
interference.  Public coast stations provide commercial operational and general purpose
communications between ship and shore and between ships that are out of each others' radio
range.
Analysis
Status of Competition
While competition in the CMRS industry as a whole continues to benefit from the effects of
increased competition, as evidenced by lower prices to consumers and increased diversity of
service offerings, competition is generally less robust in the public coast services, due in part to
the unique nature of maritime communications and the predominant safety-of-life
communications responsibilities required of licensees.  In addition, other CMRS services - such
as cellular and PCS - can serve as substitutes for commercial ship-to-shore communications,
particularly for vessels operating near the coast and on inland waterways.  Large-scale public
coast operators - particularly MariTel - are becoming predominant in VPC as many small and
independent licensees leave the business.  Competition is stronger in AMTS than on the high seas
band.
Advantages
The public coast station rules promote the safety of life and property at sea, while concurrently
providing public coast licensees with the opportunity to compete as CMRS providers.  For
example, the rules provide for licensing of VPC on a geographic basis, allow partitioning and
disaggregation, and permit VPC licensees to utilize capacity not needed for maritime service to
provide other types of services.   These characteristics are consistent with the regulatory
flexibility the Commission has provided in other competitive services.
The subpart Y competitive bidding rules establish procedures for the efficient licensing of
spectrum.  Use of auction procedures allows for substantially faster licensing than alternative
licensing methods such as lotteries and comparative hearings, and is more likely to result in
award of licenses to those entities that value the spectrum the most and will use it most
efficiently.  Auction rules also enable the Commission to recover a portion of the value of the
spectrum for the benefit of the public.
Disadvantages
Because of the unique characteristics of the maritime services, public coast station licensees are
subject to responsibilities that other CMRS providers do not face.  The international allocation of
maritime frequencies and the associated statutes, treaties, and agreements limit the flexibility of
use of maritime frequencies.  Because two frequency blocks are allocated to AMTS, competition
is limited to two competitors at any location and disaggregation is not currently available in
AMTS.  There are additional administrative burdens associated with the competitive bidding of
public coast station licenses, including filing and reporting requirements, as well as the cost of
maintaining staff and electronic resources to participate in auctions.  Nevertheless, the delays
associated with this process are significantly less than those historically associated with licensing
by lottery or hearing.
Recent Efforts
In the 1998 Maritime Third Report and Order in the Maritime Services proceeding, the
Commission substantially revised the public coast service rules to provide opportunities for the
development of competitive new services, streamline licensing procedures, promote technological
innovation, and enhance regulatory symmetry between maritime CMRS providers and other
CMRS providers.   For example, VPS and AMTS stations may now provide service to units on
land, provided that priority is given to marine originating communications.  In addition, in
December 1998, the Commission held its first auction of spectrum in the public coast service,
which resulted in the award of 26 VHF public coast station licenses.
Recommendation
The Maritime Services proceeding has established the framework for increased competition
within the public coast service, and between public coast stations and other CMRS providers.
Moreover, licensees that acquired their licenses in the 1998 auction are still engaged in buildout
of their networks.  For these reasons, the staff does not believe that there is a need to revise the
existing maritime rules in order to further competition.  The staff recommends that for the time
being, only nonsubstantive revisions be made to the structure of the Part 80 rules, to simplify and
provide clarity to licensees and applicants.
PART 90 - PRIVATE LAND MOBILE RADIO SERVICES.
Description
Part 90  contains licensing, technical, and operational rules for the group of mobile services
historically described as "private land mobile radio services" or "PLMRS."  Services regulated
under this rule part include commercial services such as Specialized Mobile Radio (SMR) and
private carrier paging (PCP), non-commercial services such as public safety, and services that are
used by utilities, transportation companies, and other businesses for both commercial and private
internal purposes.
Prior to the passage of the Omnibus Budget Reconciliation Act of 1993 (OBRA),  all Part 90
services were classified as private, i.e., non-common carrier, services.  With the passage of
OBRA, however, Congress reclassified 800 MHz and 900 MHz SMR, PCP, and some 220 MHz
and Business Radio services as commercial mobile radio services or "CMRS," and required
CMRS providers in these services to be regulated as common carriers.   The regulatory status of
non-CMRS Part 90 services was not affected by OBRA, and these services continue to be
classified as private services.
Part 90 contains 22 subparts.  Some of these subparts apply generally to all Part 90 licensees,
while others establish licensing, technical, and operational rules for specific services.   In
general, the rules in this part:  (1) specify the frequency bands in which each service operates; (2)
define the service area of licenses in each frequency band; (3) establish minimum construction or
coverage requirements for licensees; and (4) define technical limits on operation (e.g., antenna
height, transmitter power) to prevent interference.  For certain CMRS services, Part 90 also
contains subparts dealing with the auction and award of licenses,  although many of these rules
have since been consolidated in Part 1.
For purposes of the Biennial Regulatory Review, the analysis of Part 90 in this report focuses on
those subparts that affect CMRS providers:
Subpart L - Authorizations in 470-512 MHz Band
Subparts M, X - Intelligent Transportation Systems Radio Service/Auction Rules
Subpart P - Paging Operations
Subparts S, U, V - 800/900 MHz SMR Service/Auction Rules
Subparts T, W - 220 MHz Service/Auction Rules
Purpose
The purpose of the Part 90 rules is to establish basic ground rules for assignment of spectrum in
Part 90 services, to ensure efficient spectrum use by licensees, and to prevent interference.
Analysis
Status of Competition
As detailed in the Fifth Competition Report, Part 90 CMRS providers operate in an environment
that is marked by significant and increasing competition in mobile telephony, paging/messaging,
and mobile data.
Advantages
The Part 90 rules provide a clear, predictable structure for the assignment and use of spectrum.  In
Part 90 frequency bands that are licensed exclusively to CMRS providers (e.g., SMR), auction
rules promote efficient licensing of spectrum to those entities that value it the most.  In other
bands, site-specific licensing and frequency coordination are used to promote efficient spectrum
use.
Disadvantages
The Part 90 rules impose limited administrative and technical burdens that are inherent to the
licensing process and that require compliance with technical and operational rules.
Recent Efforts
The Commission has recently made changes to Part 90 in several rulemaking proceedings, as
described in greater detail within this Staff Report.  In the Universal Licensing proceeding, the
Commission eliminated many of the service-specific licensing rules in Part 90 as part of its
consolidation of all wireless licensing rules into Part 1.   The Commission also made numerous
changes to Part 90 rules in the recently adopted Report and Order in the Part 90 Biennial
Regulatory Review proceeding.
Recommendation
In general, the rules in this part are integral to the basic licensing and spectrum management
functions performed by the Commission.  The necessity for these rules is also not significantly
affected by changes in the level of competition in wireless services.  Moreover, as noted above,
the Commission has significantly revised and streamlined the Part 90 rules in several recent
proceedings.  Therefore, the staff concludes that significant modification or repeal of the Part 90
rules is not necessary at this time.  However, where modifications could be made to streamline
the rules in specific subparts, the staff has so noted in the detailed analysis of those Part 90
subparts.
PART 90, SUBPART L - REGULATIONS FOR AUTHORIZATION AND USE OF FREQUENCIES
IN THE 470-512 MHZ BAND
Description
Part 90, subpart L  governs the authorization and use of the 470-512 MHz band by both
commercial and private land mobile stations.  Frequencies in the 470-512 MHz band are shared
with UHF-TV channels 14-20, and are therefore only available in eleven cities, with different
frequencies allocated in each market.  Originally, channels in the 470-512 MHz band were
allocated to seven frequency pools based on category of eligibility.  In 1997, the Commission
eliminated the separate allocation to these pools and created a General Access Pool to permit
greater flexibility and foster more effective and efficient use of the 470-512 MHz band.  Under
current rules, all unassigned channels, including those that subsequently become unassigned, are
considered to be in the General Access Pool and are available to all eligible licensees on a first-
come, first-served basis.  If a channel is assigned in an urbanized area, however, subsequent
authorizations on that channel will only be granted to users from the same category.
In general, the rules in subpart L: (1) specify the frequencies available for assignment in the 470-
512 MHz band; (2) define the location of stations and service area of licenses in each frequency
block; (3) establish minimum loading requirements for licensees; and (4) define technical limits
on operation (e.g., antenna height, transmitter power) to prevent interference.  In accordance with
these rules, new applicants may apply for only one channel at a time.   Licensees are required to
show that any assigned channels in this band in a particular urbanized area are at full capacity
before they can be assigned additional 470-512 MHz channels in that area.   The rules in this
part also specify the minimum allowable distance between co-channel stations.   For purposes of
loading requirements, licensees in the 470-512 MHz band are divided into two groups: the Public
Safety Pool and the Industrial/Business Pool.   After loading a channel to full capacity, a
licensee may apply for another channel.   Current licensees may use existing loading to satisfy
this requirement and apply for more than one channel at one time.  Licensees in the 470-512 MHz
band that are operating above full capacity may use those units to qualify for additional channels.
Licensees operating in other frequency bands may also use existing licensed units to qualify for
more than one channel at one time.
Purpose
The purpose of the subpart L rules is to establish basic ground rules for assignment of spectrum in
the 470-512 MHz service, to ensure efficient spectrum use by licensees, and to prevent
interference with UHF television stations operating on the shared frequencies.
Analysis
Status of Competition
Because land mobile use of the 470-512 MHz band is limited by the sharing of the band with
broadcast channels 14-20, service in the band has been narrowly geared to industrial and public
safety use in a limited number of urban locations.  Demand for these channels to provide
commercial services to consumers has been largely absent.
Advantages
The subpart L rules provide a clear, predictable structure for the assignment and use of spectrum.
Site-specific licensing and frequency coordination are used to promote efficient spectrum use.
Disadvantages
The subpart L rules impose limited administrative and technical burdens that are inherent to the
licensing process and compliance with technical and operational rules.  Because the band is
shared with television broadcast stations, the technical burden imposed on licensees to prevent
interference with co-channel operations is somewhat greater than in other bands allocated
exclusively to wireless services.
Recent Efforts
In the Second Report and Order in the Refarming proceeding, the Commission authorized
centralized trunking in the 470-512 MHz band if a licensee has an exclusive service area or
obtains consent from all co-channel and adjacent channel licensees and frequency coordination is
obtained.
Recommendation
In general, the rules in this part are integral to the basic licensing and spectrum management
functions performed by the Commission.  The necessity for these rules is also not significantly
affected by changes in the level of competition in wireless services.  The staff concludes that
significant modification or repeal of the subpart L rules is not necessary at this time
PART 90, SUBPARTS M (INTELLIGENT TRANSPORTATION SYSTEMS RADIO SERVICE)
AND X (COMPETITIVE BIDDING RULES FOR THE LOCATION AND MONITORING
SERVICE)
Description
Part 90, subpart M  contains licensing, technical, and operational rules for the Intelligent
Transportation Systems (ITS) radio service.  ITS radio service consists of two sub-categories: the
Location and Monitoring Service (LMS) and the Dedicated Short Range Communications
Service (DSRCS).
Location and Monitoring Systems (LMS)
LMS systems are used for such functions as vehicle tracking and location, automated toll
collection, and other communications functions related to vehicles.  LMS systems operate in the
902-928 MHz band, which they share with federal government radiolocation systems, Industrial,
Scientific and Medical devices (LMS use is secondary to both of these uses), licensed amateur
radio operations, and unlicensed Part 15 equipment (both of which are secondary to LMS and all
other uses of the band).
The subpart M LMS service rules, governing the licensing of LMS in the 902-928 MHz band,
were adopted in 1995.   In general, the subpart M rules: (1) specify the frequency bands in
which LMS licensees operate; (2) define the service area of LMS licenses in each frequency
band; (3) establish minimum construction or coverage requirements for LMS licensees; and (4)
define technical limits on operation (e.g., antenna height, transmitter power) to prevent
interference.   The technical rules for the 902-928 MHz band contain additional provisions
governing secondary operation by Part 15 equipment users and amateur licensees in the LMS
band to reduce potential interference between these uses and LMS operations.  The rules also
establish limitations on LMS systems' interconnection with the public switched network and set
forth a number of technical requirements intended to ensure successful coexistence of all the
services authorized to operate in the band.
The LMS competitive bidding rules, set forth in Part 90, subpart X,  were adopted in 1998.
Section 90.1101  states that the auction of LMS licenses is generally subject to the competitive
bidding procedures set forth in Part 1, subpart Q.  Section 90.1103  sets forth service-specific
rules defining designated entities in LMS.  Pursuant to these rules, LMS licenses were auctioned
by the Commission in 1999.
Dedicated Short Range Communications Service (DSRCS)
In October 1999, the Commission allocated 75 MHz of spectrum at 5.850-5.925 GHz for use by
DSRCS systems operating in the Intelligent Transportation System radio service.   The
Commission amended subpart M by adding technical rules establishing power, emission, and
frequency stability limits for DSRCS operations.  However, the Commission has deferred
consideration of DSRCS licensing and service rules and spectrum channelization plans to a later
proceeding, pending promulgation of standards by the Department of Transportation.
Purpose
The purpose of Part 90, subpart M is to provide a regulatory framework that allows entities to
effectively deploy radio-based devices and systems to enhance safety of life and protection of
property on the nation's highways, railways and other transportation corridors, without causing
harmful interference to other radio services.
Analysis
Status of Competition
The services provided by LMS operators, such as vehicular tracking, tend to be niche services,
and competition in these sectors appears to be more limited than in other types of wireless
services.  In addition, many LMS licensees are state and local government entities rather than
commercial enterprises.  The number of LMS licensees has increased, however, since the
Commission completed its auction of multilateration LMS licenses in March 1999.  As these
licensees begin to deploy services, the level of competition in LMS could increase.
Advantages
The Part 90, subpart M rules provide a clear, predictable structure for the assignment and use of
spectrum.  Geographic area licensing of multilateration systems minimizes the administrative
burden involved in obtaining a license and thus avoids undue delay in the authorization of new
services to the public.  Minimal technical standards facilitate the introduction of new
technologies.
Disadvantages
The Part 90, subpart M rules impose some administrative burdens inherent to the licensing
process and to compliance with technical and operational rules.  The provisions relating to
secondary use of the LMS band by Part 15 users and amateur licensees impose some additional
technical burdens on LMS licensees to avoid and resolve interference between their systems and
these other uses.
Recent Efforts
Aside from the DSRCS proceeding discussed above, the Commission has not significantly
revised the Part 90, subpart M rules since the LMS auction.
Recommendation
In general, the rules in subparts M and X are integral to the basic licensing and spectrum
management functions performed by the Commission, and the necessity for these rules is not
significantly affected by changes in competition.  Therefore, the staff concludes that significant
modification or repeal of the rules is not necessary at this time.  The staff recommends continuing
to monitor developments in order to determine whether any additional rule modifications are
necessary to foster competition.
PART 90, SUBPART P ? PAGING OPERATIONS IN THE 929 MHZ BAND
Description
Part 90 subpart P contains licensing, technical, and operational rules for paging operations in the
929 MHz Band.  This rule part includes services such as commercial paging and private carrier
paging (PCP).  Licensees may operate on exclusive channels or designated shared channels on a
CMRS or PMRS basis.
In general, the rules in this subpart (1) specify the exclusive channels and shared channels; and
(2) define technical limits on operation (e.g., antenna height, transmitter power) to prevent
interference.  For paging operations on exclusive channels, the licensees are subject to Part 22 of
the Commission's rules regarding the Paging and Radiotelephone Service.
Purpose
The purpose of the Part 90, subpart P rules is to establish basic ground rules for assignment and
use of exclusive or shared channels in the 929 MHz Band and to prevent interference.
Analysis
Status of Competition
As detailed in the Fifth Competition Report, Part 90 paging providers operate in an environment
that is marked by significant and increasing competition in mobile telephony, paging/messaging,
and mobile data.
Advantages
The Part 90, subpart P rules provide a clear, predictable structure for the assignment and use of
spectrum.  In Part 90, Subpart P, frequency bands that are licensed on an exclusive basis are
subject to competitive bidding.  The shared channels are available to all eligible entities.
Disadvantages
The Part 90, subpart P rules impose limited administrative and technical burdens that are inherent
to the licensing process and compliance with technical and operational rules.
Recent Efforts
The Commission has made significant changes to its Part 90, subpart P rules in recent years.  In
the mid-1990s, the Commission converted the authorization of stations in the 929 MHz Band
from the original site-by-site procedure to a geographic area licensing process.  The Second
Report and Order established geographic area licensing for 929 MHz paging and adopted
competitive bidding procedures.   The Third Report and Order changed the geographic area
licensing of 929 MHz paging from MTAs to MEAs and clarified that spectrum will automatically
revert to the geographic area licensee in all instances where a non-geographic area incumbent
licensee permanently discontinues service, as well as allowing geographic area licensees to
partition their licenses.   The Commission auctioned geographic licenses for the exclusive
channels in the 929 MHz band.   Furthermore, the Part 22 Rules regarding paging now apply to
all 929 MHz licensees on exclusive channels.  More recently, most of the application filing rules
were moved from this subpart to Part 1 in connection with implementation of electronic filing
procedures and the Universal Licensing System.
Recommendation
In general, the rules in this part are integral to the basic licensing and spectrum management
functions performed by the Commission.  The necessity for these rules is also not significantly
affected by changes in the level of competition in wireless services.  Moreover, as noted above,
the Commission has significantly revised and streamlined the Part 90, subpart P rules and
consolidated them with the Part 22 rules.  The remaining rules are necessary for the operation and
interference protection for licensees in the shared channels in the 929 MHz Band.  Therefore, the
staff concludes that significant modification or repeal of the Part 90, subpart P rules is not
necessary at this time.
