[Federal Register Volume 65, Number 119 (Tuesday, June 20, 2000)]
[Rules and Regulations]
[Pages 38214-38216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15576]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[CC Docket No. 96-98; FCC 00-183]


Clarification of the Commission's Rules Regarding Use of 
Combinations of Unbundled Network Elements To Provide Exchange Access 
Service

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification.

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SUMMARY: This document clarifies certain requirements regarding the 
obligation of incumbent local exchange carriers to provide combinations 
of unbundled network elements to competitive telecommunications 
carriers for the provision of exchange access service. This action is 
needed to clarify the requirements that the Commission adopted in the 
Supplemental Order in this docket, and is also intended to provide the 
telecommunications industry with more clearly defined standards for 
using such combinations.

DATES: Effective June 20, 2000.

FOR FURTHER INFORMATION CONTACT: Jodie Donovan, Attorney Advisor, 
Policy and Program Planning Division, Common Carrier Bureau, (202) 418-
1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Supplemental Order Clarification in CC Docket No. 96-98, FCC 00-183, 
adopted May 19, 2000 and released June 2, 2000. On November 5, 1999, 
the Commission released the Third Report and Order and Fourth Further 
Notice of Proposed Rulemaking (FNPRM) in this docket (65 FR 2367, Jan. 
14, 2000; 65 FR 2542, Jan. 18, 2000). On November 24, 1999, the 
Commission released a Supplemental Order (65 FR 2367, 2368, Jan. 14, 
2000; 65 FR 2542, 2547, Jan. 18, 2000) that modified the Third Report 
and Order and Fourth FNPRM with regard to the ability of requesting 
carriers to use combinations of unbundled network elements to provide 
exchange access service prior to resolution of the Fourth FNPRM. The 
Supplemental Order Clarification clarifies certain requirements 
contained in the Supplemental Order. The complete text of the 
Supplemental Order Clarification is available for inspection and 
copying during normal business hours in the FCC Reference Information 
Center, Courtyard Level, 445 12th Street, SW, Washington, DC, and also 
may be purchased from the Commission's copy contractor, International 
Transcription Services (ITS, Inc.), CY-B400, 445 12th Street, SW, 
Washington, DC. It is also available on the Commission's website at 
http://www.fcc.gov.

Synopsis of the Supplemental Order Clarification

    1. The Commission adopts a Supplemental Order Clarification in CC 
Docket No. 96-98 regarding the obligation of incumbent local exchange 
carriers (LECs) to provide access by competitive LECs to unbundled 
loop-transport combinations for the provision of exchange access 
service. This order is needed to clarify certain requirements that the 
Commission adopted in the Supplemental Order in this docket (65 FR 
2542, 2547, Jan. 18, 2000).
    2. In particular, this document extends the temporary constraint 
identified in the Supplemental Order in CC Docket No. 96-98 while the 
Commission compiles an adequate record in the Fourth FNPRM (65 FR 2367, 
Jan. 14, 2000) regarding the ability of requesting carriers to use 
unbundled loop-transport combinations as a substitute for the incumbent 
LECs' special access service. Until the Commission resolves the issues 
in the Fourth FNPRM, interexchange carriers (IXCs) may not substitute 
an incumbent LEC's unbundled loop-transport combinations for special 
access services unless they provide a significant amount of local 
exchange service, in addition to exchange access service, to a 
particular customer. This temporary constraint does not apply to stand-
alone loops. By issuing the Supplemental Order Clarification, the 
Commission does not decide any of the substantive issues contained in 
the Fourth FNPRM.
    3. The primary issue on which the Commission must build an adequate 
record concerns its identification of the network elements that 
``should be made available'' for purposes of 47 U.S.C. section 
251(d)(2). In considering whether loop-transport combinations meet the 
``impair'' standard in section 251(d)(2), the Commission must determine 
whether the local exchange and exchange access markets, although 
legally distinct, are otherwise interrelated from an economic and 
technological perspective, such that a finding that a network element 
meets the ``impair'' standard for the local exchange market would 
itself entitle competitors to use that network element solely or 
primarily in the exchange access market. Unless the Commission finds 
that these markets are inextricably interrelated in these other 
respects, it is unlikely that Congress intended to compel the 
Commission, once it determines that a network element meets the 
``impair'' standard for the local exchange market, to grant competitors 
access--for that reason alone, and without further inquiry--to that 
same network element solely or primarily for use in the exchange access 
market.
    4. The Commission extends the temporary constraint so that it may 
take into account the market effects of its new unbundling rules (65 FR 
2542, Jan. 18, 2000) as it conducts its ``impair'' analysis for special 
access service, and must allow a meaningful period of time to elapse 
from the date on which those new rules became effective. The Commission 
will therefore issue a Public Notice in early 2001 to gather evidence 
on this issue so that it may then resolve it expeditiously. In 
addition, the Commission and the parties need more time to evaluate the 
issues raised in the record in the Fourth FNPRM.
    5. To reduce uncertainty for incumbent LECs and requesting carriers 
and to maintain the status quo while the Commission reviews the issues

