Petition for a Declaratory Ruling That Gte Airfone, Gte Railfone. And Gte Mobilnet Are Not Subject to the Telephone Operator Consumer Services Improvement Act of 1990

8 FCC Red No. 18

Federal Communications Commission Record

DA 93-1022

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

PETITION FOR

File No. MSD-92-14

A DECLARATORY RULING

THAT GTE AIRFONE, GTE

RAILFONE, AND GTE MOBILNET

ARE NOT SUBJECT TO THE

TELEPHONE OPERATOR CONSUMER

SERVICES IMPROVEMENT ACT OF

1990

DECLARATORY RULING

Adopted: August 18, 1993;

Released: August 27, 1993

Comment Date: October 12, 1993

Reply Date: October 27, 1993

By the Acting Chief. Common Carrier Bureau:

I. INTRODUCTION

1. The Common Carrier Bureau has before it a Petition

for Declaratory Ruling filed by GTE Service Corporation

(GTE) on behalf of GTE Airfone Incorporated (Airfone),

GTE Railfone Incorporated (Railfone), and GTE Mobilnet

Incorporated (Mobilnet) 1 (collectively GTE subsidiaries),

asking that none of the GTE subsidiaries be considered

subject to the requirements of the Telephone Operator

Consumer Services Improvement Act of 1990 (TOCSIA). 2

On March 17, 1992, we issued a Public Notice re~uesting

interested parties to file comments in response.

Seven

comments and five reply comments were received.4

1 All references to Mobilnet herein refer only to GTE's subsid-

iary which provides cellular credit card activated telephones in

rental cars. GTE is also a cellular licensee in a number of

cellular markets and operates under the name GTE Mobilnet in

these markets. Our ruling does not pertain to GTE's cellular

licenses per se.

2 47 u.s.c. § 226 (1990).

3 See Public Notice, Mimeo No. 22280, Mar. 17, 1992. We issued

a subsequent Public Notice amending the comment filing dates.

See Public Notice, Mimeo No. 22316, Mar. 19, 1992.

4

See Appendix. To the extent commenting parties are seeking

a ruling broader than that sought by GTE, their pleadings are

also being treated as petitions for declaratory ruling and are

addressed by this ruling.

5 S. Rep. No. 439, !Olst Cong., 2d Sess. at l ( 1990): see also H.R.

Rep. No. 213, lOlst Cong., 1st Sess. at 2

ment filing dates.

See Public Notice, Mimeo No. 22316, Mar. 19, 1992.

4

See Appendix. To the extent commenting parties are seeking

a ruling broader than that sought by GTE, their pleadings are

also being treated as petitions for declaratory ruling and are

addressed by this ruling.

5 S. Rep. No. 439, !Olst Cong., 2d Sess. at l ( 1990): see also H.R.

Rep. No. 213, lOlst Cong., 1st Sess. at 2. (1989)("the purpose of

[the Act! is to protect telephone consumers against unfair pro-

cess and practices of some operator service providers (OSPs), yet

allow the legitimate companies in the industry the opportunity

to compete in the market.") "Operator services" include collect

or person-to-person calls, calls billed to a third number. and

calls billed to a calling card or credit card. These services may

be provided by an automated device as well as by a live oper-

ator. S. Rep. No. 439, lOlst Cong .. 2d Sess. at n.l.

6171

II.BACKGROUND

2. In October 1990, Congress enacted TOCSIA "to pro-

tect consumers who make interstate operator services calls

from pay telephones, hotels, and other public locations

against unreasonably high rates and anticompetitive prac-

tices."5 Congress noted that in recent years a number of

operator services companies have emerged. These operator

services providers (OSPs) compete with local exchange and

long distance carriers by providing telephones to the gen-

eral public.6 When a caller dials an operator assisted se-

quence from a telephone served by one of these OSPs the

call is routed automatically to the OSP. 7 The OSP provides

the desired operator services to facilitate completion of the

call.

3. Congress was addressing two main concerns in enact-

ing TOCSIA--ensuring that consumers are aware of the

identity of the pre-subscribed operator service provider,

and guaranteeing that callers are able to employ the carrier

of their choice in placing operator-assisted calls

ted automatically to the OSP. 7 The OSP provides

the desired operator services to facilitate completion of the

call.

3. Congress was addressing two main concerns in enact-

ing TOCSIA--ensuring that consumers are aware of the

identity of the pre-subscribed operator service provider,

and guaranteeing that callers are able to employ the carrier

of their choice in placing operator-assisted calls. Congress

directed the Commission to prescribe rules that assure that

the objectives of TOCSIA are met. 8 In 1991, the Commis-

sion adopted the rules and regulations pertaining to oper-

ator service providers mandated by Congress.9

4. A telecommunications service is covered by the Com-

mission's operator service rules if the service includes any

automatic or live operator assistance to the caller to ar-

range for billing or completion of an interstate call

through a method other than ( 1) automatic completion

with billing to the telephone from which the call origi-

nated. or (2) completion through an access code used by

the consumer, with billing to an account ~reviously estab-

lished with the carrier by the consumer. 1 There are two

6 See id. at 2.

7 All credit card calls are considered "operator assisted" wheth-

er the customer utilizes a live operator or not.

8 On June 14, 1990. the Commission issued its initial Notice of

Proposed Rulemaking. See Notice of Proposed Rulemaking,

Policies and Rules Concerning Operator Service Providers, CC

Docket No. 90-313, 5 FCC Red 4630 ( 1990) (NPRM). On De-

cember 21, 1990, the Commission issued a Further Notice of

Proposed Rulemaking in the same proceeding. See Further No-

tice of Proposed Rulemaking, 6 FCC Red 120 (1990) (FNPRM).

We note that while GTE filed comments generally in support of

the above proceeding on September 7, 1990, GTE did not men-

tion any of its subsidiaries which are at issue in the current

~roceeding.

See

Policies and Rules Concerning Operator Service

Providers, Report and Order, CC Docket No

aking in the same proceeding. See Further No-

tice of Proposed Rulemaking, 6 FCC Red 120 (1990) (FNPRM).

