******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Federal Communications Commission Washington, D.C. 20554 DA 97-2726 December 30, 1997 Mr. Keith Davis Ms. Cathleen A. Massey Southwestern Bell Telephone AT&T Wireless Services, Inc. One Bell Plaza 1150 Connecticut Ave., N.W. Room 2900 4th Floor Dallas, TX 75202 Washington, D.C. 20036 Ms. Kathleen Q. Abernathy Mr. Mark Stachiw AirTouch Communications, Inc. AirTouch Paging 1818 N St., N.W. 12221 Merit Drive 8th Floor Suite 800 Washington, D.C. 20036 Dallas, TX 75251 Ms. Judith St. Ledger-Roty Kelley Drye & Warren 1200 19th St., N.W. Suite 500 Washington, D.C. 20016 Dear Mr. Davis, Ms. Massey, Ms. Abernathy, Mr. Stachiw, and Ms. St. Ledger-Roty: This letter responds to letters from Southwestern Bell Telephone (SWBT) dated April 25, 1997 and May 9, 1997, and from AirTouch Communications, Inc., AirTouch Paging, AT&T Wireless Services, Inc., and PageNet, Inc. dated May 16, 1997, requesting that the Common Carrier Bureau (Bureau) clarify whether the Commission's current rules permit a local exchange carrier (LEC) to charge a provider of paging services for the cost of LEC transmission facilities that are used on a dedicated basis to deliver to paging service providers local telecommunications traffic that originates on the LEC's network. The Bureau sought public comment on these letters on May 22, 1997. Certain LECs, including SWBT, contend that Section 51.703(b) of the Commission's rules, 47 C.F.R.  51.703(b), governs only the charges for "traffic" between carriers and does not prevent LECs from charging for the Mr. Keith Davis et al. December 30, 1997 Page Two "facilities" used to transport that traffic. For the reasons discussed below, we conclude that the Commission's rules prohibit a LEC from imposing such charges. The Communications Act of 1934 (Act), as amended by the Telecommunications Act of 1996, requires LECs to "establish reciprocal compensation agreements for the transport and termination of telecommunications." In the Local Competition Order, the Commission concluded that commercial mobile radio service (CMRS) providers such as paging carriers offer "telecommunications" as defined in the Act, see 47 U.S.C.  153(43), and that LECs accordingly "are obligated, pursuant to section 251(b)(5) [of the Act,] . . . to enter into reciprocal compensation arrangements with all CMRS providers, including paging providers, for the transport and termination of traffic on each other's networks." With respect to such compensation arrangements, the Commission adopted Section 51.703(b) of its rules, which states that a "LEC may not assess charges on any other telecommunications carrier for local telecommunications traffic that originates on the LEC's network." In adopting this rule, the Commission stated, with specific reference to paging and other CMRS providers: "As of the effective date of this order, a LEC must cease charging a CMRS provider or other carrier for terminating LEC-originated traffic and must provide that traffic to the CMRS provider or other carrier without charge." Given the Commission's clear statement that LECs must provide traffic originating on their networks to CMRS carriers "without charge," the Bureau finds no basis for the argument advanced by SWBT that LECs are permitted to assess charges on CMRS carriers to recover the costs of facilities that are used by LECs to deliver traffic to CMRS carriers. Mr. Keith Davis et al. December 30, 1997 Page Three Accordingly, we conclude that the Commission's current rules do not allow a LEC to charge a provider of paging services for the cost of LEC transmission facilities that are used on a dedicated basis to deliver to paging service providers local telecommunications traffic that originates on the LEC's network. Our conclusion is based on the text of Section 51.703(b), as explained by the Commission in the Local Competition Order. We note that this issue is subject to pending petitions for reconsideration of the Local Competition Order in CC Docket No. 96- 98. The Commission will consider this issue further based on the record developed in response to those petitions. Sincerely, A. Richard Metzger, Jr. Chief Common Carrier Bureau