******************************************************** 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. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D. C. 20554 In the Matter of ) ) Federation of American Health Systems) File No. ENF-92-008 ) Petition for Declaratory Ruling,) or in the Alternative, Petition for Waiver) ) MEMORANDUM OPINION AND ORDER Adopted: January 30, 1997; Released: February 6, 1997 By the Commission: I. INTRODUCTION 1. In this Memorandum Opinion and Order, we address the Application for Review ("Application") filed by the Federation of American Health Systems ("FAHS"), seeking Commission review of an order issued by the Common Carrier Bureau (the "Bureau") in the above-captioned proceeding. 2. In the Health Systems Order, the Bureau addressed a petition for declaratory ruling ("Petition") filed by FAHS regarding the requirement imposed by Section 64.704(c) of the Commission's rules to permit access to the 10XXX dialing sequence from telephones located in hospital patient rooms. In the Petition, FAHS asked that the Commission rule that patient bedside telephones are not aggregator equipment. The Petition asked in the alternative for a permanent waiver of Section 64.705(c)(5) for the benefit of medical facilities with a "small volume of interexchange calls." The Bureau dismissed the declaratory ruling request on procedural grounds. The Bureau also denied the alternative request by FAHS for waiver of this section of our rules. For the reasons discussed below, we deny the Application for Review. II. BACKGROUND 3. In 1991, the Commission adopted comprehensive regulations governing the practices and telephone service offerings of operator service providers and the call aggregators with whom they contract to provide operator services. Among other things, the regulations included the following statutory definition of "aggregator": "any person that, in the ordinary course of its operations, makes telephones available to the public or to transient users of its premises, for interstate telephone calls using a provider of operator services." 4. On May 20, 1992, FAHS filed its Petition, requesting that the Commission issue a ruling declaring that hospitals and other health care facilities are not "aggregators" with respect to patient bedside telephones because, according to FAHS, such equipment is not provided in the ordinary course of their operations. Alternatively, FAHS asked the Commission to waive on a permanent basis the requirements of Section 64.704(c)(5) of its rules for medical facilities with an average monthly volume of less than 2,500 interstate minutes of use for operator-assisted telephone calls from patient telephones. 5. The Bureau found that, although FAHS styled its original filing as a petition for declaratory ruling, it was in substance a petition for reconsideration of the Commission's 1991 Report and Order. The Bureau noted that the position advocated by FAHS, that hospitals and other health care facilities should not be included within the definition of "aggregator" with respect to telephones located in hospital patient rooms, was presented to the Commission in CC Docket No. 90-313 and that the Commission specifically discussed this argument, concluding that hospitals and other health care facilities are within the scope of the definition of "aggregator." Relying on Section 405 of the Communications Act (the "Act"), and Section 1.429(d) of the Commission's rules, the Bureau found that FAHS filed its Petition almost a year after the statutory deadline for a petition for reconsideration had expired. The Bureau also ruled that FAHS made no argument that any exception to the Act or to the Commission's rules applied in this case. Therefore, the Bureau dismissed FAHS' Petition as an untimely petition for reconsideration. 6. The Bureau did, however, address FAHS' contention that the Commission must defer to the definition of patient telephones in hospitals adopted by the U.S. Department of Health and Human Services. The Bureau found that there was no logical inconsistency between the two statutory interpretations, because of the crucial differences in both the statutory language and purposes. It therefore determined no need to harmonize the Commission's TOCSIA regulations with the Medicare Act and those regulations promulgated under it by excluding hospitals from the definition of "aggregator." Moreover, the Bureau found that the legislative history of TOCSIA clearly established that Congress considered hospitals to be aggregators, contrary to FAHS' assertion that they are not. 7. Regarding FAHS' request for a waiver of Section 64.704(c)(5) of the Commission's rules, the Health Systems Order recognized that pursuant to Section 1.3 of the Commission's rules, the Commission has authority to waive its rules for good cause shown. The Bureau observed that the agency may exercise its discretion to waive a