*************************************************** NOTICE *************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, itallic, underlining, etc. from the original document will not show up in this text version. Features of the orginal document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) BEEHIVE TELEPHONE, INC., and ) BEEHIVE TELEPHONE NEVADA, INC. ) ) Complainants, ) ) v. ) File No. E-94-57 ) THE BELL OPERATING COMPANIES, ) ) Defendants. ) MEMORANDUM OPINION AND ORDER Adopted: October 21, 1997 Released: October 27, 1997 By the Commission: I. INTRODUCTION 1. In this Memorandum Opinion and Order, we address, on voluntary remand from the United States Court of Appeals for the D.C. Circuit, claims by Beehive Telephone, Inc. and Beehive Telephone of Nevada, Inc. (collectively "Beehive") asserting that the Commission staff improperly changed the ex parte procedures governing this formal complaint proceeding, and violated Beehive's due process rights by engaging in allegedly impermissible ex parte contacts in the course of the Commission's consideration of Beehive's formal complaint. We also address certain other arguments asserted by Beehive in the course of this proceeding. For the reasons set forth below, we find Beehive's arguments without merit. II. BACKGROUND 2. This matter involves the interrelationship between two separate proceedings. The first is a tariff investigation initiated by Commission staff concerning the reasonableness of tariffs filed by various local exchange carriers ("LECs") in relation to the provision of subscriber 800 service and 800 number portability. The second is the instant formal complaint proceeding in which Beehive, a local exchange common carrier under the Communications Act of 1934, as amended ("Act"), challenged one of the tariffs under review in the aforementioned investigation. A. History of the Commission Proceedings 3. On April 28, 1993, the Commission's Common Carrier Bureau ("Bureau") initiated an investigation into 47 tariffs filed by various LECs governing the terms and conditions upon which customers may obtain 800 database access services. This investigation also addressed issues relating to the Service Management System ("SMS") Tariff that had been filed jointly by the Bell Operating Companies ("BOCs"). 4. The origin of this tariff proceeding was the Commission's order requiring all LECs to provide access services to interexchange carriers ("IXCs") that would permit customers to change IXCs, but retain their telephone numbers with 800 prefixes ("800 number portability"). In order to implement access services to accommodate 800 number portability, the LECs deployed new technology that could route 800 calls to each customer's preferred IXC by consulting a data base containing IXC routing information for all 800 subscribers. In furtherance of this scheme, two types of tariffs were required to be filed. First, LECs were required to file tariffs to govern their offering of access services using the 800 data base system. Additionally, because the Commission determined it to be a common carrier service, the BOCs filed a joint tariff to offer access to the SMS centralized database containing customer records and routing instructions. The LECs' offerings of 800 data base access service and the BOCs' joint offering of services through the central data base were proposed in tariffs filed in March 1993. In the Investigation Order, the Bureau suspended these tariffs for one day and initiated an investigation into the reasonableness of the terms and conditions of these tariffs and the adequacy of the cost support for many of the carriers' rates. 5. Pursuant to Commission rules, the investigation was designated a non-restricted, or "permit but disclose," proceeding under the ex parte rules, meaning that written and oral contacts with Commission staff were allowed so long as the substance of such presentations are provided for inclusion in the docket. The Bureau directed that the investigation be conducted as a notice and comment proceeding in which the carriers bore the burden of demonstrating that their rates were just and reasonable. At the time Beehive filed its complaint, the Bureau's Tariff Division, which had primary responsibility for the investigation, had issued an order directing interested parties to submit oppositions or comments on April 15, 1994, with rebuttals to such comments due April 28, 1994. 6. On March 10, 1994, Beehive filed its formal complaint in this matter pursuant to Section 208 of the Act. In its 53-page complaint, Beehive challenged the lawfulness of the BOCs' 800 SMS Tariff which, as detailed above, was one of the tariffs being reviewed in the investigation. In accordance with its rules, the Commission served copies of Beehive's complaint on the defendant BOCs by mail on April 21, 1994. Pursuant to the Commission's ex parte rules, this notice designated the complaint proceeding as restricted, meaning that ex parte contacts were generally not allowed. 