| FEDERAL REPORT
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| RE: FEDERAL REGULATORY REPORT DATE: JULY 26, 1999 ______________________________________________________________________________ Set forth below is the Federal Regulatory Report for the July 26, 1999, meeting of the Board of Directors of the Telecommunications Resellers Association: Major Occurrences: • SBC/Ameritech Merger: Earlier this month, SBC and Ameritech filed a lengthy package of merger conditions that were negotiated over the past several months with the staff of the FCC’s Common Carrier Bureau, suggesting that Commission action on the proposed combination of the two companies is imminent. Although developed with the stated intent of addressing the competitive harm that would be occasioned by a SBC/Ameritech merger, the proffered conditions would do little to advance local competition, and, in one notable instance, would severely impede, at least, local resale. Thus, while SBC and Ameritech propose larger wholesale discounts, reduced prices for unbundled loops, and ready access to UNE platform services, they sharply restrict not only the quantity of lines, customers and services to which these benefits would apply, but limit to a matter of a few years the period of time during which they would be available. More dangerous and disturbing is a SBC/Ameritech proposal to provide advanced services, such as digital subscriber line services, exclusively through one or more marginally separate affiliates which would have no statutory wholesale pricing or network unbundling obligations. While most of the other merger conditions proposed by SBC/Ameritech have at least some pro- competitive aspects, most represent little more than slightly enhanced restatements of existing obligations or obligations which could be imposed by the Commission either unilaterally or on the basis of existing records in ongoing Commission proceedings. The merged SBC/Ameritech does commit to enter as a competitor markets served by other incumbents, but SBC had earlier effectively acknowledged that market forces would have driven this result without its merger with Ameritech. TRA has urged the Commission to deny the merger authority sought by SBC and Ameritech, or, at a minimum, to substantially strengthen the merger conditions. • Slamming: Efforts to introduce a modicum of rationality into the FCC’s on-going efforts to curb slamming continue. The concept of an industry funded and directed third party administrator to serve as a central clearinghouse for the receipt and adjudication of slamming complaints has been revamped and will soon be formally presented to the Commission anew as an industry-wide solution in which participation would be mandatory, rather than voluntary. The mandatory approach has been occasioned by the continued resistance of the incumbent local exchange carrier community to any construct that would limit their rights to provide immediate credits to consumers using monies owed to interexchange carriers. Key issues such as funding and governance under the mandatory proposal continue to account for the unique concerns of small carrier. Currently, the FCC appears supportive of the mandatory approach, as do the major consumer groups and representatives of states attorneys general. Efforts to secure support from state regulators, however, have met with decidedly mixed results. Congressional action appears unlikely so long as progress is being made at the FCC. • Local Competition: The FCC has initiated a rulemaking proceeding with the stated intent of fostering additional facilities-based local competition. In particular, the Commission proposes to address problems encountered by competitors in accessing multiple tenant environments such as apartment and office buildings, office parks, shopping centers, and manufactured housing communities. For example, the Commission tentatively concludes that incumbents must grant competitors reasonable and nondiscriminatory access to rooftops and other rights-of-way and riser conduit, and that riser conduit and wiring must be made available by incumbents as unbundled network elements. The Commission also seeks comment on whether building owners must allow equal access to all telecommunications providers, as well as on the impact of state and local rights-of-way and tax policies on facilities-based competition. Elsewhere on the local competition front, the Commission summarily rejected long-pending proposals (i) by LCI to “fast-track” in-region, interLATA approval for Bell Operating Companies that voluntarily agree to structurally separate retail and wholesale activities, and (ii) by a number of consumer groups to adopt a “realistic choice” approach to in-region, interLATA approval which would focus on the ready availability of alternative local telephone providers for both residential and business users. • Number Portability: The FCC has reaffirmed over vigorous incumbent local exchange carrier objections its authority not only to mandate and set cost recovery guidelines for interim number portability, but the constitutionality and reasonableness of the cost recovery guidelines it had adopted both to ensure competitive neutrality and to avoid hindering market entry by small providers. The Commission also prohibited both incumbent and competitive local exchange carriers from assessing additional terminating access charges on interexchange carriers for forwarding calls to ported numbers. Elsewhere