[comp.dcom.modems] Complete text of FCC 'modem fees' proposal

W8SDZ@SIMTEL20.ARPA (Keith Petersen) (07/25/87)

This file is available from SIMTEL20 as PD:<MISC.BBS>VANFEES2.TXT.  It
is being sent via netmail because of its importance to the network
community.

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[Revised 23-July-87 by Keith Petersen, W8SDZ, to correct a number
of typographical errors and to reformat the file into standard
ASCII text.]

This document is a copy of the FCC Notice of Proposed Rulemaking,
issued on July 17, 1987, to consider whether interstate access charges
should be assessed on enhanced service providers.  It was originally
downloaded from the IDI Board 703-734-1796, which features public policy
discussions and information about telecommunications policy issues
from Washington, DC.  Call the IDI board for more information on how
to participate before FCC in this matter.  It can be reached over PC
Pursuit.


********************************************************************


                           Before The
                Federal Communications Commission
                     Washington, D.C.  20554


                      CC Docket No. 87-215


In the Matter of


Amendments of Part 69
of the Commission's Rules
Relating to Enhanced Service
    Providers


                 NOTICE OF PROPOSED RULE MAKING

Adopted:  June 10, 1987:           Released:  July 17, 1987

By The Commission:


                        I.  INTRODUCTION

1. In 1983 we adopted a comprehensive "access charge" plan for the
recovery by local exchange carriers (LECs) of the costs associated with
the organization and termination of interstate calls.1  At that time,
we concluded that the immediate application of this plan to certain
providers of interstate services might unduly burden their operations
and cause disruptions in provision of service to the public.
Therefore, we granted temporary exemptions from payment of access
charges to certain classes of exchange access users, including enhanced
service providers.  Three years later, in the Second Report and Order
in CC Docket No. 86-1, in which we eliminated the exemption for resale
carriers, we announced our intention to reexamine the exemption granted
to enhanced service providers after our consideration of certain
related issues in the Computer III proceeding.2  We recently completed
that consideration.3  We issue this Notice of Proposed Rule Making to
consider whether interstate access charges should be assessed on
enhanced service providers.  We tentatively conclude that it is now
appropriate that enhanced service providers, like providers of
interstate basic services, be assessed access charges for their use of
local exchange facilities, and we propose amendments to our rules to
accomplish that end.

                         II.  BACKGROUND

2. In the access charge proceeding, the first of our four primary goals
was the "elimination of unreasonable discrimination and undue
preferences among rates for interstate services."4  Specifically, our
objective has been to distribute the costs of exchange access in a fair
and reasonable manner among all users of exchange access service,
irrespective of their designation as carriers, non-carrier service
providers, or private customers.5  We noted in 1983 that although many
entities used exchange access service, some were paying local business
rates.6  We endeavored to establish a more equitable sharing of costs,
and initially intended to impose interstate access charges on enhanced
service providers for their use of local exchange facilities to
originate and terminate their interstate offerings.7  Interstate
enhanced services often use common lines and local exchange switches in
the same manner as MTS and some MTS equivalent services.  To the extent
that this is the case, we concluded that equity and efficiency require
that those enhanced service providers pay the same charges for exchange
access.

3. In the discussion of the application of access charges to enhanced
service providers in the First Reconsideration, we said that we wanted
to develop a rate structure under which all exchange access users were
charged on the same basis.8  In the pre-access charge environment,
facilities-based interstate carriers othrr than AT&T (other common
carriers or OCCs) were paying carrier-type access charges in the form
of ENFIA rates, while WATS resellers, enhanced service providers, and
shares were paying much lower local business rates.9  Despite our
resolve to distribute the costs of exchange access among all users of
access service, we recognized that the immediate imposition of
interstate access charges on all users of exchange access would have
some undesirable consequences.  For example, we said that because WATS
resellers and enhanced service providers were currently paying local
business rates for their interstate access, the immediate imposition of
interstate access charges would have a substantial and sudden impact on
their costs, which could undermine their ability to continue to provide
service while they were adjusting their operations in response to the
new access charge rule.10

