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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 ) ) Paradyne Corporation ) File Nos.: ) Petition for Waiver of the Signal Power ) Limitations Contained in Section 68.308(e) ) NSD-L-98-93 of the Commission's Rules ) ) ) ORDER Adopted: March 26, 1999 Released: March 29, 1999 By the Chief, Network Services Division, Common Carrier Bureau: I. INTRODUCTION 1. Paradyne Corporation ("Paradyne") has filed a Petition for waiver of Section 68.308(e) of the Commission's Rules ("Petition") so that it may register its Hotwire Multiple Virtual Lines ("Hotwire MVL") equipment under Part 68 of the Commission's Rules. Hotwire MVL is metallic channel customer premises equipment ("CPE"), that provides concurrent high-bit-rate digital and analog voice transmission through a single telephone line. For the reasons discussed below, we grant Paradyne's Petition for Waiver, subject to the conditions contained in this Order. II. BACKGROUND 2. Part 68: All terminal equipment sold in the United States for connection to the public switched telephone network (PSTN) must be registered with the Commission, pursuant to Part 68 of its rules. To enter the United States, any foreign product that is subject to Commission registration or approval must comply with Commission requirements, including Part 68. Thus, Hotwire MVL equipment must comply with, and be registered under, Part 68 of the Commission's rules before distribution, installation or use. Furthermore, carriers may disconnect equipment that causes harm, or that is likely to cause harm, to the PSTN. 3. More specifically, Part 68 of the Commission's rules provides operating parameters for CPE attached to the PSTN. These parameters target four potential sources of network harm: (1) hazardous voltage levels, (2) excessive signal power levels, (3) excessive longitudinal imbalance, and (4) improper network control signaling. Compliance with these parameters ensures that CPE will not harm the PSTN. To ensure such compliance, the Part 68 registration program requires rigorous testing of CPE to demonstrate that it conforms to Part 68 technical requirements. Equipment suppliers seeking to register their products submit application materials and test results to the Commission. If the application is complete and the test results show that the equipment complies with Part 68 of the Commission's rules, the Commission "registers" the equipment, assigning a "registration number" to be permanently marked on each unit. Part 68 registration indicates that the device may enter the United States, and be sold and connected to the PSTN. III. DISCUSSION 4. Paradyne's Petition: In its Petition, Paradyne contends that Hotwire MVL equipment benefits the public interest by providing enhanced consumer choice and improved service quality for data transmission through the PSTN. Paradyne claims that Hotwire MVL conforms to Part 68 of the Commission's rules, except for section 68.308(e). Paradyne also assures us that Hotwire MVL equipment poses no risk of harm to the PSTN. Paradyne seeks a waiver of section 68.308(e) to permit registration of its Hotwire MVL equipment. 5. Comments: BellSouth's opposition to Paradyne's Petition admonishes the Commission "not to bypass appropriate rulemaking procedures by inviting de facto rule changes through ad hoc waiver consideration." Alcatel Network Systems, Inc. (Alcatel) suggests that the Commission should delay granting any waivers or changes to the technical parameters of Part 68 until industry working groups have completed and finalized new standards. Alcatel reports that several standards bodies, including T1E1.4 Subcommittee, the ADSL Forum, ETSI, Telecommunications Industry Association (TIA) TR 41.9 Customer Premises Group, and International Telecommunications Union (ITU) Study Group 15/4 (SG 15/4) are conducting PSTN interference studies. Specifically, Alcatel argues in its comments that the Commission should not approve any waiver until Subcommittee T1E1.4 of the Alliance for Telecommunications Industry Solutions (ATIS) Technical (T1) Committee formulates a spectrum compatibility standard for xDSL technologies. 6. Nortel, however, states that "technological progress should not have to await Commission [rule modification] to accommodate advances in technology." CCL and MGC add that even the Commission's consideration of waiver petitions does not sufficiently enable Part 68 standards to keep pace with new technology, and suggests that the Commission adopt a new mechanism for expedited registration of new technologies. Both commenters recommend that the Commission fashion a process modeled upon the Canadian Terminal Attachment Program Advisory Committee (TAPAC). CCL and MGC report that TAPAC employs a Technical Task Force committee to formulate technical requirements for any terminal equipment not covered by CS-03. 7. Decision: In the Alameda Order, the Commission stated that the introduction of innovative customer premises equipment that increases choice for consumers and improves consumer value for a particular service serves the public interest. Paradyne purports that its Hotwire MVL equipment offers greater transmission capacity and capability than consumers may now attain from basic services offered through their local loop. Thus, the first branch of our analysis of the merits of Paradyne's Petition is an evaluation of Hotwire MVL's effect upon consumer choice and value. Further, the overriding purpose of Part 68 of the Commission's rules, and the mission of the Part 68 program, is to protect the PSTN from harm. Paradyne asserts that Hotwire MVL does not pose a threat of harm to the PSTN, although some commenters disagree with that position. Thus, the second branch of our analysis of this Petition addresses the possibility that permitting Paradyne's Hotwire MVL to exceed section 68.308(e) voltage limitations will create a risk of harm to the PSTN. 8. Waiver Standard: In analyzing Paradyne's Petition, we must consider the well established legal standard for waiver of the Commission's rules. The Commission must adhere strictly to its rules unless a party can demonstrate that "in the public interest the rule should be waived." Furthermore, the Commission may only waive a provision of its rules for good cause. The Commission must take a "hard look" at applications for waiver and must consider all relevant factors when determining if good cause exists. The party petitioning the Commission for a waiver bears the heavy burden of showing good cause: "[a]n applicant [for a waiver] faces a high hurdle even at the starting gate." In addition, "[t]he agency must explain why deviation better serves the public interest, and articulate the nature of the special circumstances, to prevent discriminatory application and to put future parties on notice as to its operation." Finally, a waiver of one or more portions of the Commission's rules does not excuse an applicant from compliance with the Commission's other requirements. 9. Public Interest - New Products and Innovation: The first branch of our analysis considers whether granting Paradyne's Petition will serve the public interest in greater consumer choice and value. In its Petition and ex parte pleadings, Paradyne argues that its Hotwire MVL equipment is a new and innovative product offering consumers additional choice and value. Paradyne claims that Hotwire MVL provides to the consumer the ability to maintain an Internet connection and communicate by telephone at the same time, over the same telephone line. Paradyne also claims that its Hotwire MVL equipment offers the consumer faster data transmission rates than otherwise offered by consumer equipment such as pulse code modulation, or "56 kbps," modems. Specifically, Paradyne claims that Hotwire MVL provides POTS service through passive low-pass filters while using bandwidth above the voice- frequency band to provide data transmission at up to 768 kbps. 10. MGC and Communication Certification Laboratory (CCL) support Paradyne's Petition, arguing that consumers are entitled to benefit from new technologies enabling faster Internet access. Rhythms NetConnections, Inc. (Rhythms) also supports Paradyne's Petition, identifying itself as a potential purchaser of Hotwire MVL equipment. Rhythms notes that Hotwire MVL's "unique performance" and low installation cost are "absolutely essential" to the deployment of high-speed access services to its customers. No commenters objected to the concept that Hotwire MVL offers increased choice and value to consumers. 11. We agree that Paradyne's Hotwire MVL equipment offers increased consumer choice and value, by permitting consumers to utilize a single subscriber line for POTS concurrent with high-speed digital transmission. Thus, we find that Paradyne's Hotwire MVL equipment serves the public interest, satisfying the first criterion for grant of this Petition for Waiver. 12. Public Interest - Harm to the Network: The second branch of our analysis considers the possibility that the connection and use of Hotwire MVL equipment will harm the PSTN. Section 68.308 signal power limitations protect the network from crosstalk and other interference caused by excessive analog signal power in the PSTN. Paradyne's Petition requests that we waive section 68.308(e) as it applies to Hotwire MVL equipment. Section 68.308(e) limits the power level of "out of band" signals. "Out-of-band" signals are signals of a higher frequency than those normally used for "POTS" or "voiceband" service. For Part 68 purposes, the "out-of-band" signal frequency range extends from 4 kilohertz (kHz) to 6 megahertz (MHz). Section 68.308(e) ensures that registered terminal equipment does not introduce "out-of-band" signals to the PSTN that could be harmful to telephone company transmission systems or services. These limits reflect the crosstalk and terminating impedance characteristics of the cable facilities in the PSTN. 13. In the Petition, Paradyne states that "industry observers" and "telecommunications carriers" recognize Hotwire MVL's compatibility with other telecommunications services sharing the PSTN. Paradyne also makes two arguments contending that Hotwire MVL equipment will not cause harm to the PSTN. First, Paradyne argues that Hotwire MVL equipment employs "out-of-band" frequencies to minimize the likelihood of interference with "voiceband" transmissions in the PSTN. Paradyne also states that Hotwire MVL equipment incorporates low-pass filters to ensure compatibility with "voiceband" frequency transmissions. Second, Paradyne states that Hotwire MVL complies with the frequency and signal power limits for Integrated Services Digital Network (ISDN) Basic Rate (BRA) equipment defined in American National Standards Institute (ANSI) T1.601-1992. Finally, Paradyne asserts that Hotwire MVL's compliance with the Canadian CS-03 standard indicates that it does not pose a risk of harm to the United States' PSTN. 14. Paradyne states that its out-of-band signals are substantially attenuated to minimize crosstalk interference potential. Ameritech contradicts Paradyne's claims that Hotwire MVL's performance characteristics ensure compatibility with "voiceband" transmissions, asserting that Hotwire MVL's "relatively high" transmitted signal power level could cause excessive crosstalk on local loop facilities and interference on analog carrier systems. Rhythms, however, avers that it has "seen nothing to indicate that there is any scientific basis for such claims." BellSouth, although opposed to Paradyne's Petition on other grounds, also states that it has "no reason to believe that Paradyne's equipment will cause harm to BellSouth's network." 15. Paradyne defends its claim that Hotwire MVL will not harm the PSTN by asserting that Hotwire MVL and ISDN BRA equipment have a similar effect upon the PSTN. Paradyne argues that Hotwire MVL operates within the permissible power spectral density mask for ISDN equipment, as defined in ANSI T1.601-1992. Paradyne observes that the Commission registers ISDN BRA equipment under Part 68. Part 68 does not contain a specific limitation for ISDN BRA signals presented directly to the network user interface. Paradyne interprets the absence of such limitation as indicating that the Commission finds user interface signals compatible with other services and unlikely to cause crosstalk or other harm to the PSTN. Paradyne then argues by analogy that because Hotwire MVL generates signal power levels similar to the ISDN BRA user interface, Hotwire MVL is unlikely to harm the PSTN. 16. Nortel indicates that it would support Paradyne's Petition, or any other petition, were it supported by "an appropriate showing" that grant of the petition will not lead to the disruption of high-bit- rate digital equipment sharing the PSTN. Alcatel and Nortel suggest that the Commission should use one developing industry standard as a basis for all Part 68 authorizations or waivers: draft issue 2 of the ANSI T1.413 standards for Digital Subscriber Line (xDSL) CPE. Nortel claims that this document contains "the best requirements" to prevent harm to the PSTN. Rhythms, however, suggests that a different industry standard is more appropriate in this case. Specifically, Rhythms and Paradyne recommend that the Commission require that Hotwire MVL comply with ANSI T1.601 power spectral density (PSD) specification as a condition for its waiver. 17. ANSI T1.601 PSD standards apply to the electrical characteristics of the signals appearing at the PSTN interface of ISDN BRA CPE. ANSI T1.413 issue 2 standards apply to the electrical characteristics of the signals appearing at the PSTN interface of xDSL CPE. Both standards describe the physical interface between the PSTN and the customer installation and provide the minimum requirement set for transmission between the customer installation and the PSTN. Both standards apply to equipment that connects to the PSTN to facilitate data transmission. Both standards also represent industry consensus PSD masks defining output levels that will not cause harm to the PSTN. We note that ATIS Committee T1 utilizes an open, industry consensus-building process to develop network protection standards, such as these, applicable to the connection of digital and high capacity transmission equipment to the PSTN. 18. We find that both ANSI T1.601 and ANSI T1.413 reflect a reasonable level of industry consensus on CPE output limitations intended to protect the viability of the PSTN as a transmission media for currently deployed and nascent digital transmission technologies, such as ISDN BRA and xDSL. We find that MVL's compliance with ANSI T1.601 indicates that it does not pose a threat of harm to the PSTN, satisfying the second branch of our review. Thus, we grant Paradyne's Petition for Waiver for Hotwire MVL equipment, with the condition that Hotwire MVL equipment continues to comply with the T1.601 standard. We emphasize, however, that Hotwire MVL's compliance with this still-developing consensus industry standard is not a sufficient basis, on its own, for granting Paradyne's Petition. Rather, it is only in combination with satisfaction of the public interest requirements discussed in the context of the first branch of this analysis that we find sufficient justification for grant of this Petition. Thus, future petitioners seeking to obtain Part 68 waivers to permit registration of CPE not otherwise compliant with our Part 68 rules must show compliance with a widely recognized, industry consensus standard, designed to protect the PSTN from harm. No less important, future petitioners must also present a compelling public interest case that grant of a petition for Part 68 waiver will increase consumer value and choice. 19. Canadian CS-03: Finally, Nortel's opposition to Paradyne's Petition takes exception to Paradyne's claim that Hotwire MVL's compliance with the Canadian CS-03 standard supports the assumption that Hotwire MVL will not cause interference or other harm the United States' PSTN. We agree with Nortel on this issue: Hotwire MVL's compliance with Canadian standard CS-03 is not a substantial justification for this waiver. CS-03 does not contain a direct corollary to section 68.308(e). Compliance with CS-03 does not ensure compatibility among services using high-bit-rate digital CPE or adjacent copper loops, nor does it speak to the primary issue in this matter: the risk of harm to the PSTN. Thus, although we have harmonized our Part 68 standards with CS-03 so far as possible, CS-03 is not controlling authority, and our decisions must always pursue the public interest goals of Part 68. 20. Conclusion: Thus, we conclude that Petitioners have shown good cause for granting this Petition, and that grant of this petition will not result in harm to the PSTN. We emphasize the limited scope and condition for grant of this waiver. We also note that a carrier need not connect, or remain connected, to any device that the carrier reasonably suspects will cause harm to the PSTN. Section 68.108 of our rules affords carriers certain self-help privileges, enabling them to take necessary actions to protect the PSTN. These actions include temporarily disconnecting or refusing to connect inside wiring or CPE that is likely to cause harm to the PSTN. Carriers seeking to utilize those self-help privileges must notify the customer of their intended action, give the customer an opportunity to correct problems, and inform the customer of his right to complain to the Commission should the carrier act improperly. ORDERING CLAUSE 21. Accordingly, IT IS HEREBY ORDERED, pursuant to authority delegated in Sections 0.91 and 0.291 of the Commission's Rules, 47 C.F.R. 0.91, 0.291, and Section 1.3 of the Commission's Rules, 47 C.F.R. 1.3, that Paradyne Corporation's Petition for waiver of Section 68.308(e) of the Rules, 47 C.F.R. 68.308(e), IS GRANTED to the extent stated herein. FEDERAL COMMUNICATIONS COMMISSION Anna M. Gomez Chief Network Services Division Common Carrier Bureau