with regard to number portability, the Commission directed both U S WEST and Ameritech to reduce the monthly charges they had proposed to assess on consumers to recover carrier- specific costs directly related to the provision of number portability. • Access Charges: Addressing tentatively what will likely become a more and more common subject of dispute, the FCC has ruled that the Communications Act’s dialing parity, equal access or payphone service requirements do not prevent an interexchange carrier from declining to take access service from a competitive local exchange carrier, subject, of course, to more general statutory requirements regarding justness and reasonableness of carrier practices. The Commission, however, also ruled that an IXC which utilizes a competitive LEC’s originating or terminating access services is liable for all charges associated with those services and may not simply decline to pay for services accepted by it on the ground that the services were unwanted or priced excessively. • Judicial: Activity in the courts has rachetted up of late. TRA recently joined with other interexchange carriers in a brief urging the U.S. Court of Appeals for the District of Columbia Circuit to remand for a third time the FCC’s flawed payphone compensation scheme, and will soon be filing another brief with other like minded parties opposing efforts by payphone service providers to increase payphone compensation levels. TRA also recently joined with other competitive local exchange carriers in moving to block efforts by incumbent local exchange carriers to persuade the U.S. Court of Appeals for the Eighth Circuit to vacate the Commission’s pro-competitive findings regarding the availability by incumbent LECs of shared transport services. Also before the U.S. Court of Appeals for the Eighth Circuit, TRA will soon participate in a brief with other competitive LECs defending elements of the FCC’s local competition rules impacting, among other things, pricing and combinations of unbundled network elements. Back before the U.S. Court of Appeals for the District of Columbia Circuit, TRA will soon join in briefs with other competitive LECs both in challenging the FCC’s determination that “dial-up” traffic delivered to Internet service providers is jurisdictionally interstate and in defending the Commission against incumbent LEC challenges to its retention of existing reciprocal compensation arrangements for such traffic. Briefing before the U.S. Court of Appeals for the District of Columbia Circuit in appeals of the expanded collocation opportunities recently afforded competitive LECs by the FCC and the Commission’s misguided anti-slamming safeguards and mandatory detariffing requirements will commence this Fall. Appeals of the FCC’s “Truth-in-Billing” directives, as well as certain of its more recent universal service holdings, have recently been filed in the U.S. Courts of Appeals for the First and Fifth Circuits. Over the last month, TRA made the following filings with the FCC: • Reply Comments, filed with the FCC on July 22, 1999, in which TRA countered the objections raised by incumbent local exchange carriers to a petition seeking to clarify and enhance expanded collocation rights afforded competitive local exchange carriers, Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98-147. • Ex Parte Letter, filed with the FCC on July 20, 1999, in which TRA joined with other parties in objecting to the conditions proposed by SBC Communications Inc. and Ameritech Corporation to address the competitive harms that would be occasioned by their merger, as well as the process by which those conditions had been negotiated with the Commission staff, Ameritech Corporation, Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Authorizations Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission’s Rules. CC Docket No. 98-141. • Reply Comments, filed with the FCC on July 19, 1999, in which TRA argued that the conditions proposed by SBC Communications Inc. and Ameritech Corporation to address the competitive harms that would be occasioned by their merger were inadequate, Ameritech Corporation, Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Authorizations Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission’s Rules. CC Docket No. 98-141. • Comments, filed with the FCC on July 13,1999, in which TRA urged the Commission to confirm that Internet access providers are entitled to commercial leased access under Section 612 of the Communications Act of 1934, as amended, to designated channels on cable television systems, Internet Ventures, Inc., Internet On-Ramp, Inc. Request for Declaratory Ruling that Internet Service Providers are Entitled to Leased Access to Cable Television Facilities Under Section 612 of the Communications Act of 1934, as amended, CSR- 5407-L. • Comments, filed with the FCC on July 9, 1999, in which TRA supported the adoption of clear and concise standardized labels to describe charges associated with federal regulatory action, including access charges, universal service contributions and local number portability charges, Truth-in-Billing and Billing Format, CC Docket No. 98-170. • Ex Parte Letter, filed with the FCC on July 8, 1999, in which TRA memorialized a meeting with representatives of the Policy and Program Planning Division of the FCC’s Common Carrier Bureau, as well as representatives of the Commission’s Office of Engineering and Technology, to discuss