PART 90, SUBPARTS S (REGULATIONS FOR LICENSING AND USE OF FREQUENCIES IN
THE 800 AND 900 MHZ BANDS), AND U AND V (COMPETITIVE BIDDING PROCEDURES
FOR THE 900 AND 800 MHZ SERVICE)
Description
Subpart S  contains licensing, technical, and operational rules the 800 MHz and 900 MHz
Specialized Mobile Radio (SMR) services, as well as non-commercial services above 800 MHz,
i.e., public safety services and services that are used by utilities, transportation companies, and
other businesses for internal purposes.  Prior to the passage of the Omnibus Budget
Reconciliation Act of 1993 (OBRA),  all of these services were described as "private land
mobile radio services" or "PLMRS," and were classified as private, i.e., non-common carrier,
services.  With the passage of OBRA, however, Congress reclassified 800 MHz and 900 MHz
SMR services as commercial mobile radio services or "CMRS," and required all CMRS providers
to be regulated as common carriers.   The regulatory status of non-CMRS Part 90 services was
not affected by OBRA, and these services continue to be classified as private land mobile radio
services.
In general, the rules in Subpart S: (1) specify the frequency bands in which each service operates;
(2) define the service area of licenses in each frequency band; (3) establish minimum construction
or coverage requirements for licensees; and (4) define technical limits on operation (e.g., antenna
height, transmitter power) to prevent interference.
Subparts U and V  contain competitive bidding rules and procedures for 900 MHz SMR and
800 MHz SMR services, respectively.  The rules in these subparts: (1) identify the licenses to be
sold by competitive bidding; (2) establish the competitive bidding mechanisms to be used in 900
and 800 MHz SMR auctions; (3) establish application, disclosure and certification procedures for
short- and long-form applications; (4) specify down payment, withdrawal, and default
mechanisms; (5) provide definitions of gross revenues for designated entities and specify the
bidding credits for which designated entities qualify; and (6) provide eligibility and technical
requirements for partitioning and disaggregation.
The original Subpart S rules for were adopted by the Commission in 1982, and provided for site-
based licensing of 800 and 900 MHz channels.   Following the passage of OBRA,  the
Commission initiated rulemakings to use geographic licensing and auctions in the 800 MHz and
900 MHz services.  In PR Docket 89-553, the Commission revised Subpart S to provide for
geographic licensing of the 900 MHz SMR service, and replaced the previous site-based licensing
rules with competitive bidding rules by adding Subpart U to Part 90.   In PR Docket No. 93-144,
the Commission adopted geographic licensing rules for 800 MHz SMR, and adopted the
competitive bidding rules in Subpart V.   In both services, the Commission grandfathered all
previously granted site-based SMR licenses.  Consequently, many of the Subpart S rules
governing operation by site-based SMR licensees remain in effect as to these grandfathered
licensees.  In 1997, the Commission conducted the 900 MHz auction and awarded geographic
area licenses.  Geographic licensing of 800 MHz licensing has been divided into phases.  The 800
MHz upper band auction was held in December 1997; the 800 MHz lower band and General
Category auctions are scheduled for later this year.
Purpose
The purpose of the Subpart S rules is to establish basic ground rules for the assignment of
spectrum to the affected SMR licensees, to ensure efficient spectrum use by licensees, and to
prevent interference.  The competitive bidding rules of Subparts U and V help to ensure access to
new telecommunications offerings by ensuring that market forces guide the allocation of licenses
so that all customer segments are served with the greatest economic efficiency.  Additionally, the
designated entity provisions of the competitive bidding rules are intended to provide opportunities
for small businesses to participate in the provision of telecommunications services.
Analysis
Status of Competition
As detailed in the Fifth Competition Report, Part 90 SMR providers operate in an environment
that is marked by significant and increasing competition in mobile telephony, paging/messaging,
and mobile data.  Some of the larger SMR carriers, particularly Nextel and Southern, provide
digital wide-area voice services that compete with cellular and PCS.  Other SMR carriers provide
more traditional dispatch service on a local or regional basis.  Although SMR channels have been
used primarily for voice communications, systems are also being developed to carry data and
facsimile services.  Additionally, new digital SMR technology is leading to the development of
new features and services, such as two-way acknowledgment paging, teleconferencing, and
voicemail.
Advantages
The Subpart S rules provide a clear and predictable structure for the assignment and use of SMR
spectrum, and afford substantial flexibility to licensees to choose the type of service they will
provide based on market demand.  The Subpart U and V auction rules promote efficient licensing
of SMR spectrum to those entities that value it the most.
Disadvantages
There continue to be differences between the licensing, technical, and operational rules that apply
to grandfathered site-based SMR licenses and those that apply to geographic area licenses.  This
multiplicity of rules is potentially burdensome to SMR licensees who have both geographic and
site-based systems, which may result in inconsistent regulatory obligations (e.g., buildout
requirements) for different portions of their systems.
Recent Efforts
In the past year, the Commission has reconsidered and revised some of its 800 MHz SMR rules in
anticipation of the SMR lower band and General Category auctions.   The Commission has also
given incumbent SMR licensees with wide-area systems the option of applying the same buildout
and coverage requirements as geographic licensees, thus giving these incumbents greater
flexibility and parity with geographic licensees.
Recommendation
In general, the rules in Subpart S are integral to the basic licensing and spectrum management
functions performed by the Commission.  Additionally, the need for these rules is not
significantly affected by changes in the level of competition in wireless services.  However, there
are several rule sections that contain outdated or burdensome requirements.  For example, the
staff recommends that the Commission consider eliminating section 90.655,  which requires
individual end user licensing of SMR facilities that require Federal Aviation Administration
clearance, have a significant environmental effect, or are located in a radio frequency "quiet
zone."  The staff recommends that similar consideration be given to removing the requirement
that site-based SMR licensees provide loading data in order to renew their licenses.   We also
recommend removal of section 90.607(a),  which requires SMR applicants to provide a
statement describing the applicant's "planned mode of operation."  Such a requirement appears to
serve no regulatory purpose, and is inconsistent with the Commission's policies regarding
flexible use of spectrum.
PART 90, SUBPARTS T (REGULATIONS FOR LICENSING AND USE OF FREQUENCIES IN
THE 220-222 MHZ BAND) AND W (COMPETITIVE BIDDING PROCEDURES FOR THE 220
MHZ SERVICE)
Description
Part 90, subpart T  contains licensing, technical, and operational rules for the 220-222 MHz
(220 MHz) service.  In general, the rules in this part: (1) define the service area of 220 MHz
licenses; (2) specify the permissible operations for authorized systems; (3) specify the frequencies
available to 220 MHz licensees; (4) establish license terms; (5) establish the minimum
construction or coverage requirements for 220 MHz licensees; and (6) define technical limits on
operation (e.g., antenna height, field strength) to prevent interference.
Part 90, subpart W  contains competitive bidding rules and procedures for commercial licenses
in the 220 MHz service.  The rules in this subpart: (1) specify which 220 MHz licenses are
eligible for competitive bidding; (2) establish the competitive bidding mechanisms to be used in
220 MHz auctions; (3) establish application, disclosure and certification procedures for short- and
long-form applications; and (4) specify down payment, withdrawal, and default mechanisms.
The original Subpart T rules for the 220 MHz service were adopted by the Commission in
1991.   The Commission intended the 220 MHz band to be used for the development of new
spectrally efficient technologies that would support provision of two-way narrowband services,
including mobile voice, dispatch, and messaging.  In order to stimulate greater spectral efficiency
in the band, the Commission adopted a band plan for the 220 MHz service based on 5 kHz
channels, a narrower bandwidth than was generally used in other private land mobile services.
As originally designed, the band plan provided for site-based licensing of 220 MHz channels.
Between 1991 and 1993, the Commission awarded approximately 3,800 site-based licenses, as
well as a small number of nationwide licenses, using lotteries to select from among mutually
exclusive applicants (referred to as "Phase I" licensing).  However, the Commission discontinued
licensing under this approach due to the large volume of applications received, concerns
regarding possible speculation in applications, and judicial challenges to the Phase I licensing
procedures.
In 1993, Congress passed the Omnibus Budget Reconciliation Act, which conferred authority on
the Commission to award licenses by competitive bidding.   Based on its new authority, the
Commission sought to develop new licensing rules for 220 MHz spectrum that was not licensed
in Phase I.  In 1997, the Commission adopted "Phase II" licensing rules, substantially revising
Subpart T to provide for licensing based on regional and nationwide geographic areas rather than
site-specific licenses.   The Commission also replaced the previous lottery-based licensing rules
with competitive bidding rules by adding Subpart W to Part 90.  As part of the conversion to
geographic licensing and auctions, the Commission grandfathered all previously granted Phase I
licenses.  Consequently, the Subpart T rules governing operation by site-based 220 MHz
licensees remain in effect as to these grandfathered licensees.  In September-October 1998 and
June 1999, the Commission conducted Phase II auctions of 220 MHz spectrum pursuant to the
rules and procedures set forth in Subpart W.
Purpose
The purpose of the Subparts T and W rules is to facilitate the assignment of spectrum in the 220-
222 MHz service, to ensure efficient spectrum use by licensees, and to prevent interference
through establishment of technical limits on operation (e.g., siting requirements and limits on
transmitter power).
Analysis
Status of Competition
Licensees in the 220 MHz service are permitted to provide voice, data, paging, and fixed
communications.  Because of the limited amount of spectrum in the 220 MHz band, most
licensees offer narrowband services that are not spectrum-intensive.  Trunked dispatch has
become a particularly prevalent application, particularly as the 800/900 MHz SMR bands are
used increasingly for mobile telephony.  Since the award of Phase II licenses in 1998 and 1999,
many 220 MHz licensees have begun to deploy their networks, and dispatch subscribership in the
220 MHz band grew 35 percent in 1999.   Suppliers of 220 MHz equipment anticipate that there
will be increased buildout and demand for service in the next several years.   Thus, there is
potential for the 220 MHz service to be increasingly competitive and to contribute to inter-service
CMRS competition.
Advantages
The Subpart T rules, particularly the rules applicable to Phase II geographic licensees, provide a
clear and predictable structure for the assignment and use of 220-222 MHz band spectrum, and
afford substantial flexibility to licensees to choose the type of service they will provide based on
market demand.  The Subpart W auction rules promote efficient licensing of 220 MHz spectrum
to those entities that value it the most.
Disadvantages
Although the Commission has recently simplified and streamlined the 220 MHz rules in many
respects (see below), there continue to be differences among the licensing, technical, and
operational rules that apply to grandfathered Phase I site-based licenses and those that apply to
Phase II geographic area licenses.  This multiplicity of rules is potentially burdensome to 220
MHz licensees who have systems comprised of both Phase I and Phase II licenses, which may
result in inconsistent regulatory obligations (e.g., buildout requirements) for different portions of
their systems.
Recent Efforts
In several recent orders, the Commission has taken steps to reduce regulatory burdens and afford
greater flexibility to 220 MHz licensees.  For example, the original 220 MHz rules required
licensees to provide two-way land mobile service on a primary basis, and allowed use of the band
for fixed services or for paging only on an "ancillary" basis.  In the 220 MHz Third Report and
Order, the Commission eliminated the ancillary use limitation, thus allowing licensees to provide
any or all of these services on a co-primary basis.    The Commission has also adopted rules
permitting partitioning and disaggregation of 220 MHz licenses, and has eliminated the "40-mile
rule" that previously limited the number of Phase I licenses that an individual licensee could hold
in a given geographic area.   Finally, the Commission recently eliminated mandatory spectrum
efficiency standards that had previously been adopted for provision of voice and data over 220
MHz systems that combined contiguous 5 kHz channels.   The Commission concluded that
mandating technical standards was unnecessary because market forces would spur efficient
spectrum use, and that retaining mandatory standards could impair rather than encourage
technical innovation.
Recommendation
In general, the rules in Subpart T are integral to the basic licensing and spectrum management
functions performed by the Commission.  Moreover, as noted above, the Commission has
significantly revised and streamlined the 220 MHz rules in recent proceedings.  Therefore, the
staff concludes that substantial modification or repeal of the 220 MHz rules is not necessary at
this time.  However, the staff recommends that consideration be given to whether certain rules
applicable to Phase I licensees continue to be necessary.  For example, section 90.737 imposes
certain reporting requirements and restrictions on assignments of unconstructed Phase I licenses
that were intended to prevent speculation and trafficking in licenses awarded by lottery.   Now
that licensing by lottery has been discontinued, however, these rules may actually impede the
transferability of 220 MHz spectrum.  The staff therefore recommends that consideration be given
to eliminating these rules.
Similarly, as noted elsewhere in this Staff Report, the Commission has consolidated its
competitive bidding rules in Part 1, with the goal of having future auctions be conducted in
accordance with Part 1 rules.  Therefore, to the extent that future auctions are necessary in the
220 MHz service, they will be governed by Part 1, and the continued presence of separate 220
MHz auction rules in Subpart W appears to be redundant.  The staff recommends that
consideration be given to eliminating these rules.
PART 95 - PERSONAL RADIO SERVICES, SUBPART F - 218-219 MHZ SERVICE
Description
Part 95  contains licensing, technical, and operational rules for the Personal Radio Services, a
collection of wireless services that are generally used by individuals for personal communications
and to support the radio needs of their activities and interests.  These services include the General
Mobile Radio Service (Subpart A), the Family Radio Service (Subpart B), the Radio Control
(R/C) Radio Service (Subpart C), and the Citizens Band (CB) Radio Service (Subpart D).  The
Personal Radio Services also include the Low Power Radio Service (Subpart G) and the Wireless
Medical Telemetry Service (Subpart H), which are used to support auditory assistance and
medical applications.
For purposes of the Biennial Regulatory Review, the analysis of Part 95 in this report focuses on
the 218-219 MHz Service (Subpart F), which is unique among the Personal Radio Services in that
it may be used for commercial applications, it is licensed on a geographic exclusive-use basis,
and its licensure is subject to the Commission's competitive bidding procedures.
Part 95, subpart F was originally created to support the Interactive Video and Data Service
(IVDS), a short-distance communications service by which licensees could provide information,
products, or services to, and allow interactive responses from, subscribers within the licensee's
service area.  In 1998, the Commission renamed IVDS the 218-219 MHz Service and revised
Subpart F to allow 218-219 MHz licensees greater flexibility to identify and structure services in
response to market demand.  Under the current service rules, both common carrier and private
operations are permitted, and both one- and two-way communications are allowed.
The licensing and technical rules for the 218-219 MHz Service are contained in Subpart F,
although certain rules that are broadly applicable to all wireless telecommunications services
(including the 218-219 MHz Service) have been consolidated in Part 1.
Purpose
Part 95, subpart F contains the licensing and technical rules for the administration of a radio
service in the 218-219 MHz band.  The rules are intended to provide licensees with the maximum
flexibility to structure their services while protecting over-the-air television reception of TV
Channel 13.
Analysis
Status of Competition
The original IVDS service was generally not commercially successful, and little or no
competition emerged to use the 218-219 MHz band to provide interactive television applications.
Under the revised service rules, 218-219 MHz Service licensees have proposed wireless data
applications such as meter reading and vehicle tracking services.  Accordingly, the expectation is
that the 218-219 MHz Service could soon provide sources of competition for other wireless
services.  However, this competition is developing slowly, due in part to (1) the limited
permissible use of the service before its recent restructuring; (2) the fact that many 218-219 MHz
Service markets are not currently licensed due to payment defaults; and (3) the on-going
implementation of the service restructuring.
Advantages
The Part 95, subpart F rules provide licensees with the flexibility to identify and implement
services in response to market demand.  Licensees no longer have to operate within the context of
rules designed to support a specific application - interactive television - and instead enjoy a freer
hand in structuring service under their licenses.  For example, technical rules that mandated
specific antenna height-power ratios have been replaced with general interference protection
requirements, and rigid construction benchmarks have been replaced with a "substantial service"
requirement that is more suitable to niche services that may develop in the 218-219 MHz Service.
Disadvantages
There are no significant disadvantages to the Subpart F rules at this time, although the rules do
impose limited administrative and technical burdens that are inherent to the licensing process and
that are necessary for compliance with technical and operational rules.  As more licensees begin
providing service and we gain more experience in the administration of the 218-219 MHz
Service, we will continue to examine whether any of these rules impose unnecessary burdens and
costs and could therefore be candidates for additional streamlining.
Recent Efforts
The Commission has made significant changes to its Part 95, subpart F rules in recent years.  As
noted above, the Commission renamed the service and revised the rules in 1998 to afford more
flexibility to licensees over use of the spectrum.  The Commission adopted additional sweeping
changes to the 218-219 MHz service in September 1999.   The Wireless Telecommunications
Bureau is still implementing these changes, and several petitions for reconsideration remain
pending in the docket.  In addition, the 218-219 MHz Service has been affected by a number of
broadly applicable rulemaking actions, such as the Universal Licensing System (ULS) proceeding
that was initiated in conjunction with the 1998 Biennial Regulatory Review.
Recommendation
Due to the recent comprehensive evaluation and restructuring of the 218-219 MHz Service, no
changes are recommended to this subpart at this time.  The rules that were retained in the 1999
restructuring are an integral part of the basic licensing and spectrum management functions
performed by the Commission and should be retained.  Although there is presently only limited
competition within the 218-219 MHz Service, this fact is primarily attributable to the narrow
focus of the former rules that supported interactive television applications and the uncertainty
surrounding the restructuring of the service.  The staff anticipates the provision of competitive
services within the 218-219 MHz Service, and will continue to monitor developments in order to
determine whether any additional rule modifications are necessary to foster competition.
