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



     )
In the Matter of                                    )
                                                    )
Ameritech                                           )
Petition for Limited Modification of LATA    )              
Boundaries to Provide Expanded Local         )              File No. NSD-L-97-34 
Calling Service (ELCS) in Wisconsin          )              
                                                                    

MEMORANDUM OPINION AND ORDER
              

Adopted:   February 17, 1998                                     Released:  February 17, 1998

By the Chief, Network Services Division: 

                                   I.     INTRODUCTION
                           
     1.     On September 29, 1997, Ameritech, pursuant to Section 3(25) of the
Communications Act of 1934, as amended, filed a petition to provide message rate, two-way,
expanded local calling service (ELCS) between the Milton, Richmond, and Delavan exchanges
in Wisconsin. Ameritech requests a limited modification of a local access transport area (LATA)
boundary.  The petition was placed on public notice and one party commented.  No reply
comments were filed.   For the reasons stated below, we grant Ameritech's request.

                                   II.    BACKGROUND
                                     
     2.     Requests for new ELCS routes are generally initiated by local subscribers. 
IntraLATA ELCS routes can be ordered by the state commission.  For interLATA routes, prior
to the Telecommunications Act of 1996 (1996 Act), the BOCs were required to secure state
approval and then obtain a waiver from the United States District Court for the District of
Columbia (District Court).  In the years between the Consent Decree and the 1996 Act, the
District Court received more than a hundred requests for Consent Decree waivers to permit new
interLATA ELCS routes.  Because of the large number of requests involved and because most
of the requests were non-controversial, the District Court developed a streamlined process for
handling such requests.

     3.     Under the streamlined process developed by the District Court, the BOC submitted
its waiver request to the Department of Justice (Department).  The Department reviewed the
request and then submitted the request, along with the Department's recommendation, to the
District Court.  In evaluating ELCS requests, the Department and the District Court considered
the number of customers or access lines involved as well as whether a sufficiently strong
community of interest between the exchanges justified granting a waiver of the Consent
Decree.  A community of interest could be demonstrated by such evidence as:  (1) poll results
showing that customers in the affected exchange were willing to pay higher rates to be included
in an expanded local calling area; (2) usage data demonstrating a high level of calling between
the exchanges; and (3) narrative statements describing how the two exchanges were part of one
community and how the lack of local calling between the exchanges caused problems for
community residents.  In addition, the Department and the District Court gave deference to the
state's community of interest finding.  The District Court also considered the competitive effects
of granting a proposed ELCS waiver.
      
     4.     Matters previously subject to the Consent Decree are now governed by the Act. 
Under section 3(25)(B) of the Act, BOCs may modify LATA boundaries, if such modifications
are approved by the Commission.  On July 15, 1997, the Commission released a decision
granting 23 requests for limited boundary modification to permit ELCS.  Although calls
between the ELCS exchanges would now be treated as intraLATA, each ELCS exchange would
remain assigned to the same LATA for purposes of classifying all other calls.  The
Commission stated that it would grant requests for such limited modifications only where a
petitioning BOC showed that the ELCS was a flat-rated, non-optional service, a significant
community of interest existed among the affected exchanges, and grant of the requested waiver
would not have any anticompetitive effects.  The Commission stated further that a carrier
would be deemed to have made a prima facie case supporting grant of the proposed modification
if the ELCS petition: (1) has been approved by the state commission; (2) proposes only
traditional local service (i.e., flat-rated, non-optional ELCS); (3) indicates that the state
commission found a sufficient community of interest to warrant such service; (4) documents this
community of interest through such evidence as poll results, usage data, and descriptions of the
communities involved; and (5) involves a limited number of customers or access lines.   

                                   III.      DISCUSSION

     5.     Ameritech's petition proposes to establish a message rate, two-way ELCS. 
Message rate service is the only type of local service provided by Ameritech to its Wisconsin
customers.  The request is accompanied by: (1) an order confirming state approval of the
limited LATA modification requested; (2) a statement that only traditional local service is
proposed; (3) a community of interest finding by the Wisconsin Public Service Commission; (4)
usage data; and (5) a statement that the petition involves 10 access lines.  The brief descriptions
of the basis for the requested ELCS reveal that many community services (such as hospitals,
doctors offices, schools, stores, public transportation facilities, and government offices) are
located in a nearby community in the adjacent LATA, and that making interLATA toll calls for
such services generates significant expenses for residents.

     6.     As we stated in the July 1997 Order, granting an ELCS petition removes the
proposed route from the competitive interexchange market.  Some LATA modifications could
reduce the incentive created by Section 271 of the Act for BOCs to open their local exchange
and exchange access markets to competition.  The effect on competition was an important
reason in the District Court granting flat-rated ELCS requests while opposing, for example,
optional or measured rate ELCS requests.  Optional or measured rate ELCS requests, however,
were opposed by the District Court where the request would introduce such plans into the
expanded local calling area as contrasted with requests where such plans were part of the existing
levels of service.  In the present case, Ameritech only offers message rate service in
Wisconsin.  Given this fact, and that Ameritech's petition involves only ten access lines, we find
that the proposed LATA modification will not have a significant anticompetitive effect on the
interexchange market or on Ameritech's incentive to open its local exchange and exchange
access markets to competition.

     7.     We conclude that, in the petition, the community's need for the proposed ELCS
routes outweighs the risk of potential anticompetitive effects.  Granting Ameritech's petition
serves the public interest by permitting a minor LATA modification in a case where such
modification is necessary to meet the needs of local subscribers and will not have any significant
effect on competition. Accordingly, we approve Ameritech's petition for limited LATA
modification in order to provide message rate ELCS.  The LATA is modified solely for the
limited purpose of allowing two-way, message rate local calling service between the specific
exchanges or geographic areas identified in the requests.  The LATA is not modified to permit
the BOC to offer any other type of service, including calls that originate or terminate outside
the specified areas.  Thus, message rate ELCS between the specified exchanges will be treated
as intraLATA, and the provisions of the Act governing intraLATA service will apply.  Other
types of service between the specified exchanges will remain interLATA, and the provisions of
the Act governing interLATA service will apply.  

IV.      ORDERING CLAUSES
             
     8.     Accordingly, IT IS ORDERED that, 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 and 0.291 of the Commission's rules, that the request of Ameritech for LATA modification
for the limited purpose of providing message rate ELCS at specific locations, identified in File
No. NSD-L-97-34, IS APPROVED to the extent described above.  

     9.     IT IS FURTHER ORDERED that, pursuant to section 416(a) of the Act, 47
U.S.C.  416(a), the Secretary SHALL SERVE a copy of this order upon the petitioner,
Ameritech. 

                                   FEDERAL COMMUNICATIONS COMMISSION




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