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                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554
                                                                           

In the Matter of       )     
      )
Petitions of Ameritech Illinois         )     
for Modification of LATA Boundary       )
for the Chicago LATA   )
      )     File No.   NSD-LM-97-29 
      )     
      )

MEMORANDUM OPINION AND ORDER


Adopted:  October 22, 1997                    Released:  October 22, 1997  

By the Chief, Network Services Division: 

      I.    INTRODUCTION

 1.   Illinois Bell Telephone Company (referred to herein as Ameritech) filed a petition
with the Commission requesting that the Des Plaines and Park Ridge exchanges (Exchanges) be
included within the Chicago local access transport area (LATA).  The Exchanges are
independent telephone company (ITC) exchanges that are "associated" with the Chicago LATA. 
A subsidiary of Ameritech has purchased the Exchanges from a subsidiary of Sprint Corporation
(Sprint), and Ameritech requests that the Chicago LATA be modified so that the Exchanges
would be a part of the Chicago LATA for "all relevant purposes."  For the reasons stated
below, petitioner's LATA modification request is granted.



      II.   BACKGROUND

 2.   On August 24, 1982, the United States District Court for the District of Columbia
(Court) entered an order (Consent Decree) that required AT&T to divest its ownership of the
Bell Operating Companies (BOCs).  The Court divided all Bell territory in the continental
United States into geographic areas called LATAs.  Under the Consent Decree, the BOCs were
permitted to provide telephone service within a LATA (intraLATA service), but were not
permitted to carry traffic across LATA boundaries (interLATA service).  InterLATA traffic was
to be carried by interexchange carriers.  The LATAs did not cover territory served by ITCs,
and the ITCs were not subject to the restrictions imposed by the Consent Decree;  thus, while
a BOC could not carry traffic across a LATA boundary, an ITC could carry traffic regardless
of whether that traffic crosses LATA boundaries.

 3.   The Court, however, noted that there were often joint operating arrangements
between independent exchanges and neighboring BOC facilities.  For example, BOCs often
switched traffic between their end offices and the end offices of the ITCs, which then carried
the traffic to its final destination.  If all of this traffic were considered interLATA, BOCs could
not participate in these arrangements and significant and costly network rearrangements would
have been necessary.  To prevent the need for such rearrangements, the Court classified most
independent exchanges as "associated" with a particular BOC LATA.  Traffic between a BOC
LATA and an associated exchange was treated as intraLATA and could be carried by the BOC;
traffic between a BOC LATA and an unassociated exchange was treated as interLATA, and thus
could not be carried by the BOC.

 4.   Also in establishing the LATAs, the Court recognized that there were existing
local calling areas that would cross the newly created LATA boundaries.  The Court did not
intend for LATA boundaries to interfere with local calling areas that had been established by
state regulators; thus, the Court granted "exceptions" to permit BOCs to carry interLATA
traffic if necessary to preserve existing LATA arrangements.  In granting such exceptions,
known as expanded local calling service (ELCS) requests, the Court and Department of Justice
(DOJ) considered factors such as the number of customers or access lines involved; degree of
community interest; degree of calling between the exchanges; and the competitive effects. 
Similarly, the Court received more than a hundred additional requests involving LATA
associations, including requests for new associations, disassociations, and changes in association
from one LATA to another.  LATA association requests were generally granted if the changes
in associations would avoid the need for expensive reconfiguration and would not endanger
competition. 

 5.   Passage of the Telecommunications Act of 1996 (1996 Act), which amended the
Communications Act of 1934 (Act), changed the procedure by which a LATA boundary is
modified.  Pursuant to the 1996 Act, matters previously subject to the Consent Decree are now
governed by the Act.  Consequently, BOCs may modify LATA boundaries, if such
modifications are approved by the Commission; for example, in a recent Order the Commission
granted numerous ELCS petitions.  Though the Act does not specifically address modification
of LATA associations, the Commission recently issued an Order in which the term "modify"
in Section 3(25) was read to include modifications to permit a change in association. 
 
