Procedures to Be Followed When Formal Complaints are Filed Against Common Carriers

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CC Docket No. 96-238; FCC 98-154]

Procedures to Be Followed When Formal Complaints are Filed

Against Common Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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

SUMMARY: The Commission adopted a Second Report and Order that created

an Accelerated Docket that provides for a decision, within 60 days, of

formal complaint proceedings that are accepted onto the Accelerated

Docket. The Accelerated Docket will stimulate the growth of competition

for telecommunications services by ensuring the prompt resolution of

disputes that may arise between market participants as well as allow

for the prompt disposal of complaints that are without substantial

merit.

DATES: Effective October 5, 1998, except for Secs. 1.115, 1.721, 1.724,

1.726, 1.729, 1.730 and 1.733, which contain information collection

requirements that are not effective until approved by the Office of

Management and Budget. The FCC will publish a document in the Federal

Register announcing the effective date for those sections. Written

comments by the public on the information collections are due September

3, 1998.

FOR FURTHER INFORMATION CONTACT: Dorothy Attwood or Frank Lamancusa

(202) 418-0700. For additional information concerning the information

collections contained in this Report and Order contact Judy Boley at

202-418-0214, or via the Internet at [email protected]. Direct all

comments on the information collections to Timothy Fain, Office of

Management and Budget, Room 10236 NEOB, Washington, DC 20503, (202)

395-3561 or via internet at [email protected], and Judy Boley, Federal

Communications Commission, Room 234, 1919 M Street, NW,

[[Page 41434]]

Washington, DC 20554 or via internet to [email protected].

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

Report and Order in CC Docket No. 96-238, adopted on July 9, 1998, and

released on July 14, 1998. The full text of the Second Report and Order

is available for inspection and copying during normal business hours in

the FCC Reference Center, Room 239, 1919 M Street, NW., Washington DC.

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

Commission's duplicating contractor, International Transcription

Services, 1231 20th Street NW, Washington DC 20036, (202) 857-3800.

This Report and Order contains modified information collections

subject to the Paperwork Reduction Act of 1995 (PRA). It has been

submitted to the Office of Management and Budget (OMB) for review under

the PRA. The Commission is requesting emergency OMB review of the

information collections with approval by September 11, 1998. Persons

wishing to comment on this information collection should submit

comments on or before September 11, 1998.

Paperwork Reduction Act

This Second Report and Order contains modified information

collections. The Commission, as part of its continuing effort to reduce

paperwork burdens, invites the general public to comment on the

information collections contained in this Order, as required by the

Paperwork Reduction Act of 1995, Pub. L. 104-12. The Commission has

requested emergency OMB review of the collections with an approval by

September 11, 1998. Persons wishing to comment on this information

collection should submit comments on or before September 11, 1998.

Comments should address: (1) Whether the new or modified collection of

information is necessary for the proper performance of the functions of

the Commission, including whether the information shall practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: 3060-0411.

Title: Amendment of Rules Governing Procedures to Be Followed When

Formal Complaints are Filed Against Common Carriers.

Form No.: N/A.

Type of Review: Revision.

Respondents: Individuals or households; businesses or other for

profit, including small business; not-for-profit institutions; state,

local or tribal government.

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

Est. time per Total annual

Section/title Number of respondent burden

respondents (hours) (hours)

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

a. Requests for Inclusion on Accelerated Docket................ 300 0.5 150

b. Pleadings................................................... 80 4 320

c. Automatic Document Production Requirements.................. 80 20 1,600

d. Discovery................................................... 80 20 1,600

e. Status Conference........................................... 80 3 240

f. Proposed Findings of Fact and Conclusions of Law............ 80 5 400

g. Minitrials Submissions...................................... 80 3 240

h. Minitrial Transcript........................................ 80 10 800

i. Applications for Review of Staff Decisions.................. 20 15 300

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

Total Annual Burden: 5,650 hours (for new and/or modified

collections only).

Estimated Costs Per Respondent: $150.00 for each respondent that

files a complaint against a common carrier that is accepted onto the

Accelerated Docket; it is estimated that 40 complaints will be accepted

onto the Accelerated Docket in the next year.

Needs and Uses: The information has been and is currently being

used by the Commission to determine the sufficiency of complaints and

to resolve the merits of disputes between the parties.

The Second Report and Order requires any party to a complaint or

prospective complaint that wishes to be on the new docket to transmit

to the Chief of the Common Carrier Bureau's Enforcement Division a

request seeking the inclusion of its dispute on the Accelerated Docket.

If the dispute for which inclusion on the docket is sought is the

subject of a pending complaint, the request must be in writing,

transmitted by facsimile or by hand, with a copy to the other parties

by the same mode of transmission. When a complainant has been admitted

onto the Accelerated Docket before filing its complaint, it is required

to file with its complaint a letter indicating that the complaint has

been accepted for treatment on the new docket.

The Second Report and Order requires the complaint to include a

detailed explanation of the alleged violation; answers are required to

set out fully the nature of any defense, and to respond specifically to

all material allegations of the complaint. The rules dispense, in

Accelerated Docket proceedings, with the requirement that parties

provide extensive legal analysis, proposed findings of fact and

conclusions of law with their initial pleadings and with the

requirement that they support their initial pleadings with affidavits.

Defendants are allowed ten days to file an answer.

The Second Report and Order requires copies of documents within a

party's possession, custody or control that are likely to bear

significantly on the issues in a complaint proceeding to be produced

with that party's complaint, answer or the reply statements in its pre-

status-conference filing, if applicable. The rules adopt a production

standard that is narrower than all relevant documents with the goal of

reducing the number of documents subject to production.

The Second Report and Order requires that parties seeking discovery

beyond that available by the automatic document production request such

additional discovery in the filing that they are required to make two

days before the initial status conference. These requests may include,

and Commission staff may order, additional document production,

depositions of persons with relevant knowledge and/or responses to

interrogatories. Additionally, any party that intends to rely on expert

testimony must identify its expert and provide a brief expert

statement.

The Second Report and Order requires parties to submit to the

staff, two business days, before the initial status conference, a

listing of the

[[Page 41435]]

stipulations and the discovery issues on which they have reached

agreement. If necessary, parties are permitted to submit separate

statements of disputed factual and legal issues. Where appropriate, a

complainant's pre-status-conference filing may respond to any

affirmative defenses that the defendant may have raised in its answer.

The Second Report and Order further requires parties to submit

proposed findings of fact and conclusions of law no less than two days

before the beginning of the minitrial. Parties may, but are not

required to, submit revised proposed findings of fact and conclusions

of law within three days after the conclusion of the minitrial.

Separate briefs are not permitted in Accelerated Docket proceedings.

Under the Second Report and Order, parties to Accelerated Docket

proceedings are required to present evidence and argument in support of

their cases to Commission staff during a hearing-type proceeding. Three

days before the minitrial, parties are required to exchange exhibits

that they may introduce during the proceeding and lists of witnesses

whom they may call.

The Second Report and Order requires parties to Accelerated Docket

proceedings to arrange for the preparation of, and file with the

Commission three days after the minitrial, a stenographic transcript of

the minitrial proceedings.

Finally, the Second Report and Order requires parties to

Accelerated Docket proceedings that wish to obtain review of the

staff's decision or recommended decision to file their application for

review or challenge to the initial decision with the Commission within

15 days of the release of the staff decision.

Summary of Second Report and Order

I. Introduction

1. In enacting the Telecommunications Act of 1996 (the ``1996

Act''), Congress stressed the importance of establishing a ``pro-

competitive, deregulatory'' national policy framework for the

telecommunications industry. In furtherance of that goal, we issued, in

this docket's First Report and Order, 63 FR 990 (January 7, 1998),

revised rules governing formal complaints filed with the Commission

that allege unlawful conduct by telecommunications carriers. These new

rules grew out of the shortened deadlines for resolution of certain

categories of complaints imposed in the 1996 Act, and they had as their

goal the prompt resolution of all complaints in order to ``reduce

impediments to robust competition in all telecommunications markets.''

2. On November 25, 1997, a Public Notice, 62 FR 66321 (December 18,

1997), issued seeking further comment on certain issues raised in this

proceeding. Specifically, the Public Notice sought comment on the

creation of an ``Accelerated Docket'' for complaint adjudication that

would (1) provide for the presentation of live evidence and argument in

a hearing-type proceeding and (2) operate on a 60-day time frame, or on

some other schedule that is more compressed than that for a formal

complaint proceeding conducted under the new procedures set out in the

First Report & Order.

3. In this Second Report and Order, we adopt rules that will govern

the Accelerated Docket. Briefly stated, the new complaint procedures

that we adopt today provide for the decision, within 60 days, of formal

complaint proceedings that are accepted onto the Accelerated Docket,

with the additional possibility of en banc hearing, before the full

Commission, of applications for review of the staff decision. In order

to expedite the complaint process in this manner, we require that

parties seeking to place their disputes on the Accelerated Docket first

meet for pre-filing settlement discussions supervised by Commission

staff. Once a complaint has been filed and accepted onto the

Accelerated Docket the defendant will have ten days to file its answer.

Both the complainant and the defendant will be required to serve on

their opponents, with their respective initial pleadings, those

documents that are likely to bear on the issues in the proceeding and a

list of individuals likely to have relevant knowledge. Ten days after

the answer is filed, Commission staff will hold an initial status

conference, at which the parties may request further discovery,

including a limited number of depositions, which we expect to play an

important role in Accelerated Docket proceedings. Between 40 and 45

days after the filing of a complaint, a minitrial will be held at which

the parties will have the opportunity to present evidence and make

argument in support of their respective positions. Commission staff

shall issue its decision no more than sixty days after the matter is

placed on the Accelerated Docket. Review by the full Commission will be

available through an application for review. In appropriate cases, the

Commission may hold en banc hearings to decide applications for review

of Accelerated Docket proceedings.

4. As discussed below, the rules that we adopt herein modify

certain deadlines and procedural requirements for complaint proceedings

accepted onto the Accelerated Docket. In general, the new rules will

govern admission onto the Accelerated Docket, procedural and scheduling

aspects of Accelerated Docket proceedings, the breadth of discovery

available in such proceedings, and the hearing-type procedure in which

Accelerated Docket proceedings typically will culminate. To the extent

that the rules set out in this Second Report & Order do not

specifically cover some procedural aspect of a proceeding on the

Accelerated Docket, the rules promulgated with the First Report & Order

will govern.

A. The Need for, and Benefits of, the Accelerated Docket

5. The Public Notice sought comment on whether there existed a need

for the hearing-type process and the shortened deadline for complaint

adjudication that would be available with the Accelerated Docket.

Additionally, the Public Notice sought comment on how the Commission

could work cooperatively with the states to ensure that the interests

of both the Commission and the states were protected.

6. We believe that important benefits will flow from the expedition

of the complaint process in cases appropriate for inclusion on the

Accelerated Docket. The Accelerated Docket will provide prompt

resolution of carrier-related disputes and it frequently will allow

carriers to obtain more extensive discovery from their opponents than

has been routinely available in formal complaint proceedings.

Additionally, it will provide for the full and effective presentation

of each party's case in a hearing-type proceeding. The Accelerated

Docket will minimize the opportunity for carriers to continue to engage

in anti-competitive practices because the lawfulness of those practices

will be subject to expedited review under our new procedures, and

market entrants will be able to obtain adjudication of their complaints

much more quickly than in the past. We believe, therefore, that the

Accelerated Docket will facilitate the market's continuing movement

toward the full competition that Congress envisioned when it enacted

the 1996 Act.

