Expanded Interconnection With Local Telephone Company Facilities

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61, 64, and 69

[CC Docket 91-141, FCC No. 94-118]

Expanded Interconnection With Local Telephone Company Facilities

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission required Tier 1 local exchange carriers (LECs)

(except members of the National Exchange Carrier Association (NECA)) to

provide to interested third parties, including competitive access

providers (CAPs), interexchange carriers, (IXCs), and end users,

signalling information necessary to provide tandem switching services.

These parties will thus, for the first time, be able to carry traffic

of multiple IXCs from LEC end offices to their own tandems, switch

traffic at that point, and deliver the traffic to the appropriate IXC.

LECs must offer signalling information from their equal access end

offices pursuant to tariff.

EFFECTIVE DATE: September 15, 1994.

FOR FURTHER INFORMATION CONTACT:

Gary L. Phillips (202) 632-4048 or Linda L. Haller (202) 632-1298.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third

Report and Order in CC Docket No. 91-141, adopted May 19, 1994, and

released May 27, 1994. The full text of this decision is available for

inspection and copying during normal business hours in the FCC

Reference Center (Room 239), 1919 M Street, NW., Washington, DC 20554.

The complete text of this decision also may be purchased from the

Commission's copy contractor, International Transcription Service,

Inc., 2100 M Street, NW., Suite 140, Washington, DC 20037, (202) 857-

3800.

Paperwork Reduction Act

Public reporting burden for this collection of information is

estimated to average 37 hours per response, including the time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Send comments regarding this burden estimate

or any other aspect of this collection of information, including

suggestions for reducing the burden, to the Federal Communications

Commission, Records Management Division, Paperwork Reduction Project,

Washington, DC 20554 and to the Office of Management and Budget,

Paperwork Reduction Project, Washington, DC 20503.

Summary of the Order

1. The Commission found that this decision represents another step

in a series of efforts to remove barriers to competition in interstate

access services. It stated that while the Commission's earlier expanded

interconnection decisions opened the door to competition in special

access and switched transport transmission services, interconnectors,

however, had to rely on LECs to perform the switching functions

necessary to provide switched transport. The Commission concluded that

the Order will enable interconnectors, as well as other parties, to

provide tandem switching functions for switched transport services.

2. The Commission concluded that LEC-provision of signalling

information will open the door to third parties to provide competitive

tandem switching services. By further reducing barriers to competition

in switched access services, this action will benefit all users of

tandem switching, especially small IXCs that tend to rely heavily on

tandem-switched transport, who will benefit from more competitively

priced tandem switching services. The Commission also found that its

action should promote more efficient use and deployment of the

country's telecommunications networks, encourage technological

innovation, and exert downward pressure on access charges and long-

distance rates, all of which should contribute to economic growth and

the creation of new job opportunities. In addition, these measures

should increase access to diverse facilities, which could improve

network reliability.

3. The Commission required Tier 1 LECs (except NECA pool members)

to provide signalling information necessary for tandem switching from

LEC equal access end offices to any interested third party (hereinafter

sometimes referred to as ``tandem switching providers'' or ``TSPs'').

(Tier 1 LECs are those with $100 million or more in annual regulated

revenues for a sustained period of time.) In end offices in which

common channel signalling (CCS or SS7) is available, TSPs shall have

the option of receiving signalling information via SS7 or multi-

frequency (MF) signalling. The provision of this information will be

treated as a new service under the Commission's price caps regime. Tier

1 LECs must file tariff amendments to reflect the availability of

signalling information from LEC equal access end offices within ninety

days of the publication of the Order in the Federal Register. Based on

the record and in light of prior decisions on pricing flexibility in

the Switched Transport Expanded Interconnection Order and in the

Transport proceeding, the Commission did not grant LECs additional

pricing flexibility at this time. The Commission also found that the

transport interconnection charge is sufficient to protect support flows

potentially affected by the provision of signalling information.

