Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 69

[CC Docket 96-128; DA 98-481]

Implementation of the Pay Telephone Reclassification and

Compensation Provisions of the Telecommunications Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification and waivers.

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SUMMARY: The Common Carrier Bureau adopted a Memorandum Opinion and

Order, which clarifies the requirements for the provision of payphone-

specific coding digits by local exchange carriers (LECs) and payphone

service providers (PSPs) to interexchange carriers (IXCs). The order

also clarifies that automatic number identification indicators (``ANI

ii'') and flexible automatic numbering identification (``FLEX ANI''),

are the methods to provide payphone-specific coding digits that comply

with the requirements of the Payphone Orders. In addition, the order

clarifies the tariff requirements that LECs must file pursuant to the

Payphone Orders. The order also grants a waiver of part 69 of the

Commission's rules so that LECs can establish rate elements to recover

the costs of implementing FLEX ANI to provide payphone-specific coding

digits for per-call compensation. Additionally, this order provides

limited waivers to LECs, PSPs, and IXCs, when appropriate, to

facilitate the implementation of per call compensation.

DATES: Effective March 9, 1998.

FOR FURTHER INFORMATION CONTACT: Rose Crellin, Formal Complaints and

Information Branch, Enforcement Division, Common Carrier Bureau (202)

418-0960.

SUPPLEMENTARY INFORMATION: This is a summary of the Bureau's Memorandum

Opinion and Order in CC Docket No. 96-128 [DA 98-481], adopted on March

9, 1998, and released on March 9, 1998. The full text of the Memorandum

Opinion and Order (``Order'') is available for inspection and copying

during normal business hours in the FCC Reference Center, Room 239,

1919 M Street, N.W., Washington, D.C. The complete text of this

decision also may be purchased from the Commission's duplicating

contractor, International Transcription Services, 1231 20th Street,

N.W., Washington, D.C. 20036.

Paperwork Reduction Act

The Federal Communications Commission has received Office of

Management and Budget (OMB) approval for the following public

information collections contained in the Order pursuant to the

Paperwork Reduction Act of 1995, Public Law 104-13. An agency may not

conduct or sponsor and a person is not required to respond to a

collection of information unless it displays a currently valid control

number.

OMB Control Number: 3060-0823.

Expiration Date: 09/30/98.

Title: Pay Telephone Reclassification Memorandum Opinion and Order,

CC Docket No. 96-128.

Form No.: N/A.

Respondents: Business or other for-profit entities.

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No. of Est. time per

Information collection requirement respondents response Total annual

(approximately) (hours) burden

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a. LEC Tariff To Provide FLEX ANI to IXCs...................... 400 35 14,000

b. LEC Tariff To Recover Costs................................. 400 35 14,000

c. LECS Must Provide IXCs on Payphones that Provide Payphone

specific Coding Digits........................................ 400 24 9,600

d. LECs must Provide IXCs and PSPs Information on where FLEX

ANI is Available Now and When it is to be Scheduled in the

Future........................................................ 400 16 6,400

e. Waiver; LECs to Provide Cost Analysis Upon Request.......... 20 35 700

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Total Annual Burden: 44,700 Hours.

Estimated Annual Reporting and Recordkeeping cost Burden: $0.

Needs and Uses: In the MO&O, the Bureau clarifies and provides

waivers of requirements established in the Payphone Orders for the

provision of payphone-specific coding digits by LECs and PSPs, to IXCs,

beginning October 7, 1997. The information disclosure rules and

policies governing the payphone industry to implement Section 276 of

the Act will ensure the payment per-call

[[Page 20535]]

compensation by implementing a method for LECs to provide information

to IXCs to identify calls, for each and every call made from a

payphone. The Bureau has reviewed several methods of identifying

payphone calls and has determined that among them, FLEX ANI is the most

flexible and has the added capability of providing a number of

additional coding digits, in real-time, that can uniquely identify a

call as coming from a payphone. Obligation to respond: Required. Public

reporting burden for the collections of information is as noted above.

Send comments regarding the burden estimate or any other aspect of the

collections of information, including suggestions for reducing the

burden to Performance Evaluation and Records Management, Washington,

D.C. 20554.