We note that while GTE filed comments generally in support of

the above proceeding on September 7, 1990, GTE did not men-

tion any of its subsidiaries which are at issue in the current

~roceeding.

See

Policies and Rules Concerning Operator Service

Providers, Report and Order, CC Docket No. 90-313, 6 FCC Red

2744 (1991) (Report and Order}, recon., 7 FCC Red 3882 (1992).

See also Policies and Rules Concerning Operator Service Access

and Pay Telephone Compensation, CC Docket No. 91-35, Report

and Order and Further Notice of Proposed Rule Making, 6 FCC

Red 4736 (1991). Second Report and Order, 7 FCC Red 3251

F992), recon., 7 FCC Red 4355 (1992).

0 See 47 C.F.R. § 64.708(g).

DA 93·1022

Federal Communications Commission Record

8 FCC Red No. 18

categories of rules adopted pursuant to TOCSIA--rules

which are applicable to aggregators11 and rules which are

applicable to operator service providers (OSPs). 12

5. Pursuant to the Commission's Rules adopted under

TOCSIA, an aggregator is required to post certain informa-

tion on or near the telephone.13 The aggregator must also

ensure that its telephones do not block the access codes to

other than the presubscribed OSP so consumers have the

ability to utilize other providers of operator services. Fi-

nally, the aggregator must ensure that no charge by the

aggregator to the consumer for using an access code to

another OSP is greater than for calls placed using the

presubscribed OSP.14 The Commission stated that any en-

tity which exercises control over the telephone, whether

through ownership of the equipment or control of access

to the equipment, will be responsible as an aggregator

11 The term "aggregator" is defined in paragraph (b) of Section

64.708 of the Commission's Rules as follows: "(Ajny person that,

in the ordinary course of its operations, makes telephones avail-

able to the public or to transient users of its premises, for

inter

e telephone, whether

through ownership of the equipment or control of access

to the equipment, will be responsible as an aggregator

11 The term "aggregator" is defined in paragraph (b) of Section

64.708 of the Commission's Rules as follows: "(Ajny person that,

in the ordinary course of its operations, makes telephones avail-

able to the public or to transient users of its premises, for

interstate telephone calls using a provider of operator services."

47 C.F.R. § 64.708(b); see also 47 U.S.C. § 226(a)(2).

12 For the purposes of these requirements, an OSP is a provider

of:

any interstate telecommunications service initiated from

an aggregator location that includes, as a component, any

automatic or live assistance to a consumer to arrange for

billing or completion, or both, of an interstate telephone

call through a method other than--

(A) automatic completion with billing to the telephone

from which the call originated; or

(B) completion through an access code used by the con-

sumer, with billing to an account previously established

with the carrier by the consumer.

47 C.F.R.

§§ 64.708(g). 64.708(i); 47 U.S.C. §§ 226(a)(7),

226(a)(9). The Commission has noted that this definition of

OSP may not be appropriate for purposes other than identifying

which carriers are subject to the OSP requirements of TOCSIA.

For instance, the Commission has stated that Congress may not

have intended the access code exclusion to apply to the defini-

tion of an OSP for compensation purposes. See Policies and

Rules Concerning Operator Service Access and Pay Telephone

Compensation, Second Report and Order, supra, at 3261.

13 The information the aggregator must post is as follows:

t to the OSP requirements of TOCSIA.

For instance, the Commission has stated that Congress may not

have intended the access code exclusion to apply to the defini-

tion of an OSP for compensation purposes. See Policies and

Rules Concerning Operator Service Access and Pay Telephone

Compensation, Second Report and Order, supra, at 3261.

13 The information the aggregator must post is as follows:

(i) the name, address, and toll-free telephone number of

the (presubscribed] provider of operator services;

(ii) a written disclosure that the rates for all operator-

assisted calls are available upon request, and that con-

sumers have a right to obtain access to the interstate

common carrier of their choice and may contact their

preferred interstate common carriers for information on

accessing that carrier's service using that telephone; and

(iii) the name and address of the Enforcement Division

of the Common Carrier Bureau of the Commission, to

which the consumer may direct complaints regarding

operator services.

47 C.F.R. § 64.703(b); 47 U.S.C. § 226 (c)(l)(A).

14 See 47 C.F.R. §§ 64.703(b), 64.704(a), (c) and 64.705(b); see

also, 47 U.S.C. §§ 226(c)(l)(A), (B), and (C).

15 See Report and Order, 6 FCC Red at 2751.

6172

under the Act and our Rules. 15 Accordingly, there will be

instances where the premises owner and the equipment

owner will share responsibility as aggregators.

6. An OSP, on the other hand, is required to double

brand calls, 16 to permit the consumer to terminate the call

at no charge before the call is connected and to disclose

certain information to the customer at no charge. 17 The

OSP must also ensure that the aggregator is in compliance

with the aggregator provisions and withhold payment if the

aggregator is blocking access codes. The OSP may not bill

for unanswered calls, engage in call splashing, 18 or bill for

a call that does not reflect the location of the origination of

the call

connected and to disclose

certain information to the customer at no charge. 17 The

OSP must also ensure that the aggregator is in compliance

with the aggregator provisions and withhold payment if the

aggregator is blocking access codes. The OSP may not bill

for unanswered calls, engage in call splashing, 18 or bill for

a call that does not reflect the location of the origination of

the call. 19 It is possible for an entity to be both an

aggregator and an OSP and therefore subject to the require-

ments for both.

7. On November 13, 1992, the Commission submitted its

Final Report to Congress regarding TOCSIA.20 The Com-

mission stated in this report that:

16 Call branding "is the process by which an OSP audibly and

distinctly identifies itself to every person who uses its operator

services." NPRM, 5 FCC Red at 4632. The OSP is required to

brand the call at the beginning of each call and again before the

customer incurs any charge for the call. See 47 C.F.R. §§

64.703(a), 64.703(c); 47 u.s.c. § 22o(b)(l)(A).