Background

4. The Commission stated that it has taken several initiatives to

increase competition in the long-distance market. First, in 1992, in

the Special Access Expanded Interconnection Order, the Commission

required Tier 1 LECs, except NECA pool members, to provide expanded

interconnection for interstate special access to all interested

parties.\1\ The Commission also stated that in 1993, it adopted the

Switched Transport Expanded Interconnection Order, in which the

Commission required LECs providing expanded interconnection for special

access to provide expanded interconnection for switched transport

service as well.\2\ In that order, the Commission opened the

opportunity for interconnectors to provide alternative transmission

services to LEC-provided direct-trunked transport and entrance

facilities by collocating transmission facilities in LEC end offices,

tandems, serving wire centers (SWCs), and certain remote nodes. The

Commission stated that as a result of those two actions,

interconnectors are now able to provide special access and switched

transport transmission services in competition with the LECs.

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\1\Expanded Interconnection with Local Telephone Company

Facilities, Report and Order and Notice of Proposed Rulemaking, 7

FCC Rcd 7369 (1992), 57 FR 54323 (November 18, 1992), vacated in

part and remanded in part, Bell Atlantic v. FCC, No. 92-1619 (D.C.

Cir. June 10, 1994), recon., 8 FCC Rcd 127 (1992), recon., 8 FCC Rcd

7341 (1991).

\2\Expanded Interconnection with Local Telephone Company

Facilities, Second Report and Order and Third Notice of Proposed

Rulemaking, 8 FCC Rcd 7374 (1993), 58 FR 48756 (September 17, 1993),

appeal pending sub nom. Bell Atlantic v. FCC, No. 93-1743 (D.C.

Cir., filed November 12, 1993).

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5. The Commission stated that only LECs, however, currently can

provide tandem switching functions. Third parties cannot now provide

such functions because they generally do not have access to the

signalling information necessary to switch and route traffic to IXCs.

Thus, virtually all tandem-switched transport currently must be routed

through LEC tandems and switched by the LECs at that point;

interconnectors can provide only the link between the LEC tandem and

the IXC point-of-presence (POP).

6. The Commission stated that in a Second Notice of Proposed

Rulemaking (Notice),\3\ which is the subject of this proceeding, it

proposed to broaden the scope of its access initiatives to address this

limitation. Specifically, the Commission proposed to require LECs to

provide other parties to offer tandem switching functions. Under this

proposal, interconnectors would be able to offer tandem-switched

transport, using their own tandems, in competition with the LECs. In

addition, third parties, such as IXCs, could obtain economies by

aggregating their traffic from end offices on a single direct trunk,

routing that traffic to a third-party tandem, and switching it at that

point.

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\3\Expanded Interconnection with Local Telephone Company

Facilities, Second Notice of Proposed Rulemaking, 7 FCC Rcd 7740

(1991), 56 FR 52496 (October 21, 1991).

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Technical Requirements and Network Modifications

7. The Commission stated that the record identifies four types of

signalling information used to provide switched transport: (1) The

Carrier Identification Code (CIC), which identifies the caller's

selected IXC; (2) the OZZ, which indicates the specific IXC trunk group

that is to carry the call; (3) the Automatic Number Identification

(ANI), which identifies the billed number; and (4) the Called Number

Identification (CNI), which identifies the called telephone number.

IXCs may use different trunk groups to carry different classes of

calls. For example, 0+ calls may be carried on a different trunk group

than direct-dialed domestic calls. The OZZ digits indicate the call

type, and thus the trunk group, onto which a particular call should be

routed.

Requirement to Provide Signalling Information

8. The Commission stated that currently, LECs transmit ANI and CNI

to their access customers on originating Feature Group D trunks from

LEC end offices and tandems. They do not, however, transmit the CIC and

OZZ codes to third parties because IXCs do not need this information to

route and bill calls. Thus, these latter codes are dropped by the LECs

from the signalling data stream after trunk selection has taken place.

In the case of direct-trunked traffic, the CIC and OZZ codes are

dropped at the originating end office; in the case of tandem-switched

traffic, they are dropped at the tandem. Because the CIC and OZZ codes

are needed for tandem switching and are not currently provided to third

parties, these data are the focus of this proceeding.

9. The Commission affirmed its tentative conclusion that broader

interconnection requirements to facilitate access competition are in

the public interest. In accordance with this finding, the Commission

required Tier 1 LECs (except NECA pool members) to provide signalling

information from equal access end offices so that third parties may

install their own tandems to provide tandem-switching services. Third

parties may collocate at LEC end offices and provide their own tandem-

switched transport between those end offices and their tandems, or they

may purchase LEC transport to their tandems. We do not require LECs to

provide signalling information for tandem-switching from their tandems

since we find that the record does not support the establishment of

such a requirement at this time.