7. In addition to the benefits that we envision flowing to

competitive market entrants, we believe that in certain instances the

incumbent local carriers also are likely to enjoy a substantial benefit

from the new docket. The Accelerated Docket will provide the incumbent

carriers with a means of obtaining the expedited disposal of certain

complaints filed against them. On balance, therefore, we believe that

[[Page 41436]]

any additional burdens that may be imposed on parties by the

Accelerated Docket are more than offset by the resulting benefits, both

to the carriers themselves and to the public.

8. We are unpersuaded by the various commenters' criticisms of the

Accelerated Docket. The proposed timeframe for resolving complaints on

the Accelerated Docket is not unreasonable or inconsistent with due

process. As with the new rules issued in the First Report & Order,

parties to Accelerated Docket proceedings will have full notice of

their opponents' contentions well before the 60-day period for

conclusion of the proceeding begins to run. During the mandatory pre-

filing settlement discussions, parties will fully explore, under the

supervision of Commission staff, the facts surrounding, and legal bases

for, each side's claims and defenses. Furthermore, matters not

reasonably susceptible to resolution within the sixty-day framework we

have established, whether due to factual or legal complexity or any

other reason, will not be accepted onto the Accelerated Docket.

9. We also reject the argument that we should refrain from issuing

rules for the Accelerated Docket until we have accumulated additional

experience under the First Report & Order. We do not view the new

docket as something that merely builds, with minor modifications, on

the generally applicable formal complaint process; rather, we believe

that it will give rise to substantial benefits independent of the

current process. Extensive examination of proceedings under the general

rules, therefore, is not necessarily a prerequisite to setting up the

Accelerated Docket. Moreover, we will continue to monitor the

experience with both sets of rules. This will allow us to make further

improvements in the future as it appears to be appropriate.

B. Subject Matter for the Accelerated Docket

10. Under the rules that we adopt today, we confer on the staff

administering the Accelerated Docket broad discretion to determine

which formal complaints relating to common carrier services it will

accept onto the docket. In exercising this discretion, the Bureau

should consider several different factors. First among these is the

extent to which it appears that the parties to the dispute have

exhausted the reasonable opportunities for settlement during the

supervised pre-filing settlement discussions.

11. Second, to the extent that the expedited resolution of a

particular dispute appears likely to advance competition in the

relevant telecommunications markets, it may be appropriate for

inclusion on the Accelerated Docket.

12. Third, the Bureau staff shall also consider whether the issues

presented by a particular proceeding appear to be suited for decision

under the constraints imposed by the Accelerated Docket. For example,

if the dispute appears to involve more distinct questions than may be

litigated effectively under the expedited procedures, staff would be

within its discretion to refuse the case. Another factor for

consideration in this category likely will be whether the complaining

party has chosen to bifurcate its liability claims from its damages

claims. Similarly, if it appears that factual discovery will be so

extraordinarily complex and time-consuming that it cannot effectively

be conducted under the compressed schedule of the Accelerated Docket,

the staff administering the docket also would be within its discretion

to decline the case.

13. Fourth, in determining whether to admit a dispute to the

Accelerated Docket, staff shall consider any suggestions that the

complaint fails to state a cognizable claim or raises issues outside of

the Commission's established jurisdiction.

14. Fifth, the staff administering the Accelerated Docket also has

discretion to refuse a complaint proceeding where it appears that one

party would be unreasonably limited in its ability effectively to

conduct discovery or prepare its case because of an overwhelming

resource advantage of the opposing party.

15. Beyond the factors listed above, we expect that, in accepting

matters onto the Accelerated Docket, the Bureau staff will consider

such other issues as it deems appropriate and conducive to the prompt

and fair adjudication of the complaint proceedings before it.

C. Jurisdictional Considerations

16. Nothing in this report and order should be interpreted to

expand the Commission's jurisdiction to adjudicate disputes under the

Act. We also recognize that the Eighth Circuit's decision on review of

our Local Competition Order places limits on the Commission's authority

in section 208 enforcement proceedings. Questions of our jurisdiction

to adjudicate individual complaint proceedings will be decided on a

case-by-case basis as they arise. Furthermore, we are hopeful that

contact and careful coordination with the relevant state commissions

will reduce the potential for state concerns about jurisdictional

issues. Accordingly, we direct that the staff administering the

Accelerated Docket take all appropriate steps to inform the appropriate

state utility commissions where it appears that such action is

appropriate.

II. Pre-Filing Requirements

17. The Public Notice sought comment on whether it would be useful

for parties on the Accelerated Docket to participate in staff

supervised settlement discussions before a complaint was filed. The

notice asked whether one criterion for acceptance onto the Accelerated

Docket should be adequate notice, through these pre-filing discussions,

of the issues a complainant would raise in its complaint. It asked

whether such supervised pre-filing settlement discussions would

implicate the Commission's ex parte rules, and it sought suggestions on

how to protect confidential or proprietary information that the parties

might exchange during these discussions. Additionally, the Public

Notice sought comment on which parties to a dispute could seek

inclusion on the Accelerated Docket.

A. Staff Supervision of Pre-Filing Discussions

18. We believe that requiring supervision of the parties' pre-

filing discussions will provide substantial benefits in the Accelerated

Docket. We believe that one way in which the Accelerated Docket will

speed the development of competition is by facilitating the informal

resolution of many disputes before complaints are even filed.

Involvement of Commission staff in the parties' pre-filing discussions

will serve to make those talks run more smoothly and be more

productive. Staff involvement in the discussions also may help the

parties to focus their dispute in a way that will be most conducive to

the short schedule of the Accelerated Docket if a complaint ultimately

is filed. We are unpersuaded by the argument that staff participation

in settlement discussions will unnecessarily prolong that phase of

proceedings. Our commitment to the prompt adjudication of disputes

affecting competition extends to the pre-filing stage of proceedings.

We are confident that requiring staff involvement in the mandatory pre-

filing settlement discussions will not slow this phase of proceedings.

19. We do not believe that it would be improper for the individual

staff member who conducts the pre-filing discussions to handle the

matter after a complaint has been filed. Federal courts repeatedly have

held that a judge's participation in settlement discussions,

[[Page 41437]]

by itself, provides no basis for recusing the judge from deciding the

case; it does not create the kind of personal or extra-judicial

knowledge that requires disqualification. Only when a judge conducts

himself in a manner that may raise questions about his impartiality is

there proper ground for recusal. We see no reason to adopt a stricter

rule than that of the federal courts on this issue.

B. Procedure for Acceptance to the Accelerated Docket

20. We conclude that the Accelerated Docket will be most effective

if either party to a dispute may request inclusion on it. Requiring

mutual agreement of the parties, as suggested by some commenters, would

give either party veto power over the process and substantially reduce

the docket's effectiveness at stimulating a competitive environment.

However, we believe that the ends of the Accelerated Docket would not

be well served if the staff had the discretion to place a proceeding on

the docket absent a request from at least one party.

21. A prospective complainant who wishes to have its dispute

handled on the Accelerated Docket shall contact the Bureau either by

phone or in writing to seek assistance in reaching a negotiated

resolution to the matter. If it appears from the preliminary

information supplied by the prospective complainant that the dispute

may be appropriate for handling under the procedures that we set out

today, the staff will schedule the appropriate pre-filing settlement

talks. Based on the progress of these negotiations, the nature of the

dispute as revealed during the discussions, and other considerations,

including those outlined above, Commission staff will determine whether

the matter is appropriate for Accelerated Docket treatment. Once the

staff determines that a dispute is appropriate for the Accelerated

Docket and if the parties remain unable to resolve their differences

during the supervised settlement discussions, the complainant shall

submit with its complaint a letter indicating that it has gained

acceptance onto the docket. So that the staff immediately may begin

work on the matter, a complainant shall, at the time it files its

complaint, serve a copy on the staff who supervised the settlement

talks. Such a complaint, once it is filed and accepted onto the

Accelerated Docket, will be handled by the Bureau under the rules set

out herein.

22. As some commenters recommend, we believe that it is also

important that defendants be able to request that their proceeding be

included on the Accelerated Docket. We therefore adopt a rule under

which a defendant may seek inclusion on the Accelerated Docket by

contacting the Bureau no more than five days after receiving service of

a complaint. In order to comply with our ex parte rules, such contact

shall be by a facsimile or hand-delivered letter of which a copy also

is transmitted in the same manner to the complainant. A defendant

seeking admission to the Accelerated Docket will be required to file

its answer within 10 days of receiving service of the complaint, as

required by this Second Report and Order. Within two business days of a

defendant's request letter, the determination will be made whether to

grant the request and accept the proceeding onto the Accelerated

Docket. If it appears that the parties have not conducted sufficient

pre-filing settlement discussions, the staff may schedule supervised

settlement talks, as discussed above. If appropriate, the progress of

the matter after the filing of the answer may be postponed during these

discussions. Once a proceeding has been accepted onto the Accelerated

Docket at the defendant's request, the staff will also set a schedule

for both sides' production of documents and the remainder of the

proceeding. After the staff has scheduled the production of documents,

matters accepted onto the docket at a defendant's request will proceed

according to the schedule otherwise applicable to Accelerated Docket

proceedings.

23. It appears that certain complaints already pending in the

Bureau's Enforcement Division may benefit from, and be appropriate for,

the expedited procedures of the new docket. Accordingly, during the

thirty days following the effective date of these rules, either party

to a complaint proceeding then pending before the Bureau's Enforcement

Division and in which an answer previously has been served, or is past

due, may contact the staff administering the Accelerated Docket to

request inclusion of the matter on the docket. A party making such a

request shall do so by facsimile or hand-delivered letter of which a

copy is sent contemporaneously to the opposing party or parties by the

same mode of transmission.

C. Ex Parte and Confidentiality Issues

24. After reviewing the matter, we believe that staff involvement

in the pre-filing discussions poses no potential for a prohibited ex

parte contact. Our ex parte rules restrict the actions of parties to

complaint proceedings only after a complaint has been filed. Typically,

contacts between a single party and Commission staff under these rules

will occur before the filing of a complaint and therefore will not

implicate our rules. We believe that the main potential for ex parte

contact that these rules create is the situation in which a defendant

requests the inclusion of its proceeding on the Accelerated Docket. As

we note above, however, such requests must be made by letter, a copy of

which shall be provided to the complainant at the same time and by the

same mode of transmission as used for the Commission staff. This will

pose no danger of an improper ex parte contact.

25. In the event that parties engaged in the required supervised

settlement discussions should have occasion to exchange confidential or

proprietary documents, they may negotiate a confidentiality agreement

that is acceptable to both sides. If the parties are unable to reach

agreement on a confidentiality agreement, they shall be governed by 47

CFR 1.731.

III. Pleading Requirements

26. The Public Notice noted the new pleading requirements under the

First Report & Order, and stated that these requirements likely would

also apply to Accelerated Docket proceedings. It requested comment on

the reasonableness of requiring that the defendant's answer be filed

within seven calendar days of the complaint in order to accommodate the

expedited nature of the new docket.

A. Content Requirements for Pleadings

27. After review and careful consideration of the comments on this

topic, we have concluded that it is appropriate to modify slightly the

content requirements for initial pleadings on the Accelerated Docket.

As discussed in the First Report & Order, we believe that a full

presentation, by both parties, of the relevant facts will ``improve the

utility and content of pleadings'' and help to ``speed resolution of''

complaints. We also believe, however, that the key to the success of

the Accelerated Docket will be its ability to move the parties to

narrow, focused issues as quickly as possible so that evidence on those

issues may be presented at the minitrial. Given the opportunity for

parties to present evidence at the minitrials, we are less concerned

with the formal presentation of evidence through affidavits

accompanying the pleadings than we are with having the parties promptly

reach issue. Thus, as set out in 47 CFR 1.721(a)(5), promulgated with

the First Report & Order, the complaint:

shall include a detailed explanation of the manner and time period

in which a

[[Page 41438]]

defendant has allegedly violated the Act, Commission order, or

Commission rule in question, including a full identification or

description of the communications, transmissions, services, or other

carrier conduct complained of and the nature of any injury allegedly

sustained by the complainant.

