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                       Federal Communications Commission

                        2006  Biennial Regulatory Review

                              EB Docket No. 06-153

                               Enforcement Bureau

                                  Staff Report

                               February 14, 2007

   I. OVERVIEW

    1. The Enforcement Bureau (EB) is the primary organizational unit within
       the Commission that is responsible for enforcement of provisions of
       the Communications Act and the Commission's rules. EB has specific
       responsibility for administering rules governing formal common carrier
       complaint proceedings at the Commission and the imposition of
       forfeiture penalties. Staff reviewed these rules to determine whether
       they are "no longer necessary in the public interest as the result of
       meaningful economic competition between providers of such
       [telecommunications] service," as required by Section 11 of the
       Communications Act of 1934, as amended. As part of this review, the
       Commission sought recommendations from the public concerning whether
       these rules and procedures should be modified or eliminated.

   II. SCOPE OF REVIEW

    2. The Commission identified the following rule parts containing
       regulations administered by the Enforcement Bureau for review and
       comment in the Public Notice:

   Part 1 - Practice and Procedure - Sections 1.711 and 1.720 to 1.736 set
   forth rules for the filing of formal complaints against common carriers.
   Sections 1.80 and 1.89 of the Commission's rules address forfeiture
   proceedings and penalties and Notice of Violations proceedings.

   Increased competition in the marketplace does not diminish the need for
   these rules, and thus we do not find that they are no longer necessary in
   the public interest as the result of meaningful economic competition
   between telecommunications service providers. Accordingly, we find that
   these rules should be retained.

    3. Rules 1.711 and 1.720 through 1.736 set forth the procedures for
       formal complaint proceedings against common carriers. Competitive
       developments have not affected the need for these rules. Section 208
       of the Communications Act continues to permit any person to file a
       complaint with the Commission alleging that a common carrier has
       violated the provisions of the Communications Act. Indeed, in a more
       competitive marketplace, such complaints are often filed by one
       competitor against another. So long as the right to file complaints
       remains, the Commission needs to maintain rules establishing the
       procedures for filing those complaints. No party has filed comments
       arguing to the contrary. Accordingly, we do not find that these rules
       are no longer necessary in the public interest as the result of
       meaningful economic competition between providers of
       telecommunications service.

    4. The American Association of People with Disabilities ("AAPD") filed
       comments in this proceeding supporting retention of the formal
       complaint rules in sections 1.711 and 1.720 through 1.736. While
       supporting retention of the rules, AAPD submitted proposals for ways
       to improve the complaint intake process as it relates to complaints
       alleging violations of Section 255 of the Communications Act. For
       example, AAPD recommends that the formal complaint rules be modified
       to expressly reference Section 255 or to include instructions for
       filing a formal complaint alleging a violation of Section 255 of the
       Act. AAPD also recommends that the complaint filing form be modified
       to include reference to Section 255 of the Act. As stated above,
       Section 11 requires us to determine whether rules are "no longer
       necessary in the public interest as the result of meaningful economic
       competition between providers of such [telecommunications] service."
       AAPD does not suggest that the modifications it proposes meet this
       standard; however, we appreciate the concerns raised by AAPD, and will
       remain sensitive and responsive to all inquiries regarding application
       of our formal complaint rules to ensure that those wishing to file
       complaints alleging violations of Section 255 of the Act have the
       information they need to proceed.

    5. Rule 1.80 sets forth who may be subject to a forfeiture penalty for
       violation of the Communications Act or Commission rules and orders,
       the limits on the amount of the forfeitures that may be assessed, and
       guidelines for determining the amount of such forfeitures. Competitive
       developments have not reduced the need for these rules. Enforcement is
       important in a competitive marketplace to ensure that the market is
       able to function without unlawful interference, and thus rule 1.80
       remains necessary in the public interest. No parties argued for
       elimination of this rule. Accordingly, we do not find that this rule
       is no longer necessary in the public interest as a result of
       meaningful economic competition between providers of
       telecommunications service. However, as a result of ongoing review of
       rule 1.80, staff recommends initiating a new proceeding or proceedings
       to consider modifying the forfeiture guidelines to ensure that these
       guidelines are up-to-date.

    6. Rule 1.89 sets forth the process used by the Commission when issuing a
       Notice of Violation. The rule provides that, except in cases of
       willfulness or those in which public health, interest or safety
       requires otherwise, any person who holds a license, permit or other
       authorization appearing to have violated any provision of the
       Communications Act or any provision of the Commission's Rules will,
       before revocation, suspension, or cease and desist proceedings are
       instituted, be served with a written Notice of Violation calling these
       facts to his or her attention and requesting a statement regarding the
       matter. The Notice of Violation may be combined with a Notice of
       Apparent Liability for Forfeiture. Competitive developments have not
       reduced the need for this rule. Enforcement actions, and procedures to
       ensure notification to violators of those actions, are imperative in a
       competitive marketplace to ensure that the market is able to function
       without unlawful interference. To that end, staff does not find that
       rule 1.89 is "no longer necessary in the public interest as the result
       of meaningful economic competition between providers of such
       [telecommunications] service." No parties argued for elimination of
       this rule, and we recommend that it be retained.

   III. RECENT AND ONGOING ACTIVITIES

    7. At any given time, the Enforcement Bureau has pending investigations
       and complaint proceedings involving competition rules for
       telecommunications service providers in various stages of activity.
       The Bureau investigates possible violations of the Communications Act
       and the Commission's rules to ensure a level playing field which in
       turn promotes robust competition between providers of
       telecommunications service as well as to ensure that consumers are
       protected in a competitive landscape.

    8. During the past two years, for example, the Bureau or the Commission
       has taken enforcement action in the following areas related to
       telecommunications service providers, among others: the enforcement of
       Universal Service Fund (USF) and other regulatory program obligations
       (including the Telecommunications Relay Service Fund and the North
       American Numbering Plan Administration Fund), where the Commission, in
       2006 alone, has issued notices of apparent liability for forfeiture
       and entered into consent decrees totalling nearly $1.2 million dollars
       and recovered nearly $1.5 million dollars in underpayments to the
       Fund, as well as suspended or debarred four companies or individuals
       convicted of E-Rate fraud from participating in the Universal Service
       program. The Commission also took enforcement action to ensure that
       payphone service providers are fairly compensated for each and every
       call when, most recently in 2006, it issued a notice of apparent
       liability for forfeiture in the amount of $466,000 against a carrier
       for its failure to comply with the Commission's payphone compensation
       rules. In this regard, the Commission also issued an Order affirming
       the Bureau's decision granting a liability complaint filed by payphone
       service providers and their agents for billing and collection. The
       Bureau's competition enforcement also includes resolution of
       significant carrier-to-carrier and marketplace issues, as well as the
       enforcement of pole attachment rights, where the Bureau facilitates
       the resolution of disputes between telecommunications carriers and
       cable system operators, on the one hand, and utilities, on the other
       hand, regarding rights afforded by section 224 of the Act. For
       example, in 2006, among other matters, the Bureau resolved competitive
       market disputes through pre-complaint mediations and formal complaint
       proceedings against carriers, as well as initiated investigations
       related to the marketing of unauthorized equipment.

   IV. SUMMARY OF BIENNIAL REGULATORY REVIEW

    9. The staff's review of rules 1.711, 1.720 through 1.736, 1.80 and 1.89,
       as well as its review of comments submitted in connection with the
       biennial review proceeding, do not support elimination or modification
       of the subject rules as a result of competitive developments in the
       marketplace. Specifically, staff does not find that these rules are
       "no longer necessary in the public interest as the result of
       meaningful economic competition between providers of such
       [telecommunications] service." Independent of the requirements of
       section 11, however, as stated above, staff recommends initiating a
       proceeding to consider modifying section 1.80 of the Commission's
       rules.

   47 C.F.R. SS 1.80, 1.711, and 1.720 -1.736; see also 47 C.F.R. S 1.89
   (notice of violation proceedings).

   47 U.S.C. S 161.

   Public Notice, The Commission Seeks Public Comment in the 2006 Biennial
   Review of Telecommunications Regulations - EB Docket No. 06-153, FCC
   06-115, August 10, 2006.

   See AAPD Comments at 2-3.

   Id. at 2.

   Id. at 3.

   Federal Communications Commission DA 07-667

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   Federal Communications Commission DA 07-667

   10.