WPCt. 2BJZ Courier3|x'x6X@`7X@HP LaserJet 5SiHPLAS5SI.PRSx  @\!|fX@26 ZFD3|xHP LaserJet 5SiHPLAS5SI.PRSx  @\!|fX@CourierTimes New RomanTimes New Roman BoldTimes New Roman Italic2vpkkga8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# 2-vta2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# 2 _   Ua2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# 2l <    a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p 2 +j a1DocumentgDocument Style StyleXqq   l ^) I. ׃  Doc InitInitialize Document Style  0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgTech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala5TechnicalTechnical Document Style)WD (1) . 2N*a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   2Ja1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . PleadingHeader for numbered pleading paperP@n   $] X X` hp x (#%'0*,.8135@8:8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""meaning of Section 3(a) of the Communications Act of 1934, as amended,n m yO-#X\  P6G;ɒP#эx47 U.S.C.  153(a).n and are properly  X- xconsidered a communications service. m {O!-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3532. We also concluded that the LECs' validation and  X-screening services are common carrier services within the meaning of the Act.  $0 m {O#-  >#X\  P6G;ɒP#эxId. Title I of the Act gives the Commission jurisdiction over interstate or foreign communications. See  xSection 2(a) of the Act, 47 U.S.C  152(a). Title II of the Act grants the Commission specific regulatory authority  {O%%- xover common carriers engaged in the provision of interstate or foreign communications services. See Section 3(h) of the Act, 47 U.S.C.  153(h).  " 0*&&qq"Ԍ X- ` ԙx4.` ` The Commission further held in the LEC Calling Card Order that all LECs must  xprovide nondiscriminatory access to LEC joint use cardvalidation data and LEC screening data,  xand that a LEC that agrees to enter into an agreement with one IXC to accept its calling card for  xLEC services and to query that IXC's database to validate the card, must, upon request, provide  X- xsuch services on a nondiscriminatory basis to all IXCs. m {O-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3535. We further observed that the tariffed  xLIDB service would be an adequate vehicle to enable both large and small LECs to discharge  xytheir Title II obligations. We indicated that the larger LECs own and operate the LIDB systems  x/and that the smaller LECs may participate in the system by loading their data into the LIDB  XJ- x|system maintained by the larger LECs or by thirdparty providers.j JZm {OU -#X\  P6G;ɒP#эxId. at 3533.j Additionally, the  xCommission amended Part 69 of the rules to establish a new switched access rate element for  x[LIDB access, which is composed of separate components for transmission and database "look  X - xup."n m yO-#X\  P6G;ɒP#эx47 C.F.R.  69.120.n Finally, we concluded that the costs associated with the LIDB rate element should be  X -recovered on a perquery basis. |m {O-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3546.  X - III. BELL ATLANTIC, SOUTHWESTERN BELL, AND  X -& AMERITECH PETITIONS FOR RECONSIDERATION ă  X{- A.xPetitions  XM- ` x5.` ` In their petitions for reconsideration, SWB, Ameritech, and Bell Atlantic request  X6- xthat the Commission either eliminate the LIDB "cost element"\6m yO-  #X\  P6G;ɒP#эxThroughout the pleadings the parties use the term "cost elements" to refer to the cost allocation requirements  {O- xfor LIDB established in the LEC Calling Card Order, and codified in 47 C.F.R.  69.305, 69. 306, and 69.307.  {O-See, e.g.,  Ameritech petition at 12; Bell Atlantic Petition at 3. or clarify in the Part 69 cost rules  xythat price cap LECs are exempt from rules prescribing the method for allocating costs to a LIDB  X- xcost element.2 m yO-#X\  P6G;ɒP#эxSWB Petition at 2; Ameritech Petition at 1; Bell Atlantic Petition at 3. SWB states that, under rateofreturn regulation, interstate costs were traditionally  xderived using a fullydistributed cost methodology and that such costs were recovered through  xcharges paid by customers for the rate elements to which those costs were allocated by the Part  X- x69 cost allocation rules.j m yO6$-#X\  P6G;ɒP#эxSWB Petition at 3.j SWB asserts that price cap regulation broke the link between fully"R 0*&&qq"ԫ X- x-distributed costs, identified pursuant to the Part 69 rules, and access rates.am {Oy-#X\  P6G;ɒP#эxId.a SWB contends that  X- xPart 69 cost allocations for price cap LECs are now virtually irrelevant.gZm {O-#X\  P6G;ɒP#эxId. at 4.g Bell Atlantic argues  xthat the establishment of new LIDB cost elements is inconsistent with one of the fundamental  xMobjectives of price cap regulation to eliminate the complex system of cost allocation rules  X- x-required under rateofreturn regulation.tm yOA -#X\  P6G;ɒP#эxBell Atlantic Petition at 3.t Ameritech and SWB argue that the separate allocation  xand reporting of fullydistributed costs for LIDB by price cap LECs is unnecessary and  xinappropriate because LIDB rates for price cap LECs were not established based on fully X_- xKdistributed costs, and would create unnecessary administrative costs._|m yO -#X\  P6G;ɒP#эxAmeritech Petition at 24; SWB Petition at 35. SWB also contends that  x[the Commission's existing reporting requirements for price cap LECs ensure that the necessary  X1-jurisdictional separations and allocations are made correctly.j1 m yO-#X\  P6G;ɒP#эxSWB Petition at 5.j  X - ` 3x6.