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RE: FEDERAL REGULATORY REPORT DATE: JANUARY 25, 1999 ______________________________________________________________________________ Major Occurrences: • Upcoming FCC Meeting: The FCC’s January 28 “sunshine” meeting may be “the mother of all Commission meetings” given the number of critical common carrier issues that have been scheduled for consideration. First and foremost, the FCC will determine how incumbent local exchange carrier provision of advanced telecommunications services (e.g., xDSL services) will be regulated, including the extent to which relief will be granted with respect to such services from statutory resale and network unbundling obligations and/or restrictions on Bell Operating Company provision of in-region, interLATA data services. Unfortunately, it appears that the FCC will relieve any incumbent LEC which elects to offer advanced telecommunications services through a separate affiliate of its Section 251(c) obligations to offer such services at wholesale rates for resale or in their component network parts. It also appears that the Commission will expand LATA boundaries to permit BOCs to provide intrastate data services without restriction. Also on the “sunshine” agenda are such controversial issues as (i) the jurisdictional treatment of switched “dial-up” traffic delivered to Internet service providers, which will impact the right of competitive LECs serving ISPs to receive reciprocal compensation; (ii) the level of compensation due for payphone-originated access code and subscriber toll free calls, and potentially other issues involving the payphone compensation mechanism; (iii) the regulatory treatment of BOC affiliates providing out-of-region interexchange services; and (iv) the definition of “primary residential line” and “single line business line” for purposes of applying the presubscribed interexchange carrier charge. • BOC Provision of In-region, InterLATA Services: The U.S. Supreme Court may have finally laid to rest Bell Operating Company claims that restrictions on their ability to provide in-region, interLATA telecommunications and other services constitute an unconstitutional bill of attainder. Judge Kendall’s holding to this effect was rejected by the U.S. Court of Appeals for the Fifth Circuit and like arguments have been denied twice by the U.S. Court of Appeals for the District of Columbia Circuit. At TRA’s and other party’s urging, the Supreme Court has now declined SBC Communications’ and Bell Atlantic’s request that it review this issue. Further efforts by the BOCs to pursue this matter, accordingly, are unlikely. • Slamming: As reported in last month’s Infotrack, the FCC has adopted new anti- slamming safeguards which would, among other things, absolve consumers who allege that they have been slammed of their responsibility to pay for up to 30-days of telephone service, leaving to the “authorized carrier” the task of determining whether the slamming claim is valid. The Commission, however, invited carriers to establish an industry-funded third-party administrator to receive and resolve slamming claims and deferred the effective date of its new anti-slamming rules for 90 days following Federal Register publication (which is expected this week) to facilitate such an effort. TRA has been participating in a coalition of interexchange carriers working to develop such an independent dispute resolution mechanism. The rough outline of such a mechanism has been developed and discussed with the FCC on a preliminary basis. Further refinement of the proposal and discussions with consumer groups, local exchange carriers and potential vendors will follow. • International: The U.S. Court of Appeals for the District of Columbia Circuit has upheld the FCC’s international settlement rate benchmarks policy. The Commission’s benchmarks establish ceilings for international settlement rates, capping the rates U.S. carriers can pay foreign carriers for terminating U.S.-originated calls. Because the U.S. and other developing countries could not reach agreement on transitional settlement and transit rates with developing countries at the recently concluded meeting of the International Telecommunications Union in Geneva, the staged implementation of the benchmarks (which began on January 1, 1999) will continue over the next several years. During the past four weeks, TRA has made the following filings with the FCC: • Reply Comments, filed with the FCC on December 15, 1998, in which TRA opposed premature deregulatory proposals espoused by the United States Telephone Association, United States Telephone Association Petition for Rulemaking – 1998 Biennial Regulatory Review, File No. ASD 98-97. • Reply Comments, filed with the FCC on December 