News media information 202 / 418-0500 Fax-On-Demand 202 / 418-2830 Internet: http://www.fcc.gov ftp.fcc.govPUBLIC NOTICE Federal Communications Commission 1919 M St., N.W. Washington, D.C. 20554 DA 98-839 Released: May 8, 1998 COMMON CARRIER BUREAU SEEKS COMMENT ON LOCAL COMPETITION SURVEY CC Docket No. 91-141 CCB-IAD File No. 98-102 Comment Date: June 7, 1998 Reply Comment Date: June 22, 1998 I. INTRODUCTION I. In this Public Notice we seek comment on how the Federal Communications Commission (Commission) can collect sufficient information to achieve the regulatory flexibility, pro-competition, and universal service objectives of the Telecommunications Act of 1996 (1996 Act). In general, we seek to achieve an adequate understanding of local exchange and exchange access competition in diverse areas of the country while minimizing filing burdens on respondents. We seek comment on what information should be collected as well as on such issues as whether periodic data collection should be mandatory and which carriers should provide such information. 1. The 1996 Act imposes obligations on telecommunications carriers that are primarily designed to open telecommunications markets to competitive entry, to promote universal service, and to lessen the need for government regulation of telecommunications. The statute also directs the Commission to forbear from regulating telecommunications carriers or services if the Commission determines that enforcement of regulation is not necessary to protect competitors and consumers of telecommunications service, and also that regulatory forbearance is consistent with the public interest. 2. These statutory directives underlie our proposed information collection efforts here. In order to achieve these purposes, the Commission must have adequate data at hand. First, the Commission requires timely and reliable information on the pace and extent of development of local competition in different geographic markets to evaluate the effectiveness of decisions taken to implement the pro-competition provisions and to achieve the universal service goals of the 1996 Act. Second, the Commission requires such information to identify services and geographic markets where local competition has developed sufficiently to allow the Commission to exercise its regulatory forbearance authority. In sum, we believe that the Commission needs better information on the development of local competition in order to avoid "one size fits all" regulation and in order to reduce regulation where appropriate. II. BACKGROUND 3. Only a limited amount of information on the state of local competition can be derived from sources currently reported to the Commission. These data are nationwide local service revenues reported by calendar year. Although these data are filed by all carriers, including new competitive local exchange carriers, the data are not available for analysis by Commission staff until several months after filing; consist only of nationwide aggregates; and are generally given confidential treatment. A summary of this information is published, a few months thereafter, in a form that maintains the confidentiality of revenues of individual companies. Additional data on the state of local competition in selected states, and in particular cities and regions within those states, have been submitted to the Commission in various proceedings, e.g., in the course of regional Bell company applications for authorization to provide in-region interLATA services. These data provide significant information related to local competition in the state for which, and at the time, an interLATA services petition is filed. Because they are submitted only by the petitioner, however, these data do not constitute a comprehensive survey of local competition in that state. Nor do they describe the extent of development of local competition across the country at any point in time. 4. Accordingly, in recent months, the Commission has undertaken initiatives to enhance its understanding of the evolving nature of local competition, including holding an en banc hearing on the state of local competition on January 29, 1998. In connection with these initiatives, on February 20, 1998, the Bureau requested that nine large incumbent local exchange carriers submit information -- on a voluntary basis -- to facilitate the development of a consistent set of data for analyzing the state of local competition in all areas of the country. We provided the nine carriers with a two-page survey form, which appears in the Appendix to this Public Notice. We requested each carrier to complete the survey form for each state in which the carrier is an incumbent local exchange carrier. III. DISCUSSION 5. In this Public Notice we seek comment on whether we should adopt a local competition survey similar to the survey noted above, and included in the Appendix, and apply such a survey to all types of local exchange carriers, both incumbent carriers and competitive carriers. We propose to make any survey that we adopt mandatory for most carriers because we believe that an accurate and timely picture of the development of local competition and the achievement of universal service goals requires a limited set of information from substantially all local exchange carriers. We structure our request for comments using the survey that appears in the Appendix because responses to that survey provide Commission staff and parties the opportunity to evaluate the clarity of survey questions in light of the accuracy and completeness of the reported information. A. Data to be Filed 6. We seek comment on whether the information items set out in the Appendix are both necessary and sufficient to describe and understand the state of local competition in diverse areas of the nation. That is, we ask parties to identify any information items in the Appendix that are not necessary for this purpose, and we also ask parties to identify any additional information, missing from the Appendix, that parties deem necessary to achieve our purpose. We invite parties to comment on any specific wording of information items set out in the Appendix -- and on the need for, and the specific wording of, instructions to accompany those information items - - that would ensure that all carriers