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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 Matters of ) ) Implementation of the ) Telecommunications Act of 1996: ) CC Docket No. 96-115 ) Telecommunications Carriers' Use ) of Customer Proprietary Network ) Information and Other ) Customer Information ) ) Implementation of the Local Competition ) Provisions of the Telecommunications Act ) CC Docket No. 96-98 of 1996 ) ) Provision of Directory Listing Information ) under the Telecommunications Act of 1934, ) CC Docket No. 99-273 As Amended ) THIRD REPORT AND ORDER in CC Docket No. 96-115, SECOND ORDER ON RECONSIDERATION of the Second Report and Order in CC Docket No. 96-98, and NOTICE OF PROPOSED RULEMAKING in CC Docket No. 99-273 Adopted: August 23, 1999 Released: September 9, 1999 Comment Date: October 13, 1999 Reply Comment Date: October 28, 1999 By the Commission: Commissioner Ness issuing a statement; Commissioner Furchtgott-Roth approving in part, dissenting in part and issuing a statement. TABLE OF CONTENTS Para. I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 1 II. THIRD REPORT AND ORDER. . . . . . . . . . . . . . . . . . 11 A. Background . . . . . . . . . . . . . . . . . . . . . 11 1. Statutory Provisions. . . . . . . . . . . . . . 11 2. Directory Publishing. . . . . . . . . . . . . . 12 3. Commission Proceedings. . . . . . . . . . . . . 17 B. Commission Authority . . . . . . . . . . . . . . . . 19 1. Background. . . . . . . . . . . . . . . . . . . 19 2. Discussion. . . . . . . . . . . . . . . . . . . 20 C. Need for Commission Regulation . . . . . . . . . . . 22 D. Applicability to Particular Carriers . . . . . . . . 24 1. Background. . . . . . . . . . . . . . . . . . . 24 2. Discussion. . . . . . . . . . . . . . . . . . . 25 E. Definition of Subscriber List Information. . . . . . 28 1. Overview. . . . . . . . . . . . . . . . . . . . 28 2. Primary Advertising Classifications . . . . . . 29 3. Unpublished and Unlisted Information. . . . . . 39 4. Updated Subscriber List Information . . . . . . 42 5. Subscribers with Multiple Telephone Numbers . . 49 6. Other Information . . . . . . . . . . . . . . . 51 F. Subscriber List Information Obtained from Competitive LECs 53 G. Provision of Subscriber List Information . . . . . . 56 1. Overview. . . . . . . . . . . . . . . . . . . . 56 2. Discussion. . . . . . . . . . . . . . . . . . . 57 H. Reasonable Rates . . . . . . . . . . . . . . . . . . 71 1. Background. . . . . . . . . . . . . . . . . . . 71 2. Overall Approach. . . . . . . . . . . . . . . . 72 3. Cost Structure. . . . . . . . . . . . . . . . . 75 4. Method for Determining "Reasonableness" . . . . 80 5. Presumptively Reasonable Rates. . . . . . . . . 93 6. Complaint Procedures. . . . . . . . . . . . . 105 I. Subscriber List Information Formats. . . . . . . . 108 J. Directory Publishing Purposes. . . . . . . . . . . 111 1. Background. . . . . . . . . . . . . . . . . . 111 2. Safeguards. . . . . . . . . . . . . . . . . . 112 3. Updating Previously Purchased Subscriber List Information 116 4. Obtaining Advertisers . . . . . . . . . . . . 117 K. Enforcement. . . . . . . . . . . . . . . . . . . . 120 III. SECOND ORDER ON RECONSIDERATION. . . . . . . . . . . . 124 A. Definition of the Term "Nondiscriminatory Access". 124 1. Background. . . . . . . . . . . . . . . . . . 125 2. Discussion. . . . . . . . . . . . . . . . . . 126 B. Burden of Proof for Showing "Nondiscriminatory Access" 131 1. Background. . . . . . . . . . . . . . . . . . 131 2. Discussion. . . . . . . . . . . . . . . . . . 132 C. Access to Features Adjunct to Operator Services and Directory Assistance 136 1. Background. . . . . . . . . . . . . . . . . . 136 2. Discussion. . . . . . . . . . . . . . . . . . 137 D. Branding . . . . . . . . . . . . . . . . . . . . . 141 1. Background. . . . . . . . . . . . . . . . . . 141 2. Discussion. . . . . . . . . . . . . . . . . . 143 E. Nondiscriminatory Access to Directory Assistance Databases 149 1. Background. . . . . . . . . . . . . . . . . . 149 2. Discussion. . . . . . . . . . . . . . . . . . 150 F. Definition of Directory Listing. . . . . . . . . . 157 1. Background. . . . . . . . . . . . . . . . . . 157 2. Discussion. . . . . . . . . . . . . . . . . . 158 G. Access to Customer Guides and Informational Pages. 161 1. Background. . . . . . . . . . . . . . . . . . 161 2. Discussion. . . . . . . . . . . . . . . . . . 162 H. Access to Nonpublished Numbers . . . . . . . . . . 164 1. Background. . . . . . . . . . . . . . . . . . 164 2. Discussion. . . . . . . . . . . . . . . . . . 165 IV. NOTICE OF PROPOSED RULEMAKING . . . . . . . . . . . . . 170 A. Relationship between Directory Publishing and Directory Assistance 170 1. Overview. . . . . . . . . . . . . . . . . . . 170 2. Internet Directories. . . . . . . . . . . . . 172 3. Oral Provision of Listing Information . . . . 180 B. Access to Nonlocal Listings. . . . . . . . . . . . 192 V. PROCEDURAL MATTERS . . . . . . . . . . . . . . . . . . . .196 A. Third Report and Order . . . . . . . . . . . . . . .196 1. Final Regulatory Flexibility Analysis . . . . .196 2. Final Paperwork Reduction Act Analysis. . . . .197 B. Second Order on Reconsideration . . . . . . . . . .198 1. Supplemental Final Regulatory Flexibility Analysis198 2. Final Paperwork Reduction Act Analysis. . . . .199 C. Notice of Proposed Rulemaking. . . . . . . . . . . .200 1. Ex Parte Presentations. . . . . . . . . . . . .200 2. Initial Regulatory Flexibility Act Analysis . .201 3. Initial Paperwork Reduction Act Analysis. . . .202 4. Comment Filing Procedures . . . . . . . . . . .203 VI. ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . .209 APPENDIX A -- LIST OF PARTIES (CC Docket No. 96-115) . . . . .A-1 APPENDIX B -- LIST OF PARTIES (CC Docket No. 96-98). . . . . .B-1 APPENDIX C -- REGULATORY FLEXIBILITY ACT . . . . . . . . . . .C-1 APPENDIX D -- FINAL RULES. . . . . . . . . . . . . . . . . . .D-1 I. INTRODUCTION 1. In passing the Telecommunications Act of 1996 (1996 Act), Congress sought "to provide for a pro-competitive, de-regulatory national policy framework" that would "accelerate rapidly private sector deployment of advanced telecommunications and information technologies to all Americans." Two components of that framework are section 222(e) of the Communications Act, which requires carriers that provide telephone exchange service to provide subscriber list information to requesting directory publishers "on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions," and section 251(b)(3) of that Act, which requires, among other things, that local exchange carriers (LECs) permit competing providers of telephone exchange service and telephone toll service "nondiscriminatory access to . . . directory assistance and directory listing." Both of these sections address third party rights to obtain telephone exchange service subscribers' names, addresses, and telephone numbers from LECs. To ensure that our policies implementing these statutory requirements are consistent, this item addresses subscriber list information issues arising under section 222(e), directory listings and directory assistance issues arising under section 251(b)(3), and issues arising out of the convergence of directory publishing and directory assistance. 2. Subscriber list information, which includes listed subscribers' names, addresses, and telephone numbers as well as headings under which businesses are listed in the yellow pages, is the foundation of the directory publishing business, a business that generates annual revenues of over $12 billion. Although most directory publishing revenue presently comes from the sale of advertising for printed yellow pages directories, many companies are now offering electronic yellow pages over the Internet. According to one estimate, the revenues from these and more advanced Internet directories will surpass those from printed directories by 2010. 3. Telecommunications carriers acquire subscriber list information when they initiate service to local telephone exchange service customers or change that service. In enacting section 222(e), Congress recognized that the LECs had "total control" over subscriber list information. Congress found that some LECs had exploited this control by, among other practices, refusing to sell subscriber list information to potential competitors, charging excessive and discriminatory prices for subscriber list information, or imposing unreasonable conditions, such as requiring independent directory publishers to purchase listings only on a statewide basis. Section 222(e) attempts to address these and other practices by requiring that each "telecommunications carrier that provides telephone exchange service shall provide subscriber list information gathered in its capacity as a provider of such service on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions, to any person upon request for the purpose of publishing directories in any format." In enacting this provision, Congress' goals included preventing unfair LEC practices and encouraging the development of competition in directory publishing. 4. Having received "information regarding difficulties faced by independent telephone directory publishers" in obtaining timely subscriber list information on a nondiscriminatory basis from LECs, the Commission invited comment in a Notice of Proposed Rulemaking (Notice) on what regulations or procedures, if any, are needed to implement the 1996 Act's subscriber list information provisions. In response to the Notice, independent directory publishers assert that, despite the enactment of section 222(e), LECs continue to engage in unfair and anticompetitive subscriber list information practices and therefore urge the Commission to adopt implementing rules. 5. We recognize that the ability of independent directory publishers to improve customer service and to develop new products, including more advanced Internet directories, is dependent on telecommunications carriers' understanding and complying with their obligations under section 222(e). Based upon the record in this proceeding, we implement section 222(e) by promulgating more specific standards regarding carriers' obligations under this provision. These standards, as set forth below in the Third Report and Order in CC Docket No. 96-115, will benefit consumers and advertisers by promoting the development of a directory publishing industry characterized by innovation, customer service, and vigorous competition, as Congress envisioned. 6. In the Local Competition Second Report and Order, the Commission promulgated rules and policies to require incumbent LECs to provide competitors with access to the incumbent LECs' networks sufficient to create a competitively neutral playing field for new entrants consistent with section 251(b)(3). Among these rules, the Commission required incumbent LECs to provide nondiscriminatory access to directory assistance and directory listings to ensure that customers of all LECs would have access to accurate directory assistance information. As the Commission stated in the Local Competition Second Report and Order, dialing parity, nondiscriminatory access, network disclosure, and numbering administration issues are critical issues for the development of local competition. The Commission noted that potential competitors in the local and long distance markets face numerous operational barriers to entry notwithstanding their legal right under the Act to enter such markets. In the Local Competition Second Report and Order, the Commission adopted rules to implement the dialing parity, nondiscriminatory access, numbering administration, and network disclosure requirements of the 1996 Act to benefit consumers by making some of the strongest aspects of LEC incumbency -- the local dialing, telephone numbers, operator services, directory assistance, and directory listing -- available to all competitors on an equal basis. 7. In this Second Order on Reconsideration, we resolve specific issues regarding the nondiscriminatory access obligations of LECs under section 251(b)(3) raised in Petitions for Reconsideration or Clarification filed in response to the Local Competition Second Report and Order in CC Docket No. 96-98. We also seek comment on additional issues arising out of developments in, and the convergence of, directory publishing and directory assistance, in the Notice of Proposed Rulemaking in CC Docket No. 99-273, below. 8. The Third Report and Order in CC Docket No. 96-115 establishes rules to implement section 222(e) in a way that should further Congress' goals of preventing unfair LEC practices and encouraging the development of competition in directory publishing. Our actions in this Order include: We conclude that section 222(e) obligates all telecommunications carriers, including competitive LECs, to provide subscriber list information regarding their telephone exchange service customers to requesting directory publishers. We also conclude that section 222(e) does not obligate a carrier to provide subscriber list information of customers of other LECs. An incumbent LEC therefore need not act as a clearinghouse for providing subscriber list information to directory publishers, except to the extent a State commission so requires. We conclude that carriers must provide requesting directory publishers with updates to subscriber list information reflecting changes in telephone exchange service. We also conclude that section 222(e) does not require a carrier to provide the names or addresses of subscribers with unlisted or unpublished numbers to independent directory publishers, but we are prepared to take action under other statutory provisions if carriers provide their own, but not competing directory publishers, with these names and addresses. We conclude that the nondiscrimination requirement in section 222(e) obligates a carrier subject to that section to provide subscriber list information to requesting directory publishers at the same rates, terms, and conditions that the carrier provides the information to itself, its directory publishing affiliate, or another directory publisher. We conclude that, to the extent its internal systems permit, a carrier that receives at least thirty days advance notice must provide subscriber list information according to the delivery schedule, at the level of unbundling, and in the format the directory publisher requests. We further conclude, however, that a carrier need not change its internal systems in order to accommodate requests for subscriber list information from a directory publisher. We conclude that $0.04 per listing constitutes a presumptively reasonable rate for base file subscriber list information and that $0.06 per listing constitutes a presumptively reasonable rate for updated subscriber list information that carriers provide directory publishers. We do not preclude a carrier from charging subscriber list information rates different than these presumptively reasonable rates. However, any carrier whose rates exceed either of these rates should be prepared to provide cost data and all other relevant information justifying the higher rate in the event a directory publisher files a complaint regarding that rate pursuant to section 208 of the Communications