4. Because of these concerns about rate shock, we exempted certain
exchange access users from the payment of certain interstate access
charges in the First Reconsideration.11  At that time, we did not
intend those exemptions to be permanent,12 and we have since eliminated
several of them.  For example, in CC Docket No. 86-1, we considered the
question of access charge exemptions for resellers.  In the First
Report and Order in that docket, we eliminated the exemptions from all
access charges for WATS resellers and from traffic-sensitive access
charges for MTS resellers, on the grounds that these exemptions were
uneconomic and inequitable and could no longer be supported by a rate
shock rationale.13  We said there that our goal was to promote
competition, not to protect competitors, and we regarded the
elimination of the exemptions as another step toward an economically
rational pricing scheme.14

5. In the 86-1 Second Report and Order, we eliminated the exemption
for private line resellers that offer non-MTS/WATS services, which
are, in general, data and telex carriers.  In that order, we said
that data and telex carriers, like carriers offering MTS/WATS-type
services, use local exchange facilities to originate and terminate
interstate traffic and should pay the same charges as those assessed
on other interexchange carriers for their use of the same
facilities.15  We also noted that our purpose in adopting the
exemption for data and telex carriers in the first place had been to
grant transitional rather than permanent relief.16  Finally, we said
that our decisions to apply access charges to these resellers, as
well as to resellers of MTS and WATS, represented another step
toward our objective of distributing the costs of exchange access
service in a fair and reasonable manner.17

            III.  THE PROPOSED CHANGES IN THE ACCESS
              CHARGE TREATMENT OF ENHANCED SERVICE
                            PROVIDERS

6. When we modified our access charge plan in the First
Reconsideration, we granted enhanced service providers an exemption
from the payment of such chargesbecause we were concerned about rate
shock.  We feared that if we imposed full interstate access charges on
enhanced service providers, which were then paying local business rates
for their interstate access, they would face large increases in their
operating costs and might no longer be viable.18  Therefore, instead of
immediately applying access charges to enhanced service providers, we
decided to fashion a transition plan to avoid the severe rate impact of
assessing such charges at the outset.19  As a result, enhanced service
providers currently pay local business rates and subscriber line
charges for their switched access connections to local exchange company
central offices.20

7. We are concerned that the charges currently paid by enhanced service
providers do not contribute sufficiently to the costs of the exchange
access facilities they use in offering their services to the public.
As we have frequently emphasized in our various access charge orders,
our ultimate objective is to establish a set of rules that provide for
recovery of the costs of exchange access used in interstate service in
a fair, reasonable, and efficient manner from all users of access
service, regardless of their designation as carriers, enhanced service
providers, or private customers.21  Enhanced service providers, like
facilities-based interexchange carriers and resellers, use the local
network to provide interstate services.  To the extent that they are
exempt from access charges, the other users of exchange access pay a
disproportionate share of the costs of the local exchange that access
charges are designed to cover.

8. As we stated in the Notice initiating the CC Docket No. 86-1
proceeding, "concerns with 'rate shock' cannot sustain an uneconomic
pricing structure in perpetuity."22  Accordingly, in previous orders in
that docket, we have concluded that such concerns no longer justify
providing WATS resellers or resellers of other services with exemptions
from access charges.  Similarly, we tentatively conclude today that a
rate shock rationale no longer justifies an access charge exemption for
enhanced service providers.  Enhanced service providers have had ample
notice of our ultimate intent to apply interstate access charges to
their operations and ample opportunity to adjust their planning
accordingly.23  We discussed our intent to impose access charges on
enhanced service providers almost four years ago in the First
Reconsideration in CC Docket No. 78-72.24  The access charge plan
itself has now been in place for almost three years.  Moreover, in
Second Report and Order in CC Docket No. 86-1, we stated that after the
resolution of certain issues with regard to enhanced service providers
in Computer III, we would consider initiating a further Rule Making to
consider the application of access charges to enhanced service
providers.  Furthermore, we propose that the application of access
charges to enhanced service providers become effective on January 1,
1988.  This should provide aditional time for enhanced service
providers to incorporate this change into their business planning.
In sum, concerns over rate shock may justify a temporary, but not a
permanent, exemption, and it now appears to us that the temporary
period during which an access charge exemption was appropriate has
lapsed.

