Federal Register / Vol. 62, No. 167 / Thursday, August 28, 1997 / Rules and Regulations 45587

thereof) will also be published in the

Federal Register, see 5 U.S.C. 604(b),

and will be sent to the Chief Counsel for

Advocacy of the Small Business

Administration.

IV. Ordering Clauses

48. Accordingly, it is ordered that,

pursuant to sections 1–4, 201–205, 214,

251, 252, and 303(r) of the

Communications Act of 1934, as

amended, 47 U.S.C. 151–154, 201–205,

214, 251, 252, and 303(r), the Third

Order on Reconsideration is adopted.

49. It is further ordered that changes

adopted on reconsideration and the rule

amendments will be effective September

29, 1997.

50. It is further ordered, pursuant to

section 405 of the Communications Act

of 1934, as amended, 47 U.S.C. 405, and

§ 1.106 of the Commission’s rules, 47

CFR 1.106 (1995), that the petitions for

reconsideration filed by WorldCom, Inc.

and the Local Exchange Carriers

Coalition are denied in part and granted

in part to the extent indicated above.

51. It is further ordered, that the

Commission shall send a copy of this

Third Order on Reconsideration and

Further Notice of Proposed Rulemaking,

including the associated Supplemental

Final Regulatory Flexibility Analysis

and Initial Regulatory Flexibility

Analysis, to the Chief Counsel for

Advocacy of the Small Business

Administration.

List of Subjects in 47 CFR Part 51

Communications common carriers,

Network elements, Transport and

termination.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Part 51 of title 47 of the Code of

Federal Regulations is amended as

follows:

PART 51—INTERCONNECTION

1. The authority citation for part 51

continues to read as follows:

Authority: Sections 1–5, 7, 201–05, 207–

09, 218, 225–27, 251–54, 271, 48 Stat. 1070,

as amended, 1077; 47 U.S.C. 151–55, 157,

201–05, 218, 225–27, 251–54, 271, unless

otherwise noted.

2. Section 51.319 is amended by

revising paragraph (d)(1) to read as

follows:

§ 51.319 Specific unbundling

requirements.

* * * * *

(d) * * *

(1) Interoffice transmission facilities

include:

(i) Dedicated transport, defined as

incumbent LEC transmission facilities

dedicated to a particular customer or

carrier that provide telecommunications

between wire centers owned by

incumbent LECs or requesting

telecommunications carriers, or between

switches owned by incumbent LECs or

requesting telecommunications carriers;

(ii) Shared transport, defined as

transmission facilities shared by more

than one carrier, including the

incumbent LEC, between end office

switches, between end office switches

and tandem switches, and between

tandem switches, in the incumbent

LEC’s network;

* * * * *

3. Section 51.515 is amended by

adding paragraph (d) to read as follows:

§ 51.515 Application of access charges.

* * * * *

(d) Interstate access charges described

in part 69 shall not be assessed by

incumbent LECs on each element

purchased by requesting carriers

providing both telephone exchange and

exchange access services to such

requesting carriers’ end users.

[FR Doc. 97–22734 Filed 8–27–97; 8:45 am]

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FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 64

[FCC 97–163]

Implementation of Section 254(k) of the

Communications Act of 1934, as

Amended

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this Order, the Commission

implements section 254(k) by codifying

its prohibitions in part 64 of the

Commission’s rules. The Commission

revises § 64.901 to establish a new

section (c) to reflect section 254(k) of the

Telecommunications Act of 1996 (1996

Act). Section 254(k) states that ‘‘a

telecommunications company may not

use services that are not competitive to

subsidize services subject to

competition.’’

EFFECTIVE DATE: September 29, 1997.

FOR FURTHER INFORMATION CONTACT:

Andrew Mulitz, Accounting and Audits

Division, Common Carrier Bureau, (202)

418–0827.

