FR Doc 04-28531

[Federal Register: December 29, 2004 (Volume 69, Number 249)]
[Rules and Regulations]
[Page 77950-77954]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de04-13]

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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
04-248]

Review of the Section 251 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-to-the-curb (FTTC) architectures pursuant to section 251 of
the Telecommunications Act of 1996 (1996 Act). Specifically, the
Commission concludes that FTTC loops will be subject to the same,
limited unbundling obligations governing fiber-to-the-home (FTTH)
loops. The Commission further clarifies that incumbent LECs need not
build time division multiplexing (TDM) capability into new packet-based
networks or into existing packet-based networks that never had TDM
capability. In addition, the Order also clarifies that where an
incumbent LEC has deployed new FTTH or FTTC loops using packet-based
equipment, and they nevertheless need to hand off a signal to some
customers in TDM format in order

[[Page 77951]]

to be compatible with an end user's customer premises equipment, this
``TDM handoff'' does not change the scope of unbundling relief.

DATES: Effective January 28, 2005.

FOR FURTHER INFORMATION CONTACT: Marcus Maher, Attorney-Advisor,
Competition Policy Division, Wireline Competition Bureau, at (202) 418-
1580, or via the Internet at marcus.maher@fcc.gov.

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 04-248, adopted October 14, 2004, and released
October 18, 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 via e-mail http://www.bcpiweb.com It is also available on the Commission's website at http://www.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.

Synopsis of the Order on Reconsideration

1. In the Triennial Review Order, 68 FR 52276, September 2, 2003,
the Commission adopted rules pursuant to section 251 of the 1996 Act,
requiring incumbent local exchange carriers (LECs) to make elements of
their local network available to competitors on an 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. The Commission granted the greatest unbundling relief for dark
or lit fiber loops serving mass market customers that extend to the
customer's premises (known as fiber-to-the-home or FTTH loops) in new
build or ``greenfield'' situations. For those loops, the Commission
determined that no unbundling is required. However, where a FTTH loop
is deployed in overbuild, or ``brownfield,'' situations, the Commission
determined that 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.
2. In this Order, the Commission concludes that it is appropriate
to apply the FTTH rules to FTTC loops, as well. With respect to new
FTTC deployments (``greenfield'' deployments), the Commission finds
that competitive LECs face similar barriers to deployment as incumbent
LECs. In the Triennial Review Order, the Commission found that entry
barriers for FTTH deployments were largely the same for incumbent and
competitive carriers. The Commission finds that this conclusion remains
valid regardless of the loop technology deployed, and thus equally
applies to greenfield deployments of FTTC loops. However, the
Commission also finds that just as overbuild FTTH deployments ``merit[]
slightly different treatment than greenfield FTTH deployments,'' so,
too, do overbuild FTTC deployments. Thus, in the overbuild context, the
Commission finds that competitive LECs face impairment to a limited
extent, and requires that competitive LECs should have continued access
to either a copper loop or a 64 kbps transmission path in those
situations.
3. Second, the Commission utilizes its discretion under the section
251(d)(2) ``at a minimum'' authority to consider the statutory goals of
section 706 which requires the Commission to encourage the deployment
of advanced telecommunications capability to all Americans. The
Commission concludes that subjecting FTTC loops to the same unbundling
framework adopted for FTTH loops furthers the goals of section 706. The
Commission finds that the record in this case demonstrates that further
reducing the unbundling obligations associated with FTTC loops would
eliminate disincentives to invest in broadband facilities and,
therefore, furthers section 706's goals. The Commission, therefore,
reconsiders its determination in the Triennial Review Order that FTTC
loops should be characterized as hybrid loop architecture for the
purpose of the unbundling regulations, and revises its broadband loop
unbundling rules to regulate FTTC loops in the same manner as adopted
for FTTH loops in the Triennial Review Order.
4. This Order tailors unbundling relief by defining a FTTC loop as
a fiber transmission facility connecting to copper distribution plant
that is not more than 500 feet from the customer's premises, and
further specifying that the fiber transmission facility in a FTTC loop
must connect to copper distribution plant at a serving area interface
from which every other copper distribution subloop also is not more
than 500 feet from the respective customer's premises.
5. Petitions by BellSouth and SureWest also sought clarification
whether the Commission's existing unbundling rules require incumbent
LECs to build time division multiplexing (TDM) capabilities into
networks at the request of competitive LECs. Consequently, this Order
clarifies that incumbent LECs are not required to add TDM capabilities
into new packet-based networks or into existing packet-based networks
that never had TDM capability. In addition, the Order also clarifies
that where an incumbent LEC has deployed new FTTH or FTTC loops using
packet-based equipment, and they nevertheless need to hand off a signal
to some customers in TDM format in order to be compatible with an end
user's customer premises equipment, this ``TDM handoff'' does not
change the scope of unbundling relief.

Final Paperwork Reduction Act Analysis

6. 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).

Supplemental Final Regulatory Flexibility Analysis

7. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the NPRM. 67 FR 1947, January 15, 2002. 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 issues raised by two petitions for reconsideration of the
Triennial Review Order. Specifically, the Order modifies the unbundling
rules governing fiber-to-the-curb (FTTC) loops in response to a
petition from BellSouth. The Order also clarifies existing rules
regarding network modifications in response to petitions from BellSouth
and SureWest. This present Supplemental FRFA (Supplemental FRFA)
conforms to the RFA.

[[Page 77952]]

8. Need for, and Objectives of, the Rules. In response to
BellSouth's petition for reconsideration of the Triennial Review Order,
this Order promotes investment in broadband facilities through the
implementation of the unbundling requirements of section 251 of the
Act. Specifically, the Order concludes that the fiber-to-the-home
(FTTH) rules, which relieve the incumbent LECs from certain unbundling
obligations, will also apply to FTTC loops. Specifically, a FTTC loop
is a fiber transmission facility connecting to copper distribution
plant that is not more than 500 feet from the customer's premises. The
Commission further specifies that the fiber transmission facility in a
FTTC loop must connect to copper distribution plant at a serving area
interface from which every other copper distribution subloop also is
not more than 500 feet from the respective customer's premises. 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 principles of the Triennial Review Order by further extending
the unbundling relief to FTTC loops. In this Order, the Commission
concludes that, as with FTTH, competitors are not impaired without
access to FTTC loops in new build (``greenfield'') situations. While
requesting carriers may face limited impairment in overbuild
(``brownfield'') situations, that is addressed by requiring unbundled
access to a 64 kbps channel or unbundled access to spare copper
facilities. Based on this analysis of impairment and the section 706
balancing of investment incentives against the costs of unbundling for
FTTC, the Commission concludes that FTTC loops should have the same
unbundling relief as FTTH loops.
9. Petitions by BellSouth and SureWest also sought clarification
whether the Commission's existing unbundling rules require incumbent
LECs to build time division multiplexing (TDM) capabilities into
networks at the request of competitive LECs. Consequently, this Order
clarifies that incumbent LECs are not required to add TDM capabilities
into new packetized transmission facilities. In addition, the Order
also clarifies that where an incumbent LEC has deployed FTTH or FTTC
loops using packet-based equipment, and they nevertheless need to hand
off a signal to some customers in TDM format in order to be compatible
with an end user's customer premises equipment, this ``TDM handoff''
does not change the scope of unbundling relief.
10. 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.
11. 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).
12. 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.
13. 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.
14. 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.
15. 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.
16. Cable and Other Program Distribution. 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.
17. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities: In this Order, we conclude
that FTTC loops will be subject to the same unbundling obligations as
FTTH loops. This rule modification will relieve the providers of such
broadband loops from unbundling obligations under section 251 of the
Act. This relieved a section

[[Page 77953]]

251 unbundling requirement currently placed on such providers.
18. 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.''
19. In this Order, we conclude that FTTC loops should be governed
by the FTTH loop rules. The Order considered, and rejected, the
alternative of retaining the existing unbundling obligations for FTTC.
The Order reached this conclusion by applying principles established in
the Triennial Review Order to more precisely calibrate the Commission's
policy for broadband loops. In response to petitions for
reconsideration requesting that the Commission look more closely at the
unbundling requirements for FTTC loops, the Order considers potential
impairment faced by requesting carriers and weighs section 706's
broadband deployment goals, and concludes that the record demonstrates
that FTTC loops should have the same unbundling relief as FTTH loops.
Although this rule will deny unbundling to competitive carriers seeking
to serve customers served by FTTC loops, the Commission concluded that
requesting carriers face no impairment in greenfield situations and
only limited impairment in brownfield situations, which is addressed
through access to a 64 kbps channel or a spare copper facility.
Further, such unbundling relief was necessary to remove disincentives
for incumbent LECs to deploy FTTC facilities. Alternatives considered,
including the denial of such unbundling relief to FTTC, were not
adopted because they do not accomplish the Commission's objectives in
this proceeding of promoting broadband deployment.
20. 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.

Ordering Clauses

21. 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,
and that part 51 of the Commission's rules, 47 CFR part 51, is amended
as set forth in Appendix B of the Order. The requirements of this Order
shall become effective 30 days after publication in the Federal
Register.
22. 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.
23. 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

For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 51 as follows:

PART 51--INTERCONNECTION

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) to read as
follows:

Sec. 51.319 Specific unbundling requirements.

(a) * * *
(3) Fiber loops. (i) Definitions. (A) 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).
(B) Fiber-to-the-curb loops. A fiber-to-the-curb loop is a local
loop consisting of fiber optic cable connecting to a copper
distribution plant that is not more than 500 feet from the customer's
premises or, in the case of predominantly residential MDUs, not more
than 500 feet from the MDU's MPOE. The fiber optic cable in a fiber-to-
the-curb loop must connect to a copper distribution plant at a serving
area interface from which every other copper distribution subloop also
is not more than 500 feet from the respective customer's premises.
(ii) New builds. An incumbent LEC is not required to provide
nondiscriminatory access to a fiber-to-the-home loop or a fiber-to-the-
curb loop on an unbundled basis when the incumbent LEC deploys such a
loop to an end user's customer premises that previously has not been
served by any loop facility.
(iii) Overbuilds. An incumbent LEC is not required to provide
nondiscriminatory access to a fiber-to-the-home loop or a fiber-to-the-
curb loop on an unbundled basis when the incumbent LEC has deployed
such a loop parallel to, or in replacement of, an existing copper loop
facility, except that:
(A) The incumbent LEC must maintain the existing copper loop
connected to the particular customer premises after deploying the
fiber-to-the-home loop or the fiber-to-the-curb loop and provide
nondiscriminatory access to that copper loop on an unbundled basis
unless the incumbent LEC retires the copper loops pursuant to paragraph
(a)(3)(iv) of this section.
(B) An incumbent LEC that maintains the existing copper loops
pursuant to paragraph (a)(3)(iii)(A) of this section need not incur any
expenses to ensure that the existing copper loop remains capable of
transmitting signals prior to receiving a request for access pursuant
to that paragraph, in which case the incumbent LEC shall restore the
copper loop to serviceable condition upon request.
(C) An incumbent LEC that retires the copper loop pursuant to
paragraph (a)(3)(iv) of this section shall provide nondiscriminatory
access to a 64 kilobits per second transmission path capable of voice
grade service over the

[[Page 77954]]

fiber-to-the-home loop or fiber-to-the-curb loop on an unbundled basis.
(iv) Retirement of copper loops or copper subloops. Prior to
retiring any copper loop or copper subloop that has been replaced with
a fiber-to-the-home loop or a fiber-to-the-curb loop, an incumbent LEC
must comply with:
(A) The network disclosure requirements set forth in section
251(c)(5) of the Act and in Sec. 51.325 through Sec. 51.335; and
(B) Any applicable state requirements.
* * * * *

0
3. Section 51.325 is amended by revising paragraph (a)(4) to read as
follows:

Sec. 51.325 Notice of network changes: Public notice requirement.