     9.  In addition, the financial impact on enhanced service
providers from the imposition of interstate access charges will
be substantially smaller than it would have been at the time of
the implementation of the access charge plan and will decrease in
the immediate future.  As the end user contribution to common
line costs through subscriber line charges increases, the
contribution from carriers and enhanced service providers through
carrier common line (CCL) charges decreases.  In May of 1984, the
CCL charge for both originating and terminating traffic was 5.24
cents per minute of use.25  Currently, the terminating charge is
4.33 cents per minute of use, and the originating charge is .69
cents per minute.  This decline in CCL charges represents a
sizeable drop in the costs of interstate access charges, and will
mitigate the impact of the imposition of those charges on
enhanced service providers.  With additional increases in
subscriber line charges scheduled for December 1988 and April
1989, the CCL charge for both originating and terminating traffic
should decrease even further.26  We are aware that, under our rules,
many enhanced service providers would be assessed terminating CCL
charges.27

10. Parties are free to comment upon our tentative conclusions about
rate shock.  Such comments should be accompanied by detailed data
supporting the arguments advanced therein.  Commenters addressing the
rate shock issue should provide information on network configurations
used by enhanced service providers and possible reconfigurations, as
well as data on industry rates, revenues, and growth rates going back
at least five years (which would include a period prior to the adoption
of our access charge plan).  For example, we request comment on the
types of interstate transmission and exchange access facilities that
enhanced service providers are currently using, and on the types of
enhanced service providers that would be affected by the elimination of
the exemption from interstate access charges.  Parties should also
discuss ways in which affected enhanced service providers might
reconfigure their networks in response to rule changes of the kind
proposed.  In addition, we request comment on the rates that enhanced
service providers ave charged customers, as well as on industry
revenues during that period.  If possible, commenters should provide
data on the demand for services and the revenues in the entire enhanced
service provider sector (including, but not limited to, the value added
networks and data base services), and on the possible effect of the
proposed rule changes on demand and revenues.  Finally, commenters
should provide information on the growth rates of the various segments
of the enhanced services industry, and the way in which those growth
rates might be affected by the proposed rule changes.  To the extent
that a commenter proposes that application of access charges to
enhanced service providers be implemented on a date later than January
1, 1988, such proposal should present specific arguments justifying the
continuation of the current special treatment of enhanced service
providers for the extended period.28

11. In addition, we request comment on issues involving implementation
of the proposal to assess interstate access charges on enhanced service
providers.  We invite parties to comment on the method of determining
interstate and intrastate usage of enhanced services for access charge
billing.  Parties that address the measurement issue are requested to
comment on the possibility of using the Entry Surrogate (EES) method
currently used to estimate jurisdictional usage for Feature Group A and
Feature Group B services.29  Finally, parties are of course free to
identify any other implementation problems they think the Commission
should address prior to applying access charges to enhanced service
providers and to suggest possible approaches to resolving these
problems.

