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I.Xa2IndentedLeft-indented text"?C ? A.` ` 2I#CG$G%H&?Ia3IndentedLeft-indented text#HP ? ` ` 1. a4IndentedLeft-indented text$Qp- ? ` `  a.` 'a5IndentedLeft-indented text%[ܽ ? ` `  '(1) hh-a6IndentedLeft-indented text&dK ? ` `  'hh-(a)42'-J(J)sK1La7IndentedLeft-indented text'l݇ ? ` `  'hh-4i)h:a8IndentedLeft-indented text(u-b ? ` `  'hh-4:a)ppAa1InterrogatoresStarts with A. at margin, 1 at first indent)UZZI. X'  = X4yxdddxyw  Federal Communications Commission`(#FCC 96472 ăX01Í ÍX01Í Í +Before the  a4 #|\  P6G;_P#Federal Communications Commission#Xj\  P6G;ynXP# MWashington, D.C. 20554 c X` hp x (#%'0*,.8135@8:XZ , yOv$'#X\  P6G;ɒP#Ѝ Bellcore indicates that, in 1996, its budget exceeds $1 billion and it employs nearly 6,000 people. Over 4000 of these employees were "highly trained and experienced engineers and scientists who provide a critical mass of telecommunications expertise and resources." These employees make Bellcore "unique[] in its ability to"&=0*&&&" provide endtoend solutions for its customers." In addition, Bellcore's patent portfolio contains more than 680  {OX'domestic and foreign patents. See Bellcore Ownership in Transition, undated briefing materials received Dec. 4, 1996. We will place a copy of these briefing materials in the docket file of this proceeding.% Since its creation, Bellcore has been owned and controlled" >0*&&aa" jointly by the RHCs. The RHCs, however, have recently announced their agreement to sell Bellcore to Science Applications International Corporation ("SAIC"), a large defense  X4contractor.?, {Om'#X\  P6G;ɒP#э Bellcore Owners Sell Business to Defense Contractor, Communications Daily, Nov. 22, 1996, at 1.  X4#36.XXCurrently, Bellcore plays an extensive role in setting generic requirements and standards and performing product certification for equipment used in telecommunications networks. Bellcore claims that it created the advanced intelligent network ("AIN") concept, made national Integrated Services Digital Network ("ISDN") service a reality, and provides the tools for the planning, design and operation of global standards for Synchronous Optical  X14Network ("SONET") and Asynchronous Transfer Mode ("ATM").|@1|, {O^'#X\  P6G;ɒP#э See Bellcore Ownership in Transition.| In each of these fundamental areas, AIN, ISDN, ATM, SONET, and other key areas such as Common Channel Signaling ("CCS"), Personal Communications Services ("PCS !M] " !M] ) and Automatic Message  X 4Accounting ("AMA !M_ " !M_ ), Bellcore sets the vast majority of industrywide generic requirements.A" , yO'#X\  P6G;ɒP#Ѝ For example, Bellcore provides over thirty generic requirements documents that provide requirements for AIN. These documents specify requirements for switching systems, signaling control points, signaling transfer  {O;'points, operations systems and other network components. Bellcore, 1995 Catalog of Technical Information, at 813. Bellcore also provides technical analysis through laboratory and infield testing to ensure that network elements meet these requirements. Finally, Bellcore plays a leading role in industry forums such as the ATM Forum and in the development of standards by accredited standards development organizations. Bellcore assumes this role through technical contributions and its  Xy4leadership of organizations that develop accredited standards.aBXy , yO"'#X\  P6G;ɒP#Ѝ Members of the technical staff at Bellcore have served as the Chairperson of Committee T1 for over eight years, now lead the ATM Forum, and continue to serve in other leadership positions within accredited standards development organizations and industry forums.a Additionally, Bellcore states that it plays a key role in helping to develop network standards for the evolution of a new  XK4national information infrastructure.CK, {O!'#X\  P6G;ɒP#э Bellcore, 1995 Catalog of Technical Information, at 229.  X4$37. XXSection 273(d) limits the circumstances under which Bellcore or any successor entity or affiliate may manufacture telecommunications equipment or CPE. Section 273(d)(1)(B) prohibits Bellcore from "manufacturing telecommunications equipment or  X4customer premises equipment as long as it is an affiliate of more than 1 otherwise unaffiliated"C0*&&aa:"  X4Bell operating company or successor or assign of any such company."DX, yOy'#X\  P6G;ɒP#Ѝ Section 273(d)(1)(B) (emphasis supplied). This subsection further states that "[n]othing in this subsection prohibits Bell Communications Research, Inc., or any successor entity, from engaging in any activity in which it is lawfully engaged on the date of enactment of the Telecommunications Act of 1996." 47 U.S.C. 273(d)(1). With respect to this statutory phrase, we note that many of the BOCs are commonly owned or controlled by a  X4single RHC. Such BOCs would appear to meet the 1996 Act's definition of "affiliates."pE, {Om'#X\  P6G;ɒP#э See note 20, supra.p Accordingly, we tentatively conclude that Section 273(d)(1)(B) prohibits Bellcore from manufacturing telecommunications equipment or CPE only as long as it is (1) affiliated with two or more otherwise unaffiliated RHCs; (2) affiliated with two or more BOCs that are not under the ownership or control of the same RHC, and are not otherwise affiliated; or (3) affiliated with an RHC and a BOC that is not otherwise affiliated with that RHC. We seek comment on this tentative conclusion.  X 4%38. XXSection 273(d)(1)(A) provides that Bellcore "shall not be considered a [BOC] or a  X 4successor or assign of a BOC at such time as it is no longer an affiliate of any [BOC]."mF z, yO0'#X\  P6G;ɒP#э 47 U.S.C. 273(d)(1)(A).m  X 4Based on the limited information before us,G , {O'#X\  P6G;ɒP#э Bellcore Owners Sell Business to Defense Contractor, Communications Daily, Nov. 22, 1996, at 1. we tentatively conclude that, if the announced sale of Bellcore to SAIC were eventually to be consummated, under Section 273(d)(1)(A), Bellcore would no longer be considered a BOC, a BOC affiliate, or a BOC successor or assign. As such, we tentatively conclude that it would be permitted to begin manufacturing telecommunications equipment and CPE in accordance with Sections 273(d)(1)(B) and 273(d)(3). We seek comment on these tentative conclusions, including specific comment on these and other implications of Bellcore's sale.  X6' 2.XXSection 273(d)(2): Proprietary Information  X4  X4&39.XXSection 273(d)(2) provides that: "[a]ny entity which establishes standards for telecommunications equipment or customer premises equipment, or generic network requirements for such equipment, or certifies telecommunications equipment or customer premises equipment shall be prohibited from releasing or otherwise using any proprietary information, designated as such by its owner, in its possession as a result of such activity, for any purpose other than purposes authorized in writing by the owner of such information, even  X~4after such entity ceases to be so engaged."jH~, yO#'#X\  P6G;ɒP#э 47 U.S.C.  273(d)(2).j  XP4'40. XX We seek to clarify to which entities this section should apply, how Section"P, H0*&&aah" 273(d)(2) should be enforced, and what impact this section may have on accredited standards development organizations and industry forums and accordingly seek comment on these issues. While Section 273(d)(4) sets procedures for use by any entity that is not an accredited standards development organization and that establishes industrywide standards,  X4Section 273(d)(2), on its face applies to any entity that establishes standards. A comparison of the two provisions suggests that the term " any entity that establishes standards" encompasses a broader range of entities than does Section 273(d)(4). Specifically, we tentatively conclude that Section 273(d)(2) applies to all entities that develop standards, and includes entities that create "de facto" standards. We seek comment on the extent to which  X34Section 273(d)(2) also applies to ISO 9000 certificationqI3, yO '#X\  P6G;ɒP#э The ISO 9000 Series, published by the International Standards Organization, is a set of three generic standards (ISO 9001, ISO 9002, and ISO 9003) that "provide quality assurance requirements and quality management guidance." ISO 9001 is a quality assurance standard for companies involved in the design, testing, manufacture, delivery, or service of products. ISO 9002 covers manufacturing and installation. ISO 9003  yO 'addresses product testing. Newton, Harry, Newton's Telecom Dictionary 328 (11th Ed. 1996).q or interoperability testing in general. We also seek comment on the extent to which this section applies to BOCs' or other carriers' development of internal interfaces and protocols that might or might not be adopted more  X 4widely.VJ x, yO'#X\  P6G;ɒP#э In this case, by "internal interfaces and protocols," we intend to include both (1) those standards that are used only internally by the BOCs and are otherwise transparent to network interconnectors and/or users, at least in the absence of the unbundling or sale of individual network elements; and (2) those standards that are adopted by the BOCs on an "individual" basis, but which may nevertheless have the effect of foreclosing other alternative standards by virtue of the BOCs' substantial size and market share.V We also tentatively conclude that, because Section 273(d)(2) uses the terms "standards" or "generic requirements" rather than industrywide standards," or "industrywide  X 4generic requirements, this section applies to the establishment of any standard or requirement, not just those that are industrywide. We seek comment on the validity of these tentative conclusions. Similarly, we seek comment on the types of certification activities that are encompassed by Sections 273(d)(2), Section 273(d)(3), and Section 273(d)(4), including comment on possible differences in the scope of certification activities encompassed by each.  