*Pages 1--6 from Microsoft Word - 13602.doc* Federal Communications Commission DA 01- 2894 Before the Federal Communications Commission Washington, D. C. 20554 ) In the Matter of ) ) Verizon- West Virginia ) Petition for Limited Modification of LATA ) Boundary to Provide Expanded Local ) File No. NSD- L- 00- 232 Calling Service (ELCS) ) MEMORANDUM OPINION AND ORDER Adopted: December 19, 2001 Released: December 19, 2001 By the Acting Chief, Network Services Division, Common Carrier Bureau: I. INTRODUCTION 1. On September 14, 2000, Verizon- West Virginia (“ Verizon”), pursuant to Section 3( 25) of the Communications Act of 1934, as amended, 1 filed a pet it ion (Pet it ion) to provide two- way, non-opt ional expanded local calling service (ELCS) bet ween various exchanges in West Virginia. 2 Verizon’s pet it ion request s limited modificat ions of local access and transport area (LATA) boundaries. 3 The requested modification would not affect the current local calling options; instead, the modification would only increase the local calling area. The petition was placed on public notice, 4 and no comments were filed. For the reasons stated below, we grant Verizon’s request. 1 See 47 U. S. C. § 153( 25). 2 Glenville and Gassaway are Verizon exchanges. Grantsville and Arnoldsburg are Citizens Telecommunications Company exchanges. 3 Section 3( 25) of the Act defines LATAs as those areas established prior to enactment of the 1996 Act by a Bell Operating Company (BOC) such that no exchange area includes points within more than “one metropolitan statistical area, consolidated metropolitan statistical area, or State, except as expressly permitted under the AT& T Consent Decree”; or established or modified by a BOC after such date of enactment and approved by the Commission. 4 See Public Notice, “Comment Sought on Verizon- West Virginia Request for Limited Modification of LATA Boundaries to Provide Expanded Local Calling Service Between Various Exchanges in West Virginia, rel. Nov. 15, 2000. 1 Federal Communications Commission DA 01- 2894 2 II. BACKGROUND 2. Requests for new ELCS routes are generally initiated by local subscribers. IntraLATA ELCS routes can be ordered by the state commission. 5 For interLATA routes, prior to the Telecommunications Act of 1996 (1996 Act), 6 the Bell Operat ing Companies (BOCs) were required t o secure state approval and then obtain a waiver from the United States District Court for the District of Columbia (Dist rict Court ). 7 In the years between the Consent Decree 8 and the 1996 Act, the District Court received more than one hundred requests for Consent Decree waivers to permit new interLATA ELCS routes. 9 Because of the large number of requests involved and because most of the requests were non- controversial, the District Court developed a streamlined process for handling such requests. 10 3. Under the st reamlined process developed by the Dist rict Court , the BOC submitt ed it s waiver request to the Department of Justice (Department). The Department reviewed the request and then submitted the request, along with the Department's recommendation, to the District Court. In evaluating ELCS requests, the Department and the District Court considered the number of customers or access lines involved 11 as well as whether a sufficiently strong community of interest between the exchanges justified granting a waiver of the Consent Decree. 12 A communit y of int erest could be demonstrated by such evidence as: (1) poll results showing that customers in the affected exchange were willing t o pay higher rat es to be included in an expanded local calling area; 13 (2) usage data demonst rat ing a high level of calling bet ween the exchanges; and (3) narrat ive st at ement s describing how the two exchanges were part of one community and how the lack of 5 United States v. Western Electric Company, Inc., 569 F. Supp. 990, 995 (D. D. C. 1983). “The distance at which a local call becomes a long distance toll call has been, and will continue to be, determined exclusively by the various state regulatory bodies.” Id. 6 Pub. L. No. 104- 104, 110 Stat. 56 (1996). 7 United States v. Western Electric, 569 F. Supp. at 995. 8 The Consent Decree required AT& T to divest its ownership of the BOCs. United States v. American Telephone and Telegraph Co., 552 F. Supp. 131 (D. D. C. 1982), aff'd sub nom. Maryland v. United States, 460 U. S. 1001 (1983). 9 Petitions for Limited Modification of LATA Boundaries to Provide Expanded Local Calling Service (ELCS) at Various Locations, Memorandum Opinion and Order, 12 FCC Rcd 10646, 10648 (July 1997 Order). 10 See United States v. Western Electric Company, Inc., No. 82- 0192 (D. D. C. Feb. 6, 1984); United States v. Western Electric Company, Inc., No. 82- 0192 (D. D. C. Mar. 15, 1984). 11 See United States v. Western Electric Company, Inc., No. 82- 0192, slip op. at 3 n. 8 (D. D. C. July 19, 1984) (July 1984 Order). 12 See, e. g., United States v. Western Electric Company, Inc., No. 82- 0192 slip op. at 2, 3 n. 3 (D. D. C. Jan. 31, 1985) (Jan. 1985 Order); United States v. Western Electric Company, Inc., No. 82- 0192 (D. D. C. Dec. 3, 1993); United States v. Western Electric Company, Inc., No. 82- 0192 (D. D. C. Dec. 17, 1993). 13 See July 1984 Order at 2 n. 5. 2 Federal Communications Commission DA 01- 2894 3 local calling between the exchanges caused problems for community residents. 