[[Page 38215]]

contained in the Fourth FNPRM, it defines more precisely the 
``significant amount of local exchange service'' that a requesting 
carrier must provide in order to obtain unbundled loop-transport 
combinations. These definitions provide a safe harbor that allows the 
Commission to preserve the status quo while it examines the issues in 
the Fourth FNPRM in more detail, while still allowing carriers to use 
combinations of unbundled loop and transport network elements to 
provide local exchange service.
    6. The Commission finds that a requesting carrier is providing a 
``significant amount of local exchange service'' to a particular 
customer if it meets one of three alternative definitions. The 
Commission notes that traffic is considered to be local under these 
definitions if it is defined as such in a requesting carrier's state-
approved local exchange tariff and/or it is subject to a reciprocal 
compensation arrangement between the requesting carrier and the 
incumbent LEC: (1) The requesting carrier certifies that it is the 
exclusive provider of an end user's local exchange service. The loop-
transport combinations must terminate at the requesting carrier's 
collocation arrangement in at least one incumbent LEC central office. 
This option does not allow loop-transport combinations to be connected 
to the incumbent LEC's tariffed services, or (2) The requesting carrier 
certifies that it provides local exchange and exchange access service 
to the end user customer's premises and handles at least one third of 
the end user customer's local traffic measured as a percent of total 
end user customer local dialtone lines; and for DS1 circuits and above, 
at least 50 percent of the activated channels on the loop portion of 
the loop-transport combination have at least 5 percent local voice 
traffic individually, and the entire loop facility has at least 10 
percent local voice traffic. When a loop-transport combination includes 
multiplexing (e.g., DS1 multiplexed to DS3 level), each of the 
individual DS1 circuits must meet this criteria. The loop-transport 
combination must terminate at the requesting carrier's collocation 
arrangement in at least one incumbent LEC central office. This option 
does not allow loop-transport combinations to be connected to the 
incumbent LEC's tariffed services, or (3) The requesting carrier 
certifies that at least 50 percent of the activated channels on a 
circuit are used to provide originating and terminating local dialtone 
service and at least 50 percent of the traffic on each of these local 
dialtone channels is local voice traffic, and that the entire loop 
facility has at least 33 percent local voice traffic. When a loop-
transport combination includes multiplexing (e.g., DS1 multiplexed to 
DS3 level), each of the individual DS1 circuits must meet this 
criteria. This option does not allow loop-transport combinations to be 
connected to the incumbent LEC's tariffed services. Under this option, 
collocation is not required.
    7. The Commission clarifies that the definitions described above 
provide a reasonable threshold for determining whether a carrier has 
taken affirmative steps to provide local service. There may be 
extraordinary circumstances under which a requesting carrier is 
providing a significant amount of local exchange service but does not 
qualify under any of the three definitions. In such a case, the 
requesting carrier may always petition the Commission for a waiver of 
the safe harbor requirements under its existing rules.
    8. The Commission does not eliminate the prohibition on ``co-
mingling'' (i.e. combining loops or loop-transport combinations with 
tariffed special access services) in the local usage definitions 
discussed. It is not persuaded on this record that removing this 
prohibition would not lead to the use of unbundled network elements by 
interexchange carriers solely or primarily to bypass special access 
services. The Commission also emphasizes that the co-mingling 
determinations that it makes in this order do not prejudge any final 
resolution on whether unbundled network elements may be combined with 
tariffed services. The Commission will seek further information on this 
issue in the Public Notice that we will issue in early 2001.
    9. The Commission also clarifies that incumbent LECs must allow 
requesting carriers to self-certify that they are providing a 
significant amount of local exchange service over combinations of 
unbundled network elements. The Commission also states that it 
continues to believe that the Access Service Request process that 
incumbent LECs use to provision access circuits will allow requesting 
carriers to avoid material provisioning delays and unnecessary costs to 
integrate unbundled loop-transport combinations into their networks, 
and expect that carriers will use this process for circuit conversions.
    10. In order to confirm reasonable compliance with the local usage 
requirements in the Supplemental Order Clarification, the Commission 
also finds that incumbent LECs may conduct limited audits only to the 
extent reasonably necessary to determine a requesting carrier's 
compliance with the local usage definitions. Incumbent LECs requesting 
an audit should hire and pay for an independent auditor to perform the 
audit, and competitive LECs should reimburse the incumbent if an audit 
uncovers non-compliance with the local usage definitions. Incumbent 
LECs must provide at least 30 days written notice to a carrier that it 
will conduct an audit, and may not conduct more than one audit of the 
carrier in any calendar year unless an audit finds non-compliance. At 
the same time that an incumbent LEC provides notice of an audit to the 
affected carrier, it should send a copy of the notice to the 
Commission. The Commission expects that carriers will maintain 
appropriate records that they can use to support their local usage 
certification, and emphasizes that an audit should not impose an undue 
financial burden on smaller requesting carriers that may not keep 
extensive records. In the event of an audit of these smaller carriers, 
the incumbent LEC should verify compliance using the records that the 
carriers keep in the normal course of business.