10. The Commission concluded that the availability to third parties

of signalling information needed for tandem switching could provide

significant public benefits. It would facilitate broader access

competition by enabling interconnectors to offer competitive interstate

tandem-switching and transport services. In addition, it would increase

opportunities for small IXCs to gain economies of scale by sharing

direct-routed transport facilities and providing their own tandem-

switching. The Commission found that as it stated in the Notice,

broader access competition should exert downward pressure on tandem-

switched transport rates, while fostering more efficient provisioning

of these services by new competitors and LECs. The Commission also

concluded that in addition, competition should encourage innovation and

investment in new technologies and could offer increased network

reliability through route diversity and redundancy. IXCs would benefit

from greater competition in the tandem-switched service market. Small

IXCs would especially benefit because they tend to rely more heavily on

tandem-switched transport than larger IXCs. The Commission also stated

that in addition, by promoting competition in tandem-switched transport

services and facilitating the use of direct-trunked transport by small

IXCs, these measures should help ensure more rational cost-based

pricing relationships between direct-trunked and tandem-switching

transport services, thereby lessening the need for regulatory controls

and fostering more efficient use of these services. All of these

benefits should contribute to economic growth--by enabling IXCs to use

more efficient transport arrangements, by fostering better, more

reliable, and more rationally priced access services, as well as by

creating new market opportunities for interconnectors.

11. The Commission also concluded that LECs can make signalling

information available from their end offices at very little cost.

Indeed, the record indicates that the costs to LECs of providing such

information from end offices may well be de minimis, involving only a

simple change in the end office routing table. The Commission stated

that while a few LECs baldly assert that the costs of providing

signalling could be significant, these LECs do not substantiate their

allegations with cost estimates or data. Nor do they distinguish

between end-office generated and tandem-generated signalling

information. The Commission found that moreover, no party has shown

that the necessary modifications to LEC billing systems would be

unreasonably costly or burdensome, or that the asserted need to change

industry standards to accommodate the passage of CIC and OZZ codes over

Feature Group D represents a significant barrier to the implementation

of this proposal. The Commission concluded that any such measures could

be accomplished without undue burden or cost.

12. The Commission stated that it was not persuaded that

competitive tandem switching services would require assignment of CICs

to IXCs. The record fails to indicate that any entity would actually

seek to offer or use that kind of routing dynamic. Even without

additional CIC assignments, IXCs would be able to designate a primary

route and an overflow route for their traffic, thereby securing the

benefits of both route and carrier diversity. Moreover, IXCs could vary

routing between a LEC and third party tandem on an end-office-by-end-

office basis or, perhaps, based on OZZ codes--thereby designating one

as primary for a particular type of traffic and another for a different

type of traffic. No IXC indicates that these options are insufficient,

at least for now. Therefore, the Commission found, no additional CIC

code assignments would have to be made to accommodate competitive

tandem-switched networks.

13. The Commission also found that the record belies any contention

that third parties do not really want signalling information and that

IXCs do not really want to use competitively-provided tandem-switching

services. The Commission found that the vast majority of parties,

including IXCs, CAPs, users, and some LECs, argue that unbundled

signalling information would allow development of alternatives to LEC

tandem-switched transport services and they urge us to make such

information available. The Commission stated that even if the measures

that it now takes do not produce an immediate change in the access

market, they will be beneficial in the long-term. By eliminating

barriers to competition in the provision of tandem-switched services,

this action will pave the way to a more competitive access market in

the future. The Commission also stated that the availability of

signalling information to third parties could, in itself and even

without actual entry into the market by competitive tandem-switching

providers, subject LEC pricing to some additional competitive

pressures. Since the costs of providing signalling information from

equal access end offices are so small, the Commission concluded, these

benefits are well worth the costs. The Commission also stated that LECs

should be required to offer signalling information from equal access

end offices is not based on application of the test that governs LEC

BSE offerings since signalling information is not a BSE, but that,

nevertheless, its conclusion was based on the same type of cost/benefit

considerations.

14. The Commission stated that it appears that providing signalling

information from LEC tandems would require software upgrades to those

tandems. In addition, the record indicates that tandem-provided

signalling may be of less utility to TSPs than end office-provided

signalling. Although some parties claim generally that tandem-provided

signalling could provide a useful adjunct to other forms of

interconnection, they do not explain with any specificity how they

could use such an architecture, or how a two-tandem architecture could

actually be competitively viable, either from a service quality or

pricing standpoint. Therefore, based on the current record, the

Commission did not require LECs to provide this service at this time.

