Guam Public Utilities Commission Petition for Declaratory Ruling concerning Sections 3(37) and 251(h) of the Communications Act Treatment of the Guam Telephone Authority and Similarly Situated Carriers as Incumbent Local Exchange Carriers under Section…

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Text

Federal Communications Commission

FCC 97-171

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matters of

Guam Public Utilities Commission

Petition for Declaratory Ruling

concerning Sections 3(37) and 251(h)

of the Communications Act

Treatment of the Guam Telephone

Authority and Similarly Situated

Carriers as Incumbent Local Exchange

Carriers under Section 251(h)(2)

of the Communications Act

CCB Pol. 96-18

CC Docket No. 97-134

DECLARATORY RULING AND

NOTICE OF PROPOSED RULEMAKING

Adopted: May 16, 1997

Comment Date: July 7, 1997

Reply Comment Date: July 28, 1997

By the Commission:

Released: May 19, 1997

TABLE OF CONTENTS

para.

I. INTRODUCTION

II. BACKGROUND

Relevant Provisions of the Commimications Act

A Brief History of OTA

The Parties' Positions

III. DECLARATORY RULING

GTA's Status imder Section 251(h)(1)

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GTA's Status under Section 3(37)

IV. NOTICE OF PROPOSED RULEMAKING

Overview

Discussion

Section 251(h)(2)(A)

Section 251(h)(2)(B)

Section 251(h)(2)(C)

Proposal to Treat GTA ~ and Possibly

Others ~ as an Incumbent EEC

Procedural Matters

Ex Parte Presentations

. 44

Initial Regulatory Flexibility Analysis

Comment Filing Procedures

V. ORDERING CLAUSES

1. INTRODUCTION

On August 13, 1996, the Public Utilities Commission of the Territory of Guam~

(Guam Commission) filed a Petition for Declaratory Ruling (Petition) seeking a declaratory

ruling on two questions arising from application of certain provisions of the

Telecommunications Act of 1996 (1996 Act)' to the circumstances in the Territory of Guam

(Guam):

(A) Is the Guam Telephone Authority (GTA) — the local exchange

carrier (EEC) throughout Guam ~ an "incumbent local exchange carrier" within

the meaning of section 251(h)(1) of the Communications Act," and thus subject

to the interconnection, imbimdling, resale, and other obligations imposed by

section 251(

communications Act of 1996 (1996 Act)' to the circumstances in the Territory of Guam

(Guam):

(A) Is the Guam Telephone Authority (GTA) — the local exchange

carrier (EEC) throughout Guam ~ an "incumbent local exchange carrier" within

the meaning of section 251(h)(1) of the Communications Act," and thus subject

to the interconnection, imbimdling, resale, and other obligations imposed by

section 251(c) of the Act?^

Pub. L. No. 104-104, 110 Stat. 56, codified at 47 U.S.C. §§ 151 et seq. The 1996 Act amended the

Communications Act of 1934 (Act or Communications Act), 47 U.S.C. §§ 151 et seq. All citations herein to the

1996 Act will be to the 1996 Act as codified in Title 47 of the United States Code.

47 U.S.C. § 251(h)(1).

47 U.S.C. § 251(c).

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(B) Is GTA a "rural telephone company" within the meaning of section

3(37) of the Communications Act/ and thus exempt (at least initially) under

section 251(f)(1) of the Act^ from the obligations of section 251(c)?

We address these questions in Part 111, below. With regard to the first

question, we determine that GTA is not an "incumbent local exchange carrier" within the

meaning of section 251(h)(1). GTA is not an incumbent LEC under that provision because it

was not deemed to be a member of the National Exchange Carrier Association, Inc. (NECA)

as of February 8, 1996, the date of enactment of the 1996 Act, and it has not since become a

successor or assign of a NECA member.^ With regard to the second question, we determine

that GTA is a "rural telephone company" within the meaning of section 3(37). GTA is a rural

telephone company under that provision because it is a local exchange carrier operating entity

that provides telephone exchange service to a local exchange study area ~ Guam ~ with

fewer than 100,000 access lines.'

Our determination that GTA is not an incumbent LEC under section 251(h)(1)

means that the obligations of section 251(c) do not apply to GTA at this time

ection 3(37). GTA is a rural

telephone company under that provision because it is a local exchange carrier operating entity

that provides telephone exchange service to a local exchange study area ~ Guam ~ with

fewer than 100,000 access lines.'

Our determination that GTA is not an incumbent LEC under section 251(h)(1)

means that the obligations of section 251(c) do not apply to GTA at this time. Section

251(h)(2) of the Communications Act,^ however, allows us to treat a local exchange carrier

such as GTA as an incumbent LEC for pury^'ses of section 251 if certain statutory criteria are

met.' Because of the importance of the question for the development of telecommunications

competition in Guam, we initiate a rulemaking proceeding pursuant to section 251(h)(2) to

determine whether GTA should be treated as an incumbent LEC for purposes of section 251.

We tentatively conclude that the statutory criteria for such treatment set forth in section

251(h)(2) are satisfied, and that such treatment is necessary to avoid frustrating the

Congressional intent to include Guam within the new national policy framework of

competition in telecommunications. We propose, therefore, to provide for the treatment of

' 47 U.S.C. § 153(37).

47 U.S.C. § 251(f)(1).

' See 47 U.S.C. § 251(h)(1)(B). NECA is an association of LECs established by the Commission in the

early 1980s to administer the interstate access tariff and revenue distribution processes. See MTS and IVATS

Market Structure, CC Docket No. 78-72, Phase 1, Third Report and Order, 93 FCC 2d 241, 333-34 (1983).

' See 47 U.S.C. § 153(37)(C); Guam Telephone Authority Petition for Declaratory Ruling, Report and

Order, DA 97-595 (Accg. & Aud. Div. rel. March 21, 1997)(granting GTA's request for designation of Guam as

a study area).

47 U.S.C. § 251(h)(2).

We list those criteria in Part 11(A), infra.

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arket Structure, CC Docket No. 78-72, Phase 1, Third Report and Order, 93 FCC 2d 241, 333-34 (1983).

' See 47 U.S.C. § 153(37)(C); Guam Telephone Authority Petition for Declaratory Ruling, Report and

Order, DA 97-595 (Accg. & Aud. Div. rel. March 21, 1997)(granting GTA's request for designation of Guam as

a study area).

47 U.S.C. § 251(h)(2).

We list those criteria in Part 11(A), infra.

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GTA as an incumbent LEC for section 251 purposes. We invite comment on these tentative

conclusions and proposal. We also seek comment whether LECs situated similarly to GTA

exist and, if so, whether we should adopt the same rule with respect to such class or category

of LECs.

11. BACKGROUND

Relevant Provisions of the Communications Act

Section 251(h) establishes two alternative grounds for classifying a LEC such

as GTA as an incumbent LEC. First, a LEC may satisfy the statutory definition of an

incumbent LEC set forth in section 251(h)(1):

[T]he term "incumbent local exchange carrier" means, with

respect to an area, the local exchange carrier that (A) on the date

of enactment of the Telecommunications Act of 1996, provided

telephone exchange service in such area; and (B)(i) on such date

of enactment, was deemed to be a memln. of the exchange

carrier association pursuant to section 69.601(b) of the

Commission's regulations (47 C.F.R. § 69.601(b)); or (ii) is a

person or entity that, on or after such date of enactment, became

a successor or assign of a member described in clause (i).'°

Second, under section 251(h)(2), the Commission "may, by rule, provide for the treatment of

a local exchange carrier (or class or category thereof) as an incumbent local exchange carrier

for purposes of [section 251]"" if:

47 U.S.C. § 251(h)(1)

. § 69.601(b)); or (ii) is a

person or entity that, on or after such date of enactment, became

a successor or assign of a member described in clause (i).'°

Second, under section 251(h)(2), the Commission "may, by rule, provide for the treatment of

a local exchange carrier (or class or category thereof) as an incumbent local exchange carrier

for purposes of [section 251]"" if:

47 U.S.C. § 251(h)(1). Section 69.601(b) of the Commission's rules provides:

All telephone companies that participate in the distribution of Carrier

Common Line revenue requirement, pay long term support to association

Common Line Tariff participants, or receive payments from the transitional

support fund administered by the association shall be deemed to be members

of the association.

47 C.F.R. § 69.601(b). The "association" to which section 251(h)(1) and this rule refer is NECA.

47 U.S.C. § 251(h)(2).

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(A) such carrier occupies a position in the market for telephone

exchange service within an area that is comparable to the

position occupied by a carrier described in paragraph (1);

(B) such carrier has substantially replaced an incumbent local

exchange carrier described in paragraph (1); and (C) such

treatment is consistent with the public interest, convenience, and

necessity and the purposes of this section.'"

Section 251(c) requires incumbent LECs ~ and only incumbent LECs — to

meet certain specified obligations with respect to interconnection, access to unbundled

network elements,'^ resale of their retail services, notification of interoperability changes to

their facilities or networks, and collocation.'"' Section 251(f)(1), however, provides an

automatic exemption from section 251(c) for any incumbent EEC that is a "rural telephone

company,"'^ which section 3(37) defines as:

a local exchange carrier operating entity to the extent such entity

(A) provides conunon carrier service to any local exchange

carrier study area that does not include either (i) any

incorporated place of 10

and collocation.'"' Section 251(f)(1), however, provides an

automatic exemption from section 251(c) for any incumbent EEC that is a "rural telephone

company,"'^ which section 3(37) defines as:

a local exchange carrier operating entity to the extent such entity

(A) provides conunon carrier service to any local exchange

carrier study area that does not include either (i) any

incorporated place of 10,000 inhabitants or more, or '.jiy part

thereof, based on the most recently available populatiorx statistics

of the Bureau of the Census: or (ii) any territory, incorporated or

unincorporated, included in an urbanized area, as defined by the

Bureau of the Census as of August 10, 1993; (B) provides

telephone exchange service, including exchange access, to fewer

than 50,000 access lines; (C) provides telephone exchange

service to any local exchange study area with fewer than 100,000

access lines; or (D) has less than 15 percent of its access lines in

Id.