use the same definitions, assumptions, and, if required, estimation procedures when they compile and report data in the surveys. We note that evolving services and technological change may affect the future effectiveness of the survey. We therefore ask parties to make specific suggestions that would enhance the accuracy of the local competition data over time. 7. We also seek comment on whether there are authoritative data sources other than a periodic survey that could provide information necessary to evaluate the development of local competition and the achievement of universal service goals on a timely basis. We invite parties to identify publicly available alternative sources of any or all of the data discussed below. We ask parties proposing alternative data sources to identify those sources precisely and to explain in detail how those sources provide information that is accurate, sufficient, and timely to describe and understand the state of local competition in diverse areas of the country. 8. Definition of Reporting Areas. In the survey in the Appendix, we requested information by state. We seek comment on the geographic areas for which data on local competition should be reported. For information to be useful, it must be reported on a consistent geographic basis by all carriers submitting local competition surveys. Although many geographic classification systems are used by the telecommunications industry for specific purposes such as regulatory compliance, no single system applies to all providers of local exchange or exchange access service, and some geographic classifications will become irrelevant over time. The regional Bell companies, for example, generally may provide toll services only within Local Access and Transport Areas (LATAs), but the 1996 Act explicitly provides for the removal of this operating restriction. New local service competitors need not design their business plans around any of the geographic classification systems that are traditional in the industry, although they must comply with requirements legitimately imposed by state regulatory authorities. All carriers will maintain state-by-state data for a variety of tax, regulatory, and other purposes. 9. We recognize that data describing local competition in narrowly defined geographic areas -- for example, for individual cities, or separately by urban, suburban, and rural areas within a state -- may be of interest because local competition has tended to develop first in the largest cities. We expect, however, that considerable effort by carriers and Commission staff would be required to assure that all carriers report data according to consistently defined geographic areas that are smaller than a state. Because we seek to collect necessary and sufficient information without unduly burdening carriers, we therefore propose that the states should be the geographic reporting areas for local competition surveys. We invite comments on this proposal. Parties favoring a definition of reporting areas other than the states should explain how the alternative would be practical for all carriers submitting local competition surveys and how the alternative would enhance the purposes of this Public Notice. 10. Number of local service lines sold directly to end users by the reporting carrier. In the survey in the Appendix (items 1 and 6), we requested nine large incumbent local exchange carriers to report the number of local service lines they sold directly to end users. We propose that all carriers providing local exchange or exchange access service report the number of local service lines that they sell and bill, on a retail basis, directly to end users. Monitoring the achievement of universal service goals requires information on customers served in total. The Commission also cannot judge the effectiveness of its implementation of the pro-competition provisions of the 1996 Act without consistently reliable information on the number of customers served by local exchange carriers over their own facilities. We believe that, in order to obtain such information, it may be necessary to collect the data from competitive local exchange carriers. For example, where competitive local exchange carriers provide local service to end users using only their own facilities, they are the only carriers that have access to information about these local service lines. Moreover, competitive local exchange carriers are likely the best source of consistently reliable information about other aspects of their provision of service. We invite parties to comment on these proposals and observations. We also invite parties to comment on the extent to which alternative sources of information on all local service customers, e.g., comprehensive directory listings or 911/E911 databases, might be publicly and readily available, and sufficient for our purposes. 11. Number of local service lines sold to competing local carriers for resale. In the voluntary local competition survey (items 3 and 8), we requested incumbent carriers to report the number of local service lines they sold to competing local carriers for resale. Section 251(c)(4) of the 1996 Act establishes the duty of incumbent local exchange carriers to offer retail services at wholesale rates for resale, and section 251(b)(1) establishes the duty of all local exchange carriers not to prohibit or place unreasonable or discriminatory conditions or limitations on the resale of telecommunications services. We propose that all carriers submitting local competition surveys report the number of lines they sell to competing local carriers for resale to end users, and we seek comment on this proposal. 12. Number of unbundled loops and unbundled switch ports for local access lines provided by the reporting carrier to an unaffiliated carrier. In the survey in the Appendix (items 2, 5, and 7), we requested responding carriers to report the number of unbundled loops and unbundled switch ports for local access lines that they provided to unaffiliated carriers. Section 251(c)(3) of the 1996 Act establishes the duty of incumbent local exchange carriers to provide access to network elements on an unbundled basis. We propose that all incumbent local exchange carriers submitting local competition surveys report the number of unbundled loops and unbundled switch ports for local access lines that they provide to unaffiliated carriers, and we invite comment on this proposal. 