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SCOPE OF THE COMMISSION'S AUTHORITYp>"(#v 4  X-XX` ` A.` ` Scope of Authority Over Alarm Monitoring Services ` p>"(#v 4  X-XX` ` B.` ` Scope of Authority to Issue Rules to Implement Section 275 ` p"(#s 17  X|-XX` ` C.` ` Constitutional Issues ` p"(#s 23 XUIII. ALARM MONITORING SERVICE DEFINED p"(#s 26  X7-XX` ` A.` ` Scope of Section 275(e) ` p"(#s 26  X -XX` ` B. ` ` Meaning of "Provision" in Section 275(a) ` p"(#s 34 XUIV. EXISTING ALARM MONITORING SERVICE PROVIDERS p"(#s 42 XUV. NONDISCRIMINATION SAFEGUARDS p"(#s 45 XUVI. PROCEDURAL MATTERS p"(#s 56  X#-XX` ` A.` ` Final Regulatory Flexibility Certification ` p"(#s 56  Xh$-XX` ` B.` ` Final Paperwork Reduction Analysis ` p"(#s 63 XUVII. ORDERING CLAUSES p"(#s 64":&0*''ZZ$"Ԍ  X- J-I. INTRODUCTION ׃  X-1.` ` I.In February 1996, the "Telecommunications Act of 1996" became law.$ {O4-ԍ Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996 Act), codified at 47 U.S.C.   {O-151 et seq. Hereinafter, all citations to the 1996 Act will be to the 1996 Act as it is codified in the United States Code. The 1996 Act amended the Communications Act of 1934. We will refer to the Communications Act of 1934, as amended, as "the Communications Act" or "the Act." The intent of the 1996 Act is "to provide for a procompetitive, deregulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening  X_-all telecommunications markets to competition."G\_ {O -ԍ See Joint Statement of Managers, S. Conf. Rep. No. 104230, 104th Cong., 2d Sess. 1 (1996) (Joint  {O -Explanatory Statement); see also 47 U.S.C.  706(a) (encouraging the deployment of advanced telecommunications capability to all Americans).G  X1-2.` ` On July 18, 1996, the Commission released a Notice of Proposed Rulemaking  X -(NPRM) regarding implementation of sections 260, 274, and 275 of the Communications Act  X -addressing telemessaging, electronic publishing, and alarm monitoring services, respectively.  {O-ԍ Implementation of the Telecommunications Act of 1996: Telemessaging, Electronic Publishing, and Alarm  {OX-Monitoring Services, CC Docket No. 96152, Notice of Proposed Rulemaking, FCC 96310 (July 18, 1996).  X -This Order implements the alarm monitoring provisions of section 275. 4  yO-ԍ On February 7, 1997, we released the First Report and Order and Further Notice of Proposed Rulemaking  {O-in CC Docket No. 96152 implementing the telemessaging and electronic publishing provisions of the Act. See Implementation of the Telecommunications Act of 1996: Telemessaging, Electronic Publishing, and Alarm  {O--Monitoring Services, CC Docket No. 96152, First Report and Order and Further Notice of Proposed Rulemaking, FCC 9735 (rel. Feb.7, 1997).  X -3.` ` Section 275 prohibits Bell Operating Companies (BOCs)y  yOY-ԍ We define the term "BOC" as the term is defined in 47 U.S.C.  153(4).y from providing alarm monitoring service until February 8, 2001, although it exempts from this prohibition  X-those BOCs that were providing alarm monitoring service as of November 30, 1995.Px {O -ԍ See 47 U.S.C.  275(a).P This Order clarifies the definition of "alarm monitoring service" and the manner in which we will apply the nondiscrimination provisions of section 275(b). We address the enforcement issues  XM-related to sections 260, 274, and 275 in a separate proceeding.\M  {O%-ԍ See Amendment of Rules Governing Procedures to be Followed When Formal Complaints are Filed  {O%-Against Common Carriers, CC Docket No. 96238, Notice of Proposed Rulemaking, FCC 96460 (rel. Nov. 27, 1996). "M.0*''ZZg"Ԍ X-l ׃  X- II. SCOPE OF THE COMMISSION'S AUTHORITY ׃  X- A.` ` Scope of Authority Over Alarm Monitoring Services  X-` ` 1. Background  X_-4.` ` II.  COMP III  II.A. Pursuant to Computer III,L _ {O-ԍ COMPUTER IIIIII  REF3 Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer III), CC Docket No.  {O -85229, Phase I, 104 FCC 2d 958 (1986) (Phase I Order), recon., 2 FCC Rcd 3035 (1987) (Phase I  {Ol -Reconsideration Order), further recon., 3 FCC Rcd 1135 (1988) (Phase I Further Reconsideration Order),  {O6 -second further recon., 4 FCC Rcd 5927 (1989) (Phase I Second Further Reconsideration Order); Phase I Order  {O -and Phase I Reconsideration Order vacated, California v. FCC, 905 F.2d 1217 (9th Cir. 1990) (California I);  {O -Phase II, 2 FCC Rcd 3072 (1987) (Phase II Order), recon., 3 FCC Rcd 1150 (1988) (Phase II Reconsideration  {O -Order), further recon., 4 FCC Rcd 5927 (1989) (Phase II Further Reconsideration Order); Phase II Order  {O^-vacated, California I, 905 F.2d 1217; Computer III Remand Proceeding, 5 FCC Rcd 7719 (1990) (ONA Remand  {O(-Order), recon., 7 FCC Rcd 909 (1992), pets. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir. 1993)  {O-(California II); Computer III Remand Proceedings: Bell Operating Company Safeguards and Tier I Local  {O-Exchange Company Safeguards, 6 FCC Rcd 7571 (1991) (BOC Safeguards Order), BOC Safeguards Order  {O-vacated in part and remanded, California v. FCC, 39 F.3d 919 (9th Cir. 1994), (California III), cert. denied, 115 S. Ct. 1427 (1995). The Ninth Circuit Court of Appeals found that the Commission may only preempt inconsistent state rules regulating intrastate information services in such circumstances where exercise of such authority by the states would negate a valid federal regulatory goal.L the Commission has traditionally regulated alarm  XJ-monitoring services provided by BOCs J`  {O[-ԍ  See, e.g., Bell Operating Companies Joint Petition for Waiver of Computer II Rules, 10 FCC Rcd 13758,  {O%-13770 (Com. Car. Bur. 1995) (CEI Plan Order) (approving Ameritech's CEI plan for "SecurityLink" service). as enhanced (or information) services. J yO-ԍ INFO  The Commission has determined that "all of the services that the Commission has previously considered  {O-to be 'enhanced services' are 'information services.'"  See Implementation of the NonAccounting Safeguards of  {OI-Sections 271 and 272 of the Communications Act of 1934, as amended, CC Docket No. 96149, First Report and  {O-Order and Further Notice of Proposed Rulemaking, FCC 96309 (rel. Dec. 24, 1996) at  102 (NonAccounting  {O-Safeguards Order). Accordingly, we use the term "information services" to apply to both. These rules applied to all BOCprovided alarm monitoring services intrastate as well as interstate. Because the Modified Final Judgment (MFJ) prohibition on BOC provision of interLATA telecommunications services also applied to interLATA information services, however, the  X -BOCs were limited to providing alarm monitoring services on an intraLATA basis.1 Z t yO!-ԍ Ameritech, however, was granted a waiver of the interLATA restriction to allow it to provide alarm  {O!-monitoring service across LATA boundaries.  See United States v. Western Electric Co., No. 820192, slip op. (D.D.C. Sept. 8, 1995).1 "  0*%%ZZ "Ԍ X-5.` ` Section 275 of the Act refers generally to BOC and incumbent local exchange carrier (LEC) provision of alarm monitoring services and does not differentiate between interLATA and intraLATA or between interstate and intrastate alarm monitoring services. In  X-the NPRM, we sought comment on the extent of the Commission's authority over intrastate  X-alarm monitoring services.C  {O-ԍ  NPRM at  2627.C We also asked whether, if the Commission lacks express authority over intrastate alarm monitoring services, the Commission has authority to preempt  Xx-state regulation with respect to these matters pursuant to Louisiana PSC. xZ {O -ԍ Louisiana Public Service Comm'n v. FCC, 476 U.S. 355, 377 (1986) (Louisiana PSC).  XL- ` ` 2. Comments  X - 6.` ` Three BOCs and two state commissions generally contend that the Commission  X -lacks authority over intrastate alarm monitoring services.  {O-ԍ See, e.g., Ameritech comments at 6; Bell Atlantic comments at 3; BellSouth comments at 9; California Commission comments at 9; New York Commission comments at 2. Ameritech and BellSouth argue that, because section 275 does not expressly confer general intrastate jurisdiction on the  X -Commission, the Commission is "fenced off" by section 2(b) from adopting rules that apply  X -to intrastate alarm monitoring services. F yO-ԍ Ameritech comments at 6; BellSouth comments at 9 (citing 47 U.S.C.  152(b)). Ć Hence, BellSouth and Bell Atlantic claim that the Commission may not exercise jurisdiction over such intrastate services unless the FCC can demonstrate that such services are inseparable from interstate alarm monitoring services,  X}-pursuant to the "impossibility exception" of Louisiana PSC.g} yO-ԍ Bell Atlantic comments at 23; BellSouth comments at 9. g The California Commission also argues that Congress did not intend to grant the Commission authority over intrastate  XQ-alarm monitoring services.RZQf  yOh-ԍ California Commission comments at 4 ("California believes that Congress, in passing the Act, in no way  {O0-intended to transfer the power to regulate intrastate services to the FCC as suggested in the NPRM, whether those services are provided by BOCs or [by other] LECs"). R The New York Commission asserts that the Louisiana PSC decision does not provide a basis for Commission preemption of state authority in the areas in question. It also argues that it is premature to make a determination about preemption at this  X-juncture.L  yOG"-ԍ New York Commission comments at 2.L  X-7.