Telecom/1996-04-telecom-walnutcreek.iso/legal-fcc/modem.tax.action

Text File | 1991-10-29 | 25KB | 537 lines

 From: [e-mail] (Michael H. Riddle)
 Subject: The FCC Rule in the latest "Modem Tax"
 Reply-To: [e-mail]

Patrick:

Here is the pertinent rule the FCC issued which has led to GEnie, inter
alia, complaining of increased costs and has generated one of the two
current threads about the costs of "modeming."

 56 FR 33879-01

RULES and REGULATIONS

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61 and 69

[CC Docket Nos. 89-79, 87-313, FCC 91-186]

Creation of Access Charge Subelements for Open Network Architecture
and Policy and Rules Concerning Rates for Dominant Carriers
Wednesday, July 24, 1991

 AGENCY: Federal Communications Commission (FCC).

 ACTION: Final rule.

 SUMMARY: The Commission amends its part 69 access charge rules to
enable the Bell Operating Companies (BOCs) and other local exchange
carriers (LECs) desiring to implement Open Network Architecture
(ONA) to offer unbundled ONA services.  The Commission also
modifies the interim pricing test for new services adopted in the
LEC Price Cap Reconsideration Order to provide carriers with
additional pricing flexibility.  The showing for LEC rates for new
services may now include a demonstration that the service is
especially risky. LECs will also be allowed to justify non-uniform
allocation of overheads.  In addition, the Commission requires that
the existing feature groups offered by the BOCs be eliminated after
a transition period.  The Commission expects these actions to
stimulate the introduction of innovative new enhanced services.

 EFFECTIVE DATE: August 23, 1991.

 FOR FURTHER INFORMATION CONTACT: Mark S. Nadel, Common Carrier
Bureau, [phone].

 SUPPLEMENTARY INFORMATION:

 Paperwork Reduction Act

  Public reporting burden for the collections of information is
estimated to average 258.13 hours per response, including the time
for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and
reviewing the collection of information.  Send comments regarding
the burden estimate or any other aspect of the collections of
information, including suggestions for reducing the burden, to the
Federal Communications Commission, Office of Managing Director,
Paperwork Reduction Project (3060-0298), Washington, DC 20554 and
to the Office of Management and Budget, Paperwork Reduction Project
(3060-0298), Washington, DC 20503.

 Background

  CC Docket 89-79:  Notice of Proposed Rulemaking, Amendments of
part 69 of the Commission's rules Relating to the Creation of
Access Charge Subelements for Open Network Architecture, CC Docket
89-79. Adopted: March 30, 1989. Released: May 9, 1989. 54 FR 20873
(May 15, 1988).
  CC Docket No. 87-313:  Notice of Proposed Rulemaking.  Policy and
Rules Concerning Rates for Dominant Carriers, CC Docket No. 87-313.
Adopted: August 4, 1987. Released: August 21, 1987. 52 FR 33962
(Sept. 9, 1987).  By the Commission.  Further Notice of Proposed
Rulemaking, CC Docket No. 87-313. Adopted: May 12, 1988. Released:
May 23, 1988. 53 FR 22356 (June 15, 1988).  By the Commission.
Supplemental Notice of Proposed Rulemaking, CC Docket No. 87- 313.
Adopted: March 8, 1990. Released: March 12, 1990. 55 FR 12526 (Apr.
4, 1990).  By the Commission.  Second Report and Order, CC Docket
No. 87-313. Adopted: September 19, 1990. Released: October 4, 1990.
55 FR 42375 (Oct. 19, 1990).  By the Commission.  Commissioner
Duggan concurring in part and dissenting in part and issuing a
separate statement.  Order on Reconsideration, CC Docket No.
87-313, Adopted: April 9, 1991. Released: April 17, 1991. 56 FR
21612 (May 10, 1991).  By the Commission.