Similarly, the answer ``shall advise the complainant and the Commission

fully and completely of the nature of any defense, and shall respond

specifically to all material allegations of the complaint.'' As

discussed at greater length below, initial pleadings on the Accelerated

Docket also shall include that portion of the information designation

discussed in the First Report & Order which lists individuals believed

to have firsthand knowledge of the facts alleged with particularity in

the pleadings.

28. Given the relatively rapid pace of the Accelerated Docket, we

have decided to dispense with certain pleading requirements set out in

the First Report & Order. First, we will not require that parties to

Accelerated Docket proceedings provide extensive legal analysis,

proposed findings of fact and conclusions of law with their initial

pleadings. Rather, parties will be required to submit proposed findings

of fact and conclusions of law shortly before the minitrial that

typically will take place in proceedings on this docket. Similarly,

during this minitrial, parties will have the opportunity to present

legal argument regarding their claims and defenses, and we therefore

believe that this material may be omitted from the initial pleadings

without substantially slowing down the process. We emphasize, however,

that our decision not to require extensive legal analysis should not be

interpreted as sanctioning notice-pleading or a similar omission of the

full factual and legal basis for a party's pleadings. Rather, we expect

that the complaint and answer will fully set out the facts and legal

theories on which the parties premise their claims and defenses.

29. Additionally, we have decided to dispense with the requirement

that parties to Accelerated Docket proceedings support their initial

pleadings with affidavits, as required in 47 CFR 1.721(a)(5), (a)(11)

and 1.724(g). We believe that the opportunity to present live testimony

at the minitrial and the more extensive discovery available on the

Accelerated Docket will render unnecessary the requirement that parties

support their pleadings with affidavits. We have also decided to

dispense, in Accelerated Docket proceedings, with the requirement that

parties include in their information designations a description of all

relevant documents in their possession. As we discuss below, parties

will be required automatically to produce with their initial pleadings

those documents that bear the appropriate relevance relationship with

the issues in the proceeding.

B. Timing of the Answer

30. After consideration of the comments regarding the timing of the

answer, we have concluded that an appropriate answer period for the

Accelerated Docket is ten days. Thus, a defendant's answer, as well as

the discovery documents subject to automatic production discussed

below, will be due ten calendar days after the defendant receives

service of a complaint on the Accelerated Docket. As noted in the First

Report & Order, defendants will have substantial advance notice of the

facts and legal theories underlying a complaint from the pre-filing

settlement discussions that are now required in all complaint

proceedings.

31. Notwithstanding the criticisms that several commenters level at

the short answer period proposed in the Public Notice, we strongly

believe that the ten-day period we have adopted is appropriate. First,

we note that the Act expressly grants the Commission broad discretion

to conduct its ``proceedings in such manner as will best conduce to the

proper dispatch of business and to the ends of justice.'' Courts

applying this language in reviewing the Commission's procedural rules

regularly have recognized the Commission's wide authority in questions

of its own procedures. Thus, in FCC v. Schreiber, 113 U.S. 279, 290

(1965), the Court noted that the Commission ``should be free to fashion

(its) own rules of procedure and to pursue methods of inquiry capable

of permitting (it) to discharge (its) multitudinous duties.'' In

Florida Cellular Mobile Communications Corp. v. FCC, 28 F.3d 191, 198

(D.C. Cir. 1994), the court stated, in the context of a licensing

dispute, that there ``can be no doubt of the FCC's authority to impose

strict procedural rules.''

32. Apart from complying with the relevant statute, the primary

limitation on agency procedures is that they must comply with the

requirements of due process. Through the supervised pre-filing

settlement discussions, potential defendants will have full notice of

the likely claims against them substantially in advance of the filing

of a complaint. We believe that, when combined with this pre-filing

period, the ten-day answer period comports with the requirements of due

process. By diligently reviewing their records and conducting the

appropriate interviews both before and after the complaint is filed,

defendants should have ample opportunity to gather the information

necessary both to file their answer and to produce the documents that,

as we discuss below, must be served with it. We recognize that an

answer period of this short duration will put defendants and their

counsel to a greater burden than may exist under the 20-day answer

period in the more generally applicable rules. However, defendants in

Accelerated Docket proceedings will be required to assemble

substantially less information before filing their answer than is

required under the rules set out in the First Report & Order. Thus,

Accelerated Docket defendants will not be required to prepare proposed

findings of fact and conclusions of law or affidavits regarding the

facts pleaded in their answers. Nor will they be required to create the

index of relevant documents required under the First Report & Order.

33. Due process analysis focuses on whether a procedural limitation

is so severe that a party is prevented from preparing an effective

defense. We are aware of no authority, and the commenters cite none,

holding that an expedited procedure of the type that we implement today

amounts to a denial of due process. Only SBC attempts to cite specific

legal authority to support its due process argument, and it relies

principally on a decision from 1900 that is plainly inapposite. In

Roller v. Holly, 176 U.S. 398 (1900), the Court found a denial of due

process when a summons directed the recipient in Virginia to appear in

a Texas court five days later to defend himself. The Court did not hold

that, as an absolute matter, five days was too little time to respond

effectively to process of the type involved in that case. Rather, the

Court relied on the fact that the trip from Virginia to Texas would

require four of the five available days and the respondent would have

had only one day in which to prepare his case. The Court emphasized

that the adequacy of a response period turned on whether it permitted a

defendant sufficient time ``to prepare his defense and for his

journey.''

34. We find the Roller decision, written in the era before

commercial automobiles, airplanes, facsimile machines and e-mail, to be

of no probity in evaluating the propriety of a 10-day answer period

nearly 100 years later. Defendants on the Accelerated Docket will have

the full ten-day answer period, as well as the pre-filing period,

[[Page 41439]]

to conduct their investigation and prepare their answer. Accordingly,

we believe that the answer period we adopt for the Accelerated Docket

is adequate.

IV. Discovery

35. The Public Notice sought comment on a variety of issues

surrounding the conduct of discovery in an expedited process like that

proposed for the Accelerated Docket. The Public Notice inquired whether

parties to Accelerated Docket proceedings should be required

automatically to produce documents that bear the appropriate relevance

relationship to the issues in the complaint proceeding, and it asked

when such production should take place. Furthermore it sought comment

on whether the parties should be required to submit all discovery

requests and disputes to the responsible staff in advance of the

initial status conference, discussed below, so that the staff could

issue its decision on these matters at the status conference, after

consultation with the parties. The Public Notice also asked what

measures would be appropriate sanctions for parties that failed to

provide discovery as ordered.

A. Timing of Automatic Document Production

36. A rule requiring the production of the most central, but not

all relevant, documents with the complaint and answer is most likely to

lead to the realization of our goal of creating a docket that is both

effective and faster than the current system for adjudicating

complaints. Furthermore, we believe that the production of documents we

require by today's rules actually may make the document portion of the

discovery process demand less of the parties' time and move more

quickly than the process in the First Report & Order, which requires

that parties provide their opponents with an index giving substantial

information about each discoverable document. We believe that requiring

production of the actual documents should reduce the uncertainty and

disputes that may arise from the creation of a description of each

document. We also believe that parties will expend markedly fewer

resources in assembling and producing the appropriate documents than

they would in assembling the documents and then preparing the detailed

index required under the First Report & Order. Thus, our rule for the

Accelerated Docket requiring automatic production of documents meeting

the appropriate standard will likely increase the speed and

effectiveness of the discovery that each party obtains.

B. Content of Automatic Document Production

37. The Public Notice sought comment on what standard should be

adopted to guide the automatic production of documents on the

Accelerated Docket. In particular, the Public Notice suggested the

possibility of using the standard in the local rule governing automatic

disclosure in the U.S. District Court for the Eastern District of

Texas. This standard requires the automatic production, early in the

discovery phase, of ``all documents, data compilations, and tangible

things in the possession, custody, or control of the party that are

likely to bear significantly on any claim or defense.''

38. After review and consideration of the various comments

regarding the appropriate standard, we have determined that, on the

Accelerated Docket, the parties' automatic document production will be

governed by the ``likely to bear'' standard proposed in the Public

Notice. Thus, at the time the parties file their initial pleadings in

an Accelerated Docket proceeding, they will be required to produce to

each other all documents, data compilations, and tangible things ``in

the possession, custody, or control of the party that are likely to

bear significantly on any claim or defense.'' This standard will

include materials: (1) That would not support the disclosing party's

contentions; (2) that are likely to have an influence on or affect the

outcome of a claim or defense; (3) that reflect the relevant knowledge

of persons who, if their potential testimony were known, might

reasonably be expected to be deposed or called as a witness by any of

the parties; or (4) that competent counsel would consider reasonably

necessary to prepare, evaluate or try a claim or defense.

Fundamentally, if a party would expect to proffer a document at the

minitrial as an exhibit in support of its case, the party should

produce the document. Similarly, if the party would expect its

opponent, if it had the document, to proffer it as an exhibit against

the party, the document also should be produced.

39. Despite most commenters' lack of enthusiasm for this standard,

we adopt it because we believe that it will lead to the most manageable

system for the initial, automatic document productions on the

Accelerated Docket. We are not persuaded by the comments asserting that

the standard is so vague that it will lend itself to abuse by counsel

or that it will be difficult to enforce. We have no reason to suspect

that the ``likely to bear standard'' is any more susceptible to

manipulation by counsel than is the relevance standard. Nor does the

standard appear to be inherently more difficult for an adjudicator to

apply in deciding discovery disputes or imposing sanctions.

40. What we envision this standard as likely to avoid is the

production of every single document that is relevant, even if only

tenuously so, to the issues in a complaint proceeding. We believe that

the parties' needs for discovery would be poorly served by a rule

requiring such broad production in a process that runs as quickly as

the new docket will. We are hopeful that the ``likely to bear''

standard will focus both parties'' production efforts on the documents

of core relevance to a particular proceeding. Thus, it should reduce

the volume of documents produced by each side and ensure that the party

receiving a production will be able fully to review the material in the

time available in Accelerated Docket proceedings. If necessary, at a

later date, we may refine or modify the standard to ensure fair and

expeditious completion of the initial document production on the

Accelerated Docket.

41. We note that, both with their initial document productions and

subsequent productions that may be ordered, parties may have occasion

to produce documents for which they wish to request confidential

treatment. Production of such documents shall be made in accordance

with 47 CFR 1.731. In the rare case in which a producing party believes

that 47 CFR 1.731 will not provide adequate protection for its

assertedly confidential material, it may request either that the

opposing party consent to greater protection, or that the staff

supervising the proceeding order greater protection.

C. Depositions and Other Discovery

42. As indicated in the Public Notice, we contemplate that, in many

instances, parties to Accelerated Docket proceedings will have the

opportunity to depose certain key witnesses who have personal knowledge

of the relevant issues in dispute. We believe that a limited number of

depositions in proceedings on this docket will serve our goal of

ensuring that the parties fully may develop their cases so that staff

decisions in the proceedings will be both fully informed and rendered

with the speed that a complete record allows. In order to facilitate

the scheduling of such depositions within the time constraints of the

Accelerated Docket, we believe that parties should be required to

exchange information about individuals with knowledge relevant to the

issues of a proceeding. We require that parties on the

[[Page 41440]]

Accelerated Docket provide, with their initial pleadings, a designation

containing the name, address, and position of each individual believed

to have firsthand knowledge of the facts alleged with particularity in

its pleading, along with a general description of the relevant facts

within any such individual's knowledge. Alternatively, this designation

may refer to the paragraph numbers of the appropriate pleading as a

means of describing the scope of an individual's knowledge.