PART 100 - DIRECT BROADCAST SATELLITE SERVICE
Description
Part 100 was issued pursuant to the provisions of Title III of the Communications Act of 1934, as
amended, which gives the Federal Communications Commission authority to regulate radio
transmissions and to issue licenses for radio stations.  Part 100 sets forth rules applicable to the
Direct Broadcast Satellite Service (DBS), including public interest obligations, general licensing
and application filing requirements, technical and operating requirements, and competitive
bidding procedures.
Part 100 is organized into five sub-parts:
A- General Information
B- Administrative Procedures
C- Technical Requirements
D-Operating Requirements
E- Competitive Bidding Procedures for DBS
Purpose
Part 100 provides rules under which the International Bureau licenses DBS systems.  The rules
are designed to promote fair competition in the multi-channel video programming distribution
market.  Sections of Part 100 also have provisions:  (1) to assure protection from impermissible
levels of interference; (2) to assure compliance with international regulations; (3) to assure the
timely construction and operation of authorized space stations; (4) to assure the timely provision
of sufficient information to allow for processing of applications; (5) to assure compliance with
license specifications and conditions, as well as with Commission rules and regulations; and (6)
to provide competitive bidding procedures for the provision of DBS services.
Analysis
Status of Competition
The DBS service competes with other multi-channel video program distribution services (e.g.,
cable).  Today there are two major providers of DBS.  The service as a whole, and the individual
companies are growing rapidly in subscribership and have the capital to offer new digital
technologies to consumers.  Additionally, the Commission has permitted mergers in the DBS
industry that have placed the two DBS licensees in a stronger position to compete with other
suppliers of multi-channel video program distribution services (e.g., cable TV systems, which are
still today the dominant suppliers of multi-channel video program distribution services).
Furthermore, the U.S. has entered into agreements with Mexico and Argentina, which allow those
countries to provide Direct-to-Home services (similar to DBS) into the U.S.  Finally, we
anticipate auctioning additional DBS orbital slots that are allotted to the U.S. which will provide
existing or new DBS providers the opportunity to further expand the service to U.S. consumers.
Advantages
Subpart A- General Information: This subpart includes the basis and purpose of this rule subpart.
Specifically, it sets forth the Commission's statutory authority to regulate DBS, which fosters
efficient spectrum use.  This subpart increases consumer choice and diversity in programming, as
well as imposes political advertising rules on DBS providers.
Subpart B- Administrative Procedures: This subpart describes the eligibility criterion for DBS
authorizations, including foreign ownership restrictions.  It provides clear procedures for filing
applications and procedures for evaluating whether applications are complete.  This allows for
efficient use of resources and ensures compliance with the Commission's rules.
Subpart C-Technical Requirements: This subpart provides technical standards and operating
rules to minimize interference among DBS licensees.
Subpart D- Operating Requirements: Section 100.51 describes the Equal Employment
Opportunities policy for DBS.  This section promotes diversity in employment and creates
expanded opportunities to provide service.  Section 100.53 sets out geographic service rules for
DBS providers.  This ensures delivery of service to the public.
Subpart E- Competitive Bidding Procedures for DBS: This subpart describes the mechanism for
competitive bidding for satellite DBS service.  Competitive bidding awards DBS licenses to those
firms that will most efficiently use orbital resources to compete in providing service.  Further, it
fosters efficient use of spectrum and the development of a competitive DBS market.
Disadvantages
Subpart A- General Information: Section 100.5 (DBS public interest obligations) may increase a
licensees operating administrative and compliance costs.  Further, this section may restrict the
alternative uses of the resources that must now be set aside for public interest programming.
Subpart B- Administrative Procedures: This subpart could increase a licensee's administrative
costs and hamper the introduction of new services.  For example, if the milestone schedule for
construction and operation of DBS systems is too long, it may result in the deployment of
inefficient technologies.  In the alternative, if the schedule is too short, it may result in a loss of a
license if build out is delayed because of unforeseen technical problems.
Subpart C- Technical Requirements: These standards and operating rules, while preserving the
operating environment today, could hamper the introduction of new services and restrict
alternative uses of resources in the future.
Subpart D-Operating Requirements: Rules in this section might increase operating costs and limit
potential use of resources.
Subpart E- Competitive Bidding Procedures for DBS: Satellite services in the planned frequency
bands require international coordination prior to the commencement of operations (e.g., when the
plans are modified to accommodate new services).  The value of the orbital location resource is
uncertain if the international coordination process has not yet been completed.
Recent Efforts
As described in the staff report, the Commission has taken steps to streamline the regulation of
DBS.  The Commission issued an Notice of Proposed Rulemaking, which seeks comment on its
proposals to streamline the DBS rules by integrating the Part 100 DBS service rules into Part 25
(Satellite Communications), by eliminating duplicative rule sections, and by consolidating
existing rule sections as appropriate.
Recommendation
Consistent with the outstanding Notice of Proposed Rulemaking, the staff recommends that all of
the DBS rules contained in Part 100 be retained.  It is anticipated that the entire Part 100 will be
incorporated into Part 25 and Part 100 will be eliminated as a result of the outstanding
proceeding.
PART 101 - FIXED MICROWAVE SERVICES
Description
Part 101  contains licensing, technical, and operational rules for the microwave services.  Fixed
microwave spectrum is primarily used to deliver video, audio, data, and control functions for
other specific communications services from one point and/or hub to other points and/or
subscribers for distribution.  Most Part 101 application processing rules, technical standards, and
operational requirements apply to all Part 101 services, but others apply only to specific
services,  or to common carrier services but not private services (or vice versa).
Part 101 was created in 1996 through consolidation of the rules for the common carrier and
private operational fixed (POFS) microwave services contained in Parts 21 and 94.
Part 101 contains 14 lettered subparts:
	A - General
	B - Applications and Licenses
	C - Technical Standards
	D - Operational Requirements
	E - Miscellaneous Common Carrier Provisions
	F - Developmental Authorizations
	G - 24 GHz Services and Digital Electronic Message Service
	H - Private Operational Fixed Point-to-Point Microwave Service
	I - Common Carrier Fixed Point-to-Point Microwave Service
	J - Local Television Transmission Service
	K - [Reserved]
	L - Local Multipoint Distribution Service
	M - Competitive Bidding Procedures for LMDS
N - Competitive Bidding Procedures for the 38.6-40.0 GHz Band
Purpose
Part 101 sets forth application processing procedures, technical standards, and operational
requirements for the microwave services.  The Commission created the Part 101 rules to reduce
or eliminate the differences in processing applications between common carriers and private
operational fixed microwave service licensees, and to further the regulatory parity among these
microwave services.
Analysis
Status of Competition
Because the Part 101 microwave services encompass a variety of private and common carrier
applications, and because some services are licensed on a point-to-point basis while others are
licensed geographically, the level of competition varies greatly among individual microwave
services.
The largest commercial deployment of Part101 microwave services has occurred in the 24 GHz
(DEMS), 28 GHz (LMDS), and 39 GHz bands.  The most significant operators in these bands,
Teligent, Inc. (Teligent) and WinStar Communications, Inc. (WinStar), are currently
concentrating on business customers.  These operators are either now offering or are planning in
the future to offer subscribers a variety of one- and two-way broadband services, such as video
programming distribution, wireless local loop telephony, Internet access and other high speed
data transmission services.  Thus, if successful, licensees in these bands have the potential to
create facilities-based competition in numerous industries, including high-speed broadband
services.  In other Part 101 services, licensees continue to rely on traditional point-to-point
microwave systems to meet their operational support and critical infrastructure needs as opposed
to using microwave technologies to directly access customers.
Advantages
The Part 101 rules provide for a unified regulatory approach for the microwave services, and
eliminate the differences in processing applications between common carriers and POFS
licensees that existed in the former rules.  The Part 101 rules were adopted at the same time the
microwave industry was developing new collaboration and coordination agreements, and took
into consideration the industry's expressed desire to have common carrier and POFS microwave
services treated in the same fashion when appropriate.   Because each of the microwave services
share at least some frequencies with other microwave services, and because some frequencies are
shared with government users, the rules minimize repetition, reduce the potential for interference,
and aid different microwave users in efficient use of the microwave spectrum.
Part 101 also contains competitive bidding rules (Subparts M and N) that, in conjunction with our
spectrum allocation rules, promote economic growth and enhance access to telecommunications
service offerings for consumers, producers, and new entrants.  The competitive bidding rules are
structured to promote opportunity and competition.  This has resulted in the rapid implementation
of new and innovative services and the efficient use of spectrum use, thereby fostering economic
growth.  In contrast to lotteries and comparative hearings, auctions are faster, more efficient, and
more likely to get spectrum to entities that value it the most.  Through these rules, the
Commission has recovered a portion of the value of the public spectrum.
Disadvantages
Because the Part 101 rules represent a relatively new consolidation of Parts 21 and 74, licensees
and applicants have identified certain rules that are ambiguous or confusing, and certain technical
characteristics - including those relating to frequency tolerance, spectrum efficiency, and antenna
standards - that could be modified.   In addition, some rules could  be candidates for further
consolidation or streamlining.   For example, the current rules do not allow shared use among
providers and between POFS and common carrier licensees.
Recent Efforts
The Commission is in the midst of a comprehensive re-evaluation of the Part 101 rules.   The
Part 101 NPRM, which was released on February 14, 2000, proposes to eliminate rules that are
duplicative, outmoded, or otherwise unnecessary; it also seeks comment on specific proposals to
"examine the[] rules and procedures and offer their view and explanations of ways to streamline
them and to make sure that the regulations conform with the Communications Act of 1934, as
amended."   The pleading cycle for the Part 101 NPRM closed August 4, 2000.
The Commission has made significant changes to the competitive bidding rules of Part 1, subpart
Q.  In the Part 1 Third Report and Order,  the Commission made substantive amendments and
modifications to the competitive bidding rules for all auctionable services.  These changes to the
competitive bidding rules are intended to streamline regulations and eliminate unnecessary rules
wherever possible, increase the efficiency of the competitive bidding process, and provide more
specific guidance to auction participants.  The changes also advance our auction program by
reducing the burden on the Commission and the public of conducting service-by-service auction
rule makings, such as those rule makings that created the competitive bidding rules of Subparts M
and N.
Recommendation
Because of the ongoing rulemaking embodied in the Part 101 NPRM, staff does not recommend
that any additional changes be made to the rules within the context of the biennial regulatory
review.  Indeed, the pending rulemaking engages in the same type of comprehensive examination
of our service and technical rules that we are undertaking as part of the larger biennial regulatory
review process.
In general, the competitive bidding rules in this subpart are integral to the basic licensing and
spectrum management functions performed by the Commission.  The necessity for these rules is
also not significantly affected by changes in the level of competition in the auctionable services.
In addition, the Commission has significantly revised and streamlined the competitive bidding
rules in this subpart in several proceedings.  Therefore, the staff concludes that significant
modification or repeal of the Part 101 competitive bidding rules is not necessary at this time.
However, to the extent that service-specific auction rules are duplicative of the consolidated
auction rules in Part 1, the staff recommends that they be modified or eliminated.
PART 101, SUBPART G - 24 GHZ SERVICE AND DIGITAL ELECTRONIC MESSAGE SERVICE
Description
Part 101 contains licensing, technical, and operational rules for fixed operational microwave
services that require operating facilities on land or in certain offshore coastal areas.  This report
focuses on subpart G, which contains rules for the 24 GHz Service and the Digital Electronic
Message Service (DEMS).  DEMS systems are common carrier point-to-multipoint microwave
networks designed to communicate information between a fixed (nodal) station and a multiple
fixed user terminals,  and this subpart was originally intended to accommodate operation of
high-speed, two-way, point-to-multipoint terrestrial microwave transmission systems.
DEMS was originally licensed for use in the 18.82-18.92 GHz and 19.16-19.26 GHz bands.  It
was subsequently reallocated to the 24.25-24.45 GHz and 25/05-25.25 GHz bands.
Purpose
The purpose of the Part 101 subpart G rules is to establish the rules for allocation and use of
wireless services at 24 GHz (including DEMS), to ensure efficient spectrum use, and to prevent
interference.
Analysis
Status of Competition
Under the original DEMS grants in the 1980s, the service was not initially commercially
successful.   In the early 1990s, a small number of companies began acquiring licenses in
approximately thirty of the nation's largest markets.   The majority of licenses are currently held
by Teligent.  The 24 GHz spectrum used by DEMS has been identified as a potential competitor
in the local exchange telephone market.   Teligent, which recently completed its initial plan to
roll out service in 40 U.S. markets, provides a bundle of broadband fixed wireless
telecommunication services to small- and medium-sized businesses.
Advantages
The current rules provide a clear regulatory framework for the development of competitive fixed
wireless services.  The existing technical and operational rules are necessary for administration of
a radio service at 24 GHz.
Disadvantages
The current subpart G rules were written when the primary use of DEMS was expected to be by
businesses requiring internal networks to distribute documents, share data, and hold
teleconferences.  Accordingly, some of the terminology reflects this initial service concept.
Mobile service is not permitted in the 24 GHz band.
Recent Efforts
In 1999, the Commission initiated a rulemaking proceeding (WT Docket No. 99-327) in which it
undertook a comprehensive review of use of the 24 GHz band.  In a Report and Order adopted
July 25, 2000, the Commission revised Part 101 subpart G to comprehensively regulate
operations within the 24 GHz band.  Under the newly adopted changes, the Commission will
license the 24 GHz band in 40 MHz channel pairs, provide 24 GHz band licensees more
flexibility in system design, implement a ten-year license term and a "substantial service"
requirement at renewal, allow 24 GHz band licensees to partition and/or disaggregate their
licenses, and introduce flexible technical standards.  Existing DEMS licensees are treated as
incumbent licensees subject to the new 24 GHz rules.
Recommendation
In light of the Commission's comprehensive review of its 24 GHz rules in WT Docket No. 99-
327, the staff concludes that issues pertaining to Subpart G are being adequately addressed in that
proceeding.
PART 101, SUBPARTS L (LOCAL MULTIPOINT DISTRIBUTION SERVICE (LMDS)) AND M
(COMPETITIVE BIDDING PROCEDURES FOR LMDS)
Description
Part 101  contains licensing, technical, and operational rules for the fixed microwave radio
services.  Local Multipoint Distribution Service (LMDS) systems are fixed point-to-point or
point-to-multipoint radio systems that consist of hub and subscriber stations.  LMDS licensees
may provide a variety of services, including high-speed data and Internet services and multi-
channel video programming distribution.
Subpart L contains licensing, technical, and operational rules for LMDS.  In general, the rules in
this part: (1) provide eligibility restrictions in this service; (2)  define the service area of LMDS
licenses; (3) specify the permissible operations for authorized systems; (3) specify the frequencies
available to LMDS licensees; (4) establish license terms; (5) establish the minimum construction
or coverage requirements for LMDS licensees; and (6) define system operations and permissible
communication services.
Subpart M contains competitive bidding rules and procedures for commercial licenses in LMDS.
In particular, the rules, on a service-specific basis: (1) provide competitive bidding mechanisms
and design options; (2) establish application, disclosure and certification procedures for short-
and long-form applications; (3) specify down payment, unjust enrichment, withdrawal and default
mechanisms; (4) provide definitions of gross revenues for designated entities and specify the
bidding credits for which designated entities qualify; and (5) provide eligibility and technical
requirements for partitioning and disaggregation.
Purpose
The purpose of the Part 101 rules is to establish basic ground rules for assignment of spectrum for
private operational, common carrier, and LMDS fixed microwave operations that require
operating facilities on land or in specified offshore coastal areas.  Subpart L contains the basic
licensing and operational rules for LMDS.  Subpart M helps to ensure access to new
telecommunications offerings by ensuring that all customer segments are served, that there is not
an excessive concentration of licenses, and that small businesses, rural telephone companies, and
businesses owned by women and minorities will have genuine opportunities to participate in the
provision of service.
Analysis
Status of Competition
LMDS is a "nascent market."   The initial LMDS operator, Cellularvision, no longer provides
multi-channel video programming distribution services, and has announced plans to offer high-
speed data access on a portion of its original spectrum.  The remaining licenses were issued by
auctions held in March 1998 and April and May 1999.  Accordingly, LMDS equipment is still
subject to limited availability and the majority of licensees are still developing their systems.
LMDS will most likely compete with wireless and wireline broadband service providers targeting
small and medium businesses.
Advantages
The Subpart L rules provide licensees with broad flexibility to identify and implement services in
response to market demand.  The Commission recently allowed LMDS eligibility restrictions for
incumbent local exchange carrier and cable companies to sunset;  this development should
provide access to additional capital to develop LMDS fully, make administration of LMDS
consistent with other competitive services, and aid the development of LMDS in rural markets.
The Subpart M competitive bidding rules, in conjunction with our spectrum allocation rules,
promote economic growth and enhance access to telecommunications service offerings for
consumers, producers, and new entrants.  The competitive bidding rules of Subpart M were
structured to promote opportunity and competition.  This has resulted in the rapid implementation
of new and innovative services and the efficient use of spectrum use, thereby fostering economic
growth.  In contrast to lotteries and comparative hearings, auctions are faster, more efficient, and
more likely to get spectrum to entities that value it the most.  Through these rules, the
Commission has recovered a portion of the value of the public spectrum.
Disadvantages
There are no discernable disadvantages to the LMDS rules.  The existing rules consist of
technical and operational rules that are necessary for administration of the service.
The Subpart M competitive bidding rules have no significant disadvantages.  Nevertheless, the
rules impose higher transaction costs to auction participants.  For example, auction transaction
costs are higher than the transaction costs for lotteries.  In addition, because the need remains for
service-specific notice and comment proceedings prior to the auction event, there is some delay in
licensing.  These delays, however, are far less than other licensing mechanisms.