23, 1998, in which TRA countered incumbent local exchange carrier assertions that local exchange/exchange access markets are sufficiently competitive to warrant elimination of prohibitions against incumbent LEC bundling of customer premises equipment or enhanced services with local exchange and exchange access services, 1998 Biennial Review -- Review of Customer Premises Equipment and Enhanced Services Unbundling Rules in the Interexchange, Exchange Access and Local Exchange Markets, CC Docket No. 98-183. • Comments, filed with the FCC on December 23, 1998, in which TRA endorsed elements of the Federal-State Joint Board’s recommendations regarding the funding of universal service, but urged the Commission to refrain from prescribing from whom, in what amount, and by what means carriers may recover universal service contributions, Federal-State Joint Board on Universal Service, CC Docket No. 96-45. • Comments, filed with the FCC on January 5, 1999, in which TRA urged the Commission to reconsider its holding that digital subscriber line services designed to provide dedicated, high-speed connections between end users and Internet service providers are jurisdictionally interstate in nature, GTE Telephone Operating Cos., GTOC Tariff No. 10, GTOC Transmittal No. 1148, CC Docket No. 98-79. • Comments, filed with the FCC on January 7, 1999, in which TRA urged the Commission to initiate a rulemaking proceeding to treat as incumbent local exchange carriers, and impose network interconnection and unbundling, as well as resale, obligations on, competitive LEC which constitute the only facilities-based providers in geographically identifiable areas not previously served by an incumbent LEC, Idaho Public Utilities Commission, Petition for Declaratory Ruling Concerning Section 251(h)(2) of the Communications Act, Treatment of CTC Telecom, Inc. and Similarly Situated Carriers as Incumbent Local Exchange Carriers under Section 251(h)(2) of the Communications Act, CC Docket No. 98-221. • Opposition, filed with the FCC on January 11, 1999, in which TRA opposed various premature deregulatory initiatives proposed by SBC Communications, 1998 Biennial Review -- Petition for Section 11 Review filed by SBC Communications, Inc., Southwestern Bell Telephone Company, Pacific Bell, and Nevada Bell, CC Docket No. 98-177. • Ex Parte Letter, filed with the FCC on January 21, 1999, by which TRA transmitted materials distributed at a meeting with Commissioner Furchtgott-Roth and his legal advisors which addressed the Commission’s proposal to relieve incumbent local exchange carriers of their resale and network unbundling obligations as they relate to advanced telecommunications services, Deployment of Wireline Service Offering Advanced Telecommunications Capability, CC Docket No. 98-147. • Ex Parte Letters, filed with the FCC on January 21, 1999, in which TRA transmitted to Chairman Kennard and Commissioners Powell and Tristani materials opposing the Commission’s proposal to relieve incumbent local exchange carriers of their resale and network unbundling obligations as they relate to advanced telecommunications services, Deployment of Wireline Service Offering Advanced Telecommunications Capability, CC Docket No. 98-147. • Opposition, filed with the FCC on January 21, 1999, in which TRA opposed a SBC Communications request to be relieved of dominant carrier regulation in its provision of high capacity dedicated transport services in 14 major metropolitan statistical areas, Petition of SBC Companies from Regulation as a Dominant Carrier for High Capacity Dedicated Transport Services in Specified MSAs, CC Docket No. 98-227. • Ex Parte Letter, filed with the FCC on January 21, 1999, by which TRA transmitted materials distributed at a meeting with Commissioner Ness’ legal advisor which addressed the Commission’s proposal to relieve incumbent local exchange carriers of their resale and network unbundling obligations as they relate to advanced telecommunications services, Deployment of Wireline Service Offering Advanced Telecommunications Capability, CC Docket No. 98-147. • Ex Parte Materials, distributed at a FCC on January 22, 1999 meeting with the Chief of the Enforcement Division of the Commission’s Common Carrier Bureau, outlining a proposal for creation of a industry-funded third-party administrator to adjudicate slamming complaints, Implementation of Subscriber Carrier Selection Change Provisions of Telecommunications Act of 1996, CC Docket No. 94-129. • Reply Comments, filed with the FCC on January 25, 1999, in which TRA countered comments supporting various premature deregulatory initiatives proposed by SBC Communications, 1998 Biennial Review -- Petition for Section 11 Review filed by SBC Communications, Inc., Southwestern Bell Telephone