Procedural Issues: Final Regulatory Flexibility Certification

    11. The Regulatory Flexibility Act (RFA) requires that regulatory 
flexibility analyses be prepared for notice and comment rulemaking 
proceedings, unless the agency certifies that ``the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.'' See 5 U.S.C. 605(b). The RFA generally defines 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' See 5 U.S.C. 601(6). In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act. See 5 U.S.C. 601(3). A small business 
concern is one which: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(SBA). See 15 U.S.C. section 632. SBA rules provide that for 
establishments providing ``Telephone Communications Except 
Radiotelephone,'' which is Standard Industrial Classification (SIC) 
Code 4813, a small entity is one employing no more than 1,500 persons.
    12. This Clarification of the Supplemental Order in CC Docket No. 
96-98 sets out the criteria under which a requesting carrier may use 
combinations of unbundled network

[[Page 38216]]

elements to provide exchange access services. The criteria is 
consistent with several of the Commission's findings in the 
Supplemental Order. It also extends the date by which the Commission 
will resolve its Fourth FNPRM from June 30, 2000. Until resolution of 
the Fourth FNPRM, IXCs are prohibited from converting special access 
services that they purchase from the Bell Operating Companies or other 
incumbent local exchange carriers to combinations of unbundled loops 
and transport network elements unless they meet the designated 
criteria. This clarification therefore pertains directly to IXCs, and 
indirectly to Bell Operating Companies (BOCs), other incumbent local 
exchange carriers, competitive local exchange carriers, and competitive 
access providers.
    13. The Commission certifies that this clarification of the 
Supplemental Order will not have a significant economic impact on a 
substantial number of small entities because it maintains the status 
quo regarding the ability of IXCs to purchase special access services 
for a longer period of time. It also maintains the status quo for any 
small incumbent local exchange carriers from which interexchange 
carriers purchase special access services. The clarification also 
allows some limited auditing by incumbent local exchange carriers to 
determine whether IXCs that use combinations of unbundled network 
elements meet the established criteria in the Order. This limited 
auditing will not have a significant economic impact on a substantial 
number of small entities because any incumbent LEC that chooses to 
voluntarily exercise its limited auditing rights will bear all expenses 
associated with any resulting audit. The Commission has also required 
that audits be conducted based on the records that a small carrier 
keeps in the normal course of business. The Commission will send a copy 
of the Supplemental Order Clarification, including a copy of this final 
certification, in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). 
In addition, the Supplemental Order Clarification and this 
certification will be sent to the Chief Counsel for Advocacy of the 
Small Business Administration, and will be published in the Federal 
Register. See 5 U.S.C. 605(b).

Ordering Clauses

    14. Pursuant to authority contained in sections 1,3,4,201-205, 251, 
256, 271, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 271, 303(r), the 
Commission clarifies the Supplemental Order discussed.
    15. The requirements in this order will become effective 
immediately upon publication in the Federal Register.
    16. The Commission's Consumer Information Bureau, Reference 
Information Center, SHALL SEND a copy of this Supplemental Order 
Clarification, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-15576 Filed 6-19-00; 8:45 am]
BILLING CODE 6712-01-P