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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of ) ) Ameritech Petition for Waiver of) CC Docket Nos. 85-229, 90-623, Computer III Rules for ) 95-20 Reverse Search Capability ) ) ORDER Adopted: March 24, 1997 Released: March 24, 1997 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION 1. On October 25, 1996, Ameritech filed a petition for a waiver of the Commission's comparably efficient interconnection (CEI) requirements in order to provide a reverse-search capability in conjunction with its existing electronic white pages service, Ameritech Directory Search (ADS). In this Order, we grant Ameritech a limited waiver of the Computer III CEI plan and CEI equal access parameter requirements to provide reverse-search capability with its ADS service. We condition the waiver on Ameritech's compliance with the Commission's joint cost rules, appropriate amendments to Ameritech's cost allocation manual (CAM), and compliance with the Computer III customer proprietary network information (CPNI) requirements, as amended by the 1996 Act. II. BACKGROUND 2. Regulatory framework. Pursuant to the regulatory scheme established in its Computer II proceeding, the Commission has traditionally classified communications services as either basic or enhanced services. In that proceeding, the Commission defined "basic" services as those that provide a "pure transmission capability over a communications path that is virtually transparent in terms of its interaction with customer-supplied information." The Commission has defined "enhanced services" as "services offered over common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information, provide the subscriber additional, different, or restructured information, or involve subscriber interaction with stored information." Unlike basic services, enhanced services are not regulated under Title II of the Act. In the Computer II proceeding, the Commission established rules to govern the provision of enhanced services, including a requirement that the then-integrated Bell system establish separate subsidiaries for the provision of enhanced services. Following the divestiture of AT&T, the Commission extended the structural separation requirements of Computer II to the Bell Operating Companies (BOCs). 3. In the Computer III proceeding, the Commission established a regulatory framework through which BOCs could offer integrated enhanced and basic services. In October 1994, the United States Court of Appeals for the Ninth Circuit remanded portions of the Computer IIIproceeding to the Commission. Following that remand, the Common Carrier Bureau issued an Interim Waiver Order, pursuant to which BOCs are permitted to continue to provide enhanced services on an integrated basis. BOCs are required to file CEI plans for each proposed enhanced service offering or receive a waiver of the Commission's CEI requirements, if they wish to offer an enhanced service on an integrated basis and the service is not the subject of a previously-approved CEI plan. In their CEI plans, the BOCs must demonstrate that they provide interconnection opportunities to other enhanced service providers (ESPs) on an "equal access" basis, thus making basic facilities available on an unbundled and functionally equivalent basis. The Commission imposed the CEI plan requirements, in addition to its joint cost rules and CAM requirements, as nonstructural safeguards to prevent BOCs from subsidizing enhanced services with revenues from basic services and to prevent discrimination against competing ESPs with respect to the rates, terms, and conditions of access. 4. Previous waivers. In November 1995, the Commission granted a waiver of its CEI plan requirements to U S WEST, permitting the carrier to offer a reverse-search capability in conjunction with its Electronic White Pages (EWP) service. The Commission conditioned that waiver on U S WEST's compliance with the Commission's joint cost rules, CAM requirements, and Computer III CPNI requirements, as amended by the 1996 Act. In July 1996, we granted Southwestern Bell Telephone Company (SWBT) and BellSouth Telecommunications, Inc. (BellSouth) waivers of the CEI requirements, subject to the same conditions, to provide reverse- search capability in conjunction with their EWP services. 5. Ameritech's petition. Ameritech requests relief identical to that accorded to U S WEST, BellSouth, and SWBT in the U S West Order and the Reverse Search Reconsideration Order. Specifically, Ameritech seeks a waiver to permit it to provide reverse-search capability as an integrated part of its ADS offering, on the grounds that technological constraints do not permit it to offer the service economically on an equal access basis. No other party has filed comments in this proceeding. 6. Currently, Ameritech offers ADS as a tariffed basic service, which customers use in an electronic directory assistance environment. Ameritech states that its "current system: (1) provides access to a database of telephone subscribers' names, addresses, telephone numbers, and, in some cases, zip codes; (2) includes no other data in the databases that would be available to customers; (3) enables searches by name only; (4) enables searches of a single name or multiple names at a time; and (5) enables customers to request the data via a personal computer and modem." In addition, Ameritech represents that the service does not permit ADS users to obtain non-published and non-listed information. Ameritech asserts that the ADS reverse-search capability that it proposes to offer would enable customers to search the same database by telephone number, rather than only by name, but that customers would not be able to search the database by address. 7. Ameritech agrees to comply with requirements that the Commission imposed on U S WEST, BellSouth, and SWBT upon granting them waivers of the CEI requirements to provide reverse-search capabilities. Specifically, Ameritech represents that it would remove all of the costs associated with providing reverse-search capability from its regulated accounts in accordance with the Commission's joint cost rules. In addition, Ameritech states that it would file revisions to its CAM to identify reverse-search capability as a non-regulated offering and to establish appropriate cost pools. Finally, Ameritech has pledged to comply with the Commission's Computer III CPNI requirements. 8. Ameritech estimates that development of a stand-alone search capability consistent with the Commission's CEI requirements would take between one and one-half and two and one-half years to develop and cost approximately $700,000 to $750,000. Moreover, Ameritech asserts that reverse-search capability is typically provided as an incremental feature of traditional electronic directory assistance services, rather than as a stand-alone capability. Indeed, Ameritech asserts that competition is flourishing in the directory services market and that competing providers offer services that are functionally equivalent to ADS reverse-search capability via on-line services, as well as other CD-ROM products that allow users to perform a variety of similar functions. Therefore, Ameritech states that competing providers of electronic directory services do not require interconnection with Ameritech's existing ADS application. IV. DISCUSSION 9. The Commission may grant a waiver of a provision of its rules "if good cause therefor is shown." To establish good cause, a petitioner must demonstrate that "special circumstances warrant a deviation from the general rule and such deviation will serve the public interest." The petitioner "must clearly demonstrate that the general rule is not in the public interest when applied to its particular case and that the grant of the waiver will not undermine the public policy served by the rule." Accordingly, as we found in our previous CEI waiver orders, a petitioner seeking a waiver of the Commission's CEI requirements carries the burden of demonstrating that a waiver is in the public interest by establishing that a grant of a waiver is unlikely to permit the petitioner to engage in unlawful discrimination or cross-subsidization and is likely to produce benefits for consumers. 10. We find that Ameritech has met its burden of demonstrating that the waiver is in the public interest because Ameritech has shown on the record that the Commissions's grant of the waiver is unlikely to permit Ameritech to engage in unlawful discrimination or cross-subsidization. Further, we find it significant that no party opposes granting Ameritech a waiver in this proceeding. Moreover, no party has challenged Ameritech's assertion that competition is flourishing in the directory services market and that competing providers offer services that are functionally equivalent to ADS reverse-search capability via on-line services, as well as other CD-ROM products that allow users to perform a variety of similar functions. Thus, the record indicates that other companies do not require access to Ameritech's basic service offerings in order to provide competing reverse- search capabilities. We condition the grant of this waiver, however, on Ameritech's compliance with the Commission's joint cost rules, CAM requirements, and the Computer III CPNI requirements, as amended by the 1996 Act. 11. We also conclude that the waiver is likely to produce benefits for consumers. We believe that the costs of complying with the CEI requirements in this case outweigh the benefits, given that compliance with those requirements is not necessary to allow competing providers to offer reverse-search services. In addition, no party has challenged Ameritech's assertion that compliance with the Commission's CEI requirements would delay Ameritech's introduction of its proposed service by as much as two and one-half years and create substantial costs that could be avoided by integrating the telephone number search capability into Ameritech's ADS system. Thus, we find that granting the waiver benefits consumers by promoting competition. 12. Accordingly, we conclude that Ameritech has established good cause for granting a limited waiver of the Computer III CEI plan and CEI equal access parameter requirements for the reverse-search capability offered in conjunction with Ameritech's ADS offering. We limit this waiver to the reverse-search capability as described in Ameritech's petition. V. ORDERING CLAUSE 13. IT IS HEREBY ORDERED that Ameritech's petition for a waiver of the Computer III CEI requirements for Ameritech's ADS reverse-search capability IS GRANTED subject to the conditions and requirements established herein. FEDERAL COMMUNICATIONS COMMISSION A. Richard Metzger, Jr. Deputy Bureau Chief, Common Carrier Bureau