7. In a letter dated May 2, 1994, Beehive first notified the Commission of its concern that the existence of issues common to the tariff investigation and its complaint in this proceeding could lead to inadvertent violations of the ex parte rules in the restricted complaint proceeding. Beehive requested that Commission staff ensure that ex parte presentations not be made on the common issues. After reviewing the matter, the Bureau's Enforcement and Tariff Divisions jointly issued a Public Notice redesignating the complaint proceeding as non-restricted, or "permit but disclose." Thus, the same ex parte rules that had already been designated for the tariff investigation were also to apply to the complaint proceeding. In making the decision to modify the standard rules applicable to formal complaint proceedings, the staff explained: In conjunction with the investigation, and consistent with the Commission's ex parterules providing for the disclosure of permissible presentations, the staff has been engaged in discussions with certain parties for the purpose of obtaining information and exploring possible resolutions of the issues raised in the investigation. . . . We believe that the public interest in resolving the issues raised by the tariff investigation expeditiously would best be served by ensuring that the investigation and related discussions continue with a minimum of disruption during the pendency of the formal complaint. Because the tariff and complaint proceedings involve common issues, however, we believe that this interest must be balanced against the parties' interest in ensuring that decisions on the common issues are based upon a record that is available to all interested parties. . . . The Bureau finds that the public interest would be served by making applicable to the formal complaint proceeding the "permit but disclose" ex parte rules applicable to nonrestricted proceedings. 8. On July 5, 1994, Beehive filed an Application for Review of the staff's decision in the Public Notice to modify the ex parte procedures for the complaint proceeding. In its Application, Beehive asserted that Commission staff had no authority to modify the ex parteprocedures and, even if they had such authority, the changes prescribed in the Public Noticeexceeded such authority and violated proper procedures. On August 16, 1995, the Commission issued an order that denied Beehive's formal complaint on the merits. This order did not, however, address the ex parte issues raised in Beehive's Application for Review of the Public Notice. Beehive petitioned the U.S. Court of Appeals for the D.C. Circuit to review this order, and included in this petition its claims based on the alleged ex parte improprieties. Because the ex parte issue had been initially raised before the Commission, but had not been addressed in the order under review, the Commission requested and was granted a remand. B. The Commission's Ex Parte Rules 9. The primary purpose of the Commission's ex parte rules is to assure that the agency's decisions are based upon a publicly available record, rather than influenced by off-the-record communications between decision-makers and outside persons. As stated in the rules, the ex parterequirements serve an important role in ensuring that the Commission's decision-making processes are fair, impartial, and otherwise comport with the concepts of due process. We have also explained that "[a]n equally important objective is to establish procedures that allow the Commission sufficient flexibility to obtain information and evidence necessary for reasoned decision-making. Thus, the ex parte rules not only set forth guidelines that are intended to comport with elementary principles of 'fairness' and 'due process,' but they are also designed to facilitate a full exchange of information so that informed and reasoned agency decision making may result." 10. In the 1987 Ex Parte Order, the Commission significantly revamped the existing rules by clarifying the scope of ex parte presentations, establishing three broad categories of ex parterules -- exempt, non-restricted and restricted -- and identifying the various Commission proceedings to which these rules apply. Under these rules, an ex parte presentation generally encompasses any communication with Commission decision-making personnel directed at the merits or outcome of a proceeding that (i) if written, is not served on the parties to the proceeding, or (ii) if oral, is made without advance notice to the parties to the proceeding and without opportunity for them to be present. The first category of proceedings established by the 1987 Ex Parte Order are those for which there are no ex parte restrictions. In these "exempt" proceedings, parties and Commission decision-makers may communicate freely, without regard to the prohibitions and disclosure requirements in the rules. The second category are those proceedings classified as "non-restricted" or "permit but disclose." In non-restricted proceedings, parties and Commission decision-makers are permitted to engage in ex parte communications but certain disclosure requirements must be met. In general, the rules require persons making written ex parte presentations in non-restricted proceedings to submit copies of such presentations for inclusion in the record, while those making oral ex parte presentations are required to submit written summaries of such communications for inclusion in the record. The final category of proceedings established by the rules is "restricted," in which ex parte presentations are generally prohibited. 11. As stated above, the tariff investigation was designated a non-restricted, or "permit but disclose" proceeding, pursuant to Section 1.1206(b) of the Commission's rules. Pursuant to these rules, Commission staff were allowed to receive both oral and written presentations so long as they were included in the record. Also pursuant to the rules, Beehive's formal complaint, filed under Section 208 of the Act, was initially designated a restricted proceeding. While the Commission may still receive communications on the merits of proceedings designated as restricted, written presentations must be served on all parties to the proceeding and oral presentations must be preceded by advance notice to all parties with the opportunity for all parties to be present. III. CONTENTIONS AND DISCUSSION 12. Beehive raises several arguments in support of its position that the decision to modify the ex parte procedures applicable to its complaint violated the Commission's own rules, and thereby tainted that proceeding. We will address these arguments seriatim. A. Did Commission Staff Have Authority to Modify the Ex Parte Rules? 