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                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                           Washington D.C. 20554


Policy and Rules Concerning the                      )
Interstate, Interexchange Marketplace         )
       )       CC Docket No. 96-61
Implementation of Section 254(g) of the              )
Communications Act of 1934, as amended               )

 
                                  ORDER 


Adopted:       October 2, 1997Released:       October 3, 1997


By the Commission:

                             I.   INTRODUCTION

                1.      In this Order, we grant, in part, and deny, in part, a motion filed by PrimeCo
Personal Communications, LP ("PrimeCo") requesting a stay of enforcement of Section
64.1801 of the Commission's Rules, 47 C.F.R. 64.1801, with respect to application of rate
integration requirements to Commercial Mobile Radio Service ("CMRS") providers pending
reconsideration of the Commission's Rate Integration Reconsideration Order.  We deny
PrimeCo's petition for stay of application of rate integration requirements to providers of
CMRS services, but grant PrimeCo's request that we stay for CMRS providers, pending
further reconsideration, application of our requirements that providers of interstate
interexchange services integrate rates across affiliates.  We also stay, pending reconsideration,
application of rate integration requirements with respect to wide area rate plans offered by
CMRS providers. 

                              II.  BACKGROUND

           2.   Section 254(g) of the Telecommunications Act of 1996 states that "a provider
of interstate interexchange telecommunications services shall provide such services to its
subscribers in each State at rates no higher than the rates charged to its subscribers in any
other State."  This is the statutory provision that imposes the rate integration requirement on
providers of interexchange services. 

           3.   In the Rate Averaging and Rate Integration Report & Order, we adopted a
rate integration rule that reiterated the language of section 254(g).  We stated that this rule
would incorporate our existing rate integration policy, and would apply to all interstate
interexchange services as defined in the Act and to all providers of these services.  We also
determined, inter alia, that American Mobile Satellite Carriers Subsidiary Corp. ("AMSC"), a
CMRS service provider, is required to integrate rates charged for its offshore service into the
rate structure offered for its mainland service, because its services appear to fall within the
definition of interstate interexchange telecommunications services subject to section 254(g). 
In the Rate Integration Reconsideration Order, we repeated this conclusion stating that the
service offered by AMSC's mobile satellite is an interstate interexchange telecommunications
service subject to rate integration requirements.  We also denied AMSC's petition for
reconsideration and forbearance. 
             
           4.   In a petition for reconsideration of the Rate Averaging and Rate Integration
Order, GTE Service Corporation ("GTE") asked the Commission to clarify whether it meant
all GTE-affiliated carriers are to integrate rates, and specifically, "whether this direction was
meant to include affiliated CMRS providers or interexchange resellers and, if so, that the
[Rate Averaging and Rate Integration Order] is intended to override other FCC policies that
may impose inconsistent requirements on affiliates."   

           5.   We addressed GTE's petition for clarification in paragraph 18 of the Rate
Integration Reconsideration Order.  We clarified that our rules implementing section 254(g)
require carriers to integrate their rates across affiliates, but do not require a carrier to
integrate an interstate interexchange CMRS service with other interstate interexchange service
offerings.  We stated that our rate integration rules require CMRS providers to provide
interstate interexchange CMRS service on an integrated basis in all their states.  

           
                       III.  POSITION OF THE PARTIES

           A.   PrimeCo's Motion for Stay

           6.   On September 23, 1997, PrimeCo filed a motion for stay of enforcement of
Section 64.1801 of the Commission's Rules, 47 C.F.R. 64.1801, pending reconsideration of
the Commission's Rate Integration Reconsideration Order.   PrimeCo seeks a stay of the
Rate Integration Reconsideration Order to the extent that it extends application of rate
integration requirements to Commercial Mobile Radio Service ("CMRS") providers and to
carriers that they control or own.  PrimeCo contends that the Rate Integration
Reconsideration Order established for the first time that rate integration applies to CMRS
providers.  PrimeCo states that the Commission, at a minimum, should stay enforcement of
the affiliation rules, which it maintains may require CMRS providers to engage in unlawful
price fixing and otherwise violate the Commission's pro-competition policies.

               7.    PrimeCo asserts that a stay of enforcement of Section 64.1801 as applied to
CMRS would permit the Commission to remedy alleged procedural infirmities and develop a
record upon which it may resolve issues associated with the implementation of the integration
and affiliate rules to the extent they apply to the CMRS industry.  PrimeCo further claims
that a temporary stay of enforcement would be consistent with prior Commission decisions in
which the Commission has stayed the effectiveness of a rule in instances where, after
adoption of the rule, the Commission concluded that its implementation may lead to
unanticipated and unintended consequences.  PrimeCo states that, as an exercise of
discretionary authority, stay of enforcement may not require satisfaction of the four-part test
for granting a stay set forth in Virginia Petroleum Jobbers Ass'n v. FPC, but maintains that,
nevertheless, its request satisfies this standard.

               8.    PrimeCo contends that there is a strong probability that the Commission's
action will be rescinded or revised upon further reconsideration on the ground that application
of the rate integration and affiliate requirements to a CMRS provider is procedurally
deficient.  PrimeCo states that the record reveals little, if any, information supporting the
need for integration of CMRS interstate, interexchange rates, or the effects of imposing rate
integration with the affiliate rule upon CMRS providers.  PrimeCo states that neither the
Rate Averaging and Rate Integration NPRM nor the Rate Averaging and Rate Integration
Report & Order refer to CMRS carriers, and that the Rate Integration Reconsideration Order
refers to the application of rate integration to CMRS providers in only one subordinate
clause.  PrimeCo asserts that, since CMRS operates without regard to exchange boundaries,
and is an end-to-end service in which some carriers bundle long distance and local service, it
is unclear which CMRS offerings must be integrated.  PrimeCo further contends that section
254(g) was intended to codify the Commission's existing rate integration policy, which,
according to PrimeCo, had never been applied to CMRS.   For this reason, PrimeCo claims
that it is fundamentally arbitrary and capricious for the Commission to adopt a statutory
interpretation that imposes new regulatory burdens upon CMRS providers, without careful
analysis based upon record evidence.

               9.    PrimeCo maintains that enforcement of the affiliate requirement will result in
irreparable harm to PrimeCo and will have significant anti-competitive effects.  PrimeCo is
owned, through intermediary partnerships, by AirTouch, US West, and Bell Atlantic, each of
which arguably controls PrimeCo, and therefore, the affiliate requirement would require
PrimeCo to integrate its rates with each of its three controlling parents.  This, in turn, would
require all three carriers to agree to charge identical rates for their respective interstate toll
services offered to their CMRS customers.  PrimeCo, as well as its controlling parents,
control other CMRS carriers with other entities, resulting in an expanding "daisy-chain" of
carriers that would be required to integrate rates with one another.  PrimeCo contends that
application of the affiliate requirement to CMRS carriers, therefore, would require unlawful
price fixing counter to antitrust policies and the Commission's pro-competitive policies.

               10.   PrimeCo contends that a temporary stay of enforcement will not injure the
legitimate interests of any party and will serve the public interest.  According to PrimeCo,
consumers will not be injured, because the CMRS industry previously has not been subject to
rate integration obligations, and the industry is highly competitive, producing market pressures
that keep rates low.  PrimeCo asserts that a stay would serve the public interest by allowing
CMRS carriers to maintain competitive rate structures, and by relieving them of allegedly
significant compliance burdens from imposition of the affiliate requirement.

               B.    Comments

               11.   Nine parties have filed comments supporting PrimeCo's Motion for generally
the same reasons stated by PrimeCo.  In addition to repeating arguments advanced in its
Petition for Reconsideration, GTE also argues that, because section 254(g) does not
distinguish between "providers," any stay granting relief must be applied to all providers of
interstate interexchange services.  BellSouth, in addition to supporting PrimeCo's Motion
generally, expresses concerned that our rate integration requirements would preclude its
offering of wide area rate plans.  It requests emergency forbearance pursuant to Section 10
of the Act to prevent application of rate integration requirements to its wide area rate plans. 
It also requests forbearance of any affiliate requirements.  

               12.     The State of Hawaii ("Hawaii"), the State of Alaska ("Alaska"), and the
Commonwealth of the Northern Mariana Islands oppose the motion, arguing that PrimeCo has
failed to satisfy the four-part Virginia Petroleum Jobbers Ass'n test for granting a stay of a
Commission order.  Hawaii and Alaska also dispute PrimeCo's contention that the Rate
Integration Reconsideration Order is procedurally deficient because the Commission for the
first time imposed rate integration requirements on providers of CMRS services in the Rate
Integration Reconsideration Order.  Hawaii and Alaska note that the Commission put
everyone on notice of its view in the Rate Averaging and Rate Integration NPRM and Rate
Averaging and Rate Integration Order by stating that the requirements would apply to all
domestic interexchange services, and by rejecting the suggestion of AMSC that rate
integration applied only to traditional wireline providers of interexchange services.  Alaska
also asserts that GTE seemed to understand that its CMRS operations would be subject to rate
integration requirements when it challenged the Commission's determination that all GTE
affiliates would be required to integrate their rates together.  Hawaii states that PrimeCo's
argument that, until passage of section 254(g) CMRS providers were not subject to a rate
integration requirement, is incorrect and irrelevant.

               13.   Neither Hawaii nor Alaska opposes a narrowly tailored stay limited to the
application of the affiliate rule to multiple, competing parent companies that jointly control a
CMRS provider.  Hawaii states, however, that it opposes a stay that would permit CMRS
affiliates under the common ownership and control of a single corporate parent to provide
services on a non-integrated basis.  Similarly, Alaska states that the stay should not permit
PrimeCo or a similarly situated firm from failing to satisfy rate integration requirements with
respect to its own operations.

                             IV.   DISCUSSION
               
               14.   Pursuant to section 1.103(a) of our Rules, 47 C.F.R.  1.103(a), we stay,
pending reconsideration, for CMRS providers, application of our requirement that providers of
interstate interexchange services integrate rates across affiliates.  Parties have raised in the
stay requests significant issues including potential anti-competitive impacts of requiring rate
integration across affiliates that may require alteration of the rule with respect to CMRS
affiliates.  We also stay, pending reconsideration, application of our rate integration rule to the
extent that it otherwise would apply to wide area rate plans offered by CMRS providers. 
Given these two actions, however, we decline to stay enforcement of our requirement that
CMRS carriers provide interstate interexchange services on an integrated basis.  Under this
decision, CMRS providers must provide any separate offering of interstate interexchange
service on an integrated basis, but are not required, pending further reconsideration, to
integrate rates across affiliates, or to implement rate integration for wide area rate plans.  Our
stay of rate integration requirements only applies to CMRS providers.  Other carriers,
including other wireless carriers, are not covered by this stay.  
               
               15.   We will stay application of our rule that requires CMRS providers to integrate
their rates to the extent that they provide CMRS service through wide area rate plans, pending
reconsideration, pursuant to section 1.103(a) of our Rules, 47 C.F.R.  1.103(a).  As noted
by PrimeCo, we have previously extended the effective date of rules where application of a
rule could raise issues that are best resolved with the benefit of additional information and
arguments.  Subject to a more complete examination of this issue on reconsideration, wide
area rate plans, for purposes of the instant Order, may involve bundled offering of air time
and interstate interexchange services.  Wide area rate plans permit callers to make calls within
a specified calling area at uniform charges specified by the carrier's particular plan.  Some
wide area rate plans may encompass broad geographic areas and may traverse state
boundaries.  In addition, carriers may offer different wide area rate plans in different areas.  It
is difficult to determine how rate integration should be applied with respect to wide area rate
plans.  We are concerned that immediate application of rate integration requirements to wide
area rate plans could be disruptive to consumers.  In addition, our examination of this issue
would benefit from a more complete record regarding the need to require any rate integration
of wide area rate plans.  Thus, we will stay application of rate integration to wide area rate
plans, pending further reconsideration.  In order to ensure that our rules pending
reconsideration will not be disruptive to local or wide area service plans, the stay will
additionally apply to any separate offering of interstate interexchange service within a major
trading area ("MTA").  CMRS providers will not have to modify existing wide area rate
plans, or alter plans for revised or new plans, until we review this matter on a more complete
record.   

               16.   With respect to application of the affiliate rule to CMRS providers, we will,
likewise, stay application of this rule pending further reconsideration, so that CMRS providers
will not have to integrate rates across affiliates until we review this rule on a more complete
record.  Although commenters most recently had an opportunity to address the issue of
application of rate integration to CMRS providers in the notice and comment period following
GTE's petition for reconsideration, we received virtually no comments on the issue.  The
record generated in response to PrimeCo's motion suggests a significant degree of affiliation
in the CMRS industry, even among carriers competing in the same market.  We thus conclude
it is necessary for us to examine this issue further.  Temporarily staying application of the
affiliate rule to providers of CMRS services will allow the Commission to develop a more
complete record upon which we can fashion any necessary refinements of affiliate
requirements for CMRS providers.  Accordingly, we will stay application of our affiliate
requirement as applied to CMRS providers pending further reconsideration, pursuant to
section 1.103(a) of our Rules, 47 C.F.R.  1.103(a). 

               17.   We disagree with GTE's contention that, because section 254(g) does not
distinguish between "providers," any stay relief granted must be applied to all providers of
interstate interexchange services.  As we stated in the Rate Integration Reconsideration
Order, section 254(g) does not require a carrier to integrate an interstate interexchange CMRS
service with other interstate interexchange service offerings.  GTE has failed to provide any
reason why a stay should apply to it.  Indeed, as explained in the Rate Integration
Reconsideration Order, not requiring GTE and other non-CMRS providers of interstate
interexchange services to integrate across affiliates would prevent achievement of the purposes
of section 254(g).  Nothing in the record suggests that the stay adopted herein, pending
reconsideration, would seriously hamper our implementation of section 254(g).  Our stay of
application of our rate integration affiliate requirement only applies to CMRS affiliates.  GTE
and other carriers that provide interstate interexchange service through means other than
CMRS continue to be required to integrate rates across affiliates as determined in the Rate
Integration Reconsideration Order.

               18.   We next evaluate PrimeCo's motion under the standards of Virginia Petroleum
Jobbers Ass'n/Washington Metropolitan Area Transit Commission.  The four factors to be
considered under this test are:  (1) a likelihood of success on the merits by the party
requesting the stay; (2) irreparable harm in the absence of a stay; (3) no substantial harm to
other interested parties if the stay is granted; and (4) public interest in favor of the stay.  We
will evaluate these factors in light of our decision to stay application of rate integration to
wide area rate plans offered by CMRS providers, as well as our decision to stay application
of our affiliate requirement as applied to CMRS providers, pending further reconsideration.

               19.   We determine that PrimeCo has failed to demonstrate that it is likely to prevail
on the merits of its challenge to the general application of the rate integration rules to CMRS
providers adopted in the Rate Integration Reconsideration Order.  Its principal basis for this
claim is that the Commission's decision to apply rate integration requirements to providers of
CMRS services is deficient in that there was allegedly inadequate notice and record to support
application in this proceeding of section 254(g) to wireless carriers.  The language of section
254(g), however, applies to "providers of interexchange telecommunications services" with no
exceptions enumerated.  Further, the Rate Averaging and Rate Integration NPRM stated that
an interexchange call includes all means of connecting two points, "wireline or wireless." 
We, therefore, find no lack of notice regarding the application of rate integration requirements
to providers of CMRS services.  We also reiterated in the Rate Averaging and Rate
Integration Order, that rate integration requirements applied to "all domestic interstate
interexchange telecommunication services as defined in the 1996 Act, and all providers of
such services (emphasis added)."  We also specifically rejected AMSC's claim that rate
integration applied only to wireline providers of interexchange services.  We stated in both
the Rate Averaging and Rate Integration Order and the Rate Integration Reconsideration
Order that AMSC, a CMRS service provider, is required to integrate its rates.  Moreover,
GTE specifically raised on the record on reconsideration the issue of rate integration across
affiliates, clearly implicating application of rate integration across CMRS affiliates, and we
explained that it was necessary to apply rate integration requirements across affiliates in order
to maintain, and further achieve, the rate integration policy of section 254(g).    

               20.   We also find that, especially in light of our stay discussed above, PrimeCo has
failed to demonstrate that application of rate integration requirements will result in irreparable
harm to it or other CMRS providers.  With respect to application of rate integration
requirements generally, PrimeCo and the commenting parties have failed to show, to the
extent that they are not already substantially in compliance, that they would be harmed by
offering any separate offering of interstate interexchange service on an integrated basis.

               21.   Our rate averaging and rate integration rules afford CMRS providers some
types of flexibility in implementing rate integration, to the extent that they are not now in
compliance.  In the Rate Averaging and Rate Integration Order, for example, we decided to
forbear from applying Section 254(g), consistent with the intent of Congress, to the extent
necessary to permit carriers to depart from geographic rate averaging to offer contract tariffs,
Tariff 12 offerings, optional calling plans, temporary promotions, and private line services. 
We also decided to permit carriers to offer temporary promotions that may be
"geographically limited," provided that the promotions are temporary, i.e., limited to no more
than 90 days.  We noted that our rate integration rules require that, to the extent that a
provider of interexchange service offers optional calling plans, contract tariffs, discounts,
promotions, and private line services to its subscribers in one state, it must use the same
ratemaking methodology and rate structure when offering those services to its subscribers in
any other state.  For all of these reasons, we conclude that PrimeCo and other carriers will
not be irreparably harmed by application of rate integration requirements to them.  Because
we have determined that PrimeCo has failed to meet the first two elements of the standard for
granting a stay, i.e., that it is likely to prevail on the merits and that it would be irreparably
harmed by application of rate integration requirements, we find it unnecessary to address
whether grant of the requested stay would substantially harm other interested parties or serve
the public interest.
               

                           V.   ORDERING CLAUSES

               22.   Accordingly, IT IS ORDERED that the "Motion for Stay of Enforcement of
PrimeCo Personal Communications, LP," IS GRANTED to the extent discussed above, and IS
OTHERWISE DENIED.

               23.   IT IS FURTHER ORDERED, pursuant to Section 4(i) of the Communications
Act of 1934, as amended, 47 U.S.C.  154(i), and Section 1.103(a) of the Commission's
Rules, 47 C.F.R.  1.103(a), that application of rules requiring rate integration across CMRS
affiliates established in the Rate Integration Reconsideration Order IS STAYED pending
further reconsideration of the Rate Integration Reconsideration Order. 

               24.   IT IS FURTHER ORDERED, pursuant to Section 4(i) of the Communications
Act of 1934, as amended, 47 U.S.C.  154(i), and Section 1.103(a) of the Commission's
Rules, 47 C.F.R.  1.103(a), that application of rules requiring CMRS providers to integrate
their rates to the extent that they provide wide area rate plans IS STAYED pending further
reconsideration of the Rate Integration Reconsideration Order. 

               25.   IT IS FURTHER ORDERED that this Order IS EFFECTIVE upon the date of
adoption.


                     FEDERAL COMMUNICATIONS COMMISSION

 
                     William F. Caton                   
                     Acting Secretary