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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 FOR  IMMEDIATE  RELEASE:  NEWS  MEDIA  CONTACT:  March  11,  2004  Michael  Balmoris  at  (202)  418-  0253 
 Email:  Michael.  Balmoris@  fcc.  gov 


 FCC  ELIMINATES  RULES  IN  ORDER  TO  EXPAND  LONG  DISTANCE  COMPETITION 
 Rule  Change  Allows  Local  Phone  Companies  to  Integrate  Certain  Local  and  Long  Distance  Service  Operations 
 Washington,  DC  –  The  Federal  Communications  Commission  (FCC)  today  acted  to  improve  telephone  service  for  consumers  by  eliminating  certain  of  the  FCC’s  “operate 
 independently”  rules.  Permitting  the  sharing  of  these  limited  internal  functions  that  BOCs  and  their  long  distance  affiliates  formerly  had  to  separately  perform  will  provide  efficiency 
 gains  and  should  translate  to  savings  of  millions  of  dollars  in  yearly  operational  costs  that  likely  will  be  passed  on  to  the  BOCs’  long  distance  consumers. 


 The  “operate  independently”  rules  were  adopted  in  1996  by  the  FCC  to  implement  section  272  of  the  Telecommunications  Act’s  separate  affiliate  requirements.  These  rules 
 prohibited  a  BOC’s  local  service  operations  and  its  long  distance  affiliate  from:  1)  providing  operating,  installation,  and  maintenance  (OI&  M)  services;  and  2)  jointly  owning 
 switching  and  transmission  facilities. 
 Today’s  action  eliminates  the  OI&  M  requirements,  but  retains  the  prohibition  against  joint  ownership  of  switching  and  transmission  facilities.  The  FCC  concluded  that 
 the  OI&  M  sharing  prohibition  is  an  overbroad  means  of  preventing  cost  misallocation  or  discrimination  by  BOCs  against  unaffiliated  rivals.  Furthermore,  the  FCC  concluded  that 
 the  existing  non-  structural  safeguards  –  including  the  cost  allocation  and  affiliate  transaction  rules  –  are  well-  tailored  and  sufficient  to  provide  effective  protections  against 
 anti-  competitive  behavior. 
 OI&  M  functions  generally  include  all  activity  related  to  installing,  operating,  and  maintaining  switching  and  transmission  facilities,  such  as  network  operations  monitoring 
 and  customer  trouble  report  management.  Under  the  OI&  M  rule,  BOCs  and  their  long  distance  affiliates  had  to  maintain  separate  work  forces  to  perform  these  functions.  Now, 
 BOCs  and  their  long  distance  affiliates  will  be  able  to  use  a  single  set  of  employees  to  perform  OI&  M  services  for  both  their  local  and  long  distance  networks. 
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 Today’s  Order  also  grants  SBC’s  request  for  modification  of  the  SBC/  Ameritech  Merger  Order  conditions  related  to  OI&  M  services  to  the  extent  that  they  are  incorporated 
 into  the  conditions  of  the  2002  SBC  Advanced  Services  Forbearance  Order. 


 -FCC- 
 Docket  Nos.:  WC  03-  228;  CC  96-  149,  98-  141,  01-  337 
 Action  by  the  Commission  March  11,  2004,  by  Report  and  Order  and  Memorandum  Opinion  and  Order  (FCC  04-  54).  Chairman  Powell,  Commissioners’ 
 Abernathy,  and  Martin;  with  Commissioners  Copps  and  Adelstein  concurring.  Separate  statements  issued  by  Chairman  Powell,  Commissioners  Abernathy,  Copps,  and  Adelstein 


 Wireline  Competition  Bureau  Contact:  Christi  Shewman  at  202-  418-  1686 
 News  about  the  Federal  Communications  Commission  can  also  be  found  on  the  Commission’s  web  site  www.  fcc.  gov. 
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