1. Staff Authority to Modify the Rules. 13. In its Application, Beehive challenges the Bureau's authority to issue a public notice setting forth modified ex parte procedures. Beehive argues that because the ex parte rules were properly promulgated, Commission staff were obligated to obey those rules and had no authority to engage in its own "balancing" of interests. Beehive concludes that "[Commission] staff had no more authority than Beehive to adopt 'modified' ex parte procedures to govern its own conduct." 14. Beehive's challenge is without merit. The Commission has general authority to suspend, waive, or amend its rules, on its own motion, for good cause. As the D.C. Circuit has confirmed, good cause exists where "particular facts would make strict compliance inconsistent with the public interest." Moreover, our ex parte rules specifically provide that "[w]here the public interest so requires in a particular proceeding, the Commission retains the discretion to issue public notices setting forth modified or more stringent ex parte procedures." Accordingly, the Commission has retained authority to alter the standard ex parte procedures where such modification is in the public interest. 15. Furthermore, the Common Carrier Bureau is authorized to act for the Commission under delegated authority, and to carry out the common carrier-related functions of the Commission under the Act. Pursuant to this authority, the Bureau is authorized to take such action as is appropriate for the performance of its functions, with certain enumerated exceptions not relevant here. These functions include advising the Commission, or acting for the Commission under delegated authority, in both adjudicatory and rulemaking proceedings pertaining to the regulation and licensing of communications common carriers. Therefore, where appropriate for the effective resolution of such proceedings, and to the extent not inconsistent with other applicable law, Bureau staff is necessarily delegated the authority to modify the ex parte rules. Indeed, as we recognized in our recent order amending the ex parte rules, the staff's conduct in this matter was consistent with existing Commission practice. 16. For the above reasons, we also disagree with Beehive's argument that the Commission's rules require any modifications to the ex parte procedures to be directed exclusively by the Office of the Managing Director (OMD) rather than by the bureau responsible for handling the applicable proceeding. Although Commission rules identify the Managing Director as the principal operating official on ex parte matters involving restricted proceedings, the rules do not restrict to OMD the authority to modify the ex parte procedures. Rather, as explained above, the Chief of the Common Carrier Bureau is delegated broad authority to perform all common carrier- related functions of the Commission, subject to specific exceptions and limitations not relevant here, and staff involved in specific proceedings are typically best situated to evaluate the need for ex partemodifications. Finally, we note that the delegation of authority rules are a matter between the Commission and its staff and do not give private parties rights. In this regard, our decision to affirm the staff's decision effectively renders moot Beehive's delegated authority argument. 2. Recusal Arguments. 17. Beehive also asserts that Bureau staff involved in the investigation and complaint proceedings were obligated to recuse themselves from consideration of the ex parte modification. Beehive argues that any staff who participated in ex parte communications between the date Beehive's complaint was filed and the date the Public Notice was issued were subject to sanctions for violating the ex parte rules, and therefore such staff had a personal interest in modifying those rules. Beehive concludes that in order to avoid the appearance of bias, any determination to modify the ex parte procedures should not have been made by the staff involved in the tariff investigation or complaint proceeding. 18. We disagree. As detailed below, as to any ex parte presentation that may have occurred prior to the issuance of the Public Notice, Beehive has shown neither prejudice from such ex parte presentations nor evidence of bad faith on the part of Commission staff. Although Beehive's Application contains numerous innuendo and suggestions of malfeasance by the staff in issuing the Public Notice, Beehive fails to offer any support for such accusations. In sum, there is no basis for finding that the decision to issue the Public Notice was tainted by staff bias. 3. Timing of Modification. 19. Finally, we note that in its appellate brief (but not in its Application), Beehive seeks to draw a distinction between modifications made to the ex parte rules "before the case got underway, so that the procedural change would operate prospectively," and those modifications made "after the decision-making process was underway." Beehive suggests that no modifications could be adopted after its complaint was filed. 