Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59583

List of Subjects in 40 CFR Part 721

Environmental protection, Chemicals,

Hazardous substances, Reporting and

recordkeeping requirements.

Dated: October 28, 1997.

Charles M. Auer,

Director, Chemical Control Division, Office

of Pollution Prevention and Toxics.

Therefore, 40 CFR part 721 is

amended as follows:

PART 721—[AMENDED]

1. The authority citation for part 721

continues to read as follows:

Authority: 15 U.S.C. 2604, 2607, and

2625(c).

2. By adding new § 721.3550 to

subpart E to read as follows:

§ 721.3550 Dipropylene glycol dimethyl

ether.

(a) Chemical substances and

significant new uses subject to reporting.

(1) The chemical substance identified as

dipropylene glycol dimethyl ether (PMN

P–93–507; CAS No. 11109–77–4) is

subject to reporting under this section

for the significant new uses described in

paragraph (a)(2) of this section. This

class 2 substance is exempt from the

notification requirements of this rule if

it contains less than 5 percent by weight

of the specific isomer, propane, 2,2′-

oxybis[1-methoxy- (CAS No. 189354–

80–1), which is one of the possible

products of the manufacturing process

for PMN P–93–507.

(2) The significant new uses are:

(i) Protection in the workplace.

Requirements as specified in § 721.63

(a)(1), (a)(2)(i), and (a)(3).

(ii) Industrial, commercial, and

consumer activities. Requirements as

specified in § 721.80(o).

(b) Specific requirements. The

provisions of subpart A of this part

apply to this section except as modified

by this paragraph.

(1) Recordkeeping requirements. The

following recordkeeping requirements

specified in § 721.125 (a), (b), (c), (d),

and (e) are applicable to manufacturers,

importers, and processors of this

substance.

(2) Limitations or revocation of

certain notification requirements. The

provisions of § 721.185 apply to this

section.

[FR Doc. 97–29153 Filed 11–3–97; 8:45 am]

BILLING CODE 6560–50–F

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 42 and 61

[CC Docket No. 96–61; FCC 97–293]

Policy and Rules Concerning the

Interstate, Interexchange Marketplace

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Order on Reconsideration

(Order) released August 20, 1997

reconsiders the Second Report and

Order in this docket (61 FR 59340

(November 22, 1996)). The Order

modifies the Second Report and Order

by: adopting permissive detariffing for

interstate, domestic, interexchange

direct-dial services; adopting permissive

detariffing for the first 45 days of service

to new customers that contact the local

exchange carrier to choose their primary

interexchange carrier; and eliminating

the requirement that nondominant

interexchange carriers make publicly

available information concerning

current rates, terms, and conditions for

all of their interstate, domestic,

interexchange services, except in the

case of dial-around 0+ services from

aggregator locations.

EFFECTIVE DATE: December 4, 1997.

FOR FURTHER INFORMATION CONTACT: Lisa

Choi, Attorney, Common Carrier

Bureau, Policy and Program Planning

Division, (202) 418–1580. For additional

information concerning the information

collections contained in this Order

contact Judy Boley at (202) 418–0214, or

via the Internet at jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Order

adopted August 15, 1997, and released

August 20, 1997. The full text of this

Order is available for inspection and

copying during normal business hours

in the FCC Reference Center, 1919 M

St., NW, Room 239, Washington, DC

The complete text also may be obtained

through the World Wide Web, at http:/

/www.fcc.gov/Bureaus/Common

Carrier/Orders/fcc97–293.wp, or may be

purchased from the Commission’s copy

contractor, International Transcription

Service, Inc., (202) 857–3800, 1231 20th

St., NW, Washington, DC 20036.

Regulatory Flexibility Analysis

As required by the Regulatory

Flexibility Act, the Order contains a

Final Regulatory Flexibility Analysis on

Reconsideration which is set forth in the

Order on Reconsideration. A brief

description of the analysis follows.

Pursuant to section 604 of the

Regulatory Flexibility Act, the

Commission performed a

comprehensive analysis of the Order on

Reconsideration with regard to small

entities. This analysis includes: (1) A

succinct statement of the need for, and

objectives of, the Commission’s

decisions in the Order on

Reconsideration; (2) a summary of the

significant issues raised by the public

comments in response to the initial

regulatory flexibility analysis, a

summary of the Commission’s

assessment of these issues, and a

statement of any changes made in the

Order on Reconsideration as a result of

the comments; (3) a description of and

an estimate of the number of small

entities to which the Order on

Reconsideration will apply; (4) a

description of the projected reporting,

recordkeeping and other compliance

requirements of the Order on

Reconsideration, including an estimate

of the classes of small entities which

will be subject to the requirement and

the type of professional skills necessary

for compliance with the requirement; (5)

a description of the steps the

Commission has taken to minimize the

significant economic impact on small

entities consistent with the stated

objectives of applicable statutes,

including a statement of the factual,

policy, and legal reasons for selecting

the alternative adopted in the Order on

Reconsideration and why each one of

the other significant alternatives to each

of the Commission’s decisions which

affect small entities was rejected.

The rules adopted in this Order on

Reconsideration are necessary to

implement the provisions of the

Telecommunications Act of 1996.

Paperwork Reduction Act

The Federal Communications

Commission (FCC) has received Office

of Management and Budget (OMB)

approval for the following public

information collections pursuant to the

Paperwork Reduction Act of 1995, Pub.

L.104–13. An agency may not conduct

or sponsor and a person is not required

to respond to a collection of information

unless it displays a currently valid

control number.

OMB Control Number: 3060–0704.

Expiration Date: February 28, 1998.

Title: Policy and Rules Concerning the

Interstate, Interexchange Marketplace;

Implementation of section 254(g) of the

Communications Act of 1934, as

amended, CC Docket No. 96–61.

Respondents: Business or other forprofit.

Public reporting burden for the

collection of information is estimated as

follows:
59584 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

Information collection

No. of respondents

(approx.)

Annual hour burden

per response Total annual burden

Detariffing* ................................................................................................................ 0 0 ................................ 0.

Certification requirement .......................................................................................... 519 0.5 hour ..................... 259.5.

Tariff cancellation requirement: completely cancel tariffs ........................................ 519 2 hours per page

(1,252 pages) (onetime).

2,504 (one-time).

Tariff cancellation requirement: revise mixed tariffs to remove domestic services 519 2 hours per page

(36,047 pages)

(one-time).

72,094 (one-time).

Information disclosure requirement** ....................................................................... 0 0 ................................ 0.

Recordkeeping requirement ..................................................................................... 519 2 hours ...................... 1,038.

* The Commission affirmed its decision in the Second Report and Order to eliminate the requirement that nondominant interexchange carriers

file tariffs for interstate, domestic, interexchange services. In the Order, the Commission has decided to (1) permit nondominant interexchange

carriers to file tariffs for the provision of dial-around 1+ services using a nondominant interexchange carrier’s carrier access code; (2) permit nondominant interexchange carriers to file tariffs for the initial 45 days of domestic, interstate, interexchange service, or until there is a written contract between the carrier and the customer, whichever is earlier; and (3) eliminate the public disclosure requirement.

** The Commission has eliminated the information disclosure requirement.

Total Annual Burden: 75,895.5 hours,

of which 74,598 will be one-time.

Frequency of Response: Annual,

except for tariff cancellation

requirement, which will be one-time,

and on occasion.

Estimated Annual Reporting and

Recordkeeping Costs: $435,000.

Needs and Uses: The attached item

affirms the Commission’s previous

decision in the Second Report and

Order to eliminate the requirement that

nondominant interexchange carriers file

tariffs for interstate, domestic,

interexchange telecommunications

services. In this Order, the Commission

has eliminated this information

disclosure requirement. In addition, the

Commission has reconsidered its

decision to require affected carriers to

maintain, and to make available to the

public in at least one location,

information concerning their rates,

terms and conditions for all of their

interstate, domestic, interexchange

services.

Public reporting burden for the

collection of information is as noted

above. Send comments regarding the

burden estimate or any other aspect of

the collections of information, including

suggestions for reducing the burden to

Performance Evaluation and Records

Management, Washington, DC 20554.

Synopsis of Order on Reconsideration

I. Introduction

1. On October 29, 1996, the

Commission adopted the Second Report

and Order (61 FR 59340 (November 22,

1996)) in its proceeding reviewing the

regulation of interstate, domestic,

interexchange telecommunications

services in light of the passage of the

Telecommunications Act of 1996 (1996

Act) and the increasing competition in

the interexchange market over the last

decade. Consistent with the intent of the

1996 Act to provide a ‘‘pro-competitive,

deregulatory’’ national policy

framework for telecommunications and

information technologies and services,

Congress directed the Commission to

forbear from applying any provision of

the Communications Act or the

Commission’s regulations if certain

conditions are met.

2. We determined in the Second

Report and Order that the statutory

forbearance criteria in section 10 of the

Communications Act were met for

complete detariffing (‘‘Complete

detariffing’’ refers to a policy of neither

requiring nor permitting nondominant

interexchange carriers to file tariffs

pursuant to section 203 of the

Communications Act for their interstate,

domestic, interexchange services.

‘‘Permissive detariffing’’ refers to a

policy of allowing, but not requiring,

nondominant interexchange carriers to

file tariffs for such services.) of the

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers, and, therefore,

that we would no longer allow such

carriers to file tariffs pursuant to section

203 of the Communications Act for their

interstate, domestic, interexchange

services, with the limited exception of

AT&T’s provision of 800 directory

assistance and analog private line

services. At the same time, we

recognized that a transition period was

necessary to allow nondominant

interexchange carriers time to adapt to

complete detariffing. We therefore

ordered all nondominant interexchange

carriers to cancel their tariffs for such

services within nine months from the

effective date of the Second Report and

Order. We maintained the tariffing

requirement for the international

portion of bundled domestic and

international service offerings. We

further required nondominant

interexchange carriers to: (1) File an

annual certification stating that they are

in compliance with the geographic rate

averaging and rate integration

requirements of section 254(g) of the

Communications Act; (2) maintain

supporting documentation on the rates,

terms, and conditions of their interstate,

domestic, interexchange services that

they could submit to the Commission

within ten business days upon request;

and (3) make publicly available

information concerning current rates,

terms, and conditions for all of their

interstate, domestic, interexchange

services. The basis for the information

disclosure requirement was to ensure

that the public was provided with the

information necessary to determine

whether a nondominant interexchange

carrier was adhering to the rate

averaging and rate integration

requirements of section 254(g) of the

Communications Act. In addition, we

determined that a public disclosure

requirement would promote the public

interest by making it easier for

consumers, including resellers, to

compare service offerings.

3. Our actions in the Second Report

and Order were intended to advance

Congress’ pro-competitive and

deregulatory objectives by eliminating

regulatory requirements that the

Commission determined were no longer

necessary to protect consumers or serve

the public interest. We concluded that

our actions would foster increased

competition in the market for interstate,

domestic, interexchange services by

deterring tacit price coordination,

eliminating the possible invocation of

the ‘‘filed-rate’’ doctrine, and

establishing market conditions that

more closely resemble an unregulated

environment. We found that elimination

of the possible invocation of the ‘‘filedrate’’ doctrine is in the public interest
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59585

because, pursuant to the ‘‘filed-rate’’

doctrine articulated by the courts, where

a filed tariff rate, term, or condition

differs from a rate, term, or condition in

a non-tariffed carrier-customer contract,

the carrier is required to assess the tariff

rate, term, or condition. See Armour

Packing Co. v. United States, 209 U.S.

56 (1908); American Broadcasting Cos.,

Inc. v. FCC, 643 F.2d 818 (D.C. Cir.

1980); see also Aero Trucking, Inc. v.

Regal Tube Co., 594 F.2d 619 (7th Cir.

1979); Farley Terminal Co., Inc. v.

Atchison, T. & S.F. Ry., 522 F.2d 1095

(9th Cir.), cert. denied, 423 U.S. 996

(1975). Consequently, if a carrier

unilaterally changes a rate by filing a

tariff revision, the newly filed rate

becomes the applicable rate for all

customers of that service unless the

revised rate is found to be unjust,

unreasonable, or unlawful under the

Communications Act. See 47 U.S.C.

201(b); see also Maislin Industries, U.S.,

Inc. v. Primary Steel, Inc., 497 U.S. 116

(1990).

4. Several parties appealed the

Second Report and Order to the United

States Court of Appeals for the District

of Columbia Circuit and filed motions

requesting that the court stay the

Second Report and Order pending

judicial review. On February 13, 1997,

the court granted these motions. The

Commission’s rules adopted in this

proceeding, therefore, are stayed until

the court issues its determination on the

merits of the appeal. Accordingly,

nondominant interexchange carriers are

currently required to file tariffs for their

interstate, domestic, interexchange

services.

5. In addition, eleven parties filed

petitions requesting that we reconsider

or clarify the rules we adopted in the

Second Report and Order. The United

States Court of Appeals for the District

of Columbia Circuit deferred the

briefing schedule in the appeal of the

rules adopted in the Second Report and

Order to allow the Commission to act on

these petitions for reconsideration. MCI

Telecommunications Corp. v. FCC, No.

96–1459 (D.C. Cir. April 4, 1997). The

court directed the parties to file motions

to govern further proceedings 60 days

after April 4, 1997. Id. The Commission

issued a public notice to establish a

pleading cycle for the issues raised in

the petitions for reconsideration and

clarification. The public notice sought

comments on or oppositions to the

petitions and replies. Policy and Rules

Concerning the Interstate, Interexchange

Marketplace, CC Docket No. 96–61,

Public Notice, Petitions for

Reconsideration and Clarification of

Action in Rulemaking Proceedings

(released January 7, 1997). For

convenience, we will cite the parties’

filings in these three phases as petitions,

comments, and replies, respectively. For

the reasons set forth below, we grant

requests for reconsideration on three

issues. Specifically, we modify the

Second Report and Order by: (1)

Adopting permissive detariffing for

interstate, domestic, interexchange

direct-dial services to which end-users

obtain access by dialing a carrier’s

access code (CAC); (2) adopting

permissive detariffing for the first 45

days of service to new customers that

contact the local exchange carrier (LEC)

to choose their primary interexchange

carrier (PIC); and (3) eliminating the

requirement that nondominant

interexchange carriers make publicly

available information concerning

current rates, terms, and conditions for

all of their interstate, domestic,

interexchange services, except in the

case of dial-around 0+ services from

aggregator locations, pursuant to section

226 of the Communications Act. In

another proceeding, we are considering

the issue of forbearing from applying

section 226, which requires operator

service providers to file informational

tariffs. See Billed Party Preference for

InterLATA 0+ Calls, CC Docket No. 92–

77, Second Further Notice of Proposed

Rulemaking, 11 FCC Rcd 7274 (1996);

Public Notice, DA 96–1695 (released

October 10, 1996) (seeking further

comment). We deny all of the other

petitions for reconsideration. We also

make a number of clarifications in this

Order on Reconsideration.

II. Detariffing Issues

A. Forbearance From Tariff Filing

Requirements for the Interstate,

Domestic, Interexchange Services of

Nondominant Interexchange Carriers

i. Background

6. In the Second Report and Order, we

concluded that the statutory forbearance

criteria in section 10 were satisfied,

based on our findings that: (1) Tariffs

are not necessary to ensure that the

rates, practices, classifications, and

regulations of nondominant

interexchange carriers for interstate,

domestic, interexchange services are

just and reasonable and not unjustly or

unreasonably discriminatory; (2) tariffs

for interstate, domestic, interexchange

services of nondominant interexchange

carriers are not necessary to protect

consumers; and (3) complete detariffing

of interstate, domestic, interexchange

services provided by nondominant

interexchange carriers, and not

permissive detariffing of such services,

is in the public interest. We concluded

that permissive detariffing of interstate,

domestic, interexchange services

provided by nondominant

interexchange carriers is not in the

public interest because it: (1) Would not

necessarily eliminate possible

invocation of the ‘‘filed-rate’’ doctrine;

(2) would create a risk that

nondominant interexchange carriers

would file tariffs to send price signals

and to manipulate prices; and (3) would

impose administrative costs on the

Commission, which must maintain and

organize tariff filings for public

inspection. We further concluded that

the Commission has the authority under

section 10 to prohibit carriers from

filing tariffs. Accordingly, pursuant to

section 10, we determined that we must

forbear from applying section 203 tariff

filing requirements to the interstate,

domestic, interexchange services offered

by nondominant interexchange carriers

and not permit nondominant

interexchange carriers to file tariffs for

their interstate, domestic, interexchange

services, with the limited exception of

AT&T’s provision of 800 directory

assistance and analog private line

services.

ii. Positions of the Parties

7. Frontier, Telecommunications

Resellers Association (TRA), and Telco

petition the Commission to reconsider

its decision to adopt complete

detariffing, and urge the Commission to

adopt permissive detariffing for the

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers. TRA further

argues that the increased costs and

burdens of a complete detariffing regime

will adversely affect small and midsized nondominant interexchange

carriers, which have fewer resources.

