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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 ) ) U S WEST Petition to Establish Part 69 Rate ) CCB/CPD 99-37 Elements for SS7 Signaling ) ) ) ORDER Adopted: December 22, 1999 Released: December 23, 1999 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION AND BACKGROUND 1. On July 22,1999, U S WEST Communications, Inc. (U S WEST) filed an expedited petition pursuant to section 69.4(g)(1)(i) of the Commission's Rules, 47 C.F.R.  69.4(g)(1)(i), to permit U S WEST to restructure its existing local switching access charges and establish separate rate elements to recover Signaling System 7 (SS7) call set- up costs. In addition, U S WEST requests that the Commission allow it to establish new rate elements for the transport and switching of transient Transaction Capabilities Application Part (TCAP) messages. U S WEST's petition is unopposed. For the reasons stated below, we grant U S WEST's petition. 2. U S WEST's SS7 network uses Integrated Services Digital Network User Part (ISUP) messages to establish transmission paths over which telephone calls are carried (i.e., to establish call set-up). U S WEST bundles SS7 call set-up with other local switching functionality. Currently, SS7 call set-up costs are recovered through a per minute local switching charge. The three new SS7 rate elements U S WEST seeks to establish are: (1) ISUP Signal Formulation to cover the cost of formulating ISUP messages on a per call attempt basis (per initial address message); (2) ISUP Signal Transport to recover the cost of transporting signaling data between the local Signal Transfer Point (STP) and the end office/tandem Signaling Point/Service Switching Point (SP/SSP) on a per call attempt basis; and (3) ISUP Signal Switching to recover the cost of switching of SS7 call set-up messages at the local STP on a per call attempt basis. 3. In support of its petition, U S WEST argues that its proposed rate structure for SS7 set-up costs constitutes a restructuring of existing rate elements under the Commission's price cap regulation, and would be revenue neutral. U S WEST asserts that, consistent with the Commission's decision in the Access Charge Reform Order, the proposed rate elements should be placed in the Local Switching Category of the Traffic Sensitive Basket. U S WEST argues that such placement is appropriate because call-set up is a function of local switching, application of the rate elements is on a per-call attempt basis, and the individual rate elements are not subject to competition. 4. U S WEST argues that it would be in the public interest to permit U S WEST to recover SS7 call set-up costs in a manner that more accurately reflects the way in which those costs are incurred. U S WEST states that the current rate structure, which bundles switched access services with signaling services on a minute of use basis, is a rate structure that forces some customers to subsidize others. In addition, U S WEST argues that the current rate structure precludes U S WEST from recovering set-up charges from calls that are not completed even though U S WEST incurs the set-up cost for originating and terminating calls regardless of whether the call is completed. 5. As stated above, U S WEST also requests that the Commission allow it to establish two new rate elements for the transport and switching of transient TCAP messages: (1) TCAP Signal Transport, which will recover the costs of transporting signaling data between U S WEST's STP and the end office/tandem SP/SSP on a per- data-request basis; and (2) TCAP Signal Switching, which will recover the costs of switching SS7 call set-up messages at the U S WEST STP on a per-data-request basis. SS7 signaling is used to obtain information from various databases, such as the Line Information Database and 800 Access Service Database. TCAP messages are necessary to access various databases, and support toll free and alternatively billed calls, such as Custom Local Area Signaling Services (CLASS), and other advanced services. Therefore, TCAP messages allow U S WEST customers to obtain information from foreign (i.e., non-U S WEST) databases through the use of unbundled SS7 signaling from U S WEST. U S WEST currently recovers the costs of TCAP messages associated with its own advanced services in the query rates for those services, and will continue to do so under the revised structure. U S WEST argues that the proposed new TCAP rate elements are in the public interest and will allow increased competition in telecommunications from entities that cannot afford the expense of an SS7 network by allowing access to foreign databases through the use of transient TCAP messages carried over U S WEST's SS7 network. On July 27, 1999, the Commission released a Public Notice seeking comments on U S WEST's Petition. No comments were filed. II. DISCUSSION A. Restructured SS7 Call Set-Up Rate Elements 6. Section 1.3 of the Commission's rules provides that the Commission may grant waivers of its rules "if good cause therefor is shown." Courts have interpreted this rule to require petitioners to demonstrate that special circumstances justify a departure from the general rule and that such a deviation will serve the public interest. U S WEST has made investments to provide its network with the capability to assess rate elements on each switched access originating or terminating call attempt, rather than the duration of a call. We find that the newly deployed capability of U S WEST to provide SS7 call set-up on a per-message basis constitutes special circumstances. The Common Carrier Bureau (Bureau) has previously found in the past that advances in network technology justify waiver of our rules. 7. We also find that the U S WEST proposed restructure is in the public interest because it will permit US WEST to recover its SS7 costs in a way that reflects more accurately the manner in which those costs are incurred. Under U S WEST's current rate structure for its SS7 call set-up cost recovery, the per-minute signaling service charge is based on the duration of the underlying telephone call. Thus, entities making calls of shorter duration pay less than those making calls of longer duration. Under the proposed rate structure, individual signaling rate elements would be charged on a per- message basis, regardless of the duration of the telephone call that the signalling sets-up. As U S WEST points out, the cost of call set-up is not dependent upon the duration of the telephone call, although to some extent it may rely upon the volume of traffic passed over the SS7 network. Therefore, we find that U S WEST's proposed rate structure would more accurately reflect the manner in which signaling costs are incurred. B. New Rate Elements for Transport and Switching of Transient TCAP Messages 8. At the time the instant petition was filed, section 69.4(g) of the Commission's rules provided that local exchange carriers "may establish one or more switched access rate elements for a new service . . . upon approval of a petition demonstrating that . . . the new rate element or elements would be in the public interest." A new service is any service which adds to the range of options already available to customers. A new service may, but need not, include a new technology or functional capability. Prior to adoption of section 69.4(g), the Commission required carriers seeking to obtain new switched access rate elements to demonstrate good cause for grant of a waiver, under the general standard for waiver of the Commission's rules. The Bureau has previously granted Part 69 waivers to enable carriers to establish new rate elements "that are tailored precisely to their respective services," stating that "the creation of new rate elements would advance the goal of the Commission's access charge regime by enabling the carriers to better match relevant costs and rate elements," thus allowing recovery of costs from the customers using those services." 9. Based on our review of U S WEST's petition, we find that the proposed new rate elements for TCAP messages constitute new services pursuant to section 61.42(g) of the Commission's rules. Our existing Part 69 transport rate elements do not include rate elements that accurately reflect the costs of assessing foreign databases through the use of TCAP messages carried over SS7 networks. Allowing U S WEST to establish a rate structure that more accurately reflects the way in which the costs of providing these services are incurred, will result in more efficient use of U S WEST's existing network resources and the introduction of new services to customers. We further conclude that it would be in the public interest to grant U S WEST's petition because the proposed services add to the range of options available to U S WEST customers. Therefore, we grant U S WEST's petition to restructure its SS7 call set-up rate elements and establish new rate elements for its SS7 call set-up costs and TCAP messages. III. ORDERING CLAUSE 10. Accordingly, IT IS ORDERED, pursuant to Section 1.3 of the Commission's rules, 47 C.F.R.  1.3, and Section 69.4(g)(1)(i), 47 C.F.R.  69.4 (g)(1)(i) of the Commission's Rules, the petition filed by U S WEST IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Yog R. Varma Deputy Chief, Common Carrier Bureau