` ` Additionally, SWB argues that the Commission failed to seek comment on the  X - xchanges to Part 69.a m {O9-#X\  P6G;ɒP#эxId.a SWB and Ameritech also request the Commission to clarify that the  xlprovision of costs associated with the new LIDB element will not become an Automated  X -Reporting Management Information System (ARMIS) reporting requirement in the future. . m yO-#X\  P6G;ɒP#эxSWB Petition at 5; Ameritech Petition at 4.  X- B.XxComments (#  Xb- ` _x7.` ` US West, BellSouth, and USTA filed comments in support of the above petitions.  x.US West and BellSouth agree with the petitioners that the creation of new cost allocations for  xLIDB access is inconsistent with the principles of price cap regulation and imposes unnecessary  X- xadministrative burdens on price cap LECs. m yO -#X\  P6G;ɒP#эxUS West Comments at 3; BellSouth Comments at 2. US West contends that the LECs have developed  xtheir LIDB rates in conformity with the price cap rules for new services and, therefore, the  xapplication of the prescribed LIDB cost element, and the related cost allocation procedures, is  X-illogical and serves no useful regulatory purpose.nN m yO$-#X\  P6G;ɒP#эxUS West Comments at 3.n "0*&&qq"Ԍ X- ` x8.` ` MCI filed comments in opposition to the Bell Atlantic, Ameritech, and SWB  x/petitions. MCI asks the Commission to deny the petitions filed by SWB, Bell Atlantic, and  xKAmeritech, and specifically to deny the requests to eliminate the amendments to the Part 69 Rules  X- xjestablishing the new LIDB cost allocations.jm yO4-#X\  P6G;ɒP#эxMCI Comments at 1.j MCI argues that the LECs' complaints about the  xLIDB Part 69 cost allocations are outweighed by two important factors. First, MCI contends that  X- xLIDB is one of many LEC services that have evolved out of signalling system seven (SS7)zXm yO-  ]#X\  P6G;ɒP#эxSS7 and common channel signalling (CCS) are terms often used interchangeably to refer to CCSbased  xwservices and capabilities that use SS7. In order to access LIDB, customers must purchase a CCS interconnection link.  xWith CCS service, call setup instructions are separated from the call and carried over a packet switching network  xindependent of the circuits that carry the calls. This "outofband" signalling is efficient because the voice path is  xnot occupied until the call is ready to go through. The LECs use the SS7 protocol, which is the switching software  {O~ - xthat defines the procedures for call setup and formatting, for their CCS services. See LEC Calling Card Order, 7 FCC Rcd at 3544 n.182.  xtechnology and involve the use of a database, and it is important that the LECs do not  X_- xdouble-recover for the SS7 services.j_m yO-#X\  P6G;ɒP#эxMCI Comments at 3.j According to MCI, the only safeguard to prevent double  xLrecovery is an explicit requirement that each service recover only the specific costs incurred in  X1-the provision of the service.a1* m {O -#X\  P6G;ɒP#эxId.a  X - ` }x9.` ` Second, MCI argues that LECs have the potential to manipulate the costrecovery  xrules to crosssubsidize their services and recover certain costs for LIDB through another  X - xservice.a m {OB-#X\  P6G;ɒP#эxId.a MCI contends that Ameritech failed to allocate any computer investment to the LIDB,  xalthough there are some computer costs associated with the provision of the LIDB, and thus  X - x-Ameritech is recovering those costs through another service.i! N m {O-#X\  P6G;ɒP#эxId. at 34.i MCI contends that the only way  xto ensure that each SS7 service recovers its specific costs, and that crosssubsidization does not  Xy-occur, is through codification of the specific LIDB costs in the Part 69 rules.b"ym {O -#X\  P6G;ɒP#эxId. b  XK- C.xReplies  X- ` x 10.` ` In its reply, Bell Atlantic argues that adding new Part 69 cost allocations would  xnot prevent double recovery because the Part 69 cost elements are not the basis of the price cap"r"0*&&qq("  X- x\carrier's rates.q#m yOy-#X\  P6G;ɒP#эxBell Atlantic Reply at 2.q Ameritech contends that rates for new services are not based upon Part 69  xfully-distributed costs, and, therefore, a requirement to report such costs provides no protection  X- xor useful data concerning rates for price cap new services.a$Xm {O-#X\  P6G;ɒP#эxId.a Ameritech further argues that MCI  X- xdid not contend that its cost study violated the Commission's price cap services costing rules.a%m {OV-#X\  P6G;ɒP#эxId.a  X- ` x 11.