X84(41.XXIn addition, we seek specific comment as to whether, and if so, how, Section  X!4273(d) applies to the activities of industry forums such as the ATM ForumK !( , yO'#X\  P6G;ɒP#Ѝ The ATM Forum is an international nonprofit organization formed with the objective of accelerating the use of ATM products and services through a rapid convergence of interoperability specifications. In addition, the Forum promotes industry cooperation and awareness. The ATM Forum consists of over 700 member companies, and it remains open to any organization that is interested in accelerating the availability of ATMbased solutions. or the National  X 4ISDN User s Forum.}LX , yO#'#X\  P6G;ɒP#Ѝ The North American ISDN Users' Forum (NIUF) objectives are to provide users the opportunity to influence developing ISDN technology to reflect their needs; to identify ISDN applications, develop implementation requirements and facilitate their timely, harmonized, and interoperable introduction; and to solicit"[%K0*&&k%" user, product provider, and service provider participation in the process. In 1988, the National Institute of Standards and Technology (NIST) collaborated with industry to establish the NIUF. Members of NIST's Computer Systems Laboratory have served as the chair of the forum and have hosted the NIUF Secretariat. Over 300 organizations participate in the NIUF. The NIUF is open to all interested parties, product providers, and service providers.} The work of these forums can be characterized in a variety of ways. " xL0*&&aaL" For example, the ATM Forum maintains a World Wide Web page in which it describes its work product as "specifications." The Telecommunications Industry Association (TIA)  X4characterizes the ATM Forum as a "standards development organization,"Mx, yO'#X\  P6G;ɒP#Ѝ TIA Standards and Technology Annual Report 1995. We will place a copy of this document in the docket file of this proceeding. while the Network Reliability Council states that industry forums, like the ATM Forum, "use and influence standards to create user application profiles of standards and implementation agreements based  X4on options approved in standards."N, yO'#X\  P6G;ɒP#Ѝ Network Reliability Council Increased Interconnection Task Group II Report (Dec. 1, 1995) at 57. We seek comment on whether the work product of these types of industry forums constitutes either a "standard" or a "generic requirement." Additionally, we seek comment as to whether these forums, if they have some relationship with "accredited standards development organizations" should themselves be considered "accredited standards development organizations" for the purpose of this section of the Act. We also seek comment as to what type of relationship, if any, should lead to these industry forums being classified as "accredited" for the purposes of Section 273(d), and how "accredited" should be defined for the purpose of administering Section 273. We encourage commenters to address the advantages and disadvantages of interpreting this section to include industry forums as standards setting entities within the meaning of Section 273(d) of the Act, and further encourage commenters to address the impact on members of these groups of a finding that they are covered by Section 273(d).  Xb4)42.XXWe also seek comment on the extent to which the preceding interpretations would require accredited standards organizations and industry forums to alter their existing practices and procedures for protecting proprietary information to comply with this provision of the Act, and the projected costs and benefits of such alterations. We recognize that the protection of proprietary information is vital to continued development of new technology and innovative network advances. Assuming accredited standards development organizations and industry forums must comply with Section 273(d)(2), we seek comment on and draft language for any rules that a commenting party asserts we should establish to mitigate any adverse effects of improper disclosure.  X|' 3.XXSection 273(d)(3): Manufacturing Safeguards  Xe4  XN4*43.XXSection 273(d)(3) has three parts. In general, Section 273(d)(3)(A) restricts the ability of an entity to manufacture and certify any particular class of telecommunications"7` N0*&&aa" equipment or CPE and requires that such manufacturing be performed only through an affiliate separate from the certifying entity. Sections 273(d)(3)(B) and 273(d)(3)(C) impose specific separation requirements on the manufacturing affiliate and the certifying entity, respectively. Under Section 273(d)(3)(B), the entity's manufacturing affiliate must maintain books, records and accounts separate from those of the certifying affiliate, must not engage in joint manufacturing activities with the certifying entity, and must have segregated facilities and separate employees. Under Section 273(d)(3)(C), a certifying entity must not discriminate in favor of its manufacturing affiliate, must not disclose unaffiliated manufacturers' proprietary information without authorization, and must not permit any employee engaged in certification activities to participate in joint equipment sales or marketing activities with the certifying entity's manufacturing affiliate. We tentatively conclude that, if the sale of Bellcore to SAIC were to be consummated, Bellcore would be permitted to engage in manufacturing activities, but would need to comply with the structural and accounting safeguards of Section 273(d)(3). We seek comment on this tentative conclusion.  X 4+44. XXSection 273(d)(3)(A) states that any entity which certifies telecommunications equipment and customer premises equipment manufactured by an unaffiliated entity shall only manufacture a particular class of telecommunications equipment or customer premises equipment for which it is undertaking or has undertaken, during the previous 18 months,  XK4certification activity for such class of equipment through a separate affiliate."mOK, yO'#X\  P6G;ɒP#э 47 U.S.C. 273(d)(3)(A).m While the terms "telecommunications equipment" and "customer premises equipment" are defined in the  X4Act,xPX, {O&'#X\  P6G;ɒP#э See notes 21 and 22, supra.x "class" is not defined by the Act. This term must be clearly defined so that certification entities know what equipment they may manufacture directly. We tentatively  X4conclude that we should define specific classes of equipment and that these classes should be based on existing industry classifications to the extent that they exist. We request comment that describes classifications currently used within the industry and proposed definitions for each class of equipment. We also seek comment on the practical effects of defining "classes" broadly, versus narrowly. On the one hand, defining broad classes, such as "Network Switching Equipment" or "Network Transmission Equipment" would greatly reduce the ability of certification entities to manufacture equipment directly. For example, if we defined "Network Transmission Equipment" as a "class," this class would include many types of network components such as channel banks, multiplexing equipment, fiber optic couplers, and even fiber optics or copper wire. Adopting such a definition of "class" would mean that an entity certifying only channel banks would not be able to manufacture these other items directly because they would fall into the same class. On the other hand, a narrow definition of "classes of telecommunications equipment" may only minimally affect certifying entities, but fail to provide the safeguards Congress intended in enacting this section. "!P0*&&aa% "Ԍ X4,45.XX The breadth of the term "class" may also affect how quickly the sunset provision contained in Section 273(d)(6) becomes effective. If classes are defined more narrowly, it may be easier for the Commission to make a determination that the requirements of Section 273(d)(3) should be terminated with respect to a specific class, but it would have many such determinations to make. Conversely, if the Commission defined "class" broadly, it would be more difficult for the Commission to make a determination that the requirements of Section 273(d)(3) should be terminated, but there would be a much smaller number of determinations needed.  X14-46.XXWe also seek comment on how to interpret the phrase "during the previous 18  X 4months" in Section 273(d)(3)(A).Q , yO '#X\  P6G;ɒP#э 47 U.S.C.  273(d)(3)(A) (emphasis supplied). One interpretation of the italicized phrase is that if, at the date on which an entity seeks to manufacture equipment, that entity is currently certifying equipment, or has within the previous 18 months certified equipment within a particular class, it may manufacture equipment within that class only through a separate affiliate. If an entity that certifies equipment seeks to manufacture equipment within a particular class of equipment and within the previous 18 months that entity has not certified equipment within that same class, it may manufacture equipment directly. A second possible interpretation of the phrase is that if the certification entity was certifying equipment and manufacturing equipment within the same class within 18 months prior to the effective date of the 1996 Act, the entity may continue to do so without creating a separate affiliate. We seek comment on the proper interpretation of this phrase.  X 4.47.XXSection 273(d)(3)(B) specifies particular separate affiliate requirements, such as the maintenance of separate books, records and accounts. The Commission has issued a separate  X4NPRM addressing affiliate transactions that fall within the scope of that section.#RX, {O'#X\  P6G;ɒP#э Implementation of the Telecommunications Act of 1996: Accounting Safeguards Under the  {O'Telecommunications Act of 1996, Notice of Proposed Rulemaking, 11 FCC Rcd 9054, 90999102 (1996).