"Network element" means "a facility or equipment used in the provision of a telecommunications

service," and "includes features, functions, and capabilities that are provided by means of such facility or

equipment, including subscriber numbers, databases, signaling systems, and information sufficient for billing and

collection or used in the transmission, routing, or other provision of a telecommunications service." 47 U.S.C.

§ 153(29).

See ^1 U.S.C. § 251(c)(2)-(6). See also Joint Statement of Managers, S. Conf. Rep. No. 104-230, 104th

Cong., 2d Sess., 121-22 {\996)(Joint Explanatory Statement).

47 U.S.C. § 251(f)(1).

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r numbers, databases, signaling systems, and information sufficient for billing and

collection or used in the transmission, routing, or other provision of a telecommunications service." 47 U.S.C.

§ 153(29).

See ^1 U.S.C. § 251(c)(2)-(6). See also Joint Statement of Managers, S. Conf. Rep. No. 104-230, 104th

Cong., 2d Sess., 121-22 {\996)(Joint Explanatory Statement).

47 U.S.C. § 251(f)(1).

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communities of more than 50,000 on the date of enactment of

the Telecommunications Act of 1996.'^

The automatic exemption from section 251 (c) terminates if and when the rural telephone

company receives a "bona fide request for interconnection, services, or network elements" that

the relevant State commission determines is not unduly economically burdensome, technically

infeasible, or inconsistent with statutory tiniversal service requirements.'^ Moreover, section

"251(f)(2) of the Communications Act provides that a LEC "with fewer than 2 percent of the

Nation's subscriber lines installed in the aggregate nationwide"'^ may;

petition a State commission for a suspension or modification of

the application of a requirement or requirements of [section

251(b)] or [section 251(c)] to telephone exchange service

facilities specified in such petition. The State Commission shall

grant such petition to the extent that, and for such duration as,

the State commission determines that such suspension or

modification (A) is necessary (i) to avoid a significant adverse

economic impact on users of telecommunications services

generally; (ii) to avoid imposing a requirement that is unduly

economically burdensome; or (iii) to avoid imposing a

requirement that is technically infeasible; and (B) is consistent

with the public interest, convenience, and necessity."

A Brief History of GTA

uspension or

modification (A) is necessary (i) to avoid a significant adverse

economic impact on users of telecommunications services

generally; (ii) to avoid imposing a requirement that is unduly

economically burdensome; or (iii) to avoid imposing a

requirement that is technically infeasible; and (B) is consistent

with the public interest, convenience, and necessity."

A Brief History of GTA

In 1973, the government of the Territory of Guam created GTA as a not-for-

profit public corporation to provide local exchange and exchange access services to the

Territory.-" Since that time, GTA has operated as a semi-autonomous agency of the Territory

47 U.S.C. § 153(37).

47 U.S.C. § 251(f)(1).

47 U.S.C. § 251(f)(2).

Id.

See IT&E Overseas, Inc. and PCI Communications, Inc. Petition for Emergency Relief and Expedited

Declaratory Ruling, Memorandum Opinion and Order, 7 FCC Red 4023 (1992)(Guam Jurisdictional Order), as

modified in 1 FCC Red 4670 (1992), 7 FCC Red 7270 (1992), 8 FCC Red 8381 (1993)(all extending filing

dates), petitions for recon. pending.

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of Guam."' OTA is regulated by the Guam Commission, which is also an agency of the

government of the Territory of Guam. By 1995, GTA operated the twenty-ninth largest local

telephone network in the United States, serving approximately 67,000 access lines." GTA

appears to be the sole provider of local telephone service to the more than 130,000 residents

of Guam."'

On June 2, 1992, the Commission determined, inter alia, that GTA and Guam

are subject to the Communications Act of 1934, even though that Act makes no explicit

mention of Guam

twenty-ninth largest local

telephone network in the United States, serving approximately 67,000 access lines." GTA

appears to be the sole provider of local telephone service to the more than 130,000 residents

of Guam."'

On June 2, 1992, the Commission determined, inter alia, that GTA and Guam

are subject to the Communications Act of 1934, even though that Act makes no explicit

mention of Guam. The Commission based its finding of jurisdiction on its statutory mandate

to "regulat[e] interstate and foreign commerce in commimication by wire and radio.""'* The

Commission noted that the Act expressly defines such communication to include transmissions

to or from any Territory of the United States."^ The Commission concluded, therefore, "that

the Communications Act was intended by Congress to apply, ... in every respect, to all radio

and wire communications originating or terminating on the Territory of Guam.""^

In the Guam Jurisdictional Order, the Commission also concluded that GTA

had engaged in unjust, unreasonable, and unreasonably discriminatory practices in violation of

See GTA NECA Membership Order at ^ 2.

■"

Phone Facts at 9 (United States Telephone Association 1996 ed.)(indicating that in fiscal year 1995

GTA was the twenty-ninth largest telephone company, with 66,587 access lines). See Comments of Guam Cable

Telecommunications, Inc. in Applications for GTA Interconnection and Resale Under the 1996

Telecommunications Act. Guam Commission Docket No. 96-006, at 2 (attached to the Guam Commission's

Petition); Comments of TelePacific Network, Inc. in Applications for GTA Interconnection and Resale Under the

1996 Telecommunications Act, Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam

Commission's Petition). See also Comments of Guam Cable Telecommunications, Inc. at 3; Comments of MCI

Telecommunications Corp. at 3.

See Bureau of the Census, United States Department of Commerce, 1990 Census of Population and

Housing: Guam at 1; Letter dated February 5, 1997 from Veronica M

der the

1996 Telecommunications Act, Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam

Commission's Petition). See also Comments of Guam Cable Telecommunications, Inc. at 3; Comments of MCI

Telecommunications Corp. at 3.

See Bureau of the Census, United States Department of Commerce, 1990 Census of Population and

Housing: Guam at 1; Letter dated February 5, 1997 from Veronica M. Ahem, GTA's outside counsel, to Alex

Starr, FCC's Common Carrier Bureau, CCB Pol. 96-18; Comments of the Guam Telephone Authority in

Applications for GTA Interconnection and Resale Under the 1996 Telecommunications Act, Guam Commission

Docket No. 96-006, at 3 n.4 (attached to the Guam Commission's Petition). See also Comments of MCI

Telecommunications Corp. at 3.

Guam Jurisdictional Order, 1 FCC Red at 4024 {quoting 47 U.S.C. § 151).

Id. See 47 U.S.C. §§ 153(e)(1991)(now codified at 47 U.S.C. § 153(22)), 153(g)(1991)(now codified at

47 U.S.C. § 153(50)), 153(0(199l)(now codified at 47 U.S.C. § 153(17)).

Guam Jurisdictional Order, 1 FCC Red at 4024.

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sections 201 and 202 of the Act."^ In particular, the Commission found that GTA had

favored one interexchange carrier over all others by refusing to provide access services,

providing inferior access services, using a non-standard network interface, and imposing

excessive access charges."^ As a result, the Commission ordered GTA. inter alia, to show

cause why it should not be required to file lawful interstate and foreign exchange access

service tariffs with the Commission pursuant to sections 201 and 202 of the Act."'

others by refusing to provide access services,

providing inferior access services, using a non-standard network interface, and imposing

excessive access charges."^ As a result, the Commission ordered GTA. inter alia, to show

cause why it should not be required to file lawful interstate and foreign exchange access

service tariffs with the Commission pursuant to sections 201 and 202 of the Act."'

The Guam Jurisdictional Order triggered a series of reforms in GTA's

practices and policies that continues to this day."' As of the date of enactment of the 1996

Act, however, GTA had not participated in NECA's carrier common line pool, paid long term

support to NECA common line tariff participants, or received payments from NECA's

transitional support fund.^' Since that date of enactment, GTA has successfully petitioned the

Commission to become a member of NECA and thereby participate in NECA's common line

pool.^*

The Parties' Positions

10.

In its Petition, the Guam Commission states that, in the spring of 1996, GTA

received requests from TelePacific Network, Inc. (TNI) and Guam Cable

Telecommtmications, Inc. (GCT) to interconnect with GTA's network and resell GTA's local

47 U.S.C. §§ 201, 202.

Guam Jurisdictional Order. 1 FCC Red at 4025-26.

Id. at 4026-27.

See generally Guam Telephone Authority Tariff No. 1, Transmittal Nos. 7. P, Order, 10 FCC Red 9930

(Com. Car. Bur. 1995); Guam Telephone Authority Petition for Declaratory Ruling, Memorandum Opinion and

Order, 9 FCC Red 4890 (1994); Guam Telephone Authority Tariff F.C.C. No. I, Transmittal Nos. 5 and 6,

Order, 9 FCC Red 1042 (Com. Car. Bur. 1994); Guam Telephone Authority Tariff F.C.C. No. I, Transmittal

No. I, Order. 8 FCC Red 3640 (Com. Car. Bur. 1993).

See 47 C.F.R. § 69.601(b) (listing eonditions for being deemed a NECA member). See also 47 C.F.R

Declaratory Ruling, Memorandum Opinion and

Order, 9 FCC Red 4890 (1994); Guam Telephone Authority Tariff F.C.C. No. I, Transmittal Nos. 5 and 6,

Order, 9 FCC Red 1042 (Com. Car. Bur. 1994); Guam Telephone Authority Tariff F.C.C. No. I, Transmittal

No. I, Order. 8 FCC Red 3640 (Com. Car. Bur. 1993).

See 47 C.F.R. § 69.601(b) (listing eonditions for being deemed a NECA member). See also 47 C.F.R.

§§ 69.2(y), 69.2(ii), 69.612; Safeguards to Improve the Administration of the Interstate Access Tariff and

Revenue Distribution Processes, Report and Order and Order to Show Cause, 10 FCC Red 6243 (1995)

(deseribing aspeets of NECA programs relevant to eonditions for NECA membership listed in 47 C.F.R.

§ 69.601(b)).

See Guam Telephone Authority Petition for Declaratory Ruling to Participate in the National Exchange

Carrier Association, Inc., Memorandum Opinion and Order, DA 97-1007, CCB/CPD File No. 96-29 (Com. Car.

Bur. rel. May 12, \991\GTA NECA Membership Order).

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exchange services pursuant to section 251(c). The Guam Commission also states that GTA

responded to those requests by asserting in a letter to the Guam Commission that, under

sections 3(37) and 251(f)(1) of the Act, GTA would be exempt from the requirements of

section 251(c) if the Guam Commission determined, inter alia, that GTA is a rural telephone

company."" The Guam Commission initiated a proceeding to resolve the issues raised by the

requests and GTA's letter.""* In connection with that proceeding, the Guam Commission filed

the Petition described above, asking this Commission to determine whether GTA is an

"incumbent local exchange carrier" under section 251(h)(1) and a "rural telephone company"

under section 3(37). The Guam Commission takes no position on the merits of either of those

questions."" Ten parties filed comments on the Guam Commission's Petition, and four parties

replied."^

, the Guam Commission filed

the Petition described above, asking this Commission to determine whether GTA is an

"incumbent local exchange carrier" under section 251(h)(1) and a "rural telephone company"

under section 3(37). The Guam Commission takes no position on the merits of either of those

questions."" Ten parties filed comments on the Guam Commission's Petition, and four parties

replied."^

11.

GTA asserts that, "[ujnder a strict interpretation of section 251(h)(1) of the Act,

GTA is not an incumbent local exchange carrier because it was not a member of NECA.

GTA professes no desire, however, "to avoid the obligations of section 251(c) — as long as

the Commission rules that GTA qualifies as a "rural telephone company" under section

3(37)."^

12.

All of the other commenters urge the Commission to minimize GTA's ability

to impede competitive entry and preserve its monopoly status."' Several of those commenters

Guam Commission Petition at 2-3.

See Applications for GTA Interconnection and Resale under the 1996 Telecommunications Act, Guam

Commission Docket No. 96-006.

Guam Commission Petition at 3-9.

These parties are GTA, GCT, IT&E Overseas. Inc. (IT&E), Guam Cellular Telephone Company, Inc.

(Guam Cellular), MCI Telecommunications Corp. (MCI), PCI Communications, Inc. (PCI), Sprint

Communications Company, L.P. (Sprint), The Employers Council, Speaker Don Parkinson of the Guam

Legislature (Speaker Parkinson), Senator Thomas Ada of the Guam Legislature (Senator Ada), and Guam

resident Joseph Stoll (Stoll).

GTA Comments at 3-4.

Id.

See GCT Comments at 1-8; Guam Cellular Comments at 2-3; MCI Comments at 2-4; PCI Comments at

4-6; Sprint Comments at 1-7; Speaker Parkinson Comments at 1-2; Senator Ada Comments at 1-2; The

Employers Council Comments at 1; Stoll Comments at 1-2; GCT Reply at 1-4; MCI Reply at 1-3; IT&E Reply

at 4-7.

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am Legislature (Senator Ada), and Guam

resident Joseph Stoll (Stoll).

GTA Comments at 3-4.

Id.

See GCT Comments at 1-8; Guam Cellular Comments at 2-3; MCI Comments at 2-4; PCI Comments at

4-6; Sprint Comments at 1-7; Speaker Parkinson Comments at 1-2; Senator Ada Comments at 1-2; The

Employers Council Comments at 1; Stoll Comments at 1-2; GCT Reply at 1-4; MCI Reply at 1-3; IT&E Reply

at 4-7.

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argue that GTA possesses substantial financial resources and economies of density,

connectivity, and scale comparable to those possessed by LECs that are clearly incumbent

LECs under section 251(h)(1). Therefore, according to these commenters. a determination

that GTA is not an incumbent LEG would retard the development of competition in the local

exchange and exchange access markets on Guam, in contravention of the pro-competitive

purposes of the 1996 Act."*® GCT, MCI, and PCI maintain that GTA's status as a non-

member of NECA stems from GTA's failure to comply with the Guam Jurisdictional Order

in a timely manner, conduct from which GTA allegedly should not benefit.'*' GCT and MCI

claim that other statutory provisions permit the Commission to impose the obligations of

section 251(c) on GTA, even if GTA is not an incumbent EEC under section 251(h)(1)."*"

IT&E and GCT contend that section 251(h)(2) permits the Commission to rule that GTA must

comply with those obligations."*^

13.

With respect to whether GTA is a "rural telephone company" under section

3(37), GTA does not contend that it qualifies as a "rural telephone company" under sections

3(37)(A), (B), or (D)

ection 251(c) on GTA, even if GTA is not an incumbent EEC under section 251(h)(1)."*"

IT&E and GCT contend that section 251(h)(2) permits the Commission to rule that GTA must

comply with those obligations."*^

13.

With respect to whether GTA is a "rural telephone company" under section

3(37), GTA does not contend that it qualifies as a "rural telephone company" under sections

3(37)(A), (B), or (D). GTA does contend, however, that it qualifies under section 3(37)(C),

because its telephone exchange service area has fewer than 100,000 access lines."*"* The other

commenters identify only one potential obstacle to determining that GTA is a rural telephone

company within the meaning of section 3(37)(C) ~ the Commission had not formally

classified GTA's service area as a "study area" prior to the close of the comment period in

this proceeding."*' Thus, the commenters discuss whether GTA needs to seek a waiver to

See GCT Comments at 2-4, 7; MCI Comments at 2-4; PCI Comments at 4-6; Senator Ada Comments at

1-2; Speaker Parkinson Comments at 1-2; GCT Reply at 3-4; IT&E Reply at 4-7.

See PCI Comments at 4-5; GCT Reply at 3; MCI Reply at 2.

See GCT Comments at 7-8, citing 47 U.S.C. §§ 251(a)(1), (b)(1); MCI Reply at 1-3, citing 47 U.S.C.

§ 154(i).

See GCT Comments at 7; IT&E Reply at 5. The Guam Commission notes that "the Commission may,

by rule, provide that GTA is comparable to an incumbent LEG pursuant to Section 251(h)(2)," but "Section

251(h)(2) may not be applicable in this instance" because "GTA has not replaced an [incumbent LEC]." Petition

at 9, 9 n.23.

See GTA Comments at 1-2; GTA Reply at 2. In its Petition, the Guam Commission represents that it

"has confirmed that GTA serves an area with fewer than 100,000 access lines. . . ." Petition at 5 n.l 1.

See GCT Comments at 4-7; PCI Comments at 1-4; Sprint Comments at 1-7; GCT Reply at 2-3; IT&E

Reply at 5-7

this instance" because "GTA has not replaced an [incumbent LEC]." Petition

at 9, 9 n.23.

See GTA Comments at 1-2; GTA Reply at 2. In its Petition, the Guam Commission represents that it

"has confirmed that GTA serves an area with fewer than 100,000 access lines. . . ." Petition at 5 n.l 1.

See GCT Comments at 4-7; PCI Comments at 1-4; Sprint Comments at 1-7; GCT Reply at 2-3; IT&E

Reply at 5-7. The Communications Act does not define "study area." The Commission has defined "study area"

as a geographical segment of a carrier's telephone operations that typically corresponds to a carrier's entire

service area within a state or territory. See, e.g., Micronesian Telecommunications Corp. Request for a

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create a new study area in order to attain the status of a rural telephone company in Guam,

and, if so, whether the Conunission should grant such a waiver/''

III. DECLARATORY RULING

GTA's Status under Section 251(h)(1)

14.

Under section 251(h)(1), a LEG is an incumbent LEG with respect to a given

service area if two conditions are met. The LEC must have provided telephone exchange

service in that area on the date of enactment of the 1996 Act; and the LEC must have either

been deemed to be a NECA member pursuant to section 69.601(b) of the Commission's rules

as of that date of enactment, or become a successor or assign of a NECA member after that

date.''^ GTA meets the first of these requirements. It provided local telephone exchange

service in Guam on the date of enactment of the 1996 Act; indeed, it apparently was the only

entity that did so. GTA, however, does not meet the second requirement. As of the date of

enactment of the 1996 Act, GTA was not engaged in any of the activities that would have

allowed it to be deemed a NECA member under section 69.601(b) of the Commission's rules.

Moreover, since that date, GTA has not become a successor or assign of any NECA member

e 1996 Act; indeed, it apparently was the only

entity that did so. GTA, however, does not meet the second requirement. As of the date of

enactment of the 1996 Act, GTA was not engaged in any of the activities that would have

allowed it to be deemed a NECA member under section 69.601(b) of the Commission's rules.

Moreover, since that date, GTA has not become a successor or assign of any NECA member.

Consequently, we conclude that GTA is not an incumbent LEC within the meaning of section

251(h)(1).

15.