43. In its filings before the initial status conference, a party

may request approval to conduct the depositions of individuals with

knowledge relevant to a complaint proceeding, including those

individuals listed in an opponent's information designation; in their

pre-status-conference filings, parties also may request additional

document production or, where appropriate, interrogatories. We expect

that, where the requested discovery is reasonable and consistent with

the applicable time constraints, staff will be inclined to grant it. In

order to ensure diligence and completeness in each party's designation

of individuals with relevant knowledge, no party, absent a showing of

good cause, will be permitted to call as a witness at a minitrial, or

otherwise offer evidence from, any individual in that party's employ

who does not appear on the party's information designation with a

general description of the issues on which the individual will offer

evidence.

44. As with fact witnesses, it is important that parties have an

opportunity to explore the substance of, and the basis for, expert

testimony offered by an opponent. Given the rapid pace of Accelerated

Docket proceedings, however, it will be necessary for such witnesses to

be identified, and for the substance of their testimony to be

disclosed, as quickly as possible. A complainant who plans to introduce

expert evidence for a purpose other than to rebut the defendant's

expert evidence will be required to identify the witness or witnesses

in the information designation accompanying its complaint. In addition

to identifying its expert witness, complainants also will be required

to provide, at the time they file their complaint, a brief statement of

the opinions to be expressed by the expert, the basis and reasons

therefor and any data or other information that the witness considered

in forming her opinions, as is required in Federal Rule of Civil

Procedure 26(a)(2)(B).

45. We require that defendants who intend to rely on expert

testimony identify their experts at the time that they file their

answer. Defendants shall also disclose the other material relating to

their expert witnesses that is required of complainants; however this

disclosure may be made in the defendant's filing that is due two days

before the initial status conference. If a complainant chooses to rely

on previously unidentified experts to rebut any portion of the

defendant's case, the complainant shall identify such experts and make

the other required disclosures about their testimony at the initial

status conference. By the end of the initial status conference, the

parties will have provided full disclosure of any expert testimony on

which they intend to rely, and they will be in a position to seek staff

approval to depose expert witnesses from whom they may want additional

discovery.

46. In light of the numerous tasks that the parties will be

required to complete at the beginning of Accelerated Docket

proceedings, we see no purpose to routinely allowing the service of

interrogatories before the initial status conference. Accordingly, the

rules that we adopt today provide that parties to Accelerated Docket

proceedings may propound interrogatories only after the initial status

conference and with the permission of the staff supervising the

proceeding. At the initial status conference, when the parties request

leave to take depositions or request additional document production,

they may also seek staff approval to serve a limited number of

interrogatories on their opponent. The decision of whether to permit

such interrogatories shall be within the discretion of the staff

administering the proceeding.

D. Sanctions

47. The Public Notice sought comment on what types of sanctions

would be appropriate for parties who had failed to comply with their

discovery obligations in Accelerated Docket proceedings. In a process

that will move at the pace of the Accelerated Docket, it will be

crucial that staff be able effectively to compel prompt action and

adherence to its discovery orders. Without such sanction authority, a

recalcitrant party likely would be able to delay a proceeding enough

that many of the docket's projected benefits would vanish.

48. We strongly believe that swift and effective sanctions will be

necessary to ensure against attempts to prolong Accelerated Docket

proceedings through discovery delay or abuse. Appropriate sanctions

should also deter attempts to affect the substance of proceedings by

improperly withholding information. We believe it will encourage the

parties' strict compliance with discovery obligations for us to grant

the staff administering the Accelerated Docket broad discretion to

respond to discovery violations with the sanction that it deems to be

appropriate.

V. Status Conferences

49. The Public Notice sought comment on the timing and content

requirements for the initial status conference in the Accelerated

Docket proceedings. It proposed that, to accommodate the time

constraints of the Accelerated Docket, the initial conference take

place 15 calendar days after the filing of the complaint and that the

parties be required to meet before the conference to discuss a variety

of issues to be covered at the conference, including issues in dispute

and questions of discovery and scheduling. It also proposed that the

parties be required to draft a joint statement summarizing the issues

on which they agreed and their remaining disputes, and to submit the

statement to the Commission two days before the initial status

conference.

A. Timing of Initial Status Conference

50. After careful consideration of the comments on this issue, we

direct that the initial status conference in Accelerated Docket

proceedings will take place ten calendar days after the answer is due

to be filed. This will place the conference twenty days after the

service of the complaint, rather than fifteen as proposed in the Public

Notice. We recognize that this interval of time will require that

counsel and parties work with substantial diligence and efficiency.

However, we view this short time period as necessary to effectuate the

speedy adjudication of disputes that is our main goal for the

Accelerated Docket.

B. Issues to Be Addressed At Initial Status Conference

51. The Public Notice proposed that, before the status conference,

the parties meet and confer about a variety of issues, including

settlement prospects, discovery, issues in dispute, stipulations, and a

schedule for the remainder of the proceeding. It also proposed that,

before the status conference, the parties report jointly in writing to

the Commission about the results of their discussions on these issues,

including disputed and stipulated facts, and key legal issues.

52. We believe that early discussion of the specific facts in

dispute will assist the parties in focusing on the issues of central

relevance to the proceeding; it is therefore critical to the overall

success

[[Page 41441]]

of the Accelerated Docket. We require that, before the initial status

conference, the parties discuss, and attempt to reach agreement on,

discovery issues and the factual issues to which they can stipulate;

they shall submit to the staff, two business days before the initial

conference, a listing of these stipulations and the discovery issues on

which they have reached agreement. Parties may conduct these meetings

either in person or by telephone conference call.

53. Additionally, the complainant's submission before the initial

status conference shall respond, as appropriate, to any affirmative

defenses that the defendant may have raised in its answer. We believe

that, given the constraints of the Accelerated Docket, it will be more

efficient to require a complainant to respond to affirmative defenses

in this manner than it would be to provide for the filing of a separate

reply.

54. At the initial status conference, the responsible staff will

review the parties' disputed and stipulated issues of fact. Based on

the factual issues that appear from this material, the staff will

determine what additional discovery, beyond the initial disclosures,

the parties may take. Thus, at the status conference, parties should be

prepared to demonstrate specifically how the discovery they seek

relates to particular issues in dispute. The discovery that the staff

may grant at this status conference includes depositions and additional

document production. Indeed, in light of the relative efficiency of

depositions as a discovery tool, we expect that the staff typically

will grant a limited number of depositions appropriate to the issues

in, and complexity of, a particular case. Given the truncated nature of

the Accelerated Docket, we believe that interrogatories will be of

limited usefulness. However, at the initial conference, the staff may

grant permission to propound interrogatories if it appears that they

will function as an effective alternative to some other form of more

time-consuming discovery. As noted elsewhere, where discovery requests

are reasonable, we expect that staff will be inclined to grant them.

55. At the initial status conference, the Commission staff also

will establish a schedule for the remainder of the proceeding, setting

the deadlines for completion of discovery, the pre-hearing submissions

discussed below, the minitrial and any post-hearing submissions.

56. Commenters also raise the issue of whether a defendant in an

Accelerated Docket proceeding should be required to post a bond or to

escrow funds to cover potential damages. Under the First Report &

Order, the Commission may order a defendant who has lost the liability

phase of a bifurcated proceeding to post a bond or escrow funds pending

resolution of damages issues. We decline to modify the escrow rules

issued with the First Report & Order. The staff administering the

Accelerated Docket will retain the same discretion as staff does under

the First Report & Order to require a defendant that has been found

liable to post a bond or escrow funds pending a determination of

damages.

VI. Minitrials

57. The Public Notice sought comment on one of the unique

characteristics under consideration for the Accelerated Docket, a

hearing-type proceeding or ``minitrial'' to be conducted during each

action. The notice stated that such a proceeding likely would offer

certain advantages over the all-paper proceeding currently used for

formal complaints. It noted that, given the need for dispatch on the

Accelerated Docket, the minitrial likely would occur between 40 and 45

days after the filing of a complaint. Furthermore, the Public Notice

stated that, in order to expedite these minitrials, consideration was

being given to allotting to each party a set amount of time in which to

present its case.

A. Utility of Minitrial Process

58. We strongly believe that minitrials held at the end of

Accelerated Docket proceedings will substantially increase the quality

and clarity of the record on which complaints are decided. As

commenters note, live testimony will permit Commission staff to gauge

credibility in a manner that is impossible in paper proceedings.

Furthermore, live testimony will allow the parties and the decision

maker to flesh out both factual and legal issues in a way that cannot

be accomplished within the static limitations of an all-paper process.

A related benefit of live proceedings is that they will permit the

decision maker to focus the parties on those issues that it deems to be

central to the dispute; the decision maker will not be required simply

to accept the dispute in the posture presented by the parties' briefs.

59. Another benefit that we envision as likely to result from

minitrials is the direct participation of parties' employees in the

adjudicative process. We believe that the experience of testifying

during a minitrial may give carriers' employees a more immediate

appreciation of their individual roles in effectuating compliance with

the Act. Thus, having once been called as a witness to explain their

actions, employees whose regular duties may have an impact on their

employer's compliance with the Act may be more inclined to consider

that impact when executing their daily duties. We believe that this

procedure may emphasize the strictures of the Act in a way that cannot

be accomplished under a paper process in which carrier employees'

involvement with the process typically is restricted to the preparation

of an affidavit to be presented by the carrier's counsel.

60. Given the above benefits that we view as likely to arise from

minitrials, we believe that, on balance, the advantages of the process

outweigh the drawbacks identified by some commenters. We recognize that

preparing for a minitrial to be held 40 days after the filing of a

complaint may require counsel for both sides to expend some more effort

and time than required to prepare and submit a brief under our general

complaint rules. However, this increased burden is justified by the

more complete record, and the consequently more informed decision, that

likely will emerge from the process.

B. Structure of Minitrial

61. Within the time limitations discussed below, minitrials will

allow parties to Accelerated Docket proceedings to present all aspects

of their case to the decision making authority. As stated in the Public

Notice, the Accelerated Docket minitrials will not be subject to the

on-the-record hearing requirements of the Administrative Procedure Act.

Nonetheless, where possible, an Administrative Law Judge (``ALJ'') will

preside at each minitrial. The ALJ or other presiding staff will run

the minitrial, administer oaths to witnesses, and will be in charge of

the timing system discussed below. Additionally, where an ALJ

participates in the minitrial process, he will render any necessary

procedural rulings in consultation with the staff member administering

the proceeding who also will be present during the minitrial. Because

the staff's prior participation in the proceeding will have given it

substantial familiarity with the relevant issues, the Commission staff

will serve as the decision maker in Accelerated Docket proceedings, and

it, rather than the ALJ who runs the minitrial, will issue the decision

in the proceeding.

62. The rules we adopt provide for a ``chess-clock'' timing method.

Thus, the ALJ or other Commission personnel who runs the minitrial will

deduct from

[[Page 41442]]

each party's allotment any time that the party's counsel spends

examining witnesses, otherwise presenting evidence or presenting

argument. Additionally, the ALJ may exercise broad discretion in

determining any time penalty or deduction that he deems appropriate for

a party who appears intentionally to be slowing the process or

attempting to delay its opponent's presentation. This timing method

should ensure that minitrials are conducted quickly, in keeping with

the goals of the Accelerated Docket, while maintaining fairness and

allowing both parties an adequate opportunity to present evidence and

argument.