` ` Finally, Ameritech contends that MCI incorrectly asserts that LECs have the  xpotential to manipulate the price cap new services pricing rules to crosssubsidize their LIDB  X_- xservices.g&_|m {O -#X\  P6G;ɒP#эxId. at 3.g With respect to MCI's claim regarding computer investment, Ameritech asserts that  xthe costs of computer systems supporting LIDB are properly identified in Ameritech's tariff filing  xand are recovered in the LIDB rates; the costs associated with service control point processors  x/are properly allocated to LIDB; the expenses associated with updating and maintaining the  x=computers were identified in the tariff filing and included in the rate element as annualized unit  xexpense; and the capital investment for the computers, not incremental to LIDB, was properly  X -excluded from its LIDB cost study.i' m {O-#X\  P6G;ɒP#эxId. at 34.i  X - D.xDiscussion  Xy- ` x 12.` ` In the LEC Calling Card Order, the Commission amended Part 69 of our rules to  Xd- xNestablish a new switched access element, with two subelements for LIDB access.(dm {O-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3546. The  xZCommission observed that without the new unbundled subelements, the users of the LIDB would  xbe required to take both the transmission and the database lookup components of the LIDB query  X- xservice.a)2 m {O-#X\  P6G;ɒP#эxId.a The Commission noted that the establishment of separate transmission and database  xlookup elements would provide a rate structure with sufficient flexibility to respond to future  xdevelopments. Finally, the Commission concluded that the costs associated with these two  X-subelements should be recovered on a perquery basis.a* m {OO#-#X\  P6G;ɒP#эxId.a "V *0*&&qq"Ԍ X- ` x 13.` ` SWB argues that the Commission failed to seek comment on the changes to Part  X- x=69. We disagree. The Commission's Notice of Proposed Rulemaking in this docket proposed  x rules to establish the LECs' obligation under Title II of the Act to provide access to certain  X- xinformation and services for both LEC and IXC joint use calling cards.+\m yO6-  #X\  P6G;ɒP#эxPolicies and Rules Concerning Local Exchange Carrier Validation and Billing Information for Joint Use  {O- xCalling Cards, Notice of Proposed Rulemaking, CC Docket No. 91115, 6 FCC Rcd 3506 (1991) (Notice of Proposed  {O-Rulemaking).  The Commission  xZspecifically sought comment on these access requirements for calling cardvalidation services, on  xLfeasible methods for implementing the access requirements, and on the rate structure it should  Xx-prescribe for the LIDB tariffs.,xm {O -  \#X\  P6G;ɒP#эxNotice of Proposed Rulemaking, 6 FCC Rcd at 3506, 3510; see also LEC Calling Card Order, 7 FCC Rcd at 3544.  XJ- ` Ax 14.` ` SWB and Ameritech seek clarification that price cap LECs are not required to add  xa separate cost allocation category to the ARMIS (Automated Reporting Management Information  X - xSystem) reports for LIDB costs. The LEC Calling Card Order does not add a separate cost  x0allocation category to the ARMIS reports for LIDB costs. To remove any possibility of  X - xuncertainty on this point, however, we hereby clarify that the LEC Calling Card Order created no new ARMIS reporting requirements.  X - ` x15.` ` SWB and Ameritech request that the Commission clarify in Part 69 that price cap  xLECs are exempt from rules requiring the allocation of costs to the transmission and database  X- xjlookup elements that the Commission established in the LEC Calling Card Order. That Order  Xj- xestablished cost allocation requirements for LECs under rate of return regulation in Sections  XS-69.305, 69.306, and 69.307.-SFm {OJ-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 354849, Appendix B.  X%-  x16. Price cap LECs must tariff LIDB services using the elements established in the LEC  X- xCalling Card Order. However, consistent with other access charge rules for price cap LECs, the  xcosts recovery requirements for the LIDB elements do not apply to price cap carriers. As  xspecified in Section 69.1(c) of the Commission's rules, the provisions of Part 69 apply to price  X- xMcap LECs only for limited purposes.u.m yOV -#X\  P6G;ɒP#эx47 C.F.R.  69.1(c).u The LEC Calling Card Order did not revise Section  xL69.1(c), or any other provision of our rules, to change the LEC price cap regulation. Therefore, Sections 69.305, 69.306, and 69.307 continue to be inapplicable to price cap LECs.  