20. The distinction Beehive seeks to draw is inconsistent with the language of the rules, which grant the Commission the authority to modify the ex parte procedures wherever the public interest so requires. Indeed, such a restriction would not be in the public interest because it would severely limit the Commission's flexibility to modify its rules to respond to particular situations as they arise. For example, in this proceeding, it was not until May 2, 1994, nearly two months after it filed its complaint, that Beehive notified the Commission of the potential ex parte conflict. Shortly thereafter, on June 2, 1994, the Public Notice was issued in a timely fashion to address this potential conflict in a manner deemed best suited to serve the public interest. Furthermore, and contrary to Beehive's assertion, the modification adopted in the Public Notice applied only prospectively. We address below whether Beehive may have been unfairly prejudiced by any ex parte communications which may have occurred between the filing of its complaint and issuance of the Public Notice. B. Was the Modification Adopted Within the Scope Authorized? 21. Beehive next argues that even if Bureau staff were authorized to modify the ex parte rules in appropriate circumstances, the redesignation of the complaint proceeding from restricted to non-restricted was a fundamental change beyond the scope envisioned by the rules. According to Beehive, the changes to the ex parte procedures adopted in the Public Notice were outside the scope of a "modification" as that term has been interpreted by the courts. Beehive further asserts that the amended ex parte procedures unreasonably and improperly infringed upon its Constitutional due process rights. 22. We find that the Bureau acted within the scope of the Commission's rules. The ex parte rules provide that the Commission may "issue public notices setting forth modified or more stringent ex parte procedures." Further, to the extent the MCI v. AT&T decision may be applicable to the current dispute, we find the staff's amended procedures to be consistent with the Court's concept of "modify." In MCI v. AT&T, the Supreme Court reviewed a Commission order making tariff filing optional for all nondominant long distance carriers. The Commission issued this order in reliance on the authority of Section 203 of the Act, which provided that the Commission could "modify" any requirement in that section. After an extensive lexicological analysis, the Court explained that "modify" connotes "moderate change," and accordingly the Commission policy could be justified only if it made "a less than radical or fundamental change in the Act's tariff-filing requirements." In striking down the Commission's order, the Court emphasized that the tariff-filing requirements were "the heart of the common-carrier section of the Communications Act," and were "utterly central" to the administration of the Act. Noting that the order eliminated a crucial provision of the statute for 40 percent of a major sector of the telecommunications industry, the Court found that such a change was a "fundamental revision of the statute," contrary to the regulatory requirements mandated by Congress. Significantly, however, the Court concluded its discussion by recognizing as follows: We do not mean to suggest that the tariff-filing requirement is so inviolate that the Commission's existing modification authority does not reach it at all. Certainly the Commission can modify the form, contents, and location of required filings, and can defer filing or perhaps even waive it altogether in limited circumstances. But what we have here goes well beyond that. It is effectively the introduction of a whole new regime of regulation . . . which may be a better regime but is not the one that Congress established. 23. The current circumstances appear to be within the scope of what the Court contemplated as a modification under the Commission's authority to amend -- and even waive -- rules where deemed desirable to address specific circumstances. Unlike the rules struck down in MCI v. AT&T, the Public Notice clearly did not establish a new regulatory "regime," but instead applied the amended procedures to a "particular instance," specifically the single complaint proceeding. Moreover, and contrary to Beehive's assertion, the staff did not "waive" the ex parterules for this proceeding or grant parties "carte blanche" to make contacts with Commission decision-makers. Rather, quite distinct from designating the proceeding "exempt" (the equivalent of waiving the rules since no restrictions or disclosure requirements apply), the staff redesignated the complaint proceeding as non-restricted, thereby ensuring that all communications were disclosed in the record. We find that the adopted change was reasonably tailored to resolve the specific public interest concerns enunciated in the Public Notice, while simultaneously protecting the interests of the parties. In any event, the Commission has authority to waive any of its rules on its own motion for good cause. 24. We also find that the modified procedures did not improperly infringe upon Beehive's due process rights. As noted above, the essential distinction between restricted and non-restricted proceedings is that, under the rules for non-restricted proceedings, all parties need not be served with written presentations or notified in advance of oral presentations. Nonetheless, the substance of each such presentation must be included in the record for the proceeding. Courts reviewing ex parteissues have been most concerned with undisclosed contacts, and whether communications contain factual matter or other information outside of the record, which all parties did not have the opportunity to rebut. Under the modified ex parte procedures adopted by the staff in this complaint proceeding, all communications were subject to timely disclosure and scrutiny by Beehive or a reviewing court. While it may be true that Beehive would have to "traipse over to the Commission" to find out what is in the public record, as argued in its Application, we do not believe this rises to the level of an unconstitutional burden. C. Was the Staff's Decision to Modify the Ex Parte Rules Appropriate? 