` ` AICC and AT&T, however, maintain that the Commission has jurisdiction over such services. AICC argues that the Commission should exercise jurisdiction over both"0*%%ZZ" intrastate and interstate matters because section 275 is "inextricably linked to the new jurisdictional landscape" of sections 251 and 271. It also contends that the plain language of the statute grants the Commission authority over all alarm monitoring matters and establishes  X-no role for state commissions to resolve intrastate disputes.? yO4-ԍ AICC comments at 38.? AICC further maintains that, if the scope of section 275 were limited to interstate matters, a BOC could easily evade the  X-section's restrictions and section 275 would be rendered moot.NX yO-ԍ AICC comments at 9; AICC reply at 4.N AT&T also argues that an interpretation that excludes intrastate alarm monitoring services would nullify the safeguards  X_-established by Congress to govern the provision of these services.@_ yO -ԍ AT&T reply at 22 n.56.@ AT&T further claims that, because Congress defined alarm monitoring service "without regard to LATA or other geographic boundaries," the Commission's authority under section 275 extends to all alarm  X -monitoring services, whether interstate or intrastate, interLATA or intraLATA.: x {OC-ԍ Id. at 22.:  X -` ` 3. Discussion  X -   8.` ` For the reasons stated below, we find that section 275, and the Commission's authority thereunder, applies to intrastate as well as interstate alarm monitoring services provided by incumbent LECs and their affiliates. We also find that section 2(b) does not limit the Commission's authority to establish rules governing intrastate alarm monitoring service pursuant to section 275. We hold, therefore, that the states may regulate incumbent LEC provision of alarm monitoring services, but may not do so in a manner that is  X4-inconsistent with section 275 and the rules established in this Order.4  {O-ԍ See CCIA v. FCC, 693 F.2d 198, 205, 214 (D.C. Cir. 1982) (upholding Commission preemption of state tariffing of customer premises equipment and enhanced services and finding that when state regulation of intrastate equipment or facilities interferes with achievement of a federal regulatory goal, the Commission's jurisdiction is paramount and conflicting state regulations must necessarily yield to the federal regulatory scheme).  X-9.` ` We find that section 275, by its terms, applies to interstate and intrastate alarm  X-monitoring services. The statute makes no distinction between interstate$  yO\"-ԍ  Alarm monitoring services are jurisdictionally interstate where the monitoring station lies in a different  {O$#-state from the home or business being monitored.  See Petition for Emergency Relief and Declaratory Ruling  {O#-Filed by the BellSouth Corp., 7 FCC Rcd 1619 (1992), aff'd Georgia Public Service Comm'n v. FCC, 5 F.3d 1499 (11th Cir. 1993) (finding BellSouth's voice mail service has an interstate communication component for"$0*%%$"  {O-jurisdictional purposes when accessed by a caller outside the state in which the service is located) (BellSouth  {OZ-Corp.). and intrastate alarm"$0*%%ZZ" monitoring services, but rather enacts a broad prohibition on all BOC provision of alarm  X-monitoring services, except for "grandfathered" BOCs.@$ {O-ԍ Id.  275(a).@ Significantly, section 275(b)  X-provides that "an incumbent local exchange carrier... engaged in the provision of alarm monitoring service shall not subsidize its alarm monitoring services either directly or  X-indirectly from telephone exchange service operations."Q yO -ԍ 47 U.S.C.  275(b) (emphasis added).Q Because telephone exchange service is a local, intrastate service, section 275(b) plainly addresses intrastate service. Thus, the safeguards provided in section 275(b) clearly and explicitly relate to intrastate service. Given that section 275(b) applies explicitly to intrastate service, we find that Congress intended that all of section 275 apply to intrastate alarm monitoring service.  X - 10.` ` This interpretation of section 275 also is consistent with existing Commission regulation of alarm monitoring and other enhanced services. As discussed above, alarm monitoring services provided by BOCs are currently regulated as enhanced services and are  X -subject to Computer III nondiscrimination safeguards.S F {O-ԍ  See supra  COMP III4.S These safeguards apply to the  X -intrastate as well as interstate aspects of alarm monitoring services.^  {OM-ԍ  Regulation under Computer III applied only to BOCs; nonBOC LECs that provided enhanced services  {O-prior to passage of the 1996 Act were not subject to Computer III regulation. See BOC Safeguards Order. We  {O-note, however, that certain of the Computer III requirements were extended to GTE in 1994. See infra note GTE129 .  X- 11. ` ` We also find that adopting the view that section 275, and our authority thereunder, applies only to interstate services would lead to implausible results. If section 275 were interpreted to apply only to interstate alarm monitoring services, the fiveyear prohibition on BOC entry into alarm monitoring service in section 275(a) would apply only to the extent that a BOC provides alarm monitoring services on an interstate basis. Because the jurisdictional nature of an alarm monitoring service depends on whether the monitoring center is situated in the same state as the monitored premises, a BOC could escape a prohibition on providing interstate alarm monitoring service by establishing a monitoring center in each state  X-in which it sought to do business.r  {O"-ԍ  See AICC comments at 9; see also BellSouth Corp.r We agree with AICC and AT&T that such a reading would render the section 275(a) prohibition against BOC entry into the alarm monitoring business nearly meaningless, a result that in our view is contrary to the plain intent of this" 0*%%ZZp"  X-section.T yOy-ԍ AICC comments at 9; AT&T reply at 22 n.56.T We further find that limiting the scope of the prohibition to interstate alarm monitoring services would be contrary to the rule of statutory construction "that one provision should not be interpreted in a way . . . that renders other provisions of the same statute  X-inconsistent or meaningless."3X {O-ԍ  See Shields v. United States, 698 F.2d 987, 989 (9th Cir. 1982), cert. denied, 464 U.S. 816; see also Lake  {O-Cumberland Trust, Inc. v. EPA, 954 F.2d 1218, 1222 (6th Cir. 1992) ("[W]e must . . . giv[e] effect to each word and mak[e] every effort not to interpret a provision in a manner that renders other provisions of the same statute  {O -inconsistent, meaningless or superfluous.") (citing Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir. 1991)).3  X- 12.` ` Nevertheless, several parties argue that sections 2(b) of the 1934 Act and 601(c) of the 1996 Act prevent the Commission from exercising authority over intrastate  X_-alarm monitoring services. _ {O-ԍ  See, e.g., Ameritech comments at 6; BellSouth comments at 9; California Commission comments at 4. Section 2(b) provides that "nothing in this Act shall be construed to apply to or give the Commission jurisdiction with respect to . . . charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate  X -communications service . . . ."@!  yOk-ԍ 47 U.S.C.  152(b).@ In Louisiana PSC, the Supreme Court held that, in order to overcome section 2(b)'s limitation of Commission authority over intrastate service, Congress must either modify section 2(b) or grant the Commission additional authority over intrastate  X -services.&" 0  {O-ԍ  Louisiana PSC, 476 U.S. at 377. Of course, the Court also recognized the continuing validity of federal  {O-preemption of state regulation where interstate and intrastate services are inseverable. See id. at 375 n.4.&  X - 13.` ` As discussed above, we find that Congress, by the Act's use of the term "telephone exchange service," explicitly granted the Commission authority over intrastate  X{-alarm monitoring services for the purpose of section 275. Accordingly, consistent with the  Xf-Court's statement in Louisiana, we find that section 2(b) does not limit our authority over  XQ-intrastate alarm monitoring services. Consistent with our finding in the Local Competition  X<-Orderu#<  {Oy -ԍ  See Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC  {OC!-Docket No. 96-98, First Report and Order, 11 FCC Rcd 15499 (1996) (Local Competition Order), Order on  {O "-Reconsideration, 11 FCC Rcd 13042 (1996), further recon. pending, pet. for review pending sub nom. and  {O"-partial stay granted, Iowa Utilities Board v. FCC, No. 96-3221 and consolidated cases (8th Cir. filed Sept. 6,  {O#-1996), partial stay lifted in part, Iowa Utilities Board v. FCC, No. 96-3321 and consolidated cases, 1996 WL  yOk$-589284 (8th Cir. Oct. 15, 1996), Second Order on Reconsideration, FCC 96-476 (rel. Dec. 13, 1996) 61 Fed."k$"0*%%$" Reg. 66931 (Dec. 19, 1996).u and the NonAccounting Safeguards Order,[$<X {O -ԍ  NonAccounting Safeguards Order at  40.[ we find that in enacting section 275"<$0*%%ZZ*" after section 2(b) and addressing services that are intrastate in nature, Congress intended the express language of section 275 to take precedence over any limiting language in section  X-2(b).% {Om-ԍ  See, e.g., Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992) ("it is a commonplace of  {O7-statutory construction that the specific governs the general"); see also 2 J. Sutherland, Statutory Construction 22.34 (6th ed.) (where amended and original sections of a statute cannot be harmonized, the new provisions  {O -should prevail as the latest declaration of legislative will); American Airlines, Inc. v. Remise Industries, Inc., 494  {O -F.2d 196, 200 (2nd Cir. 1974). See also NonAccounting Safeguards Order at  41.Ĭ  X- 14.` ` We similarly are not persuaded that section 601(c) of the 1996 Act evinces an intent by Congress to preserve states' authority over intrastate alarm monitoring. Section 601(c) of the 1996 Act provides that the Act and its amendments "shall not be construed to modify, impair, or supersede Federal, State, or local law unless expressly so provided in such  XH-Act or amendments."&H yO-ԍ 1996 Act,  601(c)(1), 110 Stat. 56, 143 (to be codified as a note following 47 U.S.C.  152). As shown above, we conclude that section 275 expressly modifies the Commission's existing statutory authority and authorizes adoption of regulations implementing the requirements of section 275 that apply to incumbent LECs' provision of  X -both intrastate and interstate alarm monitoring service. pp  X -15.` ` We also find implausible the suggestion that we should interpret section 275 to apply broadly to all alarm monitoring services, but that the Commission's rulemaking authority under that section is limited to interstate services. Rather, we conclude that the Commission's rulemaking authority pursuant to section 275 is coextensive with the reach of the statute. As discussed below, the Commission possesses broad rulemaking authority to  Xb-implement and interpret provisions of the Communications Act.m'b2  {OE-ԍ  See infra at   RULES19 ש 2222 .m Nothing in section 275 or elsewhere in the Act deprives the Commission of this authority.  X-16.` ` We therefore find that section 275 and the Commission's authority thereunder apply to all alarm monitoring services interstate or intrastate and affirm our tentative conclusion that section 275 applies to interLATA and intraLATA alarm monitoring services. We further hold that the rules we establish to implement section 275 are binding upon the states and that states may not impose any requirements that are inconsistent with section 275 or the Commission's rules. Because we find that section 275 provides the Commission with direct authority over intrastate alarm monitoring services, we reject the argument of the New" '0*%%ZZ" York Commission that the Commission lacks authority to preempt inconsistent state rules  X-regarding intrastate alarm monitoring services.L( yOb-ԍ New York Commission comments at 2.L  X-v B.` ` Scope of Authority to Issue Rules to Implement Section 275   X-` ` 1. Background  X_- 17.` `  II.B. Section 275 contains several terms that are subject to varying interpretation.  XH-vThe NPRM sought comment on whether several provisions of section 275 should be  X3-clarified.C)3X {O< -ԍ NPRM at  6874.C  X -  X -` ` 2. Comments(#`  X - 18. ` ` BOCs generally argue that the statutory nonaccounting provisions relating to alarm monitoring services are complete and selfexecuting, and consequently that no federal  X -rules are required.*  {OD-ԍ  See Bell Atlantic reply at 12; Pacific Telesis comments at 23; SBC comments at 23; U S WEST  {O-comments at 35; see also USTA comments at 23, 56. The California Commission recommends that the Commission not issue "strict national rules," but should establish "guidelines for the states in these areas with sufficient explanation as to allow the states the ability to coordinate with the FCC's rules and  Xd-comply with the Act."T+dF yO[-ԍ California Commission comments at 2, 910.T AICC argues that the Commission should establish national rules  XM-interpreting section 275.C,M yO-ԍ AICC comments at 34, 20.C  X-` ` 3. Discussion  X-  X-19.` `  RULES In the NPRM, we identified areas of ambiguity in the requirements of section 275 that may benefit from the adoption of rules that clarify and implement those mandates. We find that Congress enacted in section 275 principles that can best be implemented if we give affected parties more specific guidelines concerning the requirements of that section, which will enable the Commission to carry out effectively and efficiently its enforcement obligations under the Communications Act. "i f ,0*%%ZZ"Ԍ X-20.` ` We reject the suggestion of the California Commission that we issue nonbinding "guidelines" that would be applied by the states if they so choose. Such an approach could result in inconsistent and uncertain application of the requirements of section 275, which may deter or hamper alarm monitoring service providers that wish to offer service on a nationwide basis.  Xv-21.` ` Based on the foregoing, we find, pursuant to the general rulemaking authority vested in the Commission by sections 4(i), 201(b), and 303(r) of the Communications Act, and consistent with fundamental principles of administrative law, that the Commission has the  X1-requisite authority to promulgate rules implementing section 275 of the Communications Act.  X -  X -22.` ` 22It is wellestablished that the Commission possesses authority to adopt rules to implement the requirements of the Communications Act. Sections 4(i), 201(b), and 303(r) of the Act authorize the Commission to adopt rules it deems necessary or appropriate in order to carry out its responsibilities under the Communications Act, so long as those rules are not  X -otherwise inconsistent with the Communications Act.-  {O -Ѝ  See United States v. Storer Broadcasting Co., 351 U.S. 192, 20203 (1956). đ Moreover, courts repeatedly have held  X-that the Commission's general rulemaking authority is "expansive" rather than limited..Z {O-Ѝ  National Broadcasting Co. v. United States, 319 U.S. 190, 219 (1943); see also FCC v. National Citizens  {Oe-Committee for Broadcasting, 436 U.S. 775, 793 (1978). In addition, it is wellestablished that an agency has the authority to adopt rules to administer  Xb-congressionally mandated requirements./&b {O-Ѝ See Morton v. Ruiz, 415 U.S. 199, 231 (1974) ("The power of an administrative agency to administer a congressionally created. . . program necessarily requires the formulation of policy and the making of rules to fill  {O[-any gap left, implicitly or explicitly, by Congress"); see also Chevron, U.S.A., Inc. v. Natural Resources Defense  {O%-Council, 467 U.S. 837 (1984).  Vl  X4- C.` ` Constitutional Issues   X-23.` `  II.C. BellSouth and U S WEST raise constitutional concerns with respect to our  X-implementation of section 275.0 yOD-ԍ BellSouth comments at 23; U S WEST reply at 23. These concerns were not raised in response to any  {O -inquiry in the NPRM. BellSouth contends that the Commission must be "circumspect" in its construction of section 275 because the prohibition on alarm monitoring services "impose[s an] impermissible prior restraint[] on BOCs' speech activities," in violation  X-of the First Amendment.N1  yOY$-ԍ BellSouth comments at 3.N Further, it maintains that section 275, as well as other sections of" 10*%%ZZR" the Act, are unconstitutional "bills of attainder" to the extent they single out BOCs by name  X-and impose restrictions on them alone.2 yOb-ԍ BellSouth states that singling out BOCs for specific treatment under the Act violates "Articles I and III of  {O*-the Constitution, and more specifically, the Bill of Attainder Clause, Art. I,  9, cl. 3." Id. Article I,  9, applicable to Congress, provides, in relevant part, that "[n]o Bill of Attainder or ex post facto Law shall be passed." U.S. Const. art. I,  9. A Bill of Attainder is a legislative act that applies "either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial." Black's Law Dictionary 150 (5th ed. 1979). Recognizing that we have no discretion to ignore Congress' mandate to apply sections 275, BellSouth urges us to construe these sections, and  X-others, narrowly.I3B yO -ԍ BellSouth comments at 3. I U S WEST concurs with BellSouth that section 275 is an unlawful bill of attainder and urges the Commission not to adopt any structural rules beyond the express terms  X-of the statute.4X yO-ԍ U S WEST reply at 23 (contending that "FCC rules adding to these statutory restrictions especially if adopted as a matter of statutory interpretation, not public interest analysis, would create a second violation of the Constitution").  X_-24.` ` Although decisions about the constitutionality of congressional enactments are  XH-generally outside the jurisdiction of administrative agencies,g5H  {O-ԍ See Johnson v. Robison, 415 U.S. 361, 368 (1974).g we have an obligation under Supreme Court precedent to construe a statute "where fairly possible to avoid substantial constitutional questions" and not to "impute to Congress an intent to pass legislation that is  X -inconsistent with the Constitution as construed by the [Supreme Court]."6  {O8-ԍ United States v. XCitement Video, 115 S. Ct. 464, 467, 469 (1994); see also NonAccounting Safeguards  {O-Order at  279. As BellSouth concedes, we have no discretion to ignore Congress' mandate respecting these sections or any  X -other sections of the Act.B7  yOf-ԍ BellSouth comments at 3.B Nevertheless, we find BellSouth's argument to be without merit. We find that the prohibition on the provision of alarm monitoring services in section 275 is not a restriction on BellSouth's speech under the First Amendment.  Xy-25.` ` Similarly, we reject BellSouth and U S WEST's argument that section 275 is an unconstitutional "bill of attainder" because the statute singles out BOCs by name and imposes restrictions on them alone. We conclude that section 275 is not an unconstitutional"K p70*%%ZZg"  X-bill of attainder simply because it applies only to the BOCs.8 {Oy-ԍ See Nixon v. Adm'r of Gen. Servs., 433 U.S. 425, 47172 (concluding that the fact that a statute applies only to a limited group does not automatically contravene the Bill of Attainder Clause). Rather, judicial precedent teaches that, in determining whether a statute amounts to an unlawful bill of attainder, we must consider whether the statute "further[s] nonpunitive legislative purposes," and whether  X-Congress evinced an intent to punish.9" {O-ԍ Selective Serv. Sys. v. Minnesota Pub. Interest Research Group, 468 U.S. 841, 852 (1984). We find no evidence, and BellSouth and U S WEST have offered none, that would support a finding that Congress enacted section 275 to punish the BOCs. Thus, we conclude that the section 275 restrictions imposed on BOCs do not violate the Bill of Attainder Clause.  XH-   III. ALARM MONITORING SERVICE DEFINED׃  X1-  X - A.` ` Scope of Section 275(e)  X -` ` 1. Background  X -  X -26.` `  III.  III.A. Section 275(e) defines "alarm monitoring service" as: Xa service that uses a device located at a residence, place of business, or other fixed  premises (1) to receive signals from other devices located at or about such premises regarding a possible threat at such premises to life, safety, or property, from burglary, fire, vandalism, bodily injury, or other emergency, and (2) to transmit a signal regarding such threat by means of transmission facilities of a [LEC] or one of its affiliates to a remote monitoring center to alert a person at such center of the need to inform the customer or another person or police, fire, rescue, security, or public safety  X-personnel of such threat . . . . @: yOT-ԍ 47 U.S.C.  275(e).@  (#  X-The NPRM tentatively concluded that the provision of underlying basic tariffed telecommunications services does not fall within the definition of alarm monitoring service  X-under section 275(e).A;D {O -ԍ  NPRM at  69. A The NPRM further tentatively concluded that Ameritech's alarm monitoring service falls within the definition in section 275(e) and is therefore grandfathered  Xi-under section 275(a)(2). The NPRM sought comment on whether any other services provided"i ;0*%%ZZ" by incumbent LECs should be considered alarm monitoring services under section 275(e) and  X-grandfathered under section 275(a)(2).?< {Ob-ԍ  Id. at  70.?  X- ` ` 2. Comments  X-   X-27. ` ` AICC, Entergy, and several of the BOCs agree with our tentative conclusion  Xv-that alarm monitoring service is an information service.=vZ {O -ԍ AICC comments at 1112; Entergy reply at 34.  See, e.g., Ameritech comments at 24; BellSouth comments at 2; SBC comments at 18. In addition, all parties commenting on the issue agree that Ameritech's service is grandfathered as an alarm monitoring service  XH-under section 275(a)(2).>H yO -ԍ  AICC comments at 1315; Ameritech comments at 2526; Entergy reply at 34; MCI reply at 910.  X -28.` ` There is also broad agreement that the provision of underlying basic  X -transmission services does not constitute the provision of alarm monitoring service.? D yO-ԍ AICC comments at 1112; Ameritech comments at 2526; Bell Atlantic comments at 1314; BellSouth comments at 22; Entergy reply at 34; SBC comments at 18. U S WEST argues, however, that transmission services used for alarm monitoring, such as its "ScanAlert" and "Versanet" services, are alarm monitoring services because both services possess the characteristics and perform the functions described in section 275(e). Because US WEST provided both services as of November 30, 1995, it argues that it is exempt under  X-section 275(a)(2) from the fiveyear prohibition on offering alarm monitoring services.L@ yO-ԍ U S WEST comments at 2831. L Several BOCs, interexchange carriers, and members of the alarm monitoring industry disagree. They argue that services such as the services identified by U S WEST provide only a component of alarm monitoring service and therefore do not qualify as alarm monitoring  X4-services under section 275(e).A4,  {O-ԍ  See, e.g., AICC comments at 1112; Ameritech comments at 2526; BellSouth comments at 22; NYNEX comments at 25; SBC comments at 18; Entergy reply at 34; MCI reply at 910.  Many small alarm monitoring companies also dispute U S  X-WEST's position on similar grounds.B  yOT!-ԍ  We received letters from the following alarm monitoring service providers disputing U S WEST's interpretation of section 275(e): Robert R. Bean, President/CEO, Alert Holdings Group, Inc.; Walter L. Bent, President, Checkpoint Ltd.; Robert J. Berlin, Managing Partner, Morse Signal Devices; Robert A. Bonifas, President/CEO, Alarm Detection Systems, Inc.; David W. Carter, President/CEO, NSS National Security Service; Douglas DeMoss, President, Safeguard Alarms, Inc.; Michael L. Duffy, President, Per Mar Security Services;"t$A0*%%$" Patrick M. Egan, President, Commonwealth Security Systems, Inc.; Robert M. Gallagher, President, SVI Security Systems, Inc.; Donald J. George, President, George Alarm Company, Inc.; Larry Halpern, President, Safe Systems; Malcolm B. Hammond, President, Security Systems by Hammond, Inc.; Jerry D. Howe, President, Peak Alarm Company, Inc.; Lester D. Jones, Director of Operations, Valley Burglar & Fire Alarm Co., Inc.; Ronald D. LaFontaine, CEO, Security Systems, Inc.; James W. Lees, CEO/Treasurer, Sentry Protective Systems; Jerry J. Linder, President, ElectroSecurity Corporation; John Lombardi, President, Commercial Instruments & Alarm Systems, Inc.; Kirk D. MacDowell, Executive Vice President, Post Alarm Systems, Inc.; Charles T. May, President, Smith Alarm Systems; Larry McMillen, President, Midwest Alarm Company, Inc.; John J. Rooney, President/CEO, Sentry Alarm Systems of America, Inc.; Ralph W. Sevinor, President, Wayne Alarm Systems; Michael A. Boswell, Sales Manager, Vector Security; Jim D. Wade, President, Atlas Security Service, Inc.; Walter G. Wargacki, President, Merchant's Alarm Systems.  " ( B0*%%ZZ)"Ԍ X-ԙ` ` 3. Discussion  X-  X-29.` ` We find that a service provided by incumbent LECs to transmit information for use in connection with an alarm monitoring service, such as U S WEST's "ScanAlert" or "Versanet," does not constitute an alarm monitoring service as defined by the Act. We further find, for the reasons discussed below, that the service provided by Ameritech constitutes an alarm monitoring service, as defined by section 275(e).  XH-30.` `  REF2 Incumbent LEC Services Used to Transmit Alarm Monitoring Information. We conclude that an incumbent LEC that provides a service used to transmit alarm monitoring information used by a third party to furnish alarm monitoring service is not engaged in the provision of alarm monitoring service under the Act. U S WEST argues that its basic service  X -"ScanAlert" and enhanced "Versanet"C$ (  yO-ԍ  VERSANET  "Versanet" is treated as an enhanced transmission service used by alarm monitoring providers because it  {O-involves code and protocol conversion. See Applied Spectrum Technologies Inc., ENF No. 856, 58 R.R. 2d 881  {OW-(Com. Car. Bur., July 3, 1985); see also Mountain States Tel. and Tel. Co., AAD 61104 1986 WL 291403 (Com. Car. Bur., Apr. 2, 1986). service qualify as alarm monitoring services under section 275(e) because these services "use" a device to receive signals from other devices at the customer's premises and transmit a signal to a remote monitoring center. U S WEST neither operates the monitoring center nor provides the "devices" that transmit the alarm signal. Rather, U S WEST only provides the transmission link between the two locations.  Xb-31.` ` The definition of alarm monitoring service in section 275(e) does not specify whether the "device" that transmits the information or the service provided by the "remote monitoring center" that receives the information must be offered by a BOC in order for its service to qualify as an alarm monitoring service. Nor does the legislative history address this issue. We find, however, that a service that only transmits a signal from the monitored premises to the monitoring center, and therefore does not "use a device . . . to receive signals from other devices located at or about such premises . . . . " cannot qualify as alarm monitoring service regardless of whether it is regulated as a telecommunications service or an"C0*%%ZZ"  X-information service.@D yOy-ԍ 47 U.S.C.  274(e).@ Since alarm monitoring service is offered throughout the country by alarm companies that use BOCprovided basic telephone service to provide transmission  X-between the monitored premises and the alarm monitoring center,EX {O-ԍ See Letter from Danny E. Adams, Counsel, AICC, to William F. Caton, Acting Secretary, FCC (Nov. 27, 1996) at 12. the statutory interpretation advocated by U S WEST would grandfather all BOCs and, consequently, would make none  X-subject to the prohibition in section 275(a).@F yO -ԍ 47 U.S.C.  275(a).@ We reject this interpretation because it would render section 275(a) superfluous. For the same reason, we also reject U S WEST's contention that an information service used to transmit signals used for alarm monitoring, such as its "Versanet" service, should be classified as an alarm monitoring service merely  XH-because it includes an enhanced component.G&HB {O;-ԍ As discussed above, supra note  INFO10 , in the NonAccounting Safeguards Order, the Commission held that all services that the Commission has previously considered to be enhanced services are information services.  {O-"Versanet" is treated as an information service because it employs protocol processing, an enhanced service. See  {O-also supra note VERSANET67.  Whether a particular service qualifies as an enhanced or information service does not necessarily qualify it as an alarm monitoring service. We therefore affirm our tentative conclusion that an incumbent LEC that provides a basic telecommunications service that is used by third parties to offer an alarm monitoring service is not engaged in the provision of an alarm monitoring service. We further find that an incumbent LEC that provides an enhanced service that transmits an alarm signal to a third party is not engaged in the provision of alarm monitoring service. We find that our conclusion will satisfy Congress's intent to impose a fiveyear restriction on BOC entry into the alarm monitoring services market and the associated protections to nonaffiliated alarm monitoring providers.  XK-32.` ` We clarify, however, that the prohibition on BOC provision of alarm monitoring services in section 275(a) applies only to alarm monitoring services as defined in section 275(e). Neither U S WEST nor any other BOC is precluded from continuing to provide telecommunications and information services used by unaffiliated firms to provide alarm monitoring service. We also clarify, in accord with BellSouth's request, that "service offerings such as remote meter reading . . . , remote monitoring of customer premises equipment (CPE) for maintenance and other purposes, or other services in which the purpose  X-of the service offering is not to alert public safety personnel of [a] threat"`H0  yO#-ԍ BellSouth comments at 24-25; BellSouth reply at 17-18.` do not constitute alarm monitoring services because such services do not fall within the definition of alarm" H0*%%ZZQ" monitoring service in section 275(e). Since section 275(e) defines alarm monitoring service specifically to include transmission of signals "regarding a possible threat at such premises to life, safety, or property from burglary, fire, vandalism, bodily injury or other injury . . ." we find that service offerings that do not involve a possible threat, such as those BellSouth mentions, do not fall within the definition in section 275(e).  Xv- 33.` `  ATECH Ameritech's Service. Ameritech's" SecurityLink" service was described in its 1995 CEI plan as "the sale, installation, monitoring and maintenance of intrusion and motion detection systems, fire detection systems, and other types of monitoring and control systems, .. . the transmission of a nonvoice message from the residential, commercial or governmental alarm system to a central monitoring station . . . [and] a voice call placed by personnel at the monitoring station to the police or fire department and to persons designated  X -to be contacted in the event of an alarm . . . ."I  {Oe -ԍ  CEI Plan Order, 10 FCC Rcd at 13770 (1995) (approving Ameritech's CEI plan for "SecurityLink" service). This service fits squarely within the definition of alarm monitoring service in section 275(e). We therefore find that Ameritech's "SecurityLink" service falls within the definition of an alarm monitoring service under section 275(e). Since Ameritech is the only BOC that was authorized to provide alarm monitoring  X-service as of November 30, 1995,9J" {Oc-ԍ  Id.9 we find that Ameritech is the only BOC that qualifies for  Xy-"grandfathered" treatment under section 275(a)(2).CKy yO-ԍ 47 U.S.C.  275(a)(2).C  Xb-  XK- B. ` ` Meaning of "Provision" in Section 275(a) (#` ` `  X- ` ` 1. Background  X-!34.` `  III.B.  III.B. Section 275(a)(1) prevents BOCs from "engag[ing] in the provision" of alarm monitoring service until February 8, 2001. Section 275(b) places certain nondiscrimination obligations on all incumbent LECs "engaged in the provision" of alarm monitoring services.  X-In the NPRM, we sought comment on the types of activities that constitute the "provision" of alarm monitoring services subject to this section. We asked parties to address, with specificity, the levels and types of involvement in alarm monitoring that would constitute "engag[ing] in the provision" of alarm monitoring service. We tentatively concluded that resale of alarm monitoring service constitutes the provision of such service and sought comment on whether, among other things, billing and collection, sales agency, marketing and/or various compensation arrangements, either individually or collectively, would constitute the provision of alarm monitoring. We also asked parties to address any other" DK0*%%ZZ[" factors that may be relevant in determining whether an incumbent LEC, including a BOC, is  X-providing alarm monitoring service under section 275.@L {Ob-ԍ NPRM at  71.@  X- ` ` 2. Comments  X-   X-"35.` ` All of the commenters on this issue agree with our tentative conclusion that the resale of alarm monitoring service constitutes the provision of alarm monitoring under section  X_-275.M_Z {Oj -ԍ See, e.g., AICC comments at 17; AICC reply at 910; Ameritech comments at 27; Bell Atlantic comments at 1314; Entergy reply at 3. Most BOCs maintain, however, that billing and collection, sales agency, marketing, and/or various compensation arrangements, either individually or collectively, do not rise to  X1-the level of "engag[ing] in the provision" of alarm monitoring service.2N1 yO-ԍ Bell Atlantic comments at 1314; BellSouth comments at 2324; BellSouth reply at 18; SBC comments at  yO^-1920 ; U S WEST reply at 22 (acting as a sales agent for an unaffiliated alarm monitoring company is not the  {O&-provision of alarm monitoring services under section 275); but see Ameritech comments at 2728 (asserting that financial arrangements must be looked at on a casebycase basis to see if the compensation is consistent with the value of the services rendered).2 Other commenters, in contrast, assert that, because involvement in sales agency, marketing activities, and/or certain financial arrangements may provide an incumbent LEC with an incentive to favor one alarm monitoring company over another, such activities constitute the provision of alarm  X -monitoring.wO f  yO-ԍ AICC comments at 17, AICC reply at 9; Entergy reply at 4; MCI reply at 1011.w To interpret the term "provision" otherwise, according to some parties, may  X -render the fiveyear prohibition on BOC provision of alarm monitoring meaningless.P  {Oe-ԍ See, e.g,  Letter from Malcolm B. Hammond, President, Security Systems by Hammond, Inc., to William F. Caton, Acting Secretary, FCC (Sept. 13, 1996); Letter from Robert R. Bean, President/CEO, Alert Holdings Group, Inc., to William F. Caton, Acting Secretary, FCC (Sept. 16, 1996); Letter from Michael L. Duffy, President, Per Mar Security Services, to William F. Caton, Acting Secretary, FCC (Sept. 18, 1996) (Per Mar  yO-Letter).   X-+)ZDefault Paragraph Fo+%VDefault Paragraph Fo% ` ` 3. Discussion  Xb-#36.` ` We conclude, consistent with our reading of the statutory definition of alarm monitoring service, that an incumbent LEC, including a BOC, is engaged in the "provision" of alarm monitoring service if it operates the "remote monitoring center" in connection with  X-the provision of alarm monitoring service to end users.MQ {Ov$-ԍ See 47 U.S.C.  275(e)(2).M As noted above, if an incumbent":Q0*%%ZZ " LEC is merely providing the CPE and/or the underlying transmission service, it is not engaged in the provision of alarm monitoring service under section 275. We further find, consistent with Commission precedent, that the resale of a service constitutes the provision of  X-that service.dR^ {O4-ԍ Regulatory Policies Concerning Resale and Shared Use of Common Carrier Service and Facilities,  {O-Report and Order, 60 FCC 2d 261 (1976), recon., 62 FCC 2d 588 (1977), aff'd sub nom. AT&T v. FCC, 572  {O-F.2d 17 (2d Cir.), cert. denied, 439 U.S. 875 (1978).d We therefore affirm our tentative conclusion that the resale of alarm monitoring service constitutes the provision of such service under section 275. We also conclude that BOC performance of the billing and collection for a particular alarm monitoring company does not, in itself, constitute the provision of alarm monitoring service under section 275(a). Indeed, BOCs perform billing and collection for many services that they themselves  XH-do not offer and, in some cases, are barred from offering.oSZH yO -ԍ For example, although BOCs are not permitted to provide inregion interLATA services, they currently  {O -provide billing and collection services on behalf of long distance carriers. See also SBC reply at 19 n.61 (stating that it currently provides billing and collection for alarm monitoring services).o  X -$37.` ` We find that BOC participation in sales agency, marketing, and/or various compensation arrangements in connection with alarm monitoring services does not necessarily constitute the provision of alarm monitoring under section 275(a). Whereas other provisions of the Act explicitly bar BOCs from engaging in such activities in connection with other services, section 275 does not, by its terms, prohibit a BOC from acting as a sales agent or  X -marketing alarm monitoring services.dTZ  yOh-ԍ We note that sections 272 and 274 explicitly bar BOCs from engaging in marketing activities on behalf  {O0-of, or with, the separate affiliates required by those sections. See 47 U.S.C.  272(g)(2), 274(c)(1)(B). See also  yO-SBC comments at 20.d We therefore reject AICC's suggestion that we should flatly prohibit BOCs from entering into arrangements to act as sales agents on behalf of alarm monitoring service providers or to market on behalf of, or in conjunction with, alarm  Xb-monitoring services providers.HUb2  {OE-ԍ See AICC comments at 17.H  X4-%38.` ` We recognize, however, that there may be certain situations where a BOC is not directly providing alarm monitoring service, but its interests are so intertwined with the interests of an alarm monitoring service provider that the BOC itself may be considered to be  X-"engag[ed] in the provision" of alarm monitoring in contravention of section 275(a).~V  {Od"-ԍ See, e.g., AICC comments at 17; AICC reply at 1011; Entergy reply at 4.~ We conclude therefore that we will examine sales agency and marketing arrangements between a BOC and an alarm monitoring company on a casebycase basis to determine whether they"V V0*%%ZZ"  X-constitute the "provision" of alarm monitoring service.W {Oy-ԍ See AICC comments at 18 (asserting that certain compensation arrangements, such as compensation for billing and collection services, may be used as a vehicle for revenuesharing). In evaluating such arrangements, we will take into account a variety of factors including whether the terms and conditions of the sales agency and marketing arrangement are made available to other alarm monitoring companies on a nondiscriminatory basis.  X-&39.` ` In addition, we will also consider how the BOC is being compensated for its services. For example, if a BOC, acting as a sales agent or otherwise marketing the services of a particular alarm monitoring service provider, has a financial stake in the commercial success of that provider, such involvement with the alarm monitoring company may constitute the "provision" of alarm monitoring service. Such a BOC may be unlawfully providing alarm monitoring services if its compensation for marketing such services is based on the net revenues of an alarm monitoring service provider to which the BOC furnishes such marketing services. In that circumstance, a BOC's compensation would not be tied to its performance in marketing the unaffiliated firm's service, but rather would depend on the unaffiliated firm's performance in offering alarm monitoring service. We find that this approach to evaluating sales agency and marketing arrangements will preserve the strength of the fiveyear restriction on BOC entry into the alarm monitoring services market and the associated protections to nonaffiliated alarm monitoring providers.  XK-'40.` ` Some parties have noted that the question of what constitutes "engag[ing] in the provision" of alarm monitoring service under section 275(a) is at issue in the context of Southwestern Bell Telephone Company's (SWBT) comparably efficient interconnection (CEI)  X-plan to provide "security services."wX^" {O-ԍ See SWBT's Plan for Security Service, CC Docket Nos. 85229, 90623, and 9520, filed Apr. 4, 1996;  {O-Pleading Cycle Established for Comments on CEI Plan for Security Service, CC Docket Nos. 85229, 90623,  {Om-and 9520, Public Notice, DA 96645 (rel. Apr. 26, 1996). w The lawfulness of SWBT's security services is a factspecific determination that is outside the scope of this rulemaking. We will not address, therefore, any comments filed in this proceeding that address the merits of SWBT's CEI plan. The SWBT CEI plan proceeding, however, will be resolved consistent with the rules and policies adopted in this Order.  X|-(41.` ` Finally, we reject BellSouth's contention that section 275(a)(2) permits nongrandfathered BOCs to engage in the provision of alarm monitoring to the extent that they do not obtain an "equity interest in" or "financial control of" an alarm monitoring service"NHX0*%%ZZ"  X-provider.CY yOy-ԍ BellSouth comments at 24.C We find that section 275(a)(2) pertains exclusively to alarm monitoring activities  X-by a grandfathered BOC and, therefore, has no applicability to nongrandfathered BOCs.OZX {O-ԍ See Ameritech reply at 4.O  X-_` IV. EXISTING ALARM MONITORING SERVICE PROVIDERS ׃  X- A.` ` Background  Xv-   X_-)42.` ` IV.Section 275(a)(1) generally prohibits the BOCs from engaging in the provision of alarm monitoring services until February 8, 2001. Section 275(a)(2) allows BOCs that _were providing alarm monitoring services as of November 30, 1995, to continue to do so, but provides that "[s]uch Bell operating company or affiliate may not acquire any equity interest in, or obtain financial control of, any unaffiliated alarm monitoring service entity after November 30, 1995, and until 5 years after the date of enactment of the Telecommunications Act of 1996, except that this sentence shall not prohibit an exchange of customers for the  X -customers of an unaffiliated alarm monitoring service entity." The NPRM sought comment on whether regulations are needed to define further the terms of section 275(a)(2)d and, in  X-particular, on what is meant by the terms "equity interest" and "financial control."@[ {O--ԍ  NPRM at  72.@ d It also sought comment on the conditions under which an "exchange of customers" is permitted by  Xd-the Act.3\d| {O-ԍ  Id.3  X6- B. ` ` Comments  X- *43. ` ` Ameritech argues that section 275(a)(2) prohibits only acquisition of an "equity interest" in or "financial control" of a legally distinct alarm monitoring entity and that the statute does not preclude Ameritech from acquiring the assets of an unaffiliated alarm  X-monitoring service entity.] {O-ԍ Ameritech comments at 29; see also Letter from Antoinette Cook Bush, Counsel for Ameritech, to William F. Caton, Acting Secretary, FCC (Feb. 19, 1997). AICC argues, in contrast, that section 275(a)(2) should be read broadly to prohibit a grandfathered BOC from expanding its alarm monitoring business  X-through acquisitions of any kind.>^h  yO#-ԍ AICC comments at 20.> AICC asserts, therefore, that we should interpret the term "financial control" in section 275(a)(2) to preclude a purchase of any or all of the assets of an"~ ^0*%%ZZP"  X-unaffiliated alarm monitoring service entity.:_ {Oy-ԍ Id. at 25.: AICC also contends that section 275(a)(2) was not intended to dictate the form of Ameritech's acquisitions, but rather to prohibit them  X-entirely.`Z {O-ԍ Id. at 2025; see also Letter from AICC to Reed E. Hundt, Chairman, FCC (Jan. 31, 1997). A number of alarm monitoring companies also oppose Ameritech's recent purchase of Circuit City's alarm monitoring business and Ameritech's efforts to purchase other alarm monitoring businesses. They state that this type of activity, if unchecked, will render the  X-fiveyear prohibition in section 275(a)(2) meaningless.a$ {O* -ԍ  See, e.g., Letter from Kirk D. MacDowell, Executive Vice President, Post Alarm Systems, to William F.  {O -Caton, Acting Secretary, FCC (Sept. 16, 1996); see also Letter from Danny E. Adams, Counsel to the AICC, to Regina Keeney, Chief, Common Carrier Bureau, FCC (Dec. 24, 1996); Letter from Letitia Chambers, Chambers Associates, Inc., to Reed E. Hundt, Chairman, FCC (Feb. 19, 1997).  X_- C.` ` Discussion  X1-  +44. ` ` We conclude that regulations further interpreting the terms of section 275(a)(2) are not needed at this time. Both Ameritech and AICC offer differing interpretations of these terms and disagree on the applicability of section 275 in the context of a specific factual  X -situation.hb  {Ou-ԍ See AICC comments at 2026; Ameritech comments at 2830.h These circumstances have led us to conclude that the scope of section 275(a)(2) is better addressed on a casebycase basis where the Commission is able to consider all of the facts that may apply to a particular transaction.   X- _2 V. NONDISCRIMINATION SAFEGUARDS׃  Xy-  Xb- A.` ` Background  XK-  X4-,45.` ` V.Section 275(b)(1) requires an incumbent LEC engaged in the provision of alarm monitoring services to "provide nonaffiliated entities, upon reasonable request, with the _network services it provides to its own alarm monitoring operations, on nondiscriminatory  X-terms and conditions."c$j  yO -ԍ 47 U.S.C.  275(b)(1). Our discussion in this section is limited to section 275(b)(1). The implementation  {O -of section 275(b)(2) is addressed in Implementation of the Telecommunications Act of 1996: Accounting  {O!-Safeguards Under the Telecommunications Act of 1996, CC Docket No. 96150, Report and Order, FCC 96490 (rel. Dec. 24, 1996). Prior to the Act, alarm monitoring services were regulated as enhanced services and were subject to the nondiscrimination requirements established under"V c0*%%ZZ"  X-the Commission's Computer IId^ {Oy-ԍ Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer II), 77 FCC 2d 384  {OC-(1980) (Final Order), recon., 84 FCC 2d 50 (1981), aff'd sub nom. Computer and Communications Industry  {O -Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983). and Computer III regimes.Te {O-ԍ See supra note  III8 .T Under Computer III and Open  X-Network Architecture,ff {O-ԍ See Filing and Review of Open Network Architecture Plans, 4 FCC Rcd 1 (1988) (BOC ONA Order),  {O-recon., 5 FCC Rcd 3084 (1990) (BOC ONA Reconsideration Order); 5 FCC Rcd 3103 (1990) (BOC ONA  {O -Amendment Order), erratum, 5 FCC Rcd 4045, pets. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir.  {Oz -1993), recon., 8 FCC Rcd 97 (1993) (BOC ONA Amendment Reconsideration Order"); 6 FCC Rcd 7646 (1991)  {OD -("BOC ONA Further Amendment Order); 8 FCC Rcd 2606 (1993) (BOC ONA Second Further Amendment  {O -Order), pet. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir. 1993) (collectively referred to as the  {O -ONA Proceeding). f BOCs have been permitted to provide enhanced services on an  X-integrated basis. Moreover, BOCs have been required to provide at tariffed rates nondiscriminatory interconnection to unbundled network elements used to provide enhanced  X-services.Rg  {O'-ԍ See Phase I Order, 104 FCC 2d 958.R  Xz--46.` ` We noted in the NPRM that sections 201 and 202 of the Communications Act  Xe-already place significant nondiscrimination obligations on common carriers.@he`  {Ov-ԍ NPRM at  74.@ We concluded  XN-that the Computer III nondiscrimination provisions continue to apply to the extent they are  X9-not inconsistent with the nondiscrimination requirements of section 275(b)(1).3i9 {O-ԍ Id.3 We sought comment on whether the existing nondiscrimination and network unbundling rules in  X -Computer III, as they apply to BOC provision of alarm monitoring service, are consistent with the requirements of section 275 and whether they should be applied to all incumbent  X -LECs for the provision of alarm monitoring.3j  {O-ԍ Id.3 We also sought comment on whether and what types of specific regulations are necessary to implement section 275(b)(1), to the extent  X -that parties argue that the nondiscrimination provisions of Computer III and ONA are  X-inconsistent or should not be applied.3k {Oc"-ԍ Id.3 "k0*%%ZZ"Ԍ X- B.` ` Comments   X-.47.` ` Commenters, including a number of BOCs, argue that the language of section 275(b)(1) is sufficiently clear and that there is no need for the Commission to adopt  X-additional rules to implement this provision.l {O-ԍ  See, e.g., Ameritech comments at 31; BellSouth comments at 25; Cincinnati Bell comments at 3; SBC comments at 21; USTA comments at 2. If the Commission nonetheless adopts rules to implement section 275(b)(1), SBC argues that "those rules must apply equally to all  Xv-incumbent LECs,"=mv" yOI -ԍ SBC comments at 21.= while Cincinnati Bell would exempt "any LEC with less than 2% of the  X_-nation's access lines."Hn_ yO -ԍ Cincinnati Bell comments at 6.H  X1-/48. ` ` AICC asserts that the nondiscrimination requirement of section 275(b)(1) does not require an incumbent LEC to provide network services that the LEC does not use in its  X -own alarm monitoring operations.Co B yO-ԍ AICC comments at 28 n.51.C U S WEST argues that if an incumbent LEC is not providing alarm monitoring services, it is not subject to the nondiscrimination requirement of  X -section 275(b)(1).?p  yOX-ԍ U S WEST reply at 24.?  X -049.` ` AICC recommends that we interpret the term "network services" in section 275(b)(1), like the term "network elements" in section 251(c), broadly to include "not only traditional telecommunications services, but also the features, functionalities and capabilities  Xb-available through those services."Uqbb  yOu-ԍ  AICC comments at 28 n.50.U AICC argues that section 275(b)(1) imposes obligations on incumbent LECs that are "above and beyond" the nondiscrimination requirements of  X4-sections 201 and 202.:r4  {O-ԍ Id. at 27.:  X- 150.` ` Almost all commenters addressing the issue agree that the Computer III/ONA nondiscrimination requirements are consistent with section 275(b)(1) and contend that we  X-should continue to apply them to BOC intraLATA alarm monitoring services.s  {O$-ԍ  See, e.g., AICC comments at 28; AT&T comments at 22; AT&T reply at 2223; BellSouth comments at 25; MCI comments at 8. AT&T"s0*%%ZZ"  X-would extend the Computer III/ONA requirements to all incumbent LECs.Vt yOy-ԍ AT&T comments at 2223; AT&T reply at 2223.V Ameritech,  X-however, asserts that the Computer III/ONA rules have "outlived their usefulness given the  X-robust state of competition" in the enhanced services market.FuX yO-ԍ Ameritech comments at 3132.F Similarly, although it  X-supports continued application of Computer III/ONA requirements to BOC provision of  X-intraLATA alarm monitoring services, MCI asserts that they are inadequate to pr#Xw PcXP#event access  X-discrimination.<v yO, -ԍ MCI comments at 8.< Further, AICC notes that there is no evidence that Congress intended to  X|-repeal the Computer III/ONA requirements for alarm monitoring services.>w|x yO -ԍ AICC comments at 27.>  XP- ` ` C. Discussion  X" -251.` ` Meaning of Section 275(b)(1). We conclude that no rules are necessary to implement section 275(b)(1), based on the record before us; we will reconsider this decision if circumstances warrant.   X -352.` ` As noted above, section 275(b)(1) obligates an incumbent LEC to provide nonaffiliated entities the same network services it provides to its own alarm monitoring  X-operations on nondiscriminatory terms and conditions. We find that this nondiscrimination requirement does not require an incumbent LEC to provide network services that the LEC does not use in its own alarm monitoring operations. In addition, we agree with U S WEST that, if an incumbent LEC is not providing alarm monitoring services, it is not subject to the  X<-nondiscrimination requirement of section 275(b)(1).?x< yO-ԍ U S WEST reply at 24.?  X-453.` ` We also conclude that the nondiscrimination requirement of section 275(b)(1)  X-is independent of the nondiscrimination requirement of section 202(a).y yO@-ԍ AICC comments at 2728 n.50 (comparing the obligation to provide network services in section 275(b)(1) with the requirement to unbundle network elements in section 251(c)(3)). Section 275(b)(1) requires incumbent LECs to provide nonaffiliated entities, upon reasonable request, "network  X-services . . . on nondiscriminatory terms and conditions."Cz  yOj#-ԍ 47 U.S.C.  275(b)(1).C Section 202(a) prohibits "any unjust and unreasonable discrimination . . . , or . . . any undue or unreasonable preference or" z0*%%ZZ"  X-advantage" by common carriers.@{ {Oy-ԍ Id.  202(a).@ Because the section 275(b)(1) nondiscrimination bar, unlike that of section 202(a), is not qualified by the terms "unjust and unreasonable," we  X-conclude that Congress intended a more stringent standard in section 275(b)(1).#|Z yO-ԍ This conclusion is consistent with our interpretation of similar language in sections 251(c)(2) and  {O-272(c)(1). See Local Competition Order at 15612,  217; NonAccounting Safeguards Order at  197. #  X-554.` ` We interpret the term "network services" to include all telecommunications services used by an incumbent LEC in its provision of alarm monitoring service. We do not find that this section requires incumbent LECs to provide information services or other services that use LEC facilities or features not part of the LECs' bottleneck network because  XH-there is little danger of discrimination in the provision of such services.[}H {O -ԍ  See Phase I Order, 104 FCC 2d at 958.[ We also decline to interpret the term "network services" as we do the term "network elements," to include "features, functionalities and capabilities available through those services," as AICC  X -suggests.A~ F yO-ԍ AICC comments at 2728.A Our definition of "network elements" is based on the statutory definition of that term, and we find no basis in section 275 or elsewhere in the Act for the definition of  X -"network services" advocated by AICC.  {O\-ԍ  See 47 U.S.C.  153(29). See also Local Competition Order at 1561617,  22630.  X -655.` ` Computer III/ONA Requirements and Section 275(b)(1). We also conclude that  X-the Computer III/ONA requirements are consistent with the requirements of section  X}-275(b)(1).}h  {O-ԍ See, e.g., AICC comments at 28; Ameritech comments at 32; BellSouth comments at 25; MCI comments  {O`-at 8. See also AT&T comments at 22. We affirm our conclusion, therefore, that the Computer III/ONA requirements  Xh-continue to govern the BOCs' provision of alarm monitoring services.h  {O-ԍ GTEWe note that GTE is subject to many of the Computer III/ONA requirements that apply to the BOCs.  {O-Specifically, GTE must file an ONA plan and various ONA reports with the Commission, as well as comply with the customer proprietary network information, operations support systems, network disclosure, and  {O9 -nondiscrimination in installation and maintenance rules established under Computer III. See Application of Open  {O!-Network Architecture and Nondiscrimination Safeguards to GTE Corporation, CC Docket No. 92-256, Report and Order, 9 FCC Rcd 4922 (1994).  In addition, we find that the nondiscrimination requirements of section 275(b)(1) apply to the BOCs' provision of both intraLATA and interLATA alarm monitoring services, as well as other incumbent LECs' provision of alarm monitoring services. The parties have not indicated that there is any"#D0*%%ZZG"  X-inconsistency between the nondiscrimination requirements of Computer III/ONA and section  X-275(b)(1). Section 275(b)(1), moreover, does not repeal or otherwise affect the Computer  X-III/ONA requirements. We will consider in the Commission's Computer III Further Remand  X-proceeding whether the Computer III/ONA requirements need to be revised or eliminated. For  X-the same reason, we also decline to extend the Computer III/ONA requirements to all  X-incumbent LECs, as recommended by AT&T.V yO-ԍ AT&T comments at 2223; AT&T reply at 2223.V  Xi- R VI. PROCEDURAL MATTERS  l  X;-lU A.` ` Final Regulatory Flexibility Certification   X -756.` ` VI. VI.A. The Commission certified in the NPRM that the conclusions it proposed to adopt would not have a significant economic impact on a substantial number of small entities  X -because the proposed conclusions did not pertain to small entities.@ X {O-ԍ NPRM at  87.@ No comments were received in response to the Commission's request for comment on its certification. For the reasons stated below, we certify that the conclusions adopted herein will not have a  X-significant economic impact on a substantial number of small entities.? yO7-ԍ 5 U.S.C.  605(b).? This certification conforms to the Regulatory Flexibility Act (RFA), as amended by the Small Business  Xn-Regulatory Enforcement Fairness Act of 1996 (SBREFA).nz {O-ԍ Id.  601611. SBREFA was enacted as Title II of the Contract With America Advancement Act of 1996 (CWAAA), Pub. L. No. 104121, 110 Stat. 847 (1996).  X@-857.` ` The RFA provides that the term "small business" has the same meaning as the  X)-term "small business concern" under the Small Business Act.) yO-ԍ 5 U.S.C.  601(3). The term "small entity" is a generic term encompassing the terms "small business,"  {Ov-"small organization," and "small governmental jurisdiction" under the RFA. See 5 U.S.C.  601(6). The Small Business Act defines a "small business concern" as one that is independently owned and operated; is not dominant in its field of operation; and meets any additional criteria established by the Small  X-Business Administration (SBA).C.  yO!-ԍ 15 U.S.C.  632(a)(1).C SBA has not developed a definition of "small incumbent LECs." The closest applicable definition under SBA rules is for Standard Industrial" 0*%%ZZ"  X-Classification (SIC) code 4813 (Telephone Communications, Except Radiotelephone).$ {Oy-ԍ See Executive Office of the President, Office of Management and Budget, Standard Industrial  {OC-Classification Manual 282 (1987) (stating that SIC code 4813 includes "[e]stablishments primarily engaged in furnishing telephone voice and data communications . . . [or] leasing . . . methods of telephone transmission . . . and reselling . . . to others"). The SBA has prescribed the size standard for a "small business concern" under SIC code 4813 as  X-1,500 or fewer employees.A yO7-ԍ 13 C.F.R.  121.201.A  X-958.` ` Many of the conclusions adopted in this Order apply only to the BOCs which, because they are large corporations that are dominant in their field of operation and have more than 1,500 employees, do not fall within the SBA's definition of a "small business concern." Some of the conclusions adopted in this Order apply, however, to all incumbent LECs. Some of these incumbent LECs may have fewer than 1,500 employees and thus meet the SBA's size standard to be considered "small." Because such incumbent LECs, however, are either dominant in their field of operations or are not independently owned and operated, consistent with our prior practice, they are excluded from the definition of "small entity" and  X -"small business concern."y D {O-ԍ See Local Competition Order at 1614445, 16150,  13281330, 1342.y Accordingly, our use of the terms "small entities" and "small  X -businesses" does not encompass small incumbent LECs.L  {O\-ԍ See id. at 16150,  1342.L Out of an abundance of caution, however, for regulatory flexibility purposes, we will consider small incumbent LECs within this certification and use the term "small incumbent LECs" to refer to any incumbent LECs that arguably might be defined by SBA as "small business concerns."   Xb-:59.` ` The Commission adopts the conclusions in this Order to ensure the prompt implementation of section 275 of the Act, which addresses the provision of alarm monitoring services by BOCs and other incumbent LECs. We certify that although there may be a substantial number of small incumbent LECs affected by the decisions adopted herein, the conclusions we adopt in this Order will not have a significant economic impact on those affected small incumbent LECs. First, section 275(a) applies only to Bell Operating Companies, prohibiting them, with certain exceptions, from providing alarm monitoring service until February 8, 2001. Thus, in clarifying the definition of "alarm monitoring service" and the manner in which we will apply the nondiscrimination provisions of section  X-275(b)(1), this Order has no significant economic impact on small incumbent LECs. Second, we have not adopted additional rules governing the nondiscrimination requirements of section"|h 0*%%ZZ"  X-275(b), which applies to all incumbent LECs; therefore, there is no change in the status quo  X-as to the regulation of incumbent LECs in this regard.H {Od-ԍ See supra  51.H  X-;60.` ` Third, our conclusion that section 275(b)(1) imposes a more stringent standard for determining whether discrimination is unlawful than that which already exists under  X-sections 201 and 202 and applies to all incumbent LECs,HZ {O-ԍ See supra  53.H will not have a significant economic impact on small incumbent LECs. Incumbent LECs, including small incumbent LECs, are subject to preexisting nondiscrimination requirements under the Act and state law and therefore already are required to respond to complaints of discriminatory behavior or more strictly limit their participation in discriminatory activities. We therefore find that the impact of the Order on incumbent LECs, including small incumbent LECs, of the more  X -stringent standard of section 275(b)(1) will be de minimis.  X -<61.` ` Finally, our decision not to extend the Computer III/ONA nondiscrimination requirements to all incumbent LECs providing intraLATA alarm monitoring services, as noted in Section V, will prevent any significant economic impact on incumbent LECs, particularly small incumbent LECs, by sparing them the regulatory burdens and economic impact of complying with those additional rules.  XQ-=62.` ` For all of these reasons, we certify pursuant to section 605(b) of the RFA that the conclusions adopted in this Order will not have a significant economic impact on a substantial number of small entities. The Commission shall provide a copy of this certification to the Chief Counsel for Advocacy of the SBA, and include it in the report to  X-Congress pursuant to the SBREFA.E yO-ԍ 5 U.S.C.  801(a)(1)(A).E A copy of this certification will also be published in  X-the Federal Register.@| {O -ԍ Id.  605(b).@  X- B.` ` Final Paperwork Reduction Analysis    X->63.` `  VI.B. As required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413,O {OA"-ԍ 44 U.S.C.  3501 et seq.O  Xk-the NPRM invited the general public and the OMB to comment on the Commission's"k0*%%ZZ"  X-proposed changes to its information collection requirements.F {Oy-ԍ NPRM at  88.F Specifically, the Commission  X-proposed to extend various reporting requirements, which apply to the BOCs under Computer  X-III, to all incumbent LECs pursuant to section 275(b)(1). The OMB, in approving the  X-proposed changes in accordance with the Paperwork Reduction Act,Z {O-ԍ Notice of Office of Management and Budget Action, OMB No. 30600738 (Sept. 27, 1996). "encourage[d] the [Commission] to investigate the potential for sunsetting these requirements as competition and  X-other factors allow."3 {O. -ԍ Id.3 In this Order, the Commission adopts none of the changes to our  Xz-information collection requirements proposed in the NPRM. We therefore need not address the OMB's comment, although we note that our decision is consistent with the OMB's recommendation.  X - VII. ORDERING CLAUSES ׃  X -?64.` `  VII. Accordingly, IT IS ORDERED that pursuant to sections 1, 2, 4, 201202, 275, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154, 201202, 275, and 303(r), the REPORT AND ORDER IS ADOPTED, and the requirements contained herein will become effective 30 days after publication of a summary in the Federal Register.  Xh-@65.` ` IT IS FURTHER ORDERED that the Secretary shall send a copy of this REPORT AND ORDER, including the final regulatory flexibility certification, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with paragraph  X#-605(b) of the Regulatory Flexibility Act, 5 U.S.C.  601 et seq. ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `  hh,William F. Caton ` `  hh,Acting Secretary"m~0*%%ZZ"  X- *MAppendix # List of Commenters in CC Docket No. 96152  X- Alarm Detection Systems, Inc. Alarm Industry Communications Committee (AICC) Alert Holdings Group, Inc. Ameritech Association of Directory Publishers Association of Telemessaging Services International AT&T Corporation (AT&T) Atlas Security Service, Inc. Bell Atlantic Telephone Companies (Bell Atlantic) BellSouth Corporation (BellSouth) Checkpoint Ltd. Cincinnati Bell Telephone (Cincinnati Bell) Commercial Instruments & Alarm Systems, Inc. Commonwealth Security Systems, Inc. ElectroSecurity Corporation Entergy Technology Holding Company George Alarm Company, Inc. Information Industry Association  X-Joint Parties[ yO-ԍBell Atlantic and Newspaper Association of America [ MCI Telecommunications Corporation (MCI) Merchant's Alarm Systems Midwest Alarm Company, Inc. Morse Signal Devices New York State Department of Public Service (New York Commission) Newspaper Association of America NSS National Security Service NYNEX Corporation (NYNEX) Pacific Telesis Group (PacTel) Peak Alarm Company, Inc. People of the State of California/California PUC (California Commission) Per Mar Security Services Post Alarm Systems Rodriguez, Francisco Safe Systems"! 0*%%ZZ "ԌSafeguard Alarms, Inc. SBC Communications, Inc. (SBC) SDA Security Systems, Inc. Security Systems by Hammond, Inc. Sentry Alarm Systems of America, Inc. Sentry Protective Systems Smith Alarm Systems Superior Monitoring Service, Inc. SVI Systems, Inc. Time Warner Cable United States Telephone Association (USTA) U S WEST, Inc. (U S WEST) Valley Burglar & Fire Alarm Co., Inc. Vector Security VoiceTel Wayne Alarm Systems Yellow Pages Publishers Association