NOTICE ***************************************************************** ******** NOTICE ***************************************************************** ******** This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** NOTICE ***************************************************************** ******** NOTICE ***************************************************************** ******** This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Pacific Telesis ) CCB Pol 96-20 ) Petition for Exemption from Customer ) Proprietary Network Information ) Notification Requirements ) ORDER Adopted: November 13, 1996; Released: November 13, 1996 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION 1. In February 1996, Congress passed and the President signed into law the Telecommunications Act of 1996 (1996 Act). Section 702 of the 1996 Act added a new section 222 to the Communications Act of 1934, as amended, that addresses customer proprietary network information (CPNI). Previously, in the Computer II, Computer III, GTE ONA, and BOC CPE Relief proceedings, the Commission had imposed CPNI requirements on American Telephone and Telegraph Company (AT&T), the Bell Operating Companies (BOCs), and GTE Corporation (GTE) as nonstructural safeguards applicable to the provision of enhanced services and customer premises equipment (CPE). These safeguards include requirements that AT&T, the BOCs, and GTE send CPNI notices annually to their multi-line business customers. 2. On May 17, 1996, the Commission released its CPNI NPRM to specify and clarify the obligations of telecommunications carriers under section 222, and to examine which, if any, of the Commission's CPNI requirements should be retained in light of that provision. On October 2, 1996, Pacific Telesis (PacTel) requested an exemption from the annual CPNI notification requirements for multi-line business customers for 1996. For the reasons stated below and to avoid potential customer confusion, we waive those requirements for AT&T, the BOCs, and GTE, pending Commission action in CC Docket No. 96-115, the CPNI rulemaking. This limited waiver does not, however, relieve AT&T, the BOCs, or GTE of their obligations to comply with section 222 or with other Commission CPNI requirements that are consistent with the 1996 Act. II. BACKGROUND AND SUMMARY OF PLEADINGS 3. The CPNI multi-line business customer notification requirements stem from the Computer II, Computer III, GTE ONA, and BOC CPE Relief proceedings. These requirements vary depending on whether the CPNI will be used to market CPE or enhanced services. With respect to CPE, the BOCs are required to send their multi-line business customers annual CPNI notices before using those customers' CPNI for marketing purposes. Each notice must be in writing, describe the carrier's CPNI obligations and the customer's CPNI rights, and include a response form through which a customer may restrict access to its CPNI. AT&T is required to provide such notification to all of its WATS and private line customers through a one-time insert in their network services bills before using those customers' CPNI to market CPE. In the enhanced service context, the BOCs, AT&T, and GTE are all required to provide their multi-line business customers with similar annual notices before using those customers' CPNI to market enhanced services. Carriers may send out the notices any time during the calendar year. 4. In the CPNI NPRM, the Commission sought comment on the effect of section 222 on its CPNI requirements, including the annual notification requirements for multi-line business customers. The Commission determined that section 222 did not displace the existing CPNI requirements that were consistent with the 1996 Act and that those requirements would remain in effect pending the outcome of the CPNI rulemaking. The Commission also invited comment on whether it should retain the existing CPNI requirements. 5. PacTel requests an exemption from the annual CPNI notification requirements for multi-line business customers for 1996. It contends that in view of the pendency of the CPNI rulemaking, a notification under the Commission's CPNI requirements would confuse its multi-line business customers. PacTel argues that the CPNI provisions of the 1996 Act apply to all telecommunications carriers and were designed to protect customers' privacy in newly competitive markets in a consistent manner, regardless of which telecommunications carrier the customer has chosen. PacTel maintains that a CPNI notice that advises customers of their rights under the existing rules could lead to confusion about the rules to be adopted in the CPNI rulemaking. 6. Six of the seven parties that filed comments on PacTel's request are subject to the annual multi-line business customer notification requirements. These parties support PacTel's request and seek similar relief. They argue that the notification process imposes significant administrative burdens and agree that multiple CPNI notices would confuse multi-line business customers. These parties maintain that the Commission initiated the CPNI rulemaking to specify and clarify the obligations of telecommunications carriers under section 222. They argue further that parties to that rulemaking present divergent views regarding the scope of those obligations and that any CPNI notice required after the release of a Report and Order in that rulemaking will differ significantly from the notices required under the Commission's existing rules. They also contend that multi-line business customers received a CPNI notice during 1995 and that waiving the notification requirements pending the issuance of a Report and Order in the CPNI rulemaking would not harm those customers. 