63. Under the rules that we adopt today, the Commission staff has

broad discretion to allocate the amount of time for a minitrial that it

believes to be appropriate based on the complexity of the issues and

the amount and type of evidence that appears reasonably necessary for

an adequate presentation of each party's case. Under the rules, the

staff would be within its discretion to assign either side of a

particular dispute more than half of the allowed time, but we expect

that such instances will be very rare.

64. We believe that a decision maker's observation of witness

demeanor on direct examination is as important and revealing as it is

on cross examination. Similarly, we believe that the filing of written

direct testimony often would result in parties burdening the record

with unnecessary or irrelevant information that simply would slow down

the process of reaching a final decision. Accordingly, we decline to

permit the introduction of written direct testimony on the Accelerated

Docket. Both sides shall rely on live, rather than written,

presentations of their cases at minitrials. We note, however, that the

precise format of a party's presentation during a minitrial will be a

question on which that party has wide latitude.

65. It will aid in the efficient completion of minitrials for the

parties to have notified each other, in advance, of the exhibits they

may introduce and the witnesses they may call during the minitrial. We

therefore require that, three days in advance of the scheduled

beginning of the minitrial, each party shall serve by hand or

facsimile, on all other parties to the proceeding, a copy of their

exhibits and a list of witnesses that they may call. The ALJ presiding

at the minitrial may then hear and rule on any witness or exhibit

objections before the beginning of the hearing itself. As discussed

below, relevance rarely will be an appropriate basis for objection

during minitrials; we also expect that, owing to the administrative

nature of the proceeding, other objections will be minimal.

66. One commenter suggests that we apply certain portions of the

Federal Rules of Evidence to the minitrial process. We decline to adopt

the suggested evidentiary rules. Rather, we believe that the strict

time limitations under which parties will operate in minitrials should

serve to deter and sanction the introduction of extensive amounts of

irrelevant material: the introduction of irrelevant evidence merely

will reduce the time available for other, more pertinent portions of

the proponent's case.

67. We are hopeful that the minitrial process will serve as a more

effective and informative alternative to the briefs that typically are

filed in complaint proceedings. However, we also believe that it will

aid the parties in focusing their presentations, and the responsible

staff in promptly rendering a decision, if the parties submit some

documentation outlining their arguments. Thus, we require that parties

submit proposed findings of fact and conclusions of law two days before

the beginning of the minitrial. In length, these shall not exceed 40

pages per party. Additionally, no more than three days after the

conclusion of the minitrial, parties may, but are not required to,

submit revised proposed findings of fact and conclusions of law to

respond to evidence and legal argument raised during the minitrial.

This second set of submissions should permit the parties a final

opportunity to explain complex technical issues involved in the

proceeding and to rebut their opponents' arguments. This second set of

submissions shall not exceed 20 pages per party.

VII. Damages

68. The Public Notice sought comment on limiting the Accelerated

Docket to bifurcated liability claims, with damages claims being

handled separately under the procedures in the First Report & Order.

The overwhelming majority of commenters support our proposal, although

certain commenters recommend that Commission staff be permitted to

determine damages issues on the Accelerated Docket when it appears to

be appropriate.

69. As we stated above, the staff administering the docket may

consider a complaining party's decision to bifurcate its damages claims

from the liability portion of its case in determining whether to accept

a matter onto the Accelerated Docket. We believe that bifurcation of

the issues in this manner generally will aid in the decision of

complaint proceedings within the expedited timeframe of the new docket.

We agree, however, that parties should have the option at least to

request adjudication of their damages issues on the Accelerated Docket.

Accordingly, the staff administering the docket will retain the

discretion to accept a complaint presenting both liability and damages

issues. Additionally, a complainant that has prevailed on the question

of liability may request Accelerated Docket treatment for its

subsequent damages complaint. We agree with the commenters asserting

that damages issues should be resolved as quickly as possible after a

finding of liability; however, we decline the invitation to set a

deadline for the conclusion of the damages phase when the damages phase

is not accepted onto the Accelerated Docket.

VIII. Other Issues

70. The Public Notice also requested comment on whether it would be

necessary to modify any other rules in order to accommodate the time

constraints of the Accelerated Docket. Commenters have made several

recommendations, including that we: (1) Limit the effect of Accelerated

Docket decisions on future cases; (2) allow compulsory counterclaims to

be pursued on the Accelerated Docket; and (3) issue a formal notice of

proposed rulemaking in this proceeding.

71. Precedential Value of Accelerated Docket Proceedings: Bell

Atlantic suggests that rulings in Accelerated Docket proceedings be

limited to the particular case in question and that they be accorded no

preclusive or precedential effect in other proceedings or other forums.

We decline to impose such a limit on Accelerated Docket proceedings.

Rather, staff rulings on the docket will have the same precedential

value as any other adjudicative decision issued under delegated

authority.

72. Counterclaims: CompTel suggests that counterclaims be permitted

in Accelerated Docket proceedings if they arise from the same

transaction or occurrence, and would be eligible for the Accelerated

Docket if brought separately. In the First Report & Order, we

prohibited all counterclaims in complaint proceedings, requiring that

such claims be filed as separate, independent actions. We took this

action to ensure that complaint proceedings would be resolved within

the statutory deadlines in the 1996 Act. This reasoning applies with

even greater force to the Accelerated Docket proceedings, which we

expect to be resolved even more quickly than required by the statutory

deadlines.

[[Page 41443]]

Defendants will be required to file any counterclaims that they may

have as separate actions for which they will be required independently

to seek inclusion on the Accelerated Docket.

73. Need for Formal Notice of Proposed Rulemaking: BellSouth

contends that the notice provisions of the Administrative Procedure Act

(``APA'') require that, before issuing rules to govern the Accelerated

Docket, we must issue a formal notice of proposed rulemaking, including

specific proposed rules. We disagree. Section 553(b) of the APA

requires that an agency afford interested parties adequate notice of,

and an opportunity to comment on, the provisions that appear in the

agency's final regulations. The Public Notice appeared in the Federal

Register, and it contained adequate notice of the provisions we adopt

today. Accordingly, we believe that no further notice is required to

comply with the notice provisions of the APA.

IX. Review by the Commission

74. Staff decisions issued on delegated authority after the

minitrial will be, pursuant to our rules, immediately effective and

binding on the parties. A party to the proceeding that seeks to

challenge such a decision may do so by filing its application for

review. Applications for review of Accelerated Docket staff decisions

based on delegated authority will be due 15 calendar days after the

release date of the staff decision. As under our current rules, the

opposition to the application for review will be due 15 calendar days

after the application for review is filed, and the party seeking review

may file its reply 10 calendar days after the due date of the

opposition.

75. Alternatively, certain other Accelerated Docket proceedings

will raise issues that may not be decided on delegated authority. Such

staff decisions, issued after the minitrial, will not be immediately

effective. Rather, these decisions will be recommended decisions, which

the Commission will either adopt or modify. A party to the proceeding

that seeks to challenge the staff decision before the Commission may do

so by filing its comments on the recommended decision according to the

same schedule as that applicable for applications for review on the

Accelerated Docket. Opposition and reply comments similarly are

permitted on the same schedule as that for applications for review.

76. In the event that neither party files comments to challenge a

recommended staff decision in an Accelerated Docket proceeding, the

Commission will issue its order either adopting or modifying the staff

decision within forty-five days of its release. If the staff's

recommended decision is challenged by any party to the proceeding, the

Commission will issue its order either adopting or modifying the

decision no more than thirty days after the filing of the final

comments on the decision.

77. The Commission may summarily affirm a staff decision from the

Accelerated Docket before it for review. Additionally, in cases where

it appears that argument would aid in our decision, we may schedule an

oral argument before the full Commission.

X. Conclusion

78. In this Second Report & Order, we amend our rules governing

formal complaint proceedings to create an Accelerated Docket, which

will be administered by the Enforcement Division of the Common Carrier

Bureau. The rules of practice and procedure relating to the Accelerated

Docket will promote competition in all telecommunications markets by

providing an expedited process for resolving complaints of

unreasonable, discriminatory, or otherwise unlawful conduct by

telecommunications carriers.

79. We recognize that many of the procedures we adopt for the

Accelerated Docket are, to a substantial extent, new and untried.

Accordingly, we expect that both staff and the Commission will

accumulate valuable experience in the implementation of these new

rules. We will monitor closely the effect and utility of the

Accelerated Docket procedures; and we expect to receive periodic

reports from the Common Carrier Bureau regarding its administration of

the new docket. Based on this information and within a year of the

effective dates of these rules, we will consider revisions to these

procedures to make them more effective.

XI. Final Regulatory Flexibility Analysis

80. As required by the Regulatory Flexibility Act (``RFA''), an

Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in

the notice of proposed rulemaking in this docket. The Commission sought

written public comment on the proposals in the NPRM, including comment

on the IRFA. The Commission has prepared this Final Regulatory

Flexibility Analysis of the possible significant economic impact on

small entities of the rules promulgated in this Second Report & Order.

This present Final Regulatory Flexibility Analysis (``FRFA'') conforms

to the RFA.

A. Need for and Objectives of the Implementation of the

Telecommunications Act of 1996, Amendment of Rules Governing Procedures

to be Followed When Formal Complaints Are Filed Against Common

Carriers, Second Report and Order, and the Rules Adopted Herein

81. The Commission is issuing this Second Report & Order to create

an Accelerated Docket designed to provide for the prompt resolution of

carrier-related disputes and to carriers to obtain more extensive

discovery from their opponents than has been routinely available in

formal complaint proceedings. Additionally, the new docket will provide

for the full and effective presentation of each party's case in a

hearing-type proceeding. Some of the requirements adopted in this

Second Report & Order may have a significant impact on a substantial

number of small businesses as defined by Section 601(3) of the RFA.

Generally, the amended rules will: (1) Require parties to engage in

staff-supervised pre-filing settlement discussions, (2) modify the form

of initial pleadings, (3) shorten filing deadlines, (4) modify the

discovery process, (5) provide for the live presentation of evidence to

the decision maker, and (6) require provide for expedited briefing and

review of staff decisions.

B. Summary of Significant Issues Raised by the Public Comments in

Response to the IRFA

82. In the IRFA, the Commission found that the rules we proposed to

adopt in this proceeding may have a significant impact on a substantial

number of small businesses as defined by section 601(3) of the RFA. The

IRFA solicited comment on alternatives to our proposed rules that would

minimize the impact on small entities consistent with the objectives of

this proceeding. No comments were submitted directly in response to the

IRFA. However, as described below in Section 5, we have taken into

account those portions of the rules that appear likely to affect small

entities.

C. Description and Estimate of the Number of Small Entities to Which

the Rules Adopted in the Report and Order in CC Docket No. 96-238 Will

Apply

83. We first discuss the estimated number of potential

complainants, which may include entities that are not telephone

companies. Next we discuss generally the estimated number of potential

defendants, which would be included in the total number of small

telephone companies falling within the

[[Page 41444]]

SBA definitions of small business concerns and small businesses. Then,

we discuss the number of small businesses within the SIC subcategories,

and attempt further to refine those estimates to correspond with the

categories of telephone companies that are commonly used under our

rules.