Recent Efforts
The June 23, 2000, LMDS Third R&O allowed the cross-ownership restriction that prohibited
incumbent local exchange carriers and cable companies from having an attributable interest in the
LMDS A block license that overlaps with ten percent or more of the population in their service
areas to expire on June 30.  The decision to allow the cross-ownership rule to sunset was based on
a thorough analysis of competitive issues and the LMDS market.
The Commission has made significant changes to the competitive bidding rules of Part 1 Subpart
Q.  In the Part 1 Third Report and Order,  the Commission made substantive amendments and
modifications to the competitive bidding rules for all auctionable services.  These changes to the
competitive bidding rules are intended to streamline regulations and eliminate unnecessary rules
wherever possible, increase the efficiency of the competitive bidding process, and provide more
specific guidance to auction participants.  The changes also advance our auction program by
reducing the burden on the Commission and the public of conducting service-by-service auction
rule makings, such as those rule makings that created the competitive bidding rules of Subpart M.
Recommendation
The staff recommends that no substantive changes be made to this subpart at this time.  Certain
nonsubstantive revisions could be made to the LMDS rules for the purposes of simplification and
to provide clarity to licensees and applicants.   The staff also concludes that substantive
modification of the Subpart M competitive bidding rules is not necessary at this time.  In general,
the competitive bidding rules in this subpart are integral to the basic licensing and spectrum
management functions performed by the Commission in LMDS.  However, the Commission has
consolidated its competitive bidding rules in Part 1, with the goal of having future auctions be
conducted in accordance with Part 1 rules.  Therefore, to the extent that future auctions are
necessary in LMDS, the staff recommends that they be governed by Part 1, and that consideration
be given to eliminating or phasing out the separate rules in this subpart to the extent they are
redundant.
 	47 U.S.C.  161; Telecommunications Act of 1996, Pub. Law No. 104-104,  202, 110 Stat. 56 (1996).
 	1996 Act, introductory statement.
 	See Joint Managers' Statement, S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 113 (1996) at 1
(stating that the 1996 Act would establish a "pro-competitive, deregulatory national policy framework").
 	47 U.S.C.  161; 1996 Act,  202(h).
 	"Telecommunications service" is "the offering of telecommunications for a fee directly to the public or
to such classes of users as to be effectively available to the public.."  47 U.S.C.  153(46).
 	Congress also directed the Commission to forbear from applying its regulations or provisions of the
Communications Act to a telecommunications carrier or telecommunications service, or class of
telecommunications carriers or telecommunications services, if, inter alia, the enforcement of such
regulation or provision is not necessary for the protection of consumers and if forbearance is consistent
with the public interest.  47 U.S.C.  160(a).  In determining whether forbearance is consistent with the
public interest, the Commission must consider whether forbearance would enhance competition among
telecommunications service providers.  47 U.S.C.  160(b).
 	47 C.F.R.  1.3.
 	47 U.S.C.  161.
 	See Appendix II for a listing of the completed and ongoing proceedings that were initiated as a result
of the 1998 Biennial Regulatory Review.
 	This includes consideration of how adroitly, precisely, and cost-effectively the rule addresses the
problem at issue.
 	This includes consideration of whether the rule is over- or under-inclusive in its scope, and whether
compliance imposes unnecessary costs.
 	For a broad discussion of the causes of market failure see A. Mas-Colell, M.D. Whinston, and J. R.
Green, MICROECONOMIC THEORY, (1995), Chapters 11-14.
 	This Staff Report does not affect the Commission's rules in any way.  Parties that seek a rulemaking or
waiver of a specific rule may avail themselves of sections 1.401 and 1.3 of the Commission's rules. 47
C.F.R.  1.401, 1.3.
 	See generally 47 U.S.C.  161.
 	Telecommunications @ the Millennium, at 17 (rel. Feb. 8, 2000).
 	Id. at 18.
 	Id.  These data include independent competitive LECs and the local exchange operations of large long
distance carriers.  Id. at 17-18.
 	Id. at 18.
 	Id. at 22.
 	Local Telephone Competition at the New Millennium, CCB (rel. Aug. 2000) (summarizing Dec. 31,
1999 data from FCC Forms 477 and 499-A).
 	Development of Competition in Local Telephone Markets, at 4 (rel. Jan. 2000).
 	Id. at 6.
 	Id.
 	Telecommunications @ the Millennium, at 3.
 	2000 Biennial Regulatory Review of Part 68 of the Commission's Rules and Regulations, Notice of
Proposed Rulemaking, 15  FCC Rcd 10525, 10529 (2000) (Part 68 NPRM).
 	The 1998 Biennial Regulatory Review common carrier proceedings include: (1) 1998 Biennial
Regulatory Review - Review of Accounting and Cost Allocation Requirements, USTA Petition for
Rulemaking, CC Docket No 98-81; (2) 1998 Biennial Regulatory Review - Review of ARMIS Reporting
Requirements, CC Docket No. 98-117; (3) 1998 Biennial Regulatory Review - Testing New Technology,
CC Docket No. 98-94; (4) 1998 Biennial Regulatory Review - Repeal of Part 62 of the Commission's
Rules, CC Docket No. 98-195; (5) Policy and Rules Concerning the Interstate, Interexchange
Marketplace/Implementation of Section 254(g) of the Communications Act of 1934, CC Docket No. 98-183;
(6) 1998 Biennial Regulatory Review -  Petition for Section 11 Biennial Regulatory Review filed by SBC
Communications, CC Docket No. 98-177; (7) 1998 Biennial Regulatory Review - Streamlined Contributor
Reporting Requirements Associated with Administration of Telecommunications Services, North American
Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms, CC Docket No.
98-171; (8) 1998 Biennial Regulatory Review - Modifications to Signal Power Limitations Contained in
Part 68 of the Commission's Rules, CC Docket No. 98-163; (9) 1998 Biennial Regulatory Review - Review
of Depreciation Requirements for Incumbent Local Exchange Carriers, CC Docket No. 98-137; (10) 1998
Biennial Regulatory Review -  Part 61 of the Commission's Rules and Related Tariffing Requirements, CC
Docket No. 98-131; (11) 1998 Biennial Regulatory Review - Elimination of Part 41 Telegraph and
Telephone Franks, CC Docket No. 98-119; and (12) 1998 Biennial Regulatory Review - Review of
Computer III and ONA Safeguards, CC Docket No. 98-10.  Most of these proceedings have already been
completed.  The procedural status of each of these proceedings is provided in Appendix II.
 	Common Carrier Bureau Announces Initiative to Undertake Comprehensive Review of Part 32 and
ARMIS Requirements, Public Notice, 14 FCC Rcd 6345 (1999).
 	Id. at 6346.
 	Id.
 	Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for
Incumbent Local Exchange Carriers: Phase 1 (Phase 1 Order), Report and Order, CC Docket No. 99-253,
FCC 00-78, Mar. 8, 2000.
 	Phase 1 Order, FCC 00-78 at 4.
 	Common Carrier Bureau Announces A Series of Workshops for Phase 2 of the Comprehensive Review
of Accounting and Reporting Requirements, Public Notice, DA 00-754 Apr. 5, 2000 at 1.  See also,
Common Carrier Bureau Announces Mid-Sized Carrier Workshop for Phase 2 of the Comprehensive
Review of Accounting and Reporting Requirements, Public Notice, DA 00-926 Apr. 26, 2000.
 	Jurisdictional Separations Reform and Referral to the Federal-State Joint Board, Notice of Proposed
Rulemaking, 12 FCC Rcd 22120 (1997) (Separations Reform Notice).
 	Separations Reform Notice, 12 FCC Rcd at 22139.
 	Id. at 22124.
 	Jurisdictional Separations Reform and Referral to the Federal-State Joint Board, CC Docket No. 80-
286, Recommended Decision, FCC 00-2 (rel. July 21, 2000).
 	The Commission's rules define CPE as equipment employed on the premises of a person other than a
carrier to originate, route or terminate telecommunications.  47 C.F.R. 153(14).
 	The Commission's Part 68 rules are designed to ensure that equipment directly connected to the public
switched network will not: (1) result in electrical hazards to telephone company personnel; (2) damage
telephone company equipment; (3) cause the malfunction of telephone company billing equipment; or  (4)
degrade service to persons other than the user of the equipment involved, persons the equipment user calls,
or those who call the user.  47 C.F.R.  68.3.  Equipment manufacturers are not required to comply with the
technical standards in Part 68, but CPE that is not certified as meeting these standards cannot be directly
connected to the public switched network, and has limited marketability.  The U.S.Customs Service also
prohibits the importation of terminal equipment that is not registered pursuant to Part 68.  See  19 U.S.C. 
3109.
 	CPE can now be certified as complying with the Part 68 requirements by private Telecommunications
Certification Bodies as well as the Commission.  47 C.F.R.  160.
 	2000 Biennial Regulatory Review of Part 68 of the Commission's Rules and Regulations, Notice of
Proposed Rulemaking, 15 FCC Rcd 10525, 10528 (2000) (Part 68 NPRM).
 	Common Carrier Bureau Will Hold Fora on Deregulation/Privatization of Equipment Registration and
Telephone Network Connection Rules (47 C.F.R. Part 68), CC Docket No. 99-216, Public Notice, DA 99-
1108, June 10, 1999.
 	Part 68 NPRM, 15 FCC Rcd at 10530-31, citing summary provided in Sprint Comments, filed July 20,
1999, at 1.
 	Part 68 NPRM, 15 FCC Rcd at 10532-34.
 	See 47 C.F.R. Part 15.
 	Petitions for Waiver and Reconsideration Concerning Sections 36.611, 36.612, 61.41(c)(2), 69.605( c),
69.3(e)(11) and the Definition of "Study Area" Contained in Part 36 Appendix - Glossary of the
Commission's Rules Filed by Copper Valley Telephone, Inc., et al, Memorandum Opinion and Order on
Reconsideration, AAD Docket No. 93-93, DA 1845 (rel. Sept. 9, 1999).
 	Petitions for Waiver Concerning the Definition of "Study Area" Contained in Part 36 Appendix-
Glossary of the Commission's Rules, Accent Communications, Inc., et al., Order, CC Docket No. 96-45,
DA 00-176 (rel. Aug. 4, 2000).
 	This exemption was originally adopted by the Commission in 1983.  MTS and WATS Market
Structure, 97 FCC 2d 682, 711 (1983), aff'd sub nom. National Ass'n of Reg. Util. Commissioners v. FCC,
737 F.2d 1095, 1136-37 (D.C. Cir. 1984), cert. denied, 469 U.S. 1227 (1985).  The Commission reaffirmed
this exemption in 1988 and 1997.  Amendments of Part 69 of the Commission's Rules Relating to Enhanced
Service Providers, 3 FCC Rcd 2631, 2633 (1988); Access Charge Reform, 12 FCC Rcd 15982, 16133-34,
aff'd sub nom. Southwestern Bell v. FCC, 153 F.3d 523, 542 (8th Cir. 1998).
 	FCC Reduces Access Charges by $3.2 Billion; Reductions Total $6.4 Billion Since 1996
Telecommunications Act (CC Docket Nos. 96-262, 94-1, 99-249, and 96-45), FCC News, May 31, 2000, at
1.
 	Id.
 	Access Charge Reform, Price Cap Performance Review for Local Exchange Carriers, Low-Volume
Long Distance Users, Federal-State Joint Board on Universal Service, Sixth Report and Order in CC
Dockets Nos. 96-262 and 94-1, Report and Order in CC Docket No. 99-249, Eleventh Report and Order in
CC Docket No. 96-45, 15 FCC Rcd 12962 (2000)(CALLS Order).
 	Such a proceeding would potentially affect provisions of Parts 51, 61, and 69.
 	Petition for Rulemaking of the United States Telephone Association, filed Aug. 11, 1999.  The
Cincinnati Bell Telephone Company, Roseville Telephone Company and SBC Communications filed
comments in response to the USTA petition.  The Bell Atlantic Telephone Company, MCI WorldCom, and
USTA filed replies.
 	CALLS Order, 15 FCC Rcd 12962.
 	Major fora include the World Radio Conference and the International Telecommunication Union
(ITU), at which the Bureau represents the Commission in matters such as spectrum planning, terrestrial and
satellite issues, standards, and broadcasting.
 	47 C.F.R. Parts 25 and 100.
 	See Streamlining the Commission's Rules and Regulations for Satellite Application and Licensing
Procedures, Report and Order, 11 FCC Rcd 21581 (1996) Streamlining Order.
 	Amendment to the Commission's Regulatory Policies Governing Domestic Fixed Satellites and
Separate International Satellite Systems, and DBS Petition for Declaratory Rulemaking Regarding the Use
of Transponders to provide International DBS Service, Report and Order, 11 FCC Rcd 2429, 2430 (1996)
(DISCO I).
 	Amendment of the Commission's Regulatory Policies to Allow Non-U.S.-Licensed Space Stations to
Provide Domestic and International Satellite Service in the United States, Report and Order, 12 FCC Rcd
24094 (1997) (DISCO II), recon., FCC 99-325 (rel. Oct. 29, 1999) (DISCO II First Reconsideration
Order).
 	Within the ITU, Member States (Administrations/Governments) and Sector Members (private entities)
cooperate to maintain and extend telecommunications globally.
 	See Commission Launches Earth Station Streamlining Initiative, Public Notice, DA 99-1259 (June 25,
1999).
 	Emission designators are a shorthand method used to define the frequency bandwidth and the
modulation technique and type of service or combination of services.
 	See Streamlining Order, 11 FCC Rcd at 21594-96.
 	See International Bureau to Streamline Satellite and Earth Station Processing, Public Notice, Report
No. SPB-140, Oct. 28, 1998.
 	See Streamlining the International Section 214 Authorization Process and Tariff Requirements, Report
and Order, 11 FCC Rcd 12884 (1996).  The Commission had begun the international Section 214
streamlining process in 1985.  See International Competitive Carrier Policies, Report and Order, 102 FCC
2d 812 (1985); recon. denied, 60 RR2d 1435 (1986); modified, Regulation of International Common
Carrier Services, Report and Order, 7 FCC Rcd 7331 (1992).
 	See 1998 Biennial Regulatory Review-Review of International Common Carrier Regulations, Report
and Order, 14 FCC Rcd 4909 (1999) (1998 International Common Carrier Biennial Regulatory Review
Order), recon. pending.
 	See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, Report and
Order and Order on Reconsideration, 12 FCC Rcd 23 891 (1997) (Foreign Participation Order), recon.
pending.
 	See 1998 Biennial Regulatory Review: Reform of the International Settlements Policy and Associated
Filing Requirements (Phase II), Report and Order and Order on Reconsideration, 14 FCC Rcd 7963 (1999)
(ISP Reform Order).
 	See International Settlement Rates, Report and Order, 12 FCC Rcd 19806 (1997) (Benchmarks
Order), aff'd sub nom. Cable and Wireless P.L.C. v. FCC, 166 F.3d 1224 (D.C. Cir. 1999), Report and
Order on Reconsideration and Order Lifting Stay, 14 FCC Rcd 9256 (1999) (Benchmarks Reconsideration
Order).
 	Where two or more applicants seek licenses for more spectrum than is available, the applications are
considered to be mutually exclusive. See Ashbacker v. FCC, 326 U.S. 327 (1945).  Under Ashbacker,
where such mutual exclusivity exists, the Commission must conduct a hearing to resolve the conflicting
requests.
 	47 C.F.R.  25.141.  The Commission reallocated radio-determination satellite service (RDSS)
spectrum to the Mobile Satellite Service (MSS).  Therefore, it appears that the RDSS rules in section
25.141 no longer serve any purpose.
 	47 C.F.R. Subpart H.  Subpart H is intended to govern the administration of Section 304 of the
Communications Satellite Act of 1962.  The ORBIT Act recently signed into law states that Section 304 of
the Communications Satellite Act will cease to be effective.  Any rule established to administer Section 304
therefore also should be eliminated.
 	47 C.F.R.  25.140.
 	47 C.F.R.  25.144.
 	47 C.F.R.  25.140.
 	See International Bureau to Hold Public Forum on Submarine Cable Landing Licenses, Public Notice,
DA 99-2148, Oct. 8, 1999.
 	See Review of Commission Consideration of Applications under the Cable Landing License Act, Notice
of Proposed Rulemaking, FCC 00-210, June 22, 2000.
 	International broadcast stations operate on frequencies between 5950 and 26100 kHz.  47 C.F.R. 
73.701(a).  There are both government and non-government international broadcasting stations, and only
the latter are licensed by the Commission.  Id.
 	See 47 C.F.R.  73.701-73.788.
 	See 47 C.F.R.  73.701-73.788.
 	47 C.F.R.  73.701(g) - (j) and (l).
 	47 C.F.R.  73.702(f)(1).
 	The Final Acts of WRAC `92 set January 1, 1996 as the effective implementation date for exclusive
use by international broadcasting of the following additional frequency bands: 9775-9900 kHz, 11650-
11700 kHz, 11975-12050 kHz, 13600-13800 kHz, 15450-15600 kHz, 17550-17700 kHz and 21750-21850
kHz.
 	47 C.F.R.  73.703.
 	47 C.F.R.  73.756(c).
 	Appendix 2 of the ITU Radio Regulations requires international broadcasting station transmitters to
meet a frequency control tolerance of 10 Hz for transmitters using double sideband operation.