17 The information which the OSP must furnish to the cus-

tomer upon request is:

(i) a quote of its rates or charges for the call;

(ii) the methods by which such rates or charges will be

collected; and

(iii) the methods by which complaints concerning such

rates, charges, or collection practices will be resolved.

47 u.s.c. § 226(b)(l)(C).

18 "Call splashing" refers to the transfer of a telephone call

from one provider of operator services to another where the

second provider is unable to determine the location of the

originating call and is prevented from billing the call on the

basis of such location. See 47 C.F.R. § 64.708(c); 47 U.S.C. §

226(a)(3). Example:

A consumer in a hotel in Washington, D.C., wishes to

place a call using a calling card from his chosen IXC to

Baltimore, Maryland. The presubscribed OSP for that

hotel is based in Chicago. The OSP is unable to accept

the calling card, so the caller asks the OSP to transfer the

call to an operator of his or her chosen lXC

h location. See 47 C.F.R. § 64.708(c); 47 U.S.C. §

226(a)(3). Example:

A consumer in a hotel in Washington, D.C., wishes to

place a call using a calling card from his chosen IXC to

Baltimore, Maryland. The presubscribed OSP for that

hotel is based in Chicago. The OSP is unable to accept

the calling card, so the caller asks the OSP to transfer the

call to an operator of his or her chosen lXC. The oper-

ator of the consumer's carrier of choice is unaware that

the call is originating in Washington and believes that the

call is originating in Chicago. The customer is, therefore,

billed for a call from Chicago to Baltimore, rather than

from Washington to Baltimore.

Call splashing is allowed when the consumer requests to be

transferred to another OSP, the consumer is notified in advance

· that the rates for the call may not reflect the rates from the

actual originating location of the call. and the consumer there-

after consents to be transferred. See 47 C.F.R. § 64.70S(a)(3); 47

U.S.C. § 226(b)(l)(H).

19

See

47

C.F.R.

§§

64.703(a)( I )-(3).

64.704(b),

and

64.705(a)(l)-(5); see also 47 U.S.C. §§ 226(b)( l)(A)-(1).

20 Pursuant to the requirements of TOCSlA, the Commission

was to file three reports with Congress. On May 14, 1991, the

Commission submitted its First Report; on Novembere 14, 1991,

the Commission submitted its Second Report.

8 FCC Red No. 18

Federal Communications Commission Record

DA 93-1022

(1) The statutory objectives of TOCSIA are being

achieved. Consumers are being protected from unfair

and deceptive practices relating to their use of oper-

ator services to place interstate telephone calls. Fur-

ther, consumers have an opportunity to

make

informed choices in making such calls.

bmitted its Second Report.

8 FCC Red No. 18

Federal Communications Commission Record

DA 93-1022

(1) The statutory objectives of TOCSIA are being

achieved. Consumers are being protected from unfair

and deceptive practices relating to their use of oper-

ator services to place interstate telephone calls. Fur-

ther, consumers have an opportunity to

make

informed choices in making such calls.

(2) Market forces are securing just and reasonable

rates.

Final Report at 1. The Commission detailed the fac-

tual findings in its report which led to the conclu-

sions stated above. Additionally, the Commission

stated that it believes it has a continuing duty to

ensure that all of the problems that prompted Con-

gress to adopt TOCSIA have been solved.

III. GTE's PETITION

8. GTE asks for a declaratory ruling that the types of

communications services provided by the GTE subsidiaries

are not subject to the requirements of TOCSIA. GTE ~x­

presses concern that application of TOCSIA to Airfone,

Railfone, and Mobilnet may adversely affect the continued

development of air-to-ground (ATG) and cellular credit

card services, to the detriment of the public.

9. The GTE subsidiaries offer three different types of

mobile telecommunications services. Airfone is a Commis-

sion licensee which provides telephone service to passen-

gers of commercial and private aircraft. 21 Airfone owns and

operates the radio and passenger handset equipment in-

stalled on airplanes. Airfone also owns and operates nearly

100 base stations that are used to establish a communica-

tions link between aircraft equipment and the ground.

From

the ground station, calls are routed through

Airfone's private network or through the public switched

network. Customers are charged an initial activation fee

and a time sensitive usage fee. Customers are not charged

separately for the land-based portion of long-distance calls.

10. Railfone provides telephone service to passengers of

certain rail lines

rcraft equipment and the ground.

From

the ground station, calls are routed through

Airfone's private network or through the public switched

network. Customers are charged an initial activation fee

and a time sensitive usage fee. Customers are not charged

separately for the land-based portion of long-distance calls.

10. Railfone provides telephone service to passengers of

certain rail lines. Railfone is a cellular and long distance

reseller, not a Commission licensee, and provides credit

card cellular pay telephone service on trains. The charge

for the call is, like that of Airfone, time-sensitive and billed

on a per-minute basis only. Long distance service is not

charged separately to the customer. Mobilnet is also a

provider of credit card cellular telephone service providing

service through cellular resale. Through agreements with

rental car providers, Mobilnet installs its credit card ac-

tivated cellular telephones in rental cars. If the caller

makes a long distance call using an interexchange carrier

(IXC) of his or her own choosing, the charges for the long

distance portion are billed separately and directly by the

IXC. Both Railfone and Mobilnet are resellers of cellular

service and the underlying facilities based cellular carrier is

not necessarily controlled by GTE. Railfone and Mobilnet,

therefore, do not provide direct interconnection to the

public switched network. The interconnection is provided

by the underlying facilities based cellular licensee.

21 There are five other entities licensed by the Commission to

fovide 800 MHz Air-Ground telephone service.

2 MCI Comments at 3. MCI suggests that the Commission

waive any provision of the Commission's Rules with which

GTE's subsidiaries cannot comply for technical reasons, instead

6173

11. In its pet1tton. GTE argues that the definitions in

TOCSIA refer to fixed, rather than mobile, locations

There are five other entities licensed by the Commission to

fovide 800 MHz Air-Ground telephone service.