1. Potential Complainants

84. Section 208(a) provides that formal complaints against a common

carrier may be filed by ``[a]ny person, any body politic or municipal

organization.'' Beyond this definition, the FCC has no control or

information regarding the filing frequency of complaints, nor

identities of parties that will file complaints. The filing of

complaints depends entirely upon the complainant's perception that it

has a cause of action against a common carrier subject to the Act, as

amended, and it is the complainant's decision to file its complaint

with the FCC. Therefore we are unable at this time to estimate the

number of future complainants that would qualify as small business

concerns under the SBA's definition.

85. As noted, the RFA includes ``small businesses,'' ``small

organizations'' (non-profits), and ``small governmental

jurisdictions.'' Nationwide, there are 4.44 million small business

firms, according to SBA reporting data. A small organization is

generally ``any not-for-profit enterprise which is independently owned

and operated and is not dominant in its field.'' Nationwide, there are

275,801 small organizations. Last, ``small governmental jurisdiction''

generally means ``governments of cities, counties, towns, townships,

villages, school districts, or special districts, with a population of

less than 50,000.'' As of 1992, there were 85,006 such jurisdictions in

the United States.

2. Potential Defendants

86. Estimate of Potential Defendants that may be Classified as

Small Businesses. Section 208(a) provides for the filing of formal

complaints for ``anything done or omitted to be done by any common

carrier subject to this Act.'' The FCC has no control as to the filing

frequency of complaints. This inability to predict the number of future

defendants necessitates conducting this FRFA based on the number of

potential small business defendants, which is the number of common

carriers that qualify as small business concerns under the SBA's

definition.

87. Total Number of Telephone Companies Affected. The decisions and

rules adopted herein may have a significant effect on a substantial

number of small telephone companies identified by the SBA. The United

States Bureau of the Census (``Census Bureau'') reports that, at the

end of 1992, there were 3,497 firms engaged in providing telephone

service, as defined therein, for at least one year. It seems reasonable

to conclude, therefore, that no more than 3,497 telephone service firms

are small entity telephone service firms or small incumbent LECs that

may be affected by this Order. We estimate below the potential

defendants affected by this order by service category.

88. Wireline Carriers and Service Providers. Of the 2,321 non-

radiotelephone companies listed by the Census Bureau, 2,295 companies

(or, all but twenty-six) were reported to have no more than 1,000

employees. Consequently, we estimate that there are no more than 2,295

small entity telephone communications companies (other than

radiotelephone companies) that may be affected by the actions taken in

this Report and Order.

89. Non-LEC wireline carriers. According to our most recent data,

we estimate that there are no more than 130 small entity IXCs; fifty-

seven small entity CAPs; twenty-five small entity OSPs; 271 small

entity pay telephone service providers; and 260 small entity providers

of resale telephone service; and thirty ``other'' toll carriers that

might be affected by the actions and rules adopted in this Report and

Order.

90. Local Exchange Carriers. According to our most recent data we

estimate that there are no more than 1,347 small LECs (including small

incumbent LECs) that may be affected by the actions taken in this

Report and Order.

91. Radiotelephone (Wireless) Carriers: We estimate that there are

no more than 1,164 small entity radiotelephone companies that might be

affected by the actions and rules adopted in this Report and Order.

92. Cellular and Mobile Service Carriers: We estimate that there

are no more than 792 small entity Cellular Service Carriers and no more

than 138 small entity Mobile Service Carriers that might be affected by

the actions and rules adopted in this Report and Order.

93. Broadband PCS Licensees. Based on available data, we conclude

that the number of broadband PCS licensees that might be affected by

the decisions in this Report and Order includes, at a minimum, the 183

winning bidders that qualified as small entities in the Blocks C

through F broadband PCS auctions.

D. Description of Projected Reporting, Recordkeeping and Other

Compliance Requirements

94. Below, we analyze the projected reporting, recordkeeping, and

other compliance requirements that may apply to small entities and

small incumbent LECs, and we mention some of the skills needed to meet

these new requirements. Overall, we anticipate that the impact of these

rules will be beneficial to small businesses and other filers. By

requiring supervised pre-filing settlement discussions, and offering a

faster alternative for the resolution of competitive disputes, these

rules will assist in the settlement of disputes without litigation, and

they will result in the speedier disposition of complaints that are

actually filed. Moreover, Commission staff retains the discretion to

refuse to accept a complaint proceeding onto the Accelerated Docket if

it appears that such acceptance would place an inordinately high burden

on one party, including small business entities.

95. Supervised Settlement Discussions. The amended rules will

require a prospective complainant to notify Commission staff of its

intention to file a complaint and then to participate in staff-

supervised, pre-filing settlement discussions before its complaint,

once filed, will be accepted onto the Accelerated Docket. Similarly,

the amended rules require a defendant seeking admission to the

Accelerated Docket to submit its written request to the staff and then

to participate in any supervised settlement discussions that the staff

deems appropriate. Although these supervised negotiation requirements

may delay slightly a complainant's filing of a formal complaint or the

progress of a proceeding in which a complaint has already been filed,

we conclude that these requirements will serve to settle or narrow

disputes, or to facilitate the compilation and exchange of relevant

documentation or other information prior to the filing of a formal

complaint with the Commission.

96. Pleadings and Discovery. The amended rules require complaints

and answers to be accompanied by copies of all documents within the

filing party's possession, custody or control which are likely to bear

significantly on any claim or defense in the proceeding. The defendant

must file its answer within ten days after service of the complaint. No

separate reply pleading shall be permitted, but complainants that would

otherwise file a reply may include that material in their pre-status-

conference filing. In addition to the automatic

[[Page 41445]]

document production that will accompany both parties' initial

pleadings, parties may include in their pre-status-conference filings,

requests for additional discovery, including requests for depositions,

interrogatories or additional document production.

97. Status Conferences. An initial status conference will take

place ten calendar days after the filing of the answer unless otherwise

ordered by the staff. Before this status conference, the parties shall

have conferred regarding: (1) Discovery; (2) issues in dispute; (3)

facts to which they can stipulate; (4) factual and legal issues in

dispute. The parties shall submit, two days before the initial status

conference, a joint statement of stipulated facts and, if possible,

joint statements regarding agreed discovery and disputed issues. Where

opposing parties cannot agree on discovery issues or on a joint

statement of disputed issues, each party shall submit, two days before

the status conference, a separate statement on these issues.

98. These amended rules may place a greater burden on parties,

including small business entities, to file their answers and provide

copies of discoverable documents to their opponents within a short

period of time. However, in many other respects, the rules pleading,

discovery and status conference rules under the Accelerated Docket are

significantly less burdensome than under the rules applicable more

generally to formal complaint proceedings. For example, it will be

substantially less burdensome for defendant simply to provide copies of

the appropriate documents to their opponents than it will be to compile

the document inventory required in other formal complaint proceedings.

Additionally, in light of the substantial time that it may take to

negotiate joint statements of disputed issues, parties on the

Accelerated Docket are permitted to submit separate statements

containing this information. These rules will enable the Commission to

resolve many preliminary issues efficiently at the initial status

conference and thereby prevent the parties from wasting resources

through delay. Furthermore, the rules will enable the parties quickly

to receive substantial discovery through an automatic document

production. This should substantially speed parties' preparation of

their cases.

99. Minitrials and Petitions for Review. Between forty and forty-

five days after a complaint is filed in an Accelerated Docket

proceeding, the parties will participate in a minitrial proceeding at

which they will present their case through live testimony and/or

argument of counsel. Parties will be required to file proposed findings

of fact and conclusions of law two days before the minitrial; rebuttal

proposed findings of fact and conclusions of law may be filed three

days after the conclusion of the minitrial. Once the staff has issued a

decision, any application for review by the Commission will be due

fifteen days after the release of the decision. Oppositions to the

application for review will be due fifteen days after the application;

and replies in support of the application will be due ten days

thereafter.

100. These amended rules may place a burden on parties, including

small business entities, to prepare the required proposed findings of

fact and conclusions of law and to prepare and present their cases at

the minitrial. However, this burden will be offset by a corresponding

reduction in the work that the parties would have been required to

expend preparing briefs under the generally applicable formal complaint

rules. Additionally, the compressed briefing deadlines will impose some

additional burden on parties filing applications of review of staff

decisions. These rules will permit parties to present their cases

directly to the Commission staff and to respond immediately to

questions or concerns that the staff may have. Furthermore, the

compressed briefing schedule for applications for review will ensure

that the review process for Accelerated Docket proceedings progresses

quickly, thereby affording the parties a decision by the full

Commission in as short a time as possible.

101. As noted above, Commission staff retains the discretion to

decline to admit a formal complaint proceeding to the Accelerated

Docket where it appears that such admission would place an unreasonable

burden on a party to the proceeding, including a small business entity.

It is also important to note that these rules apply only to section 208

complaints that are filed with the Commission. Complainants wishing to

participate in a less accelerated process, for example, may file their

complaints in federal district court.

E. Steps Taken to Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered

102. These amended rules may place a greater burden on a small

business entity to provide greater discovery early in the process and

to litigate their cases more quickly than in the past. However, we

conclude that the rules do not significantly alter the level of

evidentiary and legal support that would be ultimately required of

parties in formal complaint actions pursuant to the past rules.

Additionally, potentially higher initial costs may be somewhat offset

by the prompt resolution of complaints and the avoidance of protracted

and costly discovery proceedings and briefing requirements. It has been

noted, for example, that the overall litigation costs of ``rocket

docket'' cases in the U.S. District Court for the Eastern District of

Virginia are lower than the costs of cases that take longer to resolve.

Indeed, by requiring better and more complete submissions earlier in

the process, these amended rules reduce the need for discovery and

other information filings, thereby significantly reducing the burden on

small business entities.

103. Overall, we conclude that there will be a significant positive

economic impact on small entity carriers that, as a result of the new

Accelerated Docket, will find their complaints resolved more

expeditiously than in the past. The establishment of these rules of

practice and procedure, by providing a forum for prompt resolution of

complaints of unreasonable, discriminatory, or otherwise unlawful

conduct by BOCs and other telecommunications carriers, will foster

robust competition in all telecommunications markets.

F. Report to Congress

104. The Commission will send a copy of the Amendment of Rules

Governing Procedures to be Followed When Formal Complaints Are Filed

Against Common Carriers, Second Report & Order, including this FRFA, in

a report to be sent to Congress pursuant to the Small Business

Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801

(a)(1)(A). A summary of this Report and Order and this FRFA will be

sent to the Chief Counsel for Advocacy of the Small Business

Administration.

XII. Ordering Clauses

105. Accordingly, it is ordered that pursuant to sections 1, 4,

201-205, 208, 260, 271, 274, and 275 of the Communications Act of 1934,

as amended, 47 U.S.C. 151, 154, 201-205, 208, 260, 271, 274, and 275,

the policies, rules, and requirements set forth herein are adopted.

106. It is further ordered that the Second Report & Order is

adopted and will become effective October 5, 1998, except for

Secs. 1.115, 1.721, 1.724, 1.726, 1.729, 1.730 and 1.733, which contain

information collection requirements that are not effective until

approved by the Office of Management and Budget. The FCC will publish a

document in the Federal Register announcing the effective date for

those sections. Written

[[Page 41446]]

comments by the public on the information collections are due September

3, 1998.

107. It is further ordered that the Commission's Office of Public

Affairs shall send a copy of this Second Report & Order, including the

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

Administration in accordance with paragraph 603(a) of the Regulatory

Flexibility Act, Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601, et seq.

(1981).

List of Subjects in 47 CFR Part 1

Communications common carriers.

Federal Communications Commission,

Magalie Roman Salas,

Secretary.

Rule Changes

Part 1 of title 47 of the Code of Federal Regulations is amended as

follows:

PART 1--PRACTICE AND PROCEDURE

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

Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),

155, 225, and 303(r).