 	47 C.F.R.  73.766.
 	See In the Matter of Policy and Rules Concerning the Interstate Interexchange Marketplace;
Implementation of Section 254(g) of the Communications Act of 1934, as amended, Report and Order, 11
FCC Rcd 9564 (1996); Second Report and Order, 11 FCC Rcd 20730 (1996), stay granted,  MCI
Telecommunications Corp. v. FCC, No. 96-1459 (D.C. Cir. Feb. 13, 1997); Order on Reconsideration, 12
FCC Rcd 15014 (1997); Second Order on Reconsideration and Erratum, 14 FCC Rcd 6004 (1999); stay
lifted and aff'd, MCI Worldcom, Inc., et al. v. FCC, 209 F3d 760 (D.C. Cir. 2000).
 	See 47 C.F.R.  63.10.
 	47 U.S.C.  208.
 	See 47 C.F.R.  63.10.
 	Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66, 107 Stat. 312.  See 47 U.S.C. 
309(j).
 	See http://www.fcc.gov/wtb/auctions.
 	See Fourth Annual Report and Analysis of Competitive Market Conditions With Respect to
Commercial Mobile Services, 14 FCC Rcd 10145 (1999).  See also Implementation of Section 6002(b) of
the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis of Competitive Market
Conditions With Respect to Commercial Mobile Services, FCC 00-289 (adopted Aug. 3, 2000) (Fifth
Competition Report).
 	Implementation of Sections 3(n) and 332 of the Communications Act, Second Report and Order, 9 FCC
Rcd 1411 (1994).
 	Amendment of the Commission's Rules to Permit Flexible Service Offerings in the Commercial Mobile
Radio Services, First Report and Order, 11 FCC Rcd 8965 (1996).
 	Biennial Regulatory Review - Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97 and 101
of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System in the
Wireless Telecommunications Services, Notice of Proposed Rulemaking, 13 FCC Rcd 9672 (1998); Report
and Order, 13 FCC Rcd 21027 (1998); Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd
11145 (1998).
 	1998 Biennial Regulatory Review - 47 C.F.R. Part 90 - Private Land Mobile Radio Services, Notice of
Proposed Rulemaking, 13 FCC Rcd 21133 (1998); Report and Order, FCC 00-235 (rel. July 12, 2000).
 	1998 Biennial Regulatory Review - Amendment of Part 97 of the Commission's Amateur Service
Rules, Notice of Proposed Rulemaking, 13 FCC Rcd 15798 (1998); Report and Order, 15 FCC Rcd 315
(1999).
 	Federal Communications Bar Association's Petition for Forbearance from Section 310(d) of the
Communications Act Regarding Non-Substantial Assignments of Wireless Licenses and Transfers of
Control Involving Telecommunications Carriers, Memorandum Opinion and Order, 13 FCC Rcd 6293
(1998).
 	Cellular Telecommunications Industry Association's Petition for Forbearance from Commercial
Mobile Radio Services Number Portability Obligations, Memorandum Opinion and Order, 14 FCC Rcd
3092 (1999), recon., 15 FCC Rcd 4727 (2000).
 	In the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate
the 27.5-29.5 Ghz Frequency Band, to Reallocate the 29.5-30.0 Ghz Frequency Band, to Establish Rules
and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92-
237, Third Report and Order and Memorandum Opinion and Order, FCC 00-223 (rel. June 27, 2000).
 	See 47 C.F.R.  22.900 et seq.
 	47 C.F.R.  22.6.
 	Implementation of Sections 3(n) and 332 of the Communications Act, Third Report and Order, 9 FCC
Rcd 7988 (1994).
 	1998 Biennial Regulatory Review - Spectrum Aggregation Limits for Wireless Telecommunications
Carriers, Cellular Telecommunications Industry Association's Petition for Forbearance From the 45 MHz
CMRS Spectrum Cap, Report and Order, 15 FCC Rcd 9219 (1999) (Spectrum Cap Report and Order).
 	U.S. Television Household Estimates, Nielsen Media Research, Sept. 1999.
 	Nielsen Media Research, Television Audience 1996, 1997.
 	Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, 15
FCC Rcd 978 (2000), at Appendix B.
 	Id. at Table B-4.
 	FCC Press Release, Broadcast Station Totals as of September 30, 1999 (Nov. 22, 1999).
 	These station counts include all in-market stations and selected out-of-market stations listed in BIA's
"Investing in Radio," 1999 Market Report, 4th Edition.
 	A radio station is generally considered part of a group if the owner has a station in more than one
market, or if the owner has three or more stations in one market.
 	See Review of the Commission's Regulations Governing Television Broadcasting, Television Satellite
Stations Review of Policy and Rules, Further Notice of Proposed Rulemaking, 10 FCC Rcd 3535 (1995).
 	We have previously observed that our ownership rules seek to foster "outlet" and "source" diversity as
a means of promoting a diversity of viewpoints.  In the Matter of Review of the Commission's Regulations
Governing Television Broadcasting, Further Notice of Proposed Rulemaking, 10 FCC Rcd 3524, 3549-50,
 60-61 (1995).  "Outlet" diversity "refers to a variety of delivery services (e.g., broadcast stations) that
select and present programming directly to the public."  "Source" diversity refers to "a variety of program
producers and owners."  10 FCC Rcd at 3549-50,  61.  Both outlet and source diversity are "integral to the
ultimate goal of providing the public with a variety of viewpoints..The Commission has felt that without a
diversity of outlets, there would be no real viewpoint diversity - if all programming passed through the
same filter, the material and views presented to the public would not be diverse.  Similarly, the
Commission has felt that without diversity of sources, the variety of views would necessarily be
circumscribed."  Id.
 	Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 663 (1994) (Turner I) (quoting United States
v. Midwest Video Corp., 406 U.S. 649, 668 n.27 (1972) (plurality opinion) (quoting Associated Press v.
United States, 326 U.S. 1, 20 (1945)).
 	This "marketplace of ideas" metaphor was first articulated by Justice Holmes.  See Abrams v. United
States, 250 U.S. 616, 630 (1919) (Holmes, J., dissenting).
 	New York Times v. Sullivan, 376 U.S. 254, 270 (1964).
 	Turner I, 512 U.S. at 663.
 	According to a recent survey, almost 70 percent of adults said they get most of their news from
television - almost twice the number that list newspapers as their main news source.  See "America's
Watching," March/April, 1997, Roper Starch Worldwide, Inc.
 	Congress promotes diversity separate and apart from competition.  For example, Section 202(b) of the
1996 Act, which set forth new ownership limitations, is titled "Local Radio Diversity." Pub. Law No. 104-
104, 110 Stat. 56, 110 (1996) (emphasis added).  Moreover, in discussing the radio-television cross-
ownership rule, the Conference Report to the 1996 Act noted "the potential for public interest benefits of
[radio-television station combinations] when bedrock diversity interest[s] are not threatened," and further
stated that in reviewing this rule the FCC should take into account not only the increased competition
facing broadcasters but also "the need for diversity in today's radio marketplace."  S. Conf. Rep. 104-230,
104th Cong. 2d Sess. 163 (1996) (emphasis added).
 	For example, the 1996 Act directs the Commission, in Section 257, in identifying and eliminating
market entry barriers for entrepreneurs and other small businesses in certain services, "to promote the
policies and purposes of this Act favoring diversity of media voices."  47 U.S.C.  257(b).  Likewise, the
Cable Competition and Consumer Protection Act of 1992 sought to "ensure that cable television operators
do not have undue market power," and "promote the availability to the public of a diversity of views and
information."  Cable Television Consumer Protection and Competition Act of 1992, Pub. Law No. 102-
385,  2(b) (1992), 106 Stat. 1460.
 	In the Matter of Review of the Commission's Regulations Governing Television Broadcasting; and
Television Satellite Stations Review of Policy and Rules, Report and Order, 14 FCC Rcd 12903 (1999)
(1999 Local Television Ownership Report and Order).
 	In the Matter of Broadcast Television National Ownership Rules; Review of the Commission's
Regulations Governing Television Broadcasting; and Television Satellite Stations Review of Policy and
Rules, MM Docket Nos. 96-222, 91-221, and 87-8, Report and Order, FCC 99-208, Aug. 6, 1999 (1999
National Television Ownership Report and Order).
 	In the Matter of 1998 Biennial Regulatory Review - Review of the Commission's Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MM
Docket No. 98-35, Biennial Regulatory Review Report, FCC 00-191, June 20, 2000 (1998 Biennial
Regulatory Review Report).
 	47 C.F.R.  73.3555(a).
 	See, e.g., Pine Bluff Radio, Inc., Memorandum Opinion and Order, 14 FCC Rcd 6594 (1999).
 	47 C.F.R.  73.3555(b).
 	1999 Local Television Ownership Report and Order, 14 FCC Rcd at 12933,  65.
 	47 C.F.R.  73.3555(c).
 	1999 Local Television Ownership Report and Order, 14 FCC Rcd at 12955-57,  119-22.  The five
factors were:  (1) the potential public service benefits of common ownership of the facilities, such as
economies of scale, cost savings, and programming benefits; (2) the types of facilities involved; (3) the
number of media outlets already owned by the applicant in the relevant market; (4) any financial
difficulties involving the station(s); and (5) issues pertaining to the level of diversity and competition
within the affected market.
 	Waivers of the new rule will be granted only in situations involving a failed station, as defined in the
Commission's local television multiple ownership rules.  The waiver applicant must also show that the in-
market buyer is the only entity willing and able to operate the failed station and that the sale to an out-of-
market buyer would result in an artificially depressed price for the station.  1999 Local Television
Ownership Report and Order, 14 FCC Rcd at 12948-49,  101, 12954,  115.
 	1999 Local Television Ownership Report and Order, 14 FCC Rcd at 12948,  102-03.
 	47 C.F.R.  73.3555(d).
 	On August 23, 1999, the Newspaper Association of America ("NAA") filed an Emergency Petition for
Relief, which argues in favor of repeal of the newspaper/broadcast cross-ownership rule.  The NAA
petition was treated as a late-filed comment and accordingly not considered in the 1998 Biennial
Regulatory Review proceeding.  However, the petition will be included in the record of the proceeding that
will be initiated to seek comment on this staff Report.
 	In the Matter of Newspaper/Radio Cross-Ownership Waiver Policy, Notice of Inquiry, 11 FCC Rcd
13003 (1996) (Newspaper/Radio Cross-Ownership Waiver Policy NOI).
 	47 C.F.R.  73.3555(e)(1).
 	1996 Act,  202(c)(1).
 	On November 18, 1999, Fox Television Stations, Inc. filed an "Emergency Petition for Relief and
Supplemental Comments" in the 1998 Biennial Regulatory Review proceeding seeking, among other
things, repeal of the national broadcast ownership rule.  In addition, on November 19, 1999, Viacom, Inc.
filed comments in that proceeding seeking repeal of the same rule and the dual network rule.  The Fox and
Viacom filings were not considered in the 1998 Biennial Regulatory Review proceeding because they were
untimely filed.  1998 Biennial Regulatory Review Report, n.76.  They will be included, however, in the
record of the proceeding that will be initiated to seek comment on this staff Report.
 	National Television Ownership Report and Order, at  35.
 	1998 Biennial Regulatory Review Report,  25-30.
 	47 C.F.R.  73.3555(e)(2).  Section 73.3555(e)(2) explains that "national audience reach" is based on
the number of television households in DMAs, and that UHF television stations are credited with reaching
only 50 percent of the television households in the DMA.
 	47 C.F.R.  73.658(g).
 	In the Matter of Amendment of Section 73.658(g) of the Commission's Rules - The Dual Network Rule,
MM Docket No. 00-108, Notice of Proposed Rule Making, FCC 00-213, June 20, 2000.
 	47 C.F.R.  74.134.
 	In the Matter of Elimination of Experimental Broadcast Ownership Restrictions, MM Docket No. 00-
105, Notice of Proposed Rule Making, FCC 00-203, June 20, 2000.
 	47 C.F.R.  76.501(a).
 	In the Matter of Review of the Commission's Regulations Governing Attribution of Broadcast and
Cable/MDS Interests; Review of the Commission's Regulations and Policies Affecting Investment in the
Broadcast Industry; and Reexamination of the Commission's Cross-Interest Policy, Report and Order, 14
FCC Rcd 12559 (1999) (1999 Attribution Report and Order).
 	In the Matter of Review of the Commission's Rules Regarding the Main Studio and Local Public
Inspection Files of Broadcast Television and Radio Stations, Report and Order, 13 FCC Rcd 15691 (1998),
revised in part on reconsideration, 14 FCC Rcd 11113 (1999) (Main Studio and Public File Rules Report
and Order).  See also 47 C.F.R.  73.1125; 73.3526 and 73.3527.
 	In the Matter of 1998 Biennial Regulatory Review - Amendment of Parts 73 and 74 Relating to Call
Sign Assignments for Broadcast Stations, Report and Order, 14 FCC Rcd 1235 (1998) (Call Sign Report
and Order).
 	47 C.F.R.  73.3550.
 	47 C.F.R.  74.783.
 	Pub. Law No. 105-33, 111 Stat. 251 (1997).
 	In the Matter of Implementation of Section 309(j) of the Communications Act - Competitive Bidding
for Commercial Broadcast and Instructional Television Fixed Service Licenses; Reexamination of the
Policy Statement on Comparative Broadcast Hearings; and Proposals to Reform the Commission's
Comparative Hearing Process to Expedite the Resolution of Cases, First Report and Order, 13 FCC Rcd
15920 (1998), on reconsideration, 14 FCC Rcd 8724, on further reconsideration, 14 FCC Rcd 12541
(1999).
 	While concluding in the Report and Order that the channels reserved for ITFS were not exempt from
competitive bidding, the Commission announced that, given the instructional nature of the ITFS service
and the long-standing reservation of the ITFS spectrum for noncommercial educational use, it would
request Congress to clarify whether it intended the Commission's expanded auction authority to include
ITFS.  First Report and Order, 13 FCC Rcd at 15999-16002.
 	In the Matter of 1998 Biennial Regulatory Review - Streamlining of Mass Media Applications, Rules,
and Processes; Policies and Rules Regarding Minority and Female Ownership of Mass Media Facilities,
Report and Order, 13 FCC Rcd 23056 (1998), on reconsideration, 14 FCC Rcd 17525 (1999) (1998
Nontechnical Streamlining Report and Order).
 	47 C.F.R.  73.3597.
 	While copies of sales agreements are no longer required as part of the application for assignment or
transfer, the documents must still be filed for the purpose of making the contracts and agreements available
to the public in the Commission's public reference room.
 	While copies of contour overlap maps are no longer required as an exhibit to the application, the maps
must still be filed for the purpose of making the maps available to the public in the Commission's public
reference room.
 	47 C.F.R.  73.3615.
 	In the Matter of 1998 Biennial Regulatory Review - Streamlining of Radio Technical Rules in Parts 73
and 74 of the Commission's Rules, Notice of Proposed Rulemaking and Order, 13 FCC Rcd 14849 (1998)
(Technical Streamlining Notice)
 	In the Matter of 1998 Biennial Regulatory Review - Streamlining of Radio Technical Rules in Parts 73
and 74 of the Commission's Rules, First Report and Order, 14 FCC Rcd 5272 (1999) (1999 Technical
Streamlining First Report and Order).  The proposals upon which the Commission has not yet acted pertain
to whether the Commission should allow negotiated interference agreements between or among FM
broadcast stations to accept new or increased interference in connection with substantial facilities
improvements.  Technical Streamlining Notice, 13 FCC Rcd at 14857-63,  17-27.
 	47 C.F.R.  73.3571, 73.3573, and 74.1233.
 	47 C.F.R.  73.3517.  Two applications are "related" if the grant of one is necessary to permit the grant
of the second application.  Thus, the "lead" application in a group typically will not be  "contingent" on any
other application, but nevertheless will be counted as a "related" application.  1999 Technical Streamlining
Report and Order, 14 FCC Rcd at 5282 n.43.
 	47 U.S.C.  623(a)(2); 47 C.F.R.  76.905 (a).
 	47 C.F.R.  76.907.
 	The Satellite Home Improvement Act of 1999 (SHVIA), Title I of the Intellectual Property and
Communications Omnibus Reform Act of 1999 (IPACORA), Pub. Law No. 106-113, 113 Stat. 1501.
 	Id.
 	47 U.S.C. 533.
 	47 C.F.R  76.503.
 	Time Warner Entertainment Co., L.P. v. United States of America, 211 F.3d 1313 (D.C. Cir. 2000).
 	47 U.S.C.  534 (b)(4)(B).
 	Carriage of the Transmissions of Digital Television Broadcast Stations, Memorandum Opinion and
Order and Notice of Proposed Rulemaking, 13 FCC Rcd 15092 (1998)
 	Commercial Availability of Competitive Navigation Devices, Order on Reconsideration, 14 FCC Rcd
7596 (1999).
 	General Instrument Corp. v. FCC, 213 F.3d 724 (D.C. Cir., June 6, 2000)
 	Telecommunications Services Inside Wiring: Customer Premises Equipment, and Implementation and
Competition Act of 1992: Cable Home Wiring, Report and Order and Second Notice of Proposed
Rulemaking, 13 FCC Rcd 3659 (1997). The Commission is currently reviewing the petitions for
reconsideration and comments filed in this proceeding.
 	13 FCC Rcd 3680.
 	13 FCC Rcd at 3778.
 	Amendment of the Commission's Rules for Implementation of its Cable Operations and Licensing
System, CSB Docket 00-78, Notice of Proposed Rule Making, FCC 00-165, May 23, 2000.