13. Number of unaffiliated, competing local exchange carriers purchasing unbundled network elements and resold lines. In the local competition survey (items 10, 11, 12, and 13), we requested carriers to report the number of unaffiliated, competing local exchange carriers purchasing unbundled network elements and the number of such carriers purchasing resold lines. We propose to collect information about the number of unaffiliated, competing carriers purchasing unbundled network elements from each incumbent local exchange carrier, and also the number of competing carriers purchasing lines for resale to end users, because we believe the competitive dynamics of local exchange and exchange access markets in which there are few competitors may differ, in ways that are not yet known or fully appreciated, from such markets in which there are many competitors. We seek comment on whether requiring all local exchange carriers, rather than only incumbent local exchange carriers, to provide this particular information would enhance the Commission's understanding of the state of local competition. We also seek comment on whether it would be less burdensome and/or more accurate to require competitive local exchange carriers to report the types and volumes of services and facilities they obtain from incumbent local exchange carriers, rather than to require incumbent local exchange carriers to report information about their provision of such items to competitive local exchange carriers. 14. Number of wire centers where competitors have physical or virtual collocation arrangements, and number and type of customer lines served. In the voluntary survey (block D), we requested the number of wire centers where competitors have physical or virtual collocation arrangements, and the number and type of customers lines served from those wire centers, because we believe that local competition may be enhanced, particularly for residential customers, if competitive local exchange carriers are able to locate their network access equipment in the incumbent local exchange carrier wire center that directly serves the customer the new competitor seeks to serve. Section 251(c)(6) of the 1996 Act requires incumbent local exchange carriers to provide for physical collocation of equipment that is necessary for a competitor to interconnect with or obtain access to the unbundled network elements of the incumbent local exchange carrier, and for virtual collocation in circumstances when physical collocation is not practical. We propose that all incumbent local exchange carriers submitting local competition surveys report this information, and we seek comment on this proposal. We also seek comment on whether carriers other than those incumbent local exchange carriers that are subject to section 251(c)(6) should report this information. 15. Switched minutes originated with end users, terminated with end users, and exchanged with other carriers. In block E of the survey in the Appendix, we requested incumbent local exchange carriers to report information on minutes of telecommunications traffic they handled, and information on minutes of telecommunications traffic they exchanged with carriers that are not incumbent local exchange carriers. In so doing, we were looking for information on the amount of traffic delivered by incumbent carriers to carriers that are not incumbent local exchange carriers, in comparison to the amount of traffic received from such carriers. We also were looking for information on the size of such traffic exchanges relative to total traffic handled by the large incumbent carriers. We seek comment on the usefulness of the data reported in block E of the voluntary local competition survey. We also seek comment on whether such data should be collected from both competitive local exchange carriers and incumbent local exchange carriers -- or particularly from competitive local exchange carriers, because only competitive local exchange carriers have accurate information about the amount of traffic that is handled on, or among, their own networks. We invite parties to identify particular items of information requested in block E that carriers may not measure on a routine basis, and to propose methods for estimating such items of information that carriers can apply consistently and reliably. 16. Number of telephone numbers ported by interim or long-term number portability methods. In the survey in the Appendix (block F), we requested carriers to report the number of telephone numbers ported by interim or long-term number portability methods. Section 251(b)(2) of the 1996 Act establishes the duties of all local exchange carriers with respect to the provision of number portability. We therefore propose that all carriers providing local exchange or exchange access service report the information requested in block F of the Appendix, and we seek comment on this proposal. We also seek comment on the appropriateness of these measures, and we invite parties to comment on any alternative measures that might be reported more easily by carriers on a consistent, reliable, and useful basis. 17. Names of competitive local exchange carriers. In the voluntary local competition survey (block G), we requested responding carriers to provide lists of competing local exchange carriers. Knowing which local exchange carriers are active in which geographic areas is important to the Commission's understanding of patterns of development of local exchange competition, i.e., nationwide versus regional versus localized. We invite comment on this observation. We seek comment on whether all local exchange carriers, or only incumbent local exchange carriers, should report the information requested in block G of the Appendix. We also invite parties to comment on whether the information requested in block G would be necessary if all competitive local exchange carriers were to file local competition surveys. B. Survey Filings by Incumbent Local Exchange Carriers 18. We seek comment on whether each incumbent local exchange carrier should file a local competition survey for each area in which it is an incumbent local