As described above,"*^ several commenters suggest that GTA's status as a non-

member of NECA should not prevent us from classifying GTA as an incumbent LEC imder

section 251(h)(1). They argue that the Commission should overlook the NECA-membership

Declaratory Ruling, Report and Order, 9 FCC Red 2032 (Com. Car. Bur. 1994Xgranting study area waiver for

the Commonwealth of the Northern Mariana Islands); Petitions for Waivers Filed by Golden Belt Telephone

Association, Inc., et ai. Memorandum Opinion and Order, 11 FCC Red 10165 (Aeeg. & Aud. Div. 1996). Thus,

earriers operating in more than one state or territory usually have one study area for each state or territory, and

carriers operating in a single state or territory ordinarily have a single study area. See id. Because the

Commission froze all study area boundaries effective November 15, 1984, a local exchange carrier must apply to

the Commission for a waiver of the freeze in order to create a new study area. See 47 C.F.R. Part 36

(Appendix-Glossary); Request for Clarification Filed by the National Exchange Carrier Association, Inc.,

Memorandum Opinion and Order, 11 FCC Red 8646 (Com. Car. Bur. 1996).

■"

See OCX Comments at 4-7; PCI Comments at 1-4; Sprint Comments at 1-7; GCT Reply at 2-3; IT&E

Reply at 5-7.

See 47 U.S.C. § 251(h)(1).

See Part 11(C), supra.

6935

n order to create a new study area. See 47 C.F.R. Part 36

(Appendix-Glossary); Request for Clarification Filed by the National Exchange Carrier Association, Inc.,

Memorandum Opinion and Order, 11 FCC Red 8646 (Com. Car. Bur. 1996).

■"

See OCX Comments at 4-7; PCI Comments at 1-4; Sprint Comments at 1-7; GCT Reply at 2-3; IT&E

Reply at 5-7.

See 47 U.S.C. § 251(h)(1).

See Part 11(C), supra.

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requirement of section 251(h)(1)(B) because, in their view. GTA possesses potentially anti

competitive characteristics of incumbency that Congress designed section 251 (c) specifically

to redress. These characteristics allegedly include dominance in the local exchange and

exchange access markets, formidable financial resources, and economies of density,

connectivity, and scale. Congress, however, defined incumbent LEC in section 251 (h)( 1). and

the Congressional definition requires NECA membership. Accordingly, we reject the

suggestions of those commenters that urge us to overlook the NECA membership requirement.

16.

GCT, MCI, and PCI assert that GTA's refusal to comply promptly with the

Guam Jurisdictional Order has enabled it to avoid meeting the requirements of section

251(h)(1) and, as a consequence, the obligations imposed on incumbent LECs by the Act.

These parties contend that GTA should not be allowed to benefit from its improper conduct."*'

PCI claims, for example, that:

the fact that [GTA] has never been "deemed" to be a NECA •

member under section 69.601(b) ... is solely a result of its

historic and continued policy of excluding itself from compliance

with the Coimnission's Part 69 and other related rules in general.

Over four years ago, the Commission directed GTA [in the

Guam Jurisdictional Order] to show cause why it should not be

required to file lawful interstate and foreign access tariffs in

compliance with applicable requirements. ..

69.601(b) ... is solely a result of its

historic and continued policy of excluding itself from compliance

with the Coimnission's Part 69 and other related rules in general.

Over four years ago, the Commission directed GTA [in the

Guam Jurisdictional Order] to show cause why it should not be

required to file lawful interstate and foreign access tariffs in

compliance with applicable requirements. ... To date, GTA has

still not submitted to the Commission an access tariff which

complies v*dth the Commission's Part 69 rules, despite continued

assurances that it will ultimately do so. For the Commission to

reward such non-compliance by declining to classify GTA as an

"incumbent local exchange carrier" would stand logic on its

head, place form over substance, and contradict the plain goals

which the Telecommunications Act of 1996 . . . advances.^®

17.

Given that these parties have not fully explained how GTA would have been

"deemed" to be a NECA member under section 69.601(b) of the Commission's rules had

GTA complied with Part 69 of those rules, we see no basis for resorting to an analysis akin to

the equitable doctrine of "unclean hands." Instead, we conclude, as set forth in Part IV, infra,

that the best approach is to undertake a rulemaking pursuant to section 251(h)(2) to determine

whether GTA should be treated as an incumbent LEC for purposes of section 251. Therefore,

See PCI Comments at 4-5; GCT Reply at 3; MCI Reply at 2.

PCI Comments at 4-5 (citation omitted).

6936

analysis akin to

the equitable doctrine of "unclean hands." Instead, we conclude, as set forth in Part IV, infra,

that the best approach is to undertake a rulemaking pursuant to section 251(h)(2) to determine

whether GTA should be treated as an incumbent LEC for purposes of section 251. Therefore,

See PCI Comments at 4-5; GCT Reply at 3; MCI Reply at 2.

PCI Comments at 4-5 (citation omitted).

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we reject the argument that GTA's actions in response to the Guam Jurisdictional Order

require us to classify GTA as an incumbent LEG under section 251(h)(l).^'

18.

MCI suggests that the Commission rely on section 4(i) of the Act*- to classify

GTA as an incumbent LEC.^^ Section 4(i) gives the Commission broad authority to "perform

any and all acts . . . and issue such orders ... as may be necessary in the execution of its

functions," but only where doing so is "not inconsistent with this Act."^"* Consequently,

section 4(i) arguably does not permit us to circumvent the NECA- membership requirement of

section 251(h)(1). We need not resolve the extent of our authority under section 4(i).

however, because we tentatively conclude below that GTA may be classified as an incumbent

LEG pursuant to the authority of section 251(h)(2).

19.

GCT urges the Commission to rule that, given the imique circumstances here,

GTA's general duties of interconnection under section 251(a)(l)^^ and of resale imder section

251 (b)( 1

are equivalent to the specific duties of interconnection and resale delineated in

section 251(c).^^ The express language and structure of section 251 compel rejection of that

approach. Sections 251(a) through 251(c) create a three-tiered hierarchy of escalating

obligations based on the type of carrier involved

ies of interconnection under section 251(a)(l)^^ and of resale imder section

251 (b)( 1

are equivalent to the specific duties of interconnection and resale delineated in

section 251(c).^^ The express language and structure of section 251 compel rejection of that

approach. Sections 251(a) through 251(c) create a three-tiered hierarchy of escalating

obligations based on the type of carrier involved. Section 251(a) imposes relatively limited

duties on all telecom'-iunications carriers; section 251(b) imposes more extensive duties on

telecommtmications carriers that are LECs; and section 251(c) imposes the most extensive

duties on LECs that are incumbent LECs. Imposing the section 251(c) obligations on a

We express no opinion herein whether GTA's response to the Guam Jurisdictional Order has been

appropriate.

47 U.S.C. § 154(i). Section 4(i) authorizes the Commission to "perform any and all acts, make such

rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution

of its functions." Id.

See MCI Reply at 2.

47 U.S.C. § 154(i).

47 U.S.C. § 251(a)(1). Section 251(aXl) provides, in pertinent part, that "[e]ach telecommunications

carrier has the duty ... to interconnect directly or indirectly with the facilities and equipment of other

telecommunications carriers. . . ." Id.

47 U.S.C. § 251(b)(1). Section 251(b)(1) provides, in pertinent part, that "[ejach local exchange carrier

has . . . [t]he duty not to prohibit, and not to impose unreasonable or discriminatory conditions or limitations on,

the resale of its telecommunications services.. . ." Id

See GCT Comments at 7-8.

6937

ectly with the facilities and equipment of other

telecommunications carriers. . . ." Id.

47 U.S.C. § 251(b)(1). Section 251(b)(1) provides, in pertinent part, that "[ejach local exchange carrier

has . . . [t]he duty not to prohibit, and not to impose unreasonable or discriminatory conditions or limitations on,

the resale of its telecommunications services.. . ." Id

See GCT Comments at 7-8.

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carrier that is not an incumbent LEG would contravene the carefully-calibrated regulatory

regime crafted by Congress.

20.

In sum, because GTA was not deemed to be a member of NECA as of the date

of enactment of the 1996 Act and subsequently has not become a successor or assign of a

NEC A member, we conclude that GTA is not an "incumbent local exchange carrier" within

the meaning of section 251(h)(1). As discussed below, however, we propose to treat GTA as

an incumbent LEG under section 251(h)(2). Consistent with the authorization in section

251(h)(2) that we may provide for such treatment "by rule,"-' and consistent with several

parties' suggestions,^® we initiate a Notice of Proposed Rulemaking regarding whether such

treatment would be consistent with the language and purposes of section 251(h)(2).®'

GTA's Status under Section 3(37)

21.

Under section 3(37)(C), a local exchange carrier that "provides telephone

exchange service to any local exchange study area with fewer than 100,000 access lines" is a

"rural telephone company."®- GTA serves fewer than 100,000 access lines in its operating

territory.®^ Nevertheless, GCT and Sprint argue that GTA does not qualify as a rural

telephone company under section 3(37)(C) because the Commission has never designated that

See Implementation of the Local Competition Provisions of the Telecommunications Act of 1996. CC

Docket No

an 100,000 access lines" is a

"rural telephone company."®- GTA serves fewer than 100,000 access lines in its operating

territory.®^ Nevertheless, GCT and Sprint argue that GTA does not qualify as a rural

telephone company under section 3(37)(C) because the Commission has never designated that

See Implementation of the Local Competition Provisions of the Telecommunications Act of 1996. CC

Docket No. 96-98, First Report and Order, 11 FCC Rod 15499, 16110, ^ 1248 (i996)(Ioca/ Competition

0/-<ier)(hoiding that Commission cannot impose on non-incumbent LECs the obligations of section 251(c) unless

the criteria set forth in section 251(h)(2) are met), recon., 11 FCC Red 13042 {\996), further recon., FCC 96-

476 (rel. Dec. 13, 1996), additional petitions for recon. pending, petitions for review pending sub nom., Iowa

Utilities Board, et al. v. FCC, No. 96-3321 and consolidated cases (8th Cir. argued Jan. 17, 1997). See also

Local Competition Order, 11 FCC Red at 15518, 15991, 15996, 16107-10, UK 37, 997, 1006, 1241-48 (holding

that states may not impose on non-incumbent LECs the obligations of section 251(c)). On October 15, 1996, the

United States Court of Appeals for the Eighth Circuit issued an order staying certain provisions of the Local

Competition Order not relevant here. Iowa Utilities Board v. FCC. 1996 WL 589204 (8th Cir.), application to

vacate stay denied, 117 S.Ct. 379 (Thomas, J.), further applications to vacate stay denied, 117 S.Ct. 429

-incumbent LECs the obligations of section 251(c)). On October 15, 1996, the

United States Court of Appeals for the Eighth Circuit issued an order staying certain provisions of the Local

Competition Order not relevant here. Iowa Utilities Board v. FCC. 1996 WL 589204 (8th Cir.), application to

vacate stay denied, 117 S.Ct. 379 (Thomas, J.), further applications to vacate stay denied, 117 S.Ct. 429

(1996)(full Court).