 	The Supreme Court concluded that section 505 of the 1996 Act, which provides statutory authority for
47 C.F.R.  76.227, violates the First Amendment.
 	See FCC and NARUC to Host Consumer Friendly Billing Workshop on March 29, 2000, Public
Notice, DA 00-558, Mar. 29, 2000.  This forum was co-sponsored by the National Association of
Regulatory Utility Commissioners (NARUC).
 	See http://www.fcc.gov/marketsense.  This pamphlet is also available by contacting the FCC.
 	See FCC to Hold Telephone Customer Service Public Forum, Public Notice, DA-1209, June 1, 2000.
 	See Domestic Interexchange Carriers Detariffing Order Takes Effect; Common Carrier Bureau
Implements Nine-Month Transition Period; Comment Sought on Modifications to Transition Plan, Public
Notice, DA 00-1028, May 9, 2000.
 	Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities, Report and Order, 15 FCC Rcd 5140.
 	See FCC to Convene a Public Forum on Telecommunications Relay Services, Public Notice, Feb. 18,
2000, at http://www.fcc.gov/Bureaus/Consumer_Information/Public_Notices/2000/pnci0018.html.
 	47 U.S.C.  257(c).
 	Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat. 56 (1996).
 	47 U.S.C.  257(a).
 	See In the Matter of Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small
Businesses, Notice of Inquiry, 11 FCC Rcd 6280 (1996).
 	See In the Matter of Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small
Businesses, Report, 12 FCC Rcd 16802 (1997).
 	47 U.S.C.  257(b).
 	Regulatory Flexibility Act of 1980, as amended, 5 U.S.C.  601 et seq.; Small Business Act, 15 U.S.C.
 632.
 	The "Small Business Regulatory Enforcement Fairness Act of 1996" (SBREFA) was signed into law
as Title II of the Contract With America Advancement Act of 1996, Pub. Law No. 104-121, 110 Stat. 847
(1996) (CWAAA).
 	See 5 U.S.C.  601-612.
 	1997 Report, 12 FCC Rcd at 16853 (94).
 	Since 1996, the Commission had consistently included small incumbent LECs in its analyses, but had
stated that it was doing so out of an abundance of caution concerning the status of incumbent LECs.
 	See, e.g., 64 Fed. Reg. 63881, 65368 (Nov. 22, 1999).  The Unified Agenda is typically published in
April and October of each year.  The Unified Agenda project is overseen by the Government Services
Administration's Regulatory Information Service Center.
 	47 C.F.R. Parts 2, 5, 15 and 18.
 	Amendment of Part 5 of the Commission's Rules to Revise the Experimental Radio Service
Regulations, Report and Order, FCC 98-283, 13 FCC Rcd 21391 (1998).
 	Amendment of Parts 2, 15, 18, and Other Parts of the Commission's Rules to Simplify and Streamline
the Equipment Authorization Process for Radio Frequency Equipment, Report and Order, FCC 98-58, 13
FCC Rcd 11415 (1998).
 	Amendment of Parts 2, 25 and 68 of the Commission's Rules to Further Streamline the Equipment
Authorization Process for Radio Frequency Equipment, Modify the Equipment Authorization Process for
Telephone Terminal Equipment, Implement Mutual Recognition Agreements and Begin Implementation of
Global Mobile Personal Communications by Satellite Arrangements, Report and Order, FCC 98-338, 13
FCC Rcd 24687 (1998).
 	See FCC Provides Further Information on the Accreditation Requirements for Telecommunication
Certification Bodies, Public Notice, DA 99-1640, Aug. 17, 1999.
 	Amendment of Part 15 of the Commission's Rules to Provide for Unlicensed National Information
Infrastructure Devices at 5 GHz, Report and Order, FCC 97-5, 12 FCC Rcd 1576, Memorandum Opinion
and Order, 13 FCC Rcd 14355 (1998).
 	Amendment of Parts 2 and 15 of the Commission's Rules to Permit Use of Radio Frequencies Above
40 GHz for New Radio Applications, Third Report and Order, 13 FCC Rcd 15074, recon. FCC 00-161
(adopted May 8, 2000).
 	Amendment of Part 15 of the Commission's Rules Regarding Spread Spectrum Devices, Notice of
Proposed Rulemaking, 14 FCC Rcd 13046 (1999).
 	Revision of Part 15 of the Commission's Rules Regarding Ultra-Wideband Transmission Systems,
Notice of Inquiry, 13 FCC Rcd 16376; Notice of Proposed Rulemaking, FCC 00-163 (adopted May 15,
2000).
 	Amendment of Parts 2 and 90 of the Commission's Rules to Allocate the 5.850-5.925 GHz Band to the
Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services, Report
and Order, 14 FCC Rcd 18221 (1999).
 	Amendment of Parts 2 and 95 of the Commission's Rules to Create a Wireless Medical Telemetry
Service, Notice of Proposed Rule Making, 14 FCC Rcd 16719 (1999).
 	Amendment of the Commission's Rules with Regard to the 3650-3700 MHz Government Transfer
Band, Notice of Proposed Rulemaking, 14 FCC Rcd 1295 (1999).
 	Principles for Reallocation of Spectrum to Encourage the Development of Telecommunications
Technologies for the New Millennium, Policy Statement, 14 FCC Rcd 19868 (1998).
 	Inquiry Regarding Software Defined Radios, Notice of Inquiry, 15 FCC Rcd 5930 (2000).
 	47 C.F.R. Part 15 and Part 18.
 	See In the Matter of 1998 Biennial Regulatory Review - Amendment of Part 18 of the Commission's
Rules to Update Regulations for RF Lighting Devices, First Report and Order, 14 FCC Rcd 9840 (1999).
 	See In the matter of 1998 Biennial Regulatory Review - Amendment of Part 18 of the Commission's
Rules to Update Regulations for RF Lighting Devices, Notice of Proposed Rulemaking, 13 FCC Rcd 11307
(1998).
 	2000 Biennial Regulatory Review Regulatory Review of Part 68 of the Commission's Rules and
Regulations, CC Docket No. 99-216, Notice of Proposed Rulemaking, FCC 00-171, adopted May 15, 2000.
 	See American National Standard for Method of Measurement of the Electromagnetic Operational
Compatibility of Unlicensed Personal Communications Services (UPCS) Devices, ANSI C63.17 (Mar. 24,
1998).
 	47 C.F.R. 15.231
 	See FCC's Office of Engineering and Technology to Host Forum on 90 GHz Technologies, Public
Notice, DA 00-1191, May 31, 2000.
 	Amendment of the Rules Resulting From Reexamination of Technical Parameters, Report and Order,
FCC 2d 903 (1984).
 	See 47 C.F.R.  1.1200 et seq.
 	Amendment of 47 C.F.R.  1.1200 et seq. Concerning Ex Parte Presentations in Commission
Proceedings, Memorandum Opinion and Order, 14 FCC Rcd 18831 (1999).
 	Examination of Current Policy Concerning the Treatment of Confidential Information Submitted to the
Commission, Report and Order, FCC 98-184, 13 FCC Rcd 24816 (1998).
 	Amendment of Part O of the Commission's Rules to Implement The Electronic Freedom of Information
Act Amendments of 1996, Report and Order, 13 FCC Rcd 3419 (1997).
 	Amendment of the Commission's Rules of Practice and Procedure, Order, 14 FCC Rcd 7593 (1999).
 	1998 Biennial Regulatory Review - Review of Accounts Settlement in the Maritime Mobile and
Maritime Mobile-Satellite Radio Services, Order, 14 FCC Rcd 13504 (1999).  The Commission concluded
that it would cease operating as an accounting authority for settling accounts for maritime mobile, maritime
satellite, aircraft and handheld terminal radio services. The Commission will transition to full privatization
of the account-settlement function.
 	Draft Strategic Plan: A New FCC for the 21st Century, p. 9.
 	47 U.S.C.  158, 159.
 	42 USC  4321-4347.
 	5 U.S.C.  504.
 	Pub. Law No. 95-602, 92 Stat 2955 (1978) (codified at 29 U.S.C.  794).
 	21 U.S.C.  862.
 	See Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules
to Facilitate the Development and Use of the Universal Licensing System in the Wireless
Telecommunications Service, Report and Order, 13 FCC Rcd 21027 (1998) (ULS Report and Order);
Amendment of 47 C.F.R.  1.1200 et seq. Concerning Ex Parte Presentations in Commission Proceedings,
Report and Order, 12 FCC Rcd 7348 (1997); Amendment of Part 1 of the Commission's Rules - Competitive
Bidding Procedures, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, Third
Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374 (1997) (modified
by Erratum, DA 98-419) (rel. Mar. 2, 1998).
 	In The Matter of Electronic Filing of Documents in Rulemaking Proceedings, Report and Order, 13
FCC Rcd 11322 (1998).
 	47 U.S.C.  208.
 	47 C.F.R. Part 1, subpart F.
 	Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to
Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications
Service, 98-20, Report and Order, 13 FCC Rcd 21027 (1998) (ULS Report and Order).
 	47 C.F.R. 1.913.
 	Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to
Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications
Service, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 11476 (1999).
 	The Commission's environmental rules are codified at 47 C.F.R.  1.1301-1.1319.
 	42 USC  4321-4347.
 	16 USC  1531-1543.
 	Id.  470.
 	Id.  1131-1136.
 	Id.  470aa.
 	Id.  668dd.
 	See Executive Orders 11988 (floodplains) and 11990 (wetlands).
 	40 C.F.R.  1501-1508.
 	47 C.F.R.  1.1307(a)(8).
 	Id.  1.1307(b).
 	Id.  1.1307(a).
 	Id.  1.1306.
 	Id.  1.1308, 1.1311.
 	Id.  1.1313.
 	Id.  1.1314-1.1319.
 	Pub. Law No. 104-104, 104 Stat. 56, 149-151 (amending 47 U.S.C.  224).
 	See 1977 Senate Report, S. Rep. No. 580, 95th Cong., 1st Sess. 19, 20 (1977).
 	Id.
 	In the Matter of Amendment of the Commission's Rules and Policies Governing Pole Attachments,
Report and Order, 15 FCC Rcd 6453 (2000).
 	In the Matter of Implementation of Section 703(e) of the Telecommunications Act of 1996, Report and
Order, 13 FCC Rcd 6777 (1998); rev. in part, Gulf Power, et al., v. FCC, 208 F.3d 1263 (11th Cir., rel. Apr.
11, 2000). Petitions for rehearing en banc have been filed by the Commission and intervenors.
 	Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, First
Report and Order, 11 FCC Rcd 15499 (1996).
 	In the Matter of the Local Competition Provisions in the Telecommunications Act of 1996, Order on
Reconsideration, FCC 99-266 (rel. Oct. 26, 1999).
 	See Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66 (1993).
 	See Balanced Budget Act of 1997, Pub. Law No. 105-33,  3002, 111 Stat. 251 (1997) (amending 47
U.S.C.  309(j)).
 	In service-specific rule making proceedings, the Commission continues to establish the appropriate
size standards for each auctionable service.
 	47 U.S.C.  309(j)(3)(B).
 	See Amendment of Part 1 of the Commission's Rules - Competitive Bidding Procedures, Allocation of
Spectrum Below 5 GHz Transferred from Federal Government Use, Third Report and Order and Second
Further Notice of Proposed Rule Making, 13 FCC Rcd 374 (1997) (modified by Erratum, DA 98-419 (rel.
Mar. 2, 1998).
 	47 C.F.R.  1.5000-1.5007.
 	47 C.F.R. Part 17.
 	47 U.S.C.  303(q).
 	Streamlining the Commission's Antenna Structure Clearance Procedure, Report and Order, 11 FCC
Rcd 4272 (1995).
 	Streamlining the Commission's Antenna Structure Clearance Procedure, Memorandum Opinion and
Order on Reconsideration, FCC 00-76 (rel. Mar. 8, 2000).
 	See, e.g., 47 C.F.R.  1.923(d) (adopted in Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95,
97, and 101 of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing
System in the Wireless Telecommunications Service, Report and Order, 13 FCC Rcd 21027 (1998)).
 	47 C.F.R.  17.6(c) (duplicates procedures described in 17.4(e)); 17.23 (should reflect version 1K of
the FAA advisory circular); 17.45 (because the applicable FAA advisory circular will specify the
appropriate temporary warning lights, these provisions may be in conflict); 17.48 (telegraph notification is
no longer acceptable); 17.53 and 17.54 (technical specifications duplicates those specifications
incorporated by reference to the FAA advisory circulars).
 	47 C.F.R.  17.4(b), (d) (submission of paper copy of FAA study no longer necessary); 17.57
(notification is now made via FCC Form 854); 17.58 (Commission previously determined that there is no
longer a basis for this reporting requirement).
 	47 C.F.R.  17.24-43, associated section headings and notes (there is no need to retain these reserved
sections and headings); 17.4(g) and 17.49 (posting and logging requirements have caused confusion); 17.22
(should say that specified painting and lighting will be printed on the registration document); 17.56 ("as
soon as practical" time frame is too indefinite); and 17.57 (specify which "owner" should file in a change
of ownership situation).
 	47 C.F.R.  20.6.
 	Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of Mobile
Services, Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR
Systems in the 800 MHz Frequency Band, Amendment of Parts 2 and 90 of the Commission's Rules to
Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896-901 MHz and 935-940
MHz Band Allotted to the Specialized Mobile Radio Pool, Third Report and Order, 9 FCC Rcd 7988, 7992
(1994).
 	1998 Biennial Regulatory Review, Spectrum Aggregation Limits for Wireless Telecommunications
Carriers, Cellular Telecommunications Industry Association's Petition for Forbearance From the 45 MHz
CMRS Spectrum Cap, Amendment of Parts 20 and 24 of the Commission's Rules - Broadband PCS
Competitive Bidding and Commercial Mobile Radio Service Spectrum Cap, Implementation of Sections
3(n) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, Report and Order, 15
FCC Rcd 9219 (1999).
 	Id.
 	Id. at 25-26.
 	Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal
Communications Services (PCS) Licensees, Sixth Report and Order and Order on Reconsideration, FCC
00-313 (rel. Aug. 29, 2000).
 	47 C.F.R.  20.11.
 	47 U.S.C.  332(c)(1)(B).
 	See 47 U.S.C.  332.
 	See Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of
Mobile Services, Second Report and Order,  9 FCC Rcd 1411 (1994) (Second Report and Order).
 	See 47 U.S.C.  251, 252.
 	Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC
Docket No. 96-68, Interconnection between Local Exchange Carriers and Commercial Mobile Radio
Service Providers, 11 FCC Rcd 15499, 16195 (1996) (Local Competition First Report and Order).
 	Local Competition First Report and Order at  1023.
 	47 C.F.R.  20.11(c).  See also Local Competition First Report and Order at 16195.
 	Letter from Sprint Spectrum L.P., d/b/a Sprint PCS, to Thomas J. Sugrue, (filed Feb. 2, 2000).
 	See Comment Sought on Reciprocal Compensation for CMRS Providers, Public Notice, CC Docket
Nos. 96-98, 95-185, and WT Docket No. 97-207 (rel. May 11, 2000).
 	See Iowa Utilities Board v. F.C.C, (8th Cir. July 18, 2000).
 	47 C.F.R.  20.12(b).
 	Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, First
Report and Order, 11 FCC Rcd 18455 (1996) (CMRS Resale Order).
 	Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services,
Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 16340 (1999) (CMRS Resale
Reconsideration Order).
 	47 U.S.C.  201, 202.
 	Id.
 	Fifth Competition Report, supra, at 28-29.
 	Id at 29.
 	CMRS Resale Reconsideration Order at 69.
 	47 C.F.R.  20.12(c).
 	Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, Second
Report and Order and Third Notice of Proposed Rulemaking, 11 FCC Rcd 9462 (1996) (CMRS Roaming
Order).
 	Id.
 	Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, Third
Report and Order and Memorandum Opinion and Order on Reconsideration, FCC 00-251 (adopted July
13, 2000; released August 28, 2000).
 	47 C.F.R.  20.18.
 	Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling
Systems, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 18676 (1996).
 	Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling
Systems, Third Report and Order, 14 FCC Rcd 17388, 17436 (1999) (Third Report and Order).
 	Revision of the Commission's Rules To Ensure Compatibility with Enhanced 911 Emergency Calling
Systems, Fourth Memorandum Opinion and Order, FCC 00-326 (adopted August 24, 2000; released
September 8, 2000).
 	47 C.F.R. 20.20.
 	47 C.F.R. 20.20(a).
 	Amendment of the Commission's Rules to Establish Competitive Service Safeguards for Local
Exchange Carrier Provision of Commercial Mobile Radio Services, Report and Order, 12 FCC Rcd 15668
(1997).
 	47 C.F.R. 20.20(f).
 	Amendment of the Commission's Rules to Establish Competitive Service Safeguards for Local
Exchange Carrier Provision of Commercial Mobile Radio Services, First Order on Reconsideration, 14
FCC Rcd 11343 (1999) (denying petition Independent Telephone and Telecommunications Alliance
(ITTA); Amendment of the Commission's Rules to Establish Competitive Service Safeguards for Local
Exchange Carrier Provision of Commercial Mobile Radio Services, Second Order on Reconsideration, 15
FCC Rcd 414 (1999) (denying petitions of Aliant Communications Co. and Guam Cellular and Paging,
Inc.).
 	Two-Way Rulemaking, 13 FCC Rcd 19112 (1998), recon., 14 FCC Rcd 12764 (1999), further recon.,
FCC No. 00-244 (rel. July 21, 2000).
 	47 C.F.R. Part 22.
 	Fifth Competition Report, supra at 9-27, 36-63.
 	Biennial Regulatory Review - Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97 and 101
of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System in the
Wireless Telecommunications Services, Report and Order, 13 FCC Rcd 21027 (1998); Memorandum
Opinion and Order on Reconsideration, 14 FCC Rcd 11145 (1998).