exchange carrier. It is our objective, however, to minimize reporting burdens, while collecting information sufficient to understand developing local exchange and exchange access competition in diverse areas of the country. Therefore, to avoid or reduce reporting burdens, we seek comment on whether some subset of incumbent local exchange carriers should file local competition surveys, and, if so, on the appropriate basis for determining the composition of that subset of incumbent local exchange carriers. C. Survey Filings by Other Local Exchange Carriers 19. We cannot get a completely accurate picture of the state of local competition in diverse areas of the country only from information provided by incumbent local exchange carriers. To the extent that a competitor provides service to customers using its own loops and switches, these lines will not be included in any data collected by incumbents. Whether a competitive local exchange carrier serves customers over its own facilities, by means of unbundled network elements, or through resale, moreover, data provided directly by competitive local exchange carriers about their own customers would be extremely valuable as a cross-check to data provided by incumbent local exchange carriers, and should provide a much more specific snapshot of local competition. We therefore seek comment on whether carriers other than incumbent local exchange carriers should file local competition surveys if such carriers propose to provide -- or are providing -- local exchange or exchange access service as duly authorized competitive local exchange carriers. 20. We again emphasize that our objective is to collect sufficient information for the Commission to achieve the regulatory flexibility, pro-competition, and universal service objectives of the 1996 Act, while imposing on carriers the fewest burdens consistent with our need for the information. Consistent with this need for adequate information, we propose not to distinguish among local exchange carriers on the basis of the technology used to provide local exchange or exchange access service to the public. In other words, regardless whether an incumbent local exchange carrier -- or authorized competitive local exchange carrier -- uses, for example, wireline or wireless technology to provide local exchange service, we would request or require relevant data. We seek comment on this proposal. 21. We also seek comment on whether local exchange carriers other than incumbent local exchange carriers should report the same data, in the same form, that incumbent local exchange carriers report. Competitive local exchange carriers need not develop their business plans, conduct their operations, design their networks, or select geographic areas to serve in the same manner as incumbent local exchange carriers have done. Also, the 1996 Act places less extensive responsibilities on local exchange carriers other than incumbent local exchange carriers. For both these reasons, some information items in the Appendix may not apply to the operations of local exchange carriers other than incumbent local exchange carriers. 22. In particular, only incumbent local exchange carriers have a duty to provide nondiscriminatory access to network elements on an unbundled basis, to offer services for resale at wholesale rates, and to provide for physical collocation of equipment necessary for interconnection or access to unbundled network elements at their premises. We therefore seek comment on whether any local exchange carriers, other than incumbent local exchange carriers, should report information items in the Appendix that concern unbundled network elements, services sold to other carriers for resale to end users, or collocation arrangements. We invite parties to comment on the relevance, for describing and understanding the operations of such competitive local exchange carriers, of the other information items in the Appendix. We also invite parties to comment on the relevance, for these purposes, of information items that are not included in the Appendix. Would it be useful, for example, to require competitive local exchange carriers to describe how their networks interconnect with the networks of other telecommunications carriers (e.g., interexchange carriers, other competitive local exchange carriers, incumbent local exchange carriers), or to provide other information about their network architecture? D. Frequency of Filing 23. We propose that carriers file the survey quarterly, 30 days after the end of the calendar year quarter. This timing will permit carriers one month to compile and report data for the preceding quarter. We believe that monthly reporting would not significantly speed any regulatory action keyed to some threshold showing of the degree of competition in a local market, but might increase the reporting burden. We also believe that semi-annual or annual reporting is too infrequent to allow us to gauge the development of local competition on a timely basis. We seek comment on these proposals for the frequency and timing of filings of local competition surveys. We also invite comment on whether the Commission might equally or more effectively collect information on the state of local competition through an alternative mechanism, e.g., the Commission's power of subpoena. E. Sunset of Filings 24. We propose to discontinue the survey after a certain period of time. We propose that the survey be discontinued after the first quarter of 2001. That date, the first quarter of 2001, will mark a date five years after the enactment of the 1996 Act. Prior to that date, we propose to undertake a review of the efficacy and burden imposed of this data collection to determine the need and form for any data collection efforts after that date. We invite comment on the proposed sunset and alternative timeframes. F. Confidentiality of Data 25. All telecommunications carriers have a statutory duty to protect the confidentiality of certain proprietary information. Accordingly, carriers that respond to the local competition survey may wish to seek confidential treatment for information about reporting areas in which they provide services or facilities to only one or two carrier customers. We seek comment on the appropriate scope of protection in such cases and in any others where parties may legitimately seek confidential treatment for proprietary information. We note that, in connection with their voluntary local competition data filings, some incumbent local exchange carriers seek to prevent disclosure of even the names of their customers by asserting that this information is proprietary. It is not clear to us that section 222 or any other relevant provision of law compels such a conclusion, and we seek specific comment on this issue. More generally, parties should identify, for example, which data elements, if any, raise proprietary or confidential treatment issues if filed publicly, if published by reporting area (for example, state-by-state), or if published by industry totals. 