[Federal Register Volume 66, Number 161 (Monday, August 20, 2001)]
[Rules and Regulations]
[Pages 43516-43523]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20860]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 51

[CC Docket No. 98-147; FCC 01-204]


Deployment of Wireline Services Offering Advanced 
Telecommunications Capability

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document reevaluates certain provisions of the 
Commission's collocation rules on remand from the United States Court 
of Appeals for the District of Columbia Circuit. Specifically, the 
Commission amends its rules regarding which equipment is ``necessary 
for interconnection or access to unbundled network elements'' within 
the meaning of section 251(c)(6) of the Communications Act of 1934, as 
amended, (Communications Act or Act) and thus may be collocated without 
an incumbent local exchange carrier's (incumbent LEC's) approval. The 
Commission also amends its rules regarding cross-connects between 
collocators at an incumbent LEC's premises. The Commission further 
amends its rules addressing how an incumbent LEC may assign and 
configure physical collocation space.

DATES: Effective September 19, 2001.

FOR FURTHER INFORMATION CONTACT: William Kehoe, Special Counsel, or 
Kimberly Cook, Attorney Advisor, Policy and Program Planning Division, 
Common Carrier Bureau, (202)
418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fourth 
Report and Order in CC Docket No.
98-147, released August 8, 2001. The complete text of this Order is 
available for inspection and copying during regular business hours in 
the FCC Reference Information Center, Courtyard Level, 445 12th Street, 
SW., Washington, DC and also may be purchased from the Commission's 
copy contractor, International Transcription Services (ITS, Inc.), CY-
B400, 445 12th Street, SW., Washington, DC. It is also available on the 
Commission's website at http://www.fcc.gov.

Synopsis of Fourth Report and Order

    1. The Commission concludes that equipment is ``necessary for 
interconnection or access to unbundled network elements'' within the 
meaning of section 251(c)(6) of the Communications Act of 1934, as 
amended (Communications Act or Act), and thus may be collocated without 
an incumbent local exchange carrier's (incumbent LEC's) approval if, an 
inability to deploy that equipment would, as a practical, economic, or 
operational matter, preclude the requesting carrier from obtaining 
interconnection or access to unbundled network elements as contemplated 
in sections 251(c)(2) and 251(c)(3) of the Act. The Commission also 
concludes that section 251(c)(6) allows a requesting carrier to 
collocate any equipment necessary for obtaining equal interconnection 
or nondiscriminatory access to unbundled network elements as 
contemplated in sections 251(c)(2) and 251(c)(3). Applying the 
statutory standard set forth in section 251(c)(2), the Commission 
concludes that section 251(c)(6) allows the interconnecting carrier to 
collocate any equipment necessary for interconnecting with the 
incumbent LEC at a level equal in quality to that which the incumbent 
obtains within its own network or the incumbent provides to any 
affiliate, subsidiary, or other party. Similarly, applying the 
statutory standard set forth in section 251(c)(3), the Commission 
further concludes that section 251(c)(6) allows a requesting carrier to 
collocate any equipment necessary for obtaining ``nondiscriminatory 
access'' to an unbundled network element, including any of its 
features, functions, or capabilities.
    2. The Commission finds that multifunction equipment meets the 
``necessary'' standard only if the primary purpose and function of the 
equipment, as the requesting carrier seeks to deploy it, are to provide 
the requesting carrier with ``equal in quality'' interconnection or 
``nondiscriminatory access'' to one or more unbundled network elements. 
The Commission also finds that, for purposes of determining whether a 
piece of equipment is to be used primarily to obtain ``equal in 
quality'' interconnection or ``nondiscriminatory access'' to one or 
more unbundled network elements, there must be a logical nexus between 
the additional functions the equipment would perform and the 
telecommunication services the requesting carrier seeks to provide to 
its customers by means of the interconnection or unbundled network

[[Page 43517]]

