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


                                   )
In the Matter of                        )
                                   )
Ameritech                               )
Petition for Limited Modification of LATA    )         
Boundaries to Provide Expanded Local              )         File No. NSD-L-98-69 
Calling Service (ELCS)                  )              
            

                  MEMORANDUM OPINION AND ORDER


Adopted:  June 26, 1998                   
     Released:  June 26, 1998  

By the Chief, Network Services Division: 


                         I.   INTRODUCTION
                    
     1.   On May 11, 1998, Ameritech, on behalf of The Ohio Bell Telephone Company, doing
business as Ameritech Ohio (Ameritech), pursuant to Section 3(25) of the Communications Act of
1934, as amended, filed a petition to provide two-way, flat-rated, non-optional expanded local
calling service (ELCS) between three exchanges in Ohio.  Ameritech's petition requests a limited
modification of local access transport area (LATA) boundaries.  The petition was placed on public
notice, and one party filed comments.  For the reasons stated below, we grant Ameritech's request.

                         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 petition proposes to establish two-way, flat-rated, non-optional ELCS, and is
accompanied by: (1) a statement that only traditional local service is proposed; (2) an order issued
by the Public Utilities Commission of Ohio approving ELCS between the specified exchanges; (3) no
subscriber polls were required under Ohio law because no increase in end user rates was proposed;
(4) a statement of the number of access lines involved; and (5) the rate increases that will result. 
The petition provides usage data in the form of an average number of calls per access line per month
between the respective exchanges, but not the percentage of subscribers making such calls.  The
brief descriptions of the community interest reveal that many community services (such as hospitals,
schools, 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 Ameritech's motivation to open its own market to competition.  The Division finds that the
proposed LATA modification will not have a significant anticompetitive effect on the interexchange
market or on Ameritech'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 Ameritech's petition 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
Ameritech's petition for limited LATA modification in order to provide non-optional ELCS.  The
LATAs are modified solely for the limited purpose of allowing Ameritech 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 request of Ameritech for LATA modification for the limited
purpose of providing flat-rated, non-optional ELCS at specific locations, identified in File No. NSD-
L-98-69 IS 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, Ameritech.

                         FEDERAL COMMUNICATIONS COMMISSION



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