WPCN 2 BJ urier#|w s BoldTimes New RomanE37XPCG Timeset 4_230_1HPLAS4.PRS 4x  @\oeX@268 ZH݌#|x HP LaserJet 4_230_1HPLAS4.PRS 4XwLP  P7\oePC8ddddddddddYddddcodYY8!zCRz8ddddddddCCdzCYNYNYooozz8dzL8dNddzzNd8CozozdzzdzYdYdYYYYzz8dRdCNd8z8dd88d8YCzdzN8C8zYYd{dYdYYoLtodnndyy2LN7c88nCzLhcnonvyXzXshn~|yddddddddddddddddddddddddddddddddC2CCdECCCCCCCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd20K'Z?+@-Q"i~'^#)0<><q*"xxxxWWxxxWWkkxxxx 13. The Commission may exercise its discretion to waive a rule where there is "good  Y- xcause" to do so,n<  Y@#-ԍ See Section 1.3 of the Commission's Rules, 47 C.F.R.  1.3. n because the particular facts would make strict compliance inconsistent with  Y- x: the public interest.h=P Y%-ԍ WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969). h Waiver is thus appropriate only if special circumstances warrant a deviation  xfrom the general rule and such a deviation will better serve the public interest than adherence" =0*(("  Y- xto the general rule.> Yy- xԍ Id. at 1157; Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990). Further, the Commission's grant of a waiver must be based on articulated,  xyreasonable standards that are predictable, workable, and not susceptible to discriminatory  Y- xapplication.T?b Y-ԍ Northeast Cellular, 897 F.2d at 1166.T In evaluating the public interest, the Commission stated in the Second  Y- xiReconsideration Order that it would consider waiving the NRC standards established in that  xOrder only if the differential treatment resulting from the waiver would not undermine  Y- xcompetition or otherwise violate the Communications Act.L@ YQ - xiԍ Second Reconsideration Order, 8 FCC Rcd at 7363 (para. 51). Those standards are set  Y: - xforth in the Second Reconsideration Order, 8 FCC Rcd at 7362 (para. 48); and summarized in  Y# -paragraph 2 of this Order, supra.L For the reasons stated below, we find that NYNEX has made the required showing.  YH-  Nx 14. NYNEX has shown that it faces special circumstances relating to the extent of  xcompetition it faces in its region. While we lack sufficient data to reach conclusive findings  xLregarding competition in the rapidlychanging access marketplace in the NYNEX region,  xNYNEX has provided sufficient evidence to convince us that special circumstances exist to  xjustify this specific limited waiver, as conditioned below. Specifically, NYNEX has  x demonstrated that CAPs have been operating in the New York Telephone region for a substantial  Y - xperiod of time.GA  Y-ԍ NYNEX Petition at 5 n.9.G NYNEX voluntarily decided to offer physical collocation in 1990, and as  xexplained above, this has allowed CAPs to establish more collocated premises in the NYNEX  Y- xregion than in any other region, and to achieve greater market penetration.KBG  Y-ԍ July 29 Letter at 23.K In particular,  xNYNEX submits that CAPs have gained 40 percent of the high capacity special access market  Yb- xin the New York City central offices in which they are located,8Cb  Y -ԍ Id. at 2.8 which are generally Zone 1  YK- xYcentral offices.DHK  Y - xԍ In the Special Access Expanded Interconnection Order, the Commission permitted LECs  xto establish traffic densityrelated rate zones to bring special access rates more in line with costs,  Yw"- xand to give LECs flexibility in responding to competition. Special Access Expanded  Y`#- xInterconnection Order, 7 FCC Rcd at 7454 (para. 179). The Commission did not limit the  xnumber of zones, but stated it would subject a LEC's zone density plans to increased scrutiny  Y2%- xif that LEC attempted to establish more than three zones. Id. at 7454 n.413. NYNEX's zone  Y&- xxdensity plan was approved in June 1993. BellSouth Telecommunications, Inc., et al., 8 FCC Rcd 4443 (Com.Car.Bur. 1993).  Furthermore, according to NYNEX, CAPs are located in 10 of the 11 central"K D0*((*"  Y- xoffices below 59th Street in Manhattan.IE Yy-ԍ July 29 Letter at 3.I In addition, NYNEX reports that it has received  xorders to disconnect 32 percent of its switched access trunks below 59th street and to rearrange  Y- x,those circuits to collocated CAPs.2Fy Y-ԍ Id.2 We therefore conclude, for the geographic area identified  xZbelow, that NYNEX has met its burden of demonstrating that it faces a special circumstance under our waiver standards.  Yv-  x15. The Commission stated that it will consider a waiver of the NRC standards to be in  xthe public interest only if the differential treatment resulting from the waiver would not  YH- xundermine competition or otherwise violate the Communications Act.LGH* Y# - xiԍ Second Reconsideration Order, 8 FCC Rcd at 7363 (para. 51). Those standards are set  Y - xforth in the Second Reconsideration Order, 8 FCC Rcd at 7362 (para. 48); and summarized in  Y-paragraph 2 of this Order, supra.L Because CAPs have a  xsignificant presence in NYNEX's Zone 1 central offices in New York, it does not appear that  xYNYNEX's waiver, as conditioned below, would undermine nascent competition. As explained  xbelow, NYNEX will recover nonrecurring costs over time from both NYNEX customers and  xCAP customers. Thus, the difference between the treatment given to NYNEX customers and  xthe treatment given to CAP customers will be minimal. For this reason, it seems unlikely that NYNEX's rate structure will undermine competition.  