Xs-  x17. To further clarify this issue, and to eliminate any ambiguity that may arise from the  xestablishment of the rate elements for LIDB, we will amend Sections 69.1(c) and 69.120 of the  x-Commission's rules in this Order. First, we segregate the portion of Section 69.120 that discusses"Eh .0*&&qq"  xkthe costs that are to be recovered by the rate elements in Subsections (a) and (b) of Section  xl69.120, and place the costrecovery language in a new subparagraph (2) in each of those  xsubsections. Second, we shall add Sections 69.120(a)(2) and 69.120(b)(2) to the list of provisions  X- xthat have limited applicability to price cap LECs contained in Section 69.1(c)./m yO4-#X\  P6G;ɒP#эxThe changes to Part 69 of the Commission's rules are set out in Appendix B. These rule  X- xchanges should make it clear that the cost allocations for LIDB set out in the LEC Calling Card  X-Order do not apply to price cap LECs.  Xc- ` x18.` ` Finally, we are unpersuaded by MCI's argument that double recovery or cost  xmisallocation is possible unless the LECs are subject to the cost allocation requirements set out  X5- xin Sections 69.305, 69.306 and 69.307 of the Commission's rules.05Xm yO> -#X\  P6G;ɒP#эx47 C.F.R.  69.305, 69.306, and 69.307. In essence, MCI is arguing  x=that the Commission should abandon price cap regulation in favor of rateofreturn regulation.  X - xkThe price cap plan is a movement away from the costplus system of regulation.1 m yO-  #X\  P6G;ɒP#эxPolicy and Rules Concerning Rates for Dominant Carriers, CC Docket No. 87313, Second Report and  {Oh-Order, 5 FCC Rcd 6786, 6787 (1990) (LEC Price Cap Order). Separate  x<allocation and reporting of fullydistributed costs for LIDB by price cap LECs is unnecessary and  xinappropriate because LIDB rates for price cap LECs were not established on a fullydistributed  xcost basis. By grouping services with common characteristics, such as similar functions and  xlevels of competition, price cap regulation is designed to give LECs pricing flexibility with  x-respect to comparable services and to restrict the ability of LECs to offset rate increases for some  X}- x-services with rate decreases for dissimilar services.2}Bm {Op-#X\  P6G;ɒP#эxLEC Price Cap Order, 5 FCC Rcd at 6811. The price cap system creates incentives for  Xf- xzLECs to set prices for services at lower, more efficient levels than rateofreturn regulation.j3fm {O-#X\  P6G;ɒP#эxId. at 6787.j We, therefore, reject MCI's argument. x  X - " f 30*&&qq" z|IV. INDEPENDENT TELCOS PETITION FOR RECONSIDERATION  X- AND CLARIFICATION ă  X- A.xPetition  X- ` x19.` ` In its petition for reconsideration and clarification, the Independent Telcos4m yO-  #X\  P6G;ɒP#эxPetition of Elkhart Telephone Company, Inc.; Bay Springs Telephone Company., Inc.; and United Telephone Association, Inc. (collectively the "Independent Telcos"). ask  Xv- x.the Commission to state that Sections 69.120(a) and (b) of the rulesD5v m yOG -  ]#X\  P6G;ɒP#эx47 C.F.R.  69.120(a), (b). Section 69.120(a) states that a perquery charge shall be assessed upon all  xcarriers that access validation information from a LEC database to recover the costs of the transmission facilities  x<between the LEC's signalling transfer point and the database, and the signalling transfer point facilities dedicated  xto the termination of the transmission facilities connecting the database to the exchange carrier's signalling network.  xhSection 69.120(b) states that a perquery charge shall be assessed upon all carriers that access validation information from a LEC lineinformation database to recover the costs of the database.D require only IXCs to pay  X_- xfor LIDB access service.{6_m yO-#X\  P6G;ɒP#эxIndependent Telcos Petition at 45.{ The Independent Telcos argue that Section 69.5(b) provides that a  xcarrier's carrier charges shall be computed and assessed upon all interexchange carriers that use  xylocal exchange switching facilities for the provision of interstate or foreign telecommunications  X - x<services.i7 ( m {O-#X\  P6G;ɒP#эxId. at 34.i The Independent Telcos contend that IXCs, not LECs, should pay access charges for  X -access to the LIDB.a8 m {On-#X\  P6G;ɒP#эxId.a  X - ` _x20.` ` The Independent Telcos further argue that Section 69.4(b)(8) could be interpreted  xas requiring that all LECs add LIDB service to their access tariffs, and that a LEC must obtain  X - xya waiver of this rule if its access tariff does not contain all the switched access elements.i9 L m {O-#X\  P6G;ɒP#эxId. at 56.i The  xIndependent Telcos contend that incorporating the LIDB rate element into their access tariffs  Xy- xwould be unreasonable and economically impractical.i:ym {O -#X\  P6G;ɒP#эxId. at 67.i The Independent Telcos ask the  xCommission to modify the rules to provide that small independent LECs are not required to add  XK-the LIDB rate elements to their interstate access tariffs.i;Kpm {Ol#-#X\  P6G;ɒP#эxId. at 89.i " ;0*&&qqe"Ԍ X- B.XxComments (#  X- ` x21.