# In addition to these accounting safeguards, however, Section 273(d)(3)(C) states that the certification  X4entity, inter alia, shall "not discriminate in favor of its manufacturing affiliate in the establishment of standards, generic requirements, or product certification." Certain statutory provisions that predate the 1996 Act already impose nondiscrimination requirements on all common carriers. For example, Section 201 requires that all carrier "charges, practices,  XT4classifications, and regulations . . . shall be just and reasonable."gST, yO!'#X\  P6G;ɒP#э 47 U.S.C.  201(b).g In addition, section 202 makes it unlawful for any common carrier "to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services," or "to make or give any unreasonable preference or advantage to any particular person, class of persons, or"DS0*&&aa"  X4locality."gT, yOy'#X\  P6G;ɒP#э 47 U.S.C.  202(a).g Pursuant to these statutory provisions, the Commission established requirements for interconnection between local exchange carriers and interexchange telecommunications  X4service providers,UX, {O'#X\  P6G;ɒP#э  WATS See MTS and WATS Market Structure, Phase I, Third Report and Order, 93 F.C.C.2d 241 (1983),  {O'modified on reconsideration, 97 F.C.C.2d 682 (1983), modified on further recon., 97 F.C.C.2d 834 (1984), aff'd  {Oo'in principal part and remanded in part sub. nom. National Ass'n of Regulatory Util. Comm'rs v. FCC, 737 F.2d  {O9'1095 (D.C.Cir. 1984), cert. denied, 469 U.S. 1227 (1985), modified on further reconsideration, 99 F.C.C.2d 708  {O '(1984) and 101 F.C.C.2d 1222 (1985), aff'd on further reconsideration, 102 F.C.C.2d 849 (1985). and for interconnection between BOCs and ESPs.V, {O '#X\  P6G;ɒP#э Amendment of Section 64.702 of the Commission's Rules and Regulations, CC Docket No. 85229, Phase  {O_ 'I, 104 F.C.C.2d 958 (1986) ("Phase I Order") recon., 2 FCC Rcd 3035 (1987) ("Phase I Reconsideration  {O) 'Order"), further recon., 3 FCC Rcd 1135 (1988), second further recon., 4 FCC Rcd 5927 (1989); Phase I Order  {O 'and Phase I Reconsideration Order vacated California I, 905 F.2d 1217; Phase II Order, 2 FCC Rcd 3072  {O '(1987) (see note 32, supra, for the complete subsequent history of the Phase II Order).  X4/48.XXWe tentatively conclude that our existing nondiscrimination rules are inadequate in the context of Section 273(d)(3)(C) because these rules do not address the ability of a certification entity to discriminate in favor of its manufacturing affiliate. Unlike Section 202, which prohibits "unjust or unreasonable discrimination," Section 273(d)(3)(C) uses no adjectives to modify the meaning of the verb "discriminate." We seek comment, therefore, on whether Congress intended to impose a stricter standard for compliance with Section  X 4273(d)(3)(C) by enacting a flat prohibition on all discrimination.W$ , {O'#X\  P6G;ɒP#э We sought comment on a similar issue in Implementation of the NonAccounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended; and Regulatory Treatment of LEC Provision of  {O)'Interexchange Services Originating in the LEC's Local Exchange Area, CC Docket No. 96149, Notice of Proposed Rulemaking, FCC 96308,  72 (rel. July 18, 1996). The verb, "to discriminate"  X 4means to "make a clear distinction" or to "act on the basis of prejudice."X , {Ol'#X\  P6G;ɒP#э Webster's II New Riverside University Dictionary, Riverside Publishing Co., at 385 (1994). We tentatively conclude, therefore, that Section 273(d)(3)(C) requires the certification entity to provide its services to its manufacturing affiliate on terms, conditions or rates that are at least as good as those it provides to unaffiliated manufacturers. We seek comment on this tentative conclusion, including comment on (1) any specific concerns that we should address in this proceeding; (2) the language of proposed rules, if any, that a party asserts we should adopt to address these dangers; and (3) the relationship, if any, between Section 273(d)(3)(C) and Section 272(c)(1), which prohibits a BOC from discriminating between an affiliate and any  XK4other entity in, inter alia, the establishment of standards. We tentatively conclude that the other prohibitions that are contained in Section 273(d)(3)(C)(iiiii) are clear and that no clarification or additional rules appear to be necessary to implement this section. "JX0*&&aaf"Ԍ X'  4.XXSection 273(d)(4): Manufacturing Limitations for Standards  X'XXSetting Organizations  X4049.XX Section 273(d)(4) prescribes procedures that are intended to be open to all interested parties in the process for setting and establishing industrywide standards and  X4generic requirements for telecommunications equipment and CPE.mY, yO'#X\  P6G;ɒP#э 47 U.S.C.  273(d)(4)(A).m These procedures apply to standardssetting activities by "any entity that is not an accredited standards development organization and that establishes industrywide standards for telecommunications equipment or customer premises equipment, or industrywide generic network requirements for such equipment, or that certifies telecommunications equipment or customer premises equipment manufactured by an unaffiliated entity." Additionally, this section imposes requirements to  X 4assure fair, evenhanded certification processes,mZ X, yO '#X\  P6G;ɒP#э 47 U.S.C.  273(d)(4)(B).m and prohibits anticompetitive behavior.q[ , yO'#X\  P6G;ɒP#э 47 U.S.C.  273(d)(4)(C)(D).q  X 4150.XXSection 273(d)(4) potentially could encompass a wide range of entities or alliances of entities. Bellcore would appear to fall squarely within the ambit of Section 273(d)(4); we seek comment, however, on whether the sale of Bellcore to SAIC or another entity unaffiliated with the BOCs could affect the applicability of this section to Bellcore. We also seek comment on the potential additional scope of this section, including the extent to which it could apply to research, development, or adoption of standards, specifications, or generic requirements by large carriers, other entities, or alliances. In addition, we seek comment on these specific issues: (1) the ability of the RHCs, Bellcore or other carriers to circumvent the requirements of 273(d)(4) by designating standards or generic requirements as, for example, "internal," "non industrywide," "optional," companyspecific "specifications," etc.; (2) the  X4appropriate definition, and treatment, of such de facto standards or requirements that may not be adopted through the 273(d)(4) processes, including the relationship between these standards and the definition of "industrywide" standards contained in 273(d)(8)(C); and (3) the  X4adequacy of 273(d)(5) and our recentlyadopted default dispute resolution processesB\\x, {O'#X\  P6G;ɒP#э Implementation of Section 273(d)(5) of the Communications Act of 1934, as Amended by the  {O'Telecommunications Act of 1996 Dispute Resolution Regarding Equipment Standards, Report and Order, 11 FCC Rcd 12955 (1996).B to address the anticompetitive harms that may result from the establishment of such standards or requirements. Furthermore, we seek comment on the appropriate treatment of standards  Xg4developed or adopted by large entities or alliances (e.g., individual RHCs, GTE, or alliances) (a) in the event the entity or alliance were to control at least 30% of the deployed access lines in the United States, as defined in 273(d)(8)(C); and (b) in the event that the entity or alliance were to control fewer than 30% of such lines."$\0*&&aa"Ԍ X4ԙ251.XX Section 273(d)(4)(A) specifies procedures to be followed by any entity subject to Section 273(d)(4) in establishing and publishing any industrywide standard, industrywide generic requirement, or "substantial modification" thereto for telecommunications equipment or customer premises equipment. We seek comment on what should be deemed to constitute a substantial modification. Specifically, we ask commenters to address whether the Commission should define substantial modification precisely or whether we should establish factors that should be considered in determining what constitutes a substantial modification." With regard to factors to be considered, we request comment on what factors, such as impact on network reliability, performance, security, and interoperability, might be established to assess what constitutes a "substantial modification." Furthermore, we seek comment on the appropriate weight that should be given to each individual factor proposed.  X 4352.XX Section 273(d)(4)(A) imposes five duties upon any entity, "that is not an accredited standards development organization" and that establishes an industrywide standard or generic requirement. Section 273(d)(4)(A)(i) requires any such entity to "issue a public notice of its consideration of a proposed industrywide standard or industrywide generic requirement. The 1996 Act does not specify what constitutes adequate public notice. We believe that to achieve its statutory purpose, the public notice must alert as many interested persons as possible of the standard or requirement activity, so that if they so desire, they may participate in the standard or requirement development process. We seek comment on the means of publication most likely to ensure broad knowledge of the impending activity. We note that Bellcore currently publishes information regarding changes to its generic  X4requirements in its Digest of Technical Information. This digest is produced monthly and  X4provided to subscribers for a fee.3], {Oj'#X\  P6G;ɒP#Ѝ The annual subscription fee is $110. Bellcore, Digest of Technical Information, Jan. 1996. We are concerned that fees for "publications" that satisfy this "public notice" requirement remain inexpensive.3 In addition, Bellcore has provided periodic supplements to this digest that describe its requirement plans for the entire year. Entities such as the ATM Forum maintain pages on the World Wide Web that describe specifications development efforts. Additionally, when major changes to generic requirements occur, they are often discussed in Alliance for Telecommunications Industry Solutions (ATIS) industry forums.  