[Federal Register Volume 62, Number 210 (Thursday, October 30, 1997)]
[Proposed Rules]
[Pages 58700-58703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28762]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 20, 22, 24, and 90

[WT Docket No. 97-207; FCC 97-341]


Calling Party Pays Service Option in the Commercial Mobile Radio 
Services

AGENCY: Federal Communications Commission.

ACTION: Request for comments.

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SUMMARY: The Commission adopts a Notice of Inquiry (NOI) in this 
proceeding, seeking comment to establish a record Calling Party Pays 
(CPP), a service currently offered by some Commercial Radio Service 
(CMRS) providers. The goal of this proceeding is to determine whether 
the wider availability of CPP would enable CMRS providers to more 
readily compete with wireline services provided by Local Exchange 
Carriers (LECs) and to determine whether there are any actions that the 
Commission could take to promote the wider availability of CPP for CMRS 
providers. The purpose of this inquiry is to explore means of 
encouraging and facilitating competition in the local exchange 
telephone market.

DATES: Comments are due on or before December 1, 1997, and reply 
comments are due on or before December 16, 1997.

ADDRESSES: Federal Communications Commission, Office of the Secretary, 
Room 222, Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Dr. Pamela Megna or Dr. Joseph Levin, 
Policy Division, Wireless Telecommunications Bureau (202) 418-1310.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Inquiry in WB Docket No. 97-207, FCC 97-341, adopted 
September 25, 1997, and released October 23, 1997. The complete text of 
this NOI is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., 
Washington, D.C., and also may be purchased from the Commission's copy 
contractor, International Transcription Services, (202) 857-3800, 1231 
20th Street, Washington, DC 20036.

[[Page 58701]]

Synopsis of Notice of Inquiry

    1. The Commission initiates this Notice of Inquiry (NOI) to seek 
information regarding Calling Party Pays (CPP), a service option 
currently offered by some Commercial Mobile Radio Service (CMRS) 
providers. The purpose of this inquiry is to explore means of 
encouraging and facilitating competition in the local exchange 
telephone market. The NOI is intended to explore the subject of CPP to 
develop a record for determining whether the wider availability of CPP 
would enable CMRS providers to more readily compete with wireline 
services provided by Local Exchange Carriers (LECs) and to determine 
whether there are actions that the Commission could take to promote the 
wider availability of CPP for CMRS providers.
    2. CPP is a service option that some CMRS providers offer whereby 
the party placing the call or page pays the airtime charge, and any 
applicable charges for calls transported within the LECs' Local Access 
and Transport Areas. In order for a CMRS provider to offer this service 
option, the LEC must be willing and able to provide the CMRS carrier 
with this billing service or sufficient information for the CMRS 
carrier to bill the calling party directly.
    3. In this proceeding, the Commission seeks information regarding, 
among other issues, the current availability of the CPP service option, 
how the calling party is informed of charges that will be incurred, the 
magnitude of these charges, what technical and contractual requirements 
are needed to implement this service option, whether there are 
technical, regulatory, or other barriers impeding the availability of 
this service option, and whether there are pro-competitive reasons for 
the Commission to initiate any actions to encourage the availability of 
this service option.

Current Availability of CPP

    4. Although some LECs currently offer a CPP service option to CMRS 
carriers, it is unclear how many mobile carriers offer the CPP service 
option to their subscribers. Moreover, outside the United States, CPP 
seems to be the prevalent billing system for mobile telephony. Thus, 
the Commission seeks information on which carriers offer the CPP 
service option, in which geographic markets consumers have the service 
option, details of the arrangements between LECs and CMRS carriers and 
between CMRS carriers and subscribers, any regulatory requirements 
imposed by the various States and consumer reaction to the service 
option. The Commission seeks comments addressing any additional issues 
that may be associated with applying CPP to a calling party originating 
a call to a wireless phone from a wireless phone. The Commission also 
seeks comment as to the reasons CPP is not offered more broadly.
    5. The Commission seeks comment on the level of consumer demand for 
CPP. Commenters are requested to address whether the market has failed 
to accommodate consumer demand for this or other service options and is 
likely to in the future. Commenters should provide detailed information 
on the specific technical, regulatory, or economic barriers that exist, 
and what actions, if any, the Commission should take to remove these 
barriers, in the event that the Commission decides that enhancing 
access to CPP is an appropriate pro-competitive goal.
    6. Parties should also comment as to whether recent developments, 
including increased competition in the CMRS market, the related 
decrease in CMRS rates, and the implementation of reciprocal 
compensation for LEC-CMRS interconnection arrangements, will create 
sufficient market incentives for CMRS carriers to refrain from charging 
their own subscribers for incoming calls. To the extent that CPP is 
offered in a manner that requires the incumbent LEC to pay carrier to 
carrier airtime charges to complete a call, CPP and reciprocal 
compensation may address a similar issue (i.e. how the CMRS provider 
recovers the cost of completing a call that did not originate on the 
CMRS network). Parties are asked to comment on whether reciprocal 
compensation may obviate or reduce the need for CMRS providers to 
implement CPP.

Demand Stimulating Effects

    7. The Commission seeks comment on current traffic patterns in the 
United States, and in countries in which CPP is the norm, and on 
whether CPP promotes more balanced traffic flows and increased demand 
for CMRS services.
    8. It is uncertain, however, whether the balance in incoming and 
outgoing traffic reported in other countries is due to CPP service or 
due to other factors. Wireless service may be more desirable in these 
countries because the wireline network may be inferior in quality or 
less accessible. Alternatively, the increase in traffic terminating on 
a wireless network in these countries could be the result of an 
increase in subscribers' willingness to keep their wireless phones 
turned on due to the wider use of digital phones with their longer 
battery lives. The Commission seeks comment on these issues and 
requests any empirical studies that attempt to isolate the effect of 
CPP from other variables. In particular, the Commission seeks 
information on the pricing of wireless and wireline service in those 
countries in which CPP is the norm, and requests parties to submit any 
empirical studies or information addressing these issues.
    9. In addition some industry sources believe CPP can increase the 
demand for CMRS services by increasing the minutes of usage or by 
increasing the number of subscribers. The Commission requests any 
empirical studies that have documented the effects of CPP on 
subscribership, traffic patterns (including traffic between wireless 
and wireline networks), and minutes of use in the markets in which CPP 
has been implemented. The Commission also seeks information regarding 
the possibility that CPP could in some way alter the peak usage periods 
of the wireline telephone network, thus requiring network 
modifications.
    10. The Commission also seeks comment on the availability of the 
service option whereby Wireless subscribers do not pay for the first 
minute of calls they receive. The Commission seeks any empirical 
studies and information on whether this service option encourages 
consumers to subscribe to mobile telephony services, to subscribe to a 
digital system, to disclose their mobile telephone number, and to keep 
their mobile telephone in an active operational mode. Further, the 
Commission seeks comment regarding whether use of the ``first incoming 
minute free'' option more evenly balances traffic to and from wireless 
networks and whether it would have an effect on the demand for CPP.

Pricing Issues

    11. The Commission also seeks information on the pricing structure 
of CMRS and wireline services across the United States and in other 
countries. The pricing structure implicit in a CPP service is 
significantly different than the typical pricing structure for CMRS and 
local wireline service in the United States. The differences in pricing 
between local telephone service and the CPP service option could deter 
some calls from wireline to mobile subscribers and may hinder efforts 
to minimize distinctions between telephony service provided on wireline 
and wireless networks. Widespread use of CPP could decrease the extent 
to which some consumers view CMRS and wireline telephony as close 
substitutes because the wireline consumer's incremental cost to place a 
local call to a CMRS phone could significantly

[[Page 58702]]

increase while there would be no similar change in the consumer's 
incremental cost to place a local wireline call. The Commission also 
seeks information on the proportion of wireline subscribers electing 
measured local service, and estimates of the potential demand for this 
option among wireline subscribers, as well as price information for 
measured local calls and CPP calls, and whether they vary based on time 
of day or some other factors. In addition, the Commission seeks 
comments concerning the extent to which differences in prevailing rate 
levels between wireline and wireless service offerings may affect the 
relative demand for these services, as well as traffic balances between 
wireline and wireless networks.
    12. Finally, the Commission seeks comment on whether there are fees 
associated with reprogramming CMRS phones and whether there are monthly 
charges for CPP. The Commission also requests information regarding the 
amount of these fees or monthly charges, and whether the rate the 
calling party is charged varies across markets and the time of day.

Consumer Protection Issues

    13. Many State regulatory agencies and consumer groups have raised 
consumer protection issues related to informing callers that they will 
be charged a fee for placing a call to a CMRS phone, and informing 
callers of the magnitude of the charge. Therefore, the Commission seeks 
information regarding how the calling party can best be informed of 
charges for calls to CMRS phones, including the magnitude of these 
charges. The Commission also seeks comment on what technical and 
contractual capabilities are needed to inform the caller regarding his 
or her responsibility to pay for the call and regarding the amount of 
the charge for the call.
    14. Finally, the Commission seeks comment on whether it would be in 
the public interest for the Commission to assist the telecommunications 
industry and the States to develop a uniform national method to inform 
the calling party of the magnitude of the charge, and of the calling 
party's responsibility to pay for the call. Commenters are also 
requested to suggest any alternatives to a uniform national approach 
that would be in the public interest.

Technical Issues

    15. It appears that the CPP service option requires various 
infrastructure, contractual, and billing collection modifications that 
may limit its implementation in the United States. While the mobile 
carrier must have access to billing collection information for the 
calling party to be able to charge incoming calls to the calling party, 
this information may be unavailable in some circumstances and may 
result in uncollectible revenues for the CMRS carrier. The Commission 
seeks comment on these assumptions and issues, and on any steps that 
could be taken to address these concerns and impediments to the 
operation of CPP.
    16. In addition, not all LEC networks currently appear to have the 
technical capability to exchange the billing information required for 
CPP. Moreover, the use of call branding <SUP>1</SUP> as part of a CPP 
service option may not always be possible. The Commission seeks comment 
on these technical issues, and on what the Commission, the States, or 
the industry could do to resolve them.
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    \1\ Branding, in this context, is the ability to inform the 
caller to a CMRS phone (by use of a recorded intercept message) of 
additional charges applicable to the call.
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    17. Finally, there are means available to give the called CMRS 
subscriber using CPP the option to pay for incoming calls in some 
circumstances. The Commission seeks comment on the technical 
requirements for this option to be deployed, where this option is 
currently available, and how the calling party and called party are 
informed of this additional option.

Legal Issues

    18. The Commission also seeks comment regarding any legal issues 
that may be posed by any actions the Commission may take regarding 
imposition or implementation of CPP.
    19. As a threshold matter, the Commission recognizes that we have 
stated in the Arizona Decision, in the context of ruling on whether a 
State had made a sufficient showing within the meaning of section 
332(c)(3)(B) of the Communications Act <SUP>2</SUP> that it should be 
permitted to regulate the rates of CMRS providers, that regulation of 
CPP was a billing practice that may be regulated by a State as a term 
or condition under which service is provided. <SUP>3</SUP>
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    \2\ 47 U.S.C. 332(c)(3)(B).
    \3\ Petition of Arizona Corporation Commission To Extend State 
Authority Over Rate and Entry Regulation of All Commercial Mobile 
Radio Services and Implementation of Sections 3(n) and 332 of the 
Communications Act, PR Docket No. 94-104 and GN Docket No. 93-252, 
Report and Order and Order on Reconsideration, 10 FCC Rcd 7824, 7837 
(1996) (Arizona Decision).
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    20. In the wake of the Arizona Decision, the Commission has made 
clear, in the Local Competition First Report and Order,<SUP>4</SUP> 
that incumbent LECs have an obligation to provide access to unbundled 
network elements, and that such network elements include information 
sufficient to enable recipients of the unbundled network elements to 
provide billing services. In addition, the Eighth Circuit Court of 
Appeals, in its Iowa Utilities Board decision, concluded that the 
Commission has authority to order LECs to interconnect with CMRS 
carriers and has the authority to issue rules of special concern to 
CMRS providers.<SUP>5</SUP>
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    \4\ 61 FR 45476, August 29, 1996.
    \5\ Iowa Utilities Board, 1997 WL 403401 (8th Cir., July 18, 
1997), at n.21.
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    21. In light of the Local Competition First Report and Order and 
the Iowa Utilities Board decision, the Commission seeks comment 
regarding the scope of our authority to require LECs to provide billing 
information and services which will enable CMRS providers to offer CPP 
services. Specifically, the Commission seeks comment on whether we have 
authority under section 332 to establish requirements regarding CPP 
arrangements between LECs and CMRS carriers. The Commission requests 
any commenters suggesting that the Commission lacks authority under 
section 332 to identify any other provision of the Communications Act 
that gives the Commission authority over CPP arrangements. Commenters 
should also address whether that provision would give us the authority 
to preempt State regulation in order to establish nationwide rules for 
CPP.

Procedural Matters

    22. The Commission adopts this Notice of Inquiry under the 
authority contained in sections 4(i), 4(j), and 403 of the 
Communications Act of 1934, 47 U.S.C. 154(i), 154(j), 403. Pursuant to 
applicable procedures set forth in Secs. 1.415 and 1.419 of the 
Commission's Rules, 47 CFR 1.415, 1.419, interested parties may file 
comments on or before December 1, 1997, and may file reply comments on 
or before December 16, 1997.
    23. To file formally in this proceeding, you must file an original 
and five copies of all comments, reply comments, and supporting 
comments. If you want each Commissioner to receive a personal copy of 
your comments, you should file an original and ten copies. Comments and 
reply comments should be sent to the Office of the Secretary, Federal 
Communications Commission, Washington, D.C. 20554. Comments and reply 
comments will be available for public inspection during regular 
business hours in the FCC Reference Center (Room 239) of the Federal

[[Page 58703]]

Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554.
    24. There are no ex parte or disclosure requirements applicable to 
this proceeding pursuant to Sec. 1.1204(a)(4) of the Commission's 
Rules, 47 CFR 1.1204(a)(4).

List of Subjects 47 CFR Parts 20, 22, 24, and 90

    Radio.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-28762 Filed 10-29-97; 8:45 am]
BILLING CODE 6712-01-P