2 MCI Comments at 3. MCI suggests that the Commission

waive any provision of the Commission's Rules with which

GTE's subsidiaries cannot comply for technical reasons, instead

6173

11. In its pet1tton. GTE argues that the definitions in

TOCSIA refer to fixed, rather than mobile, locations. Spe-

cifically, GTE argues that an aggregator is defined as one

who makes phones available to transient users of its prem-

ises and an OSP is defined as one who provides operator

services from an aggregator location. According to GTE,

"premises" and "location" refer to a fixed point. Airplanes,

railroad trains and rental cars. argues GTE, do not con-

stitute fixed points and are not. therefore, premises or

locations under TOCSIA. GTE additionally argues that

certain of the requirements of TOCSIA are impossible for

its subsidiaries to comply with for technical reasons. GTE

asserts that the legislative history of TOCSIA demonstrates

that the problems TOCSIA was designed to prevent do not

exist with the services offered by the GTE subsidiaries.

IV. COMMENTS AND REPLY COMMENTS

12. Several commenters support GTE's position, but sug-

gest the Commission go further than just declaring

TOCSIA inapplicable to the GTE subsidiaries. For exam-

ple. In-Flight Phone Corporation (In-Flight). another ATG

service provider and Commission licensee. urges the Com-

mission to extend its ruling on GTE's petition to exempt

all 800 MHz Air-Ground Telephone Service licensees from

the rules adopted pursuant to TOCSIA. McCaw Cellular

Communications, Inc. (McCaw) and PhoneTel Technol-

ogies, Inc. (PhoneTel) argue that all mobile services should

be exempt. Cellular, Inc. (Cl). for its part. suggests that the

Commission declare that no cellular pay telephones are

subject to Commission regulation under TOCSIA.

13

mpt

all 800 MHz Air-Ground Telephone Service licensees from

the rules adopted pursuant to TOCSIA. McCaw Cellular

Communications, Inc. (McCaw) and PhoneTel Technol-

ogies, Inc. (PhoneTel) argue that all mobile services should

be exempt. Cellular, Inc. (Cl). for its part. suggests that the

Commission declare that no cellular pay telephones are

subject to Commission regulation under TOCSIA.

13. Other commenters argue, in addition to supporting

GTE's petition, that the particular services which they

provide should also be exempt. For example, Waterway

Communications System. Inc. (Waterway), Commission li-

censee of an Automated Maritime Telecommunications

System (AMTS) located along the Mississippi, Illinois, and

Ohio Rivers and Gulf Intracoastal Waterway, contends that

the shipboard telephone service on river cruise boats and

harbor cruise or dinner cruise boats it provides should be

exempt from the requirements of TOCSIA. Similarly, Pe-

troleum Communications, Inc. (Petrocom), Commission li-

censee

of

the

Domestic

Public

Cellular

Radio

Telecommunications Service system on frequency Block A

in the Gulf of Mexico Service Area, maintains that the

cellular pay telephone service it provides for the oil in-

dustry employees who work on various drilling rigs, pro-

duction platforms, and marine vessels in the Gulf should

be exempt.

14.

American

Telephone and

Telegraph Company

(AT&T) and MCI Telecommunications Corporation (MCI)

opposed GTE's petition. AT&T argues that the GTE subsid-

iaries' service arrangements fall

within the scope of

TOCSIA. MCI agrees, stating that "it seems clear that the

GTE

companies

are

providing operator services at

aggregator locations and, therefore. are subject to the re-

quirements of TOCSIA." 22

of granting a wholesale exemption from TOCSIA. We, note,

however, that the provisions for the rules under TOCSIA are

statutory and the Commission has limited discretion to waive

any of the provisions.

SIA. MCI agrees, stating that "it seems clear that the

GTE

companies

are

providing operator services at

aggregator locations and, therefore. are subject to the re-

quirements of TOCSIA." 22

of granting a wholesale exemption from TOCSIA. We, note,

however, that the provisions for the rules under TOCSIA are

statutory and the Commission has limited discretion to waive

any of the provisions.

DA 93-1022

Federal Communications Commission Record

8 FCC Red No. 18

V. DISCUSSION

A. GTE Subsidiaries

15. As stated previously, there exist two categories of

rules

adopted

under

TOCSIA--rules

that

apply

to

aggregators and rules that apply to OSPs. Our discussion,

therefore, begins with an analysis of whether the GTE

subsidiaries can be considered aggregators under our rules

and then turns to whether the· GTE subsidiaries can be

considered OSPs.

16. We have reviewed GTE's petition and the comments

and reply comments and we determine that Airfone,

Railfone, and Mobilnet are aggregators within the meaning

of TOCSIA. The statutory definition of aggregator is clear

and unambiguous. The GTE subsidiaries all, "in the or-

dinary course of [their] operations, make[] telephones avail-

able to the public or to transient users of [their] premises,

for interstate telephone calls." 23 We find no support in the

statutory language or legislative history of TOCSIA for the

limited definition of "premises" and "location" proffered

by GTE. GTE argues that the definition of premises refers

to a fixed point and not a mobile site such as an airplane,

train, or rental car. We do not believe that such a narrow

definition of "premises" serves the purpose of the rule or

the underlying statute. GTE also argues that Congress only

intended TOCSIA to apply to telephones made available in

"hotels, universities, and other public locations." 24 GTE

asserts that airplanes, trains, and rental cars are not "loca-

tions" because such vehicles are mobile

train, or rental car. We do not believe that such a narrow

definition of "premises" serves the purpose of the rule or

the underlying statute. GTE also argues that Congress only

intended TOCSIA to apply to telephones made available in

"hotels, universities, and other public locations." 24 GTE

asserts that airplanes, trains, and rental cars are not "loca-

tions" because such vehicles are mobile. We conclude,

however, that airplanes, trains, and rental cars can reason-

ably be considered "locations" despite the fact that they are

mobile. The Commission specifically stated in the Report

and Order establishing our TOCSIA rules that it "will

interpret the definition [of aggregator] broadly enough to

ensure compliance with the goals of our rules and the

Act."2s

17. Moreover, the statute applies not only to telephones

made available to transient users of the aggregator's prem-

ises, but also to telephones made available to the public.

The telephones offered by the GTE subsidiaries are avail-

able to the public.26 This is not a situation in which the

telephones are made available by "establishments such as

law firms or corporations ... solely for the convenience of

their customers," which Congress stated would be exempt

from the rules under TOCSIA.27 The telephone service

provided for the convenience of customers referred to by

Congress are courtesy telephones. The telephones provided

by the GTE subsidiaries are not courtesy telephones be-

23 See 47 C.F.R. § 64.708(b); 47 U.S.C. § 226(a)(2).

24 S. Rep. No. 439, lOlst Cong .. 2d Sess. at 2, 5.

25

Report and Order, 6 FCC Red at 2751.

26 While it is true that the telephones offered by Airfone and

Railfone are only available to ticketed passengers and the tele-

phones offered by Mobilnet are only available to automobile

rental agreement holders, we believe that the telephones are

nonetheless available to the public

.C. § 226(a)(2).

24 S. Rep. No. 439, lOlst Cong .. 2d Sess. at 2, 5.

25

Report and Order, 6 FCC Red at 2751.

26 While it is true that the telephones offered by Airfone and

Railfone are only available to ticketed passengers and the tele-

phones offered by Mobilnet are only available to automobile

rental agreement holders, we believe that the telephones are

nonetheless available to the public. This situation is analogous

to the payphones available inside airport terminals which are

only available to ticketed passengers who have cleared security.

Although these payphones are only available to ticketed pas-

~~ngers as well, the mandates of TOCSIA apply.

' See S. Rep. No. 439, lOlst Cong., 2d Sess. at 10.

28 We note also that the airlines, railroad carriers, and car

rental agencies which have GTE telephones installed in their

6174

,

cause the consumer. not the telephone provider. pays for

the cost of the call. Because the telephones provided by the

GTE subsidiaries fall within the statutory definition of

aggregator telephones, the GTE subsidiaries must comply

with the aggregator rules. Therefore, GTE's petition must

be denied in so far as the aggregator rules of TOCSIA are

concerned.28

18. Having ruled that Airfone, Railfone. and Mobilnet

are aggregators under our rules, we now turn to whether

the GTE subsidiaries are OSPs under the rules. An OSP. as

discussed above, is a provider of interstate telecommunica-

tions service initiated from an aggregator location that in-

cludes automatic or live assistance for billing or call

completion.29 Airfone does provide this type of service.

Airfone not only provides a radio link between the air-

plane and ground base station. but also interconnects di-

rectly to the interstate switched network. Because Airfone's

telephones are activated by credit cards. Airfone provides

automatic assistance for billing purposes. 30 Accordingly, we

find Airfone to be an OSP under our rules that must

comply with the OSP rules of TOCSIA.

19

rvice.

Airfone not only provides a radio link between the air-

plane and ground base station. but also interconnects di-

rectly to the interstate switched network. Because Airfone's

telephones are activated by credit cards. Airfone provides

automatic assistance for billing purposes. 30 Accordingly, we

find Airfone to be an OSP under our rules that must

comply with the OSP rules of TOCSIA.

19. The concerns expressed by GTE about its inability to

comply with various TOSCIA rules are misplaced. For

instance, GTE maintains that Airfone cannot comply with

the call splashing prohibition of Section 64.705(a)(3) of the

Rules. GTE argues that because it is impossible to deter-

mine the precise location where the call was placed it

cannot comply with Section 64.705. Currently. if a cus-

tomer using Airfone chose to use his or her own IXC, the

location on the bill would reflect the location of the inter-

cepting ground station and not the actual location of the

airplane at the time the call was placed. 31 Airfone is cur-

rently converting to a second-generation system that will

route all calls from the receiving ground station to one of

two switching centers and the location of the call would,

therefore, reflect one of these two switching centers in the

future.

20. However, Section 64.705(a)(3) allows splashing when

the customer requests to be transferred to another provider

of operator services. the customer is informed that the rates

for the call may not reflect the actual originating location

of the call, and the customer consents to the transfer.

Accordingly, Airfone informs customers in the posting of

its rates that they can select the IXC to carry their call, but

that the rates charged by that IXC may reflect an originat-

ing location other than the plane's actual location

ices. the customer is informed that the rates

for the call may not reflect the actual originating location

of the call, and the customer consents to the transfer.

Accordingly, Airfone informs customers in the posting of

its rates that they can select the IXC to carry their call, but

that the rates charged by that IXC may reflect an originat-

ing location other than the plane's actual location. then a

customer could choose to use his or her own IXC by

consenting to the transfer and the splashing would be

allowed.32

vehicles are aggregators under our rules because they are pro-

viding the use of the telephones to transient users and members

of the public, their customers.

29 See 47 C.F.R. § 64.708(g); 47 U.S.C. § 226(a)(7).

30 Additionally, Airfone provides its own live operators to assist

customers.

31 There is no practical method to determine from the airplane

in every case which base station will pick up a call when it is

~laced.

2 We note that Airfone now bundles the airtime and long

distance portion of its rates. This bundling would apparently

allow Airfone to charge the same rate to the customer regardless

of whether the customer chooses his or her own lXC. Under

this scenario, if a customer were to choose his or her own IXC.

he or she would be billed Airfone's bundled rate and also billed

by the chosen lXC, thereby incurring a higher overall charge.