TRA proposes specifically that the

Commission adopt permissive

detariffing in conjunction with a carrieradministered electronic tariff filing

system, thereby relieving the

Commission of the burden of

administering and maintaining tariff

filings. AT&T, CompTel, SBC, U S

WEST, and WorldCom also support

permissive detariffing.

8. AT&T, CompTel, and WorldCom

argue that section 10 only authorizes the

Commission to refrain from requiring

tariffs, and does not empower the

agency to prohibit carriers from

voluntarily complying with section 203.

These parties, and others, also challenge

the Commission’s determination that

permissive detariffing is not in the

public interest. Specifically, these

parties argue that: (1) The ‘‘filed-rate’’

doctrine would no longer apply if the

Commission adopted a permissive

detariffing regime because the tariffed
59586 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

rate would no longer be the only

permissible rate; (2) even if the ‘‘filedrate’’ doctrine would continue to apply,

that doctrine and carriers’ ability to

limit their liability through tariff

provisions, benefit consumers because

the terms of the carrier-customer

relationship are certain; (3) price

coordination would be difficult, if not

impossible, with permissive detariffing,

because carriers would at best have

fragmentary information about their

competitors’ rates, terms, and

conditions; (4) requiring nondominant

interexchange carriers to make price and

service information publicly available

allows carriers to coordinate prices as

easily as with filed tariffs; (5) even

under a system of permissive

detariffing, a carrier could not refuse to

accommodate a customer’s request for

services tailored to its specific needs on

the ground that the request is beyond

the scope of the carrier’s tariff; (6)

complete detariffing significantly

increases transactional and

administrative costs, especially for

small carriers, by forcing nondominant

interexchange carriers to conclude

written agreements with every customer

and notify them of modifications to the

carriers’ rates, terms, and conditions;

and (7) permissive detariffing, or even

mandatory tariffing, promotes vigorous

competition to an even greater extent

than complete detariffing, because

carriers can react to market conditions

quickly and without appreciable costs

by filing a new tariff.

9. Ad Hoc Users Committee,

American Petroleum Institute (API), and

the Television Networks oppose the

petitions of TRA and Frontier, at least

to the extent that they request

reconsideration of complete detariffing

of individually-negotiated service

arrangements. Ad Hoc Users Committee

and API contend that the petitions for

reconsideration should be denied

because they merely repeat arguments

previously made and rejected by the

Commission in the Second Report and

Order. In addition, these parties argue

that complete detariffing, and not

permissive detariffing, of interstate,

domestic, interexchange services offered

by nondominant interexchange carriers

is in the public interest, because: (1) The

‘‘filed-rate’’ doctrine would continue to

apply under a system of permissive

detariffing; (2) the ‘‘filed-rate’’ doctrine

harms consumers because it allows

carriers unilaterally to alter or abrogate

agreements; (3) complete detariffing

ensures that carriers would no longer be

able to refuse to accommodate a

customer’s request for services tailored

to its specific needs on the grounds that

the request conflicts with the carriers’

tariffs; and (4) tariffs delay rapid

responses to customer demands. API

further argues that the 1996 Act gives

the Commission authority to prohibit

tariff filings.

iii. Discussion

10. We deny the petitions of Frontier,

Telco, and TRA urging us to adopt

permissive detariffing for all interstate,

domestic, interexchange services. As

discussed infra, arguments presented by

these petitioners, and others, have

persuaded us that permissive detariffing

is warranted in certain limited

circumstances. Specifically, we find that

permissive detariffing is warranted for:

(1) Interstate, domestic, interexchange

direct-dial services to which end-users

obtain access by dialing a carrier’s CAC

(dial-around 1+ services); (A CAC

enables callers to reach any carrier

(presubscribed or otherwise) from any

telephone. During the current transition

from five to seven digit CACs, both five

digit CACs (10XXX) and seven digit

CACs (101XXXX) are in use. On April

11, 1997, the Commission determined

that the transition will end on January

1, 1998. See Administration of the North

American Numbering Plan, Carrier

Identification Codes (CICs), CC Docket

92–237, Second Report and Order, 62

FR 19056 (April 18, 1997), stay and

recon. pending. Thus, after January 1,

1998, only seven digit CACs may be

used.) and (2) interstate, domestic,

interexchange services provided by a

nondominant interexchange carrier for

the initial 45 days of service or until

there is a written contract between the

carrier and the customer, in those

limited circumstances in which a

prospective customer contacts the LEC

to select an interexchange carrier or to

initiate a PIC change (LEC-implemented

new customer services). Aside from

these two limited categories of service,

the petitions and comments do not

present any arguments that were not

considered and addressed in the Second

Report and Order. Thus, we find no

basis upon which to reconsider our

determination that the statutory criteria

are met for completely detariffing all

other interstate, domestic, interexchange

services of nondominant interexchange

carriers, except for dial-around 0+

services from aggregator locations,

pursuant to section 226 of the

Communications Act.

11. In the Second Report and Order,

we extensively considered and rejected

the argument that the Commission does

not have statutory authority under

section 10 to adopt complete detariffing.

No new arguments have been presented

that persuade us to reconsider our

decision. Therefore, we reaffirm our

earlier conclusion that Congress, in

section 10, provided the Commission

with broad forbearance authority that

enables the agency to eliminate tariff

filings under section 203.

12. In the Second Report and Order,

we also considered all of the arguments

advanced by those parties now urging

us to reconsider our determination that

permissive detariffing is in the public

interest and complete detariffing is not.

With the exception of dial-around 1+

services and LEC-implemented new

customer services, we affirm our

conclusion in the Second Report and

Order that permissive detariffing of

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers is not in the

public interest, for the reasons set forth

in our prior order. We are not persuaded

that a permissive detariffing regime

would eliminate possible invocation of

the ‘‘filed-rate’’ doctrine. In a permissive

detariffing regime, a nondominant

interexchange carrier may choose to file

a tariff for an interstate, domestic,

interexchange service, even if the carrier

has signed an underlying contract with

the customer. If a carrier files a tariff for

an interstate, domestic, interexchange

service with the Commission, whether

on a permissive or mandatory basis,

section 203(c) requires the carrier to

provide service at the rates, and on the

terms and conditions, set forth in the

tariff until the carrier files a superseding

tariff cancelling, or changing the rates,

terms, and conditions of the tariffed

offering. Thus, if the tariffed rates,

terms, and conditions differ from those

in the contract, section 203(c), in all

likelihood, requires the carrier to

provide service at the rates, and on the

terms and conditions, set forth in the

tariff. Because the ‘‘filed-rate’’ doctrine

is a judicially-created doctrine, the

determination of how to apply the

doctrine in a permissive detariffing

regime when the tariffed rates, terms, or

conditions differ from those contained

in a contract must necessarily be left to

the courts. See supra paragraph 3. Only

with a complete detariffing regime,

under which the carrier-customer

relationship would more closely

resemble the legal relationship between

service providers and customers in an

unregulated, competitive environment,

can we definitively avoid the negative

consequences for consumers of the

‘‘filed-rate’’ doctrine. The Common

Carrier Bureau, on numerous occasions,

has issued Orders Designating Issues for

Investigation to examine whether a

carrier’s proposed unilateral changes in

a tariff meet the ‘‘substantial cause’’
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59587

standard applied by the Commission.

See AT&T Contract Tariff No. 374,

Transmittal Nos. CT 2952 and CT 3441,

Order Designating Issues for

Investigation, DA 95–1784 (Common

Carrier Bureau released August 11,

1995); AT&T Communications Contract

Tariff No. 360, Transmittal No. CT 3076,

CC Docket No. 95–146, Order

Designating Issues for Investigation

(Common Carrier Bureau released

September 8, 1995).

13. Moreover, we reject carriers’

arguments that the ‘‘filed-rate’’ doctrine

benefits customers by creating certainty

in the carrier-customer relationship. In

fact, the ‘‘filed-rate’’ doctrine creates

uncertainty in the carrier-customer

relationship. Invocation of the ‘‘filedrate’’ doctrine can be especially harmful

to consumers who have signed longterm service contracts with

interexchange carriers. As Ad Hoc Users

Committee, API and the Television

Networks point out, the doctrine

permits interexchange carriers

subsequently to file a tariff that differs

from the long-term contract, and if

justified by substantial cause,

unilaterally to alter or abrogate their

contractual obligations in a manner that

is not available in most commercial

relationships and that undermines

consumers’ legitimate business

expectations. The ‘‘filed-rate’’ doctrine

also harms residential and small

business consumers who utilize mass

market services and do not enter into

long-term service arrangements. Such

customers may purchase these mass

market services in response to

representations made by sales agents of

the interexchange carrier or

advertisements. In addition, such

customers may assume the

interexchange carrier will not modify its

rates without actual notice to the

customer. In the event of a dispute

about the representations made by a

sales agent, or a subsequent

modification to an interexchange

carrier’s rates, terms, or conditions

without actual notice to customers, a

customer would be bound by the

tariffed rates, terms, and conditions.

14. Moreover, we reaffirm our finding

that permissive detariffing would

facilitate tacit price coordination,

because nondominant interexchange

carriers could file tariffs to send price

signals. On further reflection, however,

we are persuaded by the comments of

AT&T, TRA, and Telco, which maintain

that complete detariffing, in conjunction

with a public disclosure requirement,

may not effectively impede tacit price

coordination, because a nondominant

interexchange carrier’s rates, terms, and

conditions for its interstate, domestic,

interexchange services would still be

available to its competitors in one

location. We adopted the public

disclosure requirement primarily to aid

enforcement of the geographic rate

averaging and rate integration

requirements of section 254(g). In

response to petitions asking us to

reconsider the information disclosure

requirements, we determine, as

discussed below, that we can effectively

meet our obligations to enforce section

254(g) without the public disclosure

requirement. We conclude that

complete detariffing, without a public

disclosure requirement, will more

effectively deter tacit price

coordination.

15. We recognized in the Second

Report and Order that complete

detariffing would change in significant

respects the manner in which

nondominant interexchange carriers

conduct their business. We considered

the arguments raised by the parties in

their petitions for reconsideration and

comments regarding costs and

administrative burdens associated with

complete detariffing that would be

avoided if carriers were allowed to file

tariffs. With the exception of casual

calling services and LEC-implemented

new customer services, these arguments

either essentially restate claims that

were advanced in the initial phase of

this proceeding in response to the

NPRM and were rejected in the Second

Report and Order, or are new, but

unsupported by credible evidence. For

example, Frontier, CompTel and SBC

contend, as numerous parties did in

earlier comments in this proceeding,

that complete detariffing will increase

the costs and administrative burdens on

nondominant interexchange carriers

because they will have to enter into

individually negotiated contracts with

every end user in order to establish a

binding contractual relationship.

Commenters assert that the costs

associated with establishing an

enforceable contractual relationship in

the absence of tariffs will be

‘‘enormous,’’ ‘‘significant,’’ and

‘‘substantial;’’ however, they do not

provide any evidence in support of

these claims. In short, these parties did

not raise any new arguments or provide

any credible new evidence concerning

the costs of providing interstate,

domestic, interexchange service in a

detariffed environment, as required by

section 405 of the Communications Act.

We, therefore, affirm our conclusion, for

the reasons set forth in the Second

Report and Order, that requiring

nondominant interexchange carriers to

conduct their businesses as do other

businesses in unregulated markets will

not substantially increase their costs.

16. In contrast, parties offered

additional credible evidence on

reconsideration concerning the costs

and burdens to carriers of providing

dial-around 1+ services and LECimplemented new customer services in

the absence of tariffs. As discussed

below, we reconsider our decision in

light of this evidence, and determine

that permissive detariffing in these

specific, limited instances is in the

public interest. With respect to other

interstate, domestic, interexchange

services, we affirm our finding that the

benefits and pro-competitive effects of

complete detariffing outweigh any

increased transactional or

administrative costs resulting from the

shift to complete detariffing.

17. Finally, we reject the argument

that permissive detariffing or mandatory

tariffing would promote competition

more effectively than complete

detariffing. As discussed above,

allowing nondominant interexchange

carriers to file tariffs for interstate,

domestic, interexchange services creates

the risk that such carriers will use these

tariffs to send price signals in an effort

to manipulate prices. Moreover, for the

reasons discussed above and in the

Second Report and Order, requiring

nondominant interexchange carriers to

conduct their businesses as do other

businesses in unregulated markets will

not substantially increase their costs.

We, therefore, conclude that complete

detariffing of the interstate, domestic,

interexchange services of nondominant

interexchange carriers is in the public

interest, with the exception of dialaround 1+ services, LEC-implemented

new customer services and section 226

tariffs associated with dial-around 0+

calls.

B. Casual Calling Services

i. Background

18. In contrast to other interstate,

domestic, interexchange services, casual

calling services are those services that

do not require the calling party to

establish an account with an

interexchange carrier or otherwise

presubscribe to a service. ‘‘Casual

calling’’ refers to services such as collect

calling, the use of a third-party credit

card, or dial-around through the use of

an access code. Casual calling does not

include services for which customers

presubscribe to an interexchange carrier

or otherwise establish an account with

an interexchange carrier prior to using

the service, such as by obtaining a

calling card, in advance, from an

interexchange carrier. References to
59588 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

casual calling in this reconsideration do

not pertain to section 226 informational

tariffs. We concluded in the Second

Report and Order that the record did not

support a finding that complete

detariffing would cause nondominant

interexchange carriers to cease offering

such services. Rather, we found that

nondominant interexchange carriers

have options other than tariffs by which

they can ensure the establishment of a

contractual relationship with casual

callers that would legally obligate such

callers to pay for the

telecommunications service they use

and bind them to the carriers’ terms and

conditions. Second Report and Order at

59350, paragraph 58. We stated that a

casual caller providing billing or

payment information, such as a credit

card or billing number, and completing

use of the telecommunications service,

may be deemed to have accepted a legal

obligation to pay for any such services

rendered. We also noted that a carrier

could alternatively seek recovery under

an implied-in-fact contract theory. An

implied-in-fact contract ‘‘refers to that

class of obligations which arises from

mutual agreement and intent to

promise, when the agreement and

promise have simply not been expressed

in words. Despite the fact that no words

of promise or agreement have been

used, such transactions are nevertheless

true contracts, and may properly be

called inferred contracts or contracts

implied in fact.’’ 1 Williston on

Contracts, § 1.5, at 20–21 (4th ed. 1990);

see also 1 Arthur L. Corbin, et al.,

Corbin on Contracts, § 1.19, at 55–57

(rev. ed. 1993) (stating that an impliedin-fact contract requires the same terms

as an express contract and those terms

are determined through a process of

implication and inference). We further

concluded on the basis of the record

before us at that time that the

competitive benefits of complete

detariffing of nondominant

interexchange carriers’ interstate,

domestic, interexchange service

outweighed any potential increased

costs resulting from detariffing such

services.

ii. Positions of the Parties

19. AT&T, Frontier, Telco, and TRA

petition the Commission to reconsider

its decision to adopt complete

detariffing for casual calling services

and argue that the Commission, instead,

should allow nondominant

interexchange carriers to file tariffs for

these services. CompTel, Television

Networks, SBC, Sprint and WorldCom

support this request. TRA and Sprint

contend that unlike most other

businesses, common carriers are

required by statute to provide service

upon demand prior to payment for their

services. AT&T argues that allowing

nondominant interexchange carriers to

file tariffs for casual calling services is

the simplest and most efficient means of

ensuring a contractual relationship

between carriers and casual callers.

These parties, and others, contend that,

in the absence of tariffs, carriers would

need to develop costly and burdensome

mechanisms to ensure the establishment

of a legal relationship with casual

callers to obligate them to pay for the

services they receive and to bind casual

callers to the terms and conditions of

the service, including limitations on

liability.

20. Several of these parties also

maintain that the alternatives to tariffs

that the Commission suggested in the

Second Report and Order are

insufficient to ensure that carriers have

a contractual basis for enforcing their

rates, terms, and conditions for casual

calling services. Specifically, these

parties assert that neither the impliedin-fact contract theory nor requiring

customers to provide credit card

information or a billing number

guarantees that a carrier will be able to

recover its charges for calls made by

casual callers, because the carrier will

have to demonstrate that the parties

agreed upon definite terms. AT&T,

Sprint, CompTel, and SBC assert that

without tariffs, interexchange carriers

would have to resort to costly,

repetitive, state-by-state litigation to

secure payment for services rendered.

They assert that the outcome of such

litigation is uncertain, and that the

associated costs would inevitably be

passed on to consumers.

21. AT&T argues that nondominant

interexchange carriers, to ensure the

establishment of a contractual

relationship with a casual caller, would

likely need to provide casual callers

with the rates, terms, and conditions, or

at a minimum, the option of obtaining

the rates, terms, and conditions, prior to

completion of the call. AT&T contends

that using a recorded announcement

that provides the rates, terms, and

conditions of the call would greatly

inconvenience callers by adding a delay

in call set-up time of between 1.5 and

2 minutes. AT&T further maintains that

even providing casual callers with the

option of hearing such information

would add between 7 and 9 seconds to

the call set-up time. AT&T argues that

this time delay is especially

burdensome to the casual caller because

in most instances, the caller is placing

the call from a telephone away from the

home in circumstances that necessitate

simplicity, convenience and speed.

