Common carrier services: Local telephone company facilities; expanded interconnection,

[Federal Register: August 28, 1998 (Volume 63, Number 167)]

[Rules and Regulations]

[Page 45956-45958]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr28au98-22]

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[CC Docket No. 91-141; FCC 98-199]

Expanded Interconnection With Local Telephone Company Facilities

AGENCY: Federal Communications Commission.

ACTION: Final rule.

SUMMARY: The Order on Reconsideration (Order) released August 18, 1998 denies Association for Local Telecommunications Services and WilTel, Inc. Petitions for Reconsideration of the Expanded Interconnection with Local Telephone Company Facilities, CC Docket No. 91-141, Third Report and Order, Transport Phase, II (Tandem Switching Order), and grants the motion to withdraw filedby Southwestern Bell Telephone Company.

EFFECTIVE DATE: September 28, 1998.

FOR FURTHER INFORMATION CONTACT: Jason Oxman, Attorney, Common Carrier Bureau, Policy and Program Planning Division, (202) 418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order On Reconsideration adopted August 12, 1998, and released August 18, 1998. The full text of this Order is available for inspection and copying during normal business hours in the FCC Reference Center, 1919 M St., N.W., Room 239, Washington, D.C. The complete text also may be obtained through the World Wide Web, at http://www.fcc.gov/Bureaus/ Common Carrier/Orders/fcc98-199.wp, or may be purchased from the Commission's copy contractor, International Transcription Service, Inc., (202) 857-3800, 1231 20th St., N.W., Washington, D.C. 20036.

Regulatory Flexibility Certification

In the Tandem Switching Order, the Commission noted that it certified in the Second Notice of Proposed Rulemaking, 57 FR 56888, December 1, 1992, that the conclusions it proposed to adopt would not have a significant economic impact on a substantial number of small business entities. No comments were

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submitted in response to the Commission's request for comment on its certification. In this present Order on Reconsideration, the Commission promulgates no additional final rules, and our action does not affect the previous analysis.

Synopsis of Order on Reconsideration

1. In its Third Report and Order, 59 FR 32925 June 27, 1994, in the expanded interconnection proceeding, the Commission directed all Tier 1 local exchange carriers (LECs), except National Exchange Carrier Association, Inc. (NECA) pool members, to provide third parties with the signalling information necessary for these parties to supply tandem switching. Expanded Interconnection with Local Telephone Company Facilities, CC Docket No. 91-141, Third Report and Order, Transport Phase II, 9 FCC Rcd 2718 (1994) (Tandem Switching Order). Three parties filedfor reconsideration of the Tandem Switching Order, but one of the three parties has sought to withdraw its petition. For the reasons discussed below, we deny the two remaining petitions.

2. The Tandem Switching Order required Tier 1 incumbent LECs other than NECA pool members to provide all interested third parties, such as competitive local exchange carriers, interexchange carriers (IXCs), and end users, with the signalling information necessary for those parties to install their own tandems to provide tandem switching services. These third parties, called tandem switch providers (TSPs), would then be able to compete with the incumbent LECs in providing tandem switched transport. Tandem switched transport refers to traffic transported by means of a tandem switch, which is an intermediate switch between an originating telephone call location and the final destination of the call. TSPs carry traffic of multiple interexchange carriers from LEC end offices to their own tandems, and then deliver the traffic to the appropriate IXC. The Commission found that availability to third parties of signalling information needed for tandem switching could provide significant public benefits, such as facilitating broader access competition by enabling interconnectors to offer competitive interstate tandem switching and transport services. In the Commission's view, small IXCs, which rely heavily on tandem-switched transport, would particularly benefit. The Commission also found that competitive tandem switching would yield other benefits, such as putting downward pressure on access charges and long-distance rates, increasing technological innovation, and making more efficient use of the country's telecommunications networks. The Commission determined that the benefits of allowing this competition outweigh the de minimis potential costs incurred by the incumbent LECs in providing the necessary signalling. Finally, the Tandem Switching Order explicitly did not require incumbent LECs to provide signalling information from their tandem offices. The Commission found that the record did not reveal how tandem-to-tandem interconnection could be competitively viable, either from a service quality or pricing perspective.

3. WilTel, Inc. (WilTel) and the Association for Local Telecommunications Services (ALTS) filedpetitions for reconsideration of the Tandem Switching Order urging the Commission to reconsider its decision not to require tandem-to-tandem interconnection. Southwestern Bell Telephone Company (SWBT) also fileda petition for clarification and reconsideration of the Tandem Switching Order, claiming technical difficulties in implementing that order. SWBT subsequently fileda motion to withdraw its petition.

4. We deny the WilTel and ALTS petitions to reconsider the Commission's decision not to require incumbent LECs to provide signalling from their tandems in its Tandem Switching Order. The Commission explicitly considered and decided against requiring LECs to provide tandem-to-tandem interconnection, finding that the costs of tandem-to-tandem signalling were not shown to be justified by either the benefits of, or demand for, such signalling. Nothing in the record on reconsideration persuades us to alter this finding. First, the petitioners have not presented sufficient evidence to demonstrate that demand for this service exists or that this is a viable service. Even WilTel admits that the demand for this service is speculative. In addition, while some commenters claim that tandem-to-tandem switching is necessary to provide ubiquitous service, they do not dispute that such a goal may be achieved by collocating at LEC tandems and routing traffic from those tandems to their own tandems, using separate trunk groups for each IXC. Instead, these commenters argue only in general terms that this option is not cost-efficient. Second, petitioners have failed to support their claim that the costs associated with tandem-to- tandem interconnection would be minimal. The LECs claim that they would incur significant costs to develop standards and upgrade software to provide tandem-to-tandem signalling. While the parties seeking tandem- to-tandem interconnection urge that the costs associated with such interconnection are minimal, they have not provided any precise information to support those assertions. On this record, we thus conclude that WilTel and ALTS have not met their burden of persuading us to reconsider the Commission's earlier decision in the Tandem Switching Order.

5. We note here that the record suggests no reason why carriers desiring signalling from LEC tandems cannot obtain that signalling through the separate, yet to some extent parallel, interconnection requirements mandated by the Telecommunications Act of 1996 and the Commission's subsequent order establishing rules implementing those requirements. Sections 251(c)(2) and 251(c)(3) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, obligate incumbent LECs to provide interconnection and access to unbundled elements, upon request, at any ``technically feasible point.'' As explained in the Local Competition Order, the term ``technically feasible'' refers solely to technical or operational concerns, rather than economic, space, or site considerations.

6. Finally, we agree with many of the LEC commenters that consideration of modification of the Commission's new services test for LECs subject to price cap regulation is beyond the scope of this proceeding. Such arguments are more properly raised in petitions filed regarding individual tariffs, and we therefore decline to consider them here. For the reasons discussed, we affirm our decision not to require LECs to provide tandem-to-tandem signalling.

7. Accordingly, pursuant to the authority contained in sections 1, 4, and 201-205 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, and 201-205, It is ordered that the petition for reconsideration of the Association for Local Telecommunications Services and the petition for reconsideration of WilTel, Inc. Are Denied as described.

8. It is Further Ordered that the Motion to Withdraw Southwestern Bell Telephone's Petition for Clarification and Reconsideration is granted.

9. It is Further Ordered that the Motion for Leave to File Late Reply of WilTel, Inc. is granted.

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Federal Communications Commission. Magalie Roman Salas, Secretary.

[FR Doc. 98-23148Filed8-27-98; 8:45 am]

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