WPCP 2MBVRKZ3|a  7jC:,ynXj\  P6G;XP"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxdHP LaserJet 5SiHPLAS5SI.PRSXj\  P6G;\p&FXP2k K 3|a  Times New RomanTimes New Roman BoldTimes New Roman ItalicLine Draw (Scalable-LG)Times New Roman Bold ItalicCourierCourier Italic"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd2 ' ZKi #&J Pu&P#HP LaserJet 5SiHPLAS5SI.PRSXj\  P6G;\p&FP"i~'^5>I\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>Q\Q\Q>\\33\3\\\\>F3\\\\QX%Xc>0cT>>>0>>>>>>\>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\nBnnBmgg>Q\7"yyyy\njc\gnn\ errata SPIESSPIES $2 H* r L  heading 1heading 1` hp x (# heading 2heading 2F<#XXPXP#  #&J P&P#heading 3heading 3@#XXPXP#heading 4heading 4C#XXPXP# 2H Fheading 5heading 5 (# Default Paragraph FoDefault Paragraph Font1 1 #XP PXP##&J P&P#endnote textendnote text; #XP PXP#endnote referenceendnote reference44#XP PXP##&J P&P#2l 8 e 0 Nfootnote textfootnote text ;#C PP#footnote referencefootnote reference toc 1toc 1 (#`X` hp x (#toc 2toc 2 ` (#X` hp x (#2 toc 3toc 3 ` (#`X` hp x (#toc 4toc 4 (#`X` hp x (#toc 5toc 5h(#`X` hp x (#toc 6toc 6 (# X` hp x (#2&vH!#toc 7toc 7! "toc 8toc 8#$(# X` hp x (#toc 9toc 9%&(#`X` hp x (#index 1index 1'(` (#X` hp x (#2,J&h(*J+index 2index 2)*` (#X` hp x (#toa headingtoa heading+,(#X` hp x (#captioncaption;-1.#XP PXP##&J P&P#_Equation Caption_Equation Caption1/10#XP PXP##&J P&P#216,T.r00headerheader12 (# X` hp x (#footerfooter34 (# X` hp x (#page numberpage number156#XP PXP#Document MapDocument Map;718#&QP&P##&J P&P#2V6o1`3l~5 l5Body Text 2Body Text 29:` hp x (##XP PXP# Docutech numberingDocutech numbering;<` hp x (#X` hp x (#ListList=>List 2List 2 ?@2$8!l6"l6#l`7$X7List 3List 3!ABList 4List 4"CDBody TextBody Text#EFNORMAL$2:%vV8&p8'k<9(k9a8DocumentgDocument Style Style%XX` `  ` a4DocumentgDocument Style Style& . a6DocumentgDocument Style Style' GX  a5DocumentgDocument Style Style( }X(# 2m<)D:*v:+t_;,;a2DocumentgDocument Style Style)<o   ?  A.  a7DocumentgDocument Style Style*yXX` ` (#` BibliogrphyBibliography+:X (# a1Right ParRight-Aligned Paragraph Numbers,:`S@ I.  X(# 2J?-<.B=/=0>a2Right ParRight-Aligned Paragraph Numbers-C @` A. ` ` (#` a3DocumentgDocument Style Style.B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers/L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers0Uj` `  @ a. ` (# 2B1|?2;@3A4Aa5Right ParRight-Aligned Paragraph Numbers1_o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbers2h` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph Numbers3pfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph Numbers4yW"3!` `  hh#(-@p/a) -pp2(#p 2E5B6C7D85ETech InitInitialize Technical Style5. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala1DocumentgDocument Style Style6\s0  zN8F I. ׃  a5TechnicalTechnical Document Style7)WD (1) . a6TechnicalTechnical Document Style8)D (a) . 2H9E:F;CG<Ga2TechnicalTechnical Document Style9<6  ?  A.   a3TechnicalTechnical Document Style:9Wg  2  1.   a4TechnicalTechnical Document Style;8bv{ 2  a.   a1TechnicalTechnical Document StylecI?3I@Ka7TechnicalTechnical Document Style=(@D i) . a8TechnicalTechnical Document Style>(D a) . Doc InitInitialize Document Style?z   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading Paper@E!n    X X` hp x (#%'0*,.8135@8:_' =('87=F7*'Ç.7=.Eo.   2*Ç.7=G@6FDocument Style=('87=FG*'Ç.7=.Ep56` ` ` 2~qqG|re|se}t}3*Ç.7=H@6FDocument Style=('87=FH*'Ç.7=.Eq7 8 . 4*Ç.7=I@6FDocument Style=('87=FI*'Ç.7=.Er 9: 5*Ç.7=J@6FDocument Style=('87=FJ*'Ç.7=.Es ;< 6*Ç.7=K@6FDocument Style=('87=FK*'Ç.7=.Et*=>   2yupG~v~wIx7*Ç.7=L@6FDocument Style=('87=FL*'Ç.7=.Eu?@` ` ` 8*Ç.7=M@6FRight-Aligned Paragraph Numbers*'Ç.7=.Ev8AB@   9*Ç.7=N@6FRight-Aligned Paragraph Numbers*'Ç.7=.EwACD@` `  ` ` ` 10Ç.7=O@6FDocument Style=('87=FO*'Ç.7=.Ex0E F    2qyzO{|11Ç.7=P@6FRight-Aligned Paragraph Numbers*'Ç.7=.EyJGH` ` @  ` `  12Ç.7=Q@6FRight-Aligned Paragraph Numbers*'Ç.7=.EzSIJ` `  @  13Ç.7=R@6FRight-Aligned Paragraph Numbers*'Ç.7=.E{\KL` `  @hh# hhh 14Ç.7=S@6FRight-Aligned Paragraph Numbers*'Ç.7=.E|eMN` `  hh#@( hh# 2{}~k<15Ç.7=T@6FRight-Aligned Paragraph Numbers*'Ç.7=.E}nOP` `  hh#(@- ( 16Ç.7=U@6FRight-Aligned Paragraph Numbers*'Ç.7=.E~wQR` `  hh#(-@pp2 -ppp 17Ç.7=V@6FDocument Style=('87=FV*'Ç.7=.EFST *  ׃  18Ç.7=W@6FTechnical Document Style7=FW*'Ç.7=.E&UV  . 22·c19Ç.7=X@6FTechnical Document Style7=FX*'Ç.7=.E&WX  . 20Ç.7=Y@6FTechnical Document Style7=FY*'Ç.7=.E*YZ    21Ç.7=Z@6FTechnical Document Style7=FZ*'Ç.7=.E'[\   22Ç.7=[@6FTechnical Document Style7=F[*'Ç.7=.E&]^   2)ى^23Ç.7=\@6FTechnical Document Style7=F\*'Ç.7=.E4_$`     24Ç.7=]@6FTechnical Document Style7=F]*'Ç.7=.E&ab  . 25Ç.7=^@6FTechnical Document Style7=F^*'Ç.7=.E&cd  . Format Downl@6FFormat Downloaded Document=Fc*'Ç.7=.EUgh XX    X\ #d6X@7@#24‹| Word222Null@6FWord222Null_' =('87=Fp*'Ç.7=.E1{1|#/x PX##/x PX#HEADING 7t@6FJ>_' =('87=Ft*'Ç.7=.E0p Zwp x (#DDDDDD#&n P&P# 4 hp x (##&n P&P# HEADING 6v@6Ff>_' =('87=Fv*'Ç.7=.E0p Zwp x (#DDDDDD#&n P&P# 4 hp x (##&n P&P# NORMAL INDEN@6F>_' =('87=Fy*'Ç.7=.E'4 <DL!T$#&n P&P##&n P&P#2MwfݕQenumlev1=z@6F>_' =('87=Fz*'Ç.7=.E$p  N hp x (#aa#&n P&P#4` hp x (##&n P &P#footnote ref@6Ffootnote reference'87=F{*'Ç.7=.ER#V\  P!UP#26Ç.7=@6Ffootnote text =('87=F*'Ç.7=.E>4??USendnote refe@6Fendnote reference'87=F*'Ç.7=.ERR#Xj\  P"G;XP##c P#7P#2guline number@6Fline number_' =('87=F*'Ç.7=.EOO#Xj\  P$G;XP##c P%7P#Highlight@6FMiddle Article Highlight7=F*'Ç.7=.E''#G }&Y##\9> (P'YP#Headline=@6FHeadline for newsletter87=F*'Ç.7=.E''#> }(Y##\9> (P)YP#2nd line Hea@6F2nd line headline'87=F*'Ç.7=.E''#b> }*Y##\9> (P+YP#2EFGraphics hea@6FHeadlines for graphics87=F*'Ç.7=.E** #o> P},YP##\9> (P-YP# Graphics bod@6Fchart data _' =('87=F*'Ç.7=.E** #Alo> P}.YXP##\9> (P/YP# Article head@6FHeadline for new article7=F*'Ç.7=.E*'#r"z0C# #\9> (P1YP# 27Ç.7=@6FDefault Paragraph Font87=F*'Ç.7=.Eww#X}xP87XP##&sxP97&P#2ZǠpyqHEADING 9@6F >_' =('87=F*'Ç.7=.E'34 <DL!T$#c P:7P##c P;7P#HEADING 8@6F >_' =('87=F*'Ç.7=.E'34 <DL!T$#c P<7P##c P=7P#28Ç.7=@6FDocument Style=('87=F*'Ç.7=.E` ` ` 29Ç.7=@6FDocument Style=('87=F*'Ç.7=.E  . 2YeeVp30Ç.7=@6FDocument Style=('87=F*'Ç.7=.E  31Ç.7=@6FDocument Style=('87=F*'Ç.7=.E  32Ç.7=@6FDocument Style=('87=F*'Ç.7=.E*   33Ç.7=@6FDocument Style=('87=F*'Ç.7=.E` ` ` 2M34Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.E8@   35Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.EA@` `  ` ` ` 36Ç.7=@6FDocument Style=('87=F*'Ç.7=.E0    37Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.EJ` ` @  ` `  2 #ШE38Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.ES` `  @  39Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.E\` `  @hh# hhh 40Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.Ee` `  hh#@( hh# 41Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.En` `  hh#(@- ( 2ԭ?ʬO42Ç.7=@6FRight-Aligned Paragraph Numbers*'Ç.7=.Ew` `  hh#(-@pp2 -ppp 43Ç.7=@6FDocument Style=('87=F*'Ç.7=.EF *  ׃  44Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E&  . 45Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E&  . 2{7˯46Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E*    47Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E'   48Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E&   49Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E4$     22Q50Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E&  . 51Ç.7=@6FTechnical Document Style7=F*'Ç.7=.E&  . 52Ç.7=@6F: >_' =('87=F*'Ç.7=.E'4 <DL!T$#&n P>&P##&n P?&P#53Ç.7=@6Ffootnote reference'87=F*'Ç.7=.E>#V\  P@UP#2ݶ;54Ç.7=@6FDefault Paragraph Font87=F*'Ç.7=.E55Ç.7=@6Ffootnote text =('87=F*'Ç.7=.E* ??US56Ç.7=@6Fendnote reference'87=F*'Ç.7=.E>>#Xj\  PAG;XP##B\  PBUP#57Ç.7=@6F_Equation Caption'87=F*'Ç.7=.E;;#XX2PCQXP##I2PDQP#2d-sc<HIGHLIGHT 1@6FItalics and Bold('87=F*'Ç.7=.E DRAFT ON=@6FHeader A Text = DRAFT and Date*'Ç.7=.E X 8#x6X@E7X@#`] (#EDRAFTă `;(#@D3 1, 4D  ӷDRAFT OFF@6FTurn Draft Style off87=F*'Ç.7=.ED      LETTER LAND@6FLetter Landscape - 11 x 8.5F*'Ç.7=.E    '3   2hcѺc4cnLEGAL LAND@6FLegal Landscape - 14 x 8.5=F*'Ç.7=.E   'A   LETTER PORT@6FLetter Portrait - 8.5 x 11=F*'Ç.7=.E  3'   LEGAL PORT@6FLegal Portrait - 8.5 x 147=F*'Ç.7=.E  A'   TITLE7=@6FTitle of a Document87=F*'Ç.7=.E* ă2ldjBLOCK QUOTE@6FSmall, single-spaced, indented*'Ç.7=.E HIGHLIGHT 2@6FLarge and Bold=('87=F*'Ç.7=.E HIGHLIGHT 3@6FLarge, Italicized and Underscored*'Ç.7=.E  LETTERHEAD@6FLetterhead - date/margins7=F*'Ç.7=.E!  X  3'   * 3' Ѓ   2pI<<4INVOICE FEE@6FFee Amount for Math InvoiceF*'Ç.7=.E F, $0  MEMORANDUM@6FMemo Page Format('87=F*'Ç.7=.Eƹ   * M E M O R A N D U M ă y<N dddy INVOICE EXP@6FExpense Subtotals for Math Invoice*'Ç.7=.E!" ,p, $0INVOICE TOT@6FTotals Invoice for Math Macro*'Ç.7=.E#$ p,p, $024[#[~[INVOICE HEAD@6FHeading Portion of Math Invoice*'Ç.7=.E%&   p,X 9 I. A. 1. a.(1)(a) i) a)#x6X@F7X@# XX  *$HHީ  ӧ   XX  I. A. 1. a.(1)(a) i) a)Ҳ#x6X@G7X@# XX  *$HHީSMALL7=@6FSmall Typestyle=('87=F*'Ç.7=.E'(FINE.7=@6FFine Typestyle=('87=F*'Ç.7=.E)*LARGE7=@6FLarge Typestyle=('87=F*'Ç.7=.E+,2H[f[EXTRA LARGE@6FExtra Large Typestyle87=F*'Ç.7=.E-.VERY LARGE@6FVery Large Typestyle87=F*'Ç.7=.E/0ENVELOPE=@6FStandard Business Envelope with Header'Ç.7=.E.12 V,  X  , 8 I. A. 1. a.(1)(a) i) a)#x6X@H7X@#    `   Style 14=@6FSwiss 8 Pt Without Margins=F*'Ç.7=.E'3'4#Co> PIQP##)a [ PJQ)P#2z s Style 12=@6FDutch Italics 11.5'87=F*'Ç.7=.E'5'6#)^ `> XiKQ)X##)a [ PLQ)P#Style 11=@6FInitial Codes for Advanced II*'Ç.7=.EҔ 78#)a [ PMQ)P# dn  #  [ b, oT9 ! I. A. 1. a.(1)(a) i) a)#)a [ PNQ)P# ## b, oT9 !#)^ `> XiOQ)X#`e%(Advanced Legal WordPerfect II Learning Guide   x I. A. 1. a.(1)(a) i) a)#)a [ PPQ)P# ## b, oT9 !#)^ `> XiQQ)X#Advanced Legal WordPerfect II Learning Guide   xw I. A. 1. a.(1)(a) i) a)#)a [ PRQ)P# ## b, oT9 !#)^ `> XiSQ)X#   Copyright  Portola Systems, Inc. 1987, 1988`e%APage  w#)a [ PTQ)P# ## b, oT9 !