Moreover, AT&T contends that these

mechanisms would increase by

approximately $0.33 to $0.77 the cost of

each call. AT&T asserts that the costs

would be higher if the nondominant

interexchange carrier announces the

rates, terms, and conditions and lower

if the carrier provides the option of

hearing the information. AT&T further

argues that it may have underestimated

this incremental cost per call, because it

was unable to calculate the cost of

playing an announcement to dialaround callers. AT&T also argues that

computers and fax machines are unable

to recognize the announcement, and,

therefore, that any announcement

would interfere with a caller’s ability to

use casual calling services for computer

access or sending faxes. AT&T states,

further, that an announcement of the

rates, terms, and conditions transmitted

to a computer or fax machine may be

insufficient to create an enforceable

contractual relationship with the caller.

22. AT&T and Sprint also claim that

a recorded announcement may not even

be an option for callers who use dialaround 1+ services, because

interexchange carriers may be unable to

distinguish these calls from direct dial

1+ calls placed from telephones

presubscribed to that carrier. Letter from

Marybeth M. Banks, Director, Federal

Regulatory Affairs, Sprint, to William F.

Caton, Acting Secretary, Federal

Communications Commission, April 30,

1997 (Sprint April 30 Ex Parte); Letter

from Marybeth M. Banks, Director,

Federal Regulatory Affairs, Sprint, to

William F. Caton, Acting Secretary,

Federal Communications Commission,

March 21, 1997 (Sprint March 21 Ex

Parte). Direct-dial 1+ calls are those

interstate, interexchange calls that an

end-user makes using his or her

presubscribed interexchange carrier. A

caller completes this call by simply

dialing 1 before the number being

called. In contrast, dial-around 1+ calls

are generally those made by end-users to

access the interstate, domestic,

interexchange services of an

interexchange carrier other than the

carrier presubscribed to that line. Once

an end-user dials a carrier’s CAC, the

caller is connected to that interexchange

carrier, and may place a 1+ (dial-around

1+) or a 0+ (dial-around 0+) call using

the services of that interexchange

carrier. End-users may use a dial-around

service to take advantage of a lower rate

offered by a competing interexchange

carrier for that specific call, or during

outages of its presubscribed

interexchange carrier’s network. Sprint

contends that the technology to

distinguish between these two types of
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59589

calls exists, but that this feature is not

universally offered by all LECs. Sprint

contends that only those LECs with

switches capable of providing signalling

using Signalling System 7 (SS7)

protocol are able to provide this feature.

Moreover, Sprint asserts that several

LECs that have switches capable of

providing SS7 do not offer this feature.

Sprint and AT&T further argue that the

cost of implementing this technology,

where available, is significant and

inevitably will be passed on to

consumers.

23. Several parties state that the

increase in costs related to ensuring that

a legally enforceable relationship is

established with casual callers in the

absence of tariffs may make it difficult

for carriers effectively to provide casual

calling services, and may ultimately

result in carriers ceasing to offer these

services altogether.

24. Telco and SBC also argue that

possible invocation of the ‘‘filed-rate’’

doctrine—a primary reason the

Commission adopted complete

detariffing in the Second Report and

Order—is not an issue with respect to

casual calling services, for which

carriers do not negotiate individual

contracts. Frontier and SBC claim,

moreover, that contrary to the

Commission’s conclusions in the

Second Report and Order, the ‘‘filedrate’’ doctrine is actually beneficial to

consumers because the ability to tariff a

service ‘‘promotes certainty’’ in the

carrier-customer relationship. Frontier

contends that this certainty is

particularly beneficial in situations such

as casual calling, where the carrier

provides the service prior to

establishing an enforceable contractual

relationship with the customer.

25. Finally, Western Union urges the

Commission to allow nondominant

interexchange carriers to file tariffs for

consumer messaging services (e.g.,

telegram services). Western Union

advances essentially the same

arguments in support of this claim that

other parties make in urging the

Commission to adopt permissive

detariffing for casual calling services.

Western Union asserts that customers

often convey to Western Union by

telephone the message that they want

transmitted by telegram. As a result,

Western Union contends that it does not

have an opportunity to formalize a

written contract with the customer that

would bind the customer to its terms

and conditions. Western Union states

that although the carrier could provide

such information orally at the time the

customer telephones Western Union to

place an order, such a method of

conveying the information would

confuse customers, and may not create

a legally enforceable contract that

effectively limits the carrier’s liability.

Western Union further contends that if

carriers are unable to limit their liability

effectively, they may be forced to

increase their rates or cease offering

consumer messaging services altogether,

which would not be in the public

interest.

iii. Discussion

26. A number of parties urge us to

reconsider our decision to adopt

complete detariffing for casual calling

services in general. Sprint has focused

its comments on dial-around 1+

services. After examining additional

evidence presented by the parties on

reconsideration, we partially grant the

petitions and adopt permissive

detariffing, on an interim basis, for a

subset of casual calling services,

specifically, the provision of dialaround 1+ services. For all other types

of casual calling services that are the

subject of this proceeding, we affirm our

determination that complete detariffing

is warranted, and, therefore, deny the

petitions for reconsideration to this

extent.

27. We note at the outset that the

problems that nondominant

interexchange carriers maintain will

arise with respect to ensuring the

establishment of a contractual

relationship with casual callers in a

detariffed environment do not arise with

calling cards. Because customers obtain

calling cards in advance of using the

service, the carrier can formalize a

contractual relationship at the time the

customer obtains the card, rather than at

the time the call is placed. Consumers

always have the option of obtaining a

carrier’s calling card to make calls and

carriers may choose to advertise calling

cards as a preferable alternative to

casual calling in a detariffed

environment.

28. With the exception of dial-around

1+ calls, discussed infra, we affirm our

prior finding that nondominant

interexchange carriers have reasonable

options other than tariffs by which they

can ensure the establishment of a

contractual relationship with casual

callers that would legally obligate such

callers to pay for the services they use

and bind them to the carrier’s terms and

conditions. We recognize that the

implied-in-fact contract theory and the

provision of credit card information or

a billing number, alone, do not

guarantee that nondominant

interexchange carriers will have an

enforceable contract with the casual

caller, if the caller does not have

knowledge of the carrier’s rates, terms,

and conditions prior to completion of

the call. Interexchange carriers,

however, do not dispute that

alternatives can be created by which

they can establish an enforceable

contract with casual callers. One

alternative, as discussed by AT&T, is

that nondominant interexchange

carriers could establish an enforceable

contract with casual callers by

providing them with the rates, terms,

and conditions of the interstate,

domestic, interexchange service by

operator or recorded announcements

prior to completion of the call. The

parties acknowledge that an enforceable

contract would exist if the rates, terms,

and conditions were provided prior to

completion of the call. Rather, these

carriers argue only that providing such

an announcement of rates, terms, and

conditions prior to completion of the

call would be burdensome to their

casual calling customers. Many casual

calling services, including collect

calling, and calls billed to third-party

numbers, however, already require

intervention by the interexchange

carrier before the call is completed, and

nondominant interexchange carriers

could provide this announcement at

that time. Furthermore, less burdensome

alternatives may also be sufficient to

ensure the establishment of a

contractual relationship. Another

alternative discussed by AT&T would be

to provide casual callers with the option

of obtaining the rates, terms, and

conditions prior to completion of the

call either through an operator or a

recorded announcement. We need not

address whether this alternative is

sufficient to ensure the establishment of

an enforceable contract, because we

conclude that providing the rates, terms,

and conditions prior to completion of

the call would establish an enforceable

contract and, as discussed below, is a

feasible alternative. Moreover, at a

minimum, we agree with Frontier and

reaffirm our conclusion in the Second

Report and Order that if the customer

has used the carrier’s service with

knowledge of the rates, terms, and

conditions, nondominant interexchange

carriers could seek recovery under an

implied-in-fact contract theory. Thus,

we conclude that the fact that a casual

caller has not signed a written contract

does not preclude a finding that a

legally enforceable obligation exists

between the nondominant

interexchange carrier and the casual

caller, especially when the customer has

knowledge of the carrier’s charges.

29. We recognize that complete

detariffing of casual calling services may

require nondominant interexchange
59590 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

carriers to modify in significant respects

the manner in which these carriers bill

and collect charges for their affected

services. We further recognize the

concerns raised by AT&T and Sprint

that the cost of casual calls may increase

and that casual callers may experience

a delay in call set-up time. Nevertheless,

we affirm our prior conclusion that the

benefits of complete detariffing of casual

calling services except dial-around 1+

services are substantial. These benefits

include elimination of the possible

invocation of the ‘‘filed-rate’’ doctrine,

decreased risk of tacit price

coordination, and increased rate and

service information provided directly to

casual callers to ensure that a legal

relationship is established between

carriers and customers at the time the

caller uses the casual calling service. In

our view, these benefits outweigh the

increased costs and delays in call set-up

time that AT&T and Sprint claim will

result from complete detariffing. In

addition, we reiterate that casual callers

always have the option of obtaining and

using an interexchange carrier’s calling

card, thereby avoiding any increased

cost or delay.

30. We also recognize AT&T’s concern

that complete detariffing of casual

calling services would impede the use

of certain casual calling arrangements

for calls originated by computers and

fax machines, because the computer or

fax machine would not recognize the

announcement, thereby interfering with

the call, and because an announcement

transmitted to a computer or fax

machine may be insufficient to establish

an enforceable contract. AT&T,

however, overstates the problem. Casual

calling services such as collect calling

and calls billed to third-party numbers

presently require intervention by the

interexchange carrier before the call is

completed. Likewise, use of a thirdparty credit card often requires

interaction with the carrier to provide

the credit card information. Thus, the

use of a recorded announcement in a

detariffed environment will not

significantly alter the current

requirement of intervention by the

interexchange carrier. One casual

calling service that does not require

intervention with the interexchange

carrier prior to completion of the call is

dial-around 1+ service. As discussed

infra, we are permitting carriers to file

tariffs for dial-around 1+ service

through use of a carrier’s CAC.

Concededly, there may be situations

where callers using third-party credit

cards may be able to enter their credit

card information electronically by

swiping the card prior to beginning a

call, and that in the absence of tariffs,

these customers may face an additional

announcement of rates, terms, and

conditions. We nevertheless find that

the negative consequences to the limited

number of those casual callers who may

use third-party credit cards for

computer access and fax machines do

not warrant reconsideration of our

decision to detariff completely casual

calling except dial-around 1+ services in

light of the benefits of complete

detariffing of such casual calling

services and the fact that most casual

calling services already require

intervention by an interexchange

carrier. Moreover, casual callers who

now use third-party credit cards for

computer access and fax machines can

avoid the announcement of rates, terms,

and conditions by obtaining in advance

and using an interexchange carrier’s

calling card. As discussed above, an

interexchange carrier can establish an

enforceable contract with customers at

the time they obtain the calling card,

rather than when the call is placed.

31. We also reject Telco’s and SBC’s

argument that, because carriers do not

negotiate individual contracts with

casual callers, possible invocation of the

‘‘filed-rate’’ doctrine is not a concern for

casual callers. Although we agree with

Telco and SBC that generally the ‘‘filedrate’’ doctrine is an issue when a tariffed

rate, term, or condition differs from a

rate, term, or condition in a contract,

invocation of the ‘‘filed-rate’’ doctrine

may also harm casual callers. Customers

may use a casual calling service in

response to an advertisement or direct

solicitation, which may provide rates,

terms, and conditions for the interstate,

domestic, interexchange casual calling

service. If the interexchange carrier

modifies these rates, terms, or

conditions in the future, the consumer

would be bound by the tariffed rates,

terms, and conditions, even if the

consumer did not receive actual notice

of the modification. In the absence of

tariffs, consumers will likely receive, or

have the option of receiving, current

information on the rates, terms, and

conditions for the specific service they

are about to use, because nondominant

interexchange carriers will likely

disclose such information to the casual

caller in order to ensure the

establishment of a contractual

relationship.

32. While we continue to require

complete detariffing for casual calling

services in general, we adopt permissive

detariffing for dial-around 1+ services

using a nondominant interexchange

carrier’s access code. We are persuaded

that the means of ensuring the

establishment of an enforceable contract

with customers of other casual calling

services cannot be implemented

currently for dial-around 1+ services,

because, as explained below, the

interexchange carrier does not have the

ability reasonably to distinguish a caller

using dial-around 1+ services from

direct dial 1+ services, as required to

provide the dial-around 1+ caller with

the rates, terms, and conditions prior to

completion of the call. We note that this

issue is not a concern for dial-around 0+

calls from aggregator locations, because

those calls require intervention between

the carrier and customer, at which time

the carrier can establish a contractual

relationship with the customer. We

further note that not all dial-around 1+

calls are from casual callers. Presently,

some customers may need to dial their

presubscribed interexchange carrier’s

access code to use that carrier’s

interstate, domestic, interexchange

services, rather than the caller’s LEC, for

interstate, intraLATA calls. After

February 8, 1999, however, customers

will no longer need to dial their

presubscribed interexchange carrier’s

access code to use that carrier’s

interstate, domestic, interexchange

services because LECs are required to

institute dialing parity and allow

customers to select a PIC for intraLATA

toll calling by then. See Implementation

of the Local Competition Provisions of

the Telecommunications Act of 1996;

Interconnection Between Local

Exchange Carriers and Commercial

Mobile Radio; Area Code Relief Plan for

Dallas and Houston, Ordered by the

Public Utility Commission of Texas;

Administration of the North American

Numbering Plan; Proposed 708 Relief

Plan and 630 Numbering Plan Area

Code by Ameritech-Illinois, CC Docket

Nos. 96–98, 95–185, NSD File No. 96–

8, CC Docket No. 92–237, IAD File No.

94–102, Second Report and Order and

Memorandum Opinion and Order, 61

FR 47284 (September 6, 1996).

33. Sprint and AT&T have presented

evidence that the technology to

distinguish dial-around 1+ calls from

direct dial 1+ calls placed from

telephones presubscribed to an

interexchange carrier is not universally

offered by all LECs either because some

LEC switches are not capable of

providing signalling using SS7, which is

necessary to provide this feature, or

because some LECs have chosen not to

offer the technology needed to

distinguish dial-around 1+ calls from

direct dial 1+ calls. Sprint’s and AT&T’s

unchallenged representations, which

were not in the record when we

considered casual calling services in the

Second Report and Order, lead us to
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59591

find that adoption of complete

detariffing at this time for dial-around

1+ services would not be in the public

interest. Such a regime would impose

substantial costs and burdens on

nondominant interexchange carriers

that offer dial-around 1+ services and

their customers. The rates, terms, and

conditions of services provided to

presubscribed direct dial callers often

differ from those provided to casual

callers using a dial-around 1+ service.

Because nondominant interexchange

carriers would not always be able to

distinguish between these two types of

calls, they would not always be able to

determine the rates, terms, and

conditions for a particular call at the

time the call is placed. Moreover, the

inability of nondominant interexchange

carriers to distinguish between these

two types of calls would require these

carriers to implement for dial-around 1+

callers and direct dial 1+ callers the

recorded announcement of the rates,

terms, and conditions or other means

adopted by such carriers to ensure a

contractual relationship with dialaround 1+ callers. Such a recorded

announcement may confuse direct dial

1+ customers. Further, the increased

costs and the delay in call set-up time

that AT&T and Sprint contend are

attendant with ensuring the

establishment of a contractual

relationship would likely be imposed on

both dial-around 1+ calls and direct dial

1+ calls from a presubscribed telephone

line. We find that imposing these

increased costs and delays in call set-up

time on both dial-around 1+ callers and

customers using a direct dial 1+ service

from a telephone line presubscribed to

that carrier—in all likelihood, the

majority of calls over that line—would

impose an unreasonable burden on

consumers using direct dial 1+ services

from their PIC. We note that these

concerns do not arise with respect to

dial-around 0+ calls from aggregator

locations, because such calls always

require intervention by the

interexchange carrier and, therefore,

implementation of a recorded

announcement or some other means of

providing customers with the rates,

terms, and conditions of the call would

not affect consumers making calls other

than dial-around 0+ calls. We reach this

conclusion because the volume of direct

dial 1+ calls from a PIC is vastly larger

than the volume of dial-around 1+ calls,

and therefore, the costs and burdens

associated with providing an

announcement of rates, terms, and

conditions for dial-around 1+ callers

would be imposed on this much larger

group. In contrast, the increased costs

and delays in call set-up time for other

casual calling services would be

imposed only on those customers using

that particular casual calling service,

and the benefits of completely

detariffing those casual calling services

outweigh the costs, as discussed above.