15. The Commission clarified that in proposing access to LEC

signalling information from LEC end offices and tandems, it did not

intend to require LECs to reconfigure their SS7 networks. Thus, the

Commission held that LECs may provide end-office-generated signalling

information through STPs, and they may require TSPs that are

terminating traffic to transmit signalling formation to LEC end offices

through LEC STPs. The Commission recognized that STPs perform important

network screening functions and did not require LECs to decentralize

those functions by deploying them in every switch. Moreover, the record

does not indicate that TSPs would seek to interconnect via SS7 at end

offices, rather than at STPs. Rather, as some parties pointed out, it

would be far more efficient for them to interconnect at STPs.

16. Regarding billing of terminating traffic, the Commission stated

that, consistent with its earlier expanded interconnection measures,

the customer of record of the terminating LEC should be billed by the

terminating LEC for services provided by that LEC. If the TSP is the

customer of record, the LEC should bill the TSP directly. If the TSP's

customer is the customer of record, then the TSP must provide the LEC

with billing tapes so that the LEC may properly count and bill access

minutes. The Commission rejected the suggestion of some LECs that all

discrepancies between TSP-provided billing tapes and LEC billing

records be resolved in favor of the LECs. The Commission stated that

TSPs and LECs can and should establish fair and reasonable procedures

to resolve billing discrepancies.

17. The Commission stated that it does not base its decision that

LECs must, in some instances, accept billing tapes from TSPs on a co-

carrier model. It required LECs to make signalling information

available to any third party, not just providers of competitive tandem-

switched transport services. Thus, small IXCs may use signalling

information as a way to aggregate their traffic on direct-trunked

transport facilities purchased from a LEC so that they can enjoy the

same scale economies as larger IXCs. In that situation, the IXC

ordering the signalling and transport would be a reseller or

aggregator, not a co-carrier. Indeed, if the meet-point billing model

applied, TSPs would not be able to purchase direct-trunked transport

from a LEC, since LEC tandem-switched transport rates to the ``meet-

point'' would apply.

Collocation

18. The Commission affirmed its tentative conclusion that physical

collocation of switching equipment should not be required. Virtually

every commenter that addressed this issue supported the tentative

conclusion and the reasoning behind it. Thus, the parties agreed that

there is no competitive or technical benefit to locating switching

equipment in LEC offices; that switching equipment is too large and too

heavy to be collocated in LEC space; and that interconnectors would

prefer to place their switching equipment on their own premises for

monitoring purposes. The Commission found that the arguments offered in

support of mandatory collocation were not convincing. It stated that no

one has shown why the line-drawing process between switching and

transmission equipment would be unmanageable or that collocation is

necessary to ensure fair and nondiscriminatory treatment of

interconnectors by LECs. The Commission's tariffing and general

nondiscrimination requirements should provide sufficient protection

against unfair or unreasonably discriminatory LEC rates and practices.

Pricing

19. The Commission concluded that LEC provision of CIC and OZZ data

to TSPs from LEC end offices will constitute a new service under the

price caps regime, which covers all Tier 1 LECs. New services add to

the range of options already available to customers. While LECs

currently transmit CIC and OZZ codes to their own access tandems, they

do not provide this information to their customers. Therefore, these

data add to the range of options of LEC customers and hence represent a

new service. While LECs appear to be able to provide this new service

without implementing new technology, the need--or absence of need--for

new technology does not dictate the categorization of the service under

price caps. Rather, this factor affects the costs and thus the price

that LECs may charge for a new service.

20. LECs will be required to make a cost-based showing under the

price caps new services test. This showing will enable the Commission

to ensure that signalling services are reasonably priced. The

Commission will not use the net revenue test in reviewing LEC tariff

filings. The Commission stated that this is consistent with its

decision to eliminate the net revenue test for new service offerings

under price caps. That test is unnecessary, both because of the

Commission's requirement that LECs submit cost support for new

services, and because LECs clearly lack incentives to underprice

signalling services provided to competitive tandem-switching providers.