                  IV.  PAPERWORK REDUCTION ACT

12. The proposal contained herein has been analyzed with respect to the
Paperwork Reduction Act of 1980 and found to contain no new or modified
form, information collection and/or recordkeeping, labeling,
disclosure, or record retention requirements, and will not increase or
decrease burden hours imposed on the public.30

                     V.  PROCEDURAL MATTERS

13. Pursuant to 47 U.S.C. 154(i), 154(j), 201-05, 218, and 403, and
5 U.S.C. 553, NOTICE IS HEREBY GIVEN of the proposed adoption of new
or modified rules.31

14. All interested persons MAY FILE comments on the issues and
proposals discussed herein not later than August 24, 1987 and replies
may be filed not later than September 14, 1987.  In accordance with the
provisions of Section 1.419 of the Commission's Rules, 47 C.F.R. 1.419
an original and five copies of all statements, briefs, comments, or
replies shall be filed with the Federal Communications Commission,
Washington, D.C. 20554, and all such filings will be available for
public inspection in the Docket Reference Room at the Commission's
Washington, D.C. office.  In reaching its decision, the Commission may
consider information and ideas not contained in filings, provided that
such information is reduced to writing and placed in the public file,
and provided that the fact of the Commission's reliance on any such
information or ideas is noted in the Order.

15. For purposes of this nonrestricted notice and comment Rule Making
proceeding, members of the public are advised that ex parte contacts
are permitted until the time a public notice is issued stating that a
substantial disposition of the matter is to be considered in a
forthcoming meeting or until a final order disposing of the matter is
adopted by the Commission, whichever occurs earlier.  In general, an
ex parte presentation is any written or oral communications (other than
formal written comments, pleadings, and oral arguments) between a
person outside the Commission and a Commissioner or a member of the
Commission's staff that addresses the merits of the proceeding.

16. Any person who submits a written ex parte presentation must
serve a copy of that presentation on the Commission's Secretary for
inclusion in the public file.  Any person who makes an oral ex parte
presentation addressing matters not fully covered in any previously-
filed written comments for the proceeding must prepare a written
summary of that presentation, and that written summary must be
served on the Commission's Secretary for inclusion into the public
file, with a copy to the Commission official receiving the oral
presentation.  Each ex parte presentation described above must state
on its face that the Secretary has been served, and must also state by
docket number the proceeding to which it relates. See generally,
Section 1.1231 of the Commission's Rule, 47 C.F.R. 1.1231.


FEDERAL COMMUNICATIONS COMMISSION
William J. Tricarico
Secretary

                           APPENDIX A

     Part 69 of Title 47 of the Code of Federal Regulations is
amended as follows:

     Part 69 - ACCESS CHARGES

     1.   The authority citation for Part 69 continues to read as
follows:

     AUTHORITY:  Secs. 4, 201, 202, 203, 205, 218, 403, and 410
of the Communications Act as amended; 47 U.S.C. 154, 201, 202,
203, 205, 218, 403, and 410.

     47 CFR Part 69 is amended to read as follows:

     2.   Section 69.2 is amended by revising paragraphs (m) and
(gg), and adding a new paragraph (nn), to read as follows:

      69.2 Definitions.

                            * * * * *

     (m) "End user" means any customer of an interstate or foreign
telecommunications service that is not a carrier or an enhanced
service provider except that a carrier other than a telephone
company or an enhanced service provider shall be deemed to be an
"end user" when such carrier or enhanced service provider uses a
telecommunications service for administrative purposes and a person
or entity that offers telecommunications services exclusively as a
reseller shall be deemed to be an "end user" if all resale
transmissions offered by such reseller originate on the premises of
such reseller;

                            * * * * *

     (gg) "Access minutes" or "access minutes of use" is that usage
of exchange facilities in interstate or foreign service for the
purpose of calculating chargeable usage. On the originating end of
an interstate or foreign call, usage is to be measured from the time
the originating end user's call is delivered by the telephone
company and acknowledged as received by the interexchange carrier or
enhanced service provider's facilities connected with the
originating exchange.  On the teminating end of an interstate or
foreign call, usage is to be measured from the time the call is
received by the end user in the terminating exchange.  Timing of
usage at both the originating and terminating end of an interstate
or foreign call shall terminate when the calling or called party
disconnects, whichever ever recognized first in the originating and
terminating end exchanges, as applicable.