element. The Commission further finds that any function that would not 
meet its equipment standard as a stand-alone function must not cause 
the equipment to significantly increase the burden on the incumbent's 
property. The Commission concludes, in addition, that switching and 
routing equipment typically meets its equipment standard because an 
inability to deploy that equipment would, as a practical, economic, or 
operational matter, preclude a requesting carrier from obtaining 
nondiscriminatory access to an unbundled network element, the local 
loop. As a general matter, an incumbent LEC therefore must allow 
requesting carriers to collocate switching and routing equipment. An 
incumbent LEC, however, generally need not allow collocation of 
traditional circuit switches, which are very large pieces of equipment 
compared to newer, more advanced switching and routing equipment. The 
Commission finds, in light of the practical, economic, and operational 
availability of the relatively small switches and routers, that 
traditional circuit switches generally do not meet its equipment 
standard.
    3. The Commission eliminates its previous requirement, adopted 
pursuant to section 251(c)(6), that an incumbent LEC allow competitive 
LECs to construct and maintain cross-connects outside of their 
immediate physical collocation space at the incumbent's premises. The 
Commission finds, however, that sections 201 and 251(c)(6) of the 
Communications Act authorize it to require that an incumbent LEC 
provision cross-connects between collocated carriers, and the 
Commission requires that an incumbent LEC provide such cross-connects 
upon reasonable request. The Commission finds that, in making available 
a cross-connect offering, an incumbent LEC must provide the appropriate 
cross-connect as requested by the collocated competitive local exchange 
carriers (competitive LECs). The Commission notes that the 
``appropriate'' cross-connect facility may constitute a ``lit'' service 
or a dark fiber service depending upon the requirements of the two 
collocated competitors. Where a collocator is requesting a cross-
connect pursuant to the Commission's action under section 201, it shall 
provide a certification to the incumbent that more than ten percent of 
the amount of traffic to be transmitted through the cross-connect will 
be interstate. The Commission specifies that the incumbent LEC cannot 
refuse to accept the certification, but instead must provision the 
cross-connect promptly.
    4. The Commission eliminates rules that gave carriers requesting 
physical collocation the option of picking their physical collocation 
space from among the unused space in an incumbent LEC's premises, that 
precluded an incumbent LEC from restricting physical collocation to 
space separated from space housing the incumbent's equipment, and that 
precluded an incumbent from requiring the construction and use of a 
separate entrance to access physical collocation space. In their place, 
the Commission adopts new rules that establish principles to ensure 
that the incumbent LEC's policies and practices in assigning and 
configuring physical collocation space are consistent with the 
statutory requirement that the incumbent provide for physical 
collocation ``on rates, terms, and conditions that are just, 
reasonable, and nondiscriminatory.'' The Commission also adopts 
presumptions that will apply in evaluating an incumbent LEC's policies 
and practices in these areas.

Final Regulatory Flexibility Analysis

    5. As required by the Regulatory Flexibility Act (RFA), a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Order on Reconsideration and Second 
Further Notice of Proposed Rulemaking (Second Further NPRM) in CC 
Docket 98-147, 65 FR 54527, September 8, 2000. The Commission sought 
written public comment on the proposals in the Second Further NPRM, 
including comment on the Supplemental IRFA. We received comments from 
The Organization for the Promotion and Advancement of Small 
Telecommunications Companies (OPASTCO) specifically directed toward the 
Supplemental IRFA. These comments are discussed below. This Final 
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

I. Need for, and Objectives of, the Fourth Report and Order

    6. This Fourth Report and Order (Fourth Order) continues the 
Commission's efforts to facilitate the development of competition in 
telecommunications services. In the Advanced Services First Report and 
Order, 64 F.R. 23229, April 30, 1999, the Commission strengthened its 
collocation rules to reduce the costs and delays faced by carriers that 
seek to collocate equipment at the premises of incumbent local exchange 
carriers (incumbent LECs). In GTE v. FCC, the D.C. Circuit vacated 
several of those rules and remanded the case to the Commission. In this 
Fourth Order, we address the remanded issues and take additional steps 
toward implementing Congress' goals in enacting section 251(c)(6) of 
the Communications Act. Specifically, we adopt rule amendments that 
more appropriately implement the balance reflected in the 
Communications Act, between promoting competition and technological 
innovation, and establishing limits on the scope of the intrusion 
allowed into the incumbent LEC's property rights to avoid unnecessary 
takings of such property. Nonetheless, through these amended rules, we 
reaffirm our commitment to ensuring that facilities-based competitors, 
including those that are small entities, have the incentive and ability 
to invest in alternative infrastructure and innovative technologies, 
while, at the same time, ensuring that incumbents retain similar 
incentives and capabilities.

II. Summary of Significant Issues Raised by Public Comments in Response 
to the Supplemental IRFA

    7. In the Supplemental IRFA, we stated that any rule changes would 
impose minimum burdens on small entities, including both 
telecommunications carriers that request collocation and the incumbent 
LECs that, under section 251(c)(6) of the Communications Act, must 
provide collocation to requesting carriers. We also solicited comments 
on alternatives to the proposed rules that would minimize the impact 
that any changes to our rules might have on small entities. In their 
comments, OPASTCO states that the Supplemental IRFA did not provide 
``the flexibility necessary to accommodate the needs of small 
[incumbent LECs] and their customers.'' OPASTCO also states that the 
Supplemental IRFA does not specify the specific requirements that might 
be imposed on small incumbent LECs or the extent to which those 
requirements might burden small incumbent LECs. Finally, OPASTCO states 
that the Supplemental IRFA failed ``to describe the `significant 
alternatives' for small [incumbent LECs] that [were] presumptively 
under consideration'' in this rulemaking. As noted above, OPASTCO filed 
comments specifically directed to the Supplemental IRFA and to issues 
that were raised in the NPRM but not addressed in this Fourth Order 
which is limited to issues that the D.C. Circuit remanded. In making 
the determinations reflected in the Fourth Order, we have considered 
the impact of our actions on small entities.