21. The Commission concluded further that LECs must establish new

rate elements for CIC and OZZ signalling data as a separate service

category within the trunking basket. This category will be subject to

an upper pricing band of 2%. The Commission stated that because LECs

have no incentive to price signalling services at predatory levels, it

saw no need for a lower band and therefore did not impose one. The

Commission believes that these measures are necessary to prevent LECs

from offsetting increases in the price of signalling information

provided to TSPs with price reductions in the LECs' own tandem-switched

transport rates.

22. The Commission found that the co-carrier model does not aptly

define the LEC/TSP relationship. It found that even though the

Commission has stated in the past that cellular service providers are

like co-carriers, it has never held that cellular interconnection

charges should be imposed on all LEC customers or on all cellular

users, rather than on the providers taking interconnection. Thus, a co-

carrier model does not necessarily dictate that the costs unique to

providing a joint service should always be directly imposed on the

LEC's customers or on all customers of the service in question. The

Commission also stated that a cost recovery mechanism that would have

all purchasers of switched transport or tandem-switched transport bear

the costs of making signalling information available to TSPs, is

inappropriate and that instead, TSPs should pay for such costs. The

Commission found that this is consistent with its long-held view that

costs should be paid by the cost causer.

Recovery of Support Flows

23. The Commission stated that it appears from the record that

there is no need for additional support mechanisms in conjunction with

adoption of this Order. The transport interconnection charge is

sufficient to protect support flows potentially affected by this

decision.

ONA Framework

24. The Commission concluded that unbundled CIC and OZZ data are

not BSEs as defined in its ONA orders and that there is no public

policy reason to treat them equivalently. BSEs are ``optional unbundled

features . . . that an ESP may require or find useful in configuring an

enhanced service.''\4\ The Commission found that there has been no

showing that the CIC and OZZ data that are the subject of the Order

will be used by ESPs to provide enhanced services. Rather, these data

will be used by TSPs to provide basic network services. Thus, these

data do not fall within the Commission's definition of a BSE.

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\4\Filing and Review of Open Network Architecture Plans, 4 FCC

Rcd 1, 36 (1988(, 54 FR 3453 (January 24, 1989).

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25. The Commission also found that no party demonstrated that it

would be in the public interest to treat CIC and OZZ codes as BSEs. The

Commission stated that while some parties argued that the four-part

test that LECs use in determining whether to offer an ESP-requested BSE

should apply, it has relied on similar considerations in assessing the

relative costs and benefits of LEC-provided signalling information. The

Commission also stated that the ``flagging'' requirements associated

with BSEs, under which BOCs must identify BSEs that they intend to use

themselves, are irrelevant: There is no dispute that LECs use CIC and

OZZ data for tandem-switched transport service. The Commission also

found that there would be no added benefit from a pricing standpoint in

treating CIC and OZZ data as BSEs, since it has already held that the

new services test applies to their initial rates.

Tariffing and Implementation

26. The Commission required Tier 1 LECs (except NECA members) to

file tariffs, with requisite cost support, for the provision of CIC and

OZZ codes within ninety days from publication of this Order in the

Federal Register, to be effective on forty-five days' notice. The

Commission found that the record in this proceeding shows that LECs can

provide CIC and OZZ codes to third parties from equal access end

offices simply by modifying their end office routing tables, without

purchasing new end office software and without making other costly and

time-consuming modifications. The Commission concluded that under the

circumstances, there is no reason why the LECs cannot tariff this

offering for all of their equal access end offices within ninety days

of publication of this Order in the Federal Register.

LEC Pricing Flexibility

27. The Commission did not grant LECs additional pricing

flexibility but stated that it will continue to examine these issues in

a broader context in future consideration of pending access reform

petitions. The Commission also stated that it has already addressed

virtually all of the specific proposals suggested by LECs in the

Switched Transport Expanded Interconnection Order and the First

Transport Reconsideration. Thus, LECs may offer density zone pricing

and volume and term discounts under certain conditions. In addition,

they may price transport between their tandems and SWCs on a flat-rate

basis. The Commission also stated that it had considered and rejected

in the Switched Transport Expanded Interconnection Order various other

requests for flexibility. For example, the Commission rejected the

suggestion that LECs receive the same pricing flexibility as their

competitors, noting that giving LECs too much flexibility could stifle

competitive entry and harm customers of less competitive services. The

Commission also declined to eliminate service category pricing bands,

stating that these bands serve important public policy goals. The

Commission found that no party had shown that providing signalling

information to TSPs warrants a different outcome. Nor had any party set

forth any other specific pricing flexibility request related to

providing signalling information. The Commission also found that no

party had demonstrated that the availability of signalling information

warrants authorization of LEC contract tariffs. The Commission has

limited contract carriage to services found to be ``substantially

competitive.'' The Commission concluded that while the measures it now

takes should permit alternatives to LEC tandem-switched access services

to develop, it could not conclude that these services are now subject

to substantial competition.