2. Section 1.115 is amended by adding paragraph (e)(4) to read as

follows:

Sec. 1.115 Application for review of action taken pursuant to

delegated authority.

* * * * *

(e) * * *

(4) Applications for review of final staff decisions issued on

delegated authority in formal complaint proceedings on the Common

Carrier Bureau's Accelerated Docket (see, e.g., Sec. 1.730) shall be

filed within 15 days of public notice of the decision, as that date is

defined in Sec. 1.4(b). These applications for review, oppositions and

replies in Accelerated Docket proceedings shall be served on parties to

the proceeding by hand or facsimile transmission.

* * * * *

3. Section 1.720 is amended by revising the introductory paragraph

to read as follows:

Sec. 1.720 General pleading requirements.

Formal complaint proceedings are generally resolved on a written

record consisting of a complaint, answer, and joint statement of

stipulated facts, disputed facts and key legal issues, along with all

associated affidavits, exhibits and other attachments. Commission

proceedings may also require or permit other written submissions such

as briefs, written interrogatories, and other supplementary documents

or pleadings. Those formal complaint proceedings handled on the Common

Carrier Bureau's Accelerated Docket are subject to pleading and

procedural rules that differ in some respects from the general rules

for formal complaint proceedings.

* * * * *

4. Section 1.721 is amended by revising the section heading and the

introductory text of paragraph (a), and by adding paragraph (e) to read

as follows:

Sec. 1.721 Format and content of complaints.

(a) Subject to paragraph (e) of this section governing Accelerated

Docket proceedings, a formal complaint shall contain:

* * * * *

(e) Complaints on the Accelerated Docket. For the purpose of this

paragraph (e), the term document also shall include data compilations

and tangible things.

(1) Formal complaints that have been accepted onto the Accelerated

Docket shall conform to the requirements set out in this section with

the following listed exceptions:

(i) The requirement in Sec. 1.720(c) and paragraphs (a)(5) and

(a)(11) of this section that factual assertions be supported by

affidavit shall not apply to complaints on the Accelerated Docket.

Nevertheless, allegations of material fact, whether based on personal

knowledge or information and belief, that cannot be supported by

documentation remain subject to the provisions of Sec. 1.52.

(ii) Complaints on the Accelerated Docket are not required to

include proposed findings of fact, conclusions of law, and legal

analysis relevant to the claims and arguments set forth in the

complaint, as required in paragraph (a)(6) of this section.

Nevertheless, complaints on the Accelerated Docket shall fully set out

the facts and legal theories on which the complainant premises its

claims.

(iii) In light of the requirement for staff-supervised settlement

negotiations in Sec. 1.730(b), complaints on the Accelerated Docket are

not required to include a certification that the complainant has

discussed or attempted to discuss the possibility of settlement with

each defendant, as required in paragraph (a)(8) of this section.

(iv) In light of the automatic document production required in

Sec. 1.729(i)(1), complaints on the Accelerated Docket are not required

to include a description of all relevant documents in the complainant's

possession, custody or control, as required in paragraph (a)(10)(ii) of

this section.

(v) Complaints on the Accelerated Docket are not required to

provide the description, required in paragraph (a)(10)(iii) of this

section, of the manner in which the complainant identified persons with

knowledge of, and documents relevant to, the dispute.

(2) Formal complaints that have been accepted onto the Accelerated

Docket will comply with the following requirements in addition to those

requirements generally applicable in formal complaint proceedings:

(i) As required in Sec. 1.729(i)(1), complaints on the Accelerated

Docket shall be accompanied, when served on defendants, by copies of

documents, within the complainant's possession, custody or control,

that are likely to bear significantly on the issues raised in the

complaint. Unless otherwise directed, these documents shall not be

filed with the Commission.

(ii) Complaints on the Accelerated Docket will bear the following

notation in bold typeface above the normal caption on the first page:

``Accelerated Docket Proceeding: Answer Due Within Ten Days of Service

Date.''

5. Section 1.724 is amended by revising paragraph (a) and by adding

paragraph (k) to read as follows:

Sec. 1.724 Answers.

(a) Subject to paragraph (k) of this section governing Accelerated

Docket proceedings, any carrier upon which a copy of a formal complaint

is served shall answer such complaint in the manner prescribed under

this section within twenty days of service of the formal complaint by

the complainant, unless otherwise directed by the Commission.

* * * * *

(k) Accelerated Docket Proceedings. For the purpose of this

paragraph (k), the term document also shall include data compilations

and tangible things.

(1) Any party named as a defendant in an Accelerated Docket formal

complaint shall answer such complaint in the manner prescribed under

this section within ten days of service of the complaint by the

complainant, unless otherwise directed by the Commission. Except as set

forth in this paragraph (k), answers in Accelerated Docket proceedings

shall comply with the requirements of this section.

(2) The requirement in Sec. 1.720(c) and paragraph (g) of this

section that factual assertions be supported by affidavit shall not

apply to answers in Accelerated Docket proceedings. Nevertheless,

allegations of material fact, whether based on personal

[[Page 41447]]

knowledge or information and belief, that cannot be supported by

documentation remain subject to the provisions of Sec. 1.52.

(3) Answers on the Accelerated Docket are not required to include

proposed findings of fact, conclusions of law, and legal analysis

relevant to the defenses and arguments set forth in the answer, as

required in paragraph (c) of this section. Nevertheless, answers on the

Accelerated Docket shall fully set out the facts and legal theories on

which the defendant premises its defenses.

(4) In light of the requirement for staff-supervised settlement

negotiations required in Sec. 1.730(b), answers on the Accelerated

Docket are not required to include a certification that the defendant

has discussed, or attempted to discuss, the possibility of settlement

with the complainant, as required in paragraph (h) of this section.

(5) As required in Sec. 1.729(i)(1), answers on the Accelerated

Docket shall be accompanied, when served on complainants, by copies of

documents, within the defendant's possession, custody or control, that

are likely to bear significantly on the issues raised in the

proceeding. Unless otherwise directed, these documents shall not be

filed with the Commission. In light of this automatic document

production requirement, answers on the Accelerated Docket are not

required to include a description of all relevant documents in the

defendant's possession, custody or control, as required in paragraph

(f)(2) of this section.

(6) Answers on the Accelerated Docket are not required to provide

the description, required in paragraph (f)(3) of this section, of the

manner in which the defendant identified persons with knowledge of, and

documents relevant to, the dispute.

(7) In Accelerated Docket proceedings, the defendant, as required

in Sec. 1.729(i)(1), shall serve, contemporaneously with its answer,

the complainant(s) with copies of documents, within the defendant's

possession, custody or control, that are likely to bear significantly

on the issues raised in the complaint and/or the answer.

6. Section 1.726 is amended by revising paragraph (a) and adding

paragraph (g) to read as follows:

Sec. 1.726 Replies.

(a) Subject to paragraph (g) of this section governing Accelerated

Docket proceedings, within three days after service of an answer

containing affirmative defenses presented in accordance with the

requirements of Sec. 1.724(e), a complainant may file and serve a reply

containing statements of relevant, material facts that shall be

responsive to only those specific factual allegations made by the

defendant in support of its affirmative defenses. Replies which contain

other allegations or arguments will not be accepted or considered by

the Commission.

* * * * *

(g) Accelerated Docket Proceedings. For the purpose of this

paragraph (g), the term document also shall include data compilations

and tangible things.

(1) The filing of a separate pleading to reply to affirmative

defenses is not permitted in Accelerated Docket proceedings.

Complainants in such proceedings may include, in the Sec. 1.733(i)(4)

pre-status-conference filing, those statements that otherwise would

have been the subject of a reply.

(2) In Accelerated Docket proceedings, the failure to reply, in the

pre-status-conference filing, to an affirmative defense shall be deemed

an admission of such affirmative defense and of any facts supporting

such affirmative defense that are not specifically contradicted in the

complaint.

(3) If a complainant replies to an affirmative defense in its

Sec. 1.733(i)(4), pre-status-conference filing, it shall include in

that filing the information, required by paragraph (d)(1) of this

section, identifying individuals with firsthand knowledge of the facts

alleged in the reply.

(4) An Accelerated Docket complainant that replies to an

affirmative defense in its Sec. 1.733(i)(4), pre-status-conference

filing also shall serve on the defendant, at the same time as that

filing, those documents in the complainant's possession, custody or

control that were not previously produced to the defendant and that are

likely to bear significantly on the issues raised in the reply. Such a

complainant is not required to comply with the remainder of the

requirements in paragraphs (d) and (e) of this section.

7. Section 1.727 is amended by revising paragraph (a) to read as

follows:

Sec. 1.727 Motions.

(a) A request to the Commission for an order shall be by written

motion, stating with particularity the grounds and authority therefor,

and setting forth the relief or order sought.

* * * * *

8. Section 1.729 is amended by revising paragraph (a) and adding

paragraph (i) to read as follows:

Sec. 1.729 Discovery.

(a) Subject to paragraph (i) of this section governing Accelerated

Docket proceedings, a complainant may file with the Commission and

serve on a defendant, concurrently with its complaint, a request for up

to ten written interrogatories. A defendant may file with the

Commission and serve on a complainant, during the period starting with

the service of the complaint and ending with the service of its answer,

a request for up to ten written interrogatories. A complainant may file

with the Commission and serve on a defendant, within three calendar

days of service of the defendant's answer, a request for up to five

written interrogatories. Subparts of any interrogatory will be counted

as separate interrogatories for purposes of compliance with this limit.

Requests for interrogatories filed and served pursuant to this

procedure may be used to seek discovery of any non-privileged matter

that is relevant to the material facts in dispute in the pending

proceeding, provided, however, that requests for interrogatories filed

and served by a complainant after service of the defendant's answer

shall be limited in scope to specific factual allegations made by the

defendant in support of its affirmative defenses. This procedure may

not be employed for the purpose of delay, harassment or obtaining

information that is beyond the scope of permissible inquiry related to

the material facts in dispute in the pending proceeding.

* * * * *

(i) Discovery in Accelerated Docket proceedings.

(1) Each party to an Accelerated Docket proceeding shall serve,

with its initial pleading and with any reply statements in the pre-

status-conference filing (see Sec. 1.726(g)(1)), copies of all

documents in the possession, custody or control of the party that are

likely to bear significantly on any claim or defense. For the purpose

of this paragraph (i), document also shall include data compilations

and tangible things. A document is likely to bear significantly on a

claim or defense if it:

(i) Appears likely to have an influence on, or affect the outcome

of, a claim or defense;

(ii) Reflects the relevant knowledge of persons who, if their

potential testimony were known, might reasonably be expected to be

deposed or called as a witness by any of the parties;

(iii) Is something that competent counsel would consider reasonably

necessary to prepare, evaluate or try a claim or defense; or

[[Page 41448]]

(iv) Would not support the disclosing party's contentions.

(2) In their Sec. 1.733(i)(4) pre-status-conference filings,

parties to Accelerated Docket proceedings may request the production of

additional documents. In their Sec. 1.733(i)(4) filings, parties may

also seek leave to conduct a reasonable number of depositions,

including depositions of expert witnesses, if any. When requesting

additional discovery, each party shall be prepared at the status

conference to justify its requests by identifying the specific issue or

issues on which it expects to obtain evidence from each request.

(3) Interrogatories shall not be routinely granted in Accelerated

Docket proceedings. A party to an Accelerated Docket proceeding that

prefers interrogatories to the other forms of available discovery, for

reasons of convenience or expense, may seek leave in its

Sec. 1.733(i)(4) pre-status-conference filing to propound a limited

number of interrogatories.

(4) Expert Witnesses.