8 FCC Red No. 18

Federal Communications Commission Record

DA 93-1022

21. Both Railfone and Mobilnet only provide radio links

to a facilities based cellular carrier. The underlying cellular

carrier that provides the operator service interconnects di-

rectly to the interstate public switched network. Therefore,

we find that Railfone and Mobilnet are not OSPs under

our rules. Rather, the cellular carriers that connect the

calls from Railfone and Mobilnet to the switched network

are the OSPs for the services provided

to a facilities based cellular carrier. The underlying cellular

carrier that provides the operator service interconnects di-

rectly to the interstate public switched network. Therefore,

we find that Railfone and Mobilnet are not OSPs under

our rules. Rather, the cellular carriers that connect the

calls from Railfone and Mobilnet to the switched network

are the OSPs for the services provided. For this reason,

GTE's concern that it cannot brand calls on Railfone and

Mobilnet because it does not control the cellular switch

which receives the calls is misplaced. The call branding

requirement is a regulation imposed upon the OSPs. Be-

cause Railfone and Mobilnet are only aggregators under

our rules, Railfone and Mobilnet do not need to comply

with the OSP requirements.33

22. Likewise, because our ruling that the telephones

provided by Airfone fall within the aggregator provision of

our rules, In-Flight's petition to exempt all ATG licensees

from TOCSIA must be denied in so far as the aggregator

rules are concerned. Accordingly, we extend our ruling

that Airfone must comply with the aggregator rules to all

ATG licensees. Likewise, our ruling that Airfone is an OSP

under the Rules extends to all ATG carriers. Therefore. all

the ATG licensees are to comply with the OSP require-

ments as well as the aggregator requirements of TOCSIA.

Accordingly. In-Flight"s request that all ATG licensees be

exempt from the requirements of TOCSIA is denied.

B. Waterway

23. We also find that Waterway's AMTS services is not

exempt from either the aggregator or OSP requirements of

TOCSIA. Waterway provides telephones on river cruise

boats and harbor cruise or dinner boats. These telephones

are available for interstate telephone calls by the public

and by transient users of the premises of the boat.

Waterway is therefore an aggregator under our rules

Waterway

23. We also find that Waterway's AMTS services is not

exempt from either the aggregator or OSP requirements of

TOCSIA. Waterway provides telephones on river cruise

boats and harbor cruise or dinner boats. These telephones

are available for interstate telephone calls by the public

and by transient users of the premises of the boat.

Waterway is therefore an aggregator under our rules.

Waterway argues that the call blocking prohibition has no

application to it because the radio link provided by

Waterway from the ship to the shore base station is the

only manner in which a customer could obtain a radio

link needed for a call. Therefore, argues Waterway, the

customer can not avoid using Waterway's services in order

This practice contravenes the underlying goal of TOCSIA which

allows callers to choose the IXC offering the best rate and to pay

that rate. While we have serious concerns about the lawfulness

of this practice, this issue is not within the purview of this

Order.

33 The

facilities

based

cellular carrier which intercepts

Railfone's or Mobilnet's calls, however, is an OSP under the

Commission's rules. Therefore, the cellular licensee will be

required to comply with the OSP rules adopted pursuant to

TOCSIA.

34 Like Airfone, Waterway has bundled its airtime and long

distance charges. A customer using Waterway will apparently

incur a higher total charge for a call if he or she chooses his or

her own carrier. As we said with respect to Airfone, we have

serious concerns about the reasonableness of this practice. See

note 32, supra. However, the legality of Waterway's tariff is not

within the scope of this proceeding. We only decide here that

Waterway is subject to the requirements of TOCSIA.

35 Moreover, the river boat and harbor and dinner cruise boat

companies which have allowed the installation of Waterway

telephones on their vessels are also agreggators under our rules.

36 Waterway does not dispute the fact that it is an OSP in its

6175

to place a call

ff is not

within the scope of this proceeding. We only decide here that

Waterway is subject to the requirements of TOCSIA.

35 Moreover, the river boat and harbor and dinner cruise boat

companies which have allowed the installation of Waterway

telephones on their vessels are also agreggators under our rules.

36 Waterway does not dispute the fact that it is an OSP in its

6175

to place a call. Waterway, however, has misconstrued the

call blocking prohibition. While it is true that a customer

must use Waterway to establish a radio link with the shore.

the customer does not have to accept the presubscribed

IXC that connects the call from the shore base station to its

terminating point. Therefore, after the link with the shore

has been established, Waterway may not block access to the

IXC of the customer's choosing.34 Consumers must be

allowed to use the long distance carrier of their choice.

Accordingly, Waterway's request that its AMTS services

offered to customers on river and harbor cruise boats be

exempt from the aggregator requirements of TOCSIA is

denied. 35

24. Waterway, like Airfone, offers more than a radio link

to a receiving station. Waterway is the provider of an

operator service offering interconnection to the switched

network. Waterway furnishes both live operator assistance

and automatic connection. Waterway, therefore offers inter-

state telecommunications service from an aggregator loca-

tion using an automatic or live operator for billing and call

completion. Accordingly. Waterway is an OSP under our

rules,36 and is therefore required to comply also with the

OSP rules of TOCSIA. 37

C. Petrocom

25. Petrocom, as the licensee of cellular frequency Block

A in the Gulf of Mexico, provides pay telephone service to

oil industry employees, who typically work two-week shifts,

on drilling rigs. production platforms, and marine vessels.

Petrocom states that none of its telephones is in a public

location

6 and is therefore required to comply also with the

OSP rules of TOCSIA. 37

C. Petrocom

25. Petrocom, as the licensee of cellular frequency Block

A in the Gulf of Mexico, provides pay telephone service to

oil industry employees, who typically work two-week shifts,

on drilling rigs. production platforms, and marine vessels.

Petrocom states that none of its telephones is in a public

location. Rather, its cellular telephones are in areas acces-

sible only with the permission of the oil company owners.

We find, however, that Petrocom is an aggregator under

TOCSIA. While the oil platforms may not be public, and

despite the length of their shifts. which requires the oil

industry employees to take temporary residence off shore,

the users of Petrocom 's telephones are "transient users of

[the oil company's] premises." 38 Petrocom, therefore, fits

within the definition of an aggregator.39 The work shifts of

the oil industry employees are of a duration that makes the

comments. Instead, Waterway simply requests that any exemp-

tion given to the GTE subsidiaries also be extended to AMTS

service.