` ` SWB and Ameritech argue that independent LECs should not be exempt from  X- xpaying for the LIDB validation service.<m yO4-#X\  P6G;ɒP#эxSWB Comments at 24; Ameritech Comments at 23. Ameritech explains that, if an independent LEC has  xits own Operator Service Switch, it may incur charges for access to the various LIDBs to validate  x|a call either directly or through a network of interconnecting carriers. In that case the  xindependent LEC will be billed through the interconnecting network owner for the LIDB access  X_- xcharges.p=_Xm yOh -#X\  P6G;ɒP#эxAmeritech Comments at 2.p Alternatively, an independent LEC may contract with another LEC for operator  xservices support for calls originated in the former LEC's franchise area, and the contract rate paid  xby the independent LEC would include the costs of providing the operator services and LIDB  X - xiaccess charges.i> m {O-#X\  P6G;ɒP#эxId. at 23.i SWB also explains that it recovers the cost of the LIDB access service through  x.charges to end user customers, through operator services provided to independent telephone  xcompanies, and also from the local exchange and interexchange carriers that have made  X - xarrangements with SWB for LIDB validation service.l? zm yO-#X\  P6G;ɒP#эxSWB Comments at 24.l Ameritech, Bell Atlantic, and SWB argue  xthat the independent carriers are beneficiaries of the LIDB validation service, and therefore should  X -pay their share of the LIDB validation service expenses.@ m yOb-#X\  P6G;ɒP#эxSWB Comments at 3; Bell Atlantic Comments at 12; Ameritech Comments at 3.  Xy- ` Bx22.` ` Ameritech, Bell Atlantic, and SWB agree that, if an independent LEC does not  xown and operate a LIDB, and the owner of the LIDB used by the independent has filed a tariff  xfor the validation service it provides for itself and others, the independent LEC should not be  X4- xrequired to add LIDB services to its interstate access tariffs.A4m yO-#X\  P6G;ɒP#эxSWB Comments at 46; Ameritech Comments at 35; Bell Atlantic Comments at 23. Ameritech also contends that third x.party database owners can provide LIDB service but are not required to file tariffs. Ameritech  xthus maintains that it is not clear how a Title II tariff requirement is discharged by a LEC that  X- xhas stored the validation data in a database belonging to a thirdparty.pB* m yO -#X\  P6G;ɒP#эxAmeritech Comments at 5.p Ameritech states that  X-LECs could avoid tariffing requirements by using nonLEC thirdparty database owners.aC m {OC#-#X\  P6G;ɒP#эxId.a  X- " L C0*&&qq"Ԍ X-C.xReply  X- ` ~x23.` ` The Independent Telcos reply comments contend that Part 69 was designed to  xxdetermine the rates that interexchange carriers and end users pay for access to the local telephone  xfacilities used to complete interstate offerings. Therefore, they argue, the independent LECs  X- xshould not be required to pay the LIDB access charges.xDm yO-#X\  P6G;ɒP#эxIndependent Telcos Reply at 23.x Additionally, the Independent Telcos  x[argue that because Ameritech previously advised the Commission that its tariff provides LIDB  X_-access to IXCs, only IXCs should pay for LIDB access.gE_Xm {Oh -#X\  P6G;ɒP#эxId. at 4.g  X1- D.xDiscussion  X - ` ax24.` ` In the LEC Calling Card Order, the Commission held that the LIDB calling  xzcard-validation service, offered to IXCs, must be provided under tariff, and that all the LECs  xmust either maintain a LIDB or lease space from another LEC for this purpose. Validation for  xcalling card, collect, and thirdparty calls can only occur if the card issuer provides access to the  xrelevant information in its database. In other words, all LECs must establish nondiscriminatory  xkmeans of access to validation data for their joint use cards, and they must all establish non xdiscriminatory access to screening data. Only this procedure allows all carriers, both local  xexchange carriers and interexchange carriers, to query the validation database about a particular account number when a calling card, collect, or thirdparty call is placed.  X- ` ox25.