14 In addition, the Department and the District Court gave deference to the state's community of interest finding. The District Court also considered the competitive effects of granting a proposed ELCS waiver. 15 4. Matters previously subject to the Consent Decree are now governed by the Act. 16 Under section 3( 25)( B) of the Act, BOCs may modify LATA boundaries, if such modifications are approved by the Commission. 17 On July 15, 1997, the Commission released a decision granting 23 requests for limited boundary modificat ion to permit ELCS. 18 Although calls between the ELCS exchanges would now be treated as intraLATA, each ELCS exchange would remain assigned to the same LATA for purposes of classifying all ot her calls. 19 The Commission stated that it would grant requests for such limited modificat ions only where a pet it ioning BOC showed that the ELCS was a t radit ional, non-optional service, a significant community of interest existed among the affected exchanges, and grant of the requested waiver would not have any anticompetitive effects. 20 The Commission stated further that a carrier would be deemed to have made a prima facie case supporting grant of the proposed modification if the ELCS petition: (1) has been approved by the state commission; (2) proposes only t radit ional local service (i. e., tradit ional, non- opt ional ELCS); 14 See Jan. 1985 Order at 2- 3 & n. 3. 15 See July 1984 Order at 3; Jan. 1985 Order at 2- 3; United States v. Western Electric Company, Inc., No. 82- 0192, slip op. at 2 (D. D. C. May 18, 1993) (May 1993 Order). The District Court granted waivers for more than one hundred traditional, non- optional ELCS plans that allow the provision of traditional local telephone service between nearby exchanges. See, e. g., Western Electric, 569 F. Supp. at 1002 n. 54; July 1984 Order at 3; January 1985 Order at 4. Under such plans, subscribers pay no extra charge for calls beyond their established monthly service charge (the plan involves a traditional charge), and all subscribers in the exchange are included in the plan (the plan is non- optional). 16 Section 601( a)( 1) of the 1996 Act states that "[ a] ny conduct or activity that was, before the date of enactment of this Act, subject to any restriction or obligation imposed by the AT& T Consent Decree shall, on and after such date, be subject to the restrictions and obligations imposed by the Communications Act of 1934 as amended by this Act and shall not be subject to the restrictions and obligations imposed by such Consent Decree." Exclusive Commission authority to approve any changes to LATA boundaries is consistent with the 1996 Act. See Application for Review and Petition for Reconsideration or Clarification of Declaratory Ruling Regarding U S West Petitions to Consolidate LATAs in Minnesota and Arizona, Memorandum Opinion and Order, 14 FCC Rcd 14392, 14399- 14401, paras. 14- 18 (1999). 17 See 47 U. S. C. § 153( 25)( B). 18 July 1997 Order, 12 FCC Rcd at 10646. 19 If an exchange were assigned to another LATA for all purposes, any existing local calling routes between that exchange and the original LATA would be lost because such traffic would now be interLATA and could no longer be carried by the BOC. Instead, the traffic would generally be carried by an interexchange carrier charging long distance toll rates. 20 July 1997 Order, 12 FCC Rcd at 10649- 50. 3 Federal Communications Commission DA 01- 2894 4 (3) indicates that the state commission found a sufficient community of interest to warrant such service; (4) documents this community of interest through such evidence as poll results, usage data, and descript ions of the communit ies involved; and (5) involves a limited number of cust omers or access lines. 21 III. DISCUSSION 5. In 1988, the West Virginia Public Service Commission (WVPSC) adopt ed a calling plan known as the “Winfield Plan.” 22 The Winfield Plan defined local calling areas as all wire cent ers wit hin 22 miles of a cust omer’s home exchange, along wit h all cont iguous exchanges even if the wire cent er of t he cont iguous exchange was beyond 22 miles. Calls to exchanges beyond the local calling area were defined as toll calls. This definition resulted in an expansion of local calling areas for all customers in the state, and ensured that calls to neighbors in adjacent exchanges would no longer be long distance calls. 23 6. Verizon proposes t hat t he local calling area of its Glenville exchange be expanded to include Cit izens’ Grant sville and Arnoldsburg exchanges. Verizon also proposes that the local calling area of its Gassaway exchange be expanded to include Grant sville and Arnoldsburg. 