Summary of Memorandum Opinion and Order

1. In the order, the Bureau clarifies and waives certain

requirements established in the Payphone Orders 1 regarding

payphone-specific coding digits 2 to facilitate the

transition for local exchange carriers (``LECs''), payphone service

providers (``PSPs'') and interexchange carriers (``IXCs'') 3

to provide and receive payphone-specific coding digits to identify

calls from payphones to pay payphone compensation for subscriber 800

and access code calls. In doing so, the Bureau concludes that the

waivers granted therein to ensure the orderly transition for the

requirements established in the Payphone Orders to implement Section

276 of the Communications Act of 1934, as amended by the

Telecommunications Act of 1996 (``1996 Act''), are in the public

interest. The Bureau finds that the waivers granted therein reflect the

transitional ``default per-call rate'' period established by the

Commission in the Payphone Orders and extended in the Second Report and

Order. In the Order, the Bureau notes that almost 80% of payphones are

expected to provide payphone-specific coding digits by March 9, 1998,

and the number of payphone digits for which payphone-specific coding

digits are available will continue to increase over the next few months

as technical problems are overcome by LECs.

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\1\ Implementation of the Pay Telephone Reclassification and

Compensation Provisions of the Telecommunications Act of 1996, CC

Docket No. 96-128, Report and Order, 61 FR 52307 (Oct. 7, 1996), 11

FCC Rcd 20,541 (1996) (``Report and Order''); Order on

Reconsideration, 61 FR 65341 (Dec. 12, 1996), 11 FCC Rcd 21,233

(1996) (``Order on Reconsideration'') (together the ``Payphone

Orders''). The Payphone Orders were affirmed in part and vacated in

part. See Illinois Public Telecomm. Ass'n v. FCC, 117 F.3d 555 (D.C.

Cir. 1997) (``Illinois Public Telecomm.''). See also Second Report

and Order, 62 FR 58659 (Oct. 30, 1997), CC Docket No. 96-128, FCC

97-371 (rel. Oct. 9, 1997) (``Second Report and Order''), pets. for

recon. pending, review pending, MCI Telecomm. Corp. v. FCC, D.C.

Circuit No. 97-1675 (filed Nov. 7, 1997); Sprint Corp. v. FCC, D.C.

Circuit No. 97-1685 (filed Nov. 13, 1997); Personal Communications

Industry Association v. FCC, D.C. Circuit No. 97-1709 (filed Dec. 1,

1997); Illinois Public Telecommunications Association v. FCC, D.C.

Circuit No. 97-1713 (filed Dec. 3, 1997). In the Payphone Orders,

the Commission adopted new rules and policies governing the payphone

industry to implement Section 276 of the Communications Act of 1934,

as amended, (``the Act'').

\2\ Payphone-specific coding digits provide a method for LECs to

transmit, with the automatic number identification (ANI),

information (coding number or digits) identifying a call as having

been placed specifically from a payphone. See Order on

Reconsideration, 61 FR 65341 (Dec. 12, 1996), 11 FCC Rcd at 21,265-

66, para. 64.

\3\ For purposes of paying compensation for compensable calls

and other associated obligations, such as tracking calls, we note

that the term ``IXC'' includes a LEC when it provides interstate,

intraLATA toll service. See Report and Order, 61 FR 52307 (Oct. 7,

1996), 11 FCC Rcd at 20,584, para. 83 n.293.

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2. In the Order, the Bureau clarifies requirements established in

the Payphone Orders for the provision of payphone-specific coding

digits by LECs and PSPs, to IXCs beginning October 7, 1997.

Specifically, the Order explains that automatic number information

indicators (``ANI ii'') and flexible automatic numbering identification

(``FLEX ANI'') 4 are the methods that LECs can use to

provide payphone-specific coding digits that comply with the

requirements of the Payphone Orders. 5 The Order concludes

that all LECs must implement FLEX ANI to comply with the requirements

of the Payphone Orders subject to the limited waivers granted in the

Order. (i) In concluding that hardcoding ANI ii payphone-specific

coding digits and FLEX ANI, not line information database (LIDB), are

the only approaches that comply with the requirements of the Payphone

Orders for the provision of payphone-specific coding digits, the

Bureau, in the Order, rejects the claim that LIDB also complies with

those requirements because the implementation of FLEX ANI is too costly

for LECs. In the Order, the Bureau explains that the mechanisms

established by the Commission in the Payphone Orders and the Second

Report and Order, as well as the waivers granted therein respond to

those concerns.