Act. 9. In the Second Order on Reconsideration in CC Docket No. 96-98, we address issues regarding nondiscriminatory access obligations: We affirm our requirements that LECs offer access to telephone numbers, operator services, directory assistance, and directory listings that is equal to the access that the LEC provides to itself and that the providing LEC shall continue to bear the burden of proof that it is offering nondiscriminatory access. We require each LEC to provide access to adjunct features related to the provision of operator services and directory assistance services, and preclude LECs from negotiating exclusive contracts with third party vendors of such adjunct features that would prevent competing providers from negotiating licensing agreements with the vendors for access to their services. We decline to change our branding requirements concerning LECs' obligations to rebrand the traffic of interconnecting carriers and resellers, and, further, reaffirm that the benefits of this obligation are to be extended to all "competing providers of telephone exchange service and telephone toll service," including resellers. We conclude that any failure to rebrand the competitor's traffic is presumptively discriminatory and that the burden will be on the providing LEC to demonstrate that it is technically infeasible for it to arrange its network architecture to allow it to brand competitor's traffic. We clarify that, upon request, a LEC shall provide access to its directory assistance services, including directory assistance databases, and to its directory listings in any format the competing provider specifies, if the LEC's internal systems can accommodate that format. In addition, LECs must supply updates to the requesting LEC in the same manner as the original transfer and at the same time that it provides updates to itself. We also delete as redundant our definition of "directory listings," and conclude that names and addresses of subscribers with unlisted information must be shared among LECs. 10. In the Notice of Proposed Rulemaking in CC Docket No. 99-273, we address issues arising out of the interplay between section 222(e) and section 251(b)(3). In particular, We invite comment on issues relating to the development of Internet directories, including whether section 222(e) entitles directory publishers to obtain subscriber list information for use in those directories. We invite comment on whether and how we may extend nondiscriminatory access to listing information to directory assistance providers that are neither telephone exchange service providers or telephone toll service providers. We invite comment on issues relating to the development of national directory assistance, including whether all LECs providing that service must provide nondiscriminatory access to nonlocal listings pursuant to section 251(b)(3). II. THIRD REPORT AND ORDER A. Background 1. Statutory Provisions 11. Section 222(e) sets forth the requirements for the provision of subscriber list information. Specifically, section 222(e) requires each "telecommunications carrier that provides telephone exchange service" to "provide subscriber list information gathered in its capacity as a provider of such service on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions, to any person upon request for the purpose of publishing directories in any format." Section 222(f)(3) defines subscriber list information as: any information -- (A) identifying the listed names of subscribers of a carrier and such subscribers' telephone numbers, addresses, or primary advertising classifications (as such classifications are assigned at the time of the establishment of such service), or any combination of such listed names, numbers, addresses, or classifications; and (B) that the carrier or an affiliate has published, caused to be published, or accepted for publication in any directory format. Section 3(47) defines "telephone exchange service" as: (A) service within a telephone exchange, or within a connected system of telephone exchanges within the same exchange area operated to furnish to subscribers intercommunicating service of the character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or (B) comparable service provided through a system of switches, transmission equipment, or other facilities (or combination thereof) by which a subscriber can originate and terminate a telecommunications service. 2. Directory Publishing 12. As the statutory definition makes clear, subscriber list information includes the listed names, addresses, and telephone numbers of telephone exchange service subscribers as well as headings under which businesses are listed in the yellow pages. Carriers obtain this information "quite easily" during the order-taking process for telephone exchange service. Typically, individuals or businesses wishing to obtain telephone exchange service provide their names and addresses to a carrier, which in turn assigns them telephone numbers and, for many businesses, yellow pages headings. Many LECs maintain computerized subscriber list information databases. Those LECs that maintain computerized subscriber list information databases update their databases as individuals and businesses start or stop telephone exchange service, change the number of lines they receive, request unlisted status, or add new listings for existing lines. 13. Directory publishers use subscriber list information to publish a wide variety of directories. The most familiar are white and yellow pages directories that incumbent LECs publish, either directly or through affiliates or third parties. White pages directories provide, alphabetically by name, the names, addresses, and telephone numbers of subscribers receiving telephone exchange service within particular geographic areas that do not elect to have their numbers unlisted. Yellow pages directories provide the names, addresses, and telephone numbers of businesses receiving telephone exchange service within particular geographic areas as well as advertisements for individual businesses. These directories include headings that direct users to groups of listings for businesses that provide similar products or services (e.g., automobiles, restaurants, and the like) and to the advertising that accompanies those listings. Subscriber list information can be published either on paper or in many other formats, including, but not limited to, magnetic tape and optical disk. 14. Many independent directory publishers are small, entrepreneurial businesses. ADP, a trade association representing independent directory publishers, states that its members publish more than 2,200 telephone directories serving communities throughout the United States. These directories include area-wide directories that cover the service territories of multiple incumbent LECs as well as niche directories that cover much smaller areas or that appeal to particular ethnic groups. Some independents publish foreign language directories for areas within the United States. 15. In most States, directory publishers, including independents, obtain subscriber list information from LECs pursuant to contracts. In Florida, Kentucky, Louisiana, and Mississippi, however, BellSouth offers subscriber list information to directory publishers via tariffs. The California Commission and the New York Commission regulate the provision of subscriber list information to directory publishers by carriers subject to their jurisdiction. A directory publisher, in addition, may use subscriber list information copied from published directories without infringing any copyrights for those directories. 16. A directory publisher that obtains subscriber list information from a carrier typically receives an "initial load" of that information that provides, as of a given date, the carrier's subscriber list information that the publisher wishes to include in one or more directories. The publisher may also receive a "refresh" service that provides that subscriber list information as of a later date, or an "update" service that provides only the changes to that information occurring between specified dates. LECs transmit subscriber list information to directory publishers electronically, on magnetic tape, or on paper, among other means. 3. Commission Proceedings 17. Shortly after passage of the 1996 Act, the Commission sought comment on a number of subscriber list information issues in response to the problems that independent directory publishers claimed to encounter in obtaining subscriber list information. These issues included: (1) what regulations, if any, are necessary to clarify the type and categories of information that must be made available under section 222(e); (2) what regulations or procedures may be necessary to implement the requirement that subscriber list information be provided "on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions;" (3) in what format should subscriber list information be provided and how it should be unbundled; and (4) what safeguards may be necessary to ensure that a person seeking subscriber list information is doing so for the specified purpose of "publishing directories in any format." 18. In the CPNI Report and Order, we concluded that we should address separately the specific questions raised in the record regarding subscriber list information. We stated, however, that immediately upon passage of the 1996 Act, LECs became obligated to disclose subscriber list information to directory publishers at nondiscriminatory and reasonable rates, terms, and conditions pursuant to section 222(e). We also stated that a LEC's failure to discharge this duty may, depending on the circumstances, constitute both a violation of section 222(e) and an unreasonable practice in violation of section 201(b) of the Communications Act. In this Third Report and Order, we address more fully telecommunications carriers' obligations to disclose subscriber list information under section 222(e). B. Commission Authority 1. Background 19. In the Notice, the Commission sought comment on the scope of its authority with respect to the subscriber list information under section 222(e). In particular, because section 222(e) applies to carriers providing telephone exchange service, which is a local service, the Commission sought comment regarding the respective federal and State roles in ensuring that subscriber list information is made available under nondiscriminatory and reasonable rates, terms, and conditions, as section 222(e) requires. No party challenges the Commission's authority to implement section 222(e). ADP asserts that the Commission has authority to adopt regulations implementing section 222(e), and that the State public utility commissions should not be permitted to impose inconsistent regulations. YPPA maintains that the Commission should not promulgate specific rules implementing section 222(e), but states that the Commission has authority to adjudicate complaints alleging violations of that provision. 2. Discussion 20. No party has disputed our authority to promulgate regulations implementing section 222(e) pursuant to section 4(i), 201(b), and 303(r) of the Communications Act. Our discussion, therefore, will address the scope of that authority. 21. Congress stated in section 222(e) that the requirements of that provision are applicable to any "telecommunications carrier that provides telephone exchange service." Congress directed such carriers, which provide primarily intrastate service in their capacity as providers of telephone exchange service, to make their subscriber list information available to those requesting it, under the terms set forth in the statute, for the purpose of publishing directories. Congress did not intimate that only some limited portion of subscriber list information derived from any interstate component of local service would be subject to the requirements of section 222(e). Any such restriction would undermine, and effectively negate, this provision. Rather, section 222(e) expressly extends the reach of section 222(e) to any subscriber list information gathered by a carrier providing telephone exchange service "in its capacity as a provider of such service." We thus conclude that section 222(e) addresses the provision of subscriber list information, by a telephone exchange service carrier, to all persons that will use subscriber list information to publish directories, without regard to whether those listings are derived from the intrastate service offered by those carriers or from their interstate service (if any). C. Need for Commission Regulation 22. In the Notice, the Commission requested comment on what regulations, if any, are necessary to implement the requirement that subscriber list information be provided "on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions." The Commission tentatively concluded that regulations interpreting and specifying in greater detail a carrier's obligations under section 222(e) would be useful. Certain LECs and YPPA argue against implementing regulations because they claim the statute is clear on its face. ADP and MCI, on the other hand, favor implementing regulations to ensure that carriers meet their statutory obligations. 23. We conclude that our clarification and particularization of the obligations imposed on carriers by section 222(e) would be useful. The record reflects conflicting views among the parties as to the meaning of the statutory language and, in particular, as to the application of statutory terms, such as "timely" and "reasonable," to specific situations. The record also makes clear that these disputes may have prevented full realization of Congress' goals of preventing unfair carrier practices in relation to subscriber list information and encouraging the development of competition in directory publishing. We therefore conclude that our clarification and particularization of section 222(e)'s requirements is necessary to achieve Congress' goals. D. Applicability to Particular Carriers 1. Background 24. Section 222(e) expressly extends to each "telecommunications carrier that provides telephone exchange service" and gathers subscriber list information "in its capacity as a provider of such service." In the Notice, the Commission tentatively concluded that section 222(e) requires all telecommunications carriers, including interexchange carriers and cable operators, to meet the requirements of section 222(e) to the extent they provide telephone exchange service. 2. Discussion 25. Based on the express statutory language, we conclude that not only LECs, but all telecommunications carriers, including interexchange carriers, cable operators, and other competitive LECs, must satisfy the statutory obligations set forth in section 222(e) to the extent they provide telephone exchange service. Accordingly, all telecommunications carriers must provide subscriber list information gathered in their capacity as providers of telephone exchange service to any person upon request for the purpose of publishing directories. This obligation extends to competitive LECs, since they gather subscriber list information in their capacity as providers of telephone exchange service. As we determine in part II.F, below, however, the obligation to provide a particular telephone subscriber's subscriber list information extends only to the carrier that provides that subscriber with telephone exchange service. 