34. We recognize that nondominant

interexchange carriers, to avoid

burdening their presubscribed

customers, could decide not to provide

an announcement of rates, terms, and

conditions prior to completion of dialaround 1+ calls. In this circumstance, as

in any circumstance where there is no

contract, the carrier, at a minimum,

could seek to recover under a theory of

quantum meruit (Quantum meruit is an

‘‘equitable doctrine, based on the

concept that no one who benefits by the

labor and materials of another should be

unjustly enriched thereby; under those

circumstances, the law implies a

promise to pay a reasonable amount for

the labor and materials furnished, even

absent a specific contract therefor.’’

Black’s Law Dictionary 1243 (6th ed.

1990).) for the value of its services.

Because we appreciate the somewhat

greater burden of pursuing a collection

action when only a quantum meruit

theory of recovery is available, however,

we find that allowing nondominant

interexchange carriers to file tariffs for

dial-around 1+ services at this time is in

the public interest. We are also

concerned that nondominant

interexchange carriers, to avoid

imposing these costs and delays on their

presubscribed customers, may decide

not to offer a dial-around 1+ service

option. Such a result would limit

consumers’ choices, and, therefore,

would also not be in the public interest.

35. We realize that the unique

problems created by dial-around 1+

services as they are presently handled

could be eliminated if we were to

require LECs to deploy universally

switches capable of providing SS7. We

are not requiring LECs to take such

measures in this Order on

Reconsideration. A significant number

of LEC switches do not presently have

SS7 capability, and we do not have an

adequate record in this proceeding to

evaluate the costs that such a decision

would impose on LECs. We note,

however, that LECs have been rapidly

deploying switches capable of providing

SS7, and therefore, the unique

technological concerns about the ability

to distinguish between dial-around 1+

calls and direct dial 1+ calls from

presubscribed customers will not be an

issue in the near future. Once LECs

universally deploy switches that are

capable of providing SS7, we will

reexamine this issue to determine

whether we will completely detariff

dial-around 1+ services for the same

reasons that we determine that complete

detariffing of other casual calling

services is in the public interest. In the

meantime, we conclude that permissive

detariffing of dial-around 1+ services

offered by nondominant interexchange

carriers is in the public interest as an

interim measure. In addition, we

strongly encourage nondominant

interexchange carriers to provide dialaround 1+ services on a detariffed basis

as soon as they have the capability to do

so. Because we are adopting permissive

detariffing for dial-around 1+ services,

we need not address concerns raised by

Sprint that the ‘‘bad debt ratio’’ is higher

for dial-around 1+ calls than for calls

from presubscribed customers.

36. We recognize that adopting

permissive detariffing for dial-around

1+ services may raise concerns about

invocation of the ‘‘filed-rate’’ doctrine

for customers of these services. Due to

the unique technological concerns with

dial-around 1+ services that prevent the

interexchange carrier from reasonably

being able to provide the dial-around 1+

caller with the rates, terms, and

conditions prior to completion of the

call, discussed above, we conclude, on

balance, that the costs to consumers of

adopting complete detariffing for dialaround 1+ services outweigh the

benefits of complete detariffing with

respect to this particular type of service.

C. Initial Period of Service to

Presubscribed Customers

i. Background

37. The Second Report and Order did

not specifically address whether

complete detariffing is in the public

interest with respect to the provision of

interstate, domestic, interexchange

service to new customers that select and

use an interexchange service before

receiving information about the rates,

terms, and conditions of that service.

None of the comments filed in response

to the NPRM raised this issue.

ii. Positions of the Parties

38. AT&T contends that we should

permit carriers to file tariffs that are

effective for the initial 45 days of service

to residential and small business

customers, or until a contract with the

new customer is consummated,

whichever is earlier. AT&T claims that

many of the concerns carriers raise with

respect to casual calling services in a

detariffed environment are also relevant

with respect to presubscribed customers

during the initial period of service.

AT&T states that, absent tariffs,

nondominant interexchange carriers
59592 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

will be required to provide service to

new customers prior to the

formalization of a contractual

relationship during the period: (1) After

the customer contacts the LEC to

designate an interexchange carrier or

initiate a PIC change, but before the

nondominant interexchange carrier is

able to ensure the establishment of an

enforceable contractual relationship;

and (2) when the customer contacts the

interexchange carrier or its marketing

agents directly, but before the contract

can be prepared and mailed to the

customer. AT&T contends that in both

situations, tariffs are the only means by

which the interexchange carrier can

enforce its rates, terms, and conditions

and limit its liability before a contract

is finalized, without resort to costly,

repetitive litigation. AT&T concludes

that permitting nondominant

interexchange carriers to file tariffs

before they have an opportunity to

finalize a written contract with a new

customer will not adversely affect

consumers because market forces will

ensure that the filed rates, terms, and

conditions will be just, reasonable, and

nondiscriminatory, and the

Commission’s complaint process is

available as an additional safeguard.

Several commenters support AT&T’s

request.

iii. Discussion

39. We grant, in part, AT&T’s petition

for reconsideration urging us to adopt

permissive detariffing for the initial 45

days of nondominant interexchange

carriers’ provision of interstate,

domestic, interexchange mass market

services to new residential and business

customers, or until a written contract is

consummated, whichever is earlier. We

find, based on the evidence presented

by the parties, that permitting

interexchange carriers to file tariffs to

cover the provision of service during

this period is in the public interest in

the limited circumstance when a new

customer contacts the LEC to select an

interexchange carrier or to initiate a PIC

change. We expect each LEC to process

service requests promptly.

Interexchange carriers are reminded that

during the effective period of their

tariffs, they must make their services

generally available to all similarlysituated customers, pursuant to section

202(a). During the effective period of a

tariff, interexchange carriers are

required, pursuant to section 201(a), to

make all efforts to provide service

quickly, even under protest. See In the

Matter of Hawaiian Telephone

Company, 78 F.C.C. 2d 1062, 1065

(1980). Carriers are also bound by

section 201 when providing service

pursuant to individually-negotiated

contracts. We conclude, however, that

the interexchange carriers have not

demonstrated that this exception to our

detariffing policy should be extended to

the initial period of service to a new

customer when the customer directly

contacts the interexchange carrier or its

marketing agents.

40. We find persuasive AT&T’s

argument that when a residential or

small business customer contacts the

LEC in order to presubscribe to an

interexchange carrier or initiate a PIC

change, (We note that residential and

small business customers that contact

the LEC to presubscribe to an

interexchange carrier or initiate a PIC

change are generally those customers

that utilize mass market services.) the

selected interexchange carrier, because

it does not have direct contact with the

customer, may be unable immediately to

ensure that a legal relationship is

established with that customer. AT&T

presented evidence establishing that: (1)

It takes some LECs up to 60 days to

notify AT&T of the PIC designation;

(The 45-day period during which we are

allowing permissive detariffing was

requested by the parties. Although

AT&T asserts that it takes LECs up to 60

days to notify it of a PIC change, AT&T’s

petition for reconsideration requests

only that we adopt permissive

detariffing for at most 45 days to enable

it to formalize a contract. See AT&T

Petition at 9, 11–12 & n.12. Other parties

supported AT&T’s request. See supra

note . AT&T subsequently clarified that

allowing interexchange carriers to file

tariffs that are applicable for a

maximum of 45 days after the customer

begins taking service would provide the

interexchange carrier a sufficient

amount of time to establish a

contractual relationship with the

customer in almost all cases. Letter from

E. E. Estey, Government Affairs Vice

President, AT&T, to William F. Caton,

Acting Secretary, Federal

Communications Commission, July 16,

1997.) (2) AT&T, because of the

enormous churn rate in the industry,

processes in excess of 30 million PIC

changes or requests annually (an

average of more than 600,000 requests

per week); and (3) an additional two

weeks may elapse after AT&T receives

notice that it has been designated as a

customer’s PIC before contract

information is mailed to that customer.

Thus, during some initial period after

interexchange service is established,

carriers may be providing interstate,

domestic, interexchange service to new

customers without adequate assurance

that the carriers’ rates, terms, and

conditions will be legally enforceable,

and as a result, may be required to seek

recovery of unremitted charges under

alternative equitable theories, as

discussed above.

41. We have considered various

means by which LECs could convey to

new customers of a nondominant

interexchange carrier the information

necessary to ensure the establishment of

an enforceable contract during the

initial period after the customer contacts

the LEC and before the nondominant

interexchange carrier can formalize the

contractual relationship. We conclude,

however, that none of these means

adequately ensures an enforceable

contractual relationship between the

nondominant interexchange carrier and

the customer during this initial period.

Nondominant interexchange carriers

conceivably could contract with LECs to

act as agents of the interexchange carrier

to establish a contractual relationship

with the prospective customer by orally

providing the rates, terms, and

conditions of the interexchange service.

We are reluctant, however, to adopt a

policy that may have the effect of

mandating such agency arrangements,

especially since the LEC may have an

affiliate that offers competing interstate

interexchange services. Alternatively, if

prospective customers are required to

contact nondominant interexchange

carriers directly prior to the

commencement of service in order to

establish the necessary contractual

relationship, such a requirement would

preclude residential and business

customers from changing or selecting a

PIC by contacting the LECs as they do

today. That, in turn, could diminish

competition among interexchange

carriers by making it more difficult for

customers to switch interexchange

carriers. Finally, the nondominant

interexchange carrier may decide to

delay provisioning of the service until a

contractual relationship is formalized,

which also may discourage residential

and business customers from making

PIC changes, thereby deterring

competition in the interexchange

market. We, therefore, conclude that the

benefits of allowing nondominant

interexchange carriers to file tariffs, at

their discretion, for the limited period

before the customer executes a written

contract outweigh any potential benefits

resulting from complete detariffing in

this particular situation. Consistent with

the deregulatory framework of the 1996

Act, we are allowing nondominant

interexchange carriers to file tariffs

under the circumstances described

herein, as opposed to requiring tariffs, to

allow nondominant interexchange
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59593

carriers and LECs to agree upon

alternatives to tariffs for the purpose of

adequately ensuring a contractual

relationship between the nondominant

interexchange carrier and the customer

before the customer formally executes

the written contract.

42. We reject AT&T’s arguments that

we should also allow nondominant

interexchange carriers to provide an

initial period of service under tariff

when a customer contacts the

interexchange carrier or its marketing

agent directly. AT&T claims that even

when the customer contacts the carrier

or its marketing agents directly to begin

interexchange service or initiate a PIC

change, it is unable to consummate a

written contract prior to the

commencement of service, given the

large number of requests it receives and

the period of time it takes to process

customers’ requests. When a customer

contacts the interexchange carrier or its

marketing agent directly, however, there

is an opportunity for the interexchange

carrier to establish, at a minimum, an

oral contract by relating to the customer

the rates, terms, and conditions that will

be in effect from the commencement of

service until such time as the customer

formalizes a written contract with the

interexchange carrier. This situation is

distinguishable from both the situation

in which the prospective customer

contacts the LEC to select an

interexchange carrier or to initiate a PIC

change, and when a customer places a

casual call using a carrier’s CAC. The

interexchange carrier does not have an

opportunity in either of those cases to

interact with the customer. In contrast,

a customer who contacts the

nondominant interexchange carrier

directly is in essentially the same

position as customers of other

businesses in unregulated, competitive

markets, i.e., they have an opportunity

to interact with the service provider

before the service is initiated. We are

not persuaded, therefore, that we should

reconsider our decision to require

complete detariffing when a customer

contacts the interexchange carrier or its

marketing agent directly to begin

interexchange service or to initiate a PIC

change. We reaffirm our finding that

complete detariffing when a customer

contacts the interexchange carrier or its

marketing agent directly to begin

interexchange service or to initiate a PIC

change is in the public interest.

43. Moreover, we find that permitting

nondominant interexchange carriers to

file tariffs effective for the initial 45

days of service or until there is a written

contract between the carrier and the

customer, whichever is earlier, in those

limited instances where prospective

customers contact the LEC to select an

interexchange carrier or to initiate a PIC

change, is not inconsistent with a

primary reason we adopted complete

detariffing in the Second Report and

Order, i.e., eliminating the ability of

carriers to invoke the ‘‘filed-rate’’

doctrine. We believe that the ability of

carriers to invoke the ‘‘filed-rate’’

doctrine does not create significant

problems when a customer contacts the

LEC to select an interexchange carrier or

to initiate a PIC change because the

proposed tariff is in place only for a

limited time, i.e., the initial 45 days of

service or until a written contract

between the carrier and the customer is

consummated, whichever is earlier. The

limited term of the tariff would prevent

carriers from unilaterally changing the

terms of negotiated agreements or

unilaterally limiting their liability for

damages after the initial period of

service. Upon expiration of the tariff,

the legal relationship between carriers

and customers will much more closely

resemble the legal relationship between

service providers and customers in an

unregulated environment, a goal of

detariffing delineated in the Second

Report and Order.

44. We recognize that permitting

nondominant interexchange carriers to

file tariffs for service to new customers

that contact the LEC raises the risk that

carriers could use these tariffs to send

price signals for their mass market

services. We believe, however, that we

cannot address the unique problems

raised by the commenters about

establishing a contractual relationship

with these new customers in a detariffed

environment without allowing

nondominant interexchange carriers to

file tariffs for a short period needed to

formalize the contract. We note that

should we become aware of evidence

indicating that nondominant

interexchange carriers are using these

tariffs to send price signals for their

mass market services, we can reexamine

our decision to adopt permissive

detariffing for LEC-implemented new

customer services.

D. Tariff Filing Requirements for

Bundled Domestic and International

Service Offerings

i. Background

45. In the NPRM in this rulemaking

docket, the Commission sought

comment on whether it should forbear

from requiring nondominant

interexchange carriers to file tariffs for

the international portions of service

offerings that include both interstate,

domestic, interexchange services and

international services. The Commission

noted that it was reserving for a separate

proceeding the issue of whether it

should consider generally forbearing

from requiring tariffs for international

services provided by nondominant

carriers.

46. We determined in the Second

Report and Order that there was

insufficient record evidence to find that

each of the statutory criteria necessary

to forbear from requiring nondominant

interexchange carriers to file tariffs for

the international portions of bundled

domestic and international service

offerings had been satisfied. We

concluded that we should address

detariffing of the international portions

of bundled domestic and international

service offerings in a separate

proceeding in which we could examine

the state of competition in the

international market. We therefore

required nondominant interexchange

carriers with bundled domestic and

international services to bifurcate their

bundled domestic and international

service offerings and file a tariff that

includes only the international portions

of their service offerings.

47. We also adopted a nine-month

transition period in the Second Report

and Order to allow nondominant

interexchange carriers time to adjust to

detariffing. We determined that the

Commission would not accept new

tariffs for interstate, domestic,

interexchange services, or revisions to

existing tariffs, for long-term service

arrangements during the nine-month

transition.

ii. Positions of the Parties

48. API and SDN Users request that

the Commission detariff the

international portions of bundled

domestic and international services

offered by nondominant interexchange

carriers. Ad Hoc Users Committee and

the Television Networks support API’s

and SDN Users’ petitions for

reconsideration. AT&T and CompTel

argue that the international services

portion of bundled service offerings

should be treated on the same basis as

the interstate, domestic, interexchange

services portion, without specifying

whether both portions should be tariffed

or detariffed. SDN Users, AT&T, Ad Hoc

Users Committee, and CompTel contend

that requiring tariffs only for the

international portions of bundled

domestic and international service

offerings confuses customers and

complicates negotiations. API further

argues that the statutory forbearance

criteria are satisfied with respect to the

international portion of bundled

international and domestic services,

because the policy considerations that
59594 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

support the Commission’s decision to

detariff the interstate, domestic,

interexchange market are equally

relevant to the international portion of

bundled international and domestic

offerings. In particular, API states that

the public interest objectives of

eliminating the possible invocation of

the ‘‘filed-rate’’ doctrine and

establishing market conditions that

more closely resemble an unregulated

environment are also served by

detariffing the international portions of

bundled international and domestic

offerings. API further argues that there

is no evidence in the record that would

support a need to retain tariffs for the

international portions of bundled

offerings.

49. Sprint opposes the request to

allow domestic nondominant carriers to

detariff the international portions of

bundled domestic and international

services offered by nondominant

interexchange carriers. Sprint argues

that requiring carriers to detariff such

international services will confuse

customers, because some carriers are

dominant in certain international

markets and nondominant in others.

Sprint therefore urges the Commission

to maintain tariff filing requirements for

all international services until the

Commission is able to examine the

unique issues involved in applying its

detariffing policies to international

services.

50. AT&T and CompTel further

request that the Commission allow

permissive detariffing for mixed

international and domestic services

offered by nondominant interexchange

carriers during the nine-month

transition to allow carriers and

customers to adjust to the new policy.

Ad Hoc Users Committee and API

oppose this request on the ground that

such a policy would allow carriers to

alter or abrogate long-term arrangements

by invoking the ‘‘filed-rate’’ doctrine.