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\4\ FLEX ANI permits the association of additional digits with

specific calling party classes of service (e.g. coin phone, hotel/

motel, and prison service). FLEX ANI information digits provide

information along with the calling party's directory number, which

is useful for billing and paying compensation. FLEX ANI coding

digits are transmitted as part of the ANI signaling sequence and are

used by the receiving switch to identify the type of originating

line or the type of call being made. ``Open Network Architecture

User's Guide,'' June 1996 at 92.

\5\ ANI ii as currently deployed by the LECs does not provide

all the payphone-specific coding digits necessary to identify

payphones for payphone compensation. Pursuant to the waivers

provided in the Bureau Waiver Order and this order, ANI ii can be

used to provide the ``27'' payphone-specific coding digit until

either additional ANI ii codes are hardcoded or FLEX ANI is

implemented in a switch. Based on the record before us regarding the

additional costs and time it would require to hardcode additional

ANI ii digits to provide all of the payphone-specific coding digits

necessary for per-call compensation, we clarify in this order that

the transmission of payphone-specific coding digits by LECs through

FLEX ANI is required unless a LEC hardcodes into all of its switches

all the payphone-specific coding digits discussed herein as

necessary for identifying payphones calls for per-call compensation.

Accordingly, we do not require the hardcoding of these additional

ANI ii digits by LECs, although this is an approach that might be

used by some LECs, in lieu of FLEX ANI, to transmit payphone-

specific coding digits to satisfy their transmission obligations

under the Payphone Orders. See Order paras. 23-25. Where a LEC

chooses to employ hardcoding to provide payphone-specific coding

digits and to recover the incremental costs from PSPs, as provided

in this order, we assume that LEC would file an appropriate tariff

as provided in other parts of this order.

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3. The Order also clarifies the requirement to transmit payphone-

specific coding digits applies only to payphone service provided by

LECs to dumb, smart, and inmate payphones. It does not apply to any

other LEC provided service such as business lines, PBX, or Centrex

lines to which a payphone may be connected.

4. In the Bureau Waiver Order, the Bureau stated that payphones

appearing on the LEC-provided lists of payphones (LEC ANI lists) will

be eligible for per-call compensation even if they do not transmit

payphone-specific coding digits. Although payphones on the LEC ANI

lists are eligible for per-call compensation during the waiver period

of the Bureau Waiver Order, and this Order, to ensure an orderly

transition to the provision of FLEX ANI for all payphones on LEC

payphone service lines, not just any LEC service line, PSP payphones

must be on LEC payphones lines within 30 days of the release of this

order to continue to be eligible for per-call compensation, even if the

PSP payphones are on the LEC ANI lists.

5. In response to the concerns raised by LECs, PSPs, and IXCs, the

Order further clarifies the tariffing requirements for the provision of

payphone-specific coding digits established in the Payphone Orders. The

Order on Reconsideration required that LECs ``must make available to

PSPs, on a tariffed basis, such coding digits as

[[Page 20536]]

part of the ANI for each payphone.'' 12 In the Second Report

and Order, the Commission included the estimated cost of providing

coding digits in the per-call default compensation rate to be paid by

IXCs to PSPs for subscriber 800 and access code calls. To comply with

the requirements of the Payphone Orders, LECs must provide FLEX ANI to

IXCs through their interstate tariffs, so that IXCs can identify which

calls come from payphones. The LEC Coalition, Bell South, and Bell

Atlantic have proposed that LECs modify their interstate access tariffs

to provide that IXCs may request FLEX ANI without charge if it is for

the purpose of complying with the per-call compensation requirements of

the Payphone Orders. The LEC Coalition also proposes that LECs recover

the costs of providing FLEX ANI to IXCs for payphone compensation from

PSPs through a new federal rate element to be applied to all payphone

lines on a nondiscriminatory basis. That proposed rate is to be charged

monthly on a per-line basis until the costs for implementation of FLEX

ANI for payphone compensation are recovered. The Order concludes that

this approach is consistent with the tariff requirements of the

Payphone Orders.

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\12\ The Bureau Waiver Order extended that period for LECs that

were unable to provide coding digits until March 9, 1998. 62 FR

58659 (October 30, 1997), 12 FCC Rcd at 16,387, para. 1.