 Summary of Report and Order and Order on Further Reconsideration


  This is a summary of the Commission's Report and Order and
Supplemental Notice of Proposed Rulemaking in Amendments of part
69 of the Commission's Rules Relating to the Creation of Access
Charge Subelements for Open Network Architecture, CC Docket No.
89-79 and Order on Further Reconsideration in Policy and Rules
Concerning Rates for Dominant Carriers, CC Docket No. 87-313; FCC
91-186, Adopted: June 13, 1991 and Released: July 11, 1991.  The
full text of this Commission decision is available for inspection
and copying during normal business hours in the FCC Dockets Branch
(room 230), 1919 M St., NW., Washington, DC. The complete text of
this decision may also be purchased from the Commission's copy
contractor, Downtown Copy Center, [phone], 1411 21st St.,
NW, Washington, DC 20037.
  The Commission has amended its part 69 access charge rules to
enable the Bell Operating Companies (BOCs), and other local
exchange carriers (LECs) desiring to implement Open Network
Architecture (ONA), to offer unbundled ONA services. This
represents another major step towards the creation of an unbundled
ONA environment, which should promote efficient and innovative use
of the network by enhanced service providers.  The BOCs must file
tariffs on or before November 1, 1991, on 90 days' notice, to
provide the initial ONA offerings.
  The Commission also modified the interim pricing test for new
services adopted in the LEC Price Cap Reconsideration Order.  The
modified test continues to provide protection against excessive new
service prices by requiring price cap LECs to provide cost studies
for all new service prices, including those of their initial basic
service elements (BSEs) and basic serving arrangements (BSAs).
However, the Commission modified the pricing rules to give price
cap LECs some additional flexibility.
  As part of the implementation of ONA, the Commission ordered the
BOCs to replace existing feature groups with BSE features and
functions and the underlying BSA access arrangements.  However,
because interexchange carriers (IXCs) said they would need time to
adjust their ordering and  billing systems to handle such a
modification, the Commission  provided a transaction period during
which the feature groups will continue to be available alongside
the unbundled BSEs and BSAs.  This will promote the timely
implementation of ONA, while avoiding unnecessary disruptions to
IXCs.
  The BOCs will tariff all BSEs listed in approved ONA plans and
will be permitted to tariff additional BSEs approved under an
expedited review process.  In addition, BOCs will tariff one
trunkside and one lineside switched access BSA and a number of
special access BSAs. BOCs that wish to offer additional switched
access BSAs will be required to obtain waivers of the Commission's
part 69 rules.
  With respect to the cost showing for "new" services introduced
by price cap LECs, the Commission said it will require the
submission of cost studies, as in the interim approach of the LEC
Price Cap Reconsideration Order.  While LECs will be required to
set their rates based on reasonable, consistent costing
methodologies, they will be given the opportunity to select those
methodologies, to justify reasonable non-uniform overhead loadings,
and to seek higher returns on investment commensurate with the
risks they assume.  To address concerns that LECs might
discriminate against ESPs that compete with LEC enhanced service
operations, the Commission required the LECs to identify BSEs that
will be used by LEC enhanced service operations.
  Once initial BSA/BSE prices become effective and adequate
historical data have been generated, the services will be brought
under price caps, subject to an additional disclosure requirement.
The order does not modify the price cap bands and baskets, but
establishes new rules requiring the BOCs to report the percentage
of the demand for each BSE that their own usage represents, thereby
revealing any discriminatory pricing patterns.  This represents a
relatively unburdensome way of constraining the ability of a BOC
to raise the price of the BSEs used by its competitors while
lowering the price of the BSEs used by the BOC enhanced service
operators.
  The Commission retained, in its current form, the enhanced
service provider (ESP) exemption for interstate access charges.
It denied as unnecessary, in light of the adoption of the ONA
pricing rules today, requests by Ameritech and Southwestern Bell
for waivers of the part 69 access charge rules.

 List of Subjects in 47 CFR parts 61 and 69

  Communications common carriers, Reporting and recordkeeping
requirements, Telephone.

 Amendments to the Code of Federal Regulations

  Title 47 of the CFR, parts 61 and 69 are amended as follows:

 PART 61--TARIFFS

  1. The authority citation for part 61 continues to read as
follows:

  Authority: Sec. 4, 48 Stat. 1066, as amended;  47 U.S.C. 154.
Interpret or apply sec. 203, 48 Stat. 1070;  47 U.S.C. 203.
  2. Section 61.49 is amended by adding a new paragraph (h) to read
as follows:

 s 61.49 Supporting information to be submitted with letters of
transmittal for tariffs of carriers subject to price cap
regulation.

