WPC' 2BJ Courier3|n'Garamond Halbfett P7&PGaramond Antiqua_1HPLAS4.PRS 4x  @\oeX@2 6 F ZPv3|n'HP LaserJet 4_230_1HPLAS4.PRS 4&njp P7\oe&Pa8DocumentgDocument Style Style` ư 2+pRkk-a4DocumentgDocument Style Style  . a6DocumentgDocument Style Style ư a5DocumentgDocument Style Style ư a2DocumentgDocument Style Style*    2v]tG a7DocumentgDocument Style Style  ` ư BibliogrphyBibliography  x ư a1Right ParRight-Aligned Paragraph Numbers8@    ư a2Right ParRight-Aligned Paragraph Numbers A@`  ` ư 2`  G  a3DocumentgDocument Style Style 0     a3Right ParRight-Aligned Paragraph Numbers J` @  `  ư a4Right ParRight-Aligned Paragraph Numbers S`  @  ư a5Right ParRight-Aligned Paragraph Numbers \`  @h #h#ư 2  W %  a6Right ParRight-Aligned Paragraph Numberse`  #h#@$$ #h#((ư a7Right ParRight-Aligned Paragraph Numbersn`  #h#((@** ((--ư a8Right ParRight-Aligned Paragraph Numbersw `  #h#((--@/p/ --2p2ư Tech InitInitialize Technical StyleX!"T 1 .1 .1 .1 .1 .1 .1 .1 T2 b  a5TechnicalTechnical Document Style&#$  . a6TechnicalTechnical Document Style&%&  . a2TechnicalTechnical Document Style*'(    a3TechnicalTechnical Document Style')*    2Ia4TechnicalTechnical Document Style&+,    a1TechnicalTechnical Document Style4-$.     a7TechnicalTechnical Document Style&/0  . a8TechnicalTechnical Document Style&12  . 2[epDoc InitInitialize Document Style3Y4   T I. 1. A. a.(1)(a) i) a)TPleadingHeader for Numbered Pleading Paper56    X  y*dddyy*ddd`y H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21 H22 H23 H24 H25 H26 H27 H28   ӃHeading 2Underlined Heading Flush Left78 Heading 1Centered Headingcal Style9 :** Ã  2y !tBullet ListIndented Bullet List;<` ưX a1DocumentgDocument Style StyleF=> ))  ׃  HeadingChapter Heading J d  ) I. ׃  Right ParRight-Aligned Paragraph Numbers!>a݅@  I.   X(# 2"D#^$d8%SubheadingSubheading"0\ E A.  FOOTNOTEFootnote - Appearance#PHIGHLIGHT 1Italics and Boldldedd$+. DRAFT ONHeader A Text = DRAFT and Date% X =8` (#FDRAFTă r  ` (#=D3 1, 43 12pt (Z)(PC-8))T2Dă  ӟ25 &'X{(1)1DRAFT OFFTurn Draft Style off&@@    HEADERHeader A - Appearance'LETTER LANDLetter Landscape - 11 x 8.5( 3'3'Standard'3'3StandardLetter Portrait - 8.5 x 11 ;   LEGAL LANDLegal Landscape - 14 x 8.5)f 3'3'Standard'A'AStandardZ K e6VE L"nu;   2#*1g +1!,n"-X7#LETTER PORTLetter Portrait - 8.5 x 11*L 3'3'Standard3'3'StandardZ K e6VE L"nU9   LEGAL PORTLegal Portrait - 8.5 x 14+ 3'3'StandardA'A'StandardLetter Portrait - 8.5 x 119   TITLETitle of a Document,K\ * ăFOOTERFooter A - Appearanced-2y%.#/iB$0d$1j%BLOCK QUOTESmall, single-spaced, indented.N X HEADING 33rd Heading Level/| XHIGHLIGHT 2Large and Bold Large0B*d. HIGHLIGHT 3Large, Italicized and Underscored1 V -q2t+2%3E'4-)58<*LETTERHEADLetterhead - date/margins2u H XX  3'3'LetterheadZ K e VE L"n3'3'LetterheadZ K e VE L"nE9    * 3'3'LetterheadZ K e VE L"n3' II"n"Tv3'StandarddZ K e VE L"nU9 Ѓ   INVOICE FEETFee Amount for Math Invoice3 ,, $0$0  MEMORANDUMMemo Page Format4D.   ! M E M O R A N D U M ă r  y<N dddy   INVOICE EXPSEExpense Subtotals for Math Invoice5:A ,p, $0$0022/68+7,8X.9[.INVOICE TOTTotals Invoice for Math Macro6z 4p, $0$00INVOICE HEADRHeading Portion of Math Invoice7+C`*   4X 99L$0 **(  ӧ XX NORMALReturn to Normal Typestyle8SMALLSmall Typestyle920:[d/;[/<[0=[u0FINEFine Typestyle:LARGELarge Typestyle;EXTRA LARGEExtra Large Typestyle<VERY LARGEVery Large Typestyle=23>1?X2@X2A53ENVELOPEStandard Business Envelope with Header>+w ,,EnvelopeZ K e VE L"n,,EnvelopeLarge, Italicized and Under;    ,, 88+  `   MACNormal?,.1@dfStyle 14Swiss 8 Pt Without MarginsA$$D Co> PfQ  )a [ PfQO 2;B4C4Dl9E:Style 12Dutch Italics 11.5B$$F )^ `> XifQ  )a [ PfQO Style 11Initial Codes for Advanced IICJ )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 ! )^ `> XifQ ` Advanced Legal WordPerfect II Learning Guide   x )^ `> XifQ Advanced Legal WordPerfect II Learning Guide   j-n )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  jBX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 3oDutch Roman 11.5 with Margins/TabsD )a [ PfQO  ddn  # c0*b, oT9 !Style 4 PSwiss 8 Point with MarginsEDq Co> PfQ  dddd  #  2>F;G|L<H<Ih=Style 1.5Dutch Roman 11.5 FontF4h )a [ PfQO  dddn Style 2Dutch Italic 11.5G$ )^ `> XifQ Style 5Dutch Bold 18 PointH$RH$L T~> pfQ_  )a [ PfQO Style 7Swiss 11.5I$$V )ao> PfQ ]  )a [ PfQO 2MJ:>K>LCMHStyle 6Dutch Roman 14 PointJ$$N w [ PfQ   )a [ PfQO Style 10oInitial Codes for AdvancedK U )a [ PfQK  dddn  ##  [[ b, oT9 !b, oT9 !n )^ `> XifQ ` Advanced Legal WordPerfect Learning Guide   f )^ `> XifQ Advanced Legal WordPerfect Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  QN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 8PfInitial Codes for BeginninggLi )a [ PfQK  dddn  # X` hp x (#%'b, oT9  [ &e )^ `> XifQ ` Beginning Legal WordPerfect Learning Guide   d )^ `> XifQ Beginning Legal WordPerfect Learning Guide   jH )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  j )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 9Initial Codes for IntermediateM )a [ PfQK  dddn  # X` hp x (#%'b, oT9 Њ [ e )^ `> XifQ ` Intermediate Legal WordPerfect Learning Guide   3 )^ `> XifQ Intermediate Legal WordPerfect Learning Guide   jf )^ `> XifQ    Copyright  Portola Systems, Inc.`+ >Page  jX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2_NN,5SX:^UpdateInitial Codes for Update ModuleN )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 !n )^ `> XifQ ` Legal WordPerfect 5.0 Update Class Learning Guide   f )^ `> XifQ Legal WordPerfect 5.0 Update Class Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`7 CPage  jN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Garamond AntiquaGaramond HalbfettCG Times&PlJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlq/`5),.`jp P7P>H:eC::R:W@H<<!!!WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNWWW<::,33::o:::bb:(C<<:b(!!33:b!!xx::II[x3&8C!C!bC@@>.*(@<[<@85<5x::::::::::::<:C![3[3[3[3[3NY3L3L3L3L3(!(!(!(!fCf@f@f@f@b@b@b@b@W@[3`H:eC::R:W@H<<!!!WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNWWW<::,33::o:::bb:(C<<:b(!!33:b!!xx::II[xkGPtG5,tGkYYGkPGtb_PbPPnGtGkbyY|bbbye5MttbGbbbbu))MMMMyMMMtttbM\PG5ؐJppZ`]mmVVjjvvsp}vvJv]VV3J3Jʀ}}}}}}}}M=f}Garamond AntiquaGaramond HalbfettCG TimesCG Times BoldCG Times ItaliclJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PFNA,V p7nnnOCnZOOOOOOOOOOn7T5=5ZnOnI755O15?OVGnnOOOOOOOOOOnnnnn3nOOOOnnnnnnnnnnnnnnnnnnnOOnnnnnn\ICVnOnnn/AOOOOnnnnnnOOO7OOnOOnnnOOO1OOOO1OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!OOO!OOO!OOO!OOOOOOOOOOOOOTCC=C=I1E+I1^7O1%O1I=d=^1I7^1OCA7C77K1O1ICT=VCCCTE^%5^OOC1CCCCQ5555T^555OOOC5?71%nnr}c3wc}}yMMc>Bwgwgcccccc@XKKgg;;c\\\{I\waaIZQQOMXacccujygggpeyuVrQjQcccc3Qlc@uuccc;;ccccccccccccccccccccccnnnnnnnn#3#cccccj3cccccccccccccccccccccccccccccccrrrrnnnnnnnnnnXXccccccllccVVVVuuccaaaaccZZuZVVVV5*FVcc",tB^ f ^00NXX366X000XXXXXXXXXXX00Bnrm=BnmX~z6X6\\3NbN_N:Uf30f3fbb_F@=b\\bUQ\QX0XXXXX0XXXXXX\Xf3NNNNNwNsNsNsNsN=3=3=3=3fbbbbbbbbbN\bbbbmbQXQ}Q}QXXnrQrXrXrQ\XXXXff=3XfXX=fbXXfr3rBnXp=p3\w\f\byByBXcFX@cFXXrBr3~Xb\bb\bbuQzUuQ_nXfXX~Xbn0\\333WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN\XX0DNNXXXXXX=f\\X=33NNX33XXpp\\\mff3N\="\X\4\==p0\XfXz\XXQXiwUzpNm\QQ6666ppfpfzQsGzQ\Q=3QzffQz\Qpm\p\\~QQzpfppps=XpQpppp00XXXXXXXpXi\Q=Tgnj}}ccyyTjcc;T;TXFu",tB^ f ^44U``8;;`444```````````44Hx|vCHxv`;`;dd8UkUhU?]o84o8okkhLFCkddk]YdY`4`````4``````d`o8UUUUUU~U~U~U~UC8C8C8C8okkkkkkkkkUdkkkkvkX`XXX``x|X|`|`|Xd````ooC8`o``Cok``o|8|Hx`zCz8ddodkHH`lL`FlL``|H|8`kdkkdkkX]Xhx`o```kx4dd888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNd``4JUU``````Codd`C88UU`88``zzdddvoo8UdC"d`d9dCCz4d`o`d``Y`s]zUvdYY;;;;zzozoY~NYdYC8YooYdYzvdzddYYzozzz~C`zYzzzz44```````z`sdYC\   pxtll\tll@\@\`L2gf ρf 5f f ",tB^ f ^88Qdd4??d888ddddddddddd88N||NHx|k?d?dd4]oUoYFkv;8o;vkooUHHvkkh`dddd4ddddd8ddddddddv;]]]]]U~Y~Y~Y~YN;N;N;N;vkkkkvvvvh]pkkhk~odddXXddX|d|dXdkkkkvvL;dvddNvsddo8PxdzQz;ppvdkXXdpLkHpLkdPDdvpvvpvhX`Xoxdvkddh8dd444WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNddd8N``ddd]]dFodddF44]]d??ddzzdddvv4]dF"dhd9dCCz8ddoddddYds`zUvddd????zozoY~NYYYN8YooYdYz~dzddYYzozzz~NdzYzzzz88dddddddzdzdYC\   pxtll\tll@\@\`L",tB^ f ^<<cppAEEp<<<ppppppppppp<<TNTpEpEuuAc}cycIlA<A}}yYRN}uu}lhuhp=ppppp<ppppppupAccccccccccNANANANA}}}}}}}}}cu}}}}}gpgggppgppguppppNApppN}ppATpNAuuu}TTp~YpR~YppTAp}u}}u}}glgypppp}<uuAAAWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNupp<VccppppppNuupNAAccpAAppuuuAcuN"upuCuNN<uppupphplcuhhEEEEh[huhNAhhuhuuuhhNph<<ppppppppuhN /;k  PP9~~+k~~KkKk&&pY",tB^ f ^AA_uu<IIuAAAuuuuuuuuuuuAA[[T}IuIuu<lchR}EAE}cTT}}ypuuuu=uuuuuAuuuuuuuuElllllchhhh[E[E[E[E}}}}yl}}y}uuugguuguugu}}}}YEuuu[uuA]u_Eu}gguY}TY}u]Ouygpgu}uuyAuu<<<WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNuuuA[ppuuulluRuuuR<<lluIIuuuuu<lu R"uyuCuNNAuuuuuuhupcuuuIIIIh[hhh[Ahhuhuuuhh[uhAAuuuuuuuuuhN /;k  PP9~~+k~~KkKk&&pY",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L21Zf f e f Garamond AntiquaGaramond HalbfettCG TimesCG Times BoldCG Times ItalicGaramond Kursiv;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PNFNA,V p7P8wC;,#Xw PE37XPDO7zC;,,c!Xz_ pi7XANE,#ܼ PE37PxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"dsd9dCCzCddoddCdYds`zUvdddCCCCzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYC\   pxtll\tll@\@\`L",tB^ f ^;C]ddCCCdCCCCddddddddddCCdxN`xoCCCddCdoYoYFdo8Co8odooYNCodddYdddd4dddddCddddddddo8dddddYYYYYN8N8N8N8oddddooooddpddddxodddXXddXddXdddddooL8doddNorddo8PdN8ppoddXXdpLoNpLodPDdopoopodXYXodoodddCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"dsd9dCCzCddoddCdYds`zUvdddCCCCzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYC\   pxtll\tll@\@\`L",tB^ f ^ENluuNNNuNNNNuuuuuuuuuuNNhN[}NNNuuNhuhuhNuuAAuAuuuuV[Auuuuhhuhu=uuuuuNuuuuuuuuuAhhhhhhhhhhNANANANAuuuuuuuuuuhuuuuuuguggguuguuguuuuuuuNAuuuuNuuuuATuFAuuuuuTTu~Y~Y~Y}uTAuuuuuuuuggguuu}uuuNuuNNNWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNuuuNh__uuuuuuRuuuuRNNyyu<<uuuuuNyuR"uyuCuNNNuuuuNuhulcuhhNNNNh[huhNAhhuhuuuhhNuhNNuuuuuuuNuhN /;k  PP9~~+k~~KkKk&&pY",tB^ f ^T^^^^^^^^^^~^n ^^^^~~~^OOOinO~~~J^O~~~~~~~~~~^O^O^O^O~}}}}}}^O^OfUOfflllfO }}}^^^^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN^~ssdd^^II^ Ud"Q%^^^^~y~~^^^^~n~~^O~~~~~^~^^^~^'CpZ2CCNN8|2 2   =2I,8   !8,'k,,[[''''ee,,,l2 ^c f f / f lI6n=0,&njp P7&PlJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PNFNA,V p7P8wC;,#Xw PE37XPDO7zC;,,c!Xz_ pi7XQANE,#ܼ PE37PRO^T,#"hR PE37RP @LC,#Ѩ PE37P RO^T,#"hR PE37RP Q%^^^^~y~~^^^^^L^~^^^~^'CpZ2CCNN8|2 2   =2I,8   !8,'k,,[[''''ee,,,l",tB^ f ^CLiqqLLLqLLLLqqqqqqqqqqLLeLXzLLLqqLeqeqeLqq??q?qqqqTX?qqqqeeqeq;qqqqqLqqqqqqqqq?eeeeeeeeeeL?L?L?L?qqqqqqqqqqeqqqqqqdqdddqqdqqdqqqqqqqL?qqqqLq~qqq?RqD?qqqqqRRqzVzVzVzqR?qqqqqqqqdddqqqzqqqLqqLLLWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNqqqLe\\qqqqqqPqqqqPLLvvq;;qqqqq~~LvqP"qvqAqLLLqq~qqLqeqi`qeeLLLL~~eXeqeL?e~~eqeqqqee~LqeLLqqqqqqqLqeL'2h  FF0zz"hzzIhIhmV",tB^ f ^T^^^^^^^^^^~^n ^^^^LXz~~J^O~~~~~~~~~~^O^O^O^O~}}}}}}^O^OfUOfflllfO }}}^^^^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN^~ssdd^^II^ Ud"Q%^^^^~y~~^^^^^L^~^^^~^'CpZ2CCNN8|2 2   =2I,8   !8,'k,,[[''''ee,,,l",tB^ f ^T^^^^^^^^^^n ^^^^~~dO^O~n^~J^O&~~~~~nOnOnOnO}}}}lOnOqnO@}}lnlq`}~}^^^^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN^yydd^^II^ Jd"Q%^^^^~y^^^^~n~~~nO~ ~~~~n~^^^~^'CpZ2CCNN8|2 2   =2I,8   !8,'k,,[[''''ee,,,l28`- f f !f _-lI6n=0,&njp P7&PlJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PNFNA,V p7P8wC;,#Xw PE37XPDO7zC;,,c!Xz_ pi7XQANE,#ܼ PE37PRO^T,#"hR PE37RP @LC,#Ѩ PE37P RO^T,#"hR PE37RP DN^T,,ÕR_ pi7RD?LC,,b>_ pi7 N^T,,ÕR_ pi7R==========jjjj{jXjjjjj==IiViivv\V*V***   c VoP0\***C#\PI06PP========ee0IIII==========66PPPx",tB^ f ^CLiqqLLLqLLLLqqqqqqqqqqLLqXm~LLLqqLq~e~ePq~?L~?~q~~eXL~qqqeqqqq;qqqqqLqqqqqqqq~?qqqqqeeeeeX?X?X?X?~qqqq~~~~qqqqqq~qqqddqqdqqdqqqqq~~V?q~qqX~qq~?[qX?~qqddqV~XV~q[Mq~~~~qded~q~~qqqLqqLLLWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNqqqLq``qqqqqqPqqqqPLLq;;qqqqq~~LqP"qqAqLLLqq~qqLqeqm`qqqLLLL~~eXeeeX?e~~eqeqqqee~XqeLLqqqqqqqLqeL'2h  FF0zz"hzzIhIhmV",tB^ f ^T^^^^^^^^^^n ^^^^Xm~J^O&~~~~~nOnOnOnO}}}}lOnOqnO@}}lnlq`}~}^^^^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN^yydd^^II^ Jd"Q%^^^^~y^^^^nX n~^^^~^'CpZ2CCNN8|2 2   =2I,8   !8,'k,,[[''''ee,,,l",tB^ f ^^jjjjjjjjjj==j{+jjjjjXXXu{X=RjXjXjXjXjXjXjYr_YrrxxxrY+jjjjW================================================xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNjoojjRR====j+}o"===============[)jj======j===j===============================================jjjj{jXjjjjj==IiViivv\V*V***   c VoP0\***C#\PI06PP========ee0IIII==========66PPPx2f8f ]Df Of )["i~'K2^$(8<><q*"xxxxWWxxxWWkkxxxBwgwgcccccc@XKKgg;;c\\\{I\waaIZQQOMXacccujygggpeyuVrQjQcccc3Qlc@uuccc;;ccccccccccccccccccccccnnnnnnnn#3#cccccj3cccccccccccccccccccccccccccccccrrrrnnnnnnnnnnXXccccccllccVVVVuuccaaaaccZZuZVVVV5*FVcc,,_ pi7DFTK,,bI_ pi7TWj^,,_ pi7GTK,# PE37PYj^,#b PE37PV"G($,#hG PE37hPlM!B%,JBjp P7JP6uC;,:^Xu&_ x7XX&6i=,,J &i4@ x7&Xo> PfQ ]  )a [ PfQO Garamond AntiquaGond HalbfettCG TimesCG Times BoldCG Times ItalicGaramond KursivTimes New Roma2f [pf {>f'",tB^ f ^KTuTTTTTTTTTqTbTTTTqqqTFFF^bFqqqBTFqqqqqqqqqqTFTFTFTFqooooooTFTG[LG[[```[GoooTTTTWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNTqggYYTTBBT1Y"H!TTTTqulqqTTTTqbqqTFqqqqqTqTTTqT!IV5u!!