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Federal Communications Commission
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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 98-50 COMMON CARRIER ACTION December 31, 1998

(CC Docket No. 96-61)

Today, the Commission reaffirmed its 1997 decision that the rate integration requirement of section 254(g) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, applies to commercial mobile radio service (CMRS) providers. Generally, rate integration requires interstate telecommunications companies to provide interstate long distance services to their customers in each state, including U.S. territories, at rates no higher than those they charge to their customers in other states. CMRS providers, such as cellular and PCS providers, serve customers using mobile phone units.

The Commission also left in place its October 1997 Order staying the application of rate integration rules across CMRS affiliates and to CMRS "wide-area rate plans." Typically, such wide-area calling plans offer customers larger geographic areas in which they can make calls at a single rate.

The Commission's actions preserved these innovative and popular wide-area calling plans that have encouraged greater use of CMRS services by many Americans. At the same time, the Commission ensured that consumers in all 50 states and U.S. territories continue to have access to interstate, interexchange CMRS services at affordable and nondiscriminatory rates.

The Commisison also announced its intent to seek further information on how best to encourage CMRS providers to move forward with innovative pricing plans, in light of the rate integration mandate of the 1996 Act.

The 1996 Act applied the Commission's long-standing rate integration policy to all providers of interstate, interexchange services, including CMRS. As part of its implementation of the 1996 Act, the Commission adopted rules applying its rate integration policy to CMRS providers. In denying the CMRS industry's requests for reconsideration, the Commission found that rate integration protects noncontiguous parts of the United States, such as Alaska and Hawaii, from rate discrimination, even with respect to CMRS services. Today's decision also clarifies that services within a single major trading area (MTA) are not interexchange and, thus, are not subject to rate integration.

The Commission also denied the CMRS industry's forbearance requests. The Commission expressed its concern that, without rate integration, CMRS providers might be able to discriminate against the offshore points. It also agreed with the States of Hawaii and Alaska that a broad grant of forbearance would not be consistent with the public interest and that it could not determine that forbearance would promote competitive market conditions.

Action by the Commission December 31, 1998, by Memorandum Opinion and Order (FCC 98-347). Chairman Kennard, Commissioners Ness and Tristani, with Commissioner Furchtgott-Roth approving in part and concurring in part, Commissioner Powell dissenting, and Commissioners Furchtgott-Roth and Powell each issuing separate statements at a later date.


News Media Contact: Rochelle Cohen at (202) 418-1500.
Common Carrier Bureau Contact: Doug Slotten at (202) 418-1572.
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