                            * * * * *

     (nn) "Enhanced service provider" means a person providing
"enhanced services" as defined in Section 64.702(a) of these
rules.

     3.   Section 69.5 is amended by revising paragraph (b) to
read as follows:


       69.5 Persons to be assessed.

                            * * * * *

     (b) Carrier's carrier charges shall be computed and assessed
upon all interexchange carriers or enhanced service providers that
use local exchange switching facilities for the provision of
interstate or foreign telecommunications services or enhanced
services.

                            * * * * *

     4.   Section 69.105 is amended by revising paragraphs (a)
and (c) to read as follows:

      69.105 Carrier common line.

          (a) A charge that is expressed in dollars and cents per
access minute of use shall be assessed upon all interexchange
carriers or enhanced service providers that use local exchange
common line facilities for the provision of interstate or foreign
telecommunications services or enhanced services.

                            * * * * *

          (c) Any interexchange carrier or enhanced service provider
providing interstate or foreign telecommunications services or
enhanced services shall receive a credit for Carrier Common Line
charges to the extent that it resells services for which these
charges have already been assessed (e.g., MTS or MTS-type service of
other common carriers).

     5.   Section 69.106 is amended by revising paragraphs (a) to
read as follows:

      69.106 Line termination.

          (a) A charge that is expressed in dollars and cents per
access minute shall be assessed upon all interexchange carriers or
enhanced service providers that use local exchange switching
facilities for the provision of interstate or foreign
telecommunications services or enhanced services.

                            * * * * *

     6.   Section 69.107 is amended by revising paragraph (a) to
read as follows:

      69.107 Local switching.

          (a) Charges that are expressed in dollars and cents per
access minute of use shall be assessed upon all interexchange
carriers or enhanced service providers that use local exchange
switching facilities for the provision of interstate of foreign
telecommunications or enhanced services.

                            * * * * *

     7.   Section 69.108 is amended by revisigg paragraph (a) to
read as follows:

      69.108 Intercept.

          (a) A charge that is expressed in dollars and cents per
access minute of use shall be assessed upon all interexchange
carriers or enhanced service providers that use local exchange
switching facilities for the provision of interstate or foreign
telecommunications or enhanced services.

                            * * * * *

     8.   Section 69.111 is amended by revising paragraph (a) to
read as follows:

      69.111 Common transport.

          (a) A charge that is expressed in dollar and cents per
access minute shall be assessed upon all interexchange carriers or
enhanced service providers that use switching or transmission
facilities that are apportioned to the Common Transport element for
purposes of apportioning net investment.

                             * * * * *

     9.   Section 69.112 is amended by revising paragraphs (b)(1)
and (c) to read as follows:

      69.112 Dedicated transport.

                            * * * * *

          (b) Appropriate subelements shall be established for the
use of interface arrangements.  Charges for such subelements shall
be assessed and computed as follows: (1) Such charges shall be
assessed upon all interexchange carriers or enhanced service
providers for the interface arrangements they use to provide
interstate or foreign telecommunications or enhanced services;

          (c) A charge for the use of voice grade transmission
facilities shall be assessed upon interexchange carriers or enhanced
service providers that use such facilities to provide interstate or
foreign telecommunications or enhanced services.  Fees shall be
expressed in dollars and services.  Such charges shall be expressed
in dollars and cents per unit of capacity.  Total units of capacity
provided to an interexchange carrier or enhanced service provider
shall be measured by ascertaining the number of conversations that
could be transmitted simultaneously without producing blocking in
the dedicated transport facilities.  The capacity unit charge for
carriers that offer MTS shall weighted by a distance factor that
reflects the airline distance between the entry switch and the
interexchange facility.  The capacity unit charged for other
carriers or enhanced service providers shall be weighted by a
distance between the entry switch and the interexchange facility or
the airline distance between the entry switch and any interexchange
facility of carriers that offer MTS that is located within 5 miles
of such carrier or enhanced service provider's interexchange
facility.