 	In the Matter of Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future
Development of Paging Systems and Implementation of Section 309(j) of the Communications Act -
Competitive Bidding, Memorandum Opinion and Order on Reconsideration and Third Report and Order,
14 FCC Rcd 10030 (1999) (Paging Systems Reconsideration Order).
 	47 C.F.R.  22.937.
 	47 C.F.R.  22.323.
 	47 C.F.R Part 22, subpart E.
 	47 C.F.R.  22.501-22.529.
 	47 C.F.R.  22.531-22.559.
 	47 C.F.R.  22.561-22.589.
 	47 C.F.R.  22.591-22.603.
 	47 C.F.R.  22.621-22.627.
 	47 C.F.R.  22.651-22.659.
 	Fifth Competition Report, supra, at 57-58.
 	Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of
Paging Systems, Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 2732
(1997).
 	See Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules
to Facilitate the Development and Use of the Universal Licensing System in the Wireless
Telecommunications Service, Report and Order, 13 FCC Rcd 21027 (1998).
 	47 C.F.R. Part 22, subpart F.
 	See summary of Part 22, subpart E, supra.
 	Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of
Paging Systems, Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 2732
(1997).
 	47 C.F.R.  22.723.
 	47 C.F.R.  22.417, 22.727, 22.729.
 	47 C.F.R.  22.757.
 	47 C.F.R. Part 22, subpart G.
 	The original General Aviation technology allowed only one operator in each station location. In 1994,
however, the Commission mandated use of a new technology, Air-Ground Radiotelephone Automated
Service ("AGRAS"), that, among other improvements, allowed two or more competing ground stations in a
location to share control channels.
 	Two of the three licensees who failed to construct surrendered their licenses voluntarily, and the third
license was ultimately canceled by the Commission.
 	In the Matter of AirCell, Inc., Petition Pursuant to Section 7 of the Act, for a Waiver of the Airborne
Cellular Rule, or, in the Alternative for a Declaratory Ruling, Order, 14 FCC Rcd 806 (WTB 1998)
(AirCell Order), affirmed, Memorandum Opinion and Order, 15 FCC Rcd 9622 (2000).
 	47 C.F.R. Part 22, subpart H.
 	The idea of a cellular architecture, that is, a system of base stations, each having a small coverage area,
which makes possible the reuse of radio channels at relatively short distances, had been conceptualized in
the 1950s, but did not become technologically feasible until the late 1970s, when advances in computer
technology needed to manage automatic hand-off of telephone calls between cells were realized.
 	Fifth Competition Report, supra, at 9-27, 36-63.
 	Amendment of the Commission's Rules to Permit Flexible Service Offerings in the Commercial Mobile
Radio Services, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 8965
(1996) (CMRS Flex Order/FNPRM).
 	Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to
Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications
Service, Report and Order, 13 FCC Rcd 21027 (1998) (ULS Report and Order), affirmed and modified in
part, ULS Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 11476 (1999).
 	47 C.F.R.  22.937.
 	47 C.F.R.  22.933.
 	47 C.F.R. Part 22, subpart I.
 	47 C.F.R.  22.1007.
 	We also note that service is provided by other services as well: e.g., PCS, WCS, satellite, VHF
maritime, private radio (formerly petroleum radio service), private (offshore), and microwave.
 	47 U.S.C.  1002.
 	47 C.F.R. Part 22, subpart J.
 	Id.
 	See Communications Assistance for Law Enforcement Act, Third Report and Order, 14 FCC Rcd
16794 (1999).
 	47 C.F.R. Part 24, subpart J.
 	64 C.F.R. Part 64, subpart W.
 	47 U.S.C.  154, 301, 303.
 	47 C.F.R. Part 24.
 	Narrowband PCS operates on the 901-902, 930-931, and 940-941 MHz bands.  Broadband PCS
operates in the 1850-1910 and 1930-1990 MHz bands.
 	See Communications Assistance for Law Enforcement Act (CALEA), Pub. Law No. 103-414, 108
Stat. 4279 (1994).
 	See Amendment of the Commission's Rules to Establish New Personal Communications Services,
Second Report and Order, 8 FCC Rcd 7700 (1993); Amendment of the Commission's Rules to Establish
New Personal Communications Services, Third Report and Order, 9 FCC Rcd 1337 (1994).
 	See Implementation of Section 309(j) of the Communications Act - Competitive Bidding, Fifth Report
and Order, 9 FCC Rcd 5532 (1994); See Implementation of Section 309(j) of the Communications Act -
Competitive Bidding, Fourth Memorandum Opinion and Order, 9 FCC Rcd 6858 (1994); See
Implementation of Section 309(j) of the Communications Act - Competitive Bidding, Fifth Memorandum
Opinion and Order, 10 FCC Rcd 403 (1994).
 	See Amendment of the Commission's Rules to Establish New Personal Communications Services,
Narrowband PCS, Implementation of Section 309(j) of the Communications Act - Competitive Bidding
Narrowband PCS, Second Report and Order and Second Further Notice of Proposed Rule Making, 10 FCC
Rcd 403 (1994) (Narrowband Second Report and Order).
 	See Communications Assistance for Law Enforcement Act, CC Docket No. 97-213, Third Report and
Order, FCC 99-230 (rel. Aug. 31, 1999), aff'd in part, rev'd in part, United States Telecom Ass'n v. FCC,
D.C. Circuit No. 99-1442 (Aug. 15, 2000).
 	47 U.S.C.  309(j)(3).
 	Fifth Competition Report, supra, at 28-29.
 	See Narrowband Second Report and Order, 10 FCC Rcd at 403.
 	See Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal
Communications Services (PCS) Licensees, WT Docket No. 97-82, Further Notice of Proposed Rule
Making, FCC 00-197 (rel. June 7, 2000).
 	Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal
Communications Services (PCS) Licensees, Sixth Report and Order and Order on Reconsideration, FCC
00-313 (adopted August 23, 2000; released August 28, 2000).
 	47 C.F.R. Part 26.
 	Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, 4660-4685 MHz,
Second Report and Order, 11 FCC Rcd 624 (1995) (GWCS Second Report and Order).
 	Id., 11 FCC Rcd at 630-31,  12.
 	Wireless Telecommunications Bureau Announces Postponement of GWCS Auction, Public Notice,
Report No. AUC-98-19-B (Auction No. 19), DA 98-792, (rel. Apr. 24, 1998).
 	Letter to the Honorable William E. Kennard, Chairman, Federal Communications Commission, from
Larry Irving, Assistant Secretary for Communications, U.S. Department of Commerce (Mar. 30, 1999).
 	The 4.9 GHz Band Transferred From Federal Government Use, Notice of Proposed Rulemaking, 15
FCC Rcd 4778 (2000).
 	Id., Appendix A.
 	Id.,  2.
 	47 C.F.R. Part 27.  Because Part 26 applies only to the 4660-4685 MHz band, we propose to delete
Part 26 of the Commission's Rules containing General Wireless Communications Services (GWCS) rules.
47 C.F.R. Part 26.
 	47 C.F.R. Part 27
 	47 U.S.C.  309(j).
 	See Amendment of the Commission's rules to Establish Part 27, the Wireless Communications Service
(WCS), Report and Order, 12 FCC Rcd 10785 (1997) (WCS Report and Order), recon. Memorandum
Opinion and Order, 12 FCC Rcd 3977 (1997).
 	Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission's
Rules, First Report and Order, 15 FCC Rcd 476 (2000).
 	See 47 U.S.C.  337(e).  See Advanced Television Systems and Their Impact Upon Existing Television
Broadcast Service, Reconsideration of Fifth Report and Order, 13 FCC Rcd 6860, 6887 (1998).
 	WCS Report and Order, 12 FCC Rcd 10785 at  26 (1997).
 	Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission's
Rules, Carriage of the Transmissions of Digital Television Broadcast Stations, Review of the Commission's
Rules and Policies Affecting the Conversion to Digital Television, WT Docket No. 99-168, CS Docket No.
98-120, MM Docket No. 00-83, Memorandum Opinion and Order and Further Notice of Proposed
Rulemaking, FCC 00-224, (June 30, 2000).
 	Letter to the Honorable William E. Kennard, Chairman, Federal Communications Commission, from
Larry Irving, Assistant Secretary for Communications, U.S. Department of Commerce (Mar. 30, 1999).
 	The 4.9 GHz Band Transferred From Federal Government Use, Notice of Proposed Rulemaking, 15
FCC Rcd 4778 (2000).
 	Id.
 	47 U.S.C.  220.
 	47 C.F.R. Part 32.
 	See Implementation of the Telecommunications Act of 1996:  Accounting Safeguards Under the
Telecommunications Act of 1996, Report and Order, 11 FCC Rcd 17539 (1996).
 	The reporting threshold is modified annually to adjust for inflation.  The current reporting threshold is
$114 million, so that only carriers with $114 million or more in annual operating revenues report their Part
32 USOA results in the Automated Reporting Management Information System ("ARMIS") program.
 	See 1998 Biennial Regulatory Review - Review of Accounting and Cost Allocation Requirements,
Report and Order in CC Docket No. 98-81, Order on Reconsideration in CC Docket No. 96-150, Fourth
Memorandum Opinion and Order in AAD File No. 98-43, 14 FCC Rcd 11396 (1999).
 	Phase I Order
 	See, e.g., 47 C.F.R.  32.5110, 5111, 5112, 5120, 5122, 5123, 5124, 5125, 5126, 5129, 5160, 5169,
5301, 5302, 7600, 7610, 7620, 7630, 7640.
 	See 47 C.F.R.  32.2000.
 	See e.g., 47 C.F.R.  32.2211 (analog switching account), 2215 (electro-magnetic switching account).
 	See 47 C.F.R.  32.27.
 	Smith v. Illinois Bell Tel. Co., 282 U.S. 133, 148 (1930).
 	Jurisdictional Separations Reform, 12 FCC Rcd 22120 (1997).
 	This would freeze the relative proportions of plant allocated to the various separations plant categories.
Changes in the relative proportion of plant allocated to the various plant categories can change separations
results if the plant categories involved are apportioned between the federal and state jurisdictions on the
basis of different factors.
 	Recommended Decision, Jurisdictional Separations Reform and Referral to the Federal-State Joint
Board CC Docket No. 80-286 FCC 00J-2 (rel. July 21, 2000).
 	These provisions include 47 C.F.R.  36.631(a), 36.631(b), and 36.641(b).
 	MCI WorldCom, Inc. v FCC, 209 F.3d 132 (D.C. Cir. 2000).
 	47 U.S.C.  211.  Section 211 also permits the Commission to require the filing of any other contracts.
 	47 U.S.C.  219.
 	47 U.S.C.  220.
 	Only those carriers with annual operating expenses that equal or exceed the indexed revenue threshold
defined in  32.9000 and have been found by the Commission to be a dominant carrier with respect to
communications services are required to file depreciation change reports.
 	See 1998 Biennial Regulatory Review: Reform of the International Settlements Policy and Associated
Filing Requirements, Report and Order and Order on Reconsideration, 14 FCC Rcd 7963, 7974,  31
(1999).
 	See 1998 Biennial Regulatory Review - Review of ARMIS Reporting Requirement, Report and Order,
14 FCC Rcd 11443 (1999).
 	Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for
Incumbent LECs: Phase 1, CC Docket No. 99-253, Report and Order, FCC 00-78 (rel. Mar.8, 2000).
 	See 1998 Biennial Regulatory Review: Reform of the International Settlements Policy and Associated
Filing Requirements, Report and Order and Order on Reconsideration, 14 FCC Rcd 7963 (1999).
 	47 U.S.C.  251.
 	47 U.S.C.  252.
 	Iowa Utilities Board v. FCC, No. 96-3321 (8th Cir. rel. July 18, 2000).
 	47 U.S.C.  272.
 	See 47 U.S.C.  214(e), 254.
 	See, e.g., Federal-State Joint Board on Universal Service, Fifth Order on Reconsideration and Fourth
Report and Order, 13 FCC Rcd 14915 (1998);  Federal-State Joint Board on Universal Service, Ninth
Report and Order and Eighteenth Order on Reconsideration, 14 FCC Rcd 20432 (1999).
 	Federal-State Joint Board on Universal Service; Promoting Deployment and Subscribership in
Unserved Areas, Including Tribal and Insular Areas, Twelfth Report and Order, Memorandum Opinion
and Order, and Further Notice of Proposed Rulemaking, FCC 00-208 (rel. June 30, 2000).
 	See 47 C.F.R.  54.719.
 	Order on Reconsideration, Implementation of Infrastructure Sharing Provisions of the
Telecommunications Act of 1996, 62 FR 9704 (rel. Apr. 27, 2000).  This Order also addressed a number of
issues concerning the use of section 259 to facilitate resale, access to intellectual property rights, and
pricing of section 259 arrangements.  Id.
 	47 U.S.C.  203-04.
 	47 U.S.C.  201.
 	47 U.S.C.  202.
 	1998 Biennial Regulatory Review - Part 61 of the Commission's Rules and Related Tariff
Requirements, Report and Order and Further Order on Reconsideration, 14 FCC Rcd 12293 (1999).
 	CALLS Order, 15 FCC Rcd 12962.
 	Access Charge Reform, DA 00-1268 (rel. June 16, 2000)
 	Access Charge Reform, Fifth Report and Order and Further Notice of Proposed Rulemaking, 14 FCC
Rcd 14221, 14234 (1999).
 	47 U.S.C.  214(a).
 	47 C.F.R. Part 63.
 	47 C.F.R.  63.14.
 	47 C.F.R.  63.701, 63.702.
 	Implementation of Section 402(b)(2)(A) of the Telecommunications Act of 1996, 14 FCC Rcd 11364
(1999).
 	Streamlining the International Section 214 Authorization Process and Tariff Requirements, Report and
Order, 11 FCC Rcd 12884, (1996).
 	See 1998 Biennial Regulatory Review-Review of International Common Carrier Regulations, Report
and Order, 14 FCC Rcd 4909 (1999) (1998 International Common Carrier Biennial Regulatory Review
Order), recon. pending.
 	47 U.S.C.  151, 154, 201-205 and 220.
 	47 U.S.C.  223(b).
 	47 C.F.R.  64.301.
 	47 U.S.C.  201, 214, 303 and 308.
 	47 U.S.C.  151, 201-05.
 	47 U.S.C.  151, 152, 154, 201 and 205.
 	Pub. Law No. 101-336,  401, 104 Stat. 327, 366-69 (1990) (adding section 225 to the
Communications Act of 1934, as amended, 47 U.S.C.  225).
 	Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities, Report and Order and Further Notice of Proposed Rulemaking, FCC 00-56 (rel. Mar.
6, 2000) (Improved TRS Order)
 	The Use of N11 Codes and Other Abbreviated Dialing Arrangements, Second Report and Order, FCC
00-257 (rel. Aug. 9, 2000) (N11 Second Report and Order).
 	47 U.S.C.  154, 201-205, 403 and 404.
 	Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer III), Report and
Order, Phase I, 104 FCC 2d 958 (1986) (subsequent citations omitted).
 	Furnishing of Customer Premises Equipment by the Bell Operating Companies and the Independent
Telephone Companies, 2 FCC Rcd 143 (1987), aff'd sub nom., Illinois Bell Telephone Co. v. FCC, 883
F.2d 104 (D.C. Cir.1989).
 	Operator services refer to "any interstate telecommunications service initiated from an aggregator
location that includes, as a component, any automatic or live assistance to a consumer to arrange for billing
or completion, or both, of an interstate telephone call," subject to certain exceptions.  47 C.F.R.  64.708(i).
An "aggregator" is "any person that, in the ordinary course of its operations, makes telephones available to
the public or to transient users of its premises, for interstate telephone calls, using a provider of operator
services." 47 C.F.R.  64.708(b).
 	Policy and Rules Concerning the Interstate, Interexchange Marketplace; 1998 Biennial Review -
Review of Customer Premises Equipment and Enhanced Services Unbundling Rules in the Interexchange,
Exchange Access and Local Exchange Markets, Further Notice of Proposed Rulemaking, FCC Rcd 21531
(1998).
 	Amendment of Policies and Rules Concerning Operator Service Providers and Call Aggregators, CC
Docket No. 94-58, Second Report and Order, 14 FCC Rcd 16569 (1999).
 	47 C.F.R.  64.801.
  	The report filing requirement is limited to carriers with operating revenues exceeding $1 million for
the preceding year.  47 C.F.R.  64.804 (g).
  	47 C.F.R.  64.804 (b)
  	Section 401, Federal Election Campaign Act of 1971, Pub. Law No. 92-225.
 	47 U.S.C.  201 and 220.
 	Average Schedule companies do not do cost studies and do not perform cost allocations pursuant to
Part 64, subpart I.
 	See Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for
Incumbent Local Exchange Carriers: Phase 1, Report and Order, FCC 00-78 (rel. Mar. 8, 2000)
(Comprehensive Accounting Review proceeding).
 	Common Carrier Bureau Announces A Series of Workshops for Phase 2 of the Comprehensive Review
of Accounting and Reporting Requirements, Public Notice, DA 00-754, Apr. 5, 2000, at 1.  See also
Common Carrier Bureau Announces Mid-Sized Carrier Workshop for Phase 2 of the Comprehensive
Review of Accounting and Reporting Requirements, Public Notice, DA 00-926, Apr. 26, 2000.
  	An accounting rate is the price a U.S. facilities-based carrier negotiates with a foreign carrier for
handling one minute of international traffic.  Each carrier's portion of the accounting rate is referred to as
the settlement rate.