[[Page 43518]]

III. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    8. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of entities that will be affected 
by the rules. The RFA defines ``small entity'' as having the same 
meaning as the term ``small business,'' ``small organization,'' and 
``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act, 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 
Small Business Administration (SBA). In this Fourth Order, we take a 
number of steps that may affect small entities that either provide or 
obtain collocation pursuant to section 251(c)(6) of the Communications 
Act. The requirements we adopt will require small incumbent LECs to 
change their collocation practices. As Congress contemplated in 
enacting section 251(c)(6), however, our collocation requirements 
benefit small competitive local exchange carriers (competitive LECs) in 
their efforts to compete against incumbent LECs in the provision of 
telecommunications services, including advanced services. We believe 
that, on balance, the benefits to small competitive LECs of our actions 
in this Fourth Order far outweigh any burdens these place on small 
incumbent LECs.
    9. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the number of commercial wireless entities, appears to be data 
the Commission publishes annually in its Carrier Locator report, which 
encompasses data compiled from FCC Form 499-A Telecommunications 
Reporting Worksheets. According to data in the most recent report, 
there are 4,822 service providers. These carriers include, inter alia, 
providers of telephone exchange service, wireline carriers and service 
providers, LECs, interexchange carriers, competitive access providers, 
and resellers.
    10. We have included small incumbent LECs in this present RFA 
analysis. A ``small business'' under the RFA is one that, inter alia, 
meets the pertinent small business size standard (e.g., a telephone 
communications business having 1,500 or fewer employees), and ``is not 
dominant in its field of operation.'' The SBA's Office of Advocacy 
contends that, for RFA purposes, small incumbent LECs are not dominant 
in their field of operation because any such dominance is not 
``national'' in scope. We have therefore included small incumbent LECs 
in this RFA analysis, although we emphasize that this RFA action has no 
effect on FCC analyses and determinations in other, non-RFA contexts.
    11. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (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, covered specialized mobile radio providers, and 
resellers. It seems certain that some of these 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 
personal communications service (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 is reasonable to conclude 
that fewer than 3,497 telephone service firms are small entity 
telephone service firms or small incumbent LECs that may be affected by 
the proposed rules, herein adopted.
    12. 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 (wireless) company is one employing no more than 1,500 
persons. All but 26 of the 2,321 non-radiotelephone (wireless) 
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 
(wireless) companies that might qualify as small entities or small 
incumbent LECs. The Commission does not have data specifying the number 
of these carriers that are not independently owned and operated, and 
thus 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, the 
Commission estimates that fewer than 2,295 small telephone 
communications companies other than radiotelephone (wireless) companies 
are small entities or small incumbent LECs that may be affected by the 
proposed rules, herein adopted.
    13. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange service 
(LECs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. According to the most recent data, there are 1,395 incumbent 
and other LECs. The Commission does not have data specifying the number 
of these carriers that are either dominant in their field of 
operations, are not independently owned and operated, or have more than 
1,500 employees, and thus are unable at this time to estimate with 
greater precision the number of LECs that would qualify as small 
business concerns under the SBA's definition. Consequently, the 
Commission estimates that fewer than 1,395 providers of local exchange 
service are small entities or small incumbent LECs that may be affected 
by the proposed rules, herein adopted.
    14. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. According to 
the most recent data, there are 204 carriers engaged in the provision 
of interexchange services. The Commission does not have data specifying 
the number of these carriers that are not independently owned and 
operated or have more than 1,500 employees, and thus are unable at this 
time to estimate with greater precision the number of IXCs that would 
qualify as small business concerns under the SBA's definition. 
Consequently, the Commission estimates that there are less than 204 
small entity IXCs that may be affected by the proposed rules, herein 
adopted.
    15. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers

[[Page 43519]]

(CAPs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than except radiotelephone 
(wireless) companies. According to the most recent data, there are 349 
CAPs and competitive LECs engaged in the provision of competitive local 
exchange services. The Commission does not have data specifying the 
number of these carriers that are not independently owned and operated, 
or have more than 1,500 employees, and thus are unable at this time to 
estimate with greater precision the number of CAPs that would qualify 
as small business concerns under the SBA's definition. Consequently, 
the Commission estimates that there are less than 349 small entity CAPs 
providing competitive local exchange services that may be affected by 
the proposed rules, herein adopted.
    16. Resellers (including debit card providers). Neither the 
Commission nor the SBA has developed a definition of small entities 
specifically applicable to resellers. The closest applicable SBA 
definition for a reseller is a telephone communications company other 
than radiotelephone (wireless) companies. According to the most recent 
data, there are 541 local and toll resellers engaged in the resale of 
telephone service. The Commission does not have data specifying the 
number of these carriers that are not independently owned and operated 
or have more than 1,500 employees, and thus 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, the Commission estimates that there are fewer than 541 
small local and toll resellers that may be affected by the proposed 
rules, herein adopted.
    17. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions. The Commission auctioned geographic area licenses in 
the WCS service. In the auction, there were seven winning bidders that 
qualified as very small business entities, and one that qualified as a 
small business entity. The Commission concludes that the number of 
geographic area WS licenses affected includes these eight entities.