  * * * * * (h) Each tariff filing by a local exchange carrier that
introduces a new service that will later be included in a basket
must also be accompanied by
  (1) The following, including complete explanations of the bases
for the estimates.
  (i) A study containing a projection of costs for a representative
12 month period;  and
  (ii) Estimates of the effect of the new tariff on the traffic and
revenues from the service to which the new tariff applies, the
carrier's other service classifications, and the carrier's overall
traffic and revenues.  These estimates must include the projected
effects on the traffic and revenues for the same representative 12
month period used in paragraph (h)(1)(i) of this section.     (2)
Working papers and statistical data.
  (i) Concurrently with the filing of any tariff change or tariff
filing for a service not previously offered, the Chief, Tariff
Review Branch must be provided two sets of working papers
containing the information underlying the data supplied in response
to paragraph (h)(1) of this section, and a clear explanation of how
the working papers relate to that information.
  (ii) All statistical studies must be submitted and supported in
the form prescribed in s 1.363 of the Commission's rules.
 PART 69--ACCESS CHARGES

  1. The authority citation for part 69 continues to read as
follows:

  Authority: Secs. 4, 201, 202, 203, 205, 218, 403, 48 Stat. 1066,
1070, 1072, 1077, 1094, as amended, 47 U.S.C. 154, 201, 202, 203,
205, 218, 403.

  2. Section 69.2 is amended by adding the following new paragraph
(mm) to read as follows:

 s 69.2 Definitions.

 * * * * * (mm) Basic Service Elements are optional unbundled
features that enhanced service providers may require or find useful
in the provision of enhanced services, as defined in Amendments of
part 69 of the Commission's rules relating to the Creation of
Access Charge Subelements for Open Network Architecture, Report and
Order, 6 FCC Rcd , CC Docket No. 89-79, FCC 91-186 (1991).     3.
Section 69.4 is amended by revising paragraph (b) to read as
follows:

 s 69.4 Charges to be filed.

 * * * * * (b) Except as provided in subpart C of this part, in ss
69.4 (c) and (d), and in s 69.118, the carrier's carrier charges
for access service filed with this Commission shall include charges
for each of the following elements:
  (1) Limited pay telephone;
  (2) Carrier common line;
  (3) Local switching;
  (4) Information;
  (5) Common transport;
  (6) Dedicated transport;  and
  (7) Special access.
 * * * * * 4. Section 69.106 is amended by revising paragraph (a)
to read as follows:

 s 69.106 Local switching.

  (a) Except as provided in s 69.118, charges that are expressed
in dollars and cents per access minute of use shall be accessed
upon all interexchange carriers that use local exchange switching
facilities for the provision of interstate or foreign services.
 * * * * * 5. Section 69.107 is amended by revising paragraphs (a)
and (b) to read as follows:

 s 69.107 Equal access.

  (a) A monthly charge that is expressed in dollars and cents
either per Feature Group D trunk, per presubscribed equal access
line, or per trunk line that is receiving from a local exchange
switch service that is substantially equivalent to the access
provided for MTS or WATS, shall be assessed by telephone companies
that implement an Equal Access element as provided in s 69.4(d)
upon all interexchange carriers for either the interstate and
foreign Feature Group D access service trunks the interexchange
carriers uses, the interstate and foreign access service trunk
lines receiving service substantially equivalent to the access
provided for MTS or WATS from a local exchange switch, or the
presubscribed equal access lines the carrier serves.
  (b) A monthly charge per Feature Group D trunk or per trunk line
that is receiving from a local exchange switch service that is
substantially equivalent to the access provided for MTS or WATS
shall be computed by dividing the projected annual revenue
requirement for the Equal Access element by twelve times the
projected annual average number of the total of interstate and
foreign Feature Group D access service trunks and interstate and
foreign access service trunk lines receiving service substantially
equivalent to the access provided for MTS or WATS from a local
exchange switch.
 * * * * * 6. Section 69.109 is amended by revising paragraph (b)
to read as follows:

 s 69.109 Information.

 * * * * *
  (b) Except as provided in s 69.118, if such connections are
maintained exclusively by carriers that offer MTS, the projected
annual revenue requirement for the Information element shall be
divided by 12 to compute the monthly assessment to such carriers.

 * * * * * 7. Section 69.111 is amended by revising paragraph (a)
to read as follows:

 s 69.111 Common transport.

  (a) Except as provided in s 69.118, a charge that is expressed
in dollars and cents per access minute shall be accessed upon all
interexchange carriers that use
  (1) Switching or transmission facilities that are apportioned to
the Common Transport element for purposes of apportioning net
investment, or
  (2) Equivalent facilities offered by carriers subject to price
cap regulation as the term is defined in s 61.3(v) of this chapter.

 * * * * * 8. Section 69.112 is amended by revising paragraph (b)
introductory text to read as follows:

 s 69.112 Dedicated transport.

