Promotion of Competitive Networks in Local Telecommunications Markets

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 51, 68, 76

[WT Docket No. 99-217; FCC 99-141]

Promotion of Competitive Networks in Local Telecommunications

Markets

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Notice of Proposed Rulemaking, the Commission

initiates a proceeding intended to facilitate the development of

competitive telecommunications networks that will provide consumers

with alternatives to services provided by the incumbent wireline local

exchange carriers (LECs). In particular, the Commission seeks comment

on the following issues: the provision of reasonable and

nondiscriminatory access to rights-of-

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way and riser conduit on private premises that are under the ownership

or control of LECs or other utilities and competitively neutral state

and local taxation. A companion Notice of Inquiry and a Third Further

Notice of Proposed Rulemaking are summarized elsewhere in this issue of

the Federal Register.

DATES: Comments are due August 13, 1999; Reply comments are due

September 3, 1999.

ADDRESSES: Parties who choose to file comments by paper should send

comments to the Commission's Secretary, Magalie Roman Salas, Office of

the Secretary, Federal Communications Commission, 445 Twelfth Street,

SW; TW-A325; Washington, D.C. 20554. Comments filed through the

Commission's Electronic Comment Filing System (ECFS) can be sent as an

electronic file via the Internet to http://www.fcc.gov/e-file/

ecfs.html. See

SUPPLEMENTARY INFORMATION: For additional information about paper and

electronic filing.

FOR FURTHER INFORMATION CONTACT: Jeff Steinberg at (202) 418-0896 or

Joel Taubenblatt at (202) 418-1513 (Wireless Telecommunications

Bureau).

SUPPLEMENTARY INFORMATION: This is a summary of the Notice of Proposed

Rulemaking in WT Docket No. 99-217 (the ``Notice''), FCC 99-141,

adopted June 10, 1999 and released July 7, 1999. The complete text of

the document is available for inspection and copying during normal

business hours in the FCC Reference Center, 445 12th Street, S.W.,

Washington, D.C. and also may be purchased from the Commission's copy

contractor, International Transcription Services, (202) 857-3800, 445

12th Street, S.W., CY-B400, Washington, D.C. 20554. The document is

also available via the Internet at http://www.fcc.gov/Bureaus/

Wireless/Orders/1999/index.html>.

Introduction

1. This Notice is part of a larger item that seeks comment in order

to further the Commission's ongoing efforts to promote facilities-based

competition in the local telephone market. The larger item addresses

issues that are not squarely before the Commission in pending

proceedings. In particular, this Notice seeks comment on several

potential modifications of the Commission's Rules in order to

facilitate competitive providers' access to multiple tenant

environments and facilities.

Background

2. In the Telecommunications Act of 1996, codified at 47 U.S.C. 151

et seq., Congress included provisions intended to facilitate

competition with the incumbent LECs through three entry strategies:

resale of the incumbent LEC's services, leasing of unbundled network

elements, and use of a new entrant's own facilities. To date, the

Commission's efforts to facilitate local competition pursuant to these

provisions of the Act have generally encompassed all three of these

means of entry. Carriers who provide service by any of the three means

of competitive entry have the potential to bring many of the benefits

of competition to local exchange markets, and the Commission recognizes

it should continue to facilitate competitive entry by all means.

However, in the long term, the most substantial benefits to consumers

will be achieved through facilities-based competition. Only facilities-

based competitors can break down the incumbent LECs' bottleneck control

over local networks and provide services without having to rely on

their rivals for critical components of their offerings. Moreover, only

facilities-based competition can fully unleash competing providers'

abilities and incentives to innovate, both technologically and in

service development, packaging, and pricing.