26. The only additional issue raised in the record regarding the applicability of section 222(e) concerns commercial radio mobile service (CMRS) providers. Mobilemedia and PCIA contend that CMRS providers are not subject to section 222(e) because the statutory definition of LEC excludes them. We reject this argument. By its terms, section 222(e) applies to each "telecommunications carrier that provides telephone exchange service" regardless of whether the carrier is classified as a LEC. CMRS carriers are telecommunications carriers under the 1996 Act; and, as the Commission determined in the Local Competition First Report and Order, cellular, broadband personal communications service, and covered specialized mobile radio carriers provide telephone exchange service. 27. Our conclusion that CMRS providers are subject to section 222(e) to the extent they provide telephone exchange service does not necessarily mean that they must provide information regarding their customers to directory publishers. Instead, section 222(e) requires carriers to provide information to requesting directory publishers only to the extent it falls within the definition of subscriber list information in section 222(f)(3). Under that definition, subscriber list information excludes any information that a carrier or its affiliate has not "published, caused to be published, or accepted for publication in any directory format." A CMRS provider therefore need not provide subscriber list information regarding its telephone exchange customers to requesting directory publishers, except to the extent the CMRS provider or its affiliate publishes that information, causes it to be published, or accepts it for publication in any directory format. E. Definition of Subscriber List Information 1. Overview 28. Section 222(f)(3) defines subscriber list information as "the listed names of subscribers of a carrier and such subscribers' telephone numbers, addresses, or primary advertising classifications (as such classifications are assigned at the time of the establishment of such service) or any combination of such listed names, numbers, addresses, or classifications . . . that the carrier or an affiliate has published, caused to be published, or accepted for publication in any directory format." In this section, we address issues arising under this definition. 2. Primary Advertising Classifications a. Definition 29. The phrase "primary advertising classifications" is not explicitly defined in the Act, but is qualified by the parenthetical "as such classifications are assigned at the time of the establishment of such service." In the Notice, the Commission sought comment on the meaning of the phrase "primary advertising classifications." 30. We conclude, consistent with what appears to be a uniform usage within the directory publishing industry, that the phrase "primary advertising classification" as used in section 222(f)(3) refers to the principal business heading under which a business subscriber chooses to be listed in the yellow pages. We also conclude, that "such service" in section 222(f)(3) refers to telephone exchange service. This is consistent with section 222(e), in which "telephone exchange service" antecedes "such service." 31. Under the definition of subscriber list information in section 222(f)(3), subscriber list information includes primary advertising classifications only if they are "assigned at the time of the establishment" of telephone exchange service. Neither the statute nor its legislative history specifically addresses the meaning of this phrase. The commenters agree that primary advertising classifications are "assigned at the time of the establishment" of telephone exchange service whenever the carrier itself assigns yellow pages headings. Since carriers clearly cause these headings to be published, section 222(f)(3) includes them within the definition of subscriber list information to the extent they are principal business headings under which business subscribers choose to be listed in the yellow pages. Accordingly, section 222(e) requires the carrier to provide these principal business headings to directory publishers upon request. 32. The commenters disagree, however, whether a primary advertising classification falls within the definition of subscriber list information when a carrier's directory publishing affiliate assigns the yellow pages headings. Several carriers, as well as YPPA, maintain that carriers need not provide directory publishers with primary advertising classifications assigned by directory publishing affiliates because those classifications are not "assigned at the time of the establishment" of telephone exchange service. ADP, in contrast, contends that tariffs typically obligate carriers to furnish yellow pages listings as part of telephone exchange service to businesses and that carriers should not be absolved of their obligation to provide primary advertising classifications when their affiliates complete the listing process. 33. We conclude that section 222(e) does not require a carrier to provide independent directory publishers with primary advertising classifications assigned by the carrier's affiliate or a third party, unless a tariff or state requirement obligates the carrier to provide yellow pages listings as part of telephone exchange service to businesses. When the carrier neither assigns primary advertising classifications nor is required to provide yellow pages listings as part of telephone exchange service to businesses, the primary advertising classifications are not "assigned at the time of the establishment of [telephone exchange] service . . . ." Those classifications accordingly fall outside the definition of subscriber list information. When the carrier neither assigns yellow pages headings nor is obligated to provide yellow pages listings as part of telephone exchange service to businesses, however, the carrier in most instances still classifies as a business customer each telephone exchange service subscriber that the carrier's publisher will include in a yellow pages directory. We agree with those commenters that argue that, in those circumstances, this classification as a business customer constitutes the subscriber's primary advertising classification. Such carriers therefore must provide this classification to requesting directory publishers. 34. In contrast, when a tariff or state requirement obligates the carrier to provide yellow pages listings as part of telephone exchange service to businesses, telephone exchange service in fact is not established until the primary advertising classification is assigned, even if an affiliate or third party performs the assignment. Because the classification is necessary to fulfill a tariff or state obligation to furnish a yellow pages listing to each business customer receiving telephone exchange service and the carrier causes the classification to be published, the classification falls within the statutory definition of subscriber list information. 35. We need not determine that we have jurisdiction over LECs' directory publishing affiliates, as ADP urges, in order to require carriers to provide to requesting directory publishers primary advertising classifications in the limited circumstances described in the preceding paragraph. Instead, we conclude that where a tariff or State requirement obligates the carrier to provide yellow pages listings as part of telephone exchange service to businesses, the carrier must provide that classification to requesting directory publishers. In these circumstances, the assignment of a primary advertising classification is a necessary step in the establishment of telephone exchange service to businesses. The carrier's decision to have an affiliate or third party perform that step does not absolve the carrier of its obligation to provide those classifications to requesting directory publishers in accordance with section 222(e). 36. We recognize that some carriers, that will have to provide primary advertising classifications to requesting directory publishers under our interpretation of sections 222(e) and 222(f)(3), may not presently keep a record of those classifications. These carriers need not recreate any primary advertising classification assigned prior to the effective date of this Third Report and Order. We expect, however, that these carriers will provide requesting directory publishers with any classifications assigned on or after that effective date, in accordance with the procedures set forth in part II.G.2, below. b. Relationship with Electronic Publishing 37. Section 274 of the Act imposes structural and transactional requirements on the provision of "electronic publishing" by the Bell Operating Companies (BOCs). These requirements apply only to the extent a BOC's activities fall within the definition of "electronic publishing" in section 274(h) of the Act. Under section 274(h)(1), that definition includes, among other things, "the dissemination, provision, publication, or sale to an unaffiliated entity or person of . . . advertising . . . ." except to the extent specified in section 274(h)(2). Under section 274(h)(2)(I), electronic publishing does not include, however, "[t]he provision of directory assistance that provides names, addresses, and telephone numbers and does not include advertising." In the Notice, the Commission invited comment on whether publishers of electronic yellow pages engage in electronic publishing when they use advertising classifications to help users locate information. The Commission tentatively concluded that the provision of subscriber list information does not fall within the statutory definition of electronic publishing, because "primary advertising classification" in section 222(e) is used differently than "advertising" in section 274(h)(2)(I). 38. Consistent with the comments on this issue, we conclude that "primary advertising classification" in section 222(e) and "advertising" in section 274(h)((2)(I) have different meanings. Primary advertising classifications are headings in a yellow pages directory that direct users to groups of listings for businesses providing similar products or services (e.g., automobiles, restaurants, and the like) and to the advertising that accompanies those listings. Unlike advertising, those classifications are not intended to promote a particular company, product, service, or viewpoint, which is the hallmark of advertising. As a consequence, the provision of primary advertising classifications as part of a service does not preclude it from being "directory assistance that provides names, addresses, and telephone numbers and does not include advertising" within the meaning section 274(h)(2)(I) and thus does not transform directory assistance into "electronic publishing" within the meaning of section 274(h). A BOC therefore may disseminate primary advertising classifications "by means of its or any of its affiliates' basic telephone service" without meeting the structural and transactional requirements set forth in section 274. 3. Unpublished and Unlisted Information a. Background 39. The definition of subscriber list information in section 222(f)(3) includes "information . . . identifying the listed names of subscribers . . . or any combination of such listed names . . . that the carrier or an affiliate has published, caused to be published, or accepted for publication in any directory format." In the Notice, the Commission sought comment on what regulations, if any, are necessary to clarify the type and categories of information that must be made available under this definition. b. Discussion 40. Based on the references to "listed" and "published" information in section 222(f)(3), several commenters argue that carriers need not disclose unlisted or unpublished information to directory publishers, even for the sole purpose of delivering directories to subscribers with unlisted or unpublished telephone numbers. ADP and MCI disagree. MCI states that independent directory publishers need the names of subscribers with unlisted or unpublished numbers to ensure that those names are excluded from their directories. ADP stresses how important the ability to deliver directories to all telephone subscribers, including those with unlisted and unpublished numbers, is to directory publishing competition. ADP maintains that, to the extent a carrier provides its directory publishing affiliate with the addresses of subscribers with unlisted or unpublished numbers to facilitate the delivery of directories, independent directory publishers also should be able to obtain those addresses for the same purpose. 41. Because the statutory definition of subscriber list information specifically excludes unpublished and unlisted information, we conclude that section 222(e) does not require carriers to provide the names or addresses of subscribers with unlisted or unpublished numbers to independent publishers. We recognize, however, that section 222(e) does not prohibit carriers from providing such information to independent publishers. We also recognize that obtaining the names and address of subscribers with unlisted or unpublished numbers from carriers may be the most direct and least costly way for independent directory publishers to ensure that their directories do not list those subscribers. Independent publishers also may need the addresses of subscribers with unlisted or unpublished numbers to deliver directories to those subscribers on a timely basis and thereby attract businesses that want to maximize access to their advertisements. Carriers, however, may wish to gain a competitive advantage by providing their own, but not competing, directory publishers with information regarding subscribers with unlisted or unpublished numbers. Depending on the circumstances, such practices may be unreasonable or unreasonably discriminatory within the meaning of sections 201(b) and 202(a) of the Communications Act. We will be prepared to take action in the future, if problems occur in this area. 4. Updated Subscriber List Information 42. When a person or business starts or stops telephone exchange service, changes the number of lines it receives, requests unlisted status, or adds new listings for existing lines, the carrier updates its subscriber list information database. ADP states that some carriers refuse to provide this updated information to directory publishers. ADP argues that the language and legislative history of section 222(e) make clear that Congress intended to require carriers to make updated listing information available to directory publishers. USTA and Vitelco argue that the Communications Act does not require carriers to provide subscriber list information more than once for each directory or edition thereof that is published. 