rule where particular facts would make compliance inconsistent with the public interest. The Bureau found, however, that FAHS had failed to establish sufficient facts to justify its request for a broad waiver of our rules. According to the Bureau, FAHS did not offer any probative evidence showing that the 10XXX unblocking requirement would create a burden that is inconsistent with the public interest. In particular, the Bureau noted that the Commission adopted a lengthy phase-in period of five years in order to ease the impact of compliance with Section 64.704(c) on aggregators, and that FAHS made no attempt to demonstrate that this transition is inadequate to address the concerns raised by its waiver request. Moreover, the Bureau found that FAHS failed to present a principled basis for its proposal to use 2,500 minutes of interstate traffic, rather than some other figure, as a benchmark for waiver, and instead, simply presumed that this amount of traffic justifies a waiver. III. CONTENTIONS AND DISCUSSION A. Petition for Declaratory Ruling 1. Contentions. 8. FAHS contends that the Bureau's dismissal of the Petition "solely on procedural grounds" is contrary to the Administrative Procedure Act, the Commission's regulations, case precedent, and established policy. FAHS argues that the Petition raised important questions of law that have not previously been resolved by the Commission. According to FAHS, case law requires the Commission to address the merits of its Petition before the FAHS can proceed to court. FAHS maintains that the Bureau erroneously concluded that the thirty-day period for filing petitions for reconsideration could not be waived. According to FAHS, Section 405 has never been an absolute bar to reconsideration of issues raised after thirty days. 9. FAHS argues that it was wrongfully deprived of an opportunity for a substantive ruling on its request for declaratory ruling and the accompanying waiver request, and that it obtained no answer to its question as to the validity of the definition of "aggregator" contained in the Commission's rules. FAHS observes that Section 1.2 of the Commission's rules allows FAHS to request a declaratory order to remove the uncertainty it sees as to whether "healthcare institutions are 'aggregators' under the Commission's rules when, according to regulations prescribed under the Medicare Act, they do not provide patient bedside telephones under the ordinary course of their business." FAHS also cites the Administrative Procedure Act, arguing that Section 5(e) of this Act states that the Commission "may issue a declaratory order to terminate a controversy or remove uncertainty." 10. AT&T characterizes as "wrong" the FAHS argument that the Bureau had erred in dealing with its Petition as an untimely effort to seek reconsideration. AT&T argues that the Commission had no obligation to issue a substantive declaratory order here because there was "no uncertainty" over whether the TOCSIA-ordered rules were to be applied to hospitals and health care facilities. AT&T contends that this was because the Commission "as early as 1991 in the Docket 90-313 Order [had] addressed and rejected analogous claims by other hospitals that their patient bedside telephones were not subject to the Commission's jurisdiction under TOCSIA." AT&T further maintains that the original Petition was not an effort for clarification; rather, it was an attempt to vitiate the Commission's earlier decision on the status of hospital patient telephones under TOCSIA. 2. Discussion. 11. After considering the record before us, we deny FAHS' Application for Review as it relates to all of FAHS' claims. The Commission considered and rejected a claim that hospitals and health care facilities were not "aggregators" under TOCSIA in its Report and Order. Indeed, we specifically held that "hospitals and universities are clearly within the scope of the definition of 'aggregator'." In addition, the Bureau had entertained a similar argument by the Association of College and University Telecommunications Administrators, contending that colleges and universities were not aggregators under TOCSIA for purposes of telephones in dormitory rooms and similar locations. We are not inclined to issue a declaratory ruling on an issue that the Commission has fully addressed. 12. Because the Commission had addressed the issue in its rulemaking Report and Order, the non-waiver portions of the FAHS Petition must either be treated as a petition for reconsideration or a petition for rulemaking. To the extent it is to be treated as a petition for reconsideration, we agree with the Bureau that it was untimely under Section 405 of the Act and cannot be considered. FAHS filed its Petition almost a year after the statutory deadline had expired. In its Petition, FAHS did not show (or even argue) that the Commission failed to provide public notice of the Report and Order in which the Commission had specifically discussed the issue of whether hospitals and other health care facilities were included within the definition of "aggregator". In any event, as discussed below, to the extent we were to consider the filing to be a petition for rulemaking, we would deny it for the reasons set forth below. B. The Bureau's Statutory Interpretation 1. Contentions. 