28. The Commission concluded that for these reasons, it would not

to grant LECs additional pricing flexibility in conjunction with its

decision to make tandem signalling information available. The

Commission stated, however, that this decision is not intended to

prejudge broader questions regarding the possible need for access

charge reform. The Commission stated that by opening the door to

greater competition in the provision of tandem-switched services, it is

continuing the process of removing barriers to the development of a

more competitive access market in which CAPs and other entities can

participate.

Other Issues

Reciprocity

29. The Commission declined to impose reciprocal signalling

obligations on interconnectors at this time. It found, first, that

requests for reciprocal obligations are beyond the scope of this

proceeding. The Notice proposed that LECs provide signalling

information to third parties. The Commission stated that it did not

propose to impose reciprocal requirements on these third parties, and

that it declined to broaden this proceeding to consider such

requirements here. The Commission stated that second, LEC requests for

reciprocity seem to assume that only CAPs will purchase signalling

information. As noted, this information must be made available to any

interested party, including IXCs. LECs requesting reciprocity fail to

address the implications of their proposal with respect to these other

types of TSPs. The Commission stated that third, except in the few

instances where CAPs have end offices, interconnectors simply do not

have the signalling information to provide to the LECs, and the LECs

have not demonstrated specific, present needs for such information. The

Commission found furthermore, that TSPs do not possess market power. It

stated, for example, that the Commission had previously declined to

impose reciprocal obligations on interconnectors, noting, inter alia,

that CAPs and other interconnectors do not control bottleneck

facilities.

Jurisdictional Measurement and Reporting

30. The Commission found that most parties agree that the customer

of record should be responsible for reporting the PIU factor for

terminating traffic when the LEC cannot itself measure jurisdiction.

The Commission stated that this is consistent with existing reporting

arrangements that have worked satisfactorily. If the customer of record

is a TSP, it shall be the responsibility of that TSP to compile PIU

reports based on data from those to whom it provides tandem-switching.

If the customer of record is an IXC or other purchaser of access, that

entity shall continue to provide PIU reports directly to the LEC

providing terminating access.

Separations Issues

31. The Commission concluded that the signalling information

requirement does not raise separations issues that should be referred

to a Joint Board. The record does not show that providing signalling

information will raise any significant issues beyond those already

referred to the Joint Board in the Switched Transport Expanded

Interconnection Order. As noted, the costs associated with LEC

provision of CIC and OZZ codes from equal access end offices should be

minimal. The Commission found that therefore, these costs or the

revenues derived from providing signalling information do not require

Joint Board consideration. The Notice stated that the Commission did

not intend to refer to the Joint Board broader separations issues. The

Commission stated that these matters would be more properly addressed

in the context of a comprehensive separations review proceeding.

Conclusion

32. The Commission concluded that in this Order, it took another

step in its ongoing effort to promote competition in the interstate

access market. Tier 1 LECs (except NECA members) are required to

provide signalling information from equal access end offices to

interested third parties. This measure will allow third parties to

provide tandem switching and thereby promote development of

alternatives to LEC-provided tandem-switched transport service. CAPs

may develop their own tandem-switching networks; other TSPs may use

tandem-switching to achieve scale economics attending the aggregation

of traffic. The Commission found that by promoting access to diverse

facilities and providers, this action should permit more efficient use

and deployment of interstate access services, increase network

reliability and redundancy, encourage innovation, and exert downward

pressure on access charges and long-distance rates. These benefits

should, in turn, contribute to economic growth and the creation of new

job opportunities.

Regulatory Flexibility Analysis

33. The Commission stated that in the Notice, it certified that the

proposed rule changes would not have a significant economic impact on a

substantial number of small business entities, as defined by

Sec. 601(3) of the Regulatory Flexibility Act.\5\ It also stated that

the Notice provided that to the extent that a PIU reporting requirement

would apply to small entities, it would not have a significant economic

impact on a substantial number of small business entities. The

Commission found that no commenting party disagreed with its analysis.