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6. PSPs will pay the costs incurred by LECs to implement FLEX ANI

for payphone compensation through the rate applied to all payphones by

the LECs. LECs must provide FLEX ANI to IXCs and the IXCs are charged

for this service through the per-call payphone compensation rate which

IXCs pay to PSPs. Thus, IXCs will not be charged directly for this

service by the LECs. LEC FLEX ANI tariff revisions to provide FLEX ANI

to IXCs must be filed no later than March 31, 1998, with a scheduled

effective date of April 15, 1998, if a LEC is able to provide FLEX ANI

to 25% or more of the smart payphones in its service area. Thereafter,

within the waiver period granted in this order, a LEC must file its

FLEX ANI tariff to provide FLEX ANI to IXCs no later than when it is

able to provide FLEX ANI to 25% or more of the smart payphones in its

service area. After filing the FLEX ANI tariff, LECs will continue to

make FLEX ANI available as each end office becomes FLEX ANI capable.

7. Beginning March 27, 1998, until a LEC has implemented FLEX ANI

for all payphones it serves, it must provide monthly to IXCs and PSPs,

upon request, information on: (1) End offices where FLEX ANI is

available; and (2) proposed dates for the availability of FLEX ANI by

end office for all areas where it is not yet available. Beginning March

27, 1998, all LECs must provide on a monthly basis to IXCs, upon

request: (1) The number of smart and the number of dumb payphones that

are owned by the LEC PSP and independent PSPs in the LEC service area;

and (2) the ANI for smart payphones and the ANI for dumb payphones

owned by the LEC and independent PSPs that are providing payphone-

specific coding digits and those that are not providing payphone

specific coding digits in the LEC service area. Because many LECs have

reported technical problems in transmitting payphone-specific coding

digits even when FLEX ANI is available for a payphone, we require that

in these two reports required herein, that LECs indicate which end

offices and payphone ANI's are ``coding-digit-capable.'' A payphone is

``coding-digit-capable'' when it is able to transmit payphone-specific

coding digits that are capable of reaching an IXC point of presence

(POP) for subscriber 800 and access code calls from payphones using

10XXX and 101XXXX. LECs may provide these reports earlier and LECs do

not have to provide this information to an IXC that indicates that it

does not require this information to pay per-call compensation.

8. The Bureau required in the Bureau Waiver Order, and the Order

requires therein, that LECs and PSPs must transmit payphone-specific

coding digits as soon as they are technically capable, and no later

than the waivers they have been granted. The Order notes, however, that

IXCs must request, test, and coordinate with LECs to obtain this

service under carrier to carrier procedures to ensure that there are no

problems in providing and receiving the FLEX ANI digits for a

particular IXC or LEC. The Bureau notes, however, that LECs will reduce

the burden on IXCs of requesting FLEX ANI by simplifying the service

request process. While PSPs are obligated, pursuant to the Payphone

Orders, to compensate LECs for coding of the PSPs payphone lines for

the transmission from the PSPs payphones of payphone-specific coding

digits through LEC tariffed payphone services, PSPs are not required to

request the LEC payphone-specific coding digits transmission service to

IXCs.

9. LEC tariffs to recover the costs of implementing FLEX ANI from

PSPs must be filed no later than 30 days after full implementation of

FLEX ANI. The costs of implementing FLEX ANI can include, for example,

generic upgrades excluding the costs of other software features,

loading the software, paying a fee for usage of the software,

translations and conditioning the trunks for each end office. These

costs will be distributed over a reasonable period and be paid by all

PSPs. Under Sec. 69.4(g) of the Commission's Rules, 47 CFR 69.4(g), a

LEC subject to price cap regulation may establish a switched access

rate element for a new interstate service upon approval of a petition

demonstrating that establishment of the new rate element would be in

the public interest. Because Part 69 authorizes only a limited number

of rate elements, a non-price cap LEC must still obtain a waiver of

that Part to establish any rate element for a new interstate service.

The Order grants a blanket waiver of Part 69.4(b) and (c) of the

Commission's rules to enable those LECs to establish an appropriate new

rate element in their interstate tariffs that reflects the incremental

costs directly attributable to the implementation of FLEX ANI to

transmit payphone-specific coding digits for the purposes of payphone

compensation as described elsewhere in the Order and to file the

necessary revisions to their interstate tariffs. Second, the Order

grants to those price cap LECs that must secure it, blanket permission

under Part 69.4(g) of the Commission's rules to establish a new rate

element in their interstate tariffs that reflects those same

incremental costs and to file the necessary revisions to their tariffs.