7. MCI opposes PacTel's request and suggests that the BOCs' comments raise questions that should be answered before the Commission can rule on the request. MCI states that, notwithstanding its description of its request as seeking an "exemption," PacTel appears to be seeking a waiver of the notification requirements. MCI argues that PacTel's arguments apply with equal force to the entire class of carriers subject to the multi-line business customer notification requirements and that the matter must be resolved in a rulemaking, rather than a waiver, proceeding. MCI further maintains that relief cannot be granted based on assumptions regarding how the Commission will resolve matters at issue in the CPNI rulemaking. III. DISCUS SION 8. We agree with MCI that PacTel's petition amounts to a request for waiver of the Commission's annual CPNI notification requirements for multi-line business customers. We also agree that PacTel's arguments apply equally to all carriers subject to those requirements. We do not agree with MCI, however, that we may not grant a waiver to either PacTel or all of the carriers subject to those requirements. On the contrary, the Commission may exercise its discretion to waive such requirements on the basis of good cause shown, and where the particular facts would make strict compliance inconsistent with the public interest. A waiver, therefore, may be appropriate if special circumstances warrant a deviation from the general rule, and such a deviation would better serve the public interest than adherence to the general rule. 9. We conclude that special circumstances exist in this case to warrant granting AT&T, the BOCs, and GTE a temporary waiver of the Commission's CPNI multi-line business notification requirements, pending Commission action in the CPNI rulemaking. We also conclude that such a waiver would better serve the public interest than adherence to those requirements. The Commission adopted its current CPNI requirements to ensure that the multi-line business customers of AT&T, the BOCs, and GTE were aware of their CPNI rights. Any CPNI notices AT&T, the BOCs, and GTE would send those customers prior to release of a Report and Order in the CPNI rulemaking likely would be followed by new CPNI notices after that release that reflect the actions taken by the Commission in that rulemaking. Instead of making multi-line business customers aware of their CPNI rights, this combination of notices likely would create substantial customer confusion. 10. When the Commission established the annual CPNI notification requirements for AT&T, the BOCs, and GTE, it anticipated neither the enactment of section 222 nor the potential for customer confusion created by the timing of a rulemaking to implement that section. We find that these unanticipated developments constitute the requisite special circumstances that warrant a temporary waiver of the Commission's annual CPNI notification requirements. In addition, because grant of the requested waiver would reduce the potential for customer confusion, we find that a temporary waiver of those notification requirements would better serve the public interest than adherence to those requirements. 11. As MCI suggests, the circumstances described above apply equally to the entire class of carriers subject to the Commission's annual CPNI notification requirements. That fact, however, does not preclude our waiving those requirements for either PacTel or the class as a whole. MCI's argument appears to rest on the erroneous premise that the problems PacTel seeks to avoid are "inherent in" the existing notification requirements and therefore cannot constitute special circumstances required to justify a waiver of those requirements. The special circumstances in this case are not inherent in the annual CPNI notification requirements. Rather, they arise from circumstances unanticipated and thus not reflected in the drafting of the current rule -- i.e., the enactment of section 222 and the potential for customer confusion created by the timing of a rulemaking to implement that section. Moreover, the proposed waiver will not change the general standards established by the annual CPNI notification requirements. Such changes must await action in the pending CPNI rulemaking. The special circumstances at issue here are "peculiar to this situation" in that they are unlikely to occur again and will be of relatively short duration given the pendency of that rulemaking. These circumstances apply equally to all carriers subject to the annual CPNI notification requirements and, consequently justify our grant of a temporary waiver to all such carriers. We therefore grant AT&T, the BOCs, and GTE a temporary waiver of the annual CPNI notification requirements for multi-line business customers, pending Commission action in the CPNI rulemaking. 12. This limited waiver will extend only until the Commission releases a Report and Order in the CPNI rulemaking. In granting this temporary waiver, we express no opinion nor make any assumptions on any matter at issue in the CPNI rulemaking. We also emphasize that this waiver does not relieve any telecommunications carrier of its obligation to comply with section 222 or with other Commission CPNI requirements that are consistent with the 1996 Act. IV. ORDERING CLAUSES 13. Accordingly, IT IS ORDERED, pursuant to sections 4(i) and 222 of the Communications Act of 1934, as amended, and sections 0.91, 0.291, and 1.3 of the Commission's rules, 47 C.F.R.  0.91, 0.291, and 1.3, that the requirements that AT&T, the BOCs, and GTE give their multi-line business customers annual notice of their CPNI rights ARE WAIVED, pending Commission release of a Report and Order in the CPNI rulemaking. 14. IT IS FURTHER ORDERED, pursuant to sections 4(i) and 222 of the Communications Act of 1934, as amended, and sections 0.91, 0.291, and 1.3 of the Commission's rules, 47 C.F.R.  0.91, 0.291, and 1.3, that this Order IS EFFECTIVE UPON RELEASE. FEDERAL COMMUNICATIONS COMMISSION A. Richard Metzger, Jr. Deputy Chief, Common Carrier Bureau