API disputes AT&T’s contention that

customers are ‘‘significantly confused’’

by the requirement that nondominant

interexchange carriers bifurcate mixed

international and domestic service

offerings and states that customers have

worked through issues with carriers that

are far more daunting and potentially

confusing.

iii. Discussion

51. In order to determine whether the

statutory criteria are satisfied for us to

forbear from requiring tariffs for the

international portion of bundled

domestic and international service

offerings, we need to examine the state

of competition for these international

services. We find nothing in the record

on reconsideration that enables us to

make findings on the state of

competition for such services. API

claims only that detariffing the

international portion of bundled

domestic and international service

offerings would lead to the same public

interest benefits as detariffing interstate,

domestic, interexchange services. Other

parties argue that requiring tariffs only

for the international portions of bundled

domestic and international service

offerings confuses customers and

complicates negotiations. The parties,

however, have not provided new

evidence in the record that would

enable us to determine that the statutory

forbearance criteria are met for

detariffing the international portion of

bundled domestic and international

service offerings. The state of

competition in the international market

may not be the same as in the domestic

market, and, we do not have sufficient

evidence in this proceeding to make

such a determination. We therefore

affirm our conclusion that the

determination of whether to detariff the

international portions of bundled

domestic and international service

offerings should be addressed as part of

a separate proceeding in which the

Commission can further examine the

state of competition in the international

market.

52. We need not address at this time

AT&T’s request that we adopt

permissive detariffing for bundled

international and domestic service

offerings during the nine-month

transition. The United States Court of

Appeals for the D.C. Circuit has stayed

the Second Report and Order, pending

judicial review. Nondominant

interexchange carriers, therefore, are

currently required to file tariffs for all of

their interstate, domestic, interexchange

services, including those that are

bundled with international services. We

delegate authority to the Common

Carrier Bureau to determine the

appropriate transition period and

address other transition issues when the

detariffing rules become effective.

E. Local Access Portion of Interstate,

Domestic, Interexchange Services

i. Positions of the Parties

53. Ad Hoc Users Committee requests

that the Commission clarify that the

Second Report and Order detariffed the

exchange access components of the

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers, and not only the

interoffice component of such services.

It argues that a requirement that

nondominant interexchange carriers

separate their integrated end-to-end

service offerings into interexchange and

exchange access services would

radically depart from the Commission’s

historical approach to regulation of the

interstate, domestic, interexchange

marketplace and would create a

‘‘practical nightmare’’ for nondominant

interexchange carriers to implement.

API and Sprint support Ad Hoc Users

Committee’s request for clarification.

54. Bell Atlantic contends that Ad

Hoc’s request, which deals with the

regulation of exchange access services

and not the regulation of interexchange

services, is beyond the scope of this

proceeding. Moreover, Bell Atlantic

argues that the Commission should not

detariff the exchange access services of

nondominant providers without

detariffing such services for all

providers.

ii. Discussion

55. We agree with Ad Hoc Users

Committee that we detariffed integrated

end-to-end interstate, domestic,

interexchange services in the Second

Report and Order, including both the

interexchange portion and the interstate

exchange access components of such

services when offered on an integrated

basis. We note that our conclusion that

the forbearance criteria are satisfied

applies only to interstate exchange

access that is offered to customers as

part of an integrated, end-to-end

interstate, domestic, interexchange

service that the customer is purchasing.

We are not detariffing in this proceeding

the sale of interstate exchange access

that is offered on a stand-alone basis.

The Commission, in another

proceeding, recently granted, in part,

two petitions seeking forbearance from

tariff filing requirements for competitive

access providers (CAPs) and nondominant providers of interestate

exchange access services. In that

proceeding, the Commission adopted

permissive detariffing for non-ILEC

providers of interstate exchange access

services, and proposed the adoption of

complete detariffing for all non-ILEC

providers of these services. See In the

Matters of Hyperion

Telecommunications, Inc. Petition

Requesting Forbearance, Time Warner

Communications Petition for

Forbearance, Complete Detariffing for

Competitive Access Providers and

Competitive Local Exchange Carriers,

Memorandum Opinion and Order and

Notice of Proposed Rulemaking, CC

Docket No. 97–146, 62 FR 38244 (July

17, 1997); see also Access Charge

Reform; Price Cap Performance Review

for Local Exchange Carriers; Transport

Rate Structure and Pricing; End User
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59595

Common Line Charges, CC Docket Nos.

96–262, 94–1, 91–213, 95–72, First

Report and Order, 62 FR 31868 (June 11,

1997) (Access Charge Reform Order).

56. Nondominant interexchange

carriers purchase or self provide

interstate exchange access as an input to

providing integrated, end-to-end

interstate, domestic, interexchange

service. Thus, access is merely a

component of a service offered to end

users. We have found that market forces

generally will ensure that nondominant

interexchange carriers do not charge

rates, or impose terms and conditions,

for their interstate, domestic,

interexchange services that violate

sections 201 and 202 of the

Communications Act. Because market

forces will generally constrain

nondominant interexchange carriers’

charges for interstate, domestic,

interexchange services, there is no need

to require the nondominant

interexchange carrier to break out and

tariff a separate charge for interstate

exchange access.

F. Effect of Detariffing on AT&T/

Alascom’s Common Carrier Services

i. Background

57. AT&T/Alascom offers certain

‘‘common carrier’’ services that the

Commission has defined as ‘‘all

interstate interexchange transport and

switching services that are necessary for

other interexchange carriers to provide

services in Alaska up to the point of

interconnection with each Alaska local

exchange carrier.’’ In the AT&T

Reclassification proceeding, AT&T

made certain commitments, including,

inter alia, that it ‘‘will comply with all

of the obligations and conditions

contained in the Commission orders

associated with AT&T’s purchase of

Alascom, Inc., including the Alascom

Authorization Order, the Market

Structure Order (59 FR 27496 (May 27,

1994)), and the Final Recommended

Decision (58 FR 63345 (December 1,

1993)).’’ In the Second Report and

Order, we stated that our decision to

forbear from requiring nondominant

interexchange carriers to file tariffs for

interstate, domestic, interexchange

services would not affect AT&T’s

commitment to comply with the

Commission’s orders associated with

AT&T’s purchase of Alascom, and that

AT&T would continue to be bound by

this commitment.

ii. Discussion

58. We have been asked to clarify in

this proceeding that the Second Report

and Order did not detariff AT&T/

Alascom’s common carrier services. A

similar issue has been raised in the

AT&T Reclassification Order. We

believe this issue is better addressed in

that proceeding in light of AT&T’s

commitment in that proceeding to

comply with the Commission’s orders

associated with AT&T’s purchase of

Alascom. We therefore incorporate the

record filed in this proceeding on the

issue of detariffing AT&T/Alascom’s

common carriers services to the AT&T

Reclassification proceeding.

III. Information Disclosure Issues

A. Background

59. The Commission tentatively

concluded in the NPRM that it would

require nondominant providers of

interstate, domestic, interexchange

telecommunications services to file

certifications that they are in

compliance with the geographic rate

averaging and rate integration

requirements of section 254(g) of the

Communications Act to ensure

compliance with those requirements.

The Commission also tentatively

concluded in the NPRM that, if it were

to adopt a complete detariffing policy,

nondominant interexchange carriers

would be required to maintain at their

premises price and service information

regarding all of their interstate,

domestic, interexchange service

offerings, which they could submit to

the Commission upon request.

60. In the Second Report and Order,

we adopted the tentative conclusion in

the NPRM and required nondominant

interexchange carriers to file an annual

certification stating that they are in

compliance with the statutory rate

averaging and rate integration

requirements. We further adopted the

tentative conclusion in the NPRM and

ordered nondominant interexchange

carriers to maintain supporting

documentation on the rates, terms, and

conditions of their interstate, domestic,

interexchange services that they could

submit to the Commission within ten

business days upon request. In addition,

in the Second Report and Order, we

required nondominant interexchange

carriers to make information concerning

current rates, terms, and conditions for

all of their interstate, domestic,

interexchange services available to the

public in at least one location during

regular business hours, although we

expressly stated that we did not intend

to require nondominant interexchange

carriers to disclose more information

than is currently provided in tariffs.

B. Positions of the Parties

61. Several parties filed petitions

asking the Commission to reconsider or

clarify various aspects of the public

disclosure requirement in the Second

Report and Order. Ad Hoc Users

Committee requests that the

Commission eliminate the public

disclosure requirement with respect to

information on individually-negotiated

service arrangements. It argues that a

public disclosure requirement makes it

easier for interexchange carriers to

ascertain their competitors’ price and

service information, and, therefore, the

requirement is inconsistent with the

Commission’s interest in deterring price

coordination. Ad Hoc Users Committee

further argues that, because the

Commission decided to forbear from

applying section 254(g) to contract

tariffs and similar customer-specific

agreements, disclosure of the rates and

terms of individually-negotiated service

arrangements cannot be justified on the

basis of enforcing section 254(g). Rather

than requiring public disclosure, Ad

Hoc Users Committee contends that the

Commission could meet the objectives

supporting a public disclosure

requirement in the Second Report and

Order through: (1) The workings of the

competitive market; (2) the

Commission’s complaint process; and

(3) disclosure of rate and term

information to Commission and state

regulatory staff, to Congress in

connection with agency oversight, and

to complainants in discovery

proceedings before the Commission or

courts.

62. API, Bell Atlantic, and Sprint

support Ad Hoc Users Committee’s

petition, arguing that a public disclosure

requirement for customer-specific

arrangements will inhibit competition

and that businesses in other competitive

markets are not required to disclose the

terms of customer-specific deals. Bell

Atlantic further argues that, if the

Commission eliminates the public

disclosure requirement, it should also

not require dominant interexchange

carriers to disclose their prices to the

public through tariffs. Bell Atlantic

maintains that requiring dominant

interexchange carriers to file tariffs or

otherwise disclose their prices would be

anticompetitive, because nondominant

interexchange carriers would set their

prices based on the dominant carrier’s

disclosed prices.

63. TRA argues that the public

disclosure requirement is necessary to

address, at least in part, its concerns

that carriers will discriminate against

resellers in the absence of tariffs.

Several other parties request that the

Commission strengthen the information

disclosure requirements in the Second

Report and Order, which they deem

insufficient. Specifically, Rural
59596 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

Telephone Coalition (RTC) asks the

Commission to require carriers to make

information more widely available to

consumers to ensure that they have easy

access to the information necessary to

determine whether nondominant

interexchange carriers are complying

with the rate integration and rate

averaging requirements of section

254(g). RTC argues that the Second

Report and Order’s requirement that

nondominant interexchange carriers

make information available in only one

location will prevent customers,

especially those in rural areas, from

obtaining the information. Instead, RTC

urges the Commission to require carriers

to make the information available online and at one public place in each

state in which the carrier operates. RTC

contends that these requirements would

not be unduly burdensome on carriers.

Alaska and Hawaii support RTC’s

petition.

64. Telecommunications Management

Information Systems Coalition (TMISC)

requests that we clarify the disclosure

rules by specifying the type and amount

of information that must be made

publicly available, as well as the time

limit within which nondominant

interexchange carriers must make the

information publicly available. TMISC

argues that, without more specific

information requirements, the

Commission and other interested parties

may not be able effectively to enforce

the geographic rate averaging and rate

integration requirements of section

254(g). TMISC further points out that a

significant number of consumer

organizations, public interest

organizations, and state governments

filed comments in this proceeding,

arguing that effective public disclosure

requirements are not only necessary to

enforce section 254(g), but also to enable

consumers to make fully informed

service decisions. Hawaii argues that the

Commission should require

nondominant interexchange carriers to

disclose the same amount of

information that is currently provided

in tariffs and also agrees with TMISC

that the current information disclosure

provisions are inadequate.

65. AT&T responds to RTC and

TMISC by arguing that complete

detariffing will impose substantial

burdens on nondominant interexchange

carriers, particularly the costs associated

with establishing and maintaining a

legal relationship with their customers.

AT&T contends that there is no reason

to add to these costs by imposing more

burdensome information disclosure

requirements.

C. Discussion

66. The basis for our decision in the

Second Report and Order to adopt a

public disclosure requirement for all

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers was to provide

the public with the information

necessary to determine whether a carrier

was adhering to the rate integration and

rate averaging requirements of section

254(g). We recognized that, in

competitive markets, carriers would not

necessarily maintain geographically

averaged and integrated rates for

interstate, domestic, interexchange

services as required by section 254(g).

We also determined that a public

disclosure requirement would promote

the public interest by making it easier

for consumers, including resellers, to

compare service offerings and to bring

complaints. We noted, however, that

nondominant interexchange carriers

will generally provide such information

to consumers to improve or maintain

their competitive position in the market.

67. We sought to tailor this public

disclosure requirement to meet our

objective of ensuring that nondominant

interexchange carriers comply with

section 254(g) in their provision of

interstate, domestic, interexchange

services, while minimizing any

potential adverse effects on our general

policy of allowing market forces, rather

than regulation, to discipline the

practices of these carriers. Although a

public disclosure requirement does not

affect certain benefits of complete

detariffing, such as elimination of

possible invocation of the ‘‘filed-rate’’

doctrine, it may detract from our

objective of reducing regulatory burdens

and deterring tacit price coordination.

Thus, we minimized the burdens on

nondominant interexchange carriers of

complying with this requirement by, for

example, only requiring nondominant

interexchange carriers to make

information available in one location

and not specifying a format for the

disclosure.

68. Upon further examination, we

agree with Ad Hoc Users Committee

that we can more narrowly tailor our

information disclosure requirement. We

therefore grant Ad Hoc Users

Committee’s petition and eliminate the

public disclosure requirement for

individually-negotiated service

arrangements. Individually-negotiated

service arrangements, as opposed to

mass market services, are customerspecific arrangements, such as contract

tariffs, AT&T’s Tariff 12 options, MCI’s

special customer arrangements, and

Sprint’s custom network service

arrangements. We find that the

disclosure of the rates, terms, and

conditions of individually-negotiated

service arrangements cannot be justified

on the basis of the need to enforce the

rate averaging requirements of section

254(g). This is because the Commission

decided to ‘‘forbear from applying

section 254(g) to such arrangements,

consistent with the intent of Congress,

to the extent necessary.’’ The

Commission continues to require

carriers to ensure that individuallynegotiated service offerings are available

to all similarly-situated customers,

regardless of their geographic location.

The Commission did not forbear from

applying the rate integration

requirements to individually-negotiated

service arrangements. There are several

means to ensure that nondominant

interexchange carriers make

individually-negotiated service

arrangements available to all similarlysituated customers without a public

disclosure requirement. Market forces

generally will ensure that nondominant

interexchange carriers that lack market

power do not charge rates, or impose

terms and conditions, for interstate,

domestic, interexchange services that

are unjustly or unreasonably

discriminatory. Specifically, if a

nondominant interexchange carrier

could profit from selling an interstate,

domestic, interexchange service at one

price to one customer and attempted to

sell the same service at an unjustly or

unreasonably discriminatory price to a

similarly-situated customer, that

customer would purchase services from

other facilities-based nondominant

interexchange carriers that could profit

from selling the same services to that

customer at the lower market price.

Moreover, we can remedy any carrier

conduct that violates the requirement

that carriers make individuallynegotiated service arrangements

available to all similarly-situated

customers through the section 208

complaint process. A customer can file

a section 208 complaint and allege that

a carrier has unreasonably

discriminated against it in the provision

of either contract or mass market

services. The customer complainant, as

always, under section 208, bears the

initial burden of establishing that: (1)

The complainant sought substantially

the same service arrangement under the

same terms and conditions that were

made available to another customer; and

(2) the carrier refused to make that

service available to the complainant on

terms similar to those of another

customer’s service arrangement. If a

complainant establishes this, the burden
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59597

shifts to the carrier which must

demonstrate why the discrimination is

reasonable. In addition, we will be able

to investigate carriers’ compliance with

our rules through the requirement

adopted in the Second Report and Order

that interexchange carriers maintain

price and service information on all of

their interstate, domestic, interexchange

services and make this information

available to the Commission upon

request. Thus, eliminating public

disclosure for individually-negotiated

service arrangements will not hinder

enforcement of the requirement that

carriers make such services available to

all similarly-situated customers, and

will also decrease the regulatory burden

on nondominant interexchange carriers

and deter tacit price coordination.

69. Although Ad Hoc Users

Committee requests that the

Commission eliminate the public

disclosure requirement only for

individually-negotiated service

arrangements, the arguments it raises

about the effect of public disclosure on

tacit price coordination and the need to

tailor more narrowly the information

requirements apply to mass market

services as well. Although no party

specifically requested that the

Commission eliminate the public

disclosure requirement for mass market

services, the Commission, in light of

pending petitions for reconsideration,

retains jurisdiction to reconsider its

rules on its own motion. See Central

Florida Enters., Inc. v. FCC, 598 F.2d 37,

48 n.51 (D.C. Cir. 1978), cert. dismissed,

441 U.S. 957 (1979). We therefore

conclude on reconsideration that we

should also eliminate the public

disclosure requirement for mass market

interstate, domestic, interexchange

services offered by nondominant

interexchange carriers. Mass market

interstate, domestic, interexchange

services are those services that are not

individually-negotiated service

arrangements, and, therefore, we are

eliminating the public disclosure

requirement for all interstate, domestic,

interexchange services offered by

nondominant interexchange carriers.