25. Having found that the ex parte modification was procedurally proper, we next consider whether that action was appropriate or whether it unreasonably prejudiced Beehive. Beehive argues that the modifications adopted were unnecessary, because the staff could have achieved their stated objectives without altering the ex parte rules. 26. We disagree with Beehive's assertion that the nodification was improper. The ex parte rules may be modified upon a determination that the modification is in the public interest. The staff explained its decision to modify the generally applicable ex parte procedures for the complaint proceeding as serving the public interest in ensuring that the staff could continue to engage in discussions for the purpose of obtaining information deemed essential to the tariff investigation and to resolve expeditiously the issues raised in the investigation. We find this to be a reasonable determination of the public interest under the circumstances presented. It was certainly reasonable for the staff to conclude that the public interest would not be served if a tariff investigation implementing major Commission public policy initiatives was impeded by the restricted ex parte procedures that are intended to apply to narrow private adjudications common to complaint proceedings. The rules recognize that proceedings subject to the "permit but disclose" procedures often involve complex issues of general interest not readily conducted under the constraints applicable to restricted proceedings. It was reasonable for the staff to determine that the public interest in ensuring "the vigorous exchange of information necessary for reasoned and informed decision-making" weighed in favor of modifying the ex parte rules in the complaint proceeding. 27. Nor do we find that Beehive was unduly prejudiced by the modification. As Beehive itself recognizes, the only distinction between restricted and "permit but disclose" procedures is that Beehive was not entitled to service of written presentations or to be invited to attend oral presentations. Nonetheless, Beehive had virtually immediate access to all written ex partepresentations and summaries of all oral presentations. These procedures were specifically tailored to ensure that all agency decisions are based upon an open record available to the public and reviewing courts. Furthermore, once the rules were modified, Beehive had equal opportunity to make presentations to the staff, subject to the filing of required summaries. In sum, the final decisions in both proceedings were made upon a record that was fully available to all parties, including Beehive, and were therefore consistent with the principles underlying the ex parte rules. D. Did Ex Parte Presentations Made Prior to Issuance of the Public Notice Taint the Complaint Proceeding? 28. Finally, Beehive requests a ruling as to whether the complaint proceeding was tainted by ex parte presentations made in the tariff investigation between the date on which its complaint was filed and the date on which the Public Notice was issued. Having reviewed each such communication, we find no prejudice to Beehive. 29. The docket in the tariff investigation indicates that two oral ex parte communications occurred in this interim period. One, from private counsel dated April 28, 1994, involved a telephone inquiry into the status of the investigation and whether it encompassed the SMS Tariff provision concerning the sale or brokering of 800 numbers. Because this communication did not go to the merits of Beehive's complaint, it was not an ex parte presentation for purposes of this proceeding. Even if it were, however, we do not find any prejudice to Beehive from this discussion. The only other oral presentation during this period was a meeting between Tariff Division staff and representatives from US West, which occurred on April 6, 1994. The ex partedisclosure indicates that the principal topic of that meeting was the staff's decision to deny the BOCs a waiver from an order requiring them to place in the public record confidential information used to derive their 800 data base tariff prices. Again, this communication does not concern the merits of Beehive's complaint, nor do we see any prejudice to Beehive from its occurrence. We also note that each of these communications were made exclusively to Tariff Division staff, and occurred prior to the date on which Beehive notified the Commission of its concerns regarding the overlap of the two proceedings. Because Enforcement Division staff involved in the complaint proceeding did not attend these communications, there is no reason for the participants to have been aware of the potential ex parte issues. 30. Additionally, a number of written communications were included in the tariff investigation record in this interim period prior to the issuance of the Public Notice. Most of these communications were comments on the investigation filed pursuant to a staff scheduling order originally issued prior to the filing of Beehive's complaint. Because these were formal, public comments requested by the staff in a non-restricted proceeding, we believe the failure to serve these filings on parties to the complaint proceeding at most constituted inadvertent violations of the ex parte requirements. In any event, we do not find that the failure to serve these comments, or the other written ex parte presentations reflected in the docket, to have tainted the complaint proceeding or unduly prejudiced Beehive. As explained above, all such written materials were readily available to Beehive in a timely fashion. That Beehive had to make arrangements to obtain these materials, rather than having them served, does not undermine the fact that final decisions in both proceedings were made based upon a full and open record available to both Beehive and reviewing courts. Moreover, given that Beehive knew about all of these presentations prior to the Commission's decision on its complaint, it had full opportunity to respond in the context of the complaint proceeding. The Commission's order on the merits of Beehive's complaint would not have been affected by different ex parte procedures, and therefore vacating that order would serve no useful purpose. E. Miscellaneous Matters 31. Beehive has also raised other issues in this proceeding which relate to the tariff investigation. We briefly address certain of these issues below in order to ensure a complete record on review. 