IV. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    18. The Fourth Order imposes nominal increases in projected 
reporting, recordkeeping, and other compliance requirements. Both of 
these changes affect small and large companies equally. First, the 
Fourth Order requires a competitive LEC that is requesting incumbent-
LEC provisioned cross-connects pursuant to section 201 of the Act to 
provide a short certification that the amount of interstate traffic to 
be transmitted over the cross-connect constitutes more than ten percent 
of all traffic transmitted over that cross-connect. This certification 
requirement stems from jurisdictional considerations. Thus, it is not 
possible to exempt small entities from compliance with the 
certification requirement.
    19. In the Fourth Order, the Commission requires that an incumbent 
LEC must allow a requesting carrier to submit physical collocation 
space preferences prior to assigning that carrier space. This will 
enable the requesting carrier to request the space that best fits its 
operational needs. We also amend our existing space report rule to 
require that, upon request, an incumbent LEC must submit to the 
requesting carrier a report describing in detail the space that is 
available for collocation in a particular incumbent LEC premises. Thus, 
the new rule requires more detailed information within a report that 
already must be provided. A professional would likely prepare the 
additional information in a limited period of time. To give the rule 
any meaning, this report must be generated by small and large entities 
alike. Otherwise, carriers requesting collocation at a small incumbent 
LEC's facility would not have the all of the information available to 
make an educated space preference request.

V. Steps Taken To Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered

    20. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    21. In this Fourth Order, the Commission adopts collocation rules 
in implementation of section 251(c)(6) of the Communications Act. These 
rules respond to the D.C. Circuit's decision in GTE v. FCC, remanding 
certain rules the Commission had adopted to implement that provision. 
Our actions will affect both telecommunications carriers that request 
collocation and the incumbent LECs that, under section 251(c)(6), must 
provide collocation. As indicated above, both groups of carriers 
include entities that, for purposes of this FRFA, are classified as 
small entities. Neither section 251(c)(6) nor the D.C. Circuit decision 
permits the Commission to exempt any incumbent LECs, including those 
that are small entities, from their collocation obligations. Indeed, 
section 10(d) of the Communications Act precludes the Commission from 
forbearing from the application of section 251(c)(6) to any entity 
prior to that section's full implementation, an event that has not yet 
occurred.
    22. In this Fourth Order, the Commission takes a number of steps 
that may affect small entities that either provide or obtain 
collocation pursuant to section 251(c)(6) of the Communications Act. 
The requirements the Commission adopts will require incumbent LECs to 
change their collocation practices. As Congress contemplated in 
enacting section 251(c)(6), our collocation requirements benefit small 
competitive LECs in their efforts to compete against incumbent LECs, 
both large and small, in the provision of telecommunications services, 
including advanced services. The Commission believes that, on balance, 
the benefits to small competitive LECs of our actions in this Fourth 
Order far outweigh any burdens the Fourth Order places on small 
incumbent LECs.
    23. As set forth more fully below, the Commission believes that our 
actions in this Fourth Order are consistent with the RFA. Specifically, 
as OPASTCO urges, the requirements the Commission adopts provide 
substantial flexibility to incumbent LECs, including small incumbent 
LECs, in implementing section 251(c)(6). See OPASTCO Comments at 6; 
para. 3, supra. OPASTCO does not address directly any of the issues 
remanded by the D.C. Circuit and thus does not raise any specific 
alternatives we might consider in this Fourth Order. The Commission's 
requirements, however, stop short of

[[Page 43520]]