Bell Atlantic’s argument that we should

also not require dominant interexchange

carriers to disclose their rates, terms,

and conditions is now largely moot in

light of our determination that LECs

providing interstate, domestic,

interexchange services will generally be

classified as nondominant in their

provision of such services, pursuant to

Regulatory Treatment of LEC Provision

of Interexchange Services Originating in

the LEC’s Local Exchange Area; and

Policy and Rules Concerning the

Interstate, Interexchange Marketplace,

CC Docket Nos. 96–149, 96–61, Second

Report and Order and Third Report and

Order, (62 FR 35974 (July 3, 1997)).

Because this proceeding concerns

detariffing only nondominant

interexchange carriers’ interstate,

domestic, interexchange services and

the record on dominant interexchange

carrier regulation is extremely limited,

we will address the issue of the

regulatory treatment of dominant

interexchange carriers if and when we

determine that an interexchange carrier

should be classified as dominant in its

provision of interstate, domestic,

interexchange services. We emphasize,

however, that this decision does not

suggest any diminution in our

commitment to enforce the geographic

rate averaging and rate integration

requirements. To that end, we require

nondominant interexchange carriers to

file annually certifications stating that

they are in compliance with their

obligations under section 254(g) and to

maintain price and service information

on all of their interstate, domestic,

interexchange services that they must

make available to the Commission and

to state regulatory commissions upon

request. In addition, we will further our

goal of deterring tacit price

coordination, because a nondominant

interexchange carrier’s rate, terms, and

conditions for interstate, domestic,

interexchange services will not be

collected and available in one location,

although we recognize that

nondominant interexchange carriers

may still be able to obtain information

about their competitors’ rates and

service offerings in the absence of a

public disclosure requirement.

70. We believe that our decision to

eliminate the public disclosure

requirement for mass market services

will not deprive residential and other

low volume customers of information

about nondominant interexchange

carriers’ interstate, domestic,

interexchange service offerings that they

need to ensure that they have been

correctly billed and to bring to the

Commission’s attention possible

violations of the Communications Act,

particularly section 254(g). To the

contrary, we find nothing in the record

of this reconsideration proceeding that

would cause us to modify our

conclusion in the Second Report and

Order that consumers will have access

to information concerning the rates,

terms, and conditions for interstate,

domestic, interexchange services offered

by nondominant interexchange carriers

to consumers through, inter alia, the

billing process, information provided by

nondominant interexchange carriers to

establish a contractual relationship with

their customers, notifications required

by service contracts or state consumer

protection laws, and advertisements and

marketing materials. We note that the

majority of consumer complaints about

the lawfulness of carriers’ rates, terms,

or conditions for interstate, domestic,

interexchange services are based on

information obtained through the billing

process. Moreover, as set forth in the

Second Report and Order, we find that

it is highly unlikely that interexchange

carriers that lack market power could

successfully charge rates, or impose

terms and conditions that violate

sections 201 and 202 of the

Communications Act. Consumers will

also have the information they need to

select the service best suited to their

calling patterns through the

mechanisms discussed above and the

workings of the competitive market.

Because consumers will have access to

rate and service information about

nondominant interexchange carriers’

interstate, domestic, interexchange

services in a detariffed environment

without a public disclosure

requirement, we conclude that the

public disclosure requirement in the

Second Report and Order, let alone an

expanded public disclosure requirement

as RTC and TMISC request, is

unnecessary to protect consumers.

71. We recognize that elimination of

the public disclosure requirement will

make the collection of information more

difficult for businesses, including

consumer groups, that analyze and

compare the rates and services of

interexchange carriers and offer their

analysis to the public for a fee. These

businesses, however, will have access to

the information that nondominant

interexchange carriers provide to the

public in order to market their services

and improve their competitive position

in the market. On balance, we conclude

that the benefits of eliminating the

public disclosure requirement for

consumers, e.g., decreased risk of tacit

price coordination and increased

competition in the interstate, domestic,

interexchange market, outweigh any

potential adverse effects on these

businesses. Moreover, as stated above,

consumers will not be deprived of the

information they need and will receive

additional information directly from

nondominant interexchange carriers

that will provide rate and service

information to consumers in order to

ensure the establishment of a

contractual relationship with them in a

detariffed environment. Although we

find on the basis of the record in this
59598 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

proceeding that a public disclosure

requirement is not necessary to ensure

that interexchange carriers comply with

their obligation under section 254(g), we

are prepared to revisit this issue in the

event that evidence shows that the

safeguards we have implemented are

inadequate. One tool at our disposal is

to conduct audits of interexchange

carrier compliance with the rate

averaging obligations of section 254(g).

72. We also recognize the concerns of

resellers, as expressed by TRA, that,

without rate and service information

through either tariffs or a public

disclosure requirement, resellers will

not have adequate information to

prevent nondominant interexchange

carriers from discriminating against

resellers, which are not only customers,

but also competitors of the carriers. We

conclude, however, that the resellers’

concern that the resale market will not

survive in a detariffed environment

without a public disclosure requirement

is overstated. As noted in the Second

Report and Order, our decision to

forbear from requiring nondominant

interexchange carriers to file tariffs for

interstate, domestic, interexchange

services does not affect such carriers’

obligations under sections 201 and 202.

Thus, as discussed below, our longstanding policies barring prohibitions

on resale and restrictive eligibility

requirements will continue in full force

to the same extent as prior to detariffing.

Moreover, we agree with Ad Hoc Users

Committee that it is unreasonable to

assume that in a substantially

competitive market, facilities-based

carriers will not provide resellers with

service options at reasonable rates. As

TRA noted, in another proceeding,

AT&T has just begun to ‘‘reform its

conduct with respect to resellers’’ when

its market share declined to fifty

percent. If a carrier does not provide

resellers with service options at

reasonable rates, resellers are not only

likely to find another facilities-based

carrier that will do so, but resellers also

have the right to file a section 208

complaint with the Commission. We

therefore find that the increased benefits

to interexchange carriers and consumers

of complete detariffing without a public

disclosure requirement, e.g., decreased

risk of tacit price coordination and

increased competition in the interstate,

domestic, interexchange market, and a

reduced regulatory burden justify any

negative effect upon resellers of

eliminating the public disclosure

requirement.

73. Finally, we make clear that the

annual certification requirement and the

requirement that nondominant

interexchange carriers maintain price

and service information on all of their

interstate, domestic, interexchange

services that they must submit to the

Commission upon request, discussed

herein, are the same as those contained

in the Second Report and Order.

IV. Miscellaneous Issues

A. Nondiscriminatory Access to

Interstate, Domestic, Interexchange

Services

i. Positions of the Parties

74. TRA asks the Commission to

clarify that nondominant interexchange

carriers are required to make available,

upon request, all interstate, domestic,

interexchange services, including

contract-based services, on a

nondiscriminatory basis, to all qualified

entities, including resellers. TRA argues

that the Commission has required

nondominant interexchange carriers to

make such service offerings generally

available, and has declared unlawful

restrictive eligibility requirements that

unreasonably discriminate against

similarly-situated customers. TRA notes

that the Commission addressed its

concerns in the Second Report and

Order, in part, by requiring

nondominant interexchange carriers to

make publicly available price and

service information on all of their

interstate, domestic, interexchange

services. TRA contends, however, that

the Second Report and Order does not

expressly declare that the ‘‘general

availability’’ requirement will continue

to apply.

ii. Discussion

75. The Commission has longstanding policies of prohibiting

restrictions on resale and barring

restrictive eligibility requirements for

interstate, domestic, interexchange

services that have the effect of

unreasonably discriminating against

similarly-situated customers. The

Commission has further concluded that

individually-negotiated service

arrangements do not violate section

202(a)’s prohibition against ‘‘unjust or

unreasonable discrimination,’’ if the

terms of the service arrangement are

made available to similarly-situated

customers. In the Second Report and

Order, we made clear that our decision

to forbear from requiring nondominant

interexchange carriers to file tariffs for

interstate, domestic, interexchange

services does not affect carriers’

obligations under sections 201 and 202.

Thus, nondominant interexchange

carriers are prohibited from imposing

restrictions on resale and restrictive

eligibility requirements that

unreasonably discriminate against

similarly-situated customers to the same

extent that they were prohibited from

doing so prior to adoption of the Second

Report and Order. TRA also stated in its

petition that the Commission partially

addressed its concerns by requiring

nondominant interexchange carriers to

disclose publicly certain information

regarding their interstate, domestic,

interexchange services. As stated above,

we have eliminated the public

disclosure requirement in this Order on

Reconsideration. For a discussion of this

issue and TRA’s concerns, see supra

paras. 59–73.

B. Law Governing the Lawfulness of

Rates, Terms, and Conditions for

Interstate Services

i. Positions of the Parties

76. AT&T requests that the

Commission clarify that federal, and not

state, law governs the determination as

to whether a nondominant

interexchange carrier’s rates, terms, and

conditions for interstate, domestic,

interexchange services are lawful. AT&T

contends that parties may interpret the

statement in the Second Report and

Order that, with complete detariffing,

‘‘consumers will also be able to pursue

remedies under state consumer

protection and contract laws’’ as

allowing challenges under state law to

the lawfulness of rates, terms, and

conditions for these interstate services.

AT&T argues that any interpretation that

authorizes such challenges under state

law is foreclosed by numerous judicial

decisions recognizing that sections 201

and 202 of the Communications Act

preempt state law with respect to the

reasonableness of rates, terms, and

conditions for interstate

telecommunications services. Sprint,

and WorldCom support AT&T’s

petition, arguing that the

Communications Act, and not state law,

governs rates, terms, and conditions for

interstate telecommunications services.

U S WEST argues that the Commission

should adopt permissive detariffing

until it conducts a new proceeding to

determine the law that governs the

relationship between carriers and

customers in a detariffed environment.

API opposes U S WEST’s request that

the Commission conduct a new

proceeding to determine the

applicability of state and federal law in

a detariffed environment.

ii. Discussion

77. In the Second Report and Order,

we stated that our decision to forbear

from requiring nondominant

interexchange carriers to file tariffs for

interstate, domestic, interexchange
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59599

services will not affect our enforcement

of carriers’ obligations under sections

201 and 202 to charge rates, and impose

practices, classifications, and

regulations that are just and reasonable,

and not unjustly or unreasonably

discriminatory. We therefore agree with

AT&T, Sprint, and WorldCom that the

Communications Act continues to

govern determinations as to whether

rates, terms, and conditions for

interstate, domestic, interexchange

services are just and reasonable, and are

not unjustly or unreasonably

discriminatory. While the parties only

sought clarification that the

Communications Act governs the

determination as to the lawfulness of

rates, terms, and conditions, we note

that the Communications Act does not

govern other issues, such as contract

formation and breach of contract, that

arise in a detariffed environment. As

stated in the Second Report and Order,

consumers may have remedies under

state consumer protection and contract

laws as to issues regarding the legal

relationship between the carrier and

customer in a detariffed regime.

78. We reject U S WEST’s argument

that we should adopt permissive

detariffing until there is greater certainty

about the law that would govern the

relationship between carriers and

customers in the absence of tariffs. We

adopted a nine-month transition in the

Second Report and Order, during which

nondominant interexchange carriers are

permitted to file new tariffs and revise

existing tariffs for mass market services.

This transition provides for a period of

permissive detariffing to allow

nondominant interexchange carriers

time to adjust to detariffing. We believe

that a lengthier period of time is

unnecessary to address U S WEST’s

concern.

C. Private Contract Clauses Preserving

the ‘‘Filed-Rate’’ Doctrine

i. Positions of the Parties

79. Ad Hoc requests that the

Commission clarify that the intent of the

Second Report and Order is not to

permit carriers to preserve the ‘‘unfair

advantages’’ they would enjoy under

‘‘filed-rate’’ doctrine, but to eliminate

the ability of nondominant

interexchange carriers to invoke the

‘‘filed-rate’’ doctrine. Ad Hoc contends

that some interexchange carriers are

attempting to preserve their right to

make unilateral changes to contracts by

including a contract clause pursuant to

which the carrier is permitted to alter

the terms of the contract at any time,

and for any reason.

ii. Discussion

80. In the Second Report and Order,

we stated that not permitting

nondominant interexchange carriers to

file tariffs for the provision of interstate,

domestic, interexchange services will

achieve the public interest objective of

eliminating the ability of nondominant

interexchange carriers to invoke the

‘‘filed-rate’’ doctrine. We also observed

that eliminating the ability of carriers to

invoke the ‘‘filed-rate’’ doctrine benefits

consumers by creating a legal

relationship that more closely resembles

the legal relationship between service

providers and customers in an

unregulated environment, and is in the

public interest. While we do not support

attempts by carriers to preserve their

ability to alter unilaterally the terms of

a contract, pursuant to a contract clause,

we will rely on private negotiations

between the parties in the first instance

to resolve such issues. The issue of

whether a particular contract clause is

‘‘just and reasonable,’’ as required by

section 201(b) of the Communications

Act, is not before us in this proceeding,

however, such an issue would be an

appropriate matter for a section 208

complaint.

D. Relationship of Detariffing to Access

Charge Reform and Universal Service

i. Positions of the Parties

81. RTC urges the Commission in this

proceeding to ensure adequate universal

support for access charges in high-cost

areas to minimize the incentive of

interexchange carriers to deaverage their

rates. RTC contends that,

notwithstanding the statutory

requirement that interexchange carriers

charge ‘‘reasonably comparable’’ rural

and urban interexchange rates,

interexchange carriers have an incentive

to deaverage their rates, especially as

they face increased competition from

BOCs and others. RTC further argues

that eliminating tariffs and curtailing

public information availability will

decrease interexchange carriers’

incentive to average interexchange rates.

Although RTC recognizes that the

Commission is considering universal

service support and access charge

reform in other dockets, it nevertheless

contends that there is an overlap

between this proceeding and those other

dockets. Thus, RTC urges the

Commission in this proceeding to

reduce the incentive to deaverage rates

by ensuring adequate support

mechanisms for high-cost areas.

82. AT&T counters that the Second

Report and Order does not compel a

particular result in the Commission’s

universal service and access charge

reform proceedings. AT&T further

argues that any relationship between

detariffing and access charge reform or

universal service should be considered

in those particular dockets.

ii. Discussion

83. We have recently addressed

universal service support and access

charge reform in separate proceedings.

We agree with AT&T that these issues

are beyond the scope of this proceeding

and better addressed in those particular

proceedings in which numerous parties

commented specifically on universal

service and access charge reform issues.

Therefore, we decline to address these

issues in this proceeding.

E. Fees for the Withdrawal of Tariffs

i. Positions of the Parties

84. TRA requests that the Commission

refrain from collecting filing fees from

nondominant interexchange carriers

that are required to withdraw tariffs

pursuant to the Second Report and

Order. TRA argues that § 1.1113(a)(4) of

the Commission’s rules supports its

argument that it is inequitable to retain

filing fees when carriers are compelled

to withdraw tariffs as a result of

Commission action.

ii. Discussion

85. Pursuant to § 1.1105 of the

Commission’s rules, tariff filings must

be accompanied by a filing fee, which

is currently six hundred dollars per

tariff filing. After we adopted the

Second Report and Order, the Common

Carrier Bureau received inquiries

concerning whether nondominant

interexchange carriers must pay the

tariff filing fee to withdraw or revise

tariffs pursuant to the Second Report

and Order, and whether nondominant

interexchange carriers that pay such fees

would be entitled to a refund or return

of the fee. On December 19, 1996, the

Common Carrier Bureau issued the

Public Notice Concerning

Implementation, in which it responded

to these inquiries and addressed the

precise issue TRA raises here. The

Common Carrier Bureau, consistent

with Commission precedent and

practice, concluded in the Public Notice

Concerning Implementation that

nondominant interexchange carriers

would need to pay tariff filing fees to

withdraw or revise existing tariffs

pursuant to the Second Report and

Order, and that such carriers would not

be entitled to a return or refund of the

fee. We now affirm this conclusion.

86. The purpose of the fee program is

to assess and collect fees for regulatory

services provided to the public, and the
59600 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

fees charged are based primarily on the

costs to the Commission of providing

those services. In the Fee Program Order

(52 FR 5285 (February 20, 1987)), the

Commission concluded that

§ 1.1113(a)(4) was ‘‘intended to apply in

those rare instances where the

Commission creates a new regulation or

policy, or the Congress and the

President approve a new law or treaty,

that would make the grant of a pending

application a legal nullity.’’ The

Commission specifically concluded that

Congress, when it established the

regulatory fee program, did not envision

an exemption from the payment of fees

for additional tariff filings required by

changes to the Commission’s rules.

