Report No. CC 97-47COMMON CARRIER ACTION September 24, 1997
   
Commission Preempts Provision of Wyoming Telecommunications Act of 1995 
  
       In a Memorandum Opinion and Order released today, the Commission
  preempted a provision of the Wyoming Telecommunications Act of 1995 (Wyoming
  Act) that empowers certain incumbent local exchange carriers to veto any attempt by a
  competitor to provide service in the service area of the incumbent. The Commission
  also preempted an order of the Wyoming Public Service Commission (Wyoming
  Commission) enforcing the preempted provision of the Wyoming Act.  The preempted
  order denied the application of Silver Star Telephone Company, Inc. to provide local
  exchange service in the Afton, Wyoming local exchange service area. By taking these
  actions, the Commission is furthering Congress' goal in the Telecommunications Act of
  1996 to accelerate deployment of advanced telecommunications services to all
  Americans by opening all telecommunications markets to competition.
  
       Silver Star is an incumbent local exchange carrier (LEC) certificated to provide
  local exchange service in Lincoln County in western Wyoming.  Silver Star applied to
  the Wyoming Commission to become certificated to provide local exchange service in
  nearby Afton, Wyoming.  The incumbent LEC serving Afton opposed Silver Star's
  application.  The Wyoming Commission rejected Silver Star's application.  In doing so,
  the Wyoming Commission relied exclusively on a provision of the Wyoming Act that
  empowers an incumbent LEC serving a territory with 30,000 or fewer access lines to
  veto the certificate application of any entity seeking to provide local exchange service in
  that territory in competition with the incumbent LEC.  The Wyoming Act accords that
  veto power to these incumbent LECs until at least January 1, 2005.
  
       Silver Star petitioned the Commission to preempt, pursuant to section 253 of the
  Communications Act of 1934, as amended (the Communications Act), the Wyoming
  Commission order denying its certificate application and the provisions of the Wyoming
  Act on which the order was based.  In today's Memorandum Opinion and Order, the
  Commission granted in part and denied in part Silver Star's request.  In particular, the
  Commission preempted the challenged order of the Wyoming Commission and the
  provision of the Wyoming Act that gives small incumbent LECs veto authority over the
  certificate applications of potential competing LECs.  In keeping with the direction of
  section 253(d) to preempt only "to the extent necessary," however, the Commission
  chose not to preempt other challenged provisions of the Wyoming Act that are either
  derivative of the preempted provision or not implicated by Silver Star's circumstances. 
  The Commission also declined Silver Star's request for an order directing the Wyoming
  Commission to grant Silver Star's certificate application.  The Commission expressed,
  nevertheless, its expectation that the Wyoming Commission will, promptly upon
  receiving a renewed certificate application from Silver Star, reconsider the application
  in a manner consistent with the Communications Act and today's Memorandum
  Opinion and Order.
  
       In deciding to preempt, the Commission found that the Wyoming Act and the
  order of the Wyoming Commission fall within the prohibition of section 253(a) of the
  Communications Act, because they prohibit Silver Star from providing local exchange
  service in the Afton exchange area.  Section 253(a) clearly proscribes State and local
  legal requirements that prohibit all but one entity from providing telecommunications
  services in a particular area.
  
       The Commission further found that the Wyoming Act and the order of the
  Wyoming Commission are not "competitively neutral" within the meaning of section
  253(b) of the Communications Act.  Those Wyoming legal requirements favor certain
  incumbent LECs over all potential new entrants, awarding those incumbent LECs the
  ultimate competitive advantage -- preservation of monopoly status -- and saddling
  potential new entrants with the ultimate competitive disadvantage -- an effectively
  insurmountable barrier to entry.  Such disparity in the treatment of classes of providers
  is not competitively neutral and undermines Congress' pro-competitive purpose. 
  Congress envisioned that, in the ordinary case, States and localities would enforce the
  public interest goals delineated in section 253(b) through means other than prohibitions
  on entry.
  
       Action by the Commission September 23, 1997, by Memorandum Opinion and
  Order (FCC 97-336).  Chairman Hundt, Commissioners Quello, Ness, and Chong.
  
                           -FCC-
                              
       News media contact:   Rochelle Cohen at (202) 418-0253.
       Common Carrier Bureau contact:  Melissa Newman at (202) 418-1580.