43. Although USTA and Vitelco do not articulate a basis for their argument, we find that it implicitly assumes either that: (1) updates fall outside the statutory definition of subscriber list information; or (2) even if updates fall within that definition, a carrier may discharge its obligation under section 222(e) to provide subscriber list information to requesting directory publishers "on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions" by providing subscriber list information no more than once for each directory edition. We address the first of these propositions here and the second in part I.G, below. Concluding that both propositions are incorrect, we reject USTA's and Vitelco's argument. 44. Section 222(f)(3)(B) includes within the definition of subscriber list information subscriber names, telephone numbers, addresses, and primary advertising classifications "that the carrier or an affiliate has . . . accepted for publication in any directory format." This language makes clear that updates fall within the statutory definition of subscriber list information. For instance, when an individual who does not already receive telephone exchange service orders that service from a carrier, the customer tells the carrier his or her name and address, the number of lines being ordered, and other pertinent information. The carrier then assigns the customer one or more telephone numbers. If the customer does not ask to be unlisted, this order taking and assignment sets into motion a process that will result in the publication in a directory of the new subscriber's name, address, and telephone number or numbers. We conclude that this information is "accepted for publication" within the meaning of section 222(f)(3) once the carrier agrees to provide telephone exchange service to an individual or business. 45. We recognize, of course, that the statutory definition of subscriber list information refers to "the listed names of subscribers of a carrier and such subscribers' telephone numbers, addresses, or primary advertising classifications . . . ." We conclude that this reference to "listed" information does not exclude information from the definition of subscriber list information that has not yet been, but will be, published in a directory. Any other conclusion would make the statutory phrase "accepted for publication" in section 222(f)(3)(B) mere surplusage. Indeed, section 222(f)(3)(B) distinguishes listings that a carrier "has published [or] caused to be published" in a directory from those it "has . . . accepted for publication." Because, as a practical matter, a carrier or an affiliate has either "published" or "caused to be published" any subscriber's name that has been published, we conclude that the statutory phrase "accepted for publication" must refer to listings that have not yet been published. We therefore also conclude that the statutory definition of subscriber list information includes updates that a carrier "has . . . accepted for publication," but not yet published. 46. We believe that Congress intended the statutory definition of subscriber list information to include updates that a carrier "has . . . accepted for publication," but not yet published. Both the Senate and the House stated that the subscriber list information provisions were intended to ensure that independent directory publishers "are able to purchase published or to-be-published subscriber listings and updates from carriers on reasonable terms and conditions." Both the Senate and the House also stated that those provisions would give directory publishers "the ability to purchase listings[] and updates . . . ." The House stated further that subscriber list information "includ[es] information for recently connected customers" and that the provision that became section 222(e) would prohibit carriers from refusing "to sell listings or updates." 47. Finally, given Congress' goal of encouraging the development of competition in directory publishing, the inclusion of updates within the statutory definition of subscriber list information is not surprising. Updated subscriber list information is critical to the success of a directory publishing operation. A directory publisher typically will obtain an "initial load" of subscriber list information from a carrier that provides the carrier's subscriber list information as of a given date. This information requires reformatting and other processing before it can be published in a directory. As that happens, the carrier is continuously updating its subscriber list information database to reflect the addition of new telephone exchange service subscribers as well as any changes in the information regarding existing subscribers. This updated information is essential to ensure that the directory is as complete and accurate as possible as of its publication date. 48. In addition, directory publishers use updated subscriber list information to distribute directories to new residential and business telephone subscribers and to sell yellow pages advertising to new business subscribers. New residents, for example, are likely to rely heavily upon the yellow pages, and new businesses in particular require yellow pages advertising. Without updated subscriber list information, independent directory publishers would reach a more limited audience than would carriers' directory publishing operations and therefore would be less able to compete effectively. We thus conclude that excluding updated subscriber list information from the statutory definition of subscriber list information would have been inconsistent with the Congressional purposes behind section 222(e). 5. Subscribers with Multiple Telephone Numbers 49. Many telephone subscribers have multiple telephone numbers listed in white or yellow pages directories. ADP indicates that some carriers provide to their directory publishing affiliates telephone numbers for these subscribers that the carriers do not provide to independent directory publishers. We conclude that, for subscribers that have multiple telephone numbers, a carrier must provide requesting directory publishers with each telephone number that it has published, caused to be published, or accepted for publication in a directory. Those numbers fall within the statutory definition of subscriber list information. 50. Some carriers provide customers, such as large corporations, that have multiple listings for their places of business or employees, with directories containing those listings. We conclude that these directories fall outside the statutory definition of subscriber list information to the extent they are not made available or sold to the public. In these circumstances, the carrier has not published the directories, caused them to be published, or accepted them for publication within the meaning of section 222(f)(3). 6. Other Information 51. MCI contends that the Commission should require carriers to provide directory publishers with certain information in response to subscriber list information requests. This information includes lists of the "NPA-NXXs relating to the listing records being provided," the "[c]ommunity [n]ames expected to be associated with" those NPA-NXXs, and the "[i]ndependent [c]ompany names and their associated NPA-NXXs" for which listing records are being provided. YPPA argues that the requested information lies outside the statutory definition of subscriber list information. 52. MCI makes no attempt to explain why the information it requests falls within the definition of subscriber list information in section 222(f)(3) or otherwise might have to be provided to independent directory publishers under section 222(e). We therefore cannot conclude on the record before us that carriers must disclose that information to requesting directory publishers. F. Subscriber List Information Obtained from Competitive LECs 53. Section 222(e) requires each telecommunications carrier that provides telephone exchange service to provide subscriber list information "gathered in its capacity as a provider of such service" to requesting directory publishers. The parties to this proceeding dispute whether this requirement extends to incumbent LECs with regard to subscriber list information that they obtain from competitive LECs pursuant to section 251(b)(3) of the Act. That section requires, in pertinent part, each LEC to provide competing providers of telephone exchange service with "nondiscriminatory access to . . . directory listing . . . ." ADP asserts that incumbent LECs receive subscriber list information from competitive LECs pursuant to section 251(b)(3) as part of the incumbent LECs' provision of telephone exchange service. ADP claims that section 222(e) therefore obligates incumbent LECs to provide the competitive LECs' subscriber list information to requesting directory publishers. YPPA maintains that section 222(e) gives independent directory publishers the right to obtain a competitive LECs' subscriber list information directly from the competitive LECs and that the Commission lacks statutory authority to compel incumbent LECs to provide competitive LECs' subscriber list information to directory publishers. 54. We conclude that the obligation under section 222(e) to provide a particular telephone subscriber's subscriber list information extends only to the carrier that provides that subscriber with telephone exchange service. The language of section 222(e) makes clear that a carrier need not provide subscriber list information to requesting directory publishers pursuant to that section unless the carrier "gathered" that information "in its capacity as a provider of [telephone exchange] service." Under the statutory definition of "telephone exchange service," a carrier acts in this capacity only to the extent it "furnish[es] to subscribers intercommunicating service of the character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or . . . comparable service provided through a system of switches, transmission equipment, or other facilities (or combination thereof) by which a subscriber can originate and terminate a telecommunications service." This reference to "furnish[ing] to subscribers intercommunicating service" establishes that a carrier acts "in its capacity as a provider of [telephone exchange] service" only to the extent it provides telephone exchange service to subscribers of that service. When a LEC provides "nondiscriminatory access to . . . directory listing . . . ." under section 251(a)(3), it is not providing telephone exchange service to subscribers of that service. Instead, as the language of section 251(a)(3) makes clear, the LEC is providing a service -- directory listing -- to "competing providers of telephone exchange service and telephone toll service." 55. We note that our conclusion that the obligation under section 222(e) to provide a particular telephone subscriber's subscriber list information extends only to the carrier that provides that subscriber with telephone exchange service does not preclude an incumbent LEC or other entities from acting as a clearinghouse for providing subscriber list information to directory publishers. We reject, however, for the reasons stated above, the argument that we have authority under section 222(e) to require incumbent LECs to provide competitive LECs' subscriber list information to directory publishers. To the extent State law permits, State commissions are free to require incumbent LECs and competitive LECs to enter into cooperative arrangements for the provision of subscriber list information to directory publishers. G. Provision of Subscriber List Information 1. Overview 56. The Notice sought comment on what regulations or procedures may be necessary to implement the statutory requirements that telecommunications carriers provide subscriber list information to requesting directory publishers "on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions." 2. Discussion 57. ADP asserts that despite the enactment of section 222(e), some carriers refuse to make subscriber list information, including updates, available to directory publishers. Such failures violate section 222(e), which obligates each telecommunications carrier to "provide subscriber list information gathered in its capacity as a provider of [telephone exchange] service . . . to any person upon request for the purpose of publishing directories in any format." 58. We conclude, consistent with several commenters' positions, that the nondiscrimination requirement, as set forth in section 222(e), obligates each carrier that gathers subscriber list information in its capacity as a provider of telephone exchange service to provide that information to requesting directory publishers at the same rates, terms, and conditions that the carrier provides the information to its own directory publishing operation, its directory publishing affiliate, or another directory publisher. To ensure that independent directory publishers will be able to determine the rates, terms, and conditions under which a carrier provides subscriber list information for its own directory publishing operations, we require each carrier that is subject to section 222(e) to make available to requesting directory publishers any written contracts that it has executed for the provision of subscriber list information for directory publishing purposes to itself, an affiliate, or an entity that publishes directories on the carrier's behalf. In addition, to the extent any of a carrier's rates, terms, and conditions for providing subscriber list information for those operations are not set forth in a written contract, the carrier must keep a written record of, and make available to requesting directory publishers, those rates, terms, and conditions. Upon request, the carrier shall also provide these contracts and this information to this Commission. These requirements should ensure that a carrier's directory publishing operations enjoy no competitive advantages over independent directory publishers based on the carrier's control over subscriber list information. 59. We also conclude that the non-discrimination requirement in section 222(e) does not prohibit all variations in the rates, terms, and conditions under which a carrier provides subscriber list information to directory publishers. We therefore do not preclude a carrier from attempting to show, in the event a complaint filed pursuant to section 208 of the Communications Act alleges that the carrier has violated this requirement, that specific factors, such as differences in the costs of providing subscriber list information to particular directory publishers, warrant differences in the rates, terms, and conditions under which the carrier provides that information to those publishers. 60. ALLTEL and U S WEST suggest interpretations of section 222(e) under which a carrier would only have to refrain from discriminating between its own and independent directory publishers in order to comply with that section. We reject those interpretations. In addition to requiring nondiscrimination, section 222(e) requires carriers to provide subscriber list information to requesting directory publishers "on a timely and unbundled basis" and "under . . . reasonable rates, terms, and conditions." We conclude that the statutory terms "timely," "unbundled," and "reasonable" have meanings independent from that of the statutory term "nondiscriminatory." Had Congress intended the terms to have the same meaning, there would have been no need to include the timeliness, unbundling, and reasonableness requirements in section 222(e). We therefore emphasize that not only must carriers treat all directory publishers on a nondiscriminatory basis, as set forth in paragraph 58, but carriers also must provide to all requesting directory publishers subscriber list information "on a timely and unbundled basis" and "under . . . reasonable rates, terms, and conditions." 