Y-  Lx16. We disagree with LOCATE and MFS that there are no relevant differences between  Yy- xhthe rate structure NYNEX proposed in the Second Reconsideration Order and the rate structure  Yb- xxit proposes here. In the Second Reconsideration Order, NYNEX did not apply a NRC when  xcustomers reconfigured their services from facilities previously used in the same central office  xto NYNEX facilities, but did apply a NRC when customers moved their traffic from NYNEX  Y- xfacilities to CAP facilities.jH Y{-ԍ Second Reconsideration Order, 8 FCC Rcd at 7361 (para. 46).j In its waiver petition, however, NYNEX explained that its  xLcustomers do pay nonrecurring costs when they move their traffic from CAP facilities to  xNYNEX facilities, but those costs are bundled into recurring rates and recovered over time. By  xpermitting customers moving from NYNEX facilities to CAP facilities to pay nonrecurring  xcharges in monthly installments, nonrecurring costs are recovered over time from both NYNEX  x-customers and CAP customers. Therefore, the rate structure in NYNEX's waiver request is  Y- xdistinguishable from the rate structure the Commission rejected in the Second Reconsideration  Y|- x<Order. Given the extent of competition in Zone 1 of New York, we conclude that this rate structure is not likely to harm competition significantly.  Y7-  x17. While we conclude that the apparent extent of competition in NYNEX's Zone 1 New  xYYork central offices justifies this waiver, we do not believe that a waiver should apply outside  xNew York State, or even outside the Zone 1 offices in New York. NYNEX's description of"  ^ H0*((,"  xincreased competition in its area seems to focus specifically in New York City, or particularly  Y- xin Manhattan south of 59th Street.KI Yb-ԍ July 29 Letter at 23.K There is no evidence in the record before us in this  xproceeding that the competition NYNEX faces outside its Zone 1 central offices in New York  xJis as substantial as the competition it faces in Zone 1. Accordingly, we conclude that NYNEX has not shown good cause for waiver at central offices outside Zone 1.  Yv-  . x18. Although, as explained above, it appears that granting NYNEX a waiver would not  x<undermine competition, the public interest would be best served by placing some additional  xYconditions on NYNEX's waiver. Under a waiver of limited duration, we can observe whether  x the waiver we now grant affects the development of competition in NYNEX's region. We grant  xNYNEX's waiver petition only for one year following the release date of this Order. If  xYNYNEX's rate structure has some unreasonably anticompetitive effects, we can limit further or  xrescind NYNEX's waiver before any serious damage to competition occurs. Although NYNEX  xhas shown that it recovers nonrecurring costs over time from both NYNEX customers and CAP  xhcustomers, it is not clear from the record before us whether the six month period given to CAP  xcustomers is comparable to the time over which nonrecurring costs are recovered from the  xrecurring rates paid by the NYNEX customers. Therefore, NYNEX's waiver will be conditioned on it permitting CAP customers to pay the CAP rollover NRC over 12 months.  YK-  Lx19. If NYNEX desires to continue to recover its reconfiguration costs through recurring  xhcharges after this waiver of the expanded interconnection NRC standard expires, it must obtain  x another waiver. If NYNEX decides to seek such a waiver, it should file its petition no later than  xjnine months from the release date of this Order. NYNEX must show in that petition that competition in its region has not been undermined by its NRC rate structure.  Y-' IV. ORDERING CLAUSES ă  Y-  x20. Accordingly, IT IS ORDERED, pursuant to Section 1.3 of the Commission's Rules,  xh47 C.F.R.  1.3, that the petition for waiver filed by New York Telephone Company and New  xYEngland Telephone and Telegraph Company IS GRANTED, subject to the conditions described above.  Y!-  L x21. IT IS FURTHER ORDERED that New York Telephone Company and New England  xTelephone and Telegraph Company SHALL FILE, no later than 10 days from the release date  x,of this Order, on not less than 15 days' notice, tariff revisions that comply with the conditions  Y-placed on its waiver as described above.  Y!-  =x22. IT IS FURTHER ORDERED that, for these purposes, we waive Sections 61.58, and  xJ61.59 of the Commission's Rules, 47 C.F.R.  61.58, 61.59. New York Telephone Company  xand New England Telephone and Telegraph Company should cite the "DA" number of the instant Order as the authority for this filing."i$ yI0*((%"Ԍ x` ` hhFEDERAL COMMUNICATIONS COMMISSION x` ` hhKathleen M.H. Wallman x` ` hhChief, Common Carrier Bureau