      III.  PLEADING

 6.   Ameritech's petition requests that the Commission approve an unlimited
modification of the Chicago LATA boundary so that the Exchanges will be included in the
Chicago LATA for "all relevant purposes."  The unlimited modification request is made
because Ameritech plans to purchase facilities from Central Telephone Company of Illinois
(Central).  According to Ameritech, the Exchanges are presently used to provide "telephone
exchange and exchange access services," as well as calling card, payphone, operator and
directory assistance services; and, except through the provision of exchange access, Ameritech
states that the Exchanges are not used to provide interLATA or toll services as defined by 47
U.S.C.  3(21) and 3(48), or 3(22).  According to Ameritech, the Exchanges are presently
associated with the Chicago LATA, and traffic between the Exchanges and the Chicago LATA
is intra-LATA traffic.

 7.   Ameritech states that its request for an unlimited modification of the Chicago
LATA is appropriate for three reasons.  First, it contends that an unlimited modification will not
allow an evasion of Section 271 requirements for inter-LATA traffic given that local traffic
between the Exchanges and the Chicago LATA is already entirely intra-LATA.  Second,
Ameritech states that an unlimited modification is consistent with the rationale for LATAs,
which is that "all Bell territory in the continental United States is divided into LATAs."  Third,
Ameritech states that the Commission's rationale used in its ELCS Order is not applicable
because that Order applied to LATA boundary modifications for the limited purposes of
implementing ELCS across existing LATA boundaries.  Ameritech notes that the ELCS
petitions recently adjudicated by the Commission requested that exchanges already assigned to
one LATA be included in a different LATA; conversely, the present petition requests that
Exchanges never included in a LATA now be included in one, "thereby triggering the all-or-
nothing distinction between Bell and non-Bell territory."  Ameritech further states that its
petition will not affect existing calling routes because the Exchanges will not move out of a
LATA; rather, they will join a LATA that they are already associated with.  The Commission
solicited comments to Ameritech's petition and no comments were filed in response to the
petition. 

      IV.   DISCUSSION

 8.   We grant Ameritech's petition to modify the Chicago LATA to include the Des
Plaines and Park Ridge exchanges.  An unlimited modification of the Chicago LATA for the
purposes of including the Exchanges is consistent with the Act and serves the public interest. 
As in the case of the ELCS Order and the Association Order, we weigh the need for the
modification against the potential harm from BOC anticompetitive activity.  In granting LATA
modifications and association modifications, the Commission was careful not to authorize
changes that would circumvent the requirements of Section 271 or be disruptive of local dialing
patterns.

 9.   In the present case, however, such concerns do not exist for two reasons.  First,
the Chicago LATA is already associated with the Exchanges; thus, local traffic between the
respective areas may be presently handled by Ameritech without concern for violating the
prohibition against BOCs providing interLATA traffic.  Second, the modification would result
in the Exchanges becoming a part of the Chicago LATA.  Consequently, concerns that
Ameritech could evade Section 271 requirements or that local dialing patterns would be disrupted
are obviated.  Similarly, the relevant factors in ELCS and Association Orders -- e.g., whether
there will be a loss of existing calling routes or whether customers might be charged on the basis
of measured rate rather than flat rate service -- are not applicable here because, as stated above,
Ameritech is already able to handle the traffic between the Exchanges and the Chicago LATA. 
Finally, we take note of the fact that no parties filed comments in response to the public notice
that solicited comments regarding Ameritech's petition.   

      VII.  ORDERING CLAUSES

 10.  Accordingly, IT IS ORDERED, pursuant to Sections 3(25) and 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C.  153(25), 154(i), and 47 C.F.R.  
0.91 0.291 of the Commission's rules, that the request of Illinois Bell Telephone Company, File
No. NSD-LM-97-29 to modify the Chicago LATA to include the Des Plaines and Park Ridge
exchanges IS GRANTED.    


      FEDERAL COMMUNICATIONS COMMISSION



      Geraldine A. Matise 
      Chief, Network Services Division
      Common Carrier Bureau