26. Participating carriers seeking confidential treatment for submitted information proceed under Freedom of Information Act (FOIA), 5 U.S.C. Section 552, guidelines. Commission rules implementing FOIA allow information submitters to seek confidential treatment pursuant to certain FOIA-provided exemptions. In the event that, e.g., a third party files a FOIA request seeking access to information that the submitter seeks to protect, the Commission is required to inform the submitter and afford him or her an opportunity to respond. In the event of an adverse Commission ruling, the submitter is afforded opportunity to seek review of that decision from the Commission and to appeal to the federal court. Notwithstanding such protections and remedies, we encourage parties to propose alternative means of presenting data which could, on the one hand, ensure that protection is provided in appropriate cases and, on the other, promote overall the public use of submitted data. G. Electronic Filing and Records Retention 27. We propose that the carriers that file surveys be required to file surveys electronically in a standardized format and also to file paper copies of the surveys. Filing electronically allows Commission staff to use data efficiently. One possibility is for data to be filed on 3.5 inch disks in Lotus format. The Appendix, for example, was created in Lotus 123 version 4 format. We believe, however, that a far more efficient electronic filing procedure could be crafted. We seek comment on the best means of data presentation, storage, and electronic filing. 28. Part 42 of the Commission's rules governs record keeping by common carriers. We seek comment on whether instructions to be developed for the local competition survey should specify particular information or records that should be retained to support or supplement carrier data submissions. IV. PROCEDURAL ISSUES A. Ex Parte Presentations 29. Pursuant to section 1.1206 of the Commission's rules, 47 C.F.R.  1.1206, this proceeding will be conducted as a permit-but-disclose proceeding in which ex parte communications are permissible but subject to disclosure. B. Initial Paperwork Reduction Act of 1995 Analysis 30. This Public Notice contains either a proposed or modified information collection. As part of our continuing effort to reduce paperwork burdens, we invite the general public to take this opportunity to comment on the information collections contained in this Public Notice, pursuant to the Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and agency comments are due at the same time as other comments on this Public Notice. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of collection of information on respondents, including the use of automated collection techniques or other forms of information technology. 31. The Bureau estimates that filing the survey that appears in the Appendix would create a burden averaging 30 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. We invite the incumbent local exchange carriers that have filed, on a voluntary basis, the local competition survey contained in the Appendix to submit information on the burden of preparing and submitting that survey, and we invite all parties to estimate the burden of preparing and filing local competition surveys on an ongoing basis. 32. The overall burden per year of the local competition survey will depend on the number of items in the survey, on the number of local exchange carriers that file at least one survey in each reporting period, on the average number of geographic areas, e.g., states, for which surveys are submitted by the local exchange carriers that file local competition surveys in a reporting period, and on the number of reporting periods, e.g., calendar quarters, each year. It is a purpose of this Public Notice is take comments on these determinants of the overall burden per year. C. Comment Filing Procedures 33. Interested parties may file comments not later than June 7, 1998, and reply comments not later than June 22, 1998. All filings should refer to the pleadings as Local Competition Survey, CC Docket No. 91-141, CCB-IAD File No. 98-102. One original and four copies of all comments and reply comments must be sent to Magalie Roman Salas, Secretary, Federal Communications Commission, 1919 M St., NW, Room 222, Washington, DC 20554. Three copies should also be sent to Ms. Terry Conway, Common Carrier Bureau, Industry Analysis Division, 2033 M St., NW, Suite 500, Washington, DC 20554. Parties should also file one copy with the Commission's duplicating contractor, International Transcription Services, Inc. (ITS), 1231 20th St., NW, Washington, DC 20036, (202) 857-3800. Copies of documents filed with the Commission may be obtained from ITS. Documents are also available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, NW, Room 239, Washington, DC 20554, (202) 418-0270. 34. You may, in addition, file your comments electronically via the Internet. To file electronic comments in this proceeding, you may use the electronic filing interface available on the FCC's World Wide Web site at . Further information on the process of submitting comments electronically is available at that location and at . For further information, contact Ellen Burton or Jim Zolnierek, Common Carrier Bureau, Industry Analysis Division, (202) 418-0940, or, for users of TTY equipment, (202) 418-0484. Action by the Chief, Common Carrier Bureau. -FCC- APPENDIX LOCAL COMPETITION SURVEY VOLUNTARILY COMPLETED BY NINE LARGE INCUMBENT LOCAL EXCHANGE CARRIERS