allowing any incumbent LEC to act inconsistent with that statutory 
provision. Any such action would be inconsistent with the requirements 
of section 251(c)(6) and would upset the balance reflected in the 
statute. Such action also would substantially burden competitive LECs, 
including those that are small entities, in their efforts to compete 
against incumbent LECs.
    24. The record makes clear that, absent the adoption of rules 
addressing the matters remanded by the D.C. Circuit, incumbent LECs 
will impede requesting carriers' collocation efforts.
    25. The Commission's actions in this Fourth Order should benefit 
requesting carriers, many of which may be small entities, by reducing 
barriers they encounter in seeking to compete effectively in the 
provision of advanced services and other telecommunications services. 
The Commission's actions seek to balance the property interests of the 
incumbent LECs, including small incumbent LECs, with the public 
interest in promoting innovation and competition. It is concluded that 
rules that are more restrictive or less restrictive would not strike 
the appropriate balance.
    26. In this Fourth Order, the Commission adopts standards that 
determine which competitive LECs, including small carriers, may 
collocate equipment at incumbent LEC premises pursuant to section 
251(c)(6). These standards provide that equipment is ``necessary for 
interconnection or access to unbundled network elements'' within the 
meaning of section 251(c)(6) if an inability to deploy that equipment 
would, as a practical, economic, or operational matter, preclude the 
requesting carrier from obtaining interconnection or access to 
unbundled network elements as contemplated in sections 251(c)(2) and 
251(c)(3). The Commission also finds that multifunction equipment meets 
the ``necessary'' standard only if the primary purpose and function of 
the equipment, as the requesting carrier seeks to deploy it, would be 
practically, economically, or operationally necessary for that carrier 
to obtain ``equal in quality'' interconnection or ``nondiscriminatory 
access'' to one or more unbundled network elements. The Commission 
rejects incumbent LEC and competitive LEC requests for alternative 
equipment standards because we believe such standards would be 
inconsistent with section 251(c)(6). The Commission also finds that 
standards more favorable to the incumbent LECs would thwart competition 
without significantly improving the interests of the incumbent LECs, 
while standards more favorable to competitive LECs would not properly 
take into consideration the property interests of the incumbent LECs. 
Therefore, the Commission selects the alternative that best balances 
the impact on each party, including small entities, and maximizes 
benefits.
    27. The Commission also concludes that switching and routing 
equipment generally meets our equipment standard because an inability 
to deploy that equipment would, as a practical, economic, and 
operational matter, preclude a requesting carrier from accessing all 
the features, functions, and capabilities of unbundled local loops. An 
incumbent LEC therefore generally must allow requesting carriers to 
collocate the relatively small switching and routing equipment that 
technological advances have enabled manufacturers to develop. An 
incumbent LEC, however, generally need not allow collocation of 
traditional circuit switches, which are very large pieces of equipment. 
The Commission finds, in light of the practical, economic, and 
operational availability of the relatively small switches and routers 
and the materially lesser burden collocation of these switches and 
routers imposes on an incumbent's property interests, that traditional 
circuit switches generally do not meet our equipment standard. The 
Commission believes that this approach toward switching and routing 
equipment furthers the purposes behind the RFA, because it allows small 
competitive LECs flexibility in configuring their networks while 
precluding the collocation of switching and routing equipment that 
would infringe small incumbent LECs' property interests. It is noted 
that any alternative that might allow a small incumbent LEC to 
generally preclude the collocation of relatively small switches and 
routers within its premises would violate the statutory mandate that 
incumbent LECs, both large and small, provide for the collocation of 
``necessary'' equipment.
    28. In addition, in this Fourth Order, we eliminate the requirement 
that, pursuant to section 251(c)(6), an incumbent LEC allow competitive 
LECs to construct and maintain cross-connects outside of their 
immediate physical collocation space at the incumbent's premises. The 
Commission considered maintaining this requirement, but that 
alternative would be inconsistent with the Communications Act and would 
not properly take into consideration the property interests of the 
incumbent LECs. The elimination of this requirement gives small 
incumbent LECs flexibility that was not available under the 
Commission's prior collocation rules.
    29. The Commission finds that sections 201 and 251 of the 
Communications Act provide statutory authority to require an incumbent 
LEC to provision cross-connects between collocated carriers, and we 
require that an incumbent LEC provide such cross-connects upon 
reasonable request. The Commission considered not requiring incumbent 
LECs to provision cross-connects between collocated carriers, but that 
alternative would allow incumbent LECs to provide collocation to 
competitive LECs in an unjust, unreasonable, and discriminatory manner. 
It is noted that all incumbent LECs, including those that are small 
carriers, cross-connect their own equipment within their premises. 
Indeed, those premises are, by design, places where a carrier can 
cross-connect equipment. The benefits to competition from requiring 
that a small incumbent LEC provision cross-connects between collocators 
within its premises far outweigh any additional burden such a 
requirement may impose on that carrier. In addition, allowing a small 
incumbent LEC to refrain from provisioning cross-connects between 
collocated carriers would allow the incumbent to impose unreasonable 
and discriminatory terms and conditions on collocators, in violation of 
the Communications Act.
    30. In this Fourth Order, the Commission eliminates the requirement 
that incumbent LECs allow the requesting carrier to select its physical 
collocation space from among the unused space in the incumbent's 
premises as well as requirements constraining how incumbents LEC may 
configure physical collocation space. The Commission now allows 
incumbent LECs, in certain circumstances, to restrict physical 
collocation to space separated from space housing the incumbent's 
equipment and to require the construction and use of a separate 
entrance to access physical collocation space. The Commission rejects 
the alternative of retaining the prior rules, because they failed to 
properly balance the congressional goal of promoting competition 
against the need to protect an incumbent LEC's property interests 
against unwarranted intrusion. The elimination of these prior rules 
gives incumbent LECs, including small entities, flexibility that was 
not previously available.
    31. The Commission recognizes, however, that an incumbent LEC has 
powerful incentives that, left unchecked, may influence it to allocate