Company, Pacific Bell, and Nevada Bell, CC Docket No. 98-177. During the past four weeks, TRA has made the following filings with the U.S. Supreme Court and Federal Appellate and District Courts: • Opposition, filed with the U.S. Supreme Court on December 17, 1998, in which TRA urged the Court to deny the petitions of SBC Communications and Bell Atlantic for review of the decision of the U.S. Court of Appeals for the Fifth Circuit reversing Judge Kendall’s holding that the Bell Operating Company-specific provisions of the Telecommunications Act of 1996 constitute an unconstitutional bill of attainder, SBC Communications, Inc., et al. v. Federal Communications Commission; Bell Atlantic Corporation v. Federal Communications Commission and United States of America, et al., Case Nos. 98-652, 98-653. • Letter, filed with the U.S. Court of Appeals for the Fifth Circuit on January 14, 1999, in which TRA responded to a request for information issued by the Court, Alenco Communications, Inc. v. FCC, Case No. 98-60213. • Answer to First Amended Complaint of BellSouth Telecommunications, Inc. and Agreed Order of Dismissal, filed with the United States District Court for the Eastern District of Kentucky, Frankfort Division, on January 8, 1999, in connection with BellSouth's appeal of the rejection of its Statement of Generally Available Terms and Conditions by the Kentucky Public Service Commission, BellSouth Telecommunications, Inc. v. Public Service Commission of Kentucky, et al., Case No. 98-96. Upcoming (in January/February) TRA Filings with the FCC: • Reply Comments countering oppositions to a petition requesting initiation of a rulemaking proceeding to treat as incumbent local exchange carriers, and impose network interconnection and unbundling, as well as resale, obligations on, competitive LECs which constitute the only facilities-based providers in geographically identifiable areas not previously served by an incumbent LEC, Idaho Public Utilities Commission, Petition for Declaratory Ruling Concerning Section 251(h)(2) of the Communications Act, Treatment of CTC Telecom, Inc. and Similarly Situated Carriers as Incumbent Local Exchange Carriers under Section 251(h)(2) of the Communications Act, CC Docket No. 98-221. • Comments on petitions to extend waivers of the FCC’s requirements regarding the provision of payphone-specific coding digits to identify access code and subscriber toll free calls, Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96-128. • Reply Comments addressing comments of other parties on petitions to extend waivers of the FCC’s requirements regarding the provision of payphone-specific coding digits to identify access code and subscriber toll free calls, Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96-128. • Comments on Telmex/Sprint Communications’ response to an FCC order to show cause why it should not be found in violation of its Section 214 authorization to provide international switched resale service originating in the U.S., Telmex/Sprint Communications, L.L.C.; Application for Authority under Section 214 of the Communications Act for Global Authority to Operate as an International Switched Resale Carrier Between the United States and International Points, Including Mexico, IB Docket No. ITC-97-127. • Reply Comments countering incumbent local exchange carrier comments supporting a SBC Communications request to be relieved of dominant carrier regulation in its provision of high capacity dedicated transport services in 14 major metropolitan statistical areas, Petition of SBC Companies from Regulation as a Dominant Carrier for High Capacity Dedicated Transport Services in Specified MSAs, CC Docket No. 98-227. • Opposition to petition of US WEST for forbearance from regulation as a dominant carrier for high capacity services in Seattle, Petition of US WEST Communications, Inc. for Forbearance from Regulation as a Dominant Carrier for High Capacity Services in the Seattle, Washington Metropolitan Statistical Area, CC Docket No. 99-1. • Petition for Reconsideration of the FCC’s new anti-slamming safeguards, Implementation of Subscriber Carrier Selection Change Provisions of Telecommunications Act of 1996, CC Docket No. 94-129. Upcoming (in January/February) TRA Filings with the Federal Courts of Appeal: • Petition for Review of the FCC’s decision relieving incumbent local exchange carriers of their statutory resale and network unbundling obligations as they relate to advanced telecommunications services and expanding LATAs to permit Bell Operating Companies to provide in-region, interLATA data services without first securing Section 271 authority. * * * * * * * * * Please feel free to call if you have any questions or would like to discuss any of the above-referenced matters. |