SUPPLEMENTARY INFORMATION: The

opening of the local exchange and

exchange access markets to competition

as well as the ability of the Bell

Operating Companies (BOCs) to enter

new markets and engage in previously

proscribed activities creates the

potential for incumbent local exchange

carriers’ (ILECs) to misallocate costs in

ways that our current rules may not

restrict because these rules are focused

on the allocation of costs between

regulated and nonregulated activities.

New section 254(k), however,

establishes two dichotomies that are not

explicitly addressed by our existing

rules. Section 254(k) requires additional

scrutiny of the allocation of costs

between competitive and

noncompetitive activities, both

regulated and nonregulated, and

between universal services and all other

services.

Section 254(k) states that ‘‘a

telecommunications company may not

use services that are not competitive to

subsidize services that are subject to

competition.’’ The Commission

concludes that this provision of section

254(k) places an obligation on

telecommunications carriers that

supplements our existing rules. This

provision of section 254(k) addresses

the concern that ILECs may attempt to

gain an unfair market advantage in

competitive markets by allocating to

their less competitive services, for

which subscribers have no available

alternative, an excessive portion of the

costs incurred by their competitive

operations.

Section 254(k) also directs the

Commission, with respect to interstate

services, to ‘‘establish any necessary

cost allocation rules, accounting

safeguards, and guidelines to ensure

that services included in the definition

of universal service bear no more than

a reasonable share of the joint and

common costs of facilities used to

provide those services.

For ILECs, the Commission concludes

that codifying section 254(k)’s

prohibitions in part 64 of our rules will

give the fullest effect to the Act’s

prohibitions. In this way, our rules will

reflect the intent of the Act and

reinforce our commitment to enforcing

this mandate. Because this rule change

merely codifies the requirements of the

Act and involves no discretionary action

by the Commission, we find good cause

to conclude that notice and comment

procedures are unnecessary.

Ordering Clause

Accordingly, It is ordered that,

pursuant to sections 1, 4, 201–205, 218,

220, 251, 252 and 254(k) of the

Communications Act of 1934, as

amended, 47 U.S.C. § 151, 154, 201–205,

218, 220, 251, 252 and 254(k), and
45588 Federal Register / Vol. 62, No. 167 / Thursday, August 28, 1997 / Rules and Regulations

section 553(b)(B) of the Administrative

Procedure Act, 5 U.S.C. § 553(b)(B), part

64 of the Commission’s rules, 47 CFR

part 64, is amended, as described above.

It is further ordered that, pursuant to

sections 1, 4, 201–205, 218, 220, 224,

251, 252 and 254(k) of the

Communications Act of 1934, as

amended, 47 U.S.C. § 151, 154, 201–205,

218, 220, 251, 252 and 254(k), and

section 553(b)(B) of the Administrative

Procedure Act, 5 U.S.C. § 553(b)(B), the

amendment to part 64 described above,

shall be effective upon publication of

this Order in the Federal Register.

List of Subjects in 47 CFR Part 64

Civil defense, Claims,

Communications common carriers,

Computer technology, Credit, Foreign

relations, Individuals with disabilities,

Political candidates, Radio, Reporting

and recordkeeping requirements,

Telegraph, Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rules Changes

PART 64—MISCELLANEOUS RULES

RELATING TO COMMON CARRIERS

1. The authority citation for part 64 is

revised to read as follows:

Authority: 47 U.S.C. 154, 254(k); secs. 403

(b)(2)(B), (c), Public Law 104–104, 110 Stat.

56. Interpret or apply 47 U.S.C. secs. 201,

218, 226, 228, and 254(k) unless otherwise

noted.

2. Section 64.901 is amended by

adding paragraph (c) to read as follows:

§ 64.901 Allocation of costs.

* * * * *

(c) A telecommunications carrier may

not use services that are not competitive

to subsidize services subject to

competition. Services included in the

definition of universal service shall bear

no more than a reasonable share of the

joint and common costs of facilities

used to provide those services.

[FR Doc. 97–22937 Filed 8–27–97; 8:45 am]

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