[[Page 43521]]

space in a manner inconsistent with its statutory duty to provide for 
physical collocation ``on rates, terms, and conditions that are just, 
reasonable, and nondiscriminatory.'' Accordingly, the Commission 
establishes specific principles that each incumbent LEC, including 
those that are small carriers, must follow in assigning physical 
collocation space. These rules are designed to ensure that incumbent 
LECs, both large and small, act as neutral property owners and 
managers, rather than as direct competitors of the carriers requesting 
collocation, in assigning physical collocation space to requesting 
carriers. Alternatives that would give a small incumbent LEC more 
flexibility in assigning space might enable it to act unreasonably and 
discriminatorily in violation of section 251(c)(6). Those alternatives 
also would burden requesting carriers, including those that are small 
carriers, by increasing the costs they incur in competing against 
incumbent LECs. Therefore, for both statutory and public policy 
reasons, the Commission does not adopt a different standard for 
incumbent LECs that are small entities.
    32. The Commission also rejects the alternative of allowing 
incumbent LECs, including those that are small entities, to restrict 
physical collocation to space separated from space housing the 
incumbent's equipment and to require the construction and use of a 
separate entrance to access physical collocation space in all 
instances, because we find that such separation measures would be 
unreasonable and discriminatory in certain circumstances. The 
Commission concludes, for example, that an incumbent LEC may require 
such separation measures only where legitimate security concerns, or 
operational constraints unrelated to the incumbent's or any of its 
affiliates' or subsidiaries' competitive concerns, warrant them. This 
is consistent with the D.C. Circuit's recognition that alternatives 
other than separation are sufficient to address incumbent LECs' 
security concerns. To the extent small incumbent LECs encounter 
security concerns or operational constraints that differ from those 
incumbent LECs encounter, our rules permit small incumbent LECs to take 
those differences into account in their space assignment and 
configuration policies and practices.

VI. Report to Congress

    33. The Commission will send a copy of the Fourth Order, including 
this FRFA, in a report to be sent to Congress pursuant to the SBREFA. 
In addition, the Commission will send a copy of the Fourth Order, 
including the FRFA, to the Chief Counsel for Advocacy of the SBA. A 
copy of the Fourth Order and the FRFA (or summaries thereof) will also 
be published in the Federal Register.
Ordering Clauses
    34. Pursuant to sections 1-4, 201, 202, 251-254, 256, 271, and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151-54, 
201, 202, 251-54, 256, 271, and 303(r), that this Fourth Report and 
Order is adopted.
    35. Pursuant to sections 1-4, 201, 202, 251-54, 256, 271, and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151-54, 
201, 202, 251-54, 256, 271, and 303(r), that Part 51 of the 
Commission's rules, 47 CFR part 51, is amended, as set forth in Rule 
Changes, and that those rule amendments shall become effective thirty 
days after publication of the text or summary thereof in the Federal 
Register, unless the FCC publishes a document in the Federal Register 
to delay or withdraw them.
    36. The Commission's Consumer Information Bureau, Reference 
Information Center, SHALL SEND a copy of this Fourth Report and Order, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

Final Paperwork Reduction Analysis

    37. The action contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1995 and found to impose new or modified 
reporting and recordkeeping requirements or burdens on the public. 
Implementation of these new or modified reporting and recordkeeping 
requirements will be subject to approval by the Office of Management 
and Budget (OMB) as prescribed by the Paperwork Reduction Act of 1995, 
and will go into effect 30 days after publication in the Federal 
Register, unless the FCC publishes a document in the Federal Register 
to delay or withdraw them.

List of Subjects in 47 CFR Part 51

    Communications, Common carriers, Collocation, Interconnection, 
Unbundled network elements.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR Part 51 as follows:

PART 51--INTERCONNECTION

    1. The authority for Part 51 continues to read as follows: Sections 
1-5, 7, 201-05, 207-09, 218, 225-27, 251-54, 271, 332, 48 Stat. 1070, 
as amended, 1077; 47 U.S.C. 151-55, 157, 201-05, 207-09, 218, 225-27, 
251-54, 271, 332, unless otherwise noted.

    2. Section 51.5 is amended by adding in alphabetical order a 
definition of ``multi-functional equipment'' to read as follows:


Sec. 51.5  Terms and definitions.

* * * * *
    Multi-functional equipment. Multi-functional equipment is equipment 
that combines one or more functions that are necessary for 
interconnection or access to unbundled network elements with one or 
more functions that would not meet that standard as stand-alone 
functions.
* * * * *

    3. Section 51.321 is amended by revising paragraph (h) to read as 
follows:


Sec. 51.321  Methods of obtaining interconnection and access to 
unbundled elements under section 251 of the Act.