47 U.S.C. § 251(h)(2).

See Guam Commission Petition at 9; GCT Comments at 7; IT&E Reply at 5.

See Part IV, infra.

47 U.S.C. § 153(37)(C). GTA does not contend that it meets the criteria for rural telephone company

status in sections 3(37)(A), (B), or (D).

See Petition at 5 n. 11; Phone Facts at 9.

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operating territory as a study area.^"* Subsequent to the close of the comment period in this

proceeding, however, the Common Carrier Bureau granted GTA's request for a waiver to

create a new study area encompassing Guam.'' We determine, therefore, that GTA falls

within the definition of "rural telephone company" set forth in section 3(37)(C).

IV. NOTICE OF PROPOSED RULEMAKING

Overview

22.

In Part III, supra, we determine that GTA is not an "incumbent local exchange

carrier" within the meaning of section 251(h)(1). This determination means that, absent a

Commission decision to provide for the treatment of GTA as an incumbent LEC for purposes

of section 251, GTA will presently be under no legal mandate to comply with the obligations

of section 251(c)."

23.

IT&E and GCT suggest section 251(h)(2) as an alternative for applying the

obligations of section 251(c) to GTA

r" within the meaning of section 251(h)(1). This determination means that, absent a

Commission decision to provide for the treatment of GTA as an incumbent LEC for purposes

of section 251, GTA will presently be under no legal mandate to comply with the obligations

of section 251(c)."

23.

IT&E and GCT suggest section 251(h)(2) as an alternative for applying the

obligations of section 251(c) to GTA. IT&E asserts that section 251(h)(2) permits the

application of the obligations of section 251(c; to GTA because "GTA meets the spirit, if not

the letter, of the statutory definition of an 'incumbent LEC.'"'^ GCT maintains that section

251(h)(2) permits the application of the obligations of section 251(c) to GTA because GTA

"occupies a position 'comparable' to the position occupied by an incumbent LEC {i.e., a

quasi-monopoly position)."'^ The Guam Commission notes that "the Commission may. by

rule, provide that GTA is comparable to an incumbent LEC pursuant to Section 251(h)(2),"

but "Section 251(h)(2) may not be applicable in this instance" because "GTA has not replaced

an ILEC."''

See GCT Comments at 4-7; Sprint Comments at 1-7; GCT Reply at 2-3.

Guam Telephone Authority Petition for Declaratory Ruling, Report and Order, DA 97-595 (Accg. &

Aud. Div. rel. March 21, 1997)(granting GTA's request for designation of Guam as a study area).

See Local Competition Order, 11 FCC Red at 16107-10,

1241-48.

IT&E Reply at 5.

" GCT Comments at 7.

Petition at 9, 9 n.23.

6939

."''

See GCT Comments at 4-7; Sprint Comments at 1-7; GCT Reply at 2-3.

Guam Telephone Authority Petition for Declaratory Ruling, Report and Order, DA 97-595 (Accg. &

Aud. Div. rel. March 21, 1997)(granting GTA's request for designation of Guam as a study area).

See Local Competition Order, 11 FCC Red at 16107-10,

1241-48.

IT&E Reply at 5.

" GCT Comments at 7.

Petition at 9, 9 n.23.

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24.

Section 251(h)(2) allows the Commission to treat a LEC (or class or category

of LECs) as an incumbent LEG, for purposes of section 251, when the LEC "occupies a

position in the market for telephone exchange service within an area that is comparable to the

position occupied by a carrier described in [section 251(h)(l)]";'° the LEC has "substantially

replaced an incumbent local exchange carrier described in [section 251(h)(l)]";^' and "such

treatment is consistent with the public interest, convenience, and necessity and the purposes of

[section 251]."^- In this Notice, we tentatively conclude that each of these requirements is

met with respect to GTA.

25.

Regarding the first requirement, we tentatively conclude that GTA occupies a

position in the market for telephone exchange service in its service area that is comparable to

an incumbent LEC's, because GTA appears to occupy a dominant position in that market.

Regarding the second requirement, we tentatively reject an overly literal reading of the

statutory language that would produce absurd results at odds with manifest Congressional

intent. Instead, we tentatively conclude that the second requirement is satisfied where the

LEC at issue provides local exchange service to all or virtually all of the subscribers in an

area that did not receive telephone exchange service from a NECA member as of the date of

enactment of the 1996 Act

ng of the

statutory language that would produce absurd results at odds with manifest Congressional

intent. Instead, we tentatively conclude that the second requirement is satisfied where the

LEC at issue provides local exchange service to all or virtually all of the subscribers in an

area that did not receive telephone exchange service from a NECA member as of the date of

enactment of the 1996 Act. Accordingly, we also tentatively conclude that GTA satisfies the

second requirement, because GTA apparently provides a'', or virtually all of the telephone

exchange service in Guam, and no NECA member provided telephone exchange service in

Guam as of February 8, 1996. Regarding the third requirement, we tentatively conclude that

treatment of GTA as an incumbent LEC would serve the public interest, convenience, and

necessity and the purposes of section 251, because such treatment would foster the

development of competitive telecommvmications markets in Guam. In light of the foregoing

tentative conclusions, we propose, pursuant to section 251(h)(2), to adopt a rule providing for

the treatment of GTA as an incumbent LEC for purposes of section 251. We also seek

comment whether LECs situated similarly to GTA exist and, if so, whether we should adopt

the same rule with respect to such class or category of LECs.

47 U.S.C. § 251(h)(2)(A).

47 U.S.C. § 251(hX2)(B).

47 U.S.C. § 251(h)(2)(C).

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Discussion

Section 251(h)(2)(A)

nt of GTA as an incumbent LEC for purposes of section 251. We also seek

comment whether LECs situated similarly to GTA exist and, if so, whether we should adopt

the same rule with respect to such class or category of LECs.

47 U.S.C. § 251(h)(2)(A).

47 U.S.C. § 251(hX2)(B).

47 U.S.C. § 251(h)(2)(C).

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Discussion

Section 251(h)(2)(A)

26.

Under section 251(h)(2)(A), in order for the Commission to treat GTA as an

incumbent LEG, GTA must "occup[y] a position in the market for telephone exchange service

within an area that is comparable to the position occupied by a carrier described in [section

251(h)(l)]."^'' Incumbent LECs typically occupy a dominant position in the market for

telephone exchange service in their respective operating areas, and possess economies of

density, connectivity, and scale that make efficient competitive entry quite difficult, if not

impossible, absent compliance with the obligations of section 251(c)."

27.

GTA seems to exercise such dominance in Guam. It apparently is the sole

provider of local exchange and exchange access services on Guam. It therefore appears to

control -the bottleneck local exchange network on Guam and piossess substzmtial economies of

density, connectivity, and scale that, absent compliance with the obligations of section 251(c),

can impede the development of telephone exchange service competition in Guam.'^

Consequently, we tentatively conclude that GTA occupies a position in the market for

telephone exchange service in Guam that is comparable to the positiva typically occupied by

statutorily-defmed incumbent LECs. Accordingly, we also tentatively conclude that GTA

satisfies the requirement of section 251(h)(2)(A). We invite comment on these tentative

conclusions.

47 U.S.C. § 251(h)(2)(A).

See Local Competition Order, 11 FCC Red at 15505-12,

1-20

ccupies a position in the market for

telephone exchange service in Guam that is comparable to the positiva typically occupied by

statutorily-defmed incumbent LECs. Accordingly, we also tentatively conclude that GTA

satisfies the requirement of section 251(h)(2)(A). We invite comment on these tentative

conclusions.

47 U.S.C. § 251(h)(2)(A).

See Local Competition Order, 11 FCC Red at 15505-12,

1-20.

See GCT Comments at 1-8; Guam Cellular Comments at 2-3; MCI Comments at 2-4; PCI Comments at

4-6; Sprint Comments at 1-7; Speaker Parkinson Comments at 1-2; Senator Ada Comments at 1-2; The

Employers Council Comments at 1; Stoll Comments at 1-2; GCT Reply at 1-4; MCI Reply at 1-3; IT&E Reply

at 4-7. See also Letter dated February 5, 1997 from Veronica M. Ahem, GTA's outside counsel, to Alex Starr,

FCC's Common Carrier Bureau, CCB Pol. 96-18; Comments of the Guam Telephone Authority in Applications

for GTA Interconnection and Resale Under the 1996 Telecommunications Act, Guam Commission Docket No.

96-006, at 3 n.4 (attached to the Guam Commission's Petition); Phone Facts at 9; Comments of Guam Cable

Telecommunications, Inc. in Applications for GTA Interconnection and Resale Under the 1996

Telecommunications Act, Guam Commission Docket No. 96-006, at 2

(attached to the Guam Commission's

Petition); Comments of TelePacific Network, Inc. in Applications for GTA Interconnection and Resale Under the

1996 Telecommunications Act, Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam

Commission's Petition).

6941

Applications for GTA Interconnection and Resale Under the 1996

Telecommunications Act, Guam Commission Docket No. 96-006, at 2

(attached to the Guam Commission's

Petition); Comments of TelePacific Network, Inc. in Applications for GTA Interconnection and Resale Under the

1996 Telecommunications Act, Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam

Commission's Petition).

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Section 251(h)(2)(B)

28.

Under Section 251(h)(2)(B), in order for the Commission to treat GTA as an

incumbent LEG, GTA must have "substantially replaced an incumbent local exchange carrier

described in [section 251(h)(l)3."'^ The word "replace" can mean "to take the place of: serve

as a substitute for or successor of: SUCCEED, SUPPLANT. . .

Consequently, if

construed literally, section 251(h)(2)(B) would mean that GTA must have supplanted an

incumbent LEG (as defined in section 251(h)(1)) in its service area in order to be treated as

an incumbent LEG for purposes of section 251. GTA did not supplant such an incumbent

LEG. because none existed as of the date of enactment of the 1996 Act.^*

29.

We invite comment on whether we should construe section 251(h)(2)(B) so

literally. The Supreme Court has long and consistently recognized that the "plain meaning"

rule of statutory construction must give way when its application would result in an absurd

outcome contrary to the clear intent of Congress:

It is a familiar rule, that a thing may be within the letter of the statute and yet

not within the statute, because not within its spirit, nor within the intention of

its makers. ... If a literal construction of the words be absurd, the Act -.iiust

be construed to avoid the absurdity.^''

Indeed, the Supreme Court has further instructed that "even when the plain meaning [of

statutory language] d[oes] not produce absurd results but merely an unreasonable one plainly

47 U.S.C. § 251(h)(2)(B)

n the statute, because not within its spirit, nor within the intention of

its makers. ... If a literal construction of the words be absurd, the Act -.iiust

be construed to avoid the absurdity.^''

Indeed, the Supreme Court has further instructed that "even when the plain meaning [of

statutory language] d[oes] not produce absurd results but merely an unreasonable one plainly

47 U.S.C. § 251(h)(2)(B).

Webster's Third New International Dictionary of the English Language Unabridged {1993) at 1925.

Indeed, since its inception in 1973, GTA apparently has been the sole provider of local telephone

exchange service in Guam. See Part 11(B), supra.

Holy Trinity Church v. United States, 143 U.S. 457, 459 (1898). See. e.g.. Public Citizen v. United

States Department of Justice, 491 U.S. 440, 454-455 (1989X"Where the literal reading of a statutory term would

compel an odd result, we must search for other evidence of congressional intent to lend the term its proper

scope. The circumstances of the enactment of a particular legislation, for example, may persuade a court that

Congress did not intend words of common meaning to have their literal effect"); United States v. Ron Pair

Enterprises, Inc., 489 U.S. 235, 242 (1989)(where "the literal application of a statute will produce a result

demonstrably at odds with the intention of its drafters[,] ... the intention of the drafters, rather than the strict

language, controls"); United Steelworkers of America v. Weber, 443 U.S. 193, 201-04 (1979).

6942

of common meaning to have their literal effect"); United States v. Ron Pair

Enterprises, Inc., 489 U.S. 235, 242 (1989)(where "the literal application of a statute will produce a result

demonstrably at odds with the intention of its drafters[,] ... the intention of the drafters, rather than the strict

language, controls"); United Steelworkers of America v. Weber, 443 U.S. 193, 201-04 (1979).

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at variance with the policy of the legislation as a whole this Court has followed that purpose,

rather than the literal words."®"

30.

The United States Courts of Appeals have followed these precedents when

necessary to avoid results that are clearly inconsistent with Congressional intent.®' So, too,

has the Commission.®"

31.

In keeping with this consistent precedent, we tentatively conclude that we

should find section 251(h)(2)(B) satisfied where, as here, the LEC at issue provides local

exchange service to all or virtually all of the subscribers in an area that did not receive

telephone exchange service from a NECA member as of the date of enactment of the 1996

Act. In our tentative view, we must so construe section 251(h)(2)(B) in order to avoid absurd

and unreasonable results clearly contradictory of Congressional intent. We seek comment on

these tentative conclusions.

32.

These tentative conclusions are premised on Congress' clearly expressed

purpose in the 1996 Act "to provide for a pro-competitive, de-regulatory national policy

framework designed to accelerate rapidly private sector deployment of advanced

telecommunications and information technologies and services to all Americans by opening

United States v. American Trucking Associations, 310 U.S. 534, 543 (]967)(citations. footnote, and

quotation marks omitted). Compare MCI Telecommunications Corp. v. American Telephone and Telegraph Co.,

512 U.S

atory national policy

framework designed to accelerate rapidly private sector deployment of advanced

telecommunications and information technologies and services to all Americans by opening

United States v. American Trucking Associations, 310 U.S. 534, 543 (]967)(citations. footnote, and

quotation marks omitted). Compare MCI Telecommunications Corp. v. American Telephone and Telegraph Co.,

512 U.S. 218 (1994)(adhering to literal meaning of tariff provision of Communications Act panly because doing

otherwise would fhistrate purposes of complaint provisions of that Act).

See. e.g.. Environmental Defense Fund v. Environmental Protection Agency, 82 F.3d 451. 468-469 (D.C.

Cir.), amended on other grounds, 92 F.3d 1209 (D.C. Cir 1996)("Because this literal reading of the statute would

actually frustrate the congressional intent supporting it, we look to the EPA for an interpretation of the statute

more true to Congress's purpose"); In re Nofziger, 925 F.2d 428, 434-435 (D.C. Cir. 1991)("In statutory

interpretation it is a given that statutes must be construed reasonably so as to avoid absurdities — manifest intent

prevails over the letter"); Quinn v. Butz, 510 F.2d 743, 753-54 (D.C. Cir. 1975)("The Secretary's interpretation

obviously rests upon a literal reading of the language, a technique which may well stifle true legislative intent");

Red River Broadcasting Co. v. Federal Communications Commission, 98 F.2d 282. 287 (D.C. Cir.), cert, denied,

305 U.S. 625 (1938)("A well-settled rule of statutory construction enjoins courts not to attribute to the

Legislature a construction which leads to absurd results").

See Application of Fox Television Stations, Inc., Third Memorandum Opinion and Order, 10 FCC Red

8452, 8471 (1995), recon. denied, 11 FCC Red 7773 (1996Xrejecting literal "count-the-shares" methodology for

determining whether foreign ownership ceiling in 47 U.S.C. § 310(b)(4) is reached), per/r/ons for review pending

sub nom.. Metropolitan Council ofNAACP Branches, et al. v. FCC, No

urd results").

See Application of Fox Television Stations, Inc., Third Memorandum Opinion and Order, 10 FCC Red

8452, 8471 (1995), recon. denied, 11 FCC Red 7773 (1996Xrejecting literal "count-the-shares" methodology for

determining whether foreign ownership ceiling in 47 U.S.C. § 310(b)(4) is reached), per/r/ons for review pending

sub nom.. Metropolitan Council ofNAACP Branches, et al. v. FCC, No. 95-1424 and consolidated case (D.C.

Cir. filed Aug. 21, 1995).

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all telecommunications markets to competition. . .

To accomplish this purpose. Congress

chose, inter alia, to impose on entities that are classified as incumbent LECs the duties of

interconnection, access to unbimdled network elements, resale of retail services, collocation,

public notification of interoperability changes, and good faith negotiation specified in section

251(0).^"* These duties require incumbent LECs to share with competitors some of their

inherent economic advantages ~ advantages that would otherwise render competitive entry

very difficult, if not impossible. For example, the existing infrastructure of the incumbent

EEC in an area enables the incumbent LEC to serve new customers therein at a much lower

incremental cost than a facilities-based entrant that must install its own switches, trunking, and

loops to serve its customers. Because the incumbent LEC is typically dominant in its service

area, it has little economic incentive to assist new entrants. Prior to the enactment of section

251(c), an incumbent LEC also had the ability to discourage entry and robust competition by

refusing to interconnect its network with the new entrant's network or by insisting on

supracompetitive prices or other unreasonable conditions for terminating calls from the

entrant's customers to its customers.^^

it has little economic incentive to assist new entrants. Prior to the enactment of section

251(c), an incumbent LEC also had the ability to discourage entry and robust competition by

refusing to interconnect its network with the new entrant's network or by insisting on

supracompetitive prices or other unreasonable conditions for terminating calls from the

entrant's customers to its customers.^^

33.

An unduly literal construction of section 251(h)(2)(B) would mean that these

statutory objectives would be thwarted in Guam unless GTA were to comply voluntarily with

each of the obligations of section 251(c). Indeed, GTA appears to possess all of the

advantages of incumbency characteristic of the incumbent LECs described in section

251(h)(1), advantages that can impede the development of competitive markets. For example,*^

GTA apparently has substantial financial resources, significant economies of density,

connectivity, and scale, and, most importantly, control of the bottleneck local exchange

network in Guam.®^ Thus, the seemingly dominant market presence of GTA in Guam appears

Joint Explanatory Statement at 1 (emphasis added). See generally 47 U.S.C. § 160(b)(providing in the

1996 Act that "forbearance is in the public interest" if it "will promote competitive market conditions" and

"enhance competition among providers of telecommunications services"); 47 U.S.C. § 253(authorizing

Commission to preempt state or local laws that "may prohibit or have the effect of prohibiting the ability of any

entity to provide any interstate or intrastate telecommunications service"); 47 U.S.C. § 257(b)(describing the

"policies and purposes of this [1996] Act" as "favoring . . . vigorous economic competition").