TRA’s views regarding the availability of unbundled network elements in light of the U.S. Supreme Court’s decision in AT&T Corp., et al. v. Iowa Utilities Board, Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC Docket No. 96-98. • Ex Parte Letter and attachment, filed with the FCC on July 8, 1999, in which TRA memorialized a meeting with the Chief and Staff of the Enforcement Division of the FCC’s Common Carrier Bureau to discuss TRA’s objections to the Commission’s proposal to require non-facilities-based resale carriers to obtain and deploy carrier identification codes or pseudo-CICs; Implementation of Subscriber Carrier Selection Change Provisions and Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers, CC Docket No. 94-129. • Motion for Extension of Time, filed with the FCC on July 6, 1999, in which TRA joined with other parties in urging the Commission, in light of the extraordinary nature of the matter under consideration, to extend the time for commenting upon conditions proposed by SBC Communications Inc. and Ameritech Corporation in connection with their pending merger application, Ameritech Corporation, Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Authorizations Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission’s Rules. CC Docket No. 98-141. • Reply Comments, filed with the FCC on July 6, 1999, in which TRA countered oppositions to petitions for reconsideration urging the Commission to rethink and revise its newly-adopted slamming safeguards, including, among other things, abandoning the “30- day absolution” rule as contrary to law and sound public policy, Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers, CC Docket 94-129. • Comments, filed with the FCC on June 23, 1999, in which TRA addressed multiple petitions urging the Commission to rethink and revise its newly-adopted slamming safeguards, Implementation of the Subscriber Carrier Selection Change Provisions of the Telecommunications Act of 1996, CC Docket No. 94-129. • Ex Parte Letter, filed with the FCC on June 22, 1999 Ex Parte Letter memorializing a meeting with the legal advisor to Commissioner Powell regarding Commission mandated resale at wholesale rates of advanced telecommunications services, Deployment of Wireline Service Offering Advanced Telecommunications Capability, CC Docket No. 98-147. Over the last month, TRA made the following filings with the Federal Appellate Courts: • Opposition of Intervenors to the Motion of Local Exchange Carriers Regarding Proceedings on Remand, filed with the U.S. Court of Appeals for the Eighth Circuit on July 26, 1999, in which TRA joined with other intervenors in opposing an incumbent local exchange carrier motion to vacate the FCC’s Shared Transport Order, Southwestern Bell Telephone Company, et al., v. FCC, Case No. 97-3389 (and consolidated cases). • Joint Brief of Petitioners and Supporting Intervenors, filed with the U.S. Court of Appeals for the District of Columbia Circuit on June 24, 1999, in the consolidated appeal of the Commission’s revamped payphone compensation scheme, American Public Communications Council v. FCC, Case No. 99-1114 (and consolidated cases). • Motion for Voluntary Dismissal, filed with the U.S. Court of Appeals for the District of Columbia Circuit on June 25, 1999, requesting dismissal of TRA’s appeal of the FCC’s mandatory detariffing policy in light of the FCC’s reinstatement of certain “rate disclosure” requirements, Telecommunications Resellers Association v. FCC, Case No. 98- 1001. • Motion for Leave to Intervene, filed with the U.S. Court of Appeals for the District of Columbia Circuit on June 25, 1999, in the consolidated appeals of the FCC’s reinstatement of certain “rate disclosure” requirements, AT&T Corp. v. FCC, Case No. 99- 1240 (and consolidated cases). Upcoming (in August/September) TRA Filings with the FCC: • Reply Comments, to be filed with the FCC on Augustly 6, 1999, in which TRA will respond to comments of other parties addressing the Commission’s most recent proposals for development of a forward-looking cost model for use in conjunction with its universal service support mechanisms, Federal State Joint Board on Universal Service, CC Docket No. 96-45. • Joint Request for Expedited Rulemaking, to be filed with the FCC in early August, in which TRA will join with other members of the interexchange community in urging the Commission to endorse, and require participation in, an industry-funded and directed third party administrator to serve as a clearinghouse for the receipt and adjudication of slamming complaints, Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers, CC Docket No.94-129. • Reply Comments, to be filed with the FCC on August 11, 1999, in which TRA will counter oppositions to a petition seeking a declaratory ruling that Internet access providers are entitled to commercial leased access under Section 612 of the Communications Act of 1934, as amended, to designated channels on cable television systems, Internet Ventures, Inc. Petition for Declaratory Ruling that Internet Service Providers are Entitled to Leased Access to Cable Facilities Under Section 612 of the Communications Act of 1934, as Amended, CSR-5407-L. • Comments, to be filed with the FCC on August 13, 1999, in which TRA will address Commission proposals to ensure reasonable, nondiscriminatory access to rights-of-way, buildings, rooftops, and facilities for multiple tenant environments, and Commission inquiries regarding