[Federal Register: September 9, 2004 (Volume 69, Number 174)]
[Rules and Regulations]
[Page 54589-54591]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09se04-10]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 51
[CC Docket Nos. 01-338; CC Docket No. 96-98; CC Docket No. 98-147; FCC
04-191]
Unbundling Obligations of Incumbent Local Exchange Carriers;
Implementation of the Local Competition Provisions of the
Telecommunications Act of 1996; Deployment of Wireline Services
Offering Advanced Telecommunications Capability
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) modifies certain of the unbundling obligations associated
with fiber networks serving multiple dwelling units (MDUs) pursuant to
section 251 of the Telecommunications Act of 1996 (1996 Act).
Specifically, the Commission concludes that fiber networks serving
predominantly residential MDUs will be subject to the same, limited
unbundling obligations governing fiber-to-the-home (FTTH) loops serving
individual occupancy premises. The Commission further clarifies that
the definition of FTTH loops includes fiber loops deployed to the
minimum point of entry (MPOE) of MDUs, regardless of the ownership of
the MDU's inside wiring.
DATES: Effective October 12, 2004.
FOR FURTHER INFORMATION CONTACT: Pamela Arluk, Attorney-Advisor,
Wireline Competition Bureau, at (202) 418-1580, or via the Internet at
pamela.arluk@fcc.gov. The complete text of this Order on
Reconsideration 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. Further
information may also be obtained by calling the Wireline Competition
Bureau's TTY number: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
on Reconsideration in CC Docket No. 01-338, CC Docket No. 96-98, and CC
Docket No. 98-147; FCC 04-191, adopted August 4, 2004, and released
August 9, 2004. The full text of this document may be purchased from
the Commission's duplicating contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554,
telephone 1-800-378-3160, or at http://www.bcpiweb.com. It is also available
on the Commission's Web site at http://www.fcc.gov.
Synopsis of the Order on Reconsideration
1. In the Triennial Review Order (68 FR 52276, Sept. 2, 2003), the
Commission adopted rules implementing section 251 of the 1996 Act,
requiring incumbent local exchange carriers (LECs) to make elements of
their local network available to competitors on a unbundled basis. The
Triennial Review Order imposed only limited unbundling obligations with
respect to incumbent LECs' broadband loops. In USTA v. FCC, 359 F.3d
554 (D.C. Cir. 2004) (USTA II), the D.C. Circuit recently upheld these
rules. In particular, for loops serving mass market customers, the
Commission ruled that incumbent LECs need not unbundle either dark or
lit fiber loops that extend to the customer's premises (known as fiber-
to-the-home or FTTH loops) deployed in new build, or ``greenfield,''
situations. Where a FTTH loop is deployed in overbuild, or
``brownfield,'' situations, incumbent LECs must either provide
unbundled access to a 64 kbps transmission path over the fiber loop or
unbundled access to a spare copper loop. The FTTH rules expressly
applied only to fiber loops serving individual occupancy premises, and
not multiunit premises.
2. In this Order, the Commission determines that it is possible to
make an administrable distinction between predominantly residential
MDUs and other multiunit premises for purposes of its unbundling rules.
For example, a multi-level apartment building that houses retail stores
such as a drycleaner and/or a mini-mart on the ground floor would be
considered predominantly residential, while an office building that
contains a floor of residential suites would not.
3. The Commission concludes that it is appropriate to apply the
FTTH rules to fiber deployed to predominantly residential MDUs. The
Commission has the flexibility under section 251(d)(2) of the 1996 Act
to consider the statutory goals of section 706, which require the
Commission to encourage the deployment of advanced telecommunications
capability to all Americans. In the Order, the Commission finds that
the broadband deployment goals of section 706 justify reducing the
unbundling obligations on fiber to predominantly residential MDUs,
providing greater incentives for the deployment of such facilities. By
tailoring the Order's unbundling relief to predominantly residential
MDUs, the Commission draws an administrable line between those MDUs for
which unbundling relief would significantly increase broadband
investment incentives and those for which it would not.
4. The Commission further concluded that a new definition of FTTH
loops was necessary for purposes of the rules governing predominantly
residential MDUs. The prior definition of FTTH loops required the
deployment of fiber from the incumbent LEC central office all the way
to the end-user customer's premises. However, many MDUs have copper
wiring inside the building which is used to connect to each individual
tenant. To ensure that the incentives to deploy broadband facilities
extend to these buildings as well, the Commission determined that a
FTTH loop in the context of predominantly residential MDUs only
requires the deployment of fiber from the incumbent LEC's central
office to the MPOE of the MDU, which is usually located in the basement
of the building. With such a rule, the fact that the incumbent LEC may
have copper inside wiring in the MDU will not result in different
regulatory treatment.
Final Regulatory Flexibility Analysis
5. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the NPRM. The Commission sought written public comment
on the proposals in the NPRM, including comment on the IRFA. In the
Triennial Review Order, the Commission issued a Final Regulatory
Flexibility Analysis (FRFA) addressing comments submitted with regard
to the IRFA. This present Order addresses an issue raised by two
petitions for reconsideration of the Triennial Review Order. This
present Supplemental FRFA (Supplemental FRFA) conforms to the RFA.
6. Need for, and Objectives of, the Rules. This Order concludes
that the FTTH rules, which relieve the incumbent LECs from certain
unbundling obligations, will apply to MDUs that are predominantly
residential. In the Triennial Review Order released last year, the
Commission concluded that the broadband capabilities of FTTH loops
would be relieved from unbundling under section 251 of the Act. Today's
action builds on the broadband
[[Page 54590]]
principles of the Triennial Review Order by further extending the
unbundling relief to fiber loops deployed to predominantly residential
MDUs. In this Order, the Commission performs the section 706 balancing
for customers located in predominantly residential MDUs, and concludes
that fiber loops provided to such dwellings should have the same
unbundling relief as FTTH loops. The Order concludes that determining
what constitutes a predominantly residential MDU will be based on the
dwelling's predominant use. For example, a multi-level apartment
building that houses retail stores such as a drycleaner or a mini-mart
would be predominantly residential, while an office building that
contains a floor of residential suites would not. The Order further
clarifies that a loop will be considered a FTTH loop if it is deployed
to the minimum point of entry of a predominantly residential MDU,
regardless of the ownership of the inside wiring.
7. Summary of Significant Issues Raised by the Public. The subject
petitions for reconsideration were not submitted in response to the
previous FRFA, and did not address the FRFA.
8. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Would Apply. The RFA directs agencies to
provide a description of, and, where feasible, an estimate of, the
number of small entities that may be affected by the rules adopted
herein. The RFA generally defines the term ``small entity'' as having
the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. 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 Administration
(SBA).
9. In this section, we further describe and estimate the number of
small entity licensees and regulatees that may be affected by the
revised rule adopted in this Order. The most reliable source of
information regarding the total numbers of certain common carrier and
related providers nationwide, as well as the number of commercial
wireless entities, appears to be the data that the Commission publishes
in its Trends in Telephone Service report. The SBA has developed small
business size standards for wireline small businesses within the
commercial census category of Wired Telecommunications Carriers. Under
this category, a business is small if it has 1,500 or fewer employees.
Below, using the above size standards and others, we discuss the total
estimated numbers of small businesses that might be affected by our
actions.
10. We have included small incumbent local exchange carriers in
this present RFA analysis. As noted above, a ``small business'' under
the RFA is one that, inter alia, meets the pertinent small business
size standard (e.g., a telephone communications business having 1,500
or fewer employees), and ``is not dominant in its field of operation.''
The SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent local exchange carriers are not dominant in their field of
operation because any such dominance is not ``national'' in scope. We
have therefore included small incumbent local exchange carriers in this
RFA analysis, although we emphasize that this RFA action has no effect
on Commission analyses and determinations in other, non-RFA contexts.
11. Wired Telecommunications Carriers. The SBA has developed a
small business size standard for Wired Telecommunications Carriers,
which consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 1997, there were 2,225 firms in
this category, total, that operated for the entire year. Of this total,
2,201 firms had employment of 999 or fewer employees, and an additional
24 firms had employment of 1,000 employees or more. Thus, under this
size standard, the majority of firms can be considered small.
12. Incumbent Local Exchange Carriers. Neither the Commission nor
the SBA has developed a small business size standard specifically for
incumbent local exchange services. The appropriate size standard under
SBA rules is for the category Wired Telecommunications Carriers. Under
that size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 1,337 carriers have reported
that they are engaged in the provision of incumbent local exchange
services. Of these 1,337 carriers, an estimated 1,032 have 1,500 or
fewer employees and 305 have more than 1,500 employees. Consequently,
the Commission estimates that most providers of incumbent local
exchange service are small businesses that may be affected by our
proposed action.