37 To avoid violating the call splashing requirements of our

rules (Section 64.705(a)(3)), Waterway must, in the posting of

its rates, inform customers that if they choose their own IXC,

the billing location reflected on the resulting long distance bill

will be the location of the receiving switch and not the location

of the ship. If the customer elects to be transferred to an lXC

other than the presubscribed IXC after being informed of this

the customer will have consented to the transfer. Therefore,

even though the location of the call on a long distance portion

of the bill would reflect the receiving shore station and not the

actual origination of the call, the splashing is allowed because

the customer consented. See 47 C.F.R. § 64.705(a)(3).

38 See 47 C.F.R. § 64.708(b); 47 U.S.C. § 226(a)(2)

IXC after being informed of this

the customer will have consented to the transfer. Therefore,

even though the location of the call on a long distance portion

of the bill would reflect the receiving shore station and not the

actual origination of the call, the splashing is allowed because

the customer consented. See 47 C.F.R. § 64.705(a)(3).

38 See 47 C.F.R. § 64.708(b); 47 U.S.C. § 226(a)(2).

39 Petrocom likens its :;ituation to that of a telephone made

available by "establishments such as law firms or corpora-

tions ... solely for the convenience of their customers," which is

exempt from TOCSIA. See S. Rep. No. 439. IOlst Cong., 2d Sess.

at JO. As stated previously, this type of telephone is a courtesy

telephone. The telephones offered by Petrocom are not courtesy

telephones because the cost of the call is borne by the customer

and not the telephone provider. See , 17, supra.

DA 93-1022

Federal Communications Commission Record

8 FCC Red No. 18

employees "transient.1140 We believe that the dual concerns

of Congress that consumers are aware of the pre-subscribed

operator service provider and that the consumer have the

opportunity to employ the carrier of his or her choice are

present here. Petrocom has failed to demonstrate any basis

for it not being considered an aggregator under our rules.

Accordingly, we are denying Petrocom's request and

Petrocom must. therefore, comply with the aggregator re-

quirements of our rules.41

26. Further, the service offered by Petrocom is an inter-

state telephone service that originates from an aggregator

location, and includes automatic or live assistance for bill-

ing and call completion purposes. Petrocom offers cellular

radio telephone service from the Gulf of Mexico to the

shore and connection with the public switched network.

Petrocom is, therefore, an OSP under our rules

26. Further, the service offered by Petrocom is an inter-

state telephone service that originates from an aggregator

location, and includes automatic or live assistance for bill-

ing and call completion purposes. Petrocom offers cellular

radio telephone service from the Gulf of Mexico to the

shore and connection with the public switched network.

Petrocom is, therefore, an OSP under our rules. Accord-

ingly, we deny Petrocom's request for an exemption from

the rules established pursuant to TOCSIA and rule that

Petrocom must also comply with the OSP requirements of

our rules.

27. Petrocom argues that applying the aggregator rules to

its cellular service in the Gulf could force it to discontinue

service. Petrocom states that if it failed to block access

codes, its customers would avoid airtime charges by placing

calls with their selected IXCs. Petrocom asserts that the

large IXCs will not bill and collect cellular airtime charges

in connection with their provision of OSP services.

Petrocom argues that without compensation for the cellular

airtime on its cellular pay telephones it will not be able to

afford to continue service in the Gulf of Mexico.

28. The issue of compensation for competitive private

pay telephone owners has been addressed by the Commis-

sion, and Petrocom participated in these proceedings. In

the Commission's Second Report and Order in CC Docket

91-35,42 the Commission stated that the question of whether

companies such as Petrocom are aggregators and thus

would be required to unblock access to the IXCs of the

customer's choice was at that time unresolved.43 The Com-

mission, therefore, did not rule on the issue of compensa-

tion to Petrocom. However, based on the record here, it

appears that once Petrocom unblocks access from its

phones, it will not be able to collect airtime charges.44

Thus, we tentatively conclude that Petrocom is entitled to

compensation, but we lack sufficient information to deter-

mine the exact level of compensation

lved.43 The Com-

mission, therefore, did not rule on the issue of compensa-

tion to Petrocom. However, based on the record here, it

appears that once Petrocom unblocks access from its

phones, it will not be able to collect airtime charges.44

Thus, we tentatively conclude that Petrocom is entitled to

compensation, but we lack sufficient information to deter-

mine the exact level of compensation. Therefore, we order

Petrocom to provide additional information on the level of

compensation to which it believes it is entitled within 20

days of the release of this Order.45 We further invite any

interested party wishing to comment on either. our tenta-

tive conclusion that Petrocom is entitled to compensation

or on the amount Petrocom should be compensated to file

40 See e.g., Report and Order, 6 FCC Red at 2752. n.31. (Uni-

versity housing which is other than a typical apartment build-

ing is covered under the definition of TOCSIA).

41 The oil companies with Petrocom telephones installed on

their drilling rigs, production platforms, and marine vessels are

also aggregators under the Commission's rules.

42 Policies and Rules Concerning Operator Access and Pay

Telephone Compensation, Second Report and Order, 7 FCC

Red 3251 (1992)

43 The Commission referenced the instant petition for declara-

tory ruling filed by GTE. See Second Report and Order, 7 FCC

Red at n.103.

44 Apparently the issue of compensation does not arise for the

6176

comments within 45 days of the release of this Order.

Reply comments will be due 60 days after the release of

this Order.

D. Other Commenters

29. We also deny the broad ruling sought by McCaw and

PhoneTel to exempt all mobile telephones from our

TOCSIA rules. McCaw and PhoneTel advance the same

argument as GTE that "premises" does not apply to mobile

telephones, an argument we have already rejected

within 45 days of the release of this Order.

Reply comments will be due 60 days after the release of

this Order.