++mmS&  Du  QuQu??   z`",tB^ f ^^jjjjjjjjjj==j{+jjjjTb=RjXjXjXjXjXjXjYr_YrrxxxrY+jjjjW================================================xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNjoojjRR====j+}o"===============[)jj======j===j===============================================jjjjjTjjjjj==IiViivv\V*V***   c VoP0\***C#\PI06PP========ee0IIII==========66PPPxlI6n=0,&njp P7&PlJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PNFNA,V p7P8wC;,#Xw PE37XPDO7zC;,,c!Xz_ pi7XQANE,#ܼ PE37PRO^T,#"hR PE37RP @LC,#Ѩ PE37P RO^T,#"hR PE37RP DN^T,,ÕR_ pi7RD?LC,,b>_ pi7 SN^T,,ÕR_ pi7RVYj^,#b PE37PDWj^,,_ pi7DFTK,,bI_ pi7TWj^,,_ pi7GTK,# PE37PUYj^,#b PE37PWV"G($,#hG PE37hPlXM!B%,JBjp P7JP6uC;,:cXu&_ x7XX2f f %h ",tB^ f ^;C`ddCCCdCCCCddddddddddCCdxxxsCYoxxdoxxooCCCddCddYdY8dd88Y8ddddLL8dYYYLYdYd4dddddCddddddddd8xdxdxdxdxdYxYxYxYxYC8C8C8C8dddddddddoYxddddoYdxdxdxdxdXXddxxXxdxdxXdddddddD8ddddCdddddp8pHodp8p8dxddddxLxLxddLdLdLddpHp8odddddddodpLpLpLdoddddododxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCd]]ddddddFddddFCCddd88ddzzdddkddCddF"ddd9dCCzCdzdoddCdYds]zUvdYYCCCCzzzozoYzNoYdYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCsdYC\   pxtll\tll@\@\`L",tB^ f ^,,NXX~,,,X,,,\XXXXXXXXXX,,@im\=:~mf~Unzs,\,\\,UXB\B3NX6,\3fUUXG6:__UQNQ\QX0XXXXX,XXXXXX\X\6UUUUUsDmDmDmDmD=6=6=6=6fUUUU____zQU\UUzQUfUn\Xn\yQyQXXnnQmXmXnQ\XXXXXX>6X\XX=\wbXX~\g3gBmXm=m3y\y\f\X~nFnF~X\FU6\FXXgBg3nX_\__\_zXgFsNgF\mXfXXnXz\n,\\,3,WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN\XX0@KKXXXQQX=Q\\X=,,KKX66XXpp\\\_\b,K\="\Q\4\==p,\XfXz\XXQXiwUzpNm\QQ,,,,pifpfzQmGsQ\Q=3~QzffQz\Qpf\p\\pQzQzpfpppm=XzzpQpppp,,XXXXXXXzzzpXi\Q=Tgnj}}ccyyTjcc;T;TXFulI6n=0,&njp P7&PlJ;xC4,9Xxjp P7XPlKT$H(,:hHjp P7hPlLq/`5),.`jp P7PM<zC8,XzV p7XlEN<,xjp P7PNFNA,V p7P8wC;,#Xw PE37XPDO7zC;,,c!Xz_ pi7XQANE,#ܼ PE37PRO^T,#"hR PE37RP @LC,#Ѩ PE37P RO^T,#"hR PE37RP DN^T,,ÕR_ pi7RD?LC,,b>_ pi7 SN^T,,ÕR_ pi7RVYj^,#b PE37PDWj^,,_ pi7DFTK,,bI_ pi7TWj^,,_ pi7GTK,# PE37PUYj^,#b PE37PWV"G($,#hG PE37hPlXM!B%,JBjp P7JPY6uC;,:cXu&_ x7XX&6i=,,JE&i4@ x7&XX&6i=,,J &i4@ x7Xo> PfQ ]  )a [2% \-Њ#Xxjp P79XP#    #Xxjp P79XP# $// R&O, Conn. Dept. PUC, Petn CMRS Rate Reg'n, PR Dkt. 94106, FCC 95199 //$ $/ 300.332 Mobile services /$ $/ 20.13 State petitions for authority to regulate rates /$  ]-` (#g FCC 95199  gw<#jp P7xP#(f#Xw P7XP#Before the ă  X- W FEDERAL COMMUNICATIONS COMMISSION ă  Yj-L Washington, D.C. # P7 ܼP#у  \^ -# Xxjp P79XP#  \G -In the Matter of hhCqpp  )xxX (#(#` `  \ -Petition of the Connecticut Departmentq)pp  \ -Public Utility Control To RetainhhCq)  \ -Regulatory Control of the Rates ofq)ppPR Docket No. 94106  \-Wholesale Cellular Service Providers inq)  \-the State of ConnecticuthhCq) ` `  hhC  xx;Zh#R P7 "hRP# #  P7bP#Report and Order #Xw P7XP#у  Adopted: May 8, 1995; Released: May 19, 1995\ By the Commission:  XL-Gc I. INTRODUCTION Đ\  Y-` ` 1.ؠ8NORMALOn August 8, 1994, the Connecticut Department of Public Utility Control (``DPUC''), on behalf of the state, filed a petition with this Commission, requesting  Y-authority to continue regulating wholesale cellular service providers.' Wi-ԍ Petition of the Connecticut Department of Public Utility Control To Retain Regulatory Control of the Rates of Wholesale Cellular Service Providers in the State of Connecticut, PR File No. 94106, filed Aug. 8, 1994 (hereinafter ``Connecticut Petition'').' Six parties filed  Y-pleadings opposing the petition, and eleven parties filed pleadings supporting it.r W#-ԍ Parties that filed pleadings in this proceeding are listed in Appendix A.r By this action, we deny the petition because it fails to satisfy the statutory standard Congress established for extending state regulatory authority over CMRS rates.  X}!- III. BACKGROUND ă "f"0*0*0*""Ԍ Y-` ` 2.ؠIn 1993, Congress amended the Communications Act (``Act'') to revise  Y-fundamentally the statutory system of licensing and regulating wireless (i.e., radio)  Y-telecommunications services.% WM-ԍ See Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 10366, Title VI,  6002  W%-(``OBRA'' or ``Budget Act''), codified in principal part at 47 U.S.C.  332. Among other things, Congress: (1) established new classifications of ``commercial'' and ``private'' mobile radio services (``CMRS'' and ``PMRS,'' respectively) in order to enable similar wireless services to be regulated  Y-symmetrically in ways that promote marketplace competition;C@o W-ԍ See Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory  W-Treatment of Mobile Services, Second Report and Order, 9 FCC Rcd 1411, 141718 (1994) (CMRS  W\ -Second Report and Order), reconsideration pending.C (2) reallocated up to 200 megahertz of spectrum from government to private use so as to expand opportunities for  Y-innovative utilization of spectrum by the private sector;o W -ԍ National Telecommunications and Information Administration Organization Act,  113(b)(1). and (3) authorized competitive bidding as a means of improving licensing efficiency within the context of the Act's public interest goals, which include promoting investment in new and innovative wireless  YH-telecommunications technologies.>H0o W)-ԍ The competitive bidding methodology is to promote ``the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays ....'' 47 U.S.C.  309(j)(3)(A). Regulations for the conduct of such auctions, when they prescribe area designations and bandwidth assignments, are required by OBRA to promote ``investment in and rapid deployment of new technologies and services.'' 47 U.S.C.  309(j)(4)(C)(iii). >  Y -` ` 3.ؠCongress also provided that, as of August 10, 1994, no state or local government shall have authority to regulate ``the entry of or the rates charged'' for CMRS and PMRS services, although states are permitted to regulate the ``other terms and  Y -conditions'' of CMRS.O o W-ԍ See 47 U.S.C.  332(c)(3)(A).O As an exception to this general rule, Congress also provided that, if a state had ``any regulation'' concerning the rates for any commercial mobile radio service in effect as of June 1, 1993, it could retain its rate regulation authority by petitioning the Commission no later than August 9, 1994, and demonstrating that either: (1) ``market conditions with respect to such services fail to protect subscribers adequately from unjust and unreasonable rates or rates that are unjustly or unreasonably discriminatory;'' or (2) ``such market conditions exist and such service is a replacement for land line telephone exchange service for a substantial portion of the telephone land line exchange service within such  Y-State.''Oo Wv$-ԍ See 47 U.S.C.  332(c)(3)(B).O  Y-` ` 4. In our proceeding to implement OBRA, we concluded that, since Congress intended generally to preempt state and local rate and entry regulation of CMRS, a state"H0*((" seeking to retain regulatory authority must ``clear substantial hurdles'' in demonstrating that  Y-continued regulation is warranted.i o Wb-ԍ See CMRS Second Report and Order, 9 FCC Rcd at 1504.i We also determined that the nature of a state's burden of  Y-proof is delineated generally by the statute itself. Specifically, we found that:F ho W-ԍ Id., 9 FCC Rcd at 1421.F XX` ` [I]n implementing the preemption provisions of the new statute, we have provided that states must, consistent with the statute, clear substantial hurdles if they seek to continue or initiate rate regulation of CMRS providers. While we recognize that states have a legitimate interest in protecting the interests of telecommunications users in their jurisdictions, we also believe that competition is a strong protector of these interests and that state regulation in this context could inadvertently become as  Y -[sic] a burden to the development of this competition. Our preemption rules will help promote investment in the wireless infrastructure by preventing burdensome and unnecessary state regulatory practices that impede our Federal mandate for regulatory parity.x`  Yd-` ` 5. PARA252  We also concluded that, while a state should have discretion to submit whatever evidence it believes is persuasive, a petition to retain regulatory authority must be  Y6-grounded on demonstrable evidence.F 6o W-ԍ Id., 9 FCC Rcd at 1504.F In that regard, we adopted Section 20.13 of our Rules as a guide to the kinds of evidence and information that we would consider to be pertinent  Y-and helpful to our consideration of a state petition.> o Wa-ԍ 47 C.F.R.  20.13.> Moreover, in addition to the evidence, information, and analysis that a state must submit, we determined that a petitioning state also is required to identify and provide a detailed description of the specific existing or proposed  Y-rules that it would continue or establish if we were to grant its petition.i Ho W-ԍ See CMRS Second Report and Order, 9 FCC Rcd at 1505.i We noted that the  Y-standards for preemption established in Louisiana PSC do not apply to petitions submitted  Y-under Section 332 of the Act, nor to Section 20.13 of our Rules.`o W0#-ԍ Under Louisiana PSC, the Commission may preempt state regulation of intrastate service when it is not possible to separate the interstate and intrastate components of the asserted  W$-Commission regulation. Louisiana Pub. Ser. Comm'n v. FCC, 476 U.S. 355, 375 n.4 (1986). In  W%-construing the ``inseparability doctrine'' recognized by the Supreme Court in Louisiana PSC, Federal courts have held that where interstate services are jurisdictionally ``mixed'' with intrastate services and facilities otherwise regulated by the states, state regulation of the intrastate service that"h' 0*(('" affects interstate service may be preempted where the state regulation thwarts or impedes a valid  Wh-Federal policy. See California v. FCC, 905 F.2d 1217 (9th Cir. 1990); Illinois Bell Tel. v. FCC, 883 F.2d 104 (D.C. Cir. 1989); National Ass'n of Reg. Util. Comm'ners v. FCC, 880 F.2d 422 (D.C. Cir. 1989).   NOTE334 In Louisiana PSC the"0*((" Supreme Court found that Section 2(b) of the Communications Act prohibits the Commission from exercising Federal jurisdiction with respect to ``charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communications  Y-services.''o W\ -ԍ Louisiana PSC, 476 U.S. at 373, quoting Communications Act,  2(b), 47 U.S.C.  152(b). Here, Congress has explicitly amended the Communications Act to preempt state and local rate and entry regulation of commercial mobile radio services without regard to  Y-Section 2(b).  Y_-  III. DECISIONAL FRAMEWORK ă  Y2-` ` 6. In order to prevail on the merits, the DPUC must sustain its statutory burden of demonstrating that ``market conditions with respect to [commercial mobile radio] services fail to protect subscribers adequately from unjust and unreasonable rates or rates that  Y -are unjustly or unreasonably discriminatory.''B o W.-ԍ 47 U.S.C.  332(c)(3).B A question arises as to what showing is  Y -necessary to sustain this burden. Although we addressed this issue in the CMRS Second  Y -Report and Order, we revisit it in view of the parties' debate in this record.6 0o W-ԍ E.g., CTIA Reply Comments at 1 (the proper standard for retaining state regulation depends upon a finding of insufficient competition, not market dominance); McCaw Comments at 11 (the DPUC must demonstrate that market conditions in Connecticut are substantially less competitive than the FCC found in its general assessment, that Federal remedies are inadequate to address such conditions, and that any residual benefits of state regulation outweigh the costs of regulation recognized by the Commission); BAMM Comments at 79 (the DPUC must demonstrate that its rate regulation is necessary to protect consumers); DPUC Reply Comments at 1; CTCS and CM Comments at 3 (Section 332 of the OBRA does not require a heightened standard of proof on the part of a petitioning state).6 As explained more fully below, we do not agree that our decision to forbear from regulating interstate CMRS under certain provisions of Title II makes it impossible to grant a state's petition. At the same time, we conclude that a state must do more than merely show that market  Yg-conditions for cellular servicego W"-ԍ Although the provisions of Section 332(c)(3) of the Act apply to rate or entry regulation in the case of any commercial mobile radio service provider, the DPUC Petition is oriented to the provision of cellular service. have been less than fully competitive in the past. In order to retain regulatory authority, a state must show that, given the rapidly evolving market structure in which mobile services are provided, the conduct and performance of CMRS"90*((" providers illserve consumer interests by producing rates that are not just and reasonable, or  Y-are unreasonably discriminatory.   Y-` ` 7. Since the Budget Act does not explicitly construe or elaborate on the statutory phrase ``market conditions ... fail to protect subscribers adequately from unjust and unreasonable rates or rates that are unjustly or unreasonably discriminatory[,]'' we look to the ``design of the statute as a whole and its object and policy'' to give that phrase  Y_-meaning._o W-ԍ See Crandon v. United States, 494 U.S. 152, 157 (1990); McCarthy v. Bronson, 500 U.S. 136, 139 (1991). We begin that task by reference to other Sections of the Communications Act,  YH-such as Section 201, which also speak of just and reasonable rates.H@o W9 -ԍ See 47 U.S.C.  201; see also 47 U.S.C.  623 (b)(c) (provisions governing reasonableness of cable television rates). We have generally described the measure of reasonableness under these Sections in terms of rates that reflect or  Y -emulate competitive market operations.