Based on its analysis in the Fee Program

Order, the Commission required

Commercial Mobile Radio Service

providers to pay the tariff filing fee for

cancelling tariffs for domestic interstate

services pursuant to a Commission

order. We are not aware of any

distinction that justifies a different

determination in this case. We therefore

conclude that nondominant

interexchange carriers cancelling their

tariffs for interstate, domestic,

interexchange services, or revising their

tariffs for bundled international and

domestic service offerings to exclude

interstate, domestic, interexchange

services, will be required to pay the

tariff filing fee and will not be eligible

for a return or refund of that fee.

87. To minimize the cost to

nondominant interexchange carriers of

cancelling or revising tariffs pursuant to

the Second Report and Order, we

reiterate that such carriers may cancel or

revise several tariffs under one cover

letter with the payment of one filing fee,

as stated in the Public Notice

Concerning Implementation. In

addition, organizations that file tariffs

on behalf of several carriers may request

a waiver of applicable filing rules so

that they may cancel the tariffs of

several carriers or file revisions to tariffs

of several carriers under one cover letter

with the payment of one filing fee.

V. Procedural Issues

A. Final Regulatory Flexibility Analysis

on Reconsideration

88. As required by section 603 of the

Regulatory Flexibility Act (RFA), 5

U.S.C. 603, an Initial Regulatory

Flexibility Analysis (IRFA) was

incorporated in the NPRM. The

Commission sought written public

comments on the proposals in the

NPRM. In addition, pursuant to section

603, a Final Regulatory Flexibility

Analysis (FRFA) was incorporated in

the Second Report and Order. That

FRFA conformed to the RFA, as

amended by the Small Business

Regulatory Enforcement Fairness Act of

1996 (SBREFA). The Supplemental

Final Regulatory Flexibility Analysis in

this initial Order on Reconsideration

(Supplemental FRFA) also conforms to

the RFA.

i. Need for and Objectives of This Order

on Reconsideration and the Rules

Adopted Herein

89. With the exception of dial-around

1+ services and LEC-implemented new

customer services, our decisions and

rules in this Order on Reconsideration

detariff completely the interstate,

domestic, interexchange services of

nondominant interexchange carriers. In

this Order on Reconsideration, we grant

in part and deny in part several of the

petitions filed for reconsideration and/

or clarification of the Second Report

and Order, in order to further the same

needs and objectives as those discussed

in the FRFA in the Second Report and

Order, including reducing the costs and

burdens of providing interstate,

domestic, interexchange services, in the

absence of tariffs, on nondominant

interexchange carriers and customers,

some of which are small entities. First,

we adopt permissive detariffing for dialaround 1+ services using a

nondominant interexchange carrier’s

access code. Second, we adopt

permissive detariffing for the initial 45

days of LEC-implemented interstate,

domestic interexchange service to new

residential or small business customers,

or until a written contract is

consummated, whichever is earlier.

Third, we eliminate the public

disclosure requirement for all interstate,

domestic, interexchange service offered

by nondominant interexchange carriers.

In addition, we require nondominant

interexchange carriers to file annual

certifications stating that they are in

compliance with their obligations under

section 254(g) and to maintain price and

service information on all of their

interstate, domestic, interexchange

services that they must make available

to the Commission upon request.

Finally, with the exception of dialaround 1+ services and LECimplemented new customer services, we

affirm our conclusion that permissive

detariffing of all other interstate,

domestic, interexchange service of

nondominant interexchange carriers is

not in the public interest.

ii. Analysis of Significant Issues Raised

in Response to the FRFA

90. Summary of the FRFA. In the

FRFA, we recognized that many of the

decisions and rules adopted in the

Second Report and Order may have a

significant effect on a substantial

number of the small telephone

companies identified by the Small

Business Administration (SBA). Based

upon data contained in the most recent

census and a report by the

Commission’s Common Carrier Bureau,

we estimated that fewer than 3,497

telephone service firms are small entity

telephone service firms that could be

affected. We also discussed the

reporting requirements imposed by the

Second Report and Order.

91. In addition, we discussed the

steps we had taken to minimize the

impact on small entities, consistent with

our stated objectives. We concluded that

our actions in the Second Report and

Order would benefit small entities by

facilitating the development of

increased competition in the interstate,

domestic, interexchange market, thereby

benefitting all consumers, some of

which are small business entities. We

found that the record in that proceeding

indicated that detariffing on a

permissive basis would not definitively

eliminate the possible invocation of the

‘‘filed-rate’’ doctrine and would create

the risk of price signalling. We

concluded that only with complete

detariffing could we definitively

eliminate these possible anticompetitive

practices and protect consumers, some

of which are small business entities. We

noted that we attempted to keep

burdens on nondominant interexchange

carriers to a minimum. For example, we

did not require nondominant

interexchange carriers to make rate and

service information available to the

public in any particular format, or at

any particular location.

a. Impact of Complete Detariffing on

Small, Nondominant Interexchange

Carriers

92. Comments. Although not in

response to the FRFA, TRA claims that

the Second Report and Order does not

adequately address the impact of

complete detariffing on small,

nondominant interexchange carriers.

TRA requests that the Commission

permit nondominant interexchange

carriers to tariff their domestic,

interstate, interexchange service

offerings.

93. Discussion. As discussed in the

Order on Reconsideration, we permit

carriers to file tariffs for dial-around 1+

services and LEC-implemented new

customer services. We base this decision

on the credible evidence offered by

parties on reconsideration concerning

the costs and burdens to carriers and

customers of providing these services in

the absence of tariffs. Permitting carriers
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to file tariffs in these limited

circumstances will ease the burdens on

nondominant interexchange carriers and

customers, some of which are small

entities. We discuss these issues above

in the Order on Reconsideration.

iii. Description and Estimates of the

Number of Small Entities Affected by

This Order on Reconsideration

94. For the purposes of this Order on

Reconsideration, the RFA defines a

‘‘small business’’ to be the same as a

‘‘small business concern’’ under the

Small Business Act, 15 U.S.C. 632,

unless the Commission has developed

one or more definitions that are

appropriate to its activities. Under the

Small Business Act, a ‘‘small business

concern’’ is one that: (1) Is

independently owned and operated; (2)

is not dominant in its field of operation;

and (3) meets any additional criteria

established by the SBA. The SBA has

defined a small business for Standard

Industrial Classification (SIC) categories

4812 (Radiotelephone Communications)

and 4813 (Telephone Communications,

Except Radiotelephone) to be small

entities with fewer than 1,500

employees. We first discuss generally

the total number of small telephone

companies falling within both of those

SIC categories. Then, we discuss the

number of small businesses within the

two subcategories that may be affected

by our rules, and attempt to refine

further those estimates to correspond

with the categories of telephone

companies that are commonly used

under our rules.

95. Total Number of Telephone

Companies Affected. Many of the

decisions and rules adopted herein may

have a significant effect on a substantial

number of the small telephone

companies identified by the SBA. The

United States Bureau of the Census (the

Census Bureau) reports that, at the end

of 1992, there were 3,497 firms engaged

in providing telephone services, as

defined therein, for at least one year.

This number contains a variety of

different categories of carriers, including

local exchange carriers, interexchange

carriers, competitive access providers,

cellular carriers, mobile service carriers,

operator service providers, pay

telephone operators, PCS providers,

covered SMR providers, and resellers. It

seems certain that some of those 3,497

telephone service firms may not qualify

as small entities or small incumbent

LECs because they are not

‘‘independently owned and operated.’’

For example, a PCS provider that is

affiliated with an interexchange carrier

having more than 1,500 employees

would not meet the definition of a small

business. It seems reasonable to

conclude, therefore, that fewer than

3,497 telephone service firms are small

entity telephone service firms that may

be affected by this Order on

Reconsideration.

96. Wireline Carriers and Service

Providers. The SBA has developed a

definition of small entities for telephone

communications companies other than

radiotelephone (wireless) companies.

The Census Bureau reports that there

were 2,321 such telephone companies

in operation for at least one year at the

end of 1992. According to the SBA’s

definition, a small business telephone

company other than a radiotelephone

company is one employing fewer than

1,500 persons. All but 26 of the 2,321

non-radiotelephone companies listed by

the Census Bureau were reported to

have fewer than 1,000 employees. Thus,

even if all 26 of those companies had

more than 1,500 employees, there

would still be 2,295 non-radiotelephone

companies that might qualify as small

entities or small incumbent LECs.

Although it seems certain that some of

these carriers are not independently

owned and operated, we are unable at

this time to estimate with greater

precision the number of wireline

carriers and service providers that

would qualify as small business

concerns under the SBA’s definition.

Consequently, we estimate that there are

fewer than 2,295 small entity telephone

communications companies other than

radiotelephone companies that may be

affected by the decisions and rules

adopted in this Order on

Reconsideration.

97. Interexchange Carriers. Neither

the Commission nor the SBA has

developed a definition of small entities

specifically applicable to providers of

interexchange services. The closest

applicable definition under the SBA

rules is for telephone communications

companies other than radiotelephone

(wireless) companies. The most reliable

source of information regarding the

number of interexchange carriers

nationwide of which we are aware

appears to be the data that the

Commission collects annually in

connection with Telecommunications

Relay Services (TRS). According to our

most recent data, 97 companies reported

that they were engaged in the provision

of interexchange services. Although it

seems certain that some of these carriers

are not independently owned and

operated, or have more than 1,500

employees, we are unable at this time to

estimate with greater precision the

number of interexchange carriers that

would qualify as small business

concerns under the SBA’s definition.

Consequently, we estimate that there are

fewer than 97 small entity

interexchange carriers that may be

affected by the decisions and rules

adopted in this Order on

Reconsideration.

98. Resellers. Neither the Commission

nor the SBA has developed a definition

of small entities specifically applicable

to resellers. The closest applicable

definition under the SBA’s rules is for

all telephone communications

companies. The most reliable source of

information regarding the number of

resellers nationwide of which we are

aware appears to be the data that we

collect annually in connection with the

TRS. According to our most recent data,

206 companies reported that they were

engaged in the resale of telephone

services. Although it seems certain that

some of these carriers are not

independently owned and operated, or

have more than 1,500 employees, we are

unable at this time to estimate with

greater precision the number of resellers

that would qualify as small business

concerns under the SBA’s definition.

Consequently, we estimate that there are

fewer than 206 small entity resellers

that may be affected by the decisions

and rules adopted in this Order on

Reconsideration.

99. In addition, the rules adopted in

this Order on Reconsideration may

affect companies that analyze

information contained in tariffs. The

SBA has not developed a definition of

small entities specifically applicable to

companies that analyze tariff

information. The closest applicable

definition under the SBA rules is for

Information Retrieval Services (SIC

Category 7375). The Census Bureau

reports that, at the end of 1992, there

were approximately 618 such firms

classified as small entities. This number

contains a variety of different types of

companies, only some of which analyze

tariff information. We are unable at this

time to estimate with greater precision

the number of such companies and

those that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are fewer than 618 such small

entity companies that may be affected

by the decisions and rules adopted in

this Order on Reconsideration.

100. We assume that most, if not all,

small businesses purchase interstate,

domestic, interexchange

telecommunications services. As a

result, our rules in this Order on

Reconsideration would affect virtually

all small business entities. The SBA

guidelines to the SBREFA state that

about 99.7 percent of all firms are small

and have fewer than 500 employees and
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less than $25 million in sales or assets.

There are approximately 6.3 million

establishments in the SBA’s database.

The SBA database does include

nonprofit establishments, but it does not

include governmental entities. SBREFA

requires us to estimate the number of

such entities with populations of less

than 50,000 that would be affected by

our new rules. There are 85,006

governmental entities in the nation.

This number includes such entities as

states, counties, cities, utility districts

and school districts. There are no

figures available on what portion of this

number has populations of fewer than

50,000. This number, however, includes

38,978 counties, cities and towns, and

of those, 37,566, or 96 percent, have

populations of fewer than 50,000. The

Census Bureau estimates that this ratio

is approximately accurate for all

governmental entities. Thus, of the

85,006 governmental entities, we

estimate that 96 percent, or 81,600, are

small entities that would be affected by

the decisions and rules adopted in this

Order on Reconsideration.

iv. Summary Analysis of the Projected

Reporting, Recordkeeping, and Other

Compliance Requirements and Steps

Taken to Minimize the Significant

Economic Impact of This Order on

Reconsideration on Small Entities,

Including the Significant Alternatives

Considered and Rejected

101. Structure of the Analysis. In this

section of the Supplemental FRFA, we

analyze the projected reporting,

recordkeeping, and other compliance

requirements that may apply to small

entities as a result of this Order on

Reconsideration. As a part of this

discussion, we mention some of the

types of skills that will be needed to

meet the new requirements. We also

describe the steps taken to minimize the

economic impact of our decisions on

small entities, including the significant

alternatives considered and rejected.

102. We provide this summary

analysis to provide context for our

analysis in this Supplemental FRFA. To

the extent that any statement contained

in this Supplemental FRFA is perceived

as creating ambiguity with respect to

our rules or statements made in the

Second Report and Order or preceding

sections of this Order on

Reconsideration, the rules and

statements set forth in the Second

Report and Order and in the preceding

sections of this Order on

Reconsideration shall be controlling.

a. Permissive Detariffing for Dial-around

1+ Services

103. Summary of Projected Reporting,

Recordkeeping and Other Compliance

Requirements. In the Second Report and

Order, we concluded that the record did

not support a finding that complete

detariffing would cause nondominant

interexchange carriers to cease offering

casual calling services. Rather, we found

that nondominant interexchange

carriers have options other than tariffs

by which they can ensure the

establishment of a contractual

relationship with casual callers that

would legally obligate such callers to

pay for the telecommunications service

they use and bind them to the carriers’

terms and conditions. In this Order on

Reconsideration, we adopt permissive

detariffing, on an interim basis, for a

subset of casual calling services,

specifically, the provision of dialaround 1+ services. This change in the

manner of conducting their business

may require nondominant

interexchange carriers to use technical,

operation, accounting, billing, and legal

skills.

104. Steps Taken to Minimize

Significant Economic Impact on Small

Entities and Small Incumbent LECs, and

Alternatives Considered. By permitting

nondominant interexchange carriers to

file tariffs for dial-around 1+ services,

we enable these carriers and their

customers, some of which are small

business entities, to avoid the

substantial costs and burdens associated

with ensuring the establishment of an

enforceable contract in the absence of

tariffs. The means of ensuring the

establishment of an enforceable contract

with customers of other casual calling

services cannot be reasonably

implemented currently for dial-around

1+ services because the interexchange

carriers do not have the ability

reasonably to distinguish dial-around 1+

calls from direct dial 1+ calls placed

from telephones presubscribed to an

interexchange carrier, as required to

provide the dial-around 1+ caller with

the rates, terms, and conditions prior to

completion of the call. The inability of

nondominant interexchange carriers to

distinguish between dial-around 1+ and

direct dial 1+ calls would require these

carriers to implement the recorded

announcement of the rates, terms, and

conditions or other means adopted by

such carriers to ensure a contractual

relationship with dial-around 1+ callers

for both dial-around 1+ callers and

direct dial 1+ callers. The increased

costs and the delay in call set-up time

that are attendant with ensuring the

establishment of a contractual

relationship with dial-around 1+ callers

would impose an unreasonable burden

on consumers using direct dial 1+

service from their PIC. We find in this

Order on Reconsideration that the

technology to distinguish dial-around

1+ calls from direct dial 1+ calls placed

from telephones presubscribed to an

interexchange carrier is not universally

offered by all LECs, either because some

LEC switches are not capable of

providing signalling using SS7, which is

necessary to provide this feature, or

because a LEC has chosen not to offer

this feature.

105. In this Order on Reconsideration,

we reject the option of requiring LECs

to deploy universally switches capable

of providing SS7. We reject this option,

which might impose greater burdens on

small LECs, because a significant

number of LEC switches do not

presently have SS7 capability and we do

not have an adequate record in this

proceeding to evaluate the costs that

such a decision would impose on LECs.

b. Permissive Detariffing for LECImplemented New Customer Services

106. Summary of Projected Reporting,

Recordkeeping and Other Compliance

Requirements. In the Second Report and

Order, we did not specifically address

whether complete detariffing is in the

public interest with respect to the

provision of interstate, domestic,

interexchange service to new customers

that select and use an interexchange

service before receiving information

about the rates, terms, and conditions of

that service. In this Order on

Reconsideration, we permit

interexchange carriers to file tariffs to

cover the provision of service during the

initial 45 days of nondominant

interexchange carriers’ provision of

interstate, domestic, interexchange

services to new residential and small

business customers, or until a written

contract is consummated, whichever is

earlier, in the limited circumstance

when a new customer contacts the LEC

to select an interexchange carrier or to

initiate a PIC change. This change in the

manner of conducting their business

may require nondominant

interexchange carriers to use technical,

operation, accounting, billing, and legal

skills.