10. The Bureau also affirms its grant in the Bureau Waiver

Order,13 on its own motion, of a limited waiver of five

months, until March 9, 1998, to those LECs and PSPs who assert that

they cannot provide payphone-specific coding digits as required by the

Payphone Orders.

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\13\ Implementation of the Pay Telephone Reclassification and

Compensation Provisions of the Telecommunications Act of 1996, 62 FR

60034 (November 6, 1997), CC Docket No. 96-128, Order, 12 FCC Rcd

16,387 (Common Carrier Bureau 1997) (Bureau Waiver Order).

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11. The Bureau also grants in part the requests of USTA, TDS, and

the LEC Coalition. USTA requested that LECs with digital, equal-access

switches be given an additional nine months to provide the technology

required to supply and accommodate the coding digits; that LECs with

non-equal-access switches be exempt from providing payphone

identification information until their switches are replaced or

upgraded for equal-access; and that LECs be permitted to use whatever

technology they select for digital, equal-access switches to provide

information that will permit IXCs to track payphone calls in order to

compensate PSPs. The

[[Page 20537]]

LEC Coalition requested that the Commission waive the October 7, 1997

deadline, stating that LECs would be unable to supply forty percent of

payphone lines with the requisite coding digits by that date. The LEC

Coalition requests a waiver of the payphone-specific coding digit

requirements until the Commission clarifies the coding digit

requirement. The LEC Coalition states that implementation of FLEX ANI

requires loading of the software in switches that do not have it,

provisioning, translations, and trunk conditioning. The LEC Coalition

also indicates that LECs must test FLEX ANI with IXCs that wish to

receive it and ensure proper functioning so that calls are not dropped.

TDS, an owner of local exchange carriers, petitioned the Commission to

extend the deadline for payphone-specific coding digits from October 7,

1997, until July 1, 1998 and to use LIDB. TDS states that it needs

additional time to arrange agreements with database suppliers, and to

complete transmission tests to IXCs selected by its subsidiaries.

12. All of the BOCs have indicated problems in implementing FLEX

ANI, because of problems, for example, with software upgrades, certain

switch types, and network configurations that required heavy vendor

software development and network reconfiguration, and therefore, argue

that they need additional time to implement FLEX ANI. The Order

concludes that the LEC Coalition has shown that limited waivers are

justified to allow for additional time to implement FLEX ANI. In the

Order, the Bureau grants Bell Atlantic, SBC, Ameritech, and BellSouth

no more than a 90 day waiver to resolve technical and other

implementation problems with specific switch types and some call types.

In addition, the Order grants US West a waiver to provide payphone-

specific coding digits until June 30, 1998, to be able to provide FLEX

ANI for 90 percent of the smart payphones in its service area and until

December 31, 1998, to complete FLEX ANI implementation. With regard to

all other LECs that may require additional time to implement FLEX ANI,

including GTE and SNET, the Order grants each LEC a waiver until no

later than September 30, 1998, to be able to provide FLEX ANI for 75

percent of the smart payphones in its service area and until December

31, 1998, to complete FLEX ANI implementation to be able to provide

payphone-specific coding digits, subject to any additional waivers for

which they may qualify as discussed in the Order. Those LECs and PSPs

that are able to transmit the required coding digits by March 9, 1998,

remain obligated to do so. Similarly, all LECs and PSPs are obligated

to transmit the required coding digits as soon as they are technically

capable, but in any event no later than the end of the waiver period

for which they are eligible pursuant to this order.

13. The Order requires that LECs that have been granted a waiver

for additional time beyond March 9, 1998, to implement FLEX ANI, must

implement FLEX ANI first in locations where there are larger numbers of

payphones owned by independent PSPs for which payphone-specific coding

digits are not available.

14. The Order grants small and midsize LECs an extension to

implement FLEX ANI until September 30, 1998, to be able to provide

payphone-specific coding digits through FLEX ANI to 75 percent of the

smart payphones in its service area and until no later than December

31, 1998, to complete FLEX ANI implementation. The Order grants a

limited waiver to midsize and small LECs where a LEC is unable to

recover its costs, through a monthly charge for no longer than a 10

year period, from all payphones in its serving area.14 This

waiver is specifically granted for small and midsize LECs for which the

cost of implementing FLEX ANI would be unreasonably burdensome, despite

provisions in the Order for cost recovery. The LEC is required to use

the analysis set forth in the Order to determine whether it qualifies

for the waiver. The LEC must perform the analysis on an annual basis.