(i) Any complainant in an Accelerated Docket proceeding that

intends to rely on expert testimony for a purpose other than to rebut a

defendant's expert evidence, shall identify its expert witnesses in the

information designation required by Sec. 1.721(a)(10)(i). In its

Sec. 1.721(a)(10)(i) information designation, such a complainant shall

also provide its expert statement. For purposes of this paragraph

(i)(4), an expert statement shall include a brief statement of the

opinions to be expressed by the expert, the basis and reasons therefor

and any data or other information that the witness considered in

forming her opinions.

(ii) Any defendant in an Accelerated Docket proceeding that intends

to rely on expert testimony shall identify its expert witnesses in the

information designation required by Sec. 1.724(f)(1). Such a defendant

shall provide its expert statement with its Sec. 1.733(i)(4), pre-

status-conference filing.

(iii) Any complainant in an Accelerated Docket proceeding that

intends to rely on previously undisclosed expert testimony to rebut any

portion of the defendant's case shall identify the expert and provide

the appropriate expert statement at the initial status conference.

(iv) Expert witnesses shall be subject to deposition in Accelerated

Docket proceedings under the same rules and limitations applicable to

fact witnesses.

9. Section 1.730 is revised to read as follows:

Sec. 1.730 The Common Carrier Bureau's Accelerated Docket.

(a) Parties to formal complaint proceedings within the

responsibility of the Common Carrier Bureau (see Sec. 0.291 of this

chapter) may request inclusion on the Bureau's Accelerated Docket. As

set out in Secs. 1.720--1.736, proceedings on the Accelerated Docket

are subject to shorter pleading deadlines and certain other procedural

rules that do not apply to other formal complaint proceedings before

the Common Carrier Bureau.

(b) Any party that contemplates filing a formal complaint may

submit a request to the Chief of the Common Carrier Bureau's

Enforcement Division, either by phone or in writing, seeking inclusion

of its complaint, once filed, on the Accelerated Docket. In appropriate

cases, Commission staff shall schedule and supervise pre-filing

settlement negotiations between the parties to the dispute. If the

parties do not resolve their dispute and the matter is accepted for

handling on the Accelerated Docket, the complainant shall file its

complaint with a letter stating that it has gained admission to the

Accelerated Docket. When it files its complaint, such a complainant

shall also serve a copy of its complaint on the Commission staff that

supervised the pre-filing settlement discussions.

(c) Within five days of receiving service of a complaint, any

defendant in a formal complaint proceeding may submit by facsimile or

hand delivery, to the Chief of the Common Carrier Bureau's Enforcement

Division, a request seeking inclusion of its proceeding on the

Accelerated Docket. Such a defendant contemporaneously shall transmit,

in the same manner, a copy of its request to all parties to the

proceeding. A defendant submitting such a request shall file and serve

its answer in compliance with the requirements of Sec. 1.724(k), except

that the defendant shall not be required to serve with its answer the

automatic document production required by Secs. 1.724(k)(7) and

1.729(i)(1). In proceedings accepted onto the Accelerated Docket at a

defendant's request, the Commission staff will conduct supervised

settlement discussions as appropriate. After accepting such a

proceeding onto the Accelerated Docket, Commission staff will establish

a schedule for the remainder of the proceeding, including the parties'

Sec. 1.729(i)(1) automatic production of documents.

(d) During the thirty days following the effective date of these

rules, any party to a pending formal complaint proceeding in which an

answer has been filed or is past due may seek admission of the

proceeding to the Accelerated Docket by submitting a request by

facsimile or hand delivery to the Chief of the Common Carrier Bureau's

Enforcement Division, with facsimile copies to all other parties to the

proceeding by the same mode of transmission. If a pending proceeding is

accepted onto the Accelerated Docket, Commission staff will conduct

supervised settlement discussions if appropriate and establish a

schedule for the remainder of the proceeding, including the parties'

Sec. 1.729(i)(1) automatic production of documents if necessary.

(e) In determining whether to admit a proceeding onto the

Accelerated Docket, Commission staff may consider factors from the

following, non-exclusive list:

(1) Whether it appears that the parties to the dispute have

exhausted the reasonable opportunities for settlement during the staff-

supervised settlement discussions.

(2) Whether the expedited resolution of a particular dispute or

category of disputes appears likely to advance competition in the

telecommunications market.

(3) Whether the issues in the proceeding appear suited for decision

under the constraints of the Accelerated Docket. This factor may

entail, inter alia, examination of the number of distinct issues raised

in a proceeding, the likely complexity of the necessary discovery, and

whether the complainant bifurcates any damages claims for decision in a

separate proceeding. See Sec. 1.722(b).

(4) Whether the complainant states a claim for violation of the

Act, or Commission rule or order that falls within the Commission's

jurisdiction.

(5) Whether it appears that inclusion of a proceeding on the

Accelerated Docket would be unfair to one party because of an

overwhelming disparity in the parties' resources.

(6) Such other factors as the Commission staff, within its

substantial discretion, may deem appropriate and conducive to the

prompt and fair adjudication of complaint proceedings.

(f) If it appears at any time that a proceeding on the Accelerated

Docket is no longer appropriate for such treatment, Commission staff

may remove the matter from the Accelerated Docket either on its own

motion or at the request of any party.

(g) Minitrials.

(1) In Accelerated Docket proceedings, the Commission may conduct a

minitrial, or hearing-type proceeding, as an alternative to requiring

that parties submit briefs in support of their cases. Minitrials

[[Page 41449]]

typically will take place between 40 and 45 days after the filing of

the complaint. A Commission Administrative Law Judge (``ALJ'')

typically will preside at the minitrial, administer oaths to witnesses,

and time the parties' presentation of their cases. In consultation with

the Commission staff, the ALJ will rule on objections or procedural

issues that may arise during the course of the minitrial.

(2) Before a minitrial, each party will receive a specific time

allotment in which it may present evidence and make argument during the

minitrial. The ALJ or other Commission staff presiding at the minitrial

will deduct from each party's time allotment any time that the party

spends presenting either evidence or argument during the proceeding.

The presiding official shall have broad discretion in determining any

time penalty or deduction for a party who appears to be intentionally

delaying either the proceeding or the presentation of another party's

case. Within the limits imposed by its time allotment, a party may

present evidence and argument in whatever manner or format it chooses,

provided, however, that the submission of written testimony shall not

be permitted.

(3) Three days before a minitrial, each party to a proceeding shall

serve on all other parties a copy of all exhibits that the party

intends to introduce during the minitrial and a list of all witnesses,

including expert witnesses, that the party may call during the

minitrial. Service of this material shall be accomplished either by

hand or by facsimile transmission. Objections to any exhibits or

proposed witness testimony will be heard before the beginning of the

minitrial.

(4) No party will be permitted to call as a witness in a minitrial,

or otherwise offer evidence from, an individual in that party's employ,

unless the individual appears on the party's information designation

(see Secs. 1.721(a)(10)(i) or 1.724(f)(1)) with a general description

of the issues on which she will offer evidence. No party will be

permitted to present expert evidence unless the party has complied

fully with the expert-disclosure requirements of Sec. 1.729(i)(4). The

Commission may permit exceptions to the rules in this paragraph (g)(4)

for good cause shown.

(5) Two days before the beginning of the minitrial, parties shall

file proposed findings of fact and conclusions of law. These

submissions shall not exceed 40 pages per party. Within three days

after the conclusion of the minitrial, parties may submit revised

proposed findings of fact and conclusions of law to meet evidence

introduced or arguments raised at the minitrial. These submissions

shall not exceed 20 pages per party.

(6) The parties shall arrange for the stenographic transcription of

minitrial proceedings so that transcripts are available and filed with

the Commission no more than three days after the conclusion of the

minitrial. Absent an agreement to the contrary, the cost of the

transcript shall be shared equally between the parties to the

proceeding.

(h) Applications for review of staff decisions issued on delegated

authority in Accelerated Docket proceedings shall comply with the

filing and service requirements in Sec. 1.115(e)(4). In those

Accelerated Docket proceedings which raise issues that may not be

decided on delegated authority (see 47 U.S.C. 155(c)(1); 47 CFR

0.291(d)), the staff decision issued after the minitrial will be a

recommended decision subject to adoption or modification by the

Commission. Any party to the proceeding that seeks modification of the

recommended decision may do so by filing comments challenging the

decision within 15 days of its release by the Commission's Office of

Public Affairs. (Compare Sec. 1.4(b)(2).) Opposition comments may be

filed within 15 days of the comments challenging the decision; reply

comments may be filed 10 days thereafter and shall be limited to issues

raised in the opposition comments.

(i) If no party files comments challenging the recommended

decision, the Commission will issue its decision adopting or modifying

the recommended decision within 45 days of its release. If parties to

the proceeding file comments to the recommended decision, the

Commission will issue its decision adopting or modifying the

recommended decision within 30 days of the filing of the final

comments.

10. Section 1.733 is amended by revising paragraphs (a)

introductory text and (b) and adding paragraph (i) to read as follows:

Sec. 1.733 Status conference.

(a) In any complaint proceeding, the Commission may, in its

discretion, direct the attorneys and/or the parties to appear before it

for a status conference. Unless otherwise ordered by the Commission,

and with the exception of Accelerated Docket proceedings, governed by

paragraph (i) of this section, an initial status conference shall take

place, at the time and place designated by the Commission staff, ten

business days after the date the answer is due to be filed. A status

conference may include discussion of:

* * * * *

(b)(1) Subject to paragraph (i) of this section governing

Accelerated Docket proceedings, parties shall meet and confer prior to

the initial status conference to discuss:

(i) Settlement prospects;

(ii) Discovery;

(iii) Issues in dispute;

(iv) Schedules for pleadings;

(v) Joint statement of stipulated facts, disputed facts, and key

legal issues; and

(vi) In a 47 U.S.C. 271(d)(6)(B) proceeding, whether or not the

parties agree to waive the 47 U.S.C. 271(d)(6)(B) 90-day resolution

deadline.

(2) Subject to paragraph (i) of this section governing Accelerated

Docket proceedings, parties shall submit a joint statement of all

proposals agreed to and disputes remaining as a result of such meeting

to Commission staff at least two business days prior to the scheduled

initial status conference.

* * * * *

(i) Accelerated Docket Proceedings.

(1) In Accelerated Docket proceedings, the initial status

conference will be held 10 days after the answer is due to be filed.

(2) Prior to the initial status conference, the parties shall

confer, either in person or by telephone, about:

(i) Discovery to which they can agree;

(ii) Facts to which they can stipulate; and

(iii) Factual and legal issues in dispute.

(3) Two days before the status conference, parties shall submit to

Commission staff a joint statement of:

(i) The agreements that they have reached with respect to

discovery;

(ii) The facts to which they have agreed to stipulate; and

(iii) The disputed facts or legal issues of which they can agree to

a joint statement.

(4) Two days before the status conference, each party also shall

submit to Commission staff a separate statement which shall include, as

appropriate, the party's statement of the disputed facts and legal

issues presented by the complaint proceeding and any additional

discovery that the party seeks. A complainant that wishes to reply to a

defendant's affirmative defense shall do so in its pre-status-

conference filing. To the extent that this filing contains statements

replying to an affirmative defense, the complainant shall include, and/

or serve with the statement, the witness information and documents

required in Sec. 1.726(g)(3)-(4). A defendant that intends to rely on

[[Page 41450]]

expert evidence shall include its expert statement in its pre-status

conference filing. (See Sec. 1.729(i)(4)(ii).)

[FR Doc. 98-20745 Filed 8-3-98; 8:45 am]

BILLING CODE 6712-01-P