Section 214 Deregulated Entry Requirements and Streamlined Exit Requirements for Domestic Telecommunications Common Carriers

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 63

[CC Docket No. 97-11; FCC 99-104]

Section 214 Deregulated Entry Requirements and Streamlined Exit

Requirements for Domestic Telecommunications Common Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted rules that de-regulate market entry

and streamline market exit filing requirements, under section 214 of

the Communications Act of 1934. The rules confer ``blanket'' section

214 certification for new lines of all domestic carriers, exempt line

extensions and video programming services from section 214

requirements, and provide that all section 214 applications to

discontinue domestic service will be automatically granted unless the

Commission notifies the applicants otherwise. The Commission's action

also grants the substance of the section 214 regulatory relief

requested by the Independent Telephone and Telecommunications Alliance

in its forbearance petition and extends that relief to all domestic

carriers.

DATES: Effective August 23, 1999.

FOR FURTHER INFORMATION CONTACT: Marty Schwimmer, 202-418-2334.

SUPPLEMENTARY INFORMATION:

1. Section 214 of the Communications Act of 1934 requires common

carriers to obtain Commission approval for the construction,

acquisition, or operation of lines of communication (entry

certification) and for the discontinuance of service to a community

(exit certification). The FCC implements the section 214 requirements

with its rules at 47 CFR part 63 and related rules of practice at 47

CFR part 1. The Telecommunications Act of 1996 exempted from section

214 line extensions and video programming systems, under section

402(b)(2)(A) (codified as a Note to section 214) and under Section

302(a) (codified as section 651), respectively. The 1996 Act also

enabled the Commission to forbear from enforcing provisions of the Act,

codified as Section 10 of the Act.

2. In 1997, the Commission released an NPRM proposing to modify its

rules at 47 CFR part 63 to implement these changes, entitled

Implementation of Section 402(b)(2)(A) of the Telecommunications Act of

1996, Notice of Proposed Rulemaking, CC Docket No. 97-11, 12 FCC Rcd

1111 (1997), 62 FR 4965 (February 3, 1997). The Commission proposed to

(1) codify the statutory exemptions, (2) forbear from enforcing the

section 214 entry certification requirements for some carriers; and (3)

streamline its exit certification rules. The Commission also sought

comment on alternatives, including whether to streamline the section

214 entry certification procedures, which would include granting

blanket authority rather than forbearing from enforcing section 214. On

February 17, 1998, the Independent Telephone and Telecommunications

Alliance (ITTA) filed a petition seeking forbearance from section 214

entry certification requirements for its members.

3. The Commission has revised 47 CFR parts 1 and 63, in a Report

and Order released June 30, 1999, in Docket No. 97-11. In the same

document, it has also granted the substance of the section 214 relief

sought by ITTA, in a Memorandum Opinion and Order in AAD File No. 98-

43. The revised rules confer section 214 authorization for new lines of

all domestic carriers, so that no applications need be filed, codify

the statutory exemptions from section 214 authorization for line

extensions and video programming systems, and provide that all

applications for section 214 authorization to discontinue service will

be approved automatically, in 31 days for non-dominant carriers and 60

days for dominant carriers, unless the Commission notifies the carriers

otherwise.

4. The Commission's purpose in conferring blanket section 214

authority for new lines of all carriers, rather than forbearing from

exercising its section 214 jurisdiction for only some carriers, is to

deregulate and promote competition in domestic market entry. At the

same time, with blanket authority, unlike forbearance, the Commission

retains the ability to stop extremely abusive practices against

consumers by withdrawing the section 214 authorization that allows the

abusive carrier to operate.

5. The Commission's purpose in automatically granting all domestic

discontinuance applications of dominant carriers as well as non-

dominant carriers is, similarly, to reduce regulatory exit burdens and

advance Congress' pro-competitive and de-regulatory policies. The

Commission recognizes that carriers assume a certain amount of risk in

entering a new market and that, if there are significant barriers to

exit, a carrier may be reluctant to assume these risks and may choose

not to enter the market. At the same time, the Commission also

recognizes that even customers with competitive alternatives need fair

notice and information to choose a substitute service, and that by

requiring applications to be filed and notice to be given to all

customers, unlike de-regulating exit procedures by eliminating filing

and notice requirements altogether, subscribers will have adequate

opportunity to comment on whether substitute service is available.

List of Subjects

47 CFR Part 1

Administrative practice and procedure.

47 CFR Part 63

Communications common carriers, Reporting and recordkeeping

requirements, Telegraph, Telephone.

[[Page 39939]]

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Rule Changes

For the reasons discussed in the preamble, the Federal

Communications Commission amends 47 CFR parts 1 and 63 as follows:

PART 1--PRACTICE AND PROCEDURE

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

Authority: 47 U.S.C. 151, 154, 207, 303, and 309(j), unless

otherwise noted.

2. Section 1.763 is amended by revising the first sentence in

paragraph (b) to read as follows:

Sec. 1.763 Construction, extension, acquisition or operation of lines.

* * * * *

(b) In cases under this section requiring a certificate, notice is

given to and a copy of the application is filed with the Secretary of

Defense, the Secretary of State (with respect to such applications

involving service to foreign points), and the Governor of each State

involved. * * *

PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE,

REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND

GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS

3. The part heading is revised as set out above.

4. The authority citation for part 63 is revised to read as

follows:

Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218,

403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C.

151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless

otherwise noted.