* * * * *
    (h) Upon request, an incumbent LEC must submit to the requesting 
carrier within ten days of the submission of the request a report 
describing in detail the space that is available for collocation in a 
particular incumbent LEC premises. This report must specify the amount 
of collocation space available at each requested premises, the number 
of collocators, and any modifications in the use of the space since the 
last report. This report must also include measures that the incumbent 
LEC is taking to make additional space available for collocation. The 
incumbent LEC must maintain a publicly available document, posted for 
viewing on the incumbent LEC's publicly available Internet site, 
indicating all premises that are full, and must update such a document 
within ten days of the date at which a premises runs out of physical 
collocation space.
* * * * *

    4. Section 51.323 is amended by revising paragraphs (b), (c), (e), 
(f) introductory text, (h), (i) introductory text, and (k)(2) and 
adding paragraphs (f)(7), (i)(4)(i) through (i)(4)(v), (i)(5), and 
(i)(6)(i) through (i)(6)(iv) to read as follows:


Sec. 51.323  Standards for physical collocation and virtual 
collocation.

* * * * *
    (b) An incumbent LEC shall permit the collocation and use of any

[[Page 43522]]

equipment necessary for interconnection or access to unbundled network 
elements.
    (1) Equipment is necessary for interconnection if an inability to 
deploy that equipment would, as a practical, economic, or operational 
matter, preclude the requesting carrier from obtaining interconnection 
with the incumbent LEC at a level equal in quality to that which the 
incumbent obtains within its own network or the incumbent provides to 
any affiliate, subsidiary, or other party.
    (2) Equipment is necessary for access to an unbundled network 
element if an inability to deploy that equipment would, as a practical, 
economic, or operational matter, preclude the requesting carrier from 
obtaining nondiscriminatory access to that unbundled network element, 
including any of its features, functions, or capabilities.
    (3) Multi-functional equipment shall be deemed necessary for 
interconnection or access to an unbundled network element if and only 
if the primary purpose and function of the equipment, as the requesting 
carrier seeks to deploy it, meets either or both of the standards set 
forth in paragraphs (b)(1) and (b)(2) of this section. For a piece of 
equipment to be utilized primarily to obtain equal in quality 
interconnection or nondiscriminatory access to one or more unbundled 
network elements, there also must be a logical nexus between the 
additional functions the equipment would perform and the 
telecommunication services the requesting carrier seeks to provide to 
its customers by means of the interconnection or unbundled network 
element. The collocation of those functions of the equipment that, as 
stand-alone functions, do not meet either of the standards set forth in 
paragraphs (b)(1) and (b)(2) of this section must not cause the 
equipment to significantly increase the burden on the incumbent's 
property.
    (c) Whenever an incumbent LEC objects to collocation of equipment 
by a requesting telecommunications carrier for purposes within the 
scope of section 251(c)(6) of the Act, the incumbent LEC shall prove to 
the state commission that the equipment is not necessary for 
interconnection or access to unbundled network elements under the 
standards set forth in paragraph (b) of this section. An incumbent LEC 
may not object to the collocation of equipment on the grounds that the 
equipment does not comply with safety or engineering standards that are 
more stringent than the safety or engineering standards that the 
incumbent LEC applies to its own equipment. An incumbent LEC may not 
object to the collocation of equipment on the ground that the equipment 
fails to comply with Network Equipment and Building Specifications 
performance standards or any other performance standards. An incumbent 
LEC that denies collocation of a competitor's equipment, citing safety 
standards, must provide to the competitive LEC within five business 
days of the denial a list of all equipment that the incumbent LEC 
locates at the premises in question, together with an affidavit 
attesting that all of that equipment meets or exceeds the safety 
standard that the incumbent LEC contends the competitor's equipment 
fails to meet. This affidavit must set forth in detail: the exact 
safety requirement that the requesting carrier's equipment does not 
satisfy; the incumbent LEC's basis for concluding that the requesting 
carrier's equipment does not meet this safety requirement; and the 
incumbent LEC's basis for concluding why collocation of equipment not 
meeting this safety requirement would compromise network safety.
* * * * *
    (e) When providing virtual collocation, an incumbent LEC shall, at 
a minimum, install, maintain, and repair collocated equipment meeting 
the standards set forth in paragraph (b) of this section within the 
same time periods and with failure rates that are no greater than those 
that apply to the performance of similar functions for comparable 
equipment of the incumbent LEC itself.
    (f) An incumbent LEC shall provide space for the collocation of 
equipment meeting the standards set forth in paragraph (b) of this 
section in accordance with the following requirements:
* * * * *
    (7) An incumbent LEC must assign collocation space to requesting 
carriers in a just, reasonable, and nondiscriminatory manner. An 
incumbent LEC must allow each carrier requesting physical collocation 
to submit space preferences prior to assigning physical collocation 
space to that carrier. At a minimum, an incumbent LEC's space 
assignment policies and practices must meet the following principles:
    (A) An incumbent LEC's space assignment policies and practices must 
not materially increase a requesting carrier's collocation costs.
    (B) An incumbent LEC's space assignment policies and practices must 
not materially delay a requesting carrier occupation and use of the 
incumbent LEC's premises.
    (C) An incumbent LEC must not assign physical collocation space 
that will impair the quality of service or impose other limitations on 
the service a requesting carrier wishes to offer.
    (D) An incumbent LEC's space assignment policies and practices must 
not reduce unreasonably the total space available for physical 
collocation or preclude unreasonably physical collocation within the 
incumbent's premises.
* * * * *
    (h) As described in paragraphs (1) and (2) of this section, an 
incumbent LEC shall permit a collocating telecommunications carrier to 
interconnect its network with that of another collocating 
telecommunications carrier at the incumbent LEC's premises and to 
connect its collocated equipment to the collocated equipment of another 
telecommunications carrier within the same premises, provided that the 
collocated equipment is also used for interconnection with the 
incumbent LEC or for access to the incumbent LEC's unbundled network 
elements.
    (1) An incumbent LEC shall provide, at the request of a collocating 
telecommunications carrier, a connection between the equipment in the 
collocated spaces of two or more telecommunications carriers, except to 
the extent the incumbent LEC permits the collocating parties to provide 
the requested connection for themselves or a connection is not required 
under paragraph (h)(2) of this section. Where technically feasible, the 
incumbent LEC shall provide the connection using copper, dark fiber, 
lit fiber, or other transmission medium, as requested by the 
collocating telecommunications carrier.
    (2) An incumbent LEC is not required to provide a connection 
between the equipment in the collocated spaces of two or more 
telecommunications carriers if the connection is requested pursuant to 
section 201 of the Act, unless the requesting carrier submits to the 
incumbent LEC a certification that more than 10 percent of the amount 
of traffic to be transmitted through the connection will be interstate. 
The incumbent LEC cannot refuse to accept the certification, but 
instead must provision the service promptly. Any incumbent LEC may file 
a section 208 complaint with the Commission challenging the 
certification if it believes that the certification is deficient. No 
such certification is required for a request for such connection under 
section 251 of the Act.