#)^ `> XiUQ)X#   Page ``e%)Copyright  Portola Systems, Inc. 1987, 1988 Style 37=@6FDutch Roman 11.5 with Margins/Tabs*'Ç.7=.E9:#)a [ PVQ)P# n  ## b, oT9 !Style 47=@6FSwiss 8 Point with Margins=F*'Ç.7=.EG;<#Co> PWQP# dd  #  2P^Style 17=@6FDutch Roman 11.5 Font87=F*'Ç.7=.E7=>#)a [ PXQ)P# dn Style 27=@6FDutch Italic 11.5'87=F*'Ç.7=.E'?@#)^ `> XiYQ)X#Style 57=@6FDutch Bold 18 Point87=F*'Ç.7=.E'A'B#T~> pZQTp##)a [ P[Q)P#Style 77=@6FSwiss 11.5>_' =('87=F*'Ç.7=.E'C'D#)ao> P\Q)P##)a [ P]Q)P#2  0 Style 67=@6FDutch Roman 14 Point87=F*'Ç.7=.E'E'F#w [ P^QP##)a [ P_Q)P#Style 10=@6FInitial Codes for Advanced=F*'Ç.7=.EV GH#)a [ P`Q)P# dn   #  [ b, oT9 ! I. A. 1. a.(1)(a) i) a)#)a [ PaQ)P# ## b, oT9 !#)^ `> XibQ)X#`e%)Advanced Legal WordPerfect Learning Guide   u I. A. 1. a.(1)(a) i) a)#)a [ PcQ)P# ## b, oT9 !#)^ `> XidQ)X#Advanced Legal WordPerfect Learning Guide   u I. A. 1. a.(1)(a) i) a)#)a [ PeQ)P# ## b, oT9 !#)^ `> XifQ)X#  Style 87=@6FInitial Codes for BeginningF*'Ç.7=.EV IJ#)a [ PiQ)P# dn  ## b, oT9  [  I. A. 1. a.(1)(a) i) a)#)a [ PjQ)P# ## b, oT9 #)^ `> XikQ)X#`^e%)Beginning Legal WordPerfect Learning Guide   v I. A. 1. a.(1)(a) i) a)#)a [ PlQ)P# ## b, oT9 #)^ `> XimQ)X#Beginning Legal WordPerfect Learning Guide   v I. A. 1. a.(1)(a) i) a)#)a [ PnQ)P# ## b, oT9 #)^ `> XioQ)X#   Copyright  Portola Systems, Inc. 1987, 1988`e%APage   I. A. 1. a.(1)(a) i) a)#)a [ PpQ)P# ## b, oT9 #)^ `> XiqQ)X#   Page ``e%)Copyright  Portola Systems, Inc. 1987, 1988 28  j'dStyle 97=@6FInitial Codes for Intermediate*'Ç.7=.ET KL#)a [ PrQ)P# dn  ## b, oT9 Update7=@6FInitial Codes for Update Module*'Ç.7=.Ee MN#)a [ P{Q)P# dn  ##  [ b, oT9 ! I. A. 1. a.(1)(a) i) a)#)a [ P|Q)P# ## b, oT9 !#)^ `> Xi}Q)X#`Ye%%Legal WordPerfect 5.0 Update Class Learning Guide   } I. A. 1. a.(1)(a) i) a)#)a [ P~Q)P# ## b, oT9 !#)^ `> XiQ)X#Legal WordPerfect 5.0 Update Class Learning Guide   }58Ç.7=@6FFormat Downloaded Document=F*'Ç.7=.EUOP XX    #\ #d6X@7@#Bld/Und7=@6FBold and Underline Text87=F*'Ç.7=.EQR  2>!jqq\ q a1Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'%STD*  a2Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'UVa3Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'WXa4Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'YZ24#qp!q!qR"q"a5Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'[\a6Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*']^a7Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'_`a8Agenda.E+'*Ç.Agenda Items=('87=FGD!*'7=*'ab2%f##$7%a159.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'8st@   a259.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'Auv@` `  ` ` ` a359.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'Jwx` ` @  ` `  a459.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'Syz` `  @  2$)&&'S(a559.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'\{|` `  @hh# hhh a659.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'e}~` `  hh#@( hh# a759.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'n` `  hh#(@- ( a859.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'w` `  hh#(-@pp2 -ppp 2+V))*'+a160.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'8@   a260.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'A@` `  ` ` ` a360.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'J` ` @  ` `  a460.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'S` `  @  2/,,{-C.a560.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'\` `  @hh# hhh a660.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'e` `  hh#@( hh# a760.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'n` `  hh#(@- ( a860.E+'*Ç.Right-Aligned Paragraph Numbers'87=F*'w` `  hh#(-@pp2 -ppp 21pF//I001t >.x(Dt—Document Style >f.RK+P—!t >f—+b56` ` ` a129f—+b—!tRight-Aligned Paragraph NumberswH(RK+P8@   a229f—+b—!tRight-Aligned Paragraph NumberswH(RK+PA@` `  ` ` ` a329f—+b—!tRight-Aligned Paragraph NumberswH(RK+PJ` ` @  ` `  271j2K!3Kl5a429f—+b—!tRight-Aligned Paragraph NumberswH(RK+PS` `  @  a529f—+b—!tRight-Aligned Paragraph NumberswH(RK+P\` `  @hh# hhh "i~'^5>g\\>>>\g0>03\\\\\\\\\\>>ggg\yyrF\yrgyy>3>j\>\gQgQ>\g3>g3g\ggQF>g\\\QI(I_>0_j>>>0>>>>>>\>g3\\\\\QyQyQyQyQD3D3D3D3g\\\\gggg\\g\\\\pg\\\QQ_QyQyQyQyQ\\\_\gjF3FgF>Fgg__gy3ySy>yIy3ggg\\QQQgFgFgFg_y^y>yjgggggg_yQyQyQgy>ggFy>\0\\=2=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBa\>\\\\\\7>\7>\7>>\\\??n\\nBnnBsgg>\\7"yyyy\nlc\gnn\"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN>BH>>HH",B8TBH>H>28H>T>88&&*2"22,2,22,H2222&&2,B,,&((6"6*"""""""""2"2>2>2>2>2>2XBB,>,>,>,>,""""B2H2H2H2H2H2H2H2H28,>2H2H2H28,H2>2>2>2>2B,B,B6B,H<>,>,>,>,H2H2H2H6H2H6H2""2"""2L266B,88$8"8 8B2:B2B2H2H2^B>&>&>&2&2&2&668$88*H2H2H2H2H2H2TB868&8&8&H28"B22&8"82<22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFddddddddddddddddddddddddddddddddddddddddN$<<$42&22222b2 LL2 LL2L""882X"";xxxX<=x H@B @\"5hC:,%rXh*f9 xr G;XX#y.\80,>\4  pG;$z-X80,T|X9 xOG;<>vvv,pv6X@`7N@\`I4!,%^,4*f9 xr G;,X >vvv,xv6Nhez7NHXP##Xv6X@CX@#Technical[1] X2 X E S(X` hp x (#%'0*,.8135@8:ԍTelecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56, codified at 47 U.S.C.  151 et seq.  2!Hereinafter, all citations to the 1996 Act will be to the 1996 Act as it is codified in the United States Code. The  2!<1996 Act amended the Communications Act of 1934. We refer to the Communications Act of 1934, as amended, as the "Communications Act" or as the "Act." is to promote innovation and investment by all participants in the telecommunications  X2marketplace, in order to stimulate competition for all services, including advanced services.J. {O$( @ԍJoint Statement of Managers, S. Conf. Rep. No. 104230, 104th Cong. 2d Sess. 1 (1996) (Joint Explanatory  {O( 2!4Statement). For purposes of this order, we use the term "advanced services" to mean high speed, switched,  2!6broadband, wireline telecommunications capability that enables users to originate and receive high-quality voice, data,  2!Vgraphics or video telecommunications using any technology. The term "broadband" is generally used to convey  2!sufficient capacity or "bandwidth" to transport large amounts of information. As technology evolves, the  2!concept of "broadband" will evolve with it: we may consider today's "broadband" services to be "narrowband"  2!services when tomorrow's technologies appear. Today's broadband services include services based on digital  2!dsubscriber line technology (commonly referred to as xDSL), including ADSL (asymmetric digital subscriber line),  2!nHDSL (highspeed digital subscriber line), UDSL (universal digital subscriber line), VDSL (veryhigh speed digital subscriber line), and RADSL (rateadaptive digital subscriber line), and services based on packetswitched technology.J In this order, we take another important step towards implementing Congress goals with  X2respect to advanced services. N . yO'( @ԍAlthough advanced services can also be deployed using other technologies over satellite, cable, and wireless  2!systems, the issues raised in this docket are limited to wireline services. We use the term "wireline" in this order  2!to refer to facilities that have traditionally been deployed by telephone companies. This is distinct from the coaxial and other cable facilities that have traditionally been deployed by cable companies."6,**bb"Ԍ X2ԙ2.` ` Although both incumbent local exchange carriers (LECs) and new entrants are developing and deploying innovative new technologies to meet the everincreasing demand for highspeed, highcapacity advanced services, including enhanced Internet access, the consumer  X2market is still in the early stages of development.& {O4( @ԍSee Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in  2!a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of  {O( 2!the Telecommunications Act of 1996, CC Docket 98146, Report, 13 FCC Rcd 15280, 15297, para. 48. (1999)  {O((Section 706 Report to Congress). Congress has directed the Commission to ensure that advanced services are being deployed on a reasonable and timely basis to all  X2Americans, including residential consumers. {O ( @>ԍSee Pub.L. 104104, Title VII,  706, Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157. In order to encourage carriers to develop and deploy new advanced services to all markets, we are committed to ensuring that incumbent LECs and competitive carriers alike are able to make their decisions to invest in, and deploy, advanced telecommunications services based on market demand and their own strategic business plans, rather than on regulatory requirements.   X 23.` ` In this Second Report and Order, we address the issue raised in the Advanced  X 2Services NPRM of whether the discounted resale obligation of section 251(c)(4) applies to incumbent LEC provision of advanced services without regard to their classification as telephone exchange or exchange access. As discussed below, we determine that our analysis of section 251(c)(4) requires a fact specific evaluation of the features and characteristics of a particular transaction. Based on the record before us, we conclude that advanced services sold at retail by incumbent LECs to residential and business endusers are subject to the section 251(c)(4) discounted resale obligation, without regard to their classification as telephone  XO2exchange service or exchange access service.JO yO(ԍ47 U.S.C.  251(c)(4).J This finding reinforces the resale requirement of the Act by ensuring that resellers are able to acquire advanced services at wholesale rates. We reach a different result as to advanced services sold to Internet Service Providers for inclusion in a highspeed Internet service offering. We conclude that these advanced services are inherently different from advanced services made available directly to business and residential endusers, and as such, are not subject to the discounted resale obligations of section 251(c)(4). The Commissions determination herein should encourage incumbents to offer advanced services to Internet Service Providers at the lowest possible price. In turn, the Internet Service Providers, as unregulated information service providers, will be able to package the DSL service with their Internet service to offer affordable, highspeed access to the Internet to residential and business consumers. As a result, consumers will ultimately benefit through lower prices and greater and more expeditious access to innovative, diverse broadband applications by multiple providers of advanced services. "$,6)6)bb"Ԍ X2 II.Background  X24.