Xg4453. XXWe tentatively conclude that publications such as the Bellcore Digest of Technical  XR4Information and publications on the World Wide Web similar to that of the ATM Forum would constitute adequate public notice because these forms of notice are available to the public at reasonable expense, provide a summary of the proposed work, provide contact information, and set tentative dates for when the requirement or specification will be available. We seek comment on this tentative conclusion and on any additional factors that should be considered in determining generally what should constitute adequate "public notice." We also seek comments listing other publications or means of providing "public notice" that  X!4would meet the public notice requirement. To the extent that public notice can be provided by placing material on World Wide Web sites, we seek comment on whether and how the"""]0*&&aa " public could reasonably be informed of the location of this information. For example, could standards entities provide public notice by submitting an announcement or hypertext link that would be placed on a page established for this purpose on the FCC's World Wide Web site, or on the World Wide Web site of an accredited standards development organization? We also seek comment on whether public notice could be provided by posting information through the Internet on relevant Usenet newsgroups, or on a new newsgroup established for this purpose. In addition, we seek comment as to whether public notice should be provided by electronic mail, either by sending information directly to interested parties or by posting information on relevant Internet "mailing lists." Finally, we seek comment on the role that the ATIS industry forums and TIA groups might play in ensuring interested parties have access to industrywide generic requirement and standard development processes.  X 4554.XXSection 273(d)(4)(A)(ii)(v) states h"(ii) such entity shall issue a public invitation to interested parties to fund and participate in such efforts on a reasonable and nondiscriminatory basis, administered in such a manner as not to unreasonably exclude any interested industry party;  h(iii) such entity shall publish a text for comment by such parties as have agreed to participate in the process pursuant to clause (ii), provide such parties a full opportunity to submit comments, and respond to comments from such parties;  h(iv) such entity shall publish a final text of the industrywide standard or industrywide generic requirement, including the comments in their entirety, of any funding party which requests to have its comments so published; and  h(v) such entity shall attempt, prior to publishing a text for comment, to agree with the funding parties as a group on a mutually satisfactory dispute resolution process which such parties shall utilize as their sole recourse in the event of a dispute on technical issues as to which there is disagreement between any funding party and the entity conducting such activities, except that if no dispute resolution process is agreed to by all parties, a funding party may utilize the dispute resolution procedures established pursuant to paragraph (5) of this subsection."   We have recently limited the definition of a "funding party" in the context of Section 273(d)(5)'s dispute resolution processes to include only parties that "provide actual funding to support the standardssetting process," specifically excluding parties that merely post a""]0*&&aa "  X4"performance bond" or provide "inkind" support.?^\, {Oy'#X\  P6G;ɒP#э Implementation of Section 273(d)(5) of the Communications Act of 1934 as amended by  {OC'Telecommunications Act of 1996 Dispute Resolution Regarding Equipment Standards, Report and Order, 11 FCC Rcd at 12969.? We tentatively conclude that this definition should apply in the context of Section 273(d)(4)(A) as well, and that the remainder of the requirements imposed by Section 273(d)(4)(A)(ii)(v) are selfexplanatory. We request comment on these tentative conclusions.  X4655.XX Section 273(d)(4)(B) sets forth procedures that an entity must follow when it engages in product certification for telecommunications equipment or customer premises equipment manufactured by unaffiliated entities. Such activity must be performed pursuant to published and auditable criteria, and must use available industryaccepted testing methods and standards." We tentatively construe the phrase "auditable criteria" to mean criteria that, when applied in a certification process, are sufficiently precise that a neutral third party would be able to replicate each certification and determine whether each certification had, or had not, been performed in an unbiased manner. We request comment on the validity of this construction, and also request comment as to whether the "Generally Accepted Auditing Standards" that have been propounded by the American Institute of Certified Public  X 4Accountants are adequate for this purpose._ , {OD'#X\  P6G;ɒP#Ѝ See e.g., AICPA Codification of Statements on Auditing Standards, AU 320.32, 320.36, 320.37 (1996). We seek comment on what should constitute publication and how we should determine if the criteria used to perform the product certification are auditable. In addition, we seek comment as to how the term industry accepted testing methods should be defined; whether such testing methods currently exist and, if so, what they are; and what constitutes industry accepted." We also request comment as to how we should determine whether a testing method is industry accepted. More narrowly, in this context, we seek comment on whether the term "industry" includes all telecommunications service providers, or those providers and all manufacturers, or subsets of these or additional categories. We request that commenters address whether any particular types of entities specifically should be included in, or excluded from, the term "industry?"  X4756.XX Section 273(d)(4)(C) prohibits any entity that is not an accredited standards development organization and that establishes industrywide standards from undertaking "any actions to monopolize or attempt to monopolize the market for such services." We seek comment on how best to implement this provision. For example, should we identify specific  XN4acts that would constitute per se violations of Section 274(d)(4)(C)? If so, what should those  X94acts be and what showings should be required to establish a prima facie violation of this provision? Or, should some other approach be used? Those advocating another approach should discuss why this approach would be more effective. Should specific penalties (for example, fines and forfeitures) be assessed for specific violations, and if so, in what amount or amounts?"~_0*&&aak"Ԍ X4ԙ857.XXSection 273(d)(4)(D) states that any entity that is not an accredited standard development organization shall not "preferentially treat its own telecommunications equipment or customer premises equipment or that of its affiliate, over that of any other entity in establishing and publishing industrywide standards or industrywide generic requirements for, and in certification of telecommunications equipment and customer premises equipment." We seek comment on how best to implement this provision. How should the phrase "preferential treatment" be defined? In enforcing this provision of the 1996 Act, should we adopt rules that identify specific acts that would constitute "preferential treatment" and thereby constitute  XH4per se violations of Section 273(d)(4)(D), or should some other approach be used? Should we adopt rules that provide uniform fines and forfeitures for specific violations, and if so,  X 4what should the fines and forfeitures be, and what should constitute a prima facie case? We suggest that parties interested in commenting on these issues propose rules that they believe would most efficiently, and effectively, enforce these provisions of the 1996 Act. For example, one form of "preferential treatment" we can identify at this time would be preferential licensing of proprietary technology. We seek comment as to whether the Commission should require, as do the International Organization for Standardization ("ISO") and the American National Standard Institute ("ANSI"), that participants agree to license proprietary technology on "reasonable" terms before that technology is incorporated into an official standard. We request that commenters advocating such Commission action define terms that should be considered "reasonable," and that commenters opposing such Commission action discuss other possible approaches to this potential problem. In addition, we seek comment on whether we should use existing ANSI, ISO, or other rule structures as a model for developing Commission rules in this area, including specific comment on the features of existing rule structures that work well, and potential gaps that should be addressed.   X4958.XXSection 273(d)(5) requires that the Commission prescribe a dispute resolution process to be used if all parties cannot agree on a dispute resolution process when establishing and publishing any industrywide standard or generic requirement. Because this Commission has already issued a Report and Order addressing Section 273(d)(5), that section will not be  Xi4addressed further here.@`\i, {O'#X\  P6G;ɒP#э See Implementation of Section 273(d)(5) of the Communications Act of 1934 as amended by  {O'Telecommunications Act of 1996 Dispute Resolution Regarding Equipment Standards, Report and Order, 11 FCC Rcd 12955.@  X;' 5.XXSection 273(d)(6): Sunset  X$4  X 4:59.XXSection 273(d)(6) defines the circumstances under which the Commission must lift the manufacturing safeguards of Sections 273(d)(3) and the procedural safeguards of Section 273(d)(4), providing that: hThe requirements of paragraphs (3) and (4) shall terminate for the particular relevant"! `0*&&aa " activity when the Commission determines that there are alternative sources of the industrywide standards, industrywide generic requirements or product certification for a particular class of telecommunications equipment or [CPE] available in the United States. Alternative sources shall be deemed to exist when such sources provide commercially viable alternatives that are providing services to customers. The Commission shall act on any application for such a determination within 90 days after receipt of such application,  Xv4and shall receive public comment on such application.jav, yO'#X\  P6G;ɒP#э 47 U.S.C. 273(d)(6).j(#  XH4 We seek to identify those factors that the Commission should use in making the determination required by Section 273(d)(6). We tentatively conclude that factors that should be addressed include the number of entities developing standards, developing generic requirements or conducting certification work; the ability of these entities to compete with each other; and the length of time during which those entities have been conducting the relevant activity. We also seek comment as to what factual record the Commission should compile in making the determination required by Section 273(d)(6), including specific procurement documents or other information the Commission should require applicants to submit under this section. We ask that commenters addressing this issue provide specific comments on appropriate ways in which the Commission can balance its need to develop an adequate factual record on such applications against its statutory obligation to act within 90 days.  X44;60.XXIn addition, we seek comment on how we should define two phrases within Section 273(d)(6). The first, "class of telecommunications equipment or CPE," was examined in our earlier discussion of Section 273(d)(3). We request comment as to whether that analysis should apply to this phrase as used in Section 273(d)(6) and whether other considerations inherent in the implementation of Section 273(d)(6) should require a different interpretation or rule. The second phrase we seek to define is "commercially viable alternatives that are providing services to customers." The term "alternatives" in this phrase suggests that the number of entities conducting a relevant activity is a factor we should consider, and that a minimum of two entities must be conducting a relevant activity. We seek comment as to whether the existence of two entities conducting a relevant activity is both a necessary and sufficient condition for termination of the Section 273(d)(3) and (4) safeguards. In addition, it appears that, to assess the viability of entities, it is necessary to determine if the alternative entities are competitive and to examine the duration of their existences. We believe that such as analysis is necessary to ensure that we keep in place the manufacturing safeguards set by statute until they are no longer necessary. Finally, we seek comment on the relationship among (1) the phrase "commercially viable alternatives that are providing services to customers;" (2) the phrase "alternative sources of industrywide standards, industrywide generic requirements, or product certification;" and (3) the definition of the term "industrywide" contained in Section 273(d)(8)(C). "#!Xa0*&&aa!"Ԍ X4<61.XX While we do not want to lift statutory safeguards prematurely, we also would seek to eliminate them as promptly as possible once they are not needed. With this in mind, we tentatively conclude that the regulations developed to implement Section 273(d)(3) and (4) should not apply to certification pursuant to Part 15 (Radio Frequency Devices) or registration pursuant to Part 68 (Connection of Terminal Equipment to the Telephone Network) of the  X4Commission's rules.kb, yO'#X\  P6G;ɒP#э 47 C.F.R. Parts 15 and 68.k Through its equipment authorization programs, the Commission ensures compliance with Part 15 and Part 68 of its rules, ensuring against network harm when CPE is attached to the public switched network. The success of this program is underscored by the highly competitive nature of CPE in the United States that has given consumers broad choice in the type of terminal equipment they use in their homes and offices for many years. We note also that there are many commercially viable laboratories now in operation throughout the United States that test to Part 15 and Part 68 and that have done so for some  X 4time.c X, {O'#X\  P6G;ɒP#Ѝ See, e.g., Equipment Authorization Division of the Federal Communications Commission, Contract Test Sites on File as of March 1, 1996 (Mar. 1996). We seek comment on this tentative conclusion.  X 4=62.XXSection 273(d)(7) states that in administering Section 273(d), the Commission "shall have the same remedial authority as the Commission has in administering and enforcing the provisions of this title with respect to any common carrier subject to this Act." Finally, Section 273(d)(8) defines several terms used in Section 273(d). We tentatively conclude that the language of these paragraphs requires no further clarification at this time. We seek comment on this tentative conclusion.  X' E.XXSection 273(e): BOC Equipment Procurement and Sales  X4  X4>63. XXSection 273(e) governs BOC practices in procuring and selling telecommunications equipment. With the exception of Section 273(e)(4), the provisions of Section 273(e) apply on their face to all BOCs. Section 273(e), however, is contained within a statute that otherwise addresses BOC obligations in the manufacturing context. We seek comment therefore, on whether the requirements of Section 273(e) applies to all BOCs or only to BOCs that are authorized to manufacture under Section 273(a).  XN4?64.XX To prevent Bell Operating Companies from favoring entities with whom they have  X74a telecommunications equipment manufacturing relationship, S ection 273(e)(1) requires that "[i]n the procurement or awarding of supply contracts for telecommunications equipment, a Bell operating company, or any entity acting on its behalf, for the duration of the requirement for a separate subsidiary including manufacturing under this Act (A) shall consider such equipment, produced or supplied by unrelated persons; and (B) may not discriminate in favor of equipment produced or supplied by an affiliate or related person." " "c0*&&aaH"Ԍ X4ԙ@65.XX The Act provides no definition of the word "consider." As a consequence, we first look to the ordinary meaning of that word. "Consider" means to "think about seriously" or  X4"bear in mind."d, {OK'#X\  P6G;ɒP#Ѝ Webster's II New Riverside University Dictionary, Riverside Publishing Co., at 301 (1994). This definition suggests that Section 273(e)(1)(A) would be satisfied if a BOC merely opened its procurement and sales processes to entities other than itself or its affiliate(s). We request comment as to (1) whether this definition of "consider" is sufficient, or whether some other definition would be more consistent with the intent of Congress; and (2) any specific actions that a BOC must take in fulfilling this statutory obligation.  XH4A66.XXIn contrast, Section 273(e)(1)(B) unequivocally prohibits BOCs from discriminating in favor of equipment produced or supplied by an affiliate or related person. Accordingly, the language of Section 273(e)(1)(B) seems to make it clear that the procurement decision may not rest solely on the BOC's relationship with the supplying entity and that, in addition to opening its procurement and sales processes, a BOC may need to take affirmative steps to ensure that it does not favor proposals from "affiliates or related persons" for reasons other than merit. Section 272(a)(2)(A) requires a BOC to engage in manufacturing only through a separate affiliate and Section 272(c)(1) provides that the BOC "may not discriminate between that...affiliate and any other entity in the provision or procurement of goods, services, facilities and information, or in the establishment of standards." With respect to this Section 272(c)(1) prohibition, we tentatively concluded that, "at minimum, that BOCs must treat all other entities in the same manner as they treat their affiliates, and must provide and procure goods, services, facilities and information to and from  X4these other entities under the same terms, conditions, and rates."e$Z, {O('#X\  P6G;ɒP#э Implementation of the NonAccounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended; and Regulatory Treatment of LEC Provision of Interexchange Services Originating in the  {O'LEC's Local Exchange Area, CC Docket No. 96149, Notice of Proposed Rulemaking, FCC 96308,  73 (rel. July 18, 1996). We seek comment on: (1) whether the word "discriminate" has any different import in the context of Section 273(e)(1)(B) than it does in Section 272(c)(1); (2) what specific actions or types of actions by or on behalf of a BOC would be considered discriminatory in this context; and (3) what affirmative steps, if any, a BOC would need to take to ensure that it does not discriminate, in violation of Section 273(e)(1)(B).  