[Federal Register Volume 74, Number 63 (Friday, April 3, 2009)]
[Proposed Rules]
[Pages 15236-15239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7450]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36
[CC Docket No. 80-286; FCC 09-24]
Jurisdictional Separations and Referral to the Federal-State
Joint Board
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: Jurisdictional separations is the process by which incumbent
local exchange carriers (incumbent LECs) apportion regulated costs
between the intrastate and interstate jurisdictions. In this document,
the Commission seeks comment on extending until June 30, 2010 the
current freeze of part 36 category relationships and jurisdictional
cost allocation factors used in jurisdictional separations, which
freeze would otherwise expire on June 30, 2009. Extending the freeze
would allow the Commission to provide stability for, and avoid imposing
undue burdens on, carriers that must comply with the Commission's
separations rules while the Commission considers issues relating to
comprehensive reform of the jurisdictional separations process.
DATES: Comments are due on or before April 17, 2009. Reply comments are
due on or before April 24, 2009.
ADDRESSES: You may submit comments, identified by WC Docket No. 80-286,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
[[Page 15237]]
E-mail: [email protected], and include the following words in
the body of the message, ``get form.'' A sample form and directions
will be sent in response. Include the docket number in the subject line
of the message.
Mail: Secretary, Federal Communications Commission, 445
12th Street, SW., Washington, DC 20554.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Daniel Ball, Attorney Advisor, at 202-
418-1577, Pricing Policy Division, Wireline Competition Bureau.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in CC Docket No. 80-286, FCC 09-24,
released on March 27, 2009. The full text of this document is available
for public inspection during regular business hours in the FCC
Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC
20554.
Background
1. Jurisdictional separations is the process by which incumbent
LECs apportion regulated costs between the intrastate and interstate
jurisdictions. The NPRM proposes extending the current freeze of part
36 category relationships and jurisdictional cost allocation factors
used in jurisdictional separations, which freeze would otherwise expire
on June 30, 2009, until June 30, 2010. Extending the freeze will allow
the Commission to provide stability for, and avoid imposing undue
burdens on, carriers that must comply with the Commission's separations
rules while the Commission considers issues relating to comprehensive
separations reform.
2. The 2001 Separations Freeze Order, 66 FR 33202, June 21, 2001,
froze all part 36 category relationships and allocation factors for
price cap carriers and all allocation factors for rate-of-return
carriers. Rate-of-return carriers had the option to freeze their
category relationships at the outset of the freeze. The freeze was
originally established July 1, 2001 for a period of five years, or
until the Commission completed separations reform, whichever occurred
first. The 2006 Separations Freeze Extension Order, 71 FR 29843, May
24, 2006, extended the freeze for three years or until the Commission
completed separations reform, whichever occurred first.
3. In this NPRM the Commission seeks comment on extending the
freeze for one year, until June 30, 2010. The proposed extension would
allow the Commission to work with the Federal-State Joint Board on
Separations to achieve comprehensive separations reform. Pending
comprehensive reform, the Commission tentatively concludes that the
existing freeze should be extended on an interim basis to avoid the
imposition of undue administrative burdens on incumbent LECs. The
Commission asks commenters to consider how costly and burdensome an
extension of the freeze, or a reversion to the pre-freeze part 36
rules, would be for small incumbent LECs, and whether an extension
would disproportionately affect specific types of carriers or
ratepayers. Incumbent LECs have not been required to utilize the
programs and expertise necessary to prepare separations information
since the inception of the freeze almost eight years ago. If the
Commission does not extend the separations freeze, and instead allows
the earlier separations rules to return to force, incumbent LECs would
be required to reinstitute their separations processes, and they may no
longer have the necessary employees and systems in place to do so.
Given the imminent expiration of the current separations freeze, it is
unlikely that incumbent LECs would have sufficient time to reinstitute
the separations processes necessary to comply with the earlier
separations rules.
4. The extended freeze would be implemented as described in the
2001 Separations Freeze Order. Specifically, price-cap carriers would
use the same relationships between categories of investment and
expenses within part 32 accounts and the same jurisdictional allocation
factors that have been in place since the inception of the current
freeze on July 1, 2001. Rate-of-return carriers would use the same
frozen jurisdictional allocation factors, and would use the same frozen
category relationships if they had opted previously to freeze those as
well.
Comment Filing Procedures
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated in the DATES section of this
document. Comments may be filed using: (1) The Commission's Electronic
Comment Filing System (ECFS); (2) the Federal Government's eRulemaking
Portal; or (3) by filing paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to [email protected], and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
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People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
Ex Parte Requirements
This matter shall be treated as a ``permit-but-disclose''
proceeding in accordance with the Commission's ex parte rules. See 47
CFR 1.1200, 1.1206. 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 generally is required.
See 47 CFR 1.1206(b). Other rules pertaining to oral and written ex
parte presentations in permit-but-disclose proceedings are set forth in
section 1.1206(b) of the Commission's rules. 47 CFR 1.1206(b).
Initial Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, as amended
(RFA), the Commission has prepared this Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on a
substantial number of small entities by the policies and rules proposed
in this NPRM. Written public comments are requested on this IRFA.
Comments must be identified as responses to the IRFA and must be filed
by the deadlines for comments on the NPRM. The Commission will send a
copy of the NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). See 5 U.S.C.
603(a).
Need for, and Objectives of, the Proposed Rules
In the 1997 Separations NPRM, the Commission noted that the network
infrastructure by that time had become vastly different from the
network and services used to define the cost categories appearing in
the Commission's part 36 jurisdictional separations rules, and that the
separations process codified in part 36 was developed during a time
when common carrier regulation presumed that interstate and intrastate
telecommunications service must be provided through a regulated
monopoly. Thus, the Commission initiated a proceeding with the goal of
reviewing comprehensively the Commission's part 36 procedures to ensure
that they meet the objectives of the 1996 Act. The Commission sought
comment on the extent to which legislative changes, technological
changes, and market changes might warrant comprehensive reform of the
separations process. Because over eleven years have elapsed since the
closing of the comment cycle on the 1997 Separations NPRM, and over
seven years have elapsed since the imposition of the freeze, and
because the industry has experienced myriad changes during that time,
we ask that commenters, in their comments on the present NPRM, comment
on the impact of a further extension of the freeze.
The purpose of proposed extension of the freeze is to ensure that
the Commission's separations rules meet the objectives of the 1996 Act,
and to allow the Commission additional time to consider changes that
may need to be made to the separations process in light of changes in
the law, technology, and market structure of the telecommunications
industry.
Legal Basis
The legal basis for the NPRM is contained in sections 1, 2, 4, 201-
205, 215, 218, 220, 229, 254, and 410 of the Communications Act of
1934, as amended, 47 U.S.C. 151, 152, 154, 201-205, 215, 218, 220, 229,
254 and 410, and 1.1200-1.1216 of the Commission's rules, 47 CFR 1.1,
1.411-1.429, 1.1200-1.1216.
Description and Estimate of the Number of Small Entities to Which Rules
May 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 proposed rules, if adopted. 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 section 3 of the
Small Business Act. Under the Small Business Act, a ``small business
concern'' is one that: (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).
We have included small incumbent LECs in this RFA analysis. As
noted above, a ``small business'' under the RFA is one that, inter
alia, meets the pertinent small business size standard established by
the SBA, and is not dominant in its field of operation. Section 121.201
of the SBA regulations defines a small wireline telecommunications
business as one with 1,500 or fewer employees. In addition, the SBA's
Office of Advocacy contends that, for RFA purposes, small incumbent
LECs are not dominant in their field of operation because any such
dominance is not ``national'' in scope. Because our proposals
concerning the part 36 separations process will affect all incumbent
LECs providing interstate services, some entities employing 1,500 or
fewer employees may be affected by the proposals made in this NPRM. We
therefore have included small incumbent LECs in this RFA analysis,
although we emphasize that this RFA action has no effect on the
Commission's analyses and determinations in other, non-RFA contexts.
Neither the Commission nor the SBA has developed a small business size
standard specifically for providers of incumbent local exchange
services. The closest applicable size standard under the SBA rules is
for Wired Telecommunications Carriers. Under the SBA definition, a
carrier is small if it has 1,500 or fewer employees. According to the
FCC's Telephone Trends Report data, 1,311 incumbent LECs reported that
they were engaged in the provision of local exchange services. Of these
1,311 carriers, an estimated 1,024 have 1,500 or fewer employees and
287 have more than 1,500 employees. Consequently, the Commission
estimates that most incumbent LECs are small entities that may be
affected by the rules and policies adopted herein.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
None.
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 reaching its proposed approach, which may
include the following four alternatives (among others): (1) The
establishment of differing compliance and reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or part thereof, for small
entities.
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As described above, seven years have elapsed since the imposition
of the freeze, thus, we ask commenters, in their comments on the
present NPRM, to address the impact of a further extension of the
freeze. We seek comment on the effects our proposals would have on
small entities, and whether any rules that we adopt should apply
differently to small entities. We direct commenters to consider the
costs and burdens of an extension on small incumbent LECs and whether
the extension would disproportionately affect specific types of
carriers or ratepayers.
Implementation of the proposed freeze extension would ease the
administrative burden of regulatory compliance for LECs, including
small incumbent LECs. The freeze has eliminated the need for all
incumbent LECs, including incumbent LECs with 1500 employees or fewer,
to complete certain annual studies formerly required by the
Commission's rules. If an extension of the freeze can be said to have
any effect under the RFA, it is to reduce a regulatory compliance
burden for small incumbent LECs, by abating the aforementioned
separations studies and providing these carriers with greater
regulatory certainty.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
None.
Paperwork Reduction Act
The NPRM does not propose any new or modified information
collections subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. In addition, therefore, it does not contain any new,
modified, or proposed ``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, 44 U.S.C.
3506(c)(4).
List of Subjects in 47 CFR Part 36
Communications common carriers, Reporting and recordkeeping
requirements, Telephone, and Uniform System of Accounts.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 36 as follows:
PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES,
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES
1. The authority citation for part 36 continues to read:
Authority: 47 U.S.C. Secs. 151, 154(i) and (j), 205, 221(c),
254, 403, and 410.
2. In 47 CFR part 36 remove the words ``June 30, 2006'' where ever
they appear and add, in their place, the words ``June 30, 2010'' in the
following places:
a. Section 36.3(a), (b), (c), (d), and (e);
b. Section 36.123(a)(5), and (a)(6);
c. Section 36.124(c), and (d);
d. Section 36.125(h), (i), and (j);
e. Section 36.126(b)(5), (c)(4), (e)(4), and (f)(2);
f. Section 36.141(c);
g. Section 36.142(c);
h. Section 36.152(d);
i. Section 36.154(g);
j. Section 36.155(b);
k. Section 36.156(c);
l. Section 36.157(b);
m. Section 36.191(d);
n. Section 36.212(c);
o. Section 36.214(a);
p. Section 36.372;
q. Section 36.374(b), and (d);
r. Section 36.375(b)(4), and (b)(5);
s. Section 36.377(a) introductory text, (a)(1)(ix), (a)(2)(vii),
(a)(3)(vii), (a)(4)(vii), (a)(5)(vii), and (a)(6)(vii);
t. Section 36.378(b)(1);
u. Section 36.379(b)(1), and (b)(2);
v. Section 36.380(d), and (e);
w. Section 36.381(c) and (d); and
x. Section 36.382(a).
[FR Doc. E9-7450 Filed 4-2-09; 8:45 am]
BILLING CODE 6712-01-P