(a) * * *
(4) Will result in the retirement of copper loops or copper
subloops, and the replacement of such loops with fiber-to-the-home
loops or fiber-to-the-curb loops, as those terms are defined in Sec.
51.319(a)(3).
* * * * *

0
4. Section 51.331 is amended by revising paragraph (c) to read as
follows:

Sec. 51.331 Notice of network changes: Timing of notice.

* * * * *
(c) Competing service providers may object to incumbent LEC notice
of retirement of copper loops or copper subloops and replacement with
fiber-to-the-home loops or fiber-to-the-curb loops in the manner set
forth in Sec. 51.333(c).

0
5. Section 51.333 is amended by revising paragraphs (b) and (c)
introductory text, and by revising paragraph (f) to read as follows:

Sec. 51.333 Notice of Network Changes: Short term notice, objections
thereto and objections to retirement of copper loops or copper
subloops.

* * * * *
(b) Implementation date. The Commission will release a public
notice of filings of such short term notices or notices of replacement
of copper loops or copper subloops with fiber-to-the-home loops or
fiber-to-the-curb loops. The effective date of the network changes
referenced in those filings shall be subject to the following
requirements:
(1) Short term notice. Short term notices shall be deemed final on
the tenth business day after the release of the Commission's public
notice, unless an objection is filed pursuant to paragraph (c) of this
section.
(2) Replacement of copper loops or copper subloops with fiber-to-
the-home loops or fiber-to-the-curb loops. Notices of replacement of
copper loops or copper subloops with fiber-to-the-home loops or fiber-
to-the-curb loops shall be deemed approved on the 90th day after the
release of the Commission's public notice of the filing, unless an
objection is filed pursuant to paragraph (c) of this section. Incumbent
LEC notice of intent to retire any copper loops or copper subloops and
replace such loops or subloops with fiber-to-the-home loops or fiber-
to-the-curb loops shall be subject to the short term notice provisions
of this section, but under no circumstances may an incumbent LEC
provide less than 90 days notice of such a change.
(c) Objection procedures for short term notice and notices of
replacement of copper loops or copper subloops with fiber-to-the-home
loops or fiber-to-the-curb loops. An objection to an incumbent LEC's
short term notice or to its notice that it intends to retire copper
loops or copper subloops and replace such loops or subloops with fiber-
to-the-home loops or fiber-to-the-curb loops may be filed by an
information service provider or telecommunications service provider
that directly interconnects with the incumbent LEC's network. Such
objections must be filed with the Commission, and served on the
incumbent LEC, no later than the ninth business day following the
release of the Commission's public notice. All objections filed under
this section must:
* * * * *
(f) Resolution of objections to replacement of copper loops or
copper subloops with fiber-to-the-home loops or fiber-to-the-curb
loops. An objection to a notice that an incumbent LEC intends to retire
any copper loops or copper subloops and replace such loops or subloops
with fiber-to-the-home loops or fiber-to-the-curb loops shall be deemed
denied 90 days after the date on which the Commission releases public
notice of the incumbent LEC filing, unless the Commission rules
otherwise within that time. Until the Commission has either ruled on an
objection or the 90-day period for the Commission's consideration has
expired, an incumbent LEC may not retire those copper loops or copper
subloops at issue for replacement with fiber-to-the-home loops or
fiber-to-the-curb loops.

[FR Doc. 04-28531 Filed 12-28-04; 8:45 am]

BILLING CODE 6712-01-P