13. In addition, the SBA has developed a small business size
standard for Cable and Other Program Distribution, which includes all
such companies generating $12.5 million or less in annual receipts.
According to Census Bureau data for 1997, there were a total of 1,311
firms in this category, total, that had operated for the entire year.
Of this total, 1,180 firms had annual receipts of under $10 million,
and an additional 52 firms had receipts of $10 million or more but less
than $25 million. Consequently, we estimate that the majority of
providers in this service category are small businesses that may be
affected by the proposed rules and policies.
14. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities: In this Order, we conclude
that fiber networks serving predominantly residential MDUs will be
subject to the same unbundling obligations as FTTH loops serving
individual occupancy premises. This rule modification will relieve the
providers of such broadband fiber loops from unbundling obligations
under section 251 of the Act. This relieved a compliance requirement
currently placed on such providers.
15. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered: The RFA requires an
agency to describe any significant alternatives that it has considered
in developing its approach, which may include the following four
alternatives (among others): ``(1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
16. In this Order, we conclude that fiber loops serving
predominantly residential MDUs should be governed by the FTTH rules.
The Order applies principles established in the Triennial Review Order
to more precisely calibrate the Commission's broadband policy for fiber
loops for customers that reside in MDUs. In response to petitions for
reconsideration requesting that the Commission look more closely at the
unbundling requirements for MDUs, the Order considers section 706 in
its unbundling analysis for customers located in predominantly
residential MDUs, and concludes that the record demonstrates that fiber
loops provided to such dwellings should have the same unbundling relief
as FTTH loops. Although this rule will deny unbundling to competitive
carriers seeking to serve customers in predominantly residential MDUs,
the
[[Page 54591]]
Commission concluded that such unbundling relief was necessary to
remove disincentives for incumbent LECs to deploy fiber to these
buildings. We believe that this approach is the least burdensome way to
ensure that all Americans, not just those residing in single family
homes, will be able to obtain the benefits of broadband services.
Alternatives considered, including the use of a single, categorical
rule, were not adopted because they do not accomplish the Commission's
objectives in this proceeding.
17. Report to Congress: The Commission will send a copy of the
Order, including this Supplemental FRFA, in a report to be sent to
Congress pursuant to the Congressional Review Act. In addition, the
Commission will send a copy of the Order, including this Supplemental
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Order
and Supplemental FRFA (or summaries thereof) will also be published in
the Federal Register.
Final Paperwork Reduction Act Analysis
18. This document does not contain new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. In addition, therefore, it does not contain
any new or modified ``information collection burden for small business
concerns with fewer than 25 employees,'' pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4).
Ordering Clauses
19. It is ordered that, pursuant to the authority contained in
sections 2, 4(i)-4(j), 10(d), 201, 251, 303(r), and 706 of the
Communications Act of 1934, as amended, 47 U.S.C. 152, 154(i)-4(j),
160(d), 201, 251, 303(r), 706 this Order on Reconsideration is adopted.
20. It is further ordered that, pursuant to the authority contained
in sections 2, 4(i)-4(j), 10(d), 201, 251, 303(r), and 706 of the
Communications Act of 1934, as amended, 47 U.S.C. 152, 154(i)-4(j),
160(d), 201, 251, 303(r), and 706, the petitions for reconsideration
filed by BellSouth and SureWest are granted in part.
21. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Order, including the Supplemental Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR part 51
Interconnection, Unbundling requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
0
Part 51 of Title 47 of the Code of Federal Regulations is amended as
follows:
PART 51--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
0
1. The authority citation for Part 51 continues to read:
Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54,
256, 271, 303(r), 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C.
151-55, 157, 201-05, 207-09, 218, 225-27, 251-54, 256, 271, 303(r),
332, 47 U.S.C. 157 note, unless otherwise noted.
0
2. Section 51.319 is amended by revising paragraph (a)(3) introductory
text to read as follows:
Sec. 51.319 Specific unbundling requirements.
(a) * * *
(3) Fiber-to-the-home loops. A fiber-to-the-home loop is a local
loop consisting entirely of fiber optic cable, whether dark or lit,
serving an end user's customer premises or, in the case of
predominantly residential multiple dwelling units (MDUs), a fiber optic
cable, whether dark or lit, that extends to the multiunit premises'
minimum point of entry (MPOE).
* * * * *
[FR Doc. 04-20356 Filed 9-8-04; 8:45 am]
BILLING CODE 6712-01-P