                           FOOTNOTES

1.  MTS and WATS Market Structure, Memorandum Opinion and Order,
97 FCC 2d 682 (1983) (hereinafter First Reconsideration).

2.  WATS-Related and Other Amendments of Part 69 of the
Commission's Rules, Second Report and Order, CC Docket No. 86-1.
FCC 86-377, para. 15 (released August 26, 1986) (hereinafter 86-1
Second Report and Order).

3.  We concluded in our Computer III proceeding that protocol
processing would continue to be treated as an enhanced service.
Amendment to Sections 64702 of the Commission's Rules and
Regulations (Third Computer Inquiry), Report and Order, CC Docket
No. 85-229, FCC 87-102 (released May 22, 1987) (hereinafter Phase II
Order).  That decision had the effect of continuing to exempt from
access charges a major class of service providers --the VANs (value
added network providers), which offer protocol processing combined
with packet-switched data services.  See Amendment of Sections 64702
of the Commission's Rules and Regulations (Third Computer Inquiry),
Supplemental Notice of Proposed Rule Making, CC Docket No. 85-229,
FCC 86-253 (released June 16, 1986), para. 46 n. 56.

4.   See, e.g. First Reconsideration, supra note 1, at para. 3.

5.   Id. at para. 77.

6.   Id. at para. 79.

7.   Id. at para. 76.

8.   Id. at para. 77.

9.   Id. at para. 83.

10.  Id. at paras. 83-85.

11.  See 47 C.F.R.  69.5 (1985).

12.  First Reconsideration, supra note 1, at para. 83.

13.  WATS-Related and Other Amendments of Part 69 of the Commission's
Rules, Report and Order, CC Docket 86-1, FCC 86-115, paras. 26-27
(released March 21, 1986) (heriinafter First Report and Order).  To
the extent enhanced service providers resell MTS or MTS-equivalent
services in offering their services, we propose that they be treated
like MTS resellers --that is, that they be assessed the traffic-
sensitive access elements, but not the carrier common line charge.
See infra Appendix section 69.105(c).

14.  Id. at para. 26. The amendment of the rule deleting the
exemption for WATS resellers became effective June 1, 1986.  We also
provided a short transition period for WATS resellers. The
rule changes applied as of June 1, 1986, to all traffic on resold
WATS lines put in service after the order was adopted. For traffic
carried on resold WATS lines already in service as of the adoption
date of the order, we required resellers to pay all traffic-
sensitive access charges, effective une 1, 1986, but deferred their
payment of carrier common line charges until January 1, 1987.

15.  Second Report and Order, supra note 2, at para. 11. The
amendment of the rule deleting the exemption for non-MTS/WATS
resellers became effective January 1, 1987.

16.  Id. at para. 11.

17.  Id. at para. 14.

18.  First Reconsideration, supra note l, at para. 83.

19.  Id.

20.  See 47 C.F.R. 69.5(a).  Because enhanced service providers are
not carriers, they are treated as end users for the purposes of
Part 69.  See 47 C.F.R. 69.2(m).  To the extent that they purchase
special access, enhanced service providers also pay special access
surcharges.  47 C.F.R. 69.5(c).

21.  See First Reconsideration, supra note 1, at para. 77.

22.  WATS-Related and Other Amendments of Part 69 of the Commission's
Rules, Notice of Proposed Rule king, CC Docket No. 86-1, FCC 86-1,
para. 11 n. 27 (released January 6, 1986).  (hereinafter Notice).

23.  See. e.g. First Reconsideration, supra note 1, at para 76.

24.  Id. "Our intent was to apply these carrier's carrier charges to
interexchange carriers and to all resellers and enhanced service
providers...."