` o W-ԍ See Policy and Rules Concerning Rates for Dominant Carriers, CC Docket No. 87313, 4  W[-FCC Rcd 2873, 2886 (para. 25), 28892900 (1989); see also Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket Nos. 92266 & 93215, FCC 94286, released Nov. 18, 1994, at paras. 24, 3437, 6479. The more formal description, however, is whether rates fall within a ``zone of reasonableness'' that is bounded at one end by the ``investor interest in maintaining financial integrity and access to capital markets'' and at the other by  Y -the ``consumer interest in being charged nonexploitative rates.''1 o Wf-ԍ See, e.g., FERC v. Pennzoil Producing, 439 U.S. 508, 517 (1979); AT&T v. FCC, 836 F.2d  W>-1386, 1390 (D.C. Cir. 1988); see also FPC v. Hope Natural Gas, 320 U.S. 591, 602 (1944); Duquesne Light Co. v. Barasch, 488 U.S. 299, 308 (1989).1 Regardless of how the test is characterized, it is well established that determinations whether rates fall within this zone  Y -are not dictated by reference to carriers' costs and earnings,8 0 o W-ԍ See FERC v. Pennzoil Producing, 439 U.S. 508, 517 (1979) (the zone of reasonableness is not defined by a ``rigidly . . . costbased determination of rates, much less . . . one that bases each  W8-[carrier's] rates on its own costs.'') (citation omitted); see also Permian Basin Area Rate Cases, 390  W-U.S. 747, 769, 79798, 80005, reh'g denied, Bass v. FPC, 392 U.S. 917 (1968) (upholding ratemaking based upon areawide average costs). but may take account of noncost considerations such as whether rates further the public interest by tending to increase the  Yy-supply of the item being produced and sold.E8 y0o WZ#-ԍ See, e.g., Mobil Oil Corp. v. FPC, 417 U.S. 283 (1974), in which the Supreme Court upheld a Federal Power Commission incentive plan that permitted an increase in rates in order to encourage increased production. In doing so, the Court emphasized that it was permissible for the agency to consider noncost factors: "&0*((&"ԌXX` ` Mobil's argument assumes that there is only one just and reasonable rate possible for each vintage of gas, and that this rate must be based entirely on some concept of cost plus a reasonable rate of return. We  W-rejected this argument in Permian Basin and we reject it again here. The Commission explicitly based its additional ``noncost'' incentives on the evidence of a need for increased supplies.x`  Wx-Id. at 316. See also Farmers Union Cent. Exch. v. FERC, 734 F.2d 1486, 150203 (D.C. Cir), cert.  WP-denied, 469 U.S. 1034 (1984) (acknowledging agency authority to consider noncost factors in establishing just and reasonable rates); Public Service Comm'n of New York v. FERC, 589 F.2d 542, 559 (D.C. Cir. 1978) (stating that agencies have authority to adopt incentivebased regulatory approaches in order to serve the public interest).E These principles define basic components of a"y 0*((;" state's demonstration under Section 332. Specifically, a state must show that market conditions fail to produce rates that fall within a ``zone of reasonableness,'' which is defined by reference to investor and consumer interests viewed in the context of relevant public policy considerations.  Y-` ` 8. We also consider the meaning of the relevant language in the statute in the context of the overarching command of Section 332(c)(3), which is: ``no State ... shall have  Y_-any authority to regulate'' CMRS rates.B_ o W-ԍ 47 U.S.C.  332(c)(3).B As we concluded in the CMRS Second Report and  YJ-Order, that provision, as well as the title of Section 332(c)(3) (``State Preemption''), express  Y5-an unambiguous congressional intent to foreclose state regulation in the first instance._5P o W6-ԍ CMRS Second Report and Order, 9 FCC Rcd at 1504._ Moreover, OBRA reflects a general preference in favor of reliance on market forces rather than regulation. Section 332(c), for example, empowers the Commission to reduce CMRS  Y -regulation,E o W-ԍ 47 U.S.C.  332(c)(1)(A).E and it places on us the burden of demonstrating that continued regulation will  Y -promote competitive market conditions.E o W-ԍ 47 U.S.C.  332(c)(1)(C).E  Y -` ` 9. Unlike some of the opponents of the DPUC Petition, we do not view the statutory preference for market forces rather than regulation in absolute terms. If Congress had desired to foreclose state and Federal regulation of CMRS entirely, it could have done so easily. It chose instead to delineate the circumstances in which such regulation might be  YO-applied. Tellingly, it did so in the context of a broad statutory framework with several other principal components. Under the OBRA: (1) substantial amounts of spectrum reserved for Federal government use are to be identified and transferred to commercial and public safety"!00*(("  Y-uses;o Wy-ԍ OBRA  6001, amending the National Telecommunications and Information Administration Organization Act. (2) this and other available spectrum, if allocated to commercial telecommunications uses, are to be licensed ``rapidly'' through the use of competitive bidding systems to promote the development and deployment of new technologies, products, and services, with the goal  Y-of stimulating economic opportunity and competition;u@o W-ԍ See OBRA  6002(a), amending Section 309 of the Communications Act.u and (3) in contemplation of the deployment of spectrum to commercial wireless services, and to promote regulatory parity, Congress also articulated definitional criteria for determining common carrier status consistently so success in the marketplace will not be determined by regulatory strategies but by technological innovation, service quality, competitionbased pricing decisions, and  YH-responsiveness to consumer needs.Ho W -ԍ See 47 U.S.C.  332(d)(1); CMRS Second Report and Order, 9 FCC Rcd at 1420.  Y -` `  10. Viewing all three components together, the statutory plan is clear. Congress envisioned an economically vibrant and competitive market for CMRS services. It  Y -understood that such a market was still evolving, o W-ԍ The Commission's effort to establish new personal communications services (PCS) was initiated in 1989, four years prior to enactment of OBRA, in response to several petitions for rulemaking. During that period we established a formal proceeding to consider PCS issues and adopted major policy decisions that resulted in an allocation to PCS of far more spectrum than is  W}-allocated to cellular service. See Notice of Inquiry, GEN Docket No. 90314, 5 FCC Rcd 3995 (1990); Policy Statement and Order, 6 FCC Rcd 6601 (1991); Notice of Proposed Rulemaking and Tentative Decision, 7 FCC Rcd 5676 (1992); Tentative Decision and Memorandum Opinion and Order, 7 FCC Rcd 7794 (1992); Second Report and Order, 8 FCC Rcd 7700 (1993); Memorandum Opinion and Order, 9 FCC Rcd 4957(1994); Third Memorandum Opinion and Order, 9 FCC Rcd 6908 (1994). We also made recommendations and participated, on behalf of the United States Government, in international allocations decision making fora that recognized and permitted the  We-use of such spectrum for PCS and other emerging technologies on a global scale. See Report, GEN Docket No. 89554, 6 FCC Rcd 3900 (1992). Congress was well aware of such activities, as witnessed by the fact that the Budget Act commanded us to begin granting licenses for such new  W-services no later than May 1994. See OBRA  6002(d)(2)(B). and it provided the resources (e.g.,  Y -additional spectrum) and administrative authority (e.g., licensing through competitive bidding) to accelerate that process. Finally, Congress delineated its preference for allowing this emerging market to develop subject to only as much regulation for which the  Y-Commission and the states could demonstrate a clear cut need. The public interest goal of this Congressional plan is readily discernable. Congress intended to promote rapid deployment of a wireless telecommunications infrastructure. Robust investment is a"f 0*(("  Y-prerequisite to achieving that goal.!o Wy-ԍ See CMRS Second Report and Order, 9 FCC Rcd at 1421; see also 47 U.S.C.  309(j)(4)(B), 309(j)(4)(c)(iii); OBRA Conference Report at 483, 49293. Thus, in implementing the statute, we have attempted to facilitate the achievement of this goal by ensuring that regulation creates positive incentives for efficient investment rather than burdening entrepreneurial activities and by establishing a stable, predictable regulatory environment that facilitates prudent business  Y-planning.2"@o W-ԍ Id.2  Yv-` `  11.ؠ We emphasize the important impact on our decisionmaking of these fundamental elements of the OBRA statutory framework, which have no counterparts in other sections of the Communications Act. They are devoted exclusively to wireless telecommunications services, and to CMRS in particular. Our analysis of ``market conditions'' in the context of Section 332(c)(3) necessarily is governed by that framework.  Y - ` `  12. Section 332(c)(3) must be interpreted in this context; it is an exception to the general prohibition against state regulation. We conclude that Connecticut, or any other state, should not be allowed to continue regulating CMRS overall, or cellular service in particular, merely by demonstrating that the market for cellular service has been less than fully competitive. Such a standard would effectively allow an exception permitting regulation to nullify a general prohibition against it, because it is commonly understood that such conditions have in the past adhered in the cellular marketplace. On numerous occasions since the Commission established the twocarrier cellular market structure in 1982, we have  Y4-acknowledged that such a structure provided less than optimal competitive opportunities.#`4o W-ԍ See, e.g., Cellular Communications Systems, 86 FCC 2d 469, 474 (1981), modified on  W-reconsideration, 89 FCC 2d 58, 7174 (1982), modified on further reconsideration, 90 FCC 2d 571 (1982); Petitions for Rulemaking Concerning Proposed Changes to the Commission's Cellular  WM-Resale Policies, 6 FCC Rcd 1719, 1725 & n.67 (1991) (Cellular Resale Order).   Y-Other Federal agencies have taken similar positions.]$ o W-ԍ See Reply Comments of the United States Department of Justice, CC Docket No. 9134, filed June 19, 1991, at 45 (``[T]here is insufficient evidence to warrant the conclusion that the cellular service market is in fact workably competitive. In each service area there is still a duopoly[.]''); Comment of the Staff of the Bureau of Economics of the Federal Trade Commission, CC Docket No. 9134, filed July 31, 1991, at 7 (``[T]he staff disagrees with the tentative conclusion that cellular service is produced in a competitively structured market.''), 1012.] One year prior to adoption of the Budget Act, the General Accounting Office (GAO) the investigatory arm of Congress examined the industry and reported that ``[w]hile GAO found no evidence of anticompetitive or collusive behavior in the course of its work, the twocarrier (duopoly) market system that"$0*(("  Y-the FCC created may provide only limited competition in cellular telephone markets.''%o Wy-ԍ United States General Accounting Office, ``Telecommunications: Concerns About Competition in the Cellular Telephone Service Industry,'' GAO/RCED92220 (July 1992) (GAO Report). It strains credulity to assert that Congress was blind to these conditions in 1993 when it broadly  Y-prohibited state regulation of CMRS.&`o W-ԍ Cf. Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988) (Court generally presumes  Ws-Congress is knowledgeable about existing law pertinent to legislation it enacts); accord Miles v. Apex Marine Corporation, 489 U.S. 19 (1990); Cannon v. Univ. of Chicago, 441 U.S. 677 (1979); Minneapolis & St. Louis Railway Co. v. United States, 361 U.S. 173 (1959). Thus, we reject a reading of the statute that allows continued rate regulation merely on a showing of duopoly conditions, because it is not  Y-plausible to conclude that Congress adopted a selfdefeating statutory scheme.'@o W -ԍ Cf. McNary v. Haitian Refugee Center, 498 U.S. 479 (1991) (Court generally presumes Congress legislates with knowledge of basic rules of statutory construction).  Yv-` `  13. It also is worth noting that this Agency's recognition of imperfect cellular market conditions has been matched by our commitment to rectify those conditions as quickly as possible by strengthening and expanding cellular competition rather than by resorting to  Y1-heavyhanded regulation.(1 o W-ԍ See, e.g., GAO Report at 3 (The ``FCC is relying on the introduction of advanced personal communications services to bring competition to the cellular telephone marketplace.''). The Commission policy of avoiding heavyhanded regulation of the cellular market while it was  W"-developing also has been determined reasonable in court. See Cellnet Communication, Inc. v. FCC, 965 F.2d 1106, 1112 (D.C. Cir 1992) (petitions for review of FCC order declining to initiate rate regulation of cellular denied because ``the FCC could reasonably conclude, in light of the novelty of the service and the speed of technological change, to wait and see how the market evolved...''). For example, we have attempted to heighten cellular competition at the retail level by prohibiting restrictions on the resale of cellular services, except in narrow circumstances where we determined that restrictions intensify competition between  Y -the two licensees in each local market.V)8 ho W-ԍ See Cellular Resale Order, 7 FCC Rcd at 400607. We have recently initiated a review of our resale policies to tailor them to conditions in an emerging wireless telecommunications market that  W-has been expanded to include PCS. See Equal Access and Interconnection Obligations Pertaining to  W -Commercial Mobile Radio Services, 9 FCC Rcd 5408 (1994) (Notice of Proposed Rulemaking and  We!-Notice of Inquiry), Second Notice of Proposed Rulemaking, FCC 95149, released Apr. 20, 1995.V We also have retooled policies initially tailored to promote competition in the wireline market upon determining that they were unlikely to have  Y -that effect in the unique setting of wireless telecommunications.* ho W$-ԍ Bundling of Cellular Customer Premises Equipment and Cellular Service, 7 FCC Rcd 4028 (1992). Most especially, we have chosen to address the structural infirmity of the cellular market by vastly expanding the" *0*((j" amount of spectrum available for twoway wireless voice communications and other innovative wireless services and technologies.  Y-` `  14. The framework of our CMRS regulatory policy moderate regulation, symmetrical regulation of all services as appropriate, and a preference for curing market imperfections by lowering entry barriers in order to encourage competition rather than by regulating existing licensees aligns closely with the principal building blocks of OBRA.  Y_-Indeed, that statute is in a very real sense a validation of our approach.+_o W-ԍ If Congress had concluded our approach was deficient, or that we should travel in a different  W -policy direction, it is reasonable to conclude that it would have directed us accordingly.  As the legislative history of OBRA makes plain, Congress intended those building blocks to establish a  Y1-national regulatory policy for CMRS,P,1@o W" -ԍ See Conference Report at 48081, incorporating the findings set forth in the Senate Amendment, including the following: X[B]ecause commercial mobile services require a Federal license and the Federal Government is attempting to promote competition for such services, and because providers of such services do not exercise market power visavis telephone exchange service carriers and State regulation can be a barrier to the development of competition in this market, uniform national policy is necessary and in the public interest. P not a policy that is balkanized statebystate.  Y -` ` 15. That intention informs our review of petitions filed by states under Section 332(c)(3). Put simply, Congress intended such petitions to be evaluated in light of a general preference for allowing the policies embodied in OBRA to have an opportunity to work. With regard to the statutory prohibition on state regulation in Section 332(c)(3) in particular,  Y -the legislative history leaves no room for doubt on this point by providing that:`- o W-ԍ H.R. Rep. No. 103111, 103d Cong., 1st Sess. at 26162.` XX` ` [i]n reviewing [state] petitions . . . the Commission also should be mindful of the Committee's desire to give the policies embodie[d] in section 332(c) an adequate opportunity to yield the benefits of increased competition and subscriber choice anticipated by the Committee.x`  Y-` ` 16. In deference to the states, with whom we have and will continue to share telecommunications jurisdiction under the dual regulatory system of the Communications Act, we have not presumed to establish a rigid blueprint for the demonstration required under Section 332(c)(3). Moreover, unlike many opponents of the petition before us, we do not agree that a state's burden is so great that it is impossible to carry. For example, our decision to forbear from most CMRS regulation is not dispositive of the question whether"~ @ -0*((m" states may initiate or continue rate regulation of such services. We think it unlikely that Congress would have established two separate statutory procedures one to govern our  Y-forbearance, and another to govern states' petitions~.o WK-ԍ See 47 U.S.C.  332(c)(1) (forbearance) and 332(c)(3) (state petitions).~ if it intended our decisions under the former procedure to control automatically the outcomes under both of them. Instead, we conclude that the exemption in Section 332(c)(3) is designed to permit a state to demonstrate that market conditions in that state warrant a departure from national OBRA policies.  Y_-` ` 17. Such a demonstration begins but does not end with a showing of less than  YH-fully competitive market conditions. Almost all markets are imperfectly competitive,/Hho Wa -ԍ In general, perfect competition can exist only where goods are homogeneous, and all buyers  W9 -and sellers have full information and accept price as given (i.e., they do not try to influence price).  W -There are also certain necessary conditions regarding cost of production. See D. Carlton & J.  W -Perloff, Modern Industrial Organization 87 (1995). Under perfect competition, price equals  W-marginal cost , which is the incremental cost of producing the last unit of a good. Such conditions are theoretical constructs. and  Y1-such conditions can produce good results for consumers.01@o W"-ԍ See, e.g., W. Baumol, J. Panzar & R. Willig, Contestable Markets and the Theory of  W-Industry Structure 1546 (1982). In particular, as noted previously, Congress was aware of the duopoly cellular structure when it generally proscribed state regulation of CMRS. If a showing of less than perfect competition in the past could justify granting a state petition, regulation might be imposed in a great many circumstances. Nothing on this record convinces us that Congress intended that result.  Y -` ` 18.ؠInstead, we believe that a state must establish the existence of an environment of unjust and unreasonable, or unreasonably discriminatory, rates, given the dynamic and evolving structure in which CMRS is provided. When we implemented the  Yb-Section 332(c)(3) state petition process in the CMRS Second Report and Order, we adopted a rule designed to elicit the information needed to make such a showing. Such information  Y6-permits us to perform a StructureConductPerformance (``SCP'') analysis,1`6 o W-ԍ Section 20.13(a)(1) requires states to include ``demonstrative evidence'' establishing failed  Ww-market conditions. See 47 C.F.R.  20.13(a)(1). Section 20.13(a)(2) provides an extensive, detailed list of the types of information that states are encouraged to supply in order to meet this evidentiary  W'!-burden. See 47 C.F.R.  20.13(a)(2)(vi).  which is a  Y-standard paradigm of modern industrial organization analysis.2`o W#-ԍ See, e.g., F. Scherer & D. Ross, Industrial Market Structure and Economic  W$-Performance, 47 (3d ed. 1990) (``Scherer and Ross''); D. Carlton & J. Perloff, Modern  W`%-Industrial Organization, chs. 1, 9 (2d ed. 1994); J. Tirole, The Theory of Industrial  W8&-Organization 13 (1988). This paradigm, as applied to the mobile telecommunications industry, holds that market structure is impacted by basic" 20*((" conditions such as the number of licenses issued by the Commission and the state of  Y-technology. Conduct, in turn, depends on the structure of the market, e.g., on the number of competitors, the cost structure, and the degree of integration with other wireless providers. Performance, in turn, depends on the conduct of providers and other industry participants with regard to activities such as pricing, interfirm coordination, and technical standards. Such an analysis permits an evaluation of the degree of rivalry within a particular industry structure and allows us to determine whether and how consumer interests are being served by such activity.  Y3-` ` 19.ؠNothing in our rule governing the state petition process suggests that merely showing the existence of a cellular duopoly structure is enough to support a petition. In the first instance, the rule signals our insistence that a petition must be based on demonstrable evidence of anticompetitive activity, or unjust and unreasonable, or unreasonably discriminatory, rates. For example, in order to determine whether an anticompetitive environment presently exists within a state, we requested that a petitioning state produce ``specific allegations of fact,'' to be supported by a sworn affidavit of an individual with personal knowledge thereof, regarding ``anticompetitive or discriminatory  Y{-practices or behavior by commercial mobile radio service providers.''H3{o W-ԍ 47 C.F.R.  20.13(a)(2)(vi).H We also requested ``[e]vidence, information and analysis demonstrating with particularity instances of systematic unjust and unreasonable rates ... [or a] pattern of such rates, that demonstrates the inability of the commercial mobile radio service marketplace in the state to produce reasonable rates through competitive forces,'' and we indicated that we would consider such evidence  Y-``especially probative.''I4ho W!-ԍ 47 C.F.R.  20.13(a)(2)(vii).I  Y-` ` 20. In order to assess present market conditions so as to predict the future effectiveness of market forces within the state, we requested information on the number and  Y-type of CMRS providers in the state as well as their respective customers,P5o We-ԍ 47 C.F.R.  20.13(a)(2)(i) and (ii).P and ``an assessment of the extent to which services offered by the commercial mobile radio service providers the state proposes to regulate are substitutable for services offered by other carriers  Yg-in the state.''H6go W!-ԍ 47 C.F.R.  20.13(a)(2)(iv).H We also requested information and complaint statistics revealing customer  YP-satisfaction with CMRS providers within the state.J7PHo WI$-ԍ 47 C.F.R.  20.13(a)(2)(viii).J In addition to this information, and as a further aid in projecting CMRS growth rates and other trends within the state, we also requested information on ``trends'' in each commercial radio provider's rates and customer"" 70*((K"  Y-baseR8o Wy-ԍ 47 C.F.R.  20.13(a)(2)(ii) and (iii).R and on ``opportunities for new providers to enter into the provision of competing  Y-services'' as well as ``an analysis of any barriers to such entry.''G9ho W-ԍ 47 C.F.R.  20.13(a)(2)(v).G In short, although states have the discretion to adduce such evidence in support of continued rate regulation as they  Y-see fit,_:o Wt-ԍ CMRS Second Report and Order, 9 FCC Rcd at 1504._ the comprehensive list of anticipated documentation in Section 20.13 gives states guidance concerning the evidence of structure, conduct, and performance that we would find persuasive in evaluating their petitions.  Y_-` ` 21. The purposes to which such evidence must be put also are straightforward. For example, with regard to industry structure, while a state seeking to regulate twoway mobile voice services may draw attention to the cellular duopoly, it is incumbent on that state to consider factors that have a direct and substantial impact on that structure. In particular, in evaluating a cellularoriented petition, we will look with disfavor on any petition that fails to consider the immediate and nearterm impact of PCS. Given the general statutory purpose of facilitating PCStype services, it would be difficult to ignore or downplay the importance of fundamental structural changes when considering Section 332(c) petitions.  Y-` ` 22.ؠWhile PCS is not yet available to the public, it is an accepted antitrust principle that a firm may be considered in competitive analysis if it could enter the market in  Yb-question.i;8bo W-ԍ See, e.g., McCaw Personal Communications, Inc. v. Pacific Telesis Group, 645 F.Supp. 1166, 1174 (N.D. Cal. 1986) (``the existence of low barriers to entry may rebut a prima facie showing of  Wk-illegality, even where the combined market shares of the merged firms is quite high''), citing United  WC-States v. Waste Management, Inc., 743 F.2d 976, 982- 83 (2d Cir. 1984). See also American Bar  W-Association, I Antitrust Law Developments (Third) 30711 (1992) and cases cited therein.i Under the case law potential entry must be reasonably prompt, a typical period being two years from the present in order to expect a significant impact on existing  Y4-competitors,<H 4 o W-ԍ See FTC v. OwensIllinois, Inc., 681 F.Supp. 27, 37 & n.23 (D.D.C. 1988), vacated on other  We-grounds, 850 F.2d 694 (D.C. Cir. 1988) (concerning ``the extensive present and future intermaterial competition in the glass and other packaging industries,'' ``[a]n important, but undisputed, assumption of the economic analysis in this case is that the relevant time frame within which to view elasticity is approximately two years. In other words, conversions by purchasers between types of containers must be feasible within this time frame for demand and supply to be considered  W#-elastic''); Department of Justice & Federal Trade Commission, Horizontal Merger Guidelines (Apr. 2,  Wu$-1992)(Merger Guidelines), reprinted in 4 Trade Reg. Rep. (CCH)  13,104 (Apr. 7, 1992) at 20,57310 (Entry Analysis, Timeliness of Entry: ``In order to deter or counteract the competitive effects of concern, entrants must quickly achieve a significant impact on price in the relevant market. The Agency generally will consider timely only those committed entry alternatives that can be achieved"&;0*((f'" within two years from initial planning to significant market impact'') (footnote omitted). The  Wh-Merger Guidelines consider firms to be present competitors if, under certain conditions, they could  W@-shift production to a new product within only one year. Id. at 20,5734. and there is little doubt that PCS licensees will enter the market for CMRS in"4 <0*((" competition with cellular providers within this timeframe. We recently concluded an auction designed to license rapidly two additional competitive providers of wireless twoway voice and data communications in every local market in the country. As shown in the table below, the winning bidders in markets encompassing Connecticut have committed to pay substantial sums for the right to operate wireless systems in that state. Having done so, it is reasonable to conclude they will deploy the facilities necessary to become operational as quickly as possible so as to begin recouping their investment.  XH-  Broadband PCS Auction Results Đ\ c ddx !ddx Dc    "" Connecticut u      z   "" {.MTA #<  Freq.  Blk.% State% rMarket% Winning Bidder% MWinning Bidz z   "" M008- AMaineBoston- ProvidenceAT&T Wireless PCS Inc.V$121,660,000 z Z %  "g" M008w6 BwMainewBoston- ProvidencegWirelessCo, L.P.gV$127,065,892 Z Z  "gv" M001jw- AjwNew YorkjwNew YorkjwOmnipoint CorporationSg Y-R$347,518,309A=/ WJ-ԍ This figure represents the amount to be paid by the pioneer's preference licensee, as required  W"-by Section 309(j)(13) of the Communications Act. See American Personal Communications, WashingtonBaltimore MTA #10, Frequency Block A; Cox Cable Communications, Inc., LosAngelesSan Diego MTA #2, Frequency Block A; Omnipoint Communications, Inc., New York MTA #1, Frequency Block A; For Initial Authorizations in the Broadband Personal Communications Service, Memorandum Opinion and Order, 10 FCC Rcd 1101 (1994).A "Z    "v" M0016 BNew YorkNew YorkWirelessCo, L.P.V$442,712,000   S  Y-` ` 23.ؠThe nature of this impending competitive entry bears emphasis. Unlike the  Y-typical ``ease of entry'' case, where entry by new competitors is hypothetical or may occur  Y-only at an industry's margin, PCS activity is undeniably real. It is not something that ``may''  Y-occur, or that will occur only sporadically. It is happening, and it is happening on a nationwide scale. As the recentlycompleted auction demonstrates, some of this entry is being mounted by large, wellfinanced entities with long experience and success in the telecommunications business. That field of competitors will be strengthened further upon"> =0*((" completion of additional spectrum auctions in the near future. Available evidence indicates that cellular companies, faced with the nearterm entry of PCS, have reacted by preparing for  Y-impending competition, i.e., by lowering prices and adopting new technologies. For example, there are reports that observable declines in cellular prices are attributable in part to cellular carriers' knowledge that reasonably soon they will face new competition from PCS  Y-licensees.>H Zn W-ԍ See, e.g.,  Comm. Daily, Apr. 24, 1995, ``Cellular Industry Eyes Further Cuts, Adjustments to  W-Challenge PCS'' (report on independent researcher's projection of cellular service rate cuts ``up to  W-40%'' over next two years); Comm. Daily, Telephony Section, Mar. 9, 1995 (NYNEX cellular company ``said it will begin offering PCS-type services in metro N.Y. under Geographic Option Plan trademark, giving customers greater flexibility in setting rates and using service. Monthly charge is $24.99, with additional min. at 29 cents in home county, 99 cents elsewhere''); M. Mills,  W -Wireless: The Next Generation, Wash. Post, Feb. 20, 1995, Washington Business Section at 1, 1415;  W -  M. Thyfault, Bell Companies Get Personal Bell Atlantic, NYNEX Plan to Merge Their Mobile and  W -Cellular Divisions as PCS Players Continue Consolidation, InformationWeek, Communications Section at 33, July 18, 1994 (Bell Atlantic announces a lowpriced, lowrange offering on its Annapolis, Philadelphia, and Pittsburgh cellular systems, intended to resemble PCS offerings).  The advent of PCS also appears unambiguously to be having an impact on the present marketplace; it is repeatedly cited as a precipitating factor in major mergers and joint  Ya-ventures in the wireless industry.?a Zn W-ԍ See, e.g., Applications of Bell Atlantic Corp. and NYNEX Corp. for Transfer of Cellular  W-Radio Licenses to Cellco Partnership, Report No. CL9517, File Nos. 00762CLAL195 et al., filed  W-Oct. 18, 1994, Exhibit 2 (``Description of Transaction and Public Interest Statement'') at 12, 14; Id. , Attachment D, Affidavit of M. Lowenstein at para.18; Motorola, Inc., Order, DA 95890, released  WJ-Apr. 27, 1995, at para. 17 (Wireless Telecommunications Bureau), petition for reconsideration  W"-pending; Craig O. McCaw,  9 FCC Rcd at 586263.   Thus, the available evidence indicates strongly that such entry is not speculative. Instead, all evidence suggests that it is empirically real and in the very near term will be substantial and pervasive. This warrants our consideration when evaluating a state petition to regulate rates under Section 332(c)(3).   Y -` ` 24. Evidence of industry conduct and performance is also relevant. For example, a state might demonstrate specific instances of collusive behavior on the part of licensees. A state also might demonstrate that the statutory purposes of OBRA were not coming to fruition in that state, or were not likely to do so. We would find highly relevant any evidence that demand for CMRS services in general and cellular service in particular is too low to promote market entry by the number of licensees needed to ensure that facilitiesbased competition will occur at a level adequate to warrant reliance on market forces, rather than rate regulation, as a means of protecting consumer interests.  Y-` ` 25. Moreover, a very strong indication that industry conduct and performance are failing to serve consumer interests adequately would be evidence of a lack of investment on the part of licensees in CMRS facilities, or a failure by licensees to deploy adequately new facilities, technologies, and services. Such a showing might support a conclusion that licensees were restricting the output of a service solely to increase its price, and such activity"?0*((" might warrant an appropriate regulatory response. Of course, a successful showing of this  Y-nature requires more than evidence that a licensee is earning economic rents (i.e., pricing above cost). It is readily conceivable that economic rents earned in the cellular industry also might advance important public policies, such as if they were applied in furtherance of the statutory goal of promoting investment in the cellular infrastructure. In that event, the rates underlying such profits would have been paid by those who ultimately benefit from reinvestment in cellular facilities. Specifically, as a cellular carrier adds large numbers of customers, it must expand capacity so that the quality of service to existing and new customers is not degraded. Thus, an analysis of economic performance must place great weight on reinvestment of profits in this highgrowth industry, for, without such reinvestment, consumers might receive less value for their money. In short, the significance of economic rents under our Section 332(c)(3) analysis is found not simply in their existence in the first instance but in their subsequent application.  Y -` ` 26. Finally, we note that SCP evidence typically may be segregated into two  Y -categories: static factors and dynamic factors.@ Zn W"-ԍ See, e.g., J. Tirole, #&a\  P6G;#&P#The Theory of Industrial Organization##&njp P7&P# 20970 (1988). For example, prices or rates of return in a given year are static factors. Growth and investment are dynamic factors. In addition, a dynamic analysis views price and other static factors at a given point in time in their  Yd-relationship to static factors such as price in the future.=AdlZn W-ԍ Id. at 23970.= Thus, a rate of return that looks high today may be fair and reasonable when looked at in terms of its impact on future  Y6-prices.B6 Zn W-ԍ In particular, consumers may be better off facing somewhat higher prices today in exchange for high levels of investment by existing competitors. Furthermore, static factors are, as the name implies, static, or even temporary, whereas the longterm impact of dynamic factors is more important because their effects are cumulative and more permanent. Thus, we believe that evidence concerning dynamic factors is a more persuasive market indicator than evidence concerning static factors. Given the rapidly changing nature of the market in which wireless services are provided and the statutory purposes of OBRA, we conclude that evidence of where a market is going is more relevant than evidence of where it has been.  Y~-` ` 27. No single factor, standing alone, necessarily would tip the balance for or against a particular state petition. The statute allows the states flexibility to make their showings in the best manner they see fit, and it is conceivable that we might find a showing based primarily on one factor to be persuasive. Those demonstrations that are tied most closely to the statutory scheme are, of course, the most determinative. Our decisions in this proceeding and similar proceedings are based on the totality of the evidence.  X- \ \!E IV. CONNECTICUT PETITION \" B0*((!"Ԍ X- A. Procedural Issues   Y- ` ` 28. The pleadings present two threshold procedural matters that we must address before addressing the Connecticut DPUC's petition on its merits. First, some parties argue that the petition should not be granted because it requests regulatory authority only over cellular service rather than all CMRS services, thereby violating what these opponents claim is the fundamental OBRA goal of achieving symmetrical regulatory treatment of CMRS. Second, Bell Atlantic has filed an application for review of the Bureau's determination to include the record of the Connecticut state proceeding in this Docket, subject in part to confidentiality procedures.  X - 1. CellularOnly Regulation q   X -` ` a. Pleadings of the Parties  Y -` ` 29.ؠVarious parties argue that: (1) Congress revised Sec. 332 to establish regulatory parity, remedy the disparate regulatory treatment of similar forms of CMRS and create a uniform, nationwide regulatory regime; (2) by seeking to impose regulation only on cellular services, the Connecticut DPUC would impose inconsistent regulations on different CMRS providers, thereby creating precisely the asymmetrical regulatory conditions Congress sought to remedy; accordingly (3) the DPUC's petition must be rejected because it seeks to  Y-impose a type of regulatory regime expressly rejected by Congress.CZn W-ԍ See e.g., AMTA Comments at 6, BAMM Comments at 67, CTIA Comments at 79, GTE Reply Comments at 36, McCaw Comments 711, Springwich Comments at 2425.   Y-` ` 30.ؠThe Connecticut DPUC and its supporters dispute these arguments. While they acknowledge that regulatory parity is a goal of the OBRA, these parties argue that Congress expressly recognized that differential regulatory treatment of CMRS providers is  Y-permissible under the Act.lD@Zn W-ԍ E.g., OCC Reply Comments at 23; Nextel Reply Comments at 35.l Many parties claim as well that there is no evidence in this record or elsewhere that noncellular CMRS providers currently possess market power, thus  Y|-making regulation of their activities inappropriate.E|Zn W -ԍ E.g., AMTA Comments at 6; E.F. Johnson Comments at 45, MTel Reply Comments at 45.  XN-` ` b. Discussion  Y -` ` 31.ؠWe have determined in other proceedings that while regulatory parity is an important policy that can yield important procompetitive and proconsumer benefits when appropriately applied, parity for its own sake is not required by any provision of the"E0*(( "  Y-Communications Act.F`Zn Wy-ԍ See Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory  WQ-Treatment of Mobile Services, Third Report and Order, 9 FCC Rcd 7988 (1994) (CMRS Third  W)-Report and Order); Applications of Craig O. McCaw, Transferor, and American Telephone and Telegraph Company, Transferee, File No. ENF 9344, 9 FCC Rcd 5836 (1994). Indeed, the amended Act allows us to adopt a flexible regulatory  Y-scheme that treats certain CMRS in a streamlined fashion.{GZn W-ԍ See CMRS Second Report and Order, 9 FCC Rcd at 1463.{ Congress recognized that market conditions might warrant differential regulatory treatment of CMRS, and explicitly granted us  Y-the authority to forbear from applying certain provisions of the Act.1HZn W -ԍ Section 332(c)(1)(A) provides that the Commission may determine that any provision of Title II, other than Sections 201, 202 or 208 may be specified as ``inapplicable to [any] service or person'' otherwise treated as a common carrier. 47 U.S.C.  332(c)(1)(A). 1 That Congress understood such forbearance might be exercised selectively is not in doubt. As the OBRA Conference Report (at 491) states in explaining our forbearance authority: XThe purpose of this provision is to recognize that market conditions may justify differences in the regulatory treatment of some providers of commercial mobile services. While this provision does not alter the treatment of all commercial mobile services as common carriers, this provision permits the Commission some degree of flexibility to determine which specific regulations  Y -should be applied to each carrier.I Zn W}-ԍ The Conference Report further provides that ``[d]ifferential regulation of providers of commercial mobile services is permissible but is not required in order to fulfill the intent of this  W--section.'' Id.   Y -  PARA127  ` ` 32.ؠNothing in the record of this proceeding, or elsewhere to our knowledge, demonstrates that Congress intended to deny states similar flexibility with regard to the exercise of their CMRS regulatory authority. Thus, we are not persuaded by arguments that the Connecticut DPUC's request to regulate only cellular services is incongruent with regulatory parity concepts embedded in the OBRA.  X4- 2. Confidentiality  Y-` `  33. In the First Confidentiality Order, the Wireless Telecommunications Bureau (Bureau) noted that, while Connecticut twice submitted supporting materials accompanied by requests for confidential treatment, these requests failed to comply with our  Y-procedural rules. J0 Zn W%-ԍ See Petition of Public Utilities Commission, state of Hawaii, et al., PR Docket Nos. 94103,  W|&-94105, 94106, 94108, DA 95111, Jan. 25, 1995 at paras. 59 (First Confidentiality Order).  BAMM and Springwich separately filed rate of return materials accompanied by requests for confidential treatment; these materials previously had been"J0*(("  Y-subject to limited disclosure pursuant to a protective order in the Connecticut proceeding.2KZn Wy-ԍ Id.2 The Bureau adopted in this proceeding the same protective order as Connecticut applied in its  Y-own investigation.  Y-` ` !34. In the Second Confidentiality Order, the Bureau considered Connecticut's third request for confidential treatment of supporting materials and granted that request as  Yx-well as Connecticut's motion to accept the materials for filing.LxhZn W -ԍ See Petition of Public Utilities Commission, State of Hawaii, et al., PR Docket Nos. 94103,  Wi -94105, 94106, 94108, DA 95208 Feb. 9, 1995 at para. 3 (Second Confidentiality Order). These materials, confidential and public, were developed in the state's independent investigation of market conditions in Connecticut. The decision in that proceeding originally was submitted as an attachment to the  Y3-DPUC petition.HM3Zn W-ԍ See DPUC Petition at Attachment (Decision of the Connecticut Department of Public Utility Control's Investigation into the Connecticut Cellular Service Market and Status of Competition,  Wt-DPUC Docket No. 940327, Aug. 8, 1994 (Connecticut Decision)).H The Bureau granted the confidentiality request only in part, however, under discretion provided by Section 0.459(f) of the Commission's Rules. The Bureau treated as  Y -confidential certain materials,uN 0Zn W-ԍ Listed in Section 2 of Appendix A of the Second Confidentiality Order.u and denied confidential treatment to other materials, because the DPUC filing did not identify which of these materials were allegedly deserving of  Y -confidential treatment, nor describe reasons for their confidential treatment.uO Zn WX-ԍ Listed in Section 3 of Appendix A of the Second Confidentiality Order.u   Y -` ` "35.ؠSubsequently, BAMM and the Resellers filed applications for review of the  Y-Second Confidentiality Order. On its own motion, the Bureau reconsidered its decision to exclude from the record certain of the Connecticut materials, which resolved the Resellers'  Yf-application.Pfp Zn W-ԍ Petition of the Connecticut Department of Public Utility Control, PR Docket No. 94106,  W_-DA 95348, Feb. 24, 1995 at para. 3 (Reconsideration of Second Confidentiality Order). BAMM, however, also contends that the Bureau violated unspecified Commission Rules by granting Connecticut's motion, and also violated Section 20.13 (a)(5) of our Rules by accepting a substantial pleading several months after the filing deadline  Y!-specified in that rule.NQ! Zn W"-ԍ BAMM's Application for Review at 25.N  Y-` ` #36. The Bureau granted Connecticut's motion for leave to accept the materials submitted because those materials are germane to the demonstration the state is required to"Q0*(("  Y-make to support its petition.cRZn Wy-ԍ See Second Confidentiality Order, paras. 711.c The material submitted by Connecticut with this motion already was part of the state's proceeding. Excluding such materials effectively would have denied Connecticut the opportunity to make the demonstration required by the amended statute. BAMM acknowledges that Commission Staff advised it to await review of the  Y-proffered state materials, and the corrective confidentiality order on reconsideration._ShZn W-ԍ See BAMM's Application for review at n. 2._ At that time, BAMM was afforded an opportunity to file supplemental comments on these materials  Yv-and it has done so.eTvZn W/ -ԍ Reconsideration of Second Confidentiality Order at 3. e BAMM was a participant in the DPUC state proceedings, as are other parties to this docket; the Bureau's late acceptance of materials with which BAMM already was familiar imposes no hardship on BAMM given the opportunity for supplemental comments. The state proceedings, initiated with a view to filing an OBRA petition, are uniquely germane to the state's assertion of its residual rights under the amended Act. In these circumstances BAMM has not been harmed by the acceptance of the materials submitted. Further, any error committed as a result of the Bureau's failure to explicitly waive Section 20.13 when granting Connecticut's motion was harmless. BAMM's application for review accordingly is denied.  Y-` ` $37. The excluded materials were entered into the record and given limited disclosure only to outside counsel and outside experts for parties to this proceeding, pursuant  Yb-to the protective order adopted in the First Confidentiality Order.UbZn W-ԍ That protective Order is appended to the First Confidentiality Order as Appendix B. The analysis of the Connecticut petition reflects consideration of supplemental comments and replies, based on  Y6-these materials, submitted on March 10 and March 17, 1995.|V6HZn W/-ԍ Parties filing pleadings based on confidential materials are listed in Appendix A. |  Y-  X- B. Summary of Request   Y-` ` %38. Pursuant to its regulatory authority under state law, the Connecticut DPUC conducted a proceeding to examine cellular market conditions, including consumer protection  Y-issues.<WZn WE"-ԍ DPUC Petition at 1.< The DPUC held seven days of hearings on this matter.2X Zn W#-ԍ Id.2 Connecticut states that the evidence offered in DPUC Docket No. 940327 ``indicates'' that current market conditions sustain anticompetitive and discriminatory practices on the part of wholesale cellular"~( X0*(("  Y-providers.<YZn Wy-ԍ DPUC Petition at 2.< Principally on this basis, Connecticut asserts that since current market conditions do not effectuate ``true competition,'' it should retain jurisdiction over wholesale cellular  Y-providers.>ZhZn W-ԍ DPUC Petition at 12.> Evidence of discriminatory and anticompetitive conduct on the part of the wholesale cellular carriers and their retail arms, Connecticut asserts, includes (1) market tampering, (2) price fixing, (3) upsidedown pricing (setting wholesale prices for resellers above the underlying carrier's retail price), and (4) unfair billing practices; as well as conduct arising directly from the wholesale carriers' relationship to their affiliated retail operations, specifically, (5) the use of information acquired from independent resellers by the wholesale carrier for the benefit of its resale affiliate, and (6) preferential pricing and practices designed to benefit the resale affiliate.  Y -` ` &39.ؠThe DPUC also looked at the wholesale carriers' rates of return, market shares, and price levels. As to rates of return and overall service rates of the wholesale cellular providers, Connecticut states that while the record in the state proceeding shows that the cellular carriers have offered several promotions since 1987, there is no indication that  Y -these promotions have had any impact on the Connecticut market and its cellular endusers.2[ Zn W`-ԍ Id.2 The DPUC states that it has determined that the greatest benefit from these promotions has been to the underlying carriers' own retail affiliates, because of the volume discount structure  Yb-of the wholesale tariff.2\bZn W-ԍ Id.2  Y4-` ` '40.ؠThe DPUC's findings of fact in the state proceeding do not include any conclusions on the allegations of anticompetitive and discriminatory practices. The DPUC also stated as a finding of fact that the record of Docket No. 940327 is inconclusive regarding the reasonableness of cellular carriers' rates of return and their financial  Y-performance since 1987.[]HZn W-ԍ See Connecticut Decision at 30. [ In its reply comments, however, the DPUC states that:t^Zn Wq -ԍ DPUC Reply Comments at 2; see also Connecticut Decision at 31. t Xthe level of competition in Connecticut is not effective and that the DPUC should continue to regulate the wholesale cellular providers until they can satisfactorily demonstrate that other CMRS are effectively operating in their service territories and true competition is present in the marketplace.  "N ^0*((k"Ԍ Y-` ` (41.ؠThe DPUC states that it intends to initiate a separate proceeding to examine this situation further. The purpose of the DPUC's contemplated further review is to ensure that there is a proper mix of management between the cellular carriers' wholesale and  Y-retail affiliates, and a proper relationship between the wholesaler and independent resellers.>_Zn W4-ԍ DPUC Petition at 34.> In addition, the DPUC states that it intends to fully investigate the rates of return and rate structures of the wholesale providers and to investigate the relationship between the cellular carriers' costs and their service rates to ensure that customers receive fair, equitable and just  Y_-rates.8`_hZn Wx -ԍ Id. at 4.8   Y1-` ` )42.ؠThe DPUC acknowledges that new service providers (PCS, SMRs, and wide area SMRs) will provide acceptable alternatives to cellular service in the future, but it  Y -believes that these are not practical substitutes for cellular services at this time.2a Zn W-ԍ Id.2 Connecticut also states that it appears that the highly concentrated nature of the Connecticut CMRS  Y -marketplace will not change significantly before the year 2003.2b Zn W.-ԍ Id.2  X - C. Regulation for Which Continued Authority Is Sought   Yy-` ` *43.ؠAt present, Connecticut regulates its wholesale cellular providers under Section 16250b of the Connecticut General Statutes. Under this regulatory scheme, the  YK-DPUC requires that all wholesale cellular tariff filings be costjustified.EcKHZn WD-ԍ DPUC Petition at Appendix G.E The DPUC monitors market conditions by requiring each carrier to keep complete records concerning  Y-carrier's rates and charges, services, and the conduct of operations.2dZn W-ԍ Id.2 The DPUC also  Y-requires each carrier to file quarterly financial reports.2e Zn W? -ԍ Id.2 These rules have been in effect since January 29, 1986. These regulations provide the DPUC with the standards and procedures for regulation of the wholesale cellular carriers' rates and charges, services,  Y-accounting practices, and safety and conduct of their operations.af( Zn W$-ԍ DPUC Petition at 5; see also App. G (regulations).a In addition, the DPUC" f0*((" has adopted a shortened, fiveday notice provision for tariff revisions affecting banded  Y-rates.gZn Wy-ԍ DPUC Petition at 5, see also Connecticut Decision at 3031 (Finding of Fact 9). The previous notice provision required a thirtyday lag before proposed revisions could take effect. Connecticut seeks to retain regulatory control of the rates of wholesale cellular providers until it concludes a further review of conditions in the Connecticut wholesale cellular market. After the review, which is projected to conclude July 1, 1996, if the DPUC determines that the market is not truly competitive, Connecticut seeks to retain jurisdiction for an additional year, until October 1, 1997.  X_- D. Description of the Connecticut State Market   Y1-` ` +44.ؠThe subject wholesale cellular providers are Springwich Cellular Limited Partnership (Springwich), Bell Atlantic Metro Mobile Companies (Bell Atlantic), and Litchfield County Cellular, Inc. (Litchfield). Springwich and Bell Atlantic provide wholesale cellular service in Connecticut's four New England County Metropolitan Areas (Hartford, New Haven, Fairfield, and New London) and the Windham Rural Service Area (RSA). Springwich and Litchfield provide wholesale cellular service in the Litchfield RSA. Springwich currently has 15 reseller subscribers, while Bell Atlantic has 11 reseller  Y-subscribers. Litchfield has no reseller subscribers.<hWZn W-ԍ DPUC Petition at 2.<  Xb-. V. CASE ON THE MERITS   X4-\ A. General Positions of the Parties   Y-` ` ,45.ؠNCRA, Nextel,iZn W-ԍ Nextel, however, opposes state rate regulation of ``emerging nondominant CMRS carriers, including ESMR and PCS providers.'' Nextel Comments at 12. CTCS, the Connecticut Office of Consumer Counsel, and the Attorney General of Connecticut strongly support the Connecticut DPUC's Petition to retain regulatory control of the rates of wholesale cellular carriers. AMTA, MTel, Pagemart, E.F. Johnson, PageNet, and PCIA are also supportive of the Petition, to the extent that it does not seek to extend rate regulation to paging services or other commercial mobile services.  Ye-` ` -46.ؠBAMM, CTIA, GTE, McCaw, Springwich, and RCA oppose the Petition. PageNet and Pagemart oppose the Petition only with respect to paging services, arguing that  Y7-the DPUC failed to sustain its burden of proof with respect to those services.ej7oZn WW$-ԍ Pagemart Reply Comments at 34; PageNet Reply Comments at 3.e " j0*((<"Ԍ Y-` ` .47.ؠIn support of the DPUC's petition, the Attorney General argues that the  Y-Connecticut duopoly cellular market is not competitive.<kZn Wb-ԍ AG Comments at 34.< Other commenters in support include NCRA and Nextel. They argue that facilitiesbased cellular providers have a ``transmission bottleneck'' that enables them to limit competition and ``exact  Y-supracompetitive profits from the public.''l`hZn W-ԍ Nextel Comments at 13, citing California Petition at 25 (``access to radio spectrum and switching facilities are deemed bottleneck facilities in the cellular market and that the facilitiesbased carriers' control of these bottleneck functions is the primary cause of resellers' diminished contributions in the cellular marketplace''); NCRA Comments at 3. NCRA has listed in an Appendix to its comments the reports of eight Federal agencies, which it alleges have concluded that the  Yv-cellular industry is not competitive.m8vZn W -ԍ The list includes the CMRS Second Report and Order; Memorandum of the United States in Response to Bell Companies' Motions for Generic Wireless Waivers, Department of Justice, Civ. Action No. 820192, July 25, 1994; and Memorandum of the United States in Opposition to AT&T's Motion for a Waiver of Section 1(D) of the Decree in Connection with its Acquisition of McCaw, Department of Justice, Feb. 14, 1994.  Nextel also argues that the duopolist character of the  Y_-cellular industry compels us to grant Connecticut's Petition.An_ Zn W-ԍ Nextel Comments at 910.A  Y1-` ` /48.ؠOn the issue ISSUE  of substitutability and consequent competition from other types of commercial mobile services, Nextel contends that presently there are no ``voicegrade'' mobile services offering viable competition to cellular service. Nextel asserts that ``[u]ntil effective competition develops, continued rate regulation may be necessary in some  Y -states to restrain the dominant market power of cellular duopolists.''o 0 Zn W-ԍ Id. at 10, citing, in support, Second CMRS Report and Order, 9 FCC Rcd at 1470.  Y -` ` 049.ؠThose opposing the DPUC Petition point to various factors showing that the cellular market in Connecticut is sufficiently competitive to protect consumers adequately from unreasonable rates. BAMM states that evidence obtained in Docket No. 940327 showed declining prices, high rates of subscriber growth, expanding service coverage, introduction of numerous new services, and intense competition between BAMM and  Y4-Springwich over the past five years.=p4Zn W"-ԍ BAMM Comments at 12.= With respect to the Federal reports Connecticut relied on, BAMM particularly contends that NCRA's reliance upon the DOJ's reports is misplaced because ``[n]one of the reports bear any relationship to whether CMRS rate regulation is  Y-necessary to protect consumers in Connecticut.''IqpZn W'-ԍ BAMM Reply Comments at 7, n. 11.I "q0*(("Ԍ Y-ԙ` ` 150.ؠSpringwich states that subscribership in Connecticut for all commercial mobile services and for cellular services is predicted to continue to expand with the proliferation of new retail rate plans, the continued decline in wholesale prices, and the entry  Y-of new CMRS providers.CrZn W4-ԍ Springwich Comments at 13.C Springwich's yearend estimates for 1993 indicate 86,052 active cellular numbers, while BAMM reported 101,139 active cellular numbers for the same  Y-period.2shZn W-ԍ Id.2 Springwich adds that: X(# XThe wholesale cellular carriers in Connecticut have made substantial network investment in response to...competition. Each of the carriers has made significant investments to expand network coverage through deployment of additional cell sites. Since it received a cellular license in 1985, Springwich has invested in its cellular network by expanding network coverage and facilities and thereby providing additional service value to be passed on by all cellular resellers to their cellular end  Y -users.9t Zn W-ԍ Id. at 14.9(#  Y -` ` 251.ؠOther commenters, opposing the Petition, also point to the growth rate for cellular as indicative of a competitive market. CTIA alleges that cellular subscribership is growing domestically at an annual rate of more than 40 percent and that only 16.7 percent of  Yb-the national market has been tapped.=ubZn W-ԍ CTIA Comments at 17.= CTIA contends that this growth potential, in combination with high intraindustry and interindustry ``churn'' rates and rapid technological  Y4-development, evidences a dynamic and highly competitive cellular market.ev4HZn W--ԍ CTIA explains that ``churn'' rates reflect customer switching, among cellular providers in the case of ``intraindustry'' churn, or to other mobile services in the case of ``interindustry'' churn.  W-CTIA contends that the interindustry churn rate approaches 16 percent. Id. at 1415 and 23.e Several commenters remark that this alreadycompetitive market will become more competitive with the advent of PCS, SMRs, and wide area SMRs, and assert that these impending changes affect today's market and must be taken into account when evaluating its present capacity to  Y-protect consumers.w Zn W!"-ԍ See, e.g., GTE Reply Comments at 11, CTIA Reply Comments at 5, and Springwich Comments at 15.  X- B. Elements of the DPUC Case   Y|-  1. Anticompetitive and Discriminatory Practices "f w0*(("Ԍ X- ` ` a. Bulk Volume Discounts and UpsideDown Pricing  Y-` ` 352.ؠThe Connecticut DPUC, as well as the State Attorney General and the Office of Consumer Counsel, allege that carriers' volume discounts favor their retail affiliates in two respects. First, their lowest wholesale price offerings require such a high volume that  Y-they exclude all but their affiliates from the best bulk rates.xZn W-ԍ See, e.g., DPUC Petition at 3, AG Comments at 34, OCC Comments at 9, OCC Reply Comments at 1415, CTCS and CM Comments at 56, CTCS and CM Reply Comments at 26. The lowest discount rate offered is for activating over 20,000 cellular numbers, and only the carrier's own retail  Y_-affiliates meet this requirement.y`_@Zn WP -ԍ See DPUC Petition at Appendix F (contains Bell Atlantic Metro Mobile's Rate Schedule at 3; Springwich Cellular Limited Partnership's Effective Rate Schedule at 1). BAMM's and Springwich's next lowest bulk rate is for 10,00120,000 numbers; the corresponding BAMM rate discount is 0.5 percent less at this rate level and the Springwich rate is $1.00 less per month.  Y1-` ` 453.ؠSecond, petitioners state that the record in the Connecticut proceeding (Docket No. 940327) indicates that the retail affiliates currently offer rate plans for end users that are priced below the best rate at which the Resellers can purchase bulk service,  Y -given the volume discount structure.<z hZn W-ԍ DPUC Petition at 3.< CTCS contends that the wholesale carriers' pricing strategy is determined on a consolidated revenue method such that an effective rate is determined based on the overall economic effect of retail and wholesale rates offered in the  Y -market.J{  Zn W`-ԍ CTCS and CM Reply Comments at 25.J Consequently, the wholesale entity is pricing against the independent buyers. CTCS states that what the carriers ``sparingly'' give in wholesale rate reductions, they take away at retail by belowwholesale pricing, because the persubscriber cost for the  Yb-independent Resellers would increase if they offered service at belowwholesale cost.J|b Zn W-ԍ CTCS and CM Reply Comments at 26.J In  YK-addition, the Resellers' overall margin would be reduced.2}KH Zn WD-ԍ Id.2   Y-` ` 554.ؠThe carriers contend that the discounts are contained in the wholesale  Y-carriers' tariffs which the DPUC approved.J~ Zn W#-ԍ See BAMM Comments at 2224.J Moreover, they attribute the fact that only retail affiliates currently receive the greatest discounts to the affiliates' better marketing  Y-strategies.TZn W'-ԍ See Springwich Comments at 3132, 34.T Bell Atlantic also contends that the allegations of ``upsidedown pricing'' by the"(0*(("  Y-affiliated resellers were not accepted by the DPUC.GZn Wy-ԍ BAMM Comments at Appendix A24.G The Office of Consumer Counsel and the State Attorney General reply that the carriers' tariffs were approved under different circumstances, and that the DPUC has the power and the responsibility to adjust its  Y-regulatory supervision to meet changing circumstances.hhZn W-ԍ See OCC Reply Comments at 1415; AG Reply Comments at 16.h  X- ` ` b. Sharing Confidential Marketing Information  Y_-` ` 655.ؠThe DPUC, Attorney General, and Office of Consumer Counsel also allege that the wholesale carriers require independent resellers to divulge confidential information including their retail rates and competitive pricing strategies, which the  Y -wholesale carriers then share with their retail affiliates.< Zn W-ԍ DPUC Petition at 3.< The state contends employees of SNET Cellular (Springwich's retail affiliate) have met with cellular service resellers to discuss retail rates and the impact independent resellers' rates would have on the Springwich  Y -retail affiliate.J Zn W.-ԍ Connecticut Decision at 23.J Evidence also was offered that after Escotel, a reseller, discussed its marketing strategies with SNET Cellular employees, employees with access to such  Y -information were transferred to Springwich's affiliated retail operations.2 HZn W-ԍ Id.2  Yy-` ` 756.ؠ The wholesale carriers assert that such information is not required, and when it is volunteered, it is protected. Springwich adds that where there is any overlap in management responsibilities between Springwich and SNET Cellular, the companies have taken steps to ensure that wholesale and retail information is closely guarded and not  Y-shared.CZn W-ԍ Springwich Comments at 38.C  X- ` ` c. Relationship Between Wholesale Carriers and Their Retail Affiliates  Y-  Y-` ` 857.ؠConnecticut alleges that the close relationship between the wholesale providers and their retail affiliates puts the independent resellers at a distinct disadvantage. The DPUC considers the wholesale carriers' relationships with their retail affiliates to be anticompetitive, and asserts that this anticompetitive ``atmosphere'' requires continued DPUC  Yf-oversight.Mf Zn W&-ԍ Connecticut Decision at 2627.M The DPUC also suggests that Springwich's retail affiliate has received an unfair competitive advantage because it has the most prominent advertising in every SNET"O( 0*(("  Y-Company Yellow Pages directory section.BZn Wy-ԍ OCC Reply Comments at 14.B Connecticut also alleges that this integral relationship has resulted in the ability of Springwich's retail affiliate to activate cellular numbers at times when other resellers were unable to do so, such as weekends and  Y-holidays.3hZn W-ԍ Id. 3  Y-` ` 958.ؠThe carriers respond that their corporate structure is entirely consistent  Yv-with the requirements of the FCC and state regulation.LvZn W/ -ԍ Springwich Reply Comments at 3738.L Further, the carriers argue that the absence of corporate and managerial separation between wholesale and retail operations of  YH-the cellular carriers is not per se anticompetitive or discriminatory practice.9HZn W-ԍ Id. at 17.9 Springwich adds that, although it is not required to, it maintains strict cost separation between these  Y -operations to ensure the accurate allocation of costs.C HZn W-ԍ Springwich Comments at 37.C Springwich also points out that the DPUC has not formally regulated wholesale carriers' corporate structures and has recognized such structures without requiring changes to them. In addition, both Springwich and BAMM acknowledge that, on one occasion over the past ten years, they each provided information concerning a new wholesale plan to their retail affiliate before notifying other resellers. Both  Y -carriers state that these were isolated instances, which were promptly corrected.P Zn W@-ԍ Id. at 38; BAMM Opposition at 20.P  Xy- ` ` d. Equal Access and Billing   YK-` ` :59.ؠConnecticut contends that Springwich's requirement that long distance calls be carried by its long distance affiliate is anticompetitive and ``contradicts'' the policy of the  Y-Connecticut General Assembly to promote telecommunications competition. Zn WV-ԍ See DPUC Petition at 3; OCC Comments at 89; AG Comments at 4, citing Public Act 94 W. -83, An Act Implementing the Recommendations of the Telecommunications Task Force. Springwich counters by arguing that: (1) providing equal access to long distance carriers for interstate calls outside the Springwich cellular network does not justify continued state rate regulation; (2) this practice is common among nonBOC cellular carriers; and, (3) since Connecticut is a" 0*(("  Y-single LATA state, equal access is, by definition, solely an interstate issue.CZn Wy-ԍ Springwich Comments at 35.C BAMM is  Y-required to provide equal access under the Modification of Final Judgment.hZn W-ԍ United States v. AT&T, 552 F.Supp. 131, (D.D.C. 1982) aff'd sub. nom. Maryland v. United States, 460 U.S. 1001 (1983).  Y-  Y-` ` ;60.ؠConnecticut also disapproves of wholesale carriers' rounding practice in billing their airtime charges. Springwich bills on a perminute basis and BAMM bills on a thirtysecond basis; however, both companies apparently have the technical capability to bill at onetenth second intervals.  XH- 2. Rate of Return, Price Levels, Market Share   Y -` ` <61. Connecticut alleges that the cellular carriers have been earning what  Y -appear to be excessive rates of return for 198893.P Zn W-ԍ See Connecticut Decision at 911.P The DPUC also recites OCC's assertion that wholesale cellular carriers' profit levels are evidence of the lack of effective  Y -competition.9 Zn W-ԍ Id. at 10.9 OCC and the resellers contend that 15 percent is a reasonable rate of return  Y -for wholesale carriers.2 Zn W-ԍ Id.2 The wholesale carriers suggest that a rate of return of 20.7 percent is reasonable.  Yy-` ` =62.ؠThe Attorney General states that BAMM and Springwich admitted on crossexamination before the DPUC that, with competition, rates could be 25 percent to 35  YK-percent lower.IK Zn W-ԍ Connecticut Decision at 9.I According to the Resellers, proper interpretation of the cellular carriers' financial information indicates excessive wholesale prices, which is consistent with the anticipated 25 percent rate reduction that will occur following new competitors' market  Y-entry.8` Zn W!-ԍ Id. at 9.8 The wholesale carriers maintain they are earning competitive rates of return.e Zn W"-ԍ See Springwich Comments at 2830; BAMM Comments at 13.e  Y-  "0*(("Ԍ Y-` ` >63.ؠThe Attorney General states that application of the HHI (Herfindahl Y-Hirschman Index) test indicates the ``obvious'' fact that the cellular carriers are duopolists.;Zn Wb-ԍ AG Reply Comments at 10. The HHI is a means of measuring market concentration. It is calculated by squaring the market share of each market participant and then adding the squares. In antitrust analysis this calculation is made for both premerger and postmerger markets, with the difference representing the increase in market concentration that will result from the merger. The higher the premerger number, and the greater the increase to that number resulting from a merger,  W-the more likely the merger may violate the antitrust laws. See, e.g., FTC v. PPG Industries, Inc., 798  Wr-F.2d 1500, 1503 (D.C. Cir. 1986); F. Scherer & D. Ross, Industrial Market Structure and  WJ -Economic Performance (3rd ed. 1990) at 72. ; The Attorney General argues that declining wholesale cellular rates do not prove competition in Connecticut, and alleges that the two major reductions in the past seven years occurred  Y-only because the carriers were petitioning for deregulation at those times.o`PZn W -ԍ AG Reply Comments at 1112 (``BAMM's first such wholesale price change occurred in August, 1993, at the time hearings were scheduled in Docket No. 930803; BAMM's second reduction in monthly access charges was announced during the course of the hearings held before the DPUC. Springwich responded by lowering prices also.'').o The Attorney General also contends that once DPUC oversight is removed, there will be nothing to prevent  Yv-BAMM and Springwich from raising their prices.2vx Zn W-ԍ Id.2  YH-` ` ?64. Springwich (SNET) and BAMM (Bell Atlantic) provide wholesale cellular service in four MSAs, and Litchfield and Springwich provide wholesale service in one RSA. Springwich has 15 resale subscribers, BAMM has 11 resale subscribers, and Litchfield has  Y -none.< Zn W-ԍ DPUC Petition at 2.< As of the end of 1993, BAMM and Springwich possessed 54 percent and 46 percent  Y -shares of the bulk wholesale cellular market, respectively.= Zn WU-ԍ BAMM Comments at 12.= The nonwireline carrier, BAMM, has been able to erode the wireline carrier's 100 percent market share to 46 percent in nine years.  Y-` ` @65. Springwich and BAMM contend that the characteristics of the cellular marketplace in Connecticut, including the measure of market concentration produced by the HHI test, are a product of the duopoly structure adopted by the Commission for cellular  YK-services.eKXZn WT$-ԍ See Springwich Comments at 19; BAMM Comments at 1617.e Springwich argues ``the fact that such measures indicate that a twocarrier market is highly concentrated simply proves the obvious they do not, however, demonstrate that"40*(("  Y-the concentrated market is not functioning in a competitive fashion.''CZn Wy-ԍ Springwich Comments at 20.C Springwich states that competition in the wholesale cellular market intensified in 1992 when BAMM purchased the  Y-Band A nonwireline carrier in Connecticut.DhZn W-ԍ Springwich Comments at 23.D Since BAMM now serves the larger share of the wholesale market, Springwich argues that this is incontrovertible evidence that vigorous  Y-competition exists.BZn W] -ԍ Springwich Comments at 3.B Springwich states that since the introduction of cellular service, the carriers have regularly lowered wholesale rates, introduced service and rate promotions, and  Yv-introduced other new improvements.ovZn W -ԍ See Springwich Comments at 3 and Springwich Reply Comments at 8.o Springwich asserts that between 1990 and 1994, its monthly wholesale rates for cellular numbers decreased more than 11 percent before  YH-adjustment for inflation.jHHZn WA-ԍ Springwich Comments at 16 and Ex.7, Springwich states that ``last month, (i.e., August 12, 1994), in response to a rate reduction by BAMM and the changing market conditions, Springwich  W-announced an additional 35 percent decrease in monthly wholesale rates for cellular numbers.'' Id.j Springwich also asserts that rates for usage have declined  Y1-significantly.S1 Zn Wz-ԍ ``Before adjustment for inflation, Springwich's per minute rates for peak usage have decreased more than 15 percent and per minute rates for offpeak usage have declined roughly 25 percent  W*-since 1990.'' Id. See also Springwich's Exhibit 7, filed with Comments.S Springwich adds that these price reductions have come at the same time that network investment has increased and the carriers have incurred the significant cost of  Y -converting their networks to digital technology.C Zn W-ԍ Springwich Comments at 16.C Over the past five years, the growth percentage in cellular subscribers in Connecticut has averaged in the double digits. Springwich's yearend estimates for 1993 indicate 86,052 active cellular numbers, and  Y -BAMM reported 101,138 active cellular numbers for the same period.C Zn W-ԍ Springwich Comments at 13.C  Y-` ` A66.ؠThe DPUC counters the carriers' arguments by asserting that the wholesale cellular market is closed to entry, that the service offered therein is homogenous, and that neither carrier can alter significantly the quality or characteristics of the service it provides,  YK-relative to its competitor.oK(Zn W$$-ԍ DPUC Reply Comments at Appendix A, Testimony of Mr. King, pp. 785797.o Since part of the homogeneity is that of costs, the DPUC claims, this makes for implicit price collusion because each carrier knows the other carrier has the  Y-same general cost profile.2Zn W'-ԍ Id.2 "h0*((7"Ԍ Y-   Й   C . Discussion  ` `  X- 1. Introduction  Y-` ` B67. In order to continue regulation of intrastate cellular rates, Connecticut must prove that ``market conditions with respect to such services fail to protect subscribers adequately from unjust and unreasonable rates or rates that are unjustly or unreasonably  Y`-discriminatory.''O`Zn W-ԍ See 47 U.S.C.  332(c)(3)(A).O Connecticut has not satisfied the statutory requirement.  Y2-` ` C68. Our decision is based in part on the fact that the DPUC, upon completion of its own investigation of cellular market conditions less than one year ago, did not conclude that market conditions fail to protect consumers. While the DPUC found that ``the record...is inconclusive relative to the cellular carriers' rate of return and their financial performance since 1987[,]'' it did not find that these data demonstrated unjust or unreasonable, or unjustly  Y -or unreasonably discriminatory rates.T hZn W-ԍ See Connecticut Decision at 30.T The DPUC's findings concerning overall pricing  Y -behavior also were inconclusive.M Zn Wa-ԍ See paras. 3941, supra.M Moreover, the record does not indicate that the state has initiated any subsequent proceeding directed specifically at reductions or structural changes in carrier rates. Although its investigation revealed sufficient evidence of cellular market imperfections to cause the DPUC concern, and it has decided to continue monitoring market  YL-activities,TLZn W-ԍ See Connecticut Decision at 32.T the investigation apparently did not yield sufficient evidence to support a finding  Y5-ԩ by the DPUC itself that market conditions fail to protect consumers. No additional  Y -information has been filed in the record of this proceeding that would cause us to question the DPUC's own judgment in this regard.  Y-` ` D69. There are other bases for our decision. First, unrebutted evidence shows that cellular rates in Connecticut are declining. Second, the DPUC Petition does not address the direct and fundamental changes to the duopoly cellular market structure that are being realized by PCS and other services, such as wide area SMR. Third, Connecticut presents no evidence of systematically collusive or other anticompetitive practices concerning the provision of any CMRS. Fourth, Connecticut does not present evidence showing widespread consumer dissatisfaction with CMRS providers in that state, or discuss what specific rate regulations are needed to address whatever level of dissatisfaction may exist. Fifth,": H0*((L" Connecticut fails to present any analysis regarding the critical issue of investment by cellular  Y-licensees (or by any other CMRS providers).eZn Wb-ԍ An important indicator of market failure, in our view, would be evidence that cellular firms  W:-are withholding investment in facilities as a means of restricting output and thus boosting price. See  W-para. 25, supra. No such demonstration exists on this record. e  Y-` ` E70. Another weakness of the DPUC's Petition is that it views any evidence of market imperfection as proof of a need for continued rate regulation, while all countervailing  Y-evidence is attributed to its regulatory oversight. Even assuming such an argument is reasonable in theory, the DPUC has not established its factual predicate. The DPUC does not appear to have prescribed any particular pricing or rate development formula, and with minor exceptions, all currently effective and previously effective cellular rates in Connecticut appear to have been carrierinitiated. On this record, we are not persuaded by the DPUC's implicit argument that, absent continuation of its rate regulation authority, even for a limited period of time, cellular rates will quickly fall outside the zone of reasonableness. Thus, we conclude that the DPUC's demonstration is unpersuasive when viewed as a whole. As discussed below, none of the specific allegations presented by the DPUC cause us to alter  Y -this conclusion.  Y -  X- 2. AntiCompetitive and Discriminatory Practices ` `  Xb-` ` a. Bulk Volume Discounts and UpsideDown Pricing  Y4-` ` F71.ؠAs noted previously, Connecticut asserts that the facilitybased carriers' tariffed rates unreasonably favor their retail affiliates because only those affiliates qualify for the largest bulk discounts. We believe it is of decisional significance that these rates were subject to DPUC review before they took effect, and that they have been reviewed since then by the DPUC without any action by that agency to modify them. Moreover, there is no suggestion in this record that facilitybased cellular carriers are charging different rates for the same service, based on a customer's identity. Nor has Connecticut shown that the volume discounts lack an adequate economic justification. Under these circumstances, the DPUC's evidence on this point is unpersuasive.  XN-` ` b. Sharing of Confidential Marketing Information  Y -` ` G72. Connecticut asserts that Springwich requires independent resellers who compete with its retail arm to divulge competitively sensitive marketing and/or planning information, as a condition of receiving wholesale service, and offers two examples of this  Y-alleged practice.IZn W%-ԍ See para. 55, supra.I Connecticut states that it believes that these examples ``[require] further"!0*(( "  Y-review and regulation by the [DPUC].''JZn Wy-ԍ Connecticut Decision at 26.J Springwich contends that such information is not  Y-required of independent resellers, and when it is volunteered it is protected.IhZn W-ԍ See para. 56, supra.I Springwich also contends that where management responsibilities for Springwich and SNET Cellular overlap, the companies have taken steps to ensure that wholesale and retail information is not shared. Connecticut has not rebutted Springwich's assertions. Thus, Connecticut has not established a sufficient factual basis to accord significant weight to its concerns about carriers' marketing practices.  XH-X` hp x (#%'0*,.8135@8: