DA 96-1919 
Before the 
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
Petition of SoundNet Emergency ) 
Communications for a Declaratory ) 
Ruling Interpreting Section 69.104 ) 
of the Commission's Rules )
ORDER
Adopted: November 18, 1996 Released: November 18, 1996
By the Chief. Common Carrier Bureau:
i J
I. INTRODUCTION
1. The Commission's rules require that telephone subscribers pay a monthly, 
flat-rate charge, known as the subscriber line charge (SLC) for each telephone line. 1 
SoundNet Emergency Communications (SoundNet) requests a declaratory ruling that 
providers of elevator telephones should be exempted from paying the monthly SLC. For the 
reasons stated below, we deny SoundNet's petition.
II. BACKGROUND
2. The Commission created the SLC in 1983. The SLC is designed to recover 
some of the cost allocated to the interstate jurisdiction of the local exchange carriers' (LECs') 
telephone lines, known as subscriber loops, which connect end-users' premises to LEG 
switches at local central offices.2 Loop costs are non-traffic sensitive: that is, they do not 
vary in proportion to how much or how the facility is used. The separations rules allocate 
25% of most LECs' subscriber loop costs to the interstate jurisdiction, and 75% to the
1 The SLC is $6.00 per month for each multiline business line. This charge was established 
in 1983.
2 See MTS and WATS Market Structure, 93 FCC 2d 241, 251-52, H 26, 28, 30 (1983) (Access 
Charge Order).
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intrastate jurisdiction.3 The SLC recovers a portion of the non-traffic sensitive costs of 
subscriber loops that are allocated to the interstate jurisdiction.
III. POSITIONS OF THE PARTIES
3. SoundNet provides telephones in elevators. SoundNet states that its 
communications systems include hands-free telephones that, when activated, automatically 
dial a 24-hour monitoring service and can be used by individuals who are physically 
challenged. According to SoundNet, its elevator telephones contain no keypads and can only 
call the pre-programmed number of its emergency monitoring service in Kirkland, 
Washington. SoundNet asserts that some of its emergency telephones, like those in the 
monitoring center, are located in Washington, and that all calls originating from elevator 
telephone locations within Washington are therefore intrastate. SoundNet also avers that the 
unlisted telephone number of the elevator phone prevents any incoming interstate calls.
4. SoundNet argues that it should not have to pay the SLC for the lines that 
connect its elevator telephones with LEG central offices. First, SoundNet contends that the 
purpose of its telephones is to benefit users of elevators, particularly those with disabilities, 
and therefore the costs of the associated telephone lines should be borne by the general 
public. Second, SoundNet asserts that its elevator phones cannot be used to place calls other 
than those to the monitoring center and, since the telephone numbers of the elevator 
telephones are unlisted, they receive no incoming calls other than from the monitoring 
service. Accordingly, SoundNet argues that use of the phones is minimal. Third, SoundNet 
argues that long distance calls cannot be placed from its elevator telephones in Washington 
State, since the lines are designed solely for, and are only capable of, intrastate use. 
Therefore, SoundNet argues, it should not be assessed the SLC because its elevator phones 
cannot be used for interstate calls.
5. Ameritech, Pacific Bell and Nevada Bell (Pacific), and the United States 
Telephone Association (USTA) submitted comments in opposition to SoundNet's petition. 
USTA contends that nothing in the Americans with Disabilities Act exempts SoundNet from 
the SLC.4 In response to SoundNet's argument that the public should bear the cost of 
elevator telephone service, Pacific argues that only imposing a tax would pass costs to the 
general public, while a waiver of the SLC would merely impose the costs on local exchange
3 47 C.F.R. § 36.154(c). The separations rules, 47 C.F.R. Part 36, allocate telephone company 
investment and expenses between interstate and intrastate operations. The costs allocated to the interstate 
jurisdiction determine the total interstate revenue requirement to be recovered through interstate access 
charges. (Even under the price cap rules, 47 C.F.R. §§ 61.41-61.49, subscriber line charges are still 
computed based on the costs allocated through the separations process. See 47 C.F.R. §§ 69.1(c), 69.104.)
4 USTA Comments at 3; Ameritech Comments at 2.
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carriers.5 Furthermore, according to Pacific, waivers for provision of services such as elevator 
telephones would lead to unreasonable discrimination and would undermine the policies for 
which the SLC was established.6 Pacific and Ameritech argue that the Commission has 
determined what it believes to be the best mechanism to recover non-traffic sensitive costs 
and that to grant an exemption from this mechanism, the SLC, would upset the balance that 
the Commission has created.7 Pacific argues that this mechanism is in the public interest 
because it is meant to ensure universal service, nondiscrimination, network efficiency, and 
prevention of uneconomic bypass.8 Additionally, USTA and Pacific argue that SoundNet's 
level of use is unimportant. They argue, rather, that SoundNet's access to long distance 
services requires a payment of the SLC.9 Finally, according to Pacific, the restriction of the 
Washington State telephones' use to intrastate calls is insufficient to escape the SLC because 
when the Commission structured the cost recovery mechanism, it decided not to exempt from 
the SLC those who do not make interstate calls.10
IV. DISCUSSION
6. We find none of SoundNet's arguments in support of its request for an 
exemption from paying SLCs to be persuasive. The fact that SoundNet's elevator telephones 
are easy to use by the physically challenged does not lead us to conclude that the for-profit 
company, SoundNet, should be exempt from the SLC. The Commission has granted 
exemptions from the SLC only for low income households eligible to participate in the 
means-tested Lifeline and Link-Up programs." These programs were created to reduce basic 
telephone rates for low-income households. Our rules do not provide an exemption from the 
SLC for subscriber lines that are used for publicly beneficial purposes.
7. SoundNet argues that it should not have to pay the SLC because its elevator 
telephones are used infrequently. The Commission has determined that the SLC is to be 
assessed upon each end user who subscribes to a telephone line "that is or may be used for
5 Pacific Comments at 8-9.
6 Id. at 7.
7 Id. at 4; see also Ameritech Comments at 1.
8 See Pacific Comments at 4.
9 See USTA Comments at 2; see also Pacific Comments at 5-6.bee DMA 2.; facmc comments D-o.
10 See Pacific Comments at 6 (citing Access Charge Order); see id., 93 FCC 2d at 278,1 121.
11 47 C.F.R. § 69.104(j)-(l); MTS and WATS Market Structure, 2 FCC Red 2953, 2955-56, 
2958, II 15-20, 35 (1987). The SLC is not applied only when the interstate revenues used for 
this subsidy are matched by supporting revenues from the intrastate jurisdiction.
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local exchange service transmissions," even if the customer uses no long distance services. 12 
Minimal use of a subscriber line does not relieve the customer of the obligation of paying the 
SLC, because the full costs of the subscriber line are incurred no matter what the level of 
long-distance usage, and the same portion of those costs are allocated to the interstate 
jurisdiction. Thus, the FCC requires every subscriber to local exchange telephone service to 
pay the flat monthly SLC.13
8. SoundNet argues that, because SoundNet's elevator telephones make no 
interstate calls, they should not be assessed the SLC. When the Commission created the SLC, 
it reasoned that "[a] subscriber who does not use the subscriber line to place or receive 
[interstate] calls imposes the same costs as a subscriber who does use the line," and that a 
portion of these non-traffic sensitive costs is allocated to the interstate jurisdiction and must 
be recovered through interstate rates.14 Therefore, even a telephone line that is used only for 
intrastate calls imposes costs that must be recovered through interstate service rates. It is 
reasonable to require that the subscriber to a restricted line pay for at least some of those 
costs through the SLC. 15 For instance, in 1985, telephone companies in Iowa sought guidance 
from the Commission on whether to apply SLCs to a basic local service (BLS) that allowed a 
subscriber only to place or receive calls within the local area, with no access to outgoing or 
incoming interstate or intrastate toll service.16 The Commission concluded that SLCs should 
apply to BLS subscriber lines because the separations rules allocate a portion of the cost of 
such lines to the interstate jurisdiction.17
9. As with BLS, the separations rules assign part of the cost of each subscriber 
line that SoundNet uses to the interstate jurisdiction. SoundNet asserts that its lines in 
Washington State cannot be used for interstate calling because the design of its elevator 
telephones prevents outgoing interstate calls and the unlisted number prevents incoming 
interstate calls. This self-imposed restriction is not relevant to the issue of whether the SLC 
should apply. The SLC recovers a portion of the non-traffic-sensitive costs of the loop 
regardless of the number or type of calls placed on that loop. The line that the telephone
12 47 C.F.R. § 69.104(a).
13 Id.
14 Access Charge Order, 93 FCC 2d, at 278,1121. "We reject the notion that... a subscriber must 
make interstate calls before a subscriber can be assessed such a charge." Id.
15 See MTS and WATS Market Structure, 91 FCC 2d 682, 686,1 7 (1983).
16 Iowa Telephone Association Petition for Declaratory Ruling, Memorandum Opinion and Order, 
50 FR 20606 (1985).
17 Id., 50 FR at 20608, H 15, 20. See also MTS and WATS Market Structure, 97 FCC 2d 834, 845- 
46,1 37 n. 19 (1984) (applying similar analysis to conclude that SLC should apply to restricted Centrex 
lines and closed-end intrastate WATS lines).
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company provides is technically capable of originating and terminating interstate traffic, 
notwithstanding the equipment a customer chooses to connect to a phone line and a 
customer's decisions about to whom it will release an unlisted telephone number. Because 
the separations rules allocate to the interstate jurisdiction part of the cost of the subscriber 
lines that SoundNet uses, the SLC should apply. SoundNet's restriction of its Washington 
State telephones to. intrastate use does not provide a valid basis for exemption from the SLC.
10. Accordingly, we decline to interpret § 69.104 of our Rules to exempt 
SoundNet Emergency Communications from paying the subscriber line charge.
V. ORDERING CLAUSES
11. Accordingly, IT IS ORDERED that the Petition of SoundNet Emergency 
Communications for a Declaratory Ruling Interpreting 47 C.F.R. § 69.104 to exempt 
providers of elevator communications from paying the End User Common Line Charge IS 
DENIED.
FEDERAL COMMUNICATIONS COMMISSION
1eswA-
na"M. KRegina"M. Keeney
Chief, Common Carrier Bureau
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