X|4B67.XXWhile the prohibition contained in Section 272(c)(1) applies to affiliates, the prohibition contained in Section 273(e)(1)(B) applies to "affiliates and related persons." This use of the term "related persons" suggests that the discrimination prohibition in Section 273(e)(1)(B) may apply to a larger class of entities than that contained in Section 272(c)(1) and corresponds with the use in Section 273(e)(1)(A) of the term "unrelated persons." We seek comment on the meaning of the terms "unrelated persons" and "related persons." These terms suggest that the BOCs not be permitted to discriminate in favor of parties with whom"#Fe0*&&aa"  X4they have some type of relationship.f, {Oy'#X\  P6G;ɒP#Ѝ Webster's II New Riverside University Dictionary at 992 (defining "related" as "connected" or "associated"). We seek comment as to specific types of relationships that would make an entity a "related person" for purposes of Section 273(e). For example, should a royalty agreement between a BOC and a manufacturer render that manufacturer a "related person?" We note that Section 273(d)(8)(A) defines "affiliate" as having the same meaning as in Section 3 except that, for purposes of Section 273(d)(1)(B) an "aggregate voting interest in [Bellcore] of at least 5 percent of its total voting equity, owned directly or indirectly by more than 1 otherwise unaffiliated [BOC], shall constitute an affiliate relationship." In contrast, no such specificity is provided with regard to the meaning of "related person." We request that commenters provide the language of any rules that they assert would be needed to ensure that a BOC does not discriminate in favor of either affiliates or related persons, in violation of Section 273(e)(1)(B).  X 4C68.XX Section 273(e)(2) requires that "[e]ach Bell operating company or any entity acting on its behalf shall make procurement decisions and award all supply contracts for equipment, services, and software on the basis of an objective assessment of price, quality, delivery, and other commercial factors." We seek comment on the scope of, and request appropriate definitions for, each of the terms "equipment," "services," and "software." For example, we seek comment on: (1) whether the scope of the term "equipment," in this context, should be limited to telecommunications equipment and CPE; (2) what types of services the mandate of Section 273(e)(2) encompasses; and (3) whether the requirements of Section 273(e)(2) apply to the procurement of all software, only the software "essential to [the] design and  X4development of" telecommunications equipment or CPE,g", {O'#X\  P6G;ɒP#э See United States v. Western Elec. Co., 675 F. Supp. at 667 n.54 or some other subset. We tentatively conclude that the remainder of this provision is selfexplanatory and that no further elaboration of this requirement is necessary in our rules. We seek comment on this tentative conclusion and request that parties that disagree with this tentative conclusion propose the language for rules to address their concerns.  X4D69. XXWe recognize that traditional, complaintbased enforcement techniques may be inadequate for the effective enforcement of Sections 273(e)(1) and 273(e)(2). Even when confronted with clear violations of the strictures of these sections, a manufacturer may be reluctant to complain publicly because, in doing so, it might risk alienating one or more customers that represent a significant source of potential future sales. Accordingly, we request comment, including the text of proposed rules, on whether we need to develop additional enforcement mechanisms, such as mandatory auditing or reporting requirements, for use in enforcing Sections 273(e)(1) and 273(e)(2).  X 4E70.XX Section 273(e)(3) provides that "[a] Bell operating company shall, to the extent" $g0*&&aaH" consistent with the antitrust laws, engage in joint network planning and design with local exchange carriers operating in the same area of interest. No participant in such planning shall be allowed to delay the introduction of new technology or the deployment of facilities to provide telecommunications services, and agreement with such other carriers shall not be  X4required as a prerequisite for such introduction or deployment."jh, yO'#X\  P6G;ɒP#э 47 U.S.C.  273(e)(3).j We seek comment on the extent to which current antitrust laws allow joint network planning and design and on appropriate definitions of the terms "area of interest" and "network planning and design." We also request comment on the need for, and the proposed text of, any rules that the Commission should adopt (1) to facilitate permissible, or bar impermissible, joint network planning and design; and (2) otherwise to ensure that the requirements of Section 273(e)(3) are achieved.  X 4F71.XXThe Commission recently issued a Notice of Proposed Rulemaking in CC Docket  X 4No. 96237 to implement Section 259, entitled "Infrastructure Sharing."vi X, {O'#C\  P6QɒP#э We will address issues relating to Section 259 in a separate proceeding. See Implementation of  {O'Infrastructure Sharing Provisions in the Telecommunications Act of 1996, CC Docket No. 96237, Notice of  {Ot'Proposed Rulemaking, FCC 96456 (rel. Nov. 22, 1996) ("Infrastructure Sharing NPRM"). Section 259(a) requires the Commission to prescribe implementing regulations within one year of the date of enactment of the  {O'1996 Act, i.e., by February 8, 1997.v Section 259  X 4requires incumbent LECs6j , yO'#X\  P6G;ɒP#э The term "incumbent LEC" is defined, for purposes of Section 259, in Section 251(h), which states:  yO'h(1)@XXDEFINITION For purposes of this section, the term 'incumbent local exchange carrier' means, with respect to an area, the local exchange carrier that (#X  yOi'XX(A) on the date of enactment of the Telecommunications Act of 1996, provided telephone exchange service in such area; and(#  yO'XX(B) (i)8 on such date of enactment, was deemed to be a member of the exchange carrier association pursuant to section 69.601(b) of the Commission's regulations (47 C.F.R. 69.601(b)); or(#  yO'hPXX` ` (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).(# 47 U.S.C.  251(h).6 to make certain "public switched network infrastructure, technology, information, and telecommunications facilities and functions" available to defined "qualifying carriers" in the service areas where such qualifying carriers have requested and"%Xj0*&&aa"  X4obtained designation as an eligible carrier under Section 214(e).k, yOy'#C\  P6QɒP#э 47 U.S.C. 259. Section 259(d) defines a "qualifying carrier" as a telecommunications carrier that:  yO 'h(1)@XXlacks economies of scale or scope, as determined in accordance with regulations prescribed by the Commission pursuant to this section; and(#X  yOa'(2)XXoffers telephone exchange service, exchange access, and any other service that is included in universal service, to all consumers without preference throughout the service area for which such carrier has been designated as an eligible telecommunications carrier under Section 214(e).(#X  yO '47 U.S.C.  259(d). Some potential definitions of a BOC's "area of interest," as that phrase is used in Section 273(e)(3), might subject a BOC and a Section 259defined qualifying carrier to obligations under both Section 259 and Section 273(e)(3). We believe, however, that the obligations imposed by Section 273(e)(3) are separate from, and consistent with, those imposed by Section 259. Because Section 273(e)(3) requires joint network planning and design among BOCs and LECs operating in the same "area of interest," we believe that Section 273(e)(3) specifically contemplates joint network planning and design between a BOC and other LECs that may be the BOC's competitors, to the extent that such activities are consistent with the antitrust laws. In contrast, Section 259(b)(6) specifically provides that an incumbent LEC shall not be required to "engage in any [Section 259derived] infrastructure sharing agreement for any services or access which are to be provided or offered to consumers by the qualifying carrier in such  X 4[LEC's] telephone exchange area."jl ` , yO'#X\  P6G;ɒP#э 47 U.S.C.259(b)(6).j In other words, apparently unlike Section 273(e)(3), Section 259 appears to apply only in instances where the qualifying carrier does not seek to  X 4offer certain services within the incumbent LEC's exchange area.m , {O_'#X\  P6G;ɒP#э Infrastructure Sharing NPRM, at  11. Accordingly, we believe that the specific obligations imposed by Section 259 do not conflict with Section 273(e)(3)'s mandates. We seek comment on this interpretation, including comment on other possible implications for carriers that may be subject to obligations under both Section 259, as interpreted by the Commission in CC Docket No. 96237, and Section 273(e)(3).  X44G72.XXSection 256, entitled "Coordination for Interconnectivity," requires, inter alia, that the Commission establish procedures for Commission oversight of coordinated network planning by telecommunications carriers and other providers of telecommunications services for the effective and efficient interconnection of telecommunications networks used to provide  X4telecommunications service.jn , yO $'#X\  P6G;ɒP#э 47 U.S.C. 256(b)(1).j We seek comment on the relationship between the BOCs' obligations under Section 273(e)(3) and the obligations Section 256(b)(1) imposes on all telecommunications carriers and other providers of telecommunications service. The newly"&n0*&&aa" revised charter for the Commission's Federal Advisory Committee, the Network Reliability and Interoperability Council ("NRIC"), asks the NRIC to provide recommendations on the implementation of Section 256, including specifically how the Commission can most efficiently conduct effective oversight of coordinated telecommunications network planning  X4and design.LoX, yO'#X\  P6G;ɒP#э FCC Amends Charter of Network Reliability and Interoperability Council, 61 Fed. Reg. 26516 (1996). We will place a copy of the text of the Network Reliability and Interoperability Council Charter in the docket file of this proceeding.L We seek comment on the relationship between the NRIC's responsibility under Section 256 and the BOCs' obligations under Section 273(e)(3).  