Overview of Enforcement Authority
Engagement Letters to BOCs Explaining 271 Compliance review Process
Section 271(d) of the Communications Act of 1934, as amended (the
Act), grants the Commission enforcement authority to ensure that a
Bell Operating Company (BOC) continues to comply with the market
opening requirements of section 271 after the Commission has approved
its application to provide long distance service in its home region.
The Commission can take enforcement action if, at any time after
approval of the application, it determines that a BOC has ceased to
meet any of the conditions required for such approval. After
notice and an opportunity for hearing, which may be only a paper
proceeding, the Commission may: (i) issue an order to the BOC to
correct the deficiency; (ii) impose a forfeiture penalty on the BOC
pursuant to title V; or (iii) suspend or revoke the BOC's section 271
Section 271(d) provides the Commission with different enforcement
avenues. First, section 271(d)(6)(A)(iii) allows the Commission to
issue a stand-still order which could prohibit the BOC from
enrolling additional subscribers for its long distance service and from
marketing and promoting its long distance service. In extreme cases,
section 271 authorizes the Commission to revoke the BOC's authority to
provide long distance service altogether. Additionally, in accordance
with section 271(d)(6)(A)(ii), the Commission may assess monetary
forfeitures against non-compliant BOCs pursuant to section 503(b) of
the Act by issuing a notice of apparent liability. Finally, the
Commission may issue an order requiring a non-compliant BOC to correct
any deficiencies pursuant to section 271(d)(6)(A)(i).
The Commission also maintains its pre-existing enforcement powers,
including its authority under sections 206-209 of the Act, which allow
it to resolve formal complaints filed by competitors affected by the
non-compliant BOC's actions and, if warranted, award damages. Pursuant
to section 271(d)(6)(B), the Commission is required to review formal
complaints properly alleging section 271 violations within 90 days.
Section 271 Compliance Review Program
The Enforcement Bureau has a Section 271 Compliance Review Program. As
Bell Operating Companies ("BOCs") receive authority to provide long
distance service within their regions, the staff of the
Section 271 Compliance Review Team will monitor on a structured and
systematic basis the companies' compliance with the market opening
conditions of section 271 of the Telecommunications Act of 1996. This
Program augments the Enforcement Bureau's existing section 271
oversight and enhances the Bureau's ability to identify and act upon
non-compliant conduct in a timely and appropriate manner.
Attorneys, auditors, and other professionals in the Enforcement
Bureau's Investigations and Hearings Division ("IHD") staff the
Compliance Review Team. It will implement the Compliance Review
Program for each newly filed section 271 application and will continue
to monitor the BOCs' ongoing performance in those states where the
Commission has already granted section 271 authority. The Team
oversight responsibilities are divided according to BOC region, with a
dedicated group maintaining responsibility for each region.
Following Commission approval of a section 271 application, the Team
scrutinizes BOC performance data and other pertinent information to
determine whether such documentation indicates that a BOC is continuing
to meet its section 271 obligations. This process includes regular
compliance reviews six and 12 months after approval, with specific
focus on any particular concerns raised by the Commission in the order
granting a BOC section 271 authority. The Team members also serve as a
point of contact for state commissions, competitive carriers, and other
interested persons who may wish to report informally any perceived
instances of noncompliance with section 271. Finally, if the Team
determines a BOC may not be in compliance, it will initiate an
investigation and, if warranted, take or recommend appropriate
At the outset of each of the currently pending Compliance Reviews, the
Teams sent engagement letters to the BOCs explaining the 271 Compliance Review
process and highlighting the specific areas of checklist compliance
the Teams will monitor.
The Teams directed the BOCs to submit information pertaining to these areas
to the Bureau approximately six and twelve months after the Commission's
grant. These BOC submissions will assist the Teams in evaluating the BOC's
ongoing compliance with the conditions of section 271 approval.
The engagement letters, however, do not initiate or purport to initiate any
investigation or other formal enforcement proceeding into the BOC's behavior.
Rather, they describe the general Compliance Review Program processes,
detail the areas on which the Reviews will likely focus, and inform the BOC
of its obligations under the Compliance Review Program.
Although the engagement letters specify a number of areas subject to
review, the Teams may identify other aspects or areas of the BOC's
compliance efforts to review based on the Teams' own observations and/or
discussions with state regulators, competitive carriers, and others.
The Section 271 Compliance Review Teams will make these letters available
to the public.
Links to those letters are provided below.
Any person with information indicating that a BOC may no longer be in
compliance with section 271 may contact
Chief, Investigations and Hearings Division,
Theresa Z. Cavanaugh,
Deputy Chief, Investigations and Hearings Division.
They may be reached at (202)
FCC-Bell Atlantic Consent Decree
On December 22, 1999, the Commission authorized Bell Atlantic to
provide long distance service in New York pursuant to section 271. On
February 7, 2000, the Commission began investigating allegations that
Bell Atlantic was failing to notify competitors about the status of
competitors' orders for local service in a timely manner and therefore
not providing nondiscriminatory, unbundled access to network elements
as required under Section 271. Evidence submitted by Bell Atlantic
during the investigation made clear that its performance in timely
providing these notifications deteriorated following its entry into the
New York long distance market.
On March 9, 2000, the Commission and Bell Atlantic entered into a
Consent Decree. In accordance with the terms of the Decree, Bell
Atlantic implemented a new software system for processing competitors'
orders, given that its then existing system was thought to be the cause
of many of the problems. Bell Atlantic also agreed to make a $3
million voluntary contribution to the United States Treasury, and to
submit weekly reports to the Commission concerning various aspects of
its performance until it met certain performance thresholds. The
Decree also required Bell Atlantic to make significant voluntary
payments or suspend its enrollment of new customers if its performance
failed to meet specified standards. Finally, the Commission's
monitoring of Bell Atlantic's performance would terminate if its
performance met those standards. Importantly, the Commission adopted
the Consent Decree in concert with enforcement action taken by the New
York Public Service Commission, which required Bell Atlantic to make
$10 million in compensatory payments to those competitors affected by
the ordering problems.
On June 20, 2000, the Enforcement Bureau announced that Bell
Atlantic has satisfied the requirements of the Consent Decree and that,
absent evidence that the reports are materially inaccurate, Bell
Atlantic has no further obligations under the Consent Decree. The
Bureau stated that there have been substantial improvements in the
performance of Bell Atlantic's operations support systems since the
adoption of the Consent Decree, and that Bell Atlantic's systems are
performing within the standards set forth in the Consent Decree
Qwest Communications International, Inc. (Arizona)
SBC Communications, Inc. (Michigan, Illinois, Indiana, Ohio, Wisconsin)
Qwest Communications International, Inc. (Minnesota)
Qwest Communications International, Inc. (New Mexico, Oregon and South
Qwest (Colorado, Idaho, Iowa, Montana, Nebraska,
North Dakota, Utah, Washington, Wyoming)
BellSouth (Florida and Tennessee)
SBC Communications (California)
BellSouth (Alabama, Kentucky, Mississippi, North Carolina, and South Carolina)
SBC Telecommunications, Inc. (Arkansas and Missouri)
Verizon Communications, Inc. (New York, Massachusetts, Connecticut, Pennsylvania, Rhode Island, Vermont, Maine & New Jersey)
Verizon Communications, Inc.
New Hampshire, Delaware and Virginia
Verizon Communications, Inc.
West Virginia, Maryland and Washington, DC
BellSouth (Georgia & Louisiana)
SBC Communications (California & Nevada)