$//MO&O; Ameritech Waiver Petition; DA 95-551 //$ $/ Section 1.3 Waiver of Rules /$ TRANSMITTED FOR FCC RECORD ONLY ///newjob/// $///DA 95-551 Record only 4-11-95///$ BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of DA 95-551 Ameritech Operating Companies Petition for Waiver of Section 69.109 of the Commission's Rules to Provide Call Completion Service MEMORANDUM OPINION AND ORDER Adopted: March 17, 1995; Released: March 22, 1995 By the Chief, Common Carrier Bureau: I. INTRODUCTION 1. On September 19, 1994, the Ameritech Operating Companies (Ameritech) filed a petition for waiver of Part 69 of the Commission's Rules, 47 C.F.R. Part 69, to establish new rate elements under the Information rate category to recover the costs for a call completion service that it plans to offer interexchange carriers (IXCs). In particular, Ameritech seeks a waiver of Section 69.109 of the rules, which establishes a separate rate element and charges for directory assistance provided by LECs. Ameritech also seeks a waiver to establish additional rate elements or to change the rate structure in the event it changes the manner in which its call completion service is provided in the future. For reasons discussed below, we grant Ameritech a waiver of the Commission's Rules in order to establish new rate elements that will recover the costs of its proposed call completion service. We deny Ameritech's request for a blanket waiver of Part 69 to accommodate future changes that it may make to the rates and rate structure for its call completion service. II. BACKGROUND 2. Ameritech's call completion service would permit callers using Ameritech's interstate information service number (1-area code-555-1212) to complete their interstate telephone calls directly to the number requested by the caller without having to disconnect and redial the telephone number. Ameritech will provide the service to IXCs through dedicated trunks between the IXC's point of presence (POP) and Ameritech's Traffic Operator Position System (TOPS) switches that will carry the information call to the directory assistance operator. If the caller elects to use the call completion service, Ameritech will return the call to the IXC's POP for final termination. 3. Ameritech explains that a new rate element under the Information rate category will permit it to recover the costs of switching the call through the TOPS switch and the incremental directory assistance expenses. Ameritech states that it will recover these costs from the IXC's subscribers on a flat-rate per call basis. Ameritech maintains that since the expenses associated with the provision of interstate directory assistance are presently allocated to the Information rate category, allocating directory assistance call completion costs to the Information category is consistent with the Commission's current rules. Furthermore, Ameritech indicates that grant of the waiver will not undermine the policies supporting Part 69 of the rules because the proposed service was not contemplated when Part 69 was promulgated. Moreover, the current rules do not permit Ameritech to recover the costs of this service from the cost-causative customer. Ameritech further asserts that grant of the waiver will provide end users with the ease and convenience of completing two telephone calls with one call, and it reports that several regional IXCs have already expressed interest in purchasing the call completion service as soon as it is available. Accordingly, Ameritech argues that the availability of call completion service will serve the public interest. 4. Two parties responded to the Public Notice seeking comments on Ameritech's petition -- MCI Telecommunications Corporation (MCI) and Southwestern Bell Telephone Company (Southwestern Bell). MCI contends that Ameritech's call completion service is actually an operator service whose costs should not be placed in the Information rate category. MCI argues that because Ameritech's call completion service connects the call back to the Ameritech local network for completion through the IXC's POP rather than providing additional directory assistance, the service is similar to operator transfer services, in which callers are transferred to their IXC of choice. Citing the Southwestern Bell Operator Transfer Services Order, MCI asserts that the Common Carrier Bureau has found that the provision of operator services and information services are distinct services that should not be combined. MCI contends that because Ameritech seeks to offer an operator service as an addition to its directory assistance, it should have petitioned for waiver of Section 69.4(b) of the Commission's Rules. MCI argues that because Ameritech has requested a waiver of the wrong rule section, its petition should be denied. 5. Southwestern Bell filed comments supporting Ameritech's request to establish new Part 69 rate elements for call completion service. Southwestern Bell indicates, however, that it may have been more appropriate for Ameritech to have requested a waiver of other rules, such as Section 69.4. In any event, it states that the Commission should grant both Ameritech's waiver request, as well as similar requests that other LECs may file in the near future to provide call completion service. Southwestern Bell also encourages the Commission to allow the LECs to determine their own cost recovery method, rather than mandating uniform rate elements. 6. Ameritech maintains in reply that call completion service is related to directory assistance and that, consistent with its rules, the Commission may allocate those costs to the Information rate category. Ameritech emphasizes that call completion service will only be available upon the caller's receipt of directory assistance information and will produce costs incremental to directory assistance. In any event, Ameritech encourages the Commission to grant a waiver of whatever rule it deems appropriate. 7. Ameritech also seeks waiver of our Part 69 rules to establish additional rate elements or to change the rate structure for call completion service in the event it changes the manner in which the service is provided. It maintains that the grant of such authority would serve the public interest by conserving the resources that would be expended by Ameritech and the Commission if it filed additional waiver requests. 