X_4H73.XXSection 273(e)(4) states that "[n]either a Bell operating company engaged in manufacturing nor a manufacturing affiliate of such a company shall restrict sales to any local exchange carrier of telecommunications equipment, including software integral to the operation of such equipment and related upgrades." We tentatively conclude that this language is unambiguous and we seek comment on the validity of this conclusion. We also seek comment with respect to establishing criteria for determining when sales have been restricted. Commenters may address, for example, whether restriction should be measured by the volume of sales per unit of time, or by the type of equipment sold, or both, or by some other measure. We also request that commenters address: (1) whether the Commission should require or perform periodic audits of BOC sales; (2) whether the Commission should collect information on procurement practices to enable us to detect anomalous behavior that might trigger an audit or investigation; and (3) whether the Commission should adopt other additional rules to implement this provision of the 1996 Act.  X4I74.XXSection 273(e)(5) states that "[a] Bell operating company and any entity it owns or otherwise controls shall protect the proprietary information submitted for procurement decisions from release not specifically authorized by the owner of such information." We tentatively conclude that this language is unambiguous and selfexecuting because it corresponds to the customary use of common legal instruments such as nondisclosure agreements and license agreements. We seek comment on this tentative conclusion.  X|' F.XXSection 273(f): Administration and Enforcement Authority  XN4J75.XX Section 273(f) provides that for "the purposes of administering and enforcing the  X94provisions of this section and the regulations prescribed thereunder, the Commission shall have the same authority, power, and functions with respect to any Bell operating company or any affiliate thereof as the Commission has in administering and enforcing the provisions of  X4this title with respect to any common carrier subject to this Act."xp, yO$'#X\  P6G;ɒP#э 47 U.S.C. 273(f) (emphasis added).x We tentatively conclude that the Commission has broad authority to regulate all matters contemplated by Section 273"'xp0*&&aak"  X4under Sections 1,dq, yOy'#X\  P6G;ɒP#э 47 U.S.C. 151.d 2(a),%rX, yO '#X\  P6G;ɒP#Ѝ 47 U.S.C.  152(a), which states that the Communications Act "applies to all interstate and foreign  yO'communications by wire or radio . . . ."#x6X@`7X@#% 3,,s, yOa'#X\  P6G;ɒP#Ѝ 47 U.S.C.  153(51) and (33), defines communications by wire and radio in a manner that incorporates  yO)'all technologies and methods of operating.#x6X@`7X@#, and 4(i)t, yO'#X\  P6G;ɒP#Ѝ 47 U.S.C.  154(i) permits the Commission to perform "any and all acts . . . which may be necessary in the execution of its functions." of the Communications Act and seek comment on this tentative conclusion.  X4K76.XX Section 273 addresses standards development, joint network planning, research and development, and collaboration with respect to entities that are not common carriers. While Sections 206 to 209 of the Communications Act provide statutory mechanisms for  Xv4addressing complaints regarding common carrier matters,luv` , yO'#X\  P6G;ɒP#э 47 U.S.C.  206209.l additional regulations may be needed to address violations of Section 273 by entities that are not common carriers. We seek comment on, and the proposed text of, any additional rules that may be necessary, or desirable, to enforce Section 273, in addition to those that presently exist to implement  X 4Sections 206 to 209, and 501 to 503 of the Communications Act, as amended.  X 4L77.XXAlthough Section 273(d)(5) requires the Commission to prescribe a default process  X 4for use in resolving standardssetting disputes,jv , yOv'#X\  P6G;ɒP#э 47 U.S.C. 273(d)(5).j it does not contain any specific directives to govern the resolution of complaints filed under other provisions of Section 273. Particularly with respect to Sections 273(d)(2) through 273(d)(4), however, we recognize that accurate, efficient, and rapid resolution of alleged violations of Section 273 will be essential to the proper operation of this statutory section. We may find it beneficial to both the Commission and industry to amend our rules in order to increase the speed and efficiency of our complaint resolution processes and to meet better the demands of this and other sections of the 1996  X44Act. We are addressing potential means of accomplishing this goal in a separate proceedingSw\4 , {Oe '#X\  P6G;ɒP#э Implementation of the Telecommunications Act of 1996, Amendment of Rules to Be Followed When  {O/!'Formal Complaints Are Filed Against Common Carriers, CC Docket No. 96238, Notice of Proposed Rulemaking, FCC 96460, (rel. Nov. 27, 1996).S and we encourage commenters in that proceeding to address specific enforcement concerns relating to section 273 in particular and other sections of the 1996 Act in general. "(w0*&&aaC"  X' G.XXSection 273(g): Additional Rules and Regulations  X4  X4M78.XXSection 273(g) states that "[t]he Commission may prescribe such additional rules and regulations as the Commission determines are necessary to carry out the provisions of  X4[Section 273], and otherwise to prevent discrimination and crosssubsidization in a Bell  X4operating company's dealings with its affiliate and with third parties."{x, yO'#X\  P6G;ɒP#э 47 U.S.C. 273(g) (emphasis supplied).{ We seek comment on what, if any, additional rules should be adopted under this provision "to prevent discrimination and crosssubsidization in a Bell operating company's dealings with its affiliate and with third parties," and we request that commenters proposing such rules do so in their initial comments, so that other parties may respond to the proposals during the reply comment period. We seek additional specific comment on whether the sale of Bellcore, as announced, creates a need for additional rules under this section.  X ' y]III. CONCLUSION ă  X4N79.XXSection 273 establishes the conditions under which Bell Operating Companies may manufacture and provide telecommunications equipment, and manufacture customer premises equipment. It also sets forth safeguards against anticompetitive behavior in manufacturing markets by entities other than BOCs. With this NPRM, we seek to ensure that the safeguards that Congress enacted are effectively and efficiently administered. Our further objectives in this proceeding are to develop regulations that will foster technological innovation and competition in both the customer premises equipment and telecommunication equipment markets. We encourage commenters to propose innovative and administratively simple rules that will enable us to meet these objectives, and request that interested parties propose the text of any rules that they may deem appropriate to implement Section 273. We further request that, in general, those commenters proposing such rules do so in their initial comments so that other parties may reply to them in their reply comments.  XR' >IV. PROCEDURAL ISSUES  X$'  A.XXEx Parte Presentations  X4O80. XXThis is a nonrestricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are  X 4disclosed as provided in the Commission's Rules.  See generally 47 C.F.R. Sections 1.1202,  X!41.1203, and 1.1206(a). "")Xx0*&&aa "  X' B.XXRegulatory Flexibility Act  X'  X4 P81.XXWe certify that the Regulatory Flexibility Act does apply to this rulemaking proceeding because there may be a significant economic impact on a substantial number of  X4small business entities, as defined by Section 601(3) of the Regulatory Flexibility Act.fy, yO'#X\  P6G;ɒP#э 5 U.S.C. 601(3).f A complete analysis is contained in Appendix A. The Secretary shall send a copy of this  X_4Notice of Proposed Rulemaking  including this certification, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with Section 603(a) of the  X14Regulatory Flexibility Act.z1X, yO: '#X\  P6G;ɒP#Ѝ 5 U.S.C. 603(a) (as amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847, 866 (1996)).  X ' C.XXInitial Paperwork Reduction Act of 1995 Analysis  X 4Q82.XXThis NPRM contains either a proposed or modified information collection. As part of our continuing effort to reduce paperwork burdens, we invite the general public and the Office of Management and Budget (OMB) to take this opportunity to comment on the information collections identified in this NPRM, as required by the Paperwork Reduction Act  Xy4of 1995.{y, {O'#X\  P6G;ɒP#э Pub. L. No. 10413, codified at 44 U.S.C. 35013520. Public and agency comments are due at the same time as other comments on this NPRM; OMB comments are due 60 days from date of publication of this NPRM in the  XK4Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  X' D.XXNotice and Comment Provision  Xg4R83.XXPursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 C.F.R. Sections 1.415 and 1.419, interested parties may file  X94comments on or before 30 days after publication of this Notice in the Federal Register, and  X"4reply comments on or before 30 days after the comment due date. To file formally in this proceeding, interested parties must file an original and six copies of all comments, reply comments, and supporting comments, with the reference number "CC Docket 96254" on each"*B{0*&&aa" document. Those parties wishing each Commissioner to receive a personal copy of their comments must file an original plus eleven copies. Parties must send comments and reply comments to the Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W. Room 222, Washington, D.C. 20554. Parties must also provide four copies to Secretary, Network Services Division, Common Carrier Bureau, 2000 M Street, N.W., Room 235, Washington, D.C. 20554. Parties must also provide one copy of any documents filed in this docket to the Commission's copy contractor, International Transcription Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.  