Discussion

3. Accordingly, this Notice seeks comment on several potential

modifications of the Commission's Rules in order to facilitate access

by competing facilities-based providers of telecommunications service

to multiple tenant enviornments. Specifically, the Notice also seeks

comment, subject to the Commission's future interpretation of the

``necessary'' and ``impair'' standards of section 251 of the

Communications Act, 47 U.S.C. 251, on whether the Commission should

require incumbent LECs to make available to any requesting

telecommunications carrier unbundled access to riser cable and wiring

that they control within multiple tenant environments.

4. The Notice also seeks comment on whether the Commission should

require building owners who allow access to their premises to any

telecommunications provider to make comparable access available to all

such providers on a nondiscriminatory basis, and on the extent of the

Commission's legal authority to adopt such a requirement. The Notice

asks questions regarding how any such obligation should be implemented.

5. In addition, the Notice seeks comment on several other proposed

Commission actions potentially ensuring that customers located in

multiple tenant environments have access to their choice of

telecommunications service providers. Specifically, the Notice requests

comment on whether the Commission should forbid telecommunications

service providers, under some or all circumstances, from entering into

exclusive contracts with building owners, and abrogate any existing

exclusive contracts between these parties. The Notice also requests

comment on whether the Commission should modify its rules governing

determination of the demarcation point between facilities controlled by

the telephone company and by the landowner on multiple unit premises.

In addition, the Notice seeks comment on whether the current rules

governing access to cable home wiring for multichannel video

programming distributors should be extended to include providers of

telecommunications services. Furthermore, the Notice requests comment

on whether the Commission should extend rules similar to those adopted

under section 207 of the 1996 Act to providers of telecommunications

and other fixed wireless services. The Notice recognizes that section

207 by its terms applies only to certain video programming services,

but states that the Commission may have authority to adopt similar

rules prohibiting restrictions on the placement of antennas used for

over-the-air telecommunications and other fixed wireless services

pursuant to section 4(i) and other provisions of the Communications

Act, including sections 201(b) and 303(r), granting the Commission

general authority to effectuate the provisions and purposes of the

Communications Act. See 47 U.S.C. 4(i), 201(b), and 303(r).

Filing Procedures

6. Pursuant to 47 CFR 1.415, 1.419, interested parties may file

comments on or before August 13, 1999, and reply comments on or before

September 3, 1999. Comments may be filed using the Commission's

Electronic Comment Filing System (ECFS) or by filing paper copies. See

Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg.

24,121 (1998).

7. Comments filed through the ECFS can be sent as an electronic

file via the Internet to http://www.fcc.gov/e-file/ecfs.html>.

Generally, only one copy of an electronic submission must be filed. If

multiple docket or rulemaking

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numbers appear in the caption of this proceeding, however, commenters

must transmit one electronic copy of the comments to each docket or

rulemaking number referenced in the caption. In completing the

transmittal screen, commenters should include their full name, Postal

Service mailing address, and the applicable docket or rulemaking

number. Parties may also submit electronic comments by Internet e-mail.

To get filing instructions for e-mail comments, commenters should send

an e mail to [email protected], and should include the following words in

the body of the message, ``get form .'' A sample

form and directions will be sent in reply.

8. Parties who choose to file by paper must file an original and

four copies of each filing. If more than one docket or rulemaking

number appear in the caption of this proceeding, commenters must submit

two additional copies for each additional docket or rulemaking number.

All filings must be sent to the Commission's Secretary, Magalie Roman

Salas, Office of the Secretary, Federal Communications Commission, 445

12th Street, S.W., TW-A325, Washington, D.C. 20554.

9. Regardless of whether parties choose to file electronically or

by paper, parties should also file one copy of any documents filed in

this docket with the Commission's copy contractor, International

Transcription Services, Inc., 445 12th Street, S.W., CY-B400,

Washington, D.C. 20554. Comments and reply comments will be available

for public inspection during regular business hours in the FCC

Reference Center, 445 12th Street, S.W., Washington, D.C. 20554.

10. Comments and reply comments must include a short and concise

summary of the substantive arguments raised in the pleading. Comments

and reply comments must also comply with 47 CFR 1.49, and all other

applicable sections of the Commission's rules. The Commission also

directs all interested parties to include the name of the filing party

and the date of the filing on each page of their comments and reply

comments. All parties are encouraged to utilize a table of contents,

regardless of the length of their submission.

Initial Regulatory Flexibility Analysis

11. As required by the Regulatory Flexibility Act (RFA), the

Commission has prepared this Initial Regulatory Flexibility Analysis

(IRFA) of the possible significant economic impact on small entities of

the policies and rules proposed in this Notice of Proposed Rulemaking.

Written public comments are requested on this IRFA. These comments must

be filed in accordance with the same filing deadlines for comments on

the rest of this Notice of Proposed Rulemaking, as set forth in the

Filing Procedures section above, and they must have a separate and

distinct heading designating them as responses to the IRFA. The

Commission's Office of Public Affairs, Reference Operations Division,

will send a copy of this Notice of Proposed Rulemaking, including the

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

Administration, in accordance with the RFA.

I. Need for and Objectives of the Proposed Rules

12. We are issuing this Notice of Proposed Rulemaking to seek

comment on proposals to facilitate competition with the incumbent local

exchange carriers (LECs) by competitors who use their own end-to-end

facilities. Extensive facilities-based competition will provide

consumers with a choice of telecommunications providers that will

compete to offer traditional, voice-grade telephone service, as well as

high-speed data and other advanced services, at reasonable prices and

with reasonable terms and conditions--a major goal of the

Telecommunications Act of 1996. We particularly expect this proceeding

to further the availability of competition to the many consumers and

businesses that are located in multiple tenant environments, such as

apartment and office buildings.

13. Specifically, this Notice of Proposed Rulemaking seeks comment

on the following issues: (1) Whether we should require incumbent LECs

to make available to any requesting telecommunications carrier

unbundled access to riser cable and wiring that they control within

multiple tenant environments, subject to the Commission's future

interpretation of the ``necessary'' and ``impair'' standards of 47

U.S.C. 251; (2) whether we should require building owners who allow

access to their premises to any telecommunications provider to make

comparable access available to all such providers on a

nondiscriminatory basis; (3) whether we should forbid

telecommunications service providers, under some or all circumstances,

from entering into exclusive contracts with building owners, and

abrogate any existing exclusive contracts between these parties; (4)

whether we should modify our rules governing determination of the

demarcation point between facilities controlled by the telephone

company and by the landowner on multiple unit premises; (5) whether the

rules governing access to cable home wiring for multichannel video

program distribution should be extended to benefit providers of

telecommunications services; and (6) whether we should adopt rules

similar to those adopted in the video context under section 207 of the

1996 Act protecting the ability to place antennas to transmit and

receive telecommunications signals and other signals that are not

covered under section 207.

II. Legal Basis

14. The potential actions on which comment is sought in this Notice

of Proposed Rulemaking would be authorized under sections 1, 2(a),

4(i), 4(j), 201(b), 251(c)(3), 251(d), 303(r), and 332 of the

Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i),

154(j), 201(b), 251(c)(3), 251(d), 303(r), and 332, and 47 CFR 1.411

and 1.412.

III. Description and Estimate of the Number of Small Entities to

Which the Proposed Rules Will Apply

15. The RFA requires that an initial regulatory flexibility

analysis be prepared for notice-and-comment rulemaking proceedings,

unless the agency certifies that ``the rule will not, if promulgated,

have a significant economic impact on a substantial number of small

entities.'' The RFA generally defines ``small entity'' as having the

same meaning as the terms ``small business,'' ``small organization,''

and ``small governmental jurisdiction.'' In addition, the term ``small

business'' has the same meaning as the term ``small business concern''

under the Small Business Act. A small business concern is one which:

(1) is independently owned and operated; (2) is not dominant in its

field of operation; and (3) satisfies any additional criteria

established by the Small Business Administration (SBA). For many of the

entities described below, the SBA has defined small business categories

through Standard Industrial Classification (``SIC'') codes.

16. This Notice of Proposed Rulemaking could result in rule changes

that, if adopted, would impose requirements on local exchange carriers,

building owners and managers, multichannel video program distributors,

neighborhood associations, and small governmental jurisdictions. To

assist the Commission in analyzing the total number of potentially

affected small entities, commenters are requested to provide estimates

of the number of small entities that may be affected by any rule

changes resulting from this Notice of Proposed Rulemaking.

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a. Local Exchange Carriers

17. Many of the potential rules on which comment is sought in this

Notice of Proposed Rulemaking, if adopted, would affect small LECs.

Neither the Commission nor the SBA has developed a small business

definition specifically for small LECs. The closest applicable

definition under the SBA rules is for those telephone communications

companies that are not radiotelephone (wireless) companies. The SBA has

defined establishments engaged in providing ``Telephone Communications,

Except Radiotelephone'' to be small businesses when they have no more

than 1,500 employees. According to November 1997 Telecommunications

Industry Revenue data, 1,371 carriers reported that they were engaged

in the provision of local exchange services. We do not have data

specifying the number of these carriers that are either dominant in

their field of operations, are not independently owned and operated, or

have more than 1,500 employees, and thus are unable at this time to

estimate with greater precision the number of LECs that would qualify

as small business concerns under the SBA's definition. Consequently, we

estimate that fewer than 1,371 providers of local exchange service are

small entities or small incumbent LECs that may be affected by the

potential actions discussed in this Notice of Proposed Rulemaking, if

adopted.

18. Above, we have included smaller incumbent LECs in our analysis.

Although some incumbent LECs may have 1,500 or fewer employees, we do

not believe that such entities should be considered small entities

within the meaning of the RFA because they are either dominant in their

field of operations or are not independently owned and operated, and

therefore by definition not ``small entities'' or ``small business

concerns'' under the RFA. Accordingly, our use of the terms ``small

entities'' and ``small businesses'' does not encompass small incumbent

LECs. Out of an abundance of caution, however, for regulatory

flexibility analysis purposes, we will separately consider small

incumbent LECs within this analysis and use the term ``small incumbent

LECs'' to refer to any incumbent LECs that arguably might be defined by

the SBA as ``small business concerns.''

b. Building Owners and Managers

19. Several of our inquiries in this Notice of Proposed Rulemaking

would affect multiple dwelling unit operators and real estate agents

and managers, if such inquiries lead to adopted rules. Such inquiries

include the following issues: whether we should require building owners

who allow access to their premises to any telecommunications provider

to make comparable access available to all such providers on a

nondiscriminatory basis; whether we should forbid telecommunications

service providers, under some or all circumstances, from entering into

exclusive contracts with building owners, and abrogate any existing

exclusive contracts between these parties; and whether we should adopt

rules similar to those adopted in the video context under section 207

of the 1996 Act protecting the ability to place antennas to transmit

and receive telecommunications signals and other signals that were not

covered under section 207.

(1) Multiple Dwelling Unit Operators (SIC 6512, SIC 6513, SIC 6514)

20. The SBA has developed definitions of small entities for

operators of nonresidential buildings, apartment buildings, and

dwellings other than apartment buildings, which include all such

companies generating $5 million or less in revenue annually. According

to the Census Bureau, there were 26,960 operators of nonresidential

buildings generating less than $5 million in revenue that were in

operation for at least one year at the end of 1992. Also according to

the Census Bureau, there were 39,903 operators of apartment dwellings

generating less than $5 million in revenue that were in operation for

at least one year at the end of 1992. The Census Bureau provides no

separate data regarding operators of dwellings other than apartment

buildings, and we are unable at this time to estimate the number of

such operators that would qualify as small entities.