13. FAHS challenges the Bureau ruling for concluding that, in enacting TOCSIA and the Medicare Act, Congress used the same term, "patient telephones," but gave the term inconsistent meanings. FAHS argues that the Bureau gave no "reasoned explanation" for this inconsistency. FAHS also contends that the Bureau ruling misread the statutory language in TOCSIA, and incorrectly relied on the legislative history. FAHS observes that the Medicare Act was enacted before TOCSIA, and argues that where the meaning of a statutory term is clearly accepted in judicial and legislative practice, that definition applies. FAHS contends that when the same words are used in different statutes, such as the Medicare Act and TOCSIA, Congress usually intends for these words to be given the same meaning. In the Medicare Act, FAHS contends, Congress described the facilities and equipment that are typically made available by hospitals in the ordinary course of their operations, and Congress deferred to the expertise of Health and Human Services ("HHS") to determine what equipment a hospital makes available to the public "in the ordinary course of its operations." FAHS contends that HHS determined that patient bedside telephones "are not furnished in the ordinary course of a hospital's business," and in applying the Medicare Act, HHS adopted regulations that defined patient telephones as "personal comfort items" which are not services "ordinarily" furnished to patients by hospitals. Because the Medicare Act was enacted prior to TOCSIA, FAHS continues, this definition must be "presumed to have been known to Congress when it enacted" TOCSIA. 14. AT&T refutes FAHS' claim that the Bureau's decision was an arbitrary and capricious interpretation of TOCSIA. AT&T states that "[t]he legislative findings in the preamble to TOCSIA expressly recognize the need to reduce customer confusion and prevent unreasonable practices resulting from increased competition 'to provide operator services to hotels, hospitals, airports, and other aggregators of telephone business from consumers.'" AT&T observes that the scope of TOCSIA's definition of an aggregator is intended to fulfill this Congressional objective. AT&T also points out that in the Senate Report accompanying the bill points out that the term aggregator "include[s] hotels and motels, hospitals, . . . and others." AT&T argues that the legal authority and statutory history here are clear, and that FAHS submits nothing persuasive to advance its position that the members of FAHS are not aggregators as that term is used in TOCSIA. The Bureau, AT&T states, correctly held that FAHS' attempt to reconcile the disparate statutory schemes of Medicare and TOCSIA is "specious." AT&T also notes that there are "crucial differences" in the statutory language and purposes. There is no basis, according to AT&T, for FAHS' claim that the Commission is required to harmonize its TOCSIA regulations and the Medicare regulations with the Medicare Act by excluding hospitals from the definition of aggregators. 2. Discussion. 15. The Commission has always viewed hospitals as aggregators. The language and Congressional reports of TOCSIA make clear that Congress intended hospitals and other health care facilities for inclusion in the category of "aggregators." As discussed below, we agree with the Bureau that TOCSIA and the Medicare Act are distinct statutory schemes, unrelated for purposes of determining whether hospitals and other health care facilities are "aggregators." We therefore find no basis for revisiting our interpretation of the statutory definition of "aggregators." 16. Under TOCSIA, an aggregator is defined as "any person that, in the ordinary course of its operations, makes telephones available to the public or to transient users of its premises, for interstate telephone calls using a provider of operator services." FAHS' sole support for the critical contention that its members are not aggregators with respect to patient bedside telephones is its observation that bedside telephones are excluded from the classification of equipment "ordinarily furnished . . . for the care and treatment of patients" under the Medicare Act. FAHS therefore claims that the classification of patient bedside telephones under the Medicare Act necessarily means that Congress also excluded those instruments from TOCSIA requirements. Each Act, however, not only has different statutory language, but also has a different legislative intent. Under the Medicare Act, Congress was seeking to provide a hospital insurance program for the elderly. The legislative findings in the preamble to TOCSIA make clear that in enacting TOCSIA Congress was concerned about the need to reduce customer confusion and prevent unreasonable practices resulting from increased competition "to provide operator services, to hotels, hospitals, airports, and other aggregators of telephone business from consumers. . . ." The Bureau therefore was not arbitrary in its conclusion that hospitals are to be treated as aggregators under TOCSIA, despite the categorization of telephones as "personal comfort items" under the Medicare Act. Thus, were we to treat FAHS' Petition as a request for rulemaking, we would deny it. C. Waiver Request 1. Contentions. 