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BACKGROUND p>"(# 9  X$4XX` ` A.` ` Overview of Computer III/ONA and Related Court Decisions ` p>"(# 9  X4XX` ` B.` ` Overview of the 1996 Act ` p"(# 17  X4XX` ` X ` ` 1. Opening the Local Exchange Market p"(# 18  X4XX` ` X ` ` 2. BOC Provision of Information Services p"(# 20 X\III. CALIFORNIA III REMAND p"(# 24  X"4XX` ` A.` ` Background ` p"(# 24  X#4 e iKXX` ` B.` ` Subsequent Events May Have Alleviated the Ninth Circuit's California III Concerns ` p"(# 29 X\IV. EFFECT OF THE 1996 ACT p"(# 37  X+'4XX` ` A.` ` Basic/Enhanced Distinction ` p"(# 38"+',((CC9%"Ԍ X4XX` ` B.` ` CostBenefit Analysis of Structural Safeguards ` p"(# 43  X4XX` ` X ` ` 1. Background p"(# 43  X4XX` ` X ` ` 2. Effect of the 1996 Act and Other Factors p"(# 48  X4XX` ` X X a.Section 251 and Local Competition p"(# 49  X4XX` ` X X b.Structural Separation and the 1996 Act p"(# 52  X4XX` ` C.` ` Comparably Efficient Interconnection (CEI) Plans ` p"(# 60  Xv4XX` ` X ` ` 1. Proposed Elimination of Current Requirements p"(# 60  X_4XX` ` X ` ` 2. Treatment of Services Provided Through 272/274 Affiliates p"(# 66  XH4XX` ` X X a.Section 272 p"(# 66  X14XX` ` X X b.Section 274 p"(# 71  X 4XX` ` X ` ` 3. Treatment of Telemessaging and Alarm Monitoring Services p"(# 74  X 4XX` ` X ` ` 4. Related Issues p"(# 75  X 4XX` ` D.` ` ONA and Other Nonstructural Safeguards ` p"(# 78  X 4XX` ` X ` ` 1. ONA Unbundling Requirements p"(# 78  X 4XX` ` X X a.Introduction p"(# 78  X 4XX` ` X X b.ONA Unbundling Requirements p"(# 80  X4XX` ` X X c.Effect of the 1996 Act p"(# 92  Xy4XX` ` X ` ` 2. ONA and Nondiscrimination Reporting Requirements p"(# 99  Xb4XX` ` X X a.Introduction p"(# 99  XK4XX` ` X X b.Annual ONA Reports p!(# 103  X44XX` ` X X c.SemiAnnual ONA Reports p!(# 108  X4XX` ` X X d.Nondiscrimination Reports p!(# 112  X4XX` ` X ` ` 3. Other Nonstructural Safeguards p!(# 117  X4XX` ` X X a.Network Information Disclosure Rules p!(# 117  X4XX` ` X X b.Customer Proprietary Network Information (CPNI) p!(# 124 X\V. JURISDICTIONAL ISSUES p!(# 130 X\VI. PROCEDURAL MATTERS p!(# 133  Xe4XX` ` A.` ` Ex Parte Presentations ` p!(# 133  XN4XX` ` B.` ` Initial Paperwork Reduction Act Analysis ` p!(# 134  X74XX` ` C.` ` Initial Regulatory Flexibility Certification ` p!(# 135  X 4XX` ` D.` ` Comment Filing Procedures ` p!(# 137 X\VII. ORDERING CLAUSES p!(# 141 ",D'D'CC7"Ԍ X4M: I. INTRODUCTION ă  X41.` ` In the Commission's Computer IIIj R {OK'ԍAmendment of Section 64.702 of the Commission's Rules and Regulations (Computer III), Report and  {O'Order, CC Docket No. 85229, PhaseI, 104 FCC 2d 958 (1986) (Phase I Order), recon., 2 FCC Rcd 3035  {O'(1987) (Phase I Recon. Order), further recon., 3 FCC Rcd 1135 (1988) (Phase I Further Recon. Order), second  {O'further recon., 4 FCC Rcd 5927 (1989) (Phase I Second Further Recon.), Phase I Order and Phase I Recon.  {Os'Order, vacated, California v. FCC, 905 F.2d 1217 (9th Cir. 1990) (CaliforniaI); Phase II, 2 FCC Rcd 3072  {O='(1987) (Phase II Order), recon., 3 FCC Rcd 1150 (1988) (PhaseII Recon. Order), further recon., 4 FCC Rcd  {O '5927 (1989) (Phase II Further Recon. Order), PhaseII Order vacated, CaliforniaI, 905 F.2d 1217 (9th Cir.  {O '1990); Computer III Remand Proceedings, 5 FCC Rcd 7719 (1990) (ONA Remand Order), recon., 7 FCC Rcd  {O '909 (1992), pets. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir. 1993) (CaliforniaII); Computer III  {Oe 'Remand Proceedings: Bell Operating Company Safeguards and Tier1 Local Exchange Company Safeguards,  {O/ '6FCC Rcd 7571 (1991) (BOC Safeguards Order), recon. dismissed in part, Order, CC Docket Nos.90623 and  {O '92256, 11 FCC Rcd 12513 (1996); BOC Safeguards Order vacated in part and remanded, California v. FCC,  {O '39 F.3d 919 (9th Cir. 1994) (CaliforniaIII), cert. denied, 115 S.Ct. 1427 (1995) (referred to collectively as the  {O'ComputerIII proceeding).j and Open Network Architecture (ONA) R {O'ԍ ONACITE Filing and Review of Open Network Architecture Plans, 4 FCC Rcd 1 (1988) (BOC ONA Order),  {O'recon., 5 FCC Rcd 3084 (1990) (BOC ONA Reconsideration Order); 5 FCC Rcd 3103 (1990) (BOC ONA  {O'Amendment Order), erratum, 5 FCC Rcd 4045 (1990), pets. for review denied, California v. FCC, 4 F.3d 1505  {O}'(9th Cir. 1993), recon., 8 FCC Rcd 97 (1993) (BOC ONA Amendment Reconsideration Order); 6 FCC Rcd 7646  {OG'(1991) (BOC ONA Further Amendment Order); 8 FCC Rcd 2606 (1993) (BOC ONA Second Further Amendment  {O'Order), pet. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir. 1993).  proceedings, the Commission sought to establish appropriate safeguards for the provision by  X4the Bell Operating Companies (BOCs) of "enhanced" services. R yOw'ԍBasic services, such as "plain old telephone service" (POTS), are regulated as tariffed services under Title II of the Communications Act. Enhanced services use the existing telephone network to deliver services  {O'that provide more than a basic transmission offering.  Bell Operating Companies' Joint Petition for Waiver of  {O'Computer II Rules, Memorandum Opinion & Order, 10 FCC Rcd 1724 n.3 (1995) (Interim Waiver Order); 47C.F.R.  64.702(a). The terms "enhanced service" and "basic service" are defined and discussed more fully  {Oc'infra at  ENHANCED138.  Examples of enhanced services include, among other things, voice mail, electronic mail, electronic storeandforward, fax storeandforward, data processing, and gateways to online databases. Underlying this  Xa4effort, as well as our reexamination of the Computer III and ONA rules in this Further Notice of Proposed Rulemaking (Further Notice), are three complementary goals. First, we seek to enable consumers and communities across the country to take advantage of innovative  X 4"enhanced" or "information" services R yOm"'ԍThe terms "enhanced services" and "information services" are used interchangeably in this Further  {O5#'Notice.  See infra note ENHINF17. offered by both the BOCs and other information service providers (ISPs). Second, we seek to ensure the continued competitiveness of the already robust information services market. Finally, we seek to establish safeguards for BOC" ,D'D'CC " provision of enhanced or information services that make common sense in light of current technological, market, and legal conditions.  X42.` ` Under Computer III and ONA, the BOCs are permitted to provide enhanced  X4services on an "integrated" basis (i.e., through the regulated telephone company), subject to  X4certain "nonstructural safeguards," as described more fully below. ,R {O 'Ѝ GTECEI  See infra Part II.A. The Commission initially applied the Computer III and ONA rules to both AT&T  {O'and the BOCs. Computer III Phase I Order, 104 FCC 2d 958 (1986). In subsequent orders, the Commission  {O'first modified, and then relieved, AT&T of most Computer III and ONA requirements.  See, e.g., Computer III  {Oh 'Phase I Reconsideration Order, 2 FCC 3035 (1987); Competition in the Interstate Interexchange Marketplace,  {O2 'Report and Order, 6 FCC Rcd 5880 (1991); Competition in the Interstate Interexchange Marketplace,  yO 'Memorandum Opinion and Order on Reconsideration, 10 FCC Rcd 4562 (1995). AT&T was never subject to  {O 'the annual and biannual ONA reporting requirements the Commission imposed on the BOCs in the BOC ONA  {O 'Further Amendment Order, 6 FCC Rcd 7646 (1991). AT&T remains subject, however, to a modified ONA plan  {OX 'that the Commission approved in 1988 and for which AT&T must submit an annual affidavit. AT&T ONA  {O"'Order, 4 FCC Rcd 2449 (1988); see discussion infra at  AFFIDAVIT116. AT&T also is subject to the Commission's  {O'customer proprietary network information (CPNI) and network information disclosure rules.  See discussion infra  yO'  CPNI117 שCPNI2126. In 1994, the Commission extended to GTE the Commission's requirements regarding ONA  {O~'unbundling, ONA reporting, CPNI, and network information disclosure, among other things. Application of  {OH'Open Network Architecture and Nondiscrimination Safeguards to GTE Corporation, CC Docket No. 92256,  {O'9FCC Rcd 4922 (1994) (GTE ONA Order). The Commission has not applied the Computer III/ONA  {O'requirements to any other local exchange carriers (LECs). Our discussion of the Computer III and ONA requirements in this Further Notice are intended to cover their application with respect to AT&T and GTE to the extent applicable. These rules replaced those  Xz4previously established in Computer II, which required AT&T (and subsequently the BOCs) to  Xe4offer enhanced services through structurally separate subsidiaries.&(eR {O'ԍAmendment of Section 64.702 of the Commission's Rules and Regulations (Computer II), 77 FCC 2d  {O'384 (1980) (Final Decision), recon., 84 FCC 2d 50 (1980) (Reconsideration Order), further recon., 88 FCC 2d  {Of'512 (1981) (Further Reconsideration Order), affirmed sub nom. Computer and Communications Industry Ass'n v.  {O0'FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983).& On February 21, 1995, the  XN4Commission released a Notice of Proposed Rulemaking (Computer III Further Remand  X94Notice)B^9R {O'ԍComputer III Further Remand Proceedings: Bell Operating Company Provision of Enhanced Services,  {O`'CC Docket No. 9520, Notice of Proposed Rulemaking, 10 FCC Rcd 8360 (1995) (Computer III Further  {O*'Remand Notice).B following a remand from the United States Court of Appeals for the Ninth Circuit  X$ 4(California III).~$ R {O!'ԍCalifornia v. FCC, 39 F. 3d 919 (9th Cir. 1994) (California III).~ The Computer III Further Remand Notice sought comment on both the  X 4remand issue in California III relating to the replacement of structural separation requirements" d,D'D'CC "  X4for BOC provision of enhanced services with nonstructural safeguards,L R {Oy'ԍSee infra Part III.A.L as well as the  X4effectiveness of the Commission's Computer III and ONA nonstructural rules in general.v ZR {O'ԍComputer III Further Remand Notice, 10 FCC Rcd at 8362,  2.v  X43.` ` Since the adoption of the Computer III Further Remand Notice, significant changes have occurred in the telecommunications industry that affect our analysis of the issues raised in this proceeding. Most importantly, on February 8, 1996, Congress passed the  Xz4Telecommunications Act of 1996 (1996 Act) zR yO 'ԍTelecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56, codified at 47 U.S.C.  151 etseq. Hereinafter, all citations to the 1996 Act will be to the 1996 Act as it is codified in the United States Code. The 1996 Act amended the Communications Act of 1934. We will refer to the Communications Act of 1934, as amended, as the "Communications Act" or the "Act."  to establish "a procompetitive, deregulatory national policy framework" in order to make available to all Americans "advanced telecommunications and information technologies and services by opening all  X54telecommunications markets to competition." 5R yO'ԍJoint Statement of Managers, S. Conf. Rep. No. 104230, 104th Cong., 2d Sess. 1 (1996) (Joint Explanatory Statement). As the Supreme Court recently noted, the 1996 Act "was an unusually important legislative enactment" that changed the landscape of  X 4telecommunications regulation.[  , R {O'ԍReno v. ACLU, 117 S.Ct. 2329 (1997).[  X 44.` ` The 1996 Act significantly alters the legal and regulatory framework governing the local exchange marketplace. Among other things, the 1996 Act opens local exchange markets to competition by imposing new interconnection, unbundling, and resale obligations  X4on all incumbent local exchange carriers (LECs), including the BOCs. R {O'ԍ 8CIR See 47 U.S.C.  251; see also Implementation of the Local Competition Provisions in the  {O'Telecommunications Act of 1996, CC Docket No. 96-98, First Report and Order, 11 FCC Rcd 15499, 15808,  {O'611 (1996) (Local Competition Order), aff'd in part and vacated in part sub nom. Competitive  {Oa'Telecommunications Ass'n v. FCC, 117 F.3d 1068 (8th Cir. 1997); vacated in part on reh'g, Iowa Utilities Bd. v.  {O+'FCC, 120 F.3d 753, further vacated in part sub nom. California Public Utilities Comm'n v. FCC, 124 F.3d 934,  {O'writ of mandamus issued sub nom. Iowa Utilities Bd. v. FCC, No. 963321 (8th Cir. Jan. 22, 1998), petition for  {O 'cert. granted, Nos. 97-826, 97-829, 97-830, 97-831, 97-1075, 97-1087, 97-1099, and 97-1141 (U.S. Jan. 26,  {O!'1998) (collectively, Iowa Utils. Bd.), Order on Reconsideration, 11 FCC Rcd 13042 (1996), Second Order on Reconsideration, 11 FCC Rcd 19738 (1996), Third Order on Reconsideration and Further Notice of Proposed  {O#'Rulemaking, FCC 97295 (rel. Aug. 18, 1997), further recons. pending. In addition, the 1996  X}4Act allows the BOCs, under certain conditions,Y}hR {O%'ԍSee 47 U.S.C.  271, 272. Y to enter markets from which they previously"},D'D'CCI"  X4were restricted,R yOy'ԍMFJPrior to the 1996 Act, the BOCs and their affiliates effectively were precluded under the Modification of Final Judgment (MFJ) from providing information services across local access and transport area (LATA)  {O 'boundaries, as those terms were defined in the MFJ. See United States v. Western Elec. Co., 552 F. Supp. 131  yO'(D.D.C. 1982) (subsequent history omitted) . While the MFJ, as originally entered, prohibited the BOCs from providing information services, that restriction was subsequently narrowed, and then eliminated entirely in 1991.  {Oc'United States v. Western Elec. Co., 714 F. Supp. 1 (D.D.C. 1988); United States v. Western Elec. Co., 767F.Supp. 308 (D.D.C. 1991) (subsequent history omitted). The MFJ still prohibited the BOCs from  yO'providing services across LATA boundaries; thus the BOCs could provide information services only between  {O'points located in the same LATA. Pursuant to section 601 of the 1996 Act, see 47 U.S.C.  152 nt, the Act supplants the restrictions and obligations imposed by the MFJ.  including the interLATA telecommunications and interLATA information  X4services markets.6 f R yO 'ԍ ENHINF The terms "local access and transport area" or "LATA," "information service," and "telecommunications  {O 'service" are defined in the Act. See 47 U.S.C.  153(25), (20), (46). In the NonAccounting Safeguards Order, we concluded that all the services the Commission has previously considered to be "enhanced services" are  {OZ'"information services" as defined in the Act. See Implementation of the NonAccounting Safeguards of Sections  {O$'271 and 272 of the Communications Act of 1934, as amended, CC Docket No. 96149, First Report and Order  {O'and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21905, 21955,  102 (1996) (NonAccounting  {O'Safeguards Order) (subsequent citations omitted). We seek comment in this proceeding on whether those services previously considered to be "basic services" fall within the definition of "telecommunications services"  {OJ'as defined in the Act. See infra   AMK41 . We also seek comment on whether the Commission should conform its  {O'terminology to that used in the Act. See infra  CONFORM42. Thus, all providers that previously were considered to be enhanced service providers (ESPs) would now be deemed information service providers (ISPs). For historical consistency, however, we use the terms "enhanced service" and "basic service" in this Further Notice as necessary when discussing certain notices, orders, and decisions that used those terms prior to the 1996 Act.  In some cases, the 1996 Act requires a BOC to offer services in these  X4markets through a separate affiliate.dR {O'ԍ TEXAS1 See infra  SEPAFF20שSEPAFF223. We note that on December 31, 1997, the United States District Court for the Northern District of Texas held that sections 271275 of the Act are a bill of attainder and thus are  {Oy'unconstitutional as to SBC Corporation and U S WEST. SBC Communications, Inc. v. Federal Communications  {OC'Comm'n, No. 7:97CV163X, 1997 WL 800662 (N.D. Tex. Dec. 31, 1997) (SBC v. FCC) (ruling subsequently  {O 'extended to Bell Atlantic), request for stay pending. In general, the analysis in this Further Notice assumes the continued applicability of these provisions to the Bell companies. At appropriate places in this Further Notice,  {O'however, we ask commenters to assess the impact of SBC v. FCC on our analysis.  In addition, the 1996 Act incorporates new terminology  X4and definitions that differ from those the Commission had been using.R {O'ԍSee discussion of "telecommunications service" and "information service" infra at Part IV.A.  X45.` ` In light of the 1996 Act and ensuing changes in telecommunications technologies and markets, we believe it is necessary not only to respond to the issues remanded by the Ninth Circuit, but also to reexamine the Commission's nonstructural safeguards regime governing the provision of information services by the BOCs. Congress recognized, in passing the 1996 Act, that competition will not immediately supplant monopolies and therefore imposed a series of safeguards to prevent the BOCs from using their existing market power to engage in improper cost allocation and discrimination in their" @,D'D'CC " provision of interLATA information services, among other things. These statutory safeguards seek to address many of the same anticompetitive concerns as, but do not explicitly displace,  X4the safeguards established by the Commission in the Computer II, Computer III, and ONA proceedings. We therefore issue this Further Notice to address issues raised by the interplay  X4between the safeguards and terminology established in the 1996 Act and the Computer III  X4regime. These 1996 Actrelated issues were not raised in the Computer III Further Remand  X|4Notice. We therefore ask interested parties to respond to the issues raised in this Further  Xg4Notice and, to the extent that parties want any arguments made in response to the Computer  XR4III Further Remand Notice to be made a part of the record for this Further Notice, we ask them to restate those arguments in their comments.  X 46.` `  BIENREV1 We note, in addition, that Congress required the Commission to conduct a biennial review of regulations that apply to operations or activities of any provider of telecommunications service and to repeal or modify any regulation it determines to be "no  X 4longer necessary in the public interest."J R yOC'ԍ47 U.S.C.  161(a)(2).J Accordingly, the Commission has begun a comprehensive 1998 biennial review of telecommunications and other regulations to promote "meaningful deregulation and streamlining where competition or other considerations warrant  X4such action."XR {O'ԍSee 1998 Biennial Review of FCC Regulations Begun Early, FCC News Release (rel. Nov. 18, 1997). In this Further Notice, therefore, we seek comment on whether certain of the  Xn4Commission's current Computer III and ONA rules are "no longer necessary in the public  XY4interest." To the extent parties identify additional Computer III and ONA rules they believe warrant review under the Act, we invite those comments as well.  X47.` ` Consistent with the 1996 Act, in this Further Notice we seek to strike a reasonable balance between our goal of reducing and eliminating regulatory requirements when appropriate as competition supplants the need for such requirements to protect consumers and competition, and our recognition that, until full competition is realized, certain safeguards may still be necessary. We want to encourage the BOCs to provide new technologies and innovative information services that will benefit the public, as well as ensure that the BOCs will make their networks available for the use of competitive providers of such services. We therefore seek comment in this Further Notice on, among other things, the following tentative conclusions:  X04 ` ` notwithstanding the 1996 Act's adoption of separate affiliate requirements for BOC provision of certain information services (most notably, interLATA information services), the Act's overall procompetitive, deregulatory framework, as well as our public interest analysis, support the continued application of the Commission's nonstructural safeguards regime to BOC  X!4provision of intraLATA information services [ NONSTRUC43שNONSTRUC259];(#` "!,D'D'CC% "Ԍ X4ԙ ` ` given the protections established by the 1996 Act and our ONA rules, we  X4should eliminate the requirement that BOCs file Comparably Efficient Interconnection (CEI) plans and obtain Common Carrier Bureau (Bureau) approval for those plans prior to providing new intraLATA information services  X4[  CEI60 ש CEI 265 ]; (#`  Xv4` ` at a minimum, we should eliminate the CEIplan requirement for BOC intraLATA information services provided through an Actmandated affiliate  XH4under section 272 or 274 [  27266 ש 272272 ]; and(#`  X 4` ` the Commission's network information disclosure rules established pursuant to section 251(c)(5) should supersede certain, but not all, of the Commission's  X 4previous network information disclosure rules established in Computer II and  X 4Computer III [ 251C5122]. (#` We also generally seek comment on, among other things, the following issues:  X}4X©X` ` whether enactment and implementation of the 1996 Act, as well as other developments, should alleviate the Ninth Circuit's concern about the level of  XO4unbundling mandated by ONA [  MOOT29 ש MOOT236 ];(#`   X!4X©X` ` whether the Commission's definition of the term "basic service" and the 1996 Act's definition of "telecommunications service" should be interpreted to extend  X4to the same functions [  BASIC38 שBASIC242];(#`  X4X©X` ` whether the Commission's current ONA requirements have been effective in providing ISPs with access to the basic services that ISPs need to provide their  X4own information service offerings [  ISPS85 ש ISPS290 ]; (#`  Xi4 ` ` whether the Commission, under its general rulemaking authority, should extend to ISPs some or all section 251type unbundling rights, which the Commission  X;4previously concluded was not required by section 251 of the Act [ RULE25194שRULE251296] ; and(#`  X4` ` how the Commission's current ONA reporting requirements should be  X4streamlined and modified [ STREAMLINE99שSTREAMLINE2116]. (#`  X!48.` ` As set forth i STEVENS1 n the 1998 appropriations legislation for the Departments of Commerce, Justice, and State, the Commission is required to undertake a review of its implementation of the provisions of the 1996 Act relating to universal service, and to submit"#,D'D'CC!"  X4its review to Congress no later than April 10, 1998.\R {Oy'ԍSee Pub. L. 105119,  623, 111 Stat. 2440 (1997) (Universal Service Report); see also Common Carrier Bureau Seeks Comment for Report to Congress on Universal Service Under the Telecommunications Act  {O 'of 1996, Public Notice, CC Docket No. 9645 (Report to Congress), DA 982 (rel. Jan. 5, 1998).  The Commission must review, among other things, the Commission's interpretations of the definitions of "information service" and "telecommunications service" in the 1996 Act, and the impact of those interpretations on the current and future provision of universal service to consumers, including consumers in high  X4cost and rural areas.:R {OA 'ԍId.: We recognize that there is a some overlap between the inquiry in this Further Notice about the relationship between the Commission's definition of the term "basic service" and the 1996 Act's definition of "telecommunications service," and the issues to be addressed in the Commission's report to Congress. Furthermore, we recognize that other aspects of this Further Notice also may be affected by the analysis in the Universal Service Report. We note that the inquiry in this Further Notice is primarily focused on the rules and  X 4terminology the Commission should be using in the context of its Computer II and Computer  X 4III requirements. We also note that the order in this proceeding will be issued after the Universal Service Report is submitted to Congress, and will thus take into account any conclusions made in that report.  X 4 g< II. BACKGROUND׃  X4  X}4 XA.X` ` Overview of Computer III/ONA and Related Court Decisions (#`  XP49.` ` We discussed in detail the factual history of Computer III/ONA in the  X;4Computer III Further Remand Notice.;~R {Oj'ԍComputer III Further Remand Notice, 10 FCC Rcd at 83628369,  310. One of the Commission's main objectives in the  X&4Computer III and ONA proceedings has been to permit the BOCs to compete in unregulated enhanced services markets while preventing the BOCs from using their local exchange market power to engage in improper cost allocation and unlawful discrimination against ESPs. The concern has been that BOCs may have an incentive to use their existing market power in local exchange services to obtain an anticompetitive advantage in these other markets by improperly allocating to their regulated core businesses costs that would be properly attributable to their competitive ventures, and by discriminating against rival, unaffiliated ESPs in the provision of  X4basic network services in favor of their own enhanced services operations. In Computer II, the Commission addressed these concerns by requiring the thenintegrated Bell System to  X[4establish fully structurally separate affiliates in order to provide enhanced services.|[R {O$'ԍComputer II Final Decision, 77 FCC 2d 384, 475486,  23360. | "[ ,D'D'CCN"  X4Following the divestiture of AT&T in 1984,R {Oy'ԍUnited States v. AT&T, 552 F. Supp. 131 (D.D.C. 1982), affirmed sub nom. Maryland v. United States, 460 U.S. 1001 (1983). the  X4Commission extended the structural separation requirements of Computer II to the BOCs.\"R {O'ԍPolicy and Rules Concerning the Furnishing of Customer Premises Equipment, Enhanced Services and  {O'Cellular Communications Equipment by the Bell Operating Companies, CC Docket No 83115, Report and  {OP'Order, 95 FCC 2d 1117, 1120,  3 (1984) (BOC Separation Order), affirmed sub nom. Illinois Bell Telephone  {O'Co. v. FCC, 740 F.2d 465 (7th Cir. 1984), affirmed on recon., FCC 84252, 49 Fed. Reg. 26056 (1984) (BOC  {O'Separation Reconsideration Order), affirmed sub nom. North American Telecommunications Ass'n v. FCC,  {O '772F.2d 1282 (7th Cir. 1985). See infra note COMPIISTRUCSEP136 for a discussion of the Computer II structural separation requirements.\  X4 10.` ` In Computer III, after reexamining the telecommunications marketplace and the  X4effects of structural separation during the six years since Computer II, the Commission determined that the benefits of structural separation were outweighed by the costs, and that nonstructural safeguards could protect competing ESPs from improper cost allocation and discrimination by the BOCs while avoiding the inefficiencies associated with structural  XN4separation.wNn R {Om'ԍComputer III Phase I Order, 104 FCC 2d at 964965,  36.w The Commission concluded that the advent of more flexible, competitionoriented regulation would permit the BOCs to provide enhanced services integrated with their  X 4basic network facilities.e R {O'ԍComputer III Phase I Order, 104 FCC 2d at 963.e Towards this end, the Commission adopted a twophase system of nonstructural safeguards that permitted the BOCs to provide enhanced services on an integrated basis. The first phase required the BOCs to obtain Commission approval of a  X 4servicespecific CEI plan in order to offer a new enhanced service.wZ R yO'ԍThe Commission initially imposed these CEI requirements on AT&T as well. In subsequent orders, the Commission first modified, and then relieved, AT&T of these requirements. The Commission has never imposed  {O'CEI requirements on GTE or any other independent LEC. See supra note  GTECEI5 . w In these plans, the BOCs were required to explain how they would offer to ESPs all the underlying basic services the BOCs used to provide their own enhanced service offerings, subject to a series of  X4"equal access" parameters.6R {O'ԍSee Computer III Phase I Order, 104 FCC 2d at 10351042,  147166. As described in note  9CEI169   {O 'infra, the nine CEI parameters are: 1) interface functionality; 2) unbundling of basic services; 3) resale; 4)technical characteristics; 5) installation, maintenance, and repair; 6) end user access; 7) CEI availability as of the date the BOC offers its own enhanced service to the public; 8) minimization of transport costs; and 9)availability to all interested ISPs.6 Thus, the CEI phase of nonstructural safeguards imposed obligations on the BOCs only to the extent they offered specific enhanced services. The Commission indicated that such a CEI requirement could promote the efficiencies of"h h,D'D'CC&" competition in enhanced services markets by permitting the BOCs to participate in such  X4markets provided they open their networks to competitors.m R {Ob'ԍComputer III Phase I Order, 104 FCC 2d at 963,  2.m  X4 11.` ` During the second phase of implementing Computer III, the Commission required the BOCs to develop and implement ONA plans. The ONA phase was intended to broaden a BOC's unbundling obligations beyond those required in the first phase. ONA plans explain how a BOC will unbundle and make available to unaffiliated ESPs network services  Xa4in addition to those the BOC uses to provide its own enhanced services offerings.}!aZR {Ol 'ԍComputer III Phase I Order, 104 FCC 2d at 10631068,  210225.} These ONA plans were required to comply with a defined set of criteria in order for the BOC to  X34obtain structural relief on a goingforward basis." 3R {O 'ԍComputer III Phase I Order, 104 FCC 2d at 1064, 106768,  213, 22021. The unbundling standard for the BOCs required that: (1) the BOCs' enhanced services operation obtain unbundled network services pursuant to tariffed terms, conditions, and rates available to all ESPs; (2) BOCs provide an initial set of basic service functions that could be commonly used in the provision of enhanced services to the extent technologically feasible; (3) ESPs participate in developing the initial set of network services; (4) BOCs select the set of network services based on the expected market demand for such services, their utility as perceived by enhanced service competitors, and the technical and costing feasibility of such unbundling; and (5) BOCs comply with CEI  {OJ'requirements in providing basic network services to affiliated and unaffiliated ESPs. Id., 104 FCC 2d at 1064-66,  214218.  This means that a BOC would not need to obtain approval of CEI plans prior to offering specific enhanced services on an integrated basis. The Commission also required the BOCs to comply with various other nonstructural safeguards in the form of rules related to network disclosure, customer proprietary network  X 4information (CPNI), and quality, installation, and maintenance reporting.# R {OH'ԍComputer III Phase I Order, 104 FCC 2d at 10801086, 10891091,  246255, 260265; Computer III  {O'Phase II Order, 2 FCC Rcd at 30843086,  8898. All of these nonstructural safeguards were designed to promote the efficiency of the telecommunications network, in part by permitting the technical integration of basic and enhanced services and in part by preserving competition in the enhanced services market through the control of  X{4potential anticompetitive behavior by the BOCs.p${R {OH'ԍComputer III Phase I Order, 104 FCC 2d at 1063,  210.p  XM4 12.` ` In 1990, the Court of Appeals for the Ninth Circuit vacated three orders in the  X64Computer III proceeding, finding that the Commission had not adequately justified the decision to rely on (nonstructural) cost accounting safeguards as protection against cross X 4subsidization of enhanced services by the BOCs.% R {Oi%'ԍCalifornia I, 905 F.2d at 12321239 (vacating the Computer III Phase I Order, Phase I Recon. Order,  {O3&'and Phase II Order). In response to this remand, the"  %,D'D'CC"  X4Commission adopted the BOC Safeguards Order, which strengthened the cost accounting safeguards, and reaffirmed the Commission's conclusion that nonstructural safeguards should govern BOC participation in the enhanced services industry, rather than structural separation  X4requirements.&R {O6'ԍSee BOC Safeguards Order, 6 FCC Rcd at 75787588, 761725,  1441, 98109.  X4 13.` ` During the period from 1988 to 1992, the Commission approved the BOCs' ONA plans, which described the basic services that the BOCs would provide to unaffiliated  Xa4and affiliated ESPs and the terms on which these services would be provided.'aZR {Ol 'ԍSee supra note ONACITE2 for a full citation of the ONA proceedings. During the twoyear period from 1992 to 1993, the Bureau approved the lifting of structural separation for individual BOCs upon their showing that their initial ONA plans complied with the  X 4requirements of the BOC Safeguards Order,( R {O'ԍSee Computer III Further Remand Notice, 10 FCC Rcd at 8366 n.22, for a string citation of the referenced orders. and these decisions were later affirmed by the  X 4Commission.)^ FR {O'ԍPetition for Removal of the Structural Separation Requirements and Waiver of Certain State Tariffing  {O'Requirements, 9 FCC Rcd 3053 (1994) (Structural Relief Order), joint motion for remand granted in light of  {O'California I, MCI v. FCC, No. 941597 (D.C. Cir. May 10, 1995).   X 4 14.` ` After California I and the Commission's response in the BOC Safeguards  X 4Order, the Ninth Circuit in California II upheld the Commission's orders approving BOC  X 4ONA plans.\* l R {O'ԍCalifornia v. FCC, 4 F.3d 1505.\ In California II, the court concluded that the Commission had scaled back its  X4vision of ONA since Computer III by approving BOC ONA plans before "fundamental  X4unbundling" had been achieved.F+ R {O4'ԍId. at 151113.F The court also concluded that the issue of whether implementation of ONA plans justified the lifting of structural separation, as the Commission  XW4had determined, was not properly before it.,W R yO'ԍThe Court pointed out that the petition for review before it covered four Commission ONA orders, but  {O` 'not the specific Commission order lifting structural separation. Id. at 1513.   X)415.` ` In California III, the Court of Appeals for the Ninth Circuit partially vacated  X4the Commission's BOC Safeguards Order.W-R {O$'ԍCalifornia III, 39 F.3d at 930. W The California III court found that, in granting full structural relief based on the BOC ONA plans, the Commission had not adequately" |-,D'D'CC" explained its apparent "retreat" from requiring "fundamental unbundling" of BOC networks as  X4a component of ONA and a condition for lifting structural separation.F.R {Ob'ԍId. at 929930.F The court was therefore concerned that ONA unbundling, as implemented, failed to prevent the BOCs from  X4engaging in discrimination against competing ESPs in providing access to basic services.:/ZR {O'ԍId.: The court did find, however, that the Commission had adequately responded to its concerns regarding costmisallocation by strengthening its cost accounting rules and introducing a  Xv4system of "price cap" regulation;90vR yO 'ԍ SPAETH Price cap regulation focuses primarily on the prices that an incumbent LEC may charge and the revenues it may generate from interstate access services. Price cap regulation encourages incumbent LECs to improve their efficiency by harnessing profitmaking incentives to reduce costs, invest efficiently in new plant and facilities, and develop and deploy innovative service offerings, while setting price ceilings at reasonable levels. Thus, price caps act as a transitional regulatory scheme until the advent of actual competition makes  {O'price cap regulation unnecessary. Access Charge Reform, CC Docket No. 96262, Price Cap Performance  {O'Review for Local Exchange Carriers, CC Docket No. 941, Transport Rate Structure and Pricing, CC Docket  {O'No. 91213, End User Common Line Charges, CC Docket No. 9572, First Report and Order, 12 FCC Rcd  {OY'15982, 1599394,  26 (1997) (Access Reform Report and Order).9 the court indicated its belief that these strengthened  X_4safeguards would significantly reduce the BOCs' incentive and ability to misallocate costs.W1_ R {O'ԍCalifornia III, 39 F.3d at 926. W  XH4The court also upheld the scope of federal preemption adopted in the BOC Safeguards  X34Order.23V R {O:'ԍ California III, 39 F.3d at 931933. See infra  PREEMPT131 for a discussion of the scope of federal preemption  {O'adopted in the BOC Safeguards Order.  X 416.` ` In response to California III, the Bureau issued the Interim Waiver Order, which reinstated the requirement that BOCs must file CEI plans, and obtain Commission approval of those plans, to continue to provide specific enhanced services on an integrated  X 4basis.3 R {O''ԍInterim Waiver Order, 10 FCC Rcd 1724. See infra  INTERIM60 for a more complete discussion of the Interim  {O'Waiver Order. Also in response, the Commission issued the Computer III Further Remand Notice,  X 4which sought comment on the California III court's remand question regarding the sufficiency of ONA unbundling as a condition of lifting structural separation, and on the general issue of  X4whether relying on nonstructural safeguards serves the public interest.v4R {OB#'ԍComputer III Further Remand Notice, 10 FCC Rcd at 8362,  2.v "l 4,D'D'CC@"Ԍ X' X B.X` ` Overview of the 1996 Act (#`  X417.` ` Since the California III remand and the Commission's release of the Computer  X4III Further Remand Notice, the 1996 Act became law and the Commission has conducted a number of proceedings to implement its provisions. These developments give us a fresh perspective from which to evaluate the Commission's current regulatory framework for the provision of information services. In this section, we describe some of the major provisions of the 1996 Act, and in later sections we examine how those provisions may affect our current rules.  X 'XX` ` 1.X Opening the Local Exchange Market (#  X 418.` `  OPEN1 Various provisions of the 1996 Act are intended to open local exchange markets to competition. Section 251(c) of the Act requires, among other things, incumbent LECs, including the BOCs and GTE, to provide to requesting telecommunications carriers interconnection and access to unbundled network elements at rates, terms, and conditions that are just, reasonable, and nondiscriminatory, and to offer telecommunications services for  X}4resale.S5}R {O'ԍSee 47 U.S.C.  251(c). S Section 253(a) bars state and local governments from imposing certain legal requirements that prohibit or have the effect of prohibiting the ability of any entity to provide any telecommunications service, and section 253(d) authorizes the Commission to preempt  X84such legal requirements to the extent necessary to correct inconsistency with the Act.L68ZR yOC'ԍ47 U.S.C.  253(a), (d).L As a result, telecommunications carriers may now enter the local exchange market, and compete with the incumbent LEC, through access to unbundled network elements, resale, or through construction of network facilities.  X419.` `  OPEN2 In implementing section 251 of the Act, the Commission prescribed certain minimum points of interconnection necessary to permit competing carriers to choose the most efficient points at which to interconnect with the incumbent LEC's network. The Commission also adopted a minimum list of unbundled network elements (UNEs) that incumbent LECs  Xi4must make available to new entrants, upon request. 7iR yO 'ԍWe note that states have the authority to adopt additional interconnection points or unbundled network  {O 'elements in accordance with section 251 of the Act. Local Competition Order, 11 FCC Rcd at 15567,  136.  In Parts III and IV below, we discuss and seek comment on the potential impact of these unbundling requirements in more detail,  X;4both with respect to the issue in California III regarding the Commission's justification of ONA unbundling as a condition of lifting structural separation, as well as our overall reexamination of the Commission's current nonstructural safeguards framework.  X4 "D7,D'D'CC"Ԍ X'XX` ` 2.X BOC Provision of Information Services (#  X420. SEPAFF ` ` The 1996 Act conditions the BOCs' entry into the market for many inregion interLATA services, among other things, on their compliance with the separate affiliate,  X4accounting, and nondiscrimination requirements set forth in section 272.8"R yO'ԍAn "inregion interLATA service" is interLATA service that originates in any of a BOC's inregion states, which are the states in which the BOC or any of its affiliates was authorized to provide wireline telephone exchange service pursuant to the reorganization plan approved under the AT&T Consent Decree, as in effect on  {Ou'February 7, 1996. 47 U.S.C.  153(21), 271(i)(1); see also 47 C.F.R.  53.3. In the Non X4Accounting Safeguards Order, we noted that these safeguards are designed to prohibit anticompetitive discrimination and improper cost allocation while still permitting the BOCs to enter markets for certain interLATA telecommunications and information services, in the  XL4absence of full competition in the local exchange marketplace.t9LR {O 'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 21911,  9.t We also concluded in the  X54NonAccounting Safeguards Order that the Commission's Computer II, Computer III, and  X 4ONA requirements are consistent with section 272 of the Act, and continue to govern the BOCs' provision of intraLATA information services, since section 272 only addresses BOC  X 4provision of interLATA services.v: DR {O'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 21969,  132.v  X 421.` ` Sections 260, 274, and 275 of the Act set forth specific requirements governing the provision of telemessaging, electronic publishing, and alarm monitoring services, respectively, by the BOCs and, in certain cases, by incumbent LECs. Section 260 delineates the conditions under which incumbent LECs, including the BOCs, may offer telemessaging  Xh4services. We affirmed our conclusion in the NonAccounting Safeguards Order that, since telemessaging service is an "information service," BOCs that offer interLATA telemessaging  X<4services are subject to the separation requirements of section 272.;(<R {O'ԍImplementation of the Telecommunications Act of 1996: Telemessaging, Electronic Publishing, and  {O'Alarm Monitoring Services, CC Docket No. 96152, First Report and Order and Further Notice of Proposed  {OW'Rulemaking, 12 FCC Rcd 5361, 5455,  210 (1997) (Telemessaging and Electronic Publishing Order), citing  {O!'NonAccounting Safeguards Order, 11 FCC Rcd at 2197576,  145.  We further concluded that  X%4the Computer III/ONA requirements are consistent with the requirements of section 260(a)(2), and, therefore, BOCs may offer intraLATA telemessaging services on an integrated basis  X4subject to both Computer III/ONA and the requirements in section 260.< R {Op"'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5455,  221. "X <,D'D'CC:"Ԍ X422.` ` Section 274 permits the BOCs to provide electronic publishing services,  X4whether interLATA or intraLATA,~=ZR yOb'ԍWe concluded that section 274 applies to a BOC's provision of both intraLATA and interLATA electronic publishing services, since, in contrast to section 272, Congress did not distinguish between such  {O'services in section 274. Telemessaging and Electronic Publishing Order, 12 FCC Rcd at 5383,  50. ~ only through a "separated affiliate" or an "electronic publishing joint venture" that meets certain separation, nondiscrimination, and joint marketing  X4requirements in that section.&>R {OV'ԍSee 47 U.S.C  274. Electronic publishing services are excluded from section 272's separation and  {O 'other requirements for BOC provision of interLATA information services. See 47 U.S.C.  272(a)(2)(C). & The Commission found that there was no inconsistency  X4between the nondiscrimination requirements of Computer III/ONA and section 274(d).?FR {O 'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446,  199. We  X4therefore found that the Computer III/ONA requirements continue to govern the BOCs'  Xz4provision of intraLATA electronic publishing.@zR {O'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446,  200. We also noted that the nondiscrimination requirements of section 274(d) apply to the BOCs' provision of both intraLATA and  XL4interLATA electronic publishing.:ALj R {Og'ԍId.:  X 423. SEPAFF2 ` ` Section 275 of the Act prohibits the BOCs from providing alarm monitoring services until February 8, 2001, although BOCs that were providing alarm monitoring services  X 4as of November 30, 1995 are grandfathered. Section 275 of the Act does not impose any  X 4separation requirements on the provision of alarm monitoring services.B R yO'ԍAlarm monitoring services are excluded from section 272's separation and other requirements for BOC  {ON'provision of interLATA information services. See 47 U.S.C.  272(a)(2)(C). We concluded in the  X 4Alarm Monitoring Order that the Computer III/ONA requirements are consistent with the requirements of section 275(b)(1), and therefore continue to govern the BOCs' provision of  X4alarm monitoring service.ECV R {O'ԍImplementation of the Telecommunications Act of 1996: Telemessaging, Electronic Publishing, and  {Og'Alarm Monitoring Services, CC Docket No. 96152, Second Report and Order, 12 FCC Rcd 3824, 384849,  55  {O1'(1997), recons. pending (Alarm Monitoring Order); see also Enforcement of Section 275(a)(2) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, Against Ameritech  {O 'Corporation, CCBPol 96-17, Memorandum Opinion and Order, 12 FCC Rcd 3855 (1997), vacated and remanded sub nom. Alarm Industry Communications Committee v. Federal Communications Commission and United States  {OU"'of America, No. 97-1218, 1997 WL 791658 (D.C. Cir. Dec. 30, 1997).E We discuss the potential impact of the Act's new requirements for BOC provision of certain information services on our costbenefit analysis of structural versus nonstructural safeguards in more detail in Part IV.B below. "QC,D'D'CC"Ԍ X4O &  III. CALIFORNIA III REMAND ă  X' XA.X` ` Background (#`  X424.` ` As noted above, in California III,pDR {O'ЍCalifornia v. FCC, 39 F.3d 919 (9th Cir. 1994).p the Ninth Circuit reviewed the BOC  X4Safeguards Order,cEZR {O'ԍBOC Safeguards Order, 6 FCC Rcd 7571 (1991).c in which the Commission reaffirmed its earlier determination to remove O structural separation requirements imposed on a BOC's provision of enhanced services, based on a BOC's compliance with ONA requirements and other nonstructural safeguards. The  XL4court found that, in the BOC Safeguards Order, and in the orders implementing ONA, the Commission had "changed its requirements for, or definition of, ONA so that ONA no longer  X 4contemplates fundamental unbundling."Fl R {O'ԍCalifornia III, 39 F.3d at 923, 930. While the court did not provide a specific definition of the phrase  {O'"fundamental unbundling," the California III decision relied upon and reaffirmed the court's California II determination that:  {O'X[I]n Computer III, the FCC adopted general standards for ONA which the BOCs needed to satisfy as a precondition for lifting structural separation and which, when met, would eliminate  {Os'the need for CEI plans. . . . The plans actually submitted pursuant to Computer III, however, did not meet those standards. The FCC recognized in the orders that the technology it thought  {O'in Computer III would soon permit open access and serve as a prerequisite to structural separation [sic] was not available; yet it approved the plans. This was a change in policy.   {O_'California II, 4 F.3d at 1512. Because, in the Ninth Circuit's view, the Commission had not adequately explained why this perceived shift did not undermine its decision to rely on the ONA safeguards to grant full structural relief, the court remanded the  X 4proceeding to the Commission.VG R {O'ԍCalifornia III, 39 F.3d at 930.V  X 425.` ` In the Computer III Phase I Order, the Commission declined to adopt any specific network architecture proposals or specific unbundling requirements, but instead set  X4forth general standards for ONA.pHR {O 'ԍComputer III Phase I Order, 104 FCC 2d at 1064,  213.p BOCs were required to file initial ONA plans presenting a set of "unbundled basic service functions that could be commonly used in the provision of  XS4enhanced services to the extent technologically feasible."pISDR {OH$'ԍComputer III Phase I Order, 104 FCC 2d at 1065,  216.p The Commission stated that, by adopting general requirements rather than mandating a particular architecture for implementing ONA, it wished to encourage development of efficient interconnection"%I,D'D'CC"  X4arrangements.pJR {Oy'ԍComputer III Phase I Order, 104 FCC 2d at 1064,  213.p The Commission also noted that inefficiencies might result from  X4"unnecessarily unbundled or splintered services."MKZR {O'ԍId. at 1065,  217.M  X426.` ` The Computer III Phase I Order required the BOCs to meet a defined set of  X4unbundling criteria in order for structural separation to be lifted.LBR {OC 'ԍComputer III Phase I Order at 1064, 106768,  213, 22021. As noted above, the unbundling standard for the BOCs required that: (1) the BOCs' enhanced services operation obtain unbundled network services pursuant to tariffed terms, conditions, and rates available to all ESPs; (2) BOCs provide an initial set of basic service functions that could be commonly used in the provision of enhanced services to the extent technologically feasible; (3) ESPs participate in developing the initial set of network services; (4) BOCs select the set of network services based on the expected market demand for such elements, their utility as perceived by enhanced service competitors, and the technical and costing feasibility of such unbundling; and (5) BOCs comply with CEI requirements in providing basic network services to affiliated and unaffiliated ESPs. In the BOC ONA Order,  X4the Commission generally approved the "common ONA model" proposed by the BOCs.M R {O8'ԍBOC ONA Order, 4 FCC Rcd at 13, 4142,  8, 69. The "common ONA model" is further discussed  {O'infra at Part IV.D.1. The common ONA model was based on the existing architecture of the BOC local exchange networks, and consisted of unbundled services categorized as basic service arrangements  XL4(BSAs),&N|LR R yOO'ԍ NOTEA BSAs are the fundamental tariffed switching and transport services that allow an ESP to communicate with its customers through the BOC network. Under the common ONA model, an ESP and its customers must obtain some form of BSA in order to obtain access to the network functionalities that an ESP needs to offer its specific services. Examples of BSAs include lineside and trunkside circuitswitched service, lineside and  {Oo'trunkside packet switched service, and various grades of local private line service. BOC ONA Order, 4 FCC Rcd at 36,  56. BSAs must be included in a BOC's interstate access tariff, as well as tariffed at the state level.  {O'Id. at 116, 1434,  226, 276.& basic service elements (BSEs),O\LR yO'ԍ NOTEB BSEs are optional unbundled features (such as calling number identification) that an ESP may require or  {O['find useful in configuring an enhanced service. BOC ONA Order, 4 FCC Rcd at 36,  57. BSEs must be  {O%'tariffed at the federal and state levels. Id. at 145,  279. complementary network services (CNSs),P\LR yO'ԍ NOTEC CNSs are optional unbundled features (such as stutter dial tone) that endusers may obtain from carriers  {O 'in order to obtain access to or receive an enhanced service. BOC ONA Order, 4 FCC Rcd at 36,  57. CNSs  {OI!'must be tariffed at the state level, but need not be tariffed at the federal level. Id. at 47,  83. and  X54ancillary network services (ANSs).Q5R {O#'ԍ NOTED ANSs are nonregulated services, such as billing and collection, that may prove useful to ESPs. BOC  {O$'ONA Order, 4 FCC Rcd at 36, 5758,  57, 106. " :Q,D'D'CC> "Ԍ X427.` ` In the BOC ONA proceeding, certain commenters criticized the common ONA  X4model.CR^R {Od'ԍBOC ONA Order, 4 FCC Rcd at 3741,  5968. In general, these arguments were set forth in a report  {O.'by Hatfield Associates, Inc., sponsored by Telenet, CompuServe, Dun & Bradstreet, CBEMA, and IDCMA. See  {O'id. n.112.C The commenters argued that the BOCs had avoided the Computer III Phase I Order unbundling requirements by failing to "disaggregate communications facilities and services on  X4an elementbyelement basis."_SR {O^'ԍBOC ONA Order, 4 FCC Rcd at 37,  59._ They urged the Commission to adopt a more "fundamental" concept of unbundling in the ONA context, by requiring the BOCs to unbundle facilities such  X4as loops, as well as switching functions, interoffice transmission, and signalling.!TR {O 'ԍBOC ONA Order, 4 FCC Rcd at 37,  60. The commenters characterized the unbundling achieved  {O 'under the common ONA model as "a set of merely softwaredefined switching features." Id. at 37, 39,  60, 63.!  Xz4Specifically, they claimed that BSAs could be further unbundled; e.g., trunks could be unbundled from the circuitswitched, trunkside BSA, so that ESPs could connect their own  XN4trunks to BOC switches.XUNR {O'ԍBOC ONA Order, 4 FCC Rcd at 37,  59. Other commenters, such as the American Petroleum Institute (API) and the Association of Data Communications Users (ADCU) also characterized BSAs as highly packaged,  {Om'endtoend services in which switching, signalling, and transmission functions are not disaggregated. Id. at 38-39,  62. MCI asserted that access, switching, and transport functions are all physically segregable, and  {O'should not be bundled in the form of BSAs. Id. at 39,  63.X  X 428.` ` In the BOC ONA Order, the Commission rejected arguments that ONA, as set  X 4forth in the Computer III Phase I Order, required unbundling more "fundamental" than that  X 4set forth in the "common ONA model" proposed by the BOCs. V~ R {O9'ԍBOC ONA Order, 4 FCC Rcd at 13, 41,  8, 69. Instead, the Commission found that the common ONA model, which achieves BSE unbundling through the mechanism of software changes in endoffice switches, "recognize[d] the realities" of thencurrent network architecture, and thus was "more likely to bring new features to ESPs at a faster rate, with less investment, than would a radical reconfiguration to a more modularized  {O['architecture." BOC ONA Order 4 FCC Rcd at 42,  70. The Commission, specifically rejecting any argument that BSAs should be further unbundled, found that requiring such further unbundling could cause technical and  {O'operational difficulties. Id. at 42,  71.  The Commission indicated  X 4that the Computer III Phase I Order anticipated that the BOCs would unbundle network services, not facilities, and determined that the ONA services developed by the BOCs under the common ONA model were consistent with the examples of service unbundling set forth in  X4the Computer III Phase I Order.aWFR {O%#'ԍ NIIF BOC ONA Order, 4 FCC Rcd at 41,  69, citing Computer III Phase I Order, 104 FCC 2d at 101920,  yO#'1040,  113, 158, n.215. While rejecting the arguments of the parties that advocated further, or more "fundamental," unbundling, the Commission recognized that such unbundling, in the long run, might have pro-competitive effects as technology and regulatory policies evolve, and requested that the Information Industry Liaison Committee (IILC) investigate the technical and operational problems associated with such unbundling, in"G&V,D'D'K&"  {O'order to lay the groundwork for future policymaking. BOC ONA Order, 4 FCC Rcd at 43,  72. The IILC was established in 1987 by the Exchange Carriers Standards Association (ECSA) to serve as an interindustry forum for discussion and voluntary resolution of industrywide concerns about the provision of ONA services and  {O'related matters. BOC ONA Order, 4 FCC Rcd at 31,  49. In 1994, the ECSA changed its name to the Alliance for Telecommunications Industry Solutions (ATIS). Effective January 1, 1997, the IILC was sunset as an ATIS-sponsored committee. Under a reorganizational plan approved by the ATIS board, all open issues and work programs underway at that time were transferred from the IILC to the Network Interconnection/  {O 'Interoperability Forum (NIIF). See also infra   IILC182 ש IILC284  for further discussion of NIIF functions.a The Ninth Circuit, however, agreed with the view that the"W,D'D'CCR" Commission's approval of the BOC ONA plans, and subsequent lifting of structural  X4separation, was a retreat from a "requirement" of "fundamental unbundling."gXR {Op 'ԍSee California III, 39 F.3d at 923, 930. g  X4X B.X` ` Subsequent Events May Have Alleviated the Ninth Circuit's California III  X'Concerns (#`  Xw429. MOOT ` `  ISPR2 In this section, we seek comment on whether the enactment and implementation of the 1996 Act, as well as other developments, should alleviate the Ninth Circuit's underlying concern about the level of unbundling mandated by ONA. Section 251 of the Act requires incumbent LECs, including the BOCs and GTE, to provide to requesting  X 4telecommunications carriers interconnection and access to unbundled network elementsY h R yO4'ԍThe statute defines "network element" as: Xa facility or equipment used in the provision of a telecommunications service. Such term also includes features, functions, and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems, and information sufficient for billing and collection or used in the transmission, routing, or other provision of a telecommunications service.  47 U.S.C.  153(29). at rates, terms, and conditions that are just, reasonable, and nondiscriminatory, and to offer  X 4telecommunications services for resale.AZ 8R {O'ԍSee 47 U.S.C.  251(c)(2)(4). The Commission implemented the local competition provisions of  {O'sections 251 and 252 in the Local Competition Order, supra note  8CIR14 . Certain portions of the Commission's rules, most notably the pricing rules and certain unbundling rules, were vacated by the United States Court of  {O2 'Appeals for the Eighth Circuit in the Iowa Utilities Board decision. See Iowa Utilities Board, 120 F.3d at 792-800, 807818.A Section 251 also requires incumbent LECs to provide for physical collocation at the LEC's premises of equipment necessary for  X 4interconnection or access to unbundled network elements, under certain conditions.[ R yO^$'ԍ47 U.S.C.  251(c)(6). The Eighth Circuit upheld the Commission's rules implementing the collocation  {O&%'requirement. See Iowa Utilities Board, 120 F.3d at 817. " H[,D'D'CCh "Ԍ X430.` ` In its regulations implementing these statutory provisions, the Commission identified a minimum list of network elements that incumbent LECs are required to unbundle, including local loops, network interface devices (NIDs), local and tandem switching capabilities, interoffice transmission facilities (often referred to as trunks), signalling networks and callrelated databases, operations support systems (OSS) facilities, and operator services  X4and directory assistance.\$R {O'ЍLocal Competition Order, 11 FCC Rcd at 1568315775,  366541; see also 47 C.F.R.  51.319. The Eighth Circuit upheld the Commission's determination that OSS, operator services and directory services, and vertical switching features (such as caller ID, call forwarding, and call waiting) qualify as network elements that  {O` 'are subject to the unbundling requirements of the Act. Iowa Utilities Board, 120 F.3d at 807810. Additional unbundling requirements may be specified during voluntary negotiations between carriers, by state commissions during arbitration proceedings, or by the Commission as long as such requirements are consistent with the 1996 Act and the  XH4Commission's regulations.z]\HR {O 'ԍLocal Competition Order, 11 FCC Rcd at 1562526, 1563132,  244, 246, 259. The FCC and the state commissions also have authority to require "more granular" unbundling of the specific network elements  {O?'identified by the Local Competition Order. Id., 11 FCC Rcd at 1563132,  259.z We note that the 1996 Act creates particular incentives for the BOCs to unbundle and make available the elements of their local exchange networks. For example, section 271 provides that a BOC may gain entry into the interLATA market in a  X 4particular state by demonstrating, inter alia, that it has entered into access and interconnection agreements with competing telephone exchange service providers that satisfy the "competitive  X 4checklist" set forth in section 271(c)(2)(B).^ R {O`'ԍSee 47 U.S.C.  271(c). The "competitive checklist" itself contains specific unbundling requirements, including nondiscriminatory access to network elements (47 U.S.C.  271(c)(2)(B)(ii)), unbundled local loop transmission (47 U.S.C.  271(c)(2)(B)(iv)), unbundled local transport (47 U.S.C.  271(c)(2)(B)(v)), unbundled local switching (47 U.S.C.  271(c)(2)(B)(vi)), as well as nondiscriminatory access to databases and associated  {O'signaling necessary for call routing and completion (47 U.S.C.  271(c)(2)(B)(x)). But see discussion of SBC v.  {OL'FCC, supra note TEXAS118.  X 431.` `  DIFGOALS In our view, the unbundling requirements imposed by section 251 and our implementing regulations (hereinafter referred to as "section 251 unbundling") are essentially equivalent to the "fundamental unbundling" requirements proposed by certain commenters,  Xd4and rejected by the Commission as premature, in the BOC ONA Order. These commenters asked the Commission to require the BOCs to unbundle network elements such as loops,  X84switching functions, interoffice transmission, and signalling.a_8V R {O?!'ԍBOC ONA Order, 4 FCC Rcd at 37,  60. a As noted above, section 251(c)(3) and the Commission's implementing regulations require those elements, and others, to be unbundled by the BOCs, and by other incumbent LECs that are subject to the requirements of section 251(c). In addition, the type and level of unbundling under section  X4251 is different and more extensive than that required under ONA.\`R {Ou&'ԍSee infra  251VSONA93. \ This may be because"z`,D'D'CC " one of Congress's primary goals in enacting section 251 to bring competition to the largely monopolistic local exchange market is more farreaching than the Commission's goal for ONA, which has been to preserve competition and promote network efficiency in the  X4developing, but highly competitive, information services market.aR {O4'ԍSee, e.g., Computer II Final Decision, 77 FCC 2d at 433,  128; Computer III Phase I Order, 104 FCC 2d at 1010,  95.  X432. ISPR ` ` We recognize that, according to the terms of section 251, only "requesting telecommunications carriers" are directly accorded rights to interconnect and to obtain access  X_4to unbundled network elements.b_"R {O2 'ԍISP251ONASee 47 U.S.C.  251(c)(2), (c)(3). The Commission determined that entities that provide both telecommunications services and information services are classified as telecommunications carriers for the purposes of section 251, and are subject to the general interconnection obligations of section 251(a), to the extent  {O 'that they are acting as telecommunications carriers. Local Competition Order, 11 FCC Rcd at 15990,  995. The Commission further concluded that telecommunications carriers that have obtained interconnection or access to unbundled network elements under section 251 in order to provide telecommunications services, may offer information services through the same arrangement, so long as they are offering telecommunications services  {O'through the same arrangement as well. Id. See infra  251ONA92ש251ONA296 for a more complete discussion of section 251  {Ox'unbundling visavis ONA. See also  STEVENS18 for a discussion of the Universal Service Report.  In that regard, the section 251 unbundling requirements do not provide access and interconnection rights to the identical class of entities as does the ONA regime, since these rights do not extend to entities that provide solely information services ("pure ISPs"). We also recognize that the development of competition in the local exchange  X 4market has not occurred as rapidly as some expected since the enactment of the 1996 Act. c R {O'ԍCommon Carrier Bureau Seeks Recommendations on Commission Actions Critical to the Promotion of  {Ox'Efficient Local Exchange Competition, Public Notice, CCBPol 979, DA 971519 (rel. Jul. 18, 1997).   X 4 33.` `  ISPCOMP We believe, however, that section 251 is intended to bring about competition in the local exchange market that, ultimately, will result in increased variety in service offerings and lower service prices, to the benefit of all endusers, including ISPs. Moreover, because local telecommunications services are important inputs to the information services ISPs provide, ISPs are uniquely positioned to benefit from an increasingly competitive local exchange market.  SLOW There is evidence, for example, that carriers that have direct rights under section 251 will compete with the incumbent LECs to provide pure ISPs with the basic network services that ISPs need to create their own information service offerings, either by  X4obtaining unbundled network elements for the provision of telecommunications services7d\V R {O$"'ԍThe Local Competition Order states that incumbent LECs could not restrict the services that competitors  {O"'could provide using unbundled network elements. Local Competition Order, 11 FCC Rcd at 15634, 15646, 264, 292.7 or"zd,D'D'CCo"  X4through the resale of such services. eR {Oy'ԍ ISDNNEWS See, e.g., Third CLEC To Fan Flames of ISDN Competition, ISDN News, Jan. 28, 1997 (discussing Intermedia Communications' plans to resell parts of the Bell networks to Internet service providers).  As a result, incumbent LECs have an incentive to provide an increased variety of telecommunications services to pure ISPs at lower prices in response to the market presence of such competitors. Pure ISPs also could enter into  X4partnering or teaming arrangements with carriers that have direct rights under section 251.GfZ"R {O'ԍCOMMTODAYSee, e.g., Internet Service Provider Outlines Regional ADSL Rollout, Communications Today, June 17, 1997 (discussing plans of ioNet, an ISP, to partner with competitive local service providers to offer asymmetric digital subscriber line (ADSL) services).G In addition, ISPs can obtain certification as telecommunications service providers in order to  X4receive direct benefits under section 251.WgZDR {O 'ԍ COMMWEEK See, e.g., Networking Business Concentric Plans IPO, Communications Week, July 21, 1997 (discussing plans of Concentric Network Corp. to register as a competitive local exchange carrier in several states, which is described in the article as "a growing trend with ISPs").W We also note that many ISPs that currently provide both telecommunications services and information services will have the benefit of  X_4both section 251 unbundling as well as ONA.\h_f R {Ov'ԍSee supra note ISP251ONA98.\  X14!34.` ` For all these reasons, the fact that section 251's access and interconnection rights apply by their terms only to a "requesting telecommunications carrier" does not, in our view, change our conviction that the 1996 Act, as well as other factors, should alleviate the  X 4court's underlying concern in California III that the level of unbundling required under ONA does not provide sufficient protection against access discrimination. We seek comment on  X 4this analysis. In light of several recent court decisions bearing on these issues, we also ask commenters to address how the opinions of the Eighth Circuit Court of Appeals, including the decision regarding the recombination of unbundled network elements, as well as the decision of the United States District Court for the Northern District of Texas concerning the  Xd4constitutionality of sections 271 through 275 of the Act, affect our analysis.lid R {O 'ԍSee supra notes  8CIR14 , TEXAS118.l  X64"35.` ` In addition to the changes engendered by the 1996 Act, there have been other regulatory and marketbased developments that, we believe, also should alleviate the court's underlying concern about whether the level of unbundling mandated by ONA provides  X4sufficient protection against access discrimination. For example, the Commission's Expanded  X4Interconnectionj( R {O$'ЍExpanded Interconnection with Local Telephone Company Facilities, Report and Order and Notice of  {O$'Proposed Rulemaking, 7 FCC Rcd 7369 (1992) (Special Access Interconnection Order), recon., 8 FCC Rcd 127  {O%'(1992), further recon., 8 FCC Rcd 7341 (1993), vacated in part and remanded sub nom. Bell Atlantic Telephone  {Ou&'Cos. v. FCC, 24 F.3d 1441 (D.C. Cir. 1994) (subsequent citations omitted).  proceeding requires Class A LECs,0kZzR yO'ԍClass A LECs are companies having annual revenues from regulated telecommunications operations that  {OX'equal or exceed the indexed revenue threshold (which is currently approximately $107 million). See 47 C.F.R. 32.11(a)(1).0 including the BOCs and GTE, to"k,D'D'CC:" allow all interested parties to provide competitive interstate special access, transport, and tandem switched transport by interconnecting their transmission facilities with the LECs'  X4networks.l^R {Om'ԍ ANDREA TCSee 47 C.F.R.  64.1401, 64.1402. The Local Competition Order concluded that section 251 of the  {O7'Act does not supersede the Commission's Expanded Interconnection rules, because the two sets of requirements  {O 'are not coextensive. See Local Competition Order, 11 FCC Rcd at 15808,  611. Competing ISPs that utilize transmission facilities thus may provide certain  X4transport functions as part of their enhanced services independent of the Computer III framework. These additional interconnection requirements, together with section 251 unbundling and the Commission's current ONA requirements, further help to protect ISPs  Xx4against access discrimination by the BOCs. We seek comment on this analysis.  XJ4#36. MOOT2 ` ` In addition, the level of competition within the information services market,  X34which the Commission termed "truly competitive" as early as 1980,m3R {O'ԍSee Computer II Final Decision, 77 FCC 2d at 433,  128. See also Computer III Phase I Order, 104 FCC 2d at 1010,  95 (concluding that the enhanced services market is "extremely competitive"). has continued to increase markedly as new competitive ISPs have entered the market. The phenomenal growth of the Internet over the past several years illustrates how robustly competitive one sector of  X 4the information services market has become.n j R yO 'ԍAs of January 1997, there were over 16 million host computers on the Internet, more than ten times as  {O'many as there were in January 1992. See Kevin Werbach, FCC Office of Plans and Policy, Working Paper 29,  {O'Digital Tornado: The Internet and Telecommunications Policy, 2122 (March 1997) (Digital Tornado), citing  {Oe'Network Wizards Internet Domain Survey (Jan. 1997). One recent study estimated the number of U.S.  {O/'subscribers to Internet services at 47 million. See id., citing Internet IT Informer (Feb. 19, 1997). Recent surveys suggest that there are some  X 43,000 Internet access providers in the United States;o "R {O'ԍSee Digital Tornado at 22, citing Boardwatch Directory of Internet Service Providers (Fall 1996). these providers range from small startup operations, to large providers such as IBM and AT&T, to consumer online services such as America Online. We believe that other sectors of the information services market have also  X4continued to grow, as we observed in the Computer III Further Remand Notice.wpR {O'ԍComputer III Further Remand Notice, 10 FCC Rcd at 8382,  32.w The presence of wellestablished participants in the information services market, such as EDS, MCI, AT&T, Viacom, TimesMirror, General Electric, and IBM, may make it more difficult  XO4for BOCs to engage in access discrimination.qOFR {OF$'ԍSee Computer III Further Remand Notice, 10 FCC Rcd at 8382,  33 & n.81. For example, the California I court indicated that "the emergence of powerful competitors such as IBM, which have the resources and expertise to monitor the quality of access to the network, reduces the BOCs' ability to"#q,D'D'CC"  X4discriminate in providing access to their competitors."VrR {Oy'ԍCalifornia I, 905 F.2d at 1233.V We seek comment on whether the sustained growth of competition within the information services market, including the continued participation of large information service competitors, serves to diminish further the threat of access discrimination and, consequently, the court's concern about whether the level  X4of unbundling mandated by ONA is sufficient.ms\ZR {O'ԍSee also infra   ISPS290 ש ISPS391  where we seek comment on whether and how the development of new information services, including Internet services, which rely on emerging packetswitched networks, should affect  {OA 'the Commission's Computer III and ONA rules. m  Xv'   IV. EFFECT OF THE 1996 ACT  \  XH4$37.` ` As detailed in the background section, the Commission issued the Computer III  X34Phase I Order more than ten years ago, shortly after divestiture, and before the BOCs had  X 4obtained authorization from the MFJ court to begin to provide information services.Vt ~R {OM'ԍSee supra note  MFJ16 .V Similarly, the implementation of ONA primarily took place between 1988 and 1992. Our objective is now, as it was then, to promote efficiency and increased service offerings while controlling anticompetitive behavior by the BOCs. We therefore reevaluate below the continuing need for these safeguards, in light of the 1996 Act and the significant technological  X 4and market changes that have taken place since the Computer III nonstructural safeguards  X4were first proposed. This reevaluation is also part of the Commission's 1998 biennial review  X4of regulations as required by the 1996 Act.nuR {O@'ԍSee supra  BIENREV16; 47 U.S.C.  161.n  XQ'X A.X` ` Basic/Enhanced Distinction (#`  X#4%38. BASIC ` ` ENHANCED1In the Computer II proceeding, the Commission adopted a regulatory scheme that distinguished between the common carrier offering of basic transmission services and the  X4offering of enhanced services.lvR {OJ'ԍComputer II Final Decision, 77 FCC 2d at 387,  5.l The Commission defined a "basic transmission service" as the common carrier offering of "pure transmission capability" for the movement of information "over a communications path that is virtually transparent in terms of its  X4interaction with customersupplied information."}w4 R {O#'ԍSee Computer II Final Decision, 77 FCC 2d at 41920,  93, 96.} The Commission further stated that a basic transmission service should be limited to the offering of transmission capacity between" w,D'D'CC"  X4two or more points suitable for a user's transmission needs.pxR {Oy'ԍComputer II Final Decision, 77 FCC 2d at 41920,  95.p The common carrier offering  X4of basic services is regulated under Title II of the Communications Act.oyZR {O'ԍComputer II Final Decision, 77 FCC Rcd at 428,  114.o ENHANCED2In contrast, the Commission defined enhanced services as: Xservices, offered over common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provide the subscriber additional, different, or restructured information; or  XH4involve subscriber interaction with stored information.JzHR yO 'ԍ47 C.F.R.  64.702(a).J (#  X 4Enhanced services are not regulated under Title II of the Communications Act.{H |R {OG'ԍId. See also Computer II Final Decision, 77 FCC 2d at 42830,  11418. In Computer II, the Commission determined that, while we have jurisdiction over enhanced services under the general provisions of Title I, it would not serve the public interest to subject ESPs to traditional common carriage regulation under  {O'Title II because, among other things, the enhanced services market was "truly competitive."  Id., 77 FCC 2d at 430, 43233  119, 124, 128. Examples of services the Commission has treated as enhanced include voice mail, EMail, fax storeandforward, interactive voice response, protocol processing, gateway, and audiotext  {O'information services. See Bell Operating Companies Joint Petition for Waiver of Computer II Rules, Order,  {O'10FCC Rcd 13,758, 13,77013,774, App. A (Com. Car. Bur. 1995) (BOC CEI Plan Approval Order).  X 4&39.` `  TELSERV The 1996 Act does not utilize the Commission's basic/enhanced terminology, but instead refers to "telecommunications services" and "information services." The 1996 Act defines "telecommunications" as: Xthe transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and  Xb4received.H|b R yO'ԍ47 U.S.C.  153(43).H (# "K|,D'D'CC"Ԍ "Telecommunications service" is defined as: Xthe offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of facilities  X4used.}R yO'ԍ47 U.S.C.  153(46). According to the Joint Explanatory Statement, the definitions of "telecommunications" and "telecommunications service" were derived from the Senate Bill with amendments. Joint Explanatory Statement at 116. The Joint Explanatory Statement indicates that the definition of "telecommunications service" was intended to include commercial mobile service (CMS), competitive access service, and alternative local telecommunications services to the extent they are offered to the public or such classes of users as to be effectively available to the public. Joint Explanatory Statement at 114. (#  The 1996 Act defines "information service" as: Xthe offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the  X 4management of a telecommunications service.~ @R yO'ԍ47 U.S.C.  153(20). This definition is based on the definition of "information service" used in the  {O'MFJ. See Joint Explanatory Statement at 11516. (#  X 4'40.` ` We concluded in the NonAccounting Safeguards Order that, although the text of the Commission's definition of "enhanced services" differs from the 1996 Act's definition of "information services," the two terms should be interpreted to extend to the same  X{4functions.z{R {O'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 2195556,  102. z We found no basis to conclude that, by using the term "information services," Congress intended a significant departure from the Commission's usage of "enhanced  XM4services."@M, R {O*'ԍId.@ We further explained that interpreting "information services" to include all "enhanced services" provides a measure of regulatory stability for telecommunications carriers and ISPs by preserving the definitional scheme under which the Commission exempted certain  X4services from traditional common carriage regulation.: R {Ow!'ԍId.:  X4(41.AMK` ` Consistent with our conclusion in the NonAccounting Safeguards Order that "enhanced services" fall within the statutory definition of "information services," we seek comment in this Further Notice on whether the Commission's definition of "basic service" and the 1996 Act's definition of "telecommunications service" should be interpreted to extend to"P ,D'D'CC"  X4the same functions, even though the two definitions differ.R {Oy'ԍSee also the discussion of the Universal Service Report in  STEVENS18. We ask parties to address whether there is any basis to conclude that, by using the term "telecommunications services," Congress intended a significant departure from the Commission's usage of "basic services."  X4As noted in the NonAccounting Safeguards Order, we believe the public interest is served by maintaining the regulatory stability of the definitional scheme under which the Commission exempted certain services from traditional common carriage regulation. To the extent parties believe that "telecommunications services" differ from "basic services" in any regard, they should identify the distinctions that should be drawn between the two categories, describe any overlap between the two categories, and delineate the particular services that would come within one category and not the other.  X 4)42. BASIC2  CONFORM ` ` In light of our conclusion in the NonAccounting Safeguards Order that the statutory term "information services" includes all services the Commission has previously considered to be "enhanced," and our decision in this proceeding to seek comment on whether the statutory term "telecommunications services" includes all services the Commission has previously considered to be "basic services," we seek comment on whether the Commission hereafter should conform its terminology to that used in the 1996 Act. We ask commenters to discuss whether the Commission's rules, which previously distinguished between basic and enhanced services, should now distinguish between telecommunications and information  XO4services. For example, we ask whether the Commission's Computer II decision should now be interpreted to require facilitiesbased common carriers that provide information services to unbundle their telecommunications services and offer such services to other ISPs under the same tariffed terms and conditions under which they provide such services to their own  X4information services operations.ZR {O'ԍSee Computer II Final Decision, 77 FCC 2d at 475. We note that we have issued a Notice of Inquiry seeking comment on the treatment of Internet access and other information services that use the public switched  {O'network. Usage of the Public Switched Network by Information Service and Internet Access Providers,  {O\'CCDocket No. 96263, Notice of Inquiry, 11 FCC Rcd 21354 (1996) (Information Service and Internet Access  {O&'NOI). We intend in that proceeding to review the status of ISPs in a more comprehensive manner.  X'  X'XB.X` ` CostBenefit Analysis of Structural Safeguards(#`  X4  X' XX` ` 1.X Background (#  X4  Xk4*43. NONSTRUC ` ` The Commission's goals in addressing BOC provision of information services have been both to promote innovation in the provision of information services and to prevent access discrimination and improper cost allocation. Because the BOCs control the local exchange network and the provision of basic services, in the absence of regulatory safeguards they may have the incentive and ability to engage in anticompetitive behavior against ISPs that must obtain basic network services from the BOCs in order to provide their information",D'D'CC" service offerings. For example, BOCs may discriminate against competing ISPs by denying them access to services and facilities or by providing ISPs with access to services and facilities that is inferior to that provided to the BOCs' own information services operations. BOCs also may allocate costs improperly by shifting costs they incur in providing information services, which are not regulated under Title II of the Act, to their basic services.  Xv4 +44. PRICECAP ` ` Under rateofreturn regulation, which allows carriers to set rates based on the cost of providing a service, the BOCs may have had an incentive to shift costs incurred in providing information services to their basic service customers. In 1990, the Commission replaced rateofreturn regulation with price cap regulation of the BOCs and certain other  X 4LECs to discourage improper cost allocation, among other things." R yO 'ԍThe Commission required the BOCs and GTE to be subject to price cap regulation and permitted other  {O[ 'LECs to elect price cap regulation. Policy and Rules Concerning Rates for Dominant Carriers, CC Docket No.87313, Second Report and Order, 5 FCC Rcd 6786, 681819,  257265 (1990). Currently, fourteen incumbent LECs are subject to price cap regulation. Recently, the Commission revised its price caps regime to eliminate the sharing mechanism, which required price cap carriers to "share" with their access customers half or all their earnings above certain  X 4levels in the form of lower rates.( R {O8'ԍ See Price Cap Performance Review for Local Exchange Carriers, CC Docket No. 941, and Access  {O'Charge Reform, CC Docket No. 96262, Fourth Report and Order in CC Docket No. 941 and Second Report  {O'and Order in CC Docket No. 96262, 12 FCC Rcd 16642, 16699703,  147155 (1997) (Price Caps Fourth  {O'Report and Order).  This revision substantially reduces the BOCs' incentive to  X 4misallocate costs.m~ R yO'ԍThe price caps regime, however, still retains a rateofreturn aspect in the lowend adjustment mechanism. The lowend adjustment mechanism permits a LEC with a rateofreturn of less than 10.25 percent to increase its price cap index to a level that would enable it to earn 10.25 percent. Furthermore, periodic performance reviews to update the Xfactor could replicate the effects of rateofreturn regulation, if based on  {O1'particular carriers' interstate earnings rather than industrywide productivity growth. We stated in the Price Caps  {O'Fourth Report and Order, however, that in our next performance review we plan to focus on ensuring that we do  {O'not replicate rateofreturn effects. Price Caps Fourth Report and Order, 12 FCC Rcd 16714,  180.m  X4,45.` ` Since the adoption of Computer I in 1971, the Commission has employed various regulatory tools, including structural separation, to prevent access discrimination and cost misallocation, first by AT&T and then, after divestiture, by the BOCs, in providing  XM4information services. In Computer I, we imposed a "maximum separation policy" on the provision of "data processing" services by common carriers other than AT&T and its Bell  X!4System subsidiaries.  !R yO#'ԍUnder "maximum separation," we required that the separate entity maintain its own books of account, have separate officers and separate operating personnel, and utilize computer equipment and facilities separate from those of the carrier in providing unregulated services. Moreover, a carrier subject to the separation requirement was prohibited from engaging in the sale or promotion of the separate entity's services and from"&,D'D'&" making available any computer capacity or computer system component, used in the provision of its  {OX'communications service, to others for the provision of unregulated services. Regulatory and Policy Problems  {O"'Presented by the Interdependence of Computer and Communication Services and Facilities (Computer I), 28 FCC  {O'2d 291, 302304,  3834 (1970) (Tentative Decision); 28 FCC 2d 267 (1971) (Final Decision), aff'd in part  {O'sub. nom. GTE Service Corp. v. FCC, 474 F.2d 724 (2d Cir. 1973), decision on remand, 40 FCC 2d 293 (1973). We did not establish requirements for AT&T and its subsidiaries based on our assumption that they were precluded from offering any type of data processing services by the terms of an antitrust consent decree then in  {O'effect. See United States v. Western Electric Co., 13 Rad. Reg. (P&F) 2143, 1956 Trade Cas. (CCH) 71,134 (D.N.J. 1956).  We continued to impose structural separation on the provision of"!,D'D'CCo"  X4enhanced services by AT&T and its Bell System subsidiaries in Computer II,` R {OS 'ԍCOMPIISTRUCSEPUnder the rules adopted in the Computer II Final Decision, the AT&T separate subsidiary was prohibited from providing basic services or owning any network or local distribution transmission facilities, while its basic services affiliates were prohibited from offering enhanced services or customer premises equipment (CPE). Those rules also strictly limited the interactions of the separate subsidiary with its basic service affiliates. We required the separate subsidiary to obtain all transmission facilities necessary for providing enhanced services under tariff. We required it to elect separate officers; maintain separate books of account; employ separate operating, installation, and maintenance personnel; and perform its own marketing and advertising. We further required it to deal with any affiliated manufacturing entity only on an armslength basis and to utilize separate computer facilities in providing enhanced services. Moreover, the separate subsidiary was required either to develop its own software or to contract with nonaffiliates for such software, except that it was permitted to obtain generic software embedded within equipment that its affiliate sold offtheshelf to any interested purchaser. We also decided to require AT&T's basic service affiliates to disclose network design and other network information that affected the interconnection or interoperation of customer premises equipment (CPE) or  {O}'enhanced services. Computer II Final Decision, 77 FCC 2d at 47586,  23360; see also Computer III Phase I  {OG'Order, 104 FCC 2d 958 at 969971,  1415. These requirements were extended to the BOCs in 1984. See  {M'Policy and Rules Concerning the Furnishing of Customer Premises Equipment, Enhanced Services and Cellular  {O'Communications Equipment by the Bell Operating Companies, CC Docket 83115, Report and Order, 95 FCC 2d  {O'1117, 1120,  3 (1984) (BOC Separation Order). While GTE also was initially subject to the Computer II  {Om'structural separation requirements, the Commission subsequently relieved GTE of those rules. Computer II  {O7'Reconsideration Order, 84 FCC 2d at 7273,  66. ` until we replaced structural separation with a system of nonstructural safeguards in 1986, in  X4ComputerIII.  X4-46. COSTS ` ` The Commission has long recognized both the benefits as well as the costs of  X4structural separation as a regulatory tool.|R {OZ'ԍSee Computer II Final Decision, 77 FCC 2d at 46163,  20107.| The Commission noted in Computer II that a structural separation requirement reduces firms' ability to engage in anticompetitive activity without detection because the extent of joint and common costs between affiliated firms is reduced, transactions must take place across corporate boundaries, and the rates, terms, and conditions on which services will be available to all potential purchasers must be made  X 4publicly available.L R {O{%'ԍId. at 462,  205.L Structural separation thus is useful as an enforcement tool and as a deterrent, because firms are less likely to engage in anticompetitive activity the more easily it" <,D'D'CC " can be detected. As for costs, the Commission recognized that structural separation increases  X4firms' transaction and production costs,_R {Ob'ԍId. at 461,  20203._ but did not agree with arguments presented at the  X4time that structural separation reduces innovation.VZR {O'ԍId. at 46466,  21114.V  X4.47. COSTS2 ` ` The Commission similarly weighed the benefits and costs of structural  X4separation in Computer III when, with the passage of time and the accumulation of  Xx4experience, it replaced the ComputerII structural separation requirements with a system of  Xc4nonstructural safeguards. The Commission concluded in Computer III that the benefits of structural separation are not significantly greater than the benefits of nonstructural safeguards in preventing anticompetitive practices by the BOCs, and that structural separation imposes  X 4greater costs on the public and the BOCs than nonstructural safeguards.z R {O'ԍComputer III Phase I Order, 104 FCC 2d at 101012,  96, 98.z The Commission also found that the benefits of structural separation had decreased since the adoption of the  X 4BOC Separation Order, due to technological and market developments that diminished the  X 4BOCs' ability to misallocate costs and engage in access discrimination.H ~R yO 'ԍSpecifically, the Commission found that the BOCs' ability to engage in access discrimination was hindered by implementation of the CEI and ONA requirements, development of the T1 standards committee, and  {O'growth of bypass and other alternatives to local service. Computer III Phase I Order, 104 FCC 2d at 1011,  97. The Commission also found that the BOCs' ability to misallocate costs was diminished by the availability of bypass and other new technologies, and political and regulatory pressures to minimize rural, residential, and  {O'small business local exchange rates. Id. at 101011,  9596. As noted in  PRICECAP44 supra, because the  {O'Commission's recent Price Caps Fourth Report and Order eliminates the sharing mechanism, the BOCs'  {O'incentive to misallocate costs is further reduced. See Price Caps Fourth Report and Order at  147155.  Further, the Commission found, based on its experience, that the introduction of new information services by the BOCs was slowed or prevented altogether by structural separation, thus denying the  X4public the benefits of innovation.o R {O'ԍComputer III Phase I Order, 104 FCC 2d at 1007,  89.o The Commission also found that structural separation imposed direct costs on the BOCs resulting from duplication of facilities and personnel,  Xj4limitations on joint marketing, and deprivation of economies of scope.rj R {O; 'ԍComputer III Phase I Order, 104 FCC 2d at 100809,  91.r The Ninth Circuit  XS4upheld the Commission's analysis of the costs of structural separation in California I and  X>4California III.$\>R {O#'ԍThe California I court stated that the record "suffice[d] to support" our finding that "separation has discouraged innovation in developing and marketing new enhanced services technologies, has prevented the BOCs from providing customers with efficient packages of basic and enhanced services, and has generally  {O%'created inefficiencies by forcing the BOCs to maintain duplicate organizations and facilities." California I,"%,D'D'&"  {O'905F.2d at 1231. The California III court stated that "[p]etitioners have not raised any new claims with regard to the [Commission's] analysis of the costs of structural separation which would require us to reconsider our  {O"'conclusion in California I." California III, 39 F.3d at 925. ">,D'D'CC"Ԍ X4 X X` ` 2.X Effect of the 1996 Act and Other Factors (#  X4/48. STRUCSEP ` ` In the Computer III Further Remand Notice, the Commission sought comment on how various factors, including reports of anticompetitive behavior by the BOCs and the increase in the number of BOC information service offerings since the elimination of structural separation, affected the Commission's costbenefit analysis of structural separation  Xx4in Computer III.xR {O 'ԍComputer III Further Remand Notice, 10 FCC Rcd at 838487,  3640. The 1996 Act was enacted after the Commission issued the Computer III  Xc4Further Remand Notice, and raises additional issues that may affect this costbenefit analysis. As discussed in more detail below, we tentatively conclude that the Act's overall procompetitive, deregulatory framework, as well as our public interest analysis, support the continued application of the Commission's nonstructural safeguards regime to the provision by  X 4the BOCs of intraLATA information services.H ~R {O8'ԍSTRUCSEPNOTEIn our previous Computer III orders, we have not made a regulatory distinction between interLATA and intraLATA information services, since the BOCs were prevented under the MFJ from providing any interLATA  {O'services. See supra note  MFJ16 . Under the 1996 Act, BOC provision of interLATA information services (except for electronic publishing and alarm monitoring services) is subject to the separation and nondiscrimination  {O\'requirements in section 272. See 47 U.S.C.  272(a)(2)(C). We thus confine our tentative conclusion to the application of the Commission's nonstructural safeguards regime to BOC provision of intraLATA information services. We discuss separately the legal and regulatory issues regarding BOC provision of electronic publishing  {O'and alarm monitoring services infra at   EPAM71 ש EPAM274 .  We also tentatively conclude that allowing the BOCs to offer intraLATA information services subject to nonstructural safeguards serves as an appropriate balance of the need to provide incentives to the BOCs for the continued development of innovative new technologies and information services that will benefit the public with the need to protect competing ISPs against the potential for anticompetitive behavior by the BOCs. We thus propose to allow the BOCs to continue to provide  X4intraLATA information services on an integrated basis, subject to the Commission's Computer  Xj4III and ONA requirements as modified or amended by this proceeding, or on a structurally  XU4separate basis. If a BOC chooses to provide intraLATA information services on a structurally separate basis, we seek comment on whether we should permit the BOC to choose between a  X'4Computer II and an Actmandated affiliate under section 272 or section 274, or whether we should mandate one of these types of affiliates.  X'X X` ` X a.XSection 251 and Local Competition (#  X4049. LOCAL ` ` Competition in the local exchange and exchange access markets is the best safeguard against anticompetitive behavior. BOCs are unable to engage successfully in discrimination and cost misallocation to the extent that competing ISPs have alternate sources" ,D'D'CCm" of access to basic services. Stated differently, when other telecommunications carriers, such as interexchange carriers (IXCs) or cable service providers, compete with the BOCs in providing basic services to ISPs, the BOCs are less able to engage successfully in discrimination and cost misallocation because they risk losing business from their ISP  X4customers for basic services to these competing telecommunications carriers. "R yO'ԍ ACSAMK We note that, even when the BOCs face competition from alternate providers of basic services, they  yO'may still be able to charge unreasonable rates for terminating access. The rules we adopted in our recently  {O'released Access Reform Report and Order address this issue. See Access Reform Report and Order, supra  yOw'noteSPAETH48, 12 FCC Rcd at 1613542,  349366.   Xv4150.` ` As discussed above, the 1996 Act affirmatively promotes local competition. Sections 251 and 253, among other sections, are intended to eliminate entry barriers and  XH4foster competition in the local exchange and exchange access markets.HR {O 'ԍSee discussion supra   OPEN118 ש OPEN219 . Indeed, the market for local exchange and exchange access services has begun to respond to some degree to the procompetitive mandates of the 1996 Act. Some ISPs, for example, currently are obtaining basic services that underlie their information services from competing providers of telecommunications services that have entered into interconnection agreements with the BOCs  X 4pursuant to section 251. DR {O'ԍSee, e.g., Third CLEC To Fan Flames of ISDN Competition, ISDN News, supra note ISDNNEWS101.  X 4251. LOCAL2 ` ` We recognize that the BOCs remain the dominant providers of local exchange  X4and exchange access services in their inregion states,\R yO'ԍThe BOCs currently account for approximately 99.1 percent of the local service revenues in those  {O'markets. Industry Analysis Division, Telecommunications Industry Revenue: TRS Worksheet Data (Com. Car.  {O'Bur. Dec. 1996); see also NonAccounting Safeguards Order, 11 FCC Rcd at 21912,  10. and thus continue to have the ability and incentive to engage in anticompetitive behavior against competing ISPs. On the other hand, the movement toward local exchange and exchange access competition should, over time, decrease and eventually eliminate the need for regulation of the BOCs to ensure that they do not engage in access discrimination or cost misallocation of their basic service  X4offerings. R {O'ԍSee discussion supra   MOOT29 ש MOOT236 .  The Commission has previously concluded that the nonstructural safeguards  X4established in Computer III could combat such anticompetitive behavior as effectively as  X4structural separation requirements, but in a less costly way. R {O.#'ԍComputer III Phase I Order, 104 FCC Rcd at 1011,  97. As noted above, we examine in this Further Notice the continued effectiveness of these nonstructural safeguards. We thus tentatively conclude that the deregulatory, procompetitive provisions of the 1996 Act, and the framework the 1996 Act set up for promoting local competition, are consistent with, and provide additional"!,D'D'CC1" support for, the continued application of the Commission's current nonstructural safeguards regime for BOC provision of intraLATA information services. We seek comment on this tentative conclusion.  X'` ` X b.XStructural Separation and the 1996 Act(#  X4  Xv4352.` `  HARMONY3 In the Computer III Further Remand Notice, we sought comment on the issue of whether some form of structural separation should be reimposed for the provision of information services by the BOCs, and we discussed briefly the costs and benefits that the Commission previously identified in granting structural relief to the BOCs. In this section, we seek comment on the extent to which the Actmandated separation requirements may affect this costbenefit analysis.  X 4453. HARMONY ` ` As noted above, the 1996 Act permits the BOCs to enter markets from which they were previously restricted, allowing the BOCs to develop and market innovative new technologies and information services. In doing so, Congress in certain cases imposed structural separation requirements on the BOCs. Section 272, for example, allows the BOCs to provide certain interLATA information services as well as inregion, interLATA telecommunications services, and to engage in manufacturing activities, only through a structurally separate affiliate. Section 274 imposes structural separation requirements on BOC provision of intraLATA and interLATA electronic publishing services. Congress did not,  X4however, mandate separation requirements for BOC provision of other information services.~R {O'ԍSee, e.g., 47 U.S.C.  260, 275 (governing the provision of telemessaging and alarm monitoring services, respectively). While some parties asked the Commission to impose separation requirements on the provision of intraLATA telemessaging services pursuant to our general regulatory authority, we declined to do  {O'so. See Telemessaging and Electronic Publishing Order, 12 FCC Rcd at 5457,  227. We also note that section 276 requires the Commission to prescribe a set of nonstructural safeguards for BOC provision of payphone  {O'service at least "equal to those adopted in the [Computer III] proceeding." 47 U.S.C.  276(b)(1)(C). See infra  yON' PAYPHONE76שPAYPHONEA77 for a discussion of the nonstructural safeguards applicable to BOC provision of payphone service.   X4554.` ` In the NonAccounting Safeguards Order we recognized that section 272 on its face does not require the BOCs to offer intraLATA information services through a separate affiliate, and deferred to this proceeding the question of whether the Commission should  X4exercise its general rulemaking authority to do so.zR {Om 'ԍSee NonAccounting Safeguards Order, 11 FCC Rcd at 21971,  135.z We find it significant that Congress limited the separate affiliate requirement in section 272 to BOC provision of most interLATA information services, interLATA telecommunications services, and manufacturing, and in  Xi4section 274 to BOC provision of electronic publishing services.ZiR {O$'ԍSee 47 U.S.C.  272.Z We therefore tentatively conclude that Congress' decision to impose structural separation requirements in sections 272"R"2 ,D'D'CC4"  X4and 274, while relevant to our costbenefit analysis, does not in itself warrant a return to structural separation for BOC provision of intraLATA information services not subject to those sections. We seek comment on this tentative conclusion.  X4655.` ` Congress's decision to mandate structural separation only for certain information services does not necessarily foreclose the Commission from mandating or allowing structural separation for other information services. We recognize that, for example, the statutory separate affiliate requirements may reduce the cost of returning to a structural separation regime for BOC provision of intraLATA information services, given that the BOCs already are required to establish at least one structurally separate affiliate in order to provide  X 4the services covered by sections 272 and 274.$ R {O 'ԍWe permitted the BOCs in the Telemessaging and Electronic Publishing Order to provide section 272 services and electronic publishing services through the same affiliate, so long as that affiliate meets the  {O% 'requirements of both sections 272 and 274 for each service. Telemessaging and Electronic Publishing Order, 12FCC Rcd at 5407,  110.  Some BOCs may find it more efficient to provide all of their information services through a statutorilymandated affiliate. In addition, it may be in the public interest for the Commission to prescribe a uniform set of regulations for BOC provision of both intraLATA and interLATA information services, by requiring, for  X 4example, that BOCs provide all information services through an affiliate that complies with the statute. This approach would eliminate the need to distinguish between intraLATA and interLATA information services for purposes of regulation and, consequently, lower compliance and enforcement costs.  XK4756.` ` On the other hand, mandatory structural separation would entail increased  X44transaction and production costs for the BOCs, as discussed above.4R {O'ԍSee supra at   COSTS46 שCOSTS247 and note COMPIISTRUCSEP136. In addition, in the  X4Computer III Further Remand Notice we noted that all of the BOCs currently are offering some information services on an integrated basis pursuant to CEI plans approved by the  X4Commission.zFR {O'ԍComputer III Further Remand Notice, 10 FCC Rcd at 838687,  40.z Thus, our costbenefit analysis should take into account the costs today of returning to structural separation. These would include the personnel, operational, and other changes the BOCs would have to undergo in order to reinstate a regime of structural separation, and the service disruptions, lower service quality, reduced innovation, and higher  X4user rates that may result.\R {O"'ԍAs discussed in the Computer III Further Remand Notice, the BOCs have indicated that they would have to "relocate hundreds of pieces of [information] services equipment, transfer or hire hundreds of dedicated [information] services personnel and replace integrated sales personnel with a dedicated direct sales force."  {Ox$'Computer III Further Remand Notice, 10 FCC Rcd at 8386, 87,  40 (citing Joint Contingency Petition for  {OB%'Interim Waiver of the Computer II Rules at Exhibit B (Nov. 14, 1994) (Interim Waiver Petition)). In 1991, USWest and Pacific Bell estimated that the onetime costs of converting from integrated to structurally separated" &,D'D'&"  {O'provision of voice mail service alone would be as high as $10$15 million. Id. (citing BOC Safeguards Order, 6FCC Rcd at 7621,  104). The BOCs also estimated that converting to structural separation would result in  {O"'price increases for information services between 30 and 80 percent. Id.Ĉ We must also consider the effect on the public of the potential"#,D'D'CC" delay in the development of new technologies and information services by the BOCs that may  X4result. In addition, once the separation requirements under sections 272 and 274 sunset, R yO'ԍThe structural separation requirements for interLATA information services under section 272 and those for electronic publishing under section 274 expire on February 8, 2000, although section 272 authorizes the Commission to extend the fouryear period for interLATA information services by rule or order. 47 U.S.C. 272(f)(2), 274(g)(2).  structural separation for intraLATA information services based on the existence of the  X4statutorilymandated affiliates would have to be reexamined.   X4   857. HARMONY2 ` ` We also recognize the benefits of a flexible, regulatory framework that would allow the BOCs, consistent with the public interest, to structure their operations as they see fit in order to maximize efficiencies and thus provide greater benefits to consumers. We note that, under our current rules, a BOC may provide an intraLATA information service either on an integrated basis pursuant to an approved CEI plan or on a structurally separated basis  X 4pursuant to the Commission's Computer II rules.sZ R yO'ԍWhile BOCs can also provide intraLATA information services through a section 272 or 274 affiliate, we have deferred to this proceeding the issue of whether doing so would relieve the BOCs of the obligation to file a  {O1'CEI plan. See  CEIPLAN66שCEIPLAN272 infra. s SBC has argued that the BOCs continue to need this type of flexibility to provide intraLATA information services either on an integrated basis, subject to appropriate safeguards, or through a separate affiliate, because the most appropriate form of regulation varies servicebyservice, depending on the relative  X 4significance of cost considerations and other factors.'Z R {Oi'ԍSee Letter from Todd F. Silbergeld, SBC Communications Inc., to William F. Caton, Acting Secretary, FCC, April 25, 1997; Letter from Robert J. Gryzmala, Southwestern Bell Telephone, to William F. Caton, Acting Secretary, FCC, June 21, 1996.' Although the Commission may need to devote more resources to administer and enforce multiple regulatory regimes, this approach would allow the BOCs to structure their intraLATA information service offerings more in accordance with their business needs. In addition, such an approach may minimize the risk of service disruptions, since the BOCs would not have to change the manner in which they are  XO4providing their current intraLATA information service offerings.OOR yO!'ԍAs noted above, the BOCs previously have indicated that reimposition of structural separation likely would require them to relocate hundreds of pieces of equipment to provide information services, transfer or hire  yO"'hundreds of dedicated information services personnel, and replace integrated sales personnel with a dedicated  {Op#'direct sales force. Computer III Further Remand Notice, 10 FCC Rcd at 838687,  40 (citing Interim Waiver  {O:$'Petition at Exhibit B).O "8$,D'D'CC"Ԍ X4958.` ` In addition to the factors cited by the Commission in the Computer III Phase I  X4Order,[R {Od'ԍSee supra  COSTS247. [ more recent events may affect the analysis of the relative costs and benefits of  X4structural and nonstructural safeguards. In particular, we earlier discussed how our Price  X4Caps Fourth Report and Order eliminates the sharing mechanism from the price caps regime,  X4thereby reducing the BOCs' incentive to misallocate costs.]ZR {O'ԍSee supra  PRICECAP44. ] We also described previously how the local competition provisions of the 1996 Act provide for alternate sources of access to basic services, thereby diminishing the BOCs' ability to engage in anticompetitive behavior  Xg4against competing ISPs.wgR {O 'ԍSee supra   LOCAL49 שLOCAL251. w  X94:59.NONSTRUC2` `  HARMONY4 In light of this analysis, we continue to believe it is preferable, as a matter of public interest, to continue with the Commission's nonstructural safeguards regime rather than to reimpose structural separation, notwithstanding the affiliate requirements of sections 272 and 274 of the Act. We thus tentatively conclude that the BOCs should continue to be able to choose whether to provide intraLATA information services either on an integrated basis,  X 4subject to the Commission's Computer III and ONA requirements as modified or amended by  X 4this proceeding, or pursuant to a separate affiliate. We seek comment on this tentative conclusion. In addition, if a BOC chooses to provide intraLATA information services through a separate affiliate, we seek comment on whether we should permit the BOC to choose  Xl4between a Computer II and an Actmandated affiliate, or whether we should mandate one of  XW4these types of affiliates. Finally, we seek comment on how the recent SBC v. FCC decision  XB4in the United States District Court for the Northern District of Texas affects this analysis.YB~R {Oq'ԍSee supra note TEXAS118.Y  X'X C.X` ` Comparably Efficient Interconnection (CEI) Plans (#`  X4XX` ` 1.X Proposed Elimination of Current Requirements  (#  X4 ;60.CEI INTERIM ` ` In the Interim Waiver Order adopted in response to the California III decision, the Bureau allowed the BOCs to continue to provide existing enhanced services on an  X4integrated basis, provided that they filed CEI plans for those services.R {OM"'ԍ 9CEI Interim Waiver Order, 10 FCC Rcd 1724 (1995). A CEI plan details how a BOC proposes to comply with the nine CEI "equal access" parameters with respect to the provision of a specific enhanced service. These parameters include: 1) interface functionality; 2) unbundling of basic services; 3) resale; 4) technical characteristics; 5) installation, maintenance, and repair; 6) end user access; 7) CEI availability as of the date the BOC offers its own enhanced service to the public; 8) minimization of transport costs; and 9) availability to all  {O7&'interested ISPs. See Computer III Phase I Order, 104 FCC 2d at 10391042,  154166. In addition, the"% ,D'D'CC" Bureau required the BOCs to file CEI plans for new enhanced services they propose to offer,  X4and to obtain the Bureau's approval for these plans before beginning to provide service.kR {Ob'ԍInterim Waiver Order, 10 FCC Rcd at 1730,  30.c.k  X4We concluded that the partial vacation of the BOC Safeguards Order in California III reinstated the servicespecific CEI plan regime, augmented by implementation of ONA, until  X4the Commission concluded its remand proceedings.v ZR {O'ԍInterim Waiver Order, 10 FCC Rcd at 1728,  20. Since issuing the Interim Waiver Order, the Bureau  {O{'has approved CEI plans and amendments for a number of preexisting BOC enhanced services offerings. See Bell  {OE 'Operating Companies Joint Petition for Waiver of Computer II Rules, Order, 10 FCC Rcd 13,758 (Com. Car. Bur. 1995). The Bureau has also approved CEI plans for a number of new BOC enhanced service offerings.  {O 'See, e.g., Ameritech's Offer of Comparably Efficient Interconnection to Providers of Message Delivery Service,  {O '11 FCC Rcd 5590 (Com. Car. Bur. 1996); NYNEX Telephone Companies Offer of Comparably Efficient  {Ok 'Interconnection to Providers of Enhanced Services, 11 FCC Rcd 2419 (Com. Car. Bur. 1996); Southwestern Bell  {O5 'Telephone Companies Offer of Comparably Efficient Interconnection to Providers of Enhanced Services,  {O '11FCCRcd 7041 (Com. Car. Bur. 1996); Bell Atlantic Telephone Companies Offer of Comparably Efficient  {O'Interconnection to Providers of Internet Access Services, Order, 11 FCC Rcd 6919 (Com. Car. Bur. 1996), recon.  {O'pending; Southwestern Bell Telephone Companies Comparably Efficient Interconnection Plans for Security  {O]'Services, 11 FCC Rcd 10938 (Com. Car. Bur. 1997).  BOCs were also required to comply with the requirements established in their approved ONA plans, because we had previously determined that ONA requirements are independent of the removal of structural separation  Xa4requirements.a R {O'ԍInterim Waiver Order, 10 FCC Rcd at 1728,  22, citing Computer III Remand Proceedings, 5 FCC Rcd  {Ot'7719 (1990) (ONA Remand Order).  X34<61.` ` In this Further Notice, we tentatively conclude that we should eliminate the requirement that BOCs file CEI plans and obtain Bureau approval for those plans prior to providing new information services. We note that CEI plans were always intended to be an interim measure, designed to bridge the gap between the Commission's decision to lift  X 4structural separation in the Computer III Phase I Order and the implementation of ONA.  X 4While CEI plans have been effective as interim safeguards,$ R {Og'ԍ The California III court acknowledged that, as an interim measure until ONA was implemented, CEI plans "ensured that enhanced service competitors were provided with interconnections to the BOCs' own networks that were substantially equivalent to the interconnections that the BOCs provided for their own  {O'enhanced services." California III, 39 F.3d at 927. we tentatively conclude that they are not necessary to protect against access discrimination once the BOCs are providing information services pursuant to approved ONA plans, which they have been for several  X}4years.}R {O$'ԍSee Computer III Further Remand Proceedings, 10 FCC Rcd at 8374,  19. The BOCs currently make available to competing ISPs over 150 ONA network services. ONA provides ISPs an even greater level of protection against access discrimination than CEI. Under ONA, not only must the BOCs offer network services to competing ISPs in"f&:,D'D'CC " compliance with the nine CEI "equal access" parameters, but the BOCs must also unbundle and tariff key network service elements beyond those they use to provide their own enhanced  X4services offerings.R {OK'ԍComputer III Phase I Order, 104 FCC 2d at 101920,  113; see also Computer III Further Remand  {O'Proceedings, 10 FCC Rcd at 8373,  18. BOCs are also subject to ONA amendment requirements that constitute an additional safeguard against access discrimination following the lifting of structural  X4separation.z$R yOy'ԍIf a BOC seeks to offer an enhanced service that uses a new basic underlying service or otherwise uses different arrangements for basic underlying services than those included in its approved ONA plan, the BOC must amend its ONA plan at least 90 days before it proposes to offer the enhanced service, and must obtain Commission approval of the amendment before it can use the new basic service for its own enhanced services.  {O 'Computer III Phase I Order, 104 FCC 2d at 1068,  221222; BOC ONA Further Amendment Order, 6 FCC Rcd at 7654,  13. We further discuss the ONA amendment process, and seek comment on whether this process has been effective, in Part IV.D.1.  Xv4=62.` ` Further, under the 1996 Act, the BOCs are now subject to additional statutory requirements that will help prevent access discrimination, including the section 251 unbundling requirements and the network information disclosure requirements of section  X14251(c)(5).1f R {OH'ԍSee infra   AMK2121  for a discussion of the section 251(c)(5) network information disclosure requirements. These statutory requirements all serve as further protections against access discrimination, both by requiring the BOCs to open the local exchange market to competition, and by ensuring that the BOCs publicly disclose on a timely basis information about changes in their basic network services.  X 4>63.` ` Given the protections afforded by ONA and the 1996 Act, we believe that the substantial administrative costs associated with BOC preparation, and agency review, of CEI plans outweigh their utility as an additional safeguard against access discrimination. Moreover, the time and effort involved in the preparation and review of the CEI plans may delay the introduction of new information services by the BOCs, without commensurate regulatory benefits. Such a result is contrary to one of the Commission's original purposes in adopting a nonstructural safeguards regime, which was to promote and speed introduction of new information services, benefiting the public by giving them access to innovative new  X4technologies. R {O 'ԍSee generally Computer III Phase I Order, 104 FCC 2d at 10071011,  8897.  X4?64.` ` For the reasons outlined above, we tentatively conclude that we should eliminate the requirement that BOCs file CEI plans and obtain Bureau approval for those plans prior to providing new information services. We believe the significant burden imposed by these requirements on the BOCs and the Commission outweighs their possible incremental"' ,D'D'CC"  X4benefit as additional safeguards against access discrimination.#ZR {Oy'ԍSee, e.g., Ameritech's Comparably Efficient Interconnection Plan for Electronic Vaulting Service, CCBPol 9703, Order, DA 972715 (rel. Dec. 31, 1997) (evaluating in detail and approving CEI plan to which no party had filed objections).# In this light, we tentatively conclude that lifting the CEI plan requirement will further our statutory obligation to review  X4and eliminate regulations that are "no longer necessary in the public interest."R {Om'ԍSee 47 U.S.C.  161 (requiring the Commission periodically to review and eliminate unnecessary regulations). We seek comment on this tentative conclusion and our supporting analysis. Parties who disagree with this tentative conclusion should address whether there are more streamlined procedures that could be adopted as an alternative to the current CEI filing requirements.  X_4@65. CEI 2 ` ` We recognize that, as part of our effort to reexamine our nonstructural safeguards regime, we seek comment in this Further Notice on whether we should modify or  X14amend certain ONA requirements.K1DR {O&'ԍSee infra Part IV.D.K Because we base our tentative conclusion that we should eliminate the CEIplan filing requirement in part on the adequacy of ONA, we ask that parties comment on how any of the modifications the Commission proposes in Part IV.D., or proposed by commenters in response to our questions, may affect this tentative conclusion. We also seek comment on whether the requirements that the 1996 Act imposes on the BOCs, such as those relating to section 251 unbundling and network information disclosure, are sufficient in themselves to provide a basis for eliminating CEI plans.  Xy'XX` ` 2.X Treatment of Services Provided Through 272/274 Affiliates(#  Xb4  XK'XX` ` X a.XSection 272 (#  X4A66.272 CEIPLAN ` ` In the NonAccounting Safeguards Order, we noted that section 272 of the Act imposes specific separate affiliate and nondiscrimination requirements on BOC provision of "interLATA information services," but does not address BOC provision of intraLATA  X4information services.yR {Oa'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 2196970,  132.y We concluded that, pending the conclusion of the Computer III  X4Further Remand proceeding, BOCs may continue to provide intraLATA information services on an integrated basis, in compliance with the Commission's nonstructural safeguards  X4established in Computer III and ONA.]h R {O#'ԍId. at 2196971,  132, 134. ]  Xm4B67.` ` The NonAccounting Safeguards Order also raised the related issue of whether a BOC that provides all information services (both intraLATA and interLATA) through a"X( ,D'D'CCh"  X4section 272 separate affiliate satisfies the Commission's Computer II separate subsidiary  X4requirements, and therefore does not have to file a CEI plan for those services.PR {Od'ԍId. at 21972,  137. P We noted  X4that the record in the NonAccounting Safeguards Order was insufficient to make this  X4determination, and that we would examine this issue in the Computer III Further Remand proceeding.  X|4C68.` ` If we do not adopt our tentative conclusion in this proceeding to eliminate the  Xe4CEI plan filing requirement for the BOCs,MeZR {Op 'ԍSee supra Part IV.C.1.M we tentatively conclude that the BOCs should not have to file CEI plans for information services that are offered through section 272 separate affiliates, notwithstanding that section 272's requirements are not identical to the  X 4Commission's Computer II requirements (all other applicable Computer III and ONA safeguards, however, as amended or modified by this proceeding, would continue to apply). We note that, to the extent certain or all BOCs no longer have to provide interLATA services  X 4through a section 272 affiliate as a result of the SBC v. FCC decision by the United States District Court for the Northern District of Texas, then this tentative conclusion would not  X 4apply.Y R {ON'ԍSee supra note TEXAS118.Y  X4D69.` ` We reach our tentative conclusion for several reasons. First, we believe that  Xl4the concerns underlying the Commission's Computer II requirements regarding access discrimination and cost misallocation are sufficiently addressed by the accounting and nonaccounting requirements set forth in section 272 and the Commission's orders implementing  X)4this section.)~R {OX'ԍSee, e.g., NonAccounting Safeguards Order, 11 FCC Rcd at 2197696,  14691 (structural separation requirements), 2199722017,  194236 (nondiscrimination safeguards), 2203647,  27292 (joint marketing  {O'restrictions); Implementation of the Telecommunications Act of 1996: Accounting Safeguards Under the  {O'Telecommunications Act of 1996, CC Docket No. 96150, Report and Order, 11 FCC Rcd 17539 at 1761718,  {O~'16770 (accounting requirements) (1996) (Accounting Safeguards Order).  ć Second, after a BOC receives authority under section 271 to provide interLATA services through a section 272 affiliate, the BOC in many cases may want to provide a seamless information service to customers that would combine both the inter and intraLATA components of such service. For the Commission to require that the BOC also receive approval under a CEI plan for the intraLATA component of such service is, in our view, unnecessary, and likely to delay the provision of integrated services that would be beneficial to consumers. We seek comment on this tentative conclusion and supporting analysis. "q)6 ,D'D'CCq"Ԍ X4E70.` ` We also noted in the NonAccounting Safeguards Order that other issues raised  X4regarding the interplay between the 1996 Act and the Commission's Computer III/ONA  X4regime would be addressed in the Computer III Further Remand proceeding.R {OO'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 2197071,  133, 135. These included whether: (1) the Commission should harmonize its regulatory treatment of intraLATA information services provided by the BOCs with the section 272 requirements imposed by Congress on interLATA information services; (2) the 1996 Act's CPNI, network disclosure, nondiscrimination, and accounting provisions supersede various of the  Xe4Commission's Computer III nonstructural safeguards; and (3) section 251's interconnection  XP4and unbundling requirements render the Commission's Computer III and ONA requirements unnecessary. These issues are either being addressed in this Further Notice or have been  X$ 4covered in other proceedings.)$ ZR {O/ 'ԍSee supra  HARMONY352שHARMONY459 for a discussion of whether the Commission should harmonize its regulatory  {O 'treatment of intraLATA information services with section 272.  See infra   CPNI117 שCPNI2126 for a discussion of the 1996 Act's network disclosure and CPNI requirements. We previously concluded that the 1996 Act's  {O'nondiscrimination requirements are consistent with Computer III and apply in addition to the Commission's  {OU'Computer III requirements. See, e.g., Telemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446,  {O'5455,  199200, 221; Alarm Monitoring Order, 12 FCC Rcd at 384849,  55. We also have already concluded that our existing accounting safeguards, with some modifications, effectively prevent BOCs from crosssubsidizing their unregulated information services with the BOCs' regulated local exchange service under  {Oy'the 1996 Act.  See generally Accounting Safeguards Order, 11 FCC Rcd 17539. See infra  251ONA92ש251ONA296 for a discussion of section 251 unbundling visavis ONA. )  X 'XX` ` X b.XSection 274 (#  X 4F71. EPAM ` ` In the Telemessaging and Electronic Publishing Order, we concluded that the  X 4Commission's Computer II, Computer III, and ONA requirements continue to govern the  X4BOCs' provision of intraLATA electronic publishing services. R {OM'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446,  200. We also found that section 274, which establishes specific structural separation and nondiscrimination requirements for BOC provision of electronic publishing, applies to the provision of both intraLATA and interLATA electronic  {O'publishing. Id. at 5383,  50. BOCs that want to provide interLATA electronic publishing, however, must first  {Oq'obtain section 271 authorization to do so. See 47 U.S.C.  271; NonAccounting Safeguards Order, 11 FCC Rcdat 2190809,  3. We found, however, that the record was insufficient to determine whether BOC provision of electronic publishing through  Xp4a section 274 affiliate satisfied all the relevant requirements of Computer II, such that the  X[4BOC would not have to file a CEI plan for that service.[|R {O#'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446,  200. We noted that we would consider  XD4that issue, as well as other issues raised regarding the revision or elimination of the Computer  X/4III/ONA requirements, in the Computer III Further Remand proceeding. "*,D'D'CCf"Ԍ X4G72. 2722  CEIPLAN2 ` ` If we do not adopt our tentative conclusion in this proceeding to eliminate the CEI plan filing requirement for the BOCs, we tentatively conclude, as we do above for information services that are provided through a section 272 affiliate, that BOCs should not have to file CEI plans for electronic publishing services or other information services  X4provided through their section 274 affiliate (as noted above, however, all other applicable  X4Computer III and ONA safeguards, as amended or modified by this proceeding, would continue to apply). As noted above, to the extent certain or all BOCs no longer are subject to  Xa4section 274 for their provision of electronic publishing as a result of the SBC v. FCC decision by the United States District Court for the Northern District of Texas, then this tentative  X54conclusion would not apply.Y5R {O 'ԍSee supra note TEXAS118.Y  X 4H73.` ` Again, we reach our tentative conclusion for several reasons. First, we believe the section 274 separation and nondiscrimination requirements, and the Commission's rules implementing those requirements, are sufficient to address concerns regarding access discrimination and misallocation of costs in general. Second, given that Congress set forth detailed rules in section 274 for the specific provision of electronic publishing services, we do not believe the Commission should continue to require the BOCs to file, and the Commission to approve, CEI plans before the BOCs may provide such services. We seek comment on this tentative conclusion and supporting analysis.  X8'XX` ` 3.X Treatment of Telemessaging and Alarm Monitoring Services (#  X 4I74. EPAM2 ` ` In the Telemessaging and Electronic Publishing Order and the Alarm  X4Monitoring Order, respectively, we concluded that the Commission's Computer II, Computer  X4III, and ONA requirements continue to govern the BOCs' provision of intraLATA  X4telemessaging servicesr\ZR {O'ԍTelemessaging and Electronic Publishing Order, 12 FCC Rcd at 5455,  221. We also noted that BOC provision of interLATA telemessaging service is subject to the requirements of section 272 in addition to the  {Oh'requirements of section 260. Id. at 5450,  210.   r and alarm monitoring services.E~R {O'ԍSee Alarm Monitoring Order, 12 FCC Rcd at 384849,  55. We also found that section 275 applies to  {O'the provision by the BOCs of both intraLATA and interLATA alarm monitoring services. Id. at 383132,  16. Section 275(a)(1), however, generally prevents the BOCs from engaging in the provision of alarm monitoring  {OV 'service until February 8, 2001. See 47 U.S.C.  275. Because Ameritech is the only BOC that was authorized  yO !'to provide alarm monitoring services as of November 30, 1995, we found that Ameritech is the only BOC that  {O!'qualifies for "grandfathered" treatment under section 275(a)(2). See id.  275(a)(2); Alarm Monitoring Order, 12FCC Rcd at 3839,  33. Ameritech provides intraLATA alarm monitoring pursuant to an approved CEI plan,  {Oz#'see Bell Operating Companies Joint Petition for Waiver of Computer II Rules, 10 FCC Rcd 13758, 1376970, 7275 (Com. Car. Bur. 1995) (approving Ameritech's CEI plan for "SecurityLink" service), and interLATA  {O %'alarm monitoring service pursuant to an MFJ waiver. See United States v. Western Electric Co., No. 820192, slip op. (D.D.C. Sept. 8, 1995). E Because neither section 260 nor"+,D'D'CC" section 275 imposes separation requirements for the provision of intraLATA telemessaging services or alarm monitoring services, respectively, BOCs may provide those services, subject  X4both to other restrictions in those sections, as applicable,R {OK'ԍSee discussion of SBC v. FCC, supra note TEXAS118. as well as the Commission's current nonstructural safeguards regime, as modified by the proposals that we may adopt in this proceeding.  Xv'XX` ` 4.X Related Issues (#  XH4J75.` ` If we adopt our tentative conclusion to eliminate the CEI plan filing requirement for the BOCs, we seek comment on whether we should dismiss all CEI matters pending at that time (including pending CEI plans, pending CEI plan amendments, and requests for CEI waivers), on the condition that the BOCs must comply with any new or  X 4modified rules that may be established as a result of this Further Notice. ZR {O'ԍPending CEIrelated matters include, for example: Bell Atlantic Telephone Companies Offer of  {O'Comparably Efficient Interconnection to Providers of Internet Access Services, Order, 11 FCC Rcd 6919 (Com.  {O'Car. Bur. 1996), recon. pending; Pleading Cycle Established for Comments on the Amendment to Bell Atlantic's Plan to Offer Comparably Efficient Interconnection to Providers of Enhanced Internet Access Services in the  {O'NYNEX Region States, Public Notice, CCBPol 96-09, DA 97-1039 (rel. May 16, 1997); Pleading Cycle Established for Comments on SWBT's Plan to Provide Comparably Efficient Interconnection Internet Support  {O'Services, Public Notice, CCBPol 97-05, DA 97-1132 (rel. May 29, 1997); Bell Operating Companies' Joint  {Oy'Petition for Waiver of Computer II Rules, Order, 10 FCC Rcd 13758 n.6 (Ameritech's Plan to Provide Comparably Efficient Interconnection to Providers of Fast Packet Data Services and Internet Access Services  {O 'Pending).  We also seek comment on whether we should require a BOC with CEI approval to continue to offer service under the CEI requirements. To the extent that parties involved in pending CEI matters raise  X 4issues other than those directly related to the CEI requirements (e.g., whether the service for which the BOC is seeking CEIplan approval is a true information service, as opposed to a telecommunications service that should be offered under tariff), we seek comment on how and in what forum those issues should be addressed.  X64K76. PAYPHONE ` ` We note that section 276 directs the Commission to prescribe a set of nonstructural safeguards for BOC provision of payphone service, which must include, at a  X4minimum, the "nonstructural safeguards equal to those adopted in" the Computer III  X4proceeding.D R yO!'ԍ47 U.S.C.  276.D In implementing section 276, the Commission required the BOCs, among other", ,D'D'CC" lthings, to file CEI plans describing how they would comply with various nonstructural  X4safeguards.?R {Ob'ԍImplementation of the Pay Telephone Reclassification and Compensation Provisions of the  {O,'Telecommunications Act of 1996, CC Docket No. 96128, Report and Order, 11 FCC Rcd 20541 at 2064041,  {O'199 (Payphone Order) (subsequent citations omitted). BOC provision of payphone service is also subject,  {O'among other things, to certain accounting safeguards. See Accounting Safeguards Order, 11 FCC Rcd at 17582, 1765217655,  100, 251258. ? The Bureau approved the BOCs' CEI plans to provide payphone service on  X4April 15, 1997. R {O 'ԍSee Ameritech's Plan to Provide Comparably Efficient Interconnection to Providers of Pay Telephone Services; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the  {O 'Telecommunications Act of 1996, CC Docket No. 96-128, Order, DA 97-790 (rel. April 15, 1997) (CCB); Bell Atlantic Telephone Companies' Comparably Efficient Interconnection Plan for the Provision of the Basic Payphone Services; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the  {O 'Telecommunications Act of 1996, CC Docket No. 96-128, Order, DA 97-791 (rel. April 15, 1997) (CCB); BellSouth Corporation's Offer of Comparably Efficient Interconnection to Payphone Service Providers; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications  {OI'Act of 1996, CC Docket No. 96-128, Order, DA 97-792 (rel. April 15, 1997) (CCB); The NYNEX Telephone Companies' Offer of Comparably Efficient Interconnection to Payphone Service Providers; Implementation of the  {O'Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket  {O'No. 96-128, Order, DA 97-793 (rel. April 15, 1997) (CCB); Pacific Bell and Nevada Bell Comparably Efficient Interconnection Plan for the Provision of Basic Telephone Service; Implementation of the Pay Telephone  {O7'Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96-128,  {O'Order, DA 97-794 (rel. April 15, 1997) (CCB); Southwestern Bell Telephone Company's Comparably Efficient Interconnection Plan for the Provision of Basic Payphone Services; Implementation of the Pay Telephone  {O'Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96-128,  {O]'Order, DA 97-795 (rel. April 15, 1997) (CCB); U S WEST's Comparably Efficient Interconnection Plan for Payphone Services; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the  {O'Telecommunications Act of 1996, CC Docket No. 96-128, Order, DA 97-796 (rel. April 15, 1997) (CCB)  {O'(collectively, BOC CEI Payphone Orders). l  X4L77.PAYPHONEA` ` We seek comment on whether the changes that may be made to the  X4Commission's Computer III and ONA rules as a result of this Further Notice should also  Xx4apply to the nonstructural safeguards regime established in the Payphone Order proceeding for BOC provision of payphone service. For example, to the extent that we adopt our tentative conclusion to eliminate the CEI plan filing requirement, should we also relieve the BOCs from the requirement of filing amendments to their CEI plans for payphone service? How does this comport with the statutory requirement in section 276? We seek comment on these issues. " -,D'D'CC "Ԍ X'1X D.X` ` ONA and Other Nonstructural Safeguards (#`  X'XX` ` 1.X ONA Unbundling Requirements (#  X'XX` ` X a.XIntroduction (#  Xv4M78.` ` The Commission's ONA unbundling requirements serve both to safeguard against access discrimination and to promote competition and market efficiency in the 1information services industry. As described above, the Commission conditioned the  X14permanent elimination of the Computer II structural separation requirements imposed on the BOCs upon the evolutionary implementation of ONA and other nonstructural safeguards. The ONA requirements, however, have a significance independent of whether they provide the basis for lifting structural separation. In 1990, during the course of the remand proceedings in  X 4response to California I, the Commission required the BOCs to implement ONA regardless of whether ONA provided the basis for elimination of structural separation. As discussed below, the Commission stated that "[a] major goal of ONA is to increase opportunities for ESPs to use the BOCs' regulated networks in highly efficient ways, enabling ESPs to expand their markets for their present services and develop new offerings as well, all to the benefit of  Xf4consumers."fR {O'ԍ IILC ONA Remand Order, 5 FCC Rcd at 7720,  7, 11. It was for this reason that the Commission applied the ONA requirements to  XO4GTE in 1994.OZR {OZ'ԍGTEONAORDERSee GTE ONA Order, 9 FCC Rcd at 4924, 493236,  3, 1624.   X!4N79.` ` ONA is the overall design of a carrier's basic network services to permit all users of the basic network, including the information services operations of the carrier and its competitors, to interconnect to specific basic network functions and interfaces on an  X4unbundled and "equal access" basis.rR {Oy'ԍComputer III Phase I Order, 104 FCC 2d at 1019,  113. r The BOCs and GTE through ONA must unbundle key components of their basic services and make them available under tariff, regardless of whether their information services operations utilize the unbundled components. Such unbundling ensures that competitors of the carrier's information services operations can develop information services that utilize the carrier's network on an economical and efficient basis.  XR'XX` ` X b.XONA Unbundling Requirements (#  X$4O80. ONAMODEL ` ` In the Computer III Phase I Order we declined to adopt any specific network architecture proposals for ONA and instead specified certain standards that carriers' ONA  X4plans must meet.~R {O'&'ԍ  Computer III Phase I Order, 104 FCC 2d at 1064,  213.Ď The unbundling standard for the BOCs required that: (1) the BOCs'".,D'D'CC" enhanced services operations obtain unbundled network services pursuant to tariffed terms, conditions, and rates available to all ISPs; (2) BOCs provide an initial set of basic service functions that could be commonly used in the provision of information services to the extent technologically feasible; (3) ISPs participate in developing the initial set of network services; (4) BOCs select the set of network services based on the expected market demand for such elements, their utility as perceived by information service competitors, and the technical and costing feasibility of such unbundling; and (5) BOCs comply with CEI requirements in  X_4providing basic network services to affiliated and unaffiliated ISPs.(_R {O'ԍComputer III Phase I Order, 104 FCC 2d at 106466,  214218. These requirements were originally  {O 'applied only to the BOCs and were later extended to GTE. See GTE ONA Order, 9 FCC Rcd at 4937,  26.( In the BOC ONA  XJ4Order that reviewed the initial BOC ONA plans for compliance with the Commission's requirements, the Commission generally approved the use of the "common ONA model" that  X 4described unbundled services BOCs would provide to competing ISPs.d $R {O 'ԍBOC ONA Order, 4 FCC Rcd at 13,  5.d Under the common ONA model, ISPs obtain access to various unbundled ONA services, termed Basic Service  X 4Elements (BSEs), through access links described as Basic Service Arrangements (BSAs).o R {OW'ԍSee supra notes  NOTEA78  and  NOTEB79 .o BSEs are used by ISPs to configure their information services. Other ONA elements include Complementary Network Services (CNSs), which are optional unbundled basic service features (such as stutter dial tone) that an end user may obtain from carriers in order to obtain access to or receive information services, and Ancillary Network Services (ANSs), which are  X}4nonTitle II services, such as billing and collection, that may be useful to ISPs.}HR {Ov'ԍSee supra notes  NOTEC80  and  NOTED81 . See also BOC ONA Amendment Order, 5 FCC Rcd at 3104,  4.   XO4 AMENDMENTP81. ONAAMEND ` ` The BOCs and GTE are also subject to the ONA amendment requirement. Under this requirement, if a subject carrier itself seeks to offer an information service that uses a new BSE or otherwise uses different configurations of underlying basic services than those included in its approved ONA plan, the carrier must amend its ONA plan at least ninety  X4days before it proposes to offer that information service.R {O~'ԍComputer III Phase I Order, 104 FCC 2d at 1068,  221; BOC ONA Further Amendment Order, 6 FCC Rcd at 7654,  13. The Commission must approve the amendment before the subject carrier can use the new basic service for its own  X4information services.=4 R {O"'ԍId.=  X4Q82. IILC1 ` ` In addition to the ONA services that BOCs and GTE currently provide, there are mechanisms to help ISPs obtain the new ONA services they require to provide information services. As described below, when an ISP identifies a new network functionality"i/ ,D'D'CC" that it wants to use to provide an information service, it can request the service directly from the BOC or GTE through a 120day process specified in our rules, or it can request that the  X4Network Interconnection Interoperability Forum (NIIF)R yOK'ԍWe originally directed ISPs to seek such assistance from the IILC. As of January 1, 1997, the NIIF  {O'assumed the functions of the IILC. See supra note  NIIF87 . sponsored by the Alliance for  X4Telecommunications Industry Solutions (ATIS)"R yO'ԍATIS is a private sector industry forum that promotes the resolution of national and international issues involving telecommunications standards and the development of operational guidelines. consider the technical feasibility of the service.  Xv4R83.` ` Under the Commission's 120day request process, an ISP that requests a new ONA basic service from the BOC or GTE must receive a response within 120 days regarding  XH4whether the BOC or GTE will provide the service.HzR {Os'ԍBOC ONA Order, 4 FCC Rcd at 20508,  390397; BOC ONA Further Amendment Order, 6 FCC Rcd at 765456. The BOC or GTE must give specific reasons if it will not offer the service. The BOC or GTE's evaluation of the ISP request is to  X 4be based on the ONA selection criteria set forth in the original Phase I Order: (1) market area demand; (2) utility to ISPs as perceived by the ISPs themselves; (3) feasibility of  X 4offering the service based on its cost; and (4) technical feasibility of offering the service. R {Os'ЍComputer III Phase I Order, 104 FCC 2d at 1065,  217. If an ISP objects to the BOC or GTE's response, it may seek redress from the Commission by  X 4filing a petition for declaratory ruling. f R {O'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 767778, Appendix B.  X4S84. IILC2 ` ` Additionally, ISPs can ask the NIIF for technical assistance in developing and  X{4requesting new network services.o{ R {O$'ԍBOC ONA Order, 4 FCC Rcd at 3334,  5254.o Upon request, the NIIF will establish a task force composed of representatives from different industry sectors to evaluate the technical feasibility of the service, and through a consensus process, make recommendations on how the service can be implemented. ISPs can then take the information to a specific BOC or GTE and request the service under the 120day process using the NIIF result to show that the request is technically feasible.  X4T85. ISPS ` ` As part of the Commission's 1998 biennial review of regulations, we seek comment on whether ONA has been and continues to be an effective means of providing ISPs with access to the BOC/GTE unbundled network services they need to structure efficiently"0 ,D'D'CC" and innovatively their information service offerings. To the extent that commenters assert that ONA is effective or ineffective, we request that they cite to specific instances to support their claims.   X4U86.ONAAMEND2` ` In addition, we seek comment on whether the "common ONA model" through which ISPs gain access to BSEs, BSAs, CNSs, and ANSs is adequate to provide ISPs with the network functionalities they need. If not, what specific changes to the ONA unbundling framework should be made? Some parties have argued that the common ONA model forces ISPs to purchase unnecessary services or functionalities that are embedded within the BSEs, BSAs, CNSs, and ANSs. We seek comment on this argument. In addressing these issues, commenters should take note of our separate inquiry below regarding the impact of section  X 4251 and its separate unbundling regime.q R {O| 'ԍSee infra  251ONA92ש251ONA296.q  X 4V87.` ` We further seek comment on whether ISPs make use of the ONA framework to acquire unbundled network services or whether they use other means to obtain such services in order to provide their information service offerings. Commenters that have used means other than ONA to acquire or provide unbundled network services should identify those means, state why ONA was not used, and discuss why the alternative approach was more effective and efficient.  X44 W88.` ` ONAAMEND2In addition, we seek comment on whether the ONA 120day request process established to help ISPs obtain new ONA services has been effective. We seek comment, from ISPs in particular, regarding whether they have made use of the 120day request process, and the results from using that process. If ISPs have not used the 120day request process, we request that they explain why they have not done so. We further request that parties comment, with specificity, on what, if anything, we should do to streamline the 120day request process to make it more useful. In the alternative, we seek comment on whether the 120day request process should be eliminated, in light of the fact that the issues that must be resolved between the carrier and the requesting ISP are technical and operational in nature, and may be most appropriately addressed in an industry forum, such as the NIIF. We also seek comment on whether the ONA amendment process has been effective.  X 4X89.` ` We further seek comment regarding the role of the NIIF in helping ISPs obtain basic services from the BOCs and GTE. We seek comment, from ISPs in particular, regarding whether they have requested assistance from the NIIF in determining the technical feasibility of offering particular network functionalities as new basic services, and if so, the results obtained. If ISPs have not done so, we request that they tell us why not. We further" 1Z,D'D'CC." seek comment on whether we should continue to request that the NIIF perform the function of facilitating ISP ONA requests or whether some other forum or industry group would be more  X4appropriate.ZR yOK'ԍWe note that questions relating to the effectiveness of the new NIIF to address ONA issues on behalf of  {O'ISPs have been raised by the Association of Telemessaging Services International, Inc. (ATSI). See Letter from  yO'Herta Tucker, Executive Vice President, ATSI, to Reed Hundt, Chairman, FCC (March 31, 1997).   X4Y90. ISPS2 ` ` Finally, we seek comment on whether and how the development of new information services, including, for example, Internet services, should affect our analysis of the effectiveness of the Commission's current ONA rules for ISPs. As we noted in the  X_4Information Service and Internet Access NOI, many of the Commission's existing rules have been designed for traditional circuitswitched voice networks rather than the emerging packet X34switched data networks.3R {O 'ԍInformation Service and Internet Access NOI, 11 FCC Rcd at 21491,  311. While the Information Service and Internet Access NOI sought comment, in general, on identifying ways in which the Commission could facilitate the development of highbandwidth data networks while preserving efficient incentives for  X 4investment and innovation in the underlying voice network,: |R {O'ԍId.: we seek comment in this  X 4Further Notice specifically on whether and how the Commission should modify the Computer  X 4III and ONA rules in light of these technological developments.  X4Z91.` `  ISPS3 Specifically, we seek comment on how the Commission's Computer III or ONA rules may impact the BOCs' incentive to invest in and deploy data network switching technology. For example, the Commission's existing ONA rules require the BOCs to unbundle and separately tariff all basic services. We have interpreted this rule to require a BOC to unbundle and separately tariff a basic service used in the provision of an information service provided by the BOC affiliate, even where the basic service is solely located in, and owned by, the BOC affiliate, not the BOC. This situation may arise, for example, when a  X4frame relay switch]|R yO'ԍFrame relay is a highspeed packetswitching technology used to transport digital data between, among  yO'other things, geographically dispersed local area networks. The Commission has determined that frame relay service is a basic service. Under our rules, therefore, all common carriers owning transmission facilities used to provide basic frame relay service, or an enhanced service in conjunction with an underlying basic frame relay  {O 'service, must file tariffs for the basic frame relay service. See Independent Data Communications Manufacturers  {O!'Association, Inc. Petition for Declaratory Ruling that AT&T's Interspan Frame Relay Service Is a Basic Service, Memorandum Opinion and Order, 10 FCC Rcd 13717, 13718,  1, 6 (1995). ] is located in, and owned by, the BOC affiliate rather than the BOC. We seek comment on the appropriate treatment of these types of services. "2R ,D'D'CC"Ԍ X'_XX` ` X c.XEffect of the 1996 Act(#  X'XX` ` X X(1)XhhCSection 251 Unbundling (#h  X4[92. 251ONA ` ` Section 251 of the Act requires incumbent LECs, including the BOCs and GTE, to provide to requesting telecommunications carriers interconnection and access to _unbundled network elements at rates, terms, and conditions that are just, reasonable, and  X_4nondiscriminatory, and to offer telecommunications services for resale.S_R {O'ԍSee 47 U.S.C.  251(c). S The Act defines "telecommunications carrier" as "any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in  X 4section226)." ZR {O% 'Ѝ47 U.S.C. 153(44); see also id. 153(46) for the definition of "telecommunications service." As we concluded in the Local Competition Order, the term "telecommunications carrier" does not include ISPs that do not also provide domestic or  X 4international telecommunications. & R {O'ԍLocal Competition Order, 11 FCC Rcd at 15990,  995. Conversely, a company that provides both telecommunications and information services must be classified as a telecommunications carrier to the extent that  {O'it is acting as a telecommunications carrier (i.e., to the extent that it is providing telecommunications services).  {O'Id. at 15888, 15990,  992, 995. See also 47 U.S.C.  153(44).  Thus, as discussed above, companies that provide both information and telecommunications services are able to request interconnection, access to unbundled network elements, and resale under section 251, but companies that only provide  X 4information services ("pure ISPs") are not accorded such rights under section 251. R {O4'ԍLocal Competition Order, 11 FCC Rcd at 1598815990,  99295; see supra   ISPR32 .  X{4\93.` `  251VSONA Despite this limitation, there are several ways that pure ISPs may be able to  Xd4obtain benefits from section 251, as discussed in Part III.B above.ndl R {O'ԍSee discussion supra  ISPCOMP33 . n We recognize, however, that section 251 provides a level of unbundling that pure ISPs do not receive under the  X64Commission's current ONA framework.m6 R {O'ԍSee supra   ISPR229 ש ISPR32 .m Unbundling under section 251 includes the physical facilities of the network, together with the features, functions, and capabilities  X4associated with those facilities.n R {OI"'ԍLocal Competition Order, 11 FCC Rcd at 15631,  258.n Section 251 also requires incumbent LECs to provide for the collocation at the LEC's premises of equipment necessary for interconnection or access to unbundled network elements, under certain conditions. Unbundling under ONA, in contrast, emphasizes the unbundling of basic services, not the substitution of underlying facilities in a"3",D'D'CCK"  X4carrier's network.`R {Oy'ԍBOC ONA Order, 4 FCC Rcd at 41,  69. ` ONA unbundling also does not mandate interconnection on carriers'  X4premises of facilities owned by others.:ZR {O'ԍId.: These differences may be due to the different policy  X4goals that the two regimes were designed to serve.[R {Oo'ԍSee supra  DIFGOALS31.[  X4]94. RULE251 ` ` As seen above, section 251 unbundling raises a number of issues relating to the  X4Commission's ONA framework. In the NonAccounting Safeguards Order, for example, some parties stated that section 251's interconnection and unbundling requirements render the  Xa4Commission's Computer III and ONA requirements unnecessary.a~R {O 'ԍSee, e.g., NonAccounting Safeguards Order, 11 FCC Rcd at 21968, 21970,  129, 133 (noting NYNEX and Bell Atlantic comments). A related issue is whether the Commission, pursuant to our general rulemaking authority, should extend section 251type  X54unbundling to "pure ISPs."  X 4^95.` ` In this Further Notice, we seek comment on whether section 251, as currently applied, obviates the need for ONA. We ask commenters to analyze this issue with respect to both pure ISPs as well as ISPs that are also telecommunications carriers. For example, is ONA unbundling still necessary for ISPs that are also telecommunications carriers for whom section 251 unbundling is available? As for pure ISPs, does the fact that they can obtain the benefits of section 251 by becoming telecommunications carriers, or by partnering with or obtaining basic services from competitive telecommunications providers, render ONA unnecessary? Commenters should address whether ONA should still be available for pure ISPs or other ISPs in areas where there may not be sufficient competition in the local exchange market.  X 4 _96. 251ONA2  RULE2512 ` ` We also seek comment on whether it is in the public interest for the  X4Commission to extend section 251type unbundling to pure ISPs.e\R {O|'ԍWe note that related issues have been raised in the Information Services and Internet Access NOI,  {OF'11FCC Rcd at 2149093,  31118, and may be addressed in that proceeding as well.  See also  STEVENS18 for a discussion of the Universal Service Report. e Put differently, we seek comment regarding whether, pursuant to our general rulemaking authority contained in section  X4201205 of the Act, and as exercised in the Computer III, ONA, and Expanded  X4InterconnectionĠproceedings, we can and should extend some or all rights accorded by section 251 to requesting telecommunications carriers to pure ISPs. Commenters who contend that it is in the public interest to extend section 251type unbundling should address why it is necessary to do so, given the alternative options pure ISPs have to obtain the benefits of section 251 unbundling, as well as the unbundling rights ISPs currently enjoy under the"V4 ,D'D'CCh" Commission's existing ONA regime. Commenters should also address whether the extension of section 251type unbundling to pure ISPs would be inconsistent with section 251, which by its terms applies only to telecommunications carriers. Similarly, commenters should address whether section 251type unbundling is appropriate for pure ISPs, given the different purposes section 251 and ONA serve, and the different approaches to unbundling they encompass. Furthermore, commenters that argue that we should extend the section 251 unbundling framework to pure ISPs should explain what such a framework would include. For example, commenters should address, among other things, whether extending section 251type unbundling rights to pure ISPs necessarily requires the extension to pure ISPs of any obligations under section 251 or other Title II provisions. Commenters should also address  X 4whether extending section 251type unbundling to pure ISPs obviates the need for ONA. R yO 'ԍWe do not address the issue of pricing of elements or services in this Further Notice. Those issues may  {O[ 'be addressed in the proceeding on information services and Internet usage. See Information Service and Internet  {O% 'Access NOI, 11 FCC Rcd 21354. In addition, in the Access Reform Report and Order, we concluded that "ISPs  {O 'should not be subject to interstate access charges." Access Reform Report and Order, supra note ACSAMK148. We are  yO'not reexamining that decision here. ģ  X '` `  X (2)XhhCInterLATA Information Services (#h  X 4`97.` ` As discussed above, we tentatively conclude in this Further Notice that the Commission's nonstructural safeguard regime should continue to apply to BOC provision of  X4intraLATA information services.I~R {O'ԍSee supra  STRUCSEP48, NONSTRUC259; see also NonAccounting Safeguards Order 11 FCC Rcd at 2196970,  132;  {O'Telemessaging and Electronic Publishing Order, 12 FCC Rcd at 5446, 5455,  200, 221.I Prior to the enactment of the 1996 Act, however, we did not distinguish between intraLATA and interLATA information services, and we did not  Xb4explicitly apply our Computer III and ONA rules to BOC provision of interLATA information  XM4services since the BOCs were prevented under the MFJ from providing interLATA services.gMR {O'ԍSee supra note STRUCSEPNOTE147. g Section 272 of the 1996 Act, however, does distinguish between intraLATA and interLATA information services by imposing separation and nondiscrimination requirements on BOC  X4provision of interLATA information services.Nl R {O%'ԍSee 47 U.S.C.  272.N We seek comment, therefore, on whether the Commission's ONA requirements, as modified or amended by this proceeding, should be interpreted as encompassing BOC provision of interLATA information services. We also seek comment on whether it would be inconsistent with section 272 for the Commission to apply ONA requirements to BOC provision of interLATA information services.  X~4a98.` ` In addressing this issue, we ask that commenters take note of the following policy considerations. As noted above, the Commission required the BOCs to implement"g5 ,D'D'CCq"  X4ONA regardless of whether ONA provided the basis for elimination of structural separation.oR {Oy'ԍSee ONA Remand Order, 5 FCC Rcd at 7720,  7, 11.o We stated that ONA serves the public interest, not only by serving as a critical nonstructural safeguard against anticompetitive behavior by the BOCs, but also by promoting the efficient  X4use of the network by ISPs, to the benefit of consumers.ZR {O'ԍId. It is for this reason that we applied the ONA requirements to GTE as well. See GTE ONA Order, 9FCC Rcd at 4924, 493233,  3, 1618. On the other hand, section 272 already sets forth the statutory requirements for BOC provision of interLATA information services and, therefore, including such services within the Commission's ONA framework may be unnecessary to protect the public interest. Moreover, as discussed above, section 251 unbundling may obviate ONA in some or all respects, including its application to BOC provision of interLATA information services. We also seek comment, to the extent commenters believe that ONA should encompass BOC provision of interLATA information services, on how the Commission's current ONA requirements, including ONA reporting  X 4requirements, R {Oh'ԍSee discussion infra  ONAREPTREQ99שAFFIDAVIT116. may need to be changed or supplemented, if at all, to take account of such services.  X 'XX` ` 2.X ONA and Nondiscrimination Reporting Requirements (#  X'XX` ` X a.Introduction (#  Xb4b99.STREAMLINEONAREPTREQ` ` In this section of the Notice, we examine the various reporting requirements  XK4imposed on the BOCs and GTE by the Computer III and ONA regimes. These reporting requirements were originally intended as a safeguard, in that the BOCs and GTE must disclose information that would allow detection of patterns of access discrimination. In addition, certain reporting requirements were intended to promote competition, by providing interested parties (including ISPs and equipment manufacturers) with information about service introduction and deployment by the subject carriers, which may assist such parties in structuring their own operations.  X4c100.` ` We recognize, however, that a number of years have passed since certain of these reporting requirements were imposed, and that some of the information we require to be disclosed may no longer be useful, relevant, or related to either the safeguard or competition promotion functions identified above. Thus, as part of the Commission's 1998 biennial review of regulations, we intend in this proceeding to reexamine each of the reporting  X"4obligations imposed on the BOCs and GTE by the Computer III and ONA regimes, to determine whether any of these requirements should be eliminated or modified, consistent" 6F,D'D'CC"  X4with the 1996 Act.nR {Oy'ԍSee supra  BIENREV16; 47 U.S.C.  161.n We also seek comment on what, if any, different or additional reporting requirements should be imposed to safeguard against anticompetitive behavior by the BOCs and GTE and to promote competition in the provision of information services. In particular, we also seek comment on methods to facilitate access to and use of this information by unaffiliated entities, including small entities.  Xv4d101.` ` We set forth below the ONA reporting reporting requirements and make specific inquiries regarding each requirement. The following are general inquiries that apply to all ONA reporting requirements. We ask parties to respond to both the specific and general inquiries in their comments on each ONA reporting requirement.  X 4Xa.` ` Is the information reported necessary to or helpful in monitoring the compliance of the subject carriers with their unbundling and nondiscrimination obligations? If not, why not? Would other types of information be more useful for compliance monitoring or enforcement purposes?(#  X4Xb.` ` Is this requirement duplicative? In other words, does the Commission currently require other reports that disclose the same or substantially similar information, or serve the same purposes? If so, how should the Commission streamline these requirements?(#  X4Xc.` ` Do industry groups, such as ATIS and/or NIIF, collect and compile information that is duplicative of that required by the Commission? If so, is that information readily available to interested parties?(#  X4Xd.` ` Should we continue to require the subject carriers to file this report with the Commission both on paper and on disk, or should we adopt streamlined filing proposals similar to those set forth in the Further Notice of Proposed Rulemaking in  X|4the NonAccounting Safeguards proceeding?|ZR {O'ԍSee, e.g., NonAccounting Safeguards Order, 11 FCC Rcd at 2207986,  362382. Specifically, should we require either:(# XX` ` i) a certification process whereby the subject carrier must maintain the required information in a standardized format, and file with the Commission an annual affidavit stating: (1) the information is so maintained; (2)the information will be updated in compliance with our rules; (3)the information will be maintained accurately; and (4)how the public will be able to access the information; or (#` "7,D'D'CCk"ԌXX` ` ii) electronic posting whereby the subject carriers must make the required information available on the Internet (for example, by posting it on their website) or through another similar electronic mechanism?(#`  X4Xe.` ` If we continue to maintain a paper filing requirement, is the information presented in a clear, comprehensible format? If not, what modifications to the format would improve clarity and accessibility?(#  XH4Xf.` ` If we continue to maintain a paper filing requirement, should we alter the frequency with which we require this report to be filed? If so, what alteration should be made, and what is the basis for that alteration? In the alternative, if we impose a certification process or electronic posting requirement, how often should subject carriers be required to update the information they must maintain? How must the subject carriers maintain historical data, and for what length of time?(#  X 4e102.` ` In conjunction with our inquiries elsewhere in this item, we seek to examine, and, if possible, clarify the relationship between the ONA reporting requirements and the other obligations imposed on the subject carriers by ONA. For example we seek comment  Xb4above on whether we should modify or eliminate the ONA unbundling requirements.MbR {O'ԍSee supra Part IV.D.1.M To the extent that parties argue that we should do so, we request that they comment upon the effect that such action would have on the reporting obligations of the subject carriers. It seems that if the subject carriers were no longer required to unbundle and tariff ONA services, much of the information we currently require to be disclosed in the annual and semiannual ONA reports would cease to exist. Does this mean that all such reporting requirements should be eliminated? Are there other meaningful reporting requirements that should be imposed instead?  X'XX` ` X b.Annual ONA Reports (#  Xe4f103.` ` The BOCs and GTE are required to file annual ONA reports that include information on: 1) annual projected deployment schedules for ONA service, by type of service (BSA, BSE, CNS), in terms of percentage of access lines served systemwide and by market  X 4area;t^ ZR {O+!'ԍThis information must cover the upcoming three years, and must refer to generic ONA Services User  {O!'Guide names for the services covered, as well as the carrier's own trade name for the service. BOC ONA  {O"'Further Amendment Order, 6 FCC Rcd at 7653,  9, n.22. t 2) disposition of new ONA service requests from ISPs; 3) disposition of ONA service requests that have previously been designated for further evaluation; 4) disposition of ONA service requests that were previously deemed technically infeasible; 5) information on Signaling System 7 (SS7), Integrated Services Digital Network (ISDN), and Intelligent Network (IN) projected development in terms of percentage of access lines served system" 8,D'D'CCH"ԫ X4wide and on a market area basis;a\R yOy'ԍSS7 data must be reported by TR 317 and TR 394; ISDN data by Basic Rate Interface (BRI) and  {OA'Primary Rate Interface (PRI); and IN data by release number or other designation type. BOC ONA Further  {O 'Amendment Order, 6 FCC Rcd at 7660,  29, n.44. a 6) new ONA services available through SS7, ISDN, and IN; 7) progress in the IILC (now NIIF) on continuing activities implementing servicespecific and longterm uniformity issues; 8) progress in providing billing information including Billing Name and Address (BNA), lineside Calling Number Identification (CNI), or possible CNI  X4alternatives, and call detail services to ISPs;R yOA 'ԍCall detail services allow a telephone system to collect, record, and organize information about telephone calls so the system can be used for a variety of business purposes. 9) progress in developing and implementing Operation Support Systems (OSS) services and ESP access to those services; 10) progress on the uniform provision of OSS services; and 11) a list of BSEs used in the provision of  X_4BOC/GTE's own enhanced services._DR {OT'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 767778 App. B; GTE ONA Order, 9 FCC Rcd at  yO'494041,  3335. In addition, the BOCs are required to report annually on the unbundling of new technologies arising from their own initiative, in response to  X14requests by ISPs, or resulting from requirements imposed by the Commission.1R {O'ԍBOC ONA Second Further Amendment Order, 8 FCC Rcd at 2608,  10.  X 4g104.` ` We believe that certain aspects of the annual reporting requirements may be outdated and should be streamlined. We seek comment, for example, on whether we should continue to require the subject carriers to continue to report on projected deployment of ONA services (item 1 above), particularly as this information does not appear to change appreciably from year to year. Should we instead require the subject carriers to make a onetime filing of a 5year deployment schedule at the time a new ONA service is introduced? In addition, should we require the subject carriers to continue to report on the disposition of ONA service requests from ISPs (items 2,3, and 4 above), despite evidence that the frequency of such requests has declined appreciably since the initial implementation of ONA?  X4h105.` ` We seek comment on whether we should continue to require the subject carriers to report on deployment of SS7 (items 5 and 6), which has become available in most  X4service areas. We further seek comment on whether we should continue to require the subject carriers to report on the availability and deployment of ISDN, IN, and AIN services (items 5 and 6). In addition, we seek comment regarding whether the requirement that the BOCs report on "new ONA services available through SS7, ISDN, and IN, and plans to provide"90 ,D'D'CC"  X4these services" (item 6)wR {Oy'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 767778, App. B. w overlaps so significantly with the requirement that they report on  X4the unbundling of new technologiesZR {O'ԍBOC ONA Second Further Amendment Order, 8 FCC Rcd at 2608,  10. that one of these requirements should be eliminated.  X4i106.` ` In addition, we seek comment on whether, and to what extent, we should alter the requirement that carriers report on progress in industry forums regarding uniformity issues. Currently, subject carriers are required to report on progress in the IILC on continuing activities implementing servicespecific and longterm uniformity issues (item 7). As a preliminary matter, we note that the functions that used to be performed by the IILC were  XH4transferred, as of January 1, 1997, to the NIIF.WHR {O 'ԍSee supra note  NIIF87 .W We tentatively conclude that, at a minimum, the ONA reporting requirement should be updated to reflect this change. We believe that the BOCs have agreed to provide to the NIIF periodic updates regarding issues that have been resolved. We seek comment on the nature of such updates to the NIIF, including specifically what information the BOCs provide. We further seek comment regarding whether the information from such updates is comprehensive enough, and sufficiently accessible to interested parties, to allow us to eliminate the ONA reporting requirement covering progress of matters in the NIIF. In the alternative, we seek comment regarding whether there are other sources of information produced by or for ATIS or the NIIF that may reasonably substitute for this ONA reporting requirement.  XK4j107.OSS` ` We seek comment on whether we should continue to require the subject carriers to report on progress in providing billing information and call detail services to ISPs (item 8). We seek comment on whether we should continue to require the subject carriers to report on progress in developing, implementing, and providing access to Operation Support Systems (OSS) services (items 9 and 10). We believe it is important for such information to continue to be publicly available. We recognize, however, that such information may be more appropriately provided pursuant to other statutory provisions. For example, we issued a Public Notice on June 10, 1997, asking for comment on LCI's petition for expedited rulemaking to establish reporting requirements, performance, and technical standards for OSS  X|4in the context of section 251 of the Act.`^|~R {O 'ԍ OSS2 Comments Requested on Petition for Expedited Rulemaking to Establish Reporting Requirements and  {Ou!'Performance and Technical Standards for Operation Support Systems, Public Notice, RM 9101, DA 971211  {O?"'(rel. June 10, 1997) (LCI OSS Petition).` We seek comment on the appropriate forum for  Xe4collecting information about OSS and whether continued reporting under Computer III is necessary in light of other pending Commission proceedings. We further seek comment on"P:,D'D'CCN" what, if any, changes we should make to the ONA OSS reporting requirements, to better  X4reflect the obligations with respect to OSS imposed on carriers in the Local Competition  X4Order.R {OM'ԍSee Local Competition Order, 11 FCC Rcd at 1576315768,  516528.  XX` ` (#`  X'XX` ` X c.SemiAnnual ONA Reports (#  Xz4k108.` ` In addition to the annual ONA reports discussed above, the BOCs and GTE are  Xc4required to file semiannual ONA reports.cZR {On 'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 7678, App. B; GTE ONA Order, 9 FCC Rcd at  yO8 '494041,  3335. These semiannual reports include: (1) a  XL4consolidated nationwide matrix of ONA services and state and federal ONA tariffs;SXLR yO 'ԍCurrently, the BOCs prepare a consolidated, nationwide matrix of their ONA services and the federal and state tariffing status of each. GTE prepares and files a matrix, following the format established by Bellcore, showing its own ONA services and their federal and state tariffing status.S (2)computer disks and printouts of data regarding state and federal tariffs; (3) a printed copy  X 4and a diskette copy of the ONA Services User Guide;z R {O'ԍThe ONA Services User Guides filed by the BOCs contain three parts: 1) a generic Services Description section (this information is identical for all the BOCs; it is supplied both on paper and on diskette); 2) a BOCspecific Tariff Reference section listing the BOC's ONA tariffs on a statebystate basis (supplied on paper and on diskette); and 3) Wire Center Deployment information (supplied on diskette only). GTE also files all three types of information, including: 1) a Services Description section that follows the format established by the BOCs (on paper and on diskette); 2) GTE's own Tariff Reference section (on paper and on diskette); and 3)Wire Center Deployment information (supplied on diskette only). (4) updated information on 118 categories of network capabilities requested by ISPs and how such requests were addressed,  X 4with details and matrices;m R {O'ԍSee BOC ONA Order, 4 FCC Rcd at 2527,  3136.m and 5) updated information on BOC responses to the requests and matrices.  X 4l109.` ` Considerable portions of the semiannual reports filed by the BOCs appear to be redundant, as each of the BOCs files identical information. This generic information  X4includes the ONA service matrix and the Services Description section of the ONA Services  Xj4User Guide, as well as information on the 118 network capabilities originally requested by ISPs, and how the BOCs collectively have responded to these requests. Bell Communications Research, Inc. (Bellcore) originated and, until its spinoff earlier this year, prepared these portions of the BOCs' semiannual reports; currently, an organization called the National Telecommunications Alliance (NTA) has assumed this responsibility. We see no benefit to continuing to require each of the BOCs separately to file the generic portions of the semiannual report, particularly as there appear to be few changes in this information from year to";,D'D'CC:" year. Thus, we tentatively conclude that the BOCs should be permitted to make one consolidated filing (or posting) for all generic information they currently submit in their semiannual reports. We seek comment on this tentative conclusion. We further seek comment on whether we should allow GTE to join in this consolidated filing or posting (to the extent that this arrangement would be mutually agreeable to the parties) with respect to the information it files that overlaps with that filed by the BOCs.  X_4m110.` ` In addition, we seek comment on the frequency with which we require the subject carriers to file the information contained in the semiannual ONA reports. In particular, we inquire as to whether we should reduce the filing frequency, and restructure the semiannual reports to become part of the annual ONA reports filed by the subject carriers. A reduction in filing frequency would decrease the burden imposed on the subject carriers, without, we believe, significantly affecting the quality or utility of the information supplied, much of which is either generic or rather static in nature, or is available through other means (for example, in the state and federal tariffs filed by the subject carriers).  X4n111.` ` We also seek comment regarding whether certain information required in the semiannual reports overlaps with the information required in the annual reports. For example, in the annual ONA reports, the Commission requires the BOCs and GTE to supply  XK4information on the disposition of several categories of ONA requests,wKR {O'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 767778, App. B. w whereas in the semiannual reports, the Commission requires the BOCs and GTE to supply information regarding  X4how they have responded to ISP requests for the existing 118 categories of network  X4capabilities. &ZR {O'ԍBOC ONA Further Amendment Order, 6 FCC Rcd at 7678, App. B; GTE ONA Order, 9 FCC Rcd at 494041,  3335. The semiannual reports include a filing of a matrix of BOC and GTE ONA services and  {O'state and federal tariffs; data regarding state and federal tariffs; the ONA Services Users Guide; and other updated  {Om'information in the areas of ISP requests, BOC and GTE responses, and services offered. Id.  These separate requirements seem to elicit similar, if not identical, information. To the extent there is overlap, we seek comment regarding whether these requirements may be simplified and consolidated, or, in the alternative, whether either or both sets should be eliminated entirely. We also seek comment on other, similar, overlaps among the ONA reporting requirements, and what we should do to eliminate the burdens or inefficiencies associated with them.  X|'  Xe'XX` ` X d.XNondiscrimination Reports (#  X74o112.` ` The BOCs and GTE are also required to establish procedures to ensure that they do not discriminate in their provision of ONA services, including the installation,  X 4maintenance, and quality of such services, to unaffiliated ISPs and their customers.v HR {O&'ԍComputer III Phase II Order, 2 FCC Rcd at 3084,  8889.v For" <,D'D'CC" example, they must establish and publish standard intervals for routine installation orders based on type and quantity of services ordered, and follow these intervals in assigning due dates for installation, which are applicable to orders placed by competing service providers as  X4well as orders placed by their own information services operations.u\R {O4'ԍBOC ONA Order, 4 FCC Rcd at 242,  467. The installation process is tracked by mechanized systems, which must assign available facilities and equipment in a nondiscriminatory manner, without regard to the  {O'identity of the customer ordering the service. Id. at 243, 244,  468, 472.u In addition, they must standardize their maintenance procedures where possible, by assigning repair dates based on nondiscriminatory criteria (e.g., available work force and severity of problem), and handling  Xv4trouble reports on a firstcome, firstserved basis.cvR {O 'ԍ BOC ONA Order, 4 FCC Rcd at 243,  470. c  XH4p113.` ` In order to demonstrate compliance with the nondiscrimination requirements outlined above, the BOCs and GTE must file quarterly nondiscrimination reports comparing the timeliness of their installation and maintenance of ONA services for their own information  X 4services operations versus the information services operations of their competitors. ~R {O2'ԍComputer III Phase II Order, 2 FCC Rcd at 3086,  98. BOCs were also required to file other, similar quarterly installation and maintenance reports regarding their provision of services to affiliated and unaffiliated  {O'CPE vendors. See Furnishing of Customer Premises Equipment by the Bell Operating Telephone Companies and  {O'the Independent Telephone Companies, CC Docket No. 8679, Report and Order, 2 FCC Rcd 143, 155,  84  {OX'(1987) (BOC CPE Relief Order), modified on recon. 3 FCC Rcd 22 (1987) (BOC CPE Relief Reconsideration  {O"'Order). These filing requirements were recently eliminated by the Bureau. See Revision of Filing Requirements,  {O'CC Docket No. 9623, 11 FCC Rcd 16326 (Com. Car. Bur. 1996) (Revision of Filing Requirements Order). If a BOC or GTE demonstrates in its ONA plan that it lacks the ability to discriminate with respect to installation and maintenance services, and files an annual affidavit to that effect, it may modify its quarterly report to compare installation and maintenance services provided to its own information services operations with services provided to a sampling of all  X4customers. R {O 'ԍComputer III Phase II Reconsideration Order, 3 FCC Rcd at 1161,  84. In addition, the Computer III  {O'Phase II Order originally imposed a requirement to report on the quality and reliability of ONA services BOCs  {O'provided to their own enhanced services operations versus their enhanced services competitors. Computer III  {Oi'Phase II Order, 2 FCC Rcd at 3086,  98. This requirement was replaced with an annual affidavit, signed by the officer principally responsible for installation procedures, attesting that the BOC had followed installation procedures described in the BOC's ONA plan, and that the BOC had not, in fact, discriminated in the quality of  {O 'services it had provided. Computer III Phase II Reconsideration, 3 FCC Rcd at 1160,  76. In their quarterly reports, the BOCs and GTE must include information on total orders, due dates missed, and average intervals for a set of service categories specified by the  Xb4Commission,Z bR {O'$'ԍBOC ONA Reconsideration Order, 5 FCC Rcd at 309394,  7780, and App. B. The specified service categories include: (1) Circuit Switched Line: Business Line, PBX, Centrex, WATS, Mobile, Feature Group A, Foreign Exchange; (2) Circuit Switched Trunk: Feature Group B, Feature Group D, DID (Line and Trunk);"%,D'D'%" (3)Packet Switched Services (X.25 and X.75): Packet DDD Access Line, Packet Synchronous Access Line, Packet Asynchronous Access Line; (4) Dedicated Metallic: Protection Alarm, Protection Relaying, Control Circuit; (5) Dedicated Telegraph Grade: Telegraph Grade 75 Baud, Telegraph 150 Baud; (6) Dedicated Voice Grade: Voice Non-Switched Line, Voice Switched Line, Voice Switched Trunk, Voice and Tone-Radio Land Line, Data Low Speed, Basic Data and Voice, Voice and Data-PSN Access Tie Trunk, Voice and Data-SSN Access, Voice and Data-SSN-Intermachine Trunk, Data Extension-Voice Grade Data, Protection Relay Voice Grade, Telephoto and Facsimile; (7) Dedicated Program Audio: Program Audio 200-3500 HZ, Program Audio 100-5000 HZ, Program Audio 50-8000 HZ, Program Audio 50-15000 HZ; (8) Dedicated Video: TV Channel-One Way 15kHz Audio, TV Channel-One Way 5 kHz Audio; (9) Dedicated Digital: Digital Voice Circuit, Digital Data-2.4kb/s, Digital Data4.8kb/s, Digital Data-9.6kb/s, Digital Data-56kb/s; (10) Dedicated High Capacity Digital: 1.544 MBPS BSA; (11) Dedicated High Capacity Digital (Greater than 1.544 MBPS): Dedicated Digital-3.152 MBPS, Dedicated Digital-6.312 MBPS, Dedicated Digital-44.736 MBPS, Dedicated Digital-45 MBPS or Higher; (12) Dedicated Alert Transport; (13) Dedicated Derived Channel; (14) Dedicated Network Access Link (DNAL). following a format specified by the Commission. Bb R {OH 'ԍId. at 309394,  7780, and App. B. For installation reports, the Commission requires the BOCs and GTE to report separately for their own affiliated enhanced services operations and for all other customers, whether ISPs or other carriers, and to include information, for each specified service category, on: (1) total orders; (2) due dates missed; (3) percentage of due dates missed; and (4) average interval. The BOCs and GTE are also required to report maintenance activities separately for their own affiliated enhanced services operations and for all other customers. For maintenance activities with due dates, carriers are required to report: (1) total orders; (2) due dates missed; (3) percentage of due dates missed; and (4) average interval. For maintenance activities without due dates, carriers are required to report only total orders and average interval. "b= ,D'D'CC"Ԍ X4ԙq114.` ` We tentatively conclude that the nondiscrimination obligations for provisioning  X4and performing maintenance activities established by Computer III continue to apply to the BOCs and GTE. We seek comment, however, on whether the current quarterly installation and maintenance reports are an appropriate and effective mechanism for monitoring the BOCs' and GTE's compliance with these nondiscrimination obligations. Are there ways in which the quarterly reports, and the accompanying annual affidavits, may be simplified, clarified, or otherwise made more useful to the Commission and the interested public? Along these lines, we note that the Commission issued a Further Notice of Proposed Rulemaking in  XJ4conjunction with its NonAccounting Safeguards Order, seeking comment on what types of reporting requirements are necessary to implement the specific nondiscrimination requirement  X 4set forth in section 272(e)(1) of the Communications Act. " R {OY'ԍNonAccounting Safeguards Order, 11 FCC Rcd at 2207986,  362382. Section 272(e)(1) states that BOCs "shall fulfill any requests from an unaffiliated entity for telephone exchange service and exchange access within a period no longer than the period in which it provides such telephone exchange service and exchange access to itself or to its affiliates." 47 U.S.C.  272(e)(1). While we acknowledge that the nondiscrimination obligations imposed on the BOCs by section 272(e)(1) differ from those  X 4imposed by Computer III, we seek comment regarding whether the information required to demonstrate compliance with both sets of nondiscrimination requirements is sufficiently similar that we should harmonize the ONA nondiscrimination reporting requirements with the reporting requirements adopted in response to the Further Notice of Proposed Rulemaking in  X4the NonAccounting Safeguards proceeding. We also seek comment on whether we should">t ,D'D'CC " harmonize the ONA nondiscrimination reporting requirements with reporting requirements  X4being considered in other proceedings, such as in the LCI OSS Petition.} R {Ob'ԍSee supra   OSS107  and note  OSS2251 . hhC}  X4r115.` ` We note that, like the BOCs, AT&T was originally required to file quarterly nondiscrimination reports on the provision of installation and maintenance services to  X4unaffiliated providers of enhanced services. r ZR {O'ԍSee Computer III Phase I Order, 104 FCC 2d at 105556,  192; Computer III Phase II Order, 2 FCC  {Od 'Rcd at 3086,  98101; Computer III Phase II Reconsideration Order, 3 FCC Rcd at 1159,  66. Like the BOCs, AT&T was also required to file similar quarterly installation and maintenance reports regarding provision  {O 'of services to affiliated and unaffiliated CPE vendors. See Furnishing of Customer Premises Equipment and  {O 'Enhanced Services by American Telephone and Telegraph Co., 102 FCC 2d 655, 69091,  5960 (1985)  {O '(AT&T Structural Relief Order), modified in part on reconsideration, 104 FCC 2d 739 (1986) (AT&T Structural  {OT 'Relief Reconsideration Order).r The Commission modified and reduced these  Xx4reporting requirements in 1991 and in 1993.O xR {O'ԍSee Competition in the Interstate Interexchange Marketplace, CC Docket No. 90132, Report and Order,  {O'6 FCC Rcd 5880, 5909 (1991) (First Interexchange Competition Order) (eliminating nondiscrimination reporting for AT&T network services subject to maximum streamlined regulation, including Basket 3 services and services  {O+'not subject to price cap regulation); Competition in the Interstate Interexchange Marketplace, CC Docket  {O'No.90-132, Second Report and Order, 8 FCC Rcd 3668 (1993) (800 Streamlining Order) (designating AT&T's 800 services as subject to streamlined treatment). Following these modifications, only AT&T's analog private line services remained subject to nondiscrimination reporting requirements.O In 1996, the Bureau eliminated the requirement that AT&T file quarterly installation and maintenance nondiscrimination reports,  XJ4as well as the requirement that AT&T file an annual affidavitJR {O'ԍSee Computer III Phase II Reconsideration Order, 3 FCC Rcd at 1161,  80, n.148. that its quarterly reports are  X34true and that it has not discriminated in providing installation and maintenance services.3R {Od'ԍSee Revision of Filing Requirements Order, 11 FCC Rcd at 16332,  12.ą  X 4s116.STREAMLINE2AFFIDAVIT` ` The Bureau declined to eliminate the requirement that AT&T file a second  X 4affidavit, R {O'ԍSee Computer III Phase II Reconsideration Order, 3 FCC Rcd at 1159,  66. which affirms that AT&T has followed the installation procedures in its ONA  X 4plan R yO,!'ԍAs noted above, AT&T was required to file a modified ONA plan that the Commission approved in  {O!'1988, but has not been subject to other ONA reporting requirements. See supra note  GTECEI5 .  and has not discriminated in the quality of network services provided to competing  X 4enhanced service providers, deferring that determination to the instant proceeding. R {Oo$'ԍSee Revision of Filing Requirements Order, 11 FCC Rcd at 16332,  12. We tentatively conclude that we should no longer require AT&T to file this second affidavit  X4 because the level of competition in the interexchange services market is an effective check on"?,D'D'CC" AT&T's ability to discriminate in the quality of network services provided to competing  X4ISPs.R yOb'ԍThe Commission has determined that the interexchange telecommunications market is substantially  {O*'competitive. See, e.g., Policy and Rules Concerning the Interstate, Interexchange Marketplace, CC Docket  {O'No.9661, Second Report & Order, 11 FCC Rcd 20730, 2074143,  2122 (1996) (Tariff Forbearance Order),  {O'stay granted, MCI Telecommunications Corp. v. FCC, No. 961459 (D.C. Cir. filed Feb. 13, 1997); Motion of  {O'AT&T to be Reclassified as a NonDominant Carrier, Order, 11 FCC Rcd 3271, 32783279, 3288,  9, 26  {OR'(1995) (AT&T Nondominance Order), recon. pending; Competition in the Interstate Interexchange Marketplace,  {O'CC Docket No. 90132, Report & Order, 6 FCC Rcd 5880, 5887,  36 (1991) (First Interexchange Competition  {O'Order). We also note, from a regulatory parity perspective, that no other interexchange carriers are required to file service quality affidavits similar to that required of AT&T. This tentative conclusion is consistent with our previous finding that the competitive nature of the interexchange market provides an important assurance that access to those services will be open to ISPs, and that much of the information of greatest use to ISPs is  X4controlled by LECs such as the BOCs, and not by interexchange carriers.cR {O 'ԍAT&T ONA Order, 4 FCC Rcd at 2450,  4. c We also find that this tentative conclusion comports with our statutory obligation to eliminate regulations that are no longer necessary due to "meaningful economic competition" between providers of such  X_4service.J_8 R yOH'ԍ47 U.S.C.  161(a)(2).J We seek comment on this tentative conclusion.  X1'XX` ` 3.X Other Nonstructural Safeguards (#  X 'XX` ` X a.XNetwork Information Disclosure Rules (#  X 4t117. CPNI ` ` The Commission's network information disclosure rules seek to prevent anticompetitive behavior by ensuring that ISPs and other interested parties can obtain timely access to information affecting the interconnection of information services to the BOCs', AT&T's, and other carriers' networks. Prior to the 1996 Act, the rules set forth in the  Xy4Commission's Computer II and Computer III proceedings governed the disclosure of network  Xd4information.d R {O'ԍThe Computer II network information disclosure rules are set forth in section 64.702(d)(2) of the  {O'Commission's rules and in the Computer II proceeding. See 47 C.F.R.  64.702(d)(2); see, e.g., Computer II  {Oq'Final Decision, 77 FCC 2d 384 at 480,  246; Computer II Reconsideration Order, 84 FCC 2d 50 at 8283,  {O; '95; and Computer and Business Equipment Manufacturers Association Petition for Declaratory Ruling  {O!'Regarding Section 64.702(d)(2) of the Commission's Rules and the Policies of the Second Computer Inquiry,  {O!'ENF825, Report and Order, FCC 83182, 93 FCC 2d 1226 (1983) (Computer II Disclosure Order). The  {O"'Computer III network information disclosure rules are set forth in the Computer III Phase I Order and Computer  {Oc#'III Phase II Order and other Computer III orders. See, e.g., Computer III Phase I Order, 104 FCC 2d 958 at  {O-$'10801086,  246255; Computer III Phase II Order, 2 FCC Rcd 3072 at 30863093,  102140. GTE was  {O$'made subject to the Computer III network information disclosure rules in the ONA proceeding. See Application  {O%'of Open Network Architecture and Nondiscrimination Safeguards to GTE Corporation, CC Docket No. 92256,"%,D'D'%"  {O'Report and Order, FCC 9458, 9 FCC Rcd 4922, 49474948,  5053 (1994) (GTE ONA Order). Section 251(c)(5) of the Act requires incumbent LECs to "provide reasonable"d@Z,D'D'CC" public notice of changes in the information necessary for the transmission and routing of services using that local exchange carrier's facilities or networks, as well as of any other  X4changes that would affect the interoperability of those facilities or networks."zZR yO'ԍ47 U.S.C.  251(c)(5). An incumbent LEC is defined in section 251(h).z The Commission recently adopted network information disclosure requirements to implement  X4section 251(c)(5) in the Local Competition Second Report and Order.R {O? 'ԍSee 47 C.F.R.  51.32551.335; Implementation of the Local Competition Provisions of the  {O 'Telecommunications Act of 1996, CC Docket No. 9698, Interconnection Between Local Exchange Carriers and  {O 'Commercial Mobile Radio Service Providers, CC Docket No. 95185, Area Code Relief Plan for Dallas and  {O 'Houston, Ordered by the Public Utility Commission of Texas, NSD File No. 968, Administration of the North  {Og 'American Numbering Plan, CC Docket No. 92237, Proposed 708 Relief Plan and 630 Numbering Plan Area  {O1 'Code by AmeritechIllinois, IAD File No. 94102, Second Report and Order and Memorandum Opinion and  {O 'Order, 11 FCC Rcd 19392 (1996) (Local Competition Second Report and Order), recon. pending. Although we discussed our preexisting network information disclosure requirements in conjunction with the  Xx4requirements of section 251(c)(5) in the Local Competition Second Report and Order, we did  Xc4not address in that proceeding whether our Computer II and Computer III network information disclosure requirements should continue to apply independently of our section  X74251(c)(5) network information disclosure requirements.78 R {O 'ԍSee, e.g., Local Competition Second Report and Order, 11 FCC Rcd at 19472, 19476, 19486, 19490, 19491,  173 n.383, 183 n.403, 205, 214, 216 n.486. We address that issue in this proceeding as part of our 1998 biennial review of regulations, in an effort to eliminate unnecessary and possibly conflicting requirements.  X 4u118.` ` The rules established pursuant to section 251(c)(5) in some respects appear to  X 4duplicate and even exceed the rules established under Computer II and Computer III, while in other respects they do not. For example, section 251(c)(5) of the Act, and the Commission's  X4rules implementing that section, only apply to incumbent LECs,u R {O'ԍSee 47 U.S.C.  251(h) for a definition of "incumbent LEC."u while some of the  X4Computer II network information disclosure requirements apply more broadly to "all carriers  Xl4owning basic transmission facilities."sl$R {OA 'ԍComputer II Reconsideration Order, 84 FCC 2d at 82,  95.s We seek comment, therefore, on the extent to which the Commission should retain its network information disclosure rules established in the  X>4Commission's Computer II and Computer III proceedings in light of the disclosure requirements stemming from section 251(c)(5) of the 1996 Act. As a starting point, we set forth in the following paragraphs a general description of the current network disclosure  X4requirements under Computer II, Computer III, and section 251(c)(5), and then we ask parties to comment on whether, and why, specific requirements should be retained or eliminated. "A,D'D'CC:" The following descriptions are not intended to be an exhaustive list of every feature of the Commission's current network disclosure requirements. These descriptions are intended, rather, to serve as a basis for comparison by parties commenting in this proceeding.  X4v119.CII` ` Computer II Network Disclosure Obligations.  Xx4Xa.` ` Application of the Network Disclosure Obligations. The Computer II network information disclosure rules consist of two requirements: (1) a disclosure obligation  XL4which depends on the existence of a Computer II separate subsidiary;WLR {O 'ԍSee 47 C.F.R.  64.702(d)(2).W and (2) a  X74disclosure obligation that applies independent of whether the carrier has a Computer II separate subsidiary. The Commission initially imposed both requirements on AT&T in  X 4the Computer II Final Decision.& ZR {O'ԍWe initially imposed the Computer II structural separation and other requirements, including the  {O'network information disclosure rules, on AT&T and GTE in the Computer II Final Decision. We later lifted  {O'those requirements from GTE in the Computer II Reconsideration Order. Computer II Reconsideration Order,  yOt'84 FCC 2d at 7273,  66.  The Commission extended disclosure requirement  X 4(2) in the Computer II Reconsideration Order to "all carriers owning basic  X 4transmission facilities" (hereinafter the "allcarrier" rule).v HR {O'ԍComputer II Reconsideration Order, 84 FCC 2d at 8283,  95.v After divestiture, the Commission extended disclosure requirement (1) to the BOCs insofar as they are providing information services in accordance with the structural separation  X4requirements of ComputerII.R {O''ԍSee Policy and Rules Concerning the Furnishing of Customer Premises Equipment, Enhanced Services  {O'and Cellular Communications Equipment by the Bell Operating Companies, CC Docket 83115, Report and  {O'Order, 95 FCC 2d 1117 (1984) (BOC Separation Order), aff'd sub nom. Illinois Bell Telephone Co. v. FCC,  {O'740F.2d 465 (7th Cir. 1984), aff'd on reconsideration, FCC 84252, 49 Fed. Reg. 26056 (1984) (BOC  {OO'Separation Reconsideration), aff'd sub nom. North American Telecommunications Association v. FCC, 772 F.2d 1282 (7thCir. 1985).  (#  Xp4Xb.` ` Events Triggering the Public Notice Requirement. The Computer II "allcarrier" rule is triggered by implementation of "change[s] . . . to the telecommunications network that would affect either intercarrier interconnection or the  X-4manner in which interconnected CPE must operate . . . ."w -\ R {O:"'ԍComputer II Reconsideration Order, 84 FCC 2d at 81822,  92.w The Computer II separate affiliate disclosure obligation is triggered by any of three events: (1) the BOC  X4communicates the relevant network information directly to its Computer II separate  X4affiliate; (2) such information is used by the BOC or a third party to develop services  X4or products which reasonably can be expected to be marketed by the Computer II"B ,D'D'CC" separate affiliate; or (3) the BOC engages in joint research and development with its  X4Computer II separate affiliate, leading to the design or manufacture of any product that  X4either affects the network interface or relies on a notyet implemented interface.!R {OM'ԍSee Computer II Disclosure Order, 93 FCC 2d at 1245,  60; see also Computer III Phase I Order, 104FCC 2d at 971,  15. (#  X4Xc.` ` Timing of Public Notice. Under Computer II, the disclosure obligation of the  X4"allcarrier" rule must be met "in a timely manner and on a reasonable basis."""R {Od 'ԍComputer II Disclosure Order, 93 FCC 2d at 1228,  6; see also Computer II Reconsideration Order, 84FCC 2d at 8283,  93, 95. The  Xz4Computer II separate affiliate network disclosure obligation requires that disclosure be  Xe4made to information service competitors of the Computer II affiliate "at the same time"  XP4disclosure is made directly to the Computer II separate affiliate as described in item  X;4(1) above.#;|R {Oh'ԍComputer II Final Decision, 77 FCC 2d at 480,  246; Computer II Disclosure Order, 93 FCC 2d at 1245,  60. If the disclosure requirement is triggered by the events described in items (2) and (3) above, then disclosure must be made at the "make/buy" point, i.e., when the BOC or an affiliated company decides, in reliance on previously undisclosed information, to produce itself or to procure from a nonaffiliated company any product, whether it be hardware or software, the design of which either affects the network  X 4interface or relies on the network interface.t$ R {OO'ԍSee Computer II Disclosure Order, 93 FCC 2d at 1245,  60.t (#  X4Xd.` ` Types of Information To Be Disclosed. The Computer II "allcarrier" rule encompasses "all information relating to network design . . . , insofar as such  Xn4information affects . . . intercarrier interconnection . . . ."%nh R {O'ԍComputer II Reconsideration Order, 84 FCC 2d at 8283,  95; see Computer II Disclosure Order,  {OQ'93FCC 2d at 1228, 1238,  6, 38.  For the separate affiliate network disclosure requirement, the information required to be disclosed consists of, "at a minimum,...any network information which is necessary to enable all [information] service . . . vendors to gain access to and utilize and to interact effectively with [the BOCs'] network services or capabilities, to the same extent that  X4[the BOCs' Computer II separate affiliate] is able to use and interact with those  X4network services or capabilities."p& R {O[#'ԍComputer II Disclosure Order, 93 FCC 2d at 1237,  34.p This requirement includes information concerning "network design, technical standards, interfaces, or generally, the manner in which interconnected . . . enhanced services will interoperate with [any of the BOCs']"CV &,D'D'CC"  X4network."j'R {Oy'ԍId. at 1238,  36. The information required includes, but is not limited to, "(a) circuit quality (transmission speeds, error rates, bandwidths, equalization characteristics, attenuation, transmission delays, quantization effects, nonlinearities etc.); (b) performance specifications for switched systems (connection times, queuing delays, blocking probabilities, etc.); and (c) network protocols (message formats, requirements for  {O'synchronizing bits, error detection and correction procedures, signalling procedures, etc.)." Id. j In addition to technical information, the information required includes marketing information, such as "commitments of the carrier with respect to the timing of introduction, pricing, and geographic availability of new network services or  X4capabilities."L(|R {O 'ԍId. at 1238,  37.L (#  X4Xe.` ` How Public Notice Should Be Provided. Under Computer II, carriers subject to the "allcarrier" rule must disclose in their tariffs or tariff support material either the relevant network information or a statement indicating where such information can be obtained, that will allow competitors to use network facilities in the same manner as  X34the subject carrier.t)3R {O'ԍSee Computer II Disclosure Order, 93 FCC 2d at 1246,  63.t The separate affiliate network disclosure obligation requires that the BOCs "file with the Commission, within seven calendar days of the date the  X 4disclosure obligation arises, a notice apprising the public that the disclosure has taken place and indicating in summary form the nature of the information which has been  X 4disclosed [to its Computer II separate affiliate], the identity of any source documents  X 4and where interested parties can obtain additional details."L* R {O'ԍId. at  64.L Moreover, when a BOC "files a tariff for a new or changed network service where there has been a prior  X4disclosure to or for the benefit of [the Computer II separate affiliate], the tariff support materials must list any disclosure notices previously filed with the Commission that are  Xh4relevant to the tariffed offering.":+h2 R {OK'ԍId.: (#  XQ4  X:4w120.` ` Computer III Network Disclosure Obligations.  X4Xa.` ` Application of the Network Disclosure Obligations. The Computer III network information disclosure rules initially were imposed on AT&T and the BOCs in the  X4Phase I Order and Phase II Order., R {OW#'ԍSee Computer III Phase I Order, 104 FCC 2d 958 (1986); Computer III Phase II Order, 2FCCRcd3072 (1987). The Commission later extended the Computer"D,,D'D'CC:"  X4III network information disclosure rules and other nondiscrimination safeguards to  X4GTE in the GTE ONA Order.`-R {Od'ԍSee GTE ONA Order, 9 FCC Rcd 4922 (1994).` (#  X4Xb.` ` Events Triggering the Public Notice Requirement. The Computer III public notice requirement is triggered at the "make/buy" point; that is, when AT&T, any of the BOCs, or GTE "makes a decision to manufacture itself or to procure from an unaffiliated entity, any product the design of which affects or relies on the network  Xe4interface.".eZR {Op 'ԍComputer III Phase I Order, 104 FCC 2d at 1084,  252; see Computer III Phase II Order, 2 FCC Rcd at 3087,  108, 109.(#  X74Xc.` ` Timing of Public Notice. AT&T, the BOCs, and GTE must disclose the relevant information concerning planned network changes at two points in time. First, they must disclose the relevant technical information at the "make/buy" point. They are permitted, however, to condition this "make/buy" disclosure on the recipient's signing of a nondisclosure agreement, upon which the relevant technical information must be disclosed within 30 days. Second, they must make public disclosure of the relevant technical information a minimum of twelve months before implementation of the change; however, if the planned change can be implemented between six and twelve months following the "make/buy" point, then public notice is permitted at the  Xj4"make/buy" point, but at a minimum of six months before implementation./jR {O'ԍSee Computer III Phase II Order, 2 FCC Rcd at 30913093,  134140; Computer III Phase II  {O'Reconsideration Order, 3 FCC Rcd at 11641165,  116. (#  X<4Xd.` ` Types of Information To Be Disclosed. Under Computer III, the range of information encompassed by the network information disclosure requirements is  X4adopted from, and identical to, the Computer II requirements.0R {O'ԍ CIIIPI See Computer III Phase I Order, 104 FCC 2d at 1085,  253 n.298. Specifically, at the "make/buy" point, AT&T, the BOCs, and GTE must disclose that a network change or  X4network service is under development.t1R {O7 'ԍSee Computer III Phase I Order, 104 FCC 2d at 1084,  253.t The notice itself need not contain the full range of relevant network information, but it must describe the proposed network service with sufficient detail to convey what the new service is and what its  X4capabilities are.:24 R {O$'ԍId.: The notice must also indicate that technical information required for the development of compatible information services will be provided to any entity involved in the provision of information services and may indicate that such"qE 2,D'D'CC" information will be made available only to such entities willing to enter into a  X4nondisclosure agreement.:3R {Ob'ԍId.: Once an entity has entered into a nondisclosure agreement, AT&T, the BOCs, or GTE must provide the full range of relevant  X4information.B4ZR {O'ԍSee supra note CIIIPI304. The full range of network information that must be disclosed is defined in the  {O'Computer II Disclosure Order, 93 FCC 2d at 12361238,  3138, and is summarized in   CII119  supra.B (#  X4Xe.` ` How Public Notice Should Be Provided. Under the Computer III rules, public  Xx4notice is made through direct mailings, trade associations, or other reasonable means.5xR {O 'ԍComputer III Phase I Order, 104 FCC Rcd at 1084, 1086,  253, 255.(#  XJ4x121. AMK2 ` ` Section 251(c)(5) Network Disclosure Obligations.  X 4Xa.` ` Application of the Network Disclosure Obligations. These rules apply to all  X 4incumbent LECs, as the term is defined in section 251(h) of the Act.Q6 HR {O'ԍSee 47 U.S.C.  251(h).Q(#  X 4Xb.` ` Events Triggering the Public Notice Requirement. The incumbent LEC makes a decision to implement a network change that either: (1) affects "competing service providers' performance or ability to provide service; or (2) otherwise affects the ability of the incumbent LEC's and a competing service provider's facilities or network to  X4connect, to exchange information, or to use the information exchanged."7R {O 'ԍLocal Competition Second Report and Order, 11 FCC Rcd at 19476,  182; see also 47 C.F.R.  yO'51.325.  Examples of network changes that would trigger the section 251(c)(5) public disclosure obligations include, but are not limited to, changes that affect (1) transmission, (2)signalling standards, (3) call routing, (4) network configuration, (5) logical elements, (6) electronic interfaces, (7) data elements, and (8) transactions that support  X 4ordering, provisioning, maintenance, and billing.8 4 R {O'ԍLocal Competition Second Report and Order, 11 FCC Rcd at 19476,  182. (#  X4Xc.` ` Timing of Public Notice. Incumbent LECs must disclose planned network  X4changes at the "make/buy" point,9^ R {O@$'ԍ47 C.F.R.  51.331; Local Competition Second Report and Order, 11 FCC Rcd at 19491,  216. The  {O %'meaning of the "make/buy" point relevant to section 251(c)(5) is adopted from the Computer II and Computer III  {O%'proceedings. See Local Competition Second Report and Order, 11 FCC Rcd at 19491,  216 n.486. but at least twelve months before implementation"F9,D'D'CC1"  X4of the change.:$R {Oy'ԍ47 C.F.R.  51.331(a); Local Competition Second Report and Order, 11 FCC Rcd at 19490,  214. The timing requirements for public notice under section 251(c)(5) are adopted, with modifications, from the timing  {O 'requirements for public notice under Computer III. Local Competition Second Report and Order, 11 FCC Rcd at19490,  214. If the planned change can be implemented within twelve months of the "make/buy" point, then public notice must be given at the "make/buy" point, but at  X4least six months before implementation.;R {O7'ԍ47 C.F.R.  51.331(a)(1); Local Competition Second Report and Order, 11 FCC Rcd at 19490,  214. If the planned changes can be implemented within six months of the make/buy point, then the public notice may be provided less than six months before implementation, if additional requirements set forth in section  X451.333 of the Commission's rules are met.<FR {O 'ԍ47 C.F.R.  51.331(a)(2); Local Competition Second Report and Order, 11 FCC Rcd at 1949091, 215.(#  X_4Xd.` ` Types of Information To Be Disclosed. Under the Commission's regulations, incumbent LECs are required to disclose, at a minimum, "complete information about  X34network design, technical standards and planned changes to the network."=3R {O'ԍLocal Competition Second Report and Order, 11 FCC Rcd at 19479,  188. Public notice of planned network changes, at a minimum, shall consist of: (1) the carrier's name and address; (2) the name and telephone number of a contact person who can supply additional information regarding the planned changes; (3) the implementation date of the planned changes; (4) the location(s) at which the changes will occur; (5) a description of the type of changes planned (including, but not limited to, references to technical specifications, protocols, and standards regarding transmission, signalling, routing, and facility assignment as well as references to technical standards that would be applicable to any new technologies or equipment, or that may otherwise affect interconnection); and (6) a description of the reasonably foreseeable impact of the  XM4planned changes.>M2 R {O0'ԍ47 C.F.R.  51.327; Local Competition Second Report and Order, 11 FCC Rcd at 19479,  188. (#  X4Xe.` ` How Public Notice Should Be Provided. Network disclosure may be made either: (1) by filing public notice with the Commission in accordance with section 51.329 of the Commission's rules; or (2) providing public notice through industry fora, industry publications, or on the incumbent LEC's own publicly accessible Internet sites, as well as a certification filed with the Commission in accordance with section  X451.329 of the Commission's rules.? R {O#%'ԍ47 C.F.R.  51.329; Local Competition Second Report and Order, 11 FCC Rcd at 19483,  198. (# "GV ?,D'D'CC"Ԍ X4y122. 251C5 ` ` We tentatively conclude that the Commission's rules established pursuant to section 251(c)(5) for incumbent LECs should supersede the Commission's previous network  X4information disclosure rules established in Computer III. We also tentatively conclude that  X4the Commission's network disclosure rules established in Computer II should continue to  X4apply specifically, the Computer II separate affiliate disclosure rule should continue to  X4apply to any BOC that operates a Computer II subsidiary, and the allcarrier rule should continue to apply to all carriers owning basic transmission facilities. We reach our tentative  Xg4conclusion regarding the Computer III network disclosure rules since, in our view, the 1996 Act disclosure rules for incumbent LECs are as comprehensive, if not more so, than the  X;4Commission's Computer III disclosure rules. Parties who disagree with this view should  X& 4explain why all or some aspects of the Commission's Computer III disclosure rules are still needed for incumbent LECs in light of the rules established pursuant to section 251(c)(5) of the Act.  X 4z123.` `  251C5CII We recognize, however, that some BOCs may still be providing certain  X 4intraLATA information services through a Computer II subsidiary, rather than on an  X4integrated basis under the Commission's Computer III rules. We tentatively conclude,  X4therefore, that the Computer II separate subsidiary disclosure rule should continue to apply in such cases because, for instance, it encompasses marketing information which is not included within the scope of information to be disclosed under section 251(c)(5) and it requires  XH4disclosure under a more stringent timetable than that required under section 251(c)(5).N@HR yO'ԍThis marketing information includes, for instance, "information which relates to commitments of the [BOC] with respect to the timing of introduction, pricing, and geographic availability of new network services or  {OQ'capabilities." See supra   CII119 ; Computer II Disclosure Order, 93 FCC 2d at 1238,  37. Disclosure under the  {O'Computer II separate affiliate network disclosure requirement must be made to information service competitors at the same time such information is directly disclosed to the BOC's separate affiliate or, in the case of BOC disclosures to third parties for the benefit of the BOC's separate affiliate, disclosure must take place at a "make/buy point" that is more strict than the "make/buy" point which governs disclosure under section 251(c)(5).  {O='See supra   CII119 ,  AMK2121 ; Computer II Final Decision, 77 FCC 2d at 480,  246; Computer II Disclosure Order, 93FCC 2d at 1245,  60.N We also tentatively conclude that the allcarrier rule should continue to apply to all carriers owning basic transmission facilities, since it is broader in certain respects than section 251(c)(5). First, it applies to all carriers, whereas section 251(c)(5) just applies to incumbent LECs. In addition, the allcarrier rule requires, among other things, the disclosure of network changes that affect end users' CPE, whereas our rules interpreting section 251(c)(5) only require the disclosure of information that affects "competing service providers." We seek comment on these tentative conclusions and analyses.  Xy' XX` ` X b.XCustomer Proprietary Network Information (CPNI) (#  Xb'  XK4 {124.` ` The Commission first established its CPNI rules in the Computer II Final  X64Decision in 1980 to encourage AT&T, the BOCs, and GTE to develop and market efficient,"6H@,D'D'CC" integrated combinations of information and basic services without the marketing restrictions imposed by structural separation, while protecting the competitive interests of information  X4service competitors.rAR {OK'ԍSee Computer II Final Decision, 77 FCC 2d at 481,  249.r While the CPNI rules are an integral part of the Commission's current nonstructural regulatory framework for the provision of information services by AT&T, the  X4BOCs, and GTE, we defer consideration of all CPNI issues relating to our Computer II and  X4Computer III rules to our CPNI rulemaking proceeding.  Xc4|125.` ` Section 702 of the 1996 Act, which added a new section 222 to the Communications Act of 1934, as amended, sets forth requirements for use of CPNI by telecommunications carriers, including the BOCs. Although the requirements of section 222  X 4were effective upon enactment of the 1996 Act, we issued a CPNI Notice on May 17, 1996, which sought comment on, among other things, what regulations we should adopt to  X 4implement section 222.wB^ ZR {O'ԍImplementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer  {O'Proprietary Network Information and Other Customer Information, CC Docket No. 96115, Notice of Proposed  {O'Rulemaking, 11 FCC Rcd 12513 at 12515,  3 (1996) (CPNI Notice). w We stated in the CPNI Notice that the CPNI requirements the  X 4Commission previously established in the Computer II and Computer III proceedings remain in effect pending the outcome of the rulemaking, to the extent they do not conflict with  X 4section 222. The CPNI proceeding will address whether these preexisting requirements should be retained, eliminated, extended, or modified in light of the Act.  Xn4 }126.` `  CPNI2 Under the Computer II structural separation requirements, AT&T, the BOCs, and GTE were prohibited from jointly marketing their basic services with the enhanced  XB4services provided through their separate affiliate. Under the Computer III nonstructural safeguards regime, AT&T, the BOCs, and GTE were permitted to engage in joint marketing  X4of basic and enhanced services subject to restrictions on their use of CPNI.2CR {OG'ԍSpecifically, in the Computer III Phase I Order we applied to the BOCs on an interim basis, pending adoption of final CPNI rules for the BOCs, the same CPNI restrictions that we imposed on AT&T in the  {O'Computer II AT&T Structural Relief Order. Computer III Phase I Order, 104 FCC 2d at 108991,  261265.  {O'We adopted final CPNI rules for BOC provision of information services in the Computer III Phase II Order, and  {Om'reaffirmed these rules in the Computer III Phase II Reconsideration Order. Computer III Phase II Order, 2 FCC  {O7'Rcd at 309398,  14176; Computer III Phase II Reconsideration Order, 3 FCC Rcd at 116164,  85114.2 In the BOC  X4Safeguards Order, the Commission strengthened the CPNI rules by requiring that, for customers with more than twenty lines, BOC personnel involved in marketing enhanced  X4services obtain written authorization from the customer before gaining access to its CPNI.uD R {O#'ԍComputer III BOC Safeguards Order, 6 FCC Rcd at 7609,  84.u "I D,D'D'CC"Ԍ X4~127.` ` On March 6, 1992, the Association of Telemessaging Services International,  X4Inc. (ATSI) filed a petition for reconsiderationER yOb'ԍPetition for Reconsideration of the Association of Telemessaging Services International, Inc., CC Docket  {O*'No. 90623, filed Mar. 6, 1992 (ATSI Petition). of the BOC Safeguards Order in CC Docket  X4No. 90623, the Computer III Remand proceeding. ATSI asked the Commission to modify  X4the BOC Safeguards Order by: (1) prohibiting joint marketing of basic and information services; (2) extending the prior authorization requirement for CPNI to all users, regardless of  X4size; and (3) ensuring that users who restrict access to their CPNI continue to receive  X|4nondiscriminatory treatment and an adequate level of service.JF|"R {OO 'ԍATSI Petition at 1.J On May 17, 1996, the Commission issued an order dismissing issues (2) and (3) as moot because of the passage of the Telecommunications Act of 1996 and our commencement of a new proceeding to address the obligations of telecommunications carriers with respect to CPNI in light of the new  X 4statute.G^ R {O'ԍSee Computer III Remand Proceedings: Bell Operating Company Safeguards and Tier 1 Local  {OO'Exchange Company Safeguards, CC Docket No. 90623, and Rules Governing Telephone Companies' Use of  {O'Customer Proprietary Network Information, CC Docket Nos.90-623, 92256; Order, 11 FCC Rcd 16617 (1996). The order also noted that issue (1) remained to be addressed by the Commission.OH R {O'ԍId. at 1661920,  7.O  X 4ATSI filed a motion to withdraw its petition for reconsideration in CC Docket No. 90623pI^ l R {O&'ԍMotion to Withdraw Petition for Reconsideration in Computer III Remand Proceedings and To  {O'Incorporate the Same in Computer III Further Remand Proceedings and Other Proceedings, CC Docket  {O'Nos.90-623, 9520, 96149, and 96152, filed Dec. 10, 1996 (ATSI Motion).p  X 4and to incorporate its petition into the Commission's Computer III Further Remand  X 4proceeding in CC Docket No. 9520, as well as other proceedings, on December 10, 1996.JN R {O 'ԍATSI also requested that its petition be incorporated into CC Docket Nos. 96149 and 96152, the Non {O'Accounting Safeguards proceeding and the Telemessaging, Electronic Publishing, and Alarm Monitoring proceeding, respectively. We denied ATSI's motion to the extent it requested the Commission to incorporate the  {O|'joint marketing question into the NonAccounting Safeguards proceeding and the Telemessaging, Electronic  {OF'Publishing, and Alarm Monitoring Services proceeding. See Computer III Remand Proceedings: Bell Operating  {O'Company Safeguards and Tier 1 Local Exchange Company Safeguards, CC Docket No. 90623, and Computer  {O'III Further Remand Proceedings: Bell Operating Company Provision of Enhanced Services, CC Docket  {O'No.95-20, Order, 12 FCC Rcd 5899 (1997) (ATSI Order).   X 4On May 14, 1997, the Common Carrier Bureau partially granted the ATSI Motion by agreeing to address in this proceeding whether joint marketing of basic services and information  X4services by the BOCs should be prohibited.`KR {O#'ԍSee ATSI Order, 12 FCC Rcd at 5902.` "J:K,D'D'CCI"Ԍ X4128.` ` We therefore seek comment on the issue raised in the ATSI Petition: whether, to the extent the Commission continues to allow the BOCs to provide information services subject to a nonstructural safeguards regime, the BOCs should be prohibited from jointly marketing basic services and information services when these services are provided on an intraLATA basis. To the extent parties support the view that the term "telecommunications service" in the Act encompasses the same set of services as the term "basic service" did under  Xx4the Commission's previous rules,jLxR {O'ԍSee discussion supra at   AMK41 .j parties should discuss the issue raised in the ATSI petition in terms of whether joint marketing should be allowed between telecommunications services  XJ4and information services. As noted in the ATSI Order, we do not address this question with respect to interLATA information services, since under section 272 of the Act BOCs must provide interLATA information services pursuant to a section 272 affiliate and subject to the joint marketing provisions in that section. Also, under section 274, BOCs providing electronic publishing, whether on an interLATA or intraLATA basis, must do so pursuant to a section 274 affiliate and subject to the joint marketing rules in that section.  X 4129.` ` In its petition, ATSI argues that joint marketing of basic services and information services harms consumers and diminishes overall competition in the information services market. ATSI alleges that the BOCs have abused the Commission's joint marketing rules by: (1) routing calls to subscribers of competing voice messaging providers to the BOC's own voice messaging service instead; (2) soliciting customers of competing voice messaging providers who contact the BOCs to request other BOC services; (3) providing customers with misleading and disparaging information about the voice messaging services  X 4offered by competing providers; and (4) engaging in other unfair practices.NM ZR {O'ԍATSI Petition at 36. N ATSI therefore requests that the Commission prohibit the BOCs from using the same personnel and facilities to market basic services and information services. We seek comment on these issues. We also seek comment on the costs and operational efficiencies or inefficiencies of allowing the BOCs to provide intraLATA information services on an integrated basis, but requiring different personnel and facilities to market basic services and information services.    Xi4p V. JURISDICTIONAL ISSUES ă  X;4130.` ` Our authority, pursuant to section 2(a) of the Communications Act, to establish,  X$4enforce, modify, or eliminate a regime of safeguards for the provision of information services  X 4by the BOCs and GTE is well settled.N$ R {O#'ԍSee Computer III Phase I Order, 104 FCC 2d at 1124,  342 (citing Computer II Final Decision,  {Ot$'77FCC 2d at 432, 486487,  124, 261264). See also California II, 4 F.3d at 15141516 (holding that it is within the FCC's jurisdictional authority to require the federal tariffing of ONA services that are technically compatible with interstate service). In addition, the scope of our authority to preempt" KN,D'D'CC" inconsistent regulation on the part of the states has been established by the Commission in the  X4previous Computer III orders and has been affirmed on appeal.  X4131. PREEMPT ` ` In the Computer III Phase I Order, the Commission preempted: (1) all state structural separation requirements applicable to the provision of enhanced services by AT&T and the BOCs; and (2) all state nonstructural safeguards applicable to AT&T and the BOCs  Xz4that were inconsistent with federal safeguards.sOzR {O'ԍComputer III Phase I Order, 104 FCC 2d at 112728,  348.s The California I court vacated these preemption actions, on the ground that the Commission had not adequately justified imposing  XN4them.[PNZR {OY 'ԍCalifornia I, 905 F.2d at 12391245.[ In response to the California I remand, the Commission narrowed the scope of federal preemption to cover only: (1) state requirements for structural separation of facilities and personnel used to provide the intrastate portion of jurisdictionally mixed enhanced  X 4services;Q\ R {O'ԍBOC Safeguards Order, 6 FCC Rcd at 7631,  121. The Commission noted that many cases have recognized the impracticality of separate provision of interstate and intrastate basic communications and cited,  {O:'among other cases, Louisiana Public Service Comm'n v. FCC, 476 U.S. 355, 375 n.4 (1986).  (2) state CPNI rules requiring prior authorization that is not required by federal regulation; and (3) state network disclosure rules that require initial disclosure at a time  X 4different than the federal rules.iR R {O'ԍBOC Safeguards Order, 6 FCC Rcd at 7631,  121.i The Commission reasoned that such state requirements would thwart or impede the nonstructural safeguards pursuant to which the BOCs may provide interstate enhanced services, and the federal goals such safeguards were intended to  X4achieve.:SR {O'ԍId.: The California III court upheld the Commission's narrowly tailored preemption, stating that the Commission had met its burden of demonstrating that it was preempting only  Xl4state regulations that would negate valid federal regulatory goals.VTl4 R {OQ'ԍCalifornia III, 39 F.3d at 933.V  X>4132.` ` Thus, we believe that the proposals we make in the current Further Notice, and the options upon which we seek comment, fall within the scope of our authority previously established in the context of this proceeding, as outlined above. To the extent that our proposals go beyond our recognized preemption authority, we ask that commenters identify  X4those proposals and comment on our authority to adopt them. "L T,D'D'CC1"Ԍ X'TaVI. PROCEDURAL MATTERS ă  X'X A.X` ` Ex Parte Presentations (#`  X4133.` ` This matter shall be treated as a "permit-but-disclose" proceeding in accordance  X4with the Commission's revised ex parte rules, which became effective June 2, 1997.  Xx4aSeeĠAmendment of 47 C.F.R. 1.1200 et seq. Concerning Ex Parte Presentations in  Xc4Commission Proceedings, GC Docket No. 9521, Report and Order, 12 FCC Rcd 7348,  XN47356-57,  27 (citing 47 C.F.R. 1.1204(b)(1)) (1997). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented  X 4is generally required. See 47 C.F.R. 1.1206(b)(2), as revised. Other rules pertaining to oral and written presentations are set forth in Section 1.1206(b) as well.  X 'X B.` ` Initial Paperwork Reduction Act Analysis (#  X4134.` ` This Further Notice contains either a proposed or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general public and the Office of Management and Budget (OMB) to take this opportunity to comment  X@4on the information collections contained in this Further Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413. Public and agency comments are due at the  X4same time as other comments on this Further Notice; OMB comments are due 60 days from  X4the date of publication of this Further Notice in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  XC' wC.` ` Initial Regulatory Flexibility Certification   X4135.` ` The Regulatory Flexibility Act (RFA)UZR {O 'ԍ#]\  PCɒP#The RFA, see 5 U.S.C.  601 et. seq.#x6X@K X@## ]\  PCɒP#, has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small  yO "'Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).#x6X@K X@## x6X@K X@# requires that an initial regulatory flexibility analysis be prepared for noticeandcomment rulemaking proceedings, unless the wagency certifies that "the rule will not, if promulgated, have a significant economic impact on  X 4a substantial number of small entities."FV R yOk&'ԍ5 U.S.C.  605(b).F The RFA generally defines "small entity" as having" MzV,D'D'CC." the same meaning as the terms "small business," "small organization," and "small  X4governmental jurisdiction."GWR {Ob'ԍId.  601(6).G In addition, the term "small business" has the same meaning as  X4the term "small business concern" under the Small Business Act.kXZR {O'#]\  PCɒP#эId.  601(3) (incorporating by reference the definition of "small business concern" in Small Business Act, 15 U.S.C.  632). Pursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register."k A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business  X4Administration (SBA).XY R yOJ 'ԍSmall Business Act, 15 U.S.C.  632.X  X_4136.` ` This Further Notice pertains to the Bell Operating Companies (BOCs), each of which is an affiliate of a Regional Holding Company (RHC), as well as to GTE and AT&T. Neither the Commission nor SBA has developed a definition of "small entity" specifically applicable to the BOCs, GTE, or AT&T. The closest definition under SBA rules is that for establishments providing "Telephone Communications, Except Radiotelephone," which is Standard Industrial Classification (SIC) code 4813. Under this definition, a small entity is  X 4one employing no more than 1,500 persons.XZ R yO"'ԍ13 C.F.R.  121.201, SIC code 4813. X We note that each BOC is dominant in its field of operation and all of the BOCs as well as GTE and AT&T have more than 1,500  X 4employees. We therefore certify that this Further Notice will not have a significant economic impact on a substantial number of small entities. The Commission's Office of Public Affairs,  Xy4Reference Operations Division, will send a copy of this Further Notice, including this  Xb4certification, to the Chief Counsel for Advocacy of the Small Business Administration.m[b, R yO?'ԍ#]\  PCɒP#5 U.S.C.  605(b).m  XK4Acopy will also be published in the Federal Register.  X'X D.` ` Comment Filing Procedures (#  X4137.` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or before March 27, 1998, and reply comments on or before April 23, 1998. To file formally in this proceeding, you must file an original and six copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original and eleven copies. Comments and reply comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M"eN [,D'D'CC" Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C., 20036. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C., 20554.  XH4138.` ` Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also  X 4comply with section 1.49 and all other applicable sections of the Commission's rules.6\\ R {O 'ԍSee 47 C.F.R.  1.49. However, we require here that a summary be included with all comments and reply comments, regardless of length. This summary may be paginated separately from the rest of the pleading  {O% '(e.g., as "i, ii").6 We also direct all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. All parties are encouraged to utilize a table of contents, regardless of the length of their submission.  X 4139.` ` Parties are also asked to submit comments and reply comments on diskette. Such diskette submissions would be in addition to and not a substitute for the formal filing requirements addressed above. Parties submitting diskettes should submit them to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly labeled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter.  X4140.` ` You may also file informal comments or an exact copy of your formal comments electronically via the Internet at or via email  X4< computer3@comments.fcc.gov>. Only one copy of electronicallyfiled comments must be submitted. You must put the docket number of this proceeding in the subject line if you are using email (CC Docket No. 9520), or in the body of the text if by Internet. You must note whether an electronic submission is an exact copy of formal comments on the subject line. You also must include your full name and Postal Service mailing address in your submission.  X ' VII. ORDERING CLAUSES ă  X4141.` ` Accordingly, IT IS ORDERED that, pursuant to Sections 1, 2, 4, 10, 11, 201205, 251, 271, 272, and 274276, of the Communications Act of 1934, as amended, 47" O\,D'D'CC." U.S.C.  151, 152, 154, 160, 161, 201205, 251, 271, 272, and 274276, a FURTHER NOTICE OF PROPOSED RULEMAKING IS ADOPTED.  X4142.` ` IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference Operations Division, SHALL SEND a copy of this FURTHER NOTICE OF  X4PROPOSED RULEMAKING, including the Initial Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the  X_4Regulatory Flexibility Act, see 5 U.S.C.  605(b). ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhCMagalie Roman Salas ` `  hhCSecretary" P\,D'D'CC "  X4 Q  Separate Statement of Commissioner Harold W. FurchtgottRoth #Xj\  P6G;ynXP#у  a4#|\  P6G; _P#  X4W # Xj\  P6G;ynXP#Computer III Further Remand Proceedings: Bell Operating Company Provision of AEnhanced Services {Jand  X4I@1998 Biennial Regulatory Review Review of Computer III and ONA Safeguards and  X'SRequirements \  Further Notice of Proposed Rulemaking  XT4\  \I support adoption of this Further Notice of Proposed Rulemaking. I question, however, whether the FCC is prepared to meet its statutory obligation to review all of its regulations in 1998.  Contrary to the captioning of this Further NPRM (and at least one other item that the staff has presented to the Commission for decision), we may be neglecting the express directives of a terse but important provision of the Telecommunications Act of 1996. In this provision, codified as Section 11 of the Communications Act, Congress directed the FCC to  Xn4conduct, beginning in 1998, a biennial review of " all  regulations issued under [the Act] in effect at the time of the review that apply to the operations or activities of any provider of telecommunications service" and determine whether any of these regulations are "no longer necessary in the public interest as the result of meaningful economic competition between providers of such service." 47 U.S.C. Section 161 (emphasis added). Section 11 also requires that the FCC "repeal or modify any regulation it determines to be no longer necessary in the public interest. Clearly, Section 11 has two components: a policy against unnecessary regulations and a procedure to find and remove all such regulations every two years. In this Further NPRM, the Commission fully addresses only the policy component of Section 11. Although the Commission thus appears to have fulfilled its duty to implement the policy of Section 11 in the context of this particular proceeding, I am concerned that because of this item's caption and the many references to Section 11 throughout the text we may be leaving the misimpression that we also are addressing the procedural requirements of  X4Section 11. To my knowledge, the FCC has no plans to review affirmatively  all  regulations that apply to the operations or activities of any provider of telecommunications service and to make specific findings as to their continued necessity in light of current market conditions. Indeed, the comprehensive and systematic review of all FCC regulations required under Section 11 certainly would take many months to complete, yet we have not published a specific schedule to ensure completion of this task in 1998. Nor has the Commission issued general principles to guide our public interest analysis and decision making process across the wide range of FCC regulations. I believe"H'Q\,((CC%" that, in addition to the direction given us within the law, the public interest determinations we eventually make pursuant to Section 11 should be made based on a straightforward analysis: regulations are in the public interest only if their benefits significantly outweigh their costs. We have not yet adopted any such guidance. It is unfortunate that this public discussion of our responsibilities under Section 11 has  Xv4first surfaced in the context of a seemingly unrelated action in the decadeold Computer III proceedings. In my view, however, we should not let this or any other such limited Commission analysis and decision making (or even the sum of such limited actions) be mistaken for complete compliance with Section 11 as envisioned by Congress.  X 4c* * * * * * *#Xj\  P6G;ynXP#