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



In the Matter of

Implementation of the Subscriber Carrier
Selection Changes Provisions of the
Telecommunications Act of 1996

McLeodUSA Telecommunications 
Services, Inc.
Petition for Waiver
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CC Docket No. 94-129






                             ORDER

   Adopted:  November 22, 2000          Released:  November 24, 2000

By the Associate Chief, Accounting Policy Division, Common Carrier Bureau:

                I.  INTRODUCTION AND BACKGROUND
1.     In its Carrier Change Orders, the Commission adopted rules applicable to carriers
changing a consumer's preferred carrier.   In this Order, we grant McLeodUSA
Telecommunications Services, Inc. (McLeodUSA), a limited waiver of the authorization and
verification requirements of the Commission's rules and Carrier Change Orders.  McLeodUSA
seeks this waiver as part of a merger transaction whereby CapRock Communications Company,
the parent company of CapRock Telecommunications Corp. (CTC) and IWL Communications,
Inc. d/b/a CapRock Services Corp. (IWL), will become a direct subsidiary of McLeodUSA.  Our
ruling on this waiver does not prejudge in any way the Commission's ultimate determination as to
whether the requested transfers of control will serve the public interest, convenience and
necessity.  We grant this limited waiver to the extent necessary to enable McLeodUSA to
become the preferred carrier of the consumers currently presubscribed to CTC and IWL, without
first obtaining the consumers' authorization and verification.
2.     Section 258 of the Communications Act of 1934, as amended by the
Telecommunications Act of 1996, makes it unlawful for any telecommunications carrier to
"submit or execute a change in a subscriber's selection of a provider of telephone exchange service
or telephone toll service except in accordance with such procedures as the Commission shall
prescribe."  The goal of section 258 is to eliminate the practice of "slamming," the unauthorized
change of a subscriber's preferred carrier.  Pursuant to section 258, carriers are absolutely barred
from changing a customer's preferred local or long distance carrier without first complying with
the Commission's verification procedures.  In the Section 258 Order, the Commission revised its
procedures to ensure that carriers obtain the requisite authority prior to changing a customer's
preferred carrier.  The Commission requires that carriers follow one of the Commission's
prescribed verification procedures before submitting carrier changes on behalf of consumers. 
3.     McLeodUSA seeks a waiver of our verification rules to allow it to be designated the
preferred local and/or long distance carrier for customers of CTC and IWL without first obtaining
each customer's authorization and verification.  Because we conclude that, under the
circumstances presented, it is in the public interest to grant the waiver, we grant McLeodUSA a
waiver, subject to the conditions represented in its filings.
                        II.  DISCUSSION
4.     Generally, the Commission's rules may be waived for good cause shown.  As noted
by the Court of Appeals for the D.C. Circuit, however, agency rules are presumed valid.  The
Commission may exercise its discretion to waive a rule where the particular facts make strict
compliance inconsistent with the public interest.  In addition, the Commission may take into
account considerations of hardship, equity, or more effective implementation of overall policy on
an individual basis.  Waiver of the Commission's rules is therefore appropriate only if special
circumstances warrant a deviation from the general rule, and such a deviation will serve the public
interest. 
5.     We find that McLeodUSA has demonstrated that good cause exists to justify a limited
waiver of the Commission's authorization and verification requirements to the extent necessary to
enable McLeodUSA to transfer to its own customer base the affected CTC and IWL local and/or
long distance customers.  In its Waiver Petition, McLeodUSA states that it recently entered into
an agreement to merge with CapRock Communications Corp. (CCC) and acquire control of
CCC's operating subsidiaries, CTC and IWL.  After consummating the merger, McLeodUSA
plans to consolidate its operations by transferring to McLeodUSA the local and long distance
customer bases of CTC and IWL. 
6.     We conclude that special circumstances exist to justify a waiver.  Without this waiver,
the service of some former CTC and IWL customers might temporarily be interrupted when those
companies cease providing presubscribed service to customers who fail to respond in a timely
fashion to requests for preferred carrier change authorization; some customers might also pay
potentially higher casual calling rates after the discontinuance of presubscribed service.  We
conclude that a waiver of the Commission's carrier change rules and orders is necessary to
provide a seamless transition with no disruption of service to the transferred customers. 
7.     We find that McLeodUSA has demonstrated that a limited waiver of the authorization
and verification rules is in the public interest because it will prevent consumers from temporarily
losing service or paying significantly higher rates, and because McLeodUSA has agreed to notify
the affected customers as described below.  McLeodUSA states that it will undertake a two-step
process to notify the affected customers of the transfer.  In a first letter, McLeodUSA will inform
customers of the proposed transfer and assure them that no charges or rate increases will be
imposed as a result of the transfer.  McLeodUSA states that it will advise the affected customers
that they may choose a different preferred carrier, should they desire to do so.  In addition,
customers will be given a toll-free number to call with any questions they may have about the
transition.  According to McLeodUSA, once the proposed transfer has been consummated, it
will notify these customers of that event and reiterate the foregoing information, assurances, and
advice.  
8.     In addition, McLeodUSA has agreed that, if the Commission waives its rules to permit
McLeodUSA to provide service to CTC's and IWL's former customers, McLeodUSA will work
with the complainants and the Commission to investigate and resolve complaints regarding
services provided by CTC or IWL.  We conclude that these conditions will adequately protect
the rights of the transferred customers of CTC and IWL.
9.     For the foregoing reasons, we grant McLeodUSA a waiver of the authorization and
verification requirements of our rules for the limited purposes described above.  The grant of this
waiver is conditioned upon McLeodUSA's provision of customer notification and handling of
complaints and upon Commission approval of the transfers of control of licenses and lines from
CTC and IWL to McLeodUSA, as described above and further detailed in the Waiver Petition
and Petition Supplement.
                     III.  ORDERING CLAUSES

10.    Accordingly, pursuant to authority contained in Sections 1, 4, and 258 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154, 258, and the authority
delegated under sections 0.91, 0.291, and 1.3 of the Commission's rules, 47 C.F.R.  0.91,
0.291, 1.3, the waiver request filed by McLeodUSA Telecommunications Services, Inc., on
October 6, 2000, and supplemented on November 21, 2000, IS GRANTED subject to the
conditions, and to the extent, indicated herein.  
11.    IT IS FURTHER ORDERED that this Order is effective upon release. 
                              FEDERAL COMMUNICATIONS COMMISSION


                              K. Michele Walters
                              Associate Chief, 
                              Accounting Policy Division,
                              Common Carrier Bureau