  	47 C.F.R.  43.51(e).
  	47 C.F.R.  64.1001.
  47 U.S.C.  151, 201, 202, 203 and 309.
  	The Commission has established benchmarks that govern the international settlement rates that U.S.
carriers may pay foreign carriers to terminate international traffic originating in the United States. See
International Settlement Rates, Report and Order, 12 FCC Rcd 19806 (1997), aff'd sub nom. Cable and
Wireless P.L.C. v. FCC, 166 F.3d 1224 (D.C. Cir. 1999), Report and Order on Reconsideration and Order
Lifting Stay, 14 FCC Rcd 9256 (1999).
  	See 1998 Biennial Regulatory Review: Reform of the International Settlements Policy and Associated
Filing Requirements, Report and Order and Order on Reconsideration, 14 FCC Rcd 7963, 7974  31
(1999).
 	1998 Biennial Regulatory Review: Reform of the International Settlements Policy and Associated
Filing Requirements, Report and Order and Order on Reconsideration,, 14 FCC Rcd 7963 (1999); see
also, FCC Announces Elimination of Existing Service Requirement in 64.1001(k), Public Notice, DA 99-
1558 (rel. Aug. 6, 1999).
 	See FCC Announces Elimination of Existing Service Requirement in 64.1001(k), Public Notice, DA
99-1558 (rel. Aug. 6, 1999).
 	47 U.S.C.  258.
 	Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications
Act of 1996 and Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance
Carriers, First Order on Reconsideration, FCC 00-135 (rel. May 3, 2000).
 	Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications
Act of 1996 and Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance
Carriers, Third Report and Order and Second Order on Reconsideration, FCC 00-255 (rel. Aug. 15, 2000).
 	S. 761, 106th Cong., 2nd Sess. (signed into law June 30, 2000).
 	47 U.S.C.  227.  See also 47 U.S.C.  152(b).
 	See 47 U.S.C.  276.
 	American Public Communications Council v. FCC, 215 F.3d 51 (D.C. Cir. 2000).
 	Bell South, SBC, USWest and Verizon are subject to this requirement.
 	47 U.S.C.  151, 154, and 201-05.
 	47 U.S.C.  151, 154, and 201-05.
 	47 U.S.C.  151, 154, and 201-05.
 	See 47 U.S.C.  254(g).
 	GTE Service Corp. v. FCC, No. 97-1538 (D.C. Cir., July 14, 2000).
 	47 U.S.C.  254(g).
 	47 U.S.C.  151, 152, 154, 201, 202, 220, 251, 271, 272, and 303(r).
 	Regulatory Treatment of LEC Provision of Interexchange Services, Originating in the LEC's Local
Exchange Area and Policy and Rules Concerning the Interstate, Interexchange Market Place, Second
Order on Reconsideration, 14 FCC Rcd 10771 (1999).
 	47 U.S.C.  222.
 	US West v. FCC, 182 F.3d 1224 (10th Cir. 1999), cert. denied, 120 S Ct. 2215 (June 5, 2000) (No. 99-
1427).
 	47 U.S.C.  1004.
 	Communications Assistance for Law Enforcement Act, Report and Order, 14 FCC Rcd 4151 (1999).
 	47 U.S.C.  1002.
 	See Communications Assistance for Law Enforcement Act, CC Docket No. 97-213, Third Report and
Order, 14 FCC Rcd 16794 (1999).
 	Aff'd in part and rev'd in part, United States Telecom Ass'n v. FCC, Nos. 99-1442 et al. (D.C. Cir.
Aug. 15, 2000).
 	47 U.S.C.  222(e).
 	Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer
Information, CC Docket No. 96-115, Third Report and Order, FCC 99-227 (rel. Sept. 9, 1999).
 	47 U.S.C.  201(b) and 258.  These rules were inadvertently placed in subpart U in the 1999 Code of
Federal Regulations.  This error was subsequently corrected and the rules were placed in subpart Y.  65
Fed. Reg. 36637 (June 9, 2000).
 	Truth-in-Billing and Billing Format, Order on Reconsideration, CC Docket No. 98-170, FCC 00-111
(rel. Mar. 29, 2000); Errata, DA 00-745 (rel. Mar. 31, 2000).
 	47 U.S.C.  201 (b).
 	Amendment of Parts 65 and 69 of the Commission's Rules to Reform the Interstate Rate of Return
Prescription and Enforcement Process, Report and Order, 10 FCC Rcd 6788 (1995).
 	Prescribing the Authorized Unitary Rate of Return for Interstate Services of Local Exchange Carriers,
Notice Initiating a Prescription Proceeding and Notice of Proposed Rulemaking, 13 FCC Rcd 20561
(1998).
 	Hush-A-Phone v. United States, 238 F.2d 266 (D.C. Cir. 1956).
 	Hearing Aid Compatibility Act of 1988, 47 U.S.C.  610.
 	47 U.S.C.  227(d)(2).
 	47 U.S.C.  227(d)(1).
 	Office of Engineering and Technology and Common Carrier Bureau Announce the Designation of
Telecommunications Certification Bodies (TCBs) to Approve Radiofrequency and Telephone Terminal
Equipment, Public Notice, DA 00-1223 (rel. June 2, 2000); see also, 1998 Biennial Regulatory Review -
Amendment of Parts 2, 25, and 68 of the Commission's Rules to Further Streamline the Equipment
Authorization Process for Radio Frequency Equipment, Modify the Equipment Authorization Process for
Telephone Terminal Equipment, Implement Mutual Recognition Agreements and Begin Implementation of
the Global Mobile Personal Communications by Satellite (GMPCS) Arrangements, Report and Order, 13
FCC Rcd 24687 (1998).
 	2000 Biennial Regulatory Review of Part 68 of the Commission's Rules and Regulations, CC Docket
No. 99-216, Notice of Proposed Rulemaking, FCC 00-171 (rel. May 22, 2000).
 	47 U.S.C.  201.
 	47 U.S.C.  202.
 	Local exchange carriers subject to price cap regulation must offer a basic set of access rate elements,
but are free to offer additional access services.
 	Access Charge Reform, CC Docket No. 96-262, FCC 00-193, (rel. May 31, 2000).
 	Access Charge Reform, 14 FCC Rcd 14221 (1999).
 	Access Charge Reform for Incumbent LECs Subject to Rate-of-Return Regulation, 13 FCC Rcd 14236
(1998).
 	47 C.F.R. Part 80.
 	See Amendment of the Commission's Rules Concerning Maritime Communications, Second Report and
Order and Second Further Notice of Proposed Rulemaking, 12 FCC Rcd 16949 (1997) (Second Further
Notice).
 	Amendment of the Commission's Rules Concerning Maritime Communications, Third Report and
Order and Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998) (Maritime Third Report and
Order).
 	Id., 13 FCC Rcd at 19856  2.
 	See Second Further Notice, 12 FCC Rcd at 16965.
 	Maritime Third Report and Order, 13 FCC Rcd at 19856  2.
 	See Auction Fact Sheet at http://www.fcc.gov/wtb/auctions/coast/coastfct.html.
 	47.C.F.R. Part 90.
 	Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66. 107 Stat. 312 (largely codified at
47 U.S.C.  332 et seq.) (1993 Budget Act or OBRA).
 	Implementation of Sections 3(n) and 332 of the Communications Act Regulatory Treatment of Mobile
Services, Second Report and Order, 9 FCC Rcd 1411 (1994) (CMRS Second Report and Order).
 	See, e.g., Part 90, subpart L ("Authorization and Use of Frequencies in the 470-512 MHz Band").
 	See, e.g., Part 90, subpart U ("Competitive Bidding Procedures for the 900 MHz Specialized Mobile
Radio Service").
 	Fifth Competition Report, supra, at 9-27, 36-63.
 	Biennial Regulatory Review - Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97 and 101
of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System in the
Wireless Telecommunications Services, Report and Order, 13 FCC Rcd 21027 (1998); Memorandum
Opinion and Order on Reconsideration, 14 FCC Rcd 11145 (1998).
 	In the Matter of 1998 Biennial Regulatory Review - 47 C.F.R. Part 90 - Private Land Mobile Radio
Services, WT Docket No. 98-182, RM-9222, Report and Order and Further Notice of Proposed Rule
Making, FCC 00-235 (rel. July 12, 2000).
 	47 C.F.R. Part 90, subpart L.
 	The seven categories of eligible users are: (1) Public safety; (2) Power and telephone maintenance
licensees; (3) Special industrial licensees; (4) Business licensees; (5) Petroleum, forest products, and
manufacturers licensees; (6) Railroad, motor carrier, and automobile emergency licensees; and (7) Taxicab
licensees.  47 C.F.R.  90.311.
 	47 C.F.R.  90.311.
 	Id.
 	47 C.F.R.  90.307.
 	47 C.F.R.  90.313(a).
 	47 C.F.R.  90.313(c).
 	See Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify
the Policies Governing Them, Report and Order, 10 FCC Rcd 10076 (1995); Memorandum Opinion and
Order, 11 FCC Rcd 17676 (1996); Second Report and Order, FCC 97-61 (rel. Mar. 12, 1997). See 47
C.F.R.  90.187(b).  The FCC has recognized two types of trunking: centralized and decentralized. A
centralized trunked system uses one or more control channels to transmit channel assignment information
to the mobile radios. In a decentralized trunked system, the mobile radios scan the available channels and
find one that is clear.
 	47 C.F.R. Part 90, subpart M.
 	Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle
Monitoring Systems, Report and Order, 10 FCC Rcd 4695 (1995) (LMS Report and Order).
 	The definition of LMS also includes existing Automatic Vehicle Monitoring operations below 512
MHz.  Unlike other LMS operations, LMS systems below 512 MHz may neither offer service to the public
nor provide service on a commercial basis.  See LMS Report and Order, 10 FCC Rcd at 4738,  86.
 	47 C.F.R. Part 90, subpart X.
 	Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle
Monitoring Systems, Second Report and Order, 13 FCC Rcd 15182 (1998) (Second LMS Report and
Order).
 	47 C.F.R.  90.1101.
 	47 C.F.R.  90.1103.
 	Amendment of Parts 2 and 90 of the Commission's Rules to Allocate the 5.850-5.925 GHz Band to the
Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services, Report
and Order, 13 FCC Rcd 14321 (1999).
 	Fifth Competition Report, supra, at 9-27, 36-63.
 	See Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of
Paging Systems, Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 2732
(1997) (Second Report and Order).
 	See Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of
Paging Systems, Memorandum Opinion and Order on Reconsideration and Third Report and Order, 14
FCC Rcd 10030 (1999) (Third Report and Order).
 	See 929 and 931 MHz Paging Auction Closes, Public Notice, DA 00-508 (rel. Mar. 6, 2000).
 	47 C.F.R. Part 90, subpart S.
 	Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66. Title VI  6002(b)(2)(a), (b). 107
Stat. 312 (largely codified at 47 U.S.C.  332 et seq.)
 	Implementation of Sections 3(n) and 332 of the Communications Act Regulatory Treatment of Mobile
Services, Second Report and Order, 9 FCC Rcd 1411 (1994).
 	47 C.F.R. Part 90, subparts U and V.
 	Amendment of Part 90 of the Commission's Rules to Release Spectrum in the 806-821/851-866 MHz
Bands and to Adopt Rules and Regulations Which Govern Their Use, Second Report and Order, 90 FCC 2d
1281 (1982), recon. Memorandum Opinion and Order, 95 FCC 2d 477 (1983).
 	Amendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels
Outside the Designated Filing Areas in the 896-901 MHz and 935-940 MHz Bands Allotted to the
Specialized Mobile Radio Pool, Second Report and Order and Second Further Notice of Proposed Rule
Making, 10 FCC Rcd 6884 (1995) (900 MHz Second Report and Order).
 	Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in
the 800 MHz Frequency Band, First Report and Order, Eighth Report and Order and Second Further
Notice of Proposed Rulemaking, 11 FCC Rcd 1463 (1995) (800 MHz First Report and Order).
 	Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in
the 800 MHz Frequency Band, Second Report and Order, 12 FCC Rcd 19079 (1997) (Second Report and
Order).
 	Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of  SMR Systems
in the 800 MHz Frequency Band, Memorandum Opinion and Order on Remand, 14 FCC Rcd 21679
(Fresno Remand Order).
 	47 C.F.R.  90.655.
 	47 C.F.R.  90.658.
 	47 C.F.R.  90.607(a).
 	47 C.F.R. Part 90, subpart T.
 	47 C.F.R. Part 90, subpart W.
 	The 220-222 MHz band was initially allocated in 1988.  See Amendment of Part 2 of the Commission's
Rules Regarding the Allocation of the 216-225 MHz Band, Report and Order, 3 FCC Rcd 5287 (1988).
Service rules were adopted in 1991.  See Amendment of Part 90 of the Commission's Rules to Provide for
the Use of the 220-222 MHz Band by the Private Land Mobile Radio Services, Report and Order, 6 FCC
Rcd 2356 (1991).
 	Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66. Title VI  6002(b)(2)(a), (b). 107
Stat. 312 (largely codified at 47 U.S.C.  332 et seq.).
 	See Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band
by the Private Land Mobile Radio Services, Third Report and Order, 12 FCC Rcd 10943 (1997) (220 MHz
Third Report and Order).
 	Id.
 	Fifth Competition Report.
 	Id.
 	See 220 MHz Third Report and Order, 12 FCC Rcd 10943 (1997).
 	See Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band
by the Private Land Mobile Radio Services, Fourth Report and Order, 12 FCC Rcd 13453 (1997).
 	See Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band
by the Private Land Mobile Radio Services, Memorandum Opinion Order on Reconsideration, 13 FCC Rcd
14569 (1998).
 	Id.
 	47 C.F.R.  90.737.
 	47 C.F.R. Part 95.
 	Amendment of Part 95 of the Commission's Rules to Provide Regulatory Flexibility in the 218-219
MHz Service, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 19064
(1988).
 	47 C.F.R. Part 1.
 	Amendment of Part 95 of the Commission's Rules to Provide Regulatory Flexibility in the 218-219
MHz Service, Report and Order and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).
 	47 C.F.R. Part 101.
 	See, e.g., 47 C.F.R.  101.21(e), 101.61(c).
 	See, e.g., 47 C.F.R.  101.13, 101.15.
 	Reorganization and Revision of Parts 1, 2, 21, and 94 of the Rules to Establish a New Part 101
Governing  Terrestrial Microwave Fixed Radio Services, Report and Order, 11 FCC Rcd 13449 (1996)
(Part 101 Order).
 	Id., 11 FCC Rcd at 13452-53.
 	See Reorganization and Revision of Parts 1, 2, 21, and 94 of the Rules to Establish a New Part 101
Governing  Terrestrial Microwave Fixed Radio Services, Memorandum Opinion and Order and Notice of
Proposed Rule Making, 15 FCC Rcd 3129 (2000) (Part 101 NPRM) at  7.
 	Id. at  1.
 	Id.
 	See Id.
 	Id. at  2.
 	See 65 Fed Reg 38333-01 (June 20, 2000).
 	See Amendment of Part 1 of the Commission's Rules - Competitive Bidding Procedures, WT Docket
No. 97-82, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, ET Docket
No. 94-32, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374
(1997) (modified by Erratum, DA 98-419 (rel. Mar. 2, 1998) (Part 1 Third Report and Order).
 	See Amendment of Parts 2, 21, 74 and 94 of the Commission's Rules to Allocate Spectrum at 18 GHz
for, and to Establish other Rules and Policies Pertaining to, the Use of Radio in Digital Termination
Systems and in Point-to-Point Microwave Radio Systems for the Provision of Digital Electronic Message
Services, and for other Common Carrier, Private Radio, and Broadcast Auxiliary Services; and to
Establish Rules and Policies for the Private Radio Use of Digital Termination Systems at 10.6 GHz, 54
Rad. Reg. 2d 1091 (1983).
 	See id.
 	See Amendment to Parts 1, 2, and 101 of the Commission's Rules to License Fixed Services at 24 GHz,
Notice of Proposed Rulemaking, 14 FCC Rcd 19263, 19267  5 (1999) (24 GHz NPRM).
 	Id. at 14 FCC Rcd 19265  2.
 	See Amendment of the Commission's Rules to Relocate the Digital Electronic Message Service From
the 18 GHz to the 24 GHz Band and to Allocate the 24 GHz Band for Fixed Service, Memorandum Opinion
and Order, 13 FCC Rcd 15147, 15149  6 (1998) (DEMS MO&O).
 	See 24 GHz NPRM, 14 FCC Rcd at 19275  20.
 	47 C.F.R. Part 101.
 	Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the 27.5-29.5
GHz Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules and Policies
for Local Multipoint Distribution Service and for Fixed Satellite Services, Sixth Notice of Proposed
Rulemaking, 14 FCC Rcd 21520  32 (1999) (LMDS 6th NPRM).
 	Id.
 	See Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the 27.5-
29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, Third Report and Order
and Memorandum Opinion and Order, FCC 00-223 (June 27, 2000) at App. B (LMDS 3rd R&O) for a
comprehensive list of LMDS launches and the types of service each carrier is providing.
 	LMDS 3rd R&O.
 	LMDS 3rd R&O.
 	Id. at  33.
 	See Amendment of Part 1 of the Commission's Rules ? Competitive Bidding Procedures, Allocation of
Spectrum Below 5 GHz Transferred from Federal Government Use, Third Report and Order and Second
Further Notice of Proposed Rule Making, 13 FCC Rcd 374 (1997) (modified by Erratum, DA 98-419 (rel.
Mar. 2, 1998)) (Part 1 Third Report and Order).
 	For example, Section 101.1001, 47 C.F.R.  101.1001, should be amended to remove the cross-
reference to now-deleted Section 100.1003.
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	Federal Communications Commission	FCC 00-XX