 * * * * * (b) Appropriate subelements shall be established for the
use of interface arrangements.  Except as provided in s 69.118,
charges for such subelements shall be assessed and computed as
follows:
 * * * * * 9. Section 69.113 is amended by revising paragraph (a)
and adding a new paragraph (e) to read as follows:

 s 69.113 Non-premium charges for MTS-WATS equivalent services.

  (a) Charges that are computed in accordance with this section
shall be assessed upon interexchange carriers or other persons that
receive access that is not deemed to be premium access (as this
term is defined in s 69.105(b)(1)) in lieu of carrier charges that
are computed in accordance with ss 69.105, 69.106, 69.111, 69.112
and 69.118.
 * * * * * (e) The non-premium charge for any BSEs in transport or
local switching shall be computed by multiplying the premium charge
for the corresponding BSEs by . 45.
  10. New s 69.118 is added to read as follows:

 s 69.118 Traffic sensitive switched services.

  Notwithstanding ss 69.4(b), 69.106, 69.109, 69.111, and 69.112,
telephone companies subject to the BOC ONA Order, 4 Fcd Rcd 1
(1988), shall, and other telephone companies may, establish
approved Basic Service Elements as provided in amendments of part
69 of the Commission's rules relating to the Creation of Access
Charge Subelements for Open Network Architecture, Report and Order,
6 FCC Rcd G7XXX, CC Docket No. 89-79, FCC 91-186 (1991).  Telephone
companies shall take into account revenues from the relevant Basic
Service Element or Elements in computing rates for the Local
Switching, Common Transport, Dedicated Transport, and/or
Information elements.
  11. New s 69.119 is added to read as follows:

 s 69.119 Basic service element expedited approval process.
  The rules for filing comments and reply comments on requests for
expedited approval of new basic service elements are those
indicated in s 1.45 of the rules, except as specified otherwise.

  12. Section 69.205 is amended by revising paragraph (a) to read
as follows:

 s 69.205 Transitional premium charges.

  (a) Charges that are computed in accordance with this section
shall be asessed upon interexchange carriers or other persons that
receive premium access in lieu of carrier charges that are computed
in accordance with ss 69.106, 69.111, 69.112, and 69.118 of this
part if any carrier or other person does not receive premium
access, as this term is defined in s 69.105.
 * * * * *
 Federal Communications Commission.

 William F. Caton,

 Acting Secretary.

 [FR Doc. 91-17340 Filed 7-23-91;  8:45 am]

 BILLING CODE 6712-01-M

 56 FR 33879-01

END OF DOCUMENT

  56 FR 33891-01

PROPOSED RULES

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61 and 69

[Docket Nos. 89-79, 87-313, FCC 91-186]

Creation of Access Charge Subelements for Open Network Architecture
and Policy and Rules Concerning Rates for Dominant Carriers
Wednesday, July 24, 1991

 AGENCY: Federal Communications Commission (FCC).

 ACTION: Proposed rule.

 SUMMARY: The Commission requests comments on the pricing rules
that should apply to price cap local exchange carriers (LECs) with
respect to the rates they charge for future unbundled ONA elements
that qualify as restructured services under price cap rules.
Unless the current rules are modified, price cap LECs would be
required to make the showing for restructured services, and
demonstrate that the restructured service continues to comply with
the price cap index and applicable banding rules.  The Commission
seeks to determine whether this showing is sufficient to ensure
that the ONA element prices are reasonable.

 DATES: Comments must be filed by August 26, 1991.  Reply comments
are due by September 25, 1991.

 ADDRESSES: Federal Communications Commission, Washington, DC
20554.

 FOR FURTHER INFORMATION CONTACT:Mark S. Nadel, Common Carrier
Bureau, [phone].

 SUPPLEMENTARY INFORMATION:

 Paperwork Reduction Act

  The following collection of information contained in this
proposed rule has been submitted to the Office of Management and
Budget for review under Section 3504(h) of the Paperwork Reduction
Act (44 U.S.C. 3504(h)).  Copies of this submission may be
purchased from the Commission's copy contractor, Downtown Copy
Center, [phone], 1114 21st St., NW., Washington, DC 20036.
Persons wishing to comment on this collection of information should
direct their comments to Jonas Neihardt, [phone], Office of
Management and Budget, Room 3235 NEOB, Washington, DC 20503.  A
copy of any comments filed with the Office of Management and Budget
should also be sent to the following address at the Commission:
Federal Communications Commission, Office of Managing
 Director, Paperwork Reduction Project, Washington, DC 20554.  For
further information contact Judy Boley, 202-632-7513.
  Title: Part 61--Tariffs (Other Than Tariff Review Plan).     OMB
Number: 3060-0298.
  Respondents: Businesses.
  Frequency of Response: On Occasion.
  Estimated Annual Burden: 696,950.
  Needs and Uses:  This rulemaking will consider whether additional
cost support is required by regulators to help insure that LECs do
not partake in price discrimination.  If it is adopted, the
additional support would be used by regulators to permit them to
make more effective evaluations of the relative prices of various
price cap LEC ONA services, so as to ensure that rates are
reasonable.