current access to public rights-of-way and taxation, Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99-217, CC Docket No. 96-98. • Comments, to be filed with the FCC on August 23, 1999, in which TRA will address Commission proposals to eliminate or streamline accounting and reporting requirements on incumbent local exchange carriers, Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for Incumbent Local Exchange Carriers, CC Docket No. 99-253. • Comments, to be filed with the FCC on August 23, 1999, in which TRA will address the issue of cable open access in the context of the merger of AT&T Corp. and MediaOne Group, Inc., MediaOne Group, Inc., Transferor, and AT&T Corp., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Authorizations, CS Docket No. 99-251. • Comments, to be filed in late August, in which TRA will address petitions seeking reconsideration of the Commission’s “Truth-in-Billing” directives, Truth-in-Billing and Billing Format, CC Docket No. 98-170. • Reply Comments, to be filed with the FCC on September 3, 1999, in which TRA will respond to comments of other parties addressing Commission proposals to ensure reasonable, nondiscriminatory access to rights-of-way, buildings, rooftops, and facilities for multiple tenant environments, and in response to Commission inquiries regarding current access to public rights-of-way and taxation, Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99-217, CC Docket No. 96-98. • Reply Comments, to be filed with the FCC on September 9, 1999, in which TRA will respond to comments of other parties addressing Commission proposals to eliminate or streamline accounting and reporting requirements on incumbent local exchange carriers, Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for Incumbent Local Exchange Carriers, CC Docket No. 99-253. • Reply Comments, to be filed with the FCC on September 17, 1999, in which TRA will respond to comments of other parties addressing the merger of AT&T Corp. and MediaOne Group, Inc., MediaOne Group, Inc., Transferor, and AT&T Corp., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Authorizations, CS Docket No. 999-251. • Comments, to be filed with the FCC on September 20, 1999, in which TRA will address a Commission Notice of Inquiry involving the impact of flat charges on low-volume users of interstate long-distance service, Low-Volume Long-Distance Users, CC Docket No. 99-249. • Comments, to be filed with the FCC in September, 1999, in which TRA will address on remand the appropriate classification of advanced services under the Telecommunications Act of 1996, Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98-147. • Opposition, to be filed with the FCC in September, 1999, in which TRA will oppose Bell Atlantic’s petition for in-region, interLATA authority for the State of New York. Upcoming (in August/September) TRA U.S. Court of Appeals Filings: • Petition to Intervene, to be filed with the U.S. Court of Appeals for the First Circuit in early August, 1999, in the consolidated appeals of the Commission’s “truth-in- billing” directives, Bell Atlantic v. FCC. • Joint Brief for Intervenors, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on August 5, 1999, in support of the FCC in the consolidated appeals of the Commission’s classification of switched “dial-up” calls to Internet service providers as jurisdictionally interstate, Bell Atlantic v. FCC, Case No. 99-1094 (and consolidated cases). • Joint Intervenors Brief, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on August 9, 1999, in support of the FCC in the multiple payphone service provider appeals of the Commission decision revisiting payphone compensation levels, American Public Utilities Council v. FCC, Case No. 99-1114 (and consolidated cases). • Joint Brief of Interveners, to be filed with the U.S. Court of Appeals for the Eight Circuit on August 16, 1999, in support of the FCC in the Court’s further review of the FCC’s local competition rules following the U.S. Supreme Court’s decision in AT&T Corp., et al. v. Iowa Utilities Board, Iowa Utilities Board, et al., v. FCC, Case No. 96- 3321 (and consolidated cases). • Joint Reply Brief for Intervenors, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on August 19, 1999, in the consolidated appeals of the FCC’s classification of switched “dial-up” calls to Internet service providers as jurisdictionally interstate, Bell Atlantic v. FCC, Case No. 99-1094 (and consolidated cases). • Joint Reply Brief, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on August 23, 1999, in the multiple interexchange carrier appeals of the FCC decision revisiting payphone compensation levels, American Public Utilities Council v. FCC, Case No. 99-1114 (and consolidated cases). • Final Briefs, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on September 2, 1999, in the consolidated appeals of the FCC’s classification of switched “dial-up” calls to Internet service providers as jurisdictionally interstate, Bell Atlantic v. FCC, Case No. 99-1094 (and consolidated cases). • Final Briefs, to be filed with the U.S. Court of Appeals for the District of Columbia Circuit on September 7, 1999, in the consolidated appeals of the FCC decision revisiting payphone compensation levels, American Public Utilities Council v. FCC, Case No. 99-1114 (and consolidated cases). * * * * * * * * * Please feel free to call if you have any questions or would like to discuss any of the above-referenced matters. |