X14S84.XXComments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. Copies of comments and reply comments will also be available through the Commission's copy contractor: International Transcription Service, Inc. (ITS, Inc.), 2100 M Street, N.W., Suite 140, Washington, D.C. 20037 (2028573800).  X4T85.XXIn order to facilitate review of comments and reply comments, both by parties and Commission staff, we require that comments not exceed sixty (60) pages, including all appendices and attachments (except the text of proposed rules), and that reply comments not exceed thirty (30) pages. We can foresee no circumstances in which these page limits would be waived. Comments and reply comments must also include a short, concise summary of each substantive argument raised in the pleading, regardless of length. The summary may be paginated separately from the rest of the pleading and will not count toward the page  X4limitations established above.y|, {Oh'#X\  P6G;ɒP#Ѝ See 47 C.F.R.  1.49.y  X4U86.XXWritten comments by the public on the proposed and/or modified information  X4collections are due thirty days after publication of this Notice in the Federal Register and must have a separate and distinct heading designating the comments as responses to the regulatory flexibility analysis. Written comments must be submitted by the Office of Management and Budget (OMB) on the proposed and/or modified information collections on  XP4or before 60 days after date of publication in the Federal Register. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Dorothy Conway, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to dconway@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington, DC 20503 or via the Internet to fain_t@al.eop.gov. " +Z|0*&&aa."  X' E.XXOrdering Clauses  X4V87.XXAccordingly, IT IS ORDERED that pursuant to Sections 1, 3, 4, 7, 201209, 218, 251, 273 and 403 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 153, 154, 157, 201209, 218, 251, 273, and 403 that this NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED.  X_4W88.XXIT 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 Section 603(a) of the Regulatory Flexibility Act, 5 U.S.C. 603(a).  X 'XX` `  FEDERAL COMMUNICATIONS COMMISSION XX` `  William F. Caton XX` `  Acting Secretary"4,|0*&&aaD"  X4u APPENDIX A  X'. Initial Regulatory Flexibility Analysis (IRFA) ă   X4X1. XXPursuant to Section 603 of the Regulatory Flexibility Act (RFA), the Commission has prepared the following Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the policies and rules proposed in the Notice of Proposed Rulemaking (NPRM). Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments on the remainder of the NPRM, but they must have a separate and distinct heading designating them as responses to the regulatory flexibility analysis. The Secretary shall cause a copy of the NPRM, including the IRFA, to be sent to the Chief Counsel for Advocacy of the Small Business Administration in accordance with Section 603(a) of the Regulatory Flexibility Act.  X 4X2. XXReason for Action: The Commission, in compliance with Section 273 of the Communications Act of 1934 ("Communications Act"), as amended by the Telecommunications Act of 1996 ("1996 Act"), proposes rules and procedures intended to ensure the prompt adoption of regulations to administer and enforce Section 273 provisions with minimum regulatory and administrative burden on telecommunications carriers. The rules proposed in the NPRM are necessary to implement Section 273, in which Congress imposes requirements affecting Bell Operation Companies (BOCs), Bellcore, and entities that develop standards, develop generic requirements and conduct certification activity. This NPRM proposes rules and seeks comment to implement Section 273 in a manner that is consistent with Congress's intent.  X4X3. XXObjectives and Legal Basis for Proposed Rules: The Commission's objective in issuing the NPRM is to propose and seek comment on rules enabling the Commission to administer and enforce Section 273 effectively and efficiently, and in a manner that is consistent with the intent of Congress. The proposed action is authorized under Sections 1, 3, 4, 7, 201209, 218, 251, 273, and 403 of the Communications Act, as amended, 47 U.S.C. Sections 151, 153, 154, 157, 201209, 218, 251, 273, and 403.  X 4X4. XXDescription and Estimated Number of Small Entities Affected: Section 273 authorizes the Commission to impose standards on the BOCs, Bellcore, and entities that develop standards, develop generic requirements and conduct certification activity. Neither BOCs nor Bellcore qualify as small business entities; for they are dominant in their field of operation. See RFA, Section 601(3). Conversely, the size of the entities that develop  X"4standards, develop generic requirements, and conduct certification activity is unknown and may include small business entities. Accordingly, we certify that the Regulatory Flexibility Act of 1980, as amended, does not apply to this rulemaking proceeding insofar as it pertains to BOCs or Bellcore since our rules are not likely to have a significant economic impact on a"Q%-|0*&&aa#" substantial number of small entities, as defined by section 601(3) of the Regulatory Flexibility Act.  X4X5.Our rules, however, may have a significant economic impact on a substantial number of small businesses insofar as they apply to entities that develop standards, develop generic  X4requirements and conduct certification activity. We request comment on the number of possible small business entities that would fall under entities that develop standards, develop generic requirements, and conduct certification activity in addition to comment as to how to develop requirements that would effectively assist and not unduly burden qualifying small  X14business entities.  X 4X6.Reporting, Recordkeeping and Other Compliance Requirements: The NPRM requests comment on reasonable reporting requirements for BOCs as to network planning, design, and interconnection arrangements. Similarly, this IRFA seeks comment on measures that could be take by the Commission to limit any burdensome requirements upon small business entities. It seeks comment on reasonable notice requirements for BOCs as to communicating planned deployment of telecommunications equipment to their interconnecting carriers.  Xb47.The Commission's action in this proceeding is in direct response to Congress's passage of the 1996, in particular Section 273. This NPRM only sets forth tentative conclusions as to Congress's intentions within Section 273. For an exhaustive recitation of the Commission's tentative conclusions, see this NPRM at paragraphs 811, 18, 2021, 26, 29, 3738, 40, 43, 48, 50, 5255, 5962, 68, 71, 7375.  X48.This NPRM also seeks comment on rules proposed to administer end enforce manufacturing safeguards potentially impacting entities that develop standards, develop generic requirements and conduct certification activities. Rules adopted in this proceeding may require reporting, recordkeeping, and may impose other procedural requirements. There are no other reporting requirements contemplated by the NPRM.  XN49. XXFederal Rules which Overlap, Duplicate or Conflict with these Rules: The Commission seeks comment as to what overlap, if any, exists or may exist among the requirements that this Commission may adopt to implement Section 273 and the Commission's existing rules. For example, the Commission has identified two sources of potential overlap in 47 C.F.R.  64.702 and 47 C.F.R.  68.110, and seeks comment as to how the procedures required in these existing rules may be adapted to minimize additional regulatory burdens.  X"410.XXWith respect to rules that may potentially affect BOCs, Bellcore, and entities that develop standards, develop generic requirements, or conduct certification activities, the Commission tentatively concludes that no overlap, duplication, or conflict with existing rules exists. The Commission seeks comment on this conclusion."Q%.|0*&&aae#"Ԍ X4ԙ11.XXSignificant Alternatives to the Proposed Rules which Accomplish the Stated Objectives of Applicable Statutes and which Minimize any Significant Economic Impact of  X4the Proposed Rules on Small Entities: As mentioned in paragraphs four and five of this IRFA, the Commission believes that our rules may have a significant economic impact on a substantial number of small businesses insofar as they apply to entities that develop standards, develop generic requirements and conduct certification activity. We request comment from the industry in regards to significant alternatives to the proposed rules which accomplish the stated objective of applicable statutes and which minimize any significant economic impact of the proposed rules on small entities.  X 412.XXWe advance that our tentative conclusions were reached with the interests and  X 4concerns of small businesses in mind. Although tentatively there will be no differing compliance or reporting requirements or timetables that take into account the resources available to small entities, the Commission finds this to be unnecessary. The Commission seeks comment on this tentative conclusion.  X413.XXAdditionally, the Commission tentatively concludes that the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for small entities will not be necessary. The Commission seeks comment on this tentative conclusion. Lastly, neither the use of performance rather than design standards by the Commission nor an exemption from coverage of the rule, or any part thereof, for such small entities is believed to be required as a result of actions taken by the Commission in the impending Report and Order. The Commission seeks comment on this finding.