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Before the
                     Federal Communications Commission
                          Washington, D.C. 20554

     )
In the Matter of                                    )
                                                    )
Southwestern Bell Telephone                  )
Petition for Limited Modification of LATA    )              
Boundary to Provide Expanded Local           )              File No. NSD-L-98-17 
Calling Service (ELCS)                              )                      
            
MEMORANDUM OPINION AND ORDER
                          

Adopted: May 12, 1998                                                 Released:  May 12, 1998

By the Chief, Network Services Division: 

                                   I.     INTRODUCTION
                           
     1.     On February 22, 1998, Southwestern Bell Telephone Company, Inc. (SWBT),
pursuant to Section 3(25) of the Communications Act of 1934, as amended, filed seven petitions
to provide two-way, flat-rated, non-optional expanded local calling service (ELCS) between
various exchanges in Texas.  SWBT's petition requests a limited modification of local access
transport area (LATA) boundaries.  The petition was placed on public notice, and no comments
or reply comments were filed.   For the reasons stated below, we grant SWBT's requests.

                                   II.    BACKGROUND
                                     
     2.     Requests for new ELCS routes are generally initiated by local subscribers. 
IntraLATA ELCS routes can be ordered by the state commission.  For interLATA routes, prior
to the Telecommunications Act of 1996 (1996 Act), the Bell Operating Companies (BOCs) were
required to secure state approval and then obtain a waiver from the United States District Court
for the District of Columbia (District Court).  In the years between the Consent Decree and the
1996 Act, the District Court received more than a hundred requests for Consent Decree waivers
to permit new interLATA ELCS routes.  Because of the large number of requests involved and
because most of the requests were non-controversial, the District Court developed a streamlined
process for handling such requests.

     3.     Under the streamlined process developed by the District Court, the BOC submitted
its waiver request to the Department of Justice (Department).  The Department reviewed the
request and then submitted the request, along with the Department's recommendation, to the
District Court.  In evaluating ELCS requests, the Department and the District Court considered
the number of customers or access lines involved as well as whether a sufficiently strong
community of interest between the exchanges justified granting a waiver of the Consent Decree. 
A community of interest could be demonstrated by such evidence as:  (1) poll results showing
that customers in the affected exchange were willing to pay higher rates to be included in an
expanded local calling area; (2) usage data demonstrating a high level of calling between the
exchanges; and (3) narrative statements describing how the two exchanges were part of one
community and how the lack of local calling between the exchanges caused problems for
community residents.  In addition, the Department and the District Court gave deference to the
state's community of interest finding.  The District Court also considered the competitive effects
of granting a proposed ELCS waiver.
      
     4.     Matters previously subject to the Consent Decree are now governed by the Act. 
Under section 3(25)(B) of the Act, BOCs may modify LATA boundaries, if such modifications
are approved by the Commission.  On July 15, 1997, the Commission released a decision
granting 23 requests for limited boundary modification to permit ELCS.  Although calls between
the ELCS exchanges would now be treated as intraLATA, each ELCS exchange would remain
assigned to the same LATA for purposes of classifying all other calls.  The Commission stated
that it would grant requests for such limited modifications only where a petitioning BOC showed
that the ELCS was a flat-rated, non-optional service, a significant community of interest existed
among the affected exchanges, and grant of the requested waiver would not have any
anticompetitive effects.  The Commission stated further that a carrier would be deemed to have
made a prima facie case supporting grant of the proposed modification if the ELCS petition: (1)
has been approved by the state commission; (2) proposes only traditional local service (i.e., flat-
rated, non-optional ELCS); (3) indicates that the state commission found a sufficient community
of interest to warrant such service; (4) documents this community of interest through such
evidence as poll results, usage data, and descriptions of the communities involved; and (5)
involves a limited number of customers or access lines. 

                                   III.      DISCUSSION

     5.     The petitions propose to establish two-way, flat-rated, non-optional ELCS, and are
accompanied by: (1) a statement that only traditional local service is proposed; (2) an order
issued by the Public Utility Commission of Texas approving ELCS between the specified
exchanges; (3) results from subscriber polls documenting a community of interest; (4) a statement
of the number of access lines involved; and (5) the rate increases that will result.  The petitions
do not provide usage data in the form of an average number of calls per access line per month
between the respective exchanges, nor the percentage of subscribers making such calls.  The brief
descriptions of the community interest reveal that many community services (such as hospitals
and commercial services) are located in a nearby community in the adjacent LATA, and that
making interLATA toll calls for such services generates significant expenses for residents.

     6.     As we noted in the July 1997 Order, granting an ELCS petition removes the
proposed route from the competitive interexchange market, and some LATA modifications could
reduce the BOCs' incentive to open their own markets to competition pursuant to section 271 of
the Act.  Our focus, however, is on the number of access lines in the exchange to be added to
the local calling area.  The exchanges to be added to the local calling area have a small number
of access lines and should pose no competitive concerns.  Given the small number of access lines
and the small volume of traffic involved for the proposed ELCS areas in this petition, as well as
the types of service to be offered (e.g., flat-rated, non-optional local service), it is highly unlikely
that provision of ELCS service would reduce SWBT's motivation to open its own market to
competition.  The Division finds that the proposed LATA modifications will not have a
significant anticompetitive effect on the interexchange market or on SWBT's incentive to open
its own market to competition.


                            VI.      CONCLUSION

     7.     We conclude that, in this request, the need for the proposed ELCS routes
outweighs the risk of potential anticompetitive effects.  Granting SWBT's petitions serves the
public interest by permitting a minor LATA modification where such modification is necessary
to meet the needs of local subscribers and will not have any significant effect on competition.
Accordingly, we approve SWBT's petitions for limited LATA modification in order to provide
non-optional ELCS.  The LATAs are modified solely for the limited purpose of allowing SWBT
to provide flat-rated, non-optional local calling service between the specific exchanges or
geographic areas identified in the requests.  The LATAs are not modified to permit the BOC to
offer any other type of service, including calls that originate or terminate outside the specified
areas.  Thus, flat-rated, non-optional ELCS between the specified exchanges will be treated as
intraLATA, and the provisions of the Act governing intraLATA service will apply. Other types
of service between the specified exchanges will remain interLATA, and the provisions of the Act
governing interLATA service will apply.

                        VII.      ORDERING CLAUSES

     8.     Accordingly, IT IS ORDERED, pursuant to sections 3(25) and 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C.  153(25), 154(i), and 47 C.F.R.  0.91
and 0.291 of the Commission's rules, that the requests of Southwestern Bell Telephone Company,
Inc. for LATA modifications for the limited purpose of providing flat-rated, non-optional ELCS
at specific locations, identified in File No. NSD-L-98-17 ARE APPROVED.  These LATA
boundaries are modified solely for the purpose of providing non-optional ELCS between points
in the specific exchanges or geographic areas indicated in the request.  The LATA boundaries
for all other services shall remain unchanged.

     9.     IT IS FURTHER ORDERED that pursuant to section 416(a) of the Act, 47 U.S.C.
 416(a), the Secretary SHALL SERVE a copy of this order upon the petitioner, Southwestern
Bell Telephone Company, Inc.

                                   FEDERAL COMMUNICATIONS COMMISSION



                                   Geraldine A. Matise 
                                   Chief, Network Services Division 
                                   Common Carrier Bureau                                APPENDIX A






Aspermont-Contel/GTE Southwest to
Anson, Hamlin, Rotan, and Stamford of
SWBT
Aspermont -- 848 access lines
Anson -- 1,912 access lines
Hamlin -- 1,447 access lines
Rotan -- 1,222 access lines
Stamford -- 2,368 access lines


Elkins-Mid-Plains Telephone Cooperative
Amarillo and Canyon of SWBT
Elkins -- 152 access lines
Amarillo -- 114,035 access lines
Canyon -- 7,717 access lines


Redmon-Mid-Plains Telephone Cooperative
Amarillo and Canyon of SWBT
Redmon -- 186 access lines
Amarillo -- 114,035 access lines
Canyon -- 7,717 access lines


Rule-Contel/GTE Southwest
Stamford of SWBT
Rule -- 529 access lines
Stamford -- 2,368 access lines


Vigo Park-Mid-Plains Telephone
Cooperative
Amarillo and Canyon of SWBT
Vigo Park -- 99 access lines
Amarillo -- 114,035 access lines
Canyon -- 7,717 access lines


Winters-Contel/GTE Southwest
Abilene of SWBT
Winters -- 1,464 access lines
Abilene -- 69,688 access lines


Zavalla-Contel/GTE Southwest
Jasper of SWBT
Zavalla -- 69 access lines
Jasper -- 12,272 access lines