107. Steps Taken to Minimize

Significant Economic Impact on Small

Entities and Alternatives Considered.

Adoption of permissive detariffing for

the initial period of LEC-implemented

interstate, domestic, interexchange

service to new residential and small

business customer enables the

nondominant interexchange carriers and

their customers, some of which are
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59603

small business entities, to avoid the

substantial costs and burdens associated

with ensuring the establishment of an

enforceable contract in the absence of

tariffs.

108. In this Order on Reconsideration,

we considered several means by which

LECs could convey to customers of

nondominant interexchange carriers the

information necessary to ensure the

establishment of an enforceable contract

during the initial period after the

customer contacts the LEC and before

the nondominant interexchange carrier

can formalize the contractual

relationship. We conclude, however,

that none of these means adequately

ensures an enforceable contractual

relationship between the nondominant

interexchange carrier and the customer

during this initial period of service. We

reject the alternative of requiring

nondominant interexchange carriers to

contract with LECs to act as agents of

the interexchange carrier to establish a

contractual relationship with the

prospective customer by orally

providing the rates, terms, and

conditions of the interexchange service.

We are reluctant to adopt a policy that

may have the effect of mandating such

agency arrangements, especially since

the LEC may have an affiliate that offers

competing interstate interexchange

services. In addition, requiring

prospective customers to contact

nondominant interexchange carriers

directly prior to the commencement of

service in order to establish the

necessary contractual relationship

would preclude residential and small

business customers from changing or

selecting a PIC by contacting the LECs

as they do today. Finally, nondominant

interexchange carrier could decide to

delay provisioning of the service until a

contractual relationship is formalized,

but such a delay may also discourage

residential and small business

customers from making PIC changes,

thereby deterring competition in the

interexchange market.

c. Information Disclosure Requirements

109. Summary of Projected Reporting,

Recordkeeping and Other Compliance

Requirements. In the Second Report and

Order, we required nondominant

interexchange carriers to make

information on current rates, terms, and

conditions for all of their interstate,

domestic, interexchange services

available to the public in at least one

location during regular business hours.

We also required carriers to inform the

public that this information is available

when responding to consumer inquiries

or complaints and to specify the manner

in which the consumer may obtain the

information. We further required

nondominant interexchange carriers to

maintain, for a period of two years and

six months, the information provided to

the public, as well as documents

supporting the rates, terms, and

conditions for all of their interstate,

domestic, interexchange offerings, that

they can submit to the Commission

upon request. In addition, we required

nondominant interexchange carriers to

file with the Commission, and update as

necessary, the name, address, and

telephone number of the individual, or

individuals, designated by the carrier to

respond to Commission inquiries and

requests for documents. We further

required nondominant providers of

interstate, domestic, interexchange

telecommunications services to file

annual certifications signed by an

officer of the company under oath that

the company is in compliance with its

statutory geographic rate averaging and

rate integration obligations.

110. In this Order on Reconsideration,

we eliminate the requirement that

nondominant interexchange carriers

make publicly available information

concerning rates, terms, and conditions

for all of their interstate, domestic,

interexchange services. To enforce the

geographic rate averaging and rate

integration requirements applicable to

mass market services, we require

nondominant interexchange carriers to

file annual certifications stating that

they are in compliance with their

obligations under section 254(g) and to

maintain price and service information

on all of their interstate, domestic,

interexchange services that they must

make available to the Commission upon

request. Compliance with this obligation

may require the use of accounting,

billing, and legal skills.

111. Steps Taken to Minimize

Significant Economic Impact on Small

Entities and Small Incumbent LECs, and

Alternatives Considered. We recognize

that elimination of the public disclosure

requirement will make the collection of

information more difficult for

businesses, including consumer groups,

that analyze and compare the rates and

services of interexchange carriers and

offer their analysis to the public for a

fee. These businesses, however, will

have access to the information that

nondominant interexchange carriers

provide to the public in order to market

their services and improve their

competitive position in the market.

Moreover, we conclude that consumers

will not be deprived of the information

they need and will receive additional

information directly from nondominant

interexchange carriers that will provide

rate and service information to

consumers in order to ensure the

establishment of a contractual

relationship with them in a detariffed

environment.

112. We also recognize the concerns

of resellers that, without rate and

service information made available

through either tariffs or a public

disclosure requirement, resellers will

not have adequate information to

prevent nondominant interexchange

carriers from discriminating against

resellers, which are not only customers,

but also competitors of the carriers. We

find, however, that the increased

benefits to interexchange carriers and

consumers of complete detariffing

without a public disclosure

requirement, e.g., decreased risk of tacit

price coordination and increased

competition in the interstate, domestic,

interexchange market, and a reduced

regulatory burden justify any negative

effect upon resellers of eliminating the

public disclosure requirement.

v. Report to Congress

113. The Commission shall send a

copy of this Supplemental FRFA, along

with this Order on Reconsideration, in

a report to Congress pursuant to the

Small Business Regulatory Enforcement

Fairness Act of 1996, 5 U.S.C.

801(a)(1)(A). A copy of this

Supplemental FRFA will also be

published in the Federal Register.

B. Supplemental Final Paperwork

Reduction Analysis

114. As required by the Paperwork

Reduction Act of 1995, Pub. L. 104–13,

the NPRM invited the general public

and the Office of Management and

Budget (OMB) to comment on proposed

changes to the Commission’s

information collection requirements

contained in the NPRM. The changes to

our information collection requirements

proposed in the NPRM included: (1)

The elimination of tariff filings by

nondominant interexchange carriers for

interstate, domestic, interexchange

telecommunications services; (2) the

requirement that nondominant

interexchange carriers maintain at their

premises price and service information

regarding their interstate, interexchange

offerings that they can submit to the

Commission upon request; (3) the

requirement that providers of

interexchange services file certifications

with the Commission stating that they

are in compliance with their statutory

rate integration and geographic rate

averaging obligations under section

254(g) of the Communications Act; and

(4) the requirement that interexchange

carriers advertise the availability of
59604 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations

discount rate plans throughout the

entirety of their service areas. 115. On June 12, 1996, OMB approved

all of the proposed changes to our

information collection requirements in

accordance with the Paperwork

Reduction Act. In approving the

proposed changes, OMB ‘‘strongly

recommend(ed) that the (Commission)

investigate potential mechanisms to

provide consumers, State regulators,

and other interested parties with some

standardized pricing information,’’

which ‘‘could be provided as part of the

certification process or could be made

available to the public in other ways.’’ 116. In this Order on Reconsideration,

we adopt several changes to our

information collection requirements

proposed in the NPRM. Specifically, we

have decided to: (1) Permit

nondominant interexchange carriers to

file tariffs for the provision of dialaround 1+services using a nondominant

interexchange carrier’s carrier access

code; (2) permit nondominant

interexchange carriers to file tariffs for

the initial 45 days of domestic,

interstate, interexchange service, or

until there is a written contract between

the carrier and the customer, whichever

is earlier; (3) eliminate the public

disclosure requirement. We reaffirm our

decision in the Second Report and

Order to require nondominant

interexchange carriers to: (1) File annual

certifications with the Commission

stating that they are in compliance with

their statutory rate integration and

geographic rate averaging obligations

under section 254(g) of the

Communications Act, and (2) maintain

price and service information on all

their interstate, domestic, interexchange

services that they can make available to

the Commission upon request.

Implementation of these requirements

will be subject to approval by OMB as

prescribed by the Paperwork Reduction

Act.

VI. Ordering Clauses

117. Accordingly, it is ordered that,

pursuant to sections 1–4, 10, 201, 202,

203, 204, 205, 215, 218, 220, 226, and

254 of the Communications Act of 1934,

as amended, 47 U.S.C. 151–154, 160,

201, 202, 203, 204, 205, 215, 218, 220,

226, and 254, the Order on

Reconsideration is hereby adopted. The

requirements adopted in this Order on

Reconsideration shall be effective

December 4, 1997, or on the date when

the requirements adopted in the Second

Report and Order in this proceeding

become effective, whichever is later.

The collections of information

contained within are contingent upon

approval by the Office of Management

and Budget.

118. It is further ordered that parts 42

and 61 of the Commission’s rules, 47

CFR parts 42 and 61 are amended as set

forth herein.

119. It is further ordered that the

Petitions for Reconsideration filed by

Ad Hoc Users Committee, AT&T,

Frontier, Telco, and TRA are granted in

part and denied in part, as described

herein. All other Petitions for

Reconsideration filed in this proceeding

are denied.

120. It is further ordered that the

Petitions for Clarification filed in this

proceeding are granted in part, and

denied in part, as described herein.

121. It is further ordered that whereas

the Second Report and Order in this

proceeding was stayed by the United

States Court of Appeals for the District

of Columbia Circuit, we direct the

General Counsel expeditiously to file

the necessary papers with the court to

request clarification of that stay on the

decision herein.

Accordingly, this Order on

Reconsideration is stayed pending the

court’s ruling.

List of Subjects in 47 CFR Parts 42 and

61

Communications common carriers,

Reporting and recordkeeping

requirements, Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Parts 42 and 61 of title 47 of the Code

of Federal Regulations are amended as

follows:

PART 42—PRESERVATION OF

RECORDS OF COMMUNICATIONS

COMMON CARRIERS

1. The authority citation for part 42

continues to read as follows:

Authority: Sec. 4(i), 48 Stat. 1066, as

amended, 47 U.S.C. 154(i). Interprets or

applies secs. 219 and 220, 48 Stat. 1077–78,

47 U.S.C. 219, 220.

§42.10 [Removed]

2. Section 42.10 is removed.

3. Section 42.11 is amended by

revising paragraph (a) and removing

paragraph (c).

§ 42.11 Retention of information

concerning detariffed interexchange

services.

(a) A nondominant interexchange

carrier shall maintain, for submission to

the Commission upon request, price and

service information regarding all of the

carrier’s detariffed interstate, domestic,

interexchange service offerings. The

price and service information

maintained for purposes of this

subparagraph shall include documents

supporting the rates, terms, and

conditions of the carrier’s detariffed

interstate, domestic, interexchange

offerings. The information maintained

pursuant to this subsection shall be

maintained in a manner that allows the

carrier to produce such records within

ten business days.

* * * * *

PART 61— TARIFFS

4. The authority citation for part 61

continues to read as follows:

Authority: Secs. 1, 4(i), 4(j), 201–205, and

403 of the Communications Act of 1934, as

amended; 47 U.S.C.151, 154(i). 154(j), 201–

205, and 4–3, unless otherwise noted.

5. Section 61.20 is revised to read as

follows:

§ 61.20 Detariffing of interstate, domestic,

interexchange services.

(a) Except as otherwise provided in

paragraphs (b) and (c), or by

Commission order, carriers that are

nondominant in the provision of

interstate, domestic, interexchange

services shall not file tariffs for such

services.

(b) Carriers that are nondominant in

the provision of interstate, domestic,

interexchange services shall be allowed

to file tariffs for dial-around 1+services.

For the purposes of this paragraph, dialaround 1+calls are those calls made by

accessing the interexchange carrier

through the use of that carrier’s carrier

access code. A carrier access code is a

five or seven digit access code that

enables callers to reach any carrier,

presubscribed or otherwise, from any

telephone.

(c) Carriers that are nondominant in

the provision of interstate, domestic,

interexchange services shall be allowed

to file tariffs for such service to those

customers who contact the local

exchange carrier to designate an

interexchange carrier or to initiate a

change with respect to their primary

interexchange carrier. These tariffs shall

remain in effect until the interexchange

carrier and the customer consummate a

written contract, but in no event for

more than 45 days.

6. Section 61.72 is amended by

revising the introductory text of

paragraph (a) to read:

§ 61.72 Posting.

(a) Offering carriers must post (i.e.,

keep accessible to the public) during the

carrier’s regular business hours, a

schedule of rates and regulations for

those services for which tariff filings are
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Rules and Regulations 59605

required and those services for which

carriers exercise the option to file tariffs.

This schedule must include all effective

and proposed rates and regulations

pertaining to the services offered to and

from the community or communities

served, and must be the same as that on

file with the Commission. This posting

requirement must be satisfied by the

following methods:

* * * * *

[FR Doc. 97–29117 Filed 11–3–97; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[MM Docket No. 96–250; RM–8952]

Radio Broadcasting Services; Parris

Island and Hampton, SC

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission, at the

request of Simmons Broadcasting

Company, substitutes Channel 276C3

for Channel 221A at Parris Island, South

Carolina, and modifies Station

WGZO(FM)’s license accordingly. To

accommodate the upgrade, we also

substitute Channel 221A for Channel

276A at Hampton, South Carolina, and

modify Station WBHC–FM’s license

accordingly. See 61 FR 66248, December

17, 1996. Channel 276C3 can be allotted

to Parris Island in compliance with the

Commission’s minimum distance

separation requirements without the

imposition of a site restriction at

petitioner’s requested site. The

coordinates for Channel 276C3 at Parris

Island are North Latitude 32–27–00 and

West Longitude 80–47–30. Additionally,

Channel 221A can be allotted to

Hampton in compliance with the

Commission’s minimum distance

separation requirements at Station

WBHC–FM’s presently licensed site.

The coordinates for Channel 221A at

Hampton are North Latitude 32–50–39

and West Longitude 81–07–28. With

this action, this proceeding is

terminated.

EFFECTIVE DATE: December 8, 1997.

FOR FURTHER INFORMATION CONTACT:

Sharon P. McDonald, Mass Media

Bureau, (202) 418–2180.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Report

and Order, MM Docket No. 96–250,

adopted October 15, 1997, and released

October 24, 1997. The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 1919 M Street, NW.,

Washington, DC. The complete text of

this decision may also be purchased

from the Commission’s copy

contractors, International Transcription

Service, Inc., (202) 857–3800, 1231 20th

Street, NW., Washington, DC 20036.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of Title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for Part 73

continues to read as follows:

Authority: 47 U.S.C. 154, 303, 334, 336.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments under South Carolina, is

amended by removing Channel 221A

and adding Channel 276C3 at Parris

Island; and by removing Channel 276A

and adding Channel 221A at Hampton.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 97–29116 Filed 11–3–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

RIN 1018–AD05

Endangered and Threatened Wildlife

and Plants; Final Rule to List the

Northern Population of the Bog Turtle

as Threatened and the Southern

Population as Threatened Due to

Similarity of Appearance

AGENCY: Fish and Wildlife Service,

Interior.

ACTION: Final rule.

SUMMARY: The U.S. Fish and Wildlife

Service (Service) determines threatened

status pursuant to the Endangered

Species Act of 1973, as amended (Act)

for the northern population of the bog

turtle (Clemmys muhlenbergii), which

ranges from New York and

Massachusetts south to Maryland. The

Service also determines the southern

population of the bog turtle, which

occurs in the Appalachian Mountains

from southern Virginia to northern

Georgia, to be threatened due to

similarity of appearance to the northern

population, with a special rule.

The bog turtle is threatened by a

variety of factors including habitat

degradation and fragmentation from

agriculture and development, habitat

succession due to invasive exotic and

native plants, and illegal trade and

collecting. This rule implements Federal

protection and recovery provisions

afforded by the Act.

DATES: Effective November 4, 1997.

ADDRESSES: The complete file for this

rule is available for inspection, by

appointment, during normal business

hours at the Pennsylvania Field Office,

U.S. Fish and Wildlife Service, 315

South Allen Street, Suite 322, State

College, Pennsylvania 16801.

FOR FURTHER INFORMATION CONTACT:

Carole Copeyon, Endangered Species

Biologist, at the above address

(telephone 814/234–4090; facsimile

814/234–0748).

SUPPLEMENTARY INFORMATION:

Background

The bog turtle was first described and

named as Muhlenberg’s tortoise

(Testudo muhlenbergii) by Johann David

Schoepff in 1801 based on specimens

received in 1778 from Reverend

Heinreich Muhlenberg of Lancaster

County, Pennsylvania. In 1835, L.J.

Fitzinger transferred the species to the

genus Clemmys, where it remains today

(Barton and Price 1955). In 1917, Dunn

considered bog turtles within the

southern range to be distinct, and

classified the southern population as

Clemmys nuchalis (Amato, Behler,

Tryon, and Herman 1993). This taxon

was subsequently synonymized with

Clemmys muhlenbergii; however,

researchers still question the taxonomic

status of the northern and southern

populations (Amato et al. 1993,

Klemens in press). Initial data from

recent preliminary genetic studies,

based on examination of variability at

the 16S ribosomal gene, suggest that

there may not be significant genetic

differences between the northern and

southern populations. However, due to

the conservative nature of this gene in

other species, any definitive

conclusions concerning genetic

differences between the northern and

southern populations is premature

(Amato et al. 1993).

The bog turtle is sparsely distributed

over a discontinuous geographic range

extending from New England south to

northern Georgia. A 250-mile gap within

the range separates the species into

distinct northern and southern

populations (Klemens in press, Tryon

1990, Tryon and Herman 1990). The