The Secretary shall send a copy of this Report and Order, including the

certification, to the Chief Counsel for Advocacy of the Small Business

Administration in accordance with Sec. 605(b) of the Regulatory

Flexibility Act, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. Secs. 601

et seq.

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\5\Notice, 7 FCC Rcd at 7749, 57.

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Ordering Clauses

34. Accordingly, it is ORDERED, pursuant to authority contained in

Sections 1, 4(i), 201-205, and 214(d) of the Communications Act of

1934, as amended, 47 U.S.C. 151(i), 154, 201-205, and 214(d), that

Parts 61 & 69 of the Commission's rules, 47 CFR Secs. 61, 64, and 69,

are AMENDED as set forth below.

35. IT IS FURTHER ORDERED that the policies, rules, and

requirements set forth herein ARE ADOPTED, effective eighty days after

publication in the Federal Register.

36. IT IS FURTHER ORDERED that the all LECs subject to this order

shall file tariff amendments as specified herein within ninety days of

publication of this order in the Federal Register, to be effective on

forty-five days' notice.

List of Subjects in 47 CFR Parts 61, 64, and 69

Communication Common carriers, Reporting and recordkeeping

requirements, Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Amendatory Text

Parts 61, 64, and 69 of Title 47 of the Code of Federal Regulations

are amended as follows:

PART 61--TARIFFS

1. The authority citation for Part 61 continues to read as follows:

Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154.

Interpret or apply sec. 203, 48 Stat. 1070; 47 U.S.C. 203.

2. Section 61.42 is amended by adding paragraph (e)(2)(vii) to read

as follows:

Sec. 61.42 Price cap baskets and service categories.

* * * * *

(e) * * *

(2) * * *

(vii) Signalling for tandem switching, as described in Sec. 69.129

of this chapter.

* * * * *

3. Section 61.47 is amended by adding paragraph (g)(5) as follows:

Sec. 61.47 Adjustments to the SBI; pricing bands.

* * * * *

(g) * * *

(5) The upper pricing band for the ``Signalling for tandem

switching'' service category shall limit the upward pricing flexibility

for this service category, as reflected in its SBI, to two percent,

relative to the percentage change in the PCI for the trunking basket,

measured from the levels in effect on the last day of the preceding

tariff year. There shall be no lower pricing band for this service

category.

* * * * *

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

1. The authority citation for Part 64 continues to read as follows:

Authority: Section 4, 48 Stat. 1066, as amended; 47 U.S.C. 154,

unless otherwise noted. Interpret or apply secs. 201, 218, 225, 48

Stat. 1070, as amended, 1077; 47 U.S.C. 201, 218, 225, unless

otherwise noted.

2. Section 64.1401 is amended by adding paragraph (i) to read as

follows:

Sec. 64.1401 Expanded interconnection.

* * * * *

(i) The local exchange carriers specified in paragraph (a) of this

section shall offer signalling for tandem switching, as defined in

Sec. 69.2(vv) of this chapter, at central offices that are classified

as equal office end offices or serving wire centers, or at signal

transfer points if such information is offered via common channel

signalling.

PART 69--ACCESS CHARGES

1. The authority citation for Part 69 continues to read as follows:

Authority: Secs. 4, 201, 202, 203, 205, 218, 403, 48 Stat. 1066,

1070, 1072, 1077, 1094, as amended, 47 U.S.C. 154, 201, 202, 203,

205, 218, 403.

2. Section 69.2 is amended by adding paragraph (vv) to read as

follows:

Sec. 69.2 Definitions.

* * * * *

(vv) Signalling for tandem switching means the carrier

identification code (CIC) and the OZZ code, or equivalent information

needed to perform tandem switching functions. The CIC identifies the

interexchange carrier and the OZZ identifies the interexchange carrier

trunk to which traffic should be routed.

3. Section 69.129 is added to read as follows:

Sec. 69.129 Signalling for tandem switching.

A charge that is expressed in dollars and cents shall be assessed

upon the purchasing entity by a local telephone company for provision

of signalling for tandem switching.

[FR Doc. 94-15443 Filed 6-24-94; 8:45 am]

BILLING CODE 6712-01-M