` ` With respect to the Independent Telcos' first request that only IXCs should  xhave to pay for LIDB service we agree with the Independent Telcos that, for the most part,  xPart 69 determines the rates that interexchange carriers and end users pay for access to the local  xtelephone facilities used to complete interstate offerings. Access services are to be made available  X- xxto any customer that chooses to subscribe to the services for interstate purposes.Fm {O^-  #X\  P6G;ɒP#эxSee Investigation of Access and Divestiture Related Tariffs, Memorandum Opinion and Order, CC Docket No. 831145, 97 FCC 2d 1082 (1984). We note that  xunder certain circumstances an independent telephone company might subscribe to another LEC's  xLIDB service. In this instance, the independent telephone company would be a customer of the  xother LEC and subject to the LIDB charges. Section 69.120(a) specifically provides that a per Xg- xquery charge shall be assessed upon all carriers that access validation information from a LEC  xdatabase to recover the costs of the transmission facilities between the LEC's signalling transfer  xpoint and the database, and the signalling transfer point facilities dedicated to the termination of  X$- xthe transmission facilities connecting the database to the exchange carrier's signalling network.qG$Dm yO%-#X\  P6G;ɒP#эx47 C.F.R.  69.120(a).q "$ G0*&&qqz"  X- xSimilarly, Section 69.120(b) provides that a perquery charge shall be assessed upon all carriers  xjthat access validation information from a LEC lineinformation database to recover the costs of  X- xthe database.qHm yOM-#X\  P6G;ɒP#эx47 C.F.R.  69.120(b).q Therefore, we find that the rule anticipates charges being assesed upon all carriers  xiusing this service, including LECs and IXCs, and we reject the Independent Telcos' argument that only IXCs are required to pay for the LIDB service.  Xx- ` x26.` ` The LECs providing the validation service recover the cost of that service from  xLtheir customers through their LIDB charges. Any customer that queries the LIDB must pay for  x[the service it receives. The benefits of LIDB validation service do not depend on the status of  xxthe user. We conclude that the public interest requires that carriers that are similarly situated with  xrespect to LIDB access should be treated alike. We therefore deny the Independent Telcos' petition for reconsideration of this requirement.  X - ` 2x27.` ` The Independent Telcos also express a concern that small independent LECs not  xbe required to add the LIDB rate element to their access tariffs. We note that if an independent  xLEC does not own and operate a LIDB, and does not choose to offer a LIDB validation service,  xthe independent LEC need not file a LIDB query charge. Section 69.4(b) of the Commission's  xjrules is not a mandatory requirement to establish rates for all the listed elements. To the extent  xthe LEC offers the service it should file the appropriate rate. If it does not offer the service, it does not have to obtain a waiver not to establish the rate element.  X-  V. BELL ATLANTIC PETITION FOR CLARIFICATION ă  X- A.XxPetition (#  X- ` x28.` ` In its petition for clarification or partial reconsideration, Bell Atlantic argues that  X- xthe LEC Calling Card Order must be clarified because note 50 in that OrderIHXm {O-  #X\  P6G;ɒP#эxIn Detariffing of Billing and Collection Services, Report and Order, CC Docket No. 8588, 102 FCC 2d  {Oh- x1150, 1169 (1985) (Billing and Collection Report and Order), the Commission found that LEC billing and collection  xfor an unaffiliated IXC is "not a communication service for purposes of Title II of the Communications Act," but  xrather, "is a financial and administrative service." In recognizing our Title I ancillary jurisdiction over billing and  {O- xcollection services in the Billing and Collection Report and Order, the Commission found that such services were  x,"incidental" to the transmission of wire communications and thus fell within the meaning of "wire communication"  x-as defined in Section 3(a) of the Act, but remained outside the scope of Title II because they were not common  {O"-carrier services. See id., LEC Calling Card Order, 7 FCC Rcd at 3533, n. 50. could be  x interpreted as contradicting this Commission's earlier finding that billing is a "financial and  xadministrative service" and that "carrier billing or collection for the offering of another"i h I0*&&qq"  X- x[unaffiliated carrier is not a communication service for purposes of the Communications Act."Jm {Oy-#X\  P6G;ɒP#эxBell Atlantic Petition at 12. Accord, United States Telephone Association Comments at 2.  X- xBell Atlantic contends that the Commission's decision in the LEC Calling Card Order, that access  xto validation information is a communications service, does not require the reclassification of  X-exchange carrier billing.tKZm yO-#X\  P6G;ɒP#эxBell Atlantic Petition at 2.t  X- B.xComments  Xa- ` ox29.` ` CNSI filed comments in opposition to Bell Atlantic's petition for clarification or  xpartial reconsideration. CNSI contends that Bell Atlantic's "confusion" over whether billing and  X3- xcollection is a communications service arises from an incomplete quotation from the Billing and  X - xMCollection Report and Order in Bell Atlantic's petition.mL m yO-#X\  P6G;ɒP#эxCNSI Comments at 23.m According to CNSI, Bell Atlantic  X - x<misquoted the Billing and Collection Report and Order by deleting "Title II" from the statement  X - xNdescribing billing and collection as a communications service.M zm {O-#X\  P6G;ɒP#эxId., citing Billing and Collection Report and Order, 102 FCC 2d at 1168. CNSI observes that the  x@Commission found that, although billing and collection services may not be a Title II  X - x=communications service, it is a communications service subject to Title I of the Act.mN m yO-#X\  P6G;ɒP#эxCNSI Comments at 23.m It notes  xLthat the issue of whether billing and collection is a communications service has been reviewed  X- xand affirmed by the Commission in Public Service Commission of Maryland.Om {O-  #X\  P6G;ɒP#эxPublic Service Commission of Maryland, et. al., Memorandum Opinion and Order, 4 FCC Rcd 4000 (1989)  {O-(Public Service Commission of Maryland). CNSI also  xKobserves that the conclusion that billing and collection service is incidental to the transmission  x-of wire communications and thus is properly considered a communications service under Section  x3(a) of the Act is fully consistent with the Commission's prior decisions and is not a  X>-reclassification of exchange carrier billing.kP> m yO-#X\  P6G;ɒP#эxCNSI Comments at 4.k  X- C.xReply  X- ` x30.` ` In its reply, Bell Atlantic essentially reiterates its previous arguments and points  X- xout that it is only asking the Commission to confirm that it did not intend the LEC Calling Card  X-Order to change prior Commission policy.sQ m yO%-#X\  P6G;ɒP#эxBell Atlantic Reply at 12.s" Q0*&&qq"Ԍ X-ԙ D.xDiscussion  X- ` `x31.` ` Initially, we note that Bell Atlantic does not disagree with the findings made in  X- xyour LEC Calling Card Order;Rm yO4-  {#X\  P6G;ɒP#эxThose findings are that: (1) cardvalidation and the associated functions are not billing and collection  xJservices; (2) only LECs can provide cardvalidation and screening data in its original, accurate, and uptodate form;  x(3) LECs have a monopoly over this essential information; and (4) the provision of the validation services is not  {O- xsubject to the competitive pressures we found existing in the billing and collection market. LEC Calling Card Order, 7 FCC Rcd at 353132. it merely takes issue with the wording of that Order. First, Bell  X- xAtlantic argues that, in note 50 of the LEC Calling Card Order, the Commission incorrectly  xsuggested that billing and collection is properly considered a communications service, and that  Xz- xthe Billing and Collection Report and Order was cited as supporting the erroneous statement.  Xe- x=We find that this argument has no merit. In the Billing and Collection Report and Order, the  xMCommission found that, although billing and collection for a communications service that a  xcarrier offers individually or as a joint offering with other carriers is an incidental part of that  xcommunications service, carrier billing or collection for the offering of another unaffiliated carrier  X - xjis not a communications service for purposes of Title II of the Act, i.e., it is not a comon carrier  X - xlcommunication service.S zm {O!-#X\  P6G;ɒP#эxBilling and Collection Report and Order, 102 FCC 2d at 1168. We also observed that billing and collection is a financial and  X - xZadministrative service.aT m {O-#X\  P6G;ɒP#эxId.a We find that these conclusions were accurately quoted in note 50 of the  X - xLEC Calling Card Order, and therefore we deny Bell Atlantic's petition for clarification with  X -regard to this issue.U m yO-  #X\  P6G;ɒP#эxAs CNSI observed, Bell Atlantic omitted "Title II" from the statement in its petition pertaining to our  {O- xjurisdiction over billing and collection service. CNSI Comments at 23. The Commission held in the Billing and  {O- xCollection Report and Order that LEC billing and collection for an unaffiliated carrier "is not a communication  {O^- xservice for purposes of Title II of the Communications Act." Billing and Collection Report and Order, 102 FCC 2d at 1168.  X- ` Px32.` ` We also disagree with Bell Atlantic's other argument that the Commission erred  Xn- xin stating that the Billing and Collection Report and Order contained a finding that billing and  xcollection is "incidental to transmission" under Section 3(a) of the Act. As we discussed in the  XB- xLEC Calling Card Order, the Commission found in Billing and Collection Report and Order that  X-- x.billing and collection is incidental to the transmission of wire communication.V-T m {O2"-  #X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3533 n.50 citing Billing and Collection Order, 102 FCC 2d at 116869. Therefore, we  xconcluded, it is properly considered a communications service under Title I, but remains outside"V0*&&qq"  X- x0the scope of Title II because it is not a common carrier service.Wm {Oy-#X\  P6G;ɒP#эxLEC Calling Card Order, 7 FCC Rcd at 3533 n.50. We also note that this  X- x discussion of Title I and II jurisdiction was reiterated by the Commission in Public Service  X- xiCommission of Maryland, which was also cited in note 50 of the LEC Calling Card Order. Thus, we find no need for clarification of our discussion of this issue.  X-} VI. CONCLUSION ă  Xc- ` _x 33.` ` We have reviewed the petitions, comments, and replies filed in this matter and are  XL- xnot persuaded that reconsideration of the LEC Calling Card Order is necessary. We also reject  xthe petitioners' proposals that independent LECs be exempt from paying for the validation  X - xyservice. We do agree, however, that the LEC Calling Card Order and our rules could be more  xclear regarding the extent to which they apply to price cap carriers. To clarify that issue, we are  xmaking minor modifications to Part 69 of the Commission's rules. Therefore, we partially grant  X -these petitions for clarification or partial reconsideration of the LEC Calling Card Order.  X - VII. ORDERING CLAUSES ă  X-  x!34. Accordingly, IT IS ORDERED that the petitions for clarification or partial  Xl- xreconsideration of the LEC Calling Card Order filed by Ameritech Operating Companies,  d(#Southwestern Bell Telephone Companies, Bell Atlantic Telephone Companies, and Elkhart  d(#Telephone Company, Inc., Bay Springs Telephone Company, Inc., and United Telephone Association, Inc., ARE GRANTED to the extent indicated herein, and otherwise ARE DENIED.  v "35. IT IS FURTHER ORDERED that the Commission's rules ARE HEREBY  d(#=AMENDED as set forth in Appendix B, below. These rules changes shall be effective 30 days after FEDERAL REGISTER publication. ` `  FEDERAL COMMUNICATIONS COMMISSION ` `  William F. Caton XX` ` X Acting 0"Ex   0"Ex Secretary(# "ZW0*&&qq"  X-] APPENDIX A ă  X-Petitions for Reconsideration Ameritech Operating Companies (Ameritech) Bell Atlantic Telephone Companies (Bell Atlantic)  d(#Elkhart Telephone Company, Inc., Bay Springs Telephone Company, Inc., and United Telephone Association, Inc. (collectively, the Independent Telcos) Southwestern Bell Telephone Companies (SWB)  X -Oppositions/Comments Ameritech Bell Atlantic BellSouth Telecommunications Inc. (BellSouth) Capital Network System, Inc. (CNSI) MCI Telecommunications Corporation (MCI) SWB United States Telephone Association (USTA) US West Communications, Inc. (US West)  X -Replies Ameritech Bell Atlantic Independent Telcos "h$W0*&&qq(#"  X-] APPENDIX B ă  X-~  AMENDMENTS TO THE CODE OF 4FEDERAL REGULATIONS  X-y&PART 69ACCESS CHARGES ă  X_-1.The authority citation for Part 69 continues to read as follows:  X1- d(#" Authority: Sec. 4, 201, 202, 203, 205, 218, 403, 48 Stat 1066, 1070, 1072, 1094, as amended,  X -47 U.S.C. 154, 201, 202, 203, 205, 218, 403.  X -2.Section 69.1(c) is amended to read as follows:  X - 69.1 Application of access charges. ` ` *****  d(#(c) The following provisions of this part shall apply to telephone companies subject to price cap  d(#regulation only to the extent that application of such provisions is necessary to develop the  d(#[nationwide average carrier common line charge, for purposes of reporting pursuant to  43.21  d(#and 43.22 of this chapter, and for computing initial transport rates:  69.3(f), 69.105(b)(4),  d(#}69.105(b)(5), 69.106(b), 69.107(b), 69.107(c), 69.109(b), 69.110(d), 69.11(c), 69.111(g),  d(#m69.112(d), 69.114(b), 69.114(d), 69.120(a)(2), 69.120(b)(2), 69.125(b)(2), 69.205(e), 69.301  d(#!through 69.310, and 69.401 through 69.412. The computation of rates pursuant to these  d(#Zprovisions by telephone companies subject to price cap regulation shall be governed by the price cap rules set forth in Part 61 of this chapter and other applicable Commission Rules and orders.  X|-3.Section 69.120 is amended to read as follows:  XN-  69.120 Lineinformation database.  d(#Z(a)(1) A charge that is expressed in dollars and cents perquery shall be assessed upon all carriers that access validation information from a local exchange carrier database.  d(#[(2) Such perquery charge shall recover the costs of: (i) the transmission facilities between the  d(#local exchange carrier's signalling transfer point and the database; and (ii) the signalling transfer  d(#point facilities dedicated to the termination of the transmission facilities connecting the database to the exchange carrier's signalling network. "h$W0*&&qq(#"  d(# (b)(1) A charge that is expressed in dollars and cents perquery shall be assessed upon all  d(#<carriers that access validation information from a local exchange carrier lineinformation database. (2) Such perquery charge shall recover the costs of the database.