32. In its Application, Beehive asserts that because the tariff investigation involved current and past rates and practices, it was an adjudicative proceeding under the rules and therefore should have been designated as "restricted" pursuant to Section 1.1208(c)(1)(ii)(A). Beehive goes on to concede, however, that "reasonable uncertainties could exist as to whether the SMS Tariff investigation was a restricted proceeding." We find Beehive's argument to be without merit. Beehive's assertion that the tariff investigation was an "adjudicative proceeding" is not dispositive. While the section cited by Beehive applies to "any adjudicative proceeding," that phrase is qualified by the beginning of Section 1.1208(c) which excludes any proceeding otherwise governed by Sections 1.1204 or 1.1206. Further, under the provisions of Section 1.1206(b)(6), the non- restricted ex parte rules are to be applied to tariff proceedings which are set for investigation by the Commission under Section 204 or 205 of the Act. Such was the case with the investigation at issue. Although under Section 1.1206(b) proceedings pertaining primarily to past rates or practices may be restricted, Beehive has not shown that the tariff investigation dealt primarily with past rates or practices, or that the Bureau abused its discretion in treating this proceeding as permit- but-disclose. 33. Beehive also asserts that the Bureau did not have authority to institute the tariff investigation because such authority was not delegated by the Commission. This argument is patently wrong. Section 0.291 of our rules delegates to the Common Carrier Bureau all of the Commission's functions in the common carrier area, including tariff investigations, except where authority is specifically withheld. The authority to investigate tariffs has not been specifically withheld, and indeed is an authority routinely exercised. 34. Finally, Beehive has argued that SMS service is not properly tariffed because the service does not encompass service between points "on its own system." This argument is not persuasive. Initially, we note that we are authorized under Section 4(i) to "perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with the Act, as may be necessary in the execution of its functions." The Court of Appeals has previously recognized our authority under Section 4(i) to direct a party to file a tariff, even if Section 203 is inapplicable: We can assume, without deciding, that [Lincoln Telephone & Telegraph Company] is a connecting carrier for purposes of Section 203(a), and is therefore exempt from any tariff filing requirement that the section might otherwise impose. Sections 203(a)'s terms do not, however, in any way suggest that the section provides the exclusive authority under which the Commission can require a tariff to be filed. Thus, while Section 203(a) did not grant the Commission the requisite authority for its action, Section 154(i) did. Therefore, if we are authorized under Section 4(i), as the courts have held, to direct a party to file a tariff even if Section 203 is not applicable, we have the authority to require the BOCs to file the SMS Tariff as we directed. 35. Moreover, we are authorized under Section 203(b)(2) to modify, for good cause shown, "any requirement made by or under the authority of this section . . . in particular instances." Good cause was demonstrated in the CompTel Declaratory Ruling when, after we listed the numerous factors supporting same, we found that "SMS access is technically necessary to the provision of 800 access service, and is incidental to the provision of such access." Because of this necessity and the incidental nature of SMS service, we are empowered under Section 203(b)(2) to order the tariff to be filed as directed. IV. CONCLUSION 36. For the reasons stated above, we find nothing improper or prejudicial in the staff's decision to modify the ex parte procedures applicable to Beehive's complaint proceeding. We also find that Beehive has failed to substantiate its claims that any impermissible ex parte contacts tainted this proceeding. Finally, we conclude that Beehive's other arguments relating to this proceeding and the tariff investigation are unpersuasive. Having now completed our consideration of Beehive's claims, we hereby adopt and reaffirm the Beehive Order and deny Beehive's formal complaint. V. ORDERING CLAUSES 37. ACCORDINGLY, IT IS ORDERED pursuant to Sections 4(i), 4(j), 5(c)(5), and 208 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 155(c)(5), 208, and Sections 1.115(g) of the Commission's rules, 47 C.F.R.  1.115(g), that the Application for Review filed by Beehive Telephone, Inc. and Beehive Telephone Nevada, Inc., in the above-captioned proceeding, IS DENIED. 38. IT IS FURTHER ORDERED that the Commission's Memorandum Opinion and Order in this proceeding, released August 15, 1995, and attached hereto, is hereby adopted and reaffirmed, and Complainants' formal complaint in this matter IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary Attachment