61. The record in this proceeding does not provide a sufficient basis for defining all the standards that a carrier must meet in order for the terms and conditions under which it provides subscriber list information to be considered "reasonable" within the meaning of section 222(e). We therefore decline to specify comprehensive reasonableness standards at this time. We conclude, however, that a carrier would be acting unreasonably if the terms and conditions under which it provides subscriber list information were to restrict a directory publisher's choice of directory format. Any such restriction would be inconsistent with the requirement in section 222(e) that carriers make subscriber list information available to directory publishers "under . . . reasonable . . . terms[] and conditions . . . for the purpose of publishing directories in any format." 62. ADP encourages us to define "timely" because, it claims, many carriers fail to respond to requests for subscriber list information for weeks and, in some instances, months. ADP suggests that "timely" means within twenty days of a directory publisher's request for subscriber list information. We believe, however, that thirty days advance notice is necessary to give carriers sufficient time to fill most requests for subscriber list information for directory publishing purposes and should not disrupt any directory publishing schedule. We are concerned, in addition, that carriers may not be able to accommodate some requests for subscriber list information within thirty days. We also do not want to prevent a directory publisher from giving carriers additional time to fill requests for subscriber list information when that is consistent with the publisher's schedule. We therefore conclude that, for all requests for subscriber list information, a carrier must provide subscriber list information at the time specified by the directory publisher, provided that the directory publisher has given at least thirty days advance notice and the carrier's internal systems permit the request to be filled within that time frame. We will monitor implementation of this requirement and adjust the thirty-day notice period if circumstances warrant. 63. ADP alleges that, despite the unbundling requirement in section 222(e), some carriers continue to require directory publishers to purchase more listings than they want at considerable additional expense. USTA argues that the unbundling requirement does not obligate carriers to sort or otherwise manipulate listings on demand. We conclude that section 222(e) precludes a carrier from bundling listings that the carrier is able to sell separately. In enacting section 222(e), Congress expressed concern that some carriers had required directory publishers to purchase listings in addition to those the requesting publisher had determined were most likely to suit its needs. Consistent with the legislative history, we require carriers to unbundle subscriber list information, including updates, on any basis requested by a directory publisher that the carrier's internal systems can accommodate. A carrier whose internal system can accommodate a directory publisher's request for particular listings thus will have to provide only those listings. In unbundling subscriber list information for directory publishers, however, the carrier shall not disclose customer proprietary network information, such as information relating to telephone exchange service subscribers' usage patterns, except as permitted by sections 222(c) and (d) of the Act. A carrier, in addition, must not require directory publishers to purchase any product or service other than subscriber list information as a condition of obtaining subscriber list information. 64. MCI contends that carriers must make updated subscriber list information available to directory publishers on a daily basis as well as on other regularly recurring bases, such as weekly, monthly, quarterly, and annually. YPPA argues some carriers may not be able to make updates available on a daily basis. Consistent with the standards set forth in paragraphs 62 and 63, above, we conclude that, upon request, a carrier must provide subscriber list information on any periodic basis that the carrier's internal systems can accommodate. Because many carriers provide updated subscriber list information to their directory publication or directory assistance operations on a daily basis, this approach will allow directory publishers to receive subscriber list information regarding many telephone exchange service subscribers on a daily basis, as MCI urges. Requiring a carrier to provide subscriber list information only on the periodic basis that the carrier uses for its own directory publishing operations, as a nondiscrimination standard would mandate, would not recognize variations in directory publishing schedules. Restricting directory publishers to the periodic basis that the carrier uses for its own directory publishing operations thus would be inconsistent with the requirement that carriers provide subscriber list information on a "timely . . . basis." For instance, an independent publisher that updates its directories every six months might need to receive subscriber list information more often than a carrier affiliate that publishes yearly. 65. We reject USTA's and Vitelco's argument that the Communications Act does not mandate that carriers provide subscriber list information more than once for each directory or edition thereof that is published. Section 222(e) requires that carriers provide subscriber list information gathered in their capacity as providers of telephone exchange service to "any person upon request for the purpose of publishing directories in any format." This statutory language makes clear that a directory publisher may obtain subscriber list information repeatedly, as long as that information will be used for directory publishing purposes. As discussed elsewhere in this Third Report and Order, directory publishers use updated subscriber list information for at least two directory publishing purposes: to ensure that their directories are as complete and as accurate as possible as of the publication date; and to solicit advertisers for yellow pages directories. Limiting directory publishers to obtaining subscriber list information only once per directory edition would make it difficult, if not impossible, for them to accomplish these purposes. Because section 222(e) contains no such limitation, but instead makes clear that a directory publisher may obtain subscriber list information "upon request," we conclude that USTA's and Vitelco's argument lacks merit. 66. These requirements should accommodate most requests for subscriber list information for directory publishing purposes without imposing undue burdens on any carrier and thus should be of particular benefit to small directory publishers and carriers. We, of course, do not preclude a directory publisher from requesting that a carrier provide subscriber list information on any given schedule. Nor do we preclude a directory publisher from requesting that a carrier unbundle subscriber list information, including updates, on bases other than those that a carrier's internal system can accommodate. If the carrier's systems cannot accommodate the delivery schedule or the level of unbundling requested by a directory publisher, the carrier must inform the directory publisher of that fact, tell the publisher which delivery schedules or unbundling levels can be accommodated, and adhere to the schedule or unbundling level the publisher chooses from among those available. The carrier must provide this information within thirty days of when it receives the publisher's request. If this process results in the provision of listings in addition to those the directory publisher requested, the carrier may impose charges for, and the directory publisher may publish, only the requested listings. These requirements will prevent a carrier from profiting from shortcomings in its internal systems and a directory publisher from profiting from requesting fewer listings than it intends to publish. 67. We recognize, of course, that the costs a carrier incurs in responding to requests for subscriber list information may vary, depending on the delivery schedules and levels of bundling requested, among other factors. In part II.H.5, below, we recognize that a carrier may recover these additional costs from a directory publisher. 68. We also recognize that multiple or conflicting requests for subscriber list information could overburden a carrier's internal systems. If a carrier finds that it cannot accommodate all of a group of such requests within the time frames specified above, the carrier shall respond to those requests on a nondiscriminatory basis. The carrier shall inform each affected directory publisher of the conflicting requests within thirty days of when it receives the individual publisher's request. Within that thirty-day period, the carrier also shall inform each affected directory publisher how it intends to resolve the conflict and the schedule on which it intends to provide subscriber list information to each publisher. 69. The requirements set forth above attempt to reconcile directory publishers' needs with our desire not to impose any unnecessary burdens on carriers. In particular, we decline at this time to require carriers to modify their internal systems so they can accommodate each particular delivery schedule or level of unbundling that a directory publisher might find useful. We recognize, of course, that this approach may lead to disputes between carriers and directory publishers regarding the capabilities of the carriers' internal subscriber list information systems. In any such dispute, the burden will be on the carrier to show that its internal systems cannot accommodate the directory publisher's requests. 70. MCI proposes that we require carriers to provide notice of changes in their subscriber list information as those changes occur. To the extent changes in subscriber list information reflect customers' decisions to cease having particular telephone numbers listed, notice of the changes is necessary to enable directory publishers to avoid listing those numbers. We therefore require carriers to provide requesting directory publishers with notice of changes in subscriber list information in this limited circumstance. We decline to require notice of other types of changes in subscriber list information because we are not convinced that the benefits would exceed the costs. Except where subscribers request that previously listed numbers cease to be listed, notice of changes in subscriber list information would seem to serve no purpose other than to inform directory publishers of the need to request updated subscriber list information regarding particular subscribers from carriers. Directory publishers are well aware that carriers' subscriber list information databases change on an ongoing basis. To the extent changes do not involve customer requests that their numbers cease to be listed, we believe that publishers will request periodic subscriber list information updates from carriers rather than relying on any notice of changes in that information, which would have to be followed by requests for updates. Except where subscribers request that previously listed numbers cease to be listed, we conclude that the benefits of a notice requirement likely would be minimal and do not warrant requiring carriers to incur the costs of providing directory publishers with notice of changes in subscriber list information. H. Reasonable Rates 1. Background 71. Section 222(e) requires that telecommunications carriers provide subscriber list information to requesting directory publishers "under . . . reasonable rates." In the Notice, the Commission sought comment on the regulations or procedures necessary to implement this statutory requirement. YPPA and several incumbent LECs contend that a subscriber list information rate is "reasonable" only if it fairly compensates the carrier for the cost of gathering and maintaining the listings, the cost of providing them to the directory publisher, and the value of the listings themselves. These parties urge that the Commission adopt no pricing rules for subscriber list information in this proceeding. ADP maintains that the Commission should establish benchmark rates of $0.04 per listing for base file subscriber list information that a carrier provides a directory publisher and $0.06 per listing for services that update that information. These benchmarks, according to ADP, would establish the maximum rates a carrier could charge a directory publisher for subscriber list information, absent a showing that the benchmarks would not allow the carrier to recover its costs of providing subscriber list information plus a reasonable profit. 2. Overall Approach 72. After reviewing the language of section 222(e), its legislative history, the broader statutory scheme, and Congress' policy objectives, we conclude that $0.04 per listing is a presumptively reasonable rate for base file subscriber list information and that $0.06 per listing is a presumptively reasonable rate for updated subscriber list information that carriers provide directory publishers. Our presumption of reasonableness will apply regardless of the format in which the publisher intends to publish the subscriber list information and regardless of the number of times the publisher intends to publish that information. 73. We do not preclude a carrier from charging subscriber list information rates different than the presumptively reasonable rates, as long as the prices are consistent with the other requirements of section 222(e), including the requirement that subscriber list information rates be nondiscriminatory. However, any carrier whose rates exceed either of these rates should be prepared to provide cost data and all other relevant information justifying the higher rate in the event a directory publisher files a complaint regarding that rate pursuant to section 208 of the Communications Act. Absent credible and verifiable data showing that the carrier's costs, including a reasonable profit, exceed the applicable presumptively reasonable rate, the Bureau or the Commission, depending on the circumstances, shall conclude that the rate is unreasonable and award damages accordingly. 74. The Bureau or the Commission, depending on the circumstances, will use all available enforcement mechanisms, including potentially the Accelerated Docket procedures, to expedite resolution of subscriber list information rate disputes that cannot be resolved without regulatory intervention. We emphasize that any carrier charging a subscriber list information rate exceeding either of the presumptively reasonable rates should be prepared to submit cost data supporting that rate in the event a directory publisher files a complaint challenging that rate. These data must comply with the requirements set forth in part II.H.6, below. 