[[Page 43523]]

    (i) As provided herein, an incumbent LEC may require reasonable 
security arrangements to protect its equipment and ensure network 
reliability. An incumbent LEC may only impose security arrangements 
that are as stringent as the security arrangements that the incumbent 
LEC maintains at its own premises for its own employees or authorized 
contractors. An incumbent LEC must allow collocating parties to access 
their collocated equipment 24 hours a day, seven days a week, without 
requiring either a security escort of any kind or delaying a 
competitor's employees' entry into the incumbent LEC's premises. An 
incumbent LEC may require a collocating carrier to pay only for the 
least expensive, effective security option that is viable for the 
physical collocation space assigned. Reasonable security measures that 
the incumbent LEC may adopt include:
* * * * *
    (4) Restricting physical collocation to space separated from space 
housing the incumbent LEC's equipment, provided that each of the 
following conditions is met:
    (i) Either legitimate security concerns, or operational constraints 
unrelated to the incumbent's or any of its affiliates' or subsidiaries 
competitive concerns, warrant such separation;
    (ii) Any physical collocation space assigned to an affiliate or 
subsidiary of the incumbent LEC is separated from space housing the 
incumbent LEC's equipment;
    (iii) The separated space will be available in the same time frame 
as, or a shorter time frame than, non-separated space;
    (iv) The cost of the separated space to the requesting carrier will 
not be materially higher than the cost of non-separated space; and
    (v) The separated space is comparable, from a technical and 
engineering standpoint, to non-separated space.
    (5) Requiring the employees and contractors of collocating carriers 
to use a central or separate entrance to the incumbent's building, 
provided, however, that where an incumbent LEC requires that the 
employees or contractors of collocating carriers access collocated 
equipment only through a separate entrance, employees and contractors 
of the incumbent LEC's affiliates and subsidiaries must be subject to 
the same restriction.
    (6) Constructing or requiring the construction of a separate 
entrance to access physical collocation space, provided that each of 
the following conditions is met:
    (i) Construction of a separate entrance is technically feasible;
    (ii) Either legitimate security concerns, or operational 
constraints unrelated to the incumbent's or any of its affiliates' or 
subsidiaries competitive concerns, warrant such separation;
    (iii) Construction of a separate entrance will not artificially 
delay collocation provisioning; and
    (iv) Construction of a separate entrance will not materially 
increase the requesting carrier's costs.
* * * * *
    (k) * * *
    (2) Cageless collocation. Incumbent LECs must allow competitors to 
collocate without requiring the construction of a cage or similar 
structure. Incumbent LECs must permit collocating carriers to have 
direct access to their equipment. An incumbent LEC may not require 
competitors to use an intermediate interconnection arrangement in lieu 
of direct connection to the incumbent's network if technically 
feasible. An incumbent LEC must make cageless collocation space 
available in single-bay increments, meaning that a competing carrier 
can purchase space in increments small enough to collocate a single 
rack, or bay, of equipment.
* * * * *

[FR Doc. 01-20860 Filed 8-17-01; 8:45 am]
BILLING CODE 6712-01-P