17. FAHS argues that its Petition established good cause for a "limited waiver" of Section 64.705(c)(5) of the Commission's rules for medical facilities with less than 2,500 minutes of interstate telephone calls per month. The Bureau ruling, FAHS states, did not reach the correct decision on this matter because it failed to give FAHS' Petition the required "hard look." According to FAHS, forcing rural medical facilities to make a choice between buying new medical technology or selective 10XXX blocking capabilities will have the "inevitable consequence" of thwarting the advancement of rural healthcare. 18. AT&T contends that there is "no principled basis to support FAHS' claim" that the Bureau committed error by not granting a blanket waiver of the TOCSIA-based unblocking rules at hospital health care locations that have less than 2,500 minutes of interstate operator traffic monthly. AT&T also maintains that the Bureau applied precedent correctly in its order. 2. Discussion. 19. We conclude the Bureau correctly evaluated FAHS' waiver request in finding that a permanent waiver of our rules was not justified. The Commission rule which authorizes waivers states expressly that waivers may be granted "for good cause" shown. Generally, a waiver is appropriate only if special circumstances warrant a deviation from the general rule; that is, the rule is uniquely burdensome on the party seeking the waiver, and that such deviation will serve the public interest. 20. In arguing for a waiver, FAHS did not describe with particularity the nature of the burden on the health care industry presented by the requested waiver. FAHS' Petition presented only conclusory, brief, and general information about the industry's need for a waiver. FAHS did not demonstrate why it believed the proposed threshold of 2,500 minutes was necessary, nor did it show how the proposed regulation would affect its membership. Rather, FAHS simply stated that hospitals with less than 2,500 minutes of interstate calling volume faced unnecessary capital expenditures of millions of dollars to modify or completely replace otherwise satisfactory PBXs. . . . Such hospitals would be forced to redirect substantial financial resources away from their mission of providing medical care because revenues received from interexchange calls will be too small to help pay for the high cost of selective 10XXX blocking. Medical facilities with a lower calling volume tend to be located in smaller towns or more rural areas, and face more severe constraints on their capital spending. FAHS also argued in its Petition that "because of their size, they [the providers covered by the waiver request] face constraints on capital spending; and, because they are not in business to provide telephone service, they need to focus their spending on health care rather than on personal items." 21. FAHS' Application did not furnish any new evidence in this area. FAHS failed to consider the impact of the varied factors which the Commission placed in operation to ease the period of phase-in for this unblocking, most significantly that it could be phased in over five years. Furthermore, FAHS failed to offer any probative evidence demonstrating that the 10XXX unblocking requirements would create a burden inconsistent with the public interest, nor did it try to demonstrate that the lengthy transition period for aggregators was inadequate. FAHS also failed to show that all medical facilities within the threshold proposed by FAHS would be similarly burdened. In addition, FAHS made no persuasive argument that the permanent rule waiver it sought was in the public interest. Therefore, the Bureau properly found that FAHS "failed to establish sufficient facts to justify its request for a broad waiver of our rules." IV. ORDERING CLAUSE 22. Accordingly, IT IS ORDERED, pursuant to Sections 4(i) and 405 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 405, that the Application for Review filed by FAHS IS DISMISSED with respect to its request for a declaratory ruling to the extent discussed above, and is otherwise DENIED with respect to its request for waiver. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary