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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

Report No. CC 98-24 COMMON CARRIER ACTION August 6, 1998

FCC Launches Inquiry, Proposes Actions to Promote the Deployment of Advanced Telecommunications Services By All Providers
(CC Docket Nos. 98-146, 98-11, 98-26, 98-32, 98-15, 98-78, 98-91, 98-147)

The Commission today initiated two proceedings intended to create marketplace conditions conducive to the nationwide deployment of advanced telecommunications services, such as high-speed Internet access and video telephony, by all providers. First, the Commission commenced an inquiry into the current availability of advanced telecommunications services and what actions the Commission can take if it determines that these services are not being deployed to all Americans in a reasonable and timely manner. Second, the Commission proposed actions to encourage all wireline providers, both incumbent local telephone companies and their competitors, to provide advanced telecommunications services. Both proceedings follow Congress's blueprint for stimulating telecommunications competition and bringing the benefits of technology to all sectors of American society.

In the first proceeding, the Commission adopted a Notice of Inquiry pursuant to section 706 of the Telecommunications Act of 1996, which directs the FCC to examine whether advanced telecommunications services are being made available to all Americans on a reasonable and timely basis. The Commission will report its findings within six months. If the Commission's findings are negative, the FCC will take immediate action to remedy the situation, as directed by statute. Accordingly, the Commission asked for comment on what constitutes "advanced telecommunications capability," the extent to which such capabilities are being deployed, and what actions may be necessary to encourage deployment. The Commission emphasized that it is seeking input from all segments of the communications and related industries, including cable, satellite, wireless, wireline, and emerging technologies.

In the second proceeding, the Commission adopted a Notice of Proposed Rulemaking (NPRM) that offers an incumbent local telephone company the option to provide advanced services through an affiliate on a largely deregulated basis while strengthening competitors' access to the piece parts of the incumbent's network (unbundled elements) and to floor space in the incumbent's central office (collocation space). The NPRM adopted today is designed to create market conditions that will allow both the incumbent and new entrants to provide advanced telecommunications services to the public based on market risk and reward.

In the NPRM:

  • The Commission stated that, under the Communications Act, there is an optional alternative pathway for an incumbent local telephone company that is willing to offer advanced services on the same footing as other competitors. In particular, the Commission proposed that, under certain circumstances, a separate affiliate would not be deemed an incumbent local exchange company, as that term is defined in the Act, and therefore would not be subject to the same requirements as the incumbent. The Commission proposed specific safeguards that would apply to such an affiliate. The Commission also asked for comment on whether limited LATA boundary modifications or other targeted actions would be appropriate in certain circumstances, such as to carry traffic to Internet access points from rural areas.

  • The Commission proposed ways to facilitate the ability of new entrants to offer advanced services on an equal footing with an incumbent. To provide advanced services, new entrants may need to locate equipment on an incumbent's premises for interconnection and to lease unbundled network elements, such as loops. The Commission, therefore, initiated a rulemaking in response to the request by the Association for Local Telecommunications Services (ALTS) to strengthen collocation requirements and reduce the costs and delays associated with collocation. The Commission also asked for comment on whether it should review and revise its rules regarding the provision of loops to competing providers to eliminate barriers to entry.

The Commission noted that the requirement that the incumbent treat all competitors in the same manner as its affiliate should give the incumbent the incentive to improve its processes and provide unbundled elements and collocation space as quickly and cheaply as possible to all competitors.

Recognizing the importance of regulatory certainty to the ability of both incumbents and new entrants to plan and develop their products and services, the Commission intends to issue an order resolving the issues raised in the NPRM as expeditiously as possible.

The Commission also issued an Order addressing issues raised in petitions filed by several Bell Operating Companies (BOCs) and ALTS. In brief, the BOCs requested relief from certain of the Communications Act's requirements that are generally applicable to incumbents' provision of telecommunications, including the unbundling requirement which compels incumbents to make their network elements available for use by competitors at cost-based rates. The BOCs asserted that requiring them to make their advanced telecommunications facilities and technologies available to their competitors will discourage them from investing in advanced telecommunications facilities in the first place. At the same time, ALTS, representing new entrants, asked the Commission to declare that the Act applies equally to voice and data networks.

The Commission concluded that Congress made clear that the Communications Act is technologically neutral and is designed to ensure competition in all telecommunications markets. As a result, the Commission found that an incumbent local telephone company must interconnect its data network with the data networks of competitors. The Commission also clarified that the facilities and equipment used by an incumbent to provide advanced services are network elements and subject to the Act's unbundling obligations. Thus, an incumbent local telephone company must offer unbundled access to the equipment used in the provision of advanced services, subject only to considerations of technical feasibility. The Commission also clarified that the Act obligates an incumbent local telephone company to offer for resale at a wholesale discount all advanced services provided to retail customers.

The Commission concluded that it did not have the statutory authority to forbear from the critical market-opening requirements placed on incumbents in sections 251 and 271 of the Act until those requirements have been fully implemented. The Commission also denied the BOCs' petitions to establish a single, global LATA, which would allow them to offer long distance data services prior to the full implementation of sections 251 and 271.

Actions by the Commission August 6, 1998, by Notice of Inquiry (FCC 98-187) and by Memorandum Opinion and Order and Notice of Proposed Rulemaking (FCC 98-188). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani, with Commissioners Ness, Powell and Tristani issuing separate statements.


News Media contact: Rochelle Cohen at (202) 418-0253.
Common Carrier Bureau contacts: NPRM/Order: Linda Kinney or Jordan Goldstein at (202)418-1580; NOI: John Berresford at (202) 418-1886.