WPC+ 2HBEX @Z3|P (TT) X0#Xj\  P6G;XP#"5@^.=K\\!==\g.=.3\\\\\\\\\\33gggQzzpf=Gpfzfpp=3=V\=Q\Q\Q=\\33\3\\\\=G3\\\\QX%Xc.====IK=\\QQQQQzzQpQpQpQpQ=3=3=3=3\\\\\\\\\\Q\\\\\f\\QQzQzQzQpQpQpQ\\\\\\I\=\===\G\p3pK\\\z=zKfGfGN@.S\=Q\\\\\39\7\7==QQ\==\\=Q=7t=eeeegoo.Ijg2Z\\yeCpj`vZefeloPpPj`e~~tro.=K\\!==\g.=.3\\\\\\\\\\33gggQzzpf=Gpfzfpp=3=V\=Q\Q\Q=\\33\3\\\\=G3\\\\QX%Xc=\Q\\=f===QQ@\=G=.=\\\\%\=3\g=\Ie77=jS.=79\Qzpppp====gf\QQQQQQzQQQQQ3333\\\\\\\e\\\\\\\HP LaserJet 4Si/4Si MX919M RM 5126 HPLA4SMX.WRSC\  P6Q,,K"]P2W Ez@X X0#Xj\  P6G;XP#"5@^2CRdd$CCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`l2CC!CCPRCddYYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddoddYYYYYzYzYzYddddddPdCdCCCdNdz8zRdddCRoNoNNF2[dCYddddd7>d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddndddddddy.C8*XC\  P6QP7PC2XXP\  P6QXP3f]MːPSQR) y2x  E @ Z 3|P X0#Xj\  P6G;XP#"5@^*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ*7777CE7SSxJxJxJxJxJooJfJfJfJfJ7.7.7.7.xSxSxSxSxSxSxSxSxSxSxJxSxSxSxSxS]SxSxJxJoJoJoJfJfJfJxSxSxxSxSxSxSCS7S777SAxSf.fExSxSxSxo7oE]A]AN:*LS7JSSSSS.4}}S2S}277JJS77SS7J72t7[[[[^ee*C`^.wRSSn[Cfx`xWlRx[][ceIfIs`Wx[rriwge*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ7SJSS7]777JJ:S7A7xx*7SSSS!S7.S^7SC[227`L*724S}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx]SJJJJJJoJJJJJ....SSSSSSS[SSSSSSSHP LaserJet 4Si/4Si MX919M RM 5126 HPLA4SMX.WRSC\  P6Q,,K"]P2e @@O@Times New Roman (TT)Arial (Bold) (TT)Times New Roman (Bold) (TT)Times New Roman (Italic) (TT)"5@^2CRdd$CCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`l2CC!CCPRCddYYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddoddYYYYYzYzYzYddddddPdCdCCCdNdz8zRdddCRoNoNNF2[dCYddddd7>d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd"5@^.7O]]x(77Aa.7..]]]]]]]]]]77aaafxxxxofx.]xfxoxofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa.7777CE7\fx]x]x]x]x]x]o]o]o]o]........xfffffxfxfxfxfo]x]xfffo]xfofx]x]x]x]x]x]o]o]o]ffffxfxfCf7f77.f]x]f.fExfxffxAxEo]o]N:.]]7f]]]]]>=]7{{]7..SS]77]].S77t7\[[\aee*C`a.wR]]n[Cfx`xWlRx[][ceIfIs`Wx[rriwge}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}.7O]]x(77Aa.7..]]]]]]]]]]77aaafxxxxofx.]xfxoxofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa}}}.]S]]7o7}}}}..SS:]7]7}}o.7]]]]/]7{>]a7{\C\777`].77=]fxxxxxxxoooo....xxaxxxxoof]]]]]]]]]]]....fffffff\fffff]f"5@^*2GSSl$22:X*2**SSSSSSSSSS22XXX\lllld\ul*Sl\}luduld\lddd\2*2XS2S\S\S2\\**S*\\\\:S2\SuSSK:*:X*2222<>2S\lSlSlSlSlSlSdSdSdSdS********l\u\u\u\u\l\l\l\l\dSlSl\u\u\dSl\d\lSlSlSlSlSlSdSdSdSu\u\uu\u\l\l\<\2\22*\SlS\*\>l\l\u\l:l>dSdSN5*SS2\SSSSS87}}S2nnS}2**KKS22SS*K22t2RRRRX[[&d<d<CCoodCCddCoCddzzzzzzzzzzCCCCozdddddddYYYYY8888dddddddndddddYd"5@^(1<1'P8.XP2p NQ>2s#H2*X@H2p NQ.37UC2X)XU4  pQX45PC2XF_XP*f9 xQXX5W!0(X_h0\  P6QhP6I(!XO,(\  P6Q,P7{,C8*XFֳC*f9 xQX2J=.X &J\  P6Q&P"5@^*7FSS$77Sq*7*.SSSSSSSSSS77qqqSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ*7777CE7SSfSfSfSfSfSooJfJfJfJfJ7.7.7.7.oSxSxSxSxSxSxSxSxS]JfSxSxSxS]JxSfSfSfSfSoJoJoJfJfJfJxSxSxxSxSxSxSCS7S777SJoJ].]EoSoSxSofAfESASAN:*WSASSSSSS.4}}S2S}277]]S77SS7]72t7[[[[qee*C`q.wRSSn[Cfx`xWlRx[][ceIfIs`Wx[rriwge*7FSS$77Sq*7*.SSSSSSSSSS77qqqSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ7S]SS7S777]]:S7A7o]*ASSSS.S7.Sq7SC[227`W*724S}}}Sffffffoffff7777xoxxxxxqxxxxx]fSSSSSSSoJJJJJ....SSSSSSS[SSSSSJS X SLeonard J. Kennedy, Esq.  X0Page  SЊ [">   [">   X0`(##_ps7@# IN REPLY REFER TO:#Xj\  P6G;XP#у  X0q` `  hh,Rppw   #C\  P6QP##&J\  P6Q &P#DA 97433# XP\  P6QXP# February 26, 1997  X10 Leonard J. Kennedy, Esq. Dow, Lohnes & Albertson 1200 New Hampshire Avenue, N.W. Washington, D.C. 20036 Dear Mr. Kennedy: qThis letter is in response to your letter dated January 31, 1997, a copy of which is attached, in which you seek clarification of the Commission's policy on the resale of commercial mobile radio services (CMRS). Specifically, you ask whether a recent Wireless  X0Telecommunications Bureau (Bureau) enforcement decision, Metro Communications, Inc. v.  X0Ameritech Mobile Communications, Inc.,2\E yO ЍqMetro Communications, Inc. v. Ameritech Mobile Communications, Inc., File Nos. WB/ENFF95012  {OI and WB/ENFF95013, Memorandum Opinion and Order, DA 961296 (rel. Aug. 16, 1996) (Metro  {O Communications).2 altered the Commission's existing policy prohibiting exclusive resale contracts between facilitiesbased CMRS carriers and resellers. In your letter, you state that at least one major facilitiesbased CMRS carrier has interpreted the last  X0sentence of paragraph 26 of Metro Communications to provide it with flexibility to discriminate among resellers on rates, terms, and conditions of service solely on the basis of  X0whether resellers agree to become the carrier's exclusive reseller.LZE yO6 ЍqThe pertinent portion of the sentence states that, "even in the resale context, exclusive distribution arrangements are permissible so long as the distributor has the option of becoming an unrestricted reseller."  {O Metro Communications at para. 26.L Because of the competitive importance of the Commission's resale policy and our desire to eliminate any confusion that  Xk0may have resulted from the Bureau's Metro Communications Order, I believe that it would be helpful to respond to your request. qAs an initial matter, I note that a number of issues related to the Commission's CMRS  X0resale policy currently are pending before the Commission on reconsideration.&E {O& ЍqSee Petitions for Reconsideration of First Report and Order, Interconnection and Resale Obligations  {O' Pertaining to Commercial Mobile Radio Services, CC Docket No. 9454, FCC 96163 (rel. July 12, 1996) (First  {Od( Report and Order); Public Notice, Petitions for Reconsideration and Clarification of Action in Rulemaking Proceedings, Report No. 2151 (Sept. 6, 1996) (announcing receipt of petitions). To the extent that this letter characterizes the Commission's CMRS resale rule, the discussion is  X0limited to the rule as currently written and interpreted in administrative and judicial ["> " ,,,0!" decisions. Nothing in this letter should be interpreted as reaching a decision on any issue pending on reconsideration. qAs you state in your letter, the Commission currently prohibits cellular, broadband personal communications services (PCS), and certain specialized mobile radio ("covered SMR") providers from restricting resale of their services, except that this prohibition "sunsets," or ceases to be effective, five years after the last group of initial licensees for  X_0broadband PCS spectrum in the 18501910 and 19301990 MHz bands are awarded.P_U yO Ѝq47 C.F.R.  20.12.P As the Commission has stated, prohibiting unreasonable restrictions on resale confers important  X10public benefits in markets that are less than fully competitive.1XU {O: ЍqSee First Report and Order at para. 10 (describing public interest benefits flowing from unrestricted resale). Among the resale restrictions that the Commission has determined run afoul of the rule are provisions requiring a reseller to  X 0serve as the facilitiesbased carrier's exclusive agent. U {Of ЍqSee TRAC Communications, Inc. v. Detroit Cellular Telephone Co., 5 FCC Rcd 4647, 4649 (1990)  {O0 (TRAC Communications) (affirming Bureau finding that exclusive resale provisions in contract between facilitiesbased carrier and reseller were unjust and unreasonable under Section 201(b) of the Communications Act of  {O 1934, unreasonably discriminatory under Section 202(a), and contrary to the Commission's resale policy). See  {O also TRAC Communications, Inc. v. Detroit Cellular Telephone Co., 4 FCC Rcd 3769 (Com.Car.Bur. 1989). qWhile the Commission has acknowledged that the resale rule may not be appropriate  X 0for all markets at all times,Z j U {O ЍqSee First Report and Order at para. 14 ("[O]ur resale rule should be narrowly tailored to apply only to those services where, due to competitive conditions, its application will confer important benefits, and only for so long as competitive conditions continue to render application of the resale rule necessary.") it has not modified the rule since its applicability was extended  X 0to broadband PCS and covered SMR licensees in the First Report and Order.T U {O ЍqSee id. at para. 7.T Nothing in the  X0subsequent enforcement decision, Metro Communications, alters the CMRS resale rule.  Xf0qThe Metro Communications case involved an exclusive agency agreement between a  XQ0facilitiesbased cellular carrier and an agent.a QU {O ! ЍqMetro Communications at para. 3.a In paragraph 26, the Bureau distinguished the  X:0facts of the case from those of TRAC Communications, which dealt with the Commission's  X%0resale policy but did not involve an agency relationship between the parties.Q %U {O$ ЍqId. at para. 26.Q TRAC  X0Communications, which was decided by the Commission in 1990, involved three entities: a facilitiesbased cellular carrier (Ameritech); an entity that resold Ameritech's cellular service for a limited time before its own system became operational (DCTC); and a nonfacilitiesbased provider (TRAC) that resold the service of DCTC. The agreement between TRAC and"B ,))33P" DCTC contained an exclusivity provision which prevented TRAC from reselling the service  X0of others, including Ameritech. U {Ob Ѝq See generally TRAC Communications, 5 FCC Rcd 4647 (1990) (Commission order on reconsideration); 4 FCC Rcd 3769 (1989) (Common Carrier Bureau order). TRAC filed with the Commission a formal complaint  X0against DCTC, alleging that the provision violated the Commission's cellular resale policies.D "U {O ЍqId.D The Commission found that, during the period before DCTC's system became operational, there was no anticompetitive effect shown with respect to the exclusivity provision because  X0TRAC could have dealt directly with Ameritech rather than through DCTC, which itself was  Xv0a reseller of Ameritech's service during that period. vU {O ЍqTRAC Communications, 5 FCC Rcd at 4649 n.3. See also TRAC Communications, 4 FCC Rcd at 3771. In contrast, such an exclusivity provision was considered anticompetitive during the period in which DCTC was selling  XH0service to TRAC over its own licensed cellular facilities.JHFU {O? ЍqId.J Thus, as the Bureau noted in  X10Metro Communications, TRAC Communications indicated that exclusive distribution arrangements between a reseller and another reseller did not violate the resale rule; however, such arrangements violated the rule if they were between a facilitiesbased provider and a reseller. qThe facilitiesbased cellular carrier described in your letter appears to have  X 0misinterpreted this reference to TRAC Communications in the Metro Communications case. Presumably, there is no "intermediary reseller" involved in the situation described in your  X}0letter that would liken the case to TRAC Communications. The only reason the Commission  Xh0permitted resale restrictions in TRAC Communications was because, during the period in which the reseller was selling the services of another reseller, it had the "option" of dealing with the facilitiesbased provider itself. Since this is not the factual scenario described in  X0your letter, we do not believe the TRAC Communications case is applicable here. Moreover,  X0we note that this part of the holding of TRAC Communications would not be sound reasoning under the Commission's amended resale rule, which prohibits restricted resale by "providers"  X0of cellular, broadband PCS, and covered SMR services.\U {OV ЍqSee 47 C.F.R. 20.12. The Commission decided the TRAC Communications case in 1990, and the resale rule was amended in July 1996. The former version of the rule, which appeared at Section 22.901(e) of  {O! the Commission's Rules, applied to cellular system licensees. See 47 C.F.R. 22.901(e) (1995). Under the current rule, all three  X0entities involved in TRAC Communications would be bound by the rule since they were all providers of CMRS. For these reasons, the Bureau would reject the contention that the  X0language in Metro Communications at issue here supports a new interpretation of the Commission's resale rule. "^ ,))33"Ԍ X0qAs a result, the Bureau clarifies that nothing in Metro Communications suggests that CMRS carriers subject to the resale rule may use exclusivity as a basis to "reasonably discriminate" among resellers with respect to rates, terms or other conditions of service. Commission policies and precedent continue to support the view that exclusivity provisions in CMRS resale agreements are impermissible restrictions on CMRS resale in violation of Section 20.12 of the Commission's Rules. X` hp x (#%'0*,.8135@8: