[Federal Register: October 17, 2003 (Volume 68, Number 201)]
[Proposed Rules]
[Page 59756-59757]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17oc03-22]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Chapter I
[CC Docket No. 96-128; FCC 03-220]
Implementation of Section 273 of the Communications Act of 1934,
as Amended by the Telecommunications Act of 1996
AGENCY: Federal Communications Commission.
ACTION: Proposed rule; withdrawal.
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SUMMARY: This document terminates the pending Notice of Proposed
Rulemaking to implement provisions of section 273 of the
Telecommunications Act of 1996 (the Act) that pertain to manufacturing
by the Bell Operating Companies (BOCs). (In the Matter of
Implementation of Section 273 of the Communications Act of 1934, as
Amended in the Telecommunications Act of 1996, Notice of Proposed
Rulemaking, CC Docket No. 96-254, 62 FR 3638, January 24, 1997 (BOC
Manufacturing NPRM)). The statute, as written, is sufficiently detailed
and clear as to cover most circumstances at this time. Adopting rules
to implement the provisions of section 273 would not serve the public
interest and would impose unnecessary regulatory burdens inconsistent
with the pro-competitive, deregulatory goals of the Act. Accordingly,
for the reasons indicated below, the Commission concludes that it is
unnecessary to adopt rules to implement section 273 at this juncture
and terminates this proceeding.
DATES: This proposed rule is withdrawn as of October 17, 2003.
FOR FURTHER INFORMATION CONTACT: Henry L. Thaggert, Attorney-Advisor,
Competition Policy Division, Wireline Competition Bureau, at (202) 418-7941, or via the Internet at hthaggert@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Memorandum Opinion and Order in CC Docket No. 96-254, FCC 03-220,
adopted September 15, 2003, and released September 16, 2003. The
complete text of this Memorandum Opinion and Order is available for
inspection and copying during normal business hours in the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC, 20554. This document may also be purchased
from the Commission's duplicating contractor, Qualex International,
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554,
telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com. It is also available on the Commission's Web site at
http://www.fcc.gov.
Synopsis of the Memorandum Opinion and Order
1. Background. Section 273 permits a BOC to manufacture
telecommunications equipment and customer premises equipment through a
structurally separate corporate affiliate once the Commission
authorizes the BOC to provide in-region, interLATA services pursuant to
section 271(d) of the Act. Section 273 provides for two important
exceptions to the requirement that a BOC refrain from all manufacturing
activity until after it receives section 271 approval. First, section
273(b)(1) permits a BOC at any time to engage in ``close
collaboration'' with manufacturers on product design and development.
Second, section 273 (b)(2) permits a BOC at any time to enter into
``royalty agreements'' with manufacturers.
2. The BOC Manufacturing NPRM invited comment and proposed numerous
tentative conclusions to implement rules governing section 273. The BOC
Manufacturing NPRM generated comment from BOCs, competitive LECs,
manufacturers, and others. Since the issuance of the BOC Manufacturing
NPRM, each BOC has obtained section 271 authority to provide in-region
interLATA service in at least one of its states, and Verizon and
BellSouth have received section 271 authority throughout their regions.
Yet to our knowledge, no BOC has created a manufacturing affiliate, nor
has the Commission received complaints that BOCs have violated section
273.
3. The Commission concludes that the provisions of section 273 are
sufficiently detailed as to be self-executing and sufficiently clear as
to cover most circumstances. Thus, section 273 requires no further
elaboration at this time. More than seven years have passed since the
passage of the Act, and the Commission has granted section 271
authorization to provide in-region interLATA service in forty-two
states and the District of Columbia. Our experience over this time
frame persuades us, with the benefit of hindsight, that the concerns
the Commission articulated in the BOC Manufacturing NPRM were
unwarranted because the competitive harms the Commission envisioned
simply have not materialized.
4. Whenever the Commission adopts rules, it must consider whether
the benefit of such rules outweighs the burden on regulated entities.
As written, section 273 provides detailed requirements that should
facilitate quick review and disposal of alleged violations on a case-
by-case basis. Moreover, if a party believes that section 273 does not
clearly indicate the proper course of conduct, the Commission has in
place adequate mechanisms for addressing the party's concerns.
Accordingly, we believe a case-by-case approach would serve the public
interest more efficiently than imposing a new rules regime.
Regulatory Flexibility Act
5. The Commission concludes that, because it does not adopt rules
in this Memorandum Opinion & Order to implement section 273, our
resolution of this matter raises no Regulatory Flexibility Act issues.
Although section 273 focuses primarily on BOC manufacturing activity,
in the BOC Manufacturing NPRM the Commission questioned whether
development of rules would ``have a significant economic impact on a
substantial number of small businesses insofar as they apply to
entities that develop standards, develop generic requirements and
conduct certification activity.'' However, in this Memorandum Opinion &
Order, the Commission neither promulgates new rules nor revises
existing rules, thus the action does not require any change in the
current practices of any standard setting entities, large or small.
Accordingly, because the Commission implements no rules, it takes no
action that would require entities to modify their practices. Thus, the
Commission finds that the action will not have a ``significant economic
impact on a substantial number of small entities.''
Paperwork Reduction Act of 1995
6. The Commission finds that this Memorandum Opinion and Order does
not contain information collection provisions and therefore does not
implicate the Paperwork Reduction Act of 1995.
Ordering Clauses
1. Accordingly, pursuant to sections 1, 3, 4(i)-(j), 7, 201-209,
218-220, 251, 271-273 and 403 of the
[[Page 59757]]
Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154(i)-(j),
157, 201-209, 218-220, 251, 271-273, and 403 that this Memorandum
Opinion and Order is adopted.
2. The Commission has thus completed its review of the record in
the above-captioned rulemaking. Accordingly, the above-captioned
proceeding is terminated.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-26108 Filed 10-16-03; 8:45 am]
BILLING CODE 6712-01-U