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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 ) ) BellSouth ) Petition for Limited Modification of LATA ) Boundary to Provide Expanded Local ) File No. NSD-L-99-14 Calling Service (ELCS) ) MEMORANDUM OPINION AND ORDER Adopted: March 19, 1999 Released: March 19, 1999 By the Chief, Network Services Division: I. INTRODUCTION 1. On November 4, 1998, BellSouth Telecommunications, Inc. and BellSouth Corporation (BellSouth), pursuant to Section 3(25) of the Communications Act of 1934, as amended, filed a petition to provide two-way, flat-rated, non-optional expanded local calling service (ELCS) between the Fairmont and Maxton, Parkton, Red Springs, and St. Paul, North Carolina exchanges. BA's petition requests a limited modification of a local access transport area (LATA) boundary. The petition was placed on public notice, and no comments or reply comments were filed. For the reasons stated below, we grant BellSouth'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 Bell Operating Companies (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. The petition proposes to establish two-way, flat-rated, non-optional ELCS, and is accompanied by: (1) a statement that only traditional local service is proposed; (2) an order issued by the North Carolina Utilities Commission confirming that ELCS should be approved between the various exchanges to complete county-wide ELCS in Robeson County; (3) a statement that the combined poll results from the various exchanges favor county-wide ELCS; (4) a statement of the number of access lines involved; and (5) a statement that a community of interest exists between the various exchanges and other portions of Robeson County. 6. As we noted in the July 1997 Order, granting an ELCS petition removes the proposed route from the competitive interexchange market, and some LATA modifications could reduce the BOCs' incentive to open their own markets to competition pursuant to section 271 of the Act. Given, however, the small number of access lines and the small volume of traffic involved for the proposed ELCS area in this petition, as well as the types of service to be offered (e.g., two-way, flat- rated, non-optional local service), it is highly unlikely that provision of ELCS service would reduce BellSouth's motivation to open its own market to competition. Because of to the limited amount of traffic and the type of service involved, the Division finds that the proposed LATA modifications will not have a significant anticompetitive effect on the interexchange market or on BA's incentive to open its own market to competition. We conclude that the information in the petition satisfies the criteria established in the July 1997 Order. IV. CONCLUSION 7. We conclude that, in this request, the community's need for the proposed ELCS route outweighs the risk of potential anticompetitive effects. Granting BellSouth's petition serves the public interest by permitting a minor LATA modification where such modification is necessary to meet the needs of local subscribers and will not have any significant effect on competition. Accordingly, we approve BellSouth's petition for limited LATA modification in order to provide two-way, flat-rated, non-optional ELCS. The LATA is modified solely for the limited purpose of allowing BellSouth to provide two-way, flat-rated, non-optional 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, non-optional 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. V. ORDERING CLAUSES 8. 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 authority delegated by Sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R.  0.91 and 0.291, that the request of BellSouth Telecommunications, Inc. and BellSouth Corporation for LATA modification for the limited purpose of providing two-way, flat-rated, non-optional ELCS at specific locations, identified in File No. NSD-L-99-14 IS APPROVED. This LATA boundary is modified solely for the purpose of providing two-way, flat-rated, non-optional ELCS between points in the specific exchanges or geographic areas indicated in the request. The LATA boundary for all other services shall remain unchanged. 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 petitioners, BellSouth Telecommunications, Inc. and BellSouth Corporation. FEDERAL COMMUNICATIONS COMMISSION Anna M. Gomez Chief, Network Services Division Common Carrier Bureau