See 47 U.S.C. § 25 Kc).

See Local Competition Order, FCC Red at 15505-12, tif 1-20

ssion to preempt state or local laws that "may prohibit or have the effect of prohibiting the ability of any

entity to provide any interstate or intrastate telecommunications service"); 47 U.S.C. § 257(b)(describing the

"policies and purposes of this [1996] Act" as "favoring . . . vigorous economic competition").

See 47 U.S.C. § 25 Kc).

See Local Competition Order, FCC Red at 15505-12, tif 1-20.

See GCT Comments at 1-8; Guam Cellular Comments at 2-3; MCl Comments at 2-4; PCI Comments at

4-6; Sprint Comments at 1-7; Speaker Parkinson Comments at 1-2; Senator Ada Comments at 1-2; The

Employers Council Comments at 1; Stoll Comments at 1-2; GCT Reply at 1-4; MCI Reply at 1-3; IT&E Reply

at 4-7. See also Letter dated February 5, 1997 from Veronica M. Ahem, GTA's Outside Counsel, to Alex Starr,

FCC's Common Carrier Bureau, CCB Pol. 96-18; Comments of the Guam Telephone Authority in Applications

for GTA Interconnection and Resale Under the 1996 Telecommunications Act, Guam Commission Docket No.

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to be precisely the type of non-competitive situation that Congress intended section 251(c) to

redress.

34.

Moreover, we note that Congress left intact several provisions of the

Commtinications Act that led the Commission in 1992 to conclude that "the Communications

Act was intended by Congress to apply, ... in every respect, to all radio and wire

communications originating or terminating on the Territory of Guam."*' First, in the 1996

Act, Congress incorporated by reference the definitions in the 1934 Act.** Those definitions

define the "United States" as including "the several States and Territories . . . and the

possessions of the United States . . . ;"*' define "State" as including "the Territories";'" and

define "interstate communication" as including "communication or transmission . . . from any

State, Territory, or possession of the United States ... to any other State, Territory, or

possession of the United States . .

the "United States" as including "the several States and Territories . . . and the

possessions of the United States . . . ;"*' define "State" as including "the Territories";'" and

define "interstate communication" as including "communication or transmission . . . from any

State, Territory, or possession of the United States ... to any other State, Territory, or

possession of the United States . . . ."" Furthermore, despite amending section 1 of the 1934

Act in other respects. Congress left unchanged that section's command to the Commission "to

make available, so far as possible, to all the people of the United States ... a rapid, efficient, -

Nation-wide, and world-wide vrire and radio communication service with adequate facilities at

reasonable charges . . . ."" These provisions appear to make clear that Congress believed that

"the residents of Guam are just as entitled to the benefits of competition in

96-006, at 3 n.4 (attached to the Guam Commission's Petition); Comments of Guam Cable Telecommunications,

Inc. in Applications for GTA Interconnection and Resale Under the 1996 Telecommunications Act, Guam

Commission Docket No. 96-006, at 2

(attached to the Guam Commission's Petition); Comments of TelePacific

Network, Inc. in Applications for GTA Interconnection and Resale Under the 1996 Telecommunications Act,

Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam Commission's Petition).

" Guam Jurisdictional Order, 7 FCC Red at 4024.

47 U.S.C. § 153(b).

47 U.S.C. § 153(50Xemphasis added).

47 U.S.C. § 153(40).

47 U.S.C. § 153(22)(emphasis added).

47 U.S.C. § 151(emphasis added). See Joint Explanatory Statement at 32.

6945

rconnection and Resale Under the 1996 Telecommunications Act,

Guam Commission Docket No. 96-006, at Exhibit C (attached to the Guam Commission's Petition).

" Guam Jurisdictional Order, 7 FCC Red at 4024.

47 U.S.C. § 153(b).

47 U.S.C. § 153(50Xemphasis added).

47 U.S.C. § 153(40).

47 U.S.C. § 153(22)(emphasis added).

47 U.S.C. § 151(emphasis added). See Joint Explanatory Statement at 32.

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telecommunications as any other Americans,"'^ and suggest that Congress did not intend to

exclude GTA from treatment as an incumbent LEG for purposes of section 251(c).''''

35.

Of course, under section 251(f), our holding that GTA is a "rural telephone

company" within the meaning of section 3(37) would entitle GTA to an exemption, at least

initially, from the obligations of section 251(c), should GTA be treated as an incumbent LEC

in the future.'^ Congress included within section 251(f), however, a procedure for terminating

such an exemption under appropriate circumstances. Construing section 251(h)(2)(B) to

foreclose the possibility of classifying GTA as an incumbent LEC would thwart that

procedure, substituting a permanent exemption for the potentially temporary exemption

expressly set forth in section 251(f).

36.

An overly literal interpretation of section 251(h)(2)(B) would also exalt form

over substance. As indicated previously, on May 12, 1997, the Commission granted NECA's

petition to become a member of NECA.'^ GTA apparently could have filed that petition at

any time after the release of the Guam Jurisdictional Order on June 2, 1992. Thus, it appears

that only the date of initial NEC A membership will distinguish GTA from LECs that are

incumbent LECs under section 251(h)(1).

over substance. As indicated previously, on May 12, 1997, the Commission granted NECA's

petition to become a member of NECA.'^ GTA apparently could have filed that petition at

any time after the release of the Guam Jurisdictional Order on June 2, 1992. Thus, it appears

that only the date of initial NEC A membership will distinguish GTA from LECs that are

incumbent LECs under section 251(h)(1).

37.

In sum, the circumstances with respect to GTA and Guam appear to counsel

against an overly literal construction of statutory language.'^ Construed so literally, the

language of section 251(h)(2)(B) would produce absurd results "demonstrably at odds with the

Guam Jurisdictional Order, 1 FCC Red at 4024, 4026. See Policy and Rules Concerning the Interstate.

Interexchange Marketplace, Implementation of Section 254(g) of the Communications Act of 1934, as amended.

Report and Order, 11 FCC Red 9564, 9589-99 (1996)(applying rate integration requirements of seetion 254(g) to

Guam beeause seetion 153(40) defines "State" to inelude "the Territories").

See generally 142 Cong. Rec. HI 145, 1175 (Feb. 1, 1996)(statement of Representative Underwood)("My

foeus on this teleeommunieations legislation has been on ensuring that Guam has the same aecess to

teleeommunieations teehnology and advances in the information superhighway as other U.S. citizens"); cf Guam

Telephone Authority Petition for Declaratory Ruling, Memorandum Opinion and Order, 9 FCC Red 4890

enerally 142 Cong. Rec. HI 145, 1175 (Feb. 1, 1996)(statement of Representative Underwood)("My

foeus on this teleeommunieations legislation has been on ensuring that Guam has the same aecess to

teleeommunieations teehnology and advances in the information superhighway as other U.S. citizens"); cf Guam

Telephone Authority Petition for Declaratory Ruling, Memorandum Opinion and Order, 9 FCC Red 4890

(1994)(ordering GTA to implement Feature Group D Equal Access, beeause doing so would promote

interexchange competition and technological development of new telecommunications services in Guam and

thereby prevent Guam from becoming a "technological backwater with inferior communications services").

See Parts 11(A), III(B), supra.

See H 9, supra.

See, e.g., EOF v. EPA, 82 F.Sd at 468-69.

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intention of its drafters."'^ The most immediate absurdity would be a permanent exemption of

a seemingly dominant provider of local exchange and exchange access services ~ GTA —

from the very requirements that Congress designed specifically to end such dominance and

foster competition in local exchange and exchange access markets. Furthermore, this result

would not be benign; rather, it apparently would conflict with Congress' pro-competitive

objectives with respect to the twenty-ninth largest local telephone network in the United

States. We seek comment, therefore, on whether the outcome suggested by an unduly literal

reading of the statute's language would be an "unreasonable one "plainly at variance with the

policy of the legislation as a whole.'"''

38.

To avoid these absurd results and to construe the statute consistently with

Congress' obvious pro-competitive purpose, we propose to interpret section 251(h)(2)(B) to

include any LEC that provides telephone exchange service to all or virtually all of the

subscribers in its service area, where, as here, no NECA member served the area at issue as of

the date of enactment of the 1996 Act

le.'"''

38.

To avoid these absurd results and to construe the statute consistently with

Congress' obvious pro-competitive purpose, we propose to interpret section 251(h)(2)(B) to

include any LEC that provides telephone exchange service to all or virtually all of the

subscribers in its service area, where, as here, no NECA member served the area at issue as of

the date of enactment of the 1996 Act. Accordingly, we also propose to find that GTA

satisfies section 251(h)(2)(B) as construed in this manner. We invite comment on these

proposals.

39.

We also seek comment whether reading section 251(h)(2) in conjunction with

other provisions of the Communications Act creates ambiguity in section 251(h)(2)'s meaning

and intended application such that we may reasonably exercise our discretion to construe the

statute to permit treating GTA as an incumbent LEC. Applying section 251(h)(2) so as to

exempt GTA permanently from the statutory responsibilities of an incumbent LEC would, as

described above, arguably conflict with sections 251(c) and 251(f), among other

Communications Act provisions.

Section 251(h)(2)(C)

40.

Under section 251(h)(2)(C), in order for the Commission to treat GTA as an

incumbent LEC for purposes of section 251, "such treatment [must be] consistent with the

public interest, convenience, and necessity and the purposes of [section 251]."'" As described

U.S. V. Ron Pair, 489 U.S. at 242.

" Ouinn v. But:, 510 F.2d at 753 {quoting U.S. v. A.T.A., 310 U.S. at 543).

'°® Cf. Lyons v. Ohio Adult Parole Authority, 105 F.3d 1063, 1067-68 (6th Cir. 1997)(holding that two

statutory provisions were in direct conflict, creating "a rare but difficult form of ambiguity").

47 U.S.C. § 251(h)(2)(C).

6947

ity and the purposes of [section 251]."'" As described

U.S. V. Ron Pair, 489 U.S. at 242.

" Ouinn v. But:, 510 F.2d at 753 {quoting U.S. v. A.T.A., 310 U.S. at 543).

'°® Cf. Lyons v. Ohio Adult Parole Authority, 105 F.3d 1063, 1067-68 (6th Cir. 1997)(holding that two

statutory provisions were in direct conflict, creating "a rare but difficult form of ambiguity").

47 U.S.C. § 251(h)(2)(C).

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above,

Congress has

declared unequivocally that promoting competition in local exchange and exchange access

markets serves the public interest, convenience, and necessity. Treating GTA as an incumbent

LEG would promote competition in the local exchange and exchange access markets in Guam,

because such treatment would require GTA to comply with the pro-competitive obligations of

section 251(c), absent an exemption, suspension, or modification under section 251(f).

Moreover, because GTA appears to be the sole provider of local exchange and exchange

access services in Guam, we tentatively conclude that GTA has market power, economies of

density, connectivity, and scale, and control of the local network comparable to that possessed

by entities that are incumbent LECs under section 251(h)(1). Consequently, treating GTA as

an incumbent LEG may well be a prerequisite for the development of competition in the local

exchange and exchange access markets in Guam. Thus, we tentatively conclude that treating

GTA as an incumbent EEC for purposes of section 251 would be consistent with the public

interest, convenience, and necessity.

41.

For similar reasons, we also tentatively conclude that treating GTA as an

incumbent LEG would be consistent with the purposes of section 251. Section 25 Ts primary

purpose is to foster competition that otherwise would not likely develop in local exchange and

exchange r.ccess markets. It is possible that failing to treat GTA as an incumbent LEG would

stifle competition in Guam.

d necessity.

41.

For similar reasons, we also tentatively conclude that treating GTA as an

incumbent LEG would be consistent with the purposes of section 251. Section 25 Ts primary

purpose is to foster competition that otherwise would not likely develop in local exchange and

exchange r.ccess markets. It is possible that failing to treat GTA as an incumbent LEG would

stifle competition in Guam.

42.

Having tentatively concluded that GTA has market power, economies of

density, connectivity, and scale, and control of the local network, and that treating GTA as an

incumbent LEG would be consistent with the public interest, convenience, and necessity and

the purposes of section 251, we further conclude tentatively that the circumstances here satisfy

the requirements of section 251(h)(2)(G). We invite comment regarding these tentative

conclusions.

Proposal to Treat GTA — and Possibly

Others — as an Incumbent LEG

43.

For all of the reasons explained above, we tentatively conclude that the relevant

facts and circumstances meet the requirements of section 251(h)(2) for treating GTA as an

incumbent LEG for purposes of section 251. Accordingly, we propose to provide for the

treatment of GTA as an incumbent LEG for purposes of section 251. We seek comment

regarding this tentative conclusion and proposal. We also seek comment whether LEGs

situated similarly to GTA exist and, if so, whether we should adopt the same rule with respect

to such class or category of LEGs.

See Part IV(B)(2), supra.

6948

G for purposes of section 251. Accordingly, we propose to provide for the

treatment of GTA as an incumbent LEG for purposes of section 251. We seek comment

regarding this tentative conclusion and proposal. We also seek comment whether LEGs

situated similarly to GTA exist and, if so, whether we should adopt the same rule with respect

to such class or category of LEGs.

See Part IV(B)(2), supra.

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Procedural Matters

Ex Parte Presentations

44.

With respect to the rulemaking proposal in Part IV. supra, to treat GTA as an

incumbent local exchange carrier ptirsuant to section 251 (h)(2), this is a non-restricted notice-

and-comment rulemaking proceeding. Ex parte presentations are permitted, except during the

Sunshine Agenda period, provided that they are disclosed as required by the Commission's

rules.

Initial Regulatory Flexibility Analysis

45.

Section 603 of the Regulatory Flexibility Act, as amended,'"^ requires an initial

regulatory flexibility analysis in notice and comment rulemaking proceedings, unless we

certify that "the rule will not, if promulgated, have a significant economic impact on a

substantial number of small entities."'®' Our proposal in Part IV, supra, to treat GTA as an

incumbent local exchange carrier pursuant to section 251(h)(2) will affect only GTA and the

limited number of entities that seek to interconnect with GTA's network or resell GTA's

services. Even if all

these entities can be classified as small entities, we do not believe that

they constitute a "significant number of small entities" for purposes of the Regulatory

Flexibility Act. Therefore, we certify that the proposed rule will not, if promulgated, have a

significant economic impact on a substantial number of small entities

o interconnect with GTA's network or resell GTA's

services. Even if all

these entities can be classified as small entities, we do not believe that

they constitute a "significant number of small entities" for purposes of the Regulatory

Flexibility Act. Therefore, we certify that the proposed rule will not, if promulgated, have a

significant economic impact on a substantial number of small entities. The Secretary shall

send a copy of this Notice of Proposed Rulemaking, including this certification and statement,

to the Chief Counsel for Advocacy of the Small Business Administration.'®® A copy of this

certification also will be published in the Federal Register notice.

Comment Filing Procedures

46.

Pursuant to applicable procedures set forth in sections 1.415 and 1.419 of the

Commission's rules,'®' interested parties may file comments on or before July 7, 1997 and

reply comments on or before July 28, 1997. To file formally in this proceeding, you must

See generally A1 C.F.R. §§ 1.1201, 1.1203, and 1.1206.

5 U.S.C. § 603.

5 U.S.C. § 605(b).

See 5 U.S.C. § 605(b).

47 C.F.R. §§ 1.415, 1.419.

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file an original and six copies of all comments, reply comments, and supporting comments. If

you would like each Commissioner to receive a personal copy of your comments, you must

file an original and eleven copies. Comments and reply comments should be sent to Office of

the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222.

Washington. D.C. 20554. Parties should also file copies of any documents filed in this docket

with Janice Myles of the Common Carrier Bureau, 1919 M Street. N.W.. Room 544.

Washington, D.C. 20554, and with the Commission's copy contractor, International

Transcription Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.

Comments and reply comments will be available for public inspection during regular business

hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington. D.C.

20554.

on Carrier Bureau, 1919 M Street. N.W.. Room 544.

Washington, D.C. 20554, and with the Commission's copy contractor, International

Transcription Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.

Comments and reply comments will be available for public inspection during regular business

hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington. D.C.

20554.

V. ORDERING CLAUSES

47.

ACCORDINGLY, IT IS ORDERED, pursuant to sections 4(i) and 251(h)(1) of

the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 251(h)(1), section 5(e) of

the Administrative Procedtire Act, 5 U.S.C. § 554(e), and section 1.2 of the Commission's

rules, 47 C.F.R. § 1.2, that the Guam Telephone Authority is not an "incumbent local

exchange carrier" within the meanLig of section 251(h)(1) of the Communications Act of

1934, as amended, 47 U.S.C. § 251(h)(1).

48.

IT IS FURTHER ORDERED, pursuant to sections 4(i) and 251(h)(1) of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 251(h)(1), section 5(e) of the

Administrative Procedure Act, 5 U.S.C. § 554(e), and section 1.2 of the Commission's rules,

47 C.F.R. § 1.2, that the Guam Telephone Authority is a "rural telephone company" within

the meaning of section 3(37)(C) of the Communications Act of 1934, as amended, 47 U.S.C.

§ 153(37)(C).

49.

IT IS FURTHER ORDERED, pursuant to sections 4(i) and 251(h)(1) of the

Commtmications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 251(h)(1), section 5(e) of the

Administrative Procedure Act, 5 U.S.C. § 554(e), and section 1.2 of the Commission's rules,

47 C.F.R. § 1.2, that the Petition for Declaratory Ruling filed by the Public Utility

Commission of the Territory of Guam IS GRANTED to the extent discussed herein, and in all

other respects IS DENIED.

50.

IT IS FURTHER ORDERED that, pursuant to sections 4(i), 4(j), and 251(h)(1)

of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 251(h)(1),

section 5(e) of the Administrative Procedure Act, 5 U.S.C

Petition for Declaratory Ruling filed by the Public Utility

Commission of the Territory of Guam IS GRANTED to the extent discussed herein, and in all

other respects IS DENIED.

50.

IT IS FURTHER ORDERED that, pursuant to sections 4(i), 4(j), and 251(h)(1)

of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 251(h)(1),

section 5(e) of the Administrative Procedure Act, 5 U.S.C. § 554(e), and section 1.2 of the

Commission's rules, 47 C.F.R. § 1.2, the Declaratory Ruling contained in Part 111 of this

document IS EFFECTIVE upon release.

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51.

IT IS FURTHER ORDERED that, pursuant to sections I. 2. 4, 251. and 303(r)

of the Communications Act of 1934. as amended. 47 U.S.C. §§ 151. 152. 154. 251, and

303(r), the NOTICE OF PROPOSED RULEMAKING contained in Part IV of this document

is hereby ADOPTED. A summary of the Notice will be published in the Federal Register.

52.

IT IS FURTHER ORDERED that the Secretary shall send a copy of this

NOTICE OF PROPOSED RULEMAKING, including the regulatory flexibility certification,

to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with

paragraph 603(a) of the Regulatory Flexibility Act, 5 U.S.C. §§ 601 et seq. (1981).

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton

Acting Secretary

6951

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.