 Background

  CC Docket No. 89-79:  Notice of Proposed Rulemaking, Amendments
of part 69 of the Commission's Rules Relating to the Creation of
Access Charge Subelements for Open Network Architecture, CC Docket
No. 89-79. Adopted: March 30, 1989. Released: May 9, 1989. 54 FR
20873 (May 15, 1988).
  CC Docket No. 87-313:  Notice of Proposed Rulemaking, Policy and
Rules Concerning Rates for Dominant Carriers, CC Docket No. 87-313.
Adopted: August 4, 1987. Released: August 21, 1987. 52 FR 33962
(Sept. 9, 1987).  By the Commission.  Further Notice of Proposed
Rulemaking, CC Docket No. 87-313. Adopted: May 12, 1988. Released:
May 23, 1988. 53 FR 22356 (June 15, 1988).  By the Commission.
Supplemental Notice of Proposed Rulemaking, CC Docket No. 87- 313.
Adopted: March 8, 1990. Released: March 12, 1990. 55 FR 12526 (Apr.
4, 1990).  By the Commission.  Second Report and Order, CC Docket
No. 87-313. Adopted: September 9, 1990. Released: October 4, 1990.
55 FR 42375 (Oct. 19, 1990).  By the Commission.  Commissioner
Duggan concurring in part and dissenting in part and issuing a
separate statement.  Order on Reconsideration, CC Docket No.
87-313, Adopted: April 9, 1991. Released: April 17, 1991. 56 FR
21612 (May 10, 1991).  By the Commission.

 Summary of Supplemental Notice of Proposed Rulemaking

  This is a summary of the Commission's Supplemental Notice of
Proposed Rulemaking in Amendments of Part 69 of the Commission's
Rules Relating to the Creation of Access Charge Subelements for
Open Network Architecture, CC Docket No. 89-79 and Order on Further
Reconsideration in Policy and Rules Concerning Rates for Dominant
Carriers, CC Docket No. 87-313;  FCC 91-186, Adopted:  June 13,
1991 and Released:  July 11, 1991.  The full texts of Commission
decisions are available for inspection and copying during normal
business hours in the FCC Dockets Branch (Room 230), 1919 M St.,
NW., Washington, DC. The complete text of this Supplemental Notice
may also be purchased from the Commission's copy contractor,
Downtown Copy Center, [phone], 1114 21st St., NW.,
Washington, DC 20036.
  The Supplemental Notice solicits comment on whether the existing
price cap rules for restructured services should be supplemented
with additional rules directed at the increased danger of
discrimination inherent in Open Network
 Architecture (ONA) services.  The public is asked to comment on
whether local exchange carriers should be required to make the cost
showings required for new services when they introduce restructured
ONA services.  Alternatively, price cap LECs would only be subject
to the normal constraints of the restructured services test.  Any
cost showings submitted by the LECs will be used by the Commission
to determine the reasonableness of rates.
  With respect to the cost showing for "new" services introduced
by price cap LECs, the Commission said it will require the
submission of cost studies, as in the interim approach of the LEC
Price Cap Reconsideration Order.  While LECs will be required to
set their rates based on a reasonable, consistent costing
methodology, they will be given the opportunity to select that
methodology, to justify reasonable non-uniform overhead loadings,
and to seek higher returns on investment commensurate with the
risks they assume.  To address concerns that LECs would
discriminate against ESPs that compete with LEC enhanced service
operations, the Commission required the LECs to identify BSEs that
will be used by LEC enhanced service operations.

 List of Subjects in 47 CFR Parts 61 and 69.

  Communications common carriers, Reporting and recordkeeping
requirements, Telephone.

 Federal Communications Commission.

 William F. Caton,

 Acting Secretary.

 [FR Doc. 91-17341 Filed 7-23-91;  8:45 am]

 BILLING CODE 6712-01-M

 56 FR 33891-01

END OF DOCUMENT


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