The LEC may assume that the payphone rate element established to

recover the cost over a period not greater than 10 years would not be

greater than 20% of the national average payphone line cost of

$38.90,15 or $7.78 per line per month. LECs must make this

evaluation and qualify for this waiver individually and not as part of

a holding company. LECs must make this evaluation within 30 days of the

release of this order, and notify IXCs, upon request, that they will

not be implementing FLEX ANI pursuant to this waiver. The Order

required that a LEC delaying the implementation of FLEX ANI pursuant to

this waiver provision, must be prepared to submit its analysis of cost

recovery for implementing FLEX ANI, if the Bureau requests the

analysis. The Bureau may at such time determine whether there continues

to be a justification to grant a waiver to that LEC because it is

unable to recover its cost of implementing FLEX ANI.

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\14\ In making this evaluation, LECs should not include costs

for switch replacements. Below, we grant a waiver for non-equal

access switches until they are upgraded to equal access or replaced.

If a switch is replaced, however, the costs incurred in implementing

FLEX ANI can be included. This limited waiver for small and midsize

LECs that are not able to recover their costs of implementing FLEX

ANI over up to a 10 year period is not available to price cap, CLASS

A, and Tier 1 LECs. In 1996, the Class A LECs included all price cap

LECs. .

\15\ In the Second Report and Order the Commission concluded

that the average per line cost was 7 cents per call times an average

of 542 calls resulting in an average per line rate of $38.90. Id. at

para. 102. We conclude that up to a ten year recovery period to

implement FLEX ANI would not be unreasonable for this limited waiver

for small and midsize LECs to recover their costs.

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15. The Order grants LECs a waiver of the payphone-specific coding

digit requirement through FLEX ANI for non-equal access switches until

such switches are either upgraded to equal access or

replaced.16 In the Order, the Bureau concludes that USTA has

shown special circumstances with regard to non-equal access switches

and switches with Bell I signalling, because LECs are not able to

implement FLEX ANI in those switches at reasonable costs. The Bureau

concludes that it would not be in the public interest to require the

replacement of these switches with the expenditure of substantial

investment solely for the provision of payphone-specific coding digits.

When LECs replace or upgrade these switches, however, the Order

requires that FLEX ANI be implemented within 60 days unless they

qualify for another waiver discussed herein. LECs with non-equal access

switches must provide information as required above regarding payphones

in their service areas.

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\16\ This waiver for non-equal access switches also covers

switches that employ Bell I signaling. Bell I signaling must be used

with non-equal access switches and uses a single information digit

to identify classes of service. This type of signaling is not

compatible with ANI ii coding digits.

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16. In the Order, the bureau denies TDS's request that it be

allowed to implement LIDB to comply with the payphone-specific coding

digits requirement. TDS is eligible, however, for one or more of the

waivers described above.

17. Some LECs indicate that it would be costly to implement FLEX

ANI now for switches that they plan to replace in the near future. The

Order concludes that it is not cost effective to require LECs to

implement FLEX ANI in switches that are going to be replaced before

October 6, 1999, the end of the default compensation period.

Accordingly, the Order grants LECs that plan to replace switches before

October 6, 1999, a waiver until that date to

[[Page 20538]]

provide FLEX ANI through those switches.

18. SBC, BellSouth, Ameritech, SNET, and Bell Atlantic have

requested additional time to implement FLEX ANI to resolve specific

problems with certain switches and call types, and request waivers

because there are technical limitations in passing FLEX ANI payphone-

specific coding digits on certain types of calls and switches, and the

modifications cannot be completed by March 9, 1998.

19. The Order grants BOCs 90 days to resolve technical problems in

implementing FLEX ANI. BOCs must provide payphone-specific coding

digits earlier than the end of the waiver period for each technical

problem, if these problems are resolved earlier than the end of the

waiver period granted. BOCs must notify IXCs regarding the call and

switch problems the BOCs are having on a monthly basis. With regard to

these technical problems, BOCs and other LECs must notify IXCs

regarding these problems in implementing FLEX ANI. With regard to

problem (2), cited by SBC, FGB service, the Order notes that there is

currently no standard to provide payphone-specific coding digits and

carriers wishing to receive FLEX ANI must take FGD service. Thus,

pending the development of standards, the Order grants all LECs a

waiver and require that carriers taking FGB service pay PSPs per-call

compensation using ANI lists or other means they may identify.

20. All LECs and PSPs are obligated to transmit the required coding

digits as soon as they are technically capable, but in any event, no

later than the end of the waiver period for which they are eligible,

pursuant to the Order. During the period of the Bureau Waiver Order and

the waivers granted in the Orders, the IXC obligation to pay per-call

compensation established in the Payphone Orders remains in effect.

Neither the Bureau Waiver Order, nor the Order, waives the per-call

compensation requirements of the Payphone Orders and the Second Report

and Order. As required in the Bureau Waiver Order, payphones appearing

on the LEC-provided lists of payphones are eligible for per-call

compensation even if they do not transmit payphone-specific coding

digits. As required in the Payphone Orders and the Second Report and

Order, absent a negotiated agreement, IXCs must pay per-call

compensation of $0.284, for all calls they receive from payphones not

otherwise compensated. Payments must be remitted at least on a

quarterly basis. The payment for the October 1997 through December 31,

1997 period must be paid no later than April 1, 1998. LECs that have

certified to the IXC that they comply with the requirements of the

Payphone Orders must receive per-call compensation. The Order further

states that there likely will be some disputes between IXCs and PSPs

about the true number of compensable calls, but that these disputes

should not be a basis for delay of payphone compensation payments. The

Order states that whether a retroactive adjustment (true-up) of

payphone compensation may be necessary for the waiver periods granted

in the Bureau Waiver Order and this order will be addressed in a

subsequent order in this proceeding if necessary. The Order also does

not address AT&T's request, in response to the Bureau Waiver Order,

that it and similarly situated IXCs receive a waiver to pay per-phone

rather than per-call compensation for payphones that do not provide

payphone-specific coding digits. Nonetheless, IXCs must still pay

compensation on April 1, 1998.

21. The waivers granted in the Order are effective immediately in

order to ensure that all PSPs continue to receive per-call

compensation, as required by the Payphone Orders. Without these

waivers, many PSPs would not receive per-call compensation, because the

LECs servicing them are not yet able to provide the required payphone-

specific coding digits.

22. In the Order, the Bureau rejects the argument that IXCs should

not be required to compensate PSPs for the costs they incur in paying

LECs to implement FLEX ANI for payphone compensation. The Commission

concluded in the Payphone Orders that IXCs are the primary

beneficiaries of dial-around calls and they should perform per-call

tracking and pay per-call compensation. In addition, the Commission

concluded in the Second Report and Order that the costs of providing

coding digits to IXCs is a cost of doing business of PSPs for which

IXCs must provide compensation as part of the per-call rate. In the

Order, the Bureau also denies USTA's request that the Commission must

authorize full cost recovery and additional time for LECs that

implemented LIDB for CC Docket No. 91-35 stating that it is unclear

what additional costs would have been incurred to implement LIDB to

comply with the payphone-specific coding digit requirement of the

Payphone Orders, separate from those incurred for CC Docket No. 91-35

and that there is insufficient information on the record to grant the

request.

23. The Order concludes as did the Bureau Waiver Order, that it is

in the public interest for IXCs to pay payphone compensation beginning

October 7, 1997, despite the limited waivers of the requirement to

provide payphone-specific coding digits provided in the Bureau Waiver

Order and this order, because of the clear mandate of Section 276 that

PSPs be paid compensation for each and every call. The Second Report

and Order established a default per-call compensation rate and extended

the period of its applicability to address the problem presented by the

LECs, IXCs, and PSPs in these waiver requests. Pursuant to the waivers

granted in the Order, if a payphone does not provide payphone-specific

coding digits, the default per-call rate established in the Second

Report and Order for the first two years of per-call compensation,

$0.284 per-call, will continue to be the per-call default rate for that

payphone until that payphone provides payphone-specific coding digits.

24. The Order also concludes that a continuing waiver of the rule

requiring the provision of payphone-specific digits as a prerequisite

to payphone compensation in the circumstances identified in the

payphone proceeding will serve the public interest, because it will

allow us to move forward in implementing the statutory requirement that

PSPs receive fair compensation for calls placed from their phones while

continuing to progress to a market-based structure for payphone

compensation. The Bureau stated in the Bureau Waiver Order that the

unavailability of the payphone-specific coding digits will not preclude

IXCs from identifying payphone calls for the purpose of determining the

number of calls for which compensation is owed. Nor will the waiver

interfere with the payphones that currently are able to transmit

payphone-specific coding digits.

25. The waivers the Bureau grants in the Order to LECs and PSPs are

effective March 9, 1998, to ensure that all PSPs continue to receive

per-call compensation after the expiration of the waiver granted in the

Bureau Waiver Order. The immediate implementation of these waivers is

crucial to the Commission's efforts to ensure fair compensation for all

PSPs, encourage the deployment of payphones, and enhance competition

among PSPs, as mandated by Section 276 of the Act. In the Order the

Bureau grants these waivers to all similarly situated LECs and PSPs to

avoid a significant administrative impact and further delay of the

payment of payphone compensation as required by Section 276.

26. In the Order, the Bureau declines to waive the obligation of

IXCs to pay per-call compensation during the waiver

[[Page 20539]]

period of the Bureau Waiver Order and the additional waivers granted

within the Order. The Payphone Orders concluded that the primary

economic beneficiaries of a subscriber 800 and access code call are the

carriers that carry the call. The Bureau Waiver Order required that

IXCs pay per-call compensation during the coding digit waiver period as

required by the Payphone Orders. During that period, IXCs and their

customers continued to use payphones to make calls that must be

compensated pursuant to the Payphone Orders and the Second Report and

Order. Moreover, IXCs already have implemented surcharges for per-call

compensation and they would be benefiting unreasonably if the Bureau

were to grant them a waiver of the payphone compensation obligations so

that they do not have to pay per-call compensation when payphone-

specific coding digits are not available.

27. In the Order, the Bureau denies ITA's petition for

reconsideration of the obligation to pay compensation during the waiver

period, and AirTouch's petition for waiver seeking similar relief, both

of which were filed in response to the Bureau Waiver Order. The Bureau

also denies the requests of ITA and AirTouch that they be granted

relief from the payment obligations of the Payphone Order and the

Second Report and Order until they can block calls. In denying

AirTouch's petition, the Bureau notes that AirTouch has not shown

special circumstances or that a waiver is in the public interest. The

Bureau also declined to reconsider, in response to ITA's Petition, its

decision in the Bureau Waiver Order to waive payphone-specific coding

digit requirements while maintaining, and not waiving, the per-call

compensation requirements during the waiver period.

28. Accordingly, pursuant to authority contained in Sections 1, 4,

201-205, 218, 226, and 276 of the Communications Act of 1934, as

amended, 47 U.S.C. 151, 154, 201-205, 218, 226, and 276, that the

policies and requirements set forth herein are adopted.

29. It is further ordered that this Order is effective immediately

upon release thereof, and that the waivers included in this order are

effective March 9, 1998.

30. It is further ordered that pursuant to Section 203 of the

Communications Act, 47 U.S.C. 203, each of the LECs, absent a waiver,

shall FILE tariff revisions to their interstate access tariffs to

reflect the availability of FLEX ANI for IXCs for the purpose of

payphone compensation no later than March 31, 1998, with a scheduled

effective date of April 15, 1998, if FLEX ANI is available for 25% or

more of the smart payphones in its service area. Thereafter, within the

waiver period it is granted in this order, a LEC must file its tariff

revision to provide FLEX ANI to IXCs no later than when it provides

FLEX ANI to 25% or more of the smart payphones in its service area.

31. It is further ordered that pursuant to Section 203 of the

Communications Act, 47 U.S.C. 203, each of the LECs providing FLEX ANI

shall FILE tariffs to recover the cost of implementing FLEX ANI as

required herein no later than 30 days after full implementation of FLEX

ANI.

32. It is further ordered that LECs are granted a waiver of Part 69

of the Commission's rules to develop a rate element for recovery of

costs incurred to implement FLEX ANI from PSPs for the requirements of

this order to provide FLEX ANI to IXCs.

33. It is further ordered that the ITA Petition for Reconsideration

and the AirTouch Petition for Waiver of the Bureau Waiver Order are

denied.

34. It is further ordered that the waiver requests of USTA, the LEC

Coalition, and TDS are granted to the extent described herein, and

otherwise are denied.

Federal Communications Commission.

A. Richard Metzger, Jr.,

Chief, Common Carrier Bureau.

[FR Doc. 98-11163 Filed 4-24-98; 8:45 am]

BILLING CODE 6712-01-U