D. Other Commenters

29. We also deny the broad ruling sought by McCaw and

PhoneTel to exempt all mobile telephones from our

TOCSIA rules. McCaw and PhoneTel advance the same

argument as GTE that "premises" does not apply to mobile

telephones, an argument we have already rejected. Accord-

ingly, we rule that the provider of any mobile telephone

made available for interstate telephone calls either to the

public, or to transient users of the mobile premises. must

comply with the aggregator rules of TOCSIA. For the same

reasons, we deny Cl's request to exempt all cellular pay

telephones from the requirements of TOCSIA. Any entity

providing cellular telephones for interstate calls to the

public or to transient users of the premises in which the

cellular telephones are installed must comply with the

Commission's aggregator rules.

30. The comments filed by McCaw, PhoneTel, and CI do

not describe any specific service to the degree necessary to

make a determination whether other mobile or cellular

telephone service providers are OSPs under the Rules. The

comments filed by these parties speak only in general

terms about exempting all mobile and cellular telephones

from the requirements of TOCSIA. If, however, the service

provider, such as McCaw, PhoneTel, or CI, provides inter-

state telecommunications service from an aggregator loca-

tion that includes automatic or live assistance for billing or

call completion without billing to the telephone from

which the call was placed or without an access code or

previously established billing account, then the service pro-

vider must comply with the OSP requirements for that

service.

IV. CONCLUSION AND ORDERING CLAUSES

31. In conclusion, we find that TOCSIA is clear in its

terms

tion that includes automatic or live assistance for billing or

call completion without billing to the telephone from

which the call was placed or without an access code or

previously established billing account, then the service pro-

vider must comply with the OSP requirements for that

service.

IV. CONCLUSION AND ORDERING CLAUSES

31. In conclusion, we find that TOCSIA is clear in its

terms. The statute mandates that the Commission regulate

as an aggregator any entity that makes telephones available

to the public or to transient users of its premises and that

we regulate as an OSP any entity that provides interstate

telecommunications service initiated from an aggregator

location that includes automatic or live assistance to ar-

range for billing or call completion. We find that the GTE

subsidiaries, as well as all ATG carriers, Waterway, and

Petrocom provide services which make them aggregators.

Furthermore, we find that Airfone, as well as all ATG

carriers, Waterway, and Petrocom provide services which

make them OSPs. The statute requires that the petitioners

GTE subsidiaries or for Waterway because these entities use

credit card activated telephones that enable GTE and Waterway

to obtain billing information independent of the lXC used by

the customer. Therefore, GTE and Waterway are able to bill the

customer for the airtime and the IXC bills separately for the

long distance portion of the call.

45 Any other mobile telecommunications carrier affected by

this Order that believes it may be entitled to compensation as

result of being covered by the requirements of TOCSIA also

should file comments within 45 days of the release of this

Order. Based on the record in this proceeding, however, we do

not conclude that any other mobile telecommunications carrier

is entitled to compensation.

45 Any other mobile telecommunications carrier affected by

this Order that believes it may be entitled to compensation as

result of being covered by the requirements of TOCSIA also

should file comments within 45 days of the release of this

Order. Based on the record in this proceeding, however, we do

not conclude that any other mobile telecommunications carrier

is entitled to compensation.

8 FCC Red No. 18

Federal Communications Commission Record

DA 93-1022

and commenters must comply with the requirements of

TOCSIA. 46 Accordingly, we deny the petition for declara-

tory ruling and other requests for exemptions of TOCSIA.

32. IT IS THEREFORE ORDERED that the Petition for

a Declaratory Ruling filed by GTE Service Corporation

that GTE Airfone Incorporated, GTE Railfone Incorpo-

rated, and GTE Mobilnet Incorporated to be exempt from

the requirements of the Telephone Operator Consumer

Services Improvement Act of 1990 IS HEREBY DENIED.

33. IT IS FURTHER ORDERED that the requests of

Waterway Communications System, Inc. and Petroleum

Communications, Inc. for an exemption from the require-

ments of the Telephone Operator Consumer Services Im-

provement Act of 1990 ARE HEREBY DENIED.

34. IT IS FURTHER ORDERED that the declaratory

rulings filed by In-Flight Phone Corporation, McCaw Cel-

lular Communications, Inc., PhoneTel Technologies, Inc.,

and Cellular, Inc., for broad exemptions from the require-

ments of the Telephone Operators Consumer Services Im-

provement Act of 1990 ARE HEREBY DENIED.

35.

IT

IS

FURTHER ORDERED that Petroleum

Communications. Inc. SHALL FILE additional information

within 20 days of the release of this Order demonstrating

the level of compensation to which it believes it is entitled.

36. IT IS FURTHER ORDERED that parties wishing to

comment on either the tentative conclusion that Petrocom

is entitled to compensation. or on Petrocom's comments

concerning the amount that Petrocom should be com-

pensated shall file comments by October 12, 1993

information

within 20 days of the release of this Order demonstrating

the level of compensation to which it believes it is entitled.

36. IT IS FURTHER ORDERED that parties wishing to

comment on either the tentative conclusion that Petrocom

is entitled to compensation. or on Petrocom's comments

concerning the amount that Petrocom should be com-

pensated shall file comments by October 12, 1993. Reply

comments shall be filed by October 27, 1993.

FEDERAL COMMUNICATIONS COMMISSION

Kathleen B. Levitz

Acting Chief, Common Carrier Bureau

46 Those only providing telephones without providing interstate

or;rator service are only subject to the aggregator requirements.

4 The Bell Telephone Company of Pennsylvania, the four

6177

APPENDIX A

PARTIES FILING COMMENTS

American Telegraph and Telephone

Bell Atlantic Telephone Companies47

Cellular, Inc.

lnflight Phone Corporation

MCI Telecommunications Corporation

Petroleum Communications, Inc.

Waterway Communications System, Inc.

PARTIES FILING REPLY COMMENTS

MCI Telecommunications Corporation

GTE Service Corporation

McCaw Cellular Communications, Inc.

PhoneTel Technologies, Inc.

Waterway Communications System, Inc.

Chesapeake and Potomac Telephone Companies, the Diamond

State Telephone Company, and New Jersey Bell Telephone

Company.