25.  MTS and WATS Market Structure, Amendment of Part 67 of the
Commission's Rules and Establishment of a Joint board.  Recommended
Decision and Order, CC Docket Nos. 78-72 and 80-286, FCC 87J.1,
para 43 (released March 31, 1987) (hereinafter Recommended Decision
and Order).

26.  MTS and WATS Market Structure, Amendment of Part 67 of the
Commission's Rules and Establishment of a Joint Board, Report and
Order, CC Docket Nos. 78-72 and 80-286. FCC 87-133 (released May 19,
1987).  On July 1, the subscriber line charge cap increased from
$2.00 to $2.60; the charge is scheduled to increase in December 1988
to $3.20; and in April 1989 to $3.50 per month.  In addition to the
direct reduction in CCL charges from the implementation of SLC's the
associated stimulation of usage of the network will further reduce
such charges.  Enhanced service providers would of course also pay
traffic sensitive charges.  Although these charges vary by
jurisdiction, the average nationwide traffic sensitive rate is
currently 3.12 cents per access minute of use.  See Tier I Tariff
Review Plan (from October 3, 1986 tariffs).

27.  Many enhanced services are provided pursuant to a network
configuration in which a call originates over an "open" end and
terminates over a "closed" end.  Our rules provide that terminating
CCL charges apply on the "open" end where a call has only such end.
CCL charges are not assessed on "closed" ends of calls.  See First
Report and Order, supra note 13, paras. 50-53: see also 47 C.F.R.
69.207.

28.  We note that the application of full access charges to WATS
resellers was accomplished pursuant to a modest phase-in.  See First
Report and Order, supra note 13, at para. 2.  In that instance,
however, we concluded that a phase-in was warranted because of
another significant change in our access charge plan, that is,
inclusion of WATS closed end lines in the special access category,
that was made concurrently with our decision to remove the
resellers' exemption.  Similar circumstances do not appear to exist
in the instant situation.

29.  This Commission has generally provided for the use of this
surrogate pending a decision by the Federal/State Joint Board in CC
Docket No. 85-124.  See Determination of Interstate Intrastate Usage
of Feature Group A and Feature Group B Access Service, Supplemental
Notice of Proposed Rule Making, CC Docket No. 85-124 (released
December 9, 1986).  That Joint Board is considering a permanent
resolution for the proper allocation of costs and revenues between
the state and federal jurisdictions for FGA and FGB.

30.  We hereby certify that the Regulatory Flexibility Act, 5 U.S.C.
60-612(1982), is not applicable this proceeding.  We have previously
determined that the formal provisions of the Regulatory Flexibility
Act are not applicable to proceedings to adopt or revise access
charge rules because local exchange carriers, the parties directly
subject to the access charge rules, do not fall within the Act's
definition of a small entity. Id. sec. 601.  See Mid-Tex Electric
Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985); Notice at
para. n. 54; and MTS and WATS Market Structure, Third Report and
Order, 93 FCC 2d 241, paras. 358-62 (1983).  While we have not
applied the formal procedures of the Regulatory Flexibility Act in
this proceeding, we have considered and will consider the effects of
the rule changes on enhanced service providers, some of which are
small businesses, just as we considered the effects of rule changes
on resellers in CC Docket No. 86-1.  We will also consider the impact
of rule changes upon small telephone companies.  See WATS Related and
Other Amendments of Part 69, Memorandum Opinion and Order, para. 29,
CC Docket No. 86-1 (released January 15, 1987).  In accordance with
the provisions of section 605 of the Regulatory Flexibility Act, a
copy of this certification will be sent to the Chief Counsel for
Advocacy of the Small Business Administration at the time of
publication of this NPRM in the Federal Register.

31.  If we adopt the rules proposed in Amendment of Part 69 of the
Commission's Rules and Regulations, Access Charges, To Conform It
With Part 36, Jurisdictional Separations Procedures, Notice of
Proposed Rule Making, CC Docket No. 87-113 (released May 1, 1987),
we would, of course, revise the rules proposed in this notice to
ensure consistency.

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