3. Cost Structure 75. As indicated previously, many LECs maintain computerized subscriber list information databases. The LECs update these databases as individuals and businesses start or stop telephone exchange service, change the number of lines they receive, request unlisted status, or add new listings for existing lines. LECs typically provide requesting directory publishers with either "base file" subscriber list information or "updates" to that information. LECs generally transmit subscriber list information to directory publishers electronically, on magnetic tape, or on paper. 76. Incumbent LECs allege that they incur a number of different kinds of costs in providing subscriber list information to directory publishers. As discussed below, these costs can be grouped into three broad categories: (1) the incremental costs incurred in responding to individual requests for subscriber list information; (2) some allocation of the costs of a carrier's database operations, which support and are common to numerous services, including the provision of subscriber list information to directory publishers ("common costs"); and (3) some allocation of overheads. 77. According to the various incumbent LECs, the incremental costs of responding to individual subscriber list information requests include such costs as those incurred in taking and scheduling orders for such information and ensuring that the orders are properly filled, the cost of downloading the requested subscriber list information from the database (which may involve computer operator time, processing time, and programming time), the cost of the magnetic tape or paper on which the subscriber list information will be transmitted, and mailing costs. We note that some of these costs may be spread over multiple downloads. For example, an incumbent LEC that provides updated subscriber list information to directory publishers on a daily basis does not take a new order or reprogram its computer each time it transmits a daily update. Similarly, if additional directory publishers request daily or monthly updates that the carrier's internal system can accommodate, only de minimis additional computer operator or processing time should be required to produce the updates. Based on the record, we would expect the incremental costs of generating a download to be fairly low. We also would expect, in almost all instances, that the incremental cost of adding an additional listing to a given download is virtually zero. 78. Incumbent LECs argue that their subscriber list information-related costs also include substantial allocations of common costs and overheads. More specifically, the incumbent LECs argue that subscriber list information rates should allow them to recover the costs of installing, maintaining, and programming the computers that store subscriber list information databases, and the costs of ensuring that those databases are up-to-date and accurate. The incumbent LECs also argue that their subscriber list information rates should include an allocation of other costs, such as personnel costs, maintenance and administrative costs, as well as a return on investment. We note that the costs of the personnel and plant that are used in providing subscriber list information to directory publishers are common costs because these personnel and plant may be shared with additional activities. For example, the computers on which an incumbent LEC's subscriber list information database resides may also be used to provide subscriber list information to non-publishers or to perform functions unrelated to directory publishing. The incumbent LEC thus would need to buy and maintain the computers even if it did not provide subscriber list information to directory publishers. Moreover, by their very nature, these common costs should remain relatively constant regardless of the number of directory publishers that request subscriber list information, and regardless of the number of directory listings those publishers request. 79. Given the de minimis incremental cost of adding a listing, the low incremental cost per download, and the comparatively large contributions to common costs and overheads, it becomes difficult to identify a specific cost per listing for subscriber list information. More specifically, even if one specified the exact amount of contribution to common costs and overheads, the per listing cost would vary depending on the number of listings sold to directory publishers and other non-publishers. 4. Method for Determining "Reasonableness" 80. The parties to this proceeding present sharply contrasting methodologies for determining what are "reasonable" subscriber list information rates. At one extreme, ADP and MCI urge incremental cost methodologies and provide data suggesting that subscriber list information rates should be significantly below $0.01 per listing. Other parties contend that subscriber list information rates should be set through "competitive market" negotiations, a process that could result in significantly higher prices. Finally, YPPA and several incumbent LECs argue that a subscriber list information rate is reasonable only if it allows the carrier to recover its costs plus the value of the listings themselves. We address first the question whether section 222(e) requires that one of these particular methodologies, or any other particular methodology, be used in evaluating subscriber list information rates. 81. To resolve this question, we look first to the text of the statute. In requiring that subscriber list information rates be "reasonable," Congress was using a word previously used in numerous statutes, including the Communications Act, to describe the desired end result of a ratemaking process. ADP argues that Congress' use of "reasonable" in section 222(e) mandates that subscriber list information rates be based on costs and urges that we use an incremental cost methodology. In making these arguments, ADP does not claim that the statutory language itself requires that subscriber list information rates be based on costs. Instead, ADP maintains that the Commission has a long history of using costs for calculating reasonable rates and that courts have repeatedly referred to costs as the basis for establishing reasonable rates. ADP asserts that we must presume that Congress was aware of this administrative and judicial history. ADP contends that Congress' failure to specify in section 222(e) that reasonable subscriber list information rates may be based on a non-cost methodology means that a subscriber list information rate is reasonable only if it is based on costs, which ADP would determine using an incremental cost methodology. 82. YPPA and several carriers argue, in contrast, that the Commission must permit subscriber list information rates that compensate the carrier for the value of the listings themselves as well as the costs of gathering and maintaining the listings and providing them to the directory publisher. These parties make no claim that the statutory language mandates a specific method for determining reasonableness. Instead, they point out that the 1995 House Report states that a reasonableness requirement for subscriber list information rates "would ensur[e] that the telephone companies that gather and maintain [subscriber list information] are fairly compensated for the value of the listings." Although it is not clear what was meant by the term "value," adoption of a value-based methodology arguably would allow carriers to charge higher prices for certain kinds of subscriber list information, such as updates, and for certain kinds of uses, such as for publishing in multiple directories and in CD-ROMs. The prices carriers would charge could depend on the demand for these kinds of orders or on the revenue the subscriber list information generates for a directory publisher, rather than on the carriers' subscriber list information-related costs. We note, however, that YPPA and the carriers have suggested no method by which the Commission might measure the value that subscriber list information would have in a competitive market. We also note that, if there were a competitive market for subscriber list information with many firms able to provide identical listings, it is not clear that the market would generate price discrimination with different prices based on the value of that information. 83. We reject the arguments that the 1996 Act requires that subscriber list information rates be based on either an incremental cost or a value-based methodology. As an initial matter, the statutory language does not state that subscriber list information rates must be cost-based, value-based, or even set in accordance with any particular methodology. Because the statutory language on its face does not require any particular methodology for determining reasonableness, we look to the broader statutory scheme, its legislative history, and the underlying policy objectives stated by Congress to determine Congressional intent. Section 222(e) was enacted as part of the 1996 Act. As mentioned previously, Congress intended that Act "to provide for a pro-competitive, de-regulatory national policy framework" that would "accelerate rapidly private sector deployment of advanced telecommunications and information technologies to all Americans." We believe that this broad statutory goal provides a framework against which we should evaluate any approach for determining reasonable rates for carrier provision of subscriber list information to directory publishers. 84. The legislative history identifies two specific goals in relation to subscriber list information rates: the directory publishers' interest in obtaining subscriber list information at prices that facilitate competition in directory publishing; and the carriers' interest in obtaining fair compensation for their subscriber list information. For instance, in passing a provision identical to section 222(e), the Senate was specifically concerned with prohibiting unfair LEC practices and encouraging competition in directory publishing. The House wished to prohibit carriers from using their "total control" over subscriber list information to charge unreasonable rates, while "ensuring that the telephone companies that gather and maintain [subscriber list information] are fairly compensated for the value of the listings." The legislative history, however, does not further illuminate what is a reasonable subscriber list information rate, or explain how we should assess whether a particular rate would facilitate competition in directory publishing while fairly compensating the providing carrier. 85. We reject ADP's proposal that subscriber list information rates should only allow for the recovery of the incremental costs of providing that information to directory publishers. As discussed above, the incremental costs are very low relative to the common costs and overheads. Moreover, we recognize that, in setting rates, this Commission generally allows a contribution to common costs and overheads. We see no reason to depart from this long-standing practice in this area. 86. We also reject the idea that incumbent LECs be allowed to charge either whatever they want or value-based prices for subscriber list information. Congress enacted section 222(e) to correct a perceived failure in the market for subscriber list information. All directory publishers require timely and complete access to accurate subscriber list information in order to compete effectively. Because LECs obtain subscriber list information "quite easily" during the order-taking process for telephone exchange service, they have immediate and total access to "a uniquely complete and current body of listing information" for their customers. This access helps incumbent LECs, which dominate the provision of telephone exchange service as well as the directory publishing industry, ensure that their directories are complete and up-to-date when published, and delivered to each newly connected telephone exchange service subscriber. Incumbent LECs' directory publishers also use subscriber list information to identify new businesses in order to target them for specific yellow pages marketing efforts. 87. Alternative providers of subscriber list information, in contrast, generally must rely on sources, such as published directories, that do not include many of the listings in carrier databases. As individuals and businesses start or stop telephone exchange service, published directories become inaccurate over time. Other potential sources of listing information, such as Chambers of Commerce and marketing list providers, either rely on published directories or do not include many of the residential and business listings in a geographic area. Directory publishers that rely on these sources cannot publish directories that are as accurate and complete as those incumbent LECs and their affiliates publish. These directory publishers also are unable to ensure that newly connected subscribers receive directories and that newly connected businesses are targeted for yellow pages marketing because they do not have ready access to information about new customers. Subscriber list information obtained from non-carrier sources thus is not a close substitute for LEC-provided subscriber list information. 88. We reject CBT's position that "competitive market" negotiations will be sufficient to ensure reasonable subscriber list information rates as well as similar proposals that would permit carriers to exploit their control over subscriber list information. We find that Congress would not have seen a need to enact a requirement in section 222(e) that subscriber list information rates be reasonable had it merely intended to allow carriers to charge rates identical to those charged in the absence of Congressional intervention. Subscriber list information obtained from sources other than the carriers' databases, such as published directories and commercial lists, are inferior substitutes and are not likely to constrain sufficiently LEC pricing for subscriber list information. We conclude that relying on negotiations would not further Congress' goals of promoting competition in directory publishing and fairly -- as opposed to excessively -- compensating carriers for the subscriber list information they provide directory publishers. 89. We also reject YPPA's and certain incumbent LECs' argument that subscriber list information rates should include an increment above cost to reflect the "value" of that information. In so arguing, these parties rely on a statement in the 1995 House Report that a reasonableness requirement for subscriber list information rates "would ensur[e] that the telephone companies that gather and maintain [subscriber list information] are fairly compensated for the value of the listings." That report does not suggest, however, that rates that enable carriers to recover their incremental costs of providing subscriber list information plus a reasonable allocation of common costs and overheads would not fairly compensate carriers for the value of subscriber list information. Given that Congress enacted section 222(e) to redress a market failure, we do not believe that the passing reference to "value" in the 1995 House Report was intended to allow LECs with unique control and access to accurate subscriber list information to recover compensation in excess of incremental costs and a reasonable allocation of common costs and overheads through their subscriber list information rates. Instead, we find that Report and the legislative history behind section 222(e) consistent with the view that carriers should charge rates equal, or similar, to those that would be charged if there were a competitive market for subscriber list information. 90. We reject, in addition, YPPA's argument that carriers should be permitted to charge higher rates for subscriber list information just because the independent publisher intends to use them in multiple directories, just as a software manufacturer may charge extra for a software program that the customer installs on multiple computers. Unlike software developers, carriers cannot obtain copyright protection for subscriber list information that has been published in their own directories. Allowing carriers to charge a directory publisher additional amounts for republishing subscriber list information would be unfair to independent directory publishers, as it would force those publishers to pay more to use information that other publishers, including the carriers' own publishing operations, could use without charge. We therefore find YPPA's analogy to the software industry unpersuasive. 91. Finally, we note that courts have consistently held that statutory language similar to the language of section 222(e) leaves agencies free to "devise methods of regulation capable of equitably reconciling diverse and conflicting interests." Indeed, the Supreme Court has held that an agency may, within a zone of reasonableness, "employ price functionally in order to achieve relevant regulatory purposes" including the protection of consumer interests. The Supreme Court has further held that, within this zone, an agency may even require producers having different costs to charge identical rates and producers providing identical commodities to charge different rates. Given this judicial history, we cannot conclude that the language of section 222(e) requires that subscriber list information rates be based on any particular ratemaking methodology, much less the incremental cost or value-based approaches parties to this proceeding urge. 92. In the absence of explicit instructions from Congress, our task is to choose an approach that will, in our judgment, best further Congress' goals in enacting section 222(e). We conclude that subscriber list information rates should allow LECs to recover their incremental costs of providing subscriber list information to directory publishers plus a reasonable allocation of common costs and overheads. Basing rates on costs should promote the development of a competitive directory publishing market, while fairly compensating carriers for the subscriber list information they provide directory publishers. To minimize burdens on carriers, independent directory publishers, and the Commission, we will not adopt an elaborate ratemaking process with respect to subscriber list information rates. Instead, we determine below presumptively reasonable rates that we conclude, based on the evidence in the record, should in the majority of cases achieve Congress' goals. These rates are on a per listing basis because LECs typically sell subscriber list information to directory publishers on that basis. A carrier that believes that these rates will not permit it to recover its costs of providing subscriber list information to directory publishers may charge higher rates. In the event of a challenge from a directory publisher, however, the carrier must provide credible and verifiable cost data justifying the higher rates. 5. Presumptively Reasonable Rates 93. We now turn to the determination of presumptively reasonable rates for subscriber list information that carriers provide directory publishers. We first examine the cost data in the record, which consists of data regarding Ameritech's, BellSouth's, Bell Atlantic's, SBC's, and U S WEST's operations. The data appear to include in most instances allocations of common costs and overheads, as defined above. The U S WEST data comes from an ex parte letter in which US WEST provides the results of its March 1999 revision of a prior examination of its subscriber list information- related costs. This letter states that U S WEST's estimated subscriber list information- related costs are between $0.015 and $0.02 per listing for both base file subscriber list information and updates to those files. The Bell Atlantic data comes from Bell Atlantic's January 1999 filing with the New York Public Service Commission (New York Commission) in response to the New York Commission's directive that Bell Atlantic establish cost-based rates for the provision of subscriber list information to directory publishers. That filing indicates that Bell Atlantic's cost of providing base file subscriber list information is $0.0305 per listing. The Ameritech data comes from an ex parte letter in which Ameritech provides the results of a cost study performed in 1996 in response to an Indiana Utility Regulatory Commission (Indiana Commission) decision regarding the exchange of base file subscriber list information among carriers participating in extended area arrangements. This letter states that Ameritech's long-run incremental cost of providing white pages listing information to carriers is $0.11 per listing. Ameritech submitted information on how it calculated this amount, subject to a request for confidential treatment. The BellSouth data comes from a cost study BellSouth performed in 1993 for a proceeding before the Florida Public Service Commission (Florida Commission). That study states that BellSouth's "incremental" cost of providing base file subscriber list information is $0.003 per listing. After considering that study, the Florida Commission observed that a rate of $0.04 per listing for base file subscriber list information "will allow [BellSouth] to recover the cost of providing the service and will provide appropriate contribution." In addition, in an ex parte letter, BellSouth maintains that its cost of providing updates "far exceeds" $0.06 per listing, with the claimed cost per listing amount submitted under a claim of confidentiality. The SBC information comes from a cost study Southwestern Bell Telephone Company (SWBT) performed in 1988 that indicates that costs of providing base file subscriber list information of less than $0.01 per listing. 94. ADP has proposed that a rate of $0.04 per listing should be viewed as presumptively reasonable for base file subscriber list information. Based on the preponderance of the evidence in the record in this proceeding, we conclude that a rate of $0.04 per listing should allow most carriers to recover the incremental costs of providing base file subscriber list information to directory publishers and provide a reasonable contribution to those carriers' common costs and overheads. Four of the five carriers for which we have cost data indicate that their cost of providing base file subscriber list information to directory publishers is less than $0.04 per listing. Most of these cost studies are relatively recent (or were recently revised), and were undertaken to determine the cost of providing subscriber list information to directory publishers. 95. Although the precise methodologies the carriers used in determining these average costs are not before us, each carrier's data are consistent with our understanding that the incremental costs of generating a download are fairly low. Each carrier's cost data indicate that the carrier's incremental costs are well below $0.04 per listing. Indeed, two these carriers' cost data indicate that base file subscriber list information costs less than $0.01 per listing to provide. This implies that, for most carriers, a rate of $0.04 per listing should provide reasonable contributions to common costs and overheads. 96. Prices for commercial lists support our conclusion that a rate of $0.04 per listing would enable carriers to recover their incremental costs of providing base file subscriber list information to directory publishers plus reasonable contributions to common costs and overheads. The process involved in maintaining and distributing subscriber list information is quite similar to the process of producing and distributing commercial lists. As indicated above, buyers (i.e., directory publishers) do not consider commercially available lists to be a close substitute for subscriber list information, because commercially available lists are typically outdated for purposes of publishing directories. We would expect, however, the costs of providing such information to the buyer to be similar, because they both involve pulling names and related information from a database. Many commercial list providers sell direct marketing information similar to subscriber list information at prices of around $0.04 per listing, according to a recent issue of SRDS Direct Marketing List Source. Residential lists such as Lighthouse List's Consumers and Homeowners, and Resnet, have a base price of $0.035 per listing, while ABLE Consumer/Residents, American Family Consumer, and US Phonebase lists have a base price of $0.04 per listing. 97. Ameritech has submitted the results of a cost study, which it presents as demonstrating that its cost of providing base file subscriber list information is $0.11 per listing. While we cannot discuss the details of the study here, since they were submitted under a claim of confidentiality, we do not believe Ameritech's cost estimate of $0.11 is credible, for several reasons. First, Ameritech's estimate is much larger than those submitted regarding other carriers, and Ameritech has given us no reason to believe its costs are significantly different from those of other LECs. Second, we observe that Ameritech has chosen to make available its residential subscriber list information in the commercial list market for only $0.075 per listing. This casts doubt on Ameritech's assertion that its cost of providing subscriber list information to directory publishers is $0.11 per listing, as we would expect Ameritech to be selling this information in the commercial list market at a rate that would enable it to recover its costs, including some profit. Finally, Ameritech's estimate includes large allocations of common costs and overheads. Therefore, Ameritech may be attempting to place disproportionate costs on directory publishers. 98. Based on the record in this proceeding, we therefore agree with ADP that a rate of $0.04 per listing is presumptively a reasonable rate for base file subscriber list information. 99. We also conclude that a rate of $0.06 per listing should allow most carriers to recover the incremental costs of providing updated subscriber list information to directory publishers and reasonable contributions to those carriers' common costs and overheads. An additional $0.02 per listing may be necessary to compensate carriers for any additional costs of providing updates. This higher presumptively reasonable rate also is consistent with the fact that carriers generally provide updates to directory publishers in quantities smaller than those in which the carriers provide base file subscriber list information. Since ADP proposes a rate of $0.06 per listing for updates, we find it appropriate to set the presumptively reasonable rate for updates at $0.06 per listing without resolving whether an update rate closer to $0.04 per listing also would advance Congress' goals in relation to subscriber list information. 100. The presumptive figure of $0.06 per listing is based on the assumptions that (1) a carrier's allocations of common costs and overheads should not vary significantly according to whether a directory publisher requests updated, rather than base file, subscriber list information; and (2) a carrier's incremental costs of providing subscriber list information should not significantly vary with the type of subscriber list information requested. For instance, we would expect a carrier to have similar order-taking processes for base file and updated subscriber list information. The costs of downloading and shipping the data on paper, magnetic tape, or other transmission medium also would not vary depending on whether base file or updated subscriber list information is being transmitted. While some LECs may incur data processing costs in providing updated subscriber list information that they do not incur in providing base file subscriber list information, there is evidence in the record that many LECs' computer systems already have the capability of selecting and downloading subsets of their subscriber list information databases. Thus, these additional programming and processing costs should not be significant, to the extent they exist at all. We therefore conclude that the overall incremental cost of providing updates should not be much higher than the cost of providing base file subscriber list information. The additional $0.02 cents per listing that ADP proposes is reasonable and should easily cover these additional costs, for larger volumes of updates. 101. Only two carriers submitted data regarding their update costs. U S WEST claims that its cost of providing updated subscriber list information is between $0.015 and $0.02 per listing, the same range as for its base file information. In contrast, BellSouth argues that the cost of providing updates "far exceeds" $0.06 per listing. BellSouth, however, provides no explanation of why its incremental costs or common cost allocations for updates would be significantly higher than its corresponding costs for base file subscriber list information. Based on the very limited evidence before us, we conclude that in most circumstances the presumptively reasonable rate proposed by ADP of $0.06 per listing will cover the incremental costs of providing updates and provide reasonable contributions to the carrier's common costs and overheads. 102. We are concerned, however, that the rates that we deem presumptively reasonable may not always permit a LEC to recover all of the incremental costs, plus a reasonable share of common costs and overheads, involved in providing small quantities of listings to a directory publisher. That is, if the carrier has been asked to perform specialized sorts or provide updates that involve only a few listings, it may incur costs that are not recovered by the per listing rates of $0.04 and $0.06. We are also concerned that per listing rates of $0.04 and $0.06 may not adequately compensate some high-costs carriers even for downloads involving large numbers of listings. In these, relatively rare cases, higher rates would be appropriate. Any carrier that chooses to charge a rate in excess of $0.04 per listing for base file or $0.06 per listing for updated subscriber list information should bear the burden of establishing in a complaint proceeding that this rate would not enable it to recover its costs. 103. For the reasons stated above, we conclude that, in most circumstances, rates of $0.04 and $0.06 per listing will enable carriers to recover the incremental costs of providing subscriber list information to directory publishers and provide reasonable contributions to the carriers' common costs and overheads. Because these rates are cost-based, they also should promote the development of a competitive directory publishing market. We therefore conclude that they are presumptively reasonable. 104. Having presumptively reasonable rates of $0.04 and $0.06 per listing should reduce the regulatory costs to carriers and directory publishers. Carriers will not have to provide detailed cost studies, except in complaint proceedings. Moreover, to the extent that carriers charge the presumptively reasonable rates, independent directory publishers will not have to incur the expense of filing complaints. Setting forth in this proceeding our views on what rates are presumptively reasonable should reduce regulatory and litigation costs to carriers, independent directory publishers, and this Commission. 6. Complaint Procedures 105. We recognize that the presumptions we establish here might not accommodate all the circumstances in which the cost of subscriber list information might vary. We therefore do not preclude carriers from charging, or directory publishers from seeking, rates different from those we determine are presumptively reasonable in this Third Report and Order. In certain circumstances, the actual cost per listing could be higher than the presumptively reasonable rates we set forth above. For instance, for some smaller carriers a rate of $0.04 per listing may not be enough to cover the costs associated with providing base file listings, since the number of listings involved could be small. In these situations, carriers presumably would be able to justify a higher rate or minimum charge. In another portion of this Order, we conclude that we have authority under section 208 of the Communications Act to adjudicate complaints regarding compliance with section 222(e). In any future federal subscriber list information rate proceeding, the burden of proof will be on the carrier to the extent it charges a rate above the presumptively reasonable rates. 106. We will rely on the section 208 complaint process to ensure that subscriber list information rates are reasonable. In the event a directory publisher files a complaint regarding a carrier's subscriber list information rates, the carrier must present a cost study providing credible and verifiable cost data to justify each challenged rate. This cost study must clearly and specifically identify and justify: a. Incremental Costs. Each specific function the carrier performs solely to provide subscriber list information to the complainant; and the incremental costs the carrier incurs in performing each of these specific functions. b. Common Costs. The cost the carrier incurs in creating and maintaining its subscriber list information database and the methods the carrier uses to allocate that cost among supported services. c. Overheads. Any other costs the carrier incurs to support its provision of subscriber list information to the complainant; the other activities those costs support; and the methods the carrier uses to allocate those costs. d. Other Information. The projected average number of listings the carrier provides to directory publishers and, if applicable, to other entities in a year; the rate of return on investment and depreciation costs the carrier uses in calculating its subscriber list information rates; and any other information necessary to make clear the carrier's costing process. The carrier should provide this information separately for both base file and updated subscriber list information if the complainant challenges both types of rates. We also expect the carrier to describe how its methods for allocating common costs compare to those the carrier uses in other contexts. In the absence of cost data showing that the carrier's costs exceed the presumptively reasonable rates, the Bureau or the Commission, depending on the circumstances, shall find in favor of the plaintiff, and award damages accordingly. 107. We conclude that the approach adopted above provides the most efficient means of ensuring that subscriber list information rates are reasonable. This approach will enable parties to turn resources that would otherwise be expended to litigate subscriber list information rates to competing based on the quality of the products provided to consumers. I. Subscriber List Information Formats 108. In the Notice, the Commission sought comment on "the format in which [subscriber list] information should be provided." Although the commenters propose a wide variety of formats, several commenters suggest that the Commission should not impose formatting requirements that burden carriers or constrain technology. 109. We require each carrier to provide subscriber list information gathered in its capacity as a provider of telephone exchange service to a directory publisher in the format the publisher specifies, if the carrier's internal systems can accommodate that format. If the carrier's systems cannot accommodate the requested format, the carrier must inform the directory publisher of that fact and tell the publisher which formats it can accommodate as well as the date by which it can accommodate the publisher's request in each of these formats. The carrier must provide this information within thirty days of when it receives the publisher's request. The carrier also must provide the requested subscriber list information in the format the publisher selects from among those available and, unless the publisher requests a later date, by the date the carrier stated for that format. This approach will minimize burdens on both directory publishers and carriers, by allowing each directory publisher to request the format that it is likely to find most useful while making it unnecessary for the carrier to incur substantial costs to reformat subscriber list information for directory publishers. It also will allow directory publishers and carriers to change formats as technology advances. 110. In any dispute regarding a carrier's ability to provide subscriber list information in a particular format, the burden will be on the carrier to show that its internal systems cannot accommodate the format the directory publisher requests. J. Directory Publishing Purposes 1. Background 111. Section 222(e) gives directory publishers a right to obtain subscriber list information "for the purpose of publishing directories in any format." In the Notice, the Commission sought comment on what safeguards may be necessary to ensure that a person seeking subscriber list information is doing so for the specified "purpose of publishing directories in any format." The Commission also sought comment on how and to what extent a telecommunications carrier subject to section 222(e) requirements may require a person or entity requesting subscriber list information to certify that it will be used only for directory publishing purposes. The Commission asked whether requests for subscriber list information should be in writing or whether they could be made orally. 2. Safeguards 112. Subscriber list information is used for many purposes other than directory publishing. These include traditional directory assistance services as well as the preparation of direct marketing lists. We conclude that carriers may take reasonable steps, as specified below, to ensure that a person requesting subscriber list information pursuant to section 222(e) intends to use it only for directory publishing purposes. 113. As several commenters suggest, we conclude that carriers may require directory publishers to certify that they will use subscriber list information obtained pursuant to section 222(e) only for directory publishing purposes. While MCI expresses concern that carriers will demand certifications as an anticompetitive tactic, the record in this proceeding does not show that concern to be well-founded. 114. The certification may be either oral or written, at the carrier's option. Since directory publishers generally obtain subscriber list information through written contracts, a written certification should not impose any additional burden on directory publishers. We decline to prescribe the precise wording of any certification, as ADP suggests, because such a step appears unnecessary at this time. 115. We also decline to adopt YPPA's proposal that we permit a carrier to refuse to disclose subscriber list information when the carrier reasonably believes a directory publisher will use that information for purposes other than, or in addition to, directory publishing. YPPA suggests that, in this circumstance, the carrier should not need to disclose subscriber list information unless and until we were to rule against the carrier in response to a complaint under section 208 of the Communications Act. This approach would require a directory publisher to undergo the expense of filing and prosecuting a complaint prior to obtaining subscriber list information in the event that the carrier from which the information is sought concludes that the publisher will use that information for purposes other than directory publishing. Because the need to file and prosecute such complaints would delay the directory publisher's receipt of subscriber list information, this approach would be inconsistent with the requirement that directory publishers receive that information "on a timely . . . basis." If disputes regarding subscriber list information usage arise, the carrier may seek a determination that it need not provide subscriber list information to a particular person that the carrier believes will use the information for purposes other than directory publishing. Pending resolution of such a dispute, the carrier shall continue to provide subscriber list information to the directory publisher absent an order to the contrary. This approach should minimize burdens on directory publishers, including those that are small businesses, and is consistent with Congress' intent that carriers not use their control over subscriber list information to impede competition in directory publishing. 3. Updating Previously Purchased Subscriber List Information 116. ADP contends that directory publishers should be allowed to purchase updated subscriber list information and modify previously purchased listing information based upon the updates. We agree. In requiring that each carrier provide subscriber list information "on a[n] . . . unbundled basis . . . to any person upon request for the purpose of publishing directories," Congress made clear that directory publishers could purchase updated listings without having to repurchase other subscriber list information as long as the updated listings would be used for directory publishing purposes. A directory publisher typically will obtain an "initial load" of subscriber list information from a carrier that provides the carrier's subscriber list information as of a given date. This information requires reformatting and other processing before it can be published in a directory. As the directory publisher performs this reformatting and other processing, the carrier continuously updates its subscriber list information databases to reflect the addition of new telephone exchange service subscribers as well as any changes in the information regarding existing subscribers. Requiring a directory publisher to repurchase a carrier's entire subscriber list information database each time the publisher wishes to update its own database would increase the difficulties many independent publishers face. This is because the directory publisher either would have to reformat and process the listings in the new database so that it could be substituted for the old database, or somehow identify all the differences between the two databases and use them to update the old database. 4. Obtaining Advertisers 117. New or newly relocated businesses often purchase yellow pages advertising in order to attract customers. Directory publishers affiliated with carriers use updated subscriber list information to identify these new businesses in order to target them for specific yellow pages marketing efforts. ADP contends that independent directory publishers should be able to use subscriber list information obtained pursuant to section 222(e) to do the same. Vitelco maintains that the plain meaning of the statutory phrase "for the purpose of publishing directories" excludes the use of subscriber list information to sell yellow pages advertising. Vitelco asserts that directory publishers can use subscriber list information obtained from other sources, such as Chambers of Commerce, to sell advertising and that it would burden small carriers to provide marketing assistance to directory publishers. 118. We reject Vitelco's arguments. Neither the Communications Act nor the legislative history defines the phrase "for the purpose of publishing directories." Vitelco appears to assume that this statutory phrase encompasses only the actual printing and distribution of directories. Directory publishers, however, engage in additional activities "for the purpose of publishing directories." We conclude that these activities include the marketing of directory advertising to businesses. As mentioned previously, most directory publishing revenues are advertising revenues, so the marketing of directory advertising is essential to the process of publishing directories. Absent such marketing, the publisher would have no directory to print or distribute. We therefore conclude that the statutory phrase "for the purpose of publishing directories" encompasses the use of subscriber list information to solicit yellow pages advertising. 119. YPPA argues that companies should be prohibited from using subscriber list information obtained pursuant to section 222(e) to market local telephone services. We agree. Directory publishers do not market local telephone services "for the purpose of publishing directories." The provision of local telephone services is a separate activity from the publishing of directories. We therefore conclude that the statutory phrase "for the purpose of publishing directories" does not contemplate the use of subscriber list information to market local telephone services. K. Enforcement 120. In the Notice, the Commission sought comment on what procedures, if any, are required to implement section 222(e). Several parties argue that we have authority under section 208 of the Communications Act to adjudicate complaints regarding compliance with section 222(e). Vitelco contends that we lack such authority because the provision of subscriber list information is not a common carrier activity. Vitelco maintains that State commissions, rather than the Commission, therefore should enforce section 222(e). 121. We reject Vitelco's argument. Section 208(a) authorizes the Commission to adjudicate complaints from "[a]ny person . . . complaining of anything done or omitted to be done by any common carrier subject to this Act, in contravention of the provisions t