Secs. 63.01 through 63.03 [Removed]

5. Sections 63.01 through 63.03 are removed.

Secs. 63.05 and 63.06 [Removed]

6. Sections 63.05 and 63.06 are removed.

Sec. 63.08 [Removed]

7. Section 63.08 is removed.

8. Section 63.07 is redesignated as Sec. 63.01 and is revised to

read as follows:

Sec. 63.01 Authority for all domestic common carriers.

(a) Any party that would be a domestic interstate communications

common carrier is authorized to provide domestic, interstate services

to any domestic point and to construct, acquire, or operate any

domestic transmission line as long as it obtains all necessary

authorizations from the Commission for use of radio frequencies. This

authority does not apply to acquisitions of corporate control, which

are not limited to acquisitions of equity ownership, such as stock or

partnership interests, and which include actual working control by

whatever manner exercised (such as, for example, by veto power,

controlling interest in a board of directors, or other shareholder

agreement provisions).

(b) Domestic common carriers subject to this section shall not

engage in any line construction that may have a significant effect on

the environment as defined in Sec. 1.1307 of this chapter without prior

compliance with the Commission's environmental rules. See Sec. 1.1312

of this chapter.

9. New Sec. 63.02 is added to read as follows:

Sec. 63.02 Exemptions for extensions of lines and for systems for the

delivery of video programming.

(a) Any common carrier is exempt from the requirements of section

214 of the Communications Act of 1934, as amended, for the extension of

any line.

(b) A common carrier shall not be required to obtain a certificate

under section 214 of the Communications Act of 1934 with respect to the

establishment or operation of a system for the delivery of video

programming.

10. Section 63.04 is redesignated as Sec. 63.25 and the section

heading is revised to read as follows:

Sec. 63.25 Special provisions relating to temporary or emergency

service by international carriers.

11. Section 63.52 is amended by revising the section heading and

paragraph (b) to read as follows:

Sec. 63.52 Copies required; fees; and filing periods.

* * * * *

(b) No application accepted for filing and subject to part 63 of

these rules, unless provided for otherwise, shall be granted by the

Commission earlier than 30 days following issuance of public notice by

the Commission of the acceptance for filing of such application or any

major amendment unless said public notice specifies another time

period.

* * * * *

12. Section 63.71 is revised to read as follows:

Sec. 63.71 Procedures for discontinuance, reduction or impairment of

service by domestic carriers.

Any domestic carrier that seeks to discontinue, reduce or impair

service shall be subject to the following procedures:

(a) The carrier shall notify all affected customers of the planned

discontinuance, reduction, or impairment of service and shall notify

and submit a copy of its application to the public utility commission

and to the Governor of the State in which the discontinuance,

reduction, or impairment of service is proposed, and also to the

Secretary of Defense, Attn. Special Assistant for Telecommunications,

Pentagon, Washington, DC 20301. Notice shall be in writing to each

affected customer unless the Commission authorizes in advance, for good

cause shown, another form of notice. Notice shall include the

following:

(1) Name and address of carrier;

(2) Date of planned service discontinuance, reduction or

impairment;

(3) Points of geographic areas of service affected;

(4) Brief description of type of service affected; and

(5) One of the following statements:

(i) If the carrier is non-dominant with respect to the service

being discontinued, reduced or impaired, the notice shall state:

The FCC will normally authorize this proposed discontinuance of

service (or reduction or impairment) unless it is shown that

customers would be unable to receive service or a reasonable

substitute from another carrier or that the public convenience and

necessity is otherwise adversely affected. If you wish to object,

you should file your comments within 15 days after receipt of this

notification. Address them to the Federal Communications Commission,

Washington, DC 20554, referencing the Sec. 63.71 Application of

(carrier's name). Comments should include specific information about

the impact of this proposed discontinuance (or reduction or

impairment) upon you or your company, including any inability to

acquire reasonable substitute service.

(ii) If the carrier is dominant with respect to the service being

discontinued, reduced or impaired, the notice shall state:

The FCC will normally authorize this proposed discontinuance of

service (or reduction or impairment) unless it is shown that

customers would be unable to receive service or a reasonable

substitute from another carrier or that the public convenience and

necessity is otherwise adversely affected. If you wish to object,

you should file your comments within 30 days

[[Page 39940]]

after receipt of this notification. Address them to the Federal

Communications Commission, Washington, DC 20554, referencing the

Sec. 63.71 Application of (carrier's name). Comments should include

specific information about the impact of this proposed

discontinuance (or reduction or impairment) upon you or your

company, including any inability to acquire reasonable substitute

service.

(b) The carrier shall file with this Commission, on or after the

date on which notice has been given to all affected customers, an

application which shall contain the following:

(1) Caption--``Section 63.71 Application'';

(2) Information listed in Sec. 63.71(a) (1) through (4) above;

(3) Brief description of the dates and methods of notice to all

affected customers;

(4) Whether the carrier is considered dominant or non-dominant with

respect to the service to be discontinued, reduced or impaired; and

(5) Any other information the Commission may require.

(c) The application to discontinue, reduce or impair service, if

filed by a domestic, non-dominant carrier, shall be automatically

granted on the 31st day after its filing with the Commission without

any Commission notification to the applicant unless the Commission has

notified the applicant that the grant will not be automatically

effective. The application to discontinue, reduce or impair service, if

filed by a domestic, dominant carrier, shall be automatically granted

on the 60th day after its filing with the Commission without any

Commission notification to the applicant unless the Commission has

notified the applicant that the grant will not be automatically

effective. For purposes of this section, an application will be deemed

filed on the date the Commission releases public notice of the filing.

[FR Doc. 99-18765 Filed 7-21-99; 8:45 am]

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