24 Were it not for t he LATA boundary, local calling would exist bet ween these exchanges pursuant to the Winfield Plan. 7. The Verizon petition proposes to establish two- way, non- optional ELCS, and is accompanied by: (1) a statement that no new local calling service plans will result from Commission approval of this request; callers will retain their existing plan, and only the local calling area will increase; (2) an order issued by the WVPSC finding a sufficient community of interest to warrant such service; (3) a statement of the number of access lines involved; 25 and (4) 21 Id. at 10659. The Commission also delegated authority to act on petitions to modify LATA boundaries to the Common Carrier Bureau. Id. at para 10657- 58. On August 6, 1997, the Commission released a decision granting requests to modify LATA boundaries to permit three independent telephone company (ITC) exchanges in Texas to change LATA association for purposes of improving service to subscribers. The Commission stated that a carrier will be deemed to have made a prima facie case supporting grant of a proposed association change if the petition: (1) states that the association change is necessary because of planned upgrades to the ITC's network or service that will require routing traffic through a different BOC LATA; (2) involves a limited number of access lines; and (3) includes a statement from the affected BOC( s) requesting a LATA modification, pursuant to section 3( 25) of the Act, to permit the change in association. Petitions for LATA Association Changes by Independent Telephone Companies, Memorandum Opinion and Order, 12 FCC Rcd 11769 (1977) (August 1997 Order). 22 Petition at 2. See also letter from Billy Jack Gregg, Director, Consumer Advocate Division, State of West Virginia, Public Service Commission (WVPSC) at 1. 23 WVPSC at 1- 2. 24 Petition at 2- 3. 25 Glenville has 3,329 access lines. Gassaway has 2,558 access lines. Grantsville has 2,298 access lines. Arnoldsburg has 1,201 access lines. 4 Federal Communications Commission DA 01- 2894 5 usage data (expressed in messages per main station per month). 26 The brief descriptions of the community of interest reveal that many services (such as government services, schools, and businesses) are located such that customers must often incur toll calls and that making interLATA toll calls for such services generates significant expenses for these callers. 8. As we noted in the July 1997 Order, granting an ELCS petition removes the proposed route from the competitive interexchange market, and some LATA modifications could reduce the BOCs’ incentive to open their own markets to competition pursuant to section 271 of the Act. 27 We believe that the small number of access lines and the small volume of traffic involved for the proposed ELCS areas in this petition, and the type of service to be offered makes it highly unlikely that provision of ELCS service would reduce Verizon’s mot ivat ion to open its own market t o compet it ion. We conclude, therefore, that the information in the petition satisfies the criteria established in the July 1997 Order. Accordingly, t he Division finds that the proposed LATA modificat ions will not have a significant anticompetitive effect on the interexchange market or on Verizon’s incentive to open its own market to competition, and we approve Verizon’s petition for limited LATA modifications in order to provide traditional, two- way, non- optional ELCS. 9. Granting Verizon’s petition serves the public interest by permitting a minor LATA modificat ion where such modificat ion is necessary to meet the needs of local subscribers and will not have any significant effect on competition. The LATAs are modified solely for the limited purpose of allowing Verizon t o provide tradit ional, two- way, non- opt ional local calling service bet ween the specific exchanges or geographic areas identified in the requests. The LATAs are not modified to permit the BOC to offer any other type of service, including calls that originate or terminate outside the specified areas. Thus, traditional, two- way, non- optional ELCS between the specified exchanges will be t reat ed as int raLATA, and the provisions of the Act governing int raLATA service will apply. 28 Ot her types of service bet ween the specified exchanges will remain int erLATA, and t he provisions of t he Act governing int erLATA service will apply. VI. CONCLUSION AND ORDERING CLAUSES 10. Accordingly, IT IS ORDERED, pursuant to sections 3( 25) and 4( i) of the Communications Act of 1934, as amended, 47 U. S. C. §§ 153( 25), 154( i), and authority delegated by Sections 0.91 and 0.291 of the Commission’s rules, 47 C. F. R. §§ 0.91, 0.291, that the request of Verizon- West Virginia for LATA modification for the limited purpose of providing traditional, two- way, non- optional ELCS at the specific location, identified in File No. NSD- L- 00- 232, IS APPROVED. The LATA boundary is modified solely for t he purpose of providing tradit ional, two- way, non- opt ional ELCS bet ween point s in the specific exchanges or geographic areas indicated in the request. The LATA boundary for all ot her services shall remain unchanged. 26 Glenville to Arnoldsburg: 0. 11. Arnoldsburg to Glenville: 0. 21. Glenville to Grantsville: 0. 91. Grantsville to Glenville: 0. 73. Gassaway to Arnoldsburg: 0. 22. Arnoldsburg to Gassaway: 0. 31. 27 See U. S. C. § 271( b)( 1). 28 The BOC may provide ELCS service without meeting the section 271 requirements, see 47 U. S. C. § 271( a), and a separate affiliate is not required, see 47 U. S. C. § 272( a)( 2)( B). 5 Federal Communications Commission DA 01- 2894 6 11. IT IS FURTHER ORDERED that pursuant to section 416( a) of the Act, 47 U. S. C. § 416( a), the Secretary SHALL SERVE a copy of this order upon the petitioner, Verizon- West Virginia. FEDERAL COMMUNICATIONS COMMISSION Diane Griffin Harmon Acting Chief, Network Services Division Common Carrier Bureau 6