[Federal Register Volume 67, Number 10 (Tuesday, January 15, 2002)]
[Proposed Rules]
[Pages 1945-1947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-903]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 51
[CC Docket No. 01-337, FCC 01-360]
Review of Regulatory Requirements for Incumbent LEC Broadband
Telecommunications Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: This document seeks comment on changes, if any, the Commission
should make to its traditional regulatory requirements for incumbent
local exchange carriers' (LECs) broadband service. In particular, it
asks: What the relevant product and geographic markets should be for
broadband services; whether incumbent LECs possess market power in any
relevant market; and whether dominant carrier safeguards or other
regulatory requirements should govern incumbent LECs provision of
broadband service.
DATES: Comments are due March 1, 2002 and Reply Comments are due April
1, 2002.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in CC Docket No. 01-337, FCC 01-360,
adopted December 12, 2001, and released December 20, 2001. The complete
text of this NPRM is available for inspection and copying during normal
business hours in the FCC Reference Information Center, Portals II, 445
12th Street, SW., Room CY-A257, Washington, DC 20554. This document may
also be purchased from the Commission's duplicating contractor, Qualex
International, Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898,
or via e-mail [email protected]. It is also available on the
Commission's Web site at http://www.fcc.gov.
Synopsis of the Notice of Proposed Rulemaking (NPRM)
1. In this proceeding, the Commission initiates an examination of
appropriate regulatory requirements for incumbent LECs' provision of
domestic broadband telecommunications services (broadband services).
The NPRM focuses on traditional Title II common carrier regulation,
arising largely out of sections 201 and 202 of the Communications Act
of 1934, as amended, as applied to incumbent LEC provision of broadband
services. In particular, the Commission seeks comment on what
regulatory safeguards and carrier obligations, if any, should apply
when a carrier that is dominant in the provision of traditional local
exchange and exchange access services provides broadband service.
2. The Commission asks for comments on the nature and scope of the
market for domestic broadband services. It also seeks comment on the
relevant market dynamics--including intermodal competition and the
nascent stage of market development for residential broadband
services--affecting the provision of domestic broadband services. The
Commission requests comment on the appropriate regulatory requirements
under Title II of the Act for the provision of broadband services by
incumbent LECs given current market conditions.
3. In particular, the Commission asks interested parties to address
how the Commission can best balance the goals of encouraging broadband
investment and deployment, fostering competition in the provision of
broadband services, promoting innovation, and eliminating unnecessary
regulation. As part of this proceeding, the Commission also invites
comment on the Petition filed by SBC Communications on October 3, 2001,
requesting an expedited ruling that it is non-dominant in the provision
of broadband services, and asking the Commission to forbear from
dominant carrier regulation of those services.
4. Background. The NPRM summarizes the various regulatory
requirements the Commission has developed in the past, which involve
streamlining regulation of firms in increasingly competitive markets,
and competitive safeguards to ensure competition in related markets.
5. Identification of Incumbent LEC-Provided Broadband Services
Markets. The Commission asks for comment aimed at defining and
analyzing the relevant markets in which incumbent LECs provide these
broadband services. Consistent with Commission precedent, our
regulatory response should be guided by a full understanding of the
existing market dynamics for broadband services. The Commission begins
its analysis by asking questions about the relevant product and
geographic markets for incumbent LEC-provided broadband services. It
then analyzes what, if any, market power the incumbent LECs may possess
in the relevant markets for broadband services.
6. Appropriate Regulatory Requirements. Once the Commission has
defined the relevant product and geographic markets for broadband
services, it can use this information to determine what regulatory
requirements, if any, should govern the provision of broadband
services. The Commission begins by briefly describing relevant portions
of the existing regulatory structure for broadband services provided by
incumbent LECs. Then it invites interested parties to propose
alternative requirements for these broadband services in light of
existing market and technological developments. The Commission
encourages interested parties to develop proposals for new or modified
regulatory requirements for broadband services.
I. Initial Regulatory Flexibility Analysis
7. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared the present Initial
Regulatory Flexibility Analysis (IRFA) of the possible significant
economic impact on a substantial number of small entities by the
policies and rules proposed in this NPRM. Written public comments are
requested on this IRFA. Comments must be identified as responses to the
IRFA and must be filed by the deadlines for comments on the NPRM
provided in section V.B. The Commission will send a copy of the NPRM,
including the IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration. In addition, the Notice and IRFA (or summaries
thereof) will be published in the Federal Register.
II. Need for, and Objectives of, the Proposed Rules
8. In this proceeding, the Commission seeks comment on: (1) The
nature and scope of the market for domestic broadband services; (2) the
relevant market dynamics affecting the provision of domestic broadband
services; and (3) the appropriate regulatory requirements for the
provision of broadband services by incumbent LECs, given current market
conditions. The basic elements of the existing regulatory requirements
for incumbent LEC-provided broadband services were initially developed
in an era of circuit-switched, analog voice services, and may no longer
serve the public interest. Thus, the Commission asks interested parties
to address how it can best balance the goals of
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encouraging advanced telecommunications investment and deployment,
fostering competition in the provision of broadband services, promoting
innovation, and eliminating unnecessary regulation. This proceeding
also invites comment on the Petition filed by SBC Communications on
October 3, 2001, requesting an expedited ruling that it is non-dominant
in the provision of advanced services, and asking the Commission to
forebear from dominant carrier regulation of those services.
III. Legal Basis
9. The legal basis for any action that may be taken pursuant to the
NPRM is contained in sections 4, 10, 201-202, 214, 303 and 403 of the
Communications Act of 1934, as amended, 47 U.S.C. 154, 160, 201-204,
214, 303, and 403, section 706 of the Telecommunications Act of 1996,
and sections 1.1, 1.48, 1.411, 1.412, 1.415, 1.419, and 1.1200-1.1216,
of the Commission's rules, 47 CFR Secs. 1.1, 1.48, 1.411, 1.412, 1.415,
1.419, and 1.1200-1.1216.
IV. Description and Estimate of the Number of Small Entities To
Which the Proposed Rules Will Apply
10. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by the proposed rules. The RFA generally defines the term
``small entity'' as having the same meaning as the terms ``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. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA).
11. The Commission has included small incumbent LECs in this
present RFA analysis. As noted above, 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. The Commission has
therefore included small incumbent LECs in this RFA analysis, although
it emphasizes that this RFA action has no effect on FCC analyses and
determinations in other, non-RFA contexts.
12. Local Exchange Carriers. Neither the Commission nor the SBA has
developed a definition for small local exchange carriers. The closest
applicable definitions for this type of carrier under SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of LECs nationwide appears To be the data that we collect annually in
connection with the Telecommunications Relay Service (TRS). According
to our most recent data, there are 1,335 incumbent LECs. Although some
of these carriers may not be independently owned and operated, or have
more than 1,500 employees, the Commission is 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 there are no more than 1,335 small entity
incumbent LECs that may be affected by the proposals in the NPRM.
V. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
13. The Commission expects that any proposal we may adopt pursuant
this NPRM will decrease existing reporting, recordkeeping or other
compliance requirements. As noted above, dominant carriers are
currently subject to a broad range of regulatory requirements that are
generally intended to protect consumers from unjust and unreasonable
rates, terms, and conditions and unreasonable discrimination in the
provision of communications services. The Commission's dominant carrier
regulation includes rate regulation and tariff filing requirements, and
also requires supporting information, which in some cases includes
detailed cost data, to be filed by dominant carriers with their tariff
filings. Incumbent LECs are subject to rate level regulation in the
provision of their interstate access services. The BOCs and GTE are
subject to mandatory price cap regulation, and several other incumbent
LECs have entered price caps on an elective basis, while smaller
incumbent LECs are regulated under rate-of-return regulation. In
addition, in markets where carriers may have the incentive and ability
to leverage control over bottleneck facilities to disadvantage
competitors in related markets, the Commission has developed various
safeguards to neutralize that ability. This NPRM seeks comment on what
relevance, if any, these types of regulations have for broadband
services provided by incumbent LECs, and asks whether it would be
appropriate to streamline the traditional dominant carrier regulations
of incumbent LECs' provision of broadband services.
VI. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
14. The RFA requires an agency to describe any significant,
specifically small business, 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.
15. The overall objective of this proceeding is to reduce existing
regulatory burdens on incumbent LECs to the extent consistent with the
public interest. The NPRM seeks specific proposals as to which existing
regulations might be removed or streamlined in their application to
broadband services, and asks parties to comment on whether incumbent
LECs should be reclassified as non-dominant in the provision of
broadband services. The NPRM further asks parties to discuss the extent
to which different categories of broadband services face different
levels of competition, warranting different regulatory treatment, and
to address the extent to which the markets for different broadband
services are at different stages in their development and thus should
be treated differently for regulatory purposes. It asks what forms of
regulation or de-regulation would best spur deployment of alternative
technologies and facilities by existing and potential competitors, and
seeks comment on whether existing regulation inhibits or stimulates the
deployment of broadband services.
VII. Federal Rules That May Duplicate, Overlap, or Conflict With
the Proposed Rules
16. None.
Ordering Clauses
17. Accordingly, pursuant to the authority contained in sections 2,
4(i)-
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4(j), 201, and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 152, 154(i)-4(j), 201, 303(r), this NPRM is adopted.
18. The Commission's Consumer Information Bureau, Reference
Information Center, shall send a copy of this NPRM, including the
Initial Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 02-903 Filed 1-14-02; 8:45 am]
BILLING CODE 6712-02-P