(2) Real Estate Agents and Managers (SIC 6531)

21. The SBA defines real estate agents and managers as

establishments primarily engaged in renting, buying, selling, managing,

and appraising real estate for others. According to SBA's definition, a

small real estate agent or manager is a firm whose revenues do not

exceed 1.5 million dollars.

c. Multichannel Video Program Distributors (SIC 4841)

22. Our inquiry in this Notice of Proposed Rulemaking regarding

whether the rules governing access to cable home wiring for

multichannel video program distribution should be extended to benefit

providers of telecommunications services would affect operators of

cable and other pay television services, if such inquiry leads to the

adoption of rules. The SBA has developed a definition of a small entity

for cable and other pay television services, which includes all such

companies generating $11 million or less in annual receipts. This

definition includes cable system operators, closed circuit television

services, direct broadcast satellite services, multipoint distribution

systems, satellite master antenna systems and subscription television

services. According to the Bureau of the Census, there were 1423 such

cable and other pay television services generating less than $11

million in revenue that were in operation for at least one year at the

end of 1992.

d. Neighborhood Associations

23. Our inquiry in this Notice of Proposed Rulemaking regarding

whether we should adopt rules similar to those adopted in the video

context under section 207 of the 1996 Act protecting the ability to

place antennas to transmit and receive telecommunications signals and

other signals that are not covered under section 207 would affect

neighborhood associations, if such inquiry leads to the adoption of

rules. Section 601(4) of the Regulatory Flexibility Act, 5 U.S.C.

601(4), defines ``small organization'' as ``any not-for-profit

enterprise which is independently owned and operated and is not

dominant in its field.'' This definition includes homeowner and

condominium associations that operate as not-for-profit organizations.

The Community Associations Institute estimates that there were 150,000

such associations in 1993.

e. Municipalities

24. Our inquiry in this Notice of Proposed Rulemaking regarding

whether we should adopt rules similar to those adopted in the video

context under section 207 of the 1996 Act protecting the ability to

place antennas to transmit and receive telecommunications signals and

other signals that are not covered under section 207 may affect

municipalities, if such inquiry leads to the adoption of rules. The

term ``small governmental jurisdiction'' is defined as ``governments of

* * * districts, with a population of less than 50,000.'' As of 1992,

there were approximately 85,006 governmental entities in the United

States. This number includes such entities as states, counties, cities,

utility districts and school districts. Of the 85,006 governmental

entities, 38,978 are counties, cities and towns. The remainder is

composed primarily of

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utility districts, school districts, and states. Of the 38,978

counties, cities and towns, 37,566, or 96%, have populations of fewer

than 50,000. The Census Bureau estimates that this ratio is

approximately accurate for all governmental entities. Thus, of the

85,006 governmental entities, we estimate that 81,606 (96%) are small

entities.

IV. Description of Projected Reporting, Recordkeeping, and Other

Compliance Requirements

25. This Notice of Proposed Rulemaking proposes no additional

reporting, recordkeeping or other compliance measures.

V. Steps Taken to Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered

26. This Notice of Proposed Rulemaking seeks comment on how the

inquiries set forth could impact regulated entities, including small

entities. For example, with respect to our inquiry into building owner

obligations, we seek comment on whether we should limit the scope of

any building owner obligation in order to avoid imposing unreasonable

regulatory burdens on building owners, and we suggest that a potential

rule could exempt buildings that house fewer than a certain number of

tenants or are under a certain size. Commenters are invited to address

the economic impact of all of our proposals on small entities and offer

any alternatives.

VI. Federal Rules That May Duplicate, Overlap, or Conflict With the

Proposed Rules

27. None.

List of Subjects

47 CFR Parts 1 and 51

Communications common carriers, Telecommunications.

47 CFR Part 68

Communications common carriers, Communications equipment.

47 CFR Part 76

Cable television.

Federal Communications Commission.

William F. Caton,

Deputy, Secretary.

[FR Doc. 99-19635 Filed 7-30-99; 8:45 am]

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