******************************************************** 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, italic, underlining, etc. from the original document will not show up in this text version. Features of the original 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 ) ) North Carolina Utilities Commission ) CCB/CPD No. 98-41 Order Dismissing and Directing Filings,) ) Docket P-100, Sub 84b, Adopted May 15, 1997) ORDER Adopted: June 29, 1998 Released: June 29, 1998 By the Chief, Competitive Pricing Division, Common Carrier Bureau: I. INTRODUCTION 1. In this Order, we extend the deadline for filing with the Federal Communications Commission (Commission), tariffs for intrastate payphone service offerings in North Carolina, together with supporting documentation, for all payphone services that have not been determined by the North Carolina Utilities Commission (North Carolina Commission) to comply with the requirements of Section 276 and the Commission's implementing rules. We extend this deadline in order to allow the North Carolina Commission time to issue a decision on a pending motion for reconsideration filed by BellSouth Telecommunications, Inc. (BellSouth), on behalf of itself and other North Carolina telephone companies (collectively North Carolina Telcos), in which BellSouth requests that the North Carolina Commission reconsider its order directing North Carolina local exchange carriers (LECs) to file revised rates and supporting data with the Commission. II. BACKGROUND 2. Section 276 of the Act establishes requirements designed to promote competition among payphone service providers and promote the widespread deployment of payphone services to the benefit of the general public. In its Payphone Reclassification Proceeding, the Commission adopted regulatory requirements implementing Section 276. The Commission required, inter alia, that incumbent LECs file tariffs for basic payphone lines at the state level only, and that unbundled features and functions provided by LECs to their own payphone operations or to others be tariffed at both the state and federal levels. The Commission required that all incumbent LEC payphone tariffs filed at the state level be cost-based, nondiscriminatory, and consistent with both Section 276 and the Commission's Computer III tariffing guidelines. The Commission determined that the rates assessed by LECs for payphone services tariffed at the state level must satisfy the requirements that the Commission applies to new interstate access services proposed by incumbent LECs subject to price cap regulation (the "new services test"). The new services test is a cost-based test that establishes the direct cost of providing the new service as a price floor. LECs then add a reasonable amount of overhead to derive the overall price of the new service. The Commission stated that it would rely initially on state commissions to ensure that the rates, terms, and conditions applicable to the provision of basic payphone lines comply with the requirements of Section 276. The Commission determined that state commissions that are unable to review these tariffs may require incumbent LECs operating in their states to file these tariffs with the Commission. The Common Carrier Bureau (Bureau) has emphasized that the Commission retains jurisdiction under Section 276 to ensure that all requirements of Section 276 and the Payphone Reclassification Proceeding are met. 3. In its May 15, 1997 decision in Docket P-100, the North Carolina Commission concluded, based on its staff recommendation, that incumbent LEC payphone filings that proposed rates for certain new payphone services met the new services test and that no further review of those filings was necessary. The North Carolina Commission further concluded, however, that it was unable to review incumbent LECs' rates for existing payphone service offerings because it lacked the time and resources to determine whether these service offerings were lawful. The North Carolina Commission directed LECs to file revised rates and supporting data with the FCC, if they determined, based on their own analysis, that any existing payphone service rates failed to meet the new services test. 4. On September 12, 1997, the Bureau informed the North Carolina Commission by letter that it would require incumbent LECs in North Carolina to file with the Commission tariffs that set forth the rates, terms, and conditions associated with all payphone services that the North Carolina Commission did not review and did not find to be in compliance with Section 276 of the Act and the Commission's implementing regulations. 5. On March 20, 1998, the Bureau ordered all incumbent LECs in North Carolina to file with the Commission by May 1, 1998 tariffs for intrastate payphone service offerings, together with supporting documentation, for all payphone services that had not been determined by the North Carolina Commission to comply with the requirements of Section 276 and the Commission's implementing rules, including the new services test. To date, only one carrier has filed intrastate payphone tariffs with the Commission, and that carrier has withdrawn its filing. 6. BellSouth and the North Carolina Telcos filed a motion with the North Carolina Commission, on April 29, 1998, requesting that the North Carolina Commission reconsider its May 15, 1997 decision and review all incumbent LEC tariff filings for intrastate payphone services to ascertain whether they comply with Section 276 of the Act and the Commission's implementing rules. In a request to the Commission, BellSouth asked for an extension to the Commission's filing deadline until July 1, 1998 in order to give the North Carolina Commission adequate time to act on BellSouth's motion. It argued that permitting the North Carolina Commission to review all intrastate payphone services would be the most efficacious approach available because the North Carolina Commission was in the best position to determine whether these tariffs comply with Section 276 and the Commission's rules, including the new services test. The Commission released an Order granting BellSouth's request for an extension on April 30, 1998. 7. In a letter dated June 17, 1998, the North Carolina Commission requested the Commission's concurrence in the North Carolina Commission's decision to resume review of incumbent LEC rates for existing payphone service offerings in North Carolina. In a letter dated June 22, 1998, the North Carolina Payphone Association (NCPA) opposed the North Carolina Commission's June 17, 1998 letter, and requested that the Commission proceed to review the North Carolina LEC tariffs. III. DISCUSSION 8. As noted above, the Commission stated in the Payphone Reclassification Proceeding that it would rely on state commissions in the first instance to review LEC payphone tariffs and ensure that the rates, terms, and conditions applicable to the provision of basic payphone lines comply with the requirements of Section 276. In its May 15, 1997 order, the North Carolina Commission stated that it lacked the resources to determine whether incumbent LEC rates for existing payphone service offerings met the requirements of Section 276 and the Payphone Reclassification Proceeding, including the new services test. BellSouth and the North Carolina Telcos' motion for reconsideration of this North Carolina Commission order is still pending. 9. The North Carolina Commission has indicated in its June 17, 1998 letter to the Commission that it is willing to resume review of existing payphone service tariffs. It would be consistent with the Commission's Payphone Reclassification Proceeding to allow the North Carolina Commission to again assume review of incumbent LEC rates for existing payphone service offerings in North Carolina, provided that all requirements of Section 276 and the Payphone Reclassification Proceeding, including the new services test, are met during the process of this review. The North Carolina Commission's letter stated that it planned to render a decision after Public Staff has reviewed cost studies to be filed by the four largest incumbent LECs for compliance with the new services test and for applicability to other incumbent LECs, and after opportunity for comment from interested parties. We therefore concur in the North Carolina Commission's decision to resume review of incumbent LEC rates for existing payphone service offerings in North Carolina, and extend to August 1, 1998, the existing deadline for incumbent LECs in North Carolina to file with the Commission tariffs for intrastate payphone service offerings that have not been determined by the North Carolina Commission to comply with Section 276 and the Commission's implementing rules. 10. Should the North Carolina Commission resolve BellSouth's motion for reconsideration and officially reverse the decision reached in its May 15, 1997 order, we plan to rescind our March 20, 1998 order, which required specific incumbent LECs in North Carolina to file with the Commission by May 1, 1998, tariffs for intrastate payphone service offerings, together with supporting documentation. We also plan to rescind our April 30, 1998 order, and our present order, which respectively extend the deadline for filing with the Commission to July 1, 1998, and August 1, 1998. IV. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED, pursuant to Section 276 of the Communications Act of 1934, as amended, 47 U.S.C.  276, and through authority delegated pursuant to Sections 0.91 and 0.291 of the Commission's Rules, 47 C.F.R.  0.91, 0.291, that all incumbent LECs in North Carolina shall file with the Commission by August 1, 1998 tariffs and supporting documentation for intrastate payphone service offerings that have not been determined by the North Carolina Commission to comply with Section 276 and the Commission's implementing rules, including the new services test. FEDERAL COMMUNICATIONS COMMISSION Jane E. Jackson Chief, Competitive Pricing Division Common Carrier Bureau