8. MCI argues that Ameritech has failed to show "good cause" for grant of its blanket waiver request to establish additional rate elements or to change the rate structure of the call completion service in the future. MCI contends that Ameritech's waiver request lacks specificity, is unsubstantiated, and does not demonstrate how grant of such a waiver request would serve the public interest. Ameritech did not respond to these MCI arguments. III. DISCUSSION 9. Commission rules may be waived for good cause shown. The Commission may exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the public interest. In addition, the United States Court of Appeals for the District of Columbia Circuit has stated that the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis. Waiver is thus appropriate if special circumstances warrant a deviation from the general rule and such deviation would better serve the public interest than strict adherence to the general rule. 10. In determining whether the requested waivers better serve the public interest, we consider some of the goals of the access charge proceeding that led to the establishment of the access charge rate elements. Two of the goals in that proceeding were to establish a competitive interstate service market structure and to adopt a set of access rules that would cover all access facilities and services. In order to further the goals of that proceeding, the Commission prescribed in Part 69 a set of rate elements for the access services that local exchange carriers (LECs) -- such as the Bell Operating Companies (BOCs) -- would be likely to provide at the time of divestiture. Part 69 initially included an "Operator Assistance Element," which was to be assessed in instances where a LEC operator provides "direct assistance" to complete an interexchange call. Because the Commission did not expect that the BOCs would be providing such operator call processing services after divestiture, however, the Commission eliminated the element in 1983. Over a decade later, companies now seek to resume providing such services. 11. We find that Ameritech's proposed call completion service will offer IXCs and their customers a greater range of service choices, which, in turn, generally foster greater competition in the telecommunications market. As noted above, however, existing access rate elements are not designed to recover the cost of this proposed service. Hence, grant of a waiver of Part 69 will enable Ameritech to establish new rate elements for this service that are tailored precisely to that service. Creation of new rate elements will also advance the goals of the Commission's access charge regime by enabling Ameritech to recover the cost of this service from those customers who use it. In light of these two important benefits -- fostering competition and advancing a more economically efficient regulatory scheme -- we conclude that grant of a waiver of Part 69 will serve the public interest more effectively than requiring Ameritech to use the existing Part 69 rate elements. 12. We find, however, that the appropriate rule section to waive for call completion service is not Section 69.109, which establishes the Information rate element. The Information element recovers costs associated with the provision of directory assistance, i.e., an operator giving a telephone number to a caller. The Commission created Section 69.109 as a separate element to facilitate recovery of those costs from users of directory assistance. The call completion service described in Ameritech's waiver request performs a function that goes beyond directory assistance. Thus, we conclude that the proposed rates for call completion service should not be included within the Information element. 13. We instead grant Ameritech a waiver of Section 69.4(b) of the rules, which provides that LEC charges for access service shall include certain specified rate elements. In the Southwestern Bell Operator Transfer Services Order, Southwestern Bell requested, among other things, a waiver of the Part 69 cost allocation requirements to allocate the costs of providing operator call processing services to the Information rate element. In denying Southwestern Bell's request, the Bureau found that the addition of operator service costs or revenues to the Information element that are not related to directory assistance would frustrate the policies underlying Part 69 of the rules. The Bureau, however, did grant Southwestern Bell a waiver of Section 69.4(b) to establish an access element to recover the cost of operator services. We believe that Ameritech's call completion service -- which does not convey any information to the caller, but merely connects the call back to the Ameritech local network for completion -- is similar to Southwestern Bell's operator transfer service, in which callers are transferred to the IXC of their choice. This service is also similar to the operator call completion services for which Bell Atlantic and Southwestern Bell were recently granted waivers of Section 69.4(b). Because there are no existing rate elements for the service that Ameritech seeks to provide, grant of a waiver of Section 69.4(b) of the rules will permit Ameritech to recover the costs of providing call completion service through a new access rate element that will be assessed to IXCs. 14. Finally, Ameritech has not demonstrated good cause for a blanket waiver to establish additional rate elements or to change the rate structure of the call completion service in the future. In particular, Ameritech has not demonstrated that the application of the Commission's rules will result in inequity or hardship, and it fails to show that a grant of such a waiver request will serve the public interest. Therefore, we deny this part of Ameritech's waiver request. IV. ORDERING CLAUSE 15. Accordingly, IT IS ORDERED that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and Sections 0.91 and 0.291 of the Commission's Rules, 47 C.F.R.  0.91 and 0.291, the petition for waiver filed by the Ameritech Operating Companies IS GRANTED, to the extent provided herein, and IS DENIED in all other respects. FEDERAL COMMUNICATIONS COMMISSION Kathleen M.H. Wallman Chief, Common Carrier Bureau