` ` Section 251(c)(4) imposes on incumbent LECs the duty to offer for resale any telecommunications service that the carrier provides at retail to subscribers who are not  X2telecommunications carriers.@ yO( @ ԍ47 U.S.C.  251(c)(4). "Telecommunications service" is defined in section 3(46) to mean "the offering of  2!telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly  2!(to the public, regardless of the facilities used." 47 U.S.C.  153(46). "Telecommunications" is, in turn, defined in  2!Lsection 3(43) as "the transmission, between or among points specified by the user, of information of the user's  2!tchoosing, without change in the form or content of the information as sent and received." 47 U.S.C.  153(43).  2!"Telecommunications carrier" is defined in section 3(44) to mean "any provider of telecommunications services,  2!except that such term does not include aggregators of telecommunications services (as defined in section 226)." 47 U.S.C.  153(44). In the Local Competition First Report and Order, the  X2Commission emphasized that the resale obligation under 251(c)(4) extends to all such  Xz2telecommunications services.z {O( @pԍImplementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC Docket  2!No. 9698, First Report and Order, 11 FCC Rcd 15499, 15930, 15931, 15934, paras. 863, 86566, 871. (1996)  {O( 2!v(Local Competition First Report and Order), aff'd in part and vacated in part sub nom., Competitive  {OW( 2!dTelecomunications Ass'n v. FCC, 117 F.3d 1068 (8th Cir. 1997) and Iowa Utilities Bd. v. FCC, 120 F.3d 753 (8th  {O!( 2!D Cir. 1997), petition for cert. granted, Nos. 97826, 97829, 97830, 97831, 971075, 971087, 971099, and 971141  {O( 2!x(U.S. Jan. 26, 1998) (collectively Iowa Utils. Bd. v. FCC), aff'd in part and remanded, AT&T Corp., et al. v. Iowa  {O( 2!Utils. Bd. et al., 119 S.Ct 721 (1999); Order on Reconsideration, 11 FCC Rcd 13042 (1996), Second Order on  2!LReconsideration, 11 FCC Rcd 19738 (1996), Third Order on Reconsideration and Further Notice of Proposed  {OG(Rulemaking, FCC 97295 (rel. August 18, 1997), further recons. pending. The Commission concluded that an incumbent LEC must establish a wholesale rate for each retail service that: (1) meets the statutory definition of a telecommunications service; and (2) is provided at retail to subscribers who are not  X52telecommunications carriers.O 5 {O(ԍId. at 15934, para. 871.O The Commission concluded, however, that because exchange access services are predominantly offered to, and taken by, telecommunications carriers,  X 2exchange access services are not subject to the provisions of section 251(c)(4).T Z @ {O( @ԍ Id. at 15934, para. 873. "Exchange access" is defined in section 3(16) to mean "the offering of access to  2!,telephone exchange services or facilities for the purpose of the origination or termination of telephone toll services." 47 U.S.C.  153(16).T  X 25.` ` In our Advanced Services Memorandum Opinion and Order we determined that by the plain terms of the Act, advanced services offered by incumbent LECs are  X 2telecommunications services. $ b {O#( @ԍDeployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98147,  2!Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 24012, 24029, para. 35. (1998)  {OR%( 2!.(Advanced Services Order and NPRM). For purposes of this discussion, the term "advanced services" has the meaning set forth in Commission rule 51.5. Accordingly, we concluded that, pursuant to section 251(c)(4), incumbent LECs have the obligation to offer for resale at wholesale rates all advanced"N ,6)6)bb"  X2services that they generally provide to subscribers who are not telecommunications carriers.M  {Oy(ԍId. at 2404, para. 60.M We further concluded that incumbent LECs must offer advanced services for resale pursuant to section 251(c)(4), whether such services are deemed telephone exchange service or  X2exchange access services. In the accompanying Notice of Proposed Rulemaking, we tentatively concluded that, to the extent advanced services are exchange access services, these services are fundamentally different from the exchange access services that the Commission  Xx2excluded from the obligations of section 251(c)(4) in the Local Competition First Report and  Xc2Order because advanced services will be offered predominantly to residential or business end XN2users or to Internet service providers and not to telecommunications carriers.V NZ {OY ( @6ԍId. In the Local Competition First Report and Order, the Commission drew a distinction between  2!ntelecommunications services "targeted to enduser subscribers," which Congress "clearly intended" to be subject to  2!`the resale requirement, and those "predominantly offered to, and taken by" interexchange carriers which are not  {O ( 2!rsubject to the resale requirement under 251(c)(4). Local Competition First Report and Order, 11 FCC Rcd at 15935, para. 874.V Accordingly,  X72in the Advanced Services NPRM, we sought comment on the applicability of section 251(c)(4)  X" 2to advanced services to the extent that such services are exchange access services.el "  {O( @ԍAdvanced Services Order and NPRM, 13 FCC Rcd at 24094, paras. 187189. US West has sought judicial  2!review of the Commission's determination that advanced services are telecommunications services, and that carriers  yOs( 2!offering such services are subject to the obligations of section 251(c). The Commission has requested and received  2!a remand from the United States Court of Appeals for the District of Columbia Circuit to address US West's  2!`argument that the Commission is without statutory authority to subject incumbent LECs to the requirements of  {O( 2!section 251(c) in the provision of advanced services. See US West v. Federal Communications Commission, Order  {O( 2!"No. 981410 (rel. August 25, 1999). In this decision, the court declined to vacate portions of the Advanced Services  {O_( 2!Order challenged by US West. After receiving a more complete administrative record, we intend to fully address  {O)( 2!US West's arguments in a subsequent order in this docket. Public Notice Requesting Comments in Connection with  {O( 2! Court Remand of August 1998 Advanced Services Order, CC Docket Nos. 9811, 9826, 9832, 9878, 9891, 98147  2!(rel. Sept. 9, 1999). We note that the Commission made a commitment to the D.C. Circuit Court to consider and address within 120 days the issues raised by US West.e  X 2  X 2III.Discussion   X 26.` ` Incumbent LECs are marketing and providing DSL services in two distinct ways: (1) directly to residential and business endusers; and (2) to Internet Service Providers who package it as part of a highspeed Internet service. Some incumbent LECs have filed  X2tariffs with the Commission offering single lines of DSL service to enduser customers.^B {Ot"(ԍSee Bell Atlantic Transmittal No. 1081.^ Incumbent LEC advertising for these services makes clear that these single line DSL offerings"j,6)6)bb," are designed for and offered to the ultimate enduser because the incumbent LEC will be  X2performing functions such as marketing, billing, and customer care for the enduser. {Ob( @\ԍSee (Bell Atlantic offers "Personal Infospeed" service for $49.95/month. The service is marketed directly to residential consumers).   X27.` ` Incumbent LECs are also entering into arrangements directly with Internet Service Providers, such as America Online (AOL) and Prodigy, pursuant to which the Internet Service Providers purchase large volumes of DSL lines at various discounts based on the  Xv2number of lines purchased and the duration of the plan.n\v" {OI ( @ԍSee Letter from Steven Teplitz, America Online Inc., to Staci L. Pies, Attorney Advisor, Policy and Program  2!ZPlanning Division, Common Carrier Bureau, Federal Communications Commission, CC Docket No. 98148 (filed  {O (April 29, 1999) (AOL April 29 Ex Parte).n For example, Bell Atlantic recently filed a transmittal with the Commission revising its ADSL tariffs to include volume and term  XH2discount plans.HF yO?( @ԍBell Atlantic Transmittal No. 1138, Bell Atlantic Tariff F.C.C. No. 1. (Bell Atlantic Bulk DSL Tariff). On  2!June 2, 1999, the Commission released a Partial Suspension Order suspending language in the transmittal that stated  2!Zthat "[t]he telecommunications services offered under the volume and term discount plan are provided at wholesale  2!.to carriers and noncarriers" and that such services are not services provided "at retail and, accordingly, are not  2!subject to the rate provisions of sections 251(c)(4) and 252(d)(3) . . . ." The Commission allowed the remainder of  {O'( 2!the tariff to go into effect. Bell Atlantic Revisions to Tariff F.C.C. No. 1, Revisions to Tariff F.C.C. No. 11, Partial  2!dSuspension Order, CC Docket No. 992201, DA 991060 (rel. June 2, 1999). Although these services are offered  2!to both Internet Service Providers and other carriers, the plain language of section 251(c)(4) makes clear that the  2!discounted resale obligations apply only to telecommunications services sold to subscribers who are not  2!telecommunications carriers. 27 U.S.C.  251(c)(4). Our analysis in this order, therefore, addresses only those circumstances where the volume and term discount plan is offered to Internet Services Providers. Pursuant to the Bell Atlantic tariff, some Internet Service Providers, such as AOL, are purchasing the DSL service, combining the service with their Internet service, and  X 2offering the combined highspeed Internet service directly to enduser subscribers.  yOs( @ԍWe note that Internet Service Providers would not offer Bell Atlantic's ADSL service on a standalone basis  {O;( 2!without packaging it with their Internet services. See Letter from Steven Teplitz, America Online Inc., to Staci L.  2!dPies, Attorney Advisor, Policy and Program Planning Division, Common Carrier Bureau, Federal Communications  yO( 2!Commission, CC Docket No. 98147 (filed July 26, 1999) at 3 (AOL White Paper). In addition, the volume and term discount plan is available to carriers as well as Internet Service Providers. The tariff requires the entities obtaining the bulk DSL services, whether Internet Service Providers or carriers, to perform certain functions with respect to the DSL service supplied to them, including provisioning all customer premises equipment (CPE) and wiring, providing  X 2customer service, and marketing, billing, ordering, and repair. Z {O"( @ԍSee Bell Atlantic Bulk DSL Tariff, Third Revised Page 918.42, para. 16.8(F)(4)(a). See also AOL White  yO#(Paper at 1314.   X28.` ` As discussed below, based on our examination of the statutory language, the Act's purpose, and the specific facts before us, we conclude that advanced services sold to residential and business endusers are subject to the section 251(c)(4) discounted resale obligation, without regard to their classification as telephone exchange service or exchange"K,6)6)bb"  X2access service.J yOy(ԍ47 U.S.C.  251(c)(4).J Moreover, we conclude that advanced services sold to Internet Service Providers under the volume and term discount plans described above are inherently and substantially different from advanced services made available directly to business and residential endusers, and as such, are not retail services and are not subject to the discounted resale obligations of section 251(c)(4).  Xv29.` ` Section 251(c)(4) imposes on incumbent LECs the duty to offer for resale at  X_2wholesale rates any telecommunications service that the carrier provides at retail to  XH2subscribers who are not telecommunications carriers.:HX {OQ (ԍId.: The category of services subject to the provisions of section 251(c)(4) is determined, therefore, by whether those services are telecommunication services that an incumbent LEC provides (1) at retail and (2) to  X 2subscribers who are not telecommunications carriers.:  {O(ԍId.:  X 2 10.` ` The record reflects, and the parties agree, that advanced services are telecommunications services that predominantly are offered to residential and business endusers and to Internet Service Providers " all subscribers that are not telecommunications  X2carriers.#| {O( @&ԍSee, e.g., ALTS Comments at 68; CBT Comments at 40. See FederalState Joint Board on Universal  {O( 2!Service, CC Docket No. 9645, 13 FCC Rcd 11536, 15486 paras. 7382 (1998) (Report to Congress on Universal  {OQ( 2!Service) (Internet Service Providers are not telecommunications carriers). But see US West v. Federal  {O( 2!Communications Commission, Order No. 981410 (rel. August 25, 1999) (arguing that the Commission is without  2!statutory authority to subject incumbent LECs to the requirements of section 251(c) in the provision of advanced  yO(services) ; GTE Comments at 110. # Moreover, the parties do not dispute that advanced services made available directly  Xy2to business and residential endusers are provided at retail.Fy  {O&( @ԍSee, e.g., Letter from Susanne Guyer, Assistant Vice President, Federal Regulatory, Bell Atlantic, to Magalie  2!xRoman Salas, Secretary, Federal Communications Commission, CC Docket No. 98147 (filed March 4, 1999) at 2  {O( 2!(Bell Atlantic March 4 Ex Parte) (acknowledging that section 251(c)(4) applies to services targeted to end user  2!subscribers; Cincinnati Bell Comments at 40 (stating that "CBT does not dispute that advanced telecommunications  2!services will be offered to retail customers); Letter from Ernest B. Kelly, III, President TRA, to William E. Kennard,  yO ( 2!@Chairman, Federal Communications Commission, CC Docket No. 98147 (filed April 27, 1999) (TRA White Paper).  {O ( 2! See also BellSouth Comments at 2829 (stating that in addition to offering advanced services at retail to residential  yO!(and business endusers, advanced services offerings will be sold in bulk to Internet Service Providers) . The only real dispute in this proceeding is whether advanced services sold to Internet Service Providers pursuant to volume and term discount plans are subject to the discounted resale obligation under section 251(c)(4). Answering this question requires that we examine the language of this section, and in particular, determine the proper interpretation and application of the term at retail. " ,6)6)bb"Ԍ X2 i'oj  i'oj ` `  A. MAbsence of Plain Meaning  X2 11.` ` Although Congress used the term at retail to identify the types of transactions that are subject to a wholesale discount, it is not clear how the Commission should interpret  i'oj  i'oj the term. The Act does not define the term at retail, and the legislative history on section 251(c)(4) provides only minimal clarification of Congress intentions with regard to the appropriate definition and application of the term. Although the legislative history suggests that the Commission should interpret section 251(c)(4) in such a way so as to create affordable resale opportunities in order to stimulate the development of local competition, while still allowing incumbents to recover their costs for providing these services, there is no indication in the legislative history that Congress considered how "at retail" should be construed in the context of the sale of data services to Internet Service Providers as an input  X 2component to their information service offerings to the ultimate enduser. 0$  {Oe ( @ԍ See H. Conf. R. No. 458, 104th Cong. 2nd Sess. at 122 ("Conference Report"). The conference committee  {O/( 2!relied in part on the House Amendments, Section 242(a)(3), of the Senate Bill. Id. at 120. Section 242(a)(3) would  2!~have required incumbent LECs to "offer resale at economically feasible rates to the reseller" for the purpose of spurring competition "in the local exchange market." H.R. Rep. No. 204, 104th Cong. 1st Sess. at 72.0  X 2 12.` ` We agree with AOL that given the recent emergence of DSL technology to provide highspeed Internet service, Congress likely did not anticipate the prospect of bulk DSL services designed primarily for Internet Service Providers and others to be used in  Xy2conjunction with information services offered to ultimate enduser customers.Fy yO(ԍAOL White Paper at 7.F Because the meaning of the term "at retail" is not clear and unambiguous from the language of the act, using the traditional tools of statutory construction, we look to the ordinary and common meaning of the term at retail and to the overall purpose of the Act, and sections 251 and  X2706 in particular, to determine a reasonable interpretation in this context.D {O( @ԍSee AOL White Paper at 8, n.9, citing McBoyle v. United States, 283 U.S. 25 (1931); Sundstrand Corp. V.  {O( 2!Commissioner of Internal Revenue, 17 F.3d 965 (7th Cir. 1994); Nesovic v. USA, 71 F.3d 776 (9th Cir. 1995). See  {O( 2!`also Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 n.9 (1984); Bell Atlantic  {Op( 2!Telephone Companies v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997). See also Letter from Larry Irving, Assistant  2! Secretary for Communications and Information, United States Department of Commerce, to William E. Kennard,  2!Chairman, Federal Communications Commission, CC Docket No. 98147 (filed May 7, 1999) at 2 and n.7 (NTIA  {O(May 7 Ex Parte).  X2 B.` ` Ordinary Meaning of "At Retail"(#`  X2` ` 1. MSale to End Users  X2 13.` `  Although the parties generally agree that the Commission should adopt the common and ordinary definition of the term at retail, they disagree upon what constitutes that ordinary meaning. Websters Unabridged Dictionary defines the term retail as the sale of commodities, goods, articles, etc. individually or in small quantities or parcels directly to"N ,6)6)bbh"  X2the consumer.s {Oy(ԍWebster's Deluxe Unabridged Dictionary, 1545 (2nd ed. 1987).s Similarly, Blacks Law Dictionary defines retail as [a] sale for final  X2consumption in contrast to a sale for further sale or processing (i.e., wholesale) . . . to the  X2ultimate consumer.U&Z {O( @ԍBlack's Law Dictionary 1315 (6th ed. 1990). Letter from W. Scott Randolph, Director Regulatory Matters,  yO( 2!GTE, to Magalie R. Salas, Secretary, Federal Communications Commission, CC Docket No. 98ĩ148 (filed March  {Oq( 2!10, 1999) (GTE March 10 Ex Parte), citing Webster's Ninth New Collegiate Dictionary (1989); TRA White Paper  {O;(at 4, citing Blacks Law Dictionary (Centennial Edition) 6th Edition, 1597 (West Publishing Co. 1990).U Based on these definitions, we agree with commenters that retail transactions necessarily involve direct sales of a product or service to the ultimate consumer for her own personal use or consumption.  Xx2 14.` ` Therefore, whether the buyer uses the purchased DSL service to create a combined product, such as an information service, to be sold to an ultimate enduser or instead consumes the product itself is directly relevant to our analysis of the transaction. For that reason, we carefully analyze the nature of the sale to determine whether or not the service is provided to a particular group of customers "at retail." We disagree with TRA and NAS that the fact that some incumbents are making DSL services directly available to businesses and residential endusers ends our inquiry and requires a finding that all DSL services, whether sold to business and residential endusers directly or sold to Internet Service  X 2Providers, are retail services.  H yO( @ԍLetter from Rodney L. Joyce, Shook, Hardy & Bacon, counsel, Network Access Solutions, to Magalie  2!Roman Salas, Secretary, Federal Communications Commission, CC Docket No. 98147 at 5 (filed May 5, 1999)  2!B(NAS White Paper); TRA White Paper at 24 (arguing that whether the Internet Service Provider consumes the  2!(service directly or uses the service as an input to create a different product or service to be sold to the enduser is  {O( 2!pnot relevant to our analysis of the transaction).  See also Letter from Ruth M. Milkman, Lawler, Metzger &  2!(Milkman, counsel, NorthPoint Communications, Inc. to Magalie Roman Salas, CC Docket No. 98147 (filed May  {Ok( 2!25, 1999) (Northpoint May 25 Ex Parte) (arguing that section 251(c)(4) applies to DSL services, regardless of  2!whether they are subject to a volume discount, but that there might be no additional avoided costs with respect to the volume discount offering, so that the wholesale discount on that offering would be 0%). We do not find persuasive TRA's argument that Internet  X 2Service Providers are the ultimate consumers who are using or consuming the DSL services.F  yOv(ԍTRA White Paper at 5.F An Internet Service Provider is purchasing the DSL service for the sole purpose of combining the telecommunications service with its own information service and offering a new retail  Xd2service, i.e., highspeed Internet service, to the ultimate enduser.!d {O!(ԍReport to Congress on Universal Service, 13 FCC Rcd at 15486, paras. 7381. In this process, the Internet Service Provider adds value to the bulk DSL telecommunications service by dividing that service for individual consumer use and adding the Internet service, thus enabling the Internet Service Provider to offer and sell the newly created information service to the ultimate consumer: the residential or business subscriber. For these reasons, the Internet Service Provider is not the ultimate enduser. ">!,6)6)bbh"Ԍ X2 i'oj  i'oj ` `  2. MNature of Bulk Services  X215.` ` Further, the DSL services that incumbents are offering to Internet Service Providers specifically contemplate that the Internet Service Provider will be the entity  i'oj  i'oj providing to the ultimate enduser many services typically associated with retail sales, thus reinforcing our conclusion that the bulk DSL services are not retail services offered to the ultimate endusers. Bell Atlantic's volume and term discount plan tariff illustrates this point. Pursuant to Bell Atlantic's tariff, the purchasing Internet Service Provider must provision all CPE and wiring to its endusers, provide customer service directly to the endusers, and  X12assume sole responsibility for marketing, ordering, installation, maintenance, repair, billing  X 2and collections visavis the enduser subscriber."  yO (ԍBell Atlantic Bulk DSL Tariff, Third Revised Page 918.42, para. 16.8(F)(4)(a). Any Internet Service Provider that purchases a bulk DSL service must itself, rather than the incumbent, provide these typical retail services to the ultimate consumer. These facts underscore that bulk DSL services sold  X 2to Internet Service Providers are markedly different from the retail DSL services designed for individual enduser consumption.  X216.` ` In contrast, some incumbent LECs are selling single lines of DSL service directly to residential and business endusers. Parties do not dispute that these customers are the ultimate endusers of the DSL service. These customers buy the DSL service to meet  XK2their own internal telecommunications needs.# KX yOT( @lԍWe note that in some cases, incumbent LECs provide these retail services directly to business enduser  2!subscribers under arrangements where the enduser makes volume and term commitments and pays discounted rates.  2!These business subscribers are also purchasing the services to meet their own telecommunications needs.  2!pSpecifically, Bell Atlantic provides Customer Specific Arrangements ("CSAs") that involve the provision of  2!telecommunications services at retail. Just as other advanced services sold to the ultimate enduser, these CSAs  2!include retail functions that Bell Atlantic performs directly for the enduser. For example, under a CSA, Bell  {O( 2!Atlantic is responsible for accepting repair requests directly from the enduser. See Letter from Susanne Guyer,  2!Assistant Vice President, Federal Regulatory, Bell Atlantic, to Magalie Roman Salas, Secretary, Federal  yO(Communications Commission, CC Docket No. 98147, Attach. 2 at 1 (filed Oct. 18, 1999).   X2 C .` ` Statutory Purposes and Context  X217.` ` Our interpretation of the term "at retail" to mean a sale to an ultimate consumer is consistent with our previous determination that section 251(c)(4) should apply only to  X2services targeted to enduser subscribers, consistent with Congress's intent. As stated  X2previously, in the Local Competition Order,s$*  {O#(ԍLocal Competition Order, 11 FCC Rcd at 15934, paras. 87374.s the Commission recognized that although exchange access services may be purchased at times by endusers, such services are designed for, and sold to, interexchange carriers as an input component to the interexchange carriers own retail services. The Commission reasoned that Congress intended section 251(c)(4) to  XP2apply to services targeted to enduser subscribers, because only those services would involve"P $,6)6)bbT"  X2an appreciable level of avoided costs that could be used to generate a wholesale rate.:% {Oy(ԍId.: The Commission concluded that such services are not subject to section 251(c)(4) given that LECs would not avoid any retail costs when offering these services at wholesale rates to those  X2same interexchange carriers. Similarly, here the DSL services are designed for and sold to Internet Service Providers as an input component to the Internet Service Providers retail highspeed Internet service. DSL services sold to Internet Service Providers are not targeted  Xv2to enduser subscribers, but instead are targeted to Internet Service Providers that will combine a regulated telecommunications service with an enhancement, Internet service, and  XH2offer the resulting service, an unregulated information service, to the ultimate enduser.&HZ {OS ( @fԍSee Jason Oxman, The Commission and the Unregulation of the Internet, OPP Working Paper Series No. 31, July 1999 at 1113. As stated above, in offering this information service, the Internet Service Provider will take on the consumeroriented tasks of marketing, billing, and collections to the ultimate consumer and accepting repair requests directly from the enduser. Incumbents would not avoid any appreciable level of retail costs associated with providing these typical retail functions for the  X 2ultimate enduser when offering these bulk services to the Internet Service Providers.'  yO:( @\ԍWe note that the Bell Atlantic tariff does not restrict the purchase of such DSL services to Internet Service Providers. It is reasonable to conclude, therefore, that such services do not fit within the type of transaction Congress intended to include under the discounted resale obligation in section 251(c)(4).  Xy218.` ` By interpreting "at retail" in the manner described above, we give it a meaning consistent with the primary objective of section 251: opening the local exchange market to competition in all services to ensure that consumers reap the benefits of broadbased and longlasting competition. In particular, section 251 requires all incumbent LECs to provide  X2nondiscriminatory access to their network facilities,(  {O2ԍLocal Competition First Report and Order, 11 FCC Rcd at 15506, para. 4. thereby allowing competing carriers to  X2enter the local exchange and exchange access markets by purchasing parts of the incumbents network or by reselling the incumbents services at wholesale rates. Section 706 sets forth the complementary goal of facilitating investment and deployment of innovative technologies, specifically, those that provide advanced telecommunications capabilities, to all consumers. Thus, in giving meaning to the term at retail in the context of the sale of advanced services to residential and business endusers and to Internet Service Providers, we focus on the effect  X|2our determination will have on the deployment of advanced services in a competitive, broad"| (,6)6)bb"ԫbased, and expeditious manner. We conclude, therefore, that the 1interpretation and application of the term at retail set out above best promotes the procompetitive and innovationenhancing purposes of the Act.  X2  X2 IV.Conclusion  Xv219.` ` Based on the record before us and the fact specific evaluation set out above, we conclude that while an incumbent LEC DSL offering to residential and business endusers is 1clearly a retail offering designed for and sold to the ultimate enduser, an incumbent LEC offering of DSL services to Internet Service Providers as an input component to the Internet  X 2Service Provider's highspeed Internet service offering is not a retail offering.)"  yO ( @ԍWe disagree with NAS that this conclusion opens a loophole in section 251(c)(4). NAS White Paper at 56.  2!(Incumbent LECs are still under a statutory obligation to provide any telecommunications services, including DSL,  2!T1, DS3, and business exchange services, sold at retail to subscribers who are not telecommunications carriers to  {O (requesting carriers at wholesale rates. See 47 U.S.C.  251(c)(4).  Accordingly, we find that DSL services designed for and sold to residential and business endusers are subject to the discounted resale obligations of section 251(c)(4). We conclude, however, that section 251(c)(4) does not apply where the incumbent LEC offers DSL services as an input component to Internet Service Providers who combine the DSL service with their own  X 2Internet service.  Xy220.` ` We are confident that our findings reinforce the resale requirement of the Act by ensuring that resellers are able to acquire advanced services sold by incumbent LECs to residential and business endusers at wholesale rates, thus ensuring that competitive carriers are able to enter the advanced services market by providing to consumers the same quality service offerings provided by incumbent LECs. Moreover, we expect that our conclusions will stimulate the development and deployment of broadband services to residential markets in furtherance of the Commission's mandate to encourage the deployment of advanced  X2telecommunications capability to all Americans.N* {O;(ԍSee 47 U.S.C.  157.N We believe that our conclusions will encourage incumbents to offer advanced services to Internet Service Providers at the lowest possible price. In turn, the Internet Service Providers, as unregulated information service providers, will be able to package the DSL service with their Internet service to offer affordable, highspeed access to the Internet to residential and business consumers. As a result, consumers will ultimately benefit through lower prices and greater and more expeditious access to innovative, diverse broadband applications by multiple providers of advanced services. We note that our conclusions herein do not change the regulatory status of  X 2the Internet Service Provider, which we have previously concluded to be an information"  D*,6)6)bb"  X2{service provider rather than a telecommunications carrier.+Z {Oy( @ ԍSee  Report to Congress on Universal Service, 13 FCC Rcd at 11529, para 58 (finding that "[a]n offering  2!that constitutes a single service from the end user's standpoint is not subject to carrier regulation simply by virtue of the fact that it involves telecommunications components"). We believe that maintaining the  X2noncarrier status of Internet Service Providers, in this instance, benefits the public interest., yO( @\ԍ Letter from Susanne Guyer, Assistant Vice President Federal Regulatory, Bell Atlantic, to Magalie Roman  yOL( 2!Salas, Secretary, Federal Communications Commission, CC Docket No. 98147, at 1 (filed June 26, 1999) (Bell  {O( 2!Atlantic June 26 Ex Parte). This conclusion does not affect the incumbent LECs universal service contribution  2!requirements. Incumbent LECs must base their contributions on enduser telecommunications revenues, which  {O ( 2!$generally include revenues derived from Internet Service Providers. See 1998 Biennial Regulatory Review !  2!Streamlined Contributor Reporting Requirements Associated with Administration of Telecommunications Relay  {O8 ( 2!Services, North American Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms,  2!(Report and Order, Commission 99175, CC Docket No. 98171, at n.127 (rel. July 14, 1999). Bulk sales of DSL services to Internet Service Providers are included in this requirement. {  X221.` ` Moreover, we agree with NTIA that although bulk DSL services sold to Internet Service Providers are not retail services subject to section 251(c)(4), these services are telecommunications services, and as such, incumbent LECs must continue to comply with their basic common carrier obligations with respect to these services. These obligations include: providing such DSL services upon reasonable request; on just, reasonable, and  XH2nondiscriminatory terms; and in accordance with all applicable tariffing requirements.-"H  {O( @ԍNTIA May 7 Ex Parte. NTIA also argues that the incumbent LECs must show that the DSL rates that they  2!,charge to their Internet Service Provider customers, including any volume and term discounts, cover all relevant costs  2!of providing service, including a reasonable share of the costs of the underlying subscriber loop. We do not address in this order the issue of proper allocation of loop costs.  X 2822.` ` Based on the foregoing, we clarify the Commissions decision regarding the  X 2scope of section 251(c)(4) set forth in the Local Competition First Report and Order..  {O^(ԍ Local Competition First Report and Order, 11 FCC Rcd at 1593436, paras. 871877. We affirm that the type of exchange access services predominantly offered to interexchange 8carriers are not subject to the discounted resale obligations of section 251(c)(4). In addition, we amend our rules to clarify that advanced services sold to Internet Service Providers as an input component to the Internet Service Providers' own retail Internet service offering are not subject to the discounted resale obligations of section 251(c)(4). We also amend our rules to clarify that, notwithstanding the fact that advanced services sold to Internet Service Providers are excluded from the discounted resale obligations of section 251(c)(4), advanced telecommunication services sold directly to residential and business endusers are not exempt from these obligations, even though such services may be classified as exchange access  X2services.}/< yO &(ԍ  We amend 47 C.F.R.  51.605 and 607 as set forth in Appendix B.} " /,6)6)bb"Ԍ X2  i'oj  i'oj V.Final Regulatory Flexibility Act Analysis  X223.` ` As required by the Regulatory Flexibility Act, see 5 U.S.C.  604, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) of the impact on  i'oj  i'oj small entities of the conclusions in this order. The FRFA is set forth in Appendix C.  Xx2 VI.  Ordering Clauses  XJ224.` ` Accordingly, IT IS ORDERED that, pursuant to sections 14, 10, 201, 202, 251254, 256, 271, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151154, 160, 201, 202, 251254, 256, 271, and 303(r), the SECOND REPORT AND ORDER is hereby ADOPTED. The requirements adopted in this Order shall be effective 30  X 2days after publication of a summary thereof in the Federal Register.  X 225.` ` IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference Operations Division, SHALL SEND a copy of this SECOND REPORT AND ORDER, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  XM2  X626 ` `  MhhFEDERAL COMMUNICATIONS COMMISSION ` `  MhhMagalie Roman Salas ` `  MhhSecretary"~ /,6)6)bb$"  X2  @A-@ APPENDIX A  X2 - |Advanced Telecommunications Services  X2CC Docket No. 98147  X2Comments ă  X2 September 25, 1998  X_2 1. a. i.(1)(a)(i) 1) a) 1. a. i.(1)(a)(i) 1) a) 1.XADC Telecommunications, Inc.(#  XH22.XAd Hoc Telecommunications Users Committee(#  X123.XAlliance for Public Technology(#  X 24.XAllegiance Telecom, Inc.(#  X 25.XAmerica Online, Inc.(#  X 26.XAmerica's Carriers Telecommunications Association (ACTA)(#  X 27.XAmeritech(#  X 28.XAssociation for Local Telecommunications Services (ALTS)(#  X 29.XAT&T Corp.(#  X2 10.XBell Atlantic(#  Xy2 11.XBellSouth Corporation(#  Xb2 12.XCable & Wireless, Inc.(#  XK2 13.XCablevision Lightpath, Inc.(#  X42 14.XCentral Texas Telephone Cooperative, Inc.(#  X215.XCincinnati Bell Telephone Company(#  X216.XCoalition of Utah Independent Internet Service Providers(#  X217.XCommercial Internet Exchange Association(#  X218.XCommunications Workers of America(#  X219.XCompetition Policy Institute(#  X220.XCompetitive Telecommunications Association (CompTel)(#  X221.XComputer & Communications Industry Association(#  X|222.XConsumer Federation of America(#  Xe223.XCopper Mountain Networks, Inc.(#  XN224.XCottonwood Communications(#  X7225.XCovad Communications Company(#  X 226.XCTSI, Inc.(#  X 227.Xe.spire Communications, Inc.(#  X228.XFederal Trade Commission(#  X229.XFirst Regional TeleCOM, LLC and FirstWorld Communications, Inc.(#  X 230.XFlorida Digital Network, Inc.(#  X!231.XFlorida Public Service Commission(#  X"232.XGeneral Services Administration(#  X#2 33.XGST Telecom Inc.(#  Xh$2!34.XGTE Service Corporation(#  XQ%2"35.XGVNW Inc.(#  X:&2#36.XHyperion Telecommunications, Inc.(#  X#'2$37.XICG Telecom Group, Inc.(#  X (2%38.XIllinois Commerce Commission(#" (/,6)6)bb&"Ԍ X2&39.XIndiana Utility Regulatory Commission and Staff of Public Service Commission of Wisconsin(#  X2'40.XInformation Technology Association of America(#  X2(41.XIntermedia Communications Inc.(#  X2)42.XInternet Access Coalition(#  X2*43.XInternet Service Providers' Consortium(#  Xv2+44.XKeep America Connected, United Homeowners Association, Alpha One, American Council on Education, National Braille Press, National Association of Commissions for Women, the National Trust for the Development of African American Men, National Association for College and University Business Officers, Latin American Women and Supporters, Harlem Consumer Education Council, National Latino Telecommunications Task Force, Northern Virginia Resource Center for the Deaf and Hard of Hearing, MaineCITE Coordinating Committee, Florida Association for the Deaf, American Telemedicine Association, World Institute on Disability, The Massachusetts Assistive Technology Partnership, and National Association of Development Organizations(#  X 2,45.XKiesling Consulting LLC(#  X2-46.XKMC Telecom, Inc.(#  Xy2.47.XLevel 3 Communications, Inc.(#  Xb2/48.XMachOne Communications, Inc.(#  XK2049.XMcLeodUSA Telecommunications Services, Inc.(#  X42150.XMCI WorldCom, Inc.(#  X2251.XMGC Communications, Inc.(#  X2352.XMindspring Enterprises, Inc.(#  X2453.XMinnesota Department of Public Service(#  X2554.XMoultrie Independent Telephone Company(#  X2655.XNational Rural Telecom Association and the Organization for the Promotion and Advancement of Small Telephone Companies (NRTA/OPASTCO)(#  X2756.XNational Telephone Cooperative Association(#  X|2857.XNetwork Access Solutions, Inc.(#  Xe2958.XNetwork Plus, Inc.(#  XN2:59.XNew Networks Institute (Bruce Kushnick)(#  X72;60.XNew World Paradigm, Ltd.(#  X 2<61.XNew York Department of Public Service(#  X 2=62.XNEXTLINK Communications, Inc.(#  X2>63.XNorthern Telecom, Inc.(#  X2?64.XNorthpoint Communications Inc.(#  X 2@65.XOpTel, Inc.(#  X!2A66.XParadyne Corporation(#  X"2B67.XPaging and Messaging Alliance of the Personal Communications Industry Association(#  X#2C68.XPaging Network, Inc. (PageNet)(#  Xh$2D69.XPeople of the State of California and PUC of California(#  XQ%2E70.XPSINet, Inc.(#  X:&2F71.XPublic Utility Commission of Texas(#  X#'2G72.XQwest Communications Corporation(#  X (2H73.XRCN Telecom Services, Inc.(#" (/,6)6)bb%"Ԍ X2I74.XRhythms NetConnections, Inc.(#  X2J75.XRural Telecommunications Group(#  X2K76.XSBC Communications Inc.(#  X2L77.XSprint Corporation(#  X2M78.XSupra Telecommunications and Information Systems, Inc.(#  X2N79.XTandy Corporation(#  Xv2O80.XTechnology Entrepreneurs Coalition(#  X_2P81.XTCA, Inc.(#  XH2Q82.XTelecommunications Resellers Association(#  X12R83.XTelehub Network Services Corporation(#  X 2S84.XTime Warner Telecom(#  X 2T85.XTranswire Communications, Inc.(#  X 2U86.XUnited States Small Business Association(#  X 2V87.XUnited States Telephone Association(#  X 2W88.XUTC(#  X 2X89.XU S WEST Communications, Inc.(#  X2Y90.XUS Xchange, LLC(#  Xy2Z91.XVirtual Hipster (Shad Nygren)(#  Xb2[92.XWarner, Jim(#  XK2\93.XWashington Association of Internet Service Providers(#  X42]94.XWestel, Inc.(#  X2^95.XWilliams Communications, Inc.(#  X2_96.XxDSL Networks, Inc.(#  X2 Reply Comments October 16, 1998  X2 1. a. i.(1)(a)(i) 1) a)` 1. a. i.(1)(a)(i) 1) a) 1.XAllegiance Telecom, Inc.(#  X22.XALLTEL Communications Services Corporation(#  X|23.XAmeritech(#  Xe24.XAssociation for Local Telecommunications Services (ALTS)(#  XN25.XAT&T Corp.(#  X726.XAware, Inc.(#  X 27.XBell Atlantic(#  X 28.XBellSouth Corporation(#  X29.XCoalition of Utah Independent Internet Service Providers(#  X2 10.XCommercial Internet Exchange Association(#  X 2 11.XConsumer Federation of America(#  X!2 12.XCovad Communications Company(#  X"2 13.XCTSI, Inc.(#  X#2 14.XDSL Access Telecommunications Alliance(#  Xh$215.Xe.spire Communications, Inc.(#  XQ%216.XExcel Telecommunications, Inc.(#  X:&217.XFlorida Digital Network, Inc.(#  X#'218.XGeneral Services Administration(#  X (219.XGST Telecom Inc.(#" (/,6)6)bb%"Ԍ X220.XGTE Service Corporation(#  X221.XHyperion Telecommunications, Inc.(#  X222.XIntermedia Communications Inc.(#  X223.XKeep America Connected, United Homeowners Association, Harlem Consumer Education Council, National Latino Telecommunications Task Force, American Telemedicine Association, National Association of Development Organizations, Alpha One, and The World Institute on Disability(#  X_224.XKMC Telecom, Inc.(#  XH225.XLevel 3 Communications, Inc.(#  X1226.XMachOne Communications, Inc.(#  X 227.XMCI WorldCom, Inc.(#  X 228.XMGC Communications, Inc.(#  X 229.XMindspring Enterprises, Inc.(#  X 230.XMoultrie Independent Telephone Company(#  X 231.XNational Cable Television Association(#  X 232.XNational Rural Telecom Association and the Organization for the Promotion and Advancement of Small Telecommunications Companies(#  Xy2 33.XNational Telephone Cooperative Association(#  Xb2!34.XNetwork Access Solutions, Inc.(#  XK2"35.XNetwork Plus, Inc.(#  X42#36.XNew World Paradigm, Ltd.(#  X2$37.XNext Level Communications(#  X2%38.XNEXTLINK Communications, Inc.(#  X2&39.XNorthpoint Communications Inc.(#  X2'40.XQwest Communications Corporation(#  X2(41.XRCN Telecom Services, Inc.(#  X2)42.XRural Telecommunications Group(#  X2*43.XSBC Communications Inc.(#  X|2+44.XSprint Corporation(#  Xe2,45.XTelecommunications Resellers Association(#  XN2-46.XTelehub Network Services Corporation(#  X72.47.XTeligent, Inc. and Net2000 Group, Inc.(#  X 2/48.XTime Warner Telecom(#  X 2049.XTranswire Communications, Inc.(#  X2150.XUnited States Small Business Association(#  X2251.XUnited States Telephone Association(#  X 2352.XUniversal Service Alliance(#  X!2453.XU S WEST Communications, Inc.(#  X"2554.XVerio Inc.(#  X#2655.XVirgin Islands Telephone Corporation(#"#/,6)6)bb!"  X2  @A-B-@ APPENDIX B Final Rules  X2AMENDMENTS TO THE CODE OF FEDERAL REGULATIONS Đ6  X2 PART 51 INTERCONNECTION * * * *  X12 Subpart G Resale  X 2  X 2 51.605` ` Additional obligations of incumbent local exchange carriers  X 22.Section 51.605 of Title 47 of the Code of Federal Regulations (C.F.R.) is amended by deleting paragraph (b) and by adding the following new paragraphs after paragraph (a): (b), (c), (d), and (e) to read as follows:  X2  Xy2 * * * *  Xb2 (b) For purposes of this subpart, exchange access services, as defined in section 3 of the Act, shall not be considered to be telecommunications services that incumbent LECs must  X2make available for resale at wholesale rates to requesting telecommunications carriers.  X2 (c) For purposes of this subpart, advanced telecommunications services sold to Internet Service Providers as an input component to the Internet Service Providers' retail Internet service offering shall not be considered to be telecommunications services offered on a retail basis that incumbent LECs must make available for resale at wholesale rates to requesting telecommunications carriers. (d) Notwithstanding paragraph (b) of this section, advanced telecommunications  XN2services that are classified as exchange access services are subject to the obligations of 51.605(a) of this part if such services are sold on a retail basis to residential and business endusers that are not telecommunications carriers. (e) Except as provided in  51.613, an incumbent LEC shall not impose restrictions on the resale by a requesting carrier of telecommunications services offered by the incumbent LEC.   X"2  51.607` ` Wholesale pricing standard.  Xh$23.Section 51.607 of Title 47 of the Code of Federal Regulations (C.F.R.) is amended by  XQ%2deleting paragraph (b) and striking "(a)" before the beginning of the remaining text."Q%/,6)6)bb#"  X2#X\  P6G;ɒP#X01Í ÍX01Í Í#Xj\  P6G;ynXP#  @B-C-@ 1. a. i.(1)(a)(i) 1) a)7 1. a. i.(1)(a)(i) 1) a)y A PPENDIX C é FINAL REGULATORY FLEXIBITY ANALYSIS ă  X21.` ` As required by the Regulatory Flexibility Act (RFA),X01Í ÍX01ÍÍ/Zg {OK( 2!#C\  P6QɒP#э See 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et. seq., has been amended by the Contract With America  2!Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). an Initial Regulatory  X2Flexibility Analysis (IRFA) was incorporated in the Advanced Services Order and NPRM.g {O( footnote text#C PɒP##C\  P6QɒP#э Advanced Services Order and NPRM, 13 FCC Rcd 24102 (1998).  X2The Commission sought written public comment on the proposals in the Advanced Services  X2Order and NPRM, including comment on the IRFA. [The comments received are discussed  X|2below.] This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.v|g {O (#C\  P6QɒP#эSee 5 U.S.C.  604. v  XN2 I.Need for and Objectives of this First Report and Order and the Rules Adopted  X72Herein. ` `   X 22.` ` In order to encourage competition among carriers to develop and deploy new advanced services, it is critical that the marketplace for these services be conducive to  X 2investment, innovation, and meeting the needs of consumers. In this Second Report and  X 2Order, we seek to ensure that all carriers have economic incentives to innovate and invest in new technologies.  X23.` ` We amend our rules to clarify that advanced services sold to Internet Service Providers as an input component to the Internet Service Providers own retail Internet service offering are not subject to the discounted resale obligations of section 251(c)(4). We also amend our rules to clarify that, notwithstanding the fact that advanced services sold to Internet Service Providers are excluded from the residential resale obligations of section 251(c)(4), advanced telecommunication services sold directly to residential and business endusers are not exempt from these obligations, even though such services may be classified as exchange access services.  X2 II.Summary of Significant Issues Raised by Public Comments in Response to the  X2IRFA. #X\  P6G;ɒP#X01ÍÍX01ÍÍ#Xj\  P6G;ynXP#  Xo24.` ` In the IRFA, we stated that any rule changes would impose minimum burdens  XX2on small entities. We indicated that the IRFA solicited comment on alternatives to our proposed rules that would minimize the impact they may have on small entities. The  X*2comments we received did not respond directly to the issue addressed in this Order.*~u[ yO#( @ԍWe note, however, that the Office of Advocacy, United States Small Business Administration (SBA)  {OY$(commented on other issues raised in the Advanced Services Order and NPRM. ",6)6)bb."Ԍ X2 III.Description and Estimates of the Number of Small Entities Affected by the First  X2Report and Order. ` `   X25.` ` The RFA generally defines "small entity" as having the same meaning as the  X2term "small business," "small organization," and "small governmental jurisdiction."Fu[ yO(ԍ5 U.S.C.  601(6).F In  X2addition, the term "small business" has the same meaning as the term "small business concern" under the Small Business Act, unless the Commission has developed one or more definitions  X_2that are appropriate to its activities.s_Xu[ yO ( @ԍ5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5 U.S.C. 632).  2!"Pursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency after consultation  2!with the Office of Advocacy of the Small Business Administration and after opportunity for public comment,  2!xestablishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition in the Federal Register." s Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business  X 2Administration (SBA). @u[ {OC( @ԍ15 U.S.C.  632. See, e.g., Brown Transport Truckload, Inc. v. Southern Wipers, Inc., 176 B.R. 82 (N.D.Ga. 1994). The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have no more than  X 21,500 employees.H u[ yO(ԍ13 C.F.R.  121.201.H We first discuss the number of small telephone companies falling within these SIC categories, then attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  X2  Xy26.` ` The most reliable source of information regarding the total numbers of common carrier and related providers nationwide, as well as the numbers of commercial wireless  XK2entities, appears to be data the Commission publishes annually in its Carrier Locator report,  X62derived from filings made in connection with the Telecommunications Relay Service (TRS). 6u[ {O( @ԍFCC, Carrier Locator: Interstate Service Providers, Figure 1 (Jan. 1999) (Carrier Locator). See also 47  {O(C.F.R.  64.601 et seq.  X2According to data in the most recent report, there are 3,604 interstate carriers.Q . u[ {O6(ԍCarrier Locator at Fig. 1.Q These  X2carriers include, inter alia, local exchange carriers, wireline carriers and service providers, interexchange carriers, competitive access providers, operator service providers, pay telephone operators, providers of telephone toll service, providers of telephone exchange service, and resellers.  X2  X27.` ` We have included small incumbent LECs in this present RFA analysis. As  X2noted above, a "small business" under the RFA is one that, inter alia, meets the pertinent  Xk2small business size standard (e.g., a telephone communications business having 1,500 or fewer  XV2employees), and "is not dominant in its field of operation."F V u[ yO7'(ԍ5 U.S.C.  601(3).F The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of"? ,6)6)bb"  X2operation because any such dominance is not "national" in scope. Hu[ {Oy( @XԍLetter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC  2!>(May 27, 1999). The Small Business Act contains a definition of "small business concern," which the RFA  {O ( 2!incorporates into its own definition of "small business." See U.S.C.  632(a) (Small Business Act); 5 U.S.C.   2!601(3) (RFA). SBA regulations interpret "small business concern" to include the concept of dominance on a national  2!basis. 13 C.F.R.  121.102(b). Since 1996, out of an abundance of caution, the Commission has included small  {Oe( 2!hincumbent LECs in its regulatory flexibility analyses. See, e.g., Implementation of the Local Competition Provisions  {O/( 2!of the Telecommunications Act of 1996, CC Docket 9698, First Report and Order, 11 FCC Rcd 15499, 1614445 (1996). We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on FCC analyses and determinations in other, nonRFA contexts.  X28.` ` Total Number of Telephone Companies Affected. The United States Bureau of the Census ("the Census Bureau") reports that, at the end of 1992, there were 3,497 firms  Xv2engaged in providing telephone services, as defined therein, for at least one year. vu[ {O7( @ԍUnited States Department of Commerce, Bureau of the Census, 1992 Census of Transportation, Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) ("1992 Census"). This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers,  X12operator service providers, pay telephone operators, PCS providers, covered SMR providers, and resellers. It seems certain that some of those 3,497 telephone service firms may not qualify as small entities or small incumbent LECs because they are not "independently owned  X 2and operated."J j u[ yO?(ԍ15 U.S.C.  632(a)(1).J For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It seems reasonable to conclude, therefore, that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that may be affected by the decisions and rules proposed in the Notice.  Xb29.` ` Wireline Carriers and Service Providers. SBA has developed a definition of small entities for telephone communications companies other than radiotelephone companies.  X42The Census Bureau reports that, there were 2,321 such telephone companies in operation for  X2at least one year at the end of 1992.^2 u[ {O8(ԍ1992 Census, supra, at Firm Size1-123.^ According to SBA's definition, a small business telephone company other than a radiotelephone company is one employing no more than  X21,500 persons.W u[ yO (ԍ13 C.F.R.  121.201, SIC Code 4813.W All but 26 of the 2,321 nonradiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 nonradiotelephone companies that might qualify as small entities or small incumbent LECs. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 2,295 small entity telephone"N ,6)6)bb"  i'oj  i'oj communications companies other than radiotelephone companies that may be affected by the decisions and rules proposed in the Notice. i'oj  i'oj   X2 10.` ` Local Exchange Carriers, Resellers and Internet Service Providers. Neither the Commission nor SBA has developed a definition of small local exchange carriers (LECs), competitive local exchange carriers (CLECs), resellers, or Internet Service Providers (ISPs). The closest applicable definition for these carriertypes under SBA rules is for telephone  Xa2communications companies other than radiotelephone (wireless) companies.Wau[ yO(ԍ13 C.F.R.  121.210, SIC Code 4813.W The most reliable source of information regarding the number of these carriers nationwide of which we are aware appears to be the data that we collect annually in connection with the  X 2Telecommunications Relay Service (TRS). Xu[ {O] (ԍSee 47 C.F.R.  64.601 et seq.; Carrier Locator at Fig. 1. According to our most recent data, there are  X 21,410 LECs, 129 CLECs, "u[ yO(ԍThe total for CLECs includes both CLECs and competitive access providers (CAPs). and 351 resellers. u[ {O(ԍCarrier Locator at Fig. 1. The total for resellers includes both toll resellers and local resellers.  X 2 11.` ` Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of these carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 1,410 small entity LECs or small incumbent LECs, 129 CLECs, and 351 resellers that may be affected by the decisions and rules proposed in the Notice.  X62 12.` ` Internet Service Providers. SBA has developed a small business size standard  X!2for "Information Retrieval Services," SIC code 7375.!u[ {O( @LԍSee Executive Office of the President, Office of Management and Budget, Standard Industrial Classification  {O((SIC) Manual, at 366 (1987). This category includes establishments primarily engaged in providing online database information retrieval services, on a contract or fee basis. According to SBA regulations, a small business under this category is one having  X2annual receipts of $18 million or less.YHu[ yO (ԍ13 C.F.R.  121.201, SIC Code 7375. Y Based on firm size data provided by the Bureau of  X2the Census, 3,123 firms are small under SBA's $18 million size standard for SIC code 7375.u[ {O( @lԍOffice of Advocacy, U.S. Small Business Administration, Firm Size Data by Industry and Location. See (last visited June 1, 1999).  X2# footnote reference#Although some of these Internet Service Providers (ISPs) might not be independently owned and operated, we are unable at this time to estimate with greater precision the number of ISPs that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are 3,123 or fewer small entity ISPs that may be affected by the decisions and rules of the present action. ";,6)6)bb"Ԍ X2 IV.Summary of Projected Reporting, Recordkeeping, and Other Compliance  X2Requirements.  X2  X2 13.` ` We require incumbent LECs to make available at a wholesale discount advanced services sold at retail to residential and business endusers, without regard to their classification as telephone exchange service or exchange access service. We determine that complying with these rules may require use of operational, accounting, billing, and legal skills. We believe, however, that incumbent LECs will already have these skills.  XH2  X12 14.` ` The burden of compliance with this requirement is minimal because, pursuant to section 251(c), incumbent LECs already must comply with state mandated wholesale discount requirements for all telecommunications services they provide at retail to subscribers who are not telecommunications carriers.  X 2  X 2V.Steps Taken to Minimize Significant Economic Impact on Small Entities and  X 2Small Incumbent LECs, and Alternatives Considered.  Xy215.` ` Section 251(c)(4) imposes on all incumbent LECs, including small incumbent LECs, the duty to offer for resale at wholesale rates any telecommunications service that the  XK2carrier provides at retail to subscribers who are not telecommunications carriers.JKu[ yO(ԍ47 U.S.C.  251(c)(4).J The Commission's conclusions in this order clarifies this statutory obligation. The order imposes no additional obligations on incumbent LECs. ` `  M  X2 VI.Report to Congress  X216.` ` The Commission will send a copy of the SECOND REPORT AND ORDER,  X2including this FRFA, in a report to be sent to Congress pursuant to the Small Business  X2Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C.  801(a)(1)(A). In addition, the  X2Commission will send a copy of the SECOND REPORT AND ORDER, including FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the  